Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Research Fund, Inc. - Lord Xxxxxx America's Value Fund
Class A 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
"Fund"), on behalf of its LORD XXXXXX AMERICA'S VALUE FUND, (the "Series"), and
LORD XXXXXX DISTRIBUTOR LLC, a New York limited liability company (the
"Distributor").
WHEREAS, the Fund 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 shares of beneficial
interest, including the Series' Class A shares (the "Shares") pursuant to the
Distribution Agreement between the Fund and the Distributor, dated as of the
date hereof (the "Distribution Agreement").
WHEREAS, the Fund 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 Fund may make certain payments to the Distributor to be used by the
Distributor or paid to institutions and persons permitted by applicable law
and/or rules to receive such payments ("Authorized Institutions") in connection
with sales of Shares and/or servicing of accounts of shareholders holding
Shares.
WHEREAS, the Fund'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 Fund 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 Fund in order to provide additional 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.
2. The Fund also hereby authorizes the Distributor to use payments received
hereunder from the Fund in order to (a) finance any activity which is primarily
intended to result in the sale of Shares and (b) provide continuing information
and investment services to shareholder accounts not serviced by Authorized
Institutions receiving a service fee from the Distributor hereunder and
otherwise to encourage such accounts to remain invested in the Shares; provided
that (i) any payments referred to in the foregoing clause (a) shall not exceed
the distribution fee permitted to be paid at the time under paragraph 3 of this
Plan and shall be authorized by the Board of Directors of the Fund by a vote of
the kind referred to in paragraph 10 of this Plan and (ii) any payments referred
to in clause (b) shall not exceed the service fee permitted to be paid at the
time under paragraph 3 of this Plan.
3. The Fund is authorized to pay the Distributor hereunder for remittance
to Authorized Institutions and/or use by the Distributor pursuant to this Plan
(a) service fees and (b) distribution fees, each at an annual rate not to exceed
.25 of 1% of the average annual net asset value of Shares outstanding. The Board
of Directors of the Fund shall from time to time determine the amounts, within
the foregoing maximum amounts, that the Series may pay the Distributor
hereunder. Any such fees (which may be waived by the Authorized Institutions in
whole or in part) may be calculated and paid quarterly or more frequently if
approved by the Board of Directors of the Fund. Such determinations and
approvals by the Board of Directors shall be made and given by votes of the kind
referred to in paragraph 10 of this Plan. Payments by holders of Shares to the
Fund of contingent deferred reimbursement charges relating to distribution fees
paid by the Series hereunder shall reduce the amount of distribution fees for
purposes of the annual 0.25% distribution fee limit. The Distributor will
monitor the payments hereunder and shall reduce such payments or take such other
steps as may be necessary to assure that (i) 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 (ii) 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 or shares sold by) such Authorized Institution and held in an account
covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided in the
Articles of Incorporation of the Fund. If the Distributor waives all or a
portion of the 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 Fund, 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 Fund's Board of
Directors, and the 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 Fund 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 may
otherwise be provided in the Act.
7. The Distributor shall give the Fund 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 Fund, or any of the shareholders, creditors,
directors, or officers of the Fund; provided however, that nothing herein shall
be deemed to protect the Distributor against any liability to the Fund or the
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.
8. This Plan shall become effective upon the date hereof, and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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 above the maximum amounts referred to in paragraph 3
of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Directors of the Fund, including the vote
of a majority of the directors who are not "interested persons" of the Fund 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. Amendments to this Plan which do not
increase materially the amount to be spent by the Fund hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Directors of the Fund, including the vote of a majority of the directors who
are not "interested persons" of the Fund 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 Fund 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 (a) by the vote of a majority of the directors of the Fund 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 the 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.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund 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 meanings as those terms are
defined in the Act.
13. The obligations of the Fund, including those imposed hereby, are not
personally binding upon, nor shall resort be had to the private property of, any
of the directors, shareholders, officers, employees or agents of the Fund
individually, but are binding only upon the assets and property of the Fund. Any
and all personal liability, either at common law or in equity, or by statute or
constitution, of every such director, shareholder, officer, employee or agent
for any breach of the Fund 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 Fund.
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. - LORD XXXXXX
AMERICA'S VALUE FUND
By: /s/ XXXXXXXXX X. XXXXXXX
Vice President
ATTEST:
/s/ XXXXX XXXXXX
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By: /s/ XXXX X. XXXXXXX
A Partner
Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Research Fund, Inc. - Lord Xxxxxx America's Value Fund
Class B 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
"Fund"), on behalf of its LORD XXXXXX AMERICA'S VALUE FUND, (the "Series"), and
LORD XXXXXX DISTRIBUTOR LLC, a New York limited liability company (the
"Distributor").
WHEREAS, the Fund 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 shares of capital stock
including the Fund's Class B shares (the "Shares") pursuant to the Distribution
Agreement between the Fund and the Distributor, dated as of the date hereof, and
WHEREAS, the Fund 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 Fund may make certain payments to the Distributor (a) to help
reimburse the Distributor for the payment of sales commissions to institutions
and persons permitted by applicable law and/or rules to receive such payments
("Authorized Institutions") in connection with sales of Shares and (b) for use
by the Distributor in rendering service to the Fund, including paying and
financing the payment of sales commissions, service fees, and other costs of
distributing and selling Shares as provided in paragraph 3 of this Plan, and
WHEREAS, the Fund'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 Fund hereby authorizes the Distributor to enter into agreements with
Authorized Institutions (the "Agreements") which may provide for the payment to
such Authorized Institutions of (a) sales commissions (particularly those paid
or financed with payments received hereunder) and (b) service fees received
hereunder 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, respectively. 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 reductions as provided below in this paragraph 2,
the Fund periodically, as determined by the Fund's Board of Director (in the
manner contemplated in paragraph 11), shall pay to the Distributor fees (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. Payments will be based on Shares outstanding during any such
period. Shares outstanding include Shares issued for reinvested dividends and
distributions. The Board of Directors of the Fund 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 11 of this Plan. The
service fees mentioned in this paragraph are for the purposes mentioned in
clause (b) (ii) of paragraph 1 of this Plan and the distribution fees mentioned
in this paragraph are for the purposes mentioned in clause (b) (i) of paragraph
1 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 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 engage directly or indirectly in financing any activity which
is primarily intended to result in the sale of Shares including, but not limited
to: (a) paying and financing the payment of commissions or other payments
relating to selling or servicing efforts and (b) paying interest, carrying, or
any other financing charges on any unreimbursed distribution or other expense
incurred in a prior fiscal year of the Fund whether or not such charges and
unreimbursed distribution or other expense are determined to be a legal
obligation of the Fund, in whole or in part, by the Fund's Board of Directors.
The Fund's Board of Directors (in the manner contemplated in paragraph 11 of
this Plan) shall approve the timing, categories and calculation of any payments
under this paragraph 3.
4.1. The Fund will pay each person which has acted as Distributor of Shares
its Allocable Portion (as such term is defined in paragraphs 13.1 through 13.3)
of the distribution fees with respect to Shares of the Fund in consideration of
its services as principal underwriter for the Shares of the Fund. The
distribution agreement pursuant to which a person acts or acted as principal
underwriter of the Shares is referred to as the "Applicable Distribution
Agreement." Such person shall be paid its Allocable Portion of such distribution
fees notwithstanding such person's termination as Distributor of the Shares,
such payments to be changed or terminated only (i) as required by a change in
applicable law or a change in accounting policy adopted by the Investment
Companies Committee of the AICPA and approved by FASB that results in a
determination by the Fund's independent accountants that any sales charges in
respect of such Fund, which are not contingent deferred sales charges and which
are not yet due and payable, must be accounted for by such Fund as a liability
in accordance with GAAP, each after the effective date of this Plan and
restatement; (ii) if in the sole discretion of the Board of Directors, after due
consideration of such factors as they considered relevant, including the
transactions contemplated in any purchase and sale agreement entered into
between the Fund's Distributor and any commission financing entity, the Board of
Directors determines (in the manner contemplated in paragraph 12), in the
exercise of its fiduciary duty, that this Plan and the payments thereunder must
be changed or terminated, notwithstanding the effect this action might have on
the Fund's ability to offer and sell Shares; or (iii) in connection with a
Complete Termination of this Plan, it being understood that for this purpose a
Complete Termination of this Plan occurs only if this Plan is terminated and the
Fund has discontinued the distribution of Shares or other back-end load or
substantially similar classes of shares; it being understood that such does not
include Class C shares, i.e., those sold with a level load. The services
rendered by a Distributor for which that Distributor is entitled to receive its
Allocable Portion of the distribution fee shall be deemed to have been completed
at the time of the initial purchase of the Shares (as defined in the Applicable
Distribution Agreement) (whether of that Fund or another fund) taken into
account in computing that Distributor's Allocable Portion of the distribution
fee.
4.2. The obligation of the Fund to pay the distribution fee shall terminate
upon the termination of this Plan in accordance with the terms hereof.
4.3. The right of a Distributor to receive payments hereunder may be
transferred by that Distributor (but not the distribution agreement itself or
that Distributor's obligations thereunder) in order to raise funds which may be
useful or necessary to perform its duties as principal underwriter, and any such
transfer shall be effective upon written notice from that Distributor to the
Fund. In connection with the foregoing, the Fund is authorized to pay all or
part of the distribution fee and/or contingent deferred sales charges with
respect to Shares (upon the terms and conditions set forth in the then current
Fund prospectus) directly to such transferee as directed by that Distributor.
4.4. As long as this Plan is in effect, the Fund shall not change the
manner in which the distribution fee is computed (except as may be required by a
change in applicable law or a change in accounting policy adopted by the
Investment Companies Committee of the AICPA and approved by FASB that results in
a determination by the Fund's independent accountants that any distribution fees
which are not yet due and payable, must be accounted for by such Fund as a
liability in accordance with GAAP).
5. The net asset value of the Shares shall be determined as provided in the
Articles of Incorporation of the Fund. 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.
6. The Secretary of the Fund, 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 Fund'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. Over the long-term the expenses incurred
by the Distributor for engaging directly or indirectly in financing any activity
which is primarily intended to result in the sale of Shares are likely to be
greater then the distribution fees receivable by the Distributor hereunder.
Nevertheless, there exists the possibility that for a short-term period the
Distributor may not have a sufficient amount of such expenses to warrant
reimbursement by receipt of such distribution fees. Although the Distributor
undertakes not to make a profit under this Plan, the Plan will be considered a
compensation plan (i.e. distribution fees will be paid regardless of expenses
incurred) in order to avoid the possibility of the Distributor not being able to
receive such distribution fees because of a temporary timing difference between
its incurring such expenses and the receipt of such distribution fees.
7. Neither this Plan nor any other transaction between the Fund and the
Distributor, or any successor or assignee thereof, 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 Fund 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.
8. The Distributor shall give the Fund 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 Fund 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 Fund or the Fund'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.
9. 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 Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund 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.
10. 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
voting securities and each material amendment must be approved by a vote of the
Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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.
11. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 10 of this Plan may be adopted by a vote
of the Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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 Fund may, by such a vote,
interpret this Plan and make all determinations necessary or advisable for its
administration.
12. 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 Fund 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.
13.1. For purposes of this Plan, the Distributor's "Allocable Portion" of
the distribution fee shall be 100% of such distribution fees unless or until the
Fund uses a principal underwriter other than the Distributor. Thereafter the
Allocable Portion shall be the portion of the distribution fee attributable to
(i) Shares of the Fund sold by the Distributor before there is a new principal
underwriter, plus (ii) Shares of the Fund issued in connection with the exchange
of Shares of another Fund in the Lord, Xxxxxx Family of Funds, plus (iii) Shares
of the Fund issued in connection with the reinvestment of dividends and capital
gains.
13.2. The Distributor's Allocable Portion of the distribution fees and the
contingent deferred sales charges arising with respect to Shares taken into
account in computing the Distributor's Allocable Portion shall be limited under
Article III, Sections 26(b) and (d) or other applicable regulations of the NASD
as if the Shares taken into account in computing the Distributor's Allocable
Portion themselves constituted a separate class of shares of the Fund.
13.3. The services rendered by the Distributor for which the Distributor is
entitled to receive the Distributor's Allocable Portion of the distribution fees
shall be deemed to have been completed at the time of the initial purchase of
the Shares (or shares of another Fund in the Lord Xxxxxx Family of Funds) taken
into account in computing the Distributor's Allocable Portion. In addition, the
Fund will pay to the Distributor any contingent deferred sales charges imposed
on redemption of Shares (upon the terms and conditions set forth in the then
current Fund prospectus) taken into account in computing the Distributor's
Allocable Portion of the distribution fees. Notwithstanding anything to the
contrary in this Plan, the Distributor shall be paid its Allocable Portion of
the distribution fees regardless of the Distributor's termination as principal
underwriter of the Shares of the Fund, or any termination of this Agreement
other than in connection with a Complete Termination (as defined in paragraph
4.1) of the Plan as in effect on the date of execution of Distribution Agreement
with the new Distributor. Except as provided in paragraph 4.1 and in the
preceding sentence, the Fund's obligation to pay the distribution fees to the
Distributor shall be absolute and unconditional and shall not be subject to any
dispute, offset, counterclaim or defense whatsoever (it being understood that
nothing in this sentence shall be deemed a waiver by the Fund of its right
separately to pursue any claims it may have against the Distributor and to
enforce such claims against any assets of the Distributor (other than the assets
represented by the Distributor's rights to be paid its Allocable Portion of the
distribution fees and to be paid the contingent deferred sales charges).
14. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund 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.
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. - LORD
XXXXXX AMERICA'S VALUE FUND
By: /s/XXXXXXXXX X. XXXXXXX
Vice President
ATTEST:
/s/ XXXXX XXXXXX
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By: /s/ XXXX X. XXXXXXX
A Partner
Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Research Fund, Inc. - Lord Xxxxxx America's Value Fund
Class C Shares - Type II
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
"Fund"), on behalf of its LORD XXXXXX AMERICA'S VALUE FUND, (the "Series"), and
LORD XXXXXX DISTRIBUTOR LLC, a New York limited liability company (the
"Distributor").
WHEREAS, the Fund 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 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 Fund'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 Fund 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 quarter-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 Fund
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
quarter. Shares outstanding above include Shares issued for reinvested dividends
and distributions. The Board of Directors of the Fund 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 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 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 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 Fund. 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 Fund, 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 Fund'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 Fund 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 Fund 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 Fund or any of its shareholders, creditors,
directors or officers of the Fund; provided however, that nothing herein shall
be deemed to protect the Distributor against any liability to the Fund or the
Fund'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.
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 Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund 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
voting securities and each material amendment must be approved by a vote of the
Board of Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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 Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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 Fund 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 Fund 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 Fund 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.
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. - LORD
XXXXXX AMERICA'S VALUE FUND
By: /s/ XXXXXXXXX X. XXXXXXX
Vice President
ATTEST:
/s/ XXXXX XXXXXX
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By: /s/ XXXX X. XXXXXXX
A Partner
Rule 12b-1 Distribution Plan and Agreement
Lord Xxxxxx Research Fund, Inc. - Lord Xxxxxx America's Value Fund
Pension Class
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
"Fund"), on behalf of its LORD XXXXXX AMERICA'S VALUE FUND, (the "Series"), and
LORD XXXXXX DISTRIBUTOR LLC, a New York limited liability company (the
"Distributor").
WHEREAS, the Fund 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 shares of beneficial
interest, including the Class pursuant to the Distribution Agreement between the
Fund and the Distributor, dated as of the date hereof, and
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement (the
"Plan") for the Class with the Distributor, as permitted by Rule 12b-1 under the
Act, pursuant to which the Class 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 Fund's Board of Directors has determined that there is a
reasonable likelihood that the Plan will benefit the Class 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 Fund 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 Class 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
Class shall pay to the Distributor fees at each quarter-end (a) for services, at
an annual rate not to exceed .20% of 1% of the average annual net asset value of
Shares outstanding for the quarter or more and (b) for distribution, at an
annual rate not to exceed .25 of 1% of the average annual net asset value of
Shares outstanding for the quarter or more. For purposes of the quarter-end fee
payments above (A) Shares issued pursuant to an exchange for shares of another
series of the Fund 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 in
clauses (a) and (b) have been outstanding and (B) payments will be based on
Shares outstanding during any such quarter. Shares outstanding in clauses (a)
and (b) above include Shares issued for reinvested dividends and distributions
that have been outstanding for the quarter or more.
The Board of Directors of the Fund shall from time to time determine the
amounts and the time of payments (such as, at the time of sale, quarterly or
otherwise), within the foregoing maximum amounts, that the Class 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 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 Rule 2830, subparagraphs (d)(2) and (5) of the Conduct Rules of
the NASD Regulation, 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 Class shall not pay with respect to any Authorized Institution
service fees equal to more than .20% 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. Within the foregoing maximum amounts, the Distributor may use amounts
received as distribution fees hereunder from the Class to finance any activity
that 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 amounts authorized by the Fund's Board of Directors designated as the
distribution fee referred to in clause (b) of paragraph 2 to expenses incurred
by the Distributor if such expenses are primarily intended to result in the sale
of Shares. 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 other than those referred to in the
foregoing sentence.
4. The net asset value of the Shares shall be determined as provided in the
Declaration and Agreement of Trust of the Fund. If the Distributor waives all or
a portion of fees which are to be paid by the Class 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 Fund, or in his absence the Chief Financial
Officer, is hereby authorized to direct the disposition of monies paid or
payable by the Class hereunder and shall provide to the Fund'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 Fund 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 Fund 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 Fund, the Class or any of the shareholders,
creditors, directors or officers of the Fund; provided however, that nothing
herein shall be deemed to protect the Distributor against any liability to the
Fund or the Class' 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.
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 Fund, including the vote of a majority of the directors who are
not "interested persons" of the Fund 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 Class 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 Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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 Directors of the Fund, including the vote of a majority of the
directors who are not "interested persons" of the Fund 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 Fund 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 Fund who are not
"interested persons" of the Fund and have no directors 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.
12. So long as this Plan shall remain in effect, the selection and
nomination of those directors of the Fund who are not "interested persons" of
the Fund 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.
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. -
LORD XXXXXX AMERICA'S VALUE FUND
By: /s/ XXXXXXXXX X. XXXXXXX
Vice President
ATTEST:
/s/ XXXXX XXXXXX
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO.
Managing Member
By: /s/ XXXX X. XXXXXXX
A Partner
