Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Bond-Debenture Fund, Inc.
Class P Shares
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RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of April 6, 1998, by
and between LORD XXXXXX BOND-DEBENTURE FUND, INC., a Maryland corporation (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 shares of capital
stock, including the Fund's Class P shares (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 the Fund's 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 Directors 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 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 (a)
for services, at an annual rate not to exceed .20% of 1% of the average annual
net asset value of Shares outstanding for the quarter or more and (b) for
distribution, at an annual rate not to exceed .25 of 1% of the average annual
net asset value of Shares outstanding for the quarter or more. For purposes of
the quarter-end fee payments above (A) Shares issued pursuant to an exchange for
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 in clauses (a) and (b) have been outstanding and (B) payments will be
based on Shares outstanding during any such quarter. Shares outstanding in
clauses (a) and (b) above include Shares issued for reinvested dividends and
distributions that have been outstanding for the quarter or more.
The Board of Directors of the Fund shall from time to time
determine the amounts and the time of payments (such as, at the time of sale,
quarterly or otherwise), within the foregoing maximum amounts, that the Fund may
pay the Distributor hereunder. Such determinations by the Board of Directors
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 NASD Regulation, 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 .20% 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. Within the foregoing maximum amounts, the Distributor may use
amounts received as distribution fees hereunder from the Fund to finance any
activity that 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. Without limiting the generality of the foregoing, the
Distributor may apply amounts authorized by the Fund's Board of Directors
designated as the distribution fee referred to in clause (b) of paragraph 2 to
expenses incurred by the Distributor if such expenses are primarily intended to
result in the sale of Shares. The Fund's Board of Directors (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 Articles of Incorporation 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 Treasurer, 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 Directors, and the Board
of Directors 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 directors, 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, 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
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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 the shareholders,
creditors, directors 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 Directors of the Fund, including the vote of a majority of the
Directors 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 the Shares and
each material amendment must be approved by a vote of the Board of Directors of
the Fund, including the vote of a majority of the directors 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 Directors of the Fund, including the vote of a majority of the
directors 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 Directors 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 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 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.
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12. So long as this Plan shall remain in effect, the selection and
nomination of those Directors of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such disinterested directors. 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 BOND-DEBENTURE FUND, INC.
By: /s/Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx,
Vice President
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By: /s/Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, A Partner
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