Form of Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Investment Trust -- Class A Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of October
20, 1993 by and between LORD XXXXXX INVESTMENT TRUST, a Delaware business Trust
corporation (the "Trust"), 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 Class
A shares of capital stock (the "Shares") pursuant to the Distribution Agreement
between the Trust and the Distributor, dated as of the date hereof (the
"Distribution Agreement").
WHEREAS, the Trust 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 Trust 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 Plan will succeed a Rule 12b-1 Distribution Plan
and Agreement between the Trust and Lord, Xxxxxx & Co. ("Lord Xxxxxx"), an
affiliate of the Distributor.
WHEREAS, the Trust's Board of Trustees has determined that
there is a reasonable likelihood that the Plan will benefit the Trust 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 Trust 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. No payments shall be made hereunder to any Authorized Institution with
respect to any accounts for which tracking data is not available.
2. The Trust also hereby authorizes the Distributor to use
payments received hereunder from the Trust 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 any payments referred to in the foregoing clause (a) shall
be authorized by the Board of Trustees of the Trust 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 rate applicable at the time under
paragraph 3 of this Plan.
3. The Trust 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, except that service fees payable with respect to Shares that were
initially issued, or are attributable to shares that were initially issued by
the Trust or a predecessor Trust prior to June 1, 1990 shall not exceed .15 of
1% of the average net asset value of such Shares. The Board of Trustees of the
Trust shall from time to time determine the amounts, within the foregoing
maximum amounts, that the Trust 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 Trust. 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 Trust of contingent
deferred reimbursement charges relating to distribution fees paid by the Trust
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 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 (ii) the Trust 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 Articles of Incorporation of the Trust. If the Distributor
waives all or a portion of the fees which are to be paid by the Trust 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 Trust hereunder and shall provide to the Trust'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 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, or other representatives of the Distributor are or
may be "interested persons" of the Trust, except as may otherwise 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 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 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 its 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 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 Trust 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 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.
Amendments to this Plan which do not increase materially the amount to be spent
by the Trust 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 forgoing paragraph 9 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 (a) by 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 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 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 meanings 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 INVESTMENT TRUST
By:_____________________________
President
ATTEST:
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Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By:_____________________________