EXHIBIT (e)
DISTRIBUTION AGREEMENT
BETWEEN
ARTISAN FUNDS, INC.
AND
ARTISAN DISTRIBUTORS LLC
THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of this 29th day
of October, 1998 by and between ARTISAN FUNDS, INC., a corporation organized
and existing under the laws of the State of Wisconsin ("Artisan Funds"), and
ARTISAN DISTRIBUTORS LLC, a limited liability company organized and existing
under the laws of the State of Wisconsin ("Distributor").
RECITALS:
WHEREAS, Artisan Funds is engaged in business as an open-end management
investment company registered under the Investment Company Act of 1940, as
amended ("1940 Act");
WHEREAS, Distributor is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended ("1934 Act"), and the laws of each state
(including the District of Columbia and Puerto Rico) in which it engages in
business to the extent such law requires, and is a member of the National
Association of Securities Dealers, Inc. ("NASD") (such registrations and
membership are referred to collectively as the "Registrations");
WHEREAS, Artisan Funds desires Distributor to act as the distributor in the
public offering of its shares of common stock (hereinafter called "Shares")
which currently are divided into four series designated Artisan Small Cap Fund,
Artisan International Fund, Artisan Mid Cap Fund and Artisan Small Cap Value
Fund, and including shares of any additional series which may from time to time
be offered for sale to the public (hereinafter called, collectively, the "Funds"
and, individually, the "Fund");
WHEREAS, Artisan Funds has entered into an investment advisory agreement
with Artisan Partners Limited Partnership ("Artisan Partners"), an affiliate of
Distributor, pursuant to which Artisan Partners has agreed to pay all expenses
incurred in the sale and promotion of shares of Artisan Funds;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment. Artisan Funds appoints Distributor to act as principal
underwriter (as such term is defined in Section 2(a)(29) of the 0000 Xxx) of its
Shares.
2. Delivery of Artisan Funds Documents. Artisan Funds has furnished
Distributor with properly certified or authenticated copies of each of the
following in effect on the date hereof and shall furnish Distributor from time
to time properly certified or authenticated copies of all amendments or
supplements thereto:
(a) Articles of Incorporation;
(b) Bylaws;
(c) Resolutions of its Board of Directors (hereinafter referred to as
the "Board") selecting Distributor as distributor and approving
this form of agreement and authorizing its execution.
Artisan Funds shall furnish Distributor promptly with copies of any
registration statements filed by it with the Securities and Exchange Commission
("SEC") under the Securities Act of 1933 (the "1933 Act") or the 1940 Act,
together with any financial statements and exhibits included therein, and all
amendments or supplements thereto hereafter filed.
Artisan Funds also shall furnish Distributor such other certificates or
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documents which Distributor may from time to time, in its discretion, reasonably
deem necessary or appropriate in the proper performance of its duties.
3. Solicitation of Orders for Purchase of Shares
(a) Subject to the provisions of Paragraph 5,6 and 8 hereof, and to such
minimum purchase requirements as may from time to time be indicated in
the prospectus of each Fund, Distributor is authorized to solicit, as
agent on behalf of Artisan Funds, unconditional orders for purchases
of Shares authorized for issuance and registered under the 1933 Act,
provided that:
(1) Distributor shall act solely as a disclosed agent on behalf of
and for the account of Artisan Funds;
(2) Artisan Funds' transfer agent shall receive directly from
investors all payments for the purchase of Shares and also shall
pay directly to shareholders amounts due to them for the
redemption or repurchase of all Shares, with Distributor having
no rights or duties to accept such payment or to effect such
redemptions or repurchases; if a payment for the purchase of
Shares is delivered to Distributor, such payment shall not be
negotiated by Distributor but shall be delivered as soon as
reasonably practicable to Artisan Funds' transfer agent; and
(3) Distributor shall have no liability for payment for purchases of
Shares it sells as agent.
The purchase price to the public of Shares shall be the public offering
price as defined in Paragraph 7 hereof.
(b) In consideration of the rights granted to Distributor under this
Agreement, Distributor will use its best efforts (but only in states in which
Distributor may lawfully do so) to solicit from investors unconditional orders
to purchase Shares. Artisan Funds shall make available to Distributor, at no
cost to Distributor, such number of copies of the currently effective prospectus
and Statement of Additional Information of each Fund and copies of all
information, financial statements and other papers which Distributor may
reasonably request for use in connection with the distribution of Shares.
4. Selling Agreements. Distributor is authorized, as agent on behalf of
Artisan Funds, to enter into agreements with other broker-dealers providing for
the solicitation of unconditional orders for purchases of Shares authorized for
issuance and registered under the 1933 Act. All such agreements shall be in a
form as may be approved by the officers of Artisan Funds ("Selling Agreement").
All solicitations made by other broker-dealers pursuant to a Selling Agreement
shall be subject to the same terms as are applied by this Agreement to
solicitations made by Distributor.
5. Solicitation of Orders to Purchase Shares by Artisan Funds. The
rights granted to Distributor shall be non-exclusive in that Artisan Funds
reserves the right to solicit purchases from, and sell its Shares to, investors.
Further, Artisan Funds reserves the right to issue Shares in connection with the
merger or consolidation of any other investment company, trust or personal
holding company with Artisan Funds, or Artisan Funds' acquisition, by the
purchase or otherwise, of all or substantially all of the assets of an
investment company, trust or personal holding company, or substantially all of
the outstanding shares or interests of any such entity. Any right granted to
Distributor to solicit purchases of Shares will not apply to Shares that may be
offered by Artisan Funds to shareholders by virtue of their being shareholders
of Artisan Funds.
6. Shares Covered by this Agreement. This Agreement relates to the
solicitation of orders to purchase Shares that are duly authorized and
registered and available for sale by Artisan Funds, including redeemed or
repurchased Shares if and to the extent that they may be legally sold and if,
but only if, Artisan Funds authorizes Distributor to sell them. If Artisan
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Funds establishes one or more series in addition to Artisan Small Cap Fund,
Artisan International Fund, Artisan Mid Cap Fund and Artisan Small Cap Value
Fund and wishes to appoint Distributor as principal underwriter of the shares of
beneficial interest of such series, Artisan Funds shall so notify Distributor in
writing, and if Distributor agrees in writing to provide such services and
Artisan Partners acknowledges that agreement by Distributor, the shares of
common stock of such series shall become Shares under the Agreement.
7. Public Offering Price. All solicitations by Distributor pursuant to
this Agreement shall be for orders to purchase Shares through Artisan Funds'
transfer agent at the public offering price. The public offering price for each
accepted subscription for Shares will be the net asset value per share of the
particular Fund subscribed for calculated by Artisan Funds at the next close of
regular session trading on the New York Stock Exchange after such subscription
is accepted by Artisan Funds or by a person authorized by Artisan Funds to
accept such subscriptions. The net asset value per share shall be determined in
the manner provided in Artisan Funds' Articles of Incorporation as now in effect
or as they may be amended, and as reflected in the then current prospectus and
Statement of Additional Information of each Fund.
8. Suspension of Sales. If and whenever the determination of a Fund's
net asset value is suspended and until such suspension is terminated, no further
orders for Shares of such Fund shall be accepted by Artisan Funds except such
unconditional orders placed with Artisan Funds and accepted by it before the
suspension. In addition, Artisan Funds reserves the right to suspend sales of
Shares if, in the judgment of the Board of Artisan Funds, it is in the best
interest of Artisan Funds to do so, such suspension to continue for such period
as may be determined by Artisan Funds' Board; and in that event, (i) at the
direction of Artisan Funds, Distributor shall suspend its solicitation of orders
to purchase Shares until otherwise instructed by Artisan Funds and (ii) no
orders to purchase Shares shall be accepted by Artisan Funds while such
suspension remains in effect unless otherwise directed by its Board.
9. Authorized Representations. Distributor is not authorized by Artisan
Funds to give on behalf of Artisan Funds or any Fund any information or to make
any representations in connection with the sale of Shares other than information
and representations which are consistent with Artisan Funds' registration
statement filed with the SEC under the 1933 Act and/or the 1940 Act, covering
Shares, as such registration statement or Artisan Funds' prospectus may be
amended or supplemented from time to time, or contained in shareholder reports
or other material that may be prepared by or on behalf of Artisan Funds or
approved by Artisan Funds for Distributor's use. No person other than
Distributor is authorized to act as principal underwriter (as such term is
defined in the 1940 Act, as amended) for Artisan Funds.
10. Registration of Additional Shares. Artisan Funds hereby agrees to
register an indefinite number of Shares pursuant to Rule 24f-2 under the 1940
Act, as amended. Artisan Funds will, in cooperation with Distributor, take such
action as may be necessary from time to time to permit such Shares (so
registered or otherwise qualified for sale under the 0000 Xxx) to be sold in any
state mutually agreeable to Distributor and Artisan Funds, and to maintain such
qualification; provided, however, that nothing herein shall be deemed to prevent
Artisan Funds from taking action, without approval of Distributor, to permit its
Shares to be sold in any state it deems appropriate.
11. Conformity With Law. Distributor agrees that in soliciting orders to
purchase Shares it shall duly conform in all respects with applicable federal
and state laws and the rules and regulations of the NASD. Distributor will use
its best efforts to maintain its Registrations in good standing during the term
of this Agreement and will promptly notify Artisan Funds and Artisan Partners in
the event of the suspension or termination of any of the Registrations.
12. Independent Contractor. Distributor shall be an independent
contractor and neither Distributor, nor any of its members, managers, officers,
directors, employees or representatives is or shall be an employee of Artisan
Funds in the performance of Distributor's duties hereunder. Distributor shall
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be responsible for its own conduct and the employment, control and conduct of
its agents and employees and for injury to such agents or employees or to others
through its agents and employees and agrees to pay all employee taxes
thereunder.
13. Indemnification. Distributor agrees to indemnify and hold harmless
Artisan Funds and each of the members of its Board and its officers, employees
and representatives and each person, if any, who controls Artisan Funds within
the meaning of Section 15 of the 1933 Act against any and all losses,
liabilities, damages, claims and expenses (including the reasonable costs of
investigating or defending any alleged loss, liability, damage, claim or expense
and reasonable legal counsel fees incurred in connection therewith) to which
Artisan Funds or such of the members of its Board and of its officers,
employees, representatives, or controlling person or persons may become subject
under the 1933 Act, under any other statute, at common law, or otherwise,
arising out of the acquisition or sale of any Shares by any person which (i)
may be based upon any wrongful act by Distributor or any of Distributor's
members, managers, directors, officers, employees or representatives, or (ii)
may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, Statement of
Additional Information, shareholder report or other information covering Shares
filed or made public by Artisan Funds or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon information
furnished to Artisan Funds by Distributor in writing. In no case (i) is
Distributor's indemnity in favor of Artisan Funds, or any person indemnified,
to be deemed to protect Artisan Funds or such indemnified person against any
liability to which Artisan Funds or such person would otherwise be subject by
reason of willful misfeasance, bad faith or negligence in the performance of
its or his duties or by reason of its or his reckless disregard of its or his
obligations and duties under this Agreement, or (ii) is Distributor to be
liable under its indemnity agreement contained in this paragraph with respect
to any claim made against Artisan Funds or any person indemnified unless
Artisan Funds or such person, as the case may be, shall have notified
Distributor in writing of the claim within a reasonable time after the summons,
or other first written notification, giving information of the nature of the
claim served upon Artisan Funds or upon such person (or after Artisan Funds or
such person shall have received notice of such service on any designated agent).
However, failure to notify Distributor of any such claim shall not relieve
Distributor from any liability which Distributor may have to Artisan Funds or
any person against whom such action is brought otherwise than on account of
Distributor's indemnity agreement contained in this paragraph.
Distributor shall be entitled to participate, at its own expense, in the
defense, or, if Distributor so elects, to assume the defense of any suit brought
to enforce any such claim but, if Distributor elects to assume that defense,
such defense shall be conducted by legal counsel chosen by Distributor and
satisfactory to the persons indemnified who are defendants in the suit. In the
event that Distributor elects to assume the defense of any such suit and retain
such legal counsel, persons indemnified who are defendants in the suit shall
bear the fees and expenses of any additional legal counsel retained by them. If
Distributor does not elect to assume the defense of any such suit, Distributor
will reimburse persons indemnified who are defendants in such suit for the
reasonable fees of any legal counsel retained by them in such litigation.
Artisan Funds agrees to indemnify and hold harmless Distributor and each of
its members, managers, directors, officers, employees, and representatives and
each person, if any, who controls Distributor within the meaning of Section 15
of the 1933 Act against any and all losses, liabilities, damages, claims or
expenses (including the damage, claim or expense and reasonable legal counsel
fees incurred in connection therewith) to which Distributor or such of its
members, managers, directors, officers, employees, representatives or
controlling person or persons may otherwise become subject under the 1933 Act,
under any other statute, at common law, or otherwise arising out of the
acquisition of any Shares by any person which (i) may be based upon any wrongful
act by Artisan Funds or any of the members of Artisan Funds' Board, or Artisan
Funds' officers,
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employees or representatives other than Distributor, or (ii) may be based upon
any untrue statement or alleged untrue statement of a material fact contained
in a registration statement, prospectus, Statement of Additional Information,
shareholder report or other information covering Shares filed or made public by
Artisan Funds or any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading unless such
statement or omission was made in reliance upon information furnished by
Distributor to Artisan Funds. In no case (i) is Artisan Funds' indemnity in
favor of Distributor or any person indemnified to be deemed to protect
Distributor or such indemnified person against any liability to which
Distributor or such indemnified person would otherwise be subject by reason of
willful misfeasance, bad faith, or negligence in the performance of its or his
duties or by reason of its or his reckless disregard of its or his obligations
and duties under this Agreement, or (ii) is Artisan Funds to be liable under
its indemnity agreement contained in this Paragraph with respect to any claim
made against Distributor or any person indemnified unless Distributor, or such
person, as the case may be, shall have notified Artisan Funds in writing of the
claim within a reasonable time after the summons, or other first written
notification, giving information of the nature of the claim served upon
Distributor or upon such person (or after Distributor or such person shall have
received notice of such service on any designated agent). However, failure to
notify Artisan Funds of any such claim shall not relieve Artisan Funds from any
liability which Artisan Funds may have to Distributor or any person against whom
such action is brought otherwise than on account of Artisan Funds' indemnity
agreement contained in this paragraph.
Artisan Funds shall be entitled to participate, at its own expense, in the
defense or, if Artisan Funds so elects, to assume the defense of any suit
brought to enforce such claim but, if Artisan Funds elects to assume the
defense, such defense shall be conducted by legal counsel chosen by Artisan
Funds and satisfactory to the persons indemnified who are defendants in the
suit. In the event that Artisan Funds elects to assume the defense of any such
suit and retain such legal counsel, the persons indemnified who are defendants
in the suit shall bear the fees and expenses of any additional legal counsel
retained by them. If Artisan Funds does not elect to assume the defense of any
such suit, Artisan Funds will reimburse the persons indemnified who are
defendants in such suit for the reasonable fees and expenses of any legal
counsel retained by them in such litigation.
14. Duration and Termination of this Agreement. This Agreement shall
become effective upon its execution ("Effective Date") and unless terminated as
provided herein, shall remain in effect through October 29, 2000, and from year
to year thereafter, but only so long as such continuance is specifically
approved at least annually by (a) a vote of majority of the members of the Board
of Artisan Funds who are not interested persons of Distributor or Artisan Funds,
voting in person at a meeting called for the purpose of voting on such approval,
and (b) the vote of either the Board of Artisan Funds or a majority of the
outstanding Shares of Artisan Funds. This Agreement may be terminated at any
time, without the payment of any penalty (a) on 60 days' written notice, by the
Board of Artisan Funds or by a vote of a majority of the outstanding Shares of
Artisan Funds, or by Distributor, or (b) immediately, on written notice by the
Board of Artisan Funds, in the event of termination or suspension of any of the
Registrations. This Agreement will automatically terminate in the event of its
assignment. In interpreting the provisions of this Paragraph 14, the
definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of "interested person," "assignment" and "majority of the
outstanding shares") shall be
applied.
15. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by each party against which enforcement of the change, waiver,
discharge or termination is sought. If Artisan Funds should at any time deem it
necessary or advisable in the best interests of Artisan Funds that any amendment
of this Agreement be made in order to comply with the recommendations or
requirements of the SEC or any other governmental authority or to obtain any
advantage under state or federal tax laws and notifies Distributor of the form
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of such amendment and the reasons therefore, and if Distributor should decline
to assent to such amendment, Artisan Funds may terminate this Agreement
forthwith. If Distributor should at any time request that a change be made in
Artisan Funds' Articles of Incorporation, Bylaws or its methods of doing
business, in order to comply with any requirements of federal law or regulations
of the SEC, or of a national securities association of which Distributor is or
may be a member, relating to the sale of Shares, and Artisan Funds should not
make such necessary changes within a reasonable time, Distributor may terminate
this Agreement forthwith.
16. Liability. It is understood and expressly stipulated that neither the
shareholders of Artisan Funds nor the members of the Board of Artisan Funds
shall be personally liable hereunder. The obligations of Artisan Funds are not
personally binding upon, nor shall resort to the private property of, any of the
members of the Board of Artisan Funds nor of the shareholders, officers,
employees or agents of Artisan Funds, but only Artisan Funds' property shall be
bound.
17. Miscellaneous. The captions in this Agreement are included for
convenience or reference only, and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
18. Notice. Any notice required or permitted to be given by a party to
this Agreement or to any other party hereunder shall be deemed sufficient if
delivered in person or sent by registered or certified mail, postage prepaid,
addressed by the party giving notice to each such other party at the address
provided below or to the last address furnished by each such other party to the
party giving notice.
If to Artisan Funds: 0000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
If to Distributor: 0000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
If to Artisan Partners: 0000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
ARTISAN DISTRIBUTORS LLC
By:/s/ Xxxxxxx X. Xxxx
-------------------
ARTISAN FUNDS, INC.
By:/s/ Xxxxxxxx X. Xxxxxx
----------------------
ACKNOWLEDGED:
ARTISAN PARTNERS LIMITED PARTNERSHIP
By: /s/Artisan Investment Corp.
-------------------------------
/s/Its General Partner
/s/Xxxxxx X. Xxxxxxx, Pres.
-------------------------------
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