Exhibit 1
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT, dated as of December 2, 1998 by and
between EACH XXXXXXX FUND LISTED IN THE SCHEDULE OF FUNDS ATTACHED HERETO AS
SCHEDULE I (each a "Fund" and together the "Funds"), as such schedule may,
from time to time be amended, and XXXXXXX DISTRIBUTORS, INC., a Delaware
corporation (the "Distributor").
WHEREAS, each Fund is registered as an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act") and has registered
its shares, including shares of its series portfolios (the "Series"), for
sale to the public under the Securities Act of 1933 (the "1933 Act") and
various state securities laws;
WHEREAS, each Fund wishes to retain the Distributor as the
principal underwriter in connection with the offer and sale of shares of the
Series (the "Shares") and to furnish certain other services to the Series as
specified in this Agreement;
WHEREAS, this contract has been approved and amended and restated
on this day by the Trustees/Directors in anticipation of the Distributor
offering Class T shares;
WHEREAS, the Distributor is willing to act as principal underwriter
and to furnish such services on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
1. Each Fund hereby appoints the Distributor as principal
underwriter in connection with the offer and sale of its Shares. The
Distributor shall, as agent for each Fund, subject to applicable federal and
state law and the Declaration of Trust or Articles of Incorporation, and
By-laws of the applicable Fund and in accordance with the representations in
the applicable Fund's Registration Statement and Prospectus, as such
documents may be amended from time to time: (a) promote the Series; (b)
enter into appropriate dealer agreements with other registered
broker-dealers to further distribution of the Shares; (c) solicit orders for
the purchase of the Shares subject to such terms and conditions as the
applicable Fund may specify; (d) transmit promptly orders and payments for
the purchase of Shares and orders for redemption of Shares to the applicable
Fund's transfer agent; and (e) provide services agreed upon by the
applicable Fund to Series shareholders; provided, however, that the
Distributor may sell no Shares pursuant to this Agreement until the
Distributor is notified that a Fund's Registration Statement under the 1933
Act, authorizing the sale of such Shares through the Distributor, has become
effective. The Distributor shall comply with all applicable federal and
state laws and offer the Shares on an agency or "best efforts" basis under
which a Fund shall only issue such Shares as are actually sold.
2. The public offering price of the Shares shall be the net
asset value ("NAV") per share (as determined by the applicable Fund) of the
outstanding Shares of the Series, plus the applicable sales charge, if any,
as set forth in the Fund's then current Prospectus. Each Fund shall furnish
the Distributor with a statement of each computation of NAV and of the
details entering into such computation.
3. Compensation.
a. Distribution Fee.
i. Class A. In consideration of the Distributor's services as
distributor for the Class A Shares of a Fund, each Fund may pay to the
Distributor the Distribution Fee as set forth in Schedule II to this
Agreement that is payable pursuant to the Fund's Distribution Plan.
ii. Class B. In consideration of the Distributor's services as
distributor for the Class B Shares of a Fund, each Fund shall pay to the
Distributor (or its designee or transferee) the Distributor's Allocable
Portion of the Distribution Fee; (as set forth in Schedule II to this
Agreement) that is payable pursuant to the Fund's Distribution Plan in
respect of the Class B Shares of a Fund. For purposes of this Agreement, the
Distributor's "Allocable Portion" of the Distribution Fee shall be 100% of
such Distribution Fee unless or until the Fund uses a principal underwriter
other than the Distributor and thereafter the Allocable Portion shall be the
portion of the Distribution Fee attributable to (i) Class B Shares of a Fund
sold by the Distributor ("Commission Shares"), (ii) Class B Shares of the
Fund issued in connection with the exchange of Commission Shares of another
Fund, and (iii) Class B Shares of the Fund issued in connection with the
reinvestment of dividends and capital gains.
The Distributor's Allocable Portion of the Distribution Fee and the
contingent deferred sales charges arising in respect of Class B Shares taken
into account in computing the Distributor's Allocable Portion shall be
limited under Rule 2830 of the Conduct Rules or other applicable regulations
of the NASD as if the Class B Shares taken into account in computing the
Distributor's Allocable Portion themselves constituted a separate class of
shares of a Fund.
The services rendered by the Distributor for which the Distributor
is entitled to receive the Distributor's Allocable Portion of the
Distribution Fee shall be deemed to have been completed at the time of the
initial purchase of the Commission Shares (whether of the Fund or another
Fund in the Xxxxxxx Group of Funds) taken into account in computing the
Distributor's Allocable Portion. Notwithstanding anything to the contrary in
this Agreement, the Distributor shall be paid its Allocable Portion of the
Distribution Fee notwithstanding the Distributor's termination as principal
underwriter of the Class B Shares of a Fund, or any termination of this
Agreement other than in connection with a Complete Termination (as defined
in the Distribution Plan) of the Class B Distribution Plan as in effect on
the date of this Agreement. Except as provided in the preceding sentence, a
Fund's obligation to pay the Distribution Fee to the Distributor shall be
absolute and unconditional and shall not be subject to any dispute, offset,
counterclaim or defense whatsoever, (it being understood that nothing in
this sentence shall be deemed a waiver by a Fund of its right separately to
pursue any claims it may have against the Distributor and to enforce such
claims against any assets (other than its rights to be paid its Allocable
Portion of the Distribution Fee and to be paid the contingent deferred sales
charges) of the Distributor.
iii. Class C. In consideration of the Distributor's services as
distributor for the Class C Shares of a Fund, each Fund shall pay to the
Distributor the Distribution Fee as set forth in Schedule II to this
Agreement that is payable pursuant to the Fund's Distribution Plan.
b. Service Fee. As additional compensation, for Class A,
Class B, Class C and Class T Shares of each Series, applicable Funds shall
pay the Distributor a service fee (as that term is defined by the National
Association of Securities Dealers, Inc. ("NASD")) as set forth in Schedule
III to this Agreement that is payable pursuant to the Fund's Distribution
Plan.
c. Front-end Sales Charges. As additional compensation for
the services performed and the expenses assumed by the Distributor under
this Agreement, the Distributor may, in conformity with the terms and
conditions set forth in the then current Prospectus of each Fund, impose and
retain for its own account the amount of the front-end sales charge, if any,
and may reallow a portion of any front-end sales charge to other
broker-dealers, all in accordance with NASD rules.
d. Contingent Deferred Sales Charge. Each Fund will pay to
the Distributor (or its designee or transferee) in addition to the fees set
forth in Section 3 hereof any contingent deferred sales charge imposed on
redemptions of that Fund's Class B and Class C Shares upon the terms and
conditions set forth in the then current Prospectus of that Fund.
Notwithstanding anything to the contrary in this Agreement, the Distributor
shall be paid such contingent deferred sales charges in respect of Class B
Shares taken into account in computing the Distributor's Allocable Portion
of the Distribution Fee notwithstanding the Distributor's termination as
principal underwriter of the Class B shares of a Fund or any termination of
this Agreement other than in connection with a Complete Termination of the
Class B Distribution Plan as in effect on the date of this Agreement. Except
as provided in the preceding sentence, a Fund's obligation to remit such
contingent deferred sales charges to the Distributor shall not be subject to
any dispute, offset, counterclaim or defense whatsoever, it being understood
that nothing in this sentence shall be deemed a waiver by a Fund of its
right separately to pursue any claims it may have against the Distributor
and to enforce such claims against any assets (other than the Distributor's
right to be paid its Allocable Portion of the Distribution Fee and to be
paid the contingent deferred sales charges) of the Distributor. No Fund will
waive any contingent deferred sales charge except under the circumstances
set forth in the Fund's current Prospectus without the consent of the
Distributor (or, if rights to payment have been transferred, the
transferee), which consent shall not be unreasonably withheld.
4. Payments to Distributor's Transferees. The Distributor may
transfer the right to payments hereunder (but not its obligations hereunder)
in order to raise funds to cover distribution expenditures, and any such
transfer shall be effective upon written notice from the Distributor to the
Fund. In connection with the foregoing, the Fund is authorized to pay all or
a part of the Distribution Fee and/or contingent deferred sales charges in
respect of Class B Shares directly to such transferee as directed by the
Distributor.
5. Changes in Computation of Fee, etc. As long as the Class B
Distribution Plan is in effect, a Fund shall not change the manner in which
the Class B Distribution Fee is computed (except as may be required by a
change in applicable law or a change in accounting policy adopted by the
Investment Companies Committee of the AICPA and approved by FASB that
results in a determination by a Fund's independent accountants that any of
the sales charges in respect of such Fund, which are not contingent deferred
sales charges and which are not yet due and payable, must be accounted for
by such Fund as a liability in accordance with GAAP).
6. As used in this Agreement, the term "Registration
Statement" shall mean the registration statement most recently filed by a
Fund with the Securities and Exchange Commission and effective under the
1933 Act, as such Registration Statement is amended by any amendments
thereto at the time in effect, and the term "Prospectus" shall mean the form
of prospectus filed by a Fund as part of the Registration Statement.
7. The Distributor shall print and distribute to prospective
investors Prospectuses, and may print and distribute such other sales
literature, reports, forms, and advertisements in connection with the sale
of the Shares as comply with the applicable provisions of federal and state
law. In connection with such sales and offers of sale, the Distributor shall
give only such information and make only such statements or representations,
and require broker-dealers with whom it enters into dealer agreements to
give only such information and make only such statements or representations,
as are contained in the Prospectus or in information furnished in writing to
the Distributor by a Fund. The Funds shall not be responsible in any way for
any other information, statements or representations given or made by the
Distributor, other broker-dealers, or the representatives or agents of the
Distributor or such broker-dealers. Except as specifically permitted under
the Distribution Plan under Rule 12b-1 under the 1940 Act, as provided in
paragraph 3 of this Agreement, the Funds shall bear none of the expenses of
the Distributor in connection with its offer and sale of the Shares.
8. Each Fund agrees at its own expense to register the Shares
with the Securities and Exchange Commission, state and other regulatory
bodies, and to prepare and file from time to time such Prospectuses,
amendments, reports and other documents as may be necessary to maintain the
Registration Statement. Each Fund shall bear all expenses related to
preparing and typesetting its Prospectus(es) and other materials required by
law and such other expenses, including printing and mailing expenses related
to the Fund's communications with persons who are shareholders of such Fund.
9. Each Fund agrees to indemnify, defend and hold the
Distributor, its several 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
expenses (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 or directors, or any such
controlling person may incur, under the 1933 Act or under common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in its 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, provided that in no event shall anything
contained in this Agreement be construed so as to protect the Distributor
against any liability to a Fund or its shareholders 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 and duties under this Agreement.
10. The Distributor agrees to indemnify, defend and hold each
Fund, their several officers and directors, and any person who controls a
Fund within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which a
Fund, its officers or directors, or any such controlling person may incur,
under the 1933 Act or under common law or otherwise, arising out of or based
upon any alleged untrue statement or a material fact contained in
information furnished in writing by the Distributor to the Funds for use in
the Registration Statement or Prospectus(es) or arising out of or based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or
Prospectus(es) or necessary to make such information not misleading.
11. Each Fund reserves the right at any time to withdraw all
offerings of the Shares by written notice to the Distributor at its
principal office.
12. The Distributor is an independent contractor and shall be
agent for a Fund only in respect to the offer, sale and redemption of that
Fund's Shares.
13. The services of the Distributor to a Fund under this
Agreement are not to be deemed exclusive, and the Distributor shall be free
to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
14. The Distributor acknowledges that it has received notice
of and accepts the limitations upon the liability of any Fund organized as a
business trust set forth in such Fund's Declaration of Trust. The
Distributor agrees that the obligations of such Funds hereunder in any case
shall be limited to such Funds and to their assets and that the Distributor
shall not seek satisfaction of any such obligation from the shareholders of
such a Fund nor from any Trustee, officer, employee or agent of such Fund.
15. The Funds shall not use the name of the Distributor in any
Prospectus, sales literature or other material relating to the Funds in any
manner not approved prior thereto by the Distributor; provided, however,
that the Distributor shall approve all uses of its name which merely refer
in accurate terms to its appointment hereunder or which are required by the
Securities and Exchange Commission or a State Securities Commission; and,
provided further, that in no event shall such approval be unreasonably
withheld. The Distributor shall not use the name of any Fund in any material
relating to the Distributor in any manner not approved prior thereto by the
Fund; provided, however that the Funds shall approve all uses of their names
which merely refer in accurate terms to the appointment of the Distributor
hereunder or which are required by the Securities and Exchange Commission or
a State Securities Commission; and, provided further, that in no event shall
such approval be unreasonably withheld.
16. The Distributor shall prepare written reports for the
Board of Trustees/Directors of each Fund on a quarterly basis showing
information concerning services provided and expenses incurred which are
related to this Agreement and such other information as from time to time
shall be reasonably requested by a Fund's Board of Trustees/Directors.
17. As used in this Agreement, the terms "assignment,"
"interested person," and "majority of the outstanding voting securities"
shall have the meaning given to them by Section 2(a) of the 1940 Act,
subject to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order; provided, however that, in
order to obtain financing, the Distributor may assign to a lending
institution the payments due to the Distributor under this Agreement without
it constituting an assignment of the Agreement.
18. Subject to the provisions of sections 19 and 20 below,
this Agreement will remain in effect for two years from the date of is
execution and from year to year thereafter, provided that the Distributor
does not notify a Fund in writing at least sixty (60) days prior to the
expiration date in any year that it does not wish continuance of the
Agreement as to such Fund for an additional year.
19. Termination. As to any particular Fund (or Series
thereof), this Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any
penalty by a Fund or by the Distributor on sixty (60) days' written notice
to the other party. A Fund may effect such termination by a vote of (i) a
majority of the Board of Trustees/Directors of the Fund, (ii) a majority of
the Trustees/Directors who are not interested persons of the Fund, who are
not parties to this Agreement or interested persons of such parties, and who
have no direct or indirect financial interest in the operation of the
Distribution Plan, in this Agreement or in any agreement related to such
Fund's Distribution Plan (the "Rule 12b-1 Trustees/Directors"), or (iii) a
majority of the outstanding voting securities of the relevant Series.
20. This Agreement shall be submitted for renewal to the Board
of Trustees/Directors of each Fund at least annually and shall continue in
effect only so long as specifically approved at least annually (i) by a
majority vote of the Fund's Board of Trustees/Directors, and (ii) by the
vote of the majority of the Rule 12b-1 Trustees/Directors of the Fund, cast
in person at a meeting called for the purpose of voting on such approval.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the date first above written by their officers thereunto
duly authorized.
Attest: EACH FUND LISTED IN THE
ATTACHED SCHEDULE I
By: /s/ Edwidge Saint-Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
Vice President
Attest: XXXXXXX DISTRIBUTORS, INC.
By: /s/ Edwidge Saint-Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxxx
Senior Vice President
SCHEDULE I
The Xxxxxxx Fund
Xxxxxxx Tax-Free Reserves
Xxxxxxx Municipal Fund
Xxxxxxx Social Investment Fund
Xxxxxxx World Values Fund
Xxxxxxx New World Fund
First Variable Rate Fund
SCHEDULE II
Fees are expressed as a percentage of average annual daily net assets, and
are payable monthly.
Distribution Fee
Class A* Class B Class C Class I
The Xxxxxxx Fund
New Vision
Small Cap Fund N/A 0.75 0.75 N/A
Xxxxxxx Income Fund 0.25 0.75 0.75 N/A
Xxxxxxx Tax-Free Reserves
Money Market Portfolio N/A N/A N/A N/A
Limited-Term Portfolio N/A N/A N/A N/A
Long-Term Portfolio 0.10 0.75 0.75 N/A
CA. Money Market N/A N/A N/A N/A
Vermont Municipal N/A 0.75 0.75 N/A
Xxxxxxx Municipal Fund
National Interm. Fund N/A 0.75 N/A N/A
California Interm. Fund N/A 0.75 N/A N/A
Maryland Interm. Fund N/A 0.75 N/A N/A
Virginia Interm. Fund N/A 0.75 N/A N/A
Xxxxxxx Social Investment Fund
Balanced Portfolio 0.10 0.75 0.75 N/A
Equity Portfolio 0.10 0.75 0.75 N/A
Bond Portfolio 0.10 0.75 0.75 N/A
Managed Index N/A 0.75 0.75 X/X
Xxxxx Xxxxxx X/X X/X X/X X/X
Xxxxxxx World Values Fund
Capital Accum. Fund 0.10 0.75 0.75 N/A
International Equity Fund 0.10 0.75 0.75 N/A
Xxxxxxx New World Fund
Xxxxxxx New Africa Fund N/A 0.75 0.75 N/A
First Variable Rate Fund
Xxxxxxx First Gov't
Money Mkt N/A 0.75 N/A N/A
*Distributor reserves the right to waive all or a portion of the
distribution fee from time to time.
DATED: February 1998
SCHEDULE III
Fees are expressed as a percentage of average annual daily net assets and
are payable monthly.
Service Fee (%)
Class Class Class Class Class
A1 B C I T
The Xxxxxxx Fund
New Vision
Small Cap Fund 0.25 0.25 0.25 N/A N/A
Xxxxxxx Income Fund 0.25 0.25 0.25 N/A N/A
Xxxxxxx Tax-Free Reserves
Money Market Portfolio N/A N/A N/A N/A 0.25
Limited-Term Portfolio X/X X/X X/X X/X X/X
Long-Term Portfolio 0.25 0.25 0.25 N/A N/A
CA Money Market N/A N/A N/A N/A N/A
Vermont Municipal N/A 0.25 0.25 N/A N/A
Xxxxxxx Municipal Fund
National Interm. Fund 0.25 0.25 N/A N/A N/A
California Interm. Fund 0.25 0.25 N/A N/A N/A
Maryland Interm. Fund 0.25 0.25 N/A N/A N/A
Virginia Interm. Fund 0.25 0.25 N/A N/A N/A
Xxxxxxx Social Investment Fund
Balanced Portfolio 0.252 0.25 0.25 N/A N/A
Equity Portfolio 0.25 0.25 0.25 N/A N/A
Bond Portfolio 0.25 0.25 0.25 N/A N/A
Managed Index 0.25 0.25 0.25 N/A N/A
Money Market 0.25 N/A N/A N/A N/A
Xxxxxxx World Values Fund
Capital Accum. Fund 0.25 0.25 0.25 N/A N/A
International Equity Fund 0.25 0.25 0.25 N/A N/A
Xxxxxxx New World Fund
Xxxxxxx New Africa Fund 0.25 0.25 0.25 N/A N/A
First Variable Rate Fund
Xxxxxxx First Gov't
Money Mkt N/A 0.25 N/A N/A 0.25
DATED: December 1998
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1 Distributor reserves the right to waive all or a portion of the service
fees from time to time. For money market portfolios, Class A shall refer to
Class O, or if the portfolio does not have multiple classes, then to the
portfolio itself.
2 Distributor charges the service fee only on assets in excess of $30
million.
