EXHIBIT (e)(1)(ii)
DISTRIBUTION AND SERVICE AGREEMENT
THIS DISTRIBUTION AND SERVICE AGREEMENT dated as of [_____________],
2005, (the "Agreement") by and between Xxx Xxxxxx Trust, a Delaware business
trust (the "Trust"), on behalf of its series, Xxx Xxxxxx Core Plus Fixed Income
Fund (the "Fund"), and XXX XXXXXX FUNDS INC., a Delaware corporation (the
"Distributor").
1. Appointment of Distributor. The Fund appoints the Distributor as a
principal underwriter and exclusive distributor of each class of its shares of
beneficial interest (the "Shares") offered for sale from time to time pursuant
to the then current prospectus of the Fund, subject to different combinations of
front-end sales charges, distribution fees, service fees and contingent deferred
sales charges. Classes of shares, if any, subject to a front-end sales charge
and a distribution and/or service fee are referred to herein as "FESC Classes"
and the Shares of such classes are referred to herein as "FESC Shares." Classes
of shares, if any, subject to a contingent-deferred sales charge and a
distribution and/or a service fee are referred to herein as "CDSC Classes" and
Shares of such classes are referred to herein as "CDSC Shares." Classes of
shares, if any, subject to a front-end sales charge, a contingent-deferred sales
charge and a distribution and/or service fee are referred to herein as
"Combination Classes" and Shares of such class are referred to herein as
"Combination Shares." The Fund reserves the right to refuse at any time or times
to sell Shares hereunder for any reason deemed adequate by the Board of Trustees
of the Fund.
The Distributor will use its best efforts to sell, through its
organization and through other dealers and agents, the Shares which the
Distributor has the right to purchase under Section 2 hereof, but the
Distributor does not undertake to sell any specific number of Shares.
The Distributor agrees that it will not take any long or short
positions in the Shares, except for long positions in those Shares purchased by
the Distributor in accordance with any systematic sales plan described in the
then current Prospectus of the Fund and except as permitted by Section 2 hereof,
and that so far as it can control the situation, it will prevent any of its
trustees, officers or shareholders from taking any long or short positions in
the Shares, except for legitimate investment purposes.
2. Sale of Shares to Distributor. The Fund hereby grants to the
Distributor the exclusive right, except as herein otherwise provided, to
purchase Shares directly from the Fund upon the terms herein set forth. Such
exclusive right hereby granted shall not apply to Shares issued or transferred
or sold at net asset value: (a) in connection with the merger or consolidation
of the Fund with any other investment company or the acquisition by the Fund of
all or substantially all of the assets of or the outstanding Shares of any
investment company; (b) in connection with a pro rata distribution directly to
the holders of Fund Shares in the nature of a stock dividend or stock split or
in connection with any other recapitalization approved by the Board of Trustees;
(c) upon the exercise of purchase or subscription rights granted to the holders
of Shares on a pro rata basis; (d) in connection with the automatic reinvestment
of dividends and distributions from the Fund; or (e) in connection with the
issue and sale of Shares to trustees, officers and employees of the Fund; to
directors, officers and employees of the investment adviser of the Fund or any
principal underwriter (including the Distributor) of the Fund; to retirees of
the Distributor that purchased shares of any mutual fund distributed by the
Distributor prior to retirement; to directors, officers and employees of Xxx
Xxxxxx Investments Inc. (formerly The Xxx Xxxxxx American Capital, Inc.) (the
parent of the Distributor) and to the subsidiaries of Xxx Xxxxxx Investments
Inc.; and to any trust, pension, profit-sharing or other benefit plan for any of
the aforesaid persons as permitted by Rule 22d-1 under the Investment Company
Act of 1940, as amended (the "1940 Act").
The Distributor shall have the right to buy from the Fund the Shares
needed, but not more than the Shares needed (except for reasonable allowances
for clerical errors, delays and errors of transmission and cancellation of
orders) to fill unconditional orders for Shares received by the Distributor from
dealers, agents and investors during each period when particular net asset
values and public offering prices are in effect as provided in Section 3 hereof;
and the price which the Distributor shall pay for the Shares so purchased shall
be the respective net asset value used in determining the public offering price
on which such orders were based. The Distributor shall notify the Fund at the
end of each such period, or as soon thereafter on that business day as the
orders received in such period have been compiled, of the number of Shares of
each class that the Distributor elects to purchase hereunder.
3. Public Offering Price. The public offering price per Share shall be
determined in accordance with the then current Prospectus of the Fund. In no
event shall the public offering price exceed the net asset value per Share,
plus, with respect to the FESC Shares, a front-end sales charge not in excess of
the applicable maximum sales charge permitted under the Conduct Rules of the
National Association of Securities Dealers, Inc., as in effect from time to
time. The net asset value per share for each class of Shares, respectively,
shall be determined in the manner provided in the Declaration of Trust and
By-Laws of the Trust as then amended, the Certificate of Designation with
respect to the Fund, as amended, and in accordance with the then current
Prospectus of the Fund consistent with the terms and conditions of the Fund's
Multi-Class Plan, as it may be amended from time to time or succeeded by
exemptive orders or rules promulgated by the Securities and Exchange Commission
under the 1940 Act. The Fund will cause immediate notice to be given to the
Distributor of each change in net asset value as soon as it is determined.
Discounts to dealers purchasing FESC Shares from the Distributor for resale and
to brokers and other eligible agents making sales of FESC Shares to investors
and compensation payable from the Distributor to dealers, brokers and other
eligible agents making sales of CDSC Shares and Combination Shares shall be set
forth in the selling agreements between the Distributor and such dealers or
agents, respectively, as from time to time amended, and, if such discounts and
compensation are described in the then current Prospectus for the Fund, shall be
as so set forth.
4. Compliance with NASD Rules, SEC Orders, etc. In selling Fund Shares,
the Distributor will in all respects duly comply with all state and federal laws
relating to the sale of such securities and with all applicable rules and
regulations of all regulatory bodies, including without limitation the Conduct
Rules of the National Association of Securities Dealers, Inc., and all
applicable rules and regulations of the Securities and Exchange Commission under
the 1940 Act, and will indemnify and save the Fund harmless from any damage or
expense on account of any unlawful act by the Distributor or its agents or
employees. The Distributor is not, however, to be responsible for the acts of
other dealers or agents, except to the extent that they shall be acting for the
Distributor or under its direction or authority. None of the Distributor, any
dealer, any agent or any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus heretofore or hereafter filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "1933 Act") (as any such Registration Statement and Prospectus may have
been or may be amended from time to time), covering the Shares, and in any
supplemental information to any such Prospectus approved by the Fund in
connection with the offer or sale of Shares. None of the Distributor, any
dealer, any broker or any other person is authorized to act as agent for the
Fund in connection with the offering or sale of Shares to the public or
otherwise. All such sales shall be made by the Distributor as principal for its
own account.
5. Expenses.
(a) The Fund will pay or cause to be paid:
(i) all expenses in connection with the registration of
Shares under the federal securities laws, and the Fund
will exercise its best efforts to obtain said
registration and qualification;
(ii) all expenses in connection with the printing of any
notices of shareholders' meetings, proxy and proxy
statements and enclosures therewith, as well as any
other notice or communication sent to shareholders in
connection with any meeting of the shareholders or
otherwise, any annual, semiannual or other reports or
communications sent to the shareholders, and the
expenses of sending prospectuses relating to the
Shares to existing shareholders;
(iii) all expenses of any federal or state original-issue
tax or transfer tax payable upon the issuance,
transfer or delivery of Shares from the Fund to the
Distributor; and
(iv) the cost of preparing and issuing any Share
certificates which may be issued to represent Shares.
(b) The Distributor will also permit its officers and
employees to serve without compensation as trustees and officers of the Fund if
duly elected to such positions.
(c) The Fund shall reimburse the Distributor for out-of-pocket
costs and expenses actually incurred by it in connection with distribution of
each class of Shares respectively in accordance with the terms of a plan (the
"12b-1 Plan") adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as
such 12b-1 Plan may be in effect from time to time; provided, however, that no
payments shall be due or paid to the Distributor hereunder with respect to a
class of Shares unless and until this Agreement shall have been approved for
each such class by a majority of the Board of Trustees of the Fund and by a
majority of the "Disinterested Trustees" (as such term is defined in such 12b-1
Plan) by vote cast in person at a meeting called for the purpose of voting on
this Agreement. A copy of such 12b-1 Plan as in effect on the date of this
Agreement is attached as Exhibit I hereto. The Fund reserves the right to
terminate such 12b-1 Plan with respect to a class of Shares at any time, as
specified in the Plan. The persons authorized to direct the payment of funds
pursuant to this Agreement and the 12b-1 Plan shall provide to the Fund's Board
of Trustees, and the Trustees shall review, at least quarterly, a written report
with respect to each of the classes of Shares of the amounts so paid and the
purposes for which such expenditures were made for each such class of Shares.
(d) The Fund shall compensate the Distributor for providing
services to, and the maintenance of, shareholder accounts in the Fund (including
prepaying service fees to eligible brokers, dealers and financial intermediaries
and expenses incurred in connection therewith) and the Distributor may pay as
agent for and on behalf of the Fund a service fee with respect to each class of
Shares to brokers, dealers and financial intermediaries for the provision of
shareholder services and the maintenance of shareholder accounts in the Fund in
the amount with respect to each class of Shares set forth from time to time in
the Fund's prospectus. The Fund shall compensate the Distributor for such
expenses in accordance with the terms of a service plan (the "Service Plan"), as
such Service Plan may be in effect from time to time; provided, however, that no
service fee payments shall be due or paid to the Distributor hereunder with
respect to a class of Shares unless and until this Agreement shall have been
approved for each such class by a majority of the Board of Trustees of the Fund
and by a majority of the Disinterested Trustees by vote cast in person at a
meeting called for the purpose of voting on this Agreement. A copy of such
Service Plan as in effect on the date of this Agreement is attached as Exhibit
II hereto. The Fund reserves the right to terminate such Service Plan with
respect to a class of Shares at any time, as specified in the Plan. The persons
authorized to direct the payment of funds pursuant to this Agreement and the
Service Plan shall provide to the Fund's Board of Trustees, and the Trustees
shall review, at least quarterly, a written report with respect to each of the
classes of Shares of the amounts paid as service fees for each such class of
Shares.
6. Redemption of Shares. In connection with the Fund's redemption of
its Shares, the Fund hereby authorizes the Distributor to repurchase, upon the
terms and conditions hereinafter set forth, as the Fund's agent and for the
Fund's account, such Shares as may be offered for sale to the Fund from time to
time by holders of such Shares or their agents.
(a) Subject to and in conformity with all applicable federal
and state legislation, any applicable rules of the National Association of
Securities Dealers, Inc., and any applicable rules and regulations of the
Securities and Exchange Commission under the 1940 Act, the Distributor may
accept offers of holders of Shares to resell such Shares to the Fund on such
terms and conditions and at such prices as described and provided for in the
then current Prospectus of the Fund.
(b) The Distributor agrees to notify the Fund at such times as
the Fund may specify of the number of each class of Shares, respectively,
repurchased for the Fund's account and the time or times of such repurchases,
and the Fund shall notify the Distributor of the prices and, in the case of a
class of CDSC Shares or Combination Shares, of the deferred sales charge as
described below, if any, applicable to repurchases of Shares of such class.
(c) The Fund shall have the right to suspend or revoke the
foregoing authorization at any time; unless otherwise stated, any such
suspension or revocation shall be effective forthwith upon receipt of notice
thereof by telegraph or by written instrument from any of the Fund's officers.
In the event that the Distributor's authorization is, by the terms of such
notice, suspended for more than twenty-four hours or until further notice, the
authorization given by this Section 6 shall not be revived except by vote of the
Board of Trustees of the Fund.
(d) The Distributor agrees that all repurchases of Shares made
by the Distributor shall be made only as agent for the Fund's account and
pursuant to the terms and conditions herein set forth.
(e) The Fund agrees to authorize and direct its Custodian to
pay, for the Fund's account, the repurchase price (together with any applicable
contingent deferred sales charge) of any Shares so repurchased for the Fund
against the authorized transfer of book shares from an open account and against
delivery of any other documentation required by the Board of Trustees of the
Fund or, in the case of certificated Shares, against delivery of the
certificates representing such Shares in proper form for transfer to the Fund.
(f) The Distributor shall receive no commissions or other
compensation in respect of any repurchases of FESC Shares for the Fund under the
foregoing authorization and appointment as agent. With respect to any repurchase
of CDSC Shares or Combination Shares, the Distributor shall receive the deferred
sales charge, if any, applicable to the respective class of Shares that have
been held for less than a specified period of time with respect to such class as
set forth from time to time in the Fund's Prospectus. The Distributor shall
receive no other commission or other compensation in respect of any repurchases
of CDSC Shares or Combination Shares for the Fund under the foregoing
authorization and appointment as agent.
(g) If any FESC Shares sold to the Distributor under the terms
of this Agreement are redeemed or repurchased by the Fund or by the Distributor
as agent or are tendered for redemption within seven business days after the
date of the Distributor's confirmation of the original purchase by the
Distributor, the Distributor shall forfeit the amount above the net asset value
received by it in respect of such Shares, provided that the portion, if any, of
such amount re-allowed by the Distributor to dealers or agents shall be
repayable to the Fund only to the extent recovered by the Distributor from the
dealer or agent concerned. The Distributor shall include in agreements with such
dealers and agents a corresponding provision for the forfeiture by them of their
concession with respect to FESC Shares purchased by them or their principals and
redeemed or repurchased by the Fund or by the Distributor as agent within seven
business days after the date of the Distributor's confirmation of such initial
purchases.
7. Indemnification. The Fund agrees to indemnify and hold harmless the
Distributor and each of its trustees and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
against any loss, liability, claim, damage or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damage,
or expense and reasonable counsel fees incurred in connection therewith),
arising by reason of any person acquiring any Shares, based upon the ground that
the registration statement, Prospectus, shareholder reports or other information
filed or made public by the Fund (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading under the 1933 Act
or any other statute or the common law. However, the Fund does not agree to
indemnify the Distributor or hold it harmless to the extent that the statement
or omission was made in reliance upon, and in conformity with, information
furnished to the Fund by or on behalf of the Distributor. In no case (i) is the
indemnity of the Fund in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any liability to the
Fund or its security holders to which the Distributor or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Fund to be liable under its indemnity agreement contained in this Section with
respect to any claim made against the Distributor or any person indemnified
unless the Distributor or any such person shall have notified the Fund in
writing of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon the Distributor or any such person (or after the Distributor or
the person shall have received notice of service on any designated agent).
However, failure to notify the Fund of any claim shall not relieve the Fund from
any liability which it may have to the Distributor or any person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Fund shall be entitled to participate at its
own expense in the defense, or, if it so elects, to assume the defense, of any
suit brought to enforce any claims, but if the Fund elects to assume the
defense, the defense shall be conducted by counsel chosen by it and satisfactory
to the Distributor or person or persons, defendant or defendants in the suit. In
the event the Fund elects to assume the defense of any suit and retain counsel,
the Distributor, officers or trustees or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional counsel retained by them. If the Fund does not elect to assume the
defense of any suit, it will reimburse the Distributor, officers or trustees or
controlling person or persons, defendant or defendants in the suit for the
reasonable fees and expenses of any counsel retained by them. The Fund agrees to
notify the Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or directors in connection with
the issuance or sale of any of the Shares.
The Distributor also covenants and agrees that it will indemnify and
hold harmless the Fund and each of its trustees and officers and each person, if
any, who controls the Fund within the meaning of Section 15 of the 1933 Act
against any loss, liability, damage, claim or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, damage, claim or
expense and reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any Shares, based upon the 1933 Act or any other
statute or common law, alleging any wrongful act of the Distributor or any of
its employees or alleging that the registration statement, Prospectus,
shareholder reports or other information filed or made public by the Fund (as
from time to time amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, insofar as the statement or omission was made in reliance
upon, and in conformity with, information furnished to the Fund by or on behalf
of the Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Fund or any person indemnified to be deemed to protect the Fund or any
such person against any liability to which the Fund or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligation and duties under this Amended Agreement, or (ii) is
the Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Fund or person (or after the Fund or
such person shall have received notice of service on any designated agent).
However, failure to notify the Distributor of any claim shall not relieve the
Distributor from any liability which it may have to the Fund or any person
against whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in the
defense, or, if it so elects, to assume the defense, of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to the Fund,
to its officers and trustees and to any controlling person or persons, defendant
or defendants in the suit. In the event that the Distributor elects to assume
the defense of any suit and retain counsel, the Fund or controlling persons,
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them. If the Distributor does not elect to assume the
defense of any suit, it will reimburse the Fund, officers and trustees or
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Distributor
agrees to notify the Fund promptly of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
Shares.
8. Essential Personnel. The Distributor and the Fund agree that the
retention of (i) the chief executive officer, president, chief financial officer
and secretary of the Distributor and (ii) each director, officer and employee of
the Distributor or any of its Affiliates (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) who serves as an officer of the Fund
(each person referred to in (i) or (ii) hereinafter being referred to as an
"Essential Person"), in his or her current capacities, is in the best interest
of the Fund and the Fund's shareholders. In connection with the Distributor's
acceptance of employment hereunder, the Distributor hereby agrees and covenants
for itself and on behalf of its Affiliates that neither the Distributor nor any
of its Affiliates shall make any material or significant personnel changes or
replace or seek to replace any Essential Person or cause to be replaced any
Essential Person, in each case without first informing the Board of Trustees of
the Fund in a timely manner. In Addition, neither the Distributor nor any
Affiliate of the Distributor shall change or seek to change or cause to be
changed, in any material respect, the duties and responsibilities of any
Essential Person, in each case without first informing the Board of Trustees of
the Fund in a timely manner.
9. Continuation, Amendment or Termination of This Agreement. This
Agreement shall become effective on the Effective Date and thereafter shall
continue in full force for the two-year period from the effective date hereof
unless sooner terminated as hereinafter provided, and this Agreement shall
continue in full force and effect year to year thereafter with respect to each
class of Shares so long as such continuance is approved at least annually (i) by
the Board of Trustees of the Fund or by a vote of a majority of the outstanding
voting securities of the respective class of Shares of the Fund, and (ii) by
vote of a majority of the Trustees who are not parties to this Agreement or
interested persons in any such party (the "Independent Trustee") cast in person
at a meeting called for the purpose of voting on such approval, provided,
however, that (a) this Agreement may at any time be terminated with respect to
either class of Shares of the Fund without the payment of any penalty either by
vote of a majority of the Disinterested Trustees, or by vote of a majority of
the outstanding voting securities of the respective class of Shares of the Fund,
on written notice to the Distributor; (b) this Agreement shall immediately
terminate in the event of its assignment; and (c) this Agreement may be
terminated by the Distributor on ninety (90) days' written notice to the Fund.
Upon termination of this Agreement with respect to either class of Shares of the
Fund, the obligations of the parties hereunder shall cease and terminate with
respect to such class of Shares as of the date of such termination, except for
any obligation to respond for a breach of this Agreement committed prior to such
termination.
This Agreement may be amended with respect to either class of Shares at
any time by mutual consent of the parties, provided that such consent on the
part of the Fund shall have been approved (i) by the Board of Trustees of the
Fund, or by a vote of the majority of the outstanding voting securities of the
respective class of Shares of the Fund, and (ii) by vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such amendment.
For the purpose of this section, the terms "vote of a majority of the
outstanding voting securities", "interested persons" and "assignment" shall have
the meanings defined in the 1940 Act, as amended.
10. Limited Liability of Shareholder. Notwithstanding anything to the
contrary contained in this Agreement, you acknowledge and agree that, as
provided by Section 8.1 of the Agreement and Declaration of Trust of the Trust,
this Agreement is executed by the Trustees of the Trust and/or Officers of the
Fund by them not individually but as such Trustees and/or Officers, and the
obligations of the Fund hereunder are not binding upon any of the Trustees,
Officers or Shareholders individually, but bind only the trust estate.
11. Notice. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any office of
such party or at such other address as such party shall have designated in
writing.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE GOVERNED BY, THE
LAW OF THE STATE OF ILLINOIS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF
LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
Xxx Xxxxxx Trust,
on behalf of its series,
Xxx Xxxxxx Core Plus Fixed Income Fund
By:
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Name:
Title:
XXX XXXXXX FUNDS INC.
By:
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Name:
Title:
EXHIBIT I
PLAN OF DISTRIBUTION PURSUANT TO RULE 00X-0
XXX XXXXXX XXXXX - XXX XXXXXX CORE PLUS FIXED INCOME FUND
The plan set forth below (the "Distribution Plan") is the written plan
contemplated by Rule 12b-1 (the "Rule") under the Investment Company Act of
1940, as amended (the "1940 Act"), for the Xxx Xxxxxx Core Plus Fixed Income
Fund (the "Fund"), a series of the Xxx Xxxxxx Trust (the "Trust"). This
Distribution Plan describes the material terms and conditions under which assets
of the Fund may be used in connection with financing distribution related
activities with respect to each of its classes of shares of beneficial interest
(the "Shares"), each of which is offered and sold subject to a different
combination of front-end sales charges, distribution fees, service fees and
contingent deferred sales charges.1 Classes of shares, if any, subject to a
front-end sales charge and a distribution and/or service fee are referred to
herein as "Front-End Classes" and the Shares of such classes are referred to
herein as "Front-End Shares." Classes of shares, if any, subject to a
contingent-deferred sales charge and a distribution and/or a service fee are
referred to herein as "CDSC Classes" and Shares of such classes are referred to
herein as "CDSC Shares." Classes of shares, if any, subject to a front-end sales
charge, a contingent-deferred sales charge and a distribution and/or service fee
are referred to herein as "Combination Classes" and Shares of such class are
referred to herein as "Combination Shares."
The Fund has adopted a service plan (the "Service Plan") pursuant to
which the Fund is authorized to expend on an annual basis a portion of its
average net assets attributable to any or each class of Shares in connection
with the provision by the principal underwriter (within the meaning of the 0000
Xxx) of the Shares and by brokers, dealers and other financial intermediaries
(collectively, "Financial Intermediaries") of personal services to holders of
Shares and/or the maintenance of shareholder accounts. The Fund also has entered
into a distribution and services agreement (the "Distribution and Services
Agreement") with Xxx Xxxxxx Funds Inc. (the "Distributor"), pursuant to which
the Distributor acts as the principal underwriter with respect to each class of
Shares and provides services to the Fund and acts as agent on behalf of the Fund
in connection with the implementation of the Service Plan. The Distributor may
enter into selling agreements (the "Selling Agreements") with Financial
Intermediaries in order to implement the Distribution and Services Agreement,
the Service Plan and this Distribution Plan.
1. The Fund hereby is authorized to pay the Distributor a distribution fee with
respect to each class of its Shares described below to compensate the
Distributor for activities which are primarily intended to result in the sale of
such Shares ("distribution related activities") performed by the Distributor
with respect to the respective class of Shares of the Fund. Such distribution
related activities include without limitation: (a) printing and distributing
copies of any prospectuses and annual and interim reports of the Fund (after the
Fund has prepared and set in type such materials) that are used by such
Distributor in connection with the offering of Shares; (b) preparing, printing
or otherwise manufacturing and distributing any other literature or materials of
any nature used by such Distributor in connection with promoting, distributing
or offering the Shares; (c) advertising, promoting and selling Shares to
broker-dealers, banks and the public; (d) distribution related overhead and the
provision of information programs and shareholder services intended to enhance
the attractiveness of investing in the Fund; (e) incurring initial outlay
expenses in connection with compensating Financial Intermediaries for (i)
selling CDSC Shares and Combination Shares and (ii) providing personal services
to shareholders and the maintenance of shareholder accounts of all classes of
Shares, including paying interest on and incurring other carrying costs on funds
borrowed to pay such initial outlays; and (f) acting as agent for the Fund in
connection with implementing this Distribution Plan pursuant to the Selling
Agreements.
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(1) The Fund is authorized to offer multiple classes of shares pursuant to
a Rule 18f-3 Plan adopted under the 1940 Act.
2. The amount of the distribution fee hereby authorized with respect to each
class of Shares of the Fund shall be as follows:
3. With respect to Class A Shares, the distribution fee authorized hereby and
the service fee authorized pursuant to the Service Plan, in the aggregate, shall
not exceed on an annual basis 0.25% of the Fund's average daily net assets
attributable to Class A Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to Class A Shares. The Fund
may pay a distribution fee as determined from time to time by its Board of
Trustees in an annual amount not to exceed the lesser of (i) (A) 0.25% of the
Fund's average daily net asset value during such year attributable to Class A
Shares sold on or after the date on which this Distribution Plan was first
implemented with respect to Class A Shares minus (B) the amount of the service
fee with respect to the Class A Shares actually expended during such year by the
Fund pursuant to the Service Plan and (ii) the actual amount of distribution
related expenses incurred by the Distributor with respect to Class A Shares.
4. With respect to Class B Shares, the distribution fee authorized hereby and
the service fee authorized pursuant to the Service Plan, in the aggregate, shall
not exceed on an annual basis 1.00% of the Fund's average daily net assets
attributable to Class B Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to the Class B Shares. The
Fund may pay a distribution fee with respect to the Class B Shares as determined
from time to time by its Board of Trustees in an annual amount not to exceed the
lesser of (A) 0.75% of the Fund's average daily net asset value during such year
attributable to Class B Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to the Class B Shares and
(B) the actual amount of distribution related expenses incurred by the
Distributor during such year plus prior unreimbursed distribution related
expenses less the amount of any contingent deferred sales charge paid to the
Distributor, in each case with respect to the Class B Shares sold on or after
the date on which this Distribution Plan is first implemented with respect to
the Class B Shares.
5. With respect to Class C Shares, the distribution fee authorized hereby and
the service fee authorized pursuant to the Service Plan, in the aggregate, shall
not exceed on an annual basis 1.00% of the Fund's average daily net assets
attributable to Class C Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to the Class C Shares. The
Fund may pay a distribution fee with respect to the Class C Shares as determined
from time to time by its Board of Trustees in an annual amount not to exceed the
lesser of (A) 0.75% of the Fund's average daily net asset value during such year
attributable to Class C Shares sold on or after the date on which this
Distribution Plan is first implemented with respect to the Class C Shares and
(B) the actual amount of distribution related expenses incurred by the
Distributor during such year plus prior unreimbursed distribution related
expenses less the amount of any contingent deferred sales charge paid to the
Distributor, in each case with respect to the Class C Shares sold on or after
the date on which this Distribution Plan is first implemented with respect to
the Class C Shares.
6. Payments pursuant to this Distribution Plan shall not be made more often than
monthly upon receipt by the Fund of a separate written expense report with
respect to each class of Shares setting forth the expenses qualifying for such
reimbursement allocated to each class of Shares and the purposes thereof.
7. In the event that amounts payable hereunder with respect to shares of a
Front-End Class do not fully reimburse the Distributor for its actual
distribution related expenses with respect to the Shares of such class, there is
no carryforward of reimbursement obligations to succeeding years. In the event
the amounts payable hereunder with respect to shares of a CDSC Class or a
Combination Class do not fully reimburse the Distributor for its actual
distribution related expenses with respect to the Shares of the respective
class, such unreimbursed distribution expenses will be carried forward and paid
by the Fund hereunder in future years so long as this Distribution Plan remains
in effect, subject to applicable laws and regulations. Reimbursements for
distribution related expenses payable hereunder with respect to a particular
class of Shares may not be used to subsidize the sale of Shares of any other
class of Shares.
8. The Fund shall not compensate the Distributor, and neither the Fund nor the
Distributor shall compensate any Financial Intermediary, for any distribution
related expenses incurred with respect to a
class of Shares prior to the later of (a) the implementation of this
Distribution Plan with respect to such class of Shares or (b) the date that such
Financial Intermediary enters into a Selling Agreement with the Distributor.
9. The Fund hereby authorizes the Distributor to enter into Selling Agreements
with certain Financial Intermediaries to provide compensation to such Financial
Intermediaries for activities and services of the type referred to in Paragraph
1 hereof. Prior to the implementation of a Selling Agreement, such agreement
shall be approved by a majority of the Board of Trustees of the Trust and a
majority of the Disinterested Trustees (within the meaning of the 0000 Xxx) by a
vote cast in person at a meeting called for the purpose of voting on such
Selling Agreements. The Distributor may reallocate all or a portion of its
distribution fee to such Financial Intermediaries as compensation for the
above-mentioned activities and services. Such reallocation shall be in an amount
as set forth from time to time in the Fund's prospectus. Such Selling Agreements
shall provide that the Financial Intermediaries shall provide the Distributor
with such information as is reasonably necessary to permit the Distributor to
comply with the reporting requirements set forth in Paragraphs 3 and 8 hereof.
10. Subject to the provisions of this Distribution Agreement, the Fund is hereby
authorized to pay a distribution fee to any person that is not an "affiliated
person" or "interested person" of the Fund or its "investment adviser" or
"principal underwriter" (as such terms are defined in the 0000 Xxx) who provides
any of the foregoing services for the Fund. Such fee shall be paid only pursuant
to written agreements between the Fund and such other person the terms of which
permit payments to such person only in accordance with the provisions of this
Distribution Agreement and which have the approval of a majority of the
Disinterested Trustees by vote cast separately with respect to each class of
Shares and cast in person at a meeting called for the purpose of voting on such
written agreement.
11. The Fund and the Distributor shall prepare separate written reports for each
class of Shares and shall submit such reports to the Fund's Board of Trustees on
a quarterly basis summarizing all payments made by them with respect to each
class of Shares pursuant to this Distribution Plan, the Service Plan and the
agreements contemplated hereby, the purposes for which such payments were made
and such other information as the Board of Trustees or the Disinterested
Trustees may reasonably request from time to time, and the Board of Trustees
shall review such reports and other information.
12. This Distribution Plan shall become effective upon its approval by (a) a
majority of the Board of Trustees and a majority of the Disinterested Trustees
by vote cast separately with respect to each class of Shares cast in person at a
meeting called for the purpose of voting on this Distribution Plan, and (b) with
respect to each class of Shares, a "majority of the outstanding voting
securities" (as such phrase is defined in the 0000 Xxx) of such class of Shares
voting separately as a class.
13. This Distribution Plan and any agreement contemplated hereby shall continue
in effect beyond the first anniversary of its adoption by the Board of Trustees
of the Fund only so long as (a) its continuation is approved at least annually
in the manner set forth in clause (a) of paragraph 9 above and (b) the selection
and nomination of those trustees of the Fund who are not "interested persons" of
the Fund are committed to the discretion of such trustees.
14. This Distribution Plan may be terminated with respect to a class of Shares
without penalty at any time by a majority of the Disinterested Trustees or by a
"majority of the outstanding voting securities" of the respective class of
Shares of the Fund.
15. This Distribution Plan may not be amended to increase materially the maximum
amounts permitted to be expended hereunder except with the approval of a
"majority of the outstanding voting securities" of the respective class of
Shares of the Fund and may not be amended in any other material respect except
with the approval of a majority of the Disinterested Trustees. Amendments
required to conform this Distribution Plan to changes in the Rule or to other
changes in the 1940 Act or the rules and regulations thereunder shall not be
deemed to be material amendments.
16. To the extent any service fees paid by the Fund pursuant to the Service Plan
are deemed to be
payments for the financing of any activity primarily intended to result in the
sale of Shares issued by the Fund within the meaning of the Rule, the terms and
provisions of such plan and any payments made pursuant to such plan hereby are
authorized pursuant to this Distribution Plan in the amounts and for the
purposes authorized in the Service Plan without any further action by the Board
of Trustees or the shareholders of the Fund. To the extent the terms and
provisions of the Service Plan conflict with the terms and provisions of this
Distribution Plan, the terms and provisions of the Service Plan shall prevail
with respect to amounts payable pursuant thereto. This paragraph 16 is adopted
solely due to the uncertainty that may exist with respect to whether payments to
be made by the Fund pursuant to the Service Plan constitute payments primarily
intended to result in the sale of Shares issued by the Fund within the meaning
of the Rule.
17. The Trustees of the Trust have adopted this Distribution Plan as trustees
under the Declaration of Trust of the Trust and the policies of the Trust
adopted hereby are not binding upon any of the Trustees or shareholders of the
Trust individually, but bind only the trust estate.
EXHIBIT II
SERVICE PLAN
XXX XXXXXX TRUST - XXX XXXXXX CORE PLUS FIXED INCOME FUND
The plan set forth below (the "Service Plan") for the Xxx Xxxxxx Core
Plus Fixed Income Fund (the "Fund"), a series of the Xxx Xxxxxx Trust (the
"Trust"), describes the material terms and conditions under which assets of the
Fund may be used to compensate the Fund's principal underwriter, within the
meaning of the Investment Company Act of 1940, as amended (the "1940 Act"),
brokers, dealers and other financial intermediaries (collectively "Financial
Intermediaries") for providing personal services to shareholders and/or the
maintenance of shareholder accounts with respect to each of its Class A Shares
of beneficial interest (the "Class A Shares"), its Class B Shares of beneficial
interest (the "Class B Shares"), and its Class C Shares of beneficial interest
(the "Class C Shares"). The Class A Shares, Class B Shares and Class C Shares
sometimes are referred to herein collectively as the "Shares." Each class of
Shares is offered and sold subject to a different combination of front-end sales
charges, distribution fees, service fees and contingent deferred sales charges.2
Classes of shares, if any, subject to a front-end sales charge and a
distribution and/or service fee are referred to herein as "Front-End Classes"
and the Shares of such classes are referred to herein as "Front-End Shares."
Classes of shares, if any, subject to a contingent-deferred sales charge and a
distribution and/or a service fee are referred to herein as "CDSC Classes" and
Shares of such classes are referred to herein as "CDSC Shares." Classes of
shares, if any, subject to a front-end sales charge, a contingent-deferred sales
charge and a distribution and/or service fee are referred to herein as
"Combination Classes" and Shares of such class are referred to herein as
"Combination Shares."
The Fund has adopted this Service Plan pursuant to which the Fund is
authorized to expend on an annual basis a portion of its average net assets
attributable to each class of Shares for providing personal services to
shareholders and/or the maintenance of shareholder accounts. The Fund also has
entered into a distribution and services agreement (the "Distribution and
Services Agreement") with Xxx Xxxxxx Funds Inc. (the "Distributor"), pursuant to
which the Distributor acts as agent on behalf of the Fund in connection with the
implementation of the Service Plan and acts as the principal underwriter with
respect to each class of Shares. The Distributor may enter into shareholder
servicing agreements (the "Service Agreements") with brokers, dealers and other
financial intermediaries ("Financial Intermediaries") in order to implement this
Service Plan.
1. The Fund hereby is authorized to pay a service fee with respect to
its Class A Shares, Class B Shares and Class C Shares to any Financial
Intermediary who provides personal services to shareholders and/or maintains
shareholder accounts in an annual amount not to exceed 0.25% of the average
annual net asset value of the Shares maintained in the Fund by such person that
were sold on or after the date on which this Service Plan was first implemented.
The aggregate annual amount of all such payments with respect to each such class
of Shares may not exceed 0.25% of the Fund's average annual net assets
attributable to the respective class of Shares sold on or after the date on
which this Service Plan was first implemented and maintained in the Fund more
than one year.
2. Payments pursuant to this Service Plan may be paid or prepaid on
behalf of the Fund by the Distributor acting as the Fund's agent.
3. Payments by the Fund to the Distributor pursuant to this Service
Plan shall not be made more often than monthly upon receipt by the Fund of a
separate written expense report with respect to each class of Shares setting
forth the expenses qualifying for such reimbursement allocated to each class of
Shares and the purposes thereof.
-------------------------
(2) The Fund is authorized to offer multiple classes of shares pursuant to a
Rule 18f-3 Plan adopted under the 1940 Act.
4. In the event that amounts payable hereunder with respect to a class
of Shares do not fully reimburse the Distributor for pre-paid service fees, such
unreimbursed service fee expenses will be carried forward and paid by the Fund
hereunder in future years so long as this Service Plan remains in effect,
subject to applicable laws and regulations. Reimbursements for service fee
related expenses payable hereunder with respect to a particular class of Shares
may not be used to subsidize services provided with respect to any other class
of Shares.
5. The Fund shall not compensate the Distributor, and neither the Fund
nor the Distributor shall compensate any Financial Intermediary, for any service
related expenses incurred with respect to a class of Shares prior to the later
of (a) the implementation of this Service Plan with respect to such class of
Shares or (b) the date that such Financial Intermediary enters into a Service
Agreement with the Distributor.
6. The Fund hereby authorizes the Distributor to enter into Service
Agreements with certain Financial Intermediaries to provide compensation to such
Financial Intermediaries for activities and services of the type referred to in
Paragraph 1 hereof. Prior to the implementation of a Service Agreement, such
agreement shall be approved by a majority of the Board of Trustees of the Trust
and a majority of the Disinterested Trustees (within the meaning of the 0000
Xxx) by a vote cast in person at a meeting called for the purpose of voting on
such Service Agreements. Such Service Agreements shall provide that the
Financial Intermediaries shall provide the Distributor with such information as
is reasonably necessary to permit the Distributor to comply with the reporting
requirements set forth in Paragraphs 3 and 8 hereof.
7. Subject to the provisions of this Service Plan, the Fund is hereby
authorized to pay a service fee to any person that is not an "affiliated person"
or "interested person" of the Fund or its "investment adviser" or "principal
underwriter" (as such terms are defined in the 0000 Xxx) who provides any of the
foregoing services for the Fund. Such fee shall be paid only pursuant to written
agreements between the Fund and such other person the terms of which permit
payments to such person only in accordance with the provisions of this Service
Plan and which have the approval of a majority of the Disinterested Trustees by
vote cast separately with respect to each class of Shares and cast in person at
a meeting called for the purpose of voting on such written agreement.
8. The Fund and the Distributor shall prepare separate written reports
for each class of Shares and shall submit such reports to the Fund's Board of
Trustees on a quarterly basis summarizing all payments made by them with respect
to each class of Shares pursuant to this Service Plan and the agreements
contemplated hereby, the purposes for which such payments were made and such
other information as the Board of Trustees or the Disinterested Trustees may
reasonably request from time to time, and the Board of Trustees shall review
such reports and other information.
9. This Service Plan may be terminated with respect to a class of
Shares without penalty at any time by a majority of the Disinterested Trustees
or by a "majority of the outstanding voting securities" of the respective class
of Shares of the Fund.
10. This Service Plan shall become effective upon its approval by (a) a
majority of the Board of Trustees and a majority of the Disinterested Trustees
by vote cast separately with respect to each class of Shares cast in person at a
meeting called for the purpose of voting on this Service Plan, and (b) with
respect to each class of Shares, a "majority of the outstanding voting
securities" (as such phrase is defined in the 0000 Xxx) of such class of Shares
voting separately as a class.
11. This Service Plan and any agreement contemplated hereby shall
continue in effect beyond the first anniversary of its adoption by the Board of
Trustees of the Fund only so long as (a) its continuation is approved at least
annually in the manner set forth in clause (a) of paragraph 10 above and (b) the
selection and nomination of those Trustees of the Fund who are not "interested
persons" of the Fund are committed to the discretion of such Trustees.
12. This Service Plan may not be amended to increase materially the
maximum amounts permitted to be expended hereunder except with the approval of a
"majority of the outstanding voting securities" of the respective class of
Shares of the Fund. This Service Plan may not be amended in any material respect
except with the approval of a majority of the Disinterested Trustees. Amendments
required to conform this Service Plan to changes in the 1940 Act, the rules and
regulations thereunder or the Conduct Rules of the NASD shall not be deemed to
be material amendments.
The Trustees of the Trust have adopted this Service Plan as
trustees under the Declaration of Trust of the Trust and the policies of the
Trust adopted hereby are not binding upon any of the Trustees or shareholders of
the Trust individually, but bind only the trust estate.
Adopted
[______________], 2005
