Exhibit (e)(1)
FORM OF UNDERWRITING AGREEMENT
ING EQUITY TRUST
THIS AGREEMENT, made as of this 23rd day of September 2002,
between ING Equity Trust, a Massachusetts business trust (the "Trust"),
on behalf of each series of the Trust set forth on Schedule A hereto
(each a "Fund," collectively, the "Funds"), as such schedule may be
amended from time to time to add additional series, and ING Funds
Distributor, Inc., a Delaware corporation (the "Underwriter").
1. The Funds hereby appoint the Underwriter as their exclusive agent to
promote the sale and to arrange for the sale of shares of beneficial
interest of each class of each Fund, including both unissued shares and
treasury shares, through broker-dealers or otherwise, in all parts of
the United States and elsewhere throughout the world. The Funds agree
to sell and deliver their shares of each class, upon the terms
hereinafter set forth, as long as they have unissued and/or treasury
shares available for sale.
(a) The Funds hereby authorize the Underwriter, subject to
applicable law and the Trust's Declaration of Trust (the
"Declaration"), to accept, for the respective account of the
Funds, orders for the purchase of their shares, satisfactory
to the Underwriter, as of the time of receipt of such orders
by the dealer or as otherwise described in the current
Prospectuses of the Funds.
(b) The public offering price of the shares of the Funds shall be
the net asset value per share (as determined by the Funds) of
the outstanding shares of the Funds. The net asset value shall
be determined, and the public offering price based thereon
shall become effective, as set forth from time to time in each
Fund's current Prospectus; such net asset value may also be
determined, and the public offering price based thereon shall
become effective, as of such other times for the regular
determination of net asset value as may be required or
permitted by rules of the National Association of Securities
Dealers, Inc. ("NASD") or of the Securities and Exchange
Commission ("SEC"). The Funds shall furnish daily to the
Underwriter, with all possible promptness, a detailed
computation of net asset value of their Class A shares.
(c) Class A Shares
(i) The public offering price of Class A shares shall be
equal to the net asset value, as described above,
plus a commission to be fixed from time to time by
the Underwriter not to exceed 6% of the public
offering price, except that such price per share may
be adjusted to the nearest cent. The Underwriter may
fix quantity discounts and other similar terms not
inconsistent with the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"). The
Underwriter shall not impose any commission, permit
any quantity discounts or impose any other similar
terms in connection with the sale of Class A shares
of the Funds except as disclosed in the Funds'
current Prospectuses.
(ii) The Underwriter shall be entitled to deduct a
commission on all Class A shares sold equal to the
difference between the public offering price and the
net asset value on which such price is based. If any
such commission is received by a Fund, it will pay
the commission to the Underwriter. Out of such
commission, the Underwriter may allow to dealers such
concessions as the Underwriter may determine from
time to time. Notwithstanding anything in the
Agreement, sales may be made at net asset value as
provided in the Funds' current Prospectuses.
(d) Class B Shares
(i) In consideration of the Underwriter's services as
principal underwriter of each Fund's Class B shares
pursuant to this Agreement and in accordance with the
provisions of the Trust's Second Amended and Restated
Distribution and Service Plan (the "Plan") in respect
of such shares, each Fund agrees: (I) to pay to the
Underwriter or, at the Underwriter's direction, to a
third party, monthly in arrears on or prior to the
5th business day of the following calendar month (A)
a service fee (the "Service Fee") equal to 0.25 of 1%
per annum of the average daily net asset value of the
Class B shares of such Fund outstanding from time to
time, and (B) the Underwriter's "Allocable Portion"
(as hereinafter defined) of a fee (the "Distribution
Fee") equal to 0.75 of 1% per annum of the average
daily net asset value of the Class B shares of such
Fund outstanding from time to time, and (II) to
withhold from redemption proceeds in respect of Class
B shares of such Fund the Underwriter's Allocable
Portion of the Contingent Deferred Sales Charges
("CDSCs") payable in respect of such redemption as
provided in the current Prospectus of such Fund and
to pay the same over to the Underwriter or, at the
Underwriter's direction, to a third party, at the
time the redemption proceeds in respect of such
redemption are payable to the holder of the Class B
shares redeemed.
(ii) The Underwriter will be deemed to have performed all
services required to be performed in order to be
entitled to receive its Allocable Portion of the
Distribution Fee payable in respect of the Class B
shares of the Funds upon the settlement date of each
sale of a "Commission Share" (as defined in the
Allocation Schedule attached hereto as Schedule B) of
the Funds taken into account in determining the
Underwriter's Allocable Portion of such Distribution
Fees.
(iii) Notwithstanding anything to the contrary set forth in
this Agreement or (to the extent waiver thereof is
permitted thereby) applicable law, each Fund's
obligation to pay the Underwriter's Allocable Portion
of the Distribution Fees payable in respect to the
Class B shares of the Funds shall not be
2
terminated or modified for any reason (including a
termination of this Agreement) except: (a) to the
extent required by a change in the 1940 Act, the
rules thereunder or the Conduct Rules of the NASD, in
each case enacted or promulgated after ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇) on a basis which does not alter the
Underwriter's Allocable Portion of the Distribution
Fees computed with reference to Commission Shares the
Date of Original Issuance (as defined in the
Allocation Schedule) of which occurs on or prior to
the adoption of such termination or modification and
with respect to Free Shares (as defined in the
Allocation Schedule) which would be attributed to
such Underwriter under the Allocation Schedule with
reference, or (c) in connection with a "Complete
Termination" (as hereinafter defined) of the Plan.
(iv) The Funds will not take any action to waive or change
any CDSC in respect of the Class B shares, except as
provided in each Fund's current Prospectus or
statement of additional information forming a part of
that Fund's initial Registration Statement on the
date such Fund's initial Registration Statement was
declared effective by the SEC, without the consent of
the Underwriter and the permitted assigns of all or
any portion of its rights to its Allocable Portion of
the CDSCs.
(v) Notwithstanding anything to the contrary in this
Agreement, neither the termination of the
Underwriter's role as principal distributor of the
Class B shares of a Fund, nor the termination of this
Agreement with respect to a Fund, nor the termination
of the Plan with respect to a Fund will terminate the
Underwriter's right to its Allocable Portion of the
CDSCs in respect of the Class B shares of each Fund.
(vi) Notwithstanding anything to the contrary in this
Agreement, the Underwriter may assign, sell or pledge
(collectively, "Transfer") its rights to the Service
Fees and its Allocable Portion of the Distribution
Fees and CDSCs (but not its obligations to the Funds
under this Agreement) to raise funds to make the
expenditures related to the distribution of Class B
shares of a Fund and in connection therewith, upon
receipt of notice of such Transfer, a Fund shall pay,
or cause to be paid, to the assignee, purchaser or
pledgee (collectively with their subsequent
transferees, "Transferees") such portion of the
Underwriter's Service Fees, Allocable Portion of the
Distribution Fees and CDSCs in respect of the Class B
shares of a Fund so Transferred. Except as provided
in (iii) above and notwithstanding anything to the
contrary set forth elsewhere in this Agreement, to
the extent the Underwriter has Transferred its rights
thereto to raise funds as aforesaid, a Fund's
obligation to pay the Underwriter's Allocable Portion
of the Distribution Fees and CDSCs payable in respect
of the Class B shares of a Fund shall be absolute and
unconditional and shall not be subject to dispute,
offset, counterclaim or any defense whatsoever, at
law or equity, including, without limitation, any of
the foregoing based on the
3
insolvency or bankruptcy of the Underwriter (it being
understood that such provision is not a waiver of the
Funds' right to pursue the Underwriter and enforce
claims against the assets of the Underwriter other
than the Underwriter's right to the Distribution Fees
and CDSCs in respect of the Class B shares of each
Fund, which have been so transferred in connection
with such Transfer). The Funds agree that each such
Transferee is a third party beneficiary of the
provisions of this clause (vi) but only insofar as
those provisions relate to Distribution Fees and
CDSCs transferred to such Transferee.
(vii) For purposes of the Agreement, the term "Allocable
Portion" of Distribution Fees and CDSCs payable in
respect of the Class B shares of a Fund shall mean
the portion of such Distribution Fees and CDSCs
allocated to the Underwriter.
(viii) For purposes of this Agreement, the term "Complete
Termination" of the Plan in respect of a Fund means a
termination of the Plan involving the complete
cessation of the payment of Distribution Fees in
respect of all Class B shares of the Funds, and the
termination of the Plan and the complete cessation of
the payment of distribution fees pursuant to any
other distribution Plan pursuant to Rule 12b-1 under
the 1940 Act in respect of the Class B shares of the
Funds and any successor fund or the Funds acquiring a
substantial portion of the assets of the Funds and
for every future class of shares which has
substantially similar characteristics to the Class B
shares of the Funds taking into account the manner of
payment and amount of sales charge, CDSC or other
similar charges borne directly or indirectly by the
holders of such shares; provided that (a) the
Trustees of the Trust, including the Independent
Trustees of the Trust, shall have determined that
such termination is in the best interest of the Funds
and the shareholders of the Funds, and (b) such
termination does not alter the CDSC as in effect at
the time of such termination applicable to Commission
Shares of the Funds, the Date of Original Issuance
(as defined in the Allocation Schedule) of which
occurs on or prior to such termination.
(ix) The Underwriter may reallow any or all of the
Distribution and Service Fees and CDSCs which it is
paid under the Agreement to such dealers as the
Underwriter may from time to time determine.
(x) The Underwriter may fix quantity discounts and other
similar variances or waivers of the CDSCs not
inconsistent with the provisions of the 1940 Act;
provided however, that the Underwriter shall not
impose any commission, permit any quantity discount,
or impose any other similar waiver or variance in
connection with the sale of Class B shares except as
disclosed in each Fund's current Prospectus.
4
(e) Class C Shares
(i) As compensation for providing services under this
Agreement, (A) the Underwriter shall receive from
each Fund distribution and service fees under the
terms and conditions set forth in the Plan for the
Funds adopted under Rule 12b-1 under the 1940 Act, as
that Plan may be amended from time to time and
subject to any further limitation on such fees as the
Trustees may impose, and (B) the Underwriter shall
receive from each Fund all CDSCs applied on
redemption of Class C shares of the Funds. Whether
and to what extent a CDSC will be imposed with
respect to a redemption shall be determined in
accordance with, and in a manner set forth in, each
Fund's current Prospectus.
(ii) The Underwriter may reallow any or all of the
distribution and service fees and CDSCs which it is
paid under the Agreement to such dealers as the
Underwriter may from time to time determine.
(iii) The Underwriter may fix quantity discounts and other
similar variances or waivers of the CDSCs not
inconsistent with the provisions of the 1940 Act;
provided however, that the Underwriter shall not
impose any commission, permit any quantity discount,
or impose any other similar waiver or variance in
connection with the sale of Class C shares except as
disclosed in each Fund's current Prospectus.
(e) Class Q Shares
(i) As compensation for providing services under this
Agreement, the Underwriter shall receive from each
Fund service fees under the terms and conditions set
forth in the Plan for the Funds adopted under Rule
12b-1 under the 1940 Act, as that Plan may be amended
from time to time and subject to any further
limitation on such fees as the Trustees may impose.
(ii) The Underwriter may reallow any or all of the service
fees and CDSCs which it is paid under the Agreement
to such dealers as the Underwriter may from time to
time determine.
(f) Class T Shares
(i) The public offering price of Class T shares shall be
based on the net asset value per share (as determined
by the Fund) of the outstanding Class T shares of the
Fund. The net asset value of Class T shares shall be
regularly determined on every business day as of the
time of the regular closing of the New York Stock
Exchange ("NYSE") and the offering price based upon
such net asset value shall become effective as set
forth from time to time in the Fund's current
Prospectus; such net asset value shall also be
regularly determined, and the offering price based
thereon shall become effective, as of such other
times for the regular determination of net asset
5
value as may be required or permitted by rules of the
NASD, or of the SEC. The Fund shall furnish daily to
the Underwriter, with all possible promptness, a
detailed computation of net asset value of its Class
T shares.
(ii) As compensation for providing services under this
Agreement, (A) the Underwriter shall receive from the
Fund distribution and service fees under the terms
and conditions set forth in the Plan for the Fund
adopted under Rule 12b-1 under the 1940 Act, as that
Plan may be amended from time to time and subject to
any further limitation on such fees as the Trustees
may impose, and (B) the Underwriter shall receive
from the Fund all CDSC's applied on redemption of
Class T share of the Fund. Whether and to what extent
a contingent deferred sales charge will be imposed
with respect to a redemption shall be determined in
accordance with, and in a manner set forth in, the
Fund's current Prospectus.
(iii) The Underwriter may reallow any or all of the
distribution and services fees and contingent
deferred sales charges which it is paid under the
Agreement to such dealers as the Underwriter may from
time to time determine.
(iv) The Underwriter may fix quantity discounts and other
similar variances or waivers of the contingent
deferred sales charge not inconsistent with the
provisions of the 1940 Act; provided however, that
the Underwriter shall not impose any commission,
permit any quantity discount, or impose any other
similar waiver or variance in connection with the
sale of Class T shares except as disclosed in the
current Prospectus of the Fund.
2. The Underwriter agrees to devote reasonable time and effort to
enlist investment dealers to sell shares of each class of each Fund and
otherwise promote the sale and distribution and act as Underwriter for
the sale and distribution of the shares of each class of each Fund as
such arrangements may profitably be made; but so long as its does so,
nothing herein contained shall prevent the Underwriter from entering
into similar arrangements with other funds and to engage in other
activities. The Funds reserve the right to issue shares of each class
in connection with any merger or consolidation of the Funds with any
other investment company or any personal holding company or in
connection with offers of exchange exempted from Section 22(d) of the
1940 Act.
3. To the extent the Funds shall offer (as set forth in each Fund's
current Prospectus) to provide physical certificates evidencing
ownership of a class of shares, upon receipt by a Fund at its principal
place of business of a written order from the Underwriter, together
with delivery instructions, a Fund shall, as promptly as practicable,
cause certificates for the class of shares called for in such order to
be delivered or credited in such amounts and in such names as shall be
specified by the Underwriter, against payment therefor in such manner
as may be acceptable to such Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the shares of the Funds shall be subject to
the approval of the Funds to which
6
such literature relates. The Funds authorize the Underwriter in
connection with the sale or arranging for the sale of its shares to
give only such information and to make only such statements or
representations as are contained in the Prospectus or in sales
literature or advertisements approved by the Funds or in such financial
statements and reports as are furnished to the Underwriter pursuant to
paragraph 6 below. The Funds shall not be responsible in any way for
any information, statements or representations given or made by the
Underwriter or its representatives or agents other than such
information, statements and representations.
5. The Underwriter, as agent of the Funds, is authorized, subject to
the direction of the Funds, to accept shares of each class for
redemption at prices not in excess of their net asset value, determined
as prescribed in the current Prospectus of each Fund. The Funds shall
reimburse the Underwriter monthly for its out-of-pocket expenses
reasonably incurred on behalf of the Funds in carrying out the
foregoing authorization, but the Underwriter shall not be entitled to
any commissions or other compensation in respect to such redemptions.
The Underwriter shall report all redemptions promptly to the Funds.
6. The Trust, on behalf of the Funds, shall keep the Underwriter fully
informed with regard to its affairs, shall furnish the Underwriter with
a certified copy of all financial statements, and a signed copy of the
report, prepared by independent public accountants and with such
reasonable number of printed copies of the annual and other periodic
reports of the Funds as the Underwriter may request, and shall
cooperate fully in the efforts of the Underwriter to sell and arrange
for the sale of each class of shares of the Funds and in the
performance by the Underwriter of all its duties under this Agreement.
7. The Funds will pay or cause to be paid expenses (including counsel
fees and disbursements) of any registration of each class of shares of
beneficial interest under, but not limited to, Federal, state or other
regulatory authority, fees of filing periodic reports with regulatory
bodies and of preparing, setting in type and printing the Prospectus
and any amendments thereto prepared for use in connection with the
offering of shares of each class of the Funds, for fees and expenses
incident to the issuance of shares of beneficial interest of each
class, such as the cost of stock certificates (if offered), issuance
taxes, fees of the transfer agent, including the cost of preparing and
mailing notices to shareholders pertaining to transactions with respect
to shareholders' accounts, dividend disbursing agent's costs, including
the cost for preparing and mailing notices confirming shares acquired
by shareholders pursuant to the reinvestment of dividends and
distributions, and the mailing to shareholders of prospectuses, and
notices and reports as may be required from time to time by regulatory
bodies or for such other purposes, except for purposes of sales by the
Underwriter as outlined in paragraph 8 hereof.
8. The Underwriter shall pay all of its own costs and expenses (other
than expenses and costs heretofore deemed payable by the Funds and
other than expenses which one or more dealers may bear pursuant to any
agreement with the Underwriter) incident to the sale and distribution
of the shares issued or sold hereunder including (a) expenses of
printing copies of the Prospectus to be used in connection with the
sale of shares of each class of the Funds at printer's overrun costs;
(b) expenses of printing and distributing or
7
disseminating any other literature, advertising or selling aids in
connection with the offering of shares of each class for sale (however,
the expenses referred to in (a) and (b) do not include expenses
incurred in connection with the preparation, printing and distribution
of the Prospectuses or any report or other communication to
shareholders, to the extent that such expenses are necessarily incurred
to effect compliance by the Funds with any Federal or State law or
other regulatory bodies); and (c) expenses of advertising in connection
with such offering; provided, however, that the Underwriter shall not
be required to pay for any such expenses to the extent that they are
paid pursuant to each Fund's distribution plan adopted pursuant to Rule
12b-1 under the 1940 Act.
9. The Funds agree to register, from time to time as necessary,
additional shares of beneficial interest of each class with the SEC,
State and other regulatory bodies and to pay the related filing fees
therefor and to file 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 or that there
may be no omission to state a material fact therein necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. As used in this Agreement, the
term "Registration Statement" shall mean the Registration Statement
most recently filed by the Trust with the SEC and effective under the
Securities Act of 1933, as amended, as such Registration Statement is
amended from time to time, and the term "Prospectus" shall mean the
most recent form of prospectus authorized by the Trust with respect to
each Fund for use by the Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60
days' written notice, without payment of a penalty, by the Underwriter,
by vote of a majority of the outstanding voting securities (as defined
in the ▇▇▇▇ ▇▇▇) of each Fund or by vote of a majority of the Trustees,
who are not "interested persons" of each Fund and who have no direct or
indirect financial interest in the operation of the Plan or agreements.
11. This Agreement shall terminate automatically in the event of its
assignment. The term "assignment" for this purpose shall have the
meaning defined in Section 2(a)(4) of the 1940 Act. With regard to
Class T Shares, this Agreement shall also terminate automatically when
Class T shares no longer exist.
12. This Agreement has been approved by the Trustees of the Trust, on
behalf of each Fund, and shall continue in effect with respect to each
Fund until the Reapproval Date set forth for such Fund in Schedule A to
this Agreement. Thereafter, this Agreement shall continue for
successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are
not interested persons of the parties hereto as defined in the 1940 Act
and either (a) a majority of the Trustees of the Trust or (b) by vote
of a majority or the outstanding voting securities of each Fund, as
defined in the 1940 Act.
13. The Declaration, establishing the Trust, a copy of which, together
with all amendments thereto, is on file in the office of the Secretary
of the Commonwealth of Massachusetts, provides that the name of the
Trust refers to the Trustees under the
8
Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder, officer, employee or agent of
the Trust and/or each Fund may be held to any personal liability, nor
may resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with affairs of the
Trust, but the Trust property only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized and to become effective as
of the day and year set forth above.
ING EQUITY TRUST
By:
------------------------------------
▇▇▇▇▇▇ ▇. Naka
Senior Vice President
ING FUNDS DISTRIBUTOR, INC.
By:
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
9
SCHEDULE A
WITH RESPECT TO THE
UNDERWRITING AGREEMENT
BETWEEN
ING EQUITY TRUST
AND
ING FUNDS DISTRIBUTOR, INC.
EFFECTIVE: SEPTEMBER 23, 2002
LAST CONTINUED/
NAME OF FUND APPROVED BY BOARD REAPPROVAL DATE
------------ ----------------- ---------------
ING Biotechnology Fund August 20, 2002 September 1, 2003
ING Growth Opportunities Fund August 20, 2002 September 1, 2003
ING MidCap Opportunities Fund August 20, 2002 September 1, 2003
ING MidCap Value Fund August 20, 2002 September 1, 2003
ING Principal Protection Fund August 20, 2002 September 1, 2003
ING Principal Protection Fund II August 20, 2002 September 1, 2003
ING Principal Protection Fund III August 20, 2002 September 1, 2003
ING Principal Protection Fund IV August 20, 2002 September 1, 2003
ING Principal Protection Fund V August 20, 2002 September 1, 2003
ING Real Estate Fund August 20, 2002 September 1, 2003
ING Research Enhanced Index Fund August 20, 2002 September 1, 2003
ING SmallCap Opportunities Fund August 20, 2002 September 1, 2003
ING SmallCap Value Fund August 20, 2002 September 1, 2003
10
SCHEDULE B
WITH RESPECT TO THE
UNDERWRITING AGREEMENT
BETWEEN
ING EQUITY TRUST
AND
ING FUNDS DISTRIBUTOR, INC.
EFFECTIVE: SEPTEMBER 23, 2002
ALLOCATION SCHEDULE
Defined terms used in this Schedule and not otherwise defined herein
shall have the meaning assigned to them in the Underwriting Agreement of the
Trust, on behalf of each Fund, and the Underwriter made as of the 23rd day of
September, 2002, to which this Schedule B is attached (the "Underwriting
Agreement"). As used herein the following terms shall have the meanings
indicated:
CDSCs or Asset Based Sales Charges related to Class B Shares ("Shares")
of a Fund shall be allocated by a Fund among the Underwriter and any successor
principal distributor of Shares of such Fund (the "Successor Underwriter") in
accordance with this Schedule B.
"Commission Share" means, in respect of a Fund, each Share of such
Fund, which is issued under circumstances which would normally give rise to an
obligation of the holder of such Share to pay a CDSC upon redemption of such
Share (including, without limitation, any Share of such Fund issued in
connection with a Permitted Free Exchange) and any such Share shall continue to
be a Commission Share of such Fund prior to the redemption (including a
redemption in connection with a Permitted Free Exchange) or conversion of such
Share, even though the obligation to pay the CDSC may have expired or conditions
for waivers thereof may exist.
"Date of Original Issuance" means in respect of any Commission Share,
the date with reference to which the amount of the CDSC payable on redemption
thereof, if any, is computed.
"Free Share" means, in respect of a Fund, each Share of such Fund,
other than a Commission Share (including, without limitation, any Share issued
in connection with the reinvestment of dividends or capital gains).
"Inception Date" means in respect of a Fund, the first date on which
such Fund issued Shares.
"Net Asset Value" means, (i) with respect to a Fund, as of the date any
determination thereof is made, the net asset value of such Fund computed in the
manner such value is required
11
to be computed by such Fund in its reports to its shareholders, and (ii) with
respect to any share of such Fund as of any date, the quotient obtained by
dividing: (A) the net asset value of such Fund (as computed in accordance with
clause (i) above) allocated to Shares of such Fund (in accordance with the
constituent documents for such Fund) as of such date, by (B) the number of
Shares of such Fund outstanding on such date.
PART I: ATTRIBUTION OF SHARES
Shares of each Fund, which are outstanding from time to time, shall be
attributed to the Underwriter and each Successor Underwriter in accordance with
the following rules;
(1) Commission Shares:
(a) Commission Shares attributed to the Underwriter shall be Commission
Shares the Date of Original issuance of which occurred on or after the Inception
Date of such Fund and on or prior to the last date on which the Underwriter
acted as principal underwriter of Shares of such Fund.
(b) Commission Shares attributable to any Successor Underwriter shall
be Commission Shares, the Date of Original Issuance of which occurs after the
last date on which the immediately preceding principal underwriter of Shares of
such Fund acted as principal underwriter of Shares of such Fund and prior to the
last date on which the Successor Underwriter in question acted as principal
underwriter of Shares of such Fund.
(c) A Commission Share of a particular Fund (the "Issuing Fund") issued
in consideration of the investment of proceeds of the redemption of a Commission
Share of another Fund (the "Redeeming Fund") in connection with a Permitted Free
Exchange, is deemed to have a Date of Original issuance identical to the Date of
Original Issuance of the Commission Share of the Redeeming Fund and any such
Commission Share will be attributed to the Underwriter or any Successor
Underwriter based upon such Date of Original Issuance in accordance with rules
(a) and (b) above.
(d) A Commission Share redeemed (other than in connection with a
Permitted Free Exchange) or converted to a class A share is attributable to the
Underwriter or any Successor Underwriter based upon the Date of Original
Issuance in accordance with rule (a), (b) and (c) above.
(2) Free Shares:
Free shares of a Fund outstanding on any date shall be attributed to
the Underwriter or any Successor Underwriter, as the case may be, in the same
proportion that the Commission Shares of such Fund outstanding on such date are
attributed to it on such date; provided that if the Transfer Agent is able to
produce monthly reports which track the Date of original Issuance for the
Commission Shares related to such Free Shares, then the Free Shares shall be
allocated pursuant to clause 1(a), (b) and (c) above.
12
PART II: ALLOCATION OF CDSCs ("CDSCs")
CDSCs Related to the Redemption of Commission Shares:
CDSCs in respect of the redemption of Commission Shares shall be
allocated to the Underwriter or any Successor Underwriter depending upon whether
the related redeemed Commission Share is attributable to such Underwriter or
Successor Underwriter, as the case may be, in accordance with Part I above.
PART III: ALLOCATION OF ASSET BASED SALES CHARGES
Assuming that the Asset Based Sales Charge remains constant over time
and among Funds so that Part IV hereof does not become operative:
(1) The portion of the aggregate Asset Based Sales Charges accrued in
respect of all Shares of all Funds during any calendar month allocable to the
Underwriter or any Successor Underwriter is determined by multiplying the total
of such Asset Based Sales Charges by the following fraction:
(A + C) /2
----------
(B + D) /2
where:
A = The aggregate Net Asset Value of all Shares of all Funds attributed to
such Underwriter or Successor Underwriter, as the case may be, and
outstanding at the beginning of such calendar month
B = The aggregate Net Asset Value of all Shares of all Funds at the
beginning of such calendar month
C = The aggregate Net Asset Value of all Shares of all Funds attributed to
such Underwriter or Successor Underwriter, as the case may be, and
outstanding at the end of such calendar month
D = The aggregate Net Asset Value of all Shares of all Funds at the end of
such calendar month
13
(2) If the Program Administrator reasonably determines that the
Transfer Agent is able to produce automated monthly reports which allocate the
average Net Asset Value of the Commission Shares (or all Shares if available) of
all Funds among the Underwriter and any Successor Underwriter in a manner
consistent with the methodology detailed in Part I and Part III (l) above, the
portion of the Asset Based Sales Charges accrued in respect of all such Shares
of all Funds during a particular calendar month will be allocated to such
Underwriter or Successor Underwriter by multiplying the total of such Asset
Based Sales Charges by the following fraction:
(A) / (B)
where:
A = Average Net Asset Value of all such Shares of all Funds for such
calendar month attributed to such Underwriter or Successor Underwriter,
as the case may be
B = Total average Net Asset Value of all such Shares of all Funds for such
calendar month
PART IV: ADJUSTMENT OF THE UNDERWRITER'S OR SUCCESSOR UNDERWRITER'S SHARE OF
ASSET BASED SALES CHARGES AND CDSCS
The Parties to the Underwriting Agreement recognize that, if the terms
of the Underwriting Agreement, any Distribution Plan, any Prospectus, the
Conduct Rules or any other Applicable Law change, which change
disproportionately reduces, in a manner inconsistent with the intent of the
Underwriting Agreement and this Schedule B, the amount of the Underwriter's or
the Successor Underwriter's share of Asset Based Sales Charges and CDSCs that
would have been payable had no such change occurred, this Allocation Schedule
should be adjusted by agreement among the Funds, the Underwriter and each
Successor Underwriter to conform with such intent taking into account such
change; provided, however, if the Funds, the Underwriter and the Successor
Underwriters cannot agree within thirty (30) days after the date of any such
change in Applicable Laws or in any Underwriting Agreement, Distribution Plan,
Prospectus or the Conduct Rules, the Parties shall submit the question to
arbitration in accordance with the commercial arbitration rules of the American
Arbitration Association and the decision reached by the arbitrator shall be
final and binding on the Parties hereto.
14