Rule 12b-1 Plans Sample Clauses
A Rule 12b-1 Plan is a provision in mutual fund agreements that allows the fund to use assets to pay for distribution and marketing expenses. Typically, these plans permit the fund to charge shareholders an annual fee, often expressed as a percentage of assets, to cover costs such as advertising, compensation to brokers, or promotional materials. The core practical function of a Rule 12b-1 Plan is to provide a mechanism for mutual funds to finance their ongoing sales efforts, thereby potentially increasing fund assets but also impacting investor returns through additional fees.
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Rule 12b-1 Plans. (a) You may participate in each distribution and/or shareholder services plan (each, a “Plan”) adopted for a Class of a Fund or for a Fund that has only a single Class (each, a “Plan Class”) pursuant to Rule 12b-1 under the 1940 Act (“Rule 12b-1”).
(b) To the extent that you provide administrative and other services contemplated by a Plan, including, but not limited to, furnishing personal and other services and assistance to your customers who own Shares of a Plan Class, answering routine inquiries regarding a Fund covered by a Plan (each, a “Plan Fund”) or Plan Class, assisting in changing account designations and addresses, and maintaining accounts and providing such other services as a Plan Fund or we may require under a Plan, to the extent permitted by applicable laws, rules, and regulations and the applicable Plan, we shall pay you a Rule 12b-1 servicing fee. Additionally, to the extent that you participate in the distribution of Shares of a Plan Class that are eligible for a Rule 12b-1 distribution fee, we shall also pay you a Rule 12b-1 distribution fee. As part of your distribution services, you agree to support our marketing efforts by, among other things, granting reasonable requests for visits to your offices by our wholesalers and marketing representatives; including all Plan Funds on your “approved,” “preferred,” or other similar product lists, to the extent the Plan Funds satisfy your standards for inclusion on such lists; and otherwise providing satisfactory product, marketing, and sales support in connection with the Plan Funds. All Rule 12b-1 servicing and distribution fees shall be based on the value of Shares attributable to your customers and eligible for such payments and shall be calculated on the basis of and at the rates set forth in the compensation schedule then in effect for the applicable Plan Class as set forth in the applicable Plan Fund’s Prospectus (the “Compensation Schedule”). Without prior approval by a majority of the outstanding Shares of a particular Plan Class, the aggregate annual Rule 12b-1 servicing and distribution fees paid to you pursuant to the Plan for such Plan Class shall not exceed the annual maximums reflected in the applicable Plan Class’s Prospectus, which amount shall be a specified percentage of the value of such Plan Class’s net assets held in your customers’ accounts that are eligible for payment pursuant to the applicable Plan and this Agreement (determined in the same manner as such Plan Class use...