Exhibit 99.E
DISTRIBUTION AGREEMENT
AGREEMENT made as of November 18, 2005 between STI Classic Funds (the
"Trust"), a Massachusetts business trust having an office at 00 Xxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000, and BISYS FUND SERVICES LIMITED PARTNERSHIP
("Distributor"), having an office at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
WHEREAS, the Trust is an open-end management investment company organized
as a Massachusetts business trust and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended (the "1940 Act");
WHEREAS, Distributor is registered with the Commission as a broker-dealer
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a
member of the National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, it is intended that Distributor act as the distributor of the
units of beneficial interest ("Shares") of each series of the Trust, 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 promises and covenants
herein set forth, the parties agree as follows:
1. Services as Distributor.
1.1 Distributor will act as agent of the Trust on behalf of each Fund for
the distribution of the Shares covered by the registration statement of the
Trust 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 Trust and
any amendments thereto, then in effect, including Parts A (the Prospectus), B
(the Statement of Additional Information) and C of the 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
forms 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 statement together with any amendments and supplements thereto. The
Trust will notify Distributor in advance of any proposed changes to Schedule A
to this Agreement.
1.2 Consistent with the understanding between the Funds, the Funds'
investment adviser (the "Adviser") and the Distributor, the 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
Trust 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 Trust. The Trust further
understands that investors and potential investors in the Trust may invest in
shares of such other investment companies. The Trust agrees that Distributor's
duties to such other investment companies shall not be deemed in conflict with
its duties to the Trust under this Section 1.2.
1.3 Consistent with the understanding between the Funds, the Adviser and
the Distributor, and subject to the last sentence of this Section 1.3,
Distributor will engage in such activities set forth on the schedules hereto or
as otherwise agreed by the parties and 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 investors 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 Adviser or from another source as may be
permitted by applicable law, and (ii) such corresponding payment has been
approved by the Trust's Board of Trustees.
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, the 1934 Act, all applicable rules and regulations promulgated by the
Commission thereunder, all applicable rules and regulations adopted by any
securities association registered under the 1934 Act, and the laws governing the
sale of securities in the various states.
1.5 Distributor will transmit any orders received by it for purchase or
redemption of the Shares to the transfer agent for the Funds, and may instruct
dealers and other intermediaries to transmit orders directly to the transfer
agent.
1.6 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions or by abnormal circumstance of any kind, the
Trust'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.
1.7 The Trust agrees to inform the Distributor from time to time of the
states and other jurisdictions in which a Fund or its administrator has
registered or otherwise qualified shares for sale, and the Trust 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
Distributor may designate.
1.8 The Trust 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 Trust warrants that the
statements contained in any such supplemental information fairly show or
represent what they purport to show or represent. The Trust shall also furnish
Distributor upon request with: (a) unaudited semi-annual statements of the
Funds' books and accounts prepared by the Trust, (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 Distributor may
reasonably request. Distributor is not authorized by the Trust to give any
information or to make any representations other than those contained in the
Prospectus or in shareholder reports or other material that may be prepared by
or on behalf of the Trust for the Distributor's use.
1.9 The Trust represents and warrants to Distributor that all registration
statements, and each Prospectus, filed by the Trust 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 Trust 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, the Trust may deem necessary or advisable. If the Trust shall not
propose any amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Trust 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 Trust for, any
liability or loss resulting from the failure to implement such amendment. The
Trust 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 Trust's right to file at any time such amendments to any
registration statement and/or supplements to any Prospectus, of whatever
character, as the Trust may deem advisable, such right being in all respects
absolute and unconditional.
1.10 The Trust may use, or may request Distributor to use, an electronic
processing system over the internet in which electronically transmitted orders
are forwarded electronically for processing under circumstances in which
Distributor will not review the orders. Under such circumstances, the Trust
acknowledges and agrees that it will independently determine that any third
party used by the Trust to process orders is a satisfactory service provider and
that the Distributor's review will not be necessary.
1.11 The Trust authorizes the Distributor and dealers to use any Prospectus
in the form furnished by the Trust from time to time in connection with the sale
of the Shares.
1.12 The Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust 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 distribution of the Shares. The Trust agrees to indemnify, defend and hold
harmless the Distributor, its several officers and employees, and any person who
controls the Distributor within the meaning of Section 15 of the Securities Act,
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) which the Distributor, its officers and employees, or any such
controlling person, may incur (a) as the result of acting as distributor of the
Funds and entering into selling agreements, shareholder servicing agreements or
similar agreements with financial intermediaries on behalf of the Trust; (b)
under the Securities Act or under common law or otherwise, 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 Trust-related advertisement or sales
literature, or other materials distributed to the public that contains any
untrue statement, or alleged untrue statement, of a material fact, or any
omission, or alleged omission, to state a material fact required to be stated
therein to make the statements therein not misleading, 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 Trust's request; provided, however, that the
Trust's agreement to indemnify the Distributor, its officers or employees, and
any such controlling person shall not be construed to cover any claims, demands,
liabilities or expenses arising out of or based upon (a) any untrue statements,
or alleged untrue statement, as are contained in any registration statement,
Prospectus, or Trust-related advertisement or sales literature, or other
materials distributed to the public, or any omission to state a material fact
required to be stated in such materials that would be necessary to make the
information therein not misleading to the extent that such untrue statement,
alleged untrue statement, or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Trust by or on behalf
of the Distributor provided the Distributor has reviewed any such registration
statement, Prospectus, advertisement or sales literature, or other material
prior to its use, or (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.
In the event of a formal legal action against the Distributor, its officers
or employees, or any such controlling person, the Distributor shall provide the
Trust with written notice of the action, identifying the persons against whom
such action 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 Trust will
be entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability if such defense shall be conducted by counsel of good
standing chosen by the Trust and approved by the Distributor, which approval
shall not be unreasonably withheld. In the event any such claim, demand or
liability is not heard solely on an alleged misstatement, omission or wrongful
act on the Trust's part, the Distributor shall have the right to participate in
the defense. In the event the Trust elects to assume the defense of any such
suit and retain counsel of good standing so approved by the Distributor, the
Distributor and any other defendants in such suit shall bear the fees and
expenses of any additional counsel retained by them; but in any case where the
Trust does not elect to assume the defense of any such suit or in case the
Distributor reasonably withholds approval of counsel chosen by the Trust, the
Trust will reimburse the Distributor, its officers, employees, and controlling
persons 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, demand,
liability or expense covered under this Section 1.12. The Trust'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 Distributor, its officers and employees, or any controlling
person, and shall survive the delivery of any Shares.
1.13 The Distributor agrees to indemnify, defend and hold harmless the
Trust, its several officers and Trustees, and any person who controls the Trust
within the meaning of Section 15 of the Securities Act, from and against any and
all claims, demands, liabilities and expenses (including the reasonable costs of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Trust, its
officers or Trustees or any such controlling person may incur (a) under the
Securities Act 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, Prospectus, or Trust-related advertisement or
sales literature, or other materials distributed to the public, or any omission
to state a material fact required to be stated in such materials that would be
necessary to make the information therein not misleading to the extent that such
untrue statement, alleged untrue statement, or omission was made in reliance
upon, and in conformity with, information furnished in writing to the Trust by
or on behalf of the Distributor provided the Distributor has reviewed any such
registration statement, Prospectus, advertisement or sales literature, or other
material prior to its use, (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 applicable to it
in connection with its activities hereunder (other than in respect of
Trust-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 formal legal action against the Trust, its officers or
Trustees, or any such controlling person, the Trust shall provide the
Distributor with written notice of the action, identifying the persons against
whom such action is brought, promptly following the 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, demand or
liability if such defense shall be conducted by counsel of good standing chosen
by the Distributor and approved by the Trust, which approval shall not be
unreasonably withheld. In the event any such claim, demand or liability is not
based solely on an alleged misstatement, omission or wrongful act on the
Distributor's part, the Trust 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 Trust, the Trust and
any other defendants 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
Trust reasonably withholds approval of counsel chosen by the Distributor, the
Distributor will reimburse the Trust, its officers, directors, employees and
controlling persons named as defendants in such suit, for the reasonable fees
and expenses of any counsel retained by the Trust or them to the extent related
to a claim, demand, liability or expense covered under this Section 1.13. The
Distributor's indemnification agreement contained in this Section 1.13 shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Trust, its officers and employees, or any
controlling person, and shall survive the delivery of any Shares.
1.14 No Shares shall be offered by either the Distributor or the Trust
under any of the provisions of this Agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Trust 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 Act is not on file with the Commission, provided, however, that
nothing contained in this Section 1.14 shall in any way restrict or have an
application to or bearing upon the Trust's obligation to repurchase Shares from
a shareholder in accordance with the provisions of the Trust's Prospectus,
Agreement and Declaration of Trust, or Bylaws.
1.15 The Trust 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 Trust or 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.
1.16 The Distributor agrees on behalf of itself and its officers and
employees to treat confidentiality and as proprietary information of the Trust
all records and other information relative to the Trust and its prior, present
or potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder
except after prior notification to and approval in writing by the Trust, which
approval shall not be unreasonably withheld, but such approval shall not be
required where the Distributor may be exposed to civil or criminal liability for
failure to disclose such information, when requested to divulge such information
by duly constituted authorities, or when so requested by the Trust.
2. Fee.
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 and
reimbursed for its expenses 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 and reimburse the Distributor and required board approvals have been
given, then the Funds shall be responsible for all such compensation and
reimbursements or such portions of it as have been permitted and authorized
under the Distribution Plan. If the Funds do not have a Distribution Plan that
permits and authorizes them to compensate and reimburse the Distributor in full,
then the Distributor shall receive from other sources consistent with applicable
law and other written agreements any portions of owed compensation and
reimbursement not paid under the Distribution Plan. Except as provided by Rule
12b-1 under the 1940 Act and the terms of the Distribution Plan, as concerns
continuation of the Distribution Plan and termination of the Distribution Plan
under certain circumstances, the relevant Fund's obligation to pay distribution
fees to the Distributor, when applicable as provided in the foregoing provisions
of this Section 2, shall be absolute and unconditional and shall not be subject
to any dispute, offset, counterclaim or defense whatsoever.
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.
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 Plans 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 therefore
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 therefore 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.
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 Prospectus of the Load Fund.
5. Issuance of Shares.
The Trust reserves the right to issue, transfer or sell Load Shares at net
asset values (a) in connection with the merger or consolidation of the Trust or
the Load Fund(s) with any other investment company or the acquisition by the
Trust 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 for a two year period
following the Effective Date. 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 Trust's Board of
Trustees 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 Trust's Board of Trustees or the vote of a majority
of the outstanding voting securities of such Fund. This Agreement is terminable
without penalty with sixty days' prior written notice, by the Trust's Board of
Trustees, by vote of a majority of the outstanding voting securities of the
Trust, or by the Distributor. This Agreement will also terminate automatically
(a) in the event of its assignment or (b) if Distributor is no longer registered
with the Commission under the 1934 Act and a member of the NASD. (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.)
7. Limitation of Liability of the Trustees and Shareholders.
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the trust
property of the Trust as provided in the Trust's Agreement and Declaration of
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees, and this Agreement has been signed and delivered by an authorized
officer of the Trust, acting as such, and neither such authorization by the
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
the Trust's Agreement and Declaration of Trust.
8. Privacy.
Nonpublic personal financial information relating to consumers or customers
of the Funds provided by, or at the direction of, the Trust 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 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 of the Funds. The Trust
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.
9. Anti-Money Laundering Compliance.
9.1 Each of Distributor and the Trust 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 Trust'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.
9.2 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 Trust.
9.3 Each of Distributor and the Trust 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
Trust, the Trust's anti-money laundering compliance officer and regulatory
agencies, reasonable access to copies of Distributor's AML Operations, books and
records pertaining to the Trust only. It is expressly understood and agreed that
the Trust and the Trust's compliance officer shall have no access to any of
Distributor's AML Operations, books or records pertaining to other clients of
Distributor.
10. 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 Trust, to it at 00 Xxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000 Attention: Xxxxx Xxxx, with copy to Xxxx Xxxxx, 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000; and if to BISYS, to it at 000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attn: Broker-Dealer Compliance Department Manager, with a
copy to BISYS at 0000 Xxxxxxx Xxxx, Xxxxxxxx, XX 00000, Attn: 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.
11. Governing Law.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act. To
the extent that the applicable laws of the State of Ohio, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
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.
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.
STI CLASSIC FUNDS
By:
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Name:
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Title:
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BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.,
its General Partner
By:
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Name:
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Title:
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SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
BETWEEN STI CLASSIC FUNDS
AND BISYS FUND SERVICES LIMITED PARTNERSHIP
FUNDS
Aggressive Growth Stock Fund
Balanced Fund
Capital Appreciation Fund
Classic Institutional Cash Management Money Market Fund
Classic Institutional Municipal Cash Reserve Money Market Fund
Classic Institutional Short-Term Bond Fund
Classic Institutional U.S. Government Securities Money Market Fund
Classic Institutional U.S. Treasury Securities Money Market Fund
Core Bond Fund (formerly, Classic Institutional Core Bond Fund)
Emerging Growth Stock Fund
Florida Tax-Exempt Bond Fund
Georgia Tax-Exempt Bond Fund
High Income Fund
High Quality Bond Fund (formerly, Classic Institutional High Quality Bond Fund)
Intermediate Bond Fund (formerly, Classic Institutional Intermediate Bond Fund)
International Equity Fund
International Equity Index Fund
Investment Grade Bond Fund
Investment Grade Tax-Exempt Bond Fund
Large Cap Relative Value Fund (formerly, Growth and Income Fund)
Large Cap Value Equity Fund (formerly, Value Income Stock Fund)
Life Vision Aggressive Growth Fund
Life Vision Conservative Fund
Life Vision Growth and Income Fund
Life Vision Moderate Growth Fund
Life Vision Target Date 2015 Fund
Life Vision Target Date 2025 Fund
Life Vision Target Date 2035 Fund
Limited Duration Fund (formerly, Classic Institutional Limited Duration Fund)
Limited-Term Federal Mortgage Securities Fund
Maryland Municipal Bond Fund
Mid-Cap Equity Fund
Mid-Cap Value Equity Fund
North Carolina Tax-Exempt Bond Fund
Prime Quality Money Market Fund
Quality Growth Stock Fund (formerly, Tax Sensitive Growth Stock Fund)
Seix High Yield Fund (formerly, Seix Institutional High Yield Fund)
Short-Term Bond Fund
Short-Term U.S. Treasury Securities Fund
Small Cap Growth Stock Fund
Small Cap Value Equity Fund
Strategic Income Fund
Strategic Quantitative Equity Fund
Tax-Exempt Money Market Fund
Total Return Bond Fund (formerly, Classic Institutional Total Return Bond Fund)
U.S. Government Securities Fund
U.S. Government Securities Money Market Fund
U.S. Government Securities Ultra-Short Bond Fund (formerly, Classic
Institutional U.S. Government Securities Super Short Income Plus Fund)
U.S. Treasury Money Market Fund
Ultra-Short Bond Fund (formerly, Classic Institutional Super Short Income Plus
Fund)
Virginia Intermediate Municipal Bond Fund
Virginia Municipal Bond Fund
Virginia Tax-Free Money Market Fund
SCHEDULE B
DISTRIBUTION PLAN
STI CLASSIC FUNDS
DISTRIBUTION AND SERVICE PLAN
A SHARES (FORMERLY, INVESTOR SHARES)
WHEREAS, STI Classic Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution and Service Plan (the
"Plan") will benefit the Trust and the owners of the A Shares of the portfolios
("Shareholders") of the Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this Plan pursuant
to Rule 12b-1 under the 1940 Act and in accordance with the Trust's Rule 18f-3
Multiple Class Plan:
SECTION 1. The Trust has adopted this Plan to enable the Trust to directly
or indirectly bear expenses related to (a) the distribution and sale of A Shares
(collectively, the "Shares") of the portfolios of the Trust, as now in existence
or hereinafter created from time to time, (each a "Portfolio"), and (b) the
shareholder servicing of such Shares.
SECTION 2. The Shares of each Portfolio are authorized to pay the principal
underwriter of the Shares (the "Distributor") a total fee in connection with
distribution-related services and shareholder servicing provided in respect of
such class, calculated and payable monthly, at the annual rate set forth on
Schedule A attached hereto.
SECTION 3. Distribution Activities.
(a) The fee paid pursuant to Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives
and to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not way of limitation,
costs of printing and mailing prospectuses, statements of additional
information and shareholder reports to prospective investors; preparation
and distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor related to the
distribution of the Shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other broker-dealers,
banks or other financial institutions, and of any
other persons who provide support services in connection with the
distribution of the Shares, including travel, entertainment, and telephone
expenses.
(b) Payments under this Plan are not tied exclusively to the expenses for
distribution-related activities actually incurred by the Distributor, so
that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(c) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional distribution.
SECTION 4.Shareholder Servicing Activities.
(a) A portion of the fee payable to the Distributor pursuant to Section 2 may
be used by the Distributor to provide compensation for personal, ongoing
servicing and/or maintenance of shareholder accounts with respect to the
Shares of the applicable Portfolios, provided that the amount paid for such
shareholder servicing activities does not exceed the amount set forth on
Schedule A. Compensation may be paid by the Distributor, or any portion of
the fee may be reallowed, to persons, including employees of the
Distributor, and institutions who respond to inquiries of holders of the
Shares regarding their ownership of Shares or their accounts with the Trust
or who provide other administrative or accounting services not otherwise
required to be provided by the Trust's investment adviser, transfer agent,
or other agent of the Trust. Notwithstanding the foregoing, if the National
Association of Securities Dealers, Inc. (the "NASD") adopts a definition of
"service fee" for purposes of Section 26(d) of the NASD Rules of Fair
Practice that differs from the definition of shareholder servicing
activities in this paragraph, or if the NASD adopts a related definition
intended to define the same concept, the definition of shareholder
servicing activities in this paragraph shall be automatically amended,
without further action of the parties, to conform to such NASD definition.
(b) Payments under this Plan are not tied exclusively to the expenses for
shareholder servicing activities actually incurred by the Distributor, so
that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(c) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional shareholder servicing activities.
SECTION 5. This Plan shall not take effect with respect to a Portfolio
until it has been approved together with any related agreements, by votes of the
majority of both (i) the Trustees of the Trust and (ii) the Qualified Trustees,
cast in person at a Board of Trustees meeting called for the purpose of voting
on this Plan or such agreement.
SECTION 6. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Section 5 herein for the
approval of this Plan.
SECTION 7. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.
SECTION 8. This Plan may be terminated at any time with respect to a
Portfolio by the vote of a majority of the Qualified Trustees or by vote of a
majority of the Portfolio's outstanding Shares.
SECTION 9. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to a
Portfolio, without payment of any penalty, by the vote of a majority of the
Qualified Trustees or by the vote of shareholders holding a majority of the
Portfolio's outstanding Shares, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 10. This Plan may not be amended to increase materially the amount
of expenses permitted pursuant to Section 2 hereof without the approval of
shareholders holding a majority of the outstanding Shares of the applicable
Portfolio, and all material amendments to this Plan shall be approved in the
manner provided in Section 5 herein for the approval of this Plan.
SECTION 11. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
SECTION 12. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a) (19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 13 This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
Approved May 17, 2005
SCHEDULE A
TO THE DISTRIBUTION AND SERVICE PLAN
CLASS A SHARES
Pursuant to Section 2, the Trust shall pay the Distributor compensation at which
is calculated daily and paid monthly at an annual rate as set forth below.
MAXIMUM
SHAREHOLDER
PORTFOLIO FEE SERVICES FEE
--------- --- ------------
Aggressive Growth Stock Fund .35% .25%
Balanced Fund .28% .25%
Capital Appreciation Fund .35% .25%
Core Bond Fund (formerly, Classic Institutional Core Bond Fund) .25% .25%
Emerging Growth Stock Fund .35% .25%
Florida Tax Exempt Bond Fund .18% .18%
Georgia Tax Exempt Bond Fund .18% .18%
Large Cap Relative Value Fund (formerly, Growth and Income Fund) .25% .25%
High Income Fund .30% .25%
Intermediate Bond Fund
(formerly, Classic Institutional Intermediate Bond Fund) .25% .25%
International Equity Fund .33% .25%
International Equity Index Fund .35% .25%
Investment Grade Bond Fund .35% .25%
Investment Grade Tax-Exempt Bond Fund .35% .25%
Life Vision Aggressive Growth Fund .35% .25%
Life Vision Conservative Fund .35% .25%
Life Vision Growth and Income Fund .35% .25%
Life Vision Moderate Growth Fund .35% .25%
Life Vision Target Date 2015 Fund .35% .25%
Life Vision Target Date 2025 Fund .35% .25%
MAXIMUM
SHAREHOLDER
PORTFOLIO FEE SERVICES FEE
--------- --- ------------
Life Vision Target Date 2035 Fund .35% .25%
Limited-Term Federal Mortgage Securities Fund .23% .23%
Maryland Municipal Bond Fund .15% .15%
Mid-Cap Equity Fund .35% .25%
Mid-Cap Value Equity Fund .35% .25%
North Carolina Tax-Exempt Bond Fund .15% .15%
Prime Quality Money Market Fund .20% .20%
Seix Floating Rate High Income Fund .30% .25%
Seix High Yield Fund (formerly, Seix Institutional High Yield Fund) .25% .25%
Short-Term Bond Fund .23% 23%
Short-Term U.S. Treasury Securities Fund .18% .18%
Small Cap Growth Stock Fund .35% .25%
Small Cap Value Equity Fund .33% .25%
Strategic Income Fund .35% .25%
Strategic Quantitative Equity Fund .25% .25%
Quality Growth Stock Fund (formerly, Tax Sensitive Growth Stock Fund) .35% .25%
Tax-Exempt Money Market Fund .15% .15%
U.S. Government Securities Fund .35% .25%
U.S. Government Securities Money Market Fund .17% .17%
U.S. Treasury Money Market Fund .15% .15%
Large Cap Value Equity Fund (formerly, Value Income Stock Fund) .33% .25%
Virginia Intermediate Municipal Bond Fund .15% .15%
Virginia Municipal Bond Fund .15% .15%
Virginia Tax-Free Money Market Fund .20% .20%
STI CLASSIC FUNDS
DISTRIBUTION AND SERVICE PLAN
CLASS B SHARES
WHEREAS, STI Classic Funds (the "Trust") is engaged in business as an open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a reasonable
likelihood that this Distribution and Service Plan (the "Plan") will benefit the
Trust and the owners of the B Shares of the portfolios of the Trust, as now in
existence or hereinafter created from time to time (each a "Portfolio").
NOW THEREFORE, the Trustees of the Trust hereby adopt this Plan pursuant to Rule
12b-1 under the 1940 Act.
SECTION 1. The Trust has adopted this Plan to enable the Trust to directly or
indirectly bear expenses relating to (a) the distribution and sale of B Shares
(the "Shares") of the Portfolios and (b) the shareholder servicing of such
Shares.
SECTION 2. Distribution Activities.
(a) The Shares of each Portfolio are authorized to pay the principal underwriter
of the Shares (the "Distributor") a total fee in connection with
distribution-related services provided in respect of such class, calculated and
payable monthly, at the annual rate of .75% of the value of the average daily
net assets of such class. The services rendered by the Distributor for which the
Distributor is entitled to receive this fee shall be deemed to have been
completed at the time of the initial purchase of the Shares taken into account
in computing the fee.
(b) The fee paid pursuant to this Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives and
to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not way of limitation, costs
of printing and mailing prospectuses, statements of additional information and
shareholder reports to prospective investors; preparation and distribution of
sales literature; advertising of any type; an allocation of overhead and other
expenses of the Distributor related to the distribution of the Shares; and
payments to, and expenses of, officers, employees or representatives of the
Distributor, of other broker-dealers, banks or other financial institutions, and
of any other persons who provide support services in connection with the
distribution of the Shares, including travel, entertainment, and telephone
expenses.
(c) Payments under this Section 2 of the Plan are not tied exclusively to the
expenses for distribution-related activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the appropriateness of
the Plan and its payment terms on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover costs
of additional distribution.
(e) Notwithstanding anything to the contrary herein, the Distributor shall be
paid the accrued fee pursuant to this Section 2 regardless of the Distributor's
termination as principal underwriter of the Shares or any termination of the
Plan other than a complete termination of the Plan. In addition, the
Trust's obligation to pay the fee to the Distributor shall be absolute and
unconditional and shall not be subject to any dispute, offset, counterclaim, or
defense whatsoever.
SECTION 3. Shareholder Servicing Activities.
(a) In addition to the amounts set forth in Section 2 above, the Shares of each
Portfolio are authorized to pay the Distributor a fee in connection with the
personal, ongoing servicing of shareholder accounts of such Shares, calculated
and payable monthly, at the annual rate of .25% of the value of the average
daily net assets of such class.
(b) The service fee payable to the Distributor pursuant to this Section 3 hereof
may be used by the Distributor to provide compensation for personal, ongoing
servicing and/or maintenance of shareholder accounts with respect to the Shares
of the applicable Portfolios. Compensation may be paid by the Distributor, or
any portion of the fee may be reallowed, to persons, including employees of the
Distributor, and institutions who respond to inquiries of holders of the Shares
regarding their ownership of Shares or their accounts with the Trust or who
provide other administrative or accounting services not otherwise required to be
provided by the Trust's investment adviser, transfer agent, or other agent of
the Trust. Notwithstanding the foregoing, if the National Association of
Securities Dealers, Inc. (the "NASD") adopts a definition of "service fee" for
purposes of Section 26(d) of the NASD Rules of Fair Practice that differs from
the definition of shareholder servicing activities in this paragraph, or if the
NASD adopts a related definition intended to define the same concept, the
definition of shareholder servicing activities in this paragraph shall be
automatically amended, without further action of the parties, to conform to such
NASD definition.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for shareholder servicing activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by the
Distributor. The Trust's Board of Trustees will evaluate the appropriateness of
the Plan and its payment terms on a continuing basis and in doing so will
consider all relevant factors, including expenses borne by the Distributor and
amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover costs
of additional shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio until it
has been approved (a) by a vote of at least a majority of the outstanding voting
securities of the Shares of such Portfolio, if adopted after any public offering
of the Shares or the sale of such Shares to persons who are not affiliated with
the Portfolio, affiliated persons of such persons, promoters of the Portfolio,
or affiliated persons of such promoters; and (b) together with any related
agreements, by votes of the majority of both (i) the Trustees of the Trust and
(ii) the Qualified Trustees, cast in person at a Board of Trustees meeting
called for the purpose of voting on this Plan or such agreement.
SECTION 5. This Plan shall continue in effect for a period of more than one year
after its adoption only so long as such continuance is specifically approved at
least annually in the manner provided in Section 4(b) herein for the approval of
this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid or
payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at last quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any Portfolio
by the vote of a majority of the Qualified Trustees or by a vote of a majority
of the Portfolio's outstanding Shares.
SECTION 8. All agreements with any person relating to implementation of this
Plan shall be in writing, and any agreement related to this Plan shall provide
(a) that such agreement may be
terminated at any time with respect to any Portfolio, without payment of any
penalty, by the vote of a majority of the Qualified Trustees or by the vote of
shareholders holding a majority of the Portfolio's outstanding Shares, on not
more than 60 days written notice to any other party to the agreement; and (b)
that such agreement shall terminate automatically in the event of its
assignment.
SECTION 9. This Plan may not be amended to increase materially the amount of
distribution expenses permitted pursuant to Section 2 hereof without the
approval of shareholders holding a majority of the outstanding Shares of the
applicable Portfolio, and all material amendments to this Plan shall be approved
in the manner provided in Section 4(b) herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall mean
those Trustees of the Trust who are not interested persons of the Trust, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.
SECTION 11. While this Plan is in effect, the selection and nomination of those
Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 12. This Plan shall not obligate the Trust or any other party to enter
into an agreement with any particular person.
February 11, 2003
STI CLASSIC FUNDS
DISTRIBUTION AND SERVICE PLAN
C SHARES (FORMERLY, L SHARES)
WHEREAS, The STI Classic Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution and Service Plan (the
"Plan") will benefit the Trust and the owners of the C Shares of the portfolios
(the "Shareholders") of the Trust.
NOW THEREFORE, the Trustees of the Trust hereby adopt this Plan pursuant to
Rule 12b-1 under the 1940 Act and in accordance with the Trust's Rule 18f-3
Multiple Class Plan:
SECTION 1. The Trust has adopted this Plan to enable the Trust to directly
or indirectly bear expenses related to (a) the distribution and sale of C Shares
(collectively, the "Shares") of the portfolios of the Trust, as now in existence
or hereinafter created from time to time, (each a "Portfolio"), and (b) the
shareholder servicing of such Shares.
SECTION 2. Distribution Activities.
(a) The Shares of each Portfolio except the Classic Institutional Limited
Duration Fund are authorized to pay the principal underwriter of the Shares
(the "Distributor") a total fee in connection with distribution-related
services provided in respect of such class, calculated and payable monthly,
at the annual rate of .75% of the value of the average daily net assets of
such class. The Shares of the Classic Institutional Limited Duration Fund
are authorized to pay the Distributor a total fee in connection with
distribution-related services provided in respect of such class, calculated
and payable monthly, at the annual rate of .25% of the value of the average
daily net assets of such class.
(b) The fee paid pursuant to this Section 2 may be used by the Distributor to
provide initial and ongoing sales compensation to its investment executives
and to other broker-dealers in respect of sales of Shares of the applicable
Portfolios and to pay for other advertising and promotional expenses in
connection with the distribution of the Shares. These advertising and
promotional expenses include, by way of example but not way of limitation,
costs of printing and mailing prospectuses, statements of additional
information and shareholder reports to prospective investors; preparation
and distribution of sales literature; advertising of any type; an
allocation of overhead and other expenses of the Distributor related to the
distribution of the Shares; and payments to, and expenses of, officers,
employees or representatives of the Distributor, of other broker-dealers,
banks or other financial institutions, and of any other persons who provide
support services in connection with the distribution of the Shares,
including travel, entertainment, and telephone expenses.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for distribution-related activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by
the Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional distribution.
SECTION 3.Shareholder Servicing Activities.
(a) In addition to the amounts set forth in Section 2 above, the Shares of each
Portfolio are authorized to pay the Distributor a fee in connection with
the personal, ongoing servicing of shareholder accounts of such Shares,
calculated and payable monthly, at the annual rate of .25% of the value of
the average daily net assets of such class.
(b) The service fee payable to the Distributor pursuant to this Section 3
hereof may be used by the Distributor to provide compensation for personal,
ongoing servicing and/or maintenance of shareholder accounts with respect
to the Shares of the applicable Portfolios. Compensation may be paid by the
Distributor, or any portion of the fee may be reallowed, to persons,
including employees of the Distributor, and institutions who respond to
inquiries of holders of the Shares regarding their ownership of Shares or
their accounts with the Trust or who provide other administrative or
accounting services not otherwise required to be provided by the Trust's
investment adviser, transfer agent, or other agent of the Trust.
Notwithstanding the foregoing, if the National Association of Securities
Dealers, Inc. (the "NASD") adopts a definition of "service fee" for
purposes of Section 26(d) of the NASD Rules of Fair Practice that differs
from the definition of shareholder servicing activities in this paragraph,
or if the NASD adopts a related definition intended to define the same
concept, the definition of shareholder servicing activities in this
paragraph shall be automatically amended, without further action of the
parties, to conform to such NASD definition.
(c) Payments under this Section of the Plan are not tied exclusively to the
expenses for shareholder servicing activities actually incurred by the
Distributor, so that such payments may exceed expenses actually incurred by
the Distributor. The Trust's Board of Trustees will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and
in doing so will consider all relevant factors, including expenses borne by
the Distributor and amounts it receives under the Plan.
(d) The Trust's investment adviser and the Distributor may, at their option and
in their sole discretion, make payments from their own resources to cover
costs of additional shareholder servicing activities.
SECTION 4. This Plan shall not take effect with respect to a Portfolio
until it has been approved together with any related agreements, by votes of the
majority of both (i) the Trustees of the Trust and (ii) the Qualified Trustees,
cast in person at a Board of Trustees meeting called for the purpose of voting
on this Plan or such agreement.
SECTION 5. This Plan shall continue in effect for a period of more than one
year after it takes effect only for so long as such continuance is specifically
approved at least annually in the manner provided in Section 4 herein for the
approval of this Plan.
SECTION 6. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at last quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 7. This Plan may be terminated at any time with respect to any
Portfolio by the vote of a majority of the Qualified Trustees or by a vote of a
majority of the Portfolio's outstanding Shares.
SECTION 8. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time with respect to
any Portfolio, without payment of any penalty, by the vote of a
majority of the Qualified Trustees or by the vote of shareholders holding a
majority of the Portfolio's outstanding Shares, on not more than 60 days written
notice to any other party to the agreement; and (b) that such agreement shall
terminate automatically in the event of its assignment.
SECTION 9. This Plan may not be amended to increase materially the amount
of distribution expenses permitted pursuant to Section 2 hereof without the
approval of shareholders holding a majority of the outstanding Shares of the
applicable Portfolio, and all material amendments to this Plan shall be approved
in the manner provided in Section 4 herein for the approval of this Plan.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the SEC.
SECTION 11. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act shall be committed to the discretion of the
Trustees then in office who are not interested persons of the Trust.
SECTION 12. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.
Adopted May 17, 2005
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, overhead, Financial Research Corporation's Mutual
Fund Views on the News and Monitor publications, and return on investment, the
Distributor shall be entitled to receive an annual fee of $37,500 (the "Basic
Services Fee"), billed monthly; provided, however, that as long as Distributor
or an affiliate of Distributor continues to perform services under that certain
Master Services Agreement dated July 1, 2004 between BISYS Fund Services Ohio,
Inc. and the Trust, Distributor will waive the Basic Services Fee.
2. ADDITIONAL DISTRIBUTION SERVICES. The Distributor will provide the following
additional distribution services: (i) marketing and distribution strategy and
consulting services; (ii) resource management and consultation; and (iii)
product analysis and product development assistance. For providing the
additional services listed in this Section 2, the Distributor shall receive an
annual retainer in an amount mutually agreed by the parties, which amount as of
the date of this Agreement is expected to be approximately $75,000. Such
agreed-upon amount will be billed monthly.
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 authorized under
the Distribution Plan, the Distributor shall be promptly reimbursed for such
payments upon invoicing them.
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
literature fulfillment. are employed, 30% of the salary
compensation and 5% of the bonus or
The Wholesaling Personnel Services described on commission compensation, or
this Schedule D will be provided only upon the
written election of the Trust to receive such (b) if five or more Wholesaling Personnel
services. 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.
2. MARKETING AND RELATED SERVICES MARKETING AND RELATED SERVICES FEES
Marketing Execution: services include Marketing Execution:
identification and development of appropriate
marketing and communications programs, projects Quote available upon request.
and other initiatives; collaboration on
initiating, researching, developing, and
delivering appropriate sales and marketing
materials; and management of marketing and
advertising projects.
Performance Reporting: services include creation Performance Reporting:
of templates for monthly fact sheets and quarterly
fact sheets; populating templates with performance As mutually agreed.
data obtained from third parties; and coordinating
steps needed for final printing and distribution.
Creative Communication and Editorial Services: Creative Communication and Editorial Services
services include preparing drafts of textual
commentary and management discussion and analysis Quote available upon request.
for annual; and semi-annual reports, including
portfolio manager interviews; providing creative
design and direction; and coordinating production,
including typesetting (initial composition and
changes to composition), charts and ancillary
items.
Production Timing:
- No timing guarantees can be made for
completion of monthly and quarterly fact
sheets where any of the information needed to
produce the reports is generated by service
providers other than the Distributor.
However, a basic estimate of turnaround time
may be given based upon when the unit
receives all necessary data in good order.
Under normal conditions, the Performance
Reporting unit expects to make proofs ready
for review (either printed or electronic PDF
format) by the 4th business day after the
final piece of data is received. If
compliance review is necessary (e.g., when
Morningstar ratings data is used) an
additional 2 days may be required for review.
- Printing turnaround (once the factsheets are
signed-off by the client) is usually
approximately 4-5 calendar days with most
jobs shipping by the 5th day.
- If requested, final electronic PDF files may
be generated and e-mailed on the day the job
is signed-off on by the client. These PDFs
may be distributed and printed as necessary
until the final printed pieces arrive.
3. FRC SERVICES FRC SERVICES FEES
FRC's program components include: Market Analytics Publications: Quote available
upon request.
- Market Analytics Publications
Advanced Research Publications:
- Advanced Research Publications
- Topic Briefs
- Analyst Support
- FRC Focus (typical cost is approximately
- SME Direct Access $1,500)
The Trust acknowledges that certain FRC White Papers - FRC Vision (typical cost is
publications may be provided only to parties that approximately $2,500)
have entered into a written agreement or addendum
that sets forth the terms of use of such - Research Studies (costs vary, however
publications and the associated fee. The Trust typically range between $3,500 and $12,500)
will notify the Distributor whether the Trust or
the Adviser or both will enter into such an Analyst Support: Quote available upon request
agreement or addendum. The Trust acknowledges that
if only one of the Trust or the Adviser enters
into such agreement or addendum, the other party SME Direct Access: Quote available upon request
will be prohibited from receiving or using such
publications. Other FRC Fees:
- Client participation in funding FRC
Franchise Level program: $12,500
- All subsequent content and support hours
may be purchased at a 20% discount from
standard pricing.
Expenses Applicable to Special Distribution Services
Except as expressly set forth above, out-of-pocket expenses incurred by
Distributor in the performance of the special distribution services set forth on
this Schedule D are not included in the above fees. Reimbursement of such
out-of-pocket expenses will be mutually agreed upon by the parties.
Out-of-pocket expenses may include, without limitation:
- reasonable travel and entertainment costs;
- 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;
- Sponsorships, Promotions, Sales Incentives;
- 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.);
- costs and expenses incurred for telephone service, photocopying and office
supplies;
- advertising costs;
- 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;
- packaging, shipping, postage, and photocopies; and
- 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.
