Exhibit (e) 3.
UNDERWRITING AGREEMENT
BETWEEN
SM&R INVESTMENTS, INC.
(SM&R EQUITY FUNDS)
AND
SECURITIES MANAGEMENT AND RESEARCH, INC.
THIS UNDERWRITING AGREEMENT (the "Agreement") is made and entered into
as of this 31st day of December, 2000, by and between SECURITIES MANAGEMENT AND
RESEARCH, INC., a Florida corporation hereinafter referred to as the
"Underwriter," and SM&R INVESTMENTS, INC., a Maryland corporation hereinafter
referred to as the "Fund", on behalf of the following three series of the Fund:
the SM&R Growth Fund, the SM&R Equity Income Fund, and the SM&R Balanced Fund
(collectively the "Series").
Each of the Series is a separate series of the Fund with different
investment objectives than the other series, which each pursues through separate
investment policies.
Each of the Series offers three classes of shares (each, a "Class" and,
collectively, "Classes" ) described in the Fund's current effective registration
statement filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Current Registration Statement"). Such Classes
have different sales charges and distribution and service (12b-1) fee structures
described in the Fund's Current Registration Statement.
SM&R is engaged in the business of providing underwriting and related
services to investment companies and desires to provide such services to the
Fund and to each Class of each Series.
In consideration of the mutual covenants contained in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Underwriter and the Fund hereby agree as follows:
1. The Fund hereby appoints the Underwriter as exclusive distributor of the
shares of all Classes of each Series to sell such shares to the public on the
terms set forth in this Agreement. During the term of this Agreement and any
continuation thereof, no Series will sell or agree to sell any of its shares
except to or through the Underwriter at a public offering price determined in
accordance with Paragraph 3 hereof; provided, however, that any Class of the
Series may issue shares at net asset value:
(a) in connection with the merger or consolidation of any investment
company with the Fund or the acquisition by purchase or otherwise of all
or substantially all of the assets of any investment company by the Fund;
(b) to a Series' shareholders upon their reinvestment of dividends of
such Series from net investment income or representing distributions of
such Series from net realized capital gains;
(c) to the shareholders of the other series of the Fund pursuant to
paragraph 5 hereof;
(d) to one or more unit investment trusts organized under the
Investment Company Act of 1940 and sponsored by the Underwriter; and
(e) to such other persons and entities approved or recommended by
Underwriter which the Fund's Board of Directors may from time to time
approve and which are set forth in the Fund's Current Registration
Statement.
2. The Underwriter hereby accepts appointment as exclusive underwriter and
distributor of the shares of all Classes of the Series and agrees that it will
use its best efforts to sell such shares; PROVIDED, HOWEVER, that by accepting
this appointment as exclusive underwriter and distributor of such shares, the
Underwriter does not undertake to sell all or any portion of the shares of any
Class of any Series.
3. The Underwriter agrees to offer shares of the capital stock of the Series
to the public through its representatives and through dealers having sales
agreements with the Underwriter (PROVIDED, HOWEVER, that nothing provided for in
this Agreement shall obligate the Underwriter to execute sales agreements with
dealers or to
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sell any shares to dealers) at an offering price equal to the sum
of:
(a) the net asset value per share which is or becomes effective for
such order of the Series' shares, and
(b) such sales charge as may be fixed by the Underwriter with the
approval of the Board of Directors of the Fund but which shall in no
event exceed five and three-quarter percent (5 3/4%) of the offering
price of each Series' shares increased to the next higher even cent.
The "net asset value" of each Series' shares shall be computed by or on
behalf of the Fund, subject to and in conformity with:
(c) The Fund's Articles of Incorporation and By-Laws; and
(d) the applicable rules and regulations under the Investment Company
Act of 1940 by the Securities and Exchange Commission or by any
securities association of which the Underwriter is a member and is
registered under Section 15A of the Securities Exchange Act of 1934.
The full net asset value for the Fund shares purchased shall be
remitted to the Fund promptly after payment is received by the Underwriter and
in no event later than twelve (12) days after each purchase. The sales charge
received shall be retained by the Underwriter, and the Underwriter may fix the
portion of such sales charge to be allowed to its representatives or to dealers
having sales agreements with the Underwriter.
4. The Underwriter shall require each Series to issue shares of any Class
only to the extent necessary (except for reasonable allowances for clerical
errors, delays and errors of transmission and cancellation of orders) to fill
unconditional orders for shares of such Class placed with the Underwriter by
investors and dealers and not in excess of such unconditional orders, and the
Underwriter will not avail itself of any opportunity of making a profit by
expediting or withholding orders. In the event payment is not received by the
Underwriter for shares so issued by a Series, the Underwriter shall reimburse
the Series for the Net Asset Value applicable to such purchase, and thereafter
the shares so issued will be redeemed at the Net Asset Value applicable at the
time of redemption.
5. Shareholders of a Class of a Series are permitted to exchange their
shares into the shares of another series or fund to the extent provided and
subject to the conditions stated in the Fund's Current Registration Statement.
It is understood that the Underwriter has agreed to waive its right to that
portion of the sales charge waived on shares exchanged pursuant to such exchange
privilege.
6. The Fund hereby authorizes the Underwriter to redeem upon the terms and
conditions hereinafter set forth and as described in the Fund's Current
Registration Statement, as agent of the Fund and for its account, such shares of
stock of each Class of each Series as may be offered for redemption to the Fund
from time to time:
(a) The Underwriter may accept redemption requests from a stockholder
of record (including a request from an agent of such stockholder), to
redeem such shares at a price equal to the net asset value per share
which is or becomes effective for such redemption, computed as set forth
in paragraph 3 hereof
(b) The Underwriter agrees that all redemptions of the Fund's shares
made by it after this Agreement becomes effective shall be made only as
agent for the account of each Series and pursuant to the terms and
conditions herein set forth.
(c) The Fund reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension
or revocation shall be effective forthwith upon receipt of notice by an
officer of the Underwriter by written instrument from an officer of the
Fund duly authorized by its Board of Directors. In the event that the
authorization of the Underwriter is, by terms of such notice, suspended:
(i) for more than forty-eight (48) hours, excluding from such
period any day on which the New York Stock Exchange is not
open, or
(ii) until further notice, the authorization given by this
Article 6 shall not be revived except by vote of the
Board of Directors of the Fund.
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(d) The Underwriter shall have the right to terminate the operation of
this Article 6 upon giving the Fund thirty (30) days' written notice
thereof.
(e) The Underwriter shall receive no commissions in respect of any
redemptions under the foregoing authorization and appointment as agent.
7. The Underwriter covenants and agrees that in selling the shares of each
Series, it will in all respects duly conform with all state and federal laws
relating to the sale of such securities, and will indemnify and save harmless
the Fund and each such Series from any damage or expenses on account of any
wrongful act by it or its representatives. Neither the Underwriter nor any
dealer nor any other person is authorized by the Fund to give any information or
to make any representations other than those contained in the Current
Registration Statement covering the shares of any Series.
8. In connection with the purchase or sale of portfolio securities for the
account of any Series, neither the Underwriter nor any officer or director of
the Underwriter shall act as principal.
9. This Agreement shall become effective on the date hereof and shall
continue in effect for a period of one (1) year and thereafter only so long as
such continuance is specifically approved at least annually by the Board of
Directors or by a vote of a majority of the outstanding voting securities of
each Series, and in either case, by the specific approval by a majority of the
directors, who are not parties to such contract or agreement or "interested"
persons of any such parties, cast in person at a meeting called for the purpose
of voting on such approval, the term "interested" persons for this purpose
having the meaning defined in Section 2(a)(19) of the Investment Company Act of
1940, as amended.
10. This Agreement may be terminated at any time without the payment of any
penalty, by vote of the Board of Directors of the Fund or by vote of the holders
of a majority of the outstanding shares of the Series, or by the Underwriter, on
sixty (60) days' written notice to the other party.
11. This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate on the day and year first above written.
SM&R INVESTMENTS, INC.
By: /s/ Xxxxxxx X. XxXxxxxxx
-----------------------------------------------
Xxxxxxx X. XxXxxxxxx, President
SECURITIES MANAGEMENT AND RESEARCH, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
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