EXHIBIT (e)
UNDERWRITING AGREEMENT
BETWEEN
SM&R CAPITAL FUNDS, INC.
AND
SECURITIES MANAGEMENT AND RESEARCH, INC.
THIS UNDERWRITING AGREEMENT (the "Agreement") is made and entered into this
19th day of November, 1998, by and between SM&R CAPITAL FUNDS, INC. (to be
renamed SM&R Investments, Inc. effective December 31, 1998), a Maryland
corporation hereinafter referred to as the "Fund", and SECURITIES MANAGEMENT AND
RESEARCH, INC., a Florida corporation hereinafter referred to as the
"Underwriter".
The Fund is a series fund and currently has four series: SM&R Government
Bond Fund, formerly named American National Government Income Fund Series (the
"Government Bond Fund"); SM&R Primary Fund, formerly named American National
Primary Fund Series (the "Primary Fund"); SM&R Tax Free Fund, formerly named
American National Tax Free Series Fund (the "Tax Free Fund"); and SM&R Money
Market Fund (the "Money Market Fund"). The Government Bond Fund, the Primary
Fund, the Tax Free Fund and the Money Market Fund (individually and
collectively, the "Series") each pursue different investment objectives through
separate investment policies.
The Government Bond Fund and Tax Free Fund offer multiple classes of shares
(each, a "Class" and, collectively, "Classes" ) described in the Fund's current
effective registration statement filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Current
Registration Statement"). Such Classes have different sales charges and
distribution and service (12b-1) fee structures described in the Fund's Current
Registration Statement.
The Money Market and Primary Funds each consist of a single class and do
not impose any sales charges or distribution and service (12b-1) fees.
SM&R is engaged in the business of providing underwriting and related
services to investment companies and desires to provide such services to the
Fund and to each Class of each of its Series.
In consideration of the mutual covenants contained in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Underwriter and the Fund hereby agree as follows:
1. The Fund hereby appoints the Underwriter as exclusive distributor of the
shares of all Classes of each Series of the Fund to sell such shares to the
public on the terms set forth in this Agreement. During the term of this
Agreement and any continuation thereof, no Series will sell or agree to sell any
of its shares except to or through the Underwriter at a public offering price
determined in accordance with Paragraph 3 hereof; provided, however, that any
Class of any Series of the Fund may issue shares at net asset value:
(a) in connection with the merger or consolidation of any investment
company with the Fund or the acquisition by purchase or otherwise of all or
substantially all of the assets of any investment company by the Fund;
(b) to a Series' shareholders upon their reinvestment of dividends of such
Series from net investment income or representing distributions of such
Series from net realized capital gains;
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(c) to one or more unit investment trusts organized under the Investment
Company Act of 1940 and sponsored by the Underwriter; and
(d) to such other persons and entities approved or recommended by
Underwriter which the Fund's Board of Directors may from time to time
approve and which are set forth in the Fund's Current Registration
Statement.
2. The Underwriter hereby accepts appointment as exclusive underwriter and
distributor of the shares of all Classes of all Series of the Fund and agrees
that it will use its best efforts to sell such shares; PROVIDED, HOWEVER, that
by accepting this appointment as exclusive underwriter and distributor of such
shares, the Underwriter does not undertake to sell all or any portion of the
shares of any Class of any Series.
3. The Underwriter agrees to offer shares of the capital stock of the Series
to the public through its representatives and through dealers having sales
agreements with the Underwriter (PROVIDED, HOWEVER, that nothing provided for in
this Agreement shall obligate the Underwriter to execute sales agreements with
dealers or to sell any shares to dealers). The offering price for shares of
each Class of the Government Bond Fund and the Tax Free Fund shall be equal to
each such Class' net asset value per share plus the applicable sales charge, if
any, computed as provided in the Fund's Current Registration Statement. The
offering price for shares of the Primary Fund and the Money Market Fund shall be
the net asset value of such shares computed as provided in the Fund's current
Registration Statement. The net asset value for each share of any Class of any
Series, computed as provided in the Fund's Current Registration Statement, shall
be referred to as the "Net Asset Value".
The full Net Asset Value for the Fund shares purchased shall be remitted to
the Fund promptly after payment is received by the Underwriter. The applicable
sales charge, if any, received in connection with sales of shares of the
Government Bond Fund or Tax Free Fund shall be retained by the Underwriter, and
the Underwriter may fix the portion of such sales charge to be allowed to its
representatives or to dealers having sales agreements with the Underwriter.
4. The Underwriter shall require each Series to issue shares of any Class only
to the extent necessary (except for reasonable allowances for clerical errors,
delays and errors of transmission and cancellation of orders) to fill
unconditional orders for shares of such Class placed with the Underwriter by
investors and dealers and not in excess of such unconditional orders, and the
Underwriter will not avail itself of any opportunity of making a profit by
expediting or withholding orders. In the event payment is not received by the
Underwriter for shares so issued by a Series, the Underwriter shall reimburse
the Series for the Net Asset Value applicable to such purchase, and thereafter
the shares so issued will be redeemed at the Net Asset Value applicable at the
time of redemption.
5. Shareholders of a Class of a Series are permitted to exchange their shares
into the shares of another series or fund to the extent provided and subject to
the conditions stated in the Fund's Current Registration Statement. It is
understood that the Underwriter has agreed to waive its right to that portion of
the sales charge waived on shares exchanged pursuant to such exchange privilege.
6. The Fund hereby authorizes the Underwriter to redeem upon the terms and
conditions hereinafter set forth and as described in the Fund's Current
Registration Statement, as agent of the Fund and for its account, such shares of
stock of each Class of each Series of the Fund as may be offered for redemption
to the Fund from time to time:
(a) The Underwriter may accept redemption requests from a stockholder of
record (including a request from an agent of such stockholder), to redeem
such shares at a price equal to the Net Asset Value per share which is or
becomes effective for such redemption, less any applicable contingent
deferred sales charges.
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(b) The Underwriter agrees that all redemptions of the Fund's shares made
by it after this Agreement becomes effective shall be made only as agent
for the account of each Series of the Fund and pursuant to the terms and
conditions herein set forth.
(c) The Fund reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice by an
officer of the Underwriter by telegraph or written instrument from an
officer of the Fund duly authorized by its Board of Directors. In the
event that the authorization of the Underwriter is, by terms of such
notice, suspended:
(i) for more than forty-eight (48) hours, excluding from such period
any day on which the New York Stock Exchange is not open, or
(ii) until further notice, the authorization given by this Article 6
shall not be revived except by vote of the Board of Directors of
the Fund.
(d) Except for contingent deferred sales charges, which are to be paid to
SM&R, the Underwriter shall receive no commissions in respect of any
redemptions under the foregoing authorization and appointment as agent.
7. The Underwriter covenants and agrees that in selling the shares of each
Series of the Fund, it will in all respect duly conform with all state and
federal laws relating to the sale of such securities, and will indemnify and
save harmless the Fund and each such Series from any damage or expenses on
account of any wrongful act by it or its representatives. Neither the
Underwriter nor any dealer nor any other person is authorized by the Fund to
give any information or to make any representations other than those contained
in the Current Registration Statement covering the shares of any Series of the
Fund or in approved sales literature.
8. The Fund shall pay all costs and expenses in connection with registering
the shares of the Series for sale under all applicable securities laws,
including preparation and filing of required registration statements and
prospectuses under federal law and all amendments and supplements thereto, and
the expense of preparing, printing, mailing and otherwise distributing
prospectuses and statements of additional information, annual or interim reports
and proxy materials to shareholders.
9. The Underwriter shall pay the expenses normally attributable to the sale of
shares, other than as paid under the Fund's distribution and service (12b-1)
plan, including the cost of printing and mailing prospectuses (other than those
furnished to existing shareholders) and any sales literature used by the
Underwriter. It is understood and agreed that so long as the Fund's
distribution and service (12b-1) plan continues in effect, any expenses incurred
by the Underwriter hereunder may be paid in accordance with the terms of such
distribution and service (12b-1) plan.
10. In connection with the purchase or sale of portfolio securities for the
account of any Series of the Fund, neither the Underwriter nor any officer or
director of the Underwriter shall act as principal.
11. This Agreement shall become effective on the date hereof and shall continue
in effect for a period of two (2) years and thereafter only so long as such
continuance is specifically approved at least annually by the Board of Directors
or by a vote of a majority of the outstanding voting securities of each Series
of the Fund, and in either case, by the specific approval by a majority of the
directors, who are not parties to such contract or agreement or "interested"
persons of any such parties, cast in person at a meeting called for the purpose
of voting on such approval, the term "interested" persons for this purpose
having the meaning defined in Section 2(a)(19) of the '40 Act.
This Agreement may be terminated at any time without the payment of any
penalty, by vote of the
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Board of Directors of the Fund or by vote of the holders of a majority of the
outstanding shares of either Series of the Fund, or by the Underwriter, on sixty
(60) days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the '40 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate on the day and year first above written.
SM&R CAPITAL FUNDS, INC.
By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------
Xxxxxxx X. XxXxxxxxx, President
SECURITIES MANAGEMENT AND RESEARCH, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------
Xxxxxx X. Xxxxxxx, Vice President
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