Exhibit No. 5(a)
PAINEWEBBER FINANCIAL SERVICES GROWTH FUND INC.
DISTRIBUTION CONTRACT
CONTRACT made as of September 12, 2000, between PAINEWEBBER FINANCIAL
SERVICES GROWTH FUND INC., a Maryland corporation ("Fund"), and XXXXXXXX
XXXXXXXX ASSET MANAGEMENT INC., a Delaware corporation ("Xxxxxxxx Xxxxxxxx").
WHEREAS the Fund is registered under the Investment Company Act of
1940, as amended ("l940 Act"), as an open-end management investment company and
currently offers distinct series of shares of common stock ("Series"), which
correspond to distinct portfolios and for which the Fund's board of directors
("Board") has established a number of shares of common stock as Class A shares,
Class B shares, Class C shares and/or Class Y shares (referred to collectively
as "Shares"); and
WHEREAS the Fund desires to retain Xxxxxxxx Xxxxxxxx as principal
distributor in connection with the offering and sale of the Shares of the
above-referenced Series and of such other Series as may hereafter be designated
by the Board and have one or more classes of Shares established and has adopted
separate Plans of Distribution pursuant to Rule 12b-1 under the 1940 Act for its
Class A shares, Class B shares and Class C shares (respectively, "Class A Plan",
"Class B Plan" and "Class C Plan"); and
WHEREAS Xxxxxxxx Xxxxxxxx is willing to act as principal distributor of
the Shares of each such Series on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Xxxxxxxx Xxxxxxxx as its
exclusive agent to be the principal distributor to sell and to arrange for the
sale of the Shares on the terms and for the period set forth in this Contract.
Xxxxxxxx Xxxxxxxx hereby accepts such appointment and agrees to act hereunder.
It is understood, however, that this appointment does not preclude sales of the
Shares directly through the Fund's transfer agent in the manner set forth in the
Registration Statement. As used in this Contract, the term "Registration
Statement" shall mean the currently effective registration statement of the
Fund, and any supplements thereto, under the Securities Act of 1933, as amended
("1933 Act"), and the 1940 Act.
2. Services and Duties of Xxxxxxxx Xxxxxxxx.
(a) Xxxxxxxx Xxxxxxxx agrees to sell Shares on a best efforts basis
from time to time during the term of this Contract as agent for the Fund and
upon the terms described in the Registration Statement.
(b) Upon the later of the date of this Contract or the initial offering
of Shares to the public by a Series, Xxxxxxxx Xxxxxxxx will hold itself
available to receive purchase orders, satisfactory to Xxxxxxxx Xxxxxxxx, for
Shares of that Series and will accept such orders on behalf of the Fund as of
the time of receipt of such orders and promptly transmit such orders as are
accepted to the Fund's transfer agent. Purchase orders shall be deemed effective
at the time and in the manner set forth in the Registration Statement.
(c) Xxxxxxxx Xxxxxxxx in its discretion may enter into agreements to
sell Shares to such registered and qualified retail dealers, including but not
limited to PaineWebber Incorporated ("PaineWebber"), as it may select. In making
agreements with such dealers, Xxxxxxxx Xxxxxxxx shall act only as principal and
not as agent for the Fund.
(d) The offering price of the Shares shall be the net asset value per
share as next determined by the Fund following receipt of an order at Xxxxxxxx
Xxxxxxxx' principal office plus the applicable initial sales charge, if any,
computed as set forth in the Registration Statement. The Fund shall promptly
furnish Xxxxxxxx Xxxxxxxx with a statement of each computation of net asset
value.
(e) Xxxxxxxx Xxxxxxxx shall not be obligated to sell any certain number
of Shares.
(f) To facilitate redemption of Shares by shareholders directly or
through dealers, Xxxxxxxx Xxxxxxxx is authorized but not required on behalf of
the Fund to repurchase Shares presented to it by shareholders and dealers at the
price determined in accordance with, and in the manner set forth in, the
Registration Statement. Such price shall reflect the subtraction of the
contingent deferred sales charge, if any, computed in accordance with and in the
manner set forth in the Registration Statement.
(g) Xxxxxxxx Xxxxxxxx shall provide ongoing shareholder services, which
include responding to shareholder inquiries, providing shareholders with
information on their investments in the Shares and any other services now or
hereafter deemed to be appropriate activities for the payment of "service fees"
under Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD") (collectively, "service activities").
(h) Xxxxxxxx Xxxxxxxx shall have the right to use any list of
shareholders of the Fund or any other list of investors which it obtains in
connection with its provision of services under this Contract; provided,
however, that Xxxxxxxx Xxxxxxxx shall not sell or knowingly provide such list or
lists to any unaffiliated person.
3. Authorization to Enter into Dealer Agreements and to Delegate Duties
as Distributor. With respect to the Shares of any or all Series, Xxxxxxxx
Xxxxxxxx may enter into dealer agreements with PaineWebber and any other
registered and qualified dealer with respect to sales of Shares or the provision
of service activities. In a separate contract or as part of any such dealer
agreement, Xxxxxxxx Xxxxxxxx also may delegate to PaineWebber or another
registered and qualified dealer ("sub-distributor") any or all of its duties
specified in this Contract, provided that such separate contract or dealer
agreement imposes on the sub-distributor bound thereby all applicable duties and
conditions to which Xxxxxxxx Xxxxxxxx is subject under this Contract, and
further provided that such separate contract or dealer agreement meets all
requirements of the 1940 Act and rules thereunder.
4. Services Not Exclusive. The services furnished by Xxxxxxxx Xxxxxxxx
hereunder are not to be deemed exclusive and Xxxxxxxx Xxxxxxxx shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this
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Contract shall limit or restrict the right of any director, officer or employee
of Xxxxxxxx Xxxxxxxx, who may also be a Board member, officer or employee of the
Fund, to engage in any other business or to devote his or her time and attention
in part to the management or other aspects of any other business, whether of a
similar or a dissimilar nature.
5. Compensation.
(a) As compensation for its service activities under this contract with
respect to Class A, B and C shares, Xxxxxxxx Xxxxxxxx shall receive from the
Fund a service fee at the rate and under the terms and conditions of the Class A
Plan, Class B Plan and Class C Plan, respectively, as amended from time to time,
and subject to any further limitations on such fee as the Board may impose.
(b) As compensation for its activities under this contract with respect
to the distribution of the Class B and C shares, Xxxxxxxx Xxxxxxxx shall receive
from the Fund a distribution fee at the rate and under the terms and conditions
of the Class B Plan and Class C Plan, respectively, as amended from time to
time, and subject to any further limitations on such fee as the Board may
impose.
(c) As compensation for its activities under this contract with respect
to the distribution of Shares, Xxxxxxxx Xxxxxxxx shall retain the initial sales
charge, if any, on purchases of Shares as set forth in the Registration
Statement. Xxxxxxxx Xxxxxxxx is authorized to collect the gross proceeds derived
from the sale of Shares, remit the net asset value thereof to the Fund upon
receipt of the proceeds and retain the initial sales charge, if any.
(d) As compensation for its activities under this contract with respect
to the distribution of Shares, Xxxxxxxx Xxxxxxxx shall receive all contingent
deferred sales charges imposed on redemptions of Shares. Whether and at what
rate a contingent deferred sales charge will be imposed with respect to a
redemption shall be determined in accordance with, and in the manner set forth
in, the Registration Statement.
(e) Xxxxxxxx Xxxxxxxx may reallow any or all of the initial sales
charges, contingent deferred sales charges, distribution fees or service fees
which it is paid under this Contract to such dealers as Xxxxxxxx Xxxxxxxx may
from time to time determine.
6. Duties of the Fund.
(a) The Fund reserves the right at any time to withdraw offering any
class or classes of Shares of any or all Series by written notice to Xxxxxxxx
Xxxxxxxx at its principal office.
(b) The Fund shall determine in its sole discretion whether
certificates shall be issued with respect to the Shares. If the Fund has
determined that certificates shall be issued, the Fund will not cause
certificates representing Shares to be issued unless so requested by
shareholders. If Xxxxxxxx Xxxxxxxx transmits such request, the Fund will cause
certificates evidencing Shares to be issued in such names and denominations as
Xxxxxxxx Xxxxxxxx shall from time to time direct.
(c) The Fund shall keep Xxxxxxxx Xxxxxxxx fully informed of its affairs
and shall make available to Xxxxxxxx Xxxxxxxx copies of all information,
financial statements, and other
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papers which Xxxxxxxx Xxxxxxxx may reasonably request for use in connection with
the distribution of Shares, including, without limitation, certified copies of
any financial statements prepared for the Fund by its independent public
accountant and such reasonable number of copies of the most current prospectus,
statement of additional information, and annual and interim reports of any
Series as Xxxxxxxx Xxxxxxxx may request, and the Fund shall cooperate fully in
the efforts of Xxxxxxxx Xxxxxxxx to sell and arrange for the sale of the Shares
of the Series and in the performance of Xxxxxxxx Xxxxxxxx under this Contract.
(d) The Fund shall take, from time to time, all necessary action,
including payment of the related filing fee, as may be necessary to register the
Shares under the 1933 Act to the end that there will be available for sale such
number of Shares as Xxxxxxxx Xxxxxxxx may be expected to sell. The Fund agrees
to file, from time to time, such amendments, reports, and other documents as may
be necessary in order that there will be no untrue statement of a material fact
in the Registration Statement, nor any omission of a material fact which
omission would make the statements therein misleading.
(e) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares of each Series for sale under
the securities laws of such states or other jurisdictions as Xxxxxxxx Xxxxxxxx
and the Fund may approve, and, if necessary or appropriate in connection
therewith, to qualify and maintain the qualification of the Fund as a broker or
dealer in such jurisdictions; provided that the Fund shall not be required to
amend its Articles of Incorporation or By-Laws to comply with the laws of any
jurisdiction, to maintain an office in any jurisdiction, to change the terms of
the offering of the Shares in any jurisdiction from the terms set forth in its
Registration Statement, to qualify as a foreign corporation in any jurisdiction,
or to consent to service of process in any jurisdiction other than with respect
to claims arising out of the offering of the Shares. Xxxxxxxx Xxxxxxxx shall
furnish such information and other material relating to its affairs and
activities as may be required by the Fund in connection with such
qualifications.
7. Expenses of the Fund. The Fund shall bear all costs and expenses of
registering the Shares with the Securities and Exchange Commission and
qualifying the Shares for offer and sale with state and other regulatory bodies,
and shall assume expenses related to communications with shareholders of each
Series, including (i) fees and disbursements of its counsel and independent
public accountant; (ii) the preparation, filing and printing of registration
statements and/or prospectuses or statements of additional information required
under the federal securities laws; (iii) the preparation and mailing of annual
and interim reports, prospectuses, statements of additional information and
proxy materials to shareholders; and (iv) the qualifications of Shares for sale
and of the Fund as a broker or dealer under the securities laws of such
jurisdictions as shall be selected by the Fund and Xxxxxxxx Xxxxxxxx pursuant to
Paragraph 6(e) hereof, and the costs and expenses payable to each such
jurisdiction for continuing qualification therein.
8. Expenses of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx shall bear all
costs and expenses of (i) preparing, printing and distributing any materials not
prepared by the Fund and other materials used by Xxxxxxxx Xxxxxxxx in connection
with the sale of Shares under this Contract, including the additional cost of
printing copies of prospectuses, statements of additional information, and
annual and interim shareholder reports other than copies thereof required for
distribution to existing shareholders or for filing with any federal or state
securities
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authorities; (ii) any expenses of advertising incurred by Xxxxxxxx Xxxxxxxx in
connection with such offering; (iii) the expenses of registration or
qualification of Xxxxxxxx Xxxxxxxx as a broker or dealer under federal or state
laws and the expenses of continuing such registration or qualification; and (iv)
all compensation paid to Xxxxxxxx Xxxxxxxx' employees and others for selling
Shares, and all expenses of Xxxxxxxx Xxxxxxxx, its employees and others who
engage in or support the sale of Shares as may be incurred in connection with
their sales efforts.
9. Indemnification.
(a) The Fund agrees to indemnify, defend and hold Xxxxxxxx Xxxxxxxx,
its officers and directors, and any person who controls Xxxxxxxx Xxxxxxxx within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which Xxxxxxxx Xxxxxxxx, its officers,
directors or any such controlling person may incur under the 1933 Act, or under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement or arising
out of or based upon any alleged omission to state a material fact required to
be stated in the Registration Statement or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by Xxxxxxxx Xxxxxxxx to the Fund for use
in the Registration Statement; provided, however, that this indemnity agreement
shall not inure to the benefit of any person who is also an officer or Board
member of the Fund or who controls the Fund within the meaning of Section 15 of
the 1933 Act, unless a court of competent jurisdiction shall determine, or it
shall have been determined by controlling precedent, that such result would not
be against public policy as expressed in the 1933 Act; and further provided,
that in no event shall anything contained herein be so construed as to protect
Xxxxxxxx Xxxxxxxx against any liability to the Fund or to the shareholders of
any Series to which Xxxxxxxx Xxxxxxxx would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations under this
Contract. The Fund shall not be liable to Xxxxxxxx Xxxxxxxx under this indemnity
agreement with respect to any claim made against Xxxxxxxx Xxxxxxxx or any person
indemnified unless Xxxxxxxx Xxxxxxxx or other such person shall have notified
the Fund in writing of the claim within a reasonable time after the summons or
other first written notification giving information of the nature of the claim
shall have been served upon Xxxxxxxx Xxxxxxxx or such other person (or after
Xxxxxxxx Xxxxxxxx or the person shall have received notice of service on any
designated agent). However, failure to notify the Fund of any claim shall not
relieve the Fund from any liability which it may have to Xxxxxxxx Xxxxxxxx or
any person against whom such action is brought otherwise than on account of this
indemnity agreement. The Fund shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any claims subject to this indemnity agreement. If the Fund
elects to assume the defense of any such claim, the defense shall be conducted
by counsel chosen by the Fund and satisfactory to indemnified defendants in the
suit whose approval shall not be unreasonably withheld. In the event that the
Fund elects to assume the defense of any suit and retain counsel, the
indemnified defendants shall bear the fees and expenses of any additional
counsel retained by them. If the Fund does not elect to assume the defense of a
suit, it will reimburse the indemnified defendants for the reasonable fees and
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expenses of any counsel retained by the indemnified defendants. The Fund agrees
to notify Xxxxxxxx Xxxxxxxx promptly of the commencement of any litigation or
proceedings against it or any of its officers or Board members in connection
with the issuance or sale of any of its Shares.
(b) Xxxxxxxx Xxxxxxxx agrees to indemnify, defend, and hold the Fund,
its officers and Board members and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Fund, its Board members
or officers, or any such controlling person may incur under the 1933 Act or
under common law or otherwise arising out of or based upon any alleged untrue
statement of a material fact contained in information furnished by Xxxxxxxx
Xxxxxxxx to the Fund for use in the Registration Statement, arising out of or
based upon any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement necessary to
make such information not misleading, or arising out of any agreement between
Xxxxxxxx Xxxxxxxx and any retail dealer, or arising out of any supplemental
sales literature or advertising used by Xxxxxxxx Xxxxxxxx in connection with its
duties under this Contract. Xxxxxxxx Xxxxxxxx shall be entitled to participate,
at its own expense, in the defense or, if it so elects, to assume the defense of
any suit brought to enforce the claim, but if Xxxxxxxx Xxxxxxxx elects to assume
the defense, the defense shall be conducted by counsel chosen by Xxxxxxxx
Xxxxxxxx and satisfactory to the indemnified defendants whose approval shall not
be unreasonably withheld. In the event that Xxxxxxxx Xxxxxxxx elects to assume
the defense of any suit and retain counsel, the defendants in the suit shall
bear the fees and expenses of any additional counsel retained by them. If
Xxxxxxxx Xxxxxxxx does not elect to assume the defense of any suit, it will
reimburse the indemnified defendants in the suit for the reasonable fees and
expenses of any counsel retained by them.
10. Services Provided to the Fund by Employees of Xxxxxxxx Xxxxxxxx.
Any person, even though also an officer, director, employee or agent of Xxxxxxxx
Xxxxxxxx, who may be or become an officer, Board member, employee or agent of
the Fund, shall be deemed, when rendering services to the Fund or acting in any
business of the Fund, to be rendering such services to or acting solely for the
Fund and not as an officer, director, employee or agent or one under the control
or direction of Xxxxxxxx Xxxxxxxx even though paid by Xxxxxxxx Xxxxxxxx.
11. Duration and Termination.
(a) This Contract shall become effective upon the date written above,
provided that, with respect to any class of Shares of a Series, this Contract
shall not take effect unless such action has first been approved by vote of a
majority of the Board and by vote of a majority of those Board members who are
not interested persons of the Fund and, for a class of Shares for which a Plan
of Distribution has been adopted, also have no direct or indirect financial
interest in the operation of the Plan of Distribution or in any agreements
related thereto (all such Board members collectively being referred to herein as
the "Independent Board Members"), cast in person at a meeting called for the
purpose of voting on such action.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall
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continue automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Board Members, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Board or with
respect to a class of Shares of any given Series by vote of a majority of the
outstanding voting securities of that class of Shares of such Series.
(c) Notwithstanding the foregoing, with respect to a class of Shares of
a Series, this Contract may be terminated at any time, without the payment of
any penalty, by vote of the Board, by vote of a majority of the Independent
Board Members or by vote of a majority of the outstanding voting securities of
that class of Shares of the Series on sixty days' written notice to Xxxxxxxx
Xxxxxxxx or by Xxxxxxxx Xxxxxxxx at any time, without the payment of any
penalty, on sixty days' written notice to the Fund or such Series. This Contract
will automatically terminate in the event of its assignment.
(d) Termination of this Contract with respect to a class of Shares of
any given Series shall in no way affect the continued validity of this Contract
or the performance thereunder with respect to any other classes of Shares of
that Series or any classes of Shares of any other Series.
12. Amendment of this Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
13. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient upon receipt in writing at the
other party's principal offices.
14. Governing Law. This Contract shall be construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.
15. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person"
and "assignment" shall have the same meaning as such terms have in the 1940 Act,
subject to such exemption as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. Where the effect of a requirement
of the 1940 Act reflected in any provision of this Contract is relaxed by a
rule, regulation or order of the Securities and Exchange Commission, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
ATTEST: PAINEWEBBER FINANCIAL SERVICES
GROWTH FUND INC.
/s/ Xxxxxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx-VP & Assist. Sec.
XXXXXXXX XXXXXXXX ASSET
ATTEST: MANAGEMENT INC.
/s/ Xxxxxxxx Xxxxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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Xxxxxx X. X'Xxxxxxx
Senior Vice President
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