EXHIBIT (e).1
UNDERWRITING AND DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 14th day of November 1994, by and between Fortis
Money Portfolios, Inc. (formerly AMEV Money Fund, Inc.), a Minnesota corporation
(the "Fund") for and on behalf of each class of shares (each such class is
referred to hereinafter as a "Class") of each of the Fund's Portfolios and
Fortis Investors, Inc. (formerly AMEV Investors, Inc.), a Minnesota corporation
("Investors")
WITNESSETH:
1. UNDERWRITING SERVICES.
The Fund on behalf of each Class hereby engages Investors, and Investors
hereby agrees to act, as principal underwriter for each Class in connection with
the sale and distribution of the shares of each Class of the Fund's Portfolios
to the public, either through dealers or otherwise. Investors agrees to offer
such shares for sale at all times when such shares are available for sale and
may lawfully be offered for sale and sold.
As used herein, "Portfolios" is defined as Fortis Money Fund and any other
Portfolios which may hereafter be created by the Board of Directors of the Fund.
In addition, as used herein, "Classes" of the Fund's Portfolios is defined as
Class A, Class B, Class C and Class H shares of each Portfolio and any other
classes which may hereinafter be created by the Fund's Board of Directors.
2. SALE OF FUND SHARES.
The shares of each Class are to be sold only on the following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed to
have been accepted by the Fund if the Fund shall fail to notify Investors of the
rejection of such offer or sale prior to the computation of the net asset value
of the applicable Class's shares next following receipt by the Fund of notice of
such offer or sale.
(b) No share of a Class shall be sold by Investors (i) for any amount
less than the net asset value of such share, computed as provided in the Bylaws
of the Fund, or (ii) for any consideration other than cash, or, pursuant to any
exchange privilege provided for by such Class's currently effective Prospectus
or Statement of Additional Information, shares of the corresponding Class of
shares of any other investment company for which Investors acts as an
underwriter. All shares of the Fund's Portfolios sold by Investors shall be
sold at the applicable public offering price, which shall be equal to the
current net asset value per share.
(c) Investors may decline to offer for sale or sell shares of the
Fund in an amount the cumulative public offering price of which is less than
$500.00 or such smaller amount as it may from time to time fix.
3. INVESTMENT OF DIVIDEND AND DISTRIBUTIONS.
The Fund may extend to its shareholders the right to purchase shares issued
by each Class of the Fund at the net asset value thereof with the proceeds of
any dividend or capital gain distribution paid or payable by the Fund (or any
other fund for which Investors serves as underwriter) to its shareholders.
4. REGISTRATION OF SHARES.
The Fund agrees to make prompt and reasonable efforts to effect and keep in
effect, at its own expense, the registration or qualification of each Class's
shares for sale in such jurisdictions as the Fund may designate.
5. INFORMATION TO BE FURNISHED INVESTORS.
The Fund agrees that it will furnish Investors with such information with
respect to the affairs and accounts of the Fund (and each Class and Portfolio
thereof) as Investors may from time to time reasonably require, and further
agrees that Investors, at all reasonable times, shall be permitted to inspect
the books and records of the Fund.
6. ALLOCATION OF EXPENSES.
During the period of this contract, the Fund shall pay or cause to be paid
all expenses, costs and fees incurred by the Fund which are not assumed by
Investors or Fortis Advisers, Inc. ("Advisers"). Investors agrees to provide,
and shall pay costs which it incurs in connection with providing personal,
continuing services to shareholders (such costs are referred to as "Shareholder
Servicing Costs"). Shareholder Servicing Costs include all expenses of
Investors incurred in connection with providing administrative or accounting
services to shareholders of each Class, including, but not limited to, an
allocation of Investor's overhead and payments made to persons, including
employees of Investors, who respond to inquiries of shareholders regarding their
ownership of Class shares, or who provide other administrative or accounting
services not otherwise required to be provided by the applicable Funds'
investment adviser or transfer agent. Notwithstanding the foregoing, if the
National Association of Securities Dealers, Inc. ("NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair Practice
that differs from a definition of Shareholder Servicing Costs in this paragraph,
or if the NASD adopts a related definition intended to define the same concept,
the definition of Shareholder Servicing Costs in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition. Investors shall also pay all costs of distributing the shares
of each Class ("Distribution Expenses"). Distribution expenses include, but are
not limited to, initial and ongoing sales compensation (in addition to sales
loads) paid to registered representatives of Investors and to other
broker-dealers and participating financial institutions; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
-2-
literature; expenses of advertising of any type; an allocation of Investors'
overhead; payments to and expenses of persons who provide support services in
connection with the distribution of Fund shares; and other distribution-related
expenses. Advisers, rather than Investors, may bear the expenses referred to in
this paragraph, but Investors shall be primarily liable for such expenses until
paid.
7. COMPENSATION TO INVESTORS.
As compensation for all of its services provided and its costs assumed
under this contract, Investors shall receive the following forms of and amounts
of compensation:
(a) Investors shall be entitled to receive any contingent deferred
sales charge imposed in connection with any redemption of applicable Class
shares, as set forth in each applicable Class's current Prospectus. Any
contingent deferred sales charge may, at the discretion of the Fund and
Investors, be increased, reduced or eliminated in accordance with the terms of
an exemptive order received from, or any applicable rule or rules promulgated
by, the Securities and Exchange Commission by the Fund, provided such increase,
reduction or elimination shall be set forth in the Prospectus for such Class.
(b) Advisers and the Fund have entered in an Investment Advisory and
Management Agreement dated January 31, 1992 under which the Fund will pay
Advisers certain fees. From such fees Advisers shall, pursuant to the Plan of
Distribution adopted by each Class in accordance with Rule 12b-1 under the
Investment Company Act of 1940, pay to Investors on a monthly basis a fee equal
to .2 of 1% of the average daily net assets of each Class; provided, however,
that Advisers may directly pay certain expenses otherwise payable by Investors,
and deduct such amount from the .2 of 1% otherwise payable to Investors.
(i) CLASS A SHARES: With respect to Class A shares of each
of the Portfolios, this fee of .2 of 1% will constitute full compensation to
Investors for its services as distributor of the Fund's shares. All or a
portion of such total fee may be payable as a Distribution Fee, and all or any
portion of such total fee may be payable as a Shareholder Servicing Fee, as
determined from time to time by the Fund's Board of Directors. Until further
action by the Board of Directors, all of such fee shall be designated and
payable as a Distribution Fee.
(ii) CLASS B, CLASS C AND CLASS H SHARES: With respect to
Class B, Class C and Class H shares, the Fund will pay Investors an additional
.8 of 1.00% of the value of the respective Class's average daily net assets.
This total fee of 1.00% paid by each Class shall be paid in connection with
distribution-related services and servicing of shareholder accounts provided for
the respective Class. All or any portion of such total fee may be payable as a
Distribution Fee, and all or any portion of such total fee may be payable as a
Shareholder Servicing Fee, as determined from time to time by the Fund's Board
of Directors. Until further action by the Board, 75% of such fee (.75 of 1.00%)
shall be designated and payable as a Distribution Fee and 25% of such fee (.25
of 1.00%) shall be designated and payable as a
-3-
Shareholder Servicing Fee.
(iii) FUTURE PORTFOLIOS AND/OR CLASSES: The 12b-1 fees for
Class A, Class B, Class C or Class H shares of any future Portfolios shall be as
determined by the Board of Directors of the Fund upon the creation of any such
Portfolios, but in no event shall such fees exceed any then existing limitations
imposed under any applicable rule or rules promulgated by the Securities and
Exchange Commission and/or the National Association of Securities Dealers, Inc.
Upon the creation of any new classes of shares for any or all of the Portfolios,
the respective levels of sales charges and 12b-1 fees shall be determined by the
Board of Directors of the Fund, subject to any necessary shareholder approval
and only in accordance with any applicable rule or rules promulgated by the
Securities and Exchange Commission and/or the National Association of Securities
Dealers, Inc. All or any portion of the l2b-1 fees referred to in this
paragraph may be payable as a Distribution Fee, and all or any portion of such
l2b-1 fees may be payable as a Shareholder Servicing Fee, as determined from
time to time by the Fund's Board of Directors.
(iv) OTHER INFORMATION: Average daily net assets shall be
computed in accordance with the Prospectus of each applicable Class. Amounts
payable to Investors under the Plan may exceed or be less than Investor's actual
distribution expenses and shareholder servicing costs. In the event such
distribution expenses and/or shareholder servicing expenses exceed amounts
payable to Investors under the Plan, Investors shall not be entitled to
reimbursement from the Fund.
(d) In each year during which this contract remains in effect, Investors
will prepare and furnish to the Board of Directors of the Fund, and the Board
will review, on a quarterly basis written reports complying with the
requirements of Rule l2b-1 under the Investment Company Act of 1940 (the " 1940
Act") that set forth the amounts expended under this contract and the Plan and
the purposes for which those expenditures were made.
8. LIMITATION OF INVESTORS' AUTHORITY.
Investors shall be deemed to be an independent contractor and, except as
specifically provided or authorized herein, shall have no authority to act for
or represent the Fund. In connection with its role as underwriter of Fund
shares, Investors shall at all times be deemed an agent of the Fund and shall
sell Fund shares to purchasers thereof as agent and not as principal.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS.
Investors shall effect the subscription of Fund shares as agent for the
Fund. In the event that an order for the purchase of shares of the Fund is
placed with Investors by a customer or dealer and subsequently canceled,
Investors, on behalf of such customer or dealer, shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if Investors
has paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
-4-
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by
Investors.
10. INDEMNIFICATION OF THE FUND.
Investors agrees to indemnify the Fund against any and all litigation
and other legal proceedings of any kind or nature and against any liability,
judgment, cost or penalty imposed as a result of such litigation or
proceedings in any way arising out of or in connection with the sale or
distribution of the shares of the Fund by Investors. In the event of the
threat or institution of any such litigation or legal proceedings against the
Fund, Investors shall defend such action on behalf of the Fund at its own
expense, and shall pay any such liability, judgment, cost or penalty
resulting therefrom, whether imposed by legal authority or agreed upon by way
of compromise and settlement; provided, however, Investors shall not be
required to pay or reimburse the Fund for any liability, judgment, cost or
penalty incurred as a result of information supplied by, or as the result of
the omission to supply information by, the Fund to Investors, or to Investors
by a director, officer, or employee of the Fund who is not an interested
person of Investors, unless the information so supplied or omitted was
available to Investors or the Fund's investment adviser without recourse to
the Fund or any such interested person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES.
Investors shall be free to render to others services of a nature either
similar to or different from those rendered under this contract, except such as
may impair its performance of the services and duties to be rendered by it
hereunder.
12. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
(a) This Agreement shall be effective as to Fortis Money Fund and
each Class thereof on November 14, 1994. Unless sooner terminated as
hereinafter provided, this Agreement shall continue in effect only so long as
such continuance is specifically approved at least annually (a) by the Board of
Directors of the Fund, or with respect to a particular Class by the vote of the
holders of a majority of the outstanding voting securities of such Class, and
(b) by a majority of the directors who are not interested persons of Investors
or of the Fund, cast in person at a meeting called for the purpose of voting on
such approval; provided that, if a majority of the outstanding voting securities
of any of the Classes approves this Agreement, this Agreement shall continue in
effect with respect to such approving Class whether or not the shareholders of
any other Class of the Fund approve this Agreement.
(b) This Agreement may be terminated at any time without the payment
of any penalty by the vote of the Board of Directors of the Fund or by
Investors, upon sixty (60) days' written notice to the other party. This
Agreement may be terminated with respect to a particular Class at any time
without the payment of any penalty by the vote of the holders of a majority of
the outstanding voting securities of such Class, upon sixty (60) days' written
notice to Investors.
-5-
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of
the holders of a majority of the outstanding voting securities of a Class or the
Fund shall mean the vote of 67% or more of such securities if the holders of
more than 50% of such securities are present in person or by proxy or the vote
of more than 50% of such securities, whichever is less.
13. AMENDMENTS TO AGREEMENT.
No material amendment to this Agreement shall be effective until approved
by a vote of the Board of Directors of the Fund, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in this Agreement, cast in person at a meeting
called for the purpose of voting on such amendment. Additionally, no amendment
to this Agreement that materially increases the distribution fee and/or
shareholder servicing fee payable by any Class hereunder shall be effective
until any necessary amendment to the applicable Rule 12b-1 Plan has been
approved by a vote of the holders of a majority of the outstanding voting
securities of the applicable Class and approved by the Fund's Board of Directors
as required under Rule 12b-1 under the Investment Company Act of 1940.
14. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Fund and Investors have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORTIS MONEY PORTFOLIOS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Its President
FORTIS INVESTORS, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Its President
-6-
