Exhibit (5)(b)
XXXXXXXX XXXXXXXX SECURITIES TRUST
DISTRIBUTION CONTRACT
CLASS B SHARES
CONTRACT made as of __________, 2000, between XXXXXXXX XXXXXXXX SECURITIES
TRUST, a Delaware business trust ("Trust") and XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC., a Delaware corporation ("Xxxxxxxx Xxxxxxxx").
WHEREAS the Trust is registered under the Investment Company Act of 1940,
as amended ("l940 Act"), as an open-end management investment company and
currently has two distinct series of shares of beneficial interest ("Series"),
which correspond to distinct portfolios and have been designated as PaineWebber
Enhanced S&P 500 Fund and PaineWebber Enhanced Nasdaq-100 Fund; and
WHEREAS the Trust's board of trustees ("Board") has established an
unlimited number of shares of beneficial interest of the above-referenced Series
as Class B shares ("Class B Shares"); and
WHEREAS the Trust has adopted a Plan of Distribution pursuant to Rule
12b-1 under the 1940 Act for its Class B Shares ("Plan") and desires to retain
Xxxxxxxx Xxxxxxxx as principal distributor in connection with the offering and
sale of the Class B Shares of the above-referenced Series and of such other
Series as may hereafter be designated by the Board and have Class B Shares
established; and
WHEREAS Xxxxxxxx Xxxxxxxx is willing to act as principal distributor of
the Class B Shares of each such Series on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints Xxxxxxxx Xxxxxxxx as its
exclusive agent to be the principal distributor to sell and to arrange for the
sale of the Class B Shares on the terms and for the period set forth in this
Contract. Xxxxxxxx Xxxxxxxx hereby accepts such appointment and agrees to act
hereunder. It is understood, however, that this appointment does not preclude
sales of the Class B Shares directly through the Trust's transfer agent in the
manner set forth in the Registration Statement. As used in this Contract, the
term "Registration Statement" shall mean the currently effective registration
statement of the Trust, and any supplements thereto, under the Securities Act of
1933, as amended ("1933 Act"), and the 1940 Act.
2. SERVICES AND DUTIES OF XXXXXXXX XXXXXXXX.
(a) Xxxxxxxx Xxxxxxxx agrees to sell Class B Shares on a best
efforts basis from time to time during the term of this Contract as agent for
the Trust and upon the terms described in the Registration Statement.
(b) Upon the later of the date of this Contract or the initial
offering of the Class B Shares to the public by a Series, Xxxxxxxx Xxxxxxxx will
hold itself available to receive purchase orders, satisfactory to Xxxxxxxx
Xxxxxxxx, for Class B Shares of that Series and will accept such orders on
behalf of the Trust as of the time of receipt of such orders and promptly
transmit such orders as are accepted to the Trust's transfer agent. Purchase
orders shall be deemed effective at the time and in the manner set forth in the
Registration Statement.
(c) Xxxxxxxx Xxxxxxxx in its discretion may enter into agreements to
sell Class B Shares to such registered and qualified retail dealers, including
but not limited to PaineWebber Incorporated ("PaineWebber"), as it may select.
In making agreements with such dealers, Xxxxxxxx Xxxxxxxx shall act only as
principal and not as agent for the Trust.
(d) The offering price of the Class B Shares of each Series shall be
the net asset value per Share as next determined by the Trust following receipt
of an order at Xxxxxxxx Xxxxxxxx' principal office. The Trust shall promptly
furnish Xxxxxxxx Xxxxxxxx with a statement of each computation of net asset
value.
(e) Xxxxxxxx Xxxxxxxx shall not be obligated to sell any certain
number of Class B Shares.
(f) To facilitate redemption of Class B Shares by shareholders
directly or through dealers, Xxxxxxxx Xxxxxxxx is authorized but not required on
behalf of the Trust to repurchase Class B Shares presented to it by shareholders
and dealers at the price determined in accordance with, and in the manner set
forth in, the Registration Statement. Such price shall reflect the subtraction
of the contingent deferred sales charge, if any, computed in accordance with and
in the manner set forth in the Registration Statement.
(g) Xxxxxxxx Xxxxxxxx shall provide ongoing shareholder services,
which include responding to shareholder inquiries, providing shareholders with
information on their investments in the Class B Shares and any other services
now or hereafter deemed to be appropriate subjects for the payments of "service
fees" under Rule 2830 of the Conduct Rules of the National Association of
Securities Dealers, Inc. ("NASD") (collectively, "service activities").
(h) Xxxxxxxx Xxxxxxxx shall have the right to use any list of
shareholders of the Trust or any other list of investors which it obtains in
connection with its provision of services under this Contract; provided,
however, that Xxxxxxxx Xxxxxxxx shall not sell or knowingly provide such list or
lists to any unaffiliated person.
3. AUTHORIZATION TO ENTER INTO EXCLUSIVE DEALER AGREEMENTS AND TO DELEGATE
DUTIES AS DISTRIBUTOR. With respect to the Class B Shares of any or all Series,
Xxxxxxxx Xxxxxxxx may enter into an exclusive dealer agreement with PaineWebber
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or any other registered and qualified dealer with respect to sales of the Class
B Shares or the provision of service activities. In a separate contract or as
part of any such exclusive dealer agreement, Xxxxxxxx Xxxxxxxx also may delegate
to PaineWebber or another registered and qualified dealer ("sub-distributor")
any or all of its duties specified in this Contract, provided that such separate
contract or exclusive dealer agreement imposes on the sub-distributor bound
thereby all applicable duties and conditions to which Xxxxxxxx Xxxxxxxx is
subject under this Contract, and further provided that such separate contract or
exclusive dealer agreement meets all requirements of the 1940 Act and rules
thereunder.
4. SERVICES NOT EXCLUSIVE. The services furnished by Xxxxxxxx Xxxxxxxx
hereunder are not to be deemed exclusive and Xxxxxxxx Xxxxxxxx shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Xxxxxxxx Xxxxxxxx, who may also be
a trustee, officer or employee of the Trust, to engage in any other business or
to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar or a dissimilar nature.
5. COMPENSATION.
(a) As compensation for its service activities under this contract
with respect to the Class B Shares, Xxxxxxxx Xxxxxxxx shall receive from the
Trust a service fee at the rate and under the terms and conditions of the Plan
adopted by the Trust with respect to the Class B Shares of the Series, as such
Plan is amended from time to time, and subject to any further limitations on
such fee as the Board may impose.
(b) As compensation for its activities under this contract with
respect to the distribution of the Class B Shares, Xxxxxxxx Xxxxxxxx shall
receive from the Trust a distribution fee at the rate and under the terms and
conditions of the Plan adopted by the Trust with respect to the Class B Shares
of the Series, as such Plan is amended from time to time, and subject to any
further limitations on such fee as the Board may impose.
(c) As compensation for its activities under this contract with
respect to the distribution of the Class B Shares, Xxxxxxxx Xxxxxxxx shall
receive all contingent deferred sales charges imposed on redemptions of Class B
Shares of each Series. Whether and at what rate a contingent deferred sales
charge will be imposed with respect to a redemption shall be determined in
accordance with, and in the manner set forth in, the Registration Statement.
(d) Xxxxxxxx Xxxxxxxx may reallow any or all of the distribution
fees, contingent deferred sales charges, or service fees which it is paid under
this Contract to such dealers as Xxxxxxxx Xxxxxxxx may from time to time
determine.
6. DUTIES OF THE TRUST.
(a) The Trust reserves the right at any time to withdraw offering
Class B Shares of any or all Series by written notice to Xxxxxxxx Xxxxxxxx at
its principal office.
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(b) The Trust shall determine in its sole discretion whether
certificates shall be issued with respect to the Class B Shares. If the Trust
has determined that certificates shall be issued, the Trust will not cause
certificates representing Class B Shares to be issued unless so requested by
shareholders. If such request is transmitted by Xxxxxxxx Xxxxxxxx, the Trust
will cause certificates evidencing Class B Shares to be issued in such names and
denominations as Xxxxxxxx Xxxxxxxx shall from time to time direct.
(c) The Trust shall keep Xxxxxxxx Xxxxxxxx fully informed of its
affairs and shall make available to Xxxxxxxx Xxxxxxxx copies of all information,
financial statements, and other papers which Xxxxxxxx Xxxxxxxx may reasonably
request for use in connection with the distribution of Class B Shares,
including, without limitation, certified copies of any financial statements
prepared for the Trust by its independent public accountant and such reasonable
number of copies of the most current prospectus, statement of additional
information, and annual and interim reports of any Series as Xxxxxxxx Xxxxxxxx
may request, and the Trust shall cooperate fully in the efforts of Xxxxxxxx
Xxxxxxxx to sell and arrange for the sale of the Class B Shares of the Series
and in the performance of Xxxxxxxx Xxxxxxxx under this Contract.
(d) The Trust shall take, from time to time, all necessary action,
including payment of the related filing fee, as may be necessary to register the
Class B Shares under the 1933 Act to the end that there will be available for
sale such number of Class B Shares as Xxxxxxxx Xxxxxxxx may be expected to sell.
The Trust agrees to file, from time to time, such amendments, reports, and other
documents as may be necessary in order that there will be no untrue statement of
a material fact in the Registration Statement, nor any omission of a material
fact which omission would make the statements therein misleading.
(e) The Trust shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Class B Shares of each Series for sale
under the securities laws of such states or other jurisdictions as Xxxxxxxx
Xxxxxxxx and the Trust may approve, and, if necessary or appropriate in
connection therewith, to qualify and maintain the qualification of the Trust as
a broker or dealer in such jurisdictions; provided that the Trust shall not be
required to amend its Trust Instrument or By-Laws to comply with the laws of any
jurisdiction, to maintain an office in any jurisdiction, to change the terms of
the offering of the Class B Shares in any jurisdiction from the terms set forth
in its Registration Statement, to qualify as a foreign corporation in any
jurisdiction, or to consent to service of process in any jurisdiction other than
with respect to claims arising out of the offering of the Class B Shares.
Xxxxxxxx Xxxxxxxx shall furnish such information and other material relating to
its affairs and activities as may be required by the Trust in connection with
such qualifications.
7. EXPENSES OF THE TRUST. The Trust shall bear all costs and expenses of
registering the Class B Shares with the Securities and Exchange Commission and
qualifying the Class B shares with state and other regulatory bodies, and shall
assume expenses related to communications with shareholders of each Series,
including (i) fees and disbursements of its counsel and independent public
accountant; (ii) the preparation, filing and printing of registration statements
and/or prospectuses or statements of additional information required under the
federal securities laws; (iii) the preparation and mailing of annual and interim
reports, prospectuses, statements of additional information and proxy materials
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to shareholders; and (iv) the qualifications of Class B Shares for sale and of
the Trust as a broker or dealer under the securities laws of such jurisdictions
as shall be selected by the Trust and Xxxxxxxx Xxxxxxxx pursuant to Paragraph
6(e) hereof, and the costs and expenses payable to each such jurisdiction for
continuing qualification therein.
8. EXPENSES OF XXXXXXXX XXXXXXXX. Xxxxxxxx Xxxxxxxx shall bear all costs
and expenses of (i) preparing, printing and distributing any materials not
prepared by the Trust and other materials used by Xxxxxxxx Xxxxxxxx in
connection with the sale of Class B Shares under this Contract, including the
additional cost of printing copies of prospectuses, statements of additional
information, and annual and interim shareholder reports other than copies
thereof required for distribution to existing shareholders or for filing with
any federal or state securities authorities; (ii) any expenses of advertising
incurred by Xxxxxxxx Xxxxxxxx in connection with such offering; (iii) the
expenses of registration or qualification of Xxxxxxxx Xxxxxxxx as a broker or
dealer under federal or state laws and the expenses of continuing such
registration or qualification; and (iv) all compensation paid to Xxxxxxxx
Xxxxxxxx' employees and others for selling Class B Shares, and all expenses of
Xxxxxxxx Xxxxxxxx, its employees and others who engage in or support the sale of
Class B Shares as may be incurred in connection with their sales efforts.
9. INDEMNIFICATION.
(a) The Trust agrees to indemnify, defend and hold Xxxxxxxx
Xxxxxxxx, its officers and directors, and any person who controls Xxxxxxxx
Xxxxxxxx within the meaning of Section 15 of the 1933 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
Xxxxxxxx Xxxxxxxx, its officers, directors or any such controlling person may
incur under the 1933 Act, or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Registration Statement or arising out of or based upon any alleged omission to
state a material fact required to be stated in the Registration Statement or
necessary to make the statements therein not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any such
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by
Xxxxxxxx Xxxxxxxx to the Trust for use in the Registration Statement; provided,
however, that this indemnity agreement shall not inure to the benefit of any
person who is also an officer or trustee of the Trust or who controls the Trust
within the meaning of Section 15 of the 1933 Act, unless a court of competent
jurisdiction shall determine, or it shall have been determined by controlling
precedent, that such result would not be against public policy as expressed in
the 1933 Act; and further provided, that in no event shall anything contained
herein be so construed as to protect Xxxxxxxx Xxxxxxxx against any liability to
the Trust or to the shareholders of any Series to which Xxxxxxxx Xxxxxxxx would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations under this Contract. The Trust shall not be liable
to Xxxxxxxx Xxxxxxxx under this indemnity agreement with respect to any claim
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made against Xxxxxxxx Xxxxxxxx or any person indemnified unless Xxxxxxxx
Xxxxxxxx or other such person shall have notified the Trust in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon Xxxxxxxx Xxxxxxxx or such other person (or after Xxxxxxxx Xxxxxxxx
or the person shall have received notice of service on any designated agent).
However, failure to notify the Trust of any claim shall not relieve the Trust
from any liability which it may have to Xxxxxxxx Xxxxxxxx or any person against
whom such action is brought otherwise than on account of this indemnity
agreement. The Trust shall 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 claims subject to this indemnity agreement. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to indemnified defendants in the suit whose
approval shall not be unreasonably withheld. In the event that the Trust elects
to assume the defense of any suit and retain counsel, the indemnified defendants
shall bear the fees and expenses of any additional counsel retained by them. If
the Trust does not elect to assume the defense of a suit, it will reimburse the
indemnified defendants for the reasonable fees and expenses of any counsel
retained by the indemnified defendants. The Trust agrees to notify Xxxxxxxx
Xxxxxxxx promptly of the commencement of any litigation or proceedings against
it or any of its officers or trustees in connection with the issuance or sale of
any of its Class B Shares.
(b) Xxxxxxxx Xxxxxxxx agrees to indemnify, defend, and hold the
Trust, its officers and trustees and any person who controls the Trust within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Trust, its trustees or
officers, or any such controlling person may incur under the 1933 Act or under
common law or otherwise arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
Xxxxxxxx Xxxxxxxx to the Trust for use in the Registration Statement, arising
out of or based upon any alleged omission to state a material fact in connection
with such information required to be stated in the Registration Statement
necessary to make such information not misleading, or arising out of any
agreement between Xxxxxxxx Xxxxxxxx and any retail dealer, or arising out of any
supplemental sales literature or advertising used by Xxxxxxxx Xxxxxxxx in
connection with its duties under this Contract. Xxxxxxxx Xxxxxxxx shall 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 the claim, but if Xxxxxxxx
Xxxxxxxx elects to assume the defense, the defense shall be conducted by counsel
chosen by Xxxxxxxx Xxxxxxxx and satisfactory to the indemnified defendants whose
approval shall not be unreasonably withheld. In the event that Xxxxxxxx Xxxxxxxx
elects to assume the defense of any suit and retain counsel, the defendants in
the suit shall bear the fees and expenses of any additional counsel retained by
them. If Xxxxxxxx Xxxxxxxx does not elect to assume the defense of any suit, it
will reimburse the indemnified defendants in the suit for the reasonable fees
and expenses of any counsel retained by them.
10. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The trustees of the Trust and the shareholders of any Series shall not be liable
for any obligations of the Trust or any Series under this Contract, and Xxxxxxxx
Xxxxxxxx agrees that, in asserting any rights or claims under this Contract, it
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shall look only to the assets and property of the Trust or the particular Series
in settlement of such right or claims, and not to such trustees or shareholders.
11. SERVICES PROVIDED TO THE TRUST BY EMPLOYEES OF XXXXXXXX XXXXXXXX. Any
person, even though also an officer, director, employee or agent of Xxxxxxxx
Xxxxxxxx, who may be or become an officer, trustee, employee or agent of the
Trust, shall be deemed, when rendering services to the Trust or acting in any
business of the Trust, to be rendering such services to or acting solely for the
Trust and not as an officer, director, employee or agent or one under the
control or direction of Xxxxxxxx Xxxxxxxx even though paid by Xxxxxxxx Xxxxxxxx.
12. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date written
above, provided that, with respect to any Series, this Contract shall not take
effect unless such action has first been approved by vote of a majority of the
Board and by vote of a majority of 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 the Plan relating to the Series or in any
agreements related thereto (all such trustees collectively being referred to
herein as the "Independent Trustees"), cast in person at a meeting called for
the purpose of voting on such action.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for one year from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually (i) by a vote of a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Board or with respect to any given Series by vote of a majority of the
outstanding voting securities of the Class B Shares of such Series.
(c) Notwithstanding the foregoing, with respect to any Series, this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board, by vote of a majority of the Independent Trustees or by vote
of a majority of the outstanding voting securities of the Class B Shares of such
Series on sixty days' written notice to Xxxxxxxx Xxxxxxxx or by Xxxxxxxx
Xxxxxxxx at any time, without the payment of any penalty, on sixty days' written
notice to the Trust or such Series. This Contract will automatically terminate
in the event of its assignment.
(d) Termination of this Contract with respect to any given Series
shall in no way affect the continued validity of this Contract or the
performance thereunder with respect to any other Series.
13. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
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14. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware and the 1940 Act. To the extent that the
applicable laws of the State of Delaware conflict with the applicable provisions
of the l940 Act, the latter shall control.
15. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient upon receipt in writing at the other
party's principal offices.
16. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person"
and "assignment" shall have the same meaning as such terms have in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
ATTEST: XXXXXXXX XXXXXXXX SECURITIES TRUST
-------------------- By:
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ATTEST: XXXXXXXX XXXXXXXX ASSET
MANAGEMENT INC.
-------------------- By:
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