Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Investment Trust. -- Class C Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of June 8,
1996 by and between LORD XXXXXX INVESTMENT TRUST., a Delaware business trust
(the "Trust"), 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 capital stock (the "Shares") pursuant to the Distribution Agreement
between the Trust and the Distributor, dated as of the date hereof, and
WHEREAS, the Trust 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 Trust 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
hereof, and
WHEREAS, the Trust's Board of Trustees has determined that
there is a reasonable likelihood that the Plan will benefit the Trust 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 the Trust 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. No
payments shall be made hereunder to any Authorized Institution with respect to
any accounts for which tracking data is not available. 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 Trust 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 Trust (or for
shares of a Trust acquired by the Trust) 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 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 (the "NASD") as the same may be in effect from time to time and (y) the
Trust 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 Trust 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 75 basis points 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 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
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 Trust. If the Distributor
waives all or a portion of fees which are to be paid by the Trust hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Trust 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 the Trust 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
Trustees, Trustees, officers, partners, 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 accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Trust or its stockholders, or by
creditors, Trustees or officers of the Trust; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Trust 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 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 the Trust 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 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 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 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 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.
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 DISTRIBUTOR LLC
By:
