Exhibit (e)(1)
Pacific Funds
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
DISTRIBUTION AGREEMENT
June 13, 2001
Pacific Select Distributors, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Shares of beneficial interest of the Pacific Funds, a Delaware business
trust (the "Trust"), are divided into series, which are listed on Schedule A
attached hereto (each a "Fund" and, collectively, the "Funds"), which Schedule
can be amended to add or remove a Fund from time to time. The Trust, on behalf
of the Funds, desires to offer and sell the authorized but unissued shares of
the Funds to the public in accordance with applicable federal and state
securities laws. The Trust has adopted distribution plans pursuant to the
provisions of Rule 12b-1 under the Investment Company Act of 1940, as amended
(the "1940 Act").
You have informed the Trust that Pacific Select Distributors, Inc.
(referred to herein as the "Distributor" or "you") is registered as a broker-
dealer under the provisions of the Securities Exchange Act of 1934, as amended,
and is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). You have indicated your desire to act as the exclusive
selling agent and distributor for the shares of the Funds. The Trust has been
authorized to execute and deliver this Distribution Agreement (this "Agreement")
to you by a resolution of the Board of Trustees (the "Trustees") adopted at a
meeting of the Trustees, at which a majority of the Trustees, including a
majority of Trustees who are not otherwise "interested persons", as that term is
defined in the 1940 Act, of you or the Trust's investment manager or its related
organizations, were present in person and voted in favor of the said resolution
approving this Agreement.
1. Appointment of Distributor. Upon the terms and conditions set forth
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herein and the execution of this Agreement, and in consideration of the
agreements on your part herein expressed, the Trust hereby appoints you as the
exclusive distributor of the shares (other than sales made directly by the
Trust) in jurisdictions wherein shares of the Trust may be legally offered for
sale and agrees that the Trust will deliver to you such shares as may be sold
through your efforts. You agree to use your best efforts to promote the sale of
the shares, but you are not obligated to sell any specific number of the shares.
Notwithstanding the foregoing, the Trust, in its absolute discretion may issue
or sell shares directly upon such terms and conditions and for such
consideration, if any, as it may determine.
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2. Independent Contractor. You will undertake and discharge your
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obligations hereunder as an independent contractor and shall have no authority
or power to obligate or bind the Trust or the Funds by your actions, conduct or
contracts, except that you are authorized to accept orders for the purchase or
repurchase of the shares as the Trust's agent, or to direct that purchase orders
be forwarded to the Trust's transfer agent. You may appoint sub-agents or
distribute the shares through dealers (or otherwise) as you may determine
necessary or desirable from time to time. This Agreement shall not, however, be
construed as authorizing any dealer or other person to accept orders for sale,
redemption or repurchase on the Trust's behalf or to otherwise act as the
Trust's agent for any purpose.
3. Offering Price. Shares of each Fund shall be offered at a price
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equivalent to its net asset value plus, as appropriate, a variable percentage of
the public offering price as a sales load, as set forth in the Funds'
registration statements then in effect under the Securities Act of 1933, as
amended (the "1933 Act"), including the prospectuses ("Prospectus") and
statements of additional information ("Statement of Additional Information")
included therein (collectively, the "Registration Statement"), or any amendments
or supplements thereto ("Amendments"). On each business day on which the New
York Stock Exchange is open for business, the Trust will furnish you with the
net asset value of the shares, which shall be determined and become effective as
of the time described in the Funds' Prospectus. The net asset value so
determined shall apply to all orders for the purchase of the shares received by
dealers prior to the time as of which net asset value is determined, and you are
authorized in your capacity as the Trust's agent to accept orders and confirm
sales at such net asset value; provided that, such dealers notify you of the
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time when they received the particular order and that the order is placed with
you prior to the time as of which net asset value is determined. In all events,
you shall forthwith notify all of the dealers comprising your selling group of
the effective net asset value as received from the Trust. Should the Trust at
any time calculate the Trust's net asset value more frequently than once each
business day, you and the Trust will follow procedures with respect to such
additional price or prices comparable to those set forth above in this Section
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4. Orders. You shall promptly advise the Trust's transfer agent of all
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purchase orders for shares of each Fund received by you. The Trust (or its
agent) will confirm orders upon receipt, will make appropriate book entries and,
upon receipt by the Trust (or its agent) of payment therefor, will deliver
deposit receipts for the shares. Unless otherwise determined by the Trust's
Board of Trustees, the Trust will keep effectively registered under the 1933 Act
for sale as herein contemplated such shares so as to permit a continuous
offering of the shares of the Trust. You will issue and deliver or arrange for
the various sub-agents or dealers appointed by you to issue and deliver such
confirmations of sales of shares of the Trust as may be required.
5. Sales Commission.
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(a) In respect of the Class A shares of the Funds that have been sold
through your efforts pursuant to your appointment hereunder ("Class A Shares"),
the following provisions shall apply:
(i) You shall be entitled to receive a sales commission on the sale
of Class A Shares of each Fund in the amounts and according to the procedures
set forth in the Fund's Prospectus then in effect under the 1933 Act, including
any Amendments thereto.
(ii) In consideration of your services as distributor of each
Fund's Class A shares pursuant to this Agreement and the distribution and
service plan pursuant to Rule 12b-1 under the 1940 Act in respect of such shares
(the "Class A Distribution and Service Plan"), the Trust agrees, to the
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extent legally permissible, to: (1) pay to you monthly in arrears a fee (the
"Distribution and Service Fee") which shall accrue daily in an amount equal to
the product of (A) the daily equivalent of 0.50% per annum (0.25% of which is a
service fee and 0.25% of which is a distribution fee) multiplied by (B) the net
asset value of the Class A Shares outstanding on such day; and (2) withhold from
redemption proceeds any contingent deferred sales charges ("CDSCs") attributable
to Class A Shares and to pay the same over to you or at your direction.
(iii) Each of the provisions set forth in the Class A Distribution
and Service Plan as in effect on the date hereof and as from time to time
amended, together with the related definitions, are hereby incorporated by
reference with the same force and effect as if set forth herein in their
entirety.
(b) In respect of the Class B shares of the Funds that have been sold
through your efforts pursuant to your appointment hereunder ("Class B Shares"),
the following provisions shall apply:
(i) In consideration of your services as distributor of each Fund's
Class B shares pursuant to this Agreement and the distribution and service plan
pursuant to Rule 12b-1 under the 1940 Act in respect of such shares (the "Class
B Distribution and Service Plan"), the Trust agrees, to the extent legally
permissible, to: (1) pay to you monthly in arrears a fee (the "Distribution and
Service Fee") which shall accrue daily in an amount equal to the product of (A)
the daily equivalent of 1.00% per annum (0.25% of which is a service fee and
0.75% of which is a distribution fee) multiplied by (B) the net asset value of
the Class B Shares outstanding on such day; and (2) withhold from redemption
proceeds CDSCs attributable to Class B Shares and to pay the same over to you or
at your direction.
(ii) Each of the provisions set forth in the Class B Distribution
and Service Plan as in effect on the date hereof and as from time to time
amended, together with the related definitions, are hereby incorporated herein
by reference with the same force and effect as if set forth herein in their
entirety.
(c) In respect of the Class C shares of the Funds that have been sold
through your efforts pursuant to your appointment hereunder ("Class C Shares"),
the following provisions shall apply:
(i) You shall be entitled to receive a sales commission on the
sale of Class C Shares of each Fund in the amounts and according to the
procedures set forth in the Fund's Prospectus then in effect under the 1933 Act,
including any Amendments thereto.
(ii) In consideration of your services as distributor of each
Fund's Class C shares pursuant to this Agreement and the distribution and
service plan pursuant to Rule 12b-1 under the 1940 Act in respect of such shares
(the "Class C Distribution and Service Plan"), the Trust agrees, to the extent
legally permissible, to: (1) pay to you monthly in arrears a fee (the
"Distribution and Service Fee") which shall accrue daily in an amount equal to
the product of (A) the daily equivalent of 1.00% per annum (0.25% of which is a
service fee and 0.75% of which is a distribution fee) multiplied by (B) the net
asset value of the Class C Shares outstanding on such day; and (2) withhold from
redemption proceeds CDSCs attributable to Class C Shares and to pay the same
over to you or at your direction.
(iii) Each of the provisions set forth in the Class C Distribution
and Service Plan as in effect on the date hereof and as from time to time
amended, together with the related
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definitions, are hereby incorporated herein by reference with the same force and
effect as if set forth herein in their entirety.
(d) You may allow appointed sub-agents or dealers such commissions or
discounts (not exceeding the total sales commission) as you shall deem
advisable, so long as any such commissions or discounts are set forth in each
Fund's then current Prospectus, to the extent required by the applicable federal
and state securities laws. You may pay other commissions, fees or concessions
to sub-agents or dealers in your discretion in such amounts as you shall
determine from time to time consistent with applicable regulations.
(e) You may pay sub-agents, brokers, dealers or other financial
institutions with respect to all or a portion of the Distribution and Service
Fee, and such additional amounts out of your own assets as you may deem
advisable, to obtain various distribution related and/or administrative services
or service activities for the Funds in your discretion as you shall deem
advisable, so long as any such payments are provided for in each Fund's then
current Registration Statement or Amendments thereto and the Distribution and
Service Plans for Class A Shares, Class B Shares and Class C Shares, to the
extent allowed by applicable federal and state securities laws and regulations.
6. Payment for Shares. At or before the time of delivery of any of the
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Trust's shares by the Trust to, or on the order of, you or any introducing
broker, participating broker or other financial intermediary, you will pay or
cause to be paid to the Trust's custodian, for the Trust's account, an amount in
federal funds equal to the applicable net asset value of such shares. In the
event that you pay for shares issued by the Trust before your receipt of payment
from purchasers, you are authorized to reimburse yourself for the net asset
value of such shares from the offering price of such shares when received by
you.
7. Redemption. The Trust represents that any of the outstanding shares of
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the Fund may be tendered for redemption at any time, and the Trust represents
that it will repurchase or redeem the shares so tendered in accordance with the
Trust's Declaration of Trust and By-Laws and the applicable provisions of each
Fund's Prospectus. The price to be paid to redeem or repurchase the shares
shall be equal to the net asset value, less any applicable CDSC and redemption
fee, if any, determined as set forth in the applicable Prospectus (the
"redemption price").
8. Registration of Shares. No shares shall be registered on the Trust's
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books until: (i) receipt by the Trust or an authorized sub-agent or dealer of a
written request therefor; (ii) receipt by the Trust's custodian and transfer
agent of a communication from the Trust stating the amount to be received
therefor; and (iii) receipt of payment of that amount by the Trust's custodian.
The Trust will provide for the recording of all shares purchased in unissued
form in "book accounts".
9. Sale of Shares to Affiliates. You may sell Class A, Class B and Class
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C Shares at net asset value, without a sales charge as appropriate, pursuant to
an offer described in the Trust's current Registration Statement to persons to
whom such sales may be made as described therein; provided that such sales are
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made in accordance with the rules and regulations under the 1940 Act.
10. Allocation of Expenses. The Trust shall assume and pay all charges
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and expenses of its operations not specifically assumed or otherwise to be
provided by you under this Agreement or a Distribution and Service Plan.
Without limiting the foregoing:
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(a) The Trust will pay the following expenses in connection with the
sales and distribution of shares of each Fund:
(i) expenses pertaining to the preparation of the Trust's audited
and certified financial statements to be included in any Amendments to the
Fund's Registration Statements;
(ii) expenses pertaining to the preparation (including legal fees)
and printing of all Amendments filed with the Securities and Exchange
Commission, including the copies of the Prospectuses and Statements of
Additional Information included in such Amendments and the copies of the
definitive Prospectuses and Statements of Additional Information or Amendments
thereto, other than those necessitated by or related to your (including your
"parent companies") activities where such Amendments result in expenses which
the Trust would not otherwise have incurred;
(iii) expenses pertaining to the preparation of any reports or
communications, including Prospectuses and Statements of Additional Information,
which are sent to the Trust's existing shareholders, and to the printing and
distribution of the same to the Trust's existing shareholders;
(iv) filing and other fees to federal and state securities
regulatory authorities necessary to register and maintain registration of the
shares; and
(v) expenses of the Trust's transfer agent, including all costs
and expenses in connection with the issuance, transfer and registration of the
shares, including but not limited to any taxes and other governmental charges in
connection therewith.
(b) Except to the extent that you are entitled to reimbursement under
the provisions of any of the Distribution and Service Plans for the Funds, you
will pay the following expenses:
(i) expenses of printing additional copies of the Prospectus and
Statement of Additional Information and any Amendments thereto which are
necessary to continue to offer the Trust's shares to the public;
(ii) expenses pertaining to the printing of additional copies, for
use by you as sales literature, of reports or other communications which have
been prepared for distribution to the Trust's existing shareholders or incurred
by you in advertising, promoting and selling the Trust's shares to the public.
11. Conduct of Business. (a) Other than the currently effective
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Prospectus and Statement of Additional Information, you will not issue any sales
material or statements, except sales literature or advertising which conforms to
the requirements of federal and state securities laws and regulations and which
have been filed, when and if required, with the proper regulatory authorities
pursuant to applicable rules.
(b) You shall comply with the applicable federal and state laws and
regulations where the Trust's shares are offered for sale and conduct your
affairs with the Trust and with dealers, brokers or investors in accordance with
the NASD Conduct Rules. You shall be responsible for filing, when and if
required pursuant to applicable NASD Rules, any advertising and sales literature
that you prepare or distribute to dealers. You shall require dealers in the
Trust's share to use only advertising and sales literature provided by you or
approved by you or by the Trust.
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(c) You will not make or authorize any sub-agents or dealers to make
any short sales of Trust shares.
12. Redemption or Repurchase within Seven Days. If shares are tendered to
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the Trust for redemption or are repurchased by the Trust within seven (7)
business days after your acceptance of the original purchase order for such
shares, you will immediately refund to the Trust the full amount of any sales
commission (net of allowances to dealers or brokers) allowed to you on the
original sale, and will promptly, upon receipt thereof, pay to the Trust any
refunds from dealers or brokers of the balance of sales commissions reallowed by
you. The Trust shall notify you of such tender for redemption within ten (10)
days of the day on which notice of such tender for redemption is received by the
Trust.
13. Other Activities. Your services pursuant to this Agreement shall not
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be deemed to be exclusive, and you may render similar services and act as an
underwriter, distributor or dealer for other investment companies in the
offering of their shares.
14. Term of Agreement. This Agreement shall become effective on the date
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first written above or on such later date approved by the Trust's Board of
Trustees, including a majority of those Trustees who are not parties to this
Agreement or interested persons (as such term is defined in the 1940 Act)
thereof. Unless terminated as provided herein, this Agreement shall continue in
full force and effect through December 31, 2002, and shall continue in effect
from year to year thereafter for successive one (1) year periods if approved at
least annually (i) by a vote of a majority of the outstanding voting securities
of the Funds or by a vote of the Trustees of the Trust, and (ii) by a vote of a
majority of the Trustees of the Trust who are not interested persons of parties
to this Agreement (other than as Trustees of the Trust), cast in person at a
meeting called for the purpose of voting on this Agreement. This Agreement
shall terminate immediately in the event of its assignment, as that term is
defined in the 1940 Act.
15. Termination. This Agreement: (i) may be terminated at any time
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without the payment of any penalty, either by vote of the Trustees of the Trust
or by a vote of a majority of the outstanding voting securities of the Funds, on
sixty (60) days' written notice to you; and (ii) may be terminated by you on
sixty (60) days' written notice to the Trust. Termination of this Agreement
shall not affect your right to receive payments of any unpaid balance of any
compensation earned prior to such termination, including ongoing distribution
and service fee payments attributable to shares sold while this Agreement was in
effect.
16. Suspension of Sales. The Trust reserves the right at all times to
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suspend or limit the public offering of the shares upon written notice to you,
and to reject any order in whole or in part.
17. Notice. Notices of any kind to be given shall be in writing and shall
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be duly given if mailed, first class postage paid, or delivered to:
If to the Trust:
Xxxxx X. Xxxxx
Pacific Funds
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
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If to you:
Xxxxxxxx Xxxxxxxx
Pacific Select Distributors, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
18. Miscellaneous. This Agreement shall be subject to the laws of the
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State of Delaware and shall be interpreted and construed to further and promote
the operation of the Trust as an open-end investment company. As used herein,
the terms "Net Asset Value," "Offering Price," "Investment Company," "Open-End
Investment Company," "Assignment," "Interested Person," "Parents," and "Majority
of the Outstanding Voting Securities," shall have the meanings set forth in the
1933 Act and the 1940 Act, as applicable, and the rules and regulations
promulgated thereunder.
19. Liability and Indemnification. (a) Nothing contained herein shall be
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deemed to protect you against any liability to the Trust or to the Trust's
shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your obligations and
duties hereunder.
(b) You hereby agree to indemnify and hold harmless the Trust and its
officers and Trustees against any and all losses, liabilities, damages and
claims arising out of or based upon any untrue or alleged untrue statement or
representation made (except for such statements made in reliance on any
Registration Statement, Amendments thereto, or sales material supplied by the
Trust), any failure to deliver a currently effective Prospectus, or the use of
any unauthorized sales literature by any of your officers, employees or agents
in connection with the offer or sale of Fund shares. You shall reimburse each
such person for any legal or other expenses reasonably incurred in connection
with investigating or defending any such loss, liability, damage or claim.
(c) If a claim for indemnification is to be made against you by a party
entitled to indemnification under this section ("indemnified party"), such
indemnified party will promptly notify you in writing of the commencement of any
action in which indemnification may be sought, and the omission to so notify you
will not relieve you from any liability under this section, except to the extent
that the omission results in a failure of actual notice to you and you are
damaged solely as a result of the failure to give such notice.
20. Amendment. This Agreement may be amended with respect to the Funds by
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the parties only if such amendment is specifically approved by (a) the Trustees
or by the vote of a majority of the outstanding voting securities of the Fund,
and (b) by the vote of a majority of the distinerested Trustees cast in person
at a meeting called for the purpose of voting on such amendment.
21. Limitation of Liability. All parties hereto are expressly put on
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notice of the Trust's Declaration of Trust, and all amendments thereto, all of
which are contained in the Registration Statement, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Trust by its representatives as such
representatives and not individually, and the obligations of the Trust hereunder
are not binding upon any of the Trustees, officers or shareholders of the Trust
individually but are binding upon only the assets and property of the Trust.
With respect to any claim by you for recovery of any liability of the Trust
arising hereunder allocated to a particular Fund or class thereof, whether in
accordance with the express terms hereof or otherwise, you
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shall have recourse solely against the assets of that Fund or as the case may
be, to satisfy such claim, and shall have no recourse against the assets of any
other Fund for such purpose.
If the foregoing meets with your approval, please acknowledge your
acceptance by signing each of the enclosed counterparts hereof and returning
such counterparts to the Trust, whereupon this shall constitute a binding
agreement as of the date first above written.
Very truly yours,
PACIFIC FUNDS, a Delaware business trust
By: /s/ Xxxxx X. Xxxxxxx
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Title: Xxxxx X. Xxxxxxx, President
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Agreed to and Accepted:
PACIFIC SELECT DISTRIBUTORS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Title: Xxxxx X. Xxxxxxx, Vice President, Treasurer
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By: /s/ Xxxxxx X. Xxxx
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Title: Xxxxxx X. Xxxx, Director, Vice President,
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Chief Financial Officer
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SCHEDULE A
to the Pacific Funds Distribution Agreement
Name of Fund
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PF AIM Blue Chip Fund
PF AIM Aggressive Growth Fund
PF INVESCO Health Sciences Fund
PF INVESCO Technology Fund
XX Xxxxx Strategic Value Fund
XX Xxxxx Growth LT Fund
XX Xxxxxx International Value Fund
PF MFS Mid-Cap Growth Fund
PF MFS Global Growth Fund
PF PIMCO Managed Bond Fund
PF Pacific Life Money Market Fund
XX Xxxxxxx Brothers Large-Cap Value Fund
June 13, 2001
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