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Exhibit 23(n)(1)
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LM Institutional Fund Advisors II,
Multiple Class (Rule 18f-3) Plan
November 1, 1999
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This Plan is adopted by LM Institutional Fund Advisors II, Inc. (the "Company")
pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"Act"), in order to document the separate arrangements and expense allocations
of each of the classes of shares (the "Classes") of the constituent Portfolios
of the Company specified on Schedule A attached hereto (the "Multi-class
Portfolios").
Section 1. Class Designations
The types of Classes are the "Institutional Class" and the "Financial
Intermediary Class." Each Class has a different arrangement for shareholder
services or distribution or both, as follows:
1. Institutional Class Shares - are offered with no sales charges or
distribution expenses.
2. Financial Intermediary Class Shares -- are offered with no sales charges,
but are subject to expenses incurred under a distribution plan adopted in
accordance with Rule 12b-1 under the Act ("Distribution Plan").
Section 2. Voting
Each Class shall have the voting rights set out in the Articles of Incorporation
and By-Laws of the Company, as they may be amended from time to time. The
Financial Intermediary Class shares shall have the right to vote with respect to
the Distribution Plan applicable to that Class.
Section 3. Allocation of Expenses Between Classes
Distribution Expenses. All expenses incurred under a Class's Distribution Plan
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shall be allocated to that Class.
Other Class Expenses. All other expenses, to the extent they are determined by
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the Directors, or by the Company's investment manager or investment advisers, to
have been incurred by or in respect of one but not both Classes of a Multi-class
Portfolio or otherwise unequally as between such Classes, shall be allocated as
between the Classes in any manner, consistent with Rule 18f-3, that the
Directors may in their discretion consider fair and equitable. In light of the
foregoing, the Directors have currently determined that the expenses as set
forth in Schedule B attached hereto shall be allocated to the Institutional
Class or the Financial Intermediary Class as shown on Schedule B. Schedule B may
be modified from time to time by the Directors and such modification shall not
constitute an amendment to this Plan which must be submitted to the shareholders
of either Class.
Section 4. Other Allocations and Waivers/Reimbursements
Expenses Applicable to More than One Portfolio. Expenses incurred by the Company
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on behalf of a Portfolio, including any Multi-class Portfolio, shall be
allocated to that Portfolio, and
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expenses incurred by the Company on behalf of more than one Portfolio shall be
allocated among the Portfolios that incurred the expenses based on the net asset
values of the several Portfolios in relation to the aggregate net asset value of
all Portfolios to which the expense relates, or on such other basis as the
Directors may in their discretion consider fair and equitable.
Other Allocations. Income, realized and unrealized capital gains and losses, and
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expenses other than expenses allocated pursuant to Section 3 shall be allocated
to each Class on the basis of the net asset value of that Class in relation to
the net asset value of the Multi-class Portfolio, or on such other basis,
consistent with Rule 18f-3, as the Directors may in their discretion consider
fair and equitable.
Waivers and Reimbursements. Nothing in this Plan shall be construed as limiting
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the ability of any person to waive any fee paid by a Portfolio or Class to that
person or to reimburse any or all expenses of a Portfolio or Class.
Section 5. Exchanges
Shareholders of a Class may, as and to the extent permitted by the prospectus of
the Portfolios in question, exchange their shares for shares of the same Class
of any other Portfolio in accordance with Section 11(a) of the Act and the rules
thereunder. For these purposes, the term "Portfolio" includes any series of LM
Institutional Fund Advisors I, Inc.
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Schedule A to Multi-Class Plan
Constituent Portfolios of LM Institutional Fund Advisors II, Inc.
To Which the Multi-Class Plan Applies
Portfolio
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LM Value Institutional Portfolio
LM Special Investment Institutional Portfolio
LM Total Return Institutional Portfolio
LM Balanced Institutional Portfolio
Batterymarch U.S. Small Capitalization Equity Portfolio
Batterymarch U.S. MidCapitalization Equity Portfolio
Batterymarch Emerging Markets Portfolio
Batterymarch International Equity Portfolio
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Schedule B to Multi-Class Plan
Allocation of Class Expenses
Institutional Class Shares
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1. Printing and postage expenses related to preparing and distributing material
such as shareholder reports, prospectuses and proxy materials to current
holders of Institutional Class Shares;
2. Registration fees (other than State registration fees imposed on a company
or Portfolio-wide basis and Securities and Exchange Commission registration
fees) for Institutional Class Shares;
3. Litigation or other legal expenses relating solely to Institutional Class
Shares;
4. Transfer agency fees;
5. Directors' fees incurred as a result of issues relating solely to
Institutional Class Shares; and
6. The expense of holding meetings solely for holders of Institutional Class
Shares.
Financial Intermediary Class Shares
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1. Printing and postage expenses related to preparing and distributing material
such as shareholder reports, prospectuses and proxy materials to current
holders of Financial Intermediary Class Shares;
2. Registration fees (other than State registration fees imposed on a company
or Portfolio-wide basis and Securities and Exchange Commission registration
fees) for Financial Intermediary Class Shares;
3. Litigation or other legal expenses relating solely to Financial Intermediary
Class Shares;
4. Transfer agency fees;
5. Directors' fees incurred as a result of issues relating solely to Financial
Intermediary Class Shares; and
6. The expense of holding meetings solely for holders of Financial Intermediary
Class Shares.
