DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of May, 1998, between Endeavor Series
Trust, a Massachusetts business trust, (the "Trust"), and Endeavor Group, a
California corporation (the "Distributor") each with offices at 0000 Xxxx Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx xxx Xxx, Xxxxxxxxxx 00000.
WHEREAS, the Trust is a registered open-end management investment
company, which currently offers shares of its common stock in eleven series,
each as set forth on Schedule A hereto (the "Existing Funds"), and the Trust may
offer shares of one or more additional Funds in the future;
WHEREAS, the Trust was originally organized to act as the funding
vehicle for certain individual variable life insurance policies and individual
and group variable annuity contracts offered by PFL Life Insurance Company
("PFL") or life insurance companies affiliated with PFL through separate
accounts of such life insurance companies; and
WHEREAS, in the future, the Trust may also offer its shares to life
insurance companies unaffiliated with PFL (together with PFL and its affiliated
life insurance companies, the "Life Companies") as a funding vehicle for
variable life insurance policies and variable annuity contracts (together with
the variable life insurance policies and variable annuity contracts offered by
PFL and its affiliated life insurance companies, (collectively referred to
herein as "Variable Contracts"), and/or to qualified pension and retirement
plans (the "Qualified Plans"); and
WHEREAS, from time to time, the Trust may enter into sales agreements
with Life Companies that have or will establish one or more separate accounts to
offer Variable Contracts, pursuant to which one or more Funds of the Trust
serves as the underlying funding vehicle for such Variable Contracts; and, under
certain circumstances, may enter into sales agreements with the Qualified Plans;
and
WHEREAS, it is contemplated that, in addition to entering into sales
agreements with Life Companies and/or Qualified Plans, the Distributor shall
engage in certain promotional and sales efforts on behalf of the Trust, as
described in the Brokerage Enhancement Plan pursuant to Rule 12b-1 adopted by
the Trust.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. (a) The Trust proposes to issue and sell shares of common stock of
the Fund (the "Shares") to separate accounts of Life Companies and to the
Qualified Plans as may be permitted by applicable law and subject to the Trust's
obtaining any necessary regulatory approvals. The Trust hereby appoints the
Distributor as agent to sell the Shares and the Distributor hereby accepts such
appointment. The Shares will
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be distributed under such terms as are set by the Trust and will be sold to the
separate accounts and the Qualified Plans permitted to buy the Shares as
specified by the Trust's Board of Trustees.
(b) In the event that the Trust from time to time designates
one or more Funds in addition to the Existing Funds ("Additional Funds"), it
shall notify the Distributor. If the Distributor is willing to perform services
hereunder for the Additional Funds, it shall so notify the Trust. Thereafter,
the Trust and the Distributor shall mutually agree to amend Schedule A to this
Agreement in writing to add the Additional Funds and the Additional Funds shall
be subject to this Agreement, subject to the approval of the Board of Trustees
as set forth in Section 7.(a) below.
2. (a) The Distributor agrees that (i) all Shares sold by the
Distributor shall be sold at the net asset value as described in the Trust's
prospectus, and (ii) the Trust shall receive 100% of such net asset value.
(b) The Shares will be sold in accordance with any sales
agreements between the Trust and Life Companies and, where applicable, the Trust
and Qualified Plans. The Existing Funds and all Additional Funds subject to this
Agreement are referred to collectively as "Funds."
3. (a) All sales literature and advertisements used by the Distributor
in connection with sales of Shares shall be subject to approval by the Trust.
The Trust authorizes the Distributor, in connection with the sales or arranging
for the sale of Shares, to provide only such information and to make only such
statements or representations as are contained in the Trust's then-current
Prospectus or in sales literature or advertisements approved by the Trust or in
such financial and other statements which are furnished in writing to the
Distributor pursuant to the next paragraph. The Trust shall not be responsible
in any way for any information provided or statements or representations made by
the Distributor or its representatives or agents other than the information,
statements and representations described in the preceding sentence. The
Distributor shall review all materials submitted to it by Life Companies and
Qualified Plans that describe the Trust, the Shares or the Trust's investment
manager and investment advisers. The Distributor shall not be responsible for
any information provided or statements or representations made by Life Companies
or Qualified Plans, representatives or agents of Life Companies or Qualified
Plans, or any other persons or entities other than the Distributor's
representatives or agents.
(b) The Trust shall keep the Distributor fully informed with
regard to its affairs, shall furnish the Distributor with a certified copy of
all financial statements and a signed copy of each report prepared by its
independent certified public accountants, and shall cooperate fully in the
efforts of the Distributor to sell the Shares and in the performance by the
Distributor of all its duties under this Agreement.
4. (a) The Trust will pay or cause to be paid:
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(i) registration fees for registering its shares
under the Securities Act of 1933 (the "1933 Act") as
required;
(ii) the expenses, including counsel fees, of
preparing registration statements and such other
documents as the Trust believes are necessary for
registering the Shares with the Securities and
Exchange Commission (the "SEC") and such states as
are deemed necessary or appropriate;
(iii) expenses incident to preparing amendments to
registration statements of the Trust under the 1933
Act and the Investment Company Act of 1940, as
amended (the "1940 Act");
(iv) expenses for preparing and setting in type all
prospectuses and the expense of supplying them to the
then existing shareholders or beneficial owners of
Shares (including owners of Variable Contracts whose
Contracts use one or more Funds as their funding
vehicle); and
(v) expenses incident to the issuance of its Shares
such as the cost of stock certificates, if any, taxes
and fees of the transfer agent for establishing
shareholder record accounts and confirmations.
(b) The Distributor shall pay all of its own costs and
expenses connected with the offer and sale of Shares
("Distribution Expenses"), except that certain
Distribution Expenses may be reimbursed to the
Distributor as provided in Section 5 hereof.
5. (a) Pursuant to a Brokerage Enhancement Plan (the "Plan") adopted by
the Board of Trustees of the Trust in accordance with Section 12(b) of the 1940
Act, Rule 12b-1 and other rules and regulations promulgated thereunder, as the
same may be, from time to time, issued or amended, the Trust, on behalf of a
Fund that has approved the Plan pursuant to Section 5 thereof, may reimburse the
Distributor, for Distribution Expenses as described in Section 5(b) hereof.
Reimbursements shall be payable only from brokerage commissions paid by the Fund
in connection with its portfolio transactions which have been made available for
use by the Fund as described in the Plan. Reimbursements to the Distributor
shall be payable on a monthly basis. Such reimbursement may be made only for the
one year period commencing on the date hereof and for each twelve month period
(or portion thereof) thereafter, in which the Plan is in effect for that Fund.
(b) Distribution Expenses reimbursable hereunder shall
include, but not necessarily be limited to, the following costs:
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(i) printing and mailing of Trust prospectuses,
statements of additional information, any supplements
thereto and shareholder reports for existing and
prospective Variable Contract owners;
(ii) development, preparation, printing and mailing
of Trust advertisements, sale literature and other
promotional materials describing and/or relating to
the Funds and including materials intended for use
within the Life Company, or for broker-dealer only
use or retail use;
(iii) holding or participating in seminars and sales
meetings designed to promote the distribution of
Trust Shares;
(iv) marketing fees requested by broker-dealers who
sell Variable Contracts;
(v) obtaining information and providing explanations
to Variable Contract owners regarding Trust
investment objectives and policies and other
information about the Trust and the Funds, including
the performance of the Funds;
(vi) training sales personnel regarding sales of
Variable Contracts and underlying Shares of the
Trust;
(vii) compensating broker-dealers and/or their
registered representatives in connection with the
allocation of cash values and premiums of the
Variable Contracts to the Trust;
(viii) personal service and/or maintenance of
Variable Contract owner accounts with respect to
Trust Shares attributable to such accounts; and
(ix) financing any other activity that the Trust's
Board of Trustees determines is primarily intended to
result in the sale of Shares.
(c) The Distributor shall submit annual reimbursable
Distribution Expense budgets to the Board of Trustees of the Trust. As soon as
practicable after the end of each calendar quarter, the Distributor shall submit
to the Board of Trustees for ratification reports of Distribution Expenses
reimbursed as to each Fund for that quarter. The Board of Trustees will consider
each report at its next regular meeting after such report is submitted, and the
Distributor shall only retain those reimbursements that are approved by the
Board of Trustees, including a majority of the "Disinterested Trustees" (as that
term is defined in Section 7 hereof).
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6. (a) The Trust shall maintain a currently effective Registration
Statement on Form N-1A and shall file with the SEC such reports and other
documents as may be required under the 1933 Act and the 1940 Act or by the rule
and regulations of the SEC thereunder.
(b) The Trust represents and warrants that its Registration
Statement, post-effective amendments, Prospectus and Statement of Additional
Information (excluding statements based upon written information furnished by
the Distributor expressly for inclusion therein) shall not contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that all statements or information furnished to the Distributor, pursuant to
Section 3(b) hereof shall be true and correct in all material respects.
7. (a) This Agreement shall take effect on the date set forth above,
provided it has been approved by a vote of the majority of Trustees of the Trust
and those Trustees of the Trust who are not "interested persons" of the Trust
and who have no direct or indirect financial interest in the operation of the
Plan or this Agreement (the "Disinterested Trustees"), cast in person at a
meeting called for the purpose of voting on this Agreement. This Agreement shall
remain in full force and effect until May 1, 1999, and may be continued for
twelve month periods (or portions thereof) thereafter; provided that such
continuance shall be specifically approved annually by a majority of the Board
of Trustees of the Trust and by a majority of the Disinterested Trustees. This
Agreement may be amended, with respect to any Fund, with the approval of a
majority of the Board of Trustees and by a majority of the Disinterested
Trustees.
(b) This Agreement, with respect to any Fund, may be
terminated, at any time without payment of any penalty, by vote of a majority of
the Disinterested Trustees or by vote of a majority of the outstanding voting
securities of that Fund, or may be terminated by the Distributor, in either case
on not more than 60 days' written notice delivered personally by registered
mail, postage prepaid, to the other party.
(c) This Agreement shall automatically terminate in the event
of its assignment.
(d) The terms "interested persons," "assignment" and "vote of
a majority of the outstanding voting securities" as used herein shall have the
meanings given to them in the 1940 Act.
8. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties ("disabling conduct") hereunder
on the part of the Distributor (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
the Distributor or retained by it to perform or assist in the performance of its
obligations under this Agreement) the Distributor shall not be subject to
liability to the Trust or to any shareholder of the Funds
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of the Trust for any act or omission in the course of, or connected with,
rendering services hereunder, or for any loss suffered by any of them in
connection with the matters to which this Agreement relates.
9. (a) The Trust shall indemnify and hold harmless the Distributor and
each person, if any, who controls the Distributor within the meaning of Section
15 of the Securities Act against any loss, liability, claim, damage or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damage or expense and reasonable counsel fees incurred in
connection therewith), which the Distributor or 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 the Registration Statement, as from time to time amended or
supplemented, any prospectus or annual or interim report to shareholders of the
Trust, or arising out of or based upon any omission, or alleged omission, to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished to the Trust in
connection therewith by or on behalf of the Distributor; provided, however, that
in no case (i) is the indemnity of the Trust in favor of the Distributor and any
such controlling persons to be deemed to protect such Distributor or any such
controlling persons thereof against any liability to the Trust or its security
holders to which the Distributor or any such controlling persons would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of their duties or by reason of the reckless disregard of their
obligations and duties under this Agreement; or (ii) is the Trust to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Distributor or any such controlling persons, unless the
Distributor or such controlling persons, as the case may be, shall have notified
the Trust in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon the Distributor or such controlling persons (or after the
Distributor or such controlling persons shall have received notice of such
service on any designated agent), but failure to notify the Trust of any such
claim shall not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Trust will be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Trust elects to
assume the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Distributor or such controlling person or persons, defendant
or defendants in the suit. In the event the Trust elects to assume the defense
of any such suit and retain such counsel, the Distributor or such controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Trust does
not elect to assume the defense of any such suit, it will reimburse the
Distributor or such controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by them.
The Trust shall
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promptly notify the Distributor of the commencement of any litigation or
proceeding against it or any of its officers or directors in connection with the
issuance or sale of any of the Shares.
(b) The Distributor shall indemnify and hold harmless the
Trust and each of its trustees and officers and each person, if any, who
controls the Trust against any loss, liability, claim, damage or expense
described in the foregoing indemnity contained in paragraph 4.1, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Trust in writing by or on behalf of the
Distributor for use in connection with the Registration Statement, as from time
to time amended, or the annual or interim reports to shareholders. In case any
action shall be brought against the Trust or any persons so indemnified, in
respect of which indemnity may be sought against the Distributor, the
Distributor shall have the rights and duties given to the Trust, and the Trust
and each person so indemnified shall have the rights and duties given to the
Distributor by the provisions of paragraph 4.1.
10. This Agreement is made by the Trust, on behalf of each Fund,
pursuant to authority granted by the Board of Trustees, and the obligations
created hereby are not binding on any of the Trustees or shareholders of the
Trust individually, but bind only the property of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed by their duly authorized officers and under their respective
seals on the day and year first above written.
ENDEAVOR SERIES TRUST
Attest:
By:
Secretary Xxxxxxx X. XxXxxxxxxx, Xx., President
ENDEAVOR GROUP
Attest:
By:
Secretary Xxxxxxx X. XxXxxxxxxx,
Chief Executive Officer
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AMENDMENT NO. 1 TO
SCHEDULE A OF THE
DISTRIBUTION AGREEMENT
As of February 1, 1999, the Distributor shall act as distributor for shares of
the following Funds of Endeavor Series Trust:
Endeavor Money Market Portfolio
Endeavor Asset Allocation Portfolio
X. Xxxx Price International Stock Portfolio
X. Xxxx Price Equity Income Portfolio
X. Xxxx Price Growth Stock Portfolio
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Endeavor Value Equity Portfolio
Endeavor Opportunity Value Portfolio
Endeavor Enhanced Index Portfolio
Endeavor Select 50 Portfolio
Endeavor High Yield Portfolio
Endeavor Janus Growth Portfolio
Agreed to and accepted as of the date set forth above.
ENDEAVOR GROUP ENDEAVOR SERIES TRUST
By: _________________________ By: _______________________
Xxxxxxx X. XxXxxxxxxx, Xxxxxxx X. XxXxxxxxxx, Xx.
Chief Executive Officer President
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