EXHIBIT 99.B15
Rule 12b-1 Distribution Plan and Agreement
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of the day of
December 1995 by and between LORD XXXXXX INVESTMENT TRUST, a Delaware business
trust (the "Company") on behalf of its Lord Xxxxxx U.S. Government Securities
Series (the "Fund Series"), and LORD, XXXXXX & CO., a New York partnership (the
"Distributor").
WHEREAS, the Company is an open-end management investment company and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act"); and the Distributor acts as the Company's distributor pursuant to the
Distribution Agreement between the Company and the Distributor, dated the 20th
day of October, 1993.
WHEREAS, the Company desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Fund Series with the Distributor, as permitted by Rule
12b-1 under the Act, pursuant to which the Fund Series may make certain payments
to the Distributor for payment to broker-dealers with respect to the
distribution of shares of the Fund Series.
WHEREAS, the Company's Trustees have determined that there is a
reasonable likelihood that the Plan will benefit the Fund Series and its
shareholders.
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 Company hereby authorizes the Distributor to enter into
distributor's agreements (the "Distributor's Agreements") with independent
broker-dealers appointed by the Distributor providing for the payment to such
broker-dealers of fees which the Distributor receives from the Fund Series in
order to provide incentives to the broker-dealers (i) to sell shares of the Fund
Series and (ii) to maintain Fund Series shareholder accounts and/or to provide
Fund Series shareholders with service, including shareholder liaison services
such as responding to customer inquires and providing information on their
investments. The Plan goes into effect (the "effective date") on the first day
of the calendar quarter subsequent to the Fund Series' net assets reaching $50
million, with respect to all accounts, including those existing at the time and
covered by Distributor's Agreements, except with respect to certain accounts for
which tracking data is not available. The Distributor may, from time to time,
waive or defer payment of fees payable at the time of sale of shares provided
for under paragraph 2 hereof.
2. The Fund Series shall pay to the Distributor pursuant to this Plan
(i) fees for services at an annual rate not to exceed .25 of 1% of the average
daily net asset value of the shares of the Fund Series, sold from the
commencement of the Fund Series' public offering, and held in each account
covered by the Distributor's Agreement; and (ii) with respect to sales at the
breakpoint of $1 million or more, a one-time distribution fee of 1% of the net
asset value of shares sold on or after the effective date. The fees mentioned in
(i) and (ii) of this paragraph are for the purposes mentioned in (ii) and (i),
respectively, of paragraph 1 of this Plan. In determining whether a shareholder
has made an investment of the above breakpoint, the investment may be deemed to
include the value of other shares of the Fund Series and the value of the shares
of any other Lord Xxxxxx managed fund or series that has a Rule 12b-1 plan
deemed comparable to this Plan for this purpose by the Trustees of the Company
(a "Lord Xxxxxx Rule 12b-1 Fund") which the shareholder could include within the
right of accumulation or statement of intention privileges described in the
Company's Prospectus as in effect at such time. Such fees shall be calculated
and paid quarterly, subject to change by the Trustees of the Company in the
manner contemplated in paragraph 11 of this Plan.
3. If any shares as to which a distribution fee described in paragraph
2 has been paid are redeemed out of the Lord Xxxxxx family of funds on or before
the end of the twenty-fourth month after the month in which the shares were
purchased (the "twenty-fourth-month end"), the shareholder will be required to
pay the Fund Series involved a contingent deferred reimbursement charge of 1% of
the lesser of the cost or then net asset value of the shares; provided, however,
that such reimbursement charge shall not apply to redemptions by tax qualified
retirement plans under Section 401 of the Internal Revenue Code due to plan
loans, hardship withdrawals, death, retirement or separation from service with
respect to plan participants. If such shares in the Fund Series are exchanged
for shares of another Fund series or of another Lord Xxxxxx Rule 12b-1 Fund and
the shares of the other fund or series are later redeemed out of the family
before the twenty-fourth-month end, the 1% contingent deferred reimbursement
charge will be collected by the other Lord Xxxxxx Rule 12b-1 Fund at the time of
redemption and will be paid to the Fund Series. Effective the date hereof, the
Fund Series also will collect such a charge for another Lord Xxxxxx Rule 12b-1
Fund in a similar situation. Adoption of this provision in similar Plans by the
other Lord Xxxxxx Rule 12b-1 Funds and their shareholders represents the
agreement of such funds to collect such charges from their shareholders. The
timing, categories and calculation of this charge may be changed by the
Company's Trustees in the manner contemplated in paragraph 11 of this Plan.
4. Subject to the limits in paragraph 2, the Distributor may use such
amounts received from the Fund Series to finance any activity which is primarily
intended to result in the sale of shares of the Fund Series including, but not
limited to, commissions or other payments relating to selling or servicing
efforts, provided: (i) that the Company's Trustees (in the manner contemplated
in paragraph 11 of this Plan) shall have approved the timing, categories and
calculation of such payments, and (ii) the Distributor shall neither retain any
portion of such payments, nor use such payments for its obligations under the
above-mentioned Distribution Agreement.
5. The value of the net assets of the Fund Series shall be determined
as provided in the Declaration of Trust of the Company. If the Distributor
waives all or a portion of fees which are to be paid by the Fund Series
hereunder, the Distributor shall not be deemed to have waived its rights under
this Agreement to have the Fund Series pay such fees in the future.
6. 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 Fund Series hereunder and shall provide to the Company's
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.
7. 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 Company are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, trustees, officers, partners, or other representatives of the
Distributor are or may be "interested persons" of the Company, except as
otherwise may be provided in the Act.
8. The Distributor shall give the Company 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 Company, the Fund Series or any
of the shareholders, creditors, Trustees, or officers of the Company; provided
however, that nothing herein shall be deemed to protect the Distributor against
any liability to the Company or the Fund 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 obligation and
duties hereunder.
9. This Agreement shall be 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 Trustees of the Company, including the vote of a majority of the Trustees
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to the 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 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 Trustees of the Company, including the vote of a majority of the
Trustees who are not "interested persons" of the Company and who have no direct
or indirect financial interest in the operation of this Plan or in any agreement
related to the 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 forgoing paragraph 10 may be adopted by a vote of the
Trustees of the Company, including the vote of a majority of the Trustees who
are not "interested persons" of the Company and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Trustees of the Company may, by such a vote, interpret this Plan
and make all determinations necessary or advisable for its administration.
12. The 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 Company who are not
"interested persons" of the Company 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 vote of a majority of the outstanding voting securities of the Series.
This Plan shall automatically terminate in the event of its assignment. 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 Company, 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 Company
individually, but are binding only upon the assets and property of the Company.
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 Company 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 Company.
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:
Chairman
ATTEST:
Assistant Secretary
LORD, XXXXXX & CO.
By:
Partner
