Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Blend Trust -- Lord Xxxxxx Small-Cap Blend Fund
Class C Shares -- Type II
-----------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of May 17,
2001 by and between LORD XXXXXX BLEND TRUST -- LORD XXXXXX SMALL-CAP BLEND 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
capital stock (the "Shares") pursuant to the Distribution Agreement between the
Fund and the Distributor, dated as of the date hereof, and
WHEREAS, the Fund desires to adopt a Distribution Plan and
Agreement (the "Plan") for 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 quarter-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 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 quarter. 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 and the second sentence of paragraph 3 of this Plan. 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
other than those referred to in the foregoing sentence.
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 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 Corporation 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.
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 BLEND TRUST - LORD XXXXXX
SMALL-CAP BLEND FUND
By:
----------------------------
Vice President
ATTEST:
----------------------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
----------------------------
Managing Member
BY:
----------------------------
A Partner
