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EXHIBIT 6
FORM OF
FIRST AMENDED AND RESTATED
DISTRIBUTION CONTRACT
This First Amended and Restated Distribution Contract dated as of ____ day
of ___________, 1997 between Lutheran Brotherhood Securities Corp., a
corporation organized under the laws of the State of Pennsylvania and having a
place of business in Minneapolis, Minnesota (sometimes herein referred to as the
"Distributor"), and The Lutheran Brotherhood Family of Funds, a Delaware
business trust organized under the laws of Delaware and having a principal place
of business in Minneapolis, Minnesota (sometimes herein referred to as the
"Trust") which offers shares of beneficial interest in different series or
Sub-Trusts representing interests in different portfolios of assets (each series
of Shares (or Sub-Trusts) being referred to herein as a "Fund"). Each Fund may
be divided into two or more classes of shares (the "Classes"). Presently, the
Trust has eight Funds, namely the Lutheran Brotherhood Fund, Lutheran
Brotherhood Opportunity Growth Fund, Lutheran Brotherhood Income Fund, Lutheran
Brotherhood Municipal Bond Fund, Lutheran Brotherhood Money Market Fund,
Lutheran Brotherhood High Yield Fund, Lutheran Brotherhood Mid-Cap Fund and
Lutheran Brotherhood World Growth Fund (the "Existing Funds"). Each of the
Existing Funds currently consists of three Classes designated as the "Class A
Shares", "Class B Shares" and "Institutional Class Shares" (collectively, the
"Shares"). In the event that hereafter the Trust establishes one or more
additional Sub-Trusts (or Classes thereof) with respect to which it desires to
retain the Distributor, it shall so notify the Distributor in writing (the
"Notice"). If the Distributor is willing to render such services on the terms
provided for herein it shall execute and deliver the Notice to the Trust,
whereupon such Sub-Trust shall become a Fund hereunder (or such Class shall
become a Class hereunder) and such Notice shall be attached to this contract and
when attached shall be a part hereof.
WITNESSETH: In consideration of the agreements herein contained and for
other good and valuable consideration, receipt of which is hereby acknowledged,
it is agreed:
1. APPOINTMENT OF THE DISTRIBUTOR.
The Trust hereby appoints the Distributor as its exclusive agent to sell
and distribute Shares of each Fund of the Trust at the offering price thereof as
from time to time determined in the manner herein provided. The Distributor
hereby accepts such appointment and agrees during the term of this Contract to
provide the services and to assume the obligations herein set forth.
2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
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(a) The Distributor agrees to arrange to sell, as exclusive
agent for the Trust, from time to time during the term of this Contract shares
of each Fund upon the terms described in each such Fund's Prospectus(es). As
used in this Contract, the term "Prospectus" shall mean any prospectus and the
term "Statement of Additional Information" shall mean any statement of
additional information included in the Trust's Registration Statement and the
term "Registration Statement" shall mean the Registration Statement, including
exhibits and financial statements, most recently filed by the Trust with the
Securities and Exchange Commission and effective under the Securities Act of
1933, as amended (the "1933 Act") and the Investment Company Act of 1940, as
amended (the "1940 Act"), as such Registration Statement is amended by any
amendments thereto at the time in effect.
(b) Upon commencement of the continuous public offering of
Shares of any Fund of the Trust, the Distributor will hold itself available to
receive orders satisfactory to the Distributor, for the purchase of Shares of
that Fund and will accept such order on behalf of the Trust as of the time of
receipt of such orders and will transmit such orders as are so accepted to the
Trust's Transfer Agent as promptly as practicable. Purchase orders shall be
deemed effective at the time and in the manner set forth in a Fund's Prospectus.
The Trust shall furnish the Distributor, with all possible promptness, advice
regarding the determination of the net asset value per share of each Fund.
(c) (i) CLASS A SHARES. The offering price of the Class A
Shares of a Fund shall be the net asset value (as described in the Master Trust
Agreement of the Trust, as amended from time to time and determined as set forth
in the Prospectus of such Fund and the Statement of Additional Information) per
Share for that Fund next determined following receipt of an order plus the
applicable sales charge, if any, calculated in the manner set forth in the
Fund's Prospectus. The Distributor shall receive the entire amount of the sales
charge, if any, as compensation for its services under this Contract, however,
the Distributor may reallow all or any portion of such sales charge to agents or
employees of the Distributor. Shares of a Fund may be sold at prices that
reflect scheduled variations in, or elimination of, the sales charge to
particular categories of investors or transactions in accordance with a Fund's
Prospectus and the Statement of Additional Information; and
(ii) CLASS B SHARES. The offering price of the Class B
Shares of a Fund shall be the net asset value (as described in the Master Trust
Agreement of the Trust, as amended from time to time and determined as set forth
in the Prospectus of such Fund and the Statement of Additional Information) per
Share for that Fund next determined following receipt of an order. The Class B
Shares shall also be subject to a contingent deferred sales charge ("CDSC") as
calculated in the manner set forth in the Fund's Prospectus. The Distributor
shall receive the entire amount of the CDSC, if any, as compensation for its
services under this Contract, however, the Distributor may reallow all or any
portion of such CDSC to agents or employees of the Distributor. Shares of a Fund
may be sold at prices that reflect scheduled variations in, or elimination of,
the CDSC to purchaser categories of investments or purchases in accordance with
a Fund's Prospectus and the Statement of Additional Information.
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(iii) INSTITUTIONAL CLASS SHARES. The offering price of the
Institutional Class Shares of a Fund shall be the net asset value (as described
in the Master Trust Agreement of the Trust, as amended from time to time and
determined as set forth in the Prospectus of such Fund and the Statement of
Additional Information) per Share for that Fund next determined following
receipt of an order. The Institutional Class Shares shall be sold without any
initial sales charge or CDSC to investors who meet the elibility requirements
set forth in a Fund's Prospectus and the Statement of Additional Information.
(d) The Distributor shall use its best efforts and shall not be
obligated to arrange for sales of any certain number of Shares of a Fund and the
services of the Distributor to the Trust hereunder shall not be deemed to be
exclusive, and the Distributor shall be free to (i) render similar services to,
and act as underwriter or distributor in connection with the distribution of
shares of other investment companies, and (ii) engage in any other businesses
and activities from time to time.
(e) The Distributor is authorized on behalf of the Trust to
repurchase Shares of a Fund presented to it by shareholders or dealers at the
price determined in accordance with, and in the manner set forth in, the
Prospectus of such Fund.
(f) In addition to the services described above, the Distributor
will provide services, including assistance in the production of marketing and
advertising materials for the sale of Class B Shares of each Fund of the Trust
and their review for compliance with applicable regulatory requirements,
entering into other agreements with broker-dealers to sell such Shares and
monitoring their financial strength and contractual compliance. For providing
these services, the Distributor shall be entitled, subject to the terms and
conditions of the Plan of Distribution Pursuant to Rule 12b-1 adopted with
regard to the Class B Shares, to a fee at an annual rate of .75% of the average
daily value of net assets represented by such Class B Shares.
(g) The Distributor shall also undertake certain shareholder
servicing activities on behalf of the Funds with respect to the Class A Shares,
including, but not limited to: (i) answering inquiries regarding account status
and history, the manner in which purchases and redemptions of the Class A Shares
may be effected, and certain other matters pertaining to the Class A Shares;
(ii) assisting in designating and changing dividend options, account
designations and addresses; and (iii) assisting the field force, other persons
engaged in the distribution of the Class A Shares and other financial
intermediaries in responding to and dealing with shareholders and prospective
shareholders and all matters related thereto. For providing these services, the
Distributor shall be entitled, subject to the terms and conditions of the
Shareholder Servicing Plan adopted with regard to the Class A Shares, to a fee
at an annual rate of .25% of the average daily value of net assets represented
by such Class A Shares.
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(h) The Distributor shall also undertake certain shareholder
servicing activities on behalf of the Funds with respect to the Class B Shares,
including, but not limited to: (i) answering inquiries regarding account status
and history, the manner in which purchases and redemptions of the Class B Shares
may be effected, and certain other matters pertaining to the Class B Shares;
(ii) assisting in designating and changing dividend options, account
designations and addresses; and (iii) assisting the field force, other persons
engaged in the distribution of the Class B Shares and other financial
intermediaries in responding to and dealing with shareholders and prospective
shareholders and all matters related thereto. For providing these services, the
Distributor shall be entitled, subject to the terms and conditions of the
Shareholder Servicing Plan adopted with regard to the Class B Shares, to a fee
at an annual rate of .25% of the average daily value of net assets represented
by such Class B Shares.
3. DUTIES OF THE TRUST.
(a) The Trust agrees to sell Shares of its Funds so long as it
has Shares available for sale except that the Trust expressly reserves and shall
have the right to limit the class or classes of persons to whom shares of any
Fund may be sold.
(b) The Trust shall keep the Distributor fully informed with
regard to its affairs and shall furnish 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 of the
Funds. This shall include, without limitation, one certified copy of all
financial statements of the Funds prepared by independent public accountants and
such reasonable number of copies of a Fund's most current Prospectus, the
Statement of Additional Information and annual and interim reports as the
Distributor may request. The Trust shall cooperate fully in the efforts of the
Distributor to arrange for the sale of Shares of the Funds in the performance by
the Distributor of its duties under this Contract.
(c) The Trust shall take, from time to time, all necessary
action to register the Shares of the Funds under the 1933 Act, including
payments of the related filing fees, so that there will be available for sale
such number of Shares of the Funds as the Distributor may be expected to sell.
The Trust agrees to file from time to time such amendments, reports and other
documents as may be necessary in order that there may be no untrue statement of
a material fact in the Registration Statement or Prospectus of a Fund, or
necessary in order that there may be no omission to state a material fact in the
Registration Statement or Prospectus of a Fund which omission would make the
statements therein, in light of the circumstances under which they were made,
misleading.
(d) The Trust shall use its best efforts to take all appropriate
actions, including, without limitation, the filing of notices, as may be
required to permit the sale of the Shares of the Funds and the Trust in such
states as the Distributor shall designate, and, if necessary or appropriate in
connection therewith, to qualify and maintain the qualification of
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the Trust as a broker-dealer in such states. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
requested by the Trust in connection with such qualifications.
4. MANNER OF OFFERING.
The Distributor will conform to and comply with all applicable federal
securities laws and the securities laws of any jurisdiction in which it sells,
directly or indirectly, any Shares.
5. RESERVATIONS OF RIGHTS BY THE TRUST.
Notwithstanding the foregoing, the Trust may distribute shares of any Fund
without the payment of any selling commission to the Distributor in the
following instances:
(a) Any Fund may issue shares to shareholders as stock dividends
or stock splits;
(b) Shareholders of any Fund may be permitted to reinvest any
dividends or other distributions in shares of that Fund at net asset value;
(c) In case any other investment company is merged into,
consolidated with, or acquired by any Fund, that Fund's shares may be issued in
connection with any such merger, consolidation, or acquisition at less than
public offering price, but not less than net asset value per share;
(d) Any Fund's shares may be sold at net asset value to
officers, trustees, fully licensed representatives and full-time employees of
the Trust, Lutheran Brotherhood Research Corp., the investment adviser to the
Funds, or the Distributor or to such other persons identified in any Fund's
current prospectus pursuant to Rule 22d-1 adopted under the 1940 Act.
6. ALLOCATION OF EXPENSES.
(a) The Trust will be responsible for, and shall pay the
expenses of:
(i) providing all necessary services, including fees and
disbursements of counsel, related to preparation, setting in type,
printing and filing of any Registration Statement and/or Prospectus
required under the Securities Act of 1933, as amended, or under
state securities law, covering its Shares, and all amendments and
supplements thereto, and preparing, setting in type, printing and
mailing periodic reports to existing shareholders;
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(ii) the cost of all registration or qualification fees;
(iii) the cost of preparing temporary and permanent share
certificates for Shares of the Trust;
(iv) all federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares)
transfer from Trust to the Distributor of any and all Shares
distributed hereunder.
(b) The Distributor agrees that, after the Prospectus and
periodic reports have been set in type, it will bear the expense of printing and
distributing any copies thereof which are used in connection with the offering
of Shares to dealers or prospective investors. The Distributor further agrees
that it will bear the expenses of preparing, printing and distributing any other
literature used by the Distributor or furnished by it for use by dealers in
connection with the offering of Shares for sale to the public, and any expense
of advertising in connection with such offering. The Distributor will also pay
fees for services rendered by the transfer agent on behalf of the Distributor.
7. INDEPENDENT CONTRACTOR.
The Distributor shall be an independent contractor. The Distributor
is responsible for its own conduct, for the employment, control and conduct of
its agents and employees and for injury to such agents or employees or to others
through its agents or employees. The Distributor assumes full responsibility for
its agents and employees under applicable statutes and agrees to pay all
employer taxes hereunder.
8. INDEMNIFICATION.
The Trust agrees to indemnify, defend and hold the Distributor, its
officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers, directors, employees and agents or any such
controlling person may incur under the 1933 Act, the 1934 Act, or under common
law or otherwise, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, a
Prospectus, or the Statement of Additional Information or arising out of or
based upon the omission or any alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished in writing by the Distributor to the Trust for use in the
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Registration Statement, a Prospectus or a Statement of Additional Information.
The Distributor agrees to promptly notify the Trust of any event giving rise to
rights of indemnification hereunder, including any action brought against the
Distributor, its officers, directors, employees and agents or any such
controlling person, such notification to be given by letter or telegram
addressed to the Trust at its principal business office, but the Distributor's
failure to notify the Trust shall not relieve the Trust from any obligation it
may have to indemnify the Distributor hereunder or otherwise.
The Distributor agrees to indemnify, defend and hold the Trust, its
Trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Trust, its Trustees or officers 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 Trust, its Trustees or officers or such
controlling person arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in information furnished
in writing by Distributor to the Trust for use in the Registration Statement, a
Prospectus or the Statement of Additional Information. The Trust agrees to
promptly notify the Distributor of any event giving rise to rights of
indemnification hereunder, including any action brought against the Trust, its
Trustees or officers or any such controlling person, such notification being
given to the Distributor at its principal business office, but the Trust's
failure so to notify the Distributor shall not relieve the Distributor from any
obligation it may have to indemnify the Trust hereunder or otherwise.
9. TERM OF CONTRACT.
This Contract shall be executed and become effective with respect to all
Existing Funds on , 1997, and, with respect to any additional Fund, on the
date of receipt by the Trust of the Notice from the Distributor that it is
willing to serve as Distributor with respect to such Fund. Unless terminated as
provided herein, this Contract shall continue in force for two (2) years from
the date of its execution and thereafter from year to year, provided
continuance is approved at least annually by either (i) the vote of a majority
of the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Trust, and (ii) the vote of a majority of those
Trustees of the Trust who are not interested persons of the Trust and who have
no direct or indirect financial interest in any Plan of Distribution adopted by
the Trust (or any Fund or class of Shares thereof) or any agreements related to
such plan(s), cast in person at a meeting called for the purpose of voting on
the approval. As used in this Section 10, the terms "vote of a majority of the
outstanding voting securities" and "interested person" shall have the
respective meanings specified in the 1940 Act and the rules enacted thereunder
as now in effect or as hereafter amended. In addition to termination by failure
to approve continuance or by assignment, this Contract may at any time be
terminated without the payment of any penalty by vote of a majority of the
Trustees of the Trust who are not interested persons of the
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Trust, or by vote of a majority of the outstanding voting securities of the
Trust, on not more than sixty (60) days' written notice by the Trust. This
Contract may be terminated by the Distributor upon not less than sixty (60)
days' prior written notice to the Trust. This Contract supersedes any prior
agreement relating to the subject matter hereof between the parties.
10. ASSIGNMENT.
This Contract may not be assigned by the Distributor and shall
automatically terminate in the event of an assignment (as defined in the 0000
Xxx) by the Distributor, provided, however, that the Distributor may employ such
other person, persons, corporation, or corporations, as it shall determine, in
order to assist it in carrying out this Contract.
11. AMENDMENT.
This Contract may be amended at any time by mutual agreement in writing of
the parties hereto, provided that any such amendment is approved by a majority
of the trustees of the Trust who are not "interested persons" (as defined in the
0000 Xxx) of the Distributor or by the holders of a majority of the Shares of
the Trust.
12. LIMITATION OF LIABILITY.
The Master Trust Agreement dated as of September 1, 1993, amended from
time to time, establishing the Trust, which is hereby referred to, provides that
the name Lutheran Brotherhood Family of Funds means the Trustees from time to
time serving (as Trustees but not personally) under said Master Trust Agreement.
It is expressly acknowledged and agreed that the obligations of the Trust
hereunder shall not be binding upon any of the shareholders, Trustees, officers,
employees or agents of the Trust, personally, but shall bind only the trust
property of the Trust, as provided its Master Trust Agreement. The execution and
delivery of this Contract have been authorized by the Trustees of the Trust and
signed by the President of the Trust, acting as such, and neither such
authorization by such Trustee nor such execution or delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Trust as provided in its Master Trust Agreement. The obligations of any Fund
hereunder shall be the exclusive obligation of that Fund and the Distributor can
only look to the assets of that Fund to satisfy any debt or obligation incurred
by the Fund hereunder.
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IN WITNESS WHEREOF, this Contract has been executed for the Distributor
and the Trust by their duly authorized offices as of the date first set forth
above.
THE LUTHERAN BROTHERHOOD LUTHERAN BROTHERHOOD
FAMILY OF FUNDS SECURITIES CORP.
By:_____________________ By:_____________________
ATTEST: ATTEST:
________________________ ________________________
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