DISTRIBUTION PLAN
UNDER RULE 12b-1
THIS DISTRIBUTION PLAN (the "Plan") under Rule 12b-1 of the Investment
Company Act of 1940 (the "1940 Act") is made as of the 1st day of October, 1996
by and between IAA TRUST TAXABLE FIXED INCOME SERIES FUND, INC., (the "Fund"), a
Maryland corporation, on behalf of the IAA TRUST LONG-TERM BOND SERIES, (the
"Series") and FUND/PLAN BROKER SERVICES, INC., (the "Distributor") a
Pennsylvania corporation.
WITNESSETH:
WHEREAS, the Fund is engaged in the business as an open end management
investment company and is registered as such under the 1940 Act; and
WHEREAS, the Fund is authorized to issue any number of separate series as
deemed appropriate by the Fund; and
WHEREAS, it has been proposed the Series make payments to the Distributor
out of the Series' net assets for distribution services rendered to the Series;
and
WHEREAS, the Series intends to distribute its shares ("shares") in
accordance with Rule 12b-1 under the 1940 Act, and desires to adopt this Plan
pursuant to such Rule; and
WHEREAS, the Series' Board of Directors, in considering whether the Series
should adopt and implement a written plan, has evaluated such information as it
deemed necessary to an informed determination as to whether a written plan
should be adopted and implemented and has considered such pertinent factors as
it deemed necessary to form the basis for a decision to use assets of the Series
for such purposes and has determined that there is a reasonable likelihood that
adoption and implementation of a plan will benefit the Series and its
shareholders;
NOW, THEREFORE, the Series hereby adopts this Plan in accordance with Rule
12b-1 under the 1940 Act, and the parties hereto agree to the following terms
and conditions of the Plan:
1. Distribution Activities. The Series will reimburse the Distributor for
costs and expenses incurred in connection with the distribution and marketing of
shares of the Series and servicing of Series shareholders. Such Distribution and
servicing costs and expenses may include (1) printing and advertising expenses;
(2) payments to employees or agents of the Distributor who engage in or support
distribution of the Series' shares, including salary, commissions, travel and
related expenses; (3) the costs of preparing, printing and distributing
prospectuses and reports to prospective investors; (4) expenses of organizing
and conducting sales seminars; (5) expenses related to selling and servicing
efforts, including processing new account applications, transmitting customer
transaction information to the Series' transfer agent and answering questions
of shareholders; (6) payments of fees to one or more broker-dealers (which may
include the Distributor
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itself), financial institutions or other industry professionals, such as
investment advisers, accountants and estate planning firms (severally, a
"Service Organization"), in respect of the average daily value of the Series'
shares owned by shareholders for whom the Service Organization is the dealer of
record or holder of record, or owned by shareholders with whom the Service
Organization has a servicing relationship; (7) costs and expenses incurred in
implementing and operating the Plan; and (8) such other similar services as the
Series' Board of Directors determines to be reasonably calculated to result in
the sale of Series shares.
2. Compensation. The Distributor will receive a fee monthly for such
costs, expenses or payments at an annual rate of up to but not more than 0.25%
of the average daily net assets of the Series. In the event the Plan is
terminated as herein provided, the Series shall have no liability for expenses
that were not reimbursed as of the date of termination.
3. Term and Termination.
(a) This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Series," and upon
approval by a vote of the Directors of the Series and of those Directors
who have no direct or indirect financial interest in the Plan or in any
agreements related to the Plan (the "disinterested directors") cast in
person at a meeting called for the purpose of voting on the Plan.
(b) This Plan shall remain in effect until September 30, 1997, and from
year to year thereafter; provided, however, that such continuance is
subject to approval annually by a vote of the Directors of the Series and
of the disinterested directors cast in person at a meeting called for the
purpose of voting on this Plan. If such annual approval is not obtained,
the Plan shall expire twelve (12) months after the date of the last
approval. This Plan may be amended at any time by the Board of Directors;
provided that (a) any amendment to increase materially the amount to be
spent for the services described herein shall be effective only upon
approval by a vote of a majority of the outstanding shares of the Series
and (b) any material amendments of this Plan shall be effective only upon
approval in the manner provided in the first sentence in this paragraph.
(c) This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the disinterested directors or by a vote
of a majority of the outstanding voting securities of the Series, and
shall automatically terminate in the event of its assignment.
4. Reporting Requirements.
(a) the Distributor shall provide the Series, for review by the Series'
Board of Directors, and the Directors shall review, at least quarterly, a
written report of the amounts expended pursuant to the Plan and the
purposes for which such expenditures were made. Such written report shall
be in a form satisfactory to the Series and shall supply all information
necessary for the Board to discharge its responsibilities, including its
responsibilities pursuant to Rule 12b-1.
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(b) The Series or the Investment Adviser to the Series shall, from time to
time, furnish or otherwise make available to the Distributor such
financial reports, proxy statements and other information relating to the
business and affairs of the Series as the Distributor may reasonably
require in order to discharge its duties and obligations hereunder.
5. Selection and Nomination of Directors. While this Plan is in effect,
the selection and nomination of disinterested directors shall be committed to
the discretion of the Directors who are not interested persons.
6. Recordkeeping. The Series shall preserve copies of this Plan, any
related agreements, and all reports made pursuant to Section 11 hereof for a
period of not less than six years from the date of this Plan or any such
agreement or report, as the case may be, the first two years in an easily
accessible place.
7. Non-Exclusivity Clause. Nothing herein contained shall limit the
freedom of the Distributor or an "affiliated person" of the Distributor, to act
as distributor for other persons, firms or corporations or to engage in other
business activities.
8. Limit of Liability.
(a) Neither the Distributor nor any of its employees or agents is
authorized to make any representations concerning the shares except those
contained in the then current Prospectus or Statement of Additional
Information of the Series.
(b) The Distributor shall use its best efforts in rendering services
hereunder, but in the absence of willful misfeasance, bad faith,
negligence or reckless disregard of its obligations hereunder, the
Distributor shall not be liable to the Series or any of its shareholders
for any error of judgment or mistake of law of for any act or omission or
for any losses sustained by the Series or its shareholders resulting
therefrom.
(c) Nothing herein contained shall be deemed to require the Series to take
any action contrary to its Articles of Incorporation or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or
by which is bound, or relieve or deprive the Board of Directors of Series
of the responsibility for and control of the affairs the Series.
9. Applicable Law. The provisions hereof shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
shall be construed in accordance with the laws of the State of Maryland and the
applicable provisions of the 1940 Act. To the extent the applicable law of the
State of Maryland or any of the provisions herein conflicts with the applicable
provisions of the 1940 Act, the latter shall control.
10. Invalidity. If any provision of this Plan shall be held or made
invalid by a court decision, statute, rule or otherwise the remainder of the
Plan shall be affected thereby.
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11. Definitions. For the purposes of this Plan, the terms "interested
person," "assignment," "affiliated person" and "majority of the outstanding
voting securities" are used as defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be signed
by the respective officers thereunto duly authorized and their respected
corporate seals to be hereunto affixed, as of the day and year first above
written.
IAA TRUST TAXABLE FIXED INCOME SERIES FUND, INC.
By______________________________________________
Title
FUND/PLAN BROKER SERVICES, INC.
By______________________________________________
Title
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