DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of August, 2007, between Vintage Mutual
Funds, Inc. (the "Company"), having an office at 0000 00xx Xxxxxx, Xxxxxxx XX
Xxxxxxxx, Xxxx Xxx Xxxxxx, Xxxx 00000, and Foreside Distribution Services, L.P.
("Distributor"), having an office at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
WHEREAS, the Company is an open-end management investment company,
organized as a Maryland corporation and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, it is intended that Distributor act as the distributor of the
shares of beneficial interest ("Shares") of each series of the Company, as
listed on Schedule A, and such series as are hereafter created (all of the
foregoing series individually referred to herein as a "Fund" and collectively as
the "Funds").
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. SERVICES AS DISTRIBUTOR.
1.1 Distributor will act as agent of Company on behalf of each Fund for
the distribution of the Shares covered by the registration statement of the
Company then in effect under the Securities Act of 1933, as amended (the
"Securities Act") and the 1940 Act. As used in this Agreement, the term
"registration statement" shall mean the registration statement of the Company
and any amendments thereto, then in effect, including Parts A (the Prospectus),
B (the Statement of Additional Information) and C of each registration
statement, as filed on Form N-1A, or any successor thereto, with the Commission,
together with any amendments thereto. The term "Prospectus" shall mean the
then-current form of Prospectus and Statement of Additional Information used by
the Funds, in accordance with the rules of the Commission, for delivery to
shareholders and prospective shareholders after the effective dates of the
above-referenced registration statements, together with any amendments and
supplements thereto.
1.2 Consistent with the understanding between the Funds and the
Distributor, Distributor may solicit orders for the sale of the Shares and may
undertake such advertising and promotion as it believes reasonable in connection
with such solicitation. The Company understands that Distributor is now and may
in the future be the distributor of the shares of many other investment
companies or series, including investment companies having investment objectives
similar to those of the Company. The Company further understands that
shareholders and potential shareholders in the Company may invest in shares of
such other investment companies. The Company agrees that Distributor's duties to
other investment companies shall not be deemed in conflict with its duties to
the Company under this Section 1.2.
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1.3 Consistent with the understanding between the Funds and the
Distributor, and subject to the last sentence of this Section 1.3, Distributor
may engage in such activities as it deems appropriate in connection with the
promotion and sale of the Shares, which may include advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
Prospectuses to prospective shareholders other than current shareholders, and
the printing and mailing of sales literature. Distributor may enter into dealer
agreements and other selling agreements with broker-dealers and other
intermediaries; provided, however, that Distributor shall have no obligation to
make any payments to any third parties, whether as finder's fees, compensation
or otherwise, unless (i) Distributor has received a corresponding payment from
the applicable Fund's Distribution Plan (as defined in Section 2 of this
Agreement), the Fund's investment adviser (the "Adviser") or from another source
as may be permitted by applicable law, and (ii) such corresponding payment has
been approved by the Company's Board of Directors (the "Board").
1.4 In its capacity as distributor of the Shares, all activities of the
Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, all applicable rules and regulations promulgated by the Commission
thereunder, and all applicable rules and regulations adopted by any securities
association registered under the Securities Exchange Act of 1934.
1.5 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions or by abnormal circumstances of any
kind, the Company's officers may upon reasonable notice instruct the Distributor
to decline to accept any orders for or make any sales of the Shares until such
time as those officers deem it advisable to accept such orders and to make such
sales.
1.6 The Company agrees to inform the Distributor from time to time of
the states in which the Fund or its administrator has registered or otherwise
qualified shares for sale, and the Company agrees at its own expense to execute
any and all documents and to furnish any and all information and otherwise to
take all actions that may be reasonably necessary in connection with the
qualification of the Shares for sale in such states as the Distributor may
designate.
1.7 The Company shall furnish from time to time, for use in connection
with the sale of the Shares, such supplemental information with respect to the
Funds and the Shares as Distributor may reasonably request; and the Company
warrants that the statements contained in any such supplemental information will
fairly show or represent what they purport to show or represent. The Company
shall also furnish Distributor upon request with: (a) unaudited semi-annual
statements of the Funds' books and accounts prepared by the Company, (b) a
monthly itemized list of the securities in the Funds, (c) monthly balance sheets
as soon as practicable after the end of each month, and (d) from time to time
such additional information regarding the financial condition of the Funds as
the Distributor may reasonably request.
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1.8 The Company represents and warrants to Distributor that all
registration statements, and each Prospectus, filed by the Company with the
Commission under the Securities Act and the 1940 Act shall be prepared in
conformity with requirements of said Acts and rules and regulations of the
Commission thereunder. The registration statement and Prospectus shall contain
all statements required to be stated therein in conformity with said Acts and
the rules and regulations of the Commission thereunder, and all statements of
fact contained in any such registration statement and Prospectus are true and
correct in all material respects. Furthermore, neither any registration
statement nor any Prospectus includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of the Shares. The
foregoing representations and warranties shall continue throughout the term of
this Agreement and be deemed to be of a continuing nature, applicable to all
Shares distributed hereunder. The Company 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 Company's counsel, be
necessary or advisable. If the Company shall not propose any amendment or
amendments and/or supplement or supplements within 15 days after receipt by the
Company of a written request from Distributor to do so, Distributor may, at its
option, terminate this Agreement. In such case, the Distributor will be held
harmless from, and indemnified by the Company for, any liability or loss
resulting from the failure to implement such amendment. The Company shall not
file any amendment to any registration statement or supplement to any Prospectus
without giving Distributor reasonable notice thereof in advance; provided,
however, that nothing contained in this Agreement shall in any way limit the
Company's right to file at any time such amendments to any registration
statement and/or supplements to any Prospectus, of whatever character, as the
Company may deem advisable, such right being in all respects absolute and
unconditional.
1.9 The Company authorizes the Distributor and dealers to use any
Prospectus in the form furnished by the Company from time to time in connection
with the sale of the Shares.
1.10 The Distributor may utilize agents in its performance of its
services and, with prior notice to the Company, appoint in writing other parties
qualified to perform specific administration services reasonably acceptable to
the Company (individually, a "Sub-Agent") to carry out some or all of its
responsibilities under this Agreement; provided, however, that a Sub-Agent shall
be the agent of the Distributor and not the agent of the Company, and that the
Distributor shall be fully responsible for the acts of such Sub-Agent and shall
not be relieved of any of its responsibilities hereunder by the appointment of a
Sub-Agent.
1.11 The Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Distributor's part in the
performance of its duties, from reckless disregard by the Distributor of its
obligations and duties under this Agreement, or from the Distributor's failure
to comply with laws, rules and regulations applicable to it in connection with
its activities hereunder. The Company agrees to indemnify, defend and hold
harmless the Distributor, its officers, partners, employees, and any person who
controls the Distributor within the meaning of Section 15 of the Securities Act
(collectively, "Distributor Indemnitees"), from and against any and all claims,
demands, liabilities and expenses (including the reasonable cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) (collectively,
"Claims") which the Distributor Indemnitees may incur under the Securities Act
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or under common law or otherwise (a) as the result of the Distributor acting as
distributor of the Funds and entering into selling agreements, participation
agreements, shareholder servicing agreements or similar agreements with
financial intermediaries on behalf of the Company; (b) arising out of or based
upon (i) any untrue statement, or alleged untrue statement, of a material fact
contained in any registration statement or any Prospectus, (ii) any omission, or
alleged omission, to state a material fact required to be stated in any
registration statement or any Prospectus or necessary to make the statements
therein not misleading, or (iii) any untrue statement, or alleged untrue
statement, of a material fact in any Company-related advertisement or sales
literature, or any omission, or alleged omission, to state a material fact
required to be stated therein to make the statements therein not misleading, in
either case notwithstanding the exercise of reasonable care in the preparation
or review thereof by the Distributor; or (c) arising out of or based upon the
electronic processing of orders over the internet at the Company's request;
provided, however, that the Company's agreement to indemnify the Distributor
Indemnitees pursuant to this Section 1.11 shall not be construed to cover any
Claims (A) pursuant to subsection (b) above to the extent such untrue statement,
alleged untrue statement, omission, or alleged omission, was furnished in
writing, or omitted from the relevant writing furnished, as the case may be, to
the Company by the Distributor for use in the registration statement or in
corresponding statements made in the Prospectus, advertisement or sales
literature; (B) arising out of or based upon the willful misfeasance, bad faith
or gross negligence of the Distributor in the performance of its duties or the
Distributor's reckless disregard of its obligations and duties under this
Agreement; or (C) arising out of or based upon the Distributor's failure to
comply with laws, rules and regulations applicable to it in connection with its
activities hereunder.
In the event of a Claim for which the Distributor Indemnitees may be
entitled to indemnification hereunder, the Distributor shall provide the Company
with written notice of the Claim, identifying the persons against whom such
Claim is brought, promptly following receipt of service of the summons or other
first legal process, and in any event within 10 days of such receipt. The
Company will be entitled to assume the defense of any suit brought to enforce
any such Claim if such defense shall be conducted by counsel of good standing
chosen by the Company and approved by the Distributor, which approval shall not
be unreasonably withheld. In the event any such suit is not based solely on an
alleged untrue statement, omission, or wrongful act on the Company's part, the
Distributor shall have the right to participate in the defense. In the event the
Company elects to assume the defense of any such suit and retain counsel of good
standing so approved by the Distributor, the Distributor Indemnitees in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them, but in any case where the Company does not elect to assume the defense
of any such suit or in case the Distributor reasonably withholds approval of
counsel chosen by the Company, the Company will reimburse the Distributor
Indemnitees named as defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them to the extent related to a Claim
covered under this Section 1.11. The Company's indemnification agreement
contained in this Section 1.11 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Distributor
Indemnitees, and shall survive the delivery of any Shares.
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1.12 The Distributor agrees to indemnify, defend and hold harmless the
Company, its officers, Directors, employees, and any person who controls the
Company within the meaning of Section 15 of the Securities Act (collectively,
"Company Indemnitees"), from and against any and all Claims which the Company
Indemnitees may incur under the Securities Act or under common law or otherwise,
arising out of or based upon (a) any untrue statement, or alleged untrue
statement, of a material fact contained in any registration statement,
Prospectus, or Company-related advertisement or sales literature, or upon any
omission, or alleged omission, to state a material fact in such materials that
would be necessary to make the information therein not misleading, which untrue
statement, alleged untrue statement, omission, or alleged omission, was
furnished in writing, or omitted from the relevant writing furnished, as the
case may be, to the Company by the Distributor for use in the registration
statement or in corresponding statements made in the Prospectus, or
advertisement or sales literature; (b) the willful misfeasance, bad faith or
gross negligence of the Distributor in the performance of its duties, or the
Distributor's reckless disregard of its obligations and duties under this
Agreement, or (c) the Distributor's failure to comply with laws, rules and
regulations applicable to it in connection with its activities hereunder (other
than in respect of Company-related advertisements or sales literature that fails
to comply with applicable laws notwithstanding the exercise of reasonable care
in the preparation and review thereof by the Distributor).
In the event of a Claim for which the Company Indemnitees may be
entitled to indemnification hereunder, the Company shall provide the Distributor
with written notice of the Claim, identifying the persons against whom such
Claim is brought, promptly following receipt of service of the summons or other
first legal process, and in any event within ten (10) days of such receipt. The
Distributor will be entitled to assume the defense of any suit brought to
enforce any such Claim if such defense shall be conducted by counsel of good
standing chosen by the Distributor and approved by the Company, which approval
shall not be unreasonably withheld. In the event any such suit is not based
solely on an alleged untrue statement, omission, or wrongful act on the
Distributor's part, the Company shall have the right to participate in the
defense. In the event the Distributor elects to assume the defense of any such
suit and retain counsel of good standing so approved by the Company, the Company
Indemnitees in such suit shall bear the fees and expenses of any additional
counsel retained by any of them, but in any case where the Distributor does not
elect to assume the defense of any such suit or in case the Company reasonably
withholds approval of counsel chosen by the Distributor, the Distributor will
reimburse the Company Indemnitees named as defendants in such suit, for the
reasonable fees and expenses of any counsel retained by them to the extent
related to a Claim covered under this Section 1.12. The Distributor's
indemnification agreement contained in this Section 1.12 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Company Indemnitees, and shall survive the delivery of any Shares.
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1.13 No Shares shall be offered by either the Distributor or the Company
under any of the provisions of this Agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Company if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act or if and so long as a current Prospectus as required by Section
10(b)(2) of said Securities Act is not on file with the Commission; provided,
however, that: (a) the Distributor will not be obligated to cease offering
shares until it has received from the Company written notice of such events, and
(b) nothing contained in this Section 1.13 shall in any way restrict or have an
application to or bearing upon the Company's obligation to repurchase Shares
from any shareholder in accordance with the provisions of the Company's
Prospectus, Agreement and Articles of Incorporation, or Bylaws.
1.14 The Company agrees to advise the Distributor as soon as reasonably
practical by a notice in writing delivered to the Distributor:
(a) of any request by the Commission for amendments to the
registration statement or Prospectus then in effect or for
additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or
Prospectus then in effect or the initiation by service of
process on the Company of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement of
a material fact made in the registration statement or Prospectus
then in effect or which requires the making of a change in such
registration statement or Prospectus in order to make the
statements therein not misleading; and
(d) of any action of the Commission with respect to any amendment to
any registration statement or Prospectus which may from time to
time be filed with the Commission, which could reasonably be
expected to have a material negative impact upon the offering of
Shares.
For purposes of this section, informal requests by or acts of the Staff
of the Commission shall not be deemed actions of or requests by the Commission
unless they would reasonably be expected to have a material negative impact upon
the offering of Shares.
2. FEES.
2.1 Attached as Schedule B to this Agreement are all plans of
distribution under Rule 12b-1 under the 1940 Act approved by the Funds and in
effect (collectively, the "Distribution Plan"). The Funds will deliver to
Distributor promptly after any changes thereto updated copies of the
Distribution Plan. For its services under this Agreement, the Distributor shall
be compensated as set forth on Schedules C and D to this Agreement. If the Funds
have a Distribution Plan that permits and authorizes them to compensate the
Distributor and required board approvals have been given, then the Funds shall
be responsible for all such compensation or such portions of it as have been
permitted and authorized under the Distribution Plan. It is contemplated by the
Distributor that the Adviser shall compensate the Distributor for its provision
to the Funds of any distribution services for which the Funds are not authorized
to compensate the Distributor. The fees set forth on Schedules C and D are
subject to change by Distributor upon 30 days advance notice.
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2.2 If: (i) the Distributor properly receives fees from the Funds under
the Distribution Plan, other than for services rendered or expenses incurred,
that the Distributor is not obligated to pay to third party broker-dealers, plan
administrators or others ("Retained Fees"), and (ii) the Funds have authority
under the Distribution Plan to pay for some or all of the Distributor's services
under this Agreement ("Permitted Services"), then all of the Retained Fees will
either be (a) returned to the Funds and/or (b) credited against the compensation
payable by the Funds to the Distributor for Permitted Services; provided,
however, that in no event shall any Retained Fees be applied in a manner that
results in a reduction of any obligation of the Adviser to compensate the
Distributor for services under this Distribution Agreement.
3. SALE AND PAYMENT.
3.1 Shares of a Fund may be subject to a sales load and may be subject
to the imposition of a distribution fee pursuant to the Distribution Plan
referred to above. To the extent that Shares of a Fund are sold at an offering
price which includes a sales load or subject to a contingent deferred sales load
with respect to certain redemptions (either within a single class of Shares or
pursuant to two or more classes of Shares), such Shares shall hereinafter be
referred to collectively as "Load Shares" (and in the case of Shares that are
sold with a front-end sales load, "Front-end Load Shares", or Shares that are
sold subject to a contingent deferred sales load, "CDSL Shares"). Funds that
issue Front-End Load Shares shall hereinafter be referred to collectively as
"Front-End Load Funds." Funds that issue CDSL Shares shall hereinafter be
referred to collectively as "CDSL Funds." Front-end Load Funds and CDSL Funds
may individually or collectively be referred as "Load Funds." Under this
Agreement, the following provisions shall apply with respect to the sale of, and
payment for, Load Shares.
3.2 The Distributor shall have the right to offer Load Shares at their
net asset value and to sell such Load Shares to the public against orders
therefor at the applicable public offering price, as defined in Section 4
hereof. The Distributor shall also have the right to sell Load Shares to dealers
against orders therefor at the public offering price less a concession
determined by the Distributor, which concession shall not exceed the amount of
the sales charge or underwriting discount, if any, referred to in Section 4
below.
3.3 Prior to the time of delivery of any Load Shares by a Load Fund to,
or on the order of, the Distributor, the Distributor shall pay or cause to be
paid to the Load Fund or to its order an amount in New York cleared funds equal
to the applicable net asset value of such Shares. The Distributor may retain so
much of any sales charge or underwriting discount as is not allowed by the
Distributor as a concession to dealers.
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4. PUBLIC OFFERING PRICE.
The public offering price of a Load Share shall be the net asset value
of such Load Share next determined, plus any applicable sales charge, all as set
forth in the current Prospectus of the Load Fund. The net asset value of Load
Shares shall be determined in accordance with the then-current Prospectus of the
Load Fund.
5. ISSUANCE OF SHARES.
The Company reserves the right to issue, transfer or sell Load Shares at
net asset values (a) in connection with the merger or consolidation of the
Company or the Load Fund(s) with any other investment company or the acquisition
by the Company or the Load Fund(s) of all or substantially all of the assets or
of the outstanding Shares of any other investment company; (b) in connection
with a pro rata distribution directly to the holders of Shares in the nature of
a stock dividend or split; (c) upon the exercise of subscription rights granted
to the holders of Shares on a pro rata basis; (d) in connection with the
issuance of Load Shares pursuant to any exchange and reinvestment privileges
described in any then-current Prospectus of the Load Fund; and (e) otherwise in
accordance with any then-current Prospectus of the Load Fund.
6. TERM, DURATION AND TERMINATION.
This Agreement shall become effective with respect to each Fund as of
the date first written above (the "Effective Date") (or, if a particular Fund is
not in existence on such date, on the earlier of the date an amendment to
Schedule A to this Agreement relating to that Fund is executed or the
Distributor begins providing services under this Agreement with respect to such
Fund) and, unless sooner terminated as provided herein, shall continue through
March 31, 2008. Thereafter, if not terminated, this Agreement shall continue
with respect to a particular Fund automatically for successive one-year terms,
provided that such continuance is specifically approved at least annually (a) by
the vote of a majority of those members of the Company's Board who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting for the purpose of voting on such approval and (b) by the
vote of the Company's Board or the vote of a majority of the outstanding voting
securities of such Fund. This Agreement is terminable without penalty with 60
days' prior written notice, by the Company's Board, by vote of a majority of the
outstanding voting securities of the Company, or by the Distributor. This
Agreement will also terminate automatically in the event of its assignment. (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" shall have the same meaning
as ascribed to such terms in the 1940 Act.)
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7. PRIVACY.
Nonpublic personal financial information relating to consumers or
customers of the Funds provided by, or at the direction of, the Company to the
Distributor, or collected or retained by the Distributor to perform its duties
as distributor, shall be considered confidential information. The Distributor
shall not disclose or otherwise use any nonpublic personal financial information
relating to present or former shareholders of the Funds other than for the
purposes for which that information was disclosed to the Distributor, including
use under an exception in Rules 13, 14 or 15 of Securities and Exchange
Commission Regulation S-P in the ordinary course of business to carry out those
purposes. The Distributor shall have in place and maintain physical, electronic
and procedural safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent unauthorized access to or use
of, records and information relating to consumers and customers of the Funds.
The Company represents to the Distributor that it has adopted a Statement of its
privacy policies and practices as required by Securities and Exchange Commission
Regulation S-P and agrees to provide the Distributor with a copy of that
statement annually.
8. ANTI-MONEY LAUNDERING COMPLIANCE.
8.1 Each of Distributor and the Company acknowledges that it is a
financial institution subject to the USA Patriot Act of 2001 and the Bank
Secrecy Act (collectively, the "AML Acts"), which require, among other things,
that financial institutions adopt compliance programs to guard against money
laundering. Each represents and warrants to the other that it is in compliance
with and will continue to comply with the AML Acts and applicable regulations in
all relevant respects. The Distributor shall also provide written notice to each
person or entity with which it entered an agreement prior to the date hereof
with respect to sale of the Company's Shares, such notice informing such person
of anti-money laundering compliance obligations applicable to financial
institutions under applicable laws and, consequently, under applicable
contractual provisions requiring compliance with laws.
8.2 The Distributor shall include specific contractual provisions
regarding anti-money laundering compliance obligations in agreements entered
into by the Distributor with any dealer that is authorized to effect
transactions in Shares of the Company.
8.3 Each of Distributor and the Company agrees that it will take such
further steps, and cooperate with the other as may be reasonably necessary, to
facilitate compliance with the AML Acts, including but not limited to the
provision of copies of its written procedures, policies and controls related
thereto ("AML Operations"). Distributor undertakes that it will grant to the
Company, the Company's anti-money laundering compliance officer and regulatory
agencies, reasonable access to copies of Distributor's AML Operations, books and
records pertaining to the Company only. It is expressly understood and agreed
that the Company and the Company's compliance officer shall have no access to
any of Distributor's AML Operations, books or records pertaining to other
clients of Distributor.
9. NOTICES.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Company, to it at 0000 00xx Xxxxxx, Xxxxx
000, Xxxx Xxx Xxxxxx, Xxxx 00000 Attention: Xxx Xxxxxxxx; and if to Distributor,
to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Broker
Dealer Chief Compliance Officer, with a copy to Foreside Distribution Services,
0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: President, or at such other
address as such party may from time to time specify in writing to the other
party pursuant to this Section.
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10. CONFIDENTIALITY.
During the term of this Agreement, the Distributor and the Company may
have access to confidential information relating to such matters as either
party's business, trade secrets, systems, procedures, manuals, products,
contracts, personnel, and clients. As used in this Agreement, "Confidential
Information" means information belonging to the Distributor or the Company which
is of value to such party and the disclosure of which could result in a
competitive or other disadvantage to either party, including, without
limitation, financial information, business practices and policies, know-how,
trade secrets, market or sales information or plans, customer lists, business
plans, and all provisions of this Agreement. Confidential Information includes
information developed by either party in the course of engaging in the
activities provided for in this Agreement, unless: (i) the information is or
becomes publicly known without breach of this Agreement, (ii) the information is
disclosed to the other party by a third party not under an obligation
confidentiality to the party whose Confidential Information is at issue of which
the party receiving the information should reasonably be aware, or (iii) the
information is independently developed by a party without reference to the
other's Confidential Information. Each party will protect the other's
Confidential Information with at least the same degree of care it uses with
respect to its own Confidential Information, and will not use the other party's
Confidential Information other than in connection with its duties and
obligations hereunder. Notwithstanding the foregoing, a party may disclose the
other's Confidential Information if (i) required by law, regulation or legal
process or if requested by any Agency; (ii) it is advised by counsel that it may
incur liability for failure to make such disclosure; (iii) requested to by the
other party; provided that in the event of (i) or (ii) the disclosing party
shall give the other party reasonable prior notice of such disclosure to the
extent reasonably practicably and cooperate with the other party (at such other
party's expense) in any efforts to prevent such disclosure.
10. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the 1940 Act.
11. PRIOR AGREEMENTS.
This Agreement constitutes the complete agreement of the parties as to
the subject matter covered by this Agreement, and supersedes all prior
negotiations, understandings and agreements bearing upon the subject matter
covered by this Agreement.
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12. AMENDMENTS.
No amendment to this Agreement shall be valid unless made in writing and
executed by both parties hereto.
* * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
Vintage Mutual Funds, Inc.
By:
------------------------------------
Name:
Title:
Foreside Distribution Services, L.P.
By:
By:
------------------------------------
Name: Xxxxx X. Xxx
Title: President
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SCHEDULE A
FUNDS
LIQUID ASSETS FUND
INSTITUTIONAL MONEY MARKET FUND
INSTITUTIONAL RESERVES FUND
MUNICIPAL ASSETS FUND
VINTAGE LIMITED TERM BOND FUND
VINTAGE BOND FUND
VINTAGE MUNICIPAL BOND FUND
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SCHEDULE B
DISTRIBUTION PLAN
VINTAGE MUTUAL FUNDS, INC.
DISTRIBUTION & SHAREHOLDER
SERVICE PLAN
DISTRIBUTION AND SHAREHOLDER SERVICE PLAN, dated as of April 9, 1998,
of the Vintage Mutual Funds, Inc., a Maryland corporation (hereinafter the
"Company").
W I T N E S S E T H
WHEREAS, the Company, its series (each referred to as a "Fund" or
collectively as "Funds") are engaged in business as open-end management
investment companies and are registered under the Investment Company Act of
1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act"); and
WHEREAS, Rule 12b-1 under the Investment Company Act of 1940 ("Rule
12b-1") provides that, except as provided in Rule 12b-1, it shall be unlawful
for any registered open-end management investment company (other than such
company complying with the provisions of Section 10(d) under the Investment
Company Act of 1940 (the "1940 Act")) to act as distributor of securities of
which such company is the issuer, except through an underwriter; and
WHEREAS, Rule 12b-1 provides that a registered open-end management
investment company will be deemed to be acting as a distributor of securities of
which it is the issuer, other than through an underwriter, if it engages
directly or indirectly in financing any activity which is primarily intended to
result in the sale of shares issued by such company, including, but not
necessarily limited to, advertising, compensation of underwriters, dealers and
sales personnel, the printing and mailing of prospectuses to other than current
shareholders, and the printing and mailing of sales literature; and
WHEREAS, the Company has appointed Foreside Distribution Services, L.P.
("Distributor"), the distributor of the Funds pursuant to a Distribution
Agreement under which the Distributor agrees to distribute and pay the costs of
distributing shares of the Funds (the "Shares"),and, where applicable, each
class of shares ("Class") which Shares shall be issued in series corresponding
to the portfolios of the Funds, in consideration of all of which the Distributor
shall receive fees and reimbursements from the Funds as provided in the
Distribution Agreement; and
13
WHEREAS, Rule 12b-1 provides that a registered, open-end management
company may act as a distributor of securities, of which it is the issuer,
provided that any payments made by such company in connection with such
distribution are made pursuant to a written plan describing all material aspects
of the proposed financing of distribution and that all agreements with any
person relating to implementation of the plan are in writing and provided
further that certain additional conditions are met; and
WHEREAS, the Company recognizes and agrees that (a) the Distributor may
retain the services of broker/dealer firms ("Firms") and other financial
services firms (collectively, "Participating Organizations") to facilitate
purchases and provide other services to shareholders, (b) the Distributor
intends to compensate each Participating Organization which sells Shares at the
rates? set forth in Schedule 1 hereto, as such may be revised from time to time,
and (c) the Distributor may make such payments out of the fee paid to the
Distributor hereunder, its profits or any other source available to it, to the
Participating Organizations for such services; and
WHEREAS, the Board of Directors of the Company and the Shareholders of
the Company have previously adopted various forms of Distribution Plans for the
Company's various Funds and classes of shares of such Funds; and
WHEREAS, the Board of Directors of the Company desire to amend and
restate the various Plans as one plan applicable to each of the Funds and
classes of shares as may be appropriate; and
WHEREAS, such amendment and restatement of the Plans does not effect
any increase in the fees payable under the various Plans nor make any material
changes in the provisions and terms of such Plans; and
WHEREAS, the Board of Directors of the Company, in considering whether
it should adopt and implement this Plan as to the Funds, has evaluated such
information as it deemed necessary to an informed determination as to whether
this Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Funds for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Plan will benefit the
Funds and their shareholders;
NOW, THEREFORE, the Board of Directors of the Company hereby amends and
restates the Distribution Plan for the Funds in accordance with Rule 12b-1, on
the following terms and conditions:
14
Section 1. Allocation of Responsibilities.
(a) The Company shall be solely responsible for all actions required to
be taken in connection with the offer, sale and distribution of the Shares,
other than such actions as are expressly assumed by the Distributor pursuant to
(1) the terms of this Plan and (2) the Distribution Agreement, which complies?
with the provisions of Sections 6 and 7 of this Plan.
(b) The Distributor shall be solely responsible for (1) the
distribution of and payment of the costs of distribution of the Shares, which
costs shall include, by way of example, but not by way of limitation,
compensation paid to registered representatives of the Distributor and to Firms
that has entered into sales agreements with the Distributor, the costs of
preparing, printing and distributing sales literature, the costs of preparing
and running advertisements on radio, television, newspapers or magazines, costs
connected with the use of a "toll-free" telephone number for the Funds and other
distribution-related expenses, but excluding fees and expenses of registering
and qualifying the Funds and the Shares for distribution under federal and state
securities laws; (2) such other responsibilities assumed by the Distributor
pursuant to the Distribution Agreement; and (3) any other responsibilities in
connection with the distribution of the Shares assumed by the Distributor
pursuant to a written agreement which complies with Sections 6 and 7 of this
Plan.
Section 2. Payment of Costs of Distribution.
(a) As long as the Distribution Agreement, or any amendment thereto
complying with Sections 6 and 7 of this Plan, shall remain in effect, as
consideration for all services performed and expenses incurred in the
performance of its obligations under the Distribution Agreement, the Funds shall
pay the Distributor a daily distribution fee payable monthly as provided in
Schedule 1 to the Distribution Agreement as it may be amended from time to time,
provided that the maximum annual fee may not be increased except as provided in
Section 7 of this Plan. Average daily net assets shall be computed in accordance
with the currently effective Prospectus of the Fund.
(b) The Funds understand that agreements between the Distributor and
the Dealers may provide for payment of fees to Dealers to encourage the sale of
Shares and may provide for a portion (which may be all or substantially all) of
the fees payable by the Funds to the Distributor under the Distribution
Agreement to be paid by the Distributor to the Dealers in consideration of the
Dealers' services as dealers of the Shares. The Funds further understand that
the Distributor intends to enter into agreements with Participating
Organizations that are not Dealers. Insofar as Participating Organizations are
not Dealers, they will be compensated under the Plan solely for administrative
and shareholder services for their clients who wish to invest in the Funds. None
of the services provided by such Participating Organizations other than Dealers
will involve the solicitation or sale of Shares of the Fund. Nothing in this
Plan shall be construed as requiring the Funds to make any payment to any
Participating Organization or to have any obligations to any Participating
Organization in connection with services as a dealer of the Shares. The
Distributor shall agree and undertake that any agreement entered into between
the Distributor and any Participating Organization shall provide that such
Participating Organization shall look solely to the Distributor for compensation
for its services thereunder and that in no event shall such Dealer seek any?
payment from the Fund.
15
(c) The Advisor to the Funds may, at its option, make payments from its
own resources to cover the costs of additional distribution activities.
(d) This Plan shall be subject to limitations imposed by the Sales
Charge Rule, unless the Funds, the Distributor or any other person obtain
exemptive relief from the provisions of the Sales Charge Rule of Article III,
Section 26 of the NASD Rules of Fair Practice RE: Regulations by the NASD of
Mutual Fund Asset-Based Sales Charges as described in NASD Notice to Members
90-56.
(e) The Fund shall pay all fees and expenses of any independent
auditor, legal counsel, investment advisor, administrator, transfer agent,
custodian, shareholder servicing agent, registrar or dividend disbursing agent
of the Fund; expenses of distributing and redeeming Shares and servicing
shareholder accounts; expenses of preparing notices, proxy statements and
reports to governmental officers and commissions and to shareholders of the
Fund, except that the Distributor shall be responsible for the expenses of
printing (excluding typesetting) and distributing prospectuses to prospective
shareholders as provided in paragraphs 1 and 2 hereof; expenses connected with
the execution, recording and settlement of portfolio security transaction;
insurance premiums; expenses of shareholder meetings; and expenses relating to
the issuance, registration and qualification of Shares.
Section 3. Portfolio Approvals.
(a) The Funds represent that this Plan, together with the Distribution
Agreement, has been approved by a vote of the Board of Directors of the Company
and of the Directors of the Company who are not interested persons of the Funds,
as defined in Section 2(a) (19) of the 1940 Act and the rules, regulations and
releases relating thereto, and have no direct or indirect financial interest in
the operation of the Plan, or in the Distribution Agreement, or any other
agreement related to the Plan ("Interested Persons"), cast in person at a
meeting called for the purpose of voting on the Plan and the Distribution
Agreement.
16
(b) In approving the Plan and the Distribution Agreement, the Directors
have undertaken the following:
(1) The Directors have concluded, in the exercise of
reasonable business judgment and in light of their
fiduciary duties under state law and Sections 36(a) and
36(b) of the 1940 Act, that the Plan will benefit the
Funds and their shareholders.
(2) The Directors have requested and evaluated such
information as was reasonably necessary to an informed
determination of whether the Plan should be implemented,
and, in connection therewith, officials of the
Distributor, as a party to agreements related to the
Plan, have furnished such information reasonably
necessary for the foregoing purposes.
(3) The Directors have considered and given appropriate
weight to all pertinent factors, including, without
limitation, the following:
(A) the need for independent counsel or experts to
assist the Directors in reaching a
determination;
(B) the nature of the problems or circumstances
which purportedly make implementation of the
Plan necessary or appropriate;
(C) the causes of such problems or circumstances;
(D) the way in which the Plan would address these
problems or circumstances and how it would be
expected to resolve or alleviate them, including
the nature and approximate amount of the
expenditures to the overall cost structure of
the Fund, the nature of the anticipated benefits
and the time it would take for those benefits to
be achieved;
(E) the merits of possible alternative plans;
17
(F) the interrelationship between the Plan and the
activities of any other person who finances or
has financed distribution of the Shares,
including whether any payments by the Funds to
such other person are made in such a manner as
to constitute the indirect financing of
distribution by the Funds; and
(G) the possible benefits of the Plan to any other
person relative to those expected to inure to
the Funds.
Section 4. Reports to and Review by the Board of Directors of the Funds.
(a) Any person authorized to direct the disposition of monies paid or
payable by the Funds pursuant to the Plan, the Distribution Agreement or any
other agreement related to the Plan shall provide the Board of Directors of the
Company and the Board of Directors of the Company shall review, at least
quarterly, a written report of the specific purposes for which such expenditures
were made.
(b) The Distribution Agreement and any other agreement related to the
Plan shall, by their respective terms, provide that appropriate officers of the
Distributor, or any party to such other agreement, shall provide the Directors
of the Company with such information as may be reasonably necessary to the
Directors of the Company for the purposes required by Sections 3(a), 3(b) and
8(d) of this Plan.
Section 5. Selection of Directors.
In connection with the implementation and continuation of the Plan, the
Company hereby undertakes to commit the selection and nomination of Directors of
the Company who are not Interested Persons to a committee comprised of such
Directors who are not such Interested Persons.
Section 6. Concerning the Distribution
Agreement and Other Agreements Related to
the Plan.
In addition to the requirements contained in Sections 4(b) and 8 of the
Plan, the Distribution Agreement and any other agreement related to the Plan
shall be in writing and shall provide in substance that such agreement shall be
terminated:
(a) at any time, without the payment of any penalty, by vote of a
majority of the members of the Board of Directors of the Company who are not
Interested Persons or by vote of a majority of the outstanding Shares of the
Funds on not more than sixty (60) days' written notice to the other party
thereto; provided that if a majority of the outstanding Shares of any Fund votes
to terminate this Plan, such termination shall be effective with respect to such
Fund, whether or not the shareholders of any other Fund have voted to terminate
this Plan; and
(b) automatically, in the event of its assignment.
18
Section 7. Amendments and Modifications.
The Plan, the Distribution Agreement and any other agreement related to
the Plan shall not be amended, modified or superseded except by an agreement in
writing, and, in addition:
(a) may not be amended to increase materially the amount to be spent
for costs of distribution of any Fund, as provided in Section 2 of this Plan,
without the approval of a majority of the outstanding Shares of such Fund
subject to such increase; and
(b) may not be amended in any material manner unless such amendment has
been approved in the manner provided in, and consistent with the procedures
specified by, Sections 3(a), 3(b) and 8(d) of this Plan.
(c) If a majority of the outstanding Shares of any Fund votes to amend
this Plan, such amendment shall be effective with respect to such Fund, whether
or not the Shareholders of any other Fund vote to adopt such amendment.
Section 8. Continuation and Termination.
(a) The Plan shall terminate automatically in the event the shareholder
approval required pursuant to Section 10 is not received.
(b) The Plan, the Distribution Agreement and any other agreement
related to the Plan shall continue in effect for a period of more than one (1)
year from its adoption only as long as the continuance is specifically approved
in the manner described in subsection (d) of this Section 8.
(c) The Plan may be terminated at any time by a majority of the members
of the Board of Directors of the Company who are not Interested Persons or by
vote of a majority of the outstanding Shares of the Funds.
(d) In determining whether the Plan shall be continued or terminated as
provided in Section 8, the Directors of the Company shall make such
determination in the manner provided in, and consistent with the procedures
specified by, Sections 3(a) and 3(b) of this Plan; provided that, in addition to
the factors specified in Section 3(b) (3), the Directors of the Company shall
also consider and give appropriate weight to the following factors:
(1) the effect of the Plan on existing shareholders; and
(2) whether the Plan has, in fact, produced the anticipated
benefits for the Funds and their shareholders.
19
Section 9. Preservation of Information.
(a) The Fund shall, for a period of not less than six (6) years, preserve
the following information and documentation:
(1) the Plan;
(2) the Distribution Agreement;
(3) any other agreement related to the Plan;
(4) any report made pursuant to Section 4 of the Plan; and
(5) all minutes which are recorded as a result of the
requirements of Sections 3, 7 or 8 of the Plan and which
relate to the approval, amendment or continuation of the
Plan, the Distribution Agreement or any other agreement
related to the Plan.
(b) With respect to the information and documentation required to be
preserved pursuant to subsection (a) of this Section 9, such information and
documentation shall be preserved in an easily accessible place for a period of
not less than two (2) years.
Section 10. Shareholder Approval and Effective Date.
The effective date of this Plan shall be the date upon which this Plan
is approved by a vote of the holders of at least a majority of the Shares of
each Fund and, where applicable, each Class; provided that, if a majority of the
Shares of any Fund and, where applicable, each Class approves this Plan, it
shall be effective with respect to such approving Fund, whether or not the
Shareholders of any other Fund vote to approve this Plan. Wherever referred to
in this Plan, the vote or approval of the holders of a majority of the
outstanding Shares of the Funds or any Fund shall mean the vote of (a)
sixty-seven percent (67%) of such outstanding Shares present at a meeting if the
holders of more than fifty percent (50%) of such outstanding Shares are present
in person or by proxy or (b) more than fifty percent (50%) of such outstanding
shares, whichever is lesser.
20
The Plan was last adopted by the Board of Directors on October 30,
1997, and by the Shareholders of each of the series and class as appropriate as
follows:
Fund Class Date of Approval
Liquid Assets "S" Shares February 13, 1998
Liquid Assets "S2" Shares February 13, 1998
Municipal Assets "S" Shares February 13, 1998
Vintage Limited Term February 13, 1998
Vintage Bond February 13, 1998
Vintage Municipal Bond February 13, 1998
Institutional Money Market Fund December 1, 2004
Institutional Reserves Fund November 17, 1999
21
Exhibit A
Schedule 1
Distribution Fees
Vintage Mutual Funds, Inc.
Maximum
Annual Fee Present
Fund/Class Per Plan Approved Fee
Institutional Reserves 0.25% 0.00%
Institutional Money Market 0.25% 0.00%
Liquid Assets
"S" Shares 0.50% 0.40%
"S2" Shares 0.25% 0.15%
Municipal Assets
"S" Shares 0.25% 0.15%
Vintage Limited Term 0.25% 0.00%
Vintage Bond 0.25% 0.00%
Vintage Municipal Bond 0.25% 0.00%
As amended December 1, 2004.
22
SCHEDULE C
COMPENSATION OF THE DISTRIBUTOR
1. BASIC DISTRIBUTION SERVICES. For providing the distribution entity and
related infrastructure and platform, including requisite registrations and
qualifications, premises, personnel, compliance, ordinary fund board meeting
preparation, maintenance of selling agreements, clearance of advertising and
sales literature with regulators, filing appropriate documentation for advisory
representatives to qualify as registered representatives of the Distributor
(provided that the Adviser is solely responsible for its representatives'
meeting examination requirements) and their related registrations and fees,
ordinary supervisory services and overhead, the Distributor shall be entitled to
receive compensation at an annual rate of one one-hundredth of one percent
(.01%) of the average net assets of the Company subject to a maximum of
$100,000, billed monthly.
2. SPECIAL DISTRIBUTION SERVICES. For special distribution services, including
those set forth on Schedule D to this Agreement, such as additional personnel,
registrations, printing and fulfillment, website services, proprietary
distribution expertise for particular circumstances, and any other services in
addition to the basic distribution services covered by Paragraph 1 above, the
Distributor shall be reimbursed promptly upon invoicing its expenses for such
services, including: (a) all costs to support additional personnel; (b)
regulatory fees including NASD CRD costs associated with marketing materials;
and (c) printing, postage and fulfillment costs, and (d) amounts payable under
additional agreements to which Distributor is a party.
3. SPECIAL CONDUIT SITUATIONS. If the Distribution Plan, or any other Fund plans
of distribution under Rule 12b-1 that contemplate up front and/or recurring
commission and/or service payments to broker dealers, retirement plan
administrators or others by the Distributor with respect to back-end loads,
level loads, or otherwise, unless expressly agreed otherwise in writing between
the parties, all such payments shall be made to the Distributor, which shall act
as a conduit for making such payments to such broker-dealers, retirement plan
administrators or others.
4. OTHER PAYMENTS BY THE DISTRIBUTOR. If the Distributor is required to make any
payments to third parties in respect of distribution, which payments are
contemplated by the parties to the distribution agreement or otherwise arise in
the ordinary course of business, the Distributor shall be promptly reimbursed
for such payments upon invoicing them.
5. FEE ADJUSTMENTS. The fixed fees and other fees expressed as stated dollar
amounts in this Schedule C and in this Agreement are subject to annual
increases, commencing on the one-year anniversary date of the date of this
Agreement, in an amount equal to the percentage increase in consumer prices for
services as measured by the United States Consumer Price Index entitled "All
Services Less Rent of Shelter," or a similar index should such index no longer
be published, since such one-year anniversary or since the date of the last fee
increase, as applicable.
23
SCHEDULE D
SPECIAL DISTRIBUTION SERVICES AND FEES
------------------------------------------------------- ----------------------------------------------------
SERVICES FEES
------------------------------------------------------- ----------------------------------------------------
1. WHOLESALING PERSONNEL SERVICES WHOLESALING PERSONNEL SERVICES FEES
Wholesaling Personnel may be external wholesalers For each individual constituting the Wholesaling
and/or internal wholesalers. Personnel employed by the Distributor pursuant to
this Agreement, the Distributor shall receive
annually an amount equal to the sum of:
Services include soliciting support of the Funds (i) all compensation paid annually by the
with selling broker dealers; participating in Distributor to the employee; plus
promotional meetings, presentations, conferences
and other and forums; identifying high potential (ii) a management oversight fee equal to:
personnel of the Adviser and selling broker
dealers; and assisting with mail solicitations and (a) if one to four Wholesaling Personnel are
literature fulfillment. employed, 30% of the salary compensation and 5%
of the bonus or commission compensation, or
(b) if five or more Wholesaling Personnel are
employed, 25% of the salary compensation and 5%
of the bonus or commission compensation;
plus
(iii) 18% of the total compensation (covering
costs of the Distributor's employee benefits
that are provided by the Distributor).
In addition, the Distributor shall be reimbursed
for all related costs to support, educate and
train and maintain compliance oversight of
Wholesaling Personnel and other personnel such
as sales management, marketing and performance
reporting personnel (including time and
expenses, continuing education, seminars, rent,
supplies, phone, computers, firm element,
license, registration)
Upon any termination of Wholesaling Personnel at
the request of the Funds or upon termination of
this Agreement by the Funds for any reason other
than cause, the Distributor will be reimbursed
its severance costs with respect to such
terminated Wholesaling Personnel.
------------------------------------------------------- ----------------------------------------------------
24
EXPENSES APPLICABLE TO SPECIAL DISTRIBUTION SERVICES
Except as expressly set forth above, out-of-pocket expenses incurred by
Distributor in the performance of its services under this Agreement are not
included in the above fees. Such out-of-pocket expenses may include, without
limitation:
o reasonable travel and entertainment costs;
o expenses incurred by the Distributor in qualifying, registering and
maintaining the registration of the Distributor and each individual
comprising Wholesaling Personnel as a registered representative of the
Distributor under applicable federal and state laws and rules of the
NASD, e.g., CRD fees and state fees;
o Sponsorships, Promotions, Sales Incentives;
o any and all compensation to be paid to a third party as paying agent for
distribution activities (platform fees, finders fees, sub-TA fees, 12b-1
pass thru, commissions, etc.);
o costs and expenses incurred for telephone service, photocopying and
office supplies;
o advertising costs;
o costs for printing, paper stock and costs of other materials, electronic
transmission, courier, talent utilized in sales materials (e.g. models),
design output, photostats, photography, and illustrations;
o packaging, shipping, postage, and photocopies; and
o taxes that are paid or payable by the Distributor or its affiliates in
connection with its services hereunder, other than taxes customarily and
actually imposed upon the income that the Distributor receives
hereunder.
25
