Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx U.S. Government Securities Money Market Fund, Inc.
Class C Shares
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RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 1,
2001 by and between LORD XXXXXX U.S. GOVERNMENT SECURITIES MONEY MARKET 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 Class C shares of
capital stock (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 its 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 (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
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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 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 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 Directors of the Fund 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 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. 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 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 (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 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.
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 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
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.
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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 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 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 its
outstanding 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. 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 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.
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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 U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
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Vice President
ATTEST:
/s/ XXXXXXXX X. XXXXXX
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Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By: /s/ XXXX X. XXXXXXX
