Exhibit (m)(17)
Fee-Based Programs Agreement dated as of April 1, 2002 between One Group Dealer
Services, Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
One Group Dealer Services, Inc. ("Distributor") has expressed interest
in Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx")
including shares of the open-end investment companies listed on Schedule A
(hereinafter collectively referred to as the "Funds" or individually, as the
"Fund") in the fee-based program(s) (hereinafter collectively referred to as the
"Fee-Based Programs" or individually, as the "Fee-Based Program") listed on
Schedule B on the following terms:
1. Xxxxxxx Xxxxx may in connection with the Fee-Based Program(s) sell
shares of any Funds made available by Distributor, from time to time, at net
asset value to clients participating in the Fee-Based Program(s). Xxxxxxx Xxxxx
will receive no discount, commission or other concession with respect to any
such sale, but will be entitled to receive any service fees and/or distribution
fees otherwise payable with respect thereto to the extent provided from time to
time in the applicable Fund's then-current Prospectus.
2. Distributor will make available to Xxxxxxx Xxxxx for use in the
Fee-Based Program(s) such of the Funds being distributed by Distributor. The
shares of such Funds shall be of the institutional class (i.e., a class of share
without a sales load and not subject to any 12b-1 fees), or if no such class
exists, the class of shares shall be a front-end load share offered to
participants of fee-based programs at net asset value. It is understood and
agreed that in connection with such Fee-Based Program(s), Xxxxxxx Xxxxx will act
as an agent for its clients in purchasing and selling the Funds and not as a
dealer for the Funds.
3. For any Fee-Based Program client eligible to purchase Fund shares at
net asset value, Xxxxxxx Xxxxx shall charge the fees set forth in the schedule
of fees of the applicable Fee-Based Program, a copy of which are attached as
Schedule C hereto. Xxxxxxx Xxxxx shall send to Distributor upon Distributor's
request from time to time the then-current standard schedule(s) of fees for the
Fee-Based Program(s).
4. Xxxxxxx Xxxxx will not advertise, market or otherwise represent that
the Funds may be purchased through Xxxxxxx Xxxxx at "no load", except that in
brochures and other materials relating to the Fee-Based Programs, Xxxxxxx Xxxxx
may refer to the Funds as available at net asset value if such materials also
clearly reflect that: (a) shares of the Funds are only available at net asset
value through the Fee-Based Program(s) (except to the extent that the
then-current prospectus offers shares at Net Asset Value to certain groups and
those purchasing over the breakpoint); and (b) clients will be charged a fee in
connection with the Fee-Based Program(s). In connection with explaining the fees
and expenses of the Fee-Based Program, representatives of Xxxxxxx Xxxxx may
describe to customers the option of purchasing Fund shares through such Program
at net asset value.
5. This Agreement supplements the Selected Dealer Agreement between
Distributor and Xxxxxxx Xxxxx. This Agreement shall not relieve Xxxxxxx Xxxxx or
Distributor from any obligations either may have under any other agreements
between them (including, but not limited to, the Selected Dealer Agreement and
the Financial Services Agreement relating to sub-accounting for the Fund(s)) and
all sales of shares of the Funds shall be subject to the terms of the Selected
Dealer Agreement (except with respect to the payment of discounts, commissions
and other concessions). In the case of any conflicts between the terms of this
Agreement and the terms of the Selected Dealer Agreement or the Financial
Services Agreement, this Agreement shall control only with respect to the
subject matter hereof.
6. Distributor is not endorsing, recommending or otherwise involved in
providing any investment product of Xxxxxxx Xxxxx, including but not limited to
the Fee-Based Program(s). Distributor is merely affording Xxxxxxx Xxxxx the
opportunity to use shares of the Funds as an investment medium for the Fee-Based
Program(s). Xxxxxxx Xxxxx acknowledges and agrees that it is solely responsible
for the Fee-Based Program(s). Distributor shall not make any representation
about the Fee-Based Program(s) without the prior written consent of Xxxxxxx
Xxxxx.
7. This Agreement is not exclusive and may be terminated by either
party upon thirty (30) days' prior written notice to the other party; provided,
however, that it shall terminate automatically upon termination of the Selected
Dealer Agreement. This Agreement may be amended only by a written instrument
signed by both parties.
8. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
9. This Agreement may be signed in counterparts, each of which shall be
deemed to be an original, and all such counterparts shall together constitute
but one and the same agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the date set
forth below by a duly authorized officer of each party.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
First Vice President
Director, Non-Proprietary Funds
One Group Dealer Services, Inc.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: Vice President
-------------------------------
Date: April 1, 2002
Schedule A
List of Participating Funds
One Group Mutual Funds
EQUITY FUNDS
Balanced (A)
Large Cap Growth (A)
Large Cap Value (A)
Mid Cap Growth (A)
Mid Cap Value (A)
Equity Income (A)
Diversified Equity (A)
Small Cap Growth (A)
Small Cap Value (A)
Diversified Mid Cap (A)
Diversified International (A)
Health Science (A)
INVESTOR FUNDS
Investor Growth (A)
Investor Growth & Income (A)
Investor Conservative Growth (A)
Investor Balanced (A)
BOND FUNDS
Intermediate Bond (A)
Government Bond (A)
Short-Term Bond (A)
Income Bond (A)
Ultra Short-Term Bond (A)
High Yield Bond (A)
Treasury & Agency (A)
Bond Fund (A)
MUNICIPAL BOND FUNDS
Intermediate Tax Free Bond (A)
Municipal Income (A)
Arizona Municipal Bond (A)
West Virginia Municipal Bond (A)
Louisiana Municipal Bond (A)
Ohio Municipal Bond (A)
Kentucky Municipal Bond (A)
Short-Term Municipal Bond (A)
Tax-Free Bond (A)
Michigan Municipal Bond (A)
Xxxxxxx Xxxxx Fee-Based Arrangements
Schedule B
Unlimited Advantage(SM), Xxxxxxx Xxxxx Mutual Fund Advisor Program,
and Xxxxxxx Xxxxx Mutual Fund Advisor Selects(SM) Program
A. Unlimited Advantage
Basic Product Description:
Unlimited Advantage(SM) is a non-discretionary brokerage service that offers
clients a relationship with a Financial Advisor and access to Xxxxxxx Xxxxx'x
resources for an annual asset-based fee. There are no per-trade commissions on
most transactions (certain additional fees and trading and other limitations
apply) and no individual charges on various products and services (some services
are not available to certain account types). The applicable fee rate for each
asset category is based on the total amount of eligible assets (in all asset
categories) held in the account(s) that each household enrolls in Unlimited
Advantage. The fee is assessed to each account based on the value of eligible
assets in all asset categories held by the account. There is a $1,500 minimum
annual fee ($375 minimum quarterly fee). Eligible assets in Unlimited Advantage
include certain open-end mutual funds, subject to the conditions discussed
below.
Unlimited Advantage is not an investment advisory service.
Other Features of Unlimited Advantage:
Open-end mutual funds advised by both affiliates of Xxxxxxx Xxxxx (the "Xxxxxxx
Xxxxx Funds") and certain unaffiliated advisers (the "non-Xxxxxxx Xxxxx Funds")
will be included as eligible assets on a front-end load-waived or no-load basis;
the only money market funds available as eligible assets are Xxxxxxx Xxxxx
Funds. Clients may purchase institutional shares of non-Xxxxxxx Xxxxx Funds that
do not pay any service fees if such shares are made available by the fund group.
If these shares are not available, or if Xxxxxxx Xxxxx so determines, clients
may purchase any front-end load class at NAV or no-load class made available to
Xxxxxxx Xxxxx by the fund group that pays Xxxxxxx Xxxxx no more than 25 basis
points of 12b-1 fees (collectively, the "Eligible Classes").
Open-end shares previously purchased with, or subject to, a load may be
transferred into accounts enrolled in Unlimited Advantage. However, these shares
will not be subject to the annual fee in Unlimited Advantage and will not be
included in determining the applicable fee rates (the "Ineligible Assets").
No-load and front-end load-waived classes of funds transferred into Unlimited
Advantage will be subject to the annual fee (except for certain Xxxxxxx Xxxxx
Funds) and will be counted as eligible assets in determining the applicable fee
rates. Certain restrictions apply in Unlimited Advantage as to the proportion of
eligible mutual funds that clients can hold in their accounts. In addition,
Unlimited Advantage is not for day trading or other extreme trading activity,
including trading in mutual funds based on market timing.
The Unlimited Advantage fee will also be charged on: (i) shares of Eligible
Classes purchased in these accounts (including through automatic investment
plans) and (ii) shares of Eligible Classes acquired in these accounts through
reinvestment of dividends and other distributions received on underlying fund
shares, whether or not such underlying fund shares are subject to the annual
fee.
Generally, while the client is enrolled in Unlimited Advantage, mutual fund
shares (and other eligible assets) purchased under the asset-based fee
arrangement cannot be transferred out of an account. Except in certain limited
circumstances, a client will have to redeem such shares, and purchase the
appropriate class of fund shares in an account not subject to the Unlimited
Advantage annual fee and pay any applicable transaction charges, including any
applicable sales charge. To the extent an exception is made, mutual fund
positions (for clients other xxxx Xxxxxxx Xxxxx employees) are subject to
exchange, as follows: Institutional class fund shares will be exchanged into (i)
Class D (or equivalent class with a service fee) at NAV for Xxxxxxx Xxxxx Funds
or (ii) the equivalent class (i.e., front-end load that pays Xxxxxxx Xxxxx no
more than 25 basis points of 12b-1 fees) at NAV for non-Xxxxxxx Xxxxx Funds
where such exchange has been provided for by these Funds. No-load funds not
subject to any service fees will be exchanged into a class that will pay Xxxxxxx
Xxxxx no more than 25 basis points of 12b-1 fees, where made available to
Xxxxxxx Xxxxx. No exchange will be required for (i) Eligible Classes subject to
service fees; (ii) Class A (institutional class) shares of a Xxxxxxx Xxxxx Fund
where the client also holds Class A shares of the same Xxxxxxx Xxxxx Fund as
Ineligible Assets in an enrolled account; (iii) Eligible Classes transferred to
an advisory fee-based arrangement at Xxxxxxx Xxxxx; and (iv) Eligible Classes of
non-Xxxxxxx Xxxxx Funds that were acquired initially outside of Unlimited
Advantage or another brokerage or advisory fee-based arrangement at Xxxxxxx
Xxxxx on a no-load or front-end load-waived basis.
Upon termination of Unlimited Advantage, mutual fund share positions (and other
eligible assets) held in the account(s) can be liquidated by the client. If the
client chooses to hold fund positions, an exchange into another share class may
be required as noted above. In addition, for Eligible Classes of mutual funds
that have been held in Unlimited Advantage for less than one year at
termination, a closing fee equal to 1.0% of the value of such equity, balanced
and high yield Eligible Classes and 0.30% of the value of such fixed-income
(other than high yield) Eligible Classes, less, if applicable, a portion of the
annual fee assessed to the client prior to termination, may be charged. This
closing fee will not be charged if the Eligible Classes are liquidated or
transferred to a fee-based arrangement for advisory services at Xxxxxxx Xxxxx on
or before termination. If an Eligible Class of a Fund held at termination was
acquired in exchange for an Eligible Class of another Fund within the same
family of funds while the client was enrolled in Unlimited Advantage, the period
of time that the client held the prior Eligible Class in Unlimited Advantage
will be counted in determining whether the one year holding period has been met.
As described in the Unlimited Advantage Agreement, a closing fee with respect to
the client's investment activity in eligible assets other than Eligible Classes
of mutual funds may also be payable.
X. Xxxxxxx Xxxxx Mutual Fund Advisor (Xxxxxxx Xxxxx MFA(R)) Program
Basic Product Description:
The Xxxxxxx Xxxxx MFA program is a fee-based, discretionary investment advisory
program that offers clients a customized portfolio of open-end mutual funds
based upon the investment strategy selected by the client. Clients' MFA
portfolios can include both Xxxxxxx Xxxxx Funds and non-Xxxxxxx Xxxxx Funds.
Non-Xxxxxxx Xxxxx Funds are included in the MFA program on a front-end
load-waived or no-load basis; non-Xxxxxxx Xxxxx money market funds are not
included in the Xxxxxxx Xxxxx MFA program. Institutional shares that do not pay
any service fees will be purchased through MFA if made available by the fund
group; if these shares are not available, any class that pays Xxxxxxx Xxxxx
12b-1 fees may also be purchased since such 12b-1 fees will be included in the
credit against the MFA advisory fees payable by MFA clients (collectively, the
"MFA Eligible Classes"). There is currently a $5,000 minimum initial investment.
Other Features of the Xxxxxxx Xxxxx MFA Program:
Participation in the MFA program may be funded with cash or Xxxxxxx Xxxxx Fund
shares (subject to the terms and conditions of MFA). Xxxxxxx Xxxxx, in its sole
discretion, may also accept the transfer of a client's existing non-Xxxxxxx
Xxxxx Fund shares (subject to the terms and conditions of MFA). If clients seek
to transfer fund shares into another asset-based fee program or services, the
shares will be treated as shares purchased through, and subject to thje terms
of, the other program or service. Upon termination of participation in the MFA
program, clients can decide to redeem, transfer or hold mutual fund shares held
in the MFA account.
The MFA advisory fee will be computed and charged as described in the MFA client
agreement on the basis of the aggregate net asset value of the client's MFA
account.
X. Xxxxxxx Xxxxx Mutual Fund Advisor Selects Program
Basic Product Description:
The Xxxxxxx Xxxxx Mutual Fund Advisor Selects(SM) (Xxxxxxx Xxxxx MFA
Selects(SM)) program is a fee-based, non-discretionary investment advisory
program that recommends the purchase, in specified proportions, of selected
open-end mutual funds for clients' accounts. These recommendations, which are
provided at least quarterly, are tailored to help meet the clients' stated
investment goals considering, among other factors, Xxxxxxx Xxxxx asset
allocation strategy guidelines. Clients are not required to purchase any of the
recommended funds and may, in their sole discretion, purchase funds that are not
included as recommendations but are among the universe of eligible funds
available to participants in Xxxxxxx Xxxxx MFA Selects Program.
The universe of eligible funds includes both Xxxxxxx Xxxxx and non-Xxxxxxx Xxxxx
Funds on a no-load or front-end load-waived basis; the only money market funds
available as eligible securities are Xxxxxxx Xxxxx Funds. The parameters of
eligible classes for non-Xxxxxxx Xxxxx Funds are the same as those described
above at Section B for the Xxxxxxx Xxxxx MFA program. As in the MFA program,
there is currently a $5,000 minimum initial investment.
Other Features of the Xxxxxxx Xxxxx MFA Selects Program:
Participation in the Xxxxxxx Xxxxx MFA Selects program may be funded with cash
or MFA Selects eligible fund shares (subject to the terms and conditions of MFA
Selects).
If clients seek to transfer fund shares into another asset-based fee program or
service, the shares will be treated as shares purchased through, and subject to
the terms of, the other program or service. Upon termination of participation in
the MFA Selects programtransfer or hold the mutual fund shares held in the MFA
Selects account.
The Xxxxxxx Xxxxx MFA Selects advisory fee will be computed and charged as
described in the MFA Selects client agreement on the basis of the aggregate net
asset value of the client's MFA Selects account.
---------------------------------
Each of the fee-based arrangements described herein may be modified in the
future to include other features.
Xxxxxxx Xxxxx Fee-Based Arrangements
Schedule C
Basic Fee Schedules
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Unlimited Advantage(SM) Fee Schedule
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Annual Fee Rate Per Asset Category
Total Eligible Equity, Balanced and Fixed-Income-Type
Asset Levels High Yield Fixed- Investments
Income Mutual Funds (including Fixed-Income Mutual
Funds other than High
Yield) and Cash
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First $1,000,000 1.00% 0.30%
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Next $4,000,000 0.75% 0.25%
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Next $5,000,000 0.50% 0.20%
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$10,000,000+ Customized Pricing Customized Pricing
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Xxxxxxx Xxxxx Mutual Fund Advisor (Xxxxxxx Xxxxx MFA(R)) Fee Schedule
--------------------------------------------------------------------------------
Maximum Annual Gross/Net
Asset Level Advisory Fee
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First $250,000 2.00%/1.50%
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Next $250,000 1.50%/1.00%
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Additional Assets 1.00%/0.50%
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Xxxxxxx Xxxxx Mutual Fund Advisor Selects(SM)
(Xxxxxxx Xxxxx MFA Selects(SM)) Fee Schedule
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Maximum Annual Gross/Net
Asset Level Advisory Fee
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First $250,000 2.00%/1.25%
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Next $250,000 1.75%/1.00%
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Additional Assets 1.25%/0.50%
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