PIPER GLOBAL FUNDS, INC.
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 18th day of February,
1997, by and between Piper Global Funds Inc., a Minnesota corporation (the
"Company"), for and on behalf of each series of the Company (each series is
referred to hereinafter as a "Fund"), and Xxxxx Xxxxxxx Inc., a Delaware
corporation (the "Distributor"). This Agreement shall apply to each class of
shares offered by the following Funds: Pacific-European Growth Fund and
Emerging Markets Growth Fund.
WITNESSETH:
1. UNDERWRITING SERVICES
The Company, on behalf of each Fund, hereby engages the Distributor, and
the Distributor hereby agrees to act, as principal underwriter for each Fund
in the sale and distribution of the shares of each class of such Fund to the
public, either through dealers or otherwise. The Distributor agrees to offer
such shares for sale at all times when such shares are available for sale and
may lawfully be offered for sale and sold.
2. SALE OF SHARES
The shares of each Fund are to be sold only on the following terms:
(a) All subscriptions, offers, or sales shall be subject to acceptance
or rejection by the Company. Any offer for or sale of shares shall be
conclusively presumed to have been accepted by the Company if the Company
shall fail to notify the Distributor of the rejection of such offer or sale
prior to the computation of the net asset value of such shares next following
receipt by the Company of notice of such offer or sale.
(b) No share of a Fund shall be sold by the Distributor for any
consideration other than cash or, pursuant to any exchange privilege provided
for by the applicable currently effective Prospectus or Statement of
Additional Information (hereinafter referred to collectively as the
"Prospectus"), shares of another Fund or of a series of another investment
company for which the Distributor acts as the principal underwriter. All
shares of a Fund shall be sold at the public offering price per share, which
shall be determined in accordance with the applicable currently effective
Prospectus, provided that, with respect to a class of shares that is sold
with a front-end sales charge, the Distributor may sell at a discount from
said public offering price to broker-dealers that have entered into sales
agreements with the Distributor, which discount shall be no greater than the
front-end sales charge set forth in the applicable currently effective
Prospectus.
(c) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction
occurring within a certain period of time following such a purchase, as
described in the applicable currently effective Prospectus.
(d) The front-end sales charge, if any, for any class of shares of a
Fund may, at the discretion of the Company and the Distributor, be reduced or
eliminated as permitted by the Investment Company Act of 1940, and the rules
and regulations thereunder, as they may be amended from time to time (the
"1940 Act"), provided that such reduction or elimination shall be set forth
in the Prospectus for such class, and provided that the Company shall in no
event receive for any shares sold an amount less than the net asset value
thereof. In addition, any contingent deferred sales charge for any class of
shares of a Fund may, at the discretion of the Company and the Distributor,
be reduced or eliminated as permitted by the 1940 Act, provided that such
reduction or elimination shall be set forth in the Prospectus for such class
of shares.
3. REGISTRATION OF SHARES
The Company agrees to make prompt and reasonable efforts to effect and
keep in effect, at its expense, the registration or qualification of each
Fund's shares for sale in such jurisdictions as the Company may designate.
4. INFORMATION TO BE FURNISHED TO THE DISTRIBUTOR
The Company agrees that it will furnish the Distributor with such
information with respect to the affairs and accounts of the Company (and each
Fund or class thereof) as the Distributor may from time to time reasonably
require, and further agrees that the Distributor, at all reasonable times,
shall be permitted to inspect the books and records of the Company.
5. ALLOCATION OF EXPENSES
During the period of this Agreement, the Company shall pay or cause to
be paid all expenses, costs and fees incurred by the Company which are not
assumed by the Distributor or Piper Capital Management Incorporated (the
"Adviser"). The Distributor agrees to provide, and shall pay costs which it
incurs in connection with, ongoing servicing and/or maintenance of
shareholder accounts with respect to each Fund (such costs are referred to as
"Shareholder Servicing Costs"). Shareholder Servicing Costs include, but are
not limited to, an allocation of the Distributor's overhead and payments made
to persons, including employees of the Distributor, who respond to inquiries
of shareholders regarding their ownership of Fund shares or their accounts
with a Fund, or who provide other administrative services not otherwise
required to be provided by the applicable Fund's investment adviser or
transfer agent. The Distributor shall also pay all costs of distributing the
shares of each Fund ("Distribution Expenses"). Distribution Expenses
include, but are not limited to, initial and ongoing sales compensation (in
addition to sales loads) paid to investment executives of the Distributor and
to other broker-dealers in respect of sales of shares of a Fund and other
advertising and promotional expenses in connection with the distribution of
shares of a Fund. These advertising and promotional expenses include, by way
of example and not by way of limitation, costs of printing and mailing
prospectuses, statements of additional information and shareholder reports to
prospective investors; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of the
Distributor's overhead and other expenses related to the distribution of
shares of a Fund; interest expenses incurred in connection with financing the
distribution of Class B shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other broker-dealers,
banks or other financial institutions, and of any other persons who provide
support services in connection with the distribution of shares of a Fund,
including travel, entertainment and telephone expenses. The Adviser, rather
than the Distributor, may bear the expenses referred to in this section, but
the Distributor shall be liable for such expenses until paid.
6. COMPENSATION TO THE DISTRIBUTOR
As compensation for all of its services provided and its costs assumed
under this Agreement, the Distributor shall receive the following forms and
amounts of compensation:
(a) The Distributor shall be entitled to receive or retain any
front-end sales charge imposed in connection with sales of shares of each
Fund, as set forth in the applicable current Prospectus. Up to the entire
amount of such front-end sales charge may be reallowed by the Distributor to
broker-dealers in connection with their sale of Fund shares. The amount of
the front-end sales charge (if any) may be retained or deducted by the
Distributor from any sums received by it in payment for shares so sold. If
such amount is not deducted by the Distributor from such payments, such
amount shall be paid to the Distributor by the Company not later than five
business days after the close of any calendar quarter during which any such
sales were made by the Distributor and payment received by the Company.
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(b) The Distributor shall be entitled to receive or retain any
contingent deferred sales charge imposed in connection with any redemption of
shares of each Fund, as set forth in the applicable current Prospectus.
(c) Pursuant to the Plans of Distribution adopted by the Funds in
accordance with Rule 12b-1 under the 1940 Act (the "Plan"):
(i) Class A of Emerging Markets Growth Fund is obligated to pay the
Distributor a total fee in connection with the servicing of shareholder
accounts of such class or Fund and in connection with distribution-related
services provided in respect of such class or Fund, calculated daily and
payable quarterly, at the annual rate of .50% of the value of the average
daily net assets of such Class. Class A of Pacific-European Growth Fund is
obligated to reimburse the Distributor on a quarterly basis for expenses
incurred in connection with the servicing of shareholder accounts of such
Class and in connection with distribution-related services provided in
respect of such Class, in an amount not to exceed, on an annualized basis,
.50% of the average daily net assets of such Class. For each Fund, all or
any portion of the amount payable hereunder may be payable as a Shareholder
Servicing Fee designed to cover Shareholder Servicing Costs, and all or any
portion of such amount may be payable as a Distribution Fee designed to
cover Distribution Expenses, as determined from time to time by the
Company's Board of Directors. Until further action by the Board of
Directors, a portion of such amount equal to .25% per annum of the average
daily net assets of the applicable Class shall be designated and payable as
a Shareholder Servicing Fee and the remainder of such amount shall be
designated as a Distribution Fee.
(ii) Class B of each Fund is obligated to pay the Distributor a total
fee in connection with the servicing of shareholder accounts of such class
and in connection with distribution-related services provided in respect of
such class, calculated daily and payable quarterly, at the annual rate of
1.00% of the value of the average daily net assets of such class. All or
any portion of such total fee may be payable as a Shareholder Servicing
Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, a portion of
such total fee equal to .25% per annum of Class B's average daily net
assets shall be designated and payable as a Shareholder Servicing Fee and
the remainder of such fee shall be designated as a Distribution Fee.
(iii) Average daily net assets shall be computed in accordance with
the applicable currently effective Prospectus.
(iv) Amounts payable to the Distributor under the Plan relating to the
Class A shares of Pacific-European Growth Fund shall be equal to the
Distributor's actual Distribution Expenses and Shareholder Servicing Costs
with respect to such shares, provided that, in the event such Distribution
Expenses and Shareholder Servicing Costs exceed the maximum amount
reimbursable pursuant to the Plan, the Distributor shall be solely
responsible for the payment of any such excess and Pacific-European Growth
Fund and the Company shall have no responsibility therefor. All other
amounts payable to the Distributor under the Plan may exceed or be less
than the Distributor's actual Distribution Expenses and Shareholder
Servicing Costs. In the event such Distribution Expenses and Shareholder
Servicing Costs exceed amounts payable to the Distributor under the Plan,
the Distributor shall not be entitled to reimbursement by the Company.
(d) In each year during which this Agreement remains in effect, the
Distributor will prepare and furnish to the Board of Directors of the Company,
and the Board will review, on a quarterly basis, written reports complying with
the requirements of Rule 12b-1 under the 1940 Act that
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set forth the amounts expended under this Agreement and the Plan, on a class
by class basis as applicable, and the purposes for which those expenditures
were made.
7. LIMITATION OF THE DISTRIBUTOR'S AUTHORITY
The Distributor shall be deemed to be an independent contractor and,
except as specifically provided or authorized herein, shall have no authority
to act for or represent either Fund or the Company.
8. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELED ORDERS
The Distributor shall subscribe for the shares of a Fund only for the
purpose of covering purchase orders already received by it or for the purpose
of investment for its own account. In the event that an order for the
purchase of shares of a Fund is placed with the Distributor by a customer or
dealer and subsequently canceled, the Distributor shall forthwith cancel the
subscription for such shares entered on the books of the Fund, and, if the
Distributor has paid the Fund for such shares, shall be entitled to receive
from the Fund in refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by the
Distributor.
9. INDEMNIFICATION OF THE COMPANY
The Distributor agrees to indemnify each Fund and the Company against
any and all litigation and other legal proceedings of any kind or nature and
against any liability, judgment, cost, or penalty imposed as a result of such
litigation or proceedings in any way arising out of or in connection with the
sale or distribution of the shares of such Fund by the Distributor. In the
event of the threat or institution of any such litigation or legal
proceedings against any Fund, the Distributor shall defend such action on
behalf of the Fund or the Company at the Distributor's own expense, and shall
pay any such liability, judgment, cost, or penalty resulting therefrom,
whether imposed by legal authority or agreed upon by way of compromise and
settlement; provided, however, the Distributor shall not be required to pay
or reimburse a Fund for any liability, judgment, cost, or penalty incurred as
a result of information supplied by, or as the result of the omission to
supply information by, the Company to the Distributor, or to the Distributor
by a director, officer, or employee of the Company who is not an "interested
person," as defined in the provisions of the 1940 Act, of the Distributor,
unless the information so supplied or omitted was available to the
Distributor or the Adviser without recourse to the Fund or the Company or any
such person referred to above.
10. FREEDOM TO DEAL WITH THIRD PARTIES
The Distributor shall be free to render to others services of a nature
either similar to or different from those rendered under this contract,
except such as may impair its performance of the services and duties to be
rendered by it hereunder.
11. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
(a) The effective date of this Agreement is set forth in the first
paragraph of this Agreement. Unless sooner terminated as hereinafter
provided, this Agreement shall continue in effect with respect to each Fund
(and class thereof) for a period of one year after the date of its execution,
and from year to year thereafter, but only so long as such continuance is
specifically approved at least annually (i) by a vote of the Board of
Directors of the Company or by the vote of a majority of the outstanding
voting securities of the applicable Fund (or class thereof), and (ii) by the
vote of a majority of the directors who are not "interested persons" (as
defined in the provisions of the 0000 Xxx) of the
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Company and have no direct or indirect financial interest in the operation of
the Plan or in any agreement related to the Plan (including, without
limitation, this Agreement), cast in person at a meeting called for the
purpose of voting on this Agreement.
(b) This Agreement may be terminated at any time with respect to either
Fund or any class thereof, without the payment of any penalty, by the vote of
a majority of the members of the Board of Directors of the Company who are
not "interested persons" (as defined in the provisions of the 0000 Xxx) of
the Company and have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan (including,
without limitation, this Agreement), or by the vote of a majority of the
outstanding voting securities of such Fund (or class thereof), or by the
Distributor, upon 60 days' written notice to the other party.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of a Fund (or
class thereof) shall mean the lesser of (i) the vote of 67% or more of the
voting securities of such Fund (or class thereof) present at a regular or
special meeting of shareholders duly called, if more than 50% of the Fund's
(or class's, as applicable) outstanding voting securities are present or
represented by proxy, or (ii) the vote of more than 50% of the outstanding
voting securities of such Fund (or class thereof).
12. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until
approved by the Distributor and by vote of a majority of the Board of
Directors of the Company who are not interested persons of the Distributor.
13. NOTICES
Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
PIPER GLOBAL FUNDS INC.
By /s/ Xxxxxxx X. Xxxxx
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Its Chairman
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XXXXX XXXXXXX INC.
By /s/ Xxxxxx X. Xxxx
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Its President
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