Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Developing Growth Fund, Inc. -- Pension Class
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of October __, 1997 by
and between LORD XXXXXX DEVELOPING GROWTH FUND, INC., a Maryland Corporation,
(the "Fund"), on behalf of its Pension Class (the "Class"), 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 Class, pursuant to the Distribution Agreement
between the Fund and the Distributor, dated July 12, 1996, and
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Class with the Distributor, as permitted by Rule 12b-1
under the Act, pursuant to which the Class 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 Class 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 Class 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 Class shall pay to the Distributor fees at each quarter-end (a) for
services, 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 and (b) for
distribution, at an annual rate not to exceed .50 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 clause (a) and (b) above include Shares issued for
reinvested dividends and distributions which 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 Class 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 Conducts 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 Class 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. Within the foregoing maximum amounts, the Distributor may use
amounts received as distribution fees hereunder from the Class 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. 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 Class hereunder, the Distributor
shall not be deemed to have waived its rights under this Agreement to have the
Class 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 Class 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 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 Class 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 Class' 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 Class 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 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.
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 DEVELOPING GROWTH FUND, INC.
By:
Xxxx X. Xxxxxxx
Vice President
ATTEST:
Xxxxxx X. Xxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
By:
A Partner
