MASTER DISTRIBUTION PLAN AND AGREEMENT
between
WORKING EQUITY FUNDS
and
vanteq SECURITIES, INC.
THIS AGREEMENT made as of the day of , 200 , by and between WORKING
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EQUITY FUNDS, a Massachusetts business trust (the "Company"), with respect to
the classes and series of shares of the common stock of the Company set forth
on Appendix A to this Agreement, including, without limitation, Working Equity
S&P 500 Index Fund (together with any other series of shares of common stock of
the Company set forth on Appendix A, the "Funds") (the shares of each of the
Funds hereinafter referred to as the "Shares") and vanteq SECURITIES, INC., a
Delaware corporation (the "Distributor").
WHEREAS, the Company engages in business as an open-end management
investment company, and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and
WHEREAS, the Company desires to finance the distribution of the Shares,
together with the Shares of any additional Fund that may hereafter be offered
to the public, in accordance with this Master Distribution Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Act (the "Plan and
Agreement"); and
WHEREAS, Distributor desires to be retained to perform services in
accordance with such Plan and Agreement and on said terms and conditions; and
WHEREAS, this Plan and Agreement has been approved by a vote of the
board of trustees of the Company, including a majority of the trustees who are
not interested persons of the Company, as defined in the Act, and who have no
direct or indirect financial interest in the operation of this Plan and
Agreement (the "Independent Trustees"), cast in person at a meeting called for
the purpose of voting on this Plan and Agreement;
NOW, THEREFORE, the Company hereby adopts the Plan set forth herein and
the Company and Distributor hereby enter into this Agreement pursuant to the
Plan in accordance with the requirements of Rule 12b-1 under the Act, and
provide and agree as follows:
FIRST: The Plan is defined as those provisions of this document by which the
Company adopts a Plan pursuant to Rule 12b-1 under the Act and authorizes
payments as described herein. The Agreement is defined as those provisions of
this document by which the Company retains Distributor to provide distribution
services beyond those required by the General Distribution Agreement between
the parties, as are described herein. The
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Company may retain the Plan notwithstanding termination of the Agreement.
Termination of the Plan will automatically terminate the Agreement. Each Fund
is hereby authorized to utilize the assets of the Company to finance certain
activities in connection with distribution of the Company's Shares.
SECOND: The shares of each Fund may incur expenses per annum of the average
daily net assets of the Company attributable to the Shares at the rates set
forth in Schedule A subject to any limitations imposed from time to time by
applicable rules of the National Association of Securities Dealers, Inc.
THIRD: The Company shall not sell any Shares except through the Distributor and
under the terms and conditions set forth in the FOURTH paragraph below.
Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all
or a majority of the shares or assets of any such company; and
(B) the Company may issue Shares at their net asset value in connection
with certain classes of transactions or to certain categories of persons, in
accordance with Rule 22d-1 under the Act, provided that any such category is
specified in the then current prospectus of the applicable Shares.
FOURTH: The Distributor agrees that it will use its best efforts to sell the
Shares; provided, however, that:
(A) the Distributor may, and, when requested by the Company on behalf
of any Fund, shall, suspend its efforts to effectuate such sales at any time
when, in the opinion of the Distributor or of the Company, no sales should be
made because of market or other economic considerations or abnormal
circumstances of any kind; and
(B) the Company may withdraw the offering of the Shares at any time
without the consent of the Distributor. It is mutually understood and agreed
that the Distributor does not undertake to sell any specific amount of the
Shares. The Company shall have the right to specify minimum amounts for initial
and subsequent orders for the purchase of Shares.
(C ) To the extent that obligations incurred by Distributor out of its
own resources to finance any activity primarily intended to result in the sale
of Shares of a Fund, pursuant to this Plan and Agreement or otherwise, may be
deemed to constitute the indirect use of Fund assets, such indirect use of Fund
assets is hereby authorized in addition to, and not in lieu of, any other
payments authorized under this Plan and Agreement.
(D) Distributor shall provide to the Company's Board of Trustees and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended
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pursuant to the Plan and Agreement and the purposes for which such expenditures
were made.
FIFTH:
(A) The public offering price of the shares shall be the net asset
value per share plus a sales charge, if any, of the applicable shares. Net
asset value per share shall be determined in accordance with the provisions of
the then current prospectus and statement of additional information of the
applicable Fund. The sales charge shall be established by the Distributor. The
Company's Board of Trustees may establish a schedule of contingent deferred
sales charges to be imposed at the time of redemption of the Shares, and such
schedule shall be disclosed in the current prospectus or statement of
additional information of each Fund. The sales charge and contingent deferred
sales charges may reflect scheduled variations in or waivers of sales charges
on redemptions of shares or contingent deferred sales charges on redemptions of
shares, either generally to the public or to any specified class of
shareholders and/or in connection with any specified class of transactions, in
accordance with Rule 22d-1 and as set forth in the Funds' current
prospectus(es) or statement(s) of additional information. The Distributor and
the Company shall apply any then applicable scheduled variation in or waiver of
the selling commission or contingent deferred sales charges uniformly to all
offerees in the class specified.
(B) The Distributor may pay financial institutions who provide
distribution and other services with respect to Shares are sold, such portion
of the sales charge as may be payable to them and specified by the Distributor
up to but not exceeding the amount of the total sales charge. The difference
between any commissions so payable and the total sales charges included in the
offering price shall be paid to the Distributor.
( C) Amounts set forth in Schedule A may be used to finance any
activity which is primarily intended to result in the sale of the Shares,
including, but not limited to, expenses of organizing and conducting sales
seminars, advertising programs, finders fees, distribution of prospectuses and
statements of additional information (and supplements thereto) and reports for
other than existing shareholders, preparation and distribution of advertising
material and sales literature, supplemental payments to dealers and other
institutions as asset-based sales charges and providing such other services and
activities as may from time to time be agreed upon by the Company. Such
reports, prospectuses and statements of additional information (and supplements
thereto), sales literature, advertising and other services and activities may
be prepared and/or conducted either by Distributor's own staff, the staff of
affiliated companies of the Distributor, or third parties.
(D) Amounts set forth in Schedule A may also be used to finance
[payments of service fees in accordance with Section E below, and] the costs of
administering the Plan and Agreement. To the extent that amounts paid hereunder
are not used specifically to compensate Distributor for any such expense, such
amounts may be treated as
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compensation for Distributor's distribution-related services. All amounts
expended pursuant to the Plan and Agreement shall be paid to Distributor and
are the legal obligation of the Company and not of Distributor. [That portion
of] the amounts paid under the Plan and Agreement [that is not paid or advanced
as a service fee pursuant to Section E below] shall be deemed an asset-based
sales charge. No provision of this Plan and Agreement shall be interpreted to
prohibit any payments by the Company during periods when the Company has
suspended or otherwise limited sales.
(E) [Amounts expended by the Company under the Plan shall be used in
part for the implementation by Distributor of shareholder service arrangements.
The maximum service fee paid to any service provider, including, without
limitation, the Distributor, shall be twenty-five one-hundredths of one percent
(0.25%), per annum of the average daily net assets of the Company attributable
to the Shares owned by the customers of such service provider, or such lower
rate for the Fund as is specified on Schedule A.
(1) Pursuant to this program, Distributor may provide, and may
enter into agreements ("Service Agreements") with such broker-dealers
(together with the Distributor, "Dealers") as may be selected from time
to time by Distributor for the provision of, distribution-related
personal shareholder services in connection with the sale of Shares to
the Dealers' clients and customers ("Customers") to Customers who may
from time to time directly or beneficially own Shares. The
distribution-related personal continuing shareholder services to be
rendered by Dealers under the Service Agreements may include, but shall
not be limited to, the following : (i) distributing sales literature;
(ii) answering routine Customer inquiries concerning the Company and
the Shares; (iii) assisting Customers in changing dividend options,
account designations and addresses, (iv) assisting in the establishment
and maintenance of customer accounts and records, and in the processing
of purchase and redemption transactions; (v) investing dividends and
capital gains distributions automatically in Shares; and (vi) providing
such other information and services as the Company or the Customer may
reasonably request.
(2) Distributor may also enter into agreements ("Third Party
Agreements") with selected banks, financial planners, retirement plan
service providers and other appropriate third parties acting in an
agency capacity for their customers ("Third Parties"). Third Parties
acting in such capacity will provide some or all of the shareholder
services to their customers as set forth in the Third Party Agreements
from time to time.
(3) Distributor may also enter into shareholder service agreements
("Bank Trust Department Agreements and Brokers for Bank Trust
Department Agreements") with selected bank trust departments and
brokers for bank trust departments. Such bank trust departments and
brokers for bank trust departments will provide some or all of the
shareholder services to their customers as set forth in the Bank Trust
Department Agreements and Brokers for Bank Trust Department Agreements.
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(F)] No provision of this Plan and Agreement shall be deemed to
prohibit any payments by a Fund to the Distributor or by a Fund or the
Distributor to investment dealers and financial institutions where such
payments are made under the Plan and Agreement.
(G) The Company shall redeem Shares from shareholders in accordance
with the terms set forth from time to time in the current prospectus and
statement of additional information of each Fund. The price to be paid to a
shareholder to redeem Shares shall be equal to the net asset value of the
Shares being redeemed, less any applicable contingent deferred sales charge.
The Distributor shall be entitled to receive the amount of any applicable
contingent deferred sales charge that has been subtracted from gross redemption
proceeds. The Company shall pay or cause the Company's transfer agent to pay
the applicable contingent deferred sales charge to the Distributor on the date
net redemption proceeds are payable to the redeeming shareholder.
SIXTH: The Distributor shall act as agent of the Company on behalf of each Fund
in connection with the sale and repurchase of Shares. Except with respect to
such sales and repurchases, the Distributor shall act as principal in all
matters relating to the promotion or the sale of Shares and shall enter into
all of its own engagements, agreements and contracts as principal on its own
account. The Distributor shall enter into agreements with investment dealers
and financial institutions selected by the Distributor, authorizing such
investment dealers and financial institutions to offer and sell Shares to the
public upon the terms and conditions set forth therein, which shall not be
inconsistent with the provisions of this Agreement. Each agreement shall
provide that the investment dealer and financial institution shall act as a
principal, and not as an agent, of the Company on behalf of the Funds.
SEVENTH: The Funds shall bear:
(A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
EIGHTH:
(A) The Distributor shall bear the expenses of distributing the Funds'
prospectuses and statements of additional information (including supplements
thereto) relating to public offerings made by the Distributor pursuant to this
Agreement (which shall not include those prospectuses and statements of
additional information, and supplements thereto, to be distributed to
shareholders of each Fund), and any other promotional or sales literature used
by the Distributor or furnished by the Distributor in connection with
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such public offerings, and expenses of advertising in connection with such
public offerings.
(B) The Distributor may be compensated for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by the Plan and Agreement.
NINTH: The Distributor will accept orders for the purchase of Shares only to
the extent of purchase orders actually received and not in excess of such
orders, and it will not avail itself of any opportunity of making a profit by
expediting or withholding orders. It is mutually understood and agreed that the
Company may reject purchase orders where, in the judgment of the Company, such
rejection is in the best interest of the Company.
TENTH: The Company, on behalf of the Funds, and the Distributor shall each
comply with all applicable provisions of the Act, the Securities Act of 1933,
rules and regulations of the National Association of Securities Dealers, Inc.
and its affiliates, and of all other federal and state laws, rules and
regulations governing the issuance and sale of Shares.
ELEVENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Funds agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Funds, or any omission to state a material fact therein, the omission of which
makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or Fund in connection therewith by or on behalf of the
Distributor. The Distributor agrees to indemnify the Company and the Funds
against any and all claims, demands, liabilities and expenses which the Company
or the Funds may incur arising out of or based upon any act or deed of the
Distributor or its sales representatives which has not been authorized by the
Company or the Funds in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Funds
against any and all claims, demands, liabilities and expenses which the Company
or the Funds may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Funds, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or the Funds in connection therewith by or on behalf
of the Distributor.
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(C) Notwithstanding any other provision of this Agreement, the
Distributor shall not be liable for any errors of the Funds' transfer agent, or
for any failure of any such transfer agent to perform its duties.
TWELFTH: Nothing herein contained shall require the Company to take any action
contrary to any provision of its Declaration of Trust, or to any applicable
statute or regulation.
THIRTEENTH: This Plan and Agreement shall become effective as of the date
hereof, shall continue in force and effect until , 200 , and shall
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continue in force and effect from year to year thereafter, provided that such
continuance is specifically approved at least annually (a)(i) by the Board of
Trustees of the Company or (ii) by the vote of a majority of the Funds'
outstanding voting securities of Shares (as defined in Section 2(a)(42) of the
1940 Act), and (b) by vote of a majority of the Company's trustees who are not
parties to this Plan and Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Plan and Agreement cast
in person at a meeting called for such purpose.
Any amendment to this Plan and Agreement that requires the approval of the
shareholders of Shares pursuant to Rule 12b-1 under the 1940 Act shall become
effective as to such Shares upon the approval of such amendment by a "majority
of the outstanding voting securities" (as defined in the 1940 Act) of such
Shares, provided that the Board of Trustees of the Company has approved such
amendment.
FOURTEENTH: This Plan and Agreement, any amendment to this Plan and Agreement
and any agreements related to this Plan and Agreement shall become effective
immediately upon the receipt by the Company of both (a) the affirmative vote of
a majority of the Board of Trustees of the Company, and (b) the affirmative
vote of a majority of those trustees of the Company who are not "interested
persons" of the Company (as defined in the 1940 Act) and have no direct or
indirect financial interest in the operation of this Plan and Agreement or any
agreements related to it (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan and Agreement or such
agreements. Notwithstanding the foregoing, no such amendment that requires the
approval of the shareholders of Shares of a Company shall become effective as
to such Shares until such amendment has been approved by the shareholders of
such Shares in accordance with the provisions of the Fourteenth paragraph of
this Plan and Agreement.
This Plan and Agreement may not be amended to increase materially the amount of
distribution expenses provided for in Schedule A hereof unless such amendment
is approved in the manner provided herein, and no material amendment to the
Plan and Agreement shall be made unless approved in the manner provided for in
the Fourteenth paragraph hereof.
So long as the Plan and Agreement remains in effect, the selection and
nomination of persons to serve as trustees of the Company who are not
"interested persons" of the
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Company shall be committed to the discretion of the trustees then in office who
are not "interested persons" of the Company. However, nothing contained herein
shall prevent the participation of other persons in the selection and
nomination process, provided that a final decision on any such selection or
nomination is within the discretion of, and approved by, a majority of the
trustees of the Company then in office who are not "interested persons" of the
Company.
FIFTEENTH:
(A) This Plan and Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Trustees of the Company or by
vote of a majority of the outstanding voting securities of Shares of each Fund,
or by the Distributor, on sixty (60) days' written notice to the other party.
(B ) In the event that neither Distributor nor any affiliate of
Distributor serves the Company as investment adviser, the agreement with
Distributor pursuant to this Plan shall terminate at such time. The board of
trustees may determine to approve a continuance of the Plan and/or a
continuance of the Agreement, hereunder.
(C) To the extent that this Plan and Agreement constitutes a Plan of
Distribution adopted pursuant to Rule 12b-1 under the Act it shall remain in
effect as such, so as to authorize the use by the Shares of each Fund of its
assets in the amounts and for the purposes set forth herein, notwithstanding
the occurrence of an "assignment," as defined by the Act and the rules
thereunder. To the extent it constitutes an agreement with the Distributor
pursuant to a plan, it shall terminate automatically in the event of such
"assignment." Upon a termination of the agreement with Distributor, the Funds
may continue to make payments pursuant to the Plan only upon the approval of a
new agreement under this Plan and Agreement, which may or may not be with
Distributor, or the adoption of other arrangements regarding the use of the
amounts authorized to be paid by the Funds hereunder, by the Company's board of
trustees in accordance with the procedures set forth above.
SIXTEENTH: Any notice under this Plan and Agreement shall be in writing,
addressed and delivered, or mailed postage prepaid, to the other party at such
address as the other party may designate for the receipt of notices. Until
further notice to the other party, it is agreed that the addresses of both the
Company and the Distributor shall be 7800 East Union Avenue, Mail Stop 201,
Denver, Colorado 80237.
SEVENTEENTH: This Plan and Agreement shall be governed by and construed in
accordance with the laws (without reference to conflicts of law provisions) of
the State of Massachusetts.
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IN WITNESS WHEREOF, the parties have caused this Plan and Agreement to be
executed in duplicate on the day and year first above written.
WORKING EQUITY FUNDS.
By:
---------------
Name:
Title: President
Attest:
------------------
Name:
Title: Secretary
vanteq DISTRIBUTORS, INC.
By:
---------------
Name:
Title: President
Attest:
------------------
Name:
Title: Secretary
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APPENDIX A
TO
MASTER DISTRIBUTION PLAN AND AGREEMENT -
OF
WORKING EQUITY FUNDS
SHARES:
WORKING EQUITY S&P 500 Index Fund
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SCHEDULE A
TO
MASTER DISTRIBUTION PLAN and AGREEMENT -
OF
WORKING EQUITY FUNDS
(DISTRIBUTION FEE)
The Company shall pay the Distributor as full compensation for all
services rendered and all facilities furnished under the Distribution Plan and
Agreement for each Fund (or Class thereof) designated below, a Distribution
Fee* determined by applying the annual rate set forth below as to each Fund (or
Class thereof) to the average daily net assets of the Fund (or Class thereof)
for the plan year, computed in a manner used for the determination of the
offering price of shares of the Fund.
Fund Shares: WORKING EQUITY S&P 500 Index Fund
Maximum Asset Based Sales Charge
Maximum Service Fee
Maximum Aggregate Fee .0.25%
11
