Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx
Xxxx Xxxxxx Securities Trust
Class C Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of
November 1, 2001 by and between LORD XXXXXX SECURITIES TRUST, a Delaware
business trust (the "Trust"), on behalf of Alpha Series, All Value Fund,
International Series and World Bond-Debenture Series (each, a "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 Class
C shares of beneficial interest (the "Shares") pursuant to the Distribution
Agreements between the Trust and the Distributor, and
WHEREAS, the Trust desires to adopt a revised Distribution
Plan and Agreement for each Fund's Shares (the "Plan") with the Distributor, as
permitted by Rule 12b-1 under the Act, pursuant to which each 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 Trust's Board of Trustees has determined that
there is a reasonable likelihood that the Plan will benefit each 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) a 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, each 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 the Shares outstanding and (b) for
distribution, at an annual rate not to exceed .75 of 1% of the average annual
net asset value of the 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
1
from the initial 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 each 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 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) each 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 each 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 a 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 each 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 no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held
2
accountable for any mistake of law or fact, or for any loss or damage arising or
resulting there from 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 each 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
with respect to each Fund 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 with respect to each Fund 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 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.
3
13. The obligations of the Trust and each Fund, 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 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 by the Trust or
a 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.
4
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 SECURITIES TRUST
By: /s/ XXXXXXXXX X. XXXXXXX
------------------------
Vice President
ATTEST:
/s/ XXXXXXXX X. XXXXXX
----------------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By /s/ XXXX X. XXXXXXX
----------------------
A Partner
5
