Second Amended and Restated Distribution Agreement
Exhibit
(E)(1)
Second
Amended and Restated Distribution Agreement
SECOND
AMENDED AND RESTATED
SECOND
AMENDED AND RESTATED DISTRIBUTION AGREEMENT made this 1st day of May, 2005,
between NORTH TRACK FUNDS, INC., a Maryland corporation (the “Fund”), and X.X.
XXXXXXX AND COMPANY, a Delaware corporation (the “Distributor”).
WITNESSETH:
WHEREAS,
the Fund is registered under the Investment Company Act of 1940, as amended
(the
“1940 Act”), as a diversified open-end management investment company and it is
in the interest of the Fund to offer its share for sale
continuously;
WHEREAS,
the Fund and the Distributor wish to enter into an agreement with each other
with respect to the continuous offering of the Fund’s shares of Common Stock,
$.001 par value, which are issuable in series (“Common Stock”), to commence
after the effectiveness of its initial registration statement filed pursuant
to
the Securities Act of 1933, as amended (the “1933 Act”), and the 1940 Act; and
WHEREAS,
multiple series of Common Stock are currently offered by the Fund, and
additional or different series may be offered from time to time, all of which
such series are referred to as the “Portfolios.”
NOW,
THEREFORE, the parties agree as follows:
Section
1. Appointment
of the Distributor.
The
Fund
hereby appoints the Distributor its exclusive agent to sell and to arrange
for
the sale of the shares of Common Stock, including both issued and treasury
shares, on the terms and for the period set forth in this Agreement and the
Distributor hereby accepts such appointment and agrees to act hereunder.
It is
also understood, however, that purchases of Common Stock may be made directly
through the Fund’s transfer and dividend disbursing agent in the manner set
forth in the Prospectus.
Section
2. Services
and Duties of the Distributor.
(a) The
Distributor agrees to sell, as agent for the Fund, from time to time during
the
term of this Agreement, Common Stock (whether unissued or treasury shares,
in
the Fund’s sole discretion) upon the terms described in the Prospectus. As used
in this Agreement, the term “Prospectus” shall mean the prospectus included as
part of the Fund’s Registration Statement, as such prospectus may be amended or
supplemented from time to time, and the term “Registration Statement” shall mean
the Registration Statement most recently filed from time to time by the Fund
with the Securities and Exchange Commission and effective under the 1933
Act and
the 1940 Act, as such Registration Statement as amended by any amendments
thereto as the time in effect.
2
(b) Upon
commencement of the Fund’s operations, the Distributor will hold itself
available to receive orders, satisfactory to the Distributor, for the purchase
of Common Stock and will accept such orders on behalf of the Fund as of the
time
of receipt of such orders and will transmit such orders as are so accepted
to
the Fund’s transfer and dividend disbursing agent as promptly as practicable.
Purchase orders shall be deemed effective at the time in the manner set forth
in
the Prospectus.
(c) The
Distributor in its discretion may sell shares to such registered and qualified
retail dealers as it may select. In making agreements with such dealers,
the
Distributor shall act only as principal and not as agent for the
Fund.
(d) The
offering price of shares of each Portfolio of Common Stock shall be the net
asset value (as defined in the Articles of Incorporation of the Fund and
determined as set forth in the Prospectus) per share of such Portfolio of
the
Common Stock next determined following receipt of an order, plus, in the
case of
Class A Shares and Class X Shares, the applicable front-end sales charge,
if
any, determined as set forth in the Prospectus. The Fund shall furnish the
Distributor, with all possible promptness, an advice of each computation
of net
asset value.
(e) The
Distributor shall not be obligated to sell any certain number of shares of
Common Stock and nothing herein contained shall prevent the Distributor from
entering into like distribution arrangements with other investment companies
so
long as the performance of its obligations hereunder is not impaired
thereby.
(f) The
Distributor is authorized on behalf of the Fund to purchase shares presented
to
it by dealers at the price determined in accordance with, and in the manner
set
forth in, the Prospectus.
Section
3. Compensation
of the Distributor.
(a) Class
A and Class X Shares.
The
Fund shall pay to the Distributor, as compensation for acting as principal
distributor in respect of Class A and Class X Shares of the Portfolios, the
front-end sales charge described in Section 2(d) above. In addition, the
Fund
shall pay to the Distributor, as compensation for providing shareholder services
to holders of Class A or Class X Shares of the Portfolios, a service fee
(the
“Service Fee”) computed at the rates of 0.25% and 0.15% per annum of such
Portfolio’s average daily net assets attributable to its Class A Shares and
Class X Shares, respectively, which service fee will accrue daily and be
paid
monthly. The Distributor may allow such concessions or reallowances to dealers
out of the front-end sales charges as it may from time to time determine,
and
also may allow all or any portion of the Service Fee to securities dealers
in
consideration of the provision by such securities dealers of shareholder
services to holders of Class A Shares or Class X Shares.
(b) Class B
Shares
(i) The
Fund
shall pay to the Distributor, or at its direction, as compensation for acting
as
principal distributor in respect of the Class B Shares of each Portfolio
its “Allocable Portion” (as hereinafter defined) of a fee (the “Distribution
Fee”)computed at the rate of 0.75% per annum of such Portfolio’s average daily
net assets attributable to Class B Shares, which Distribution Fee will
accrue daily and be payable monthly.
3
(ii) The
Fund
shall pay to the Distributor, or at its direction, as compensation for providing
shareholder services to the holders of Class B Shares of each Portfolio its
allocable portion of a fee (the “Service Fee”) computed at the rate of 0.25% per
annum of such Portfolio’s average daily net assets attributable to Class B
Shares, which Service Fee will accrue daily and be payable monthly.
(iii) The
Distributor may allow all or any portion of the Service Fee to securities
dealers in consideration of the provision by such securities dealers of
shareholder services to particular Class B Shares.
(iv) If,
in
lieu of allowing a portion of the Service Fee relating to a particular
Class B Share to a securities dealer in consideration of such securities
dealer providing shareholder services to such Class B Share for the twelve
month period following the issuance thereof, the Distributor makes a payment
to
such securities dealer on the settlement date for the issuance of such
Class B Share in consideration of such security dealer’s commitment to
provide such services for such twelve month period without further compensation,
the Distributor will be deemed to have earned the Service Fee which accrues
in
respect of such Class B Share during such twelve month period (the “Earned
Service Fee”) upon making such payment to such securities dealer; and, in such
case, all of the provisions of Section 3(b) (v) through (x) hereof shall
apply
to such Earned Service Fee, in the same manner as they apply to the
Underwriter’s Allocable Portion of the Distribution Fee, and for this purpose
references in Section 3 (b) (v) through (x) hereof to Distribution Fees shall
be
deemed to include a reference to Earned Service Fees and references in such
section to the financing of distribution services shall be deemed to include
a
reference to financing of shareholder services.
(v) Notwithstanding
anything to the contrary set forth in this Distribution Agreement or (to
the
extent waiver thereof is permitted thereby) applicable law, the Portfolio’s
obligation to pay the Distributor’s Allocable Portion of the Distribution Fees
payable in respect of the Class B Shares of any Portfolio shall not be
terminated or modified in any manner (including, without limitation, by change
in the auto-conversion arrangements relating to Class B Shares for which
the “Date or Original Issuance” (as defined below) occurs prior to such action)
for any reason (including a termination of this Distribution Agreement as
it
relates to Class B Shares), except to the extent required by a change in
the Investment Company Act of 1940 (the “Act”) or the Conduct Rules of the
National Association of Securities Dealers, Inc. or in connection with a
“Complete Termination” (as hereinafter defined) of the Plan.
(vi) The
Fund
or the Portfolio will not take any action to waive or change in any manner
(including, without limitation, by change in the auto-conversion arrangements
relating to Class B Shares for which the “Date or Original Issuance” (as
defined below) occurs prior to such action) any CDSC in respect of any
Class B Shares of any Portfolio for which the Date of Original Issuance
occurs prior to such action, except as provided in the Portfolio’s prospectus or
statement of additional information as in effect as of the date of this
Distribution Agreement, without the consent of the Distributor and its
Transferees (as hereinafter defined) of all or any portion of its right to
its
Allocable Portion of the CDSCs.
(vii) Notwithstanding
anything to the contrary set forth in this Distribution Agreement, neither
the
termination of the Distributor’s role as principal distributor of the
Class B Shares of a Portfolio, nor the termination of this Distribution
Agreement nor the termination of the Plan will terminate such Distributor’s
right to its Allocable Portion of the CDSCs in respect of the Class B
Shares of any Portfolio.
4
(viii) Notwithstanding
anything to the contrary in this Distribution Agreement, the Distributor
may
assign, sell or pledge (collectively, a “Transfer”) its rights to its Allocable
Portion of the Distribution Fees and CDSCs earned by it (but not its obligations
to the Fund or the Portfolio under this Distribution Agreement) in respect
of
the Class B Shares to raise funds to make the expenditures related to the
distribution of Class B Shares and in connection therewith upon receipt of
notice of such Transfer, the Fund on behalf of each Portfolio shall pay,
or
cause to be paid to the assignee, purchaser or pledgee (collectively with
their
subsequent transferees, “Transferees”) such portion of the Distributor’s
Allocable Portion of the Distribution Fees and CDSCs in respect of the
Class B Shares of such Portfolio so transferred. Except as provided in
Section 3(v) above and notwithstanding anything to the contrary set forth
elsewhere in this Distribution Agreement, to the extent the Distributor has
made
a Transfer of its rights thereto to raise funds as aforesaid, the Fund’s
obligation to pay the Distributor’s Allocable Portion of the Distribution Fees
and CDSCs payable in respect of the Class B Shares shall be absolute and
unconditional and shall not be subject to dispute, offset, counterclaim or
any
defense whatsoever, at law or equity, including without limitation, any of
the
foregoing based on the insolvency or bankruptcy of the Distributor (it being
understood that such provision is not a waiver of the Fund’s or the Portfolio’s
right to pursue such Distributor and enforce such claims against the assets
of
the Distributor other than the Distributor’s right to the Distribution Fees and
CDSCs, in respect of the Class B Shares of the Portfolio or any other
company, portfolio, fund or trust, Distribution Fees and CDSCs in respect
of the
Class B Shares of which have been so transferred in connection with such
Transfer). The Fund agrees, on behalf of each Portfolio, that each such
Transferee is a third party beneficiary of the provisions of this clause
(viii)
but only insofar as those provisions relate to Distribution Fees and CDSCs
transferred to such Transferee.
(ix) For
purposes of this Distribution Agreement, the term Allocable Portion of
Distribution Fees and CDSCs payable in respect of the Class B Shares of any
Portfolio shall mean the portion of such Distribution Fees and CDSCs allocated
to such Distributor in accordance with the Allocation Schedule attached hereto
as Schedule A and the term “Date of Original Issuance” shall have the meaning
defined in such Allocation Schedule.
(x) For
purposes of this Distribution Agreement, the term “Complete Termination” of the
Plan in respect of any Portfolio means a termination of the Plan involving
the
complete cessation of the payment of Distribution Fees in respect of all
Class B Shares of the Portfolio, and the termination of the distribution
plans and the complete cessation of the payment of distribution fees pursuant
to
every other Distribution Plan pursuant to Rule 12b-1 of the Act in respect
of
the Class B Shares of the Portfolio, any other Portfolio and any successor
company, portfolio, fund or trust, or any company, portfolio, fund or trust
acquiring a substantial portion of the assets of the Portfolio or any other
Portfolio and for every future Class of shares of the Portfolio or any
other such company, portfolio, fund or trust which has substantially similar
characteristics to the Class B Shares of the Portfolio including the manner
of payment and amount of sales charge, contingent deferred sales charge or
other
similar charges borne directly or indirectly by the holders of such
shares.
5
(c) Class
C Shares.
As
compensation for acting as principal Distributor in respect of Class C Shares
of
the Portfolios, the Distributor shall be entitled to receive a Distribution
Fee
computed at the rate of 0.75% per annum of such Portfolio’s average daily net
assets attributable to Class C Shares, which Distribution Fee will accrue
daily
and be paid monthly. The Fund also shall pay to the Distributor, as compensation
for providing shareholder services to the holders of Class C Shares of each
Portfolio, a Service Fee computed at the rate of 0.25% per annum of such
Portfolio’s average daily net assets attributable to Class C Shares, which
Service Fee will accrue daily and be paid monthly. The Distributor may allow
such concessions or reallowances of all or any portion of the front-end sales
charge, Distribution Fee and Service Fee attributable to Class C Shares to
securities dealers in consideration of the provision by such securities dealers
of shareholder services and distribution services with respect to such Class
C
Shares.
(d) Class
R Shares.
As
compensation for acting as principal Distributor in respect of Class R Shares
of
the Portfolios, the Distributor shall be entitled to receive a Distribution
Fee
computed at the rate of 0.50% per annum of such Portfolio’s average daily net
assets attributable to Class R Shares, which Distribution Fee will accrue
daily and be paid monthly. The Fund also shall pay to the Distributor, as
compensation for providing, or arranging for the provision of, shareholder
services to the holders of the Class R Shares of each Portfolio, a Service
Fee computed at the rate of 0.25% per annum of such Portfolio’s average daily
net assets attributable to Class R Shares, which Service Fee will accrue
daily and be paid monthly. The Distributor may allow such concessions or
reallowances of all or any portion of the Distribution Fee and the Service
Fee
attributable to Class R Shares to securities dealers, financial
institutions, plan administrators and recordkeepers and other intermediaries
for
assisting with the distribution of, and providing shareholder services to
the
holders of, Class R Shares.
Section
4. Duties
of the Fund.
(a) The
Fund
agrees to sell its shares so long as it has shares available for sale; and
to
deliver certificates for, or cause the Fund’s transfer and dividend disbursing
agent to issue non-negotiable share deposit receipts evidencing, such shares
registered in such names and amounts as the Distributor has requested in
writing, as promptly as practicable after receipt by the Fund of the net
asset
value thereof and written request of the Distributor therefor.
(b) The
Fund
shall keep the Distributor fully informed with regard to its affairs and
shall
furnish to the Distributor copies of all information, financial statements
and
other papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Fund, and this shall include one
certified copy, upon request by the Distributor, of all financial statements
prepared for the Fund by independent accountants and such reasonable number
of
copies of its most current Prospectus and annual and interim reports as the
Distributor may request and shall cooperate fully in the efforts of the
Distributor to sell and arrange for the sale of the Fund’s shares and in the
performance of the Distributor under this Agreement.
(c) The
Fund
shall take, from time to time, all necessary action to fix the number of
authorized shares and such steps, including payment of the related filing
fee,
as may be necessary to register the same under the 1933 Act to the end that
there will be available for sale such number of shares as the Distributor
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 may be
no
untrue statement of a material fact in a Registration Statement or Prospectus,
or necessary in order that there may be no omission to state a material fact
in
the Registration Statement or Prospectus which omission would make the
statements therein misleading.
6
(d) The
Fund
shall use its best efforts to qualify and maintain the qualification of an
appropriate number of its shares for sale under the securities laws of such
states as the Distributor 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 states; provided that the Fund
shall
not be required to amend its Articles of Incorporation or By-Laws to comply
with
the laws of any state, to maintain an office in any state, to change the
terms
of the offering of its Common Stock in any state from the terms set forth
in its
Registration Statement and Prospectus, to qualify as a foreign corporation
in
any state or to consent to service of process in any state other than with
respect to claims arising out of the offering of its Common Stock. The
Distributor 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.
Section
5. Expenses.
(a) The
Fund
shall bear all costs and expenses of the continuous offering of its shares
in
connection with: (i) fees and disbursements of its counsel and independent
accountants, (ii) the preparation, filing and printing of any registration
statements and/or prospectuses required by and under the federal securities
laws, (iii) the preparation and mailing of annual and interim reports,
prospectuses and proxy materials to shareholders and (iv) the qualifications
of
shares of Common Stock for sale and of the Fund as a broker or dealer under
the
securities laws of such states or other jurisdictions as shall be selected
by
the Fund and the Distributor pursuant to Section 4(d) hereof and the cost
and
expenses payable to each such state for continuing qualification
therein.
(b) The
Distributor shall bear (i) the costs and expenses of preparing, printing
and
distributing any materials not prepared by the Fund and other materials used
by
the Distributor in connection with its offering of shares for sale to the
public, including the additional cost of printing copies of the Prospectus
and
of annual and interim reports to shareholders other than copies thereof required
for distribution to shareholders or for filing with any federal securities
authorities, (ii) any expenses of advertising incurred by the Distributor
in
connection with such offering and (iii) the expenses of the registration
or
qualification of the Distributor as a dealer or broker under federal or state
laws and the expenses of continuing such registration or
qualification.
Section
6. Indemnification.
The
Fund
agrees to indemnify, defend and hold the Distributor, its officers and directors
and any person who controls the Distributor within the meaning of Section
15 of
the 1933 Act, free and harmless from and against any and all claims, demands,
liabilities and expense (including the cost of investigating or defending
such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, 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 untrue statement of a material
fact
contained in the Registration Statement or Prospectus or arising out of or
based
upon any alleged omission to state a material fact required to be stated
in
either thereof or necessary to make the statements in either thereof 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 the Distributor to the Fund for use in
the
Registration Statement or Prospectus; provided, however, that this indemnity
agreement, to the extent that it might require indemnity of any person who
is
also an officer or director of the Fund or who controls the Fund within the
meaning of Section 15 of the 1933 Act, shall not inure to the benefit of
such
officer, director or controlling person unless a court 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 the Distributor against any liability to the Fund
or to
its security holders to which the Distributor 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 Agreement. The Fund’s agreement to indemnify the Distributor, its officers
and directors and any such controlling person as aforesaid is expressly
conditioned upon the Fund’s being promptly notified of any action brought
against the Distributor, its officers or directors, or any such controlling
person, such notification to be given by letter or telegram addressed to
the
Fund at its principal business office. The Fund agrees promptly to notify
the
Distributor of the commencement of any litigation or proceedings against
it or
any of its officers or directors in connection with the issue and sale of
any
shares of its capital stock.
7
The
Distributor agrees to indemnify, defend and hold the Fund, its officers and
directors and any person who controls the Fund, if any, 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 directors or officers,
or
any such controlling person may incur under the 1933 Act or under common
law or
otherwise, but only to the extent that such liability or expense incurred
by the
Fund, its directors or officers or such controlling person resulting from
such
claims or demands shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished in writing
by
the Distributor to the Fund for use in the Registration Statement or Prospectus
or shall arise out of or be based upon any alleged omission to state a material
fact in connection with such information required to be stated in the
Registration Statement or Prospectus or necessary to make such information
not
misleading. The Distributor’s agreement to indemnify the Fund, its directors and
officers, and any such controlling person as aforesaid is expressly conditioned
upon the Distributors being promptly notified of any action brought against
the
Fund, its officers or directors or any such controlling person, such
notification being given to the Distributor at its principal business
office.
Section
7. Compliance
with Securities Laws.
The
Fund
represents that it is registered as a diversified open-end management investment
company under the 1940 Act, and agrees that it will comply with all of the
provisions of the 1940 Act and of the rules and regulations thereunder. The
Fund
and the Distributor each agree to comply with all of the applicable terms
and
provisions of the 1940 Act, the 1933 Act and, subject to the provisions of
Section 4(d), all applicable state “Blue Sky” laws. The Distributor agrees to
comply with all of the applicable terms and provisions of the Securities
Exchange Act of 1934.
8
Section
8. Term
of Agreement; Termination.
This
Agreement shall commence on the first date set forth above. This Agreement
shall
continue in effect for a period more than two years from the date hereof
only so
long as such continuance is specifically approved at least annually in
conformity with requirements of the Investment Company Act of 1940.
This
Agreement shall terminate automatically in the event of its assignment (as
defined by the 1940 Act). In addition, this Agreement may be terminated by
either party at any time, without penalty, on not more than sixty days’ nor less
than thirty days’ written notice to the other party.
Section
9. Notices.
Any
notice required to be given pursuant to this Agreement shall be deemed duly
given if delivered or mailed by registered mail, postage prepaid, (1) to
the
Distributor at 000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxx 00000, Attention:
Mutual Fund Department; or (2) to the Fund at 000 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx,
Xxxxxxxxx 00000, Attention: Administration.
Section
10. Governing
Law.
This
Agreement shall be governed and construed in accordance with the laws of
the
State of Wisconsin.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and
year first above written.
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X.X.
XXXXXXX AND COMPANY
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| By: | /s/ Xxxx X. Xxxxxxxx | |
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Xxxx X. Xxxxxxxx, Chief Executive Officer |
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NORTH
TRACK FUNDS, INC.
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| By: | /s/ Xxxxx X. Xxxxxxxx | |
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Xxxxx
X. Xxxxxxxx, President
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9
SCHEDULE
A
(As
revised February 14, 2007)
TO
THE DISTRIBUTION AGREEMENT FOR
S&P
100 INDEX FUND
NYSE
ARCA TECH 100 INDEX FUND
GENEVA
GROWTH FUND
CASH
RESERVE FUND
DOW
XXXXX U.S. HEALTH CARE 100 PLUS FUND
DOW
XXXXX U.S. FINANCIAL 100 PLUS FUND
EQUITY
INCOME FUND
STRATEGIC
ALLOCATION FUND
WISCONSIN
TAX-EXEMPT FUND
(TOGETHER
THE “PORTFOLIOS”)
ALLOCATION
PROCEDURES
The
Distributor’s Allocable Portion of Distribution Fees, Contingent Deferred Sales
Charges and Shareholder Servicing Fees in respect of Shares of each Portfolio
shall be 100% until such time as the Distributor shall cease to serve as
exclusive distributor of Shares of such Portfolio; thereafter collections
which
constitute Contingent Deferred Sales Charges, Asset Based Sales Charges and
Shareholder Servicing Fees related to Shares of each Portfolio shall be
allocated among the Distributor and any successor distributor (“Successor
Distributor”) in accordance with this Schedule A.
Defined
terms used in this Schedule A and not otherwise defined herein shall have
the
meaning assigned to them in the above referenced Distribution Agreement.
As used
herein the following terms shall have the meanings indicated:
“Commission
Share”
means
in respect of any Portfolio, each Share of such Portfolio, which is issued
under
circumstances which would normally give rise to an obligation of the holder
of
such Share to pay a Contingent Deferred Sales Charge upon redemption of such
Share (including, without limitation, any Share of such Portfolio issued
in
connection with a permitted free exchange) and any such Share shall continue
to
be a Commission Share of such Portfolio prior to the redemption (including
a
redemption in connection with a permitted free exchange) or conversion of
such
Share, even though the obligation to pay the Contingent Deferred Sales Charge
may have expired or conditions for waivers thereof may exist.
“Date
of Original Issuance”
means
in respect of any Commission Share, the date with reference to which the
amount
of the Contingent Deferred Sales Charge payable on redemption thereof, if
any,
is computed.
A-1
“Free
Share”
means,
in respect of any Portfolio, each Share of such Portfolio, other than a
Commission Share or Omnibus Share (including, without limitation, any Share
issued in connection with the reinvestment of dividends or capital
gains).
“Inception
Date”
means
in respect of any Portfolio, the first date on which such Portfolio issued
Shares.
“Net
Asset Value”
means,
(i) with respect to any Portfolio, as of the date any determination thereof
is
made, the net asset value of such Portfolio computed in the manner such value
is
required to be computed by such Portfolio in its reports to its shareholders,
and (ii) with respect to any Share of such Portfolio as of any date, the
quotient obtained by dividing: (A) the net asset value of such Portfolio
(as
computed in accordance with clause (i) above) allocated to Shares of such
Portfolio (in accordance with the constituent documents for such Portfolio)
as
of such date, by (B) the number of Shares of such Portfolio outstanding on
such
date.
“Omnibus
Share”
means,
in respect of any Portfolio, a commission share sold by one of the Selling
Agents listed on Exhibit I or related free share issued in connection with
the
reinvestment of dividends or capital gains for such share. If, subsequent
to
closing of the Program, the Distributor and its Transferees reasonably determine
that the Transfer Agent is able provide information to track all commission
shares sold by any of the Selling Agents listed on Exhibit I (and related
free
shares in the same manner as Commission Shares and Free Shares are currently
tracked in respect of Selling Agents not listed on Exhibit I, then Exhibit
I
shall be amended to delete such Selling Agent from Exhibit I so that commission
shares sold by such Selling Agent (and related free shares) will no longer
be
treated as Omnibus Shares.
PART
I: ATTRIBUTION OF SHARES
Shares
of
each Portfolio, which are outstanding from time to time, shall be attributed
to
the Distributor and each Successor Distributor in accordance with the following
rules;
(1) Commission
Shares:
(a) Commission
Shares which are not Omnibus Shares attributed to the Distributor shall be
Commission Shares which are not Omnibus Shares the Date of Original Issuance
of
which occurred on or after the Inception Date of such Portfolio and on or
prior
to the date the Distributor ceased to be the exclusive distributor of Shares
of
such Portfolio.
(b) Commission
Shares which are not Omnibus Shares attributable to each successor Distributor
shall be Commission Shares which are not Omnibus Shares, the Date of Original
Issuance of which occurs after the date such Successor Distributor became
the
exclusive distributor of Shares of such Portfolio and on or prior to the
date
such Successor Distributor ceased to be the exclusive Distributor of Shares
of
the Fund.
(c) A
Commission Share which is not an Omnibus Share of a particular Portfolio
(the
“Issuing Portfolio”) issued in consideration of the investment of proceeds of
the redemption of a Commission Share which is not an Omnibus Share of another
Portfolio (the “Redeeming
Portfolio”)
in
connection with a permitted free exchange, is deemed to have a Date of Original
Issuance identical to the Date of Original Issuance of the Commission Share
of
the Redeeming Portfolio and any such Commission Share will be attributed
to the
Distributor or Successor Distributor based upon such Date of Original Issuance
in accordance with rules (a) and (b) above.
A-2
(d) A
Commission Share which is not an Omnibus Share redeemed (other than in
connection with a permitted free exchange) or converted to a Class A share
is attributable to the Distributor or Successor Distributor based upon the
Date
of Original Issuance in accordance with rule (a), (b) and (c)
above.
(2) Free
Shares:
Free
Shares which are not Omnibus Shares of a Portfolio outstanding on any date
shall
be attributed to the Distributor or Successor Distributor, as the case may
be,
in the same proportion that the Commission Shares which are not Omnibus Shares
of such Portfolio outstanding on such date are attributed to each on such
date;
provided that if the Distributor and its Transferees reasonably determine
that
the Transfer Agent is able to produce monthly reports which track the Date
of
Original Issuance for such Free Shares, then such Free Shares shall be allocated
pursuant to clause 1(a), (b) and (c) above.
(3) Omnibus
Shares:
Omnibus
Shares of a Portfolio outstanding on any date shall be attributed to the
Distributor or Successor Distributor, as the case may be, in the same proportion
that the Commission Shares which are not Omnibus Shares of such Portfolio
outstanding on such date are attributed to each on such date; provided that
if
the Distributor and its Transferees reasonably determine that the Transfer
Agent
is able to produce monthly reports which track the Date of Original Issuance
for
the Omnibus Shares, then the Omnibus Shares shall be allocated pursuant to
clause 1(a), (b) and (c) above.
PART
II: ALLOCATION OF CONTINGENT DEFERRED SALES CHARGES
(“CDSCS”)
(1) CDSCs
Related to the Redemption of Commission Shares which are not Omnibus
Shares:
CDSCs
in
respect of the redemption of Commission Shares which are not Omnibus Shares
shall be allocated to the Distributor or a Successor Distributor depending
upon
whether the related redeemed Commission Share is attributable to the Distributor
or such Successor Distributor, as the case may be, in accordance with Part
I
above.
(2) CDSCs
Related to the Redemption of Omnibus Shares:
CDSCs
in
respect of the redemption of Omnibus Shares shall be allocated to the
Distributor or a Successor Distributor in the same proportion that the CDSCs
related to the redemption of Commission Shares are allocated to each thereof;
provided
that if
the Distributor and its Transferees reasonably determine that the Transfer
Agent
is able to produce monthly reports which track the Date of Original Issuance
for
the Omnibus Shares, then the CDSCs in respect of the redemption of Omnibus
Shares shall be allocated among the Distributor and any Successor Distributors
depending on whether the related redeemed Omnibus Share is attributable to
the
Distributor or a Successor Distributor, as the case may be, in accordance
with
Part I above.
A-3
PART
III: ALLOCATION OF ASSET BASED SALES CHARGES
Assuming
that the Asset Based Sales Charge remains constant over time and among
Portfolios so that Part V hereof does not become operative:
(1) The
portion of the aggregate Asset Based Sales Charges accrued in respect of
all
Shares of all Portfolios during any calendar month allocable to the Distributor
or a Successor Distributor is determined by multiplying the total of such
Asset
Based Sales Charges by the following fraction:
where:
|
A
=
|
The
aggregate Net Asset Value of all Shares of all Portfolios attributed
to
the Distributor or such Successor Distributor, as the case may
be, and
outstanding at the beginning of such calendar
month
|
|
B
=
|
The
aggregate Net Asset Value of all Shares of all Portfolios at the
beginning
of such calendar month
|
|
C
=
|
The
aggregate Net Asset Value of all Shares of all Portfolios attributed
to
the Distributor or such Successor Distributor, as the case may
be, and
outstanding at the end of such calendar
month
|
|
D
=
|
The
aggregate Net Asset Value of all Shares of all Portfolios at the
end of
such calendar month
|
A-4
(2) If
the
Distributor and its Transferees reasonably determine that the Transfer Agent
is
able to produce automated monthly reports which allocate the average Net
Asset
Value of the Commission Shares (or all Shares if available) of all Portfolios
among the Distributor and any Successor Distributors in a manner consistent
with
the methodology detailed in Part I and Part III(1) above, the portion of
the
Asset Based Sales Charges accrued in respect of all such Shares of all
Portfolios during a particular calendar month will be allocated to the
Distributor or a Successor Distributor by multiplying the total of such Asset
Based Sales Charges by the following fraction:
(A)/(B)
where:
|
A
=
|
Average
Net Asset Value of all such Shares of all Portfolios for such calendar
month attributed to the Distributor or a Successor Distributor,
as the
case may be
|
|
B
=
|
Total
average Net Asset Value of all such Shares of all Portfolios for
such
calendar month
|
PART
IV: ALLOCATION OF SHAREHOLDER SERVICING FEES
Assuming
that the Shareholder Servicing Fee for all Shares remains constant over time
and
among Portfolios so that Part V hereof does not become operative:
(1) Unless
clause (2) below is applicable, the portion of the aggregate Shareholder
Servicing Fees which are accrued by or in respect of all Portfolios during
any
calendar month allocated to the Distributor or a Successor Distributor shall
be
determined by multiplying the total amount of Shareholder Servicing Fees
accruing during such calendar month by the following fraction:
where:
|
A
=
|
The
aggregate Net Asset Value of all Commission Shares (or all Shares
if
available) of all Portfolios, which are attributed to the Distributor
or
such Successor Distributor and outstanding at the beginning of
such
calendar month
|
|
B
=
|
The
aggregate Net Asset Value of all Commission Shares (or all Shares
if
available) of all Portfolios which are outstanding at the beginning
of
such calendar month
|
|
C
=
|
The
aggregate Net Asset Value of all Commission Shares (or all Shares
if
available) of all Portfolios, which are attributed to the Distributor
or
such Successor Distributor and outstanding at the end of such calendar
month
|
A-5
|
D
=
|
The
aggregate Net Asset Value of all Commission Shares (or all Shares
if
available) of all Portfolios, which are outstanding at the end
of such
calendar month
|
(2) If
the
Distributor and its Transferees reasonably determine that the Transfer Agent
is
able to produce automated monthly reports which allocate the average Net
Asset
Value of the Shares of all Portfolios among the Distributor and any Successor
Distributor in a manner consistent with the methodology detailed in Part
I and
Part III(1) above, the portion of the Shareholder Servicing Fees accrued
during
a particular calendar month allocated to the Distributor or a Successor
Distributor shall be determined by multiplying the total amount of Shareholder
Servicing Fees accruing during such calendar month by the following
fraction:
(A)/(B)
where:
|
A
=
|
Average
Net Asset Value of all Commission Shares (or all Shares if available)
of
all Portfolios for such calendar month attributed to the Distributor
or a
Successor Distributor, as the case may
be
|
|
B
=
|
Total
average Net Asset Value of all Commission Shares (or all Shares
if
available) of all Portfolios for such calendar month
|
PART
V: ADJUSTMENT OF THE DISTRIBUTOR’S ALLOCABLE PORTION AND EACH SUCCESSOR
DISTRIBUTOR’S ALLOCABLE PORTION
The
Parties to the Distribution Agreement recognize that, if the terms of any
distributor’s contract, any distribution plan, any prospectus, the conduct rules
or any other applicable law change, which change disproportionately reduces,
in
a manner inconsistent with the intent of this Distribution Agreement, the
amount
of the Distributor’s Allocable Portion or each Successor Distributor’s Allocable
Portion had no such change occurred, the definitions of the Distributor’s
Allocable Portion and/or the Successor Distributor’s Allocable Portion in
respect of the Shares relating to such Portfolio shall be adjusted by agreement
among the Distributor, its Transferees, each Successor Distributor and the
Company; provided,
however,
if the
Distributor, its Transferees, each Successor Distributor and the Company
cannot
agree within thirty (30) days after the date of any such change in applicable
laws or in any distributor’s contract, distribution plan, prospectus or the
conduct rules, they shall submit the question to arbitration in accordance
with
the commercial arbitration rules of the American Arbitration Association
and the
decision reached by the arbitrator shall be final and binding on each of
them.
A-6
As
Approved by Board of Directors
at
August, 2004 Meeting
Exhibit
1
to
Schedule
A
to
the
Distribution
Agreement
SELLING
AGENTS
A-7
