EXHIBIT 23(M)(3)
DISTRIBUTION SERVICES AGREEMENT
(RULE 12B-1 PLAN)
Forward Emerald Technology Fund
CLASS A SHARES
This Distribution Services Agreement (the "Plan") is adopted
by the Forward Funds (the "Trust"), a Delaware statutory trust organized under
the Investment Company Act of 1940 (the "Act") as an open-end mutual fund, with
respect to the distribution of its Class A Shares of the Forward Emerald
Technology Fund (the "Fund") by Citco Mutual Fund Distributors, Inc., the
principal underwriter and distributor for the Fund (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is an open-end management company of which
the Fund is a series; and
WHEREAS, it has been proposed that the Fund make payments to
the Distributor out of the Fund's net assets for distribution services rendered
to the Fund; and
WHEREAS, the Fund intends to distribute its Shares in
accordance with Rule 12b-1 under the Act and desires to adopt a distribution
plan pursuant to such rule; and
WHEREAS, the Trust's Board of Trustees in considering whether
the Fund should adopt and implement a written plan and annually thereafter,
evaluated such information as it deemed necessary to make an informed
determination as to whether a written plan should be adopted and implemented and
has considered such pertinent factors as it deemed necessary to form the basis
for a decision to use assets of the Fund for such purposes and has determined
that there is a reasonable likelihood that adoption and implementation of a plan
will benefit the Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts a distribution plan in
accordance with Rule 12b-1 under the Act, having the following terms and
conditions:
1. The Distributor shall pay all costs and expenses incurred
in connection with (i) advertising and marketing the Shares; (ii) payments of
servicing fees to one or more securities dealers (which may include the
Distributor itself but only to the extent necessary to reimburse the Distributor
for its costs and expenses incurred in connection with such servicing),
financial institutions or other industry professionals, such as investment
advisers, accountants, and estate planning firms (individually, a "Service
Organization"), in respect of the average daily net asset value of the Shares
owned by shareholders for whom the Service Organization is the dealer of record
or holder of record and with whom the Service Organization has a servicing
relationship pursuant to the Fund's related Rule 12b-1 Service Agreement; (iii)
printing any Prospectuses, Statements of Additional Information, or reports
prepared for the Distributor's use in connection with the offering of the Fund's
Shares (except those used for regulatory purposes or for distribution to
existing shareholders); and (iv) with implementing and operating this Plan.
2. Each of the Trust's respective series will reimburse the
Distributor as appropriate for its out-of-pocket costs and expenses described in
Section (1) on a monthly basis at an annual rate of not more than 0.50% of such
series net assets as of the close of the last business day of the month. To
determine the maximum amount of the costs and expenses reimbursable hereunder,
the value of the Fund's net assets shall be computed in the manner specified in
the Fund's Prospectus and/or Statement of Additional Information for the
determination of the net asset value of the Shares. The Distributor may incur
additional unreimbursed costs and expense in connection with the distribution of
Shares and may utilize its capital or any other resources to pay for such costs
and expenses.
3. The Fund shall, from time to time, furnish or otherwise
make available to the Distributor such financial reports, proxy statements, and
other information relating to the business and affairs of the Fund as the
Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
4. Nothing herein contained shall be deemed to require the
Trust to take any action contrary to its Declaration of Trust, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or relieve or deprive the Board of Trustees of the Trust of the
responsibility for and control of the conduct of the affairs of the Trust.
5. This Plan shall become effective when executed following
approval by a vote of at least a majority of the outstanding voting securities
of the Fund and by a vote of the Trustees of the Trust and of those Trustees who
are not interested persons of the Trust and who have no direct or indirect
financial interest in the Plan or in any agreements relating to the Plan (the
"Independent Trustees), cast in person at a meeting called for the purpose of
voting on the Plan.
6. This Plan shall remain in effect until December 31, 2005
and for successive annual periods of twelve months each thereafter; provided,
however, that such continuance is subject to approval annually by a vote of the
Trustees of the Trust and of the Independent Trustees cast in person at a
meeting called for the purpose of voting on this Plan. If such annual approval
is not obtained, the Plan shall expire twelve months after the date of the last
approval. This Plan may be amended at any time by the Board of Trustees;
provided that (a) any amendment to increase materially the amount to be spent
for the services described herein shall be effective only upon approval by a
vote of a majority of the outstanding Shares, and (b) any material amendment of
this Plan shall be effective only upon approval in the manner provided in the
first sentence of this paragraph.
7. This Plan may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Independent Trustees or
by a vote of a majority of the outstanding voting securities of Class A Shares
of the Fund, and shall automatically terminate in the event of its assignment.
8. Nothing herein contained shall prohibit the Distributor or
any "affiliated person" of the Distributor to act as distributor for other
persons, firms, or corporations or to engage in other business activities.
9. Neither the Distributor nor any of its employees or agents
is authorized to make any representations concerning the Shares except those
contained in the Prospectus, Statement of Additional Information, or such
supplemental sales literature as the Trust may approve.
10. The Distributor shall be required to use its best efforts
in rendering distribution services but shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with matters to which the Trust's distribution agreement with the Distributor
relates except a loss resulting from willful misfeasance, bad faith, or gross
negligence on the part of the Distributor in the performance of its duties as
Distributor of from reckless disregard by the Distributor of its obligations and
duties under such distribution agreement.
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11. The Distributor shall provide the Trust, for review by the
Trust's Board of Trustees, and the Directors shall review, at least quarterly, a
written report of the amounts expended pursuant to this Plan and the purposes
for which such expenditures were made. Such written report shall be in a form
satisfactory to the Trust and shall supply all information necessary for the
Board to discharge its responsibilities, including its responsibilities pursuant
to Rule 12b-1.
12. While this Plan is in effect, the selection and nomination
of Independent Trustees shall be committed to the discretion of such Independent
Trustees.
13. The Trust shall preserve copies of this Plan, any related
agreements, and all reports made pursuant to Section 11 hereof for a period of
not less than six years from the date of this Plan, or any such agreement or
report, as the case may be, the first two years, in an easily accessible place.
14. In the event that the Trust establishes additional classes
of shares evidencing interests in other series with respect to which it desires
the Plan to apply, it shall notify the Distributor in writing. If the
Distributor is willing to act hereunder it shall notify the Trust in writing
whereupon such series shall become a series hereunder and the compensation
payable by such new series to the Distributor will be as agreed in writing at
the time. Payments made by a series to the Distributor pursuant to this Plan
must be to reimburse the Distributor for reimbursable costs and expenses
incurred in connection with the distribution of such series shares only.
15. If any provision of this Plan shall be held or made
invalid by a court decision statute, rule or otherwise, the remainder of the
Plan shall not be affected thereby.
16. For the purposes of this Plan, the terms "interested
persons," "assignment," "affiliated person" and "majority of the outstanding
voting securities" are used as defined in the Act.
IN WITNESS WHEREOF, this Plan has been executed by the Trust
effective as of ______________, 2005.
FORWARD FUNDS
By:
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President
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