1
EXHIBIT e
ADDENDUM
TO
SALES/BANK AGREEMENT
covering shares of capital stock or shares of beneficial interest of
the Xxxxxxxx Mutual Funds
between
XXXXXXXX ADVISORS, INC.
and
DEALER/BANK
Dear Dealer/Bank:
Your Sales/Bank Agreement with Xxxxxxxx Advisors, Inc. (formerly,
Xxxxxxxx Financial Services, Inc.) ("SAI") is hereby amended to include the
following provisions in connection with the offering by the Xxxxxxxx Mutual
Funds of Class B shares* and Class C shares as described in each Fund's
prospectus, as applicable:
1. Dealer/Bank agrees to comply with the attached "Policies and
Procedures" with respect to sales of Xxxxxxxx Mutual Funds.
2. SAI shall be entitled to a contingent deferred sales load ("CDSL") on
redemptions within six years of purchase on any Class B shares sold,
within eighteen months of purchase on any Class C shares sold and
within one year of purchase on any Class D shares sold. SAI shall
also be entitled to a CDSL on redemptions within eighteen months of
purchase on any Class A shares sold at net asset value due to the size
of the purchase. With respect to omnibus accounts in which Class A
shares, Class B shares, Class C shares or Class D shares are held at
Xxxxxxxx Data Corp. ("SDC") in the Dealer/Bank's name, the Dealer/Bank
agrees that by the tenth day of each month it will furnish to SDC a
report of each redemption in the preceding month to which a CDSL was
applicable, accompanied by a check payable to SAI in payment of the
CDSL due.
3. If, with respect to a redemption of any Class A shares, Class B shares,
Class C shares or Class D shares sold by the Dealer/Bank, the CDSL is
waived because the redemption qualifies for a waiver as set forth in
the Fund's prospectus or statement of additional information, the
Dealer/Bank shall remit to SAI promptly upon notice an amount equal to
the payment or a portion of the payment made by SAI to the Dealer/Bank
at the time of sale with respect to such Class A shares, Class B
shares, Class C shares or Class D shares.
4. On each purchase of Shares by the Dealer/Bank, the Dealer/Bank shall be
entitled, based on the Class of Shares purchased and except as provided
in each Fund's current prospectus, to a concession determined as a
percentage of the price to the investor as set forth in each Fund's
current prospectus. No concessions will be paid to the Dealer/Bank for
the investment of dividends in additional shares.
5. The Dealer/Bank will comply in all respects with Notice to Members
95-80 of the National Association of Securities Dealers, Inc. regarding
member's obligations and responsibilities regarding mutual fund sales
practices.
The sale of any Class A, Class B, Class C or Class D shares of a
Xxxxxxxx Mutual Fund will constitute Dealer/Bank's acceptance of and agreement
with the terms set forth herein.
* Xxxxxxxx Municipal Fund Series, Inc., Xxxxxxxx Municipal Series Trust,
Xxxxxxxx New Jersey Municipal Fund, Inc. and Xxxxxxxx Pennsylvania
Municipal Fund Series do not currently offer Class B shares.
2
POLICIES AND PROCEDURES
In connection with the offering by the Funds of four classes of
shares1, one subject to a front-end sales load and a service fee ("Class A
Shares"), one subject to a service fee, a distribution fee, no front-end sales
load and a contingent deferred sales load on redemptions within six years of
purchase ("Class B Shares"), one subject to service fee, a distribution fee, a
front-end sales load and a contingent deferred sales load on redemptions within
eighteen months of purchase ("Class C Shares) and one subject to a service fee,
a distribution fee, no front-end sales load and a contingent deferred sales load
on redemptions within one year of purchase ("Class D Shares")2, it is important
for an investor to choose the method of purchasing shares which best suits his
or her particular circumstances. To assist investors in these decisions, SAI has
instituted the following policies with respect to orders for Shares:
1. No purchase order may be placed for Class D shares unless the
investor meets one of the qualifications provided for in
Footnote 2 below. The Dealer/Bank is solely responsible for
complying with this restriction.
2. No purchase order may be placed for Class B Shares or Class C
shares for amounts of $250,000 or more.
3. Any other purchase order may be for Class A, Class B, Class C,
or Class D shares in light of the relevant facts and
circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his
Shares; and
c. any other relevant circumstances such as the
availability of purchases under a Letter of Intent,
Volume Discount, or Right of Accumulation.
There are instances when one method of purchasing Shares may be more
appropriate than another. For example, an investor who would qualify for a
significant discount from the maximum sales load on Class A Shares may determine
that payment of such a reduced front-end sales load and service fee is
preferable to payment of a higher ongoing distribution fee. On the other hand,
an investor whose order would not qualify for such a discount may wish to have
all of his or her funds invested in Class B or Class C Shares. An investor who
expects to hold his or her shares for longer than eight years might prefer Class
B Shares over Class C Shares because of the conversion feature; once the Class B
Shares have converted to Class A Shares, the ongoing distribution fees will be
reduced. Class C Shares may remain a more attractive choice for shorter-term
investors (especially those who would qualify for a discount from the maximum
sales load) because the front-end sales load is lower than on Class A shares and
the contingent deferred sales load on such shares is only 1%, and it does not
apply if the investor owns his or her shares for at least eighteen months. If an
investor anticipates that he or she will redeem his or her Class B Shares while
still subject to a contingent deferred sales charge, the investor may, depending
on the amount of the purchase, pay an amount greater than the sales load and
service fee attributable to Class A Shares.
Appropriate supervisory personnel within your organization must ensure
that all employees receiving investor inquiries about the purchase of Shares of
a Fund advise the investor of then available pricing structures offered by such
Fund, and the impact of choosing one method over another. In some instances it
may be appropriate for a supervisory person to discuss a purchase with the
investor.
Questions relating to this policy should be directed to Xxxxxxx X.
Xxxxxxx, President, Xxxxxxxx Advisors, Inc. at (000) 000-0000.
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1 Xxxxxxxx Municipal Fund Series, Inc, Xxxxxxxx Municipal Series Trust,
Xxxxxxxx New Jersey Municipal Fund, Inc. and Xxxxxxxx Pennsylvania
Municipal Fund Series only offer three classes of shares; Class B shares
are not currently available from these Funds.
2 Class D shares are only available (1) to existing Class D shareholders, (2)
if the Dealer/Bank maintains an omnibus account at Xxxxxxxx Data Corp., or
(3) pursuant to a 401(k) or other retirement plan program for which Class D
shares are already available or for which the sponsor requests Class D
shares because the sales charge structure of Class D shares is comparable
to the sales charge structure of the other funds offered under the program.
June 1, 1999
