AMENDED AND RESTATED
CLASS B DISTRIBUTION AGREEMENT
AGREEMENT, made as of the 20th day of September, 2002 by and between
Evergreen Equity Trust (the "Trust"), separately on behalf of each of the Funds
as defined below, and Evergreen Distributor, Inc. ("Distributor").
WHEREAS, the Trust has adopted a Plan of Distribution with respect to
Class B shares of its separate investment series (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act")
which Plan authorizes the Trust on behalf of the Funds to enter into agreements
regarding the distribution of Class B shares (the "Shares") of the separate
investment series of the Trust (the "Funds") set forth on Exhibit A, as such
Exhibit may be amended from time to time; and
WHEREAS, the Trust has agreed that the Distributor, a Delaware
corporation, shall act as the distributor of the Shares; and
WHEREAS, the Distributor agrees to act as distributor of the Shares
for the period of this Distribution Agreement (the "Agreement");
NOW, THEREFORE, in consideration of the agreements hereinafter
contained, it is agreed as follows:
1. SERVICES AS DISTRIBUTOR
1.1 The Distributor, as agent for the Trust, agrees to use appropriate efforts
to promote each Fund and to solicit orders for the purchase of Shares and will
undertake such advertising and promotion as it believes reasonable in connection
with such solicitation. The services to be performed hereunder by the
Distributor are described in more detail in Section 7 hereof. The Distributor
may obtain marketing support, including financing for commissions advanced to
dealers, brokers or other persons responsible for orders for the Shares,
pursuant to the terms of that certain Marketing Services Agreement dated as of
January 1, 1998 among the Trust, the Distributor and Evergreen Investment
Services, Inc. ("EIS") (which was formerly known as Evergreen Keystone
Investment Services Company and prior to that was known as Keystone Investment
Distributors Company), as marketing services agent (as amended and supplemented
from time to time, the "Marketing Services Agreement"), and pursuant thereto may
pay or cause to be paid to EIS all or any portion of the Distribution Fee,
Service Fee, Distributor's Spread and CDSCs (each as defined below) to which the
Distributor might otherwise be entitled.
1.2 In the event that the Trust establishes additional investment series with
respect to which it desires to retain the Distributor to act as distributor for
Class B shares hereunder, it shall promptly notify the Distributor in writing.
If the Distributor is willing to render such services it shall notify the Trust
in writing whereupon such series shall become a Fund and its Class B shares
shall become Shares hereunder. The Trust, on behalf of a Fund or Funds may
terminate or amend this Agreement (subject to the provisions of Section 7
hereof) as to such Fund or Funds.
1.3 All activities by the Distributor and its agents and employees as the
distributor of Shares shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted pursuant to the 1940 Act by the Securities and Exchange Commission (the
"Commission") or any securities association registered under the Securities
Exchange Act of 1934, as amended (the "1934 Act").
1.4 In selling the Shares, the Distributor shall use its best efforts in all
respects duly to conform with the requirements of all Federal and state laws
relating to the sale of such securities. Neither the Distributor, any selected
dealer or any other person is authorized by the Trust to give any information or
to make any representations, other than those contained in the Trust's
registration statement (the "Registration Statement") or related Fund prospectus
and statement of additional information ("Prospectus and Statement of Additional
Information") and any sales literature specifically approved by the Trust.
1.5 The Distributor shall adopt and follow procedures, as approved by the
officers of the Trust, for the confirmation of sales to investors and selected
dealers, the collection of amounts payable by investors and selected dealers on
such sales, and the cancellation of unsettled transactions, as may be necessary
to comply with the requirements of the National Association of Securities
Dealers, Inc. (the "NASD"), as such requirements may from time to time exist.
1.6 The Distributor will transmit any orders received by it for purchase or
redemption of Shares to the transfer agent and custodian for the applicable
Fund.
1.7 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind, the
Trust's officers may decline to accept any orders for or make any sales of
Shares until such time as those officers deem it advisable to accept such orders
and to make such sales.
1.8 The Distributor will act only on its own behalf as principal if it chooses
to enter into selling agreements with selected dealers or others. The
Distributor shall offer and sell Shares only to such selected dealers as are
members, in good standing, of the NASD or are exempt from registration as a
broker-dealer under the 0000 Xxx.
1.9 The Distributor agrees to adopt compliance standards, in a form satisfactory
to the Trust, governing the operation of the multiple class distribution system
under which Shares are offered.
2. DUTIES OF THE TRUST.
2.1 The Trust agrees at its own expense to execute any and all documents and to
furnish, at its own expense, any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the qualification of
Shares for sale in such states as the Trust and the Distributor may designate.
2.2 The Trust shall furnish from time to time for use in connection with the
sale of Shares such information with respect to the Funds and the Shares as the
Distributor may reasonably request and the Trust warrants that any such
information shall be true and correct. Upon request, the Trust shall also
provide or cause to be provided to the Distributor: (a) unaudited semi-annual
statements of each Fund's books and accounts, (b) quarterly earnings statements
of each Fund, (c) a monthly itemized list of the securities in each Fund, (d)
monthly balance sheets as soon as practicable after the end of each month, and
(e) from time to time such additional information regarding each Fund's
financial condition as the Distributor may reasonably request.
3. REPRESENTATIONS OF THE TRUST.
3.1 The Trust represents to the Distributor that it is registered under the 1940
Act and that the Shares of each of the Funds have been registered under the
Securities Act of 1933, as amended (the "Securities Act"). The Trust will file
such amendments to its Registration Statement as may be required and will use
its best efforts to ensure that such Registration Statement remains accurate.
4. INDEMNIFICATION.
4.1 The Trust shall indemnify and hold harmless the Distributor, its officers
and directors, and each person, if any, who controls the Distributor within the
meaning of Section 15 of the Securities Act (the "Distributor Indemnitees")
against any loss, liability, claim, damage or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damage or
expense and reasonable counsel fees incurred in connection therewith), which any
Distributor Indemnitee may incur under the Securities 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 the Registration Statement, as from
time to time amended or supplemented, any prospectus or annual or interim report
to shareholders of the Trust, or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, information
furnished to the Trust in connection therewith by or on behalf of the
Distributor, provided, however, that in no case (i) is the indemnity of the
Trust in favor of the Distributor Indemnitees to be deemed to protect the
Distributor Indemnitees against any liability to the Trust, any Fund or any
security holders thereof to which the Distributor Indemnitees would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of their duties or by reason of the reckless disregard of their
obligations and duties under this Agreement; or (ii) is the Trust to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against any Distributor Indemnitee unless the Distributor Indemnitee
shall have notified the Trust in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Distributor Indemnitee (or after the
Distributor Indemnitee shall have received notice of such service on any
designated agent), but failure to notify the Trust of any such claim shall not
relieve it from any liability which it may have to the person against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph. The Trust will be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Trust elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor Indemnitee(s) defendant or defendants in the suit. In the event the
Trust elects to assume the defense of any such suit and retain such counsel, the
Distributor Indemnitee(s), defendant or defendants in the suit, shall bear the
fees and expenses of any additional counsel retained by them, but, in case the
Trust does not elect to assume the defense of any such suit, it will reimburse
the Distributor Indemnitee(s) defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Trust shall
promptly notify the Distributor of the commencement of any litigation or
proceeding against it or any of its officers or directors in connection with the
issuance or sale of any of the Shares.
4.2 The Distributor shall indemnify and hold harmless the Trust and each Fund
and each of their directors and officers and each person, if any, who controls
the Trust or any Fund within the meaning of Section 15 of the Securities Act
(the "Trust Indemnitees") against any loss, liability, claim, damage or expense
described in the foregoing indemnity contained in paragraph 4.1, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Trust or Fund in writing by or on behalf of
the Distributor for use in connection with the Registration Statement, as from
time to time amended or supplemented, any prospectus or the annual or interim
reports to shareholders. In case any action shall be brought against any Trust
Indemnitees, in respect of which indemnity may be sought against the
Distributor, the Distributor shall have the rights and duties given to the
Trust, and each Trust Indemnitee shall have the rights and duties given to the
Distributor, by the provisions of paragraph 4.1.
5. OFFERING OF SHARES.
5.1 None of the Shares shall be offered by either the Distributor or the Trust
under any of the provisions of this Agreement, and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Trust, 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
Securities Act or if and so long as a current prospectus and statement of
additional information as required by Section 10(b) (2) of the Securities Act,
as amended, are not on file with the Commission; provided, however, that nothing
contained in this paragraph 5.1 shall in any way restrict or have any
application to or bearing upon the Trust's obligation to repurchase Shares from
any shareholder in accordance with the provisions of the prospectus of each Fund
or the Trust's prospectus or Declaration of Trust.
6. AMENDMENTS TO REGISTRATION STATEMENT AND OTHER MATERIAL EVENTS.
6.1 The Trust agrees to advise the Distributor as soon as reasonably practical
by a notice in writing delivered to the Distributor: (a) of any request or
action taken by the Commission which is material to the Distributor's
obligations hereunder or (b) any material fact of which the Trust becomes aware
which affects the Distributor's obligations hereunder. 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.
7. COMPENSATION OF DISTRIBUTOR
7.1 (a) On all sales of Shares the Fund shall receive the current net
asset value. The Trust in respect of each Fund shall pay to the
Distributor or to its order a fee (the "Distribution Fee") in respect
of the Shares of each such Fund at the rate of 0.75% per annum of the
average daily net asset value of the Shares of such Fund, subject to
the limitation on the maximum amount of such fees under Business
Conduct Rule 2830 (d) (2) of the National Association of Securities
Dealers, Inc. ("NASD") Business Conduct Rules (the "Business Conduct
Rules") as applicable to such Distribution Fee on the date hereof, as
compensation for services provided in connection with the offer and
sale of Shares and shall also pay to the Distributor or to its order
contingent deferred sales charges ("CDSCs") as set forth in the Fund's
current Prospectus and Statement of Additional Information, and as
required by this Agreement. The Fund shall also make payments to the
Distributor or to its order consisting of shareholder service fees
("Service Fees") at the rate of 0.25% per annum of the average daily
net asset value of the Shares. The Distributor may allow all or a part
of said Distribution Fee and CDSCs received by it (and not paid to
others as hereinafter provided) to such brokers, dealers or other
persons as Distributor may determine. The Distributor may also pay
Service Fees received by it (and not paid to others as hereinafter
provided) to brokers, dealers or other persons providing services to
shareholders.
(b) As promptly as possible after the first Business Day (as
defined in the Prospectus) following the twentieth day of each month,
the Trust shall pay to the Distributor or to its order the
Distributor's Allocable Portion of the Distribution Fee, any CDSCs and
any Service Fees that may be due in respect of each Fund.
(c) The Trust agrees to cause its transfer agent to maintain
the records and arrange for the payments on behalf of the Trust in
respect of each Fund at the times and in the amounts and to the
accounts required by Schedule I hereto, as the same may be amended from
time to time. It is acknowledged and agreed that by virtue of the
operation of Schedule I hereto the Distribution Fee paid by the Trust
to the Distributor in respect of Shares of each Fund, may, to the
extent provided in Schedule I hereto, take into account the
Distribution Fee payable by such Fund in respect of other existing and
future classes and/or sub-classes of shares of such Fund which would be
treated as "Shares" under Schedule I hereto. The Trust will limit
amounts paid to any subsequent principal underwriters of Shares of a
Fund to the portion of the Asset Based Sales Charge paid in respect of
Shares attributable to such Shares the Date of Original Purchase of
which occurred after the termination of this Distribution Agreement.
The Trust shall cause the transfer agent and sub-transfer
agents for each Fund to withhold from redemption proceeds payable to
holders of Shares of such Fund on redemption thereof the CDSCs payable
upon redemption thereof as set forth in the then current Prospectus
and/or Statement of Additional Information of such Fund and to pay to
the Distributor or to its order such CDSCs paid in respect of Class B
Shares of such Fund.
(d) The Distributor shall be considered to have completely
earned the right to the payment of the Distribution Fee and the right
to payment over to it or to its order of the CDSC in respect of Shares
of a Fund as provided for hereby upon the completion of the sale of
each Commission Share of such Fund (as defined in Schedule I hereto).
(e) Except as provided in Section 7(F) below in respect of the
Distribution Fee only, the Trust's obligation to pay to
the Distributor or to its order the Distribution Fee in
respect of a Fund and to pay over to the Distributor or to
its order CDSCs provided for hereby shall be absolute and
unconditional and shall not be subject to dispute, offset,
counterclaim or any defense whatsoever (it being
understood that nothing in this sentence shall be deemed a
waiver by the Trust of its right separately to pursue any
claims it may have against the Distributor with respect to
a Fund and enforce such claims against any assets (other
than the Distributor's right to the Distribution Fee and
CDSCs (the "Collection Rights" )) of the Distributor.
(f) Notwithstanding anything in this Agreement to the
contrary, the Trust in respect of each Fund shall pay to
the Distributor or to its order the Distribution Fee
provided for hereby notwithstanding its termination as
Distributor for the Shares of such Fund or any termination
of this Agreement and such payment of such Distribution
Fee, and that obligation and the method of computing such
payment, shall not be changed or terminated except to the
extent required by any change in applicable law,
including, without limitation, the 1940 Act, the Rules
promulgated thereunder by the Securities and Exchange
Commission and the Business Conduct Rules, in each case
enacted or promulgated after January 1, 1998, or in
connection with a Complete Termination (as hereinafter
defined). For the purposes of this Section 7, "Complete
Termination" means in respect of a Fund a termination of
such Fund's Rule 12b-1 plan for Class B Shares involving
the cessation of payments of the Distribution Fee, and the
cessation of payments of the Distribution Fee pursuant to
every other Rule 12b-1 plan of such Fund for every
existing or future B-Class-of-Shares (as hereinafter
defined) and the Fund's discontinuance of the offering of
every existing or future B-Class-of-Shares, which
conditions shall be deemed satisfied when they are first
complied with hereafter and so long thereafter as they
are complied with prior to the date upon which the
Distributor shall have received all Distribution Fees and
CDSCs, to which it is entitled pursuant to this
Section 7. For purposes of this Section 7, the term B-
Class-of-Shares means the Shares of each Fund and each
other class of shares of such Fund hereafter issued which
would be treated as Shares under Schedule I hereto or
which has substantially similar economic characteristics
to the B Class of Shares taking into account the total
sales charge, CDSC or other similar charges borne directly
or indirectly by the holders of the shares of such
class. The parties agree that the existing C Class of
shares of any Fund does not have substantially similar
economic characteristics to the B-Class-of-Shares taking
into account the total sales charge, CDSCs or other
similar charges borne directly or indirectly by the
holders of such shares. For purposes of clarity the
parties to the Agreement hereby state that they intend
that a new installment load class of shares which is
authorized by Rule 6c-10 under the 1940 Act will be
considered to be a B-Class-of-Shares if it has economic
characteristics substantially similar to the economic
characteristics of the existing Class B Shares taking
into account the total sales charge, CDSCs or other
similar charges borne directly or indirectly by the holder
of such shares and will not be considered to be a B-Class
-of-Shares if it has economic characteristics
substantially similar to the economic characteristics of
the existing Class C shares of the Fund taking into
account the total sales charge, CDSCs or other similar
charges borne directly or indirectly by the holders of
such shares.
(g) The Distributor may assign, sell or otherwise transfer
any part of the Distribution Fee and CDSCs and obligations
of the Trust with respect to a Fund related thereto (but
not the Distributor's obligations to the Trust with
respect to such Fund provided for in this Agreement,
except that the Distributor may obtain marketing support
from EIS pursuant to the Marketing Services Agreement
and may delegate or sub-contract certain functions to
other broker-dealers so long as the Distributor remains
employed by the Trust with respect to such Fund) to any
person (an "Assignee") and any such assignment shall be
effective upon written notice to the Trust by the
Distributor. In connection therewith the Trust shall
pay all or any amounts in respect of the Distribution Fee
and CDSCs directly to the Assignee thereof as directed in
a writing by the Distributor with the consent of the
Trust.
The Trust will not, to the extent it may otherwise be
empowered to do so, change or waive any CDSC with respect to Class B
Shares, except as provided in a Fund's Prospectus or Statement of
Additional Information without the Distributor's or Assignee's consent,
as applicable. Notwithstanding anything to the contrary in this
Agreement or any termination of this Agreement or the Distributor as
principal underwriter for the Shares of the Funds, the Distributor
shall be entitled to be paid the CDSCs attributable to Shares the Date
of Original Purchase of which occurred before the termination of this
Distribution Agreement whether or not a Fund's Rule 12b-1 plan for B
Shares is terminated and whether or not any such termination is a
Complete Termination, as defined above.
(h) Under this Agreement, the Distributor shall: (i) make
payments to securities dealers and others engaged in the
sale of Shares; (ii) make payments of principal and
interest in connection with the financing of commission
payments made by the Distributor in connection with the
sale of Shares; (iii) incur the expense of obtaining such
support services, telephone facilities and shareholder
services as may reasonably be required in connection
with its duties hereunder; (iv) formulate and implement
marketing and promotional activities, including, but
not limited to, direct mail promotions and television,
radio, newspaper, magazine and other mass media
advertising; (v) prepare, print and distribute sales
literature; (vi) prepare, print and distribute
Prospectuses of the Funds and reports for recipients
other than existing shareholders of the Funds; and (vii)
provide to the Trust such information, analyses and
opinions with respect to marketing and promotional
activities as the Trust may, from time to time,
reasonably request.
(i) The Distributor shall prepare and deliver reports to the
Treasurer of the Trust on a regular, at least monthly,
basis, showing the distribution expenditures incurred by
the Distributor in connection with its services rendered
pursuant to this Agreement and the Plan and the purposes
therefor, as well as any supplemental reports as the
Trustees, from time to time, may reasonably request.
(j) The Distributor may retain the difference between the
current offering price of Shares, as set forth in the
current Prospectus for each Fund, and net asset value
("Distributor's Spread"), less any reallowance that is
payable in accordance with the sales charge schedule in
effect at any given time with respect to the Shares.
(k) The Distributor may retain any CDSCs payable with respect
to the redemption of any Shares, provided however, that
any CDSCs received by the Distributor shall first be
applied by the Distributor or its Assignee to any
outstanding amounts payable or which may in the future be
payable by the Distributor or its Assignee under financing
arrangements entered into in connection with the payment
of commissions on the sale of Shares.
8. CONFIDENTIALITY, NON-EXCLUSIVE AGENCY.
8.1. The Distributor agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Funds and its prior, present or potential
shareholders, and, other than in connection with payments to Assignees, not to
use such records and information for any purpose other than performance of its
responsibilities and to obtain approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the 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 Trust.
8.2. Nothing contained in this Agreement shall prevent the Distributor,
or any affiliated person of the Distributor, from performing services similar to
those to be performed hereunder for any other person, firm, or corporation or
for its or their own accounts or for the accounts of others.
9. TERM.
9.1 This Agreement shall continue until December 31, 2003 and thereafter for
successive annual periods, provided such continuance is specifically approved at
least annually by (i) a vote of the majority of the Trustees of the Trust and
(ii) a vote of the majority of those Trustees of the Trust who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Plan, in this Agreement or any agreement
related to the Plan (the "Independent Trustees") by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable at any time, with respect to the Trust, without penalty, (a) on not
less than 60 days' written notice by vote of a majority of the Independent
Trustees, or by vote of the holders of a majority of the outstanding voting
securities of the affected Fund, or (b) upon not less than 60 days' written
notice by the Distributor. This Agreement may remain in effect with respect to a
Fund even if it has been terminated in accordance with this paragraph with
respect to one or more other Funds of the Trust. This Agreement will also
terminate automatically in the event of its assignment, which shall not include
any assignment by the Distributor in accordance with Section 7 hereof. (As used
in this Agreement, the terms "majority of the outstanding voting securities",
"interested persons", and "assignment" shall have the same meaning as such terms
have in the 1940 Act.)
10. MISCELLANEOUS.
10.1 This Agreement shall be governed by the laws of the State of New York.
10.2 The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their constructions or effect.
10.3 The obligations of the Trust hereunder are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust and only the Trust's
property shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below.
EVERGREEN DISTRIBUTOR, INC. EVERGREEN EQUITY TRUST
By: ____________________________ By: ___________________________
Title: Title:
As of March 10, 2003
EXHIBIT A
EVERGREEN EQUITY TRUST
Balanced Funds
Evergreen Asset Allocation Fund
Evergreen Balanced Fund
Evergreen Foundation Fund
Domestic Equity Funds I
Evergreen Aggressive Growth Fund
Evergreen Capital Growth Fund
Evergreen Emerging Growth Fund
(formerly Evergreen Small Company Growth Fund)
Evergreen Fund
Evergreen Growth Fund
Evergreen Large Company Growth Fund
Evergreen Masters Fund
Evergreen Merger and Acquisition Fund
Evergreen Omega Fund
Evergreen Stock Selector Fund Evergreen
Premier 20 Fund
Domestic Equity Funds II
Evergreen Blue Chip Fund
Evergreen Equity Income Fund
Evergreen Growth and Income Fund
Evergreen Large Cap Value Fund
Evergreen Mid Cap Value Fund
Evergreen Small Cap Value Fund
Evergreen Small Cap Value Fund II
Evergreen Special Values Fund
Evergreen Value Fund
Sector Funds
Evergreen Health Care Fund
Evergreen Technology Fund
Evergreen Utility and Telecommunications Fund
Tax Strategic Funds
Evergreen Tax Strategic Equity Fund
Evergreen Tax Strategic Foundation Fund
