Exhibit 99.(m)(iii)
Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Research Fund, Inc. - Lord Xxxxxx America's Value Fund
Class C Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of
December 12, 2001 by and between LORD XXXXXX RESEARCH FUND, INC., a Maryland
corporation (the "Corporation"), on behalf of its LORD XXXXXX AMERICA'S VALUE
FUND, (the "Fund"), and LORD XXXXXX DISTRIBUTOR LLC, a New York limited
liability company (the "Distributor").
WHEREAS, the Corporation 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's Shares desires to adopt a Distribution
Plan and Agreement (the "Plan") for 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 Corporation'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 Corporation 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) 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 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 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. 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 Corporation 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
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 Directors of the
Corporation 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. 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 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. The
Fund's Board of Directors (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 Articles of Incorporation of the Corporation. 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 Corporation, 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
Corporation'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 Corporation 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 Corporation 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 Corporation 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 Corporation or the Corporation'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.
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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 Directors of the Corporation, including the vote of a
majority of the directors who are not "interested persons" of the Corporation
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 Fund hereunder without the vote of a majority of its
outstanding Shares securities and each material amendment must be approved by a
vote of the Board of Directors of the Corporation, including the vote of a
majority of the directors who are not "interested persons" of the Corporation
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 the Fund by a vote of the Board of Directors of the
Corporation, including the vote of a majority of the directors who are not
"interested persons" of the Corporation 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 Corporation 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
Corporation 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 Corporation who are not
"interested persons" of the Corporation 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 RESEARCH FUND, INC. on behalf
of its - LORD XXXXXX AMERICA'S VALUE FUND
By:/s/Xxxxxxxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxx
Vice President
ATTEST:
/s/Xxxxx Xxxxxx
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Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
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Managing Member
By:/s/Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
A Partner
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