EXHIBIT 23(E)(1)
DISTRIBUTION AGREEMENT
TRANSAMERICA INVESTORS, INC.
DISTRIBUTION AGREEMENT
THIS AGREEMENT was originally made and entered into on December 8, 2003 and
amended on February 10, 2005, by and between TRANSAMERICA INVESTORS, INC., a
corporation organized and existing under the laws of the state of Maryland (the
"Corporation"), and AFSG SECURITIES CORPORATION, a corporation organized and
existing under the laws of the state of Pennsylvania (the "Distributor").
WHEREAS, the Corporation is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1933 Act"),
and in accordance with the provisions of all applicable state securities laws
(the "Blue Sky Laws");
WHEREAS, each series of the Corporation (each a "Fund") is authorized to
issue four classes of shares: Investor Shares, Institutional Shares, Class A
Shares and Class M Shares (collectively, the "Shares"), each of which represents
interests in the same portfolio of investment securities;
WHEREAS, the Distributor is a broker-dealer registered with the Securities
and Exchange Commission (the "Commission") under the Securities Exchange Act of
1934, as amended (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Corporation has adopted a number of plans pursuant to Section
12(b) of the 1940 Act, and Rule 12b-1 thereunder (the "Plans"), to the extent
applicable, pursuant to which the Corporation may pay the expenses for certain
activities and services which are primarily intended to result of the sale of
Shares and other activities and services that are not necessarily primarily
intended to result in the sale of Shares incurred or paid by the Distributor;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE DISTRIBUTOR
The Corporation hereby appoints the Distributor as its exclusive agent to
sell and distribute, as set forth below in Section II, the Shares of each class
of each Fund and of such other Funds and classes of Shares of the Funds as may
hereafter be registered with the Commission and under the Blue Sky Laws, subject
to the terms of this Agreement and the policies and control of the Corporation's
Board of Directors (the "Board"). The Distributor hereby accepts such
appointment.
II. DUTIES OF THE DISTRIBUTOR AND THE CORPORATION
The Corporation employs the Distributor:
A. to promote the Funds;
B. to sell the Shares of each Fund on a best efforts basis from time to
time during the term of this Agreement as agent for the Corporation
and upon the terms described in the currently effective registration
statement of the Corporation, and supplements thereto, under the 1933
Act and the 1940 Act (the "Registration Statement");
C. to enter into agreements, at the Distributor's discretion, to sell
Shares to such registered and qualified retail broker-dealers,
including (without limitation) Transamerica Financial Advisors, Inc.
and Transamerica Capital, Inc., subject to the approval by the Board
of the form or forms of
such agreements. All such brokers and dealers shall act in accordance
with the Registration Statement and shall comply with all applicable
laws, rules and regulations;
D. in connection with the sales and offers of sale of Shares, to give
only such information and make such representations as is permitted by
applicable law. All sales literature and advertisements used by the
Distributor in connection with the sale of the Shares shall be filed
with the appropriate authorities, including the NASD, the states,
and/or the Commission, as may be required from time to time. The
Corporation shall not be responsible in any way for any other
information, statements or representations given or made by the
Distributor or its representatives or agents. Normally, the
Corporation will not exercise any direction or control over the time
and place of solicitation, the persons to be solicited, or the manner
of solicitation. But the Distributor agrees that solicitations will be
in a form acceptable to the Corporation and will be subject to such
terms and conditions as may be prescribed from time to time by the
Board;
E. to offer the Shares of each Fund at the offering price described in
the Registration Statement. The Corporation shall promptly furnish (or
arrange for another person to furnish) the Distributor with a
quotation of the net asset value per Share on each business day; and
F. to enter into agreements with broker dealers, banks or other financial
institutions or securities industry professionals, subject to the
approval by the Board of the form or forms of such agreements to the
extent that such approval is required by applicable law, for the
provision of a variety of non-distribution related activities and
services that are not primarily intended to result in the sale of
Shares, which may include, without limitation: the provision of
personal and continuing services to beneficial owners of Shares;
receiving, aggregating and processing purchase, exchange and
redemption orders of shareholders; providing and maintaining
retirement plan records; communicating periodically with shareholders
concerning administrative issues relating to their accounts, and
answering questions and handling correspondence from shareholders
about their accounts; maintaining account records and providing
beneficial owners with account statements; processing dividend
payments for shares held beneficially; providing sub-accounting
services for shares held beneficially; issuing shareholder reports;
forwarding shareholder communications to beneficial owners of shares;
receiving, tabulating and transmitting proxies executed by beneficial
owners of shares; providing investment advisory services to the extent
authorized by applicable law; general account administration
activities; and paying fees to one or more persons in respect of the
average daily value of Shares beneficially owned by investors for whom
the payee is the dealer of record or holder of record, or beneficially
owned by shareholders with whom the payee has a servicing
relationship.
The Distributor shall not be obligated to sell any certain number of
Shares.
The Corporation agrees:
A. that it will not, without the Distributor's consent, sell or agree to
sell any Shares of the Corporation other than through the Distributor,
except that the Corporation may:
1. issue or sell Shares in connection with its merger or
consolidation with any other investment company or the
Corporation's acquisition by purchase or otherwise of all or
substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company;
2. offer Shares to its shareholders for reinvestment of cash
distribution from capital gains or net investment income of the
Corporation.
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3. issue Shares to shareholders of a Fund who exercise any exchange
privilege set forth in the Registration Statement;
4. issue Shares directly to registered shareholders pursuant to the
authority of the Board; or
5. sell Shares in any jurisdiction in which the Distributor is not
registered as a broker-dealer.
B. to permit the Distributor to use any list of shareholders of the
Corporation or any Fund or any other list of investors which it
obtains in connection with its provision of services under the
Agreement;
C. to keep the Distributor fully informed of its affairs and to make
available to the Distributor copies of all information, financial
statements, and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares,
including, without limitation, certified copies of any financial
statements for the Corporation 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
a Fund as the Distributor may request;
D. to cooperate fully in the efforts of the Distributor to sell and
arrange for the sale of the Shares and in the performance of the
Distributor under this Agreement; and
E. to register or cause to be registered all Shares sold by the
Distributor pursuant to the provisions of this Agreement in such name
or names and amounts as the Distributor may request from time to time.
The Corporation reserves the right at any time to withdraw all offerings of
the Shares of any or all Funds by written notice to the Distributor at its
principal office.
The Corporation and the Distributor hereby agree that all advertisements
and sales literature issued by either of them referring directly or indirectly
to the Corporation or to the Distributor will be submitted to and receive the
approval of the Corporation and the Distributor before it may be used by either
party.
III. REPRESENTATIONS AND WARRANTIES OF THE DISTRIBUTOR
A. REPRESENTATIONS AND WARRANTIES OF THE DISTRIBUTOR
The Distributor hereby represents and warrants to the Corporation as
follows:
1. Due Incorporation and Organization. The Distributor is duly
organized and is in good standing under the laws of the State of
Pennsylvania and is fully authorized to enter into this Agreement
and carry out its terms.
2. Registration. The Distributor is a broker-dealer registered with
the Commission under the 1934 Act, is a member of the NASD, and
is registered or licensed under the laws of all jurisdictions in
which its activities require it to be so registered or licensed.
The Distributor shall maintain such registration or license in
effect at all times during the term of this Agreement and will
immediately notify the Corporation of the occurrence of any event
that would disqualify the Distributor from serving as a
Distributor by operation of Section 9(a) of the 1940 Act or
otherwise.
3. Best Efforts. The Distributor at all times shall provide its best
judgment and effort to the Corporation in carrying out its
obligations hereunder.
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4. Code of Ethics. The Distributor has adopted a written code of
ethics that complies with the requirements of Rule 17j-1 under
the 1940 Act and will provide the Corporation with a copy of such
code of ethics and all subsequent modifications, together with
evidence of its adoption. At least annually the Distributor will
provide the Corporation with a report which summarizes existing
procedures for compliance with the code and any changes in the
procedures made during the past year and identifies any
recommended changes in existing restrictions or procedures based
upon experience with the code, evolving industry practice, or
developments in applicable laws or regulations, and must certify
that the Distributor has adopted procedures reasonably necessary
to prevent "Access Persons," as defined in the code and Rule
17j-1 from violating the code.
5. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
The Corporation, on behalf of the Funds, hereby represents and warrants to
the Distributor as follows:
1. Due Incorporation and Organization. The Corporation is duly
organized under the laws of the State of Maryland and is fully
authorized to enter into this Agreement and carry out its terms.
2. Registration. The Corporation is registered as an investment
company with the Commission under the 1940 Act and Shares of the
Corporation will be registered for offer and sale to the public
under the 1933 Act and under the Blue Sky Laws. Such
registrations shall be kept in effect during the term of this
Agreement.
IV. COMPLIANCE WITH APPLICABLE REQUIREMENTS
In carrying out its obligations under this Agreement, the Distributor shall
at all times conform to:
A. all applicable provisions of the 1934 Act and the 1940 Act and the
rules and regulations thereunder;
B. the provisions of the Registration Statement of the Corporation as the
same may be amended from time to time, under the 1933 Act and the 1940
Act;
C. the provisions of the Corporation's Articles of Incorporation, as
amended;
D. the provisions of the By-Laws of the Corporation, as amended; and
E. any other applicable provisions of state and federal law.
V. COMPENSATION
As compensation for providing services under this Agreement, the
Distributor shall receive and may retain any portion of any front-end or
contingent deferred sales charge which is imposed on sales and redemptions of
Shares and not reallowed to selected dealers as set forth in the Registration
Statement. Upon termination of this Agreement with respect to shares of any Fund
or class for any reason, the obligation to pay and such contingent deferred
sales charge on Shares of such Fund or class sold prior to the date of
termination shall survive the termination, and the Corporation (or its agent)
shall collect and pay any such charges thereafter imposed on such Shares to the
Distributor. In addition, the Distributor shall receive from each class of each
Fund's fee at the rate and under the terms and conditions of the Distribution
and Service Plans adopted pursuant to Rule 12b-1 under the 1940 Act (each, a
"Plan"), adopted by the Corporation with respect to such classes of Shares of
the Fund (which are
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attached hereto), as such Plans are in effect from time to time, and subject to
any further limitations on such fee as the Board of Directors of the Corporation
may impose.
Additional payments to the Distributor from the Corporation's investment
adviser, and/or its affiliates, may be authorized in accordance with applicable
law.
VI. EXPENSES
The expenses in connection with the provision of services hereunder shall
be allocable as follows:
A. EXPENSES OF THE DISTRIBUTOR
The Distributor shall pay:
1. the costs of printing and distributing prospectuses and
statements of additional information for prospective investors
and the costs of preparing, printing and distributing such other
sales literature, reports, forms and advertisements in connection
with the sale of the Shares as comply with the applicable
provisions of federal and state law.
2. the costs of any additional copies of the Corporation's financial
and other reports and other literature supplied to the
Distributor for sales promotion purposes;
3. all advertising expenses incurred by the Distributor in
connection with the offering and sales of the Shares.
4. all compensation to the employees of the Distributor and others
for selling Shares, and all expenses of the Distributor and
others who engage in or support the sale of Shares as may be
incurred in connection with their sales efforts;
6. expenses relating to the formulation and implementation of
marketing strategies and promotional activities such as direct
mail promotions and television, radio, newspaper, magazine and
other mass media advertising;
7. the costs of building and maintaining a database of prospective
shareholders and of obtaining such analyses, reports and other
information with respect to marketing and promotional activities
and investor accounts as the Corporation may deem advisable;
8. the costs of providing or procuring, directly or indirectly, the
non-distribution related activities and services as provided in,
and in accordance with Section II.F. above.
B. EXPENSES OF THE CORPORATION
1. Each Fund, or class thereof, shall bear all expenses in
connection with preparing and typesetting the Corporation's
prospectuses, statements of additional information, reports to
shareholders, and other materials, related to communications of
such class or Fund with existing shareholders. .
VII. REPORTS
The Corporation agrees to indemnify, defend and hold the Distributor, each
person who has been, is, or may hereafter be an officer, director, employee or
agent of the Distributor, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless against any loss,
damage or expense reasonably
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incurred by any of them in connection with any claim or in connection with any
action, suit, or proceeding to which any of them may be a party, which arises
out of or is alleged to arise out of or is based upon a violation of any of its
covenants herein contained, or any alleged untrue statement of a material fact,
or the alleged omission to state a material fact necessary to make the
statements made not misleading, in the Registration Statement or prospectus of
the Corporation, or any amendment or supplement thereto, unless such statement
or omission was made in reliance upon written information furnished by the
Distributor. The foregoing rights of indemnification shall be in addition to any
other rights to which any of the foregoing indemnified parties may be entitled
as a matter of law. Nothing contained herein shall relieve the Distributor of
any liability to the Corporation or its shareholders to which the Distributor
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or reckless disregard of its
obligations and duties under this Agreement.
IX. INDEMNIFICATION BY THE DISTRIBUTOR
The Distributor agrees to indemnify, defend and hold the Corporation, each
person who has been, is, or may hereafter be an officer, director, employee or
agent of the Distributor, and any person who controls the Corporation within the
meaning of Section 15 of the 1933 Act, free and harmless against any loss,
damage or expense reasonably incurred by any of them in connection with any
claim or in connection with any action, suit, or proceeding to which any of them
may be a party, which arises out of or is alleged to arise out of or is based
upon a violation of any of its covenants herein contained, or any alleged untrue
statements made not misleading on the part of the Distributor or any agent or
employee of the Distributor or any other person for whose acts the Distributor
is responsible or is alleged to be responsible (such as any selected dealer or
person through whom sales are made pursuant to an agreement with the
Distributor), whether made orally or in writing, unless such statement or
omission was made in reliance upon written information furnished by the
Corporation. The foregoing rights of indemnification shall be in addition to any
other rights to which any of the foregoing indemnified parties may be entitled
as a matter of law.
X. REPURCHASE OF SHARES
The Corporation appoints and designates the Distributor as agent of the
Corporation, and the Distributor accepts such appointment as such agent, to
repurchase shares of the Corporation in accordance with the provisions of the
articles and bylaws of the Corporation.
In connection with such redemptions or repurchases, the Corporation
authorizes and designates the Distributor to take any action, to make any
adjustments in net asset value, and to make any arrangements for the payment of
the redemption or repurchase price authorized or permitted to be taken or made
in accordance with the 1940 Act and as set forth in the Registration Statement.
The authority of the Distributor under this section may, with the consent
of the Corporation, be re-delegated in whole or in part to another person or
firm.
The authority granted in this section may be suspended by the Corporation
at any time, or from time to time, until further notice to the Distributor.
After any such suspension the authority granted to the Distributor by this
section will be reinstated only by a written instrument executed by an officer
of the Corporation.
XI. DISTRIBUTOR IS INDEPENDENT CONTRACTOR
The Distributor is an independent contractor and shall be the agent for the
Corporation only with respect to the sale and redemption of Shares. The
Distributor is responsible for its own conduct, for the employment, control and
conduct of its agents and employees or to others through its agents and
employees. The Distributor assumes full responsibility for its agents and
employees under applicable laws and agrees to pay all employer taxes relating
thereto.
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XII. NON-EXCLUSIVITY
The services of the Distributor to the Corporation under this Agreement are
not to be deemed exclusive, and the Distributor shall be free to render similar
services to others (including other investment companies) so long as its
services to the Corporation are not impaired thereby. It is understood and
agreed that officers and directors of the Distributor may serve as officers or
directors of the Corporation, and that officers or directors of the Corporation
may serve as officers or directors of the Distributor to the extent permitted by
law. The officers and directors of the Distributor are not prohibited from
engaging in any other business activity or from rendering services to any other
person, or from serving as partners, officers, directors or trustees of any
other firm, corporation or trust, including other investment companies.
XIII. TERM
This Agreement shall become effective as of the later of: (i) the date on
which a Registration Statement becomes effective under the 1933 Act; and (ii)
the date on which this Agreement is executed, provided this Agreement is
approved by the vote of a majority of the Board and by the vote of a majority of
those members of the Board who are not parties to this Agreement or interested
persons of any such party, and who have no direct or indirect interest in the
operation of any Plan or this Agreement, cast in person at a meeting called for
the purpose of voting on such renewal.
Unless terminated as herein provided, this Agreement shall remain in full
force and effect for one year from the date of execution of this Agreement and
shall continue in effect from year to year thereafter, only so long as such
continuance is approved at least annually:
A. by the vote of a majority of those Directors of the Corporation who
are not parties to this Agreement or interested persons of any such
party, and who have no direct or indirect interest in the operation of
any Plan or this Agreement, cast in person at a meeting called for the
purpose of voting on such renewal; and
B. by the Board of the Corporation.
XIV. TERMINATION
This Agreement may be terminated as to any class of Shares of any Fund at
any time, without the payment of any penalty, by the vote of a majority of the
Directors of the Corporation who are not interested persons of the Corporation
and who have no direct or indirect financial interest in the operation of any
Plan or this Agreement, or by the vote of a majority of the outstanding voting
securities of the class of Shares of a Fund, on sixty (60) days' written notice
to the Distributor, or by the Distributor at any time without the payment of any
penalty, on sixty (60) days' written notice to the corporation.
XV. ASSIGNMENT
This Distribution Agreement may not be assigned by the Distributor and will
automatically and immediately terminate in the event of its assignment.
XVI. AMENDMENTS
This Agreement may be amended at any time or from time to time by an
instrument in writing, signed by a duly authorized officer of the Corporation
and by the Distributor, but no amendment to this Agreement shall be effective
until such amendment is approved:
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A. by the vote of a majority of those Directors of the Corporation who
are not parties to this Agreement or interested persons of any such
party and who have no direct or indirect financial interest in the
operation of any Plan or this Agreement, cast in person at a meeting
called for the purpose of voting on such approval; and
B. by the vote of a majority of the Board of Directors of the
Corporation;
provided, however, that amendments relating to any Plan shall not require the
consent of the Distributor.
XVII. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Maryland,
without regard to conflicts of law principles; provided, however, that nothing
herein shall be construed as being inconsistent with the 1940 Act.
XVIII. DEFINITIONS
As used in this Agreement, the terms "majority of outstanding voting
securities," "interested persons," and "assignment" shall have the same meaning
as those terms have in the 1940 Act.
XIX. NOTICE
Any notice, advice or report to be given pursuant to this Agreement shall
be deemed sufficient if delivered by hand, transmitted by electronic facsimile,
or mailed by registered, certified or overnight United States mail, postage
prepaid, or sent by overnight delivery with a recognized courier, addressed by
the party giving notice to the other party at the last address furnished by the
other party:
To the Distributor at: AFSG Securities Corporation
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx
To the Corporation at: Transamerica Investors, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Corporate Secretary
Each such notice, advice or report shall be effective upon receipt or three
days after mailing, whichever is first.
XX. SEVERABILITY
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
XXI. ENTIRE AGREEMENT
This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings relating
to this Agreement's subject matter. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
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XXII. 1940 ACT
Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of the
Commission, whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
TRANSAMERICA INVESTORS, INC.
Attest: By: /s/ T. Xxxxxxx Xxxxxxx
----------------------------- ------------------------------------
Name: T. Xxxxxxx Xxxxxxx, XX
Title: Vice President
AFSG SECURITIES CORPORATION
Attest: By: /s/ Xxxx X. Xxxxxx
----------------------------- ------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
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