EX-99.E 3 distribution.txt DISTRIBUTION AGREEMENT THE PIEDMONT INVESTMENT TRUST DISTRIBUTION AGREEMENT This DISTRIBUTION AGREEMENT ("Agreement"), dated this the 19th day of April, 2005, between THE PIEDMONT INVESTMENT TRUST, a statutory trust organized under the laws of the State of Delaware (the "Trust"), and CAPITAL INVESTMENT GROUP, INC., a North Carolina corporation (the "Distributor"). WITNESSETH: WHEREAS, the Trust is engaged in business as an open-end management investment company and is so registered under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Trust is authorized to issue an unlimited number of shares of beneficial interest ("Shares") representing interests in a series of securities and other assets, as identified in Appendix A attached hereto (each a "Fund" and collectively "Funds"); and WHEREAS, the Trust offers the Shares of such Funds and has registered the Shares under the Securities Act of 1933, as amended (the "1933 Act"), and the 1940 Act pursuant to a registration statement on Form N-1A (the "Registration Statement"), including a prospectus (the "Prospectus") and a statement of additional information (the "Statement of Additional Information"); and WHEREAS, the Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 under the 1940 Act (the "Distribution Plan") with respect to Shares of certain of the Funds, and may enter into related agreements providing for the distribution of such Shares; and WHEREAS, Distributor has agreed to act as distributor of the Shares of the Funds for the period of this Agreement; NOW, THEREFORE, it is hereby agreed between the parties hereto as follows: 1. Appointment of Distributor. (a) The Trust hereby appoints Distributor its exclusive agent for the distribution of the Shares of the Funds in jurisdictions wherein such Shares may be legally offered for sale; provided, however, that the Trust in its absolute discretion may issue Shares of the Funds in connection with (i) the payment or reinvestment of dividends or distributions; (ii) any merger or consolidation of the Trust or of a Fund with any other investment company or trust or any personal holding company, or the acquisition of the assets of any such entity or another fund of the Trust; or (iii) any offer of exchange permitted by Section 11 of the 1940 Act, or any other applicable provision. (b) Distributor hereby accepts such appointment as exclusive agent for the distribution of the Shares of the Funds and agrees that it will sell the Shares as agent for the Trust at prices determined as hereinafter provided and on the terms hereinafter set forth, all according to applicable federal and state laws and regulations and to the Trust's Declaration of Trust ("Trust Instrument"). (c) Distributor may sell Shares of the Funds to or through qualified securities dealers or others. Distributor will require each dealer or other such party to conform to the provisions hereof, the Registration Statement and the Prospectus and Statement of Additional Information, and applicable law; and neither Distributor nor any such dealers or others shall withhold the placing of purchase orders for Shares so as to make a profit thereby. (d) Distributor shall order Shares of the Funds from the Trust only to the extent that it shall have received purchase orders therefor. Distributor will not make, or authorize any dealers or others to make: (i) any short sales of Shares; or (ii) any sales of Shares to any Trustee or officer of the Trust or to any officer or director of Distributor or of any corporation or association furnishing investment advisory, managerial or supervisory services to the Trust, or to any such corporation or association, unless such sales are made in accordance with the then current Prospectus and Statement of Additional Information. (e) Distributor is not authorized by the Trust to give any information or to make any representations regarding the Shares of any Fund, except such information or representations as are contained in the Registration Statement or in the current Prospectus or Statement of Additional Information of the Fund, or in advertisements and sales literature prepared by or on behalf of the Trust for Distributor's use. (f) Notwithstanding any provision hereof, the Trust may terminate, suspend or withdraw the offering of Shares of any Fund whenever, in its sole discretion, it deems such action to be desirable. 2. Offering Price of Shares. All Shares of the Funds sold under this Agreement shall be sold at the public offering price per Share in effect at the time of the sale, as described in the then current Prospectus of the Fund. The excess, if any, of the public offering price over the net asset value of the Shares sold by Distributor as agent shall be retained by Distributor as a commission for its services hereunder. Out of such commission Distributor may allow commissions or concessions to dealers and may allow them to others in its discretion in such amounts as Distributor shall determine from time to time. Except as may be otherwise determined by Distributor from time to time, such commissions or concessions shall be uniform to all dealers. At no time shall the Trust receive less than the full net asset value of the Shares, determined in the manner set forth in the then current Prospectus and Statement of Additional Information. Distributor shall also be entitled to such commissions and other fees and payments as may be authorized by the Trustees of the Trust from time to time under the Distribution Plan. 3. Furnishing of Information. The Trust shall furnish to Distributor copies of any information, financial statements and other documents that Distributor may reasonably request for use in connection with the sale of Shares of the Funds under this Agreement. The Trust shall also make available a sufficient number of copies of the Funds' current Prospectus and Statement of Additional Information for use by the Distributor. 4. Fees and Expenses. (a) In addition to any commissions, fees or payments authorized by the Trustees under the Distribution Plan, the Trust will pay or cause to be paid to the Distributor for services provided and expenses assumed by the Distributor the fee of $5,000.00 per annum for each Fund. Such fee shall be paid to the Distributor in twelve equal monthly installments. (b) The Trust will also pay or cause to be paid the following expenses: (i) preparation, printing and distribution to shareholders of the Prospectus and Statement of Additional Information; (ii) preparation, printing and distribution of reports and other communications to shareholders; (iii) registration of the Shares under the federal securities laws; (iv) qualification of the Shares for sale in certain states; (v) qualification of the Trust as a dealer or broker under state law as well as qualification of the Trust as an entity authorized to do business in certain states; (vi) maintaining facilities for the issue and transfer of Shares; (vii) supplying information, prices and other data to be furnished by the Trust under this Agreement; (viii) certain taxes applicable to the sale or delivery of the Shares or certificates therefore; and (ix) such other compensation to the Distributor as the Trustees may authorize, from time to time, in their sole discretion. (c) Except to the extent such expenses are borne by the Trust pursuant to the Distribution Plan, Distributor will pay or cause to be paid the following expenses: (i) payments to sales representatives of the Distributor and to securities dealers and others in respect of the sale of Shares of the Funds; (ii) payment of compensation to and expenses of employees of the Distributor and any of its affiliates to the extent they engage in or support distribution of Funds' Shares or render shareholder support services not otherwise provided by the Trust's transfer agent, administrator, or custodian, including, but not limited to, answering routine inquiries regarding a Fund, processing shareholder transactions, and providing such other shareholder services as the Trust may reasonably request; (iii) formulation and implementation of marketing and promotional activities, including, but not limited to, direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; (iv) preparation, printing and distribution of sales literature and of Prospectuses and Statements of Additional Information and reports of the Trust for recipients other than existing shareholders of a Fund; and (v) obtaining such information, analyses and reports with respect to marketing and promotional activities as the Trust may, from time to time, reasonably request. (d) If so requested by the Trustees in connection with the Distribution Plan, Distributor shall prepare and deliver reports to the Trustees of the Trust on a regular basis, at least quarterly, showing the expenditures with respect to each Fund pursuant to the Distribution Plan and the purposes therefor, as well as any supplemental reports as the Trustees of the Trust, from time to time, may reasonably request. 5. Repurchase of Shares. Distributor as agent and for the account of the Trust may repurchase Shares of the Funds offered for resale to it and redeem such Shares at their net asset value. 6. Indemnification by the Trust. In absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of Distributor, the Trust agrees to indemnify Distributor and its officers and partners against any and all claims, demands, liabilities and expenses that Distributor may incur under the 1933 Act, or common law or otherwise, arising out of or based upon any alleged untrue statement of a material fact contained in the Registration Statement or any Prospectus or Statement of Additional Information of a Fund, or in any advertisements or sales literature prepared by or on behalf of the Trust for Distributor's use, 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 Trust in connection therewith by or on behalf of Distributor. Nothing herein contained shall require the Trust to take any action contrary to any provision of its Agreement and Declaration of Trust or any applicable statute or regulation. 7. Indemnification by Distributor. Distributor agrees to indemnify the Trust and its officers and Trustees against any and all claims, demands, liabilities and expenses which the Trust may incur under the 1933 Act, or common law or otherwise, arising out of or based upon (i) any alleged untrue statement of a material fact contained in the Registration Statement or any Prospectus or Statement of Additional Information of any Fund, or in any advertisements or sales literature prepared by or on behalf of the Trust for Distributor's use, or any omission to state a material fact therein, the omission of which makes any statement contained therein misleading, if such statement or omission was made in reliance upon and in conformity with information furnished to the Trust in connection therewith by or on behalf of Distributor; or (ii) any act or deed of Distributor or its sales representatives, or securities dealers and others authorized to sell Fund Shares hereunder, or their sales representatives, that has not been authorized by the Trust in any Prospectus or Statement of Additional Information of any Fund or by this Agreement. 8. Term and Termination. (a) With respect to the Funds, this Agreement shall become effective upon the commencement of operations of each Fund as set forth in the attached appendices. Unless terminated as herein provided, with respect to each Fund, this Agreement shall continue in effect for two years from the date of the Fund's commencement of operations and, with respect to the Fund, shall continue in full force and effect for successive periods of one year thereafter, but only so long as each such continuance is approved (i) by either the Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund and, in either event, (ii) by vote of a majority of the Trustees of the Trust who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such party and who have no direct or indirect financial interest in this Agreement or in the operation of the Distribution Plan or in any agreement related thereto ("Independent Trustees"), cast at a meeting called for the purpose of voting on such approval. (b) With respect to the Funds, this Agreement may be terminated at any time without the payment of any penalty by vote of the Trustees of the Trust or a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Funds or by Distributor, on sixty days' written notice to the other party. (c) This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act). 9. Subcontract. The Distributor may, at its expense and with the approval of the Trustees, appoint another firm or company as its sub-distributor or agent. The Distributor shall not, however, be relieved of any of its obligations under this Agreement by the appointment of such sub-distributor or agent. 10. Limitation of Liability. The obligations of the Trust hereunder shall not be binding upon any of the Trustees, officers or shareholders of the Trust personally, but shall bind only the assets and property of the Trust. The term "The Piedmont Investment Trust" means and refers to the Trustees from time to time serving under the Agreement and Trust Instrument of the Trust. The execution and delivery of this Agreement has been authorized by the Trustees, and this Agreement has been signed on behalf of the Trust by an authorized officer of the Trust, acting as such and not individually, and neither such authorization by such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the assets and property of the Trust as provided in the Agreement and Trust Instrument of Trust. 11. Books and Records. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Distributor hereby agrees that all records which it maintains for the Trust are the property of the Trust and further agrees to surrender promptly to the Trust any of such records upon the Trust's request. 12. Notices. Notices of any kind to be given to the Trust hereunder by the Distributor shall be in writing and shall be duly given if mailed or delivered to The Piedmont Investment Trust, 3708 Hazel Lane, Greensboro, North Carolina 27408, Attention: Jack E. Brinson, Chairman or to such other address or to such individual as shall be so specified by the Trust to the Distributor. Notices of any kind to be given to the Distributor hereunder by the Trust shall be in writing and shall be duly given if mailed or delivered to the Capital Investment Group, Inc., P.O. Box 4365, Rocky Mount, NC 27803, or at such other address or to such individual as shall be so specified by the Distributor to the Trust. Notices shall be effective upon delivery. IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. THE PIEDMONT INVESTMENT TRUST By: /s/ Jack E. Brinson ________________________ Name: Jack E. Brinson Title: Chairman CAPITAL INVESTMENT GROUP,INC. By: /s/ Richard K. Bryant _________________________ Name: Richard K. Bryant Title: President APPENDIX A Dated as of April 19, 2005 o The Piedmont Select Value Fund Date Fund commenced operations: ____________________