MULTIPLE CLASS PLAN PURSUANT TO RULE 18f-3
FOR
LEXINGTON MONEY MARKET TRUST
WHEREAS, Lexington Money Market Trust (the "Company") engages in business
as an open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, shares of common stock of the Company currently consist of one
series, Lexington Money Market Trust (the "Trust"); and
WHEREAS, the Company has adopted a Multiple Class Plan pursuant to Rule
18f-3 under the Act (the "Plan") with respect to the Trust; and
WHEREAS, pursuant to an Underwriting Agreement dated July 26, 2000, the
Trust employs Pilgrim Securities, Inc. ("Distributor") as distributor of the
securities of which it is the issuer; and
NOW, THEREFORE, the Company hereby adopts, on behalf of the Trust, the
Plan, in accordance with Rule 18f-3 under the Act on the following terms and
conditions:
1. FEATURES OF THE CLASSES. The Trust issues its shares of common stock in
Class A Shares. Class A shares of the Trust shall represent an equal pro rata
interest in the Trust and, generally, shall have identical voting, dividend,
liquidation, and other rights, preferences, powers, restrictions, limitations,
qualifications and terms and conditions, except that: (a) Class A shall have a
different designation; (b) Class A shares shall bear any Class Expenses, as
defined in Section 5 below; and (c) Class A shares shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to it or its
distribution arrangement and each class shall have separate voting rights on any
matter submitted to shareholders in which the interests of one class differ from
the interests of any other class. In addition, Class A shares shall have the
features described in Sections 2, 5 and 6 below.
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2. SALES CHARGE STRUCTURE. Class A shares of the Trust shall be offered at
the then-current net asset value plus a front-end sales charge. The front-end
sales charge shall be in such amount as is disclosed in a Fund's current
prospectus or prospectus supplement and shall be subject to reductions for
larger purchases and such waivers or reductions as are determined or approved by
the Board of Trustees. There is no initial front-end sales charge on purchases
of an amount as disclosed in the prospectus. Class A shares generally shall not
be subject to a contingent deferred sales charge provided, however, that such a
charge may be imposed when shares are redeemed within one or two years of
purchase and/or in such other cases as is disclosed in the Trust's current
prospectus or supplement thereto subject to the supervision of the Board of
Trustees.
3. SERVICE AND DISTRIBUTION PLANS. Class A shares of the Trust have adopted
a Rule 12b-1 plan with the following terms:
(a) Class A Shares. Class A shares of the Trust may pay Distributor monthly
a fee at an annual rate of 0.25% of the average daily net assets of the Trust's
Class A shares for distribution or service activities (each as defined in
paragraph (f), below), as designated by Distributor. Distributor, on behalf of
Class A shares of the Trust, may pay Authorized Dealers quarterly a fee at the
annual rate of 0.25% of the average daily net assets of the Trust's Class A
shares for shareholder services and distribution activities (as defined in
paragraph (f), below) rendered to Class A Shareholders.
(b) Distribution and Service Activities.
(1) As used herein, the term "distribution services" shall include
services rendered by Distributor as distributor of the shares of the Trust in
connection with any activities or expenses primarily intended to result in the
sale of shares of the Trust, including, but not limited to, compensation to
registered representatives or other employees of Distributor or to other
broker-dealers that have entered into an Authorized Dealer Agreement with
Distributor, compensation to and expenses of employees of Distributor who engage
in or support distribution of the Trust's shares; telephone expenses; interest
expense; printing of prospectuses and reports for other than existing
shareholders; preparation, printing and distribution of sales literature and
advertising materials; and profit and overhead on the foregoing.
(2) As used herein, the term "service activities" shall mean activities
in connection with the provision of personal, continuing services to investors
in the Trust, excluding transfer agent and subtransfer agent services for
beneficial owners of shares of the Trust, aggregating and processing purchase
and redemption orders, providing beneficial owners with account statements,
processing dividend payments, providing subaccounting services for Fund shares
held beneficially, forwarding shareholder communications to beneficial owners
and receiving, tabulating and transmitting proxies executed by beneficial
owners; provided, however, that if the National Association of Securities
Dealers Inc. ("NASD") adopts a definition of "service fee" for purposes of
Section 2830 of the NASD Conduct Rules that differs from the definition of
"service activities" hereunder, or if the NASD adopts a related definition
intended to define the same concept, the definition of "service activities" in
this Paragraph shall be automatically amended, without further action of the
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Board of Trustees, to conform to such NASD definition. Overhead and other
expenses of Distributor related to its "service activities," including telephone
and other communications expenses, may be included in the information regarding
amounts expended for such activities.
4. COMPLIANCE STANDARDS. The Company desires that investors in the Trust
select the sales financing method that best suits his or her particular
financial situation. In this connection, Distributor may encourage Authorized
Dealers to establish standards which govern sales of shares of the Trust to
assist investors in making investment decisions and to help ensure proper
supervision of purchase recommendations.
5. ALLOCATION OF INCOME AND EXPENSES. (a) The gross income of the Trust
shall, generally, be allocated to each class on the basis of relative net
assets. To the extent practicable, certain expenses (other than Class Expenses
as defined below which shall be allocated more specifically) shall be subtracted
from the gross income on the basis of the net assets of each class of the Trust.
These expenses include:
(1) Expenses incurred by the Company (for example, fees of Trustees,
auditors and legal counsel) not attributable to the Trust or to a particular
class of shares of the Trust ("Corporate Level Expenses"); and
(2) Expenses incurred by the Trust not attributable to any particular
class of the Trust's shares (for example, advisory fees, custodial fees, or
other expenses relating to the management of the Trust's assets) ("Fund
Expenses").
(b) Expenses attributable to a particular class ("Class Expenses") shall be
limited to: (i) payments made pursuant to a 12b-1 plan; (ii) transfer agent fees
attributable to a specific class; (iii) printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders of a specific class; (iv) Blue Sky
registration fees incurred by a class; (v) SEC registration fees incurred by a
class; (vi) the expense of administrative personnel and services to support the
shareholders of a specific class; (vii) litigation or other legal expenses
relating solely to one class; and (viii) Trustees' fees incurred as a result of
issues relating to one class. Expenses in category (i) above must be allocated
to the class for which such expenses are incurred. All other "Class Expenses"
listed in categories (ii)-(viii) above may be allocated to a class but only if
the President and Chief Financial Officer have determined, subject to Board
approval or ratification, which of such categories of expenses will be treated
as Class Expenses, consistent with applicable legal principles under the Act and
the Internal Revenue Code of 1986, as amended.
Therefore, expenses of the Trust shall be apportioned to each class of
shares depending on the nature of the expense item. Corporate Level Expenses and
Fund Expenses will be allocated among the classes of shares based on their
relative net asset values. Approved Class Expenses shall be allocated to the
particular class to which they are attributable. In addition, certain expenses
may be allocated differently if their method of imposition changes. Thus, if a
Class Expense can no longer be attributed to a class, it shall be charged to the
Trust for allocation among classes, as determined by the Board of Trustees. Any
additional Class Expenses not specifically identified above which are
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subsequently identified and determined to be properly allocated to one class of
shares shall not be so allocated until approved by the Board of Trustees of the
Company in light of the requirements of the Act and the Internal Revenue Code of
1986, as amended.
6. EXCHANGE PRIVILEGES. Class A shares of the Trust may be exchanged for
shares of that same class of any other Pilgrim Fund at NAV without payment of
any additional sales charge. However, a sales charge, equal to the excess, if
any, of the sales charge rate applicable to the shares being acquired over the
sales charge rate previously paid, may be assessed on exchanges from the Trust.
If a shareholder exchanges and subsequently redeems his or her shares, any
applicable Contingent Deferred Sales Charge fee will be based on the full period
of the share ownership.
7. QUARTERLY AND ANNUAL REPORTS. The Trustees shall receive quarterly and
annual statements concerning all allocated Class Expenses and distribution and
servicing expenditures complying with paragraph (b)(3)(ii) of Rule 12b-1, as it
may be amended from time to time. In the statements, only expenditures properly
attributable to the sale or servicing of a particular class of shares will be
used to justify any distribution or servicing fee or other expenses charged to
that class. Expenditures not related to the sale or servicing of Class A shares
shall not be presented to the Trustees to justify any fee attributable to Class
A shares. The statements, including the allocations upon which they are based,
shall be subject to the review and approval of the independent Trustees in the
exercise of their fiduciary duties.
8. ACCOUNTING METHODOLOGY. (a) The following procedures shall be
implemented in order to meet the objective of properly allocating income and
expenses:
(1) On a daily basis, a fund accountant shall calculate the Plan Fee to
be charged to each 12b-1 class of shares by calculating the average daily net
asset value of such shares outstanding and applying the applicable fee rate of
the respective class to the result of that calculation.
(2) The Trust accountant will allocate designated Class Expenses, if
any, to the Class A shares.
(3) The Trust accountant shall allocate income and Corporate Level and
Fund Expenses among the Class A shares based on the net asset value of Class A
shares in relation to the net asset value of the Company for Fund Expenses, and
in relation to the net asset value of the Company for Corporate Level Expenses.
These calculations shall be based on net asset values at the beginning of the
day.
(4) The Trust accountant shall then complete a worksheet, developed for
purposes of complying with this Section of this Plan, using the allocated income
and expense calculations from Paragraph (3) above, and the additional fees
calculated from Paragraphs (1) and (2) above. The Trust accountant may make
non-material changes to the form of worksheet as it deems appropriate.
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(5) The Trust accountant shall develop and use appropriate internal
control procedures to assure the accuracy of its calculations and appropriate
allocation of income and expenses in accordance with this Plan.
9. WAIVER OR REIMBURSEMENT OF EXPENSES. Expenses may be waived or
reimbursed by any adviser to the Company, by the Company's underwriter or any
other provider of services to the Company without the prior approval of the
Company's Board of Trustees.
10. EFFECTIVENESS OF PLAN. This Plan shall not take effect until it has
been approved by votes of a majority of both (a) the Trustees of the Company and
(b) those Trustees of the Company who are not "interested persons" of the
Company (as defined in the Act) and who have no direct or indirect financial
interest in the operation of this Plan, cast in person at a meeting (or
meetings) called for the purpose of voting on this Plan.
11. MATERIAL MODIFICATIONS. This Plan may not be amended to modify
materially its terms unless such amendment is approved in the manner provided
for initial approval in paragraph 11 hereof.
12. LIMITATION OF LIABILITY. The Trustees of the Company and the
shareholders of the Trust shall not be liable for any obligations of the Company
or the Trust under this Plan, and Distributor or any other person, in asserting
any rights or claims under this Plan, shall look only to the assets and property
of the Company or the Trust in settlement of such right or claim, and not to
such Trustees or shareholders.
Dated: July 26, 2000
