Exhibit 23(e-1)
DISTRIBUTION AGREEMENT
AGREEMENT made as of December 28, 2005 between Pacific Capital Funds (the
"Trust"), having an office at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and BISYS
Fund Services Limited Partnership (the "Distributor"), having an office at 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
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,
as amended (the "1940 Act"); and
WHEREAS, it is intended that Distributor act as the distributor of the
shares of beneficial interest ("Shares") of each series of the Trust, as listed
on Schedule A, and such series as are hereafter created (all of the foregoing
series individually referred to herein 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 of Trust on behalf of each Fund for the
distribution of the Shares covered by the registration statement of Trust in
effect from time-to-time under the Securities Act of 1933, as amended (the
"Securities Act") and the 1940 Act. As used in this Agreement, the term
"registration statement" as of any time shall mean the registration statement of
the Trust and any amendments thereto, then in effect, including Parts A (the
Prospectus), B (the Statement of Additional Information) and C of each
registration statement, as filed on Form N-1A, or any successor thereto, with
the Commission, together with any amendments thereto. The term "Prospectus" as
of any time shall mean the then-current form of Prospectus and Statement of
Additional Information used by the Funds, in accordance with the rules of the
Commission, for delivery to shareholders and prospective shareholders after the
effective dates of the above-referenced registration statement, together with
any amendments and supplements thereto. The Trust will notify Distributor in
advance of any proposed changes to Schedule A to this Agreement.
1.2 Distributor may solicit orders for the sale of the Shares and may
undertake such advertising and promotion as it believes reasonable in connection
with such solicitation. The Trust understands that Distributor is now and may in
the future be the distributor of the shares of many other investment companies
or series, including investment companies having investment objectives similar
to those of the Funds. The Trust further understands that shareholders and
potential shareholders in the Trust may invest in shares of such other
investment companies. The Trust agrees that Distributor's duties to other
investment companies shall not be deemed in conflict with its duties to the
Trust under this Section 1.2.
1.3 Subject to the last sentence of this Section 1.3, Distributor may
engage in such activities as it deems appropriate in connection with the
promotion and sale of the Shares, which may include advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
Prospectuses to prospective shareholders other than current shareholders, and
the printing and mailing of sales literature. Distributor may enter into dealer
agreements and other selling agreements with broker-dealers and other
intermediaries; provided, however, that Distributor shall have no obligation to
make any payments to any third parties, whether as finder's fees, compensation
or otherwise, unless (i) Distributor has received a corresponding payment from
the applicable Fund's Distribution Plan (as defined in Section 2 of this
Agreement), from the Fund's investment adviser (the "Adviser") or from another
source as may be permitted by applicable law, and (ii) such corresponding
payment or payment procedure has been approved by the Trust's Board of Trustees.
1.4 In its capacity as distributor of the Shares, all activities of the
Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, all applicable rules and regulations promulgated by the Commission
thereunder, and all applicable rules and regulations adopted by any securities
association registered under the Securities Exchange Act of 1934.
1.5 Whenever in their judgment such action is warranted the Trust's
officers may upon reasonable notice instruct the Distributor to 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 The Trust agrees to inform the Distributor from time to time of the
states in which the Trust or its administrator has registered or otherwise
qualified shares of each Fund for sale, and 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 the Distributor
may reasonably designate.
1.7 The Trust shall furnish from time to time, for use in connection with
the sale of the Shares, such supplemental information with respect to the Funds
and the Shares as the Distributor may reasonably request; and the Trust warrants
that the statements contained in any such supplemental information will fairly
show or represent what they purport to show or represent. The Trust shall also
furnish the 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 Funds as the Distributor may
reasonably request.
1.8 Duties and Representations of the Distributor.
(a) The Distributor represents that it is duly organized and in good
standing under the law of its jurisdiction of organization, is registered
as a broker-dealer under the 1934 Act and is a member in good standing of
the NASD. The Distributor agrees that it will act in material conformity
with its Articles of Organization and its By-Laws, as may be amended from
time to
-2-
time. The Distributor agrees to comply in all material respects with the
1933 Act, the 1934 Act, and all other federal and state laws and
regulations, to the extent that each of the foregoing Acts, laws and
regulations are applicable to the Distributor in connection with its
performance of its obligations under this Agreement. The Distributor
represents and warrants that this Agreement has been duly authorized by all
necessary action by the Distributor under the Distributor's Articles of
Organization and By-Laws.
(b) The Distributor agrees to advise the Trust promptly in writing of
the initiation of any proceeding against it by the SEC or its staff, the
NASD or any state regulatory authority if such proceeding: (i) relates to
the Trust, or (ii) is reasonably likely to have a material adverse effect
on the Distributor's ability to perform its obligations under this
Agreement.
1.9 The Trust represents and warrants to the Distributor that: (a) all
registration statements, and each Prospectus, filed by the Trust with the
Commission under the Securities Act and the 1940 Act shall be prepared in
conformity with requirements of said Acts and rules and regulations of the
Commission thereunder; (b) the registration statement and Prospectus shall
contain all statements required to be stated therein in conformity with said
Acts and the rules and regulations of the Commission thereunder, and all
statements of fact contained in any such registration statement and Prospectus
shall be true and correct in all material respects; and (c) neither any
registration statement nor any Prospectus shall include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Shares. The foregoing representations and warranties shall continue throughout
the term of this Agreement and be deemed to be of a continuing nature,
applicable to all Shares distributed hereunder. The Trust may, but shall not be
obligated to make from time to time such amendment or amendments to any
registration statement and such supplement or supplements to any Prospectus as,
in the light of future developments, may, in the opinion of the Trust or its
counsel, be necessary or advisable. If the Trust shall not make any amendment or
amendments and/or supplement or supplements within 15 days after receipt by the
Trust of a written request from the Distributor to do so with respect to a
material statement of fact of omission, the Distributor may, at its option,
terminate this Agreement. In such case, if the Distributor does not terminate
this Agreement, the Distributor will be held harmless from, and indemnified by
Trust for, any liability or loss resulting from the failure to implement such
amendment. The Trust shall not file any amendment to any registration statement
or supplement to any Prospectus without giving the 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 the Distributor and dealers to use any Prospectus
in the form furnished by the Trust from time to time in connection with the sale
of the Shares until such Prospectus is amended or supplemented as provided
herein.
1.11 The Distributor may utilize agents in its performance of its services
and, with prior notice to the Trust, appoint in writing other parties qualified
to perform
-3-
specific administration services reasonably acceptable to the Trust
(individually, a "Sub-Agent") to carry out some or all of its responsibilities
under this Agreement; provided, however, that a Sub-Agent shall be the agent of
the Distributor and not the agent of the Trust, and that the Distributor shall
be fully responsible for the acts of such Sub-Agent and shall not be relieved of
any of its responsibilities hereunder by the appointment of a Sub-Agent.
1.12 The Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Distributor's part in the
performance of its duties, from reckless disregard by the Distributor of its
obligations and duties under this Agreement, or from the Distributor's failure
to comply with laws, rules and regulations applicable to it in connection with
its activities hereunder. The Trust agrees to indemnify, defend and hold
harmless the Distributor, its officers, partners, employees, and any person who
controls the Distributor within the meaning of Section 15 of the Securities Act
(collectively, "Distributor Indemnitees"), from and against any and all claims,
demands, liabilities and expenses (including the reasonable cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) (collectively,
"Claims") which the Distributor Indemnitees may incur under the Securities Act
or under common law or otherwise (a) as the result of the Distributor acting as
distributor of the Funds and entering into selling agreements, participation
agreements, shareholder servicing agreements or similar agreements with
financial intermediaries on behalf of the Trust; (b) arising out of or based
upon (i) any untrue statement, or alleged untrue statement, of a material fact
contained in any registration statement or any Prospectus, (ii) any omission, or
alleged omission, to state a material fact required to be stated in any
registration statement or any Prospectus or necessary to make the statements
therein not misleading, or (iii) any untrue statement, or alleged untrue
statement, of a material fact in any Trust-related advertisement or sales
literature, or any omission, or alleged omission, to state a material fact
required to be stated therein to make the statements therein not misleading, in
either case notwithstanding the exercise of reasonable care in the preparation
or review thereof by the Distributor; or (c) arising out of or based upon the
electronic processing of orders over the internet at the Trust's request;
provided, however, that the Trust's agreement to indemnify the Distributor
Indemnitees pursuant to this Section 1.12 shall not be construed to cover any
Claims (A) pursuant to subsection (b) above to the extent such untrue statement,
alleged untrue statement, omission, or alleged omission, was furnished in
writing, or omitted from the relevant writing furnished, as the case may be, to
the Trust by the Distributor for use in the registration statement or in
corresponding statements made in the Prospectus, advertisement or sales
literature; (B) arising out of or based upon the willful misfeasance, bad faith
or gross negligence of the Distributor in the performance of its duties or the
Distributor's reckless disregard of its obligations and duties under this
Agreement; or (C) arising out of or based upon the Distributor's failure to
comply with laws, rules and regulations applicable to it in connection with its
activities hereunder.
In the event of a Claim for which the Distributor Indemnitees may be
entitled to indemnification hereunder, the Distributor shall provide the Trust
with written notice of the Claim, identifying the persons against whom such
Claim is brought, promptly
-4-
following receipt of service of the summons or other first legal process, and in
any event within a reasonable time of such receipt, unless the failure to give
notice does not prejudice the Trust. The Trust will be entitled to assume the
defense of any suit brought to enforce any such Claim if such defense shall be
conducted by counsel of good standing chosen by the Trust and approved by the
Distributor, which approval shall not be unreasonably withheld. In the event any
such suit is not based solely on an alleged untrue statement, omission, or
wrongful act on the Trust's part, the Distributor shall have the right to
participate in the defense. In the event the Trust elects to assume the defense
of any such suit and retain counsel of good standing so approved by the
Distributor, the Distributor Indemnitees in such suit shall bear the fees and
expenses of any additional counsel retained by any of them, but in any case
where the Trust does not elect to assume the defense of any such suit or in case
the Distributor reasonably withholds approval of counsel chosen by the Trust,
the Trust will reimburse the Distributor Indemnitees named as defendants in such
suit for the reasonable fees and expenses of any counsel retained by them
(limited to one counsel for all Distributor Indemnitees unless the Distributor
Indemnitees can produce reasonable evidence of a material conflict of interest
in being represented by the same counsel) to the extent related to a Claim
covered under this Section 1.12. The Trust's indemnification agreement contained
in this Section 1.12 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Distributor
Indemnitees, and shall survive the delivery of any Shares.
1.13 The Distributor agrees to indemnify, defend and hold harmless the
Trust, its officers, Trustees, employees, and any person who controls the Trust
within the meaning of Section 15 of the Securities Act (collectively, "Trust
Indemnitees"), from and against any and all Claims which the Trust Indemnitees
may incur under the Securities Act or under common law or otherwise, arising out
of or based upon (a) any untrue statement, or alleged untrue statement, of a
material fact contained in any registration statement, Prospectus, or
Trust-related advertisement or sales literature, or any omission, or alleged
omission, to state a material fact in such materials that would be necessary to
make the information therein not misleading, which untrue statement, alleged
untrue statement, omission, or alleged omission, was furnished in writing, or
omitted from the relevant writing furnished, as the case may be, to the Trust by
the Distributor for use in the registration statement or in corresponding
statements made in the Prospectus, or advertisement or sales literature; (b) the
willful misfeasance, bad faith or gross negligence of the Distributor in the
performance of its duties, or the Distributor's reckless disregard of its
obligations and duties under this Agreement; or (c) the Distributor's failure to
comply with laws, rules and regulations applicable to it in connection with its
activities hereunder (except to the extent any such Claims are based on
Trust-related advertisements or sales literature that fail to comply with
applicable laws despite the Distributor's exercise of reasonable care in the
preparation and review thereof by the Distributor).
In the event of a Claim for which the Trust Indemnitees may be entitled to
indemnification hereunder, the Trust shall provide the Distributor with written
notice of the Claim, identifying the persons against whom such Claim is brought,
promptly following receipt of service of the summons or other first legal
process, and in any event within a reasonable time of such receipt, unless the
failure to give notice does not
-5-
prejudice the Distributor. The Distributor will be entitled to assume the
defense of any suit brought to enforce any such Claim if such defense shall be
conducted by counsel of good standing chosen by the Distributor and approved by
the Trust, which approval shall not be unreasonably withheld. In the event any
such suit is not based solely on an alleged untrue statement, omission, or
wrongful act on the Distributor's part, the Trust shall have the right to
participate in the defense. In the event the Distributor elects to assume the
defense of any such suit and retain counsel of good standing so approved by the
Trust, the Trust Indemnitees in such suit shall bear the fees and expenses of
any additional counsel retained by any of them, but in any case where the
Distributor does not elect to assume the defense of any such suit or in case the
Trust reasonably withholds approval of counsel chosen by the Distributor, the
Distributor will reimburse the Trust Indemnitees named as defendants in such
suit for the reasonable fees and expenses of any counsel retained by them
(limited to one counsel for all Trust Indemnitees unless the Trust Indemnitees
can produce reasonable evidence of a material conflict of interest in being
represented by the same counsel) to the extent related to a Claim covered under
this Section 1.13. The Distributor's indemnification agreement contained in this
Section 1.13 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Trust Indemnitees, and shall
survive the delivery of any Shares.
1.14 No Shares shall be offered by either the 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 Securities Act is not on file with the Commission; provided,
however, that: (a) the Distributor will not be obligated to cease offering
shares until it has received from the Trust written notice of such events, and
(b) nothing contained in this Section 1.14 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 Prospectus,
Agreement and Declaration of Trust, or Bylaws.
1.15 The Trust agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(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 Prospectus
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
-6-
(d) of any action of the Commission with respect to any amendment to
any registration statement or Prospectus which may from time to
time be filed with the Commission, which could reasonably be
expected to have a material negative impact upon the offering of
Shares.
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
unless they would reasonably be expected to have a material negative impact upon
the offering of Shares.
1.15 NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, UNDER
NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL,
INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGES, INCLUDING LOST
REVENUE, LOST PROFITS OR LOST OR DAMAGED DATA, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES.
2. Fees.
2.1 Attached as Schedule B to this Agreement are copies of all plans of
distribution under Rule 12b-1 under the 1940 Act approved by the Trust and
currently in effect (collectively, the "Distribution Plan"). The Funds will
deliver to Distributor promptly after any changes thereto updated copies of the
Distribution Plan. For its services under this Agreement, the Distributor shall
be compensated and reimbursed for its expenses as set forth on Schedules C and D
to this Agreement. Such compensation and reimbursement with respect to each Fund
shall be made solely from (i) the Trust's Distribution Plan with respect to such
Fund, if and to the extent that the Trust has a Distribution Plan that permits
and authorizes the Fund to compensate and reimburse the Distributor as set forth
in such Schedules and required board approvals have been given, and (ii) the
amount of any portion of a sales charge or underwriting discount with respect to
Load Shares of the Fund (as defined below) that Distributor is not required to
provide to dealers ("Dealer Holdback"). If the amount of the Dealer Holdbacks
plus amounts paid to the Distributor pursuant to the Distribution Plan are not
sufficient to compensate and reimburse Distributor in accordance with this
Agreement, the Trust will have no obligation to compensate or reimburse the
Distributor for the unpaid balance, and the parties will use reasonable efforts
to agree upon an alternative arrangement involving payment by a third party to
the extent practicable and permitted by applicable law. The fees set forth on
Schedules C and D are subject to change by the Distributor upon 30 days advance
notice.
2.2 If: (i) the Distributor properly receives fees from the Funds under the
Distribution Plan, other than for services rendered or expenses incurred
hereunder by the Distributor, that the Distributor is not obligated to pay to
third party broker-dealers, plan administrators or others ("Retained Fees"), and
(ii) the Funds have authority under the Distribution Plan to pay for some or all
of the Distributor's services under this Agreement ("Permitted Services"), then
all of the Retained Fees will either be
-7-
(a) returned to the Funds and/or (b) credited against the compensation payable
by the funds to the Distributor for Permitted Services.
3. Sale and Payment of Load Shares.
3.1 Shares of a Fund may be subject to a sales load and may be subject to
the imposition of a distribution fee pursuant to the Distribution Plan referred
to above. To the extent that Shares of a Fund are sold at an offering price
which includes a sales load or are subject to a contingent deferred sales load
with respect to certain redemptions (either within a single class of Shares or
pursuant to two or more classes of Shares), such Shares shall hereinafter be
referred to collectively as "Load Shares" (and in the case of Shares that are
sold with a front-end sales load, "Front-end Load Shares", or Shares that are
sold subject to a contingent deferred sales load, "CDSL Shares"). Funds that
issue Front-End Load Shares shall hereinafter be referred to collectively as
"Front-End Load Funds." Funds that issue CDSL Shares shall hereinafter be
referred to collectively as "CDSL Funds." Front-end Load Funds and CDSL Funds
may individually or collectively be referred as "Load Funds." Under this
Agreement, the following provisions of this Section 3 shall apply with respect
to the sale of, and payment for, Load Shares.
3.2 The Distributor shall have the right to offer Load Shares at their net
asset value and to sell such Load Shares to the public against orders therefor
at the applicable public offering price, as defined in Section 4 hereof. The
Distributor shall also have the right to sell Load Shares to dealers against
orders therefor at the public offering price less a concession determined by the
Distributor, which concession shall not exceed the amount of the sales charge or
underwriting discount, if any, referred to in Section 4 below.
3.3 Prior to the time of delivery of any Load Shares by a Load Fund to, or
on the order of, the Distributor, the Distributor shall pay or cause to be paid
to the Load Fund or to its order an amount in New York cleared funds equal to
the applicable net asset value of such Shares. The Distributor may retain the
Dealer Holdback.
3.4 With respect to CDSL Funds, the following provisions shall be
applicable:
(a) The Distributor shall be entitled to receive all contingent
deferred sales load charges, 12b-1 payments and all distribution and
service fees set forth in the Distribution Plan adopted by a CDSL Fund
(collectively, the "CDSL Payments") with respect to CDSL Shares. The
Distributor may assign or sell to a third party (a "CDSL Financing Entity")
all or a part of the CDSL Payments on CDSL Shares that the Distributor is
entitled to receive under this Agreement. The Distributor's right to the
CDSL Payments on such CDSL Shares, if assigned or sold to a CDSL Financing
Entity, shall continue after termination of this Agreement.
(b) Unless the Distributor is legally entitled to receive such fees as
the financing entity, the right to receive all CDSL Payments in respect of
periods subsequent to the termination of this Agreement shall terminate
upon termination of this Agreement. In the event Distributor assigns or
sells all or a part of the CDSL Payments to a CDSL Financing Entity and
this Agreement is
-8-
subsequently terminated, Distributor shall have no obligation to assist the
CDSL Financing Entity in connection with such CDSL Financing Entity's right
to receive such CDSL Payments subsequent to such termination.
(c) The Distributor shall not be required to offer or sell CDSL Shares
of a CDSL Fund unless and until it has received a binding commitment from a
CDSL Financing Entity (a "Commitment") satisfactory to the Distributor
which Commitment shall cover all expenses and fees related to the offer and
sale of such CDSL Shares including, but not limited to, dealer
reallowances, financing commitment fees, and legal fees. If at any time
during the term of this Agreement the then-current CDSL financing is
terminated through no fault of the Distributor, the Distributor shall have
the right to immediately cease offering or selling CDSL Shares until
substitute financing becomes effective.
(d) The Distributor and the Trust hereby agree that the terms and
conditions set forth herein regarding the offer and sale of CDSL Shares may
be amended upon written approval of both parties in order to comply with
the terms and conditions of any agreement with a CDSL Financing Entity to
finance the costs for the offer and sale of CDSL Shares so long as such
terms and conditions are in compliance with the Distribution Plan.
4. Public Offering Price of Shares.
The public offering price of a Load Share shall be the net asset value of
such Load Share next determined, plus any applicable sales charge, all as set
forth in the current Prospectus of the Load Fund. The public offering price of
shares other than Load Shares shall be determined in accordance with the
then-current Prospectus of the applicable Funds. The net asset value of Load
Shares shall be determined in accordance with the then-current Prospectus of the
Load Fund.
5. Issuance of Shares.
Notwithstanding any other provision of this Agreement to the contrary, the
Trust reserves the right to issue, transfer or sell Load Shares at net asset
values (a) in connection with the merger or consolidation of the Trust or the
Load Fund(s) with any other investment company or the acquisition by the Trust
or the 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
Load Shares pursuant to any exchange and reinvestment privileges described in
any then-current Prospectus of the Load Fund; and (e) otherwise in accordance
with any then-current Prospectus of the Load Fund.
6. Term, Duration and Termination.
This Agreement shall become effective with respect to each Fund as of the
date first written above (the "Effective Date") (or, if a particular Fund is not
in existence on such date, on the earlier of the date an amendment to Schedule A
to this Agreement
-9-
relating to that Fund is executed or the Distributor begins providing services
under this Agreement with respect to such Fund) and, unless sooner terminated as
provided herein, shall continue until December 31, 2006. Thereafter, if not
terminated, this Agreement shall continue with respect to a particular Fund
automatically for successive one-year terms, provided that such continuance is
specifically approved at least annually (a) by 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) by 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 is terminable without penalty with 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 meaning
as ascribed to such terms in the 1940 Act.) Sections 1.12, 1.13, 1.15, 2 (solely
with respect to amounts owed to the Distributor as of the termination or
expiration date), the last sentence of this Section 6, 7, 10, 14 and 15 of this
Agreement will survive any termination or expiration of this Agreement.
7. Privacy.
Nonpublic personal financial information relating to consumers or customers
of the Funds provided by, or at the direction of, the Trust to the Distributor,
or collected or retained by the Distributor to perform its duties as
distributor, shall be considered confidential information. The Distributor shall
not disclose or otherwise use any nonpublic personal financial information
relating to present or former shareholders of the Funds other than for the
purposes for which that information was disclosed to the Distributor, including
use under an exception in Rules 13, 14 or 15 of Securities and Exchange
Commission Regulation S-P in the ordinary course of business to carry out those
purposes. The Distributor shall have in place and maintain physical, electronic
and procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or use
of, records and information relating to consumers and customers of the Funds.
The Trust represents to the Distributor that it has adopted a Statement of its
privacy policies and practices as required by Securities and Exchange Commission
Regulation S-P and agrees to provide the Distributor with a copy of that
statement annually.
8. Anti-Money Laundering Compliance.
8.1 Each of Distributor and the Trust acknowledges that it is a financial
institution subject to the USA Patriot Act of 2001 and the Bank Secrecy Act
(collectively, the "AML Acts"), which require, among other things, that
financial institutions adopt compliance programs to guard against money
laundering. Each represents and warrants to the other that it is in compliance
with and will continue to comply with the AML Acts and applicable regulations in
all relevant respects. The Distributor shall also provide written notice to each
person or entity with which it entered an agreement prior to the date hereof
with respect to sale of the Trust's Shares, informing such person of anti-money
laundering compliance obligations applicable to
-10-
financial institutions under applicable laws and, consequently, under applicable
contractual provisions requiring compliance with laws.
8.2 The Distributor shall include specific contractual provisions regarding
anti-money laundering compliance obligations in agreements entered into by the
Distributor with any dealer that is authorized to effect transactions in Shares
of the Trust.
8.3 Each of Distributor and the Trust agrees that it will take such further
steps, and cooperate with the other as may be reasonably necessary, to
facilitate compliance with the AML Acts, including but not limited to the
provision of copies of its written procedures, policies and controls related
thereto ("AML Operations"). Distributor undertakes that it will grant to the
Trust, the Trust's anti-money laundering compliance officer and regulatory
agencies, reasonable access to copies of Distributor's AML Operations, books and
records pertaining to the Trust only. It is expressly understood and agreed that
the Trust and the Trust's compliance officer shall have no access to any of
Distributor's AML Operations, books or records pertaining to other clients of
Distributor.
9. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
regular or certified mail, or by nationally recognized overnight courier, to the
party required to be served with such notice at the following address: if to the
Trust, to it at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, Attention:
President, Pacific Capital Funds, with a copy to Xxxxxxx Xxxxxx, Esq., Xxxx
Xxxxxxxx Xxxxxxxx & Xxxxxx, 000 X. Xxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000; and if
to Distributor, to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Broker Dealer Chief Compliance Officer, with a copy to BISYS
Distribution Services, 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention:
President; or in each case at such other address as such party may from time to
time specify in writing to the other party pursuant to this Section.
10. Confidentiality.
During the term of this Agreement, the Distributor and the Trust may have
access to confidential information relating to such matters as either party's
business, trade secrets, systems, procedures, manuals, products, contracts,
personnel, and clients. As used in this Agreement, "Confidential Information"
means information belonging to the Distributor or the Trust which is of value to
such party and the disclosure of which could result in a competitive or other
disadvantage to either party, including, without limitation, financial
information, business practices and policies, know-how, trade secrets, market or
sales information or plans, customer lists, business plans, and all provisions
of this Agreement. Confidential Information includes information developed by
either party in the course of engaging in the activities provided for in this
Agreement, unless: (i) the information is or becomes publicly known without
breach of this Agreement, (ii) the information is disclosed to the other party
by a third party not under an obligation confidentiality to the party whose
Confidential Information is at issue of which the party receiving the
information should reasonably be aware, or (iii) the information is
independently developed by a party without reference to the other's Confidential
Information. Each party will protect the other's Confidential Information
-11-
with at least the same degree of care it uses with respect to its own
Confidential Information, and will not use the other party's Confidential
Information other than in connection with its duties and obligations hereunder.
Notwithstanding the foregoing, a party may disclose the other's Confidential
Information if (i) required by law, regulation or legal process or if requested
by any Agency; (ii) it is advised by counsel that it may incur liability for
failure to make such disclosure; (iii) requested to by the other party; provided
that in the event of (i) or (ii) the disclosing party shall give the other party
reasonable prior notice of such disclosure to the extent reasonably practicably
and cooperate with the other party (at such other party's expense) in any
efforts to prevent such disclosure.
11. Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York, without regard to principles of conflicts of law, and the
applicable provisions of the 1940 Act.
12. Prior Agreements.
This Agreement constitutes the complete agreement of the parties as to the
subject matter covered by this Agreement, and supersedes all prior negotiations,
understandings and agreements bearing upon the subject matter covered by this
Agreement.
13. Amendments.
No amendment to this Agreement shall be valid unless made in writing and
executed by both parties hereto.
14. Matters Relating to the Trust as a Massachusetts Business Trust.
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of 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 them personally, but shall bind only the trust property of the
Trust as provided in the Trust's Declaration of Trust.
15. Several, Not Joint Obligations.
The duties, responsibilities and obligations of each Fund pursuant to this
Agreement shall be several and not joint. In no event shall any one Fund be
responsible for the obligations of another Fund.
-12-
* * * * * *
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.
PACIFIC CAPITAL FUNDS
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
----------------------------------
Title: President
---------------------------------
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.
its General Partner
By: /s/Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: President
-13-
SCHEDULE A
FUNDS
Tax-Free Securities Fund
Tax-Free Short Intermediate Securities Fund
Diversified Fixed Income Fund
Ultra Short Government Fund
Short Intermediate U.S. Government Securities Fund
Growth Stock Fund
Growth and Income Fund
Value Fund
Mid-Cap Fund
Small Cap Fund
International Stock Fund
New Asia Growth Fund
-14-
SCHEDULE B
DISTRIBUTION PLAN
[CLASS A SHARES, DISTRIBUTION
AND SHAREHOLDER SERVICE PLAN]
[CLASS B SHARES DISTRIBUTION
AND SHAREHOLDER SERVICE PLAN]
CLASS C SHARES
DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
This Plan (the "Plan") constitutes the distribution and shareholder service
plan of Pacific Capital Funds, a Massachusetts business trust (the "Trust"),
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). The Plan relates to the Class C Shares of those investment
portfolios ("Funds") identified on Appendix A hereto as amended from time to
time (the "Distribution Plan Funds").
Section 1. Each Distribution Plan Fund shall pay to the distributor (the
"Distributor") of the Class C of the Trust's units of beneficial interest (the
"Shares"), a fee in an amount not to exceed on an annual basis 1.00% of the
average daily net asset value of such Fund attributable to the Shares of such
Fund (the "Distribution Fee") to compensate or reimburse the Distributor for the
following: (a) payments the Distributor makes to banks and other institutions
and industry professionals, such as broker/dealers, including the Adviser,
Distributor and their affiliates or subsidiaries (collectively referred to as
"Participating Organization(s)"), pursuant to an agreement in connection with
providing sales and/or administrative support services to the holders of a
Fund's Shares; or (b) payments to financial institutions and industry
professional (such as insurance companies, investment counselors, and the
Distributor's affiliates and subsidiaries) in consideration for the distribution
services provided and expenses assumed in connection with distribution
assistance, including but not limited to printing and distributing Prospectuses
to persons other than current Class C Shareholders of a Fund, printing and
distributing advertising and sales literature and reports to Class C
Shareholders used in connection with the sale of a Fund's Shares, and personnel
and communication equipment used in servicing shareholder accounts and
prospective Class C Shareholder inquiries.
Section 2. The Distribution Fee shall be paid by the Distribution Plan
Funds to the Distributor only to compensate or to reimburse the Distributor for
payments or expenses incurred pursuant to Section 1. Notwithstanding anything
herein to the contrary, the Distribution Plan Funds shall not be obligated to
make any payments under this Plan that exceed the maximum amounts payable under
Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc.
Section 3. The Plan shall not take effect until it has been approved,
together with any related agreements, by votes of the majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
1940 Act or the rules and regulations thereunder) of both (a) the Trustees of
the Trust, and (b) the Independent
-15-
Trustees of the Trust cast in person at a meeting called for the purpose of
voting on the Plan or such agreement.
Section 4. The Plan shall continue in effect for a period of more than one
year after it takes effect only so long as such continuance is specifically
approved at least annually in the manner provided for approval of the Plan in
Section 3.
Section 5. Any person authorized to direct the disposition of monies paid
or payable by the Distribution Plan Funds pursuant to the Plan or any related
agreement shall provide to the Trustees of the Trust, and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
Section 6. The Plan may be terminated at any time by vote of a majority of
the Independent Trustees, or by vote of a majority of the outstanding voting
securities of the Class C shares of such Fund.
Section 7. All agreements with any person relating to implementation of the
Plan shall be in writing, and any agreement related to the Plan shall provide:
(a) That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Independent
Trustees or by vote of a majority of the outstanding voting
securities of the Class C shares of the Distribution Plan Fund,
on not more than 60 days' written notice to any other party to
the agreement; and
(b) That such agreement shall terminate automatically in the event of
its assignment.
Section 8. The Plan may not be amended to increase materially the amount of
distribution expenses permitted pursuant to Section 1 hereof without approval by
a vote of at least of a majority of the outstanding voting securities of the
Distribution Plan Fund being affected, and all material amendments to the Plan
shall be approved in the manner provided for approval of the Plan in Section 3.
Section 9. As used in the Plan, (a) the term "Independent Trustees" shall
mean 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
or any agreements related to it, and (b) the terms "assignment", "interested
person" and "majority of the outstanding voting securities" shall have the
respective meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission.
Adopted: December 17, 2003
Effective: April 30, 2004
-16-
April 30, 2004
APPENDIX A
TO THE CLASS C
DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
OF PACIFIC CAPITAL FUNDS
Name of Distribution Plan Fund
Growth Stock Fund
Growth and Income Fund
Value Fund
Small Cap Fund
Mid-Cap Fund
New Asia Growth Fund
International Stock Fund
Tax-Free Securities Fund
Tax-Free Short Intermediate Securities Fund
Diversified Fixed Income Fund
Ultra Short Government Fund
Short Intermediate U.S. Government Securities Fund
17
SCHEDULE C
COMPENSATION OF THE DISTRIBUTOR
1. BASIC DISTRIBUTION SERVICES. For providing the distribution entity and
related infrastructure and platform, including requisite registrations and
qualifications, premises, personnel, compliance, ordinary fund board meeting
preparation and reporting, maintenance of selling agreements, clearance of
advertising and sales literature with regulators, filing appropriate
documentation for advisory representatives to qualify as registered
representatives of the Distributor (provided that the Adviser is solely
responsible for its representatives' meeting examination requirements) and their
related registrations and fees, ordinary supervisory services, overhead,
Financial Research Corporation's Mutual Fund Views on the News and Monitor
publications, and return on investment, the Distributor shall receive an annual
fee of $75,000, billed monthly.
2. SPECIAL DISTRIBUTION SERVICES. For special distribution services, including
those set forth on Schedule D to this Agreement, such as additional personnel,
registrations, marketing services, printing and fulfillment, website services,
proprietary distribution expertise for particular circumstances, and any other
services in addition to the basic distribution services covered by Paragraph 1
above, the Distributor shall be reimbursed promptly upon invoicing its expenses
for such services, including: (a) all costs to support additional personnel; (b)
regulatory fees including NASD CRD costs associated with marketing materials;
and (c) printing, postage and fulfillment costs, and (d) amounts payable under
additional agreements to which Distributor is a party.
3. SPECIAL CONDUIT SITUATIONS. If the Distribution Plan, or any other Fund plans
of distribution under Rule 12b-1 that contemplate up front and/or recurring
commission and/or service payments to broker dealers, retirement plan
administrators or others by the Distributor with respect to back-end loads,
level loads, or otherwise, unless expressly agreed otherwise in writing between
the parties, all such payments shall be made to the Distributor, which shall act
as a conduit for making such payments to such broker-dealers, retirement plan
administrators or others.
4. OTHER PAYMENTS BY THE DISTRIBUTOR. If the Distributor is required to make any
payments to third parties in respect of distribution, which payments are
contemplated by the parties to the Distribution Agreement or otherwise arise in
the ordinary course of business, the Distributor shall be promptly reimbursed
for such payments upon invoicing them.
5. FEE ADJUSTMENTS. The fixed fees and other fees expressed as stated dollar
amounts in this Schedule C and in this Agreement are subject to annual
increases, commencing on the one-year anniversary date of the date of this
Agreement, in an amount equal to the percentage increase in consumer prices for
services as measured by the United States Consumer Price Index entitled "All
Services Less Rent of Shelter," or a similar index should such index no longer
be published, since such one-year anniversary or since the date of the last fee
increase, as applicable.
18
SCHEDULE D
SPECIAL DISTRIBUTION SERVICES AND FEES
SERVICES FEES
-------- ----
1. WHOLESALING PERSONNEL SERVICES WHOLESALING PERSONNEL SERVICES FEES
Wholesaling Personnel may be external For each individual constituting the
wholesalers and/or internal Wholesaling Personnel employed by the
wholesalers. Distributor pursuant to this Agreement,
the Distributor shall receive annually
Services include soliciting support an amount equal to the sum of:
of the Funds with selling broker
dealers; participating in promotional (i) all compensation paid annually by
meetings, presentations, conferences the Distributor to the employee; plus
and other and forums; identifying
high potential personnel of the (ii) a management oversight fee equal
Adviser and selling broker dealers; to:
and assisting with mail solicitations
and literature fulfillment. (a) if one to four Wholesaling
Personnel are employed, 30% of
the salary compensation and 5%
of the bonus or commission
compensation, or
(b) if five or more Wholesaling
Personnel are employed, 25% of
the salary compensation and 5%
of the bonus or commission
compensation;
plus
(iii) 18% of the total compensation
(covering costs of the Distributor's
employee benefits that are provided by
the Distributor).
In addition, the Distributor shall be
reimbursed for all related costs to
support, educate and train and maintain
compliance oversight of Wholesaling
Personnel and other personnel such as
sales management, marketing and
performance reporting personnel
(including time and expenses, continuing
education, seminars, rent, supplies,
phone, computers, firm element, license,
and registration)
Upon any termination of Wholesaling
Personnel at the request of the Funds or
upon termination of this Agreement by
the Funds for any reason other than
cause, the Distributor will be
reimbursed its severance costs with
respect to such terminated Wholesaling
Personnel.
19
2. MARKETING AND RELATED SERVICES MARKETING AND RELATED SERVICES FEES
Marketing Execution: services include Marketing Execution: Quote available upon request.
identification and development of
appropriate marketing and Performance Reporting
communications programs, projects and
other initiatives; collaboration on Monthly Reports
initiating, researching, developing,
and delivering appropriate sales and Monthly Updating and Typesetting --
marketing materials; and management $850 - $1,000 per sheet per month
of marketing and advertising (for an All-in-One style report)
projects.
Initial Design and Setup (1-time
Performance Reporting: services charge) -- $500 per sheet
include creation of templates for
monthly fact sheets and quarterly Quarterly Reports
fact sheets; populating templates
with performance data obtained from Quarterly Updating and Typesetting
third parties; and coordinating steps -- $300 - $350 per Fund sheet per
needed for final printing and Share Class per quarter
distribution.
Initial Design and Setup per Fund
Creative Communication and Editorial sheet (1-time charge) -- $500 per
Services: services include preparing Fund sheet
drafts of textual commentary and
management discussion and analysis Annual & Semi-Annual Reports
for annual and semi-annual reports,
including portfolio manager Coordination:
interviews; providing creative design
and direction; and coordinating - $3,000 Initial Fee (includes
production, including typesetting Chairman's Letter and 1st Fund)
(initial composition and changes to
composition), charts and ancillary - $500 for each additional Fund
items.
NOTE: The above charges do not
Production Timing: include the typesetting, printing,
shipping, fulfillment, Xxxxx filing
- No timing guarantees can be made or quick-turnaround charges that
for completion of monthly and may be incurred from the financial
quarterly fact sheets where any printer. The above fees are for
of the information needed to coordinating the project only.
produce the reports is generated
by service providers other than Creative Communication and Editorial
the Distributor. However, a Services
basic estimate of turnaround
time may be given based upon Quote available upon request.
when the unit receives all
necessary data in good order.
Under normal conditions, the
Performance Reporting unit
expects to make proofs ready for
review (either printed or
electronic PDF format) by the
4th business day after the final
piece of data is received. If
compliance review is necessary
(e.g., when Morningstar ratings
data is used) an additional 2
days may be required for review.
- Printing turnaround (once the
factsheets are signed-off by the
client) is usually approximately
4-5 calendar days with most jobs
shipping by the 5th day.
- If requested, final electronic
PDF files may be generated and
e-mailed on the day the job is
signed-off on by the client.
These PDFs may be distributed
and printed as necessary until
the final printed pieces arrive.
20
3. FRC SERVICES FRC SERVICES FEES
FRC's program components include: Market Analytics Publications: Quote
available upon request.
-Market Analytics Publications
-Advanced Research Publications Advanced Research Publications:
-Analyst Support
-SME Direct Access - Topic Briefs
The Trust acknowledges that certain - FRC Focus (typical cost is
FRC publications may be provided only approximately $1,500)
to parties that have entered into a
written agreement or addendum that White Papers - FRC Vision (typical
sets forth the terms of use of such cost is approximately $2,500)
publications and the associated fee.
The Trust will notify the Distributor - Research Studies (costs vary,
whether the Trust or the Adviser or however typically range between
both will enter into such an $3,500 and $12,500)
agreement or addendum. The Trust
acknowledges that if only one of the Analyst Support: Quote available upon
Trust or the Adviser enters into such request
agreement or addendum, the other
party will be prohibited from SME Direct Access: Quote available upon
receiving or using such publications. request
Other FRC Fees:
- Client participation in funding FRC
Franchise Level program: $12,500
- All subsequent content and support
hours may be purchased at a 20%
discount from standard pricing.
Expenses Applicable to Special Distribution Services
Except as expressly set forth above, out-of-pocket expenses incurred by
Distributor in the performance of its services under this Agreement are not
included in the above fees. Such out-of-pocket expenses may include, without
limitation:
- reasonable travel and entertainment costs;
- expenses incurred by the Distributor in qualifying, registering and
maintaining the registration of the Distributor and each individual
comprising Wholesaling Personnel as a registered representative of the
Distributor under applicable federal and state laws and rules of the NASD,
e.g., CRD fees and state fees;
- Sponsorships, Promotions, Sales Incentives;
- any and all compensation to be paid to a third party as paying agent for
distribution activities (platform fees, finders fees, sub-TA fees, 12b-1
pass thru, commissions, etc.);
- costs and expenses incurred for telephone service, photocopying and office
supplies;
21
- advertising costs;
- costs for printing, paper stock and costs of other materials, electronic
transmission, courier, talent utilized in sales materials (e.g. models),
design output, photostats, photography, and illustrations;
- packaging, shipping, postage, and photocopies; and
- taxes that are paid or payable by the Distributor or its affiliates in
connection with its services hereunder, other than taxes customarily and
actually imposed upon the income that the Distributor receives hereunder.
22
[BISYS(R) LOGO]
November 22, 2006
Xxxxxx X. Xxxxxxx
President
Pacific Capital Funds
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Dear Xx. Xxxxxxx:
Pursuant to that certain Distribution Agreement (the "Distribution Agreement")
dated as of December 28, 2005 between Pacific Capital Funds (the "Trust") and
BISYS Fund Services Limited Partnership (the "Distributor"), the Distributor is
compensated for the services provided thereunder and reimbursed for certain
expenses thereunder from: (i) the Trust's plans of distribution under Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Distribution Plan"),
and (ii) the amount of any portion of a sales charge or underwriting discount
with respect to load shares that Distributor is not required to provide to
dealers.
The Distributor hereby agrees to reduce the amount it receives from the
Distribution Plan by an amount equal to 0.15% of the average daily net assets of
each series of the Trust covered under the Trust's Class A Distribution Plan
adopted on September 16, 1993, as amended. Such reduction will commence on
December 1, 2006 and continue through November 30, 2007. Such reduction will not
affect the Distributor's right to receive fees and reimbursement of expenses as
set forth in the Distribution Agreement, including without limitation the
$75,000 annual "Basic Distribution Services" fee.
Please sign this letter in the space provided below to indicate the Trust's
acceptance of the foregoing.
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.
its General Partner
By:
---------------------------------
Name: Xxxx Xxxxxxx
Title: President
Accepted and Agreed:
PACIFIC CAPITAL FUNDS
By:
--------------------------------
Xxxxxx X. Xxxxxxx
President
