DISTRIBUTION AGREEMENT
PBHG FUNDS
THIS AGREEMENT is made as of this 8th day of July, 2004 between PBHG
Funds (the "Company"), a Delaware business trust, and Old Mutual Investment
Partners (the "Distributor"), a Pennsylvania business trust.
WHEREAS, the Company is registered as an investment company with the
Securities and Exchange Commission ("SEC") under the Investment Company Act of
1940, as amended (the "1940 Act"), and is authorized to units of beneficial
interest ("Shares") in separately designated series ("Funds"), each with its own
objectives, investment program, policies and restrictions; and
WHEREAS, the Company has registered the Shares of the Funds under the
Securities Act of 1933, as amended (the "1933 Act"), pursuant to a registration
statement on Form N-1A (the "Registration Statement"), which includes
prospectuses ("Prospectus") and statements of additional information ("Statement
of Additional Information"); and
WHEREAS, the Company has adopted a Service Plan Pursuant to Rule 12b-1
under the 1940 Act (the "Service Plan") with respect to one of its classes of
shares, i.e., the Advisor Class, and adopted Distribution Plans Pursuant to Rule
12b-1 under the 1940 Act with respect to its Class A and Class C Shares (the
"Distribution Plans") providing for the distribution of the Shares of the Funds;
and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the " 1934 Act"); and
WHEREAS, the Company wishes to engage the services of the Distributor
as principal underwriter and distributor of the Shares of the Funds that now
exist and that hereafter may be established, which are listed on Exhibit A to
this Agreement as may be amended from time to time, and the Distributor is
willing to continue to serve in that capacity.
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. APPOINTMENT OF DISTRIBUTOR.
(a) The Company hereby appoints the Distributor as principal
underwriter and distributor of the Funds of the Company to sell the Shares of
the Funds in jurisdictions wherein the Shares may be legally offered for sale.
The Distributor shall be the exclusive agent for the distribution of Shares of
the Funds; provided, however, that the Company in its absolute discretion may
issue Shares of the Funds otherwise than through the Distributor in connection
with (i) the payment or reinvestment of dividends or distributions, (ii) any
merger or consolidation of the Company or a Fund with any other investment
company or trust or any personal holding company, or the acquisition of the
assets of any such entity by the Company or any Fund, and (iii) any offer of
exchange authorized by the Board of Trustees of the Company. Notwithstanding any
other provision hereof, the Company may terminate, suspend, or withdraw the
offering of the Shares of a Fund or reject any purchase order for Shares
whenever, in its sole discretion, it deems such action to be desirable.
(b) The Distributor agrees that it will use all reasonable efforts,
consistent with its other business, in connection with the distribution of
Shares of the Company; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the state Blue Sky laws of any jurisdiction when it
determines it would be uneconomical for it to do so or to maintain its
registration in any jurisdiction in which it is now registered nor obligate the
Distributor to sell any particular number of Shares. The Distributor is
currently registered as a broker-dealer or exempt from registration in all
jurisdictions listed in Exhibit B hereto. The Distributor shall promptly notify
the Company in the event it fails to maintain its registration in any
jurisdiction in which it is currently registered. The Distributor shall sell
Shares of the Funds as agent for the Company at prices determined as hereinafter
provided and on the terms set forth herein, all according to applicable federal
and state Blue Sky laws and regulations and the Agreement and Declaration of
Trust and By-Laws of the Company. The Distributor may sell Shares of the Funds
to or through qualified brokers, dealers or others and shall require each such
person to conform to the provisions hereof, the Registration Statement, the then
current Prospectus and Statement of Additional Information, and applicable law.
Neither the Distributor nor any such person shall withhold the placing of
purchase orders for Shares so as to make a profit thereby.
(c) The Distributor shall order Shares of the Funds from the Company
only to the extent that it shall have received purchase orders therefor. The
Distributor will not make, or authorize any brokers, dealers, or others to make,
(i) any short sales of Shares or (ii) any sales of Shares to any Trustee or
officer of the Company, the Distributor, or any corporation or association
furnishing investment advisory, managerial, or supervisory services to the
Company, or to any such corporation or association, unless such sales are made
in accordance with the Company's then current Prospectus and Statement of
Additional Information.
(d) The Distributor is not authorized by the Company to give any
information or to make any representation other than those contained in the then
current Prospectus, Statement of Additional Information, and Fund shareholder
reports ("Shareholder Reports"), or in supplementary sales materials
specifically approved by the Company. The Distributor may prepare and distribute
sales literature and other material as it may deem appropriate, provided that
such literature and materials have been approved by the Company prior to their
use.
2. OFFERING PRICE OF SHARES. All Shares of each Fund sold under this
Agreement shall be sold at the public offering price per Share in effect at the
time of the sale as described in the Company's then current Prospectus and
Statement of Additional Information; provided, however that any public offering
price for the Shares shall be based upon the net asset value per Share, as
determined in the manner described in the Company's then current Prospectus
and/or Statement of Additional Information. At no time shall the Company receive
less than the full net asset value of the Shares, determined in the manner set
forth in the then current Prospectus and/or Statement of Additional Information.
3. REGISTRATION OF SHARES. The Company agrees that it will take all
actions necessary to register Shares under the Federal and state Blue Sky
securities laws so that there will be available for sale the number of Shares
the Distributor may reasonably be expected to sell and to pay all fees
associated with said registration.
4. SERVICE PLAN AND DISTRIBUTION PAYMENTS.
(a) The Company has adopted a Service Plan pursuant to Rule
12b-1 under 1940 Act to enable the Advisor Class Shares of each Fund to directly
and indirectly bear certain expenses relating to the distribution of such
Shares. Pursuant to such Service Plan, the Company shall pay a service as set
forth in the Service Plan. The shareholder servicing fee is intended to
compensate the distributor for, among other things, providing or arranging with
and paying other to provide to shareholders or the underlying beneficial owners
of Advisor Class Shares: (a) personal support services and (b) account
maintenance services. Arranging with and paying others to provide personal
services to shareholders of the Advisor Class shares and/or the maintenance of
Shareholder accounts shall expressly include, but not be limited to, (i)
insurance companies or their affiliates who provide similar services to variable
and group annuity or variable life insurance contract holders ("Contract
Holders") or their participants; (ii) sponsors of and/or administrators to
contribution plans; and (iii) sponsors of and/or administrators to various wrap
and asset allocation programs.
(b) The Company has adopted Distribution Plans pursuant to
Rule 12b-1 under the 1940 Act to enable Class A and Class C Shares of each Fund
to directly and indirectly bear certain expenses relating to the distribution of
such shares. Pursuant to the Distribution Plans, the Company shall pay
distribution fees as set forth in the Distribution Plans. The distribution fees
are intended to compensate the Distributor for, among other things, providing or
arranging with and paying others to provide distribution and shareholder
services to shareholders of Class A and Class C Shares.
(c) The Distributor shall prepare and deliver written reports
to the Board of Trustees of the Company on a regular basis (at least quarterly)
setting forth the payments made to Service Providers pursuant to the Service
Plan and Distribution Plans, and the purposes for which such expenditures were
made, as well as any supplemental reports as the Board of Trustees of the
Company may from time to time reasonably request.
5. PAYMENT OF EXPENSES.
(a) Except as otherwise provided herein, the Distributor shall
pay, or arrange for others to pay, all of the following expenses: (i) payments
to sales representatives of the Distributor and at the discretion of the
Distributor to qualified brokers, dealers and others in respect of the sale of
Shares of the Funds; (ii) compensation and expenses of employees of the
Distributor who engage in or support distribution of Shares of the Funds or
render shareholder support services not otherwise provided by the Company's
transfer and shareholder servicing agent; and (iii) the cost of obtaining such
information, analyses, and reports with respect to marketing and promotional
activities as the Company may from time to time reasonably request.
(b) The Company shall pay, or arrange for others to pay, the
following expenses: (i) preparation, printing, and distribution to shareholders
of Prospectuses and Statements of Additional Information; (ii) preparation,
printing, and distribution of Shareholder Reports and other communications
required by law to shareholders; (iii) registration of the Shares of the Funds
under the federal securities laws; (iv) qualification of the Shares of the Funds
for sale in such states as the Distributor and the Company may approve; (v)
maintaining facilities for the issue and transfer of Shares; (vi) supplying
information, prices, and other data to be furnished by the Company under this
Agreement; and (vii) taxes applicable to the sale or delivery of the Shares of
the Funds or certificates therefore.
(c) In connection with the Distributor's distribution of sales
materials, Prospectuses, Statements of Additional Information, and Shareholder
Reports to potential investors in the Company, the Company shall make available
to the Distributor such number of copies of such materials as the Distributor
may reasonably request. The Company shall also furnish to the Distributor copies
of all information, financial statements and other documents the Distributor may
reasonably request for use in connection with the distribution of Shares of the
Company. The Company will enter into arrangements providing that persons other
than the Company will bear any and all expenses of preparing, printing and
providing to the Distributor, sales materials, Prospectuses, Statements of
Additional Information and Shareholder Reports for distribution to potential
investors in the Company.
6. COMPENSATION. Except as provided in the Service Plan and
Distribution Plans, it is understood that the Distributor will not receive any
commissions or other compensation for acting as the Company's principal
underwriter and distributor.
7. REPURCHASE OF SHARES. The Distributor as agent and for the account
of the Company may repurchase Shares of the Funds offered for resale to it and
redeem such Shares at their net asset value, subject to any applicable
redemption/exchange fee, determined as set forth in the then current Prospectus
and Statement of Additional Information.
8. INDEMNIFICATION OF DISTRIBUTOR. The Company agrees to indemnify and
hold harmless the Distributor and each of its directors 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, damages or expense (including
the reasonable cost of investigating or defending any alleged loss, liability,
damages, claim, or expense, and any reasonable counsel fees and disbursements
incurred in connection therewith), including claims of third parties, arising by
reason of any person acquiring any Shares, based upon the ground that the
Registration Statement, Prospectuses, Statements of Additional Information,
Shareholder Reports or other information filed or made public by the Company (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 made not misleading. However, the Company does not agree to
indemnify the Distributor or hold it harmless to the extent that the statements
or omission was made in reliance upon, and in conformity with, information
furnished to the Company by or on behalf of the Distributor.
In no case (i) is the indemnity of the Company to be deemed to protect
the Distributor against any liability to the Company or its shareholders to
which the Distributor or such person otherwise would be subject by reason of
willful misfeasance, bad faith or negligence in its performance of its duties or
by reason of its failure to exercise due care in rendering its services and
duties under this Agreement, or (ii) is the Company to be liable to the
Distributor under the indemnity agreement contained in this section with respect
to any claim made against the Distributor or any person indemnified unless the
Distributor or other person shall have notified the Company 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 such other person (or after the Distributor or
the person shall have received notice of service on any designated agent).
However, failure to notify the Company of any claim shall not relieve the
Company 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 section.
The Company shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Company elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Company and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Company
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Company does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Company agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of its Shares.
9. INDEMNIFICATION OF COMPANY. The Distributor covenants and agrees
that it will indemnify and hold harmless the Company and each of its directors
and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense, and reasonable counsel
fees and disbursements incurred in connection therewith), including claims of
third parties, based upon the 1933 Act or any other statute or common law and
arising by reason of any person acquiring any Shares, and alleging (i) a
wrongful act or deed of the Distributor or any of its employees or sales
representatives, or (ii) that the Registration Statement, Prospectuses,
Statements of Additional Information, shareholder reports or other information
filed or made public by the Company (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 not misleading,
insofar as any such statements or omissions were made in reliance upon and in
conformity with information furnished to the Company by or on behalf of the
Distributor.
In no case (i) is the indemnity of the Distributor in favor of the
Company or any other person indemnified to be deemed to protect the Company or
any other person against any liability to which the Company or such other person
would otherwise be subject by reason of willful misfeasance or bad faith in the
performance of its duties or by reason of its failure to exercise due care in
rendering its services and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this section
with respect to any claim made against the Company or any person indemnified
unless the Company 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 Company or upon any person (or after the
Company 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 Company or
any person against whom the action is brought otherwise than on account on its
indemnity agreement contained in this section.
The Distributor 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 the Distributor and satisfactory
to the indemnified defendants, whose approval shall not be unreasonably
withheld. In the event that the Distributor elects to assume the defense of any
suit and retain counsel, the defendants in the suit shall bear the fees and
expenses of any additional counsel retained by them. If the Distributor does not
elect to assume the defense of any suit, it will reimburse the indemnified
defendants in the suit for the reasonable fees and expenses of any counsel
retained by them.
The Distributor agrees to notify the Company promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the Company's Shares.
10. TERM AND TERMINATION.
(a) This Agreement shall become effective as of the date
hereof. Unless sooner terminated as herein provided, this Agreement shall remain
in full force and effect for two (2) years from the effective date and
thereafter for successive periods of one year, but only so long as each such
continuance is specifically approved at least annually (i) either by vote of a
majority of the Board of Trustees of the Company or by vote of a majority of the
outstanding voting securities of the company, and (ii) by vote of a majority of
the Trustees of the Company who are not interested persons of the Company and
who have no direct or indirect financial interest in the operation of the
Service Plan or Distribution Plans or in this Agreement or any other agreement
related to the Service Plan or Distribution Plans (the "Rule 12b-1 Trustees"),
cast in person at a meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time, without the
payment of any penalty, by the Board of Trustees of the Company or a majority of
the Rule 12b-1 Trustees, by vote of a majority of the outstanding voting
securities of the Company, or by the Distributor, on not less than ninety (90)
days' written notice to the other party or upon such shorter notice as may be
mutually agreed upon.
(c) This Agreement shall automatically terminate in the event
of its assignment.
(d) The indemnification provisions contained in Sections 8 and
9 of this Agreement shall remain in full force and effect regardless of any
termination of this Agreement.
11. AMENDMENT. No provisions of this Agreement may be changed, waived,
discharged, or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge, or
termination is sought. If the Company should at any time deem it necessary or
advisable in the best interests of the Company that any amendment of this
Agreement be made in order to comply with the recommendations or requirements of
the SEC or other governmental authority or to obtain any advantage under state
or federal tax laws and notifies Distributor of the form of such amendment, and
the reasons therefor, and if Distributor should decline to assent to such
amendment, the Company may terminate this Agreement forthwith. If Distributor
should at any time request that a change be made in the Company's Agreement and
Declaration of Trust or By-Laws or in its methods of doing business, in order to
comply with any requirements of Federal law or regulations of the SEC, or of a
national securities association of which Distributor is or may be a member
relating to the sale of Shares, and the Fund should not make such necessary
change within a reasonable time, Distributor may terminate this Agreement
forthwith.
12. INDEPENDENT CONTRACTOR. Distributor shall be an independent
contractor and neither Distributor nor any of its officers, directors,
employees, or representatives is or shall be an employee of the Company in the
performance of Distributor's duties hereunder. Distributor shall be responsible
for its own conduct and the employment, control, and conduct of its agents and
employees and for injury to such agents or employees or to others through its
agents or employees. Distributor assumes full responsibility for its agents and
employees under applicable statutes and agrees to pay all employee taxes
thereunder.
13. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement the
terms "assignment," "interested person," "majority of the outstanding voting
securities," and "principal underwriter" shall have their respective meanings
defined in the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted to either the Distributor or the
Company by the SEC, or such interpretative positions as may be taken by the SEC
or its staff under the 1940 Act.
14. NOTICE. Any notice under this Agreement shall be deemed to be
sufficient if it is given in writing, addressed and delivered, or mailed
postpaid (a) if to the Distributor, to Old Mutual Investment Partners,
[Address], Attn: President; and (b) if to the Company, to PBHG Funds, 0000
Xxxxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxxxxxxx 00000, Attention: President.
15. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect construction or effect.
16. INTERPRETATION. Nothing herein contained shall be deemed to require
the Company or the Distributor to take any action contrary to its Agreement and
Declaration of Trust or By-Laws, or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Board of Trustees of its responsibility for and control of the
conduct of the affairs of the Company.
17. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Pennsylvania and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the Commonwealth of
Pennsylvania or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
18. MULTIPLE ORIGINALS. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the Company and Distributor have each duly executed
this Agreement, as of the day and year above written.
PBHG FUNDS
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Vice President
OLD MUTUAL INVESTMENT PARTNERS
By: /s/ Xxx X. Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Vice President
EXHIBIT A
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PBHG Growth Fund
PBHG Emerging Growth Fund
PBHG Large Cap Growth Fund
PBHG Select Equity Fund
PBHG Large Cap 20 Fund
PBHG Large Cap Fund
PBHG Mid-Cap Fund
PBHG Small Cap Fund
PBHG Focused Fund
PBHG Cash Reserves Fund
PBHG Technology & Communications Fund
PBHG Strategic Small Company Fund
Clipper Focus Fund (formerly known as PBHG Clipper Focus Fund)
PBHG XXX Capital Preservation Fund
Analytic Disciplined Equity Fund (formerly known as PBHG Disciplined Equity
Fund)
Xxxxxxx REIT Fund (formerly known as PBHG REIT Fund)
TS&W Small Cap Value Fund (formerly known as PBHG Small Cap Value Fund)
Xxxxxx Intermediate Fixed Income Fund (formerly known as PBHG Intermediate Fixed
Income Fund)
July 8, 2004
EXHIBIT B
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All 50 states of the United States of America, Puerto Rico and the District of
Columbia
