EXHIBIT (e)
DISTRIBUTION AGREEMENT
WILSHIRE TARGET FUNDS, INC.
PROVIDENCE, RHODE ISLAND
December 31, 2000
PFPC Distributors, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the Wilshire Target Funds, Inc. (the "Fund") has agreed that you
shall be, for the period of this agreement, the distributors of shares of each
Class of each Series of the Fund set forth on Exhibit A hereto, as such Exhibit
may be revised from time to time (each, a "Series"). For purposes of this
agreement the term "Shares" shall mean the authorized shares of the relevant
Classes and Series.
1. SERVICES AS DISTRIBUTOR
1.1 You will act as agent for the distribution of Shares covered by,
and in accordance with, the registration statement and prospectus
then in effect under the Securities Act of 1933, as amended, and
will transmit promptly any orders received by you for purchase or
redemption of Shares to the Transfer and Dividend Disbursing Agent
for the Fund.
1.2 You agree to use your best efforts to solicit orders for, and
otherwise to promote, the sale of Shares. To the extent that you
receive shareholder services fees under any shareholder services
plan adopted by the Fund, you agree to furnish, and/or enter into
arrangements with others for the furnishing of, personal and/or
account maintenance services with respect to the relevant
shareholders of the Fund as may be required pursuant to such plan.
It is contemplated that you will enter into sales or servicing
agreements with securities dealers, financial institutions and
other industry professionals to the extent permitted by SEC and
NASD regulations and other governing law, such as investment
advisers, accountants and estate planning firms, and in doing so
may act as agent for the Fund or on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including without
limitation, all rules and regulations made or adopted pursuant to
the Investment Company Act of 1940, as amended, by the
Securities and Exchange Commission or any securities association
registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgement such action is warranted by market,
economic or political conditions, or by abnormal circumstances of
any kind, the Fund's officers may decline to accept any orders
for, or make any sales of, any Shares until such time as they deem
it advisable to accept such orders and to make such sales and the
Fund shall advise you promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in connection with
the registration of Shares under the Securities Act of 1933, as
amended, and all expenses in connection with maintaining
facilities for the issue and transfer of Shares and for supplying
information, prices and other data to be furnished by the Fund
hereunder, and all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of additional
information for regulatory purposes and for distribution to
shareholders; provided, however, that nothing contained herein
shall be deemed to require the Fund to pay any of the costs of
advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents and to furnish
any and all information and otherwise to take all actions which
may be reasonably necessary in the discretion of the Fund's
officers in connection with the qualification of Shares for sale
in such states as you may designate to the Fund and the Fund may
approve, and the Fund agrees to pay all expenses which may be
incurred in connection with such qualification. The Fund shall
notify you in writing of the states in which the Shares may be
sold and shall notify you in writing of any changes to the
information contained in the previous notification. You shall pay
all expenses connected with your own qualification as a dealer
under state and Federal laws and, except as otherwise specifically
provided in this agreement, all other expenses incurred by you in
connection with the sale of Shares as contemplated in this
agreement.
1.7 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information with respect
to the Fund or any relevant Series and the Shares as you may
reasonably request, all of which shall be signed by one or more of
the Fund's duly authorized officers; and the Fund warrants that
the statements contained in any such information, when so signed
by the Fund's officers, shall be true and correct. The Fund also
shall furnish you upon request with: (a) semi-annual reports and
annual audited reports of the Fund's books and accounts made by
independent public accountants regularly retained by the Fund, (b)
quarterly earnings statements prepared by the Fund, (c) a monthly
itemized list of the securities in each Series' portfolio, (d)
monthly balance sheets as soon as practicable after the end of
each month, and (e) from time to time such additional information
regarding the Fund's financial condition as you may reasonably
request.
1.8 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and under
the Investment Company Act of 1940, as amended, with respect to
the Shares have been carefully prepared in conformity with the
requirements of said Acts and rules and regulations of the
Securities and Exchange Commission thereunder. As used in this
agreement the terms "registration statement" and "prospectus"
shall mean any registration statement and prospectus, including
the statement of additional information incorporated by reference
therein, filed with the Securities and Exchange Commission and any
amendments and supplements thereto which at any time shall have
been filed with said Commission. The Fund represents and warrants
to you that any registration statement and prospectus, when such
registration statement becomes effective, will contain all
statements required to be stated therein in conformity with said
Acts and the rules and regulations of said Commission; that all
statements of fact contained in any such registration statement
and prospectus will be true and correct when such registration
statement becomes effective; and that neither any registration
statement nor any prospectus when such registration statement
becomes effective will include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading. The Fund may but shall not be obligated to propose
from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus as,
in the light of future developments, may, in the opinion of the
Fund's counsel, be necessary or advisable. If the Fund shall not
propose such amendment or amendments and/or controlling supplement
or supplements within fifteen days after receipt by the Fund of a
written request from you to do so, you may, at your option,
terminate this agreement or decline to make offers of the Fund's
securities until such amendments are made. The Fund shall not file
any amendment to any registration statement or supplement to any
prospectus without giving you reasonable notice thereof in
advance; provided, however, that nothing contained in this
agreement shall in any way limit the Fund's right to file at any
time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Fund
may deem advisable, such right being in all respect absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in the form
furnished to you from time to time, in connection with the sale of
Shares. The Fund agrees to indemnify, defend and hold you, your
several officers and directors, and any person who controls you
within the meaning of Section 15 of the Securities Act of 1933, as
amended, free and harmless (i) from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which you, your
officers and directors, or such controlling person, may incur,
directly or indirectly, under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or based
upon any untrue statement, or alleged untrue statement, of a
material fact contained in any
registration statement or any prospectus or arising out of or
based upon any omission, or alleged omission, to state a material
fact required to be stated in either any registration statement or
any prospectus or necessary to make the statements in either
thereof not misleading; provided, however, that the Fund's
agreement to indemnify you, your officers or directors, and any
such controlling person shall not be deemed to cover any claims,
demands, liabilities or expenses arising out of any untrue
statement or alleged untrue statement or omission or alleged
omission made in any registration statement or prospectus in
reliance upon and in conformity with written information furnished
to the Fund by you specifically for use in the preparation
thereof; and (ii) from and against any and all such claims,
demands, liabilities and expenses (including such costs and
counsel fees) which you, your officers and directors, or such
controlling persons, may incur in connection with this Agreement
or your performance hereunder (but excluding such claims, demands,
liabilities and expenses (including such costs and counsel fees)
arising out of or based upon any untrue statement, or alleged
untrue statement, of a material fact contained in any registration
statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required
to be stated in either any registration statement or any
prospectus or necessary to make the statements in either thereof
not misleading, unless such claims, demands, liabilities and
expenses (including such costs and counsel fees) arise by reason
of your willful misfeasance, bad faith or negligence in the
performance of your duties hereunder. The Fund acknowledges and
agrees that in the event that you at the request of the Fund, are
required to give an indemnification comparable to that set forth
in clause (i) of Section 1.9 of this Agreement to any
broker-dealer selling Shares of the Fund and such broker-dealer
shall make a claim for indemnification against you, you will make
a similar claim for indemnification against the Fund. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against you,
your officers or directors, or any such controlling person, such
notification to be given by letter or by telegram addressed to the
Fund at its address set forth above within ten days after the
summons or other first legal process shall have been served. The
failure so to notify the Fund of any such action shall not relieve
the Fund from any liability which the Fund may have to the person
against whom such action is brought by reason of any such untrue,
or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of the Fund's indemnity agreement
contained in this paragraph 1.9. The Fund will be entitled to
assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be
conducted by counsel of good standing chosen by the Fund and
approved by you. In the event the Fund elects to assume the
defense of any such suit and retain counsel of good standing
approved by you, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by
any of them; but in case the Fund does not elect to assume the
defense of any such suit, or in case you do not approve of counsel
chosen by the Fund, the Fund will reimburse you, your officers and
directors, or the controlling person or persons named as
defendant or defendants in such suit, of the fees and expenses of
any counsel retained by you or them. The Fund's indemnification
agreement contained in this paragraph 1.9 and the Fund's
representations and warranties in this agreement shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of you, your officers and
directors, or any controlling person, and shall survive the
delivery of any Shares. This agreement of indemnity will inure
exclusively to your benefit, to the benefit of your several
officers and directors, and their respective estates, and to the
benefit of any controlling persons and their successors. The Fund
agrees promptly to notify you of the commencement of any
litigation or proceedings against the Fund or any of its officers
or Board members in connection with the issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund
within the meaning of Section 15 of the Securities Act of 1933, as
amended, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which the Fund,
its officers or Board members, or any such controlling person, may
incur directly or indirectly under the Securities Act of 1933, as
amended, or under state securities law, federal or state common
law or otherwise, but only to the extent that such liability or
expense incurred by the Fund, its officers or Board members, or
such controlling person resulting from such claims or demands, (i)
shall arise out of or be based upon any untrue or alleged untrue
statement of a material fact contained in information furnished in
writing by you to the Fund specifically for use in the Fund's
registration statement and used in the answers to any of the items
of the registration statement or in the corresponding statements
made in the prospectus, (ii) shall arise out of or be based upon
any omission or alleged omission to state a material fact in
connection with such information furnished in writing by you to
the Fund and required to be stated in such answers or necessary to
make such information not misleading, or (iii) shall arise out of
any violation by you of any provision of this agreement or any
provision of applicable law, or (iv) shall arise out of or be
based upon your willful misfeasance, bad faith, or negligence in
the performance of your duties hereunder. Your agreement to
indemnify the Fund, its officers and Board members, and any such
controlling person, as aforesaid, is expressly conditioned upon
your being notified of any action brought against the Fund, its
officers or Board members, or any such controlling person, such
notification to be given by letter or telegram addressed to you at
your address set forth above within ten days after the summons or
other first legal process shall have been served. You shall have
the right to control the defense of such action, with counsel of
your own choosing, satisfactory to the Fund, if such action is
based solely upon such alleged misstatement or omission on your
part, and in any other event the Fund, its offices or Board
members, or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any
such action. The failure so to notify you of any such action shall
not relieve you from any liability which you may have to the Fund,
its officers or
Board members, or to such controlling person by reason of any such
untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement
contained in this paragraph 1.10. This agreement of indemnity will
inure exclusively to the Fund's benefit, to the benefit of the
Fund's officers and Board members, and their respective estates,
and to the benefit of any controlling persons and their
successors. You agree promptly to notify the Fund of the
commencement of any litigation or proceedings against you or any
of your officers or directors in connection with the issue and
sale of Shares.
1.11 No Shares shall be offered by either you or the Fund under any of
the provisions of this agreement and no orders for the purchase or
sale of such Shares hereunder shall be accepted by the Fund if and
so long as the effectiveness of the registration statement then in
effect or any necessary amendments thereto shall be suspended
under any of the provisions of the Securities Act of 1933, as
amended, or if and so long as a current prospectus as required by
Section 10 of said Act, as amended, is not on file with the
Securities and Exchange Commission; provided, however, that
nothing contained in this paragraph 1.11 shall in any way restrict
or have an application to or bearing upon the Fund's obligation to
repurchase any Shares from any shareholder in accordance with the
provisions of the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in writing:
(a) of any request by the Securities and Exchange Commission
for amendments to the registration statement or prospectus
then in effect or for additional information;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness
of the registration statement or prospectus then in effect
or the initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any
statement of a material fact made in the registration
statement or prospectus then in effect or which requires
the making of a change in such registration statement or
prospectus in order to make the statements therein not
misleading; and
(d) of all actions of the Securities and Exchange Commission
with respect to any amendments to any registration
statement or prospectus which may from time to time be
filed with Securities and Exchange Commission.
1.13 Each party shall have the duty to mitigate damages from which the
other party may become responsible.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL EITHER PARTY, THEIR AFFILIATES
OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
SUBCONTRACTORS BE LIABLE FOR EXEMPLARY, PUNITIVE, SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES.
2. OFFERING PRICE
Shares of any class of the Fund offered for sale by you shall be offered
for sale at a price per share (the "offering price") approximately equal
to (a) their net asset value (determined in the manner set forth in the
Fund's charter documents) plus (b) a sales charge, if any (except with
respect to sales to those persons set forth in the then-current
prospectus to whom sales may be made without sales charge), which shall
be the percentage of the offering price of such Shares as set forth in
the Fund's then-current prospectus. The offering price, if not an exact
multiple of one cent, shall be adjusted to the nearest cent. In addition,
Shares of any class of the Fund offered for sale by you may be subject to
a contingent deferred sales charge as set forth in the Fund's
then-current prospectus. You shall be entitled to receive any sales
charge or contingent deferred sales charge in respect of the Shares. Any
payments to dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. TERM
As to each Series, this agreement shall become effective upon the
consummation of the acquisition of Provident Distributors, Inc. by PFPC
Inc. (or a substantially similar transaction), which the parties
anticipate to occur on or about December 31, 2000 and shall continuefor
an initial one year period, and thereafter shall continue automatically
for successive annual periods, provided such continuance is specifically
approved at least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of the Shares
of the Fund or the relevant Series, as the case may be, provided that in
either event its continuance also is approved by a majority of the Board
members who are not "interested persons' (as defined in said Act) of any
party to this agreement (the "Independent Directors"), by vote cast in
person at a meeting called for the purpose of voting on such approval.
This agreement is terminable without penalty, on 60 days' notice, by vote
of holders of a majority of the Fund's or, as to any relevant Series,
such Series' outstanding voting securities or by a majority of such
Independent Directors as to the Fund or the relevant Series, as the case
may be, or by you. This agreement also will terminate automatically, as
to the Fund or relevant Series, as the case may be, in the event of its
assignment (as defined in said Act). If the Fund has adopted a multiple
class plan or a distribution plan, you agree to furnish such information
as may be reasonably necessary to assist the Directors of the Fund in
their periodic evaluation of such plan or plans.
4. NON-EXCLUSIVITY
The Fund recognizes that you may act as the distributor of securities of
other persons (including other investment companies) and that you and
your affiliates may furnish brokerage, distribution and other services to
other persons (including other investment
companies), and the Fund has no objection to your so acting. The Fund
acknowledges that the persons employed by you to assist in the
performance of your duties under this agreement may not devote their full
time to such service and nothing contained in the agreement shall be
deemed to limit or restrict your or any of your affiliates right to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
5. EXCLUSION OF WARRANTIES
THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, YOU DISCLAIM ALL OTHER REPRESENTATONS OR WARRANTIES, EXPRESS
OR IMPLIED, MADE TO THE FUND OR ANY OTHER PERSON, INCLUDING WITHOUT
LIMITATION, ANY WARRANTIES REGARDING QUALITY, SUITABILITY,
MERCHANTABLITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE
(IRRESPECTIVE OF ANY COURSE OF DEALING, CUTOM OR USAGE OF TRADE) OF ANY
SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO SERVICES PROVIDED UNDER THIS
AGREEMENT. YOU DISCLAIM ANY WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT
AS OTHERWISE SET FORTH IN THIS AGREEMENT.
Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding agreement between us.
Very truly yours,
WILSHIRE TARGET FUNDS, INC.
By:___________________________
Accepted:
PFPC DISTRIBUTORS, INC.
By:____________________________
EXHIBIT A
The Institutional Class shares and the Investment Class shares of each of the
following Series of the Fund:
NAME OF SERIES
Large Company Growth Portfolio
Large Company Value Portfolio
Small Company Growth Portfolio
Small Company Value Portfolio
Wilshire 5000 Index Portfolio
