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EXHIBIT (6)(A)
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DISTRIBUTION AGREEMENT
June 18, 1993
The Ohio Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, The Cardinal Group, an Ohio business
trust (the "Group"), has agreed that The Ohio Company, an Ohio corporation
("Distributor"), shall be, for the period of this Distribution Agreement (the
"Agreement"), the distributor of the shares of beneficial interest of each
currently constituted investment portfolio and any additional investment
portfolios of the Group, as each are or will be identified on Schedule A hereto
(such current investment portfolios and any additional investment portfolios
together called the "Funds"). Such shares of beneficial interest are
hereinafter called "Shares."
1. Services as Distributor.
------------------------
1.1 Distributor will act as agent for the distribution of the
Shares covered by the registration statement and prospectus of the Group then
in effect under the Securities Act of 1933, as amended (the "1933 Act").
1.2 Distributor agrees to use appropriate efforts to solicit
orders for the sale of the Shares and will undertake such advertising and
promotion as it believes reasonable in connection with such solicitation. The
Group understands that Distributor is now and, in the future, may be the
distributor of the shares of several investment companies or series (together,
"Companies") including Companies having investment objectives similar to those
of the Funds of the Group. The Group further understands that investors and
potential investors in the Group may invest in shares of such other Companies.
The Group agrees that Distributor's duties to such Companies shall not be
deemed in conflict with its duties to the Group under this paragraph 1.2.
Except as provided in Section 2 herein, Distributor shall, at its own
expense, finance appropriate activities which it deems reasonable which are
primarily intended to result in the sale of the Shares, including, but not
limited to, advertising, compensation of underwriters, dealers and sales
personnel, the printing and mailing of prospectuses to other than current
Shareholders, and the printing and mailing of sales literature.
1.3 All activities by Distributor and its shareholders, directors,
agents, and employees as distributor of the Shares shall comply with all
applicable laws, rules and regulations, including, without limitation, all
rules and regulations made or adopted
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pursuant to the Investment Company Act of 1940 ("1940 Act") by the Securities
and Exchange Commission (the "Commission") or any securities association
registered under the Securities Exchange Act of 1934.
1.4 Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Group and
the Funds.
1.5 Distributor will transmit any orders received by it for
purchase or redemption of the Shares to the transfer agent and custodian for
the Funds.
1.6 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions, or by abnormal circumstances of any
kind, the Group's officers may decline to accept any orders for, or make any
sales of the Shares until such time as those officers deem it advisable to
accept such orders and to make such sales.
1.7 Distributor will act only on its own behalf as principal if it
chooses to enter into selling agreements with selected dealers or others.
1.8 The Group agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the qualification
of the Shares for sale in such states as Distributor may designate.
1.9 The Group shall furnish from time to time, for use in
connection with the sale of the Shares, such information with respect to the
Funds and the Shares as Distributor may reasonably request; and the Group
warrants that the statements contained in any such information shall fairly
show or represent what they purport to show or represent. The Group shall also
furnish Distributor upon request with: (a) unaudited semi-annual statements of
the Funds' books and accounts prepared by the Group, (b) quarterly earnings
statements prepared by the Group, (c) a monthly itemized list of the securities
in the Funds, (d) monthly balance sheets as soon as practicable after the end
of each month, and (e) from time to time such additional information regarding
the financial condition of the Funds as Distributor may reasonably request.
1.10 The Group represents to Distributor that all registration
statements and prospectuses filed by the Group with the Commission under the
1933 Act with respect to the Shares have been carefully prepared in conformity
with the requirements of the 1933 Act and rules and regulations of the
Commission thereunder. As used in this agreement the terms "registration
statement" and "prospectus"
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shall mean any registration statement and any prospectus and Statement of
Additional Information relating to the Funds filed with the Commission and any
amendments and supplements thereto which at any time shall have been filed with
the Commission. The Group represents and warrants to Distributor that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with the 1993 Act and the rules and regulations of the Commission;
that all statements of fact contained in any such registration statement and
prospectus will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus when
such registration statement becomes effective will include an 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 to a
purchaser of the Shares. The Group may but shall not be obligated to propose
from time to time such amendment or amendments to any registration statement
and such supplement or supplements to any prospectus as, in the light of future
developments, may, in the opinion of the Group's counsel, be necessary or
advisable. If the Group shall not propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by the Group of a
written request from Distributor to do so, Distributor may, at its option,
terminate this agreement. The Group shall not file any amendment to any
registration statement or supplement to any prospectus without giving
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this agreement shall in any way limit the Group's right to
file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Group may deem
advisable, such right being in all respects absolute and unconditional.
1.11 The Group authorizes Distributor and dealers to use any
prospectus in the form most recently furnished in connection with the sale of
the Shares. The Group agrees to indemnify, defend and hold Distributor, its
directors, shareholders and employees, and any person who controls Distributor
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 Distributor, its
shareholders, directors and employees, 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, or alleged untrue statement, of a material
fact contained in any registration statement or any prospectus or arising out
of or based upon any omission, or alleged omission, to state a material fact
required to be stated in either any registration statement or any prospectus or
necessary to make the statements in either
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thereof not misleading; provided, however, that the Group's agreement to
indemnify Distributor, its shareholders, directors or employees, and any such
controlling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any statements or representations as are
contained in any prospectus and in such financial and other statements as are
furnished in writing to the Group by Distributor and used in the answers to the
registration statement or in the corresponding statements made in the
prospectus, or arising out of or based upon any omission or alleged omission to
state a material fact in connection with the giving of such information
required to be stated in such answers or necessary to make the answers not
misleading; and further provided that the Group's agreement to indemnify
Distributor and the Group's representations and warranties hereinbefore set
forth in paragraph 1.10 shall not be deemed to cover any liability to the Group
or its Shareholders to which 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 Distributor's reckless disregard of its obligations and
duties under this agreement. The Group's agreement to indemnify Distributor,
its shareholders, directors and employees, and any such controlling person, as
aforesaid, is expressly conditioned upon the Group's being notified of any
action brought against Distributor, its shareholders, directors or employees,
or any such controlling person, such notification to be given by letter or by
telegram addressed to the Group at its principal office in Columbus, Ohio and
sent to the Group by the person against whom such action is brought, within 10
days after the summons or other first legal process shall have been served.
The failure to so notify the Group of any such action shall not relieve the
Group from any liability which the Group may have to the person against whom
such action is brought by reason of any such untrue, or allegedly untrue,
statement or omission, or alleged omission, otherwise than on account of the
Group's indemnity agreement contained in this paragraph 1.11. The Group will
be entitled to assume the defense of any suit brought to enforce any such
claim, demand or liability, but, in such case, such defense shall be conducted
by counsel of good standing chosen by the Group and approved by Distributor,
which approval shall not be unreasonably withheld. In the event the Group
elects to assume the defense of any such suit and retain counsel of good
standing approved by Distributor, the defendant or defendants in such suit
shall bear the fees and expenses of any additional counsel retained by any of
them; but in case the Group does not elect to assume the defense of any such
suit, or in case Distributor reasonably does not approve of counsel chosen by
the Group, the Group will reimburse Distributor, its shareholders, directors
and employees, or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
Distributor or them. The Group's indemnification agreement
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contained in this paragraph 1.11 and the Group's representations and warranties
in this agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of Distributor, its
shareholders, directors and employees, or any controlling person, and shall
survive the delivery of any Shares. This agreement of indemnity will inure
exclusively to Distributor's benefit, to the benefit of its several
shareholders, directors and employees, and their respective estates, and to the
benefit of the controlling persons and their successors. The Group agrees
promptly to notify Distributor of the commencement of any litigation or
proceedings against the Group or any of its officers or Trustees in connection
with the issue and sale of any Shares.
1.12 Distributor agrees to indemnify, defend and hold the Group,
its several officers and Trustees and any person who controls the Group 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 costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Group, its officers or
Trustees 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 Group, its officers or Trustees or such controlling person
resulting from such claims or demands, shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact contained in
information furnished in writing by Distributor to the Group and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus, or shall arise out of or be
based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by Distributor to the
Group required to be stated in such answers or necessary to make such
information not misleading. Distributor's agreement to indemnify the Group,
its officers and Trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon Distributor's being notified of any action brought
against the Group, its officers or Trustees, or any such controlling person,
such notification to be given by letter or telegram addressed to Distributor at
its principal office in Columbus, Ohio, and sent to Distributor by the person
against whom such action is brought, within 10 days after the summons or other
first legal process shall have been served. Distributor shall have the right
of first control of the defense of such action, with counsel of its own
choosing, satisfactory to the Group, if such action is based solely upon such
alleged misstatement or omission on Distributor's part, and in any other event
the Group, its officers or Trustees or such controlling person shall each have
the right to participate in the defense or preparation of the defense of any
such action. The failure to so notify Distributor of any such action shall not
relieve Distributor from any liability which Distributor may have
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to the Group, its officers or Trustees, or to such controlling person by reason
of any such untrue or alleged untrue statement, or omission or alleged
omission, otherwise than on account of Distributor's indemnity agreement
contained in this paragraph 1.12.
1.13 No Shares shall be offered by either Distributor or the Group
under any of the provisions of this agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Group if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act or if and so long as a current prospectus as required by Section 10(a) of
the 1933 Act is not on file with the Commission; provided, however, that
nothing contained in this paragraph 1.13 shall in any way restrict or have an
application to or bearing upon the Group's obligation to repurchase Shares from
any Shareholder in accordance with the provisions of the Group's prospectus,
Declaration of Trust, or By-Laws.
1.14 The Group agrees to advise Distributor as soon as reasonably
practical by a notice in writing delivered to Distributor:
(a) of any request by the Commission for amendments to
the registration statement or prospectus then in effect or for
additional information;
(b) in the event of the issuance by the Commission of any
stop order suspending the effectiveness of the registration statement
or prospectus then in effect or the initiation by service of process
on the Group of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any
statement of a material fact made in the registration statement or
prospectus then in effect or which requires the making of a change in
such registration statement or prospectus in order to make the
statements therein not misleading; and
(d) of all action of the Commission with respect to any
amendment to any registration statement or prospectus which may from
time to time be filed with the Commission.
For purposes of this section, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.15 Distributor agrees on behalf of itself and its partners and
employees to treat confidentially and as proprietary informa-
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tion of the Group all records and other information relative to the Group and
its prior, present or potential Shareholders, and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Group, which approval shall not be unreasonably withheld and may not be
withheld where Distributor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information
by duly constituted authorities, or when so requested by the Group.
1.16 This Agreement shall be governed by the laws of the State of
Ohio.
2. Fee.
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The Distributor shall receive from the Funds identified on Schedule B
hereto a distribution fee at the rate and upon the terms and conditions set
forth in the Distribution and Shareholder Service Plan attached as Schedule C
hereto, and as amended from time to time. The distribution fee described above
shall be accrued daily and shall be paid on the first business day of each
month, or at such time(s) as Distributor shall reasonably request.
3. Sale and Payment.
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Under this Agreement, the following provisions shall apply with
respect to the sale of and payment of Shares of any class sold at an offering
price which includes a sales load (collectively, "Load Shares") as described in
the prospectuses of any Funds identified on Schedule D hereto (collectively,
the "Load Funds" and individually, a "Load Fund"):
(a) The Distributor shall have the right, as principal,
to purchase Load Shares from the Load Funds at their net asset value
and to sell such Load Shares to the public against orders therefor at
the applicable public offering price, as defined in Section 4 hereof.
Distributor shall also have the right, as principal, to sell Load
Shares to dealers against orders therefor at the public offering price
less a concession determined by the Distributor, which concession
shall not exceed the amount of the sales charge or underwriting
discount, if any, referred to in Section 4 below.
(b) Prior to the time of delivery of any Load Shares by a
Load Fund to, or on the order of, the Distributor, the Distributor
shall pay or cause to be paid to the Load Fund or to
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its order an amount in federal funds equal to the applicable net asset
value of such Load Shares. Distributor may retain so much of any
sales charge or underwriting discount as is not allowed by Distributor
as a concession to dealers.
4. Public Offering Price.
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The public offering price shall be the net asset value of Load Shares,
plus any applicable sales charge, all as set forth in the current prospectus of
the Load Fund. The net asset value of Load Shares shall be determined in
accordance with the provisions of the Declaration of Trust and By-Laws of the
Group and the then current prospectus of the Load Fund.
5. Issuance of Shares.
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The Load Funds reserve the right to issue, transfer or sell Load
Shares at net asset value (a) in connection with the merger or consolidation of
the Group or the Load Fund(s) with any other investment company or the
acquisition by the Group or the Load Fund(s) of all or substantially all of the
assets or of the outstanding Shares of any other investment company; (b) in
connection with a pro rata distribution directly to the holders of Load Shares
in the nature of a stock dividend or split; (c) upon the exercise of
subscription rights granted to the holders of Load Shares on a pro rata basis;
(d) in connection with the issuance of Load Shares pursuant to any exchange and
reinvestment privileges described in any then current prospectus of the Load
Fund; and (e) otherwise in accordance with any then current prospectus of the
Load Fund.
6. Term and Matters Relating to the Group as an Ohio Business Trust.
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This Agreement shall become effective on June 18, 1993, and, unless
sooner terminated as provided herein, shall continue until June 18, 1994, and
thereafter shall continue automatically for successive annual periods ending on
June 18 of each year with respect to each of the Funds, provided such
continuance is specifically approved at least annually by (i) the Group's Board
of Trustees or (ii) by "vote of a majority of the outstanding voting
securities" (as defined below) of the Group, provided, however, that in either
event the continuance is also approved by the majority of the Group's Trustees
who are not parties to the agreement or interested persons (as defined in the
0000 Xxx) of any party to this agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is
terminable without penalty, on not less than sixty days' notice, by the Group's
Board of Trustees, by vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of the Group or by Distributor. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the 1940 Act).
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The Cardinal Group is a business trust organized under Chapter 1746,
Ohio Revised Code, and under a Declaration of Trust to which reference is
hereby made and a copy of which is on file at the office of the Secretary of
the State of Ohio as required by law, and to any and all amendments thereto so
filed or hereafter filed. The obligations of "The Cardinal Group" entered into
in the name or on behalf thereof by any of the Trustees, officers, employees or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, Shareholders, officers, employees or agents of the
Group personally, but bind only the assets of the Group, as set forth in
Section 1746.13(A), Ohio Revised Code, and all persons dealing with any of the
Funds of the Group must look solely to the assets of the Group belonging to
such series for the enforcement of any claims against the Group.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below
indicated, whereupon it shall become a binding agreement between us.
Yours very truly,
THE CARDINAL GROUP
By /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, President
Accepted:
THE OHIO COMPANY
By /s/ H. Xxxxx Xxxxx
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H. Xxxxx Xxxxx, Senior
Executive Vice President
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Dated: January __, 1996
Schedule A
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993
Name of Fund Date
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Cardinal Balanced Fund June 18, 1993
Cardinal Aggressive Growth Fund June 18, 1993
The Cardinal Fund January __, 1996
Cardinal Government Obligations Fund January __, 1996
Cardinal Government Securities Money
Market Fund January __, 1996
Cardinal Tax Exempt Money Market Fund January __, 1996
THE CARDINAL GROUP
By ______________________________
Xxxxx X. Xxxxxx, President
THE OHIO COMPANY
By ______________________________
H. Xxxxx Xxxxx, Senior
Executive Vice President
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Dated: January __, 1996
Schedule B
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993
Name of Plan Fund Date
----------------- ----
Cardinal Balanced Fund June 18, 1993
Cardinal Aggressive Growth Fund June 18, 1993
The Cardinal Fund January __, 1996
Cardinal Government Obligations Fund January __, 1996
THE CARDINAL GROUP
By ______________________________
Xxxxx X. Xxxxxx, President
THE OHIO COMPANY
By ______________________________
H. Xxxxx Xxxxx, Senior
Executive Vice President
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Schedule C
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993
DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
This Plan (the "Plan") constitutes a distribution and shareholder
service plan of The Cardinal Group, an Ohio business trust (the "Group"),
adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Plan relates to shares of those investment
portfolios identified on Schedule B to the Group's Distribution Agreement and
as amended from time to time (the "Plan Funds").
SECTION 1. Each Plan Fund shall pay to The Ohio Company, an Ohio
corporation and the distributor (the "Distributor") of the Group's shares of
beneficial interest (the "Shares"), a fee in an amount not to exceed on an
annual basis .25% of the average daily net asset value of such Fund (the "Plan
Fee") for: (a) payments the Distributor makes to broker/dealers, banks and
other institutions (a "Participating Organization") for distribution assistance
and/or Shareholder service pursuant to an agreement with the Participating
Organization or for distribution assistance and/or Shareholder service provided
by the Distributor pursuant to an agreement between the Distributor and the
Group; or (b) reimbursement of expenses incurred by a Participating
Organization pursuant to an agreement in connection with distribution
assistance and/or Shareholder service including, but not limited to, the
reimbursement of expenses relating to printing and distributing prospectuses to
persons other than Shareholders of a Plan Fund, printing and distributing
advertising and sales literature and reports to Shareholders used in connection
with the sale of Shares, and personnel and communication equipment used in
servicing Shareholder accounts and prospective shareholder inquiries. For
purposes of the Plan, a Participating Organization may include the Distributor
or any of its affiliates or subsidiaries.
SECTION 2. The Plan Fee shall be paid by the Plan Funds to the
Distributor only to compensate or to reimburse the Distributor for payments or
expenses incurred pursuant to Section 1.
SECTION 3. The Plan shall not take effect with respect to a Plan Fund
until it has been approved by the vote of the initial Shareholder of such Fund.
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SECTION 4. The Plan shall not take effect until it has been approved,
together with any related agreements, by votes of the majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
1940 Act or the rules and regulations thereunder) of both (a) the Trustees of
the Group, and (b) the Independent Trustees of the Group cast in person at a
meeting called for the purpose of voting on the Plan or such agreement.
SECTION 5. The Plan shall continue in effect for a period of more
than one year after it takes effect only so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in Section 4.
SECTION 6. Any person authorized to direct the disposition of monies
paid or payable by the Plan Funds pursuant to the Plan or any related agreement
shall provide to the Trustees of the Group, and the Trustees shall review, at
least quarterly, a written report of the amounts so expended and the purposes
for which such expenditures were made.
SECTION 7. The Plan may be terminated at any time by vote of a
majority of the Independent Trustees, or by vote of a majority of the
outstanding Shares of a Plan Fund.
SECTION 8. All agreements with any person relating to implementation
of the Plan shall be in writing, and any agreement related to the Plan shall
provide:
(a) That such agreement may be terminated at any time,
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 of the Plan Fund, on not more than 60 days' written
notice to any other party to the agreement; and
(b) That such agreement shall terminate automatically in
the event of its assignment.
SECTION 9. The Plan may not be amended to increase materially the
amount of distribution expenses of a Fund permitted pursuant to Section 1
hereof without approval by a vote of at least a majority of the outstanding
voting securities of such Fund, and all material amendments to the Plan shall
be approved in the manner provided for approval of the Plan in Section 4.
SECTION 10. As used in the Plan, (a) the term "Independent Trustees"
shall mean those Trustees of the Group who are not interested persons of the
Group, and have no direct or indirect financial interest in the operation of
the Plan or any agreements
C-2
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related to it, and (b) the terms "assignment", "interested person" and
"majority of the outstanding voting securities" shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
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Dated: January __, 1996
Schedule D
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993
Name of Load Fund Date
----------------- ----
Cardinal Balanced Fund June 18, 1993
Cardinal Aggressive Growth Fund June 18, 1993
The Cardinal Fund January __, 1996
Cardinal Government Obligations Fund January __, 1996
THE CARDINAL GROUP
By ______________________________
Xxxxx X. Xxxxxx, President
THE OHIO COMPANY
By ______________________________
H. Xxxxx Xxxxx, Senior
Executive Vice President
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