Exhibit E(2)
Form of Distribution Agreement
AGREEMENT, dated as of May 1, 2004, by and between Xxxx Xxxxxxx Variable Series
Trust I (the "Trust"), on behalf of each of the one or more portfolios of the
Trust listed in Appendix A (each such portfolio a "Participating Fund"), and
Manulife Financial Securities LLC (the "Series Distributor").
WHEREAS, the Trust is a Massachusetts business trust which is registered as an
open-end investment company under the Investment Company Act of 1940 (the "1940
Act") and sells its shares to insurance company separate accounts to which net
premiums, contributions and considerations under variable insurance and annuity
products ("Variable Products") are allocated for investment in the Trust
("Eligible Separate Accounts");
WHEREAS, the Trust has divided its shares into series, each representing a
different Fund, has further divided the shares of each Fund into three classes
of shares (NAV Class, Series I and Series II), and has adopted a plan with
respect to the Series I and shares (collectively, the "Rule 12b-1 Classes") of
each Participating Fund pursuant to Rule 12b-1 under the 1940 Act (the "Rule
12b-1 Plan");
WHEREAS, The Trust also has adopted a related plan under Rule 18f-3 (the "Rule
18f-3 Plan") under the 1940 Act;
WHEREAS, the Rule 12b-1 Plan and the Rule 18f-3 Plan (together, the "Plans")
provide that the Rule 12b-1 Classes of a Participating Fund of the Trust may be
assessed with fees at rates specified in the Rule 12b-1 Plan;
WHEREAS, the Trust desires the Series Distributor to act as a principal
underwriter with respect to Series I and Series II shares of the Participating
Fund; and
WHEREAS, the Series Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, the Trust and the Series Distributor agree as follows:
APPOINTMENT AND ACCEPTANCE
The Trust hereby appoints the Series Distributor as principal underwriter and
distributor of the shares of the Funds, and the Series Distributor hereby
accepts that appointment; provided, however, that this appointment shall extend
only to sales to Eligible Separate Accounts of Manufacturers Life Insurance
Company (U.S.A.) (hereinafter, "Manufacturers USA") and Manufacturers Life
Insurance Company of New York (hereinafter "Manufacturers New York") and
Eligible Separate Accounts of such other insurance companies as the Trust shall
have authorized in writing.
RULE 12B-1 COMPENSATION TO THE SERIES DISTRIBUTOR
Each Participating Fund will pay Rule 12b-1 compensation to the Series
Distributor up to the net effective annual rate indicated below for each Rule
12b-1 Class of the Fund's shares:
Series I .40%
Series II .60%
These fees shall be accrued daily and payable monthly based on the current net
assets of the applicable Rule 12b-1 Class of a Participating Fund's shares as to
which the Series Distributor has served as principal underwriter (or that are
exchanged or converted in any reorganization for other shares of any fund as to
which the Series Distributor served as a principal underwriter). "Current net
assets" for purposes of computing the amount of Rule 12b-1 Fee accrued with
respect to any class of a Participating Fund's shares shall mean the net assets
for that class of that Fund's shares for the most recent preceding day for which
the net assets for that Fund were computed. The fee shall be payable as soon as
possible after the last day of each calendar month. In the case of termination
of this Agreement as to any class of a Participating Fund, the fees accrued for
such shares through the date of termination will be paid. The Series Distributor
waives any claim for Rule 12b-1 Fees in excess of the rates specified above.
The Series Distributor shall be entitled to no compensation for services
rendered and expenses borne as principal underwriter and distributor other then
as specified in this Section 2.
AUTHORITY OF SERIES DISTRIBUTOR
Without limiting the foregoing, in its capacity as principal underwriter and
distributor, and acting as principal and not as agent for the Trust, the Series
Distributor is authorized, from time to time, to enter into separate agreements
with Manufacturers USA, with Manufacturers New York and with other insurance
companies authorized pursuant to Section 1 hereof, and with any broker or other
intermediary through whom a transaction is effected as to which the Series
Distributor is acting as principal underwriter hereunder, which agreements may
provide how much compensation out of any related Rule 12b-1 payments the Series
Distributor will pay to any such company or person and how much of such
payments, if any, will be retained by the Series Distributor, in each case,
however, on terms and conditions not inconsistent with this Agreement or the
Rule 12b-1 Plan.
COMPLIANCE WITH PLANS
Each party hereto agrees to comply with each provision of the Rule 12b-1 Plan or
the Rule 18f-3 Plan (as they may be amended from time to time) that is
applicable to that party. The Trust agrees to advise the Series Distributor of
any change in either Plan.
FURNISHING CERTAIN INFORMATION
Without limitation of any other provision of this Agreement, the parties hereto
agree, upon request, to furnish to the Trustees of the Trust such information
available to them that may be reasonably necessary (a) to evaluate the Rule
18f-3 Plan (or any successor or proposed successor to that Plan) in connection
with any vote referred to in Rule 18f-3(d) or (b) to an informed determination
of whether the Rule 12b-1 Plan (or any successor or proposed successor to such
Plan), or any agreement related to such Plan, or any revisions thereto, should
be approved or continued. Also, the Series Distributor shall furnish to the
Trust, at least quarterly, reports as to the sales of Trust shares made pursuant
to this Agreement. Such reports shall be in writing and include information on
the amounts of Rule 12b-1 Fees expended for each Rule 12b-1 Class of each
Participating Fund, the recipients of the Rule 12b-1 Fees expended by the Series
Distributor or by affiliated and unaffiliated insurance companies, and the
purposes for which such amounts were expended. Series Distributor hereby
authorizes Xxxx Xxxxxxx Life Insurance Company to deliver these reports on the
Series Distributor's behalf, if the Trustees of the Trust so request.
These reports shall also include such information about expense apportionments
or allocations, fee or expense waivers for any classes, and differences in
shareholder voting patterns as among different classes of the same Participating
Fund, and other pertinent matters as the Trustees may reasonably request.
PURCHASES AND REDEMPTIONS OF SHARES
Purchases and redemptions of Series I and Series II shares of a Participating
Fund shall be at the net asset value therefore as described in the Trust's
prospectus and statement of additional information.
Sales, redemptions and repurchases shall be effected directly by the transfer
agent of the Trust, as such, according to the terms of the Trust's transfer
agency agreement, and payment for shares shall be transmitted by the transfer
agent directly to the Trust's custodian.
The Trust shall have the right to suspend the redemption of shares of any of its
Participating Funds pursuant to the conditions set forth in its Prospectus and
Statement of Additional Information. The Trust shall also have the right to
suspend the sale of shares of any or all of its Funds at any time when it is
authorized to suspend redemption of such shares. The Trustees of the Trust also
may refuse to sell shares of any Fund to any person, or suspend or terminate the
offering of shares of any Fund, if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Trustees acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, in the best interests of such Fund
and its shareholders (including Variable Product owners).
The Trust will give the Series Distributor prompt notice of any such suspension
and shall promptly furnish such other information in connection with the sale
and redemption of Participating Fund shares as the Series Distributor reasonably
requests.
Issuance and transfer of the Trust's shares will be by book entry only. Share
certificates will not be issued. Shares ordered from the Trust will be recorded
on the transfer records of the Trust in an appropriate title for each
shareholder.
CERTAIN DOCUMENTS AND EXPENSES
The Trust will prepare and be responsible for filing with the SEC and any state
regulatory authorities requiring such filing all shareholder reports, proxy
materials and prospectuses and statements of additional information of the
Trust. The Trust will bear the costs of registration and qualification of the
shares of the Funds, preparation and filing of the documents listed in this
paragraph and all taxes to which an issuer is subject on the issuance and
transfer of its shares.
At the option of the Series Distributor, the Trust will either (a) provide the
Series Distributor with as many copies of the Trust's current prospectus,
statement of additional information, annual report, semi-annual report, proxy
materials and other shareholder communications, including any amendments or
supplements to any of the foregoing, as the Series Distributor may reasonably
request with respect to the Participating Funds; or (b) provide the Series
Distributor with camera ready copies of such documents in a form suitable for
printing. To the extent that the Series Distributor requests multiple copies of
documents pursuant to clause (a) above for marketing or other purposes, the
Series Distributor shall bear the cost of such multiple copies.
SALES MATERIAL AND INFORMATION
The Series Distributor will use its best efforts to ensure that any sales
literature and other promotional material prepared by it or on its behalf in
which the Trust, a Fund, any investment adviser of
subadviser to any Fund is named, conforms to all requirements of all applicable
federal and state laws and rules and regulations, including all applicable rules
and regulations of the NASD.
The Series Distributor will not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in connection with
the sale of Fund shares, other than the information or representations contained
in the registration statement, prospectus or statement of additional information
for the Fund's shares, as such registration statement, prospectus and statement
of additional information may be amended or supplemented from time to time, or
in reports or proxy statements for the Trust, or in sales literature or other
promotional material approved in writing by the Trust or its designee, except
with the written approval of the Trust or its designee.
The Trust will use its best efforts to ensure that sales literature and other
promotional material prepared by it or on its behalf in which the Series
Distributor is named, conform to all requirements of all applicable federal
rules and regulations of the NASD.
The Trust will not give any information or make any representations or
statements on behalf of or concerning the Series Distributor except with the
written permission of the Series Distributor or its designee.
Each party hereto will provide to each other party, to the extent it is relevant
to the Contracts or the Trust, a copy of any comment letter received from the
staff of the United States Securities and Exchange Commission ("SEC") or the
NASD, and such party's response thereto, following any examination or inspection
by the staff of the SEC or the NASD.
As used herein, the phrase "sales literature and other promotional material"
includes, but is not limited to, advertisements (such as material published or
designed for use in a newspaper, magazine, or other periodical, radio,
television, telephone or tape recording, videotape display, sign or billboard,
motion picture or other public medium), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales
literature or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of the Series Distributor
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The Series Distributor represents and warrants that it is limited liability
company duly organized or existing and in good standing under applicable law,
and that, in discharging its functions hereunder, it will comply in all material
respects with all applicable federal and state laws.
The Series Distributor represents and warrants that it will use all reasonable
efforts to avoid offering or selling shares of a Participating Fund to any
person or entity that is not (a) an insurance company that will hold such shares
in a "segregated asset account" within the meaning of Treas. Reg. Section
1.817-5(e) through which public access to the Fund is available only pursuant
"variable contracts," within the meaning of Section 817(d) of the Code or (b)
other purchasers of the kind specified in Treas. Reg. Section 1.817-5(f)(3) as
from time to time in effect; and the Series Distributor agrees to promptly
notify the Trust if it has reason to believe that Fund shares are being held by
or are being offered or sold to any person or entity not referred to in clause
(a) or (b) above.
Representations and Warranties of the Trust
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The Trust represents and warrants that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will at all times during the term of this Agreement comply in all material
respects with the 1940 Act.
The Trust represents and warrants that shares of the Participating Fund offered
and sold pursuant to this Agreement will be registered under the Securities Act
of 1933 (the "1933 Act"), duly authorized for issuance and sold in compliance
with the laws of the Commonwealth of Massachusetts and all applicable federal
and state securities laws and that the Trust is and will remain during the term
of this Agreement registered as an open-end management investment company under
the 1940 Act. The Trust agrees that it will amend the registration statement for
a Participating Fund's shares under the 1933 Act and the 1940 Act from time to
time as required in order to permit the continuous offering of its shares in
accordance with the 1933 Act. The Trust will register and qualify the
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Trust or the Series Distributor.
The Trust represents and warrants that the registration statement for shares of
a Participating Fund and any amendments or supplement thereto will, when they
become effective, conform in all material respects to the requirements of the
1933 Act and the 1940 Act and the rules and regulations of the SEC thereunder
and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided, however, that this representation and warranty
will not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust by or on behalf of
the Series Distributor or any holder of the Trust's shares expressly for use
therein.
NOTICES
Any notice required under this Agreement shall be sufficiently given when sent
by registered or certified mail, by facsimile transmission (provided that a copy
is also sent by registered or certified mail) or by a nationally recognized
overnight delivery service, to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to the Trust:
Xxxx Xxxxxxx Variable Series Trust I
Xxxx Xxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxx, XX 000000
Attention: Xxxxxxx X. Xxxxx
Fax No.: (000) 000-0000
If to Series Distributor:
Manulife Financial Services, LLC
X.X. Xxx 0000
Xxxxxxx, XX 00000 - 4700
Attention: President
CONTINUATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall continue as to Series I and Series II classes of a
Participating Fund's shares for a period of more than one year after it takes
effect as to that class of that Fund only so long as such continuance is
specifically approved as to that class of that Fund at least annually by votes
of the majority of (a) the Trustees and (b) the
Independent Trustees of the Trust cast in person at a meeting called for the
purpose of voting on such continuance.
This Agreement shall terminate automatically in the event of its assignment.
This Agreement may be terminated at any time with respect to any class of a
Participating Fund's shares, without payment of any penalty, by vote of a
majority of the Independent Trustees or by vote of a majority of the outstanding
voting securities representing that class of that Fund's shares, or by the
Series Distributor, on 60 days' written notice to any other parties hereto.
Termination of this Agreement as to any Participating Fund or class of shares
thereof shall not be deemed to extinguish any claim arising prior to such
termination for breach of this Agreement or breach of any representation or
warrantee herein.
DEFINITIONS
As used in this agreement, (a) the term "Independent 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 the Rule 12b-1 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 or interpretations
as may be granted or issued by the SEC.
MISCELLANEOUS
The rights, remedies and obligations contained in this Agreement are cumulative
and are in addition to any and all rights, remedies and obligations, at law or
in equity, to which the parties hereto are entitled or subject under state and
federal laws.
This Agreement is executed on behalf of the Trustees of the Trust as Trustees
and not individually, and the obligations of or arising out of this Agreement
are not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the respective class of each
Participating Fund.
This Agreement may be executed in two or more counterparts which together will
constitute one and the same instrument.
If any provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of the Agreement will not be affected
thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
XXXX XXXXXXX VARIABLE SERIES TRUST I
By:
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Name
Title:
MANULIFE FINANCIAL SECURITIES LLC
By: The Manufacturers Life Insurance Company (U.S.A.)
Its Managing Member
By:
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Name:
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Title:
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Appendix A
to
Distribution Agreement Dated as of May 1, 2004
Between Xxxx Xxxxxxx Variable Series Trust I (the "Trust")
and Manulife Financial Services LLC
The portfolios of the Trust that are deemed to be "Participating Funds," and to
which the above-captioned Agreement therefore pertains, are as follows:
International Equity Index Fund
