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EXHIBIT 99(m)
FROLEY, REVY CONVERTIBLE SECURITIES FUND
FROLEY, REVY INVESTMENT GRADE CONVERTIBLE SECURITIES FUND
(THE "FUNDS")
EACH A SERIES OF THE
TRAINER WORTHAM FUNDS
SERVICE AND DISTRIBUTION PLAN
INTRODUCTION: It has been determined that the Funds, which are each
series of the Trainer, Wortham Funds, will pay for certain costs and expenses
incurred in connection with the distribution of certain classes of their shares
and servicing of shareholders of certain classes, and adopt this Service and
Distribution Plan (the "Plan") as set forth herein pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Act").
The Board of Trustees, in considering whether the Funds should
implement the Plan, has requested and evaluated such information as it deemed
necessary to make an informed determination as to whether the Plan should be
implemented and has considered such pertinent factors as it deemed necessary to
form the basis for a decision to use assets of the Funds for such purposes.
In voting to approve the implementation of the Plan, the Trustees have
concluded, in the exercise of their reasonable business judgment and in light of
their respective fiduciary duties, that there is a reasonable likelihood that
the Plan will benefit the Funds and the shareholders of each of their classes of
shares.
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THE PLAN: The material aspects of the financing by the Funds of their
distribution expenses are as follows:
1. The Funds will compensate the Distributor for services provided and
expenses incurred in connection with the distribution and marketing of shares of
Class A and Class B of each Fund and servicing of shareholders of each such
class. 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 each 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 Funds' 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"), based on the average daily
value of each 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 servicing relationship;
(7) costs and expenses incurred in implementing and operating the Plan; and (8)
such other similar services as the Board of Trustees determines to be reasonably
calculated to result in the sale of Fund shares.
Subject to the limitations of applicable law and regulation, including
rules of the National Association of Securities Dealers ("NASD"), the
Distributor will be compensated monthly for
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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 Class A shares of the Fund and 0.75% of
the average daily net assets of Class B shares of the Fund, provided however,
that up to 0.25% of each such amount may be used as a "service fee" as defined
in applicable rules of the NASD.
2. The Distributor may periodically pay to one or more Service
Organizations (which may include the Distributor itself) a fee in respect of a
Fund's shares owned by shareholders for whom the Service Organizations are the
dealers of record or holders of record, or owned by shareholders with whom the
Service Organizations have servicing relationships. Such fees will be computed
daily and paid quarterly by the distributor at an annual rate not exceeding
0.25% of the average net asset value of shares of each class of the Fund owned
by shareholders for whom the Service Organizations are the dealers of record or
holders of record, or owned by shareholders with whom the Service Organizations
have servicing relationships. Subject to the limits herein and the requirements
of applicable law and regulations, including rules of the NASD, the distributor
may designate as "service fees," as that term is defined by applicable rules and
regulatory interpretations applicable to payments under a plan such as the Plan,
some or all of any payments made to Service Organizations (including the
distributor itself) for services that may be covered by "service fees," as so
defined.
The payment to a Service Organization is subject to compliance by the
Service Organization with the terms of a Service Agreement or Dealer Agreement
between the Service Organization and the distributor (the "Agreement"). If a
shareholder of a Fund ceases to be a client of a Service Organization that has
entered into an Agreement with the Distributor, but
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continues to hold shares of the Fund, the Distributor will be entitled to
receive a similar payment in respect of the servicing provided to such
investors. For the purposes of determining the fees payable under the Plan, the
average daily net asset value of a Fund's shares shall be computed in the manner
specified in the Declaration of Trust of the Trainer, Wortham Funds and current
prospectus for the computation of the value of a Fund's net asset value per
share.
3. The Plan will become effective immediately upon approval by a
majority of the Board of Trustees, including a majority of the Trustees who are
not "interested persons" (as defined in the Act) of the Funds and have no direct
or indirect financial interest in the operation of the Plan or in any agreements
entered into in connection with the Plan (the "Plan Trustees"), pursuant to a
vote cast in person at a meeting called for the purpose of voting on the
approval of the Plan, or upon such later date as the Trustees determine.
4. The Plan shall continue with respect to each applicable class of
shares of the Funds for a period of one year from its effective date, unless
earlier terminated in accordance with its terms, and thereafter shall continue
automatically with respect to each applicable class of shares of the Funds for
successive annual periods, provided such continuance is approved by a majority
of the Board of Trustees, including a majority of the Plan Trustees pursuant to
a vote cast in person at a meeting called for the purpose of voting on the
continuance of the Plan.
5. The Plan may be amended at any time by the Board of Trustees
provided that (a) any amendment to increase materially the costs which a class
may bear for distribution pursuant to the Plan shall be effective only upon
approval by a vote of a majority of the
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outstanding voting securities of that class and (b) any material amendments of
the terms of the Plan shall become effective only upon approval as provided in
paragraph 3 hereof.
6. The Plan is terminable without penalty at any time by (a) vote of a
majority of the Plan Trustees, or (b) vote of a majority of the outstanding
voting securities of the Funds.
7. Any person authorized to direct the disposition of monies paid or
payable by a Fund pursuant to the Plan or any agreement entered into in
connection with the Plan shall provide to the Board of Trustees, and the Board
of Trustees 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.
8. While the Plan is in effect, the selection and nomination of
Trustees who are not "interested persons" (as defined in the Act) of the Funds
shall be committed to the discretion of the Trustees who are not "interested
persons".
9. The Funds shall preserve copies of the Plan, any agreement in
connection with the Plan, and any report made pursuant to paragraph 7 hereof,
for a period of not less than six years from the date of the Plan or such
agreement or report, the first two years in an easily accessible place.
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