Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx
Xxxx Xxxxxx Securities Trust - Alpha Series
Class B Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of December
12, 1997 by and between LORD XXXXXX SECURITIES TRUST, a Delaware business
trust (the "Fund"), on behalf of the Alpha Series (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
capital stock including the Fund's Class B shares (the "Shares") pursuant to
the Distribution Agreement between the Fund and the Distributor, dated as of
the date hereof, and
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.
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Payments will be based on Shares outstanding during any such period. Shares
outstanding include Shares 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 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 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 action might have on the Fund's ability to
offer and sell Shares; or (iii) in connection with a
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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 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.
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.
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
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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 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
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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 National Association of Securities Dealers, Inc. (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).
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.
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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 SECURITIES TRUST
By: /s/ XXXXXX XXXXX
----------------
Vice President
ATTEST:
/s/ XXXXX XXXXXX
----------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
-----------------------
Managing Member
By: /s/ XXXX X. XXXXXXX
-----------------------
A Partner
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Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Securities Trust -Alpha Series
Class C Shares
-------------------------------------------------
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of May 19,
1997 by and between LORD XXXXXX SECURITIES TRUST, a Delaware business trust
(the "Fund"), on behalf of its Alpha Series (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 C shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor,
dated as of the date hereof, and
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 Series 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 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 distribution and
service fees which the Distributor receives from the Series 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 Series shall pay to the Distributor fees (I) at the time of
sale of Shares (A) for services, not to exceed .25 of 1% of the net asset
value of the Shares sold and (B) for distribution, not to exceed .75 of 1% of
the net asset value of the Shares sold; and (II) at each quarter-end after
the first anniversary of 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 for one year or more 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 one year or more. For purposes of clause (ii) 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 mentioned in
clause (ii) have been outstanding and (B) payments will be based on Shares
outstanding during any such quarter. Sales in clause (i) above exclude Shares
issued for reinvested dividends and distributions, and Shares outstanding in
clause (ii) above include Shares issued for reinvested dividends and
distributions which have been outstanding for one year or more. 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 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 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 Series 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 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. Without limiting the generality of the foregoing, the
Distributor may apply up to 10 of the total basis points authorized by the
Fund's Board of Trustees designated as the distribution fee referred to in
clause (ii)(b) of paragraph 2 to expenses incurred by the Distributor if such
expenses are primarily intended to result in the sale of Shares. The Fund'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 Fund. If the
Distributor waives all or a portion of fees which are to be paid by the
Series 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 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 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.
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, the
Series or any of the shareholders, creditors, directors 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 Series' 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.
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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 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 Series 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.
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 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 by (A) the vote of a majority of the trustees of the
Fund who are not "interested persons" of the Fund 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 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.
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.
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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 SECURITIES TRUST
By: /s/ XXXXXX X. XXXXX
-------------------
Xxxxxx X. Xxxxx
Vice President
ATTEST:
/s/ XXXXX XXXXXX
----------------
Xxxxx Xxxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
-----------------------
Managing Member
By: /s/ XXXXXXX X. XXXXXX
-----------------------
Xxxxxxx X. Xxxxxx
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Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Securities Trust -- Pension Class
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of March 9,
1999 by and between LORD XXXXXX SECURITIES TRUST, a Delaware business trust,
(the "Fund"), on behalf of its Pension Class (the "Class") of its
International Series (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 Class, pursuant to the Distribution
Agreement between the Fund and the Distributor, dated July 12, 1996, and
WHEREAS, each Series desires to adopt a Distribution Plan and
Agreement (the "Plan") for the Class with the Distributor, as permitted by
Rule 12b-1 under the Act, pursuant to which the Class 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 Trustees has determined that
there is a reasonable likelihood that the Plan will benefit the Class 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 the Class 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 Class 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 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 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 clause (a) and (b) above include Shares
issued for reinvested dividends and distributions which have been outstanding
for the quarter or more.
The Board of Trustees of the Fund 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 Class
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 Conducts Rules 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 Class 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 Class 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. Without limiting the generality of the
foregoing, the Distributor may apply amounts authorized by the Fund'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 Fund'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 of Trust of the Fund. If the Distributor waives
all or a portion of fees which are to be paid by the Class hereunder, the
Distributor shall not be deemed to have waived its rights under this
Agreement to have the Class 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 Class 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.
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, except as
otherwise may be provided in the Act.
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7. The Distributor shall give each Series 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 a Series, the
Class 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 Class' 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 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 Class 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.
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 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 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.
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 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 SECURITIES TRUST
By: /s/ XXXX X. XXXXXXX
-------------------
Xxxx X. Xxxxxxx
Vice President
ATTEST:
/s/ XXXXXXXX X. XXXXXX
Xxxxxxxx X. Xxxxxx
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
-----------------------
By: /s/ XXXX X. XXXXXXX
-----------------------
A Partner
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