EXHIBIT 99(m)(3)
Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Large-Cap Growth Fund
Class C Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of August 1, 2001
by and between LORD XXXXXX LARGE-CAP GROWTH FUND, a Delaware business trust (the
"Fund"), and LORD XXXXXX DISTRIBUTOR LLC, a New York limited liability company
(the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
the Distributor is the exclusive selling agent of the Fund's Class C shares of
beneficial interest (the "Shares") pursuant to the Distribution Agreement
between the Fund and the Distributor, and
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for its Shares with the Distributor, as permitted by Rule 12b-1
under the Act, pursuant to which the Fund may make certain payments to the
Distributor for payment to institutions and persons permitted by applicable law
and/or rules to receive such payments ("Authorized Institutions") in connection
with sales of Shares and for use by the Distributor as provided in paragraph 3
of this Plan, and
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Fund and the holders of the
Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into
agreements with Authorized Institutions (the "Agreements") which may provide for
the payment to such Authorized Institutions of distribution and service fees
which the Distributor receives from (or is reimbursed for by) the Fund in order
to provide incentives to such Authorized Institutions (i) to sell Shares and
(ii) to provide continuing information and investment services to their accounts
holding Shares and otherwise to encourage their accounts to remain invested in
the Shares. The Distributor may, from time to time, waive or defer payment of
some fees payable at the time of the sale of Shares provided for under paragraph
2 hereof.
2. Subject to possible reduction as provided below in this paragraph
2, the Fund shall pay to the Distributor fees at each month-end after the sale
of Shares (a) for services, at an annual rate not to exceed .25 of 1% of the
average annual net asset value of Shares outstanding and (b) for distribution,
at an annual rate not to exceed .75 of 1% of the average annual net asset value
of Shares outstanding. For purposes of the payment of the fees above, (A) Shares
issued pursuant to an
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exchange for Class C shares of another series of the Fund or another Lord
Xxxxxx-sponsored fund (or for shares of a fund acquired by the Fund) will be
credited with the time held from the initial purchase of such other shares when
determining how long Shares mentioned above have been outstanding and (B)
payments will be based on Shares outstanding during any such month. Shares
outstanding above include Shares issued for reinvested dividends and
distributions. The Board of Trustees of the Fund shall from time to time
determine the amounts, within the foregoing maximum amounts, that the Fund may
pay the Distributor hereunder. Such determinations by the Board of Trustees
shall be made by votes of the kind referred to in paragraph 10 of this Plan. The
service fees mentioned in this paragraph are for the purposes mentioned in
clause (ii) of paragraph 1 of this Plan and the distribution fees mentioned in
this paragraph are for the purposes mentioned in clause (i) of paragraph 1. The
Distributor will monitor the payments hereunder and shall reduce such payments
or take such other steps as may be necessary to assure that (x) the payments
pursuant to this Plan shall be consistent with Rule 2830, subparagraphs (d)(2)
and (5) of the Conduct Rules of the National Association of Securities Dealers,
Inc. with respect to investment companies with asset-based sales charges and
service fees as the same may be in effect from time to time and (y) the Fund
shall not pay with respect to any Authorized Institution service fees equal to
more than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to shares sold by) such Authorized Institution and held in an
account covered by an Agreement.
3. The Distributor may use amounts received as distribution fees
hereunder from the Fund to finance any activity which is primarily intended to
result in the sale of Shares including, but not limited to, commissions or other
payments relating to selling or servicing efforts. The Fund's Board of Trustees
(in the manner contemplated in paragraph 10 of this Plan) shall approve the
timing, categories and calculation of any payments under this paragraph 3.
4. The net asset value of the Shares shall be determined as provided
in the Declaration and Agreement of Trust of the Fund. If the Distributor waives
all or a portion of fees which are to be paid by the Fund hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Fund pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Fund hereunder and shall provide to the Fund's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts so expended pursuant to this Plan and the purposes for which such
expenditures were made.
6. Neither this Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
trustees, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund, except as otherwise
may be provided in the Act.
7. The Distributor shall give the Fund the benefit of the
Distributor's best judgment and good faith efforts in rendering services under
this Plan. Other than to abide by the
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provisions hereof and render the services called for hereunder in good faith,
the Distributor assumes no responsibility under this Plan and, having so acted,
the Distributor shall not be held liable or held accountable for any mistake of
law or fact, or for any loss or damage arising or resulting therefrom suffered
by the Fund or any of its shareholders, creditors, trustees or officers of the
Fund; provided however, that nothing herein shall be deemed to protect the
Distributor against any liability to the Fund or the Fund's shareholders by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of the reckless disregard of its
obligations and duties hereunder.
8. This Plan shall become effective on the date hereof, and shall
continue in effect for a period of more than one year from such date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may not be amended to increase materially the amount to
be spent by the Fund hereunder without the vote of a majority of its outstanding
voting securities and each material amendment must be approved by a vote of the
Board of Trustees of the Fund, including the vote of a majority of the trustees
who are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan, cast in person at a meeting called for the purpose of voting on such
amendment.
10. Amendments to this Plan other than material amendments of the
kind referred to in the foregoing paragraph 9 of this Plan may be adopted by a
vote of the Board of Trustees of the Fund, including the vote of a majority of
the trustees who are not "interested persons" of the Fund and who have no direct
or indirect financial interest in the operation of this Plan or in any agreement
related to this Plan. The Board of Trustees of the Fund may, by such a vote,
interpret this Plan and make all determinations necessary or advisable for its
administration.
11. This Plan may be terminated at any time without the payment of
any penalty by (a) the vote of a majority of the trustees 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 in any agreement related to this Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meaning as those terms are defined in the
Act.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD XXXXXX LARGE-CAP GROWTH FUND
By: /s/ Xxxxxxxxx X. Xxxxxxx
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Vice President
ATTEST:
/s/ Xxxxxxxx X. Xxxxxx
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Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
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Managing Member
By: /s/Xxxx X. Xxxxxxx
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A Partner
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