EXHIBIT 6(c)
PAINEWEBBER SECURITIES TRUST
DISTRIBUTION CONTRACT
CLASS C SHARES
CONTRACT made as of November 10, 1995 between PAINEWEBBER SECURITIES TRUST,
a Massachusetts business trust ("Fund"), and XXXXXXXX XXXXXXXX ASSET MANAGEMENT
INC., a Delaware corporation ("Xxxxxxxx Xxxxxxxx").
WHEREAS the Fund is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company and currently
has two distinct series of shares of beneficial interest ("Series"), which
correspond to distinct portfolios and have been designated as the PaineWebber
Small Cap Value Fund and PaineWebber Strategic Income Fund; and
WHEREAS the Fund's board of trustees ("Board") has established an unlimited
number of shares of beneficial interest of the above-referenced Series as Class
C shares ("Class C Shares")(formerly known as Class D shares); and
WHEREAS the Fund has adopted a Plan of Distribution pursuant to Rule 12b-1
under the 1940 Act for its Class C Shares ("Plan") and desires to retain
Xxxxxxxx Xxxxxxxx as principal distributor in connection with the offering and
sale of the Class C Shares of the above-referenced Series and of such other
Series as may hereafter be designated by the Board and have Class C Shares
established; and
WHEREAS Xxxxxxxx Xxxxxxxx is willing to act as principal distributor of the
Class C Shares of each such Series on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Xxxxxxxx Xxxxxxxx as its
exclusive agent to be the principal distributor to sell and to arrange for the
sale of the Class C Shares on the terms and for the period set forth in this
Contract. Xxxxxxxx Xxxxxxxx hereby accepts such appointment and agrees to act
hereunder. It is understood, however, that this appointment does not preclude
sales of the Class C Shares directly through the Fund's transfer agent in the
manner set forth in the Registration Statement. As used in this Contract, the
term "Registration Statement" shall mean the currently effective registration
statement of the Fund, and any supplements thereto, under the Securities Act of
1933, as amended ("1933 Act"), and the 1940 Act.
2. Services and Duties of Xxxxxxxx Xxxxxxxx.
(a) Xxxxxxxx Xxxxxxxx agrees to sell Class C Shares on a best efforts basis
from time to time during the term of this Contract as agent for the Fund and
upon the terms described in the Registration Statement.
(b) Upon the later of the date of this Contract or the initial offering of
the Class C Shares to the public by a Series, Xxxxxxxx Xxxxxxxx will hold itself
available to receive purchase orders, satisfactory to Xxxxxxxx Xxxxxxxx, for
Class C Shares of that Series and will accept such orders on behalf of the Fund
as of the time of receipt of such orders and promptly transmit such orders as
are accepted to the Fund's transfer agent. Purchase orders shall be deemed
effective at the time and in the manner set forth in the Registration Statement.
(c) Xxxxxxxx Xxxxxxxx in its discretion may enter into agreements to sell
Class C Shares to such registered and qualified retail dealers, including but
not limited to PaineWebber Incorporated ("PaineWebber"), as it may select. In
making agreements with such dealers, Xxxxxxxx Xxxxxxxx shall act only as
principal and not as agent for the Fund.
(d) The offering price of the Class C Shares of each Series shall be the
net asset value per Share as next determined by the
Fund following receipt of an order at Xxxxxxxx Xxxxxxxx' principal office. The
Fund shall promptly furnish Xxxxxxxx Xxxxxxxx with a statement of each
computation of net asset value.
(e) Xxxxxxxx Xxxxxxxx shall not be obligated to sell any certain number of
Class C Shares.
(f) To facilitate redemption of Class C Shares by shareholders directly or
through dealers, Xxxxxxxx Xxxxxxxx is authorized but not required on behalf of
the Fund to repurchase Class C Shares presented to it by shareholders and
dealers at the price determined in accordance with, and in the manner set forth
in, the Registration Statement. Such price shall reflect the subtraction of the
contingent deferred sales charge, if any, computed in accordance with and in the
manner set forth in the Registration Statement.
(g) Xxxxxxxx Xxxxxxxx shall provide ongoing shareholder services, which
include responding to shareholder inquiries, providing shareholders with
information on their investments in the Class C Shares and any other services
now or hereafter deemed to be appropriate subjects for the payments of "service
fees" under Section 26(d) of the National Association of Securities Dealers,
Inc. ("NASD") Rules of Fair Practice (collectively, "service activities").
"Service activities" do not include the transfer agency-related and other
services for which PaineWebber receives compensation under the Service Contract
between PaineWebber and the Fund.
(h) Xxxxxxxx Xxxxxxxx shall have the right to use any list of shareholders
of the Fund or any other list of investors which it obtains in connection with
its provision of services under this Contract; provided, however, that Xxxxxxxx
Xxxxxxxx shall not sell or knowingly provide such list or lists to any
unaffiliated person.
3. Authorization to Enter into Exclusive Dealer Agreements and to Delegate
Duties as Distributor. With respect to the Class C Shares of any or all Series,
Xxxxxxxx Xxxxxxxx may enter into an exclusive dealer agreement with PaineWebber
or any other registered and qualified dealer with respect to sales of the Class
C Shares or the provision of service activities. In a separate contract or as
part of any such exclusive dealer agreement, Xxxxxxxx Xxxxxxxx also may delegate
to PaineWebber or another registered and qualified dealer ("sub-distributor")
any or all of its duties specified in this Contract, provided that such separate
contract or exclusive dealer agreement imposes on the sub-distributor bound
thereby all applicable duties and conditions to which Xxxxxxxx Xxxxxxxx is
subject under this Contract, and further provided that such separate contract or
exclusive dealer agreement meets all requirements of the 1940 Act and rules
thereunder.
4. Services Not Exclusive. The services furnished by Xxxxxxxx Xxxxxxxx
hereunder are not to be deemed exclusive and Xxxxxxxx Xxxxxxxx shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Xxxxxxxx Xxxxxxxx, who may also be
a trustee, officer or employee of the Fund, to engage in any other business or
to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar or a dissimilar nature.
5. Compensation.
(a) As compensation for its service activities under this contract with
respect to the Class C Shares, Xxxxxxxx Xxxxxxxx shall receive from the Fund a
service fee at the rate and under the terms and conditions of the Plan adopted
by the Fund with respect to the Class C Shares of the Series, as such Plan is
amended from time to time, and subject to any further limitations on such fee as
the Board may impose.
(b) As compensation for its activities under this contract with respect to
the distribution of the Class C Shares, Xxxxxxxx Xxxxxxxx shall receive from the
Fund a distribution fee at the rate and under the terms and conditions of the
Plan adopted by the Fund with respect to the Class C Shares of the Series, as
such Plan is amended from time to time, and subject to any further limitations
on such fee as the
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Board may impose.
(c) As compensation for its activities under this contract with respect to
the distribution of the Class C Shares, Xxxxxxxx Xxxxxxxx shall receive all
contingent deferred sales charges imposed on redemptions of Class C Shares of
each Series. Whether and at what rate a contingent deferred sales charge will
be imposed with respect to a redemption shall be determined in accordance with,
and in the manner set forth in, the Registration Statement.
(d) Xxxxxxxx Xxxxxxxx may reallow any or all of the distribution fees,
contingent deferred sales charges, or service fees which it is paid under this
Contract to such dealers as Xxxxxxxx Xxxxxxxx may from time to time determine.
6. Duties of the Fund.
(a) The Fund reserves the right at any time to withdraw offering Class C
Shares of any or all Series by written notice to Xxxxxxxx Xxxxxxxx at its
principal office.
(b) The Fund shall determine in its sole discretion whether certificates
shall be issued with respect to the Class C Shares. If the Fund has determined
that certificates shall be issued, the Fund will not cause certificates
representing Class C Shares to be issued unless so requested by shareholders.
If such request is transmitted by Xxxxxxxx Xxxxxxxx, the Fund will cause
certificates evidencing Class C Shares to be issued in such names and
denominations as Xxxxxxxx Xxxxxxxx shall from time to time direct.
(c) The Fund shall keep Xxxxxxxx Xxxxxxxx fully informed of its affairs and
shall make available to Xxxxxxxx Xxxxxxxx copies of all information, financial
statements, and other papers which Xxxxxxxx Xxxxxxxx may reasonably request for
use in connection with the distribution of Class C Shares, including, without
limitation, certified copies of any financial statements prepared for the Fund
by its independent public accountant and such reasonable number of copies of the
most current prospectus, statement of additional information, and annual and
interim reports of any Series as Xxxxxxxx Xxxxxxxx may request, and the Fund
shall cooperate fully in the efforts of Xxxxxxxx Xxxxxxxx to sell and arrange
for the sale of the Class C Shares of the Series and in the performance of
Xxxxxxxx Xxxxxxxx under this Contract.
(d) The Fund shall take, from time to time, all necessary action, including
payment of the related filing fee, as may be necessary to register the Class C
Shares under the 1933 Act to the end that there will be available for sale such
number of Class C Shares as Xxxxxxxx Xxxxxxxx may be expected to sell. The Fund
agrees to file, from time to time, such amendments, reports, and other documents
as may be necessary in order that there will be no untrue statement of a
material fact in the Registration Statement, nor any omission of a material fact
which omission would make the statements therein misleading.
(e) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Class C Shares of each Series for sale
under the securities laws of such states or other jurisdictions as Xxxxxxxx
Xxxxxxxx and the Fund may approve, and, if necessary or appropriate in
connection therewith, to qualify and maintain the qualification of the Fund as a
broker or dealer in such jurisdictions; provided that the Fund shall not be
required to amend its Declaration of Trust or By-Laws to comply with the laws of
any jurisdiction, to maintain an office in any jurisdiction, to change the terms
of the offering of the Class C Shares in any jurisdiction from the terms set
forth in its Registration Statement, to qualify as a foreign corporation in any
jurisdiction, or to consent to service of process in any jurisdiction other than
with respect to claims arising out of the offering of the Class C Shares.
Xxxxxxxx Xxxxxxxx shall furnish such information and other material relating to
its affairs and activities as may be required by the Fund in connection with
such qualifications.
7. Expenses of the Fund. The Fund shall bear all costs and expenses of
registering the Class C Shares with the Securities and Exchange Commission and
state and other regulatory bodies, and shall
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assume expenses related to communications with shareholders of each Series,
including (i) fees and disbursements of its counsel and independent public
accountant; (ii) the preparation, filing and printing of registration statements
and/or prospectuses or statements of additional information required under the
federal securities laws; (iii) the preparation and mailing of annual and interim
reports, prospectuses, statements of additional information and proxy materials
to shareholders; and (iv) the qualifications of Class C Shares for sale and of
the Fund as a broker or dealer under the securities laws of such jurisdictions
as shall be selected by the Fund and Xxxxxxxx Xxxxxxxx pursuant to Paragraph
6(e) hereof, and the costs and expenses payable to each such jurisdiction for
continuing qualification therein.
8. Expenses of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx shall bear all costs
and expenses of (i) preparing, printing and distributing any materials not
prepared by the Fund and other materials used by Xxxxxxxx Xxxxxxxx in connection
with the sale of Class C Shares under this Contract, including the additional
cost of printing copies of prospectuses, statements of additional information,
and annual and interim shareholder reports other than copies thereof required
for distribution to existing shareholders or for filing with any federal or
state securities authorities; (ii) any expenses of advertising incurred by
Xxxxxxxx Xxxxxxxx in connection with such offering; (iii) the expenses of
registration or qualification of Xxxxxxxx Xxxxxxxx as a broker or dealer under
federal or state laws and the expenses of continuing such registration or
qualification; and (iv) all compensation paid to Xxxxxxxx Xxxxxxxx' employees
and others for selling Class C Shares, and all expenses of Xxxxxxxx Xxxxxxxx,
its employees and others who engage in or support the sale of Class C Shares as
may be incurred in connection with their sales efforts.
9. Indemnification.
(a) The Fund agrees to indemnify, defend and hold Xxxxxxxx Xxxxxxxx, its
officers and directors, and any person who controls Xxxxxxxx Xxxxxxxx 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 Xxxxxxxx Xxxxxxxx, its officers,
directors or any such controlling person may incur under the 1933 Act, or under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement or arising
out of or based upon any alleged omission to state a material fact required to
be stated in the Registration Statement or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities
or expenses arise out of or are based upon any such untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by Xxxxxxxx Xxxxxxxx to the
Fund for use in the Registration Statement; provided, however, that this
indemnity agreement shall not inure to the benefit of any person who is also an
officer or trustee of the Fund or who controls the Fund within the meaning of
Section 15 of the 1933 Act, unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling precedent, that such
result would not be against public policy as expressed in the 1933 Act; and
further provided, that in no event shall anything contained herein be so
construed as to protect Xxxxxxxx Xxxxxxxx against any liability to the Fund or
to the shareholders of any Series to which Xxxxxxxx Xxxxxxxx would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations under this Contract. The Fund shall not be liable to Xxxxxxxx
Xxxxxxxx under this indemnity agreement with respect to any claim made against
Xxxxxxxx Xxxxxxxx or any person indemnified unless Xxxxxxxx Xxxxxxxx or other
such person shall have notified the Fund in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon Xxxxxxxx
Xxxxxxxx or such other person (or after Xxxxxxxx Xxxxxxxx or the person shall
have received notice of service on any designated agent). However, failure to
notify the Fund of any claim shall not relieve the Fund from any liability which
it may have to Xxxxxxxx Xxxxxxxx or any person against whom such action is
brought
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otherwise than on account of this indemnity agreement. The Fund shall 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 claims subject to this
indemnity agreement. If the Fund elects to assume the defense of any such claim,
the defense shall be conducted by counsel chosen by the Fund and satisfactory to
indemnified defendants in the suit whose approval shall not be unreasonably
withheld. In the event that the Fund elects to assume the defense of any suit
and retain counsel, the indemnified defendants shall bear the fees and expenses
of any additional counsel retained by them. If the Fund does not elect to assume
the defense of a suit, it will reimburse the indemnified defendants for the
reasonable fees and expenses of any counsel retained by the indemnified
defendants. The Fund agrees to notify Xxxxxxxx Xxxxxxxx promptly of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any of its Class C
Shares.
(b) Xxxxxxxx Xxxxxxxx agrees to indemnify, defend, and hold the Fund, its
officers and trustees and any person who controls the Fund 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 against such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which the Fund, its trustees or officers, or
any such controlling person may incur under the 1933 Act or under common law or
otherwise arising out of or based upon any alleged untrue statement of a
material fact contained in information furnished in writing by Xxxxxxxx Xxxxxxxx
to the Fund for use in the Registration Statement, arising out of or based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement necessary to
make such information not misleading, or arising out of any agreement between
Xxxxxxxx Xxxxxxxx and any retail dealer, or arising out of any supplemental
sales literature or advertising used by Xxxxxxxx Xxxxxxxx in connection with its
duties under this Contract. Xxxxxxxx Xxxxxxxx shall 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 the claim, but if Xxxxxxxx Xxxxxxxx elects to assume
the defense, the defense shall be conducted by counsel chosen by Xxxxxxxx
Xxxxxxxx and satisfactory to the indemnified defendants whose approval shall not
be unreasonably withheld. In the event that Xxxxxxxx Xxxxxxxx elects to assume
the defense of any suit and retain counsel, the defendants in the suit shall
bear the fees and expenses of any additional counsel retained by them. If
Xxxxxxxx Xxxxxxxx does not elect to assume the defense of any suit, it will
reimburse the indemnified defendants in the suit for the reasonable fees and
expenses of any counsel retained by them.
10. Limitation of Liability of the Trustees and Shareholders of the Fund.
The trustees of the Fund and the shareholders of any Series shall not be liable
for any obligations of the Fund or any Series under this Contract, and Xxxxxxxx
Xxxxxxxx agrees that, in asserting any rights or claims under this Contract, it
shall look only to the assets and property of the Fund or the particular Series
in settlement of such right or claims, and not to such trustees or shareholders.
11. Services Provided to the Fund by Employees of Xxxxxxxx Xxxxxxxx. Any
person, even though also an officer, director, employee or agent of Xxxxxxxx
Xxxxxxxx, who may be or become an officer, trustee, employee or agent of the
Fund, shall be deemed, when rendering services to the Fund or acting in any
business of the Fund, to be rendering such services to or acting solely for the
Fund and not as an officer, director, employee or agent or one under the control
or direction of Xxxxxxxx Xxxxxxxx even though paid by Xxxxxxxx Xxxxxxxx.
12. Duration and Termination.
(a) This Contract shall become effective upon the date hereinabove written,
provided that, with respect to any Series, this Contract shall not take effect
unless such action has first been approved by vote of a majority of the Board
and by vote of a majority of those trustees of the Fund who are not interested
persons of the Fund, and have no direct or indirect financial interest in the
operation of the Plan relating to the Series or in any agreements related
thereto (all such
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trustees collectively being referred to herein as the "Independent Trustees"),
cast in person at a meeting called for the purpose of voting on such action.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for one year from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods of
twelve months each, provided that such continuance is specifically approved at
least annually (i) by a vote of a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Board or with respect to any given Series by vote of a majority of the
outstanding voting securities of the Class C Shares of such Series.
(c) Notwithstanding the foregoing, with respect to any Series, this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board, by vote of a majority of the Independent Trustees or by vote
of a majority of the outstanding voting securities of the Class C Shares of such
Series on sixty days' written notice to Xxxxxxxx Xxxxxxxx or by Xxxxxxxx
Xxxxxxxx at any time, without the payment of any penalty, on sixty days' written
notice to the Fund or such Series. This Contract will automatically terminate
in the event of its assignment.
(d) Termination of this Contract with respect to any given Series shall in
no way affect the continued validity of this Contract or the performance
thereunder with respect to any other Series.
13. Amendment of this Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
14. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Delaware and the 1940 Act[, provided, however, that
Section 10 above will be construed in accordance with the laws of the
Commonwealth of Massachusetts. To the extent that the applicable laws of the
State of Delaware or the Commonwealth of Massachusetts conflict with the
applicable provisions of the 1940 Act, the latter shall control.
15. Notice. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient upon receipt in writing at the other
party's principal offices.
16. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person"
and "assignment" shall have the same meaning as such terms have in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
ATTEST: PAINEWEBBER SECURITIES TRUST
___________________________ By:________________________________
ATTEST: XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
___________________________ By:_________________________________
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