Exhibit 7(a)
Dract--February 22, 1996
Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Global Fund, Inc. -- Class C Shares
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RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 12, 1996 by and
between LORD XXXXXX GLOBAL 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, 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 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 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 (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 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
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 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 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. 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 Directors 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 Directors (in
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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 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, 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 or its shareholders, or by 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 its
stockholders 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
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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
voting securities 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 GLOBAL FUND, INC.
By:
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Chairman
ATTEST:
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Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By:
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