PLAN OF DISTRIBUTION
WHEREAS ROCKWOOD FUND, INC. (the "Fund") is registered under the Investment
Company Act of 1940, as amended ("1940 Act"), as an open-end management
investment company, and offers for public sale shares of common stock; and
WHEREAS the Fund has entered into a Distribution Agreement ("Agreement")
with Investor Service Center, Inc. (the "Distributor") pursuant to which the
Distributor has agreed to serve as the principal distributor for the Fund;
NOW, THEREFORE, the Fund hereby adopts this plan of distribution
("Plan") with respect to the Fund in accordance with Rule 12b-1 under the 1940
Act.
1. As Distributor for the Fund, the Distributor may spend such amounts as it
deems appropriate on any activities or expenses primarily intended to result in
the sale of the Fund's shares or the servicing and maintenance of shareholder
accounts, including, but not limited to: advertising, direct mail, and
promotional expenses; compensation to the Distributor and its employees;
compensation to and expenses, including overhead and telephone and other
communication expenses, of the Distributor, the Investment Manager, the Fund,
and selected broker/dealers and their affiliates who engage in or support the
distribution of shares or who service shareholder accounts; fulfillment
expenses, including the costs of printing and distributing prospectuses,
statements of additional information, and reports for other than existing
shareholders; the costs of preparing, printing and distributing sales literature
and advertising materials; and internal costs incurred by the Distributor and
allocated by the Distributor to its efforts to distribute shares of the Fund or
service shareholder accounts such as office rent and equipment, employee
salaries, employee bonuses and other overhead expenses.
2. A. The Fund is authorized to pay to the Distributor, as compensation for the
Distributor's distribution and service activities as defined in paragraph 13
hereof with respect to its shareholders, a fee at the rate of 0.25% on an
annualized basis of its average daily net assets. All or a portion of such fee
may be designated by the Fund's board of directors ("Board") as a fee for
service activities or as a fee for distribution activities. Such fee shall be
calculated and accrued daily and paid monthly or at such other intervals as the
Board shall determine.
B. The Fund may pay fees to the Distributor at a lesser rate than the fees
specified in paragraph 2A of this Plan as mutually agreed to by the Board and
the Distributor.
3. This Plan shall not take effect until it has been approved by:
A. the vote of at least a majority of the outstanding voting securities of the
Fund; and
B. the vote cast in person at a meeting called for the purpose of
voting on this Plan of a majority of both (i) those directors of the Fund who
are not interested persons of the Fund and have no direct or indirect financial
interest in the operation of this Plan or any agreement related to it (the "Plan
Directors"), and (ii) all of the directors then in office.
4. This Plan shall continue in effect for one year from its execution or
adoption and thereafter for
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so long as such continuance is specifically approved at least annually in the
manner provided for approval of this Plan in paragraph 3B.
5. The Distributor shall provide to the Board and the Board shall review, at
least quarterly, a written report of the amounts expended under this Plan and
the purposes for which such expenditures were made. A reasonable allocation of
overhead and other expenses of the Distributor related to its distribution
activities and service activities, including telephone and other communication
expenses, may be included in the information regarding amounts expended for such
activities.
6. This Plan may not be amended to increase materially the amount of fees
provided for in paragraphs 2A and 2B hereof unless such amendment is approved by
a vote of a majority of the outstanding voting securities of the Fund, and no
material amendment to this Plan shall be made unless approved by the Board and
the Plan Directors in the manner provided for approval of this Plan in para
graph 3B.
7. The amount of the fees payable by the Fund to the Distributor under
paragraphs 2A and 2B hereof is not related directly to expenses incurred by the
Distributor on behalf of the Fund in serving as distributor, and paragraph 2
hereof does not obligate the Fund to reimburse the Distributor for such
expenses. The fees set forth in paragraphs 2A and 2B hereof will be paid by the
Fund to the Distributor unless and until this Plan is terminated or not renewed.
If this Plan is terminated or not renewed, any expenses incurred by the
Distributor on behalf of the Fund in excess of payments of the fees specified in
paragraphs 2A and 2B hereof which the Distributor has received or accrued
through the termination date are the sole responsibility and liability of the
Distributor, and are not obligations of the Fund.
8. Any other agreements related to this Plan shall not take effect until
approved in the manner provided for approval of this Plan in paragraph 3B.
9. The Distributor shall use its best efforts in rendering services to the Fund
hereunder, but in the absence of willful misfeasance, bad faith or gross
negligence in the performance of its duties or reckless disregard of its
obligations and duties hereunder, the Distributor shall not be liable to the
Fund, the Fund or to any shareholder of the Fund for any act or failure to act
by the Distributor or any affiliated person of the Distributor or for any loss
sustained by the Fund, the Fund or the Fund's shareholders.
10. This Plan may be terminated at any time by vote of a majority of the Plan
Directors, or by vote of a majority of the outstanding voting securities of the
Fund.
11. While this Plan is in effect, the selection and nomination of directors who
are not interested persons of the Fund shall be committed to the discretion of
the directors who are not interested persons.
12. The Fund shall preserve copies of this Plan and any other agreements related
to this Plan and all reports made pursuant to paragraph 5 hereof, for a period
of not less than six years from the date of this Plan, or the date of any such
agreement or of any such report, as the case may be, the first two years in an
easily accessible place.
13. For purposes of this Plan, "distribution activities" shall mean any
activities in connection with the Distributor's performance of its services
under this Plan or the Agreement that are not deemed
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"service activities." "Service activities" shall mean activities covered by the
definition of "service fee" contained in Rule 2830 of the National Association
of Securities Dealers, Inc.'s Conduct Rules.
14. As used in this Plan, the terms: "majority of the outstanding voting
securities" and "interested person" shall have the same meaning as those terms
have in the 1940 Act.
IN WITNESS WHEREOF, the Fund has executed this Plan as of the day and
year set forth below in the City and State of New York.
DATE: February 28, 1997
ATTEST: ROCKWOOD FUND, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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