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EXHIBIT (6)(a)
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DISTRIBUTION AGREEMENT
June 18, 1993, as amended as of January 2, 1997
The Ohio Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, The Cardinal Group, an Ohio business trust (the
"Group"), has agreed that The Ohio Company, an Ohio corporation ("Distributor"),
shall be, for the period of this Distribution Agreement (the "Agreement"), the
distributor of the shares of beneficial interest of each class of the currently
constituted investment portfolios and any additional investment portfolios of
the Group, as each are or will be identified on Schedule A hereto (such current
investment portfolios and any additional investment portfolios together called
the "Funds"). Such shares of beneficial interest are hereinafter called
"Shares."
1. Services as Distributor.
1.1 Distributor will act as agent for the distribution of the Shares
covered by the registration statement and prospectuses of the Group then in
effect under the Securities Act of 1933, as amended (the "1933 Act").
1.2 Distributor agrees to use appropriate efforts to solicit orders
for the sale of the Shares and will undertake such advertising and promotion as
it believes reasonable in connection with such solicitation. The Group
understands that Distributor is now and, in the future, may be the distributor
of the shares of several investment companies or series (together, "Companies")
including Companies having investment objectives similar to those of the Funds
of the Group. The Group further understands that investors and potential
investors in the Group may invest in shares of such other Companies. The Group
agrees that Distributor's duties to such Companies shall not be deemed to be in
conflict with its duties to the Group under this paragraph 1.2.
Except as provided in Section 2 herein, Distributor shall, at its own
expense, finance appropriate activities which it deems reasonable which are
primarily intended to result in the sale of the Shares, including, but not
limited to, advertising, compensation of underwriters, dealers and sales
personnel, the printing and mailing of prospectuses to other than current
Shareholders, and the printing and mailing of sales literature.
1.3 All activities by Distributor and its shareholders, directors,
agents, and employees as distributor of the Shares shall comply with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted
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pursuant to the Investment Company Act of 1940 ("1940 Act") by the Securities
and Exchange Commission (the "Commission") or any securities association
registered under the Securities Exchange Act of 1934.
1.4 Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Group and
the Funds.
1.5 Distributor will transmit any orders received by it for purchase
or redemption of the Shares to the transfer agent and custodian for the Funds.
1.6 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions, or by abnormal circumstances of any
kind, the Group's officers may decline to accept any orders for, or make any
sales of the Shares until such time as those officers deem it advisable to
accept such orders and to make such sales.
1.7 Distributor will act only on its own behalf as principal if it
chooses to enter into selling agreements with selected dealers or others.
1.8 The Group agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the qualification of
the Shares for sale in such states as Distributor may designate.
1.9 The Group shall furnish from time to time, for use in connection
with the sale of the Shares, such information with respect to the Funds and the
Shares as Distributor may reasonably request; and the Group warrants that the
statements contained in any such information shall fairly show or represent what
they purport to show or represent. The Group shall also furnish or cause to be
furnished to Distributor upon request with: (a) unaudited semi-annual statements
of the Funds' books and accounts prepared by or on behalf of the Group, (b)
quarterly earnings statements prepared by or on behalf of the Group, (c) a
monthly itemized list of the securities in the Funds, (d) monthly balance sheets
as soon as practicable after the end of each month, and (e) from time to time
such additional information regarding the financial condition of the Funds as
Distributor may reasonably request.
1.10 The Group represents to Distributor that all registration
statements and prospectuses filed by the Group with the Commission under the
1933 Act with respect to the Shares have been carefully prepared in conformity
with the requirements of the 1933 Act and rules and regulations of the
Commission thereunder. As used in this agreement the terms "registration
statement" and "prospectus" shall mean any registration statement and any
prospectus and
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Statement of Additional Information relating to the Funds filed with the
Commission and any amendments and supplements thereto which at any time shall
have been filed with the Commission. The Group represents and warrants to
Distributor that any registration statement and prospectus, when such
registration statement becomes effective, will contain all statements required
to be stated therein in conformity with the 1993 Act and the rules and
regulations of the Commission; that all statements of fact contained in any such
registration statement and prospectus will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of the Shares. The Group may but shall not be
obligated to propose from time to time such amendment or amendments to any
registration statement and such supplement or supplements to any prospectus as,
in the light of future developments, may, in the opinion of the Group's counsel,
be necessary or advisable. If the Group shall not propose such amendment or
amendments and/or supplement or supplements within fifteen days after receipt by
the Group of a written request from Distributor to do so, Distributor may, at
its option, terminate this agreement. The Group shall not file any amendment to
any registration statement or supplement to any prospectus without giving
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this agreement shall in any way limit the Group's right to
file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Group may deem
advisable, such right being in all respects absolute and unconditional.
1.11 The Group authorizes Distributor and dealers to use any prospectus
in the form most recently furnished in connection with the sale of the Shares.
The Group agrees to indemnify, defend and hold Distributor, its directors,
shareholders and employees, and any person who controls 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 Distributor, its shareholders,
directors and employees, or any such controlling person, may incur under the
1933 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
any registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that the Group's
agreement to indemnify Distributor, its shareholders, directors or employees,
and any such controlling person shall not be deemed to
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cover any claims, demands, liabilities or expenses arising out of any statements
or representations as are contained in any prospectus and in such financial and
other statements as are furnished to the Group by Distributor and used in the
answers to the registration statement or in the corresponding statements made in
the prospectus, or arising out of or based upon any omission or alleged omission
to state a material fact in connection with the giving of such information
required to be stated in such answers or necessary to make the answers not
misleading; and further provided that the Group's agreement to indemnify
Distributor and the Group's representations and warranties hereinbefore set
forth in paragraph 1.10 shall not be deemed to cover any liability to the Group
or its Shareholders to which 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 Distributor's reckless disregard of its obligations and
duties under this agreement. The Group's agreement to indemnify Distributor, its
shareholders, directors and employees, and any such controlling person, as
aforesaid, is expressly conditioned upon the Group's being notified of any
action brought against Distributor, its shareholders, directors or employees, or
any such controlling person, such notification to be given by letter or by
telegram addressed to the Group at its principal office in Columbus, Ohio and
sent to the Group by the person against whom such action is brought, within 10
days after the summons or other first legal process shall have been served. The
failure to so notify the Group of any such action shall not relieve the Group
from any liability which the Group may have to the person against whom such
action is brought by reason of any such untrue, or allegedly untrue, statement
or omission, or alleged omission, otherwise than on account of the Group's
indemnity agreement contained in this paragraph 1.11. The Group will be entitled
to assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of good
standing chosen by the Group and approved by Distributor, which approval shall
not be unreasonably withheld. In the event the Group elects to assume the
defense of any such suit and retain counsel of good standing approved by
Distributor, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case the
Group does not elect to assume the defense of any such suit, or in case
Distributor reasonably does not approve of counsel chosen by the Group, the
Group will reimburse Distributor, its shareholders, directors and employees, or
the controlling person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by Distributor or them. The
Group's indemnification agreement contained in this paragraph 1.11 and the
Group's representations and warranties in this agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of Distributor, its shareholders, directors and employees, or any
controlling person, and shall survive the delivery of any Shares. This agreement
of indemnity will inure exclusively to
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Distributor's benefit, to the benefit of its several shareholders, directors and
employees, and their respective estates, and to the benefit of the controlling
persons and their successors. The Group agrees promptly to notify Distributor of
the commencement of any litigation or proceedings against the Group or any of
its officers or Trustees in connection with the issue and sale of any Shares.
1.12 Distributor agrees to indemnify, defend and hold the Group, its
several officers and Trustees and any person who controls the Group 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 costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Group, its officers or Trustees
or any such controlling person, may incur under the 1933 Act or under common law
or otherwise, but only to the extent that such liability or expense incurred by
the Group, its officers or Trustees or such controlling person resulting from
such claims or demands, shall arise out of or be based upon any untrue, or
alleged untrue, statement of a material fact contained in information furnished
by Distributor to the Group and used in the answers to any of the items of the
registration statement or in the corresponding statements made in the
prospectus, or shall arise out of or be based upon any omission, or alleged
omission, to state a material fact in connection with such information furnished
by Distributor to the Group required to be stated in such answers or necessary
to make such information not misleading. Distributor's agreement to indemnify
the Group, its officers and Trustees, and any such controlling person, as
aforesaid, is expressly conditioned upon Distributor's being notified of any
action brought against the Group, its officers or Trustees, or any such
controlling person, such notification to be given by letter or telegram
addressed to Distributor at its principal office in Columbus, Ohio, and sent to
Distributor by the person against whom such action is brought, within 10 days
after the summons or other first legal process shall have been served.
Distributor shall have the right of first control of the defense of such action,
with counsel of its own choosing, satisfactory to the Group, if such action is
based solely upon such alleged misstatement or omission on Distributor's part,
and in any other event the Group, its officers or Trustees or such controlling
person shall each have the right to participate in the defense or preparation of
the defense of any such action. The failure to so notify Distributor of any such
action shall not relieve Distributor from any liability which Distributor may
have to the Group, its officers or Trustees, or to such controlling person by
reason of any such untrue or alleged untrue statement, or omission or alleged
omission, otherwise than on account of Distributor's indemnity agreement
contained in this paragraph 1.12.
1.13 No Shares shall be offered by either Distributor or the Group
under any of the provisions of this agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by
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the Group 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 1933 Act or if and so long as a current prospectus as
required by Section 10(a) of the 1933 Act is not on file with the Commission;
provided, however, that nothing contained in this paragraph 1.13 shall in any
way restrict or have an application to or bearing upon the Group's obligation to
repurchase Shares from any Shareholder in accordance with the provisions of the
Group's prospectus, Declaration of Trust, or By-Laws.
1.14 The Group agrees to advise Distributor as soon as reasonably
practical by a notice in writing delivered to Distributor:
(a) of any request by the Commission for amendments to the
registration statement or prospectus then in effect or for additional
information;
(b) in the event of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement or
prospectus then in effect or the initiation by service of process on
the Group of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement
of a material fact made in the registration statement or prospectus
then in effect or which requires the making of a change in such
registration statement or prospectus in order to make the statements
therein not misleading; and
(d) of all action of the Commission with respect to any amendment
to any registration statement or prospectus which may from time to time
be filed with the Commission.
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.
1.15 Distributor agrees on behalf of itself and its directors,
officers, agents, and employees to treat confidentially and as proprietary
information of the Group all records and other information relative to the Group
and its prior, present or potential Shareholders, and not to use such records
and information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in writing
by the Group, which approval shall not be unreasonably withheld and may not be
withheld where 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 Group.
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1.16 This Agreement shall be governed by the laws of the State of Ohio.
2. Fee.
The Distributor shall receive from the Funds identified on Schedule B
hereto with respect to such Funds' Investor A Shares a distribution fee at the
rate and upon the terms and conditions set forth in the Investor A Distribution
and Shareholder Service Plan attached as Schedule C hereto, and as amended from
time to time. The distribution fee described above shall be accrued daily and
shall be paid on the first business day of each month, or at such time(s) as
Distributor shall reasonably request.
3. Sale and Payment.
Under this Agreement, the following provisions shall apply only with
respect to the sale of and payment of Shares of any class sold at an offering
price which includes a sales load (collectively, "Load Shares") as described in
the prospectuses of any Funds identified on Schedule D hereto (collectively, the
"Load Funds" and individually, a "Load Fund"):
(a) Distributor shall have the right, as principal, to purchase
Load Shares from the Load Funds at their net asset value and to sell
such Load Shares to the public against orders therefor at the
applicable public offering price, as defined in Section 4 hereof.
Distributor shall also have the right, as principal, to sell Load
Shares to dealers against orders therefor at the public offering price
less a concession determined by Distributor, which concession shall not
exceed the amount of the sales charge or underwriting discount, if any,
referred to in Section 4 below.
(b) Prior to the time of delivery of any Load Shares by a Load
Fund to, or on the order of, Distributor, Distributor shall pay or
cause to be paid to the Load Fund or to its order an amount in federal
funds equal to the applicable net asset value of such Load Shares.
Distributor may retain so much of any sales charge or underwriting
discount as is not allowed by Distributor as a concession to dealers.
4. Public Offering Price.
The public offering price shall be the net asset value of Load Shares,
plus any applicable sales charge, all as set forth in the current prospectus of
the Load Fund. The net asset value of Load Shares shall be determined in
accordance with the provisions of the Declaration of Trust and By-Laws of the
Group and the then current prospectus of the Load Fund.
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5. Issuance of Shares.
The Load Funds reserve the right to issue, transfer or sell Load Shares
at net asset value (a) in connection with the merger or consolidation of the
Group or the Load Fund(s) with any other investment company or the acquisition
by the Group or the Load Fund(s) of all or substantially all of the assets or of
the outstanding Shares of any other investment company; (b) in connection with a
pro rata distribution directly to the holders of Load Shares in the nature of a
stock dividend or split; (c) upon the exercise of subscription rights granted to
the holders of Load Shares on a pro rata basis; (d) in connection with the
issuance of Load Shares pursuant to any exchange and reinvestment privileges
described in any then current prospectus of the Load Fund; and (e) otherwise in
accordance with any then current prospectus of the Load Fund.
6. Term and Matters Relating to the Group as an Ohio Business Trust.
This Agreement, as amended as of January 2, 1997, shall become
effective on January 2, 1997, and, unless sooner terminated as provided herein,
shall continue automatically for successive annual periods ending on June 18 of
each year with respect to each of the Funds, provided such continuance is
specifically approved at least annually by (i) the Group's Board of Trustees or
(ii) by "vote of a majority of the outstanding voting securities" (as defined
below) of the Group, provided, however, that in either event the continuance is
also approved by the majority of the Group's Trustees who are not parties to the
agreement or interested persons (as defined in the 0000 Xxx) of any party to
this agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, on not
less than sixty days' notice, by the Group's Board of Trustees, by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Group or by Distributor. This Agreement will also terminate automatically in
the event of its assignment (as defined in the 1940 Act).
The Cardinal Group is a business trust organized under Chapter 1746,
Ohio Revised Code, and under a Declaration of Trust to which reference is hereby
made and a copy of which is on file at the office of the Secretary of the State
of Ohio as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "The Cardinal Group" entered into in the
name or on behalf thereof by any of the Trustees, officers, employees or agents
are made not individually, but in such capacities, and are not binding upon any
of the Trustees, Shareholders, officers, employees or agents of the Group
personally, but bind only the assets of the Group, as set forth in Section
1746.13(A), Ohio Revised Code, and all persons dealing with any of the Funds of
the Group must look solely to the assets of the Group belonging to such series
for the enforcement of any claims against the Group.
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Yours very truly,
THE CARDINAL GROUP
By
---------------------------------------
Xxxxx X. Xxxxxx, President
Accepted:
THE OHIO COMPANY
By
--------------------------------
H. Xxxxx Xxxxx, Chief
Operating Officer
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Dated: January 2, 1997
Schedule A
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993, as amended as of January 2, 1997
Name of Fund Date
------------ ----
Cardinal Balanced Fund June 18, 1993
Cardinal Aggressive Growth Fund June 18, 1993
The Cardinal Fund January 10, 1996
Cardinal Government Obligations Fund January 10, 1996
Cardinal Government Securities Money
Market Fund January 10, 1996
Cardinal Tax Exempt Money Market Fund January 10, 1996
THE CARDINAL GROUP
By
--------------------------------------
Xxxxx X. Xxxxxx, President
THE OHIO COMPANY
By
--------------------------------------
H. Xxxxx Xxxxx, Chief
Operating Officer
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Dated: January 2, 1997
Schedule B
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993, as amended as of January 2, 1997
Name of Investor A Plan Fund Date
---------------------------- ----
Cardinal Balanced Fund
Investor A Shares January 2, 1997
Cardinal Aggressive Growth Fund
Investor A Shares January 2, 1997
The Cardinal Fund
Investor A Shares January 2, 1997
Cardinal Government Obligations Fund
Investor A Shares January 2, 1997
THE CARDINAL GROUP
By
--------------------------------------
Xxxxx X. Xxxxxx, President
THE OHIO COMPANY
By
--------------------------------------
H. Xxxxx Xxxxx, Chief
Operating Officer
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Schedule C
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993, as amended as of January 2, 1997
INVESTOR A DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
This Plan (the "Investor A Plan") constitutes a distribution and
shareholder service plan of The Cardinal Group, an Ohio business trust (the
"Group"), adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended (the "1940 Act"). The Investor A Plan relates to the Investor A
Shares of those investment portfolios identified on Schedule B to the Group's
Distribution Agreement as may be amended from time to time (the "Investor A Plan
Funds").
Section 1. Each Investor A Plan Fund shall pay to The Ohio Company, an
Ohio corporation and the distributor (the "Distributor") of the Group's shares
of beneficial interest (the "Shares"), a fee in an amount not to exceed on an
annual basis .25% of the average daily net asset value of the Investor A Shares
of such Fund (the "Investor A Plan Fee") for: (a) payments the Distributor makes
to broker/dealers, banks and other institutions (a "Participating Organization")
for distribution assistance and/or Shareholder service pursuant to an agreement
with the Participating Organization or for distribution assistance and/or
Shareholder service provided by the Distributor pursuant to an agreement between
the Distributor and the Group; or (b) reimbursement of expenses incurred by a
Participating Organization pursuant to an agreement in connection with
distribution assistance and/or Shareholder service including, but not limited
to, the reimbursement of expenses relating to printing and distributing
prospectuses to persons other than Shareholders of an Investor A Plan Fund,
printing and distributing advertising and sales literature and reports to
Shareholders used in connection with the sale of Investor A Shares, and
personnel and communication equipment used in servicing Shareholder accounts and
prospective shareholder inquiries. For purposes of the Investor A Plan, a
Participating Organization may include the Distributor or any of its affiliates
or subsidiaries.
Section 2. The Investor A Plan Fee shall be paid by the Investor A Plan
Funds to the Distributor only to compensate or to reimburse the Distributor for
payments or expenses incurred pursuant to Section 1.
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Section 3. The Investor A Plan shall not take effect until it has been
approved, together with any related agreements, by votes of the majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the 1940 Act or the rules and regulations thereunder) of both (a) the
Trustees of the Group, and (b) the Independent Trustees of the Group cast in
person at a meeting called for the purpose of voting on the Investor A Plan or
such agreement.
Section 4. The Investor A Plan shall continue in effect for a period of
more than one year after it takes effect only so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Investor A Plan in Section 3.
Section 5. Any person authorized to direct the disposition of monies
paid or payable by the Investor A Plan Funds pursuant to the Investor A Plan or
any related agreement shall provide to the Trustees of the Group, and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
Section 6. The Investor A Plan may be terminated at any time by vote of
a majority of the Independent Trustees, or by vote of a majority of the
outstanding Investor A Shares of an Investor A Plan Fund.
Section 7. All agreements with any person relating to implementation of
the Investor A Plan shall be in writing, and any agreement related to the
Investor A Plan shall provide:
(a) That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Independent
Trustees or by vote of a majority of the outstanding Investor A Shares
of the Investor A Plan Fund, on not more than 60 days' written notice
to any other party to the agreement; and
(b) That such agreement shall terminate automatically in the event
of its assignment.
Section 8. The Investor A Plan may not be amended to increase
materially the amount of distribution expenses of an Investor A Plan Fund
permitted pursuant to Section 1 hereof without approval by a vote of at least a
majority of the outstanding Investor A Shares of such Investor A Plan Fund, and
all material amendments to the Investor A Plan shall be approved in the manner
provided for approval of the Investor A Plan in Section 3.
Section 9. As used in the Investor A Plan, (a) the term "Independent
Trustees" shall mean those Trustees of the Group who are not interested persons
of the Group, and have no direct or
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indirect financial interest in the operation of the Investor A Plan or any
agreements related to it, and (b) the terms "assignment", "interested person"
and "majority of the outstanding voting securities" shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
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Dated: January 2, 1997
Schedule D
to the
Distribution Agreement
between The Cardinal Group and
The Ohio Company
June 18, 1993, as amended as of January 2, 1997
Name of Load Fund Date
----------------- ----
Cardinal Balanced Fund
Investor A Shares January 2, 1997
Cardinal Aggressive Growth Fund
Investor A Shares January 2, 1997
The Cardinal Fund
Investor A Shares January 2, 1997
Cardinal Government Obligations Fund
Investor A Shares January 2, 1997
THE CARDINAL GROUP
By
--------------------------------------
Xxxxx X. Xxxxxx, President
THE OHIO COMPANY
By
--------------------------------------
H. Xxxxx Xxxxx, Chief
Operating Officer
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