Exhibit (e)(1)
Amended and Restated Distribution Agreement
dated as of April 1, 2002, as amended May 15, 2003,
between
One Group Mutual Funds and One Group Dealer Services, Inc.
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 1/st/ day of April, 2002, as amended the 15/th/
day of May 2003, between One Group Mutual Funds (the "Trust"), a Massachusetts
business trust having its principal place of business at 0000 Xxxxxxx Xxxxxxx,
Xxxxxxxx, Xxxx 00000-0000, and One Group Dealer Services, Inc. ("Distributor")
having its principal place of business at 0000 Xxxxxxx Xxxxxxx, Xxxxxxxx, Xxxx
00000-0000.
WHEREAS, the Trust is an open-end management investment company, organized
as a Massachusetts business trust and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, it is intended that Distributor act as the distributor of the
units of beneficial interest ("Shares") of each of the investment portfolios of
the Trust identified in Schedule A hereto as such Schedule may be amended from
time to time (such portfolios being referred to individually as a "Fund" and
collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Distributor
1.1 Distributor will act as agent for the distribution of the Shares
covered by the registration statement and prospectuses of the Trust then in
effect under the Securities Act of 1933, as amended (the "Securities Act"). As
used in this Agreement, the term "registration statement" shall mean Parts A
(the prospectuses), B (the Statement of Additional Information) and C of each
registration statement that is filed on Form N-1A, or any successor thereto,
with the Commission, together with any amendments thereto. The term "prospectus"
shall mean each form of prospectus and Statement of Additional Information used
by the Funds for delivery to shareholders and prospective shareholders after the
effective dates of the above referenced registration statements, together with
any amendments and supplements thereto.
1.2 Distributor agrees to use appropriate efforts to solicit orders for
the sale of the Shares and will undertake such advertising and promotion as it
believes reasonable in connection with such solicitation. The Trust understands
that Distributor may in the future be the distributor of the shares of several
investment companies or series (together, "Companies") including Companies
having investment objectives similar to those of the Trust. The Trust further
understands that investors and potential investors in the Trust may invest in
shares of such other Companies. The Trust agrees that Distributor's duties to
such Companies shall not be deemed in conflict with its duties to the Trust
under this paragraph 1.2.
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Distributor may finance appropriate activities which it deems reasonable
which are primarily intended to result in the sale of the Shares, including, but
not limited to, advertising, and the compensation of underwriters, dealers and
sales personnel.
1.3 In its capacity as distributor of the Shares, all activities of
Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, all rules and regulations promulgated by the Commission thereunder and all
rules and regulations adopted by any securities association registered under the
Securities Exchange Act of 1934. Distributor may, without further consent on the
part of the Trust, subcontract for the performance of any services hereof with
any affiliated or unaffiliated entity that is duly registered as a broker or
dealer pursuant to Section 15 of the Securities Exchange Act of 1934, provided,
however, that Distributor shall be fully responsible to the Trust for the acts
and omissions of any party with whom it contracts.
1.4 Distributor will transmit any orders received by it for purchase or
redemption of the Shares to the transfer agent and custodian for the Funds.
1.5 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind, the
Trust's officers may decline to accept any orders for, or make any sales of, the
Shares until such time as those officers deem it advisable to accept such orders
and to make such sales.
1.6 Distributor will act only on its own behalf as principal if it chooses
to enter into selling agreements with selected dealers or others.
1.7 The Trust agrees at its own expense to execute any and all documents
and to furnish any and all information and otherwise to take all actions that
may be reasonably necessary in connection with the qualification of the Shares
for sale in such states as Distributor may designate.
1.8 The Trust shall furnish from time to time, for use in connection with
the sale of the Shares, such information with respect to the Funds and the
Shares as Distributor may reasonably request; and the Trust warrants that the
statements contained in any such information shall fairly show or represent what
they purport to show or represent. The Trust shall also furnish Distributor upon
request with: (a) unaudited semi-annual statements of the Funds' books and
accounts prepared by the Trust and (b) from time to time such additional
information regarding the financial condition of the Funds as Distributor may
reasonably request.
1.9 The Trust represents to Distributor that, with respect to the Shares,
all registration statements and prospectuses filed by the Trust with the
Commission under the Securities Act have been prepared in conformity with
requirements of said Act and rules and regulations of the Commission thereunder.
The registration statement and prospectuses contain all statements required to
be stated therein in conformity with said Act and the rules and regulations of
said Commission and all statements of fact contained in any such registration
statement and prospectuses are true and correct. Furthermore, neither any
registration statement nor any prospectus includes an untrue statement of a
material fact or omits to state a material fact
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required to be stated therein or necessary to make the statements therein not
misleading to a purchaser of the Shares. The Trust shall not file any amendment
to any registration statement or supplement to any prospectus without giving
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Trust's right to
file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Trust may deem
advisable, such right being in all respects absolute and unconditional.
1.10 The Trust authorizes Distributor and dealers to use any prospectus in
the form furnished from time to time in connection with the sale of the Shares.
The Trust agrees to indemnify, defend and hold Distributor, its several
directors, officers and employees, and any person who controls Distributor
within the meaning of Section 15 of the Securities Act, free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which Distributor, its directors,
officers and employees, or any such controlling person, may incur under the
Securities Act or under common law or otherwise, arising out of or based upon
any untrue statement, or alleged untrue statement, of a material fact contained
in any registration statement or any prospectus, or arising out of or based upon
any omission, or alleged omission, to state a material fact, required to be
stated in either any registration statement or any prospectus, or necessary to
make the statements in either thereof not misleading; provided, however, that
the Trust's agreement to indemnify Distributor, its directors, officers or
employees, and any such controlling person, shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any statements or
representations as are contained in any prospectus and in such financial and
other statements as are furnished in writing to the Trust by Distributor and
used in the answers to the registration statement or in the corresponding
statements made in the prospectus, or arising out of or based upon any omission
or alleged omission to state a material fact in connection with the giving of
such information required to be stated in such answers or necessary to make the
answers not misleading; and further provided that the Trust's agreement to
indemnify Distributor and the Trust's representations and warranties
hereinbefore set forth in paragraph 1.9 shall not be deemed to cover any
liability to the Trust or its Shareholders to which Distributor would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of Distributor's reckless disregard
of its obligations and duties under this Agreement. The Trust's agreement to
indemnify Distributor, its directors, officers and employees and any such
controlling person, as aforesaid, is expressly conditioned upon the Trust being
notified of any action brought against Distributor, its officers or employees,
or any such controlling person, such notification to be given by letter or by
facsimile addressed to the Trust at its principal office in Columbus, Ohio and
sent to the Trust by the person against whom such action is brought, within 10
business days after the summons or other first legal process shall have been
served. The failure to so notify the Trust of any such action shall not relieve
the Trust from any liability which the Trust may have to the person against whom
such action is brought by reason of any such untrue, or allegedly untrue,
statement or omission, or alleged omission, otherwise than on account of the
Trust's indemnity agreement contained in this paragraph 1.10. The Trust will be
entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Trust and approved by Distributor, which
approval shall not be unreasonably withheld. Such
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counsel shall consult with Distributor and give the Distributor the opportunity
to review any documents prepared by such counsel prior to filing the same with
the court. In the event the Trust elects to assume the defense of any such suit
and retain counsel of good standing approved by Distributor, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Trust does not elect to assume
the defense of any such suit, or in case Distributor does not approve of counsel
chosen by the Trust, the Trust will reimburse Distributor, its directors,
officers and employees, or the controlling person or persons named as defendant
or defendants in such suit, for the fees and expenses of any counsel retained by
Distributor or them. The Trust shall not, without the written consent of the
Distributor, consent to entry of any judgement or enter into any settlement. Any
judgement or settlement shall include as an unconditional term the giving by the
claimant or plaintiff to the Distributor and its directors, officers and
employees, or any such controlling person, of a release from all liability in
respect to such claim or litigation. The Trust's indemnification agreement
contained in this paragraph 1.10 and the Trust's representations and warranties
in this Agreement shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of Distributor, its directors,
officers and employees, or any controlling person, and shall survive the
delivery of any Shares and the termination of this Agreement.
This Agreement of indemnity will inure exclusively to Distributor's
benefit, to the benefit of its several directors, officers and employees, and
their respective estates, and to the benefit of the controlling persons and
their successors. The Trust agrees promptly to notify Distributor of the
commencement of any litigation or proceedings against the Trust or any of its
officers or Trustees in connection with the issue and sale of any Shares.
1.11 Distributor agrees to indemnify, defend and hold the Trust, its
several officers and Trustees and any person who controls the Trust within the
meaning of Section 15 of the Securities Act free and harmless from and against
any and all claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Trust, its officers or Trustees
or any such controlling person, may incur under the Securities Act or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands, shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact contained in information
furnished in writing by Distributor to the Trust and used in the answers to any
of the items of the registration statement or in the corresponding statements
made in the prospectuses, or shall arise out of or be based upon any omission,
or alleged omission, to state a material fact in connection with such
information furnished in writing by Distributor to the Trust required to be
stated in such answers or necessary to make such information not misleading.
Distributor's agreement to indemnify the Trust, its officers and Trustees, and
any such controlling person, as aforesaid, is expressly conditioned upon
Distributor being notified of any action brought against the Trust, its officers
or Trustees, or any such controlling person, such notification to be given by
letter or facsimile addressed to Distributor at its principal office in
Columbus, Ohio, and sent to Distributor by the person against whom such action
is brought, within 10 business days after the summons or other first legal
process shall have been served. Distributor shall have the right of first
control of the defense of such action, with counsel of its own choosing,
satisfactory to the Trust, if such action is based solely upon such alleged
misstatement or omission on Distributor's
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part, and in any other event the Trust, its officers or Trustees or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure to so notify
Distributor of any such action shall not relieve Distributor from any liability
which Distributor may have to the Trust, its officers or Trustees, or to such
controlling person by reason of any such untrue or alleged untrue statement, or
omission or alleged omission, otherwise than on account of Distributor's
indemnity agreement contained in this paragraph 1.11.
1.12 No Shares shall be offered by either Distributor or the Trust under
any of the provisions of this Agreement and no orders for the purchase or sale
of Shares hereunder shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act or if and so long as a current prospectus as required by Section
10(b)(2) of said Act is not on file with the Commission; provided, however, that
nothing contained in this paragraph 1.12 shall in any way restrict or have an
application to or bearing upon the Trust's obligation to repurchase Shares from
any Shareholder in accordance with the provisions of the Trust's prospectuses,
Declaration of Trust, or Bylaws.
1.13 The Trust agrees to advise Distributor as soon as reasonably practical
by a notice in writing delivered to Distributor or its counsel:
(a) of any request by the Commission for amendments to the registration
statement or prospectus then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or
prospectus then in effect or the initiation by service of process on
the Trust of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement or prospectuses then
in effect or which requires the making of a change in such
registration statement or prospectus in order to make the statements
therein not misleading; and
(d) of all actions of the Commission with respect to any amendment to any
registration statement or prospectuses which may from time to time be
filed with the Commission.
For purposes of this section, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.14 The Trust and the Distributor acknowledge and agree on behalf of
themselves and their directors, trustees, officers and employees that they may
receive from each other information, or access to information, about the
customers or about consumers generally (collectively, "Customer Information")
including, but not limited to, nonpublic personal information such as a
customer's name, address, telephone number, account relationships, account
balances and account histories. All information, including Customer Information,
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obtained pursuant to this Agreement shall be considered confidential
information. Neither party shall disclose such confidential information to any
other person or entity or use such confidential information other than to carry
out the purposes of this Agreement, including its use under sections 248.14 and
248.15 of Regulation S-P (17 CFR 248.1 - 248.30) in the ordinary course of
carrying out the purposes of the Distribution Agreement. The Distributor agrees
to:
a) Limit access to Customer Information which is obtained pursuant to this
Addendum to employees who have a need to know such Customer Information to
effect the purposes of this agreement;
b) Safeguard and maintain the confidentiality and security of Customer
Information which is obtained pursuant to this Addendum; and
c) Use Customer Information obtained pursuant to this Addendum only to carry
out the purposes for which the Customer Information was disclosed and for
no other purpose.
The Distributor shall not directly or through an affiliate, disclose an
account number or similar form of access number or access code for an account
for use in telemarketing, direct mail marketing, or marketing through electronic
mail, except as permitted in Section 248.12 of Regulation S-P.
1.15 This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
2. Term, Duration and Termination
This Agreement shall become effective April 1, 2002 and, unless sooner
terminated as provided herein, shall continue until November 30, 2002.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive one-year terms, provided that such continuance is specifically
approved at least annually by (a) the vote of a majority of those members of the
Trust's Board of Trustees who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting for the purpose of voting
on such approval and (b) the vote of the Trust's Board of Trustees or the vote
of a majority of the outstanding voting securities of such Fund. This Agreement
may be terminated without penalty, on not less than 60 days prior written
notice, by the Trust's Board of Trustees, by vote of a majority of the
outstanding voting securities of the Trust or by the Distributor. This Agreement
will also terminate automatically in the event of its assignment. (As used in
this Agreement, the terms "majority of the outstanding voting securities",
"interested persons" and "assignment" shall have the same meanings as ascribed
to such terms in the 1940 Act.)
3. Sale of Shares Subject to a Front-End Sales Load
3.1 Under this Agreement, the following provisions shall apply with
respect to the sale of and payment for those Shares sold at an offering price
which includes a front-end sales load ("Class A Shares") as described in the
prospectuses of the Funds identified on Schedule B hereto (collectively, the
"Front-End Load Funds"; individually a "Front-End Load Fund"):
(a) The Distributor shall have the right to purchase Class A Shares
from the Front-End Load Funds at their net asset value and to sell such Shares
to the public against orders
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therefor at the applicable public offering price, as defined in Section 3.2
below. The Distributor also shall have the right to pay all or a portion of the
sales charge referred to in Section 3.2 below to brokers, dealers, and other
financial institutions and intermediaries selling Class A Shares.
(b) Prior to the time of delivery of any Class A Shares by a
Front-End Load Fund to, or on the order of, the Distributor, the Distributor
shall pay or cause to be paid to the Front-End Load Fund or to its order an
amount in Boston or New York clearing house funds equal to the applicable net
asset value of such Shares. The Distributor may retain all or a portion of any
sales charge payable to brokers, dealers, and other financial institutions and
intermediaries.
3.2 The public offering price of a Class A Share of a Front-End Load Fund
shall be the net asset value of the Share, plus any applicable sales charge, all
as set forth in the current prospectus of the Front-End Load Fund. The net asset
value of Class A Shares shall be determined in accordance with the provisions of
the Declaration of Trust and Code of Regulations of the Trust and the then
current prospectus of the Front-End Load Fund.
3.3 The Front-End Load Funds reserve the right to issue, transfer or sell
Class A Shares at net asset value (a) in connection with merger or consolidation
of the Trust or the Front-End Load Fund(s) with any other investment company or
the acquisition by the Trust or the Front-End Load Fund(s) of all or
substantially all of the assets or of the outstanding Shares of any other
investment company; (b) in connection with a pro rata distribution directly to
the holders of Shares in the nature of a stock dividend or split; (c) upon the
exercise of subscription rights granted to the holders of Shares on a pro rata
basis; (d) in connection with the issuance of Shares pursuant to any exchange
and reinvestment privileges described in any then current prospectus of the
Front-End Load Fund; and (e) otherwise in accordance with any then current
prospectus of the Front-End Load Fund.
4. Shares Subject to a Rule l2b-1 Fee
4.1 Under this Agreement, the following provisions shall apply with
respect to Shares of Classes of the Trust's Shares, other than those of a Class
featuring a contingent deferred sales charge ("CDSC"), that are subject to a fee
under a Distribution and Shareholder Services Plan under Rule 12b-1 ("Plan") as
described in the prospectuses of the Funds and identified on Schedule C hereto
(collectively, the "Distribution Plan Classes;" individually a "Distribution
Plan Class"):
(a) The Distributor shall receive from the Trust all distribution and
service fees, as applicable, at the rate and under the terms and conditions set
forth in each Plan adopted by each Distribution Plan Class of each Fund, as such
Plans may be amended from time to time, and subject to any further limitations
on such fees as the Board may impose. The Distributor's right to payment of
distribution and service fees on such Shares shall continue after termination of
this Agreement, subject only to the continued effectiveness of the applicable
Plan (such effectiveness controlled exclusively by the terms of the Plan).
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(b) The Distributor may reallow any or all of the distribution or
service fees which it is paid by the Trust with respect to each Distribution
Plan Class of each Fund to such brokers, dealers and other financial
institutions and intermediaries as the Distributor may from time to time
determine.
5. Shares Subject to a Contingent Deferred Sales Charge
5.1 The Trust may offer Shares subject to a CDSC. The Distributor may pay
brokers, dealers and other financial institutions and intermediaries commissions
with regard to the sale of CDSC Shares. Under this Agreement, the following
provisions shall apply with respect to Shares of a Class featuring a CDSC (a
"CDSC Class") as described in the prospectuses of the Funds and identified on
Schedules D and E hereto.
(a) The Distributor shall be entitled to receive all CDSC payments on
Shares of a CDSC Class. The Distributor may assign or sell to a third party (a
"CDSC Financing Entity") all or a part of the CDSC payments on Shares of a CDSC
Class that the Distributor is entitled to receive under this Agreement. The
Distributor's right to payment on Shares of a CDSC Class shall continue after
termination of this Agreement.
(b) (i) The Distributor shall be entitled to receive all distribution
fees and service fees at the rate and under the terms and conditions set forth
in the Plan adopted by the Trust with respect to a CDSC Class on Shares sold.
The services rendered by the Distributor for which the Distributor is entitled
to receive any portion of such fees shall be deemed to have been completed at
the time of the initial purchase of the Shares taken into account in computing
such portion of such fees. The Distributor may assign or sell to a CDSC
Financing Entity all or a part of the distribution fees the Distributor is
entitled to receive from the Trust under the Plan. The Distributor's right to
payment of distribution fees on such Shares shall continue after termination of
this Agreement, subject only to the continued effectiveness of the Plan (such
effectiveness controlled exclusively by the terms of such Plan). The Trust's
obligation to pay distribution fees that are assigned to a CDSC Financing Entity
is absolute and unconditional and shall not be subject to any dispute, offset,
counterclaim or defense whatsoever.
(ii) The Distributor shall not be required to offer or sell Shares of
a CDSC Class if the Plan adopted by the CDSC Class is terminated and unless and
until it has received a binding commitment from a CDSC Financing Entity (a
"Commitment") satisfactory to the Distributor which Commitment shall cover all
expenses and fees related to the offer and sale of such Shares of the CDSC Class
including but not limited to dealer reallowances, financing commitment fees, and
legal fees. If at any time during the term of this Agreement the Plan adopted by
the CDSC Class terminates or the then current CDSC financing is terminated
through no fault of the Distributor, the Distributor has the right to
immediately suspend CDSC Share sales until substitute financing becomes
effective.
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(iii) The Distributor may enter into arrangements regarding the
financing of commissions pertaining to the sale of shares of a CDSC Class only
upon written approval of the Trust's Treasurer, or his or her designee, such
approval not to be unreasonably withheld.
(c) The Distributor and the Trust hereby agree that the terms and
conditions set forth herein regarding the offer and sale of Shares of a CDSC
Class may be amended upon approval of both parties in order to comply with the
terms and conditions of any agreement with a CDSC Financing Entity to finance
the costs for the offer and sale of Shares of a CDSC Class so long as such terms
and conditions are in compliance with the Plan.
6. Limitation of Liability of the Trustees and Shareholders
The name "One Group(R) Mutual Funds" and "Trustees of One Group(R) Mutual
Funds" refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a Declaration of
Trust dated May 23, 1985, as amended and restated February 18, 1999, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of the Commonwealth of Massachusetts and elsewhere as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of "One Group(R) Mutual Funds" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders or representatives of the Trust personally, but bind only
the assets of the Trust, and all persons dealing with any series and/or class of
Shares of the Trust must look solely to the assets of the Trust belonging to
such series and/or class for the enforcement of any claims against the Trust.
The execution and delivery of this Agreement have been authorized by the
Trustees, and this Agreement has been signed and delivered by an authorized
officer of the Trust, acting as such, and neither such authorization by the
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
the Trust's Agreement and Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
ONE GROUP MUTUAL FUNDS ONE GROUP DEALER SERVICES, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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Title: President Title: Chief Financial Officer
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Date: May 15, 2003 Date: May 15, 2003
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