Exhibit 7(a)
------------
Draft--February 25, 1996
Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx
Xxxx Xxxxxx Securities Trust -- Growth & Income Series -- Class A Shares
------------------------------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996
by and between LORD XXXXXX SECURITIES TRUST, a Delaware business trust (the
"Fund"), on behalf of the LORD XXXXXX GROWTH & INCOME TRUST (the "Series"), 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 shares of
beneficial interest, including the Series' Class A shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor,
dated as of the date hereof (the "Distribution Agreement").
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Series with the Distributor, as permitted by Rule 12b-1
under the Act, pursuant to which the Series may make certain payments to the
Distributor to be used by the Distributor or paid to institutions and persons
permitted by applicable law and/or rules to receive such payments ("Authorized
Institutions") in connection with sales of Shares and/or servicing of accounts
of shareholders holding Shares.
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Series 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 the Series in order to provide additional
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.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
-
primarily intended to result in the sale of Shares and (b) provide continuing
-
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the Shares;
provided that (i) any payments referred to in the foregoing clause (a) shall not
-------- -
exceed the distribution fee permitted to be paid at the time under paragraph 3
of this Plan and shall be authorized by the Board of Trustees of the Fund by a
vote of the kind referred to in paragraph 10 of this Plan and (ii) any payments
--
referred to in clause (b) shall not exceed the service fee permitted to be paid
at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
- -
to exceed .25 of 1% of the average annual net asset value of Shares outstanding.
The Board of Trustees of the Fund shall from time to time determine the amounts,
within the foregoing maximum amounts, that the Series may pay the Distributor
hereunder. Any such fees (which may be waived by the Authorized Institutions in
whole or in part) may be calculated and paid quarterly or more frequently if
approved by the Board of Trustees of the Fund. Such determinations and
approvals by the Board of Trustees shall be made and given by votes of the kind
referred to in paragraph 10 of this Plan. Payments by holders of Shares to the
Series of contingent deferred reimbursement charges relating to distribution
fees paid by the Series hereunder shall reduce the amount of distribution fees
for purposes of the annual 0.25% distribution fee limit. The Distributor will
monitor the payments hereunder and shall reduce such payments or take such other
steps as may be necessary to assure that (i) the payments pursuant to this Plan
-
shall be consistent with Article III, Section 26, subparagraphs (d)(2) and (5)
of the Rules of Fair Practice 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 (ii) the Series
--
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 or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided
in the Declaration of Trust of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
2
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 Series hereunder and shall provide to the Fund's Board of
Trustees, and the 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
directors, officers, partners, or other representatives of the Distributor are
or may be "interested persons" of the Fund, except as may otherwise 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, the Series or any of the
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 Series' 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 upon the date hereof, and shall
continue in effect for a period of more than one year from that 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 Series hereunder above the maximum amounts referred to in
paragraph 3 of this Plan without a shareholder vote in compliance with Rule 12b-
1 and Rule 18f-3 under the Act as in effect at such time, 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.
Amendments to this Plan which do not increase materially the amount to be spent
by the Series hereunder above the maximum
3
amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the
kind referred to in the forgoing paragraph 9 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 (a) by 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 the 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 meanings 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 SECURITIES TRUST
By:_____________________________
President
ATTEST:
_____________________
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By:__________________________
4
