Exhibit 99.(m)(iv)
RULE 00x-0 XXXXXXXXXXXX XXXX XXX XXXXXXXXX - XXXX XXXXXX MUNICIPAL INCOME TRUST
LORD XXXXXX HIGH YIELD MUNICIPAL BOND FUND - CLASS A SHARES
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of December 30,
2004 by and between LORD XXXXXX MUNICIPAL INCOME TRUST, a Delaware business
trust (the "Fund"), on behalf of the LORD XXXXXX HIGH YIELD MUNICIPAL BOND FUND,
(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.
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 Fund 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, and
subject to the provisions of paragraph 8 of this Plan, 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
1
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 Rule 2830, subparagraphs (d)(2) and (5) of the Conduct Rules of
the National Association of Securities Dealers, Inc. ("NASD") 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 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 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 and Agreement of Trust of the Fund. If the Distributor waives
all or a portion of the 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 Series 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 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
Trustees, officers, partners, members or other representatives of the
Distributor are or may be "interested persons" of the Fund,
2
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 or 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 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 Fund 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 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 foregoing 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
3
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.
13. The obligations of the Fund and the Series, including those
imposed hereby, are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund or Series individually, but are binding only upon the assets
and property of the Series. Any and all personal liability, either at common law
or in equity, or by statute or constitution, of every such Trustee, shareholder,
officer, employee or agent for any breach of the Fund or Series of any
agreement, representation or warranty hereunder is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement by the
Fund.
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 MUNICIPAL INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Vice President & Assistant Secretary
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO. LLC
--------------------------------
Managing Member
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
A Member
4
RULE 00x-0 XXXXXXXXXXXX XXXX XXX XXXXXXXXX - XXXX XXXXXX MUNICIPAL INCOME TRUST
LORD XXXXXX HIGH YIELD MUNICIPAL BOND FUND - CLASS B SHARES
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of December 30,
2004 by and between LORD XXXXXX MUNICIPAL INCOME TRUST, a Delaware business
trust (the "Fund"), on behalf of the LORD XXXXXX HIGH YIELD MUNICIPAL BOND FUND,
(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 B shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor.
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") with the Distributor, as permitted by Rule 12b-1 under the Act,
pursuant to which the Series may make certain payments to the Distributor (a) to
help reimburse the Distributor for the payment of sales commissions to
institutions and persons permitted by applicable law and/or rules to receive
such payments ("Authorized Institutions") in connection with sales of Shares and
(b) for use by the Distributor in rendering service to the Fund, including
paying and financing the payment of sales commissions, service fees, and other
costs of distributing and selling Shares 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 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 (a) sales commissions (particularly
those paid or financed with payments received hereunder) and (b) service fees
received hereunder 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, respectively. 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 reductions as provided below in this
paragraph 2, the Series periodically, as determined by the Fund's Board of
Trustees (in the manner contemplated in paragraph 11), shall pay to the
Distributor fees (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. Payments will be based on Shares
outstanding during any such period. Shares outstanding include Shares
1
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 Series may pay the Distributor hereunder. Such determinations
by the Board of Trustees shall be made by votes of the kind referred to in
paragraph 11 of this Plan. The service fees mentioned in this paragraph are for
the purposes mentioned in clause (b) (ii) of paragraph 1 of this Plan and the
distribution fees mentioned in this paragraph are for the purposes mentioned in
clause (b) (i) of paragraph 1 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. ("NASD") 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 Series to engage directly or indirectly in financing any
activity which is primarily intended to result in the sale of Shares including,
but not limited to: (a) paying and financing the payment of commissions or other
payments relating to selling or servicing efforts and (b) paying interest,
carrying, or any other financing charges on any unreimbursed distribution or
other expense incurred in a prior fiscal year of the Series whether or not such
charges and unreimbursed distribution or other expense are determined to be a
legal obligation of the Series, in whole or in part, by the Fund's Board of
Trustees. The Fund's Board of Trustees (in the manner contemplated in paragraph
11 of this Plan) shall approve the timing, categories and calculation of any
payments under this paragraph 3.
4.1. The Series will pay each person which has acted as Distributor of
Shares its Allocable Portion (as such term is defined in paragraphs 13.1 through
13.3) of the distribution fees with respect to Shares of the Series in
consideration of its services as principal underwriter for the Shares of the
Fund. The distribution agreement pursuant to which a person acts or acted as
principal underwriter of the Shares is referred to as the "Applicable
Distribution Agreement". Such person shall be paid its Allocable Portion of such
distribution fees notwithstanding such person's termination as Distributor of
the Shares, such payments to be changed or terminated only (i) as required by a
change in applicable law or a change in accounting policy adopted by the
Investment Companies Committee of the AICPA and approved by FASB that results in
a determination by the Fund's independent accountants that any sales charges in
respect of such Fund, which are not contingent deferred sales charges and which
are not yet due and payable, must be accounted for by such Fund as a liability
in accordance with GAAP, each after the effective date of this Plan and
restatement; (ii) if in the sole discretion of the Board of Trustees, after due
consideration of such factors as they considered relevant, including the
transactions contemplated in any purchase and sale agreement entered into
between the Fund's Distributor and any commission financing entity, the Board of
Trustees determines (in the manner contemplated in paragraph 12), in the
exercise of its fiduciary duty, that this Plan and the payments thereunder must
be changed or terminated, notwithstanding the effect this
2
action might have on the Fund's ability to offer and sell Shares; or (iii) in
connection with a Complete Termination of this Plan, it being understood that
for this purpose a Complete Termination of this Plan occurs only if this Plan is
terminated and the Fund has discontinued the distribution of Shares or other
back-end load or substantially similar classes of shares; it being understood
that such does not include Class C shares, I.E., those sold with a level load.
The services rendered by a Distributor for which that Distributor is entitled to
receive its Allocable Portion of the distribution fee shall be deemed to have
been completed at the time of the initial purchase of the Shares (as defined in
the Applicable Distribution Agreement) (whether of that Fund or another fund)
taken into account in computing that Distributor's Allocable Portion of the
distribution fee.
4.2. The obligation of the Series to pay the distribution fee shall
terminate upon the termination of this Plan in accordance with the terms hereof.
4.3. The right of a Distributor to receive payments hereunder may be
transferred by that Distributor (but not the distribution agreement itself or
that Distributor's obligations thereunder) in order to raise funds which may be
useful or necessary to perform its duties as principal underwriter, and any such
transfer shall be effective upon written notice from that Distributor to the
Fund. In connection with the foregoing, the Series is authorized to pay all or
part of the distribution fee and/or contingent deferred sales charges with
respect to Shares (upon the terms and conditions set forth in the then current
Fund prospectus) directly to such transferee as directed by that Distributor.
4.4. As long as this Plan is in effect, the Fund shall not change the
manner in which the distribution fee is computed (except as may be required by a
change in applicable law or a change in accounting policy adopted by the
Investment Companies Committee of the AICPA and approved by FASB that results in
a determination by the Fund's independent accountants that any distribution fees
which are not yet due and payable, must be accounted for by such Fund as a
liability in accordance with GAAP).
5. 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.
6. 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. Over the long-term the expenses incurred by the
Distributor for engaging directly or indirectly in financing any activity which
is primarily intended to result in the sale of Shares are likely to be greater
then the distribution fees receivable by the Distributor hereunder.
Nevertheless, there exists the possibility that for a short-term period the
Distributor may not have a sufficient amount of such expenses to warrant
reimbursement by receipt of such distribution fees.
3
Although the Distributor undertakes not to make a profit under this Plan, the
Plan will be considered a compensation plan (i.e. distribution fees will be paid
regardless of expenses incurred) in order to avoid the possibility of the
Distributor not being able to receive such distribution fees because of a
temporary timing difference between its incurring such expenses and the receipt
of such distribution fees.
7. Neither this Plan nor any other transaction between the Fund and the
Distributor, or any successor or assignee thereof, 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.
8. 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; 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.
9. 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.
10. 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.
11. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 10 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
4
make all determinations necessary or advisable for its administration.
12. 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.
13.1. For purposes of this Plan, the Distributor's "Allocable Portion" of
the distribution fee shall be 100% of such distribution fees unless or until the
Fund uses a principal underwriter other than the Distributor. Thereafter the
Allocable Portion shall be the portion of the distribution fee attributable to
(i) Shares of the Fund sold by the Distributor before there is a new principal
underwriter, plus (ii) Shares of the Fund issued in connection with the exchange
of Shares of another Fund in the Lord, Xxxxxx Family of Funds, plus (iii) Shares
of the Fund issued in connection with the reinvestment of dividends and capital
gains.
13.2. The Distributor's Allocable Portion of the distribution fees and the
contingent deferred sales charges arising with respect to Shares taken into
account in computing the Distributor's Allocable Portion shall be limited under
Article III, Sections 26(b) and (d) or other applicable regulations of the NASD
as if the Shares taken into account in computing the Distributor's Allocable
Portion themselves constituted a separate class of shares of the Fund.
13.3. The services rendered by the Distributor for which the Distributor
is entitled to receive the Distributor's Allocable Portion of the distribution
fees shall be deemed to have been completed at the time of the initial purchase
of the Shares (or shares of another Fund in the Lord Xxxxxx Family of Funds)
taken into account in computing the Distributor's Allocable Portion. In
addition, the Fund will pay to the Distributor any contingent deferred sales
charges imposed on redemption of Shares (upon the terms and conditions set forth
in the then current Fund prospectus) taken into account in computing the
Distributor's Allocable Portion of the distribution fees. Notwithstanding
anything to the contrary in this Plan, the Distributor shall be paid its
Allocable Portion of the distribution fees regardless of the Distributor's
termination as principal underwriter of the Shares of the Fund, or any
termination of this Agreement other than in connection with a Complete
Termination (as defined in paragraph 4.1) of the Plan as in effect on the date
of execution of Distribution Agreement with the new Distributor. Except as
provided in paragraph 4.1 and in the preceding sentence, the Fund's obligation
to pay the distribution fees to the Distributor shall be absolute and
unconditional and shall not be subject to any dispute, offset, counterclaim or
defense whatsoever (it being understood that nothing in this sentence shall be
deemed a waiver by the Fund of its right separately to pursue any claims it may
have against the Distributor and to enforce such claims against any assets of
the Distributor (other than the assets represented by the Distributor's rights
to be paid its Allocable Portion of the distribution fees and to be paid the
contingent deferred sales charges).
5
14. 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.
6
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 MUNICIPAL INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Vice President & Assistant Secretary
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO. LLC
--------------------------------
Managing Member
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
A Member
7
RULE 00x-0 XXXXXXXXXXXX XXXX XXX XXXXXXXXX - XXXX XXXXXX MUNICIPAL INCOME TRUST
LORD XXXXXX HIGH YIELD MUNICIPAL BOND FUND - CLASS C SHARES
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of December 30,
2004 by and between LORD XXXXXX MUNICIPAL INCOME TRUST, a Delaware business
trust (the "Trust"), on behalf of the LORD XXXXXX HIGH YIELD MUNICIPAL BOND
FUND, (the "Fund"), and LORD XXXXXX DISTRIBUTOR LLC, a New York limited
liability company (the "Distributor").
WHEREAS, the Trust 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 Fund's Class C shares of beneficial interest
(the "Shares") pursuant to the Distribution Agreement between the Trust and the
Distributor.
WHEREAS, the Trust desires to adopt a Distribution Plan and Agreement
for the Fund's Shares (the "Plan") 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.
WHEREAS, the Trust'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 Trust 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 exchange for Class C shares of another
series of the Trust or another Lord Xxxxxx-sponsored fund (or for shares of a
fund acquired by the Trust) will be credited with the time held from the initial
1
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 Trust 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. ("NASD") 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 Trust'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 Trust. 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 Trust, 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 Trust'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 Trust 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 Trust, except as otherwise
may be provided in the Act.
7. The Distributor shall give the Trust 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
2
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 Trust or any
of its shareholders, creditors, directors or officers; provided however, that
nothing herein shall be deemed to protect the Distributor against any liability
to the Trust or the Trust'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 Trust, including the vote of a majority of the
Trustees who are not "interested persons" of the Trust 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 Shares and each material amendment must be approved by a vote of the
Board of Trustees of the Trust, including the vote of a majority of the Trustees
who are not "interested persons" of the Trust 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 Trust, including the vote of a majority of
the Trustees who are not "interested persons" of the Trust 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 Trust 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 Trust who are
not "interested persons" of the Trust and have no Trustees 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 Trust who are not "interested persons" of
the Trust 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.
13. The obligations of the Trust and the Fund, including those
imposed hereby, are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees,
3
shareholders, officers, employees or agents of the Trust or Fund individually,
but are binding only upon the assets and property of the Trust or Fund. Any and
all personal liability, either at common law or in equity, or by statute or
constitution, of every such Trustee, shareholder, officer, employee or agent for
any breach of the Trust or Fund of any agreement, representation or warranty
hereunder is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement by the Trust.
IN WITNESS WHEREOF, each of the parties has 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 MUNICIPAL INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Vice President & Assistant Secretary
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO. LLC
--------------------------------
Managing Member
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
A Member
4
RULE 00x-0 XXXXXXXXXXXX XXXX XXX XXXXXXXXX - XXXX XXXXXX MUNICIPAL INCOME TRUST
LORD XXXXXX HIGH YIELD MUNICIPAL BOND FUND - CLASS P SHARES
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of December 30,
2004 by and between LORD XXXXXX MUNICIPAL INCOME TRUST, a Delaware business
trust (the "Trust"), on behalf of the LORD XXXXXX HIGH YIELD MUNICIPAL BOND
FUND, (the "Fund"), and LORD XXXXXX DISTRIBUTOR LLC, a New York limited
liability company (the "Distributor").
WHEREAS, the Trust 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 Trust's shares of
beneficial interest, including the Fund's Class P shares (the "Shares"),
pursuant to the Distribution Agreement between the Trust and the Distributor.
WHEREAS, the Trust 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.
WHEREAS, the Trust'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 Trust 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 Trust or another Lord Xxxxxx-sponsored fund (or
for shares of a fund acquired by the Trust) 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.
1
The Board of Trustees of the Trust 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 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 NASD Regulation, Inc. ("NASD") 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 Trust's Board of Trustees
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 Trust'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 Trust. 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 Trust pay such fees in the future.
5. The Secretary of the Trust, 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 Trust'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 Trust 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 Trust, except as otherwise
may be provided in the Act.
7. The Distributor shall give the Trust 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
2
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 Trust, the Fund or any of the shareholders,
creditors, Trustees or officers of the Trust; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Trust 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 Trust, including the vote of a majority of the
Trustees who are not "interested persons" of the Trust 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 Trustees
of the Trust, including the vote of a majority of the Trustees who are not
"interested persons" of the Trust 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 Trust, including the vote of a majority of
the Trustees who are not "interested persons" of the Trust 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 Trust 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 Trust who are
not "interested persons" of the Trust 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 Trust who are not "interested persons" of
the Trust 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.
3
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 MUNICIPAL INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Vice President & Assistant Secretary
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO. LLC
------------------------
Managing Member
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
A Member
4
