EXHIBIT (E)(3)
[Form of]
SunAmerica
Capital Services
Name of Firm______________________________
City______________ State_______ Zip Code_____
RE: SELLING AGREEMENT
Gentlemen:
We are the national distributor and principal underwriter of the shares of
mutual funds sponsored, managed and/or advised by SunAmerica Asset Management
Corp. (hereinafter referred to individually as a "Fund," or collectively as the
"Funds"). The Funds and each individual investment series thereof are set forth
on Schedule A, which may be amended from time to time. We invite you to
participate in making available to your customers shares of the Funds on the
following terms:
1a NON-BANK PARTICIPANTS ONLY. You represent and warrant that you are a
member of the National Association of Securities Dealer, Inc. (the "NASD"). You
agree to abide by the Rules of Fair Practice, the Constitution and By-Laws of
the NASD and to all other rules and regulations that are now or may become
applicable to transactions thereunder.
b. BANK PARTICIPANTS ONLY. You represent and warrant to us that (i)(a)
you are a "Bank" as such term is defined in Section 3(a)(6) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or (b) you are a "bank
holding company" as such term is defined in the Bank Holding Act of 1956, as
amended (the "Act"); (ii) you are duly organized and an existing "bank" or "bank
holding company" in good standing under the laws of jurisdiction in which you
were organized; (iii) all authorization (if any) required for your lawful
execution of this Agreement and your performance hereunder have been obtained;
and (iv) upon execution and delivery by you, and assuming due and valid
execution and delivery by us, this Agreement will constitute a valid and binding
agreement, enforceable against you in accordance with its terms. In the event
you are a "bank holding company" as such term is defined in the Act, you shall
attach as an exhibit, and which will be made a part of this Agreement, which
sets forth the names and addresses of the "banks" on whose behalf you are
authorizes to execute this Agreement. You agree to give written notice to us
promptly in the event you shall cease to be a "bank" as such term is defined in
Section 3(a)(6) of the Exchange Act or a "bank holding company" as such term is
defined in the Act. In such event, this Agreement shall be automatically
terminated upon such written notice. You also agree to abide by all of the Rules
of Fair Practice of the National Association of Securities Dealers, Inc.
applicable to the sale of investment company shares to your customers.
We recognize that you may be subject to the provisions of the Xxxxx-
Xxxxxxxx Act and other laws governing, among other things, the conduct of
activities by federally charted and supervised banks and affiliated
organizations. Because you will be the only one having a direct relationship
with the customer, you will comply and are complying with all laws and
regulations, including those of the applicable regulatory authorities and any
federal or state regulatory body having jurisdiction over you or your customers,
to the extent applicable to securities purchases hereunder for the account of
your customer.
2.a Orders for shares received from you and accepted by a Fund will be
priced at its next-determined net asset value, plus the applicable sales charge,
if any, at the time of such acceptance as established pursuant to the then-
current prospectus of the Fund. You hereby agree that, in the vent you receive
customer purchase or redemption orders for a fund after the time of day that
such fund prices its shares, you will have adequate internal controls designed
to prevent such orders from being aggregated with orders received before such
time. If you designate another entity to receive customer purchase and
redemption orders, you hereby agree to ensure that such designee has adopted and
implemented its own adequate internal controls. Procedures relating to the
handling of orders, including the Policies and Procedures With Respect to Sales
of SunAmerica Mutual Funds Under the Multiple Pricing Structure, as may be
amended from time to time, set forth in Schedule B hereto, shall be subject to
instructions which we shall forward from time to time to all firms (the
"Participant") through which we make available shares of the Funds. All orders
are subject to acceptance by the applicable Fund, which reserves the right in
its sole discretion to reject any order in whole or in part.
b. We will confirm transactions for each of your customers, it being
understood in all cases that (a) you are acting as the agent for the customer,
(b) the transactions are without recourse against you by the customer except to
the extent that (i) your failure to transmit orders in a timely fashion results
in a loss to your customer, or (ii) in the event you do not receive a
confirmation of the transaction within ten (10) business days following the
order date, your failure to inquire as to the status of the transaction during
such time period results in a loss to your customer, (c) as between you and the
customer, the customer shall have beneficial ownership of the Fund shares; (d)
each transaction in initiated solely upon the order of the customer, and (e)
each transaction is for the account of the customer and not for your account.
3. As a Participant, you agree to purchase shares of the Funds only
through us or from your customers. Purchases through us shall be made only for
the purpose of covering purchase orders already received from your customers or
for your own bona fide investment.
4. You agree to sell shares of the Funds only (a) to your customers at
the net asset value plus applicable sales charge, if any, then in effect as
established by the then-current prospectus of the applicable Fund or (b) to us
as agent for the Fund or the Fund itself at the redemption price as described in
the prospectus.
5. We reserve the right in our discretion, and without notice to you, to
suspend sales or withdraw the offering of shares entirely, or to modify or
cancel this Agreement. All sales shall be subject to the terms and provisions
set forth in the Funds' then-current prospectuses.
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6. No person is authorized to make any representations concerning a Fund
or its shares except those contained in its prospectus and any other information
(including any applicable "Statement of Additional Information") as may be
approved by a Fund as information supplemental to its prospectus. In purchasing
shares through us, you shall rely solely on the representations contained in the
then-effective Prospectus and supplemental information above-mentioned. You
agree to hold us harmless and indemnify the Funds and us in the event that you,
or any of your sales representatives, should violate any law, rule or
regulation, or any provisions of this Agreement, which may result in liability
to the Funds or us. Additional copies of any prospectus and/or supplement
information (including any applicable "Statement of Additional Information")
will be supplied by us to you in reasonable quantities upon request.
7. You shall have no authority whatever to act as agent of the Funds or
us, or any other Participant, and nothing in this Agreement shall constitute you
or the Funds as the agent of the other. In all transactions in these shares
between you and us, we are acting as agent for the Funds and not as principal.
8. All communications to us shall be sent to SunAmerica Capital Services,
Inc., The SunAmerica Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000. Any
notice to you shall be duly given if mailed or telegraphed to you at your
address set forth below, unless you give us written instructions otherwise. It
is your responsibility to provide us with updated information concerning where
written communications should be sent.
9. This Agreement may be terminated without penalty upon written notice
by either party at any time, and shall automatically terminate upon its
assignment, or upon any event that terminates a Fund's Distribution Agreement
with us. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The indemnification provision in Section 6
hereof shall survive any termination of this Agreement hereunder.
10. NON-BANK PARTICIPANT ONLY. By accepting this Agreement, you
represent that you are (i) registered as a broker-dealer under the Securities
Exchange Act of 1934; (ii) are qualified to act as a dealer in the states or
other jurisdictions where you transact business; and (iii) are a member in good
standing of the NASD. You agree that you will maintain such registration,
qualifications, and membership in full force and effect throughout the terms of
this Agreement. You further agree to comply with all applicable federal laws,
the laws of the states or other jurisdictions concerned, and the rules and
regulations promulgated thereunder, and with the Constitution, By-Laws and Rules
of Fair Practice, of the NASD and that you will not offer of sell the shares of
the Funds in any state or jurisdiction where they may not lawfully be offered or
sold, or where you are not registered as a broker-dealer.
11.a SERVICE FEES. We expect you to provide administration and marketing
services in the promotion of the Funds' shares, including services and
assistance to your customers who own Fund shares. For such services, you will
be entitled to compensation as set forth on Schedule A, as may be amended from
time to time, and in the Funds' current prospectuses. You hereby agree to waive
payment of such compensation until such time that we are in receipt of the
commissions or concessions due for such Fund shares. Our liability for payment
of such compensation is
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limited solely to the proceeds of such concessions receivable. No commissions or
concession shall be payable with respect to shares purchased through
reinvestment of dividends or distributions, or that had been acquired through
one or more exchange transactions which had been the subject of payments under
this paragraph. In addition, no commission or concession shall be payable with
respect to Shares that had been subject to a waiver of the sales charge except
as set forth in the Funds' current prospectuses.
b. CONTINGENT DEFERRED SALES CHARGE ("CDSC"). For purchases of Class B
and Class II shares (or for certain purchases of Class A shares), we advance
commissions with the presumption that assets will remain in the Fund(s) long
enough for expenses to be recouped. In the event of a redemption of shares
purchases before the holding period expires, a CDSC is deducted from the
redemption proceeds as described in the Funds' prospectuses.
c. CDSC WAIVERS. An exemptive order issued by the Securities and Exchange
Commission provides for a waiver of the CDSC on the following redemptions: (a)
CDSC Shares (Class B, Class II shares and certain Class A shares) requested to
be redeemed within one year of the death or initial determination of disability,
as defined in Section 72(m)(7) of the Internal Revenue Code of 1986 (the
"Code"), of a shareholder, (b) Class B shares representing taxable distributions
made by qualified retirement plans or retirement accounts (not including
rollovers) for which SunAmerica Asset Management Corp. serves as fiduciary;
provided that, the plan participant or account xxxxxx has attained the age of 59
1/2 at the time the redemption is made; (c) Class B and Class II shares being
redeemed up to the limit specified in the Funds' prospectuses made pursuant to
any systematic withdrawal plan established by the Funds. The CDSC waiver, with
respect to (a) above (i.e.; death or disability), is only applicable in cases
where the shareholder account is registered (i) in the name of an individual
person, (ii) as a joint tenancy with rights of survivorship, (iii) as community
property, or (iv) in the name of a minor under the Uniform Gift or Uniform
Transfer to Minors Acts. Notwithstanding the foregoing, we reserve the right to
terminate any or all of these waiver provisions in the future.
d. COMMISSION RECLAIMS. With respect to shares redeemed on which the
CDSC is waived pursuant to (b) above (i.e.; taxable distributions from the
qualified retirement plans as described therein), 100% of the commission
advanced to the selling Broker/Dealer in respect of such shares is subject to
reclaim in the event the redemption occurs within the first year from the date
of purchase, and 50% of the commission advanced if the redemption occurs in the
second year from the date of purchase. With respect to Class A shares purchased
at net asset value (which were part of a purchase of $1 million or more, and
which were subject to a CDSC if redeemed within one year of purchase), 50% of
the commission advanced is subject to reclaim if the redemption occurs during
the second year from the date of purchase. For all other purchases of Class A
shares at net asset value, the entire commission advanced is subject to reclaim
for any redemption occurring within the first two years from the date of
purchase. The foregoing reclamations will be subtracted from dealer concession
payments payable according to Schedule A and, if sufficient dealer concession
payments are not available to offset these reclamations, you will reimburse us
for these amounts.
12. This Agreement shall become effective upon receipt by us or a signed
copy hereof, and shall continue in effect until and unless terminated (i)
pursuant to Section 9, above,
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or (ii) on account of your violation of any representation contained herein.
This Agreement shall supersede all prior Selling Agreements with you relating to
the shares of the Funds. This Agreement may be amended in writing signed by each
of the parties hereto, except that we may amend Schedule A in our sole
discretion upon notice to you. Any such amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors.
SunAmerica Capital Services, Inc.
By:__________________________________
Name:________________________________
Date: _____________________ Title:_______________________________
The undersigned accepts your invitation to make available to its customers
the shares of the Funds and agrees to abide by the foregoing terms and
conditions. The undersigned acknowledges receipt of prospectuses of the Funds in
connection with this offering.
____________________________ ______________________________________
Firm Name Authorized Signatory
____________________________ ______________________________________
Address Print Name
____________________________ ______________________________________
Title of Signatory
____________________________ ______________________________________
Telephone Number Date
____________________________
Fax Number
Rev. 12/98
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[Form of]
SCHEDULE A
SUNAMERICA MUTUAL FUNDS
SunAmerica Income Funds
-----------------------
COMPENSATION (concession to selling dealer is based on amount of purchase)
------------
A SHARES
Purchase Amount Dealer Concession
--------------- -----------------
$ 0 to $ 99,999 4.00%
$ 100,000 to $ 249,999 3.00%
$ 250,000 to $ 499,999 2.25%
$ 500,000 to $ 999,999 1.35%
$ 1,000,000 or more 1.00%
Up to .25% Service Fee, paid quarterly, effective immediately
B SHARES - 4.00% (no breakpoints)
Up to .25% Service Fee, paid quarterly, beginning the 13th month following
purchase
II SHARES - 2.00% (no breakpoints)
For all Funds except High Income, up to .25% Service Fee and .50% trail
commission (total .75%), paid quarterly, beginning the 13th month following
purchase. With respect to High Income, up to .25% Service Fee and .75% trail
commission (total 1.00%), paid quarterly, beginning the 13th month following
purchase.
--------------------------------------------------------------------------------
SunAmerica Equity Funds
-----------------------
COMPENSATION (concession to selling dealer is based on amount of purchase)
------------
A SHARES
Purchase Amount Dealer Concession
--------------- -----------------
$ 0 to $ 49,999 5.00%
$ 50,000 to $ 99,999 4.00%
$ 100,000 to $ 249,999 3.00%
$ 250,000 to $ 499,999 2.25%
$ 500,000 to $ 999,999 1.35%
$ 1,000,000 or more 1.00%
Up to .25% Service Fee, paid quarterly, effective immediately
B SHARES - 4.00% (no breakpoints)
Up to .25% Service Fee, paid quarterly, beginning the 13th month following
purchase
II SHARES - 2.00% (no breakpoints)
Up to .25% Service Fee and .75% trail commission (total 1.00%), paid
quarterly, beginning the 13th month following purchase
SunAmerica Money Market Funds, Inc.
-----------------------------------
COMPENSATION
------------
A SHARES
Up to .15% Service Fee, paid quarterly, effective immediately
B SHARES - 4.00% (no breakpoints)
Up to .15% Service Fee, paid quarterly, beginning the 13th month following
purchase
II SHARES - 2.00% (no breakpoints)
Up to .25% Service Fee and .25% trail commission (total .50%), paid
quarterly, beginning the 13th month following purchase
STYLE SELECT SERIES
STYLE SELECT SERIES, INC.
-------------------------
COMPENSATION (concession to selling dealer is based on amount of purchase)
-------------
A SHARES
Purchase Amount Dealer Concession
--------------- -----------------
$ 0 to $ 49,999 5.00%
$ 50,000 to $ 99,999 4.00%
$ 100,000 to $ 249,999 3.00%
$ 250,000 to $ 499,999 2.25%
$ 500,000 to $ 999,999 1.35%
$ 1,000,000 or more 1.00%
Up to .25% Service Fee, paid quarterly, effective immediately
B SHARES - 4.00% (no breakpoints)
Up to .25% Services Fee, paid quarterly, beginning the 13/th/ month
following purchase
II SHARES - 2.00% (no breakpoints)
Up to .25% Services Fee and .74% trail commission (total 1.00%), paid
quarterly, beingnning the 13/th/ month following purchase
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[Form of]
SCHEDULE B
POLICIES AND PROCEDURES WITH RESPECT TO
SALES OF SUNAMERCIA MUTUAL FUNDS AND
STYLE SELECT SERIES, INC.
As certain portfolio of SunAmerica Mutual Funds and Style Select Series,
Inc. (the "Multiple Pricing Funds") offer shares subject to a front-end sales
load ("Class A Shares"), shares subject to a deferred sales charge ("Class B
Shares") and shares subject to both a front-end sales load and deferred sales
charges ("Class II Shares"), it is important for investors not only to choose a
mutual fund that best suits their investment objectives, but also to choose the
sales financing method which best suits their particular needs. To assist your
clients in these decisions and to ensure proper supervision of mutual fund
purchase recommendations, we are instituting the following policies:
(1) Any purchase of SunAmerica Mutual Fund for less than $100,000, may be
either Class A, Class B or Class II Shares.
(2) Any purchase of a SunAmerica Mutual Fund, for either Class A, Class B
or Class II Shares, in the amount of $100,000 or more, but less than $1 million,
must be reviewed and approved for appropriateness by the Broker/Dealer (who must
maintain a written record of this review) in light of the relevant facts and
circumstances pertaining to your client, including, but not limited to:
(a) the specific purchase order dollar amount;
(b) the length of time the client expects to hold his or her shares;
and
(c) any other relevant circumstances, such as the availability of
purchases under letters of intent or pursuant to rights of
accumulation.
(3) A purchase of any SunAmerica Mutual Fund for $1 million or more should
be of Class A Shares.
(4) Generally, initial purchases of the SunAmerica Money Market Fund must
be of Class A Shares. Class B or Class II shares of such Fund are only available
to those investors exchanging from Class B or Class II shares of another
SunAmerica Mutual Fund, or those investors making an initial purchase who intend
to exchange into the Class B or Class II shares of another SunAmerica Mutual
Fund.
General Guidelines
------------------
There are instances where one financing method may be more advantageous to
an investor than the other. For example, investors who may take advantage of
breakpoints and those qualifying for a discount from the maximum sales load on
Class A Shares, may determine that the purchase of Class A Shares with the
payment of a reduced front-end sales charge is preferable to payment of the
ongoing distribution fee imposed upon Class B Shares for the first seven years.
On the other hand, investors whose orders would not take advantage of
breakpoints to qualify for a discount may wish to defer the sales load and have
all of their funds invested in Class B Shares initially. After a holding period
of seven years, the Class B Shares convert to Class A Shares, and ongoing
charges are thereafter equal.
A National Association of Securities Dealers, Inc. rule specifically
prohibits "breakpoint sales" of front-end load shares. A "breakpoint sale" is a
sale to an investor of an amount of front-end load (Class A) shares just below
the amount which would be subject to the next breakpoint on the fund's sales
charge schedule. Because the deferred sales charge on Class B
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shares is gradually reduced to 0% over the six-year period in which the shares
are held, a redemption of Class B shares just before an "anniversary date" is in
some ways analogous to a breakpoint sale. An investor might wish to redeem just
before an anniversary date for tax or other reasons, and an investor who chose
to wait would continue to be at market risk. Nevertheless, you should inform
your clients intending to redeem Class B shares near an anniversary date that,
if the redemption were delayed, the deferred sales charge might be reduced.
Responsibilities of the Broker/Dealer
-------------------------------------
You must ensure that all employees receiving investor inquiries about the
purchase of shares of Multiple Pricing Funds have advised the investor of the
available financing methods offered by the mutual funds, and the impact of
choosing one method over another. In certain instances, it may be appropriate to
discuss the purchase directly with the investor. The foregoing guidelines, as
well as the examples cited above, should assist you in reviewing purchase orders
less than, equal to, or greater than $100,000.
Effectiveness
-------------
This policy is effective as of October 1, 1993 with respect to any other
for shares of all Multiple Pricing Funds.
Questions relating to this policy should be directed to SunAmerica Capital
Services, Inc., The SunAmerica Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000-
0000.
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