Exhibit 99.5
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT, made this 6th day of January 2003, by and
between SAFECO COMMON STOCK TRUST, a Delaware business trust ("Trust"), and
SAFECO SECURITIES, INC., a Washington corporation ("Distributor").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act") and has caused its shares of
beneficial interest ("Shares") to be registered for sale to the public under the
Securities Act of 1933 ("1933 Act") and various state securities laws; and
WHEREAS, the Trust offers for public sale distinct series of Shares,
each corresponding to a distinct portfolio as listed on Exhibit A to this
Agreement ("Series"); and
WHEREAS, the Trust's Board of Trustees has divided the Shares of each
Series into one or more classes (each a "Class"), designated Investor Class,
Institutional Class, Advisor Class A, Advisor Class B and Advisor Class C (the
latter three classes "Advisor Classes"), as listed on Exhibit A; and
WHEREAS, the Trust wishes to retain the Distributor as the principal
underwriter in connection with the offering and sale of the Classes of Shares of
each Series listed on Exhibit A (as amended from time to time) to this Agreement
and to furnish certain other services to the Trust as specified in this
Agreement; and
WHEREAS, this Agreement has been approved in conformity with Section
15(c) under the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter and
to furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Appointment of Distributor. The Trust hereby appoints the Distributor as
principal underwriter in connection with the offering and sale of the Shares of
each Class of each Series. The Trust authorizes the Distributor, as exclusive
agent for the Trust, for any existing Series and upon the commencement of
operations of any future Series, and subject to applicable federal and state law
and the Trust Instrument and Bylaws of the Trust: (a) to promote the Shares; (b)
to solicit orders for the purchase of the Shares subject to such terms and
conditions as the Trust may specify; and (c) to accept orders for the purchase
or redemption of the Shares on behalf of the Trust; provided, however, that the
Trust or the Distributor, at the discretion of either party, may reject any
purchase order. The Distributor shall comply with all applicable federal and
state laws and offer the Shares on an agency or "best efforts" basis under which
the Trust shall issue only such Shares as are actually sold. The Distributor
shall have the right to use any list of shareholders of the Trust or any Series
or any other list of investors which it obtains in connection with its provision
of services under this Agreement; provided, however, that the Distributor shall
not sell or knowingly provide such list or lists to any unaffiliated person of
the Trust without the consent of the Trust's Board of Trustees. Nothing in this
Agreement shall prohibit affiliates of the Distributor from selling or knowingly
providing to persons unaffiliated with the Trust, the names of customers of
other SAFECO companies or partnerships who also happen to be shareholders of the
Trust.
2. Duties of Trust. The Trust agrees to register the Shares with the
Securities and Exchange Commission, state and other regulatory bodies, and to
prepare and file from time to time such Prospectuses, Statements of Additional
Information, amendments, reports and other documents as may be necessary to
maintain the Trust's registration statement on Form N-1A ("Registration
Statement"). Each Series shall bear all expenses related to preparing and
typesetting such Prospectuses, Statements of Additional Information and other
materials required by law and such other expenses, including printing and
mailing expenses, related to such Series' communications with persons who are
shareholders of that Series.
3. Duties of Distributor. The Distributor shall print and distribute to
prospective investors Prospectuses, and shall print and distribute, upon
request, to prospective investors Statements of Additional Information, and may
print and distribute 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. In connection with such sales
and offers of sale, the Distributor shall give only such information and make
only such statements or representations as are contained in the Prospectus,
Statement of Additional Information, or in information furnished in writing to
the Distributor by the Trust, and the Trust 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. Except as specifically provided in
this Agreement, the Trust shall bear none of the expenses of the Distributor in
connection with its offer and sale of the Shares.
4. Other Broker-Dealers. The Distributor may enter into dealer agreements
with registered and qualified securities dealers for the resale of the Shares at
the public offering price. The form of any such dealer agreement shall be
mutually agreed upon and approved by the Trust and the Distributor. The
Distributor may sell Advisor Class A Shares of a Series to dealers at such
discounts from the public offering price as are set forth in the Advisor Classes
Prospectus and/or the dealer agreement between the Distributor and the dealer,
but neither such discounts nor commissions shall exceed the sales charge or
discounts referred to in the Advisor Classes Prospectus.
5. Public Offering Price. The public offering price of each Class of Shares
is equal to the net asset value per Share determined in accordance with, and in
the manner set forth in, the applicable Prospectus contained in the Registration
Statement. With respect to Advisor Class A Shares, such price shall reflect the
imposition of a front-end sales charge, if any, as described in the Advisor
Classes Prospectus contained in the Registration Statement. The Trust shall
furnish the Distributor with a statement of each computation of public offering
price and of the details entering into such computation.
6. Repurchase of Shares. The Distributor may at its sole discretion
repurchase Shares offered for sale by the shareholders. Repurchase of each Class
of Shares by the Distributor shall be at the price determined in accordance
with, and in the manner set forth in, the applicable Prospectus contained in the
Registration Statement. With respect to Advisor Class A, Advisor Class B and
Advisor Class C Shares, such price shall reflect the subtraction of a contingent
deferred sales charge, if any, computed in accordance with, and in the manner
set forth in, the Advisor Classes Prospectus contained in the Registration
Statement.
At the end of each business day, the Distributor shall notify by any
appropriate means, the Trust and SAFECO Services Corporation, the Trust's
transfer agent, of the orders for repurchase of each Class of Shares received by
the Distributor since the last such report, the amount to be paid for such
Shares, and the identity of the shareholders offering Shares for repurchase.
Upon such notice, the Trust shall pay the Distributor such amounts as are
required by the Distributor for the repurchase of such Shares in cash or in the
form of a credit against monies due the Trust from the Distributor as proceeds
from the sale of Shares. The Trust reserves the right to suspend such repurchase
right upon written notice to the Distributor. The Distributor further agrees to
act as agent for the Trust to receive and transmit promptly to the Trust's
transfer agent shareholder requests for redemption of Shares.
7. Compensation. As compensation for providing services under this
Agreement:
(a) The Distributor shall retain the front-end sales charge, if any, on
purchases of Advisor Class A Shares as set forth in the Advisor Classes
Prospectus contained in the Registration Statement. The Distributor is
authorized to collect the gross proceeds derived from the sale of the Advisor
Class A Shares, remit the net asset value thereof to the Trust upon receipt of
the proceeds and retain the front-end sales charge, if any.
(b) The Distributor shall receive all contingent deferred sales charges
applied on redemptions of Advisor Class A, Advisor Class B and Advisor 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 Advisor Classes Prospectus
contained in the Registration Statement.
(c) The Distributor shall receive distribution and service fees payable at
the rate and under the terms and conditions set forth in plans of distribution
("Plans") adopted with respect to the Advisor Classes of each Series of the
Trust, as amended from time to time and subject to any further limitations on
such fees as the Board may impose.
(d) The Distributor may reallow any or all of the front-end or contingent
deferred sales charges and distribution or service fees which it is paid under
this Agreement and the Plans to such dealers as the Distributor may from time to
time determine.
(e) The Distributor will receive no commission or other remuneration for
selling or repurchasing Investor Class Shares or Institutional Class Shares.
8. Indemnification.
(a) The Trust agrees to indemnify, defend and hold the Distributor, its
several directors, officers and employees, and any person who controls the
Distributor 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 the
Distributor, its directors, officers or employees, 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 or necessary to make the
Registration Statement not misleading.
(b) In no event shall anything contained in this Agreement be construed so
as to protect the Distributor against any liability to the Trust 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 by reason of its reckless disregard of its obligations and duties
under this Agreement, and further provided that the Trust shall not indemnify
the Distributor for conduct set forth in this subparagraph 8(b).
(c) The Distributor agrees to indemnify, defend and hold the Trust, its
several trustees, officers and employees and any person who controls the Trust
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 the Trust, its trustees,
officers or employees 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 the Distributor to the Trust for use in the Registration Statement or
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 or necessary to make such information not misleading. As used in this
subparagraph 8(c), the term "employee" shall not include a corporate entity
under contract to provide services to the Trust or any Series, or any employee
of such a corporate entity, unless such person is otherwise an employee of the
Trust.
9. Certificates. The Trust shall not be required to issue certificates
representing Shares. If the Trust elects to issue certificates and a shareholder
request for certificates is transmitted through the Distributor, the Trust will
cause certificates evidencing the Shares owned to be issued in such names and
denominations as the Distributor shall from time to time direct, provided that
no certificates shall be issued for fractional Shares.
10. Withdrawal of Offering. The Trust reserves the right at any time to
withdraw all offerings of any or all Classes of any or all Series by written
notice to the Distributor at its principal office.
11. Independent Contractor Status. The Distributor is an independent
contractor and shall act as agent for the Trust only in respect to the sale and
redemption of the Shares.
12. Non-Exclusive Services. The services of the Distributor to the Trust
under this Agreement are not to be deemed exclusive, and the Distributor shall
be free to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
13. Use of Name. In the event this Agreement is terminated by either party
or upon written notice from the Distributor at any time, the Trust hereby agrees
that it will eliminate from its name any reference to the name of "SAFECO." The
Trust shall have the non-exclusive use of the name "SAFECO" in whole or in part
only so long as this Agreement is effective or until such notice is given.
Notwithstanding this subparagraph and in the event this Agreement is terminated
by either party, the Distributor may elect to permit the Trust to continue to
use the name "SAFECO" under such terms and conditions as the Distributor shall
set forth in writing.
14. Effective Date/Renewal. This Agreement will become effective with
respect to each Series on the date first written above or such later date as
indicated on Exhibit A and, unless sooner terminated as provided herein, will
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Agreement shall continue in effect with respect to each Series
for successive annual periods ending on the same date of each year, provided
that such continuance is specifically approved at least annually (i) by the
Trust's Board of Trustees or (ii) with respect to any given Series, by a vote of
a majority of the outstanding voting securities of that Series (as defined in
the 1940 Act), provided that in either event the continuance is also approved by
a majority of the Trust's trustees who are neither interested persons (as
defined in the 0000 Xxx) of the Trust or the Distributor by vote cast at a
meeting called for the purpose of voting on such continuance.
15. Amendment. This Agreement may be amended by the parties only if the
terms of the amendment are either (i) approved by the Trust's Board of Trustees
or, (ii) with respect to any given Series, by a vote of a majority of the
outstanding voting securities of that Series at a duly called meeting of the
shareholders. In either case, the majority of the trustees, who are neither
interested persons of the Trust or the Distributor, must approve the amendment.
16. Termination. This Agreement is terminable with respect to any Series or
in its entirety without penalty by the Trust's Board of Trustees, by vote of a
majority of the outstanding voting securities of each affected Series (as
defined in the 1940 Act), or by the Distributor, on not less than 60 days'
notice to the other party and will be terminated upon the mutual written consent
of the Distributor and the Trust. This Agreement will also automatically and
immediately terminate in the event of its assignment.
17. Limitation of Liability. The Distributor is hereby expressly put on
notice of (i) the limitation of shareholder, officer and trustee liability as
set forth in the Trust Instrument of the Trust and (ii) of the provisions in the
Trust Instrument permitting the establishment of separate Series and limiting
the liability of each Series to obligations of that Series. The Distributor
agrees that obligations assumed by the Trust pursuant to this Agreement are in
all cases assumed on behalf of a particular Series and each such obligation
shall be limited in all cases to that Series and its assets. The Distributor
further agrees that it shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Trust nor from the
officers or trustees or any individual officer or trustee of the Trust.
18. Definitions. As used in this Agreement, the term(s):
(a) "net assets" shall have the meaning ascribed to it in the Trust's Trust
Instrument;
(b) "assignment", "interested person", and "majority of the outstanding
voting securities" shall have the meanings given to them by Section 2(a) of the
1940 Act, subject to such exemptions as may be granted by the Securities and
Exchange Commission by any rule, regulation or order.
(c) "Registration Statement" shall mean the registration statement most
recently filed by the Trust with the Securities and Exchange Commission and
effective under the 1940 Act and the 1933 Act, as such Registration Statement is
amended by any amendments thereto at the time in effect;
(d) "Prospectus" and "Statement of Additional Information" shall mean,
respectively, the form of prospectus and statement of additional information for
the Investor Class, Institutional Class or the Advisor Classes of each Series
filed by the Trust as part of the Registration Statement.
19. Entire Agreement. This Agreement embodies the entire Agreement between
the Distributor and the Trust with respect to the services to be provided by the
Distributor to the Trust and each Series and supersedes any prior written or
oral agreement between those parties.
20. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in counterparts, each of which taken together shall
constitute one and the same instrument. The Distributor understands that the
rights and obligations of each Series under the Trust Instrument are separate
and distinct from those of any and all other Series.
21. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Washington.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: SAFECO COMMON STOCK TRUST
By:/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------------- --------------------------------
Xxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxx
Secretary President
Attest: SAFECO SECURITIES, INC.
By:/s/ Xxxxx X. Xxxxxxxxx By:/s/ Xxxxx X. Xxxxxx
--------------------------------- ---------------------------------
Xxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxx
Secretary President
EXHIBIT A
SAFECO COMMON STOCK TRUST
The SAFECO Common Stock Trust consists of the following Series and Classes:
1. SAFECO Growth Opportunities Fund
Investor Class
Advisor Class A
Advisor Class B
Advisor Class C
2. SAFECO Equity Fund
Investor Class
Advisor Class A
Advisor Class B
Advisor Class C
3. SAFECO Dividend Income Fund
Investor Class
Advisor Class A
Advisor Class B
Advisor Class C
4. SAFECO Northwest Fund
Investor Class
Advisor Class A
Advisor Class B
Advisor Class C
5. SAFECO International Stock Fund
Investor Class
Institutional Class
Advisor Class A
Advisor Class B
Advisor Class C
6. SAFECO Balanced Fund
Investor Class
Advisor Class A
Advisor Class B
7. SAFECO Small Company Value Fund
Investor Class
Advisor Class A
Advisor Class B
8. SAFECO Small Company Growth Fund
Investor Class
Advisor Class A
Advisor Class B
Advisor Class C
9. SAFECO U.S. Value Fund
Investor Class
Advisor Class A
Advisor Class B
10. SAFECO U.S. Growth Fund
Investor Class
Advisor Class A
Advisor Class B
Advisor Class C
As of January 06, 2003
