DISTRIBUTION PLAN
UNDER RULE 12b-1
THIS DISTRIBUTION PLAN (the "Plan") under Rule 12b-1 of the Investment
Company Act of 1940 (the "1940 Act") is made as of the 8th day of February, 1993
by and between IAA TRUST ASSET ALLOCATION FUND, INC. (the "Fund"), a Maryland
corporation, and FUND/PLAN BROKER SERVICES, INC., (the "Distributor") a
Pennsylvania corporation.
WITNESSETH:
WHEREAS, the Fund is engaged in the business as an open end management
investment company and is registered as such under the 1940 Act; and
WHEREAS, it has been proposed 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 common shares ("shares") in
accordance with Rule 12b-1 under the 1940 Act, and desires to adopt this Plan
pursuant to such Rule; and
WHEREAS, the Fund's Board of Directors, in considering whether the Fund
should adopt and implement a written plan, has evaluated such information as it
deemed necessary to 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 Fund hereby adopts this Plan in accordance with Rule
12b-1 under the 1940 Act, and the parties hereto agree to the following terms
and conditions of the Plan:
1. Distribution Activities. The Fund will reimburse the Distributor for
costs and expenses incurred in connection with the distribution and marketing of
shares of the Fund and servicing of Fund shareholders. Such Distribution and
servicing costs and expenses may include (1) printing and advertising expenses;
(2) payments to employees or agents of the Distributor who engage in or support
distribution of the Fund's shares, including salary, commissions, travel and
related expenses; (3) the costs of preparing, printing and distributing
prospectuses and reports to prospective investors; (4) expenses of organizing
and conducting sales seminars; (5) expenses related to selling and servicing
efforts, including processing new account applications, transmitting customer
transaction information to the Fund's transfer agent and answering questions of
shareholders; (6) payments of fees to one or more broker-dealers (which may
include the Distributor itself), financial institutions or other industry
professionals, such as investment advisers, accountants and estate planning
firms (severally, a "Service Organization"), in respect of the average daily
value of the Fund's shares owned by shareholders for whom the Service
Organization is the dealer of record or holder of record, or owned by
shareholders with whom the Service Organization has a
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servicing relationship; (7) costs and expenses incurred in implementing and
operating the Plan; and (8) such other similar services as the Fund's Board of
Directors determines to be reasonably calculated to result in the sale of Fund
shares.
2. Compensation. The Distributor will receive a fee monthly for such
costs, expenses or payments at an annual rate of up to but not more than 0.25%
of the average daily net assets of the Fund. In the event the Plan is terminated
as herein provided, the Fund shall have no liability for expenses that were not
reimbursed as of the date of termination.
3. Term and Termination.
(a) This Plan shall become effective upon approval by a vote of at
least a "majority of the outstanding voting securities of the Fund,"
and upon approval by a vote of the Directors of the Fund and of
those Directors who have no direct or indirect financial interest in
the Plan or in any agreements related to the Plan (the
"disinterested directors") cast in person at a meeting called for
the purpose of voting on the Plan.
(b) This Plan shall remain in effect until February 8, 1993, and
from year to year thereafter; provided, however, that such
continuance is subject to approval annually by a vote of the
Directors of the Fund and of the disinterested directors 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 (12) months after the date of the last approval. This Plan
may be amended at any time by the Board of Directors; 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 of the Fund and
(b) any material amendments of this Plan shall be effective only
upon approval in the manner provided in the first sentence in this
paragraph.
(c) This Plan may be terminated at any time, without the payment of
any penalty, by vote of a majority of the disinterested directors or
by a vote of a majority of the outstanding voting securities of the
Fund, and shall automatically terminate in the event of its
assignment.
4. Reporting Requirements.
(a) the Distributor shall provide the Fund, for review by the Fund's
Board of Directors, and the Directors shall review, at least
quarterly, a written report of the amounts expended pursuant to the
Plan and the purposes for which such expenditures were made. Such
written report shall be in a form satisfactory to the Fund and shall
supply all information necessary for the Board to discharge its
responsibilities, including its responsibilities pursuant to Rule
12b-1.
(b) The Fund or the Investment Adviser to 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
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the Distributor may reasonably require in order to discharge its
duties and obligations hereunder.
5. Selection and Nomination of Directors. While this Plan is in effect,
the selection and nomination of disinterested directors shall be committed to
the discretion of the Directors who are not interested persons.
6. Recordkeeping. The Fund 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.
7. Non-Exclusivity Clause. Nothing herein contained shall limit the
freedom of the Distributor or an "affiliated person" of the Distributor, to act
as distributor for other persons, firms or corporations or to engage in other
business activities.
8. Limit of Liability.
(a) Neither the Distributor nor any of its employees or agents is
authorized to make any representations concerning the shares except
those contained in the then current Prospectus or Statement of
Additional Information of the Fund.
(b) The Distributor shall use its best efforts in rendering services
hereunder, but in the absence of willful misfeasance, bad faith,
negligence or reckless disregard of its obligations hereunder, the
Distributor shall not be liable to the Fund or any of its
shareholders for any error of judgment or mistake of law of for any
act or omission or for any losses sustained by the Fund or its
shareholders resulting therefrom.
(c) Nothing herein contained shall be deemed to require the Fund to
take any action contrary to its Articles of Incorporation or
By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which is bound, or relieve or deprive the
Board of Directors of Fund of the responsibility for and control of
the affairs the Fund.
9. Applicable Law. The provisions hereof shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
shall be construed in accordance with the laws of the State of Maryland and the
applicable provisions of the 1940 Act. To the extent the applicable law of the
State of Maryland or any of the provisions herein conflicts with the applicable
provisions of the 1940 Act, the latter shall control.
10. Invalidity. 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 be affected thereby.
11. Definitions. For the purposes of this Plan, the terms "interested
person," "assignment," "affiliated person" and "majority of the outstanding
voting securities" are used as defined in the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Plan to be signed
by the respective officers thereunto duly authorized and their respected
corporate seals to be hereunto affixed, as of the day and year first above
written.
IAA TRUST ASSET ALLOCATION FUND, INC.
By______________________________________
Title
FUND/PLAN BROKER SERVICES, INC.
By______________________________________
Title
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