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THE COUNTRYBASKETS(SM) INDEX FUND, INC.
SUPPLEMENTAL COMPENSATION AGREEMENT
SUPPLEMENTAL COMPENSATION AGREEMENT (the "Agreement") made as
of March 1, 1996, between The CountryBaskets(SM) Index Fund, Inc., a Maryland
corporation (the "Company"), and ALPS Mutual Funds Services, Inc., a
Colorado corporation ("ALPS").
W I T N E S S E T H :
WHEREAS, the Company is a management investment company
organized as a series fund and registered under the Investment Company Act
of 1940 (the "1940 Act");
WHEREAS, the Company has entered into a Marketing Agreement
with ALPS dated the date hereof (the "Marketing Agreement") providing for,
among other things, various marketing and stockholder services to be
provided by ALPS with respect to the shares of common stock ("CB Shares")
of its initial nine series (each, a "Series");
WHEREAS, pursuant to the Marketing Agreement ALPS will make
available on a full-time basis four regional wholesalers to perform the
activities specified in Section 1.3(b) thereof and Mr. Xxxxx Jemapete to
perform the services specified in Section 1.3(d) thereof (such wholesalers,
together with Mr. Jemapete and any additional wholesalers who may be
employed by ALPS from time to time in connection with the marketing of CB
Shares, the "Wholesalers");
WHEREAS, the Company and ALPS desire to make certain funds
available specifically for supplemental compensation to be paid by ALPS to
the Wholsesalers as a performance incentive as described herein; and
WHEREAS, the Company has adopted a Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act (each, a "12b-1 Plan") with
respect to each Series and will make payments to ALPS pursuant to such 12b-
1 Plans for providing marketing and stockholder services and for
supplemental compensation to the Wholesalers.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the Company and ALPS agree as follows:
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SECTION 1
SUPPLEMENTAL COMPENSATION
1.1 Definitions. All capitalized terms used but not defined
in this Agreement shall have the meanings ascribed to such terms in the
Company's registration statement on Form N-1A most recently filed by the
Company with the Securities and Exchange Commission (the "Commission") and
effective under the Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act, as such registration statement is amended by any
amendments thereto at the time in effect.
1.2 Contributions to the Bonus Pool. The aggregate amount of
supplemental compensation (the "Bonus Pool") that shall be available for
distribution [quarterly] by ALPS to the Wholsesalers shall be the sum of
the contributions to be made by the Company and ALPS, as follows:
(a) Subject to the terms and conditions of the 12b-1 Plans
and to the conditions set forth in Section 3.1 hereof, each Series
will pay to ALPS as a contribution to the Bonus Pool an amount,
calculated daily and payable [quarterly], equal to such Series'
allocable portion of 0.01% per annum of the average aggregate daily
net assets of all nine Series ("Aggregate Net Assets") in excess of
$500 million up to Aggregate Net Assets of $2.5 billion. Such
contribution shall be allocated among the Series subject to this
Agreement pro rata in accordance with the daily net assets of the
respective Series, the method of such allocation to be subject to the
annual review and approval of the Board of Directors of the Company.
(b) Subject to the conditions set forth in Section 3.1
hereof, ALPS will set aside from the amounts payable to ALPS by all
Series under Section 3.1 of the Marketing Agreement and contribute to
the Bonus Pool an amount, calculated daily and payable [quarterly],
equal to (i) 0.01% per annum of Aggregate Net Assets in excess of $2
billion up to $5 billion, plus (ii) .005% per annum of Aggregate Net
Assets in excess of $5 billion.
1.3 Distributions of the Bonus Pool. Promptly upon receipt
of any contribution to the Bonus Pool payable by the Series at the end of
each calendar [quarter], ALPS shall distribute the aggregate Bonus Pool
then available equally among all Wholesalers, provided that ALPS may make
such distribution on a basis other than equally if such alternative
distribution has been set forth in a written
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plan delivered to the Company in advance of the end of such calendar
quarter and such alternative distribution is approved at the next
succeeding regular meeting of the Board of Directors of the Company.
1.4 Base Salary. ALPS agrees that during the term of the
Marketing Agreement it shall pay each Wholesaler from the fees payable to
ALPS under Section 3.1 of the Marketing Agreement an annual salary on
average among all Wholesalers of not less than $75,000.
SECTION 2
ALPS'S REPRESENTATIONS AND OBLIGATIONS
2.1 ALPS agrees and understands that this Agreement is a Rule
12b-1 related agreement under the 1940 Act, subject to the provisions of
such Rule, as well as any other applicable rules or regulations of the
Commission.
2.2 ALPS will provide to the Company's Board of Directors at
least quarterly a written report of the Bonus Pool amounts distributed
hereunder and will furnish the Company's Board of Directors or its
designees with such information as the Company or they may reasonably
request (including, without limitation, periodic reports confirming the
provision by the Wholsesalers of the services described in the Marketing
Agreement).
SECTION 3
EFFECTIVENESS, TERMINATION AND AMENDMENT
3.1 Effectiveness. This Agreement shall become effective
without any further action of or approval by ALPS immediately upon its
approval by vote of (i) the Company's Board of Directors and (ii) a
majority of those Directors who are not "interested persons" (as defined in
the 0000 Xxx) of the Company and have no direct or indirect financial
interest in the operation of the 12b-1 Plans adopted by the Company or in
any agreement related thereto ("Disinterested Directors") cast in person at
a meeting called for the purpose of voting on such approval. Neither ALPS
nor any Series shall make any contributions to the Bonus Pool in accordance
with Section 1.2 with respect to any period prior to the effectiveness of
this Agreement.
3.2 Termination. This Agreement may be terminated at any
time as to any Series, without penalty, (a) upon sixty days' written notice
to ALPS, by the Company by the vote of a majority of the Disinterested
Directors or the vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of such Series, and (b) upon the termination
of the Marketing Agreement by the Company or ALPS in accordance with the
terms thereof.
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3.3 Assignment. This Agreement may not be assigned and shall
automatically terminate in the event of its "assignment" as defined in the
1940 Act or upon a change of control of ALPS.
3.4 Amendment. This Agreement may be amended by mutual
consent, provided that the Company's consent to any material amendment to
this Agreement requires the approval provided for in paragraph (b)(4) of
Rule 12b-1 under the 1940 Act.
3.5 Non-interested Company Directors. While this Agreement
is in effect, the selection and nomination of the Disinterested Directors
shall be committed to the discretion of such Disinterested Directors.
SECTION 4
NOTICE
4.1 Any notice or other communication required or permitted
to be given pursuant to this Agreement shall be deemed duly given if
addressed and delivered, or mailed by registered mail, postage prepaid, to
(1) ALPS Mutual Funds Services, Inc., 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000 Attention: Chief Financial Officer and (2) The
CountryBaskets(SM) Index Fund, Inc. at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Secretary.
SECTION 5
MISCELLANEOUS
5.1 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
5.2 Captions. The captions in this Agreement are included
for convenience only and in no way define or limit any of the provisions
hereof or otherwise affect their construction.
5.3 Severability. If any provisions of this Agreement shall
be held or made invalid, in whole or in part, then the other provisions of
this Agreement shall remain in force. Invalid provisions shall, in
accordance with this Agreement's intent and purpose, be replaced, to the
extent legally possible, by valid provisions in order to effectuate the
intended economic results of the invalid provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first written above.
THE COUNTRYBASKETS INDEX
FUND, INC.
By:____________________
Name:
Title:
ALPS MUTUAL FUNDS SERVICES,
INC.
By:____________________
Name:
Title:
