(e)(1)
DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of November 18, 2005 by and between Trusco Capital
Management, Inc. (the "Adviser"), and BISYS Fund Services Limited Partnership
("Distributor").
WHEREAS, the Adviser (including for purposes hereof its separate asset
management divisions and subsidiaries) serves as investment adviser to the STI
Classic Funds and STI Classic Variable Trust (collectively, the "Trusts"),
open-end investment companies registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, pursuant to the distribution agreements between the Distributor
and the Trusts currently in effect (the "Distribution Agreements"), the
Distributor acts as the principal underwriter and distributor of shares of the
portfolios of the Trusts (the "Funds"), which shares (the "Shares") are
registered under the Securities Act of 1933, as amended; and
WHEREAS, in consideration of Distributor's agreement to provide certain
sales and marketing services as described in the Distribution Agreements, the
Adviser has agreed to compensate and reimburse the Distributor to the extent
that the Funds are not authorized to so compensate and reimburse the
Distributor.
NOW THEREFORE, in consideration of the covenants hereinafter contained, the
Adviser and the Distributor agree as follows:
1. Services.
Distributor will provide the Funds and the Adviser with some or all of the
marketing and sales support services set forth in the Distribution Agreements,
as the parties agree from time to time.
2. Compensation and Expenses.
(a) The Distributor shall be entitled to receive the compensation and
reimbursement of the expenses set forth in the Distribution Agreements, based on
the services selected by Funds and/or the Adviser from time to time.
(b) In accordance with the Distribution Agreements, Adviser hereby agrees
that, if the Funds are not authorized to compensate and reimburse the
Distributor in full in accordance with the Distribution Agreements, the Adviser
shall compensate and reimburse the Distributor to the extent that the Funds are
not so authorized. Adviser's payment obligations hereunder shall extend only to
services and expenditures specifically authorized in advance in writing by
Adviser from time to time above and beyond items authorized by the Funds and
shall not constitute a guarantee of the Funds' obligations. Adviser does not
hereby commit in advance to authorize any such expenditure by Distributor.
Adviser acknowledges that Distributor shall have no obligation to provide any
service hereunder if not compensated or reimbursed therefor.
3. Term and Termination.
(a) This Agreement will become effective upon the date first set forth
above, will continue in effect throughout the term of the Distribution
Agreements, and will terminate automatically upon any termination of the
Distribution Agreements; provided, however, that, notwithstanding such
termination of the Distribution Agreements, the Adviser will continue to pay to
Distributor all fees to which Distributor
is entitled pursuant to the Distribution Agreements for services performed
through such termination date and any other fees payable upon such termination.
(b) This Agreement will terminate immediately and automatically in the
event the Distributor is expelled as a member of the NASD, and the Adviser may
terminate this Agreement immediately upon written notice in the event the
Distributor's NASD membership is suspended.
(c) In addition, either party may immediately terminate this Agreement in
whole or if the provision of services having substantially the character, form
and scope as those set forth hereunder becomes illegal or contrary to any
applicable law, or with the service and payment model remaining substantially as
reflected herein, a substantial risk that such a violation could occur would be
incurred.
(d) In addition, either party may immediately terminate this Agreement if
it has "Cause" to do so, which, for these purposes is defined as being
applicable if (i) the other party materially breaches this Agreement and the
breach is not remedied within 30 days after the party wishing to terminate gives
the breaching party written notice of the breach; (ii) a final judicial,
regulatory or administrative ruling or order is made in which the party to be
terminated has been found guilty of criminal or unethical behavior in the
conduct of its business; or (iii) the other party makes an assignment for the
benefit of its creditors, files a voluntary petition under any bankruptcy or
insolvency law, becomes the subject of an involuntary petition under any
bankruptcy or insolvency law that is not dismissed within 60 days, or a trustee
or receiver is appointed under any bankruptcy or insolvency law for the other
party or its property.
4. Rights and Obligations of the Adviser and the Distributor.
The Adviser shall be responsible for the accuracy, completeness and
propriety of information concerning its organization and sales channels that the
Adviser furnishes to the Distributor in connection with the performance of the
Distribution Agreements.
5. Representations and Warranties.
(a) The Adviser represents and warrants the following:
(i) this Agreement has been duly authorized by the Adviser and, when
executed and delivered, will constitute a legal, valid and binding obligation of
the Adviser, enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, reorganizations, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties;
(ii) the contractual advisory fees that the Adviser charges the Trusts
do not contain any component for the purpose of paying for fund distribution;
and
(iii) this Agreement has been disclosed to the Boards of Trustees of
the Trusts (the "Boards"), and the Adviser has provided all such information to
the Boards as may be appropriate (or as has been requested by the Boards) in
connection with the Board's review or approval of the arrangements contemplated
hereunder, including amounts expended by the Adviser hereunder.
(b) The Distributor represents and warrants the following:
(i) it is presently a duly registered broker-dealer with the NASD in
good standing and covenants that it shall remain so registered and in good
standing for the duration of this Agreement, and shall immediately notify the
Adviser should the foregoing no longer be true during the term of this
Agreement;
(ii) the Distributor also represents and warrants that it is in
material compliance with all laws, rules and regulations applicable to it,
including but not limited to the rules and regulations promulgated by the NASD;
and
(iii) this Agreement has been duly authorized by the Distributor and,
when executed and delivered, will constitute a legal, valid and binding
obligation of the Distributor, enforceable against the Distributor in accordance
with its terms subject to bankruptcy, insolvency, reorganizations, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
6. Confidentiality.
During the term of this Agreement, the Distributor and the Adviser may have
access to confidential information relating to such matters as either party's
business, trade secrets, systems, procedures, manuals, products, contracts,
personnel, and clients. As used in this Agreement, "Confidential Information"
means information belonging to the Distributor or the Adviser which is of value
to such party and the disclosure of which could result in a competitive or other
disadvantage to either party, including, without limitation, financial
information, business practices and policies, know-how, trade secrets, market or
sales information or plans, customer lists, business plans, and all provisions
of this Agreement. Confidential Information includes information developed by
either party in the course of engaging in the activities provided for in this
Agreement, unless: (i) the information is or becomes publicly known without
breach of this Agreement, (ii) the information is disclosed to the other party
by a third party not under an obligation confidentiality to the party whose
Confidential Information is at issue of which the party receiving the
information should reasonably be aware, or (iii) the information is
independently developed by a party without reference to the other's Confidential
Information. Each party will protect the other's Confidential Information with
at least the same degree of care it uses with respect to its own Confidential
Information, and will not use the other party's Confidential Information other
than in connection with its duties and obligations hereunder. Notwithstanding
the foregoing, a party may disclose the other's Confidential Information if (i)
required by law, regulation or legal process or if requested by any Agency; (ii)
it is advised by counsel that it may incur liability for failure to make such
disclosure; (iii) requested to by the other party; provided that in the event of
(i) or (ii) the disclosing party shall give the other party reasonable prior
notice of such disclosure to the extent reasonably practicable and reasonably
cooperate with the other party (at such other party's expense) in any efforts to
prevent such disclosure.
7. Distribution Services Personnel; Limitation of Liability; Indemnification.
(a) The Distributor retains the general rights and responsibilities
associated with its employment of wholesalers and other personnel with day to
day job responsibilities that are substantially dedicated to the activities
(including wholesaling activities) to be performed on behalf of the Adviser and
the Trusts (collectively, the "Distributor-employed Distribution Services
Personnel"). With respect to any individuals who are not employed by the
Distributor, but who are registered by the Distributor on Form U-4 in order for
such individuals ("non-Distributor-employed Distribution Services Personnel",
and together with the Distributor-employed Distribution Services Personnel
(whether or not internal or external), collectively, the "Distribution Services
Personnel") to perform activities (including wholesaling activities) on behalf
of the Adviser and the Trusts, the Distributor shall have the following rights
exercisable at any time within its sole discretion: (i) to terminate the
registration by filing Form U-5 or such other necessary and appropriate
documents (and in the event of such termination Distributor will promptly notify
the Trust that such termination has occurred); (ii) to take disciplinary action,
including, without limitation, making reports to regulatory bodies and
authorities; (iii) to seek damages for actions taken or omissions of the
non-Distributor-employed Distribution Services Personnel; (iv) to receive
information (including, without limitation, reports and certifications) from the
Adviser's Code
Compliance Officer and/or Chief Compliance Officer regarding the
non-Distributor-employed Distribution Services Personnel's compliance with the
Adviser's Code of Ethics; and (v) to receive periodic certification from the
non-Distributor-employed Distribution Services Personnel regarding his or her
compliance with the manuals and policies of the Distributor. In addition, the
Adviser shall provide the Distributor with, and the Distributor shall have the
right to receive, copies of any reports, complaints, documents or inquiries
relating to the performance of the non-Distributor-employed Distribution
Services Personnel, and any information that would affect the
non-Distributor-employed Distribution Services Personnel's status of, or
information on, his or her Form U-4 registration. For avoidance of confusion, it
is expressly agreed and understood that all Distribution Services Personnel,
whether or not Distributor-employed Distribution Services Personnel or
non-Distributor-employed Distribution Services Personnel, are considered
"Wholesaling Personnel" for purposes of the Distribution Agreements, and the
Distributor shall be entitled to be compensated and reimbursed with respect to
such Distribution Services Personnel, in accordance with the Distribution
Agreements.
(b) Subject to Section 7(a), the Distributor shall not be liable to the
Adviser or the Trusts for any action taken or omitted by it in the absence of
bad faith, willful misfeasance, gross negligence or reckless disregard by it (or
its agents or employees other than the non-Distributor-employed Distribution
Services Personnel) of its obligations and duties under this Agreement or the
Distribution Agreements. As long as the Distributor acts in good faith and
complies with laws and regulations applicable to it in connection with its
services hereunder and/or under the Distribution Agreements, the Adviser shall
indemnify and hold harmless the Distributor and its employees, agents, directors
and officers from and against, any and all claims, demands, actions and suits,
and from and against any and all judgments, liabilities, losses, damages, costs,
charges and reasonable counsel fees incurred in connection therewith
(collectively, "Losses") arising out of or related to the activities, actions
and omissions of the non-Distributor-employed Distribution Services Personnel as
registered representatives of the Distributor, except to the extent that Losses
result from (i) the Distributor's general responsibilities as employer of
Distribution Services Personnel, or (ii) the bad faith, willful misfeasance,
negligence or reckless disregard by the Distributor of its express obligations
and duties hereunder and/or the Distribution Agreements.
8. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Adviser, to it at 00 Xxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000, Attention: Xxxxxxx Xxxx; and if to Distributor, to it at 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Broker Dealer Chief Compliance
Officer, with a copy to BISYS Distribution Services, 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000, Attention: President, or at such other address as such
party may from time to time specify in writing to the other party pursuant to
this Section.
9. Assignment.
This Agreement and the rights and duties hereunder shall not be assignable
with respect to a Fund by either of the parties hereto except by the specific
written consent of the other party. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
10. Governing Law.
This Agreement shall be governed by, and interpreted in accordance with,
the laws of the State of New York.
11. Miscellaneous.
(a) Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the parties hereto
as to the subject matter covered by this Agreement, and supersedes all prior
negotiations, understandings and agreements bearing upon the subject matter
covered by this Agreement.
(c) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if this Agreement
did not contain such part, term or provision.
(d) This Agreement may be executed in counterparts, each of which shall be
an original but all of which, taken together, shall constitute one and the same
agreement.
(e) No amendment to this Agreement shall be valid unless made in writing
and executed by both parties hereto.
(f) The Adviser acknowledges that certain FRC publications referred to in
the Distribution Agreements may be provided only to parties that have entered
into a written agreement or addendum that sets forth the terms of use of such
publications and the associated fee. The Distribution Agreements provide that
the Funds will notify the Distributor whether the Funds or the Adviser or both
will enter into such an agreement or addendum. The Adviser acknowledges that if
only one of the Funds or the Adviser enters into such agreement or addendum, the
other party will be prohibited from receiving or using such publications.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
TRUSCO CAPITAL MANAGEMENT, INC. BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.
its General Partner
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx Xxxxxxxxx Name: Xxxx Xxxxxxx
Title: Managing Director Title: President
SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN STI CLASSIC FUNDS
AND BISYS FUND SERVICES LIMITED PARTNERSHIP
FUNDS
Aggressive Growth Stock Fund
Balanced Fund
Capital Appreciation Fund
Classic Institutional Cash Management Money Market Fund
Classic Institutional Municipal Cash Reserve Money Market Fund
Classic Institutional Short-Term Bond Fund
Classic Institutional U.S. Government Securities Money Market Fund
Classic Institutional U.S. Treasury Securities Money Market Fund
Core Bond Fund (formerly, Classic Institutional Core Bond Fund)
Emerging Growth Stock Fund
Florida Tax-Exempt Bond Fund
Georgia Tax-Exempt Bond Fund
High Income Fund
High Quality Bond Fund (formerly, Classic Institutional High Quality Bond
Fund)
Intermediate Bond Fund (formerly, Classic Institutional Intermediate Bond
Fund)
International Equity Fund
International Equity Index Fund
Investment Grade Bond Fund
Investment Grade Tax-Exempt Bond Fund
Large Cap Relative Value Fund (formerly, Growth and Income Fund)
Large Cap Value Equity Fund (formerly, Value Income Stock Fund)
Life Vision Aggressive Growth Fund
Life Vision Conservative Fund
Life Vision Growth and Income Fund
Life Vision Moderate Growth Fund
Life Vision Target Date 2015 Fund
Life Vision Target Date 2025 Fund
Life Vision Target Date 2035 Fund
Limited Duration Fund (formerly, Classic Institutional Limited Duration
Fund)
Limited-Term Federal Mortgage Securities Fund
Maryland Municipal Bond Fund
Mid-Cap Equity Fund
Mid-Cap Value Equity Fund
North Carolina Tax-Exempt Bond Fund
Prime Quality Money Market Fund
Quality Growth Stock Fund (formerly, Tax Sensitive Growth Stock Fund)
Seix Floating Rate High Income Fund
Seix High Yield Fund (formerly, Seix Institutional High Yield Fund)
Short-Term Bond Fund
Short-Term U.S. Treasury Securities Fund
Small Cap Growth Stock Fund
Small Cap Value Equity Fund
Small Cap Quantitative Equity Fund
Strategic Income Fund
Strategic Quantitative Equity Fund
Tax-Exempt Money Market Fund
Total Return Bond Fund (formerly, Classic Institutional Total Return Bond
Fund)
U.S. Government Securities Fund
U.S. Government Securities Money Market Fund
U.S. Government Securities Ultra-Short Bond Fund (formerly, Classic
Institutional U.S. Government Securities Super Short Income Plus Fund)
U.S. Treasury Money Market Fund
Ultra-Short Bond Fund (formerly, Classic Institutional Super Short Income
Plus Fund)
Virginia Intermediate Municipal Bond Fund
Virginia Municipal Bond Fund
Virginia Tax-Free Money Market Fund
Dated: January 6, 2006
SCHEDULE B
DISTRIBUTION PLAN
STI CLASSIC FUNDS
DISTRIBUTION AND SERVICE PLAN
A SHARES (FORMERLY, INVESTOR SHARES)
WHEREAS, STI Classic Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution and Service Plan (the
"Plan") will benefit the Trust and the owners of the A Shares of the portfolios
("Shareholders") of the Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Plan pursuant
to Rule 12b-1 under the 1940 Act and in accordance with the Trust's Rule 18f-3
Multiple Class Plan:
SECTION 1. The Trust has adopted this Plan to enable the Trust to directly
or indirectly bear expenses related to (a) the distribution and sale of A Shares
(collectively, the "Shares") of the portfolios of the Trust, as now in existence
or hereinafter created from time to time, (each a "Portfolio"), and (b) the
shareholder servicing of such Shares.
SECTION 2. The Shares of each Portfolio are authorized to pay the principal
underwriter of the Shares (the "Distributor") a total fee in connection with
distribution-related services and shareholder servicing provided in respect of
such class, calculated and payable monthly, at the annual rate set forth on
Schedule A attached hereto.
SECTION 3. Distribution Activities.
(a) The fee paid pursuant to Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives
and to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not way of limitation,
costs of printing and mailing prospectuses, statements of additional
information and shareholder reports to prospective investors; preparation
and distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor related to the
distribution of the Shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other broker-dealers,
banks or other financial institutions, and of any other persons who provide
support services in connection with the distribution of the Shares,
including travel, entertainment, and telephone expenses.
(b) Payments under this Plan are not tied exclusively to the expenses for
distribution-related activities actually incurred by the Distributor, so
that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan
and its payment terms on a continuing basis and in doing so will consider
all relevant factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(c) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional distribution.
SECTION 4. Shareholder Servicing Activities.
(a) A portion of the fee payable to the Distributor pursuant to Section 2 may
be used by the Distributor to provide compensation for personal, ongoing
servicing and/or maintenance of shareholder accounts with respect to the
Shares of the applicable Portfolios, provided that the amount paid for such
shareholder servicing activities does not exceed the amount set forth on
Schedule A. Compensation may be paid by the Distributor, or any portion of
the fee may be reallowed, to persons, including employees of the
Distributor, and institutions who respond to inquiries of holders of the
Shares regarding their ownership of Shares or their accounts with the Trust
or who provide other administrative or accounting services not otherwise
required to be provided by the Trust's investment adviser, transfer agent,
or other agent of the Trust. Notwithstanding the foregoing, if the National
Association of Securities Dealers, Inc. (the "NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair
Practice that differs from the definition of shareholder servicing
activities in this paragraph, or if the NASD adopts a related definition
intended to define the same concept, the definition of shareholder
servicing activities in this paragraph shall be automatically amended,
without further action of the parties, to conform to such NASD definition.
(b) Payments under this Plan are not tied exclusively to the expenses for
shareholder servicing activities actually incurred by the Distributor, so
that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(c) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional shareholder servicing activities.
SECTION 5. This Plan shall not take effect with respect to a Portfolio
until it has been approved together with any related agreements, by votes of the
majority of both (i) the Trustees of the Trust and (ii) the Qualified Trustees,
cast in person at a Board of Trustees meeting called for the purpose of voting
on this Plan or such agreement.
SECTION 6. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Section 5 herein for the
approval of this Plan.
SECTION 7. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 8. This Plan may be terminated at any time with respect to a
Portfolio by the vote of a majority of the Qualified Trustees or by vote of a
majority of the Portfolio's outstanding Shares.
SECTION 9. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to a
Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Trustees or by the vote of shareholders holding a majority of the
Portfolio's outstanding Shares, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 10. This Plan may not be amended to increase materially the amount
of expenses permitted pursuant to Section 2 hereof without the approval of
shareholders holding a majority of the outstanding Shares of the applicable
Portfolio, and all material amendments to this Plan shall be approved in the
manner provided in Section 5 herein for the approval of this Plan.
SECTION 11. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
SECTION 12. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 13 This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
Approved May 17, 2005
SCHEDULE A
TO THE DISTRIBUTION AND SERVICE PLAN
CLASS A SHARES
Pursuant to Section 2, the Trust shall pay the Distributor compensation at which
is calculated daily and paid monthly at an annual rate as set forth below.
MAXIMUM
SHAREHOLDER
PORTFOLIO FEE SERVICES FEE
--------- --- ------------
Aggressive Growth Stock Fund .35% .25%
Balanced Fund .28% .25%
Capital Appreciation Fund .35% .25%
Core Bond Fund (formerly, Classic Institutional Core Bond Fund) .25% .25%
Emerging Growth Stock Fund .35% .25%
Florida Tax Exempt Bond Fund .18% .18%
Georgia Tax Exempt Bond Fund .18% .18%
Large Cap Relative Value Fund (formerly, Growth and Income Fund) .25% .25%
High Income Fund .30% .25%
Intermediate Bond Fund (formerly, Classic Institutional Intermediate Bond Fund) .25% .25%
International Equity Fund .33% .25%
International Equity Index Fund .35% .25%
Investment Grade Bond Fund .35% .25%
Investment Grade Tax-Exempt Bond Fund .35% .25%
Life Vision Aggressive Growth Fund .35% .25%
Life Vision Conservative Fund .35% .25%
Life Vision Growth and Income Fund .35% .25%
Life Vision Moderate Growth Fund .35% .25%
Life Vision Target Date 2015 Fund .35% .25%
Life Vision Target Date 2025 Fund .35% .25%
Life Vision Target Date 2035 Fund .35% .25%
Limited-Term Federal Mortgage Securities Fund .23% .23%
MAXIMUM
SHAREHOLDER
PORTFOLIO FEE SERVICES FEE
--------- --- ------------
Maryland Municipal Bond Fund .15% .15%
Mid-Cap Equity Fund .35% .25%
Mid-Cap Value Equity Fund .35% .25%
North Carolina Tax-Exempt Bond Fund .15% .15%
Prime Quality Money Market Fund .20% .20%
Seix Floating Rate High Income Fund .30% .25%
Seix High Yield Fund (formerly, Seix Institutional High Yield Fund) .25% .25%
Short-Term Bond Fund .23% 23%
Short-Term U.S. Treasury Securities Fund .18% .18%
Small Cap Quantitative Equity Fund .35% .30%
Small Cap Growth Stock Fund .35% .25%
Small Cap Value Equity Fund .33% .25%
Strategic Income Fund .35% .25%
Strategic Quantitative Equity Fund .25% .25%
Quality Growth Stock Fund (formerly, Tax Sensitive Growth Stock Fund) .35% .25%
Tax-Exempt Money Market Fund .15% .15%
U.S. Government Securities Fund .35% .25%
U.S. Government Securities Money Market Fund .17% .17%
U.S. Treasury Money Market Fund .15% .15%
Large Cap Value Equity Fund (formerly, Value Income Stock Fund) .33% .25%
Virginia Intermediate Municipal Bond Fund .15% .15%
Virginia Municipal Bond Fund .15% .15%
Virginia Tax-Free Money Market Fund .20% .20%
Effective November 18, 2005
STI CLASSIC FUNDS
DISTRIBUTION AND SERVICE PLAN
CLASS B SHARES
WHEREAS, STI Classic Funds (the "Trust") is engaged in business as an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a reasonable
likelihood that this Distribution and Service Plan (the "Plan") will benefit the
Trust and the owners of the B Shares of the portfolios of the Trust, as now in
existence or hereinafter created from time to time (each a "Portfolio").
NOW THEREFORE, the Trustees of the Trust hereby adopt this Plan pursuant to Rule
12b-1 under the 1940 Act.
SECTION 1. The Trust has adopted this Plan to enable the Trust to directly or
indirectly bear expenses relating to (a) the distribution and sale of B Shares
(the "Shares") of the Portfolios and (b) the shareholder servicing of such
Shares.
SECTION 2. Distribution Activities.
(a) The Shares of each Portfolio are authorized to pay the principal underwriter
of the Shares (the "Distributor") a total fee in connection with
distribution-related services provided in respect of such class, calculated and
payable monthly, at the annual rate of .75% of the value of the average daily
net assets of such class. The services rendered by the Distributor for which the
Distributor is entitled to receive this fee shall be deemed to have been
completed at the time of the initial purchase of the Shares taken into account
in computing the fee.
(b) The fee paid pursuant to this Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives and
to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not way of limitation, costs
of printing and mailing prospectuses, statements of additional information and
shareholder reports to prospective investors; preparation and distribution of
sales literature; advertising of any type; an allocation of overhead and other
expenses of the Distributor related to the distribution of the Shares; and
payments to, and expenses of, officers, employees or representatives of the
Distributor, of other broker-dealers, banks or other financial institutions, and
of any other persons who provide support services in connection with the
distribution of the Shares, including travel, entertainment, and telephone
expenses.
(c) Payments under this Section 2 of the Plan are not tied exclusively to the
expenses for distribution-related activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the appropriateness of
the Plan and its payment terms on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover costs
of additional distribution.
(e) Notwithstanding anything to the contrary herein, the Distributor shall be
paid the accrued fee pursuant to this Section 2 regardless of the Distributor's
termination as principal underwriter of the Shares or any termination of the
Plan other than a complete termination of the Plan. In addition, the Trust's
obligation to pay the fee to the Distributor shall be absolute and unconditional
and shall not be subject to any dispute, offset, counterclaim, or defense
whatsoever.
SECTION 3. Shareholder Servicing Activities.
(a) In addition to the amounts set forth in Section 2 above, the Shares of each
Portfolio are authorized to pay the Distributor a fee in connection with the
personal, ongoing servicing of shareholder accounts of such Shares, calculated
and payable monthly, at the annual rate of .25% of the value of the average
daily net assets of such class.
(b) The service fee payable to the Distributor pursuant to this Section 3 hereof
may be used by the Distributor to provide compensation for personal, ongoing
servicing and/or maintenance of shareholder accounts with respect to the Shares
of the applicable Portfolios. Compensation may be paid by the Distributor, or
any portion of the fee may be reallowed, to persons, including employees of the
Distributor, and institutions who respond to inquiries of holders of the Shares
regarding their ownership of Shares or their accounts with the Trust or who
provide other administrative or accounting services not otherwise required to be
provided by the Trust's investment adviser, transfer agent, or other agent of
the Trust. Notwithstanding the foregoing, if the National Association of
Securities Dealers, Inc. (the "NASD") adopts a definition of "service fee" for
purposes of Section 26(d) of the NASD Rules of Fair Practice that differs from
the definition of shareholder servicing activities in this paragraph, or if the
NASD adopts a related definition intended to define the same concept, the
definition of shareholder servicing activities in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for shareholder servicing activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the appropriateness of
the Plan and its payment terms on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover costs
of additional shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio until it
has been approved (a) by a vote of at least a majority of the outstanding voting
securities of the Shares of such Portfolio, if adopted after any public offering
of the Shares or the sale of such Shares to persons who are not affiliated with
the Portfolio, affiliated persons of such persons, promoters of the Portfolio,
or affiliated persons of such promoters; and (b) together with any related
agreements, by votes of the majority of both (i) the Trustees of the Trust and
(ii) the Qualified Trustees, cast in person at a Board of Trustees meeting
called for the purpose of voting on this Plan or such agreement.
SECTION 5. This Plan shall continue in effect for a period of more than one year
after its adoption only so long as such continuance is specifically approved at
least annually in the manner provided in Section 4(b) herein for the approval of
this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid or
payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at last quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any Portfolio
by the vote of a majority of the Qualified Trustees or by a vote of a majority
of the Portfolio's outstanding Shares.
SECTION 8. All agreements with any person relating to implementation of this
Plan shall be in writing, and any agreement related to this Plan shall provide
(a) that such agreement may be terminated at any time with respect to any
Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Trustees or by the vote of shareholders holding a majority of the
Portfolio's outstanding Shares, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount of
distribution expenses permitted pursuant to Section 2 hereof without the
approval of shareholders holding a majority of the outstanding Shares of the
applicable Portfolio, and all material amendments to this Plan shall be approved
in the manner provided in Section 4(b) herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall mean
those Trustees of the Trust who are not interested persons of the Trust, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
SECTION 11. While this Plan is in effect, the selection and nomination of those
Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 12. This Plan shall not obligate the Trust or any other party to enter
into an agreement with any particular person.
February 11, 2003
STI CLASSIC FUNDS
DISTRIBUTION AND SERVICE PLAN
C SHARES (FORMERLY, L SHARES)
WHEREAS, The STI Classic Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution and Service Plan (the
"Plan") will benefit the Trust and the owners of the C Shares of the portfolios
(the "Shareholders") of the Trust.
NOW THEREFORE, the Trustees of the Trust hereby adopt this Plan pursuant to
Rule 12b-1 under the 1940 Act and in accordance with the Trust's Rule 18f-3
Multiple Class Plan:
SECTION 1. The Trust has adopted this Plan to enable the Trust to directly
or indirectly bear expenses related to (a) the distribution and sale of C Shares
(collectively, the "Shares") of the portfolios of the Trust, as now in existence
or hereinafter created from time to time, (each a "Portfolio"), and (b) the
shareholder servicing of such Shares.
SECTION 2. Distribution Activities.
(a) The Shares of each Portfolio except the Classic Institutional Limited
Duration Fund are authorized to pay the principal underwriter of the Shares
(the "Distributor") a total fee in connection with distribution-related
services provided in respect of such class, calculated and payable monthly,
at the annual rate of .75% of the value of the average daily net assets of
such class. The Shares of the Classic Institutional Limited Duration Fund
are authorized to pay the Distributor a total fee in connection with
distribution-related services provided in respect of such class, calculated
and payable monthly, at the annual rate of .25% of the value of the average
daily net assets of such class.
(b) The fee paid pursuant to this Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives
and to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not way of limitation,
costs of printing and mailing prospectuses, statements of additional
information and shareholder reports to prospective investors; preparation
and distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor related to the
distribution of the Shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other broker-dealers,
banks or other financial institutions, and of any other persons who provide
support services in connection with the distribution of the Shares,
including travel, entertainment, and telephone expenses.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for distribution-related activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by
the Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional distribution.
SECTION 3. Shareholder Servicing Activities.
(a) In addition to the amounts set forth in Section 2 above, the Shares of each
Portfolio are authorized to pay the Distributor a fee in connection with
the personal, ongoing servicing of shareholder accounts of such Shares,
calculated and payable monthly, at the annual rate of .25% of the value of
the average daily net assets of such class.
(b) The service fee payable to the Distributor pursuant to this Section 3
hereof may be used by the Distributor to provide compensation for personal,
ongoing servicing and/or maintenance of shareholder accounts with respect
to the Shares of the applicable Portfolios. Compensation may be paid by the
Distributor, or any portion of the fee may be reallowed, to persons,
including employees of the Distributor, and institutions who respond to
inquiries of holders of the Shares regarding their ownership of Shares or
their accounts with the Trust or who provide other administrative or
accounting services not otherwise required to be provided by the Trust's
investment adviser, transfer agent, or other agent of the Trust.
Notwithstanding the foregoing, if the National Association of Securities
Dealers, Inc. (the "NASD") adopts a definition of "service fee" for
purposes of Section 26(d) of the NASD Rules of Fair Practice that differs
from the definition of shareholder servicing activities in this paragraph,
or if the NASD adopts a related definition intended to define the same
concept, the definition of shareholder servicing activities in this
paragraph shall be automatically amended, without further action of the
parties, to conform to such NASD definition.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for shareholder servicing activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by
the Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
until it has been approved together with any related agreements, by votes of the
majority of both (i) the Trustees of the Trust and (ii) the Qualified Trustees,
cast in person at a Board of Trustees meeting called for the purpose of voting
on this Plan or such agreement.
SECTION 5. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Section 4 herein for the
approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at last quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Trustees or by a vote of a
majority of the Portfolio's outstanding Shares.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Trustees or by the vote of shareholders holding a majority of the
Portfolio's outstanding Shares, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of shareholders holding a majority of the outstanding Shares of the
applicable Portfolio, and all material amendments to this Plan shall be approved
in the manner provided in Section 4 herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the SEC.
SECTION 11. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 12. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
Adopted May 17, 2005
SCHEDULE C
COMPENSATION OF THE DISTRIBUTOR
1. BASIC DISTRIBUTION SERVICES. For providing the distribution entity and
related infrastructure and platform, including requisite registrations and
qualifications, premises, personnel, compliance, ordinary fund board meeting
preparation, maintenance of selling agreements, clearance of advertising and
sales literature with regulators, filing appropriate documentation for advisory
representatives to qualify as registered representatives of the Distributor
(provided that the Adviser is solely responsible for its representatives'
meeting examination requirements) and their related registrations and fees,
ordinary supervisory services, overhead, Financial Research Corporation's Mutual
Fund Views on the News and Monitor publications, and return on investment, the
Distributor shall be entitled to receive an annual fee of $37,500 (the "Basic
Services Fee"), billed monthly; provided, however, that as long as Distributor
or an affiliate of Distributor continues to perform services under that certain
Master Services Agreement dated July 1, 2004 between BISYS Fund Services Ohio,
Inc. and the Trust, Distributor will waive the Basic Services Fee.
2. ADDITIONAL DISTRIBUTION SERVICES. The Distributor will provide the following
additional distribution services: (i) marketing and distribution strategy and
consulting services; (ii) resource management and consultation; and (iii)
product analysis and product development assistance. For providing the
additional services listed in this Section 2, the Distributor shall receive an
annual retainer in an amount mutually agreed by the parties, which amount as of
the date of this Agreement is expected to be approximately $75,000. Such
agreed-upon amount will be billed monthly.
3. SPECIAL CONDUIT SITUATIONS. If the Distribution Plan, or any other Fund plans
of distribution under Rule 12b-1 that contemplate up front and/or recurring
commission and/or service payments to broker dealers, retirement plan
administrators or others by the Distributor with respect to back-end loads,
level loads, or otherwise, unless expressly agreed otherwise in writing between
the parties, all such payments shall be made to the Distributor, which shall act
as a conduit for making such payments to such broker-dealers, retirement plan
administrators or others.
4. OTHER PAYMENTS BY THE DISTRIBUTOR. If the Distributor is required to make any
payments to third parties in respect of distribution, which payments are
contemplated by the parties to the distribution agreement or authorized under
the Distribution Plan, the Distributor shall be promptly reimbursed for such
payments upon invoicing them.
SCHEDULE D
SPECIAL DISTRIBUTION SERVICES AND FEES
SERVICES FEES
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1. WHOLESALING PERSONNEL SERVICES WHOLESALING PERSONNEL SERVICES FEES
Wholesaling Personnel may be external For each individual constituting the
wholesalers and/or internal Wholesaling Personnel employed by the
wholesalers. Distributor pursuant to this Agreement,
the Distributor shall receive annually
an amount equal to the sum of:
Services include soliciting support (i) all compensation paid annually by
of the Funds with selling broker the Distributor to the employee; plus
dealers; participating in promotional
meetings, presentations, conferences (ii) a management oversight fee equal
and other and forums; identifying to:
high potential personnel of the
Adviser and selling broker dealers; (a) if one to four Wholesaling
and assisting with mail solicitations Personnel are employed, 30% of
and literature fulfillment. the salary compensation and 5%
of the bonus or commission
The Wholesaling Personnel Services compensation, or
described on this Schedule D will be
provided only upon the written (b) if five or more Wholesaling
election of the Trust to receive such Personnel are employed, 25% of
services. the salary compensation and 5%
of the bonus or commission
compensation;
plus
(iii) 18% of the total compensation
(covering costs of the Distributor's
employee benefits that are provided by
the Distributor).
In addition, the Distributor shall be
reimbursed for all related costs to
support, educate and train and maintain
compliance oversight of Wholesaling
Personnel and other personnel such as
sales management, marketing and
performance reporting personnel
(including time and expenses, continuing
education, seminars, rent, supplies,
phone, computers, firm element, license,
registration)
Upon any termination of Wholesaling
Personnel at the request of the Funds or
upon termination of this Agreement by
the Funds for any reason other than
cause, the Distributor will be
reimbursed its severance costs with
respect to such terminated Wholesaling
Personnel.
2. MARKETING AND RELATED SERVICES MARKETING AND RELATED SERVICES FEES
Marketing Execution: services include Marketing Execution:
identification and development of
appropriate marketing and Quote available upon request.
communications programs, projects and
other initiatives; collaboration on
initiating, researching, developing,
and delivering appropriate sales and
marketing materials; and management
of marketing and advertising
projects.
Performance Reporting: services Performance Reporting:
include creation of templates for
monthly fact sheets and quarterly As mutually agreed.
fact sheets; populating templates
with performance data obtained from
third parties; and coordinating steps
needed for final printing and
distribution.
Creative Communication and Editorial Creative Communication and Editorial
Services: services include preparing Services
drafts of textual commentary and
management discussion and analysis Quote available upon request.
for annual; and semi-annual reports,
including portfolio manager
interviews; providing creative design
and direction; and coordinating
production, including typesetting
(initial composition and changes to
composition), charts and ancillary
items.
Production Timing:
- No timing guarantees can be made
for completion of monthly and
quarterly fact sheets where any
of the information needed to
produce the reports is generated
by service providers other than
the Distributor. However, a
basic estimate of turnaround
time may be given based upon
when the unit receives all
necessary data in good order.
Under normal conditions, the
Performance Reporting unit
expects to make proofs ready for
review (either printed or
electronic PDF format) by the
4th business day after the final
piece of data is received. If
compliance review is necessary
(e.g., when Morningstar ratings
data is used) an additional 2
days may be required for review.
- Printing turnaround (once the
factsheets are signed-off by the
client) is usually approximately
4-5 calendar days with most jobs
shipping by the 5th day.
If requested, final electronic PDF
files may be generated and e-mailed
on the day the job is signed-off on
by the client. These PDFs may be
distributed and printed as necessary
until the final printed pieces
arrive.
3. FRC SERVICES FRC SERVICES FEES
FRC's program components include: Market Analytics Publications: Quote
available upon request.
- Market Analytics Publications Advanced Research Publications:
- Advanced Research Publications - Topic Briefs
- Analyst Support FRC Focus (typical cost is approximately
$1,500)
- SME Direct
Access White Papers - FRC Vision (typical
cost is approximately $2,500)
The Trust acknowledges that certain
FRC publications may be provided only - Research Studies (costs vary,
to parties that have entered into a however typically range between
written agreement or addendum that $3,500 and $12,500)
sets forth the terms of use of such
publications and the associated fee. Analyst Support: Quote available upon
The Trust will notify the Distributor request
whether the Trust or the Adviser or
both will enter into such an SME Direct Access: Quote available upon
agreement or addendum. The Trust request
acknowledges that if only one of the
Trust or the Adviser enters into such Other FRC Fees:
agreement or addendum, the other
party will be prohibited from - Client participation in funding FRC
receiving or using such publications. Franchise Level program: $12,500
- All subsequent content and support
hours may be purchased at a 20%
discount from standard pricing.
Expenses Applicable to Special Distribution Services
Except as expressly set forth above, out-of-pocket expenses incurred by
Distributor in the performance of the special distribution services set
forth on this Schedule D are not included in the above fees. Reimbursement
of such out-of-pocket expenses will be mutually agreed upon by the parties.
Out-of-pocket expenses may include, without limitation:
reasonable travel and entertainment costs;
expenses incurred by the Distributor in qualifying, registering and
maintaining the registration of the Distributor and each individual
comprising Wholesaling Personnel as a registered representative of the
Distributor under applicable federal and state laws and rules of the NASD,
e.g., CRD fees and state fees;
Sponsorships, Promotions, Sales Incentives;
any and all compensation to be paid to a third party as paying agent for
distribution activities (platform fees, finders fees, sub-TA fees, 12b-1
pass thru, commissions, etc.);
costs and expenses incurred for telephone service, photocopying and office
supplies;
advertising costs;
costs for printing, paper stock and costs of other materials, electronic
transmission, courier, talent utilized in sales materials (e.g. models),
design output, photostats, photography, and illustrations;
packaging, shipping, postage, and photocopies; and
taxes that are paid or payable by the Distributor or its affiliates in
connection with its services hereunder, other than taxes customarily and
actually imposed upon the income that the Distributor receives hereunder.
