SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT is made and entered into as of__________,
1997 by and between___________________ (the "Company"), and AMERICAN CENTURY
INVESTMENT SERVICES, INC. (the "Distributor").
WHEREAS, the Company offers to the public certain group and individual
variable annuity contracts (the "Contracts"); and
WHEREAS, the Company wishes to make available as investment options under
the Contracts, VP Balanced and VP International (the "Funds"), each of which is
a series of mutual fund shares registered under the Investment Company Act of
1940, as amended, and issued by American Century Variable Portfolios, Inc. (the
"Issuer"); and
WHEREAS, on the terms and conditions hereinafter set forth, Distributor
desires to make shares of the Funds available as investment options under the
Contracts and to retain the Company to perform certain administrative services
on behalf of the Funds, and the Company is willing and able to furnish such
services;
NOW, THEREFORE, the Company and Distributor agree as follows:
1. TRANSACTIONS IN THE FUNDS. Subject to the terms and conditions of this
Agreement, the Distributor will cause the Issuer to make shares of the Funds
available to be purchased, exchanged, or redeemed, by or on behalf of the
Accounts (defined in SECTION 7(a) below) through a single account per Fund at
the net asset value applicable to each order. The Funds' shares shall be
purchased and redeemed on a net basis in such quantity and at such time as
determined by the Company to satisfy the requirements of the Contacts for which
the Funds serve as underlying investment media. Dividends and capital gains
distributions will be automatically reinvested in full and fractional shares of
the Funds.
2. ADMINISTRATIVE SERVICES. The Company agrees to provide all
administrative services for the Contract owners, including but not limited to
those services specified in EXHIBIT A (the "Administrative Services").
Distributor shall not be required to provide Administrative Services for the
benefit of Contract owners. The Company agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise
comply with all laws, rules and regulations applicable to the marketing of
the Contracts and the provision of the Administrative Services. Upon request,
the Company will provide the Distributor or its representatives reasonable
information regarding the quality of the Administrative Services being
provided and its compliance with the terms of this Agreement.
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3. TIMING OF TRANSACTIONS. Distributor hereby appoints the Company as
its agent and/or agent for the Funds for the limited purpose of accepting
purchase and redemption orders for Fund shares from the Contract owners. On
each day the New York Stock Exchange (the "Exchange") is open for business
(each, a "Business Day"), the Company may receive instructions from the
Contract owners for the purchase or redemption of shares of the Funds
("Orders"). Orders received and accepted by the Company prior to the close of
regular trading on the Exchange (the "Close of Trading") on any given
Business Day (currently, 4:00 p.m. Eastern time) and transmitted to the
Issuer by 8:00 p.m. Eastern time on such Business Day will be executed at the
net asset value determined as of the Close of Trading on such Business Day.
Any Orders received by the Company on such day but after the Close of
Trading, and all Orders that are transmitted to the Issuer after 8:00 p.m.
Eastern time on such Business Day, will be executed at the net asset value
determined as of the Close of Trading on the next Business Day following the
day of receipt of such Order. The day as of which an Order is executed by the
Issuers pursuant to the provisions set forth above is referred to herein as
the "Trade Date".
4. PROCESSING OF TRANSACTIONS.
(a) If transactions in Fund shares are to be settled through the National
Securities Clearing Corporation's Mutual Fund Settlement, Entry, and
Registration Verification (Fund/SERV) system, the terms of the FUND/SERV
AGREEMENT, dated of even date, between the parties shall apply.
(b) If transactions in Fund shares are to be settled directly with the
Funds' transfer agent, the following provisions shall apply:
(1) By 6:30 p.m. Eastern time on each Business Day, Distributor (or
one of its affiliates) will provide to the Company via facsimile or other
electronic transmission acceptable to the Company the Funds' net asset value,
dividend and capital gain information and, in the case of income funds, the
daily accrual for interest rate factor (mil rate), determined at the Close of
Trading.
(2) By 10:00 p.m. Eastern time on each Business Day, the Company will
provide to Distributor via facsimile or other electronic transmission acceptable
to Distributor a report stating whether the instructions received by the Company
from Contract owners by the Close of Trading on such Business Day resulted in
the Accounts being a net purchaser or net seller of shares of the Funds. As used
in this Agreement, the phrase "other electronic transmission acceptable to
Distributor" includes the use of remote computer terminals located at the
premises of the Company, its agents or affiliates, which terminals may be linked
electronically to the computer system of Distributor, its agents or affiliates
(hereinafter, "Remote Computer Terminals").
(3) Upon the timely receipt from the Company of the report described
in (2) above, the Funds' transfer agent will execute the purchase or redemption
transactions (as the case
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may be) at the net asset value computed as of the Close of Trading on the
Trade Date. Payment for net purchase transactions shall be made by wire
transfer to the applicable Fund custodial account designated by the
Distributor on the Business Day next following the Trade Date. Such wire
transfers shall be initiated by the Company's bank prior to 4:00 p.m. Eastern
time and received by the Funds prior to 6:00 p.m. Eastern time on the
Business Day next following the Trade Date ("T+1"). If payment for a purchase
Order is not timely received, such Order will be executed at the net asset
value next computed following receipt of payment. Payments for net redemption
transactions shall be made by wire transfer by the Issuers to the account(s)
designated by the Company an T+1; PROVIDED HOWEVER, the Issuers reserve the
right to settle redemption transactions within the time period set forth in
the applicable Fund's then-current prospectus. On any Business Day when the
Federal Reserve Wire Transfer System is closed, all communication and
processing rules will be suspended for the settlement of Orders. Orders will
be settled on the next Business Day on which the Federal Reserve Wire
Transfer System is open and the original Trade Date will apply.
5. PROSPECTUS AND PROXY MATERIALS
(a) Distributor shall provide the Company with copies of the Issuer's proxy
materials, periodic fund reports to shareholders and other materials that are
required by law to be sent to the Issuer's shareholders. In addition,
Distributor shall provide the Company with a sufficient quantity of prospectuses
of the Funds to be used in conjunction with the transactions contemplated by
this Agreement, together with such additional copies of the Issuer's
prospectuses as may be reasonably requested by Company. If the Company provides
for pass-through voting by the Contract owners, or if the Company determines
that pass-through voting is required by law, Distributor will provide the
Company with a sufficient quantity of proxy materials for each, as directed by
the Company.
(b) The cost of preparing, printing and shipping of the prospectuses,
proxy materials, periodic fund reports and other materials of the Issuer to
the Company shall be paid by Distributor or its agents or affiliates;
PROVIDED, HOWEVER that if at any time Distributor or its agent reasonably
deems the usage by the Company of such items to be excessive, it may, prior
to the delivery of any quantity of materials in excess of what is deemed
reasonable, request that the Company demonstrate the reasonableness of such
usage. If Distributor believes the reasonableness of such usage has not been
adequately demonstrated, it may request that the party responsible for such
excess usage pay the cost of printing (including press time) and delivery of
any excess copies of such materials. Unless the Company agrees to make such
payments, the Distributor may refuse to supply such additional materials and
Distributor shall be deemed in compliance with this SECTION 5 if it delivers
to the Company at least the number of prospectuses and other materials as may
be required by the Issuer under applicable law.
(c) The cost of any distribution of prospectuses, proxy materials, periodic
fund reports and other materials of the Issuer to the Contract owners shall be
paid by the Company and shall not be the responsibility of Distributor or the
Issuer.
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6. COMPENSATION AND EXPENSES.
(a) The Accounts shall be the sole shareholder of Fund shares purchased
for the Contract owners pursuant to this Agreement (the "Record Owner"). The
Record Owner shall properly complete any applications or other forms required by
Distributor or the Issuer from time to time.
(b) Distributor acknowledges that it will derive a substantial savings in
administrative expenses, such as a reduction in expenses related to postage,
shareholder communications and recordkeeping, by virtue of having a single
shareholder account per Fund for the Accounts rather than having each Contract
owner as a shareholder. In consideration of the Administrative Services and
performance of all other obligations under this Agreement by the Company,
Distributor will pay the Company a fee (the "Administrative Services Fee") equal
to 20 basis points (0.20%) per annum of the average aggregate amount invested by
the Company under this Agreement.
(c) The payments received by the Company under this Agreement are for
administrative and shareholder services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution.
(d) For the purposes of computing the payment to the Company contemplated
by this SECTION 6, the average aggregate amount invested by the Company on
behalf of the Accounts in the Funds over a one month period shall be computed by
totaling the Company's aggregate investment (share net asset value multiplied by
total number of shares of the Funds held by the Company) on each Business Day
during the month and dividing by the total number of Business Days during such
month.
(e) Distributor will calculate the amount of the payment to be made
pursuant to this SECTION 6 at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter. The check for such
payment will be accompanied by a statement showing the calculation of the
amounts being paid by Distributor for the relevant months and such other
supporting data as may be reasonably requested by the Company and shall be
mailed to:
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Attention:
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Fax No.:
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7. REPRESENTATIONS.
(a) The Company represents and warrants that (i) this Agreement has been
duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it has established the
________ and the______________(the "Accounts"), each of which is a duly
authorized and established separate account under ____________ Insurance law,
and has registered each Account as a unit investment trust under the Investment
Company Act of 1940 (the " 1940 Act") to serve as an investment vehicle for the
Contracts; (iii) each Contract provides for the allocation of net amounts
received by the Company to an Account for investment in the shares of one or
more specified investment companies selected among those companies available
through the Account to act as underlying investment media; (iv) selection of a
particular investment company is made by the Contract owner under a particular
Contract, who may change such selection from time to time in accordance with the
terms of the applicable Contract; and (v) the activities of the Company
contemplated by this Agreement comply in all material respects with all
provisions of federal and state securities laws applicable to such activities.
(b) Distributor represents that (i) this Agreement has been duly
authorized by all necessary corporate action and, when executed and delivered,
shall constitute the legal, valid and binding obligation of Distributor,
enforceable in accordance with its terms; (ii) the prospectus of each Fund
complies in all material respects with federal and state securities laws, and
(iii) shares of the Issuer are registered and authorized for sale in accordance
with all federal and state securities laws.
8. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply with all provisions of federal and state laws
applicable to its respective activities under this Agreement. All obligations of
each party under this Agreement are subject to compliance with applicable
federal and state laws.
(b) Each party shall promptly notify the other parties in the event that
it is, for any reason, unable to perform any of its obligations under this
Agreement.
(c) The Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to each Account on any Business Day
will be based upon instructions that it received from the Contract owners, in
proper form prior to the Close of Trading of the Exchange on that Business Day.
The Company shall time stamp all Orders or otherwise maintain records that will
enable the Company to demonstrate compliance with SECTION 8(c) hereof.
(d) The Company covenants and agrees that all Order transmitted to the
Issuers, whether by telephone, telecopy, or other electronic transmission
acceptable to Distributor, shall be sent by or under the authority and direction
of a person designated by the Company as being duly
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authorized to act on behalf of the owner of the Accounts. Distributor shall be
entitled to rely on the existence of such authority and to assume that any
person transmitting Orders for the purchase, redemption or transfer of Fund
shares on behalf of the Company is "an appropriate person" as used in Sections
8-107 and 8-401 of the Uniform Commercial Code with respect to the transmission
of instructions regarding Fund shares on behalf of the owner of such Fund
shares. The Company shall maintain the confidentiality of all passwords and
security procedures issued, installed or otherwise put in place with respect to
the use of Remote Computer Terminals and assumes full responsibility for the
security therefor. The Company further agrees to be responsible for the
accuracy, propriety and consequences of all data transmitted to Distributor by
the Company by telephone, telecopy or other electronic transmission acceptable
to Distributor.
(e) The Company agrees that, to the extent it is able to do so, it will
use its best efforts to give equal emphasis and promotion to shares of the Funds
as is given to other underlying investments of the Accounts, subject to
applicable Securities and Exchange Commission rules. In addition, the Company
shall not impose any fee, condition, or requirement for the use of the Funds as
investment options for the Contracts that operates to the specific prejudice of
the Funds VIS-A-VIS the other investment media made available for the Contracts
by the Company.
(f) The Company shall not, without the written consent of Distributor,
make representations concerning the Issuer or the shares of the Funds except
those contained in the then-current prospectus and in current printed sales
literature approved by Distributor or the Issuer.
(g) Advertising and sales literature with respect to the Issuer or the
Funds prepared by the Company or its agents, if any, for use in marketing shares
of the Funds as underlying investment media to Contract owners shall be
submitted to Distributor for review and approval before such material is used.
9. USE OF NAMES. Except as otherwise expressly provided for in this
Agreement, neither Distributor nor any of its affiliates of the Funds shall use
any trademark, trade name, service xxxx or logo of the Company, or any variation
of any such trademark, trade name, service xxxx or logo, without the Company's
prior written consent, the granting of which shall be at the Company's sole
option. Except as otherwise expressly provided for in this Agreement, the
Company shall not use any trademark, trade name, service xxxx or logo of the
Issuer, Distributor or any of Distributor's affiliates or any variation of any
such trademarks, trade names, service marks, or logos, without the prior written
consent of either the Issuer or Distributor, as appropriate, the granting of
which shall be at the sole option of Distributor and/or the Issuer.
10. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating
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Companies (as defined in SECTION 12(a) below) participating in any Fund
calculate voting privileges in a consistent manner.
(b) The Company will distribute to Contract owners all proxy material
furnished by Distributor and will vote shares in accordance with instructions
received from such Contract owners. The Company shall vote Fund shares for which
no voting instructions are received in the same proportion as shares for which
such instructions have been received. The Company and its agents shall not
oppose or interfere with the solicitation of proxies for Fund shares held for
such Contract owners.
11. INDEMNITY.
(a) Distributor agrees to indemnify and hold harmless the Company and its
officers, directors, employees, agents, affiliates and each person, if any, who
controls the Company within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 11(a))
against any losses, claims, expenses, damages or liabilities (including amounts
paid in settlement thereof) or litigation expenses (including legal and other
expenses) (collectively, "Losses"), to which the Indemnified Parties may become
subject, insofar as such Losses result from a breach by Distributor of a
material provision of this Agreement. Distributor will reimburse any legal or
other expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. Distributor shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of the Company in performing its obligations under this Agreement.
(b) The Company agrees to indemnify and hold harmless Distributor and the
Issuers, and their respective officers, directors, employees, agents, affiliates
and each person, if any, who controls each Issuer or Distributor within the
meaning of the Securities Act of 1933 (collectively, the "Indemnified Parties"
for purposes of this SECTION 11(b)) against any Losses to which the Indemnified
Parties may become subject, insofar as such Losses result from a breach by the
Company of a material provision of this Agreement or the use by any person of
the Remote Computer Terminals. The Company will reimburse any legal or other
expenses reasonably incurred by the Indemnified Parties in connection with
investigating or defending any such Losses. The Company shall not be liable for
indemnification hereunder if such Losses are attributable to the negligence or
misconduct of Distributor or the Issuers in performing their obligations under
this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this SECTION 11. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the
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commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this SECTION 11 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
(d) If the indemnifying party assumes the defense of any such action, the
indemnifying party shall not, without the prior written consent of the
indemnified parties in such action, settle or compromise the liability of the
indemnified parties in such action, or permit a default or consent to the entry
of any judgment in respect thereof, unless in connection with such settlement,
compromise or consent, each indemnified party receives from such claimant an
unconditional release from all liability in respect of such claim.
12. POTENTIAL CONFLICTS
(a) The Company has received a copy of an application for exemptive relief,
as amended, filed by Distributor on December 21, 1987, with the SEC and the
order issued by the SEC in response thereto (the "Shared Funding Exemptive
Order"). The Company has reviewed the conditions to the requested relief set
forth in such application for exemptive relief. As set forth in such
application, the Board of Directors of the Issuer (the "Board") will monitor
the Issuer for the existence of any material irreconcilable conflict between
the interests of the contract owners of all separate accounts ("Participating
Companies") investing in funds of the Issuer. An irreconcilable material
conflict may arise for a variety of reasons, including: (i) an action by any
state insurance regulatory authority; (ii) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar
actions by insurance, tax or securities regulatory authorities; (iii) an
administrative or judicial decision in any relevant proceeding; (iv) the manner
in which the investments of any portfolio are being managed; (v) a difference
in voting instructions given by variable annuity contract owners and variable
life insurance contract owners; or (vi) a decision by an insurer to disregard
the voting instructions of contract owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and
the implications thereof.
(b) The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order by providing the Board
with all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by the Company to
inform the Board whenever contract owner voting instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contract owner investments in
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a Fund, the Board shall give prompt notice to all Participating Companies. If
the Board determines that the Company is responsible for causing or creating
said conflict, the Company shall at its sole cost and expense, and to the extent
reasonably practicable (as determined by a majority of the disinterested Board
members), take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may include but shall
not be limited to:
(i) withdrawing the assets allocable to the Accounts from
the Fund and reinvesting such assets in a different
investment medium or submitting the question of whether
such segregation should be implemented to a vote of all
affected contract owners and as appropriate,
segregating the assets of any appropriate group (i.e.,
annuity contract owners, life insurance contract
owners, or variable contract owners of one or more
Participating Companies) that votes in favor of such
segregation, or offering to the affected contract
owners the option of making such a change; and/or
(ii) establishing a new registered management investment company
or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a decision
by the Company to disregard its contract owner voting instructions and said
decision represents a minority position or would preclude a majority vote by all
of its contract owners having an interest in the Issuer, the Company at its sole
cost, may be required, at the Board's election, to withdraw an Account's
investment in the Issuer and terminate this Agreement; provided, however, that
such withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
(e) For the purpose of this SECTION 12, a majority of the disinterested
Board members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will the Issuer
be required to establish a new funding medium for any Contract. The Company
shall not be required by this SECTION 12 to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a majority of the
Contract owners materially adversely affected by the irreconcilable material
conflict.
13. TERMINATION; WITHDRAWAL OF OFFERING. This Agreement may be
terminated by either party upon 180 days' prior written notice to the other
parties. Notwithstanding the above, each Issuer reserves the right, without
prior notice, to suspend sales of shares of any Fund, in whole or in part or
to make a limited offering of shares of any of the Funds in the event that
(A) any regulatory body commences formal proceedings against the Company,
Distributor, affiliates of Distributor, or the Issuer, which proceedings
Distributor reasonably believes may have a material adverse impact an the
ability of Distributor, the Issuer or the Company to perform its obligations
under this Agreement or (B) in the judgment of Distributor, declining to
accept any additional instructions for the purchase or sale of shares of any
such Fund is warranted by market, economic
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or political conditions. Notwithstanding the foregoing, this Agreement may be
terminated immediately (i) by any party as a result of any other breach of this
Agreement by another party, which breach is not cured within 30 days after
receipt of notice from the other party, or (ii) by any party upon a
determination that continuing to perform under this Agreement would, in the
reasonable opinion of the terminating party's counsel, violate any applicable
federal or state law, rule, regulation or judicial order. Termination of this
Agreement shall not affect the obligations of the parties to make payments under
SECTION 4 for Orders received by the Company prior to such termination and shall
not affect the Issuer's obligation to maintain the Accounts as set forth by this
Agreement. Following termination, Distributor shall not have any Administrative
Services payment obligation to the Company (except for payment obligations
accrued but not yet paid as of the termination date).
14. NON-EXCLUSIVITY. Each of the parties acknowledges and agrees that this
Agreement and the arrangement described herein are intended to be non-exclusive
and that each of the parties is free to enter into similar agreements and
arrangements with other entities.
15. SURVIVAL. The provisions of SECTION 9 (use of names) and SECTION 11
(indemnity) of this Agreement shall survive termination of this Agreement.
16. AMENDMENT. Neither this Agreement, nor any provision hereof, may be
amended, waived, discharged or terminated orally, but only by an instrument in
writing signed by all of the parties hereto.
17. NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage prepaid,
return receipt requested, to the party or parties to whom they are directed at
the following addresses, or at such other addresses as may be designated by
notice from such party to all other parties.
To the Company:
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( ) (office number)
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( ) (telecopy number)
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To the Issuer or Distributor:
American Century Investment Services, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx, Esq.
(000) 000-0000 (office number)
(000) 000-0000 (telecopy number)
Any notice, demand or other communication given in a manner prescribed in this
SECTION 17 shall be deemed to have been delivered on receipt.
18. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned without the
written consent of all parties to the Agreement at the time of such assignment.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
20. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
21. ENTIRE AGREEMENT. This Agreement, including the attachments hereto,
constitutes the entire agreement between the parties with respect to the
matters dealt with herein, and supersedes all previous agreements, written or
oral, with respect to such matters.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.
AMERICAN CENTURY INVESTMENT SERVICES, INC.
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By: By:
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Name: Xxxxxxx X. Xxxxx
----------------------- Executive Vice President
Title:
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EXHIBIT A
ADMINISTRATIVE SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
all administrative and shareholder services required or requested under the
Contracts with respect to the Contract owners, including, but not limited to,
the following:
1. Maintain separate records for each Contract owner, which records shall
reflect the shares purchased and redeemed and share balances of such Contract
owners. The Company will maintain a single master account with each Fund on
behalf of the Contract owners and such account shall be in the name of the
Company (or its nominee) as the record owner of shares owned by the Contract
owners.
2. Disburse or credit to the Contract owners all proceeds of redemptions
of shares of the Funds and all dividends and other distributions not reinvested
in shares of the Funds.
3. Prepare and transmit to the Contract owners, as required by law or the
Contracts, periodic statements showing the total number of shares owned by the
Contract owners as of the statement closing date, purchases and redemptions of
Fund shares by the Contract owners during the period covered by the statement
and the dividends and other distributions paid during the statement period
(whether paid in cash or reinvested in Fund shares), and such other information
as may be required, from time to time, by the Contracts.
4. Transmit purchase and redemption orders to the Funds on behalf of the
Contract owners in accordance with the procedures set forth in SECTION 4 to the
Agreement.
5. Distribute to the Contract owners copies of the Funds' prospectus,
proxy materials, periodic fund reports to shareholders and other materials that
the Funds are required by law or otherwise to provide to their shareholders or
prospective shareholders.
6. Maintain and preserve all records as required by law to be maintained
and preserved in connection with providing the Administrative Services for the
Contracts.
A-1
AMENDMENT NO. 1 TO FUND PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO FUND PARTICIPATION AGREEMENT is made as of this
________ day of ________, 1997 by and between SAFECO LIFE INSURANCE COMPANY
(the "Company"), AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. (formerly known as
TCI Portfolios, Inc.) (the "Issuer"), the investment adviser of the Issuer,
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. (formerly known as Investors
Research Corporation) ("Investors Research") and AMERICAN CENTURY INVESTMENT
SERVICES, INC. (the "Distributor"). Capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Agreement (defined below).
RECITALS
WHEREAS, the Company, the Issuer and Investors Research are parties to a
certain Fund Participation Agreement dated December 19, 1995 (the "Agreement")
whereby shares of the Funds (as defined in the Agreement) were made available to
serve as investment funding options for the Contracts; and
WHEREAS, the Company, the Issuer and Investors Research wish to supplement
the Agreement as provided herein;
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows:
1. PREVIOUS DAY PRICING AMENDMENT. Section 3(a) of the Agreement shall be
amended by deleting the text thereof in its entirety and inserting in lieu
therefor the following:
"(a) The Issuer hereby appoints the Company as its agent for the
limited purpose of accepting purchase and redemption orders for Fund shares
from the Contract owners. On each day the New York Stock Exchange (the
"Exchange") is open for business (each, a "Business Day"), the Company may
receive instructions from the Contract owners for the purchase or
redemption of shares of the Funds ("Orders"). Orders received and accepted
by the Company prior to the close of regular trading on the Exchange (the
"Close of Trading") on any given Business Day (currently, 3:00 p.m. Central
time) and transmitted to the Issuer by 9:00 a.m. Central time on the next
following Business Day will be executed by the Issuer at the net asset
value determined as of the Close of Trading on the previous Business Day
("Day 1"). Any Orders received by the Company after the Close of Trading,
and all Orders that are transmitted to the Issuer after 9:00 a.m. Central
time on the next following Business Day, will be executed by the Issuer at
the net asset value next determined following receipt of such Order. The
day as of which an Order is executed by the Issuer pursuant to the
provisions set forth above is referred to herein as the 'Effective Trade
Date.'"
Section 3(c) of the Agreement is hereby amended by deleting the text
thereof in its entirety and inserting in lieu therefor the following:
"(c) By 9:00 a.m. Central time on each Business Day, the Company will
provide to Investors Research via facsimile or other electronic
transmission acceptable to Investors Research a report stating whether the
Orders received by the Company from Contract owners by the Close of Trading
on the preceding Business Day resulted in the Account being a net purchaser
or net seller of shares of the Funds. As used in this Agreement, the phrase
"other electronic transmission acceptable to Investors Research" includes
the use of remote computer terminals located at the premises of the
Company, its agents or affiliates, which terminals may be linked
electronically to the computer system of Investors Research, its
agents or affiliates (hereinafter, "Remote Computer Terminals")."
2. COMPENSATION AND EXPENSES. The last sentence of Section 5(b) of the
Agreement is hereby amended by deleting the text thereof in its entirety and
inserting in lieu therefor the following:
"In consideration of the Administrative Services and performance
of all other obligations under this Agreement by the Company,
Investors Research will pay the Company a fee (the "Administrative
Services fee") equal to 20 basis points (0.20%) per annum of the
average aggregate amount invested by the Company under this
Agreement."
3. ASSIGNMENT. Investors Research hereby assigns all of its rights and
obligations under the Agreement to Distributor, and Distributor hereby accepts
such assignment. The Company hereby consents to such assignment. After the date
of this Amendment, all references to "Investors Research" in the Agreement shall
be deemed to refer to the Distributor.
4. RATIFICATION AND CONFIRMATION OF AGREEMENT. In the event of a conflict
between the terms of this Amendment No. 1 and the Agreement, it is the intention
of the parties that the terms of this Amendment No. 1 shall control and the
Agreement shall be interpreted on that basis. To the extent the provisions of
the Agreement have not been amended by this Amendment No. 1, the parties hereby
confirm and ratify the Agreement.
5. COUNTERPARTS. This Amendment No. 1 may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
6. FULL FORCE AND EFFECT. Except as expressly supplemented, amended or
consented to hereby, all of the representations, warranties, terms, covenants
and conditions of the Agreement shall remain unamended and shall continue to be
in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
as of the date first above written.
SAFECO LIFE INSURANCE COMPANY AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxxxx By:
-------------------------- -------------------------
Name: Xxxxxxx Xxxxxx Xxxxxxx X. Xxxxx
Title: Vice President Executive Vice President
AMERICAN CENTURY VARIABLE AMERICAN CENTURY INVESTMENT
PORTFOLIOS, INC. SERVICES, INC.
By: By:
-------------------------- -------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx
Executive Vice President Executive Vice President
2
AMENDMENT NO. 2 TO FUND PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 2 TO FUND PARTICIPATION AGREEMENT is made as of this
12th day of September 1997, by and between SAFECO LIFE INSURANCE COMPANY (the
"Company"), AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. (the "Issuer"), and
AMERICAN CENTURY INVESTMENT SERVICES, INC. (the "Distributor"). Capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in
the Agreement (defined below).
RECITALS
WHEREAS, the Company, the Issuer and the Distributor are parties to a
certain Fund Participation Agreement dated December 19, 1995, as amended on June
26, 1997 (the "Agreement") whereby shares of the Funds were made available to
serve as investment funding options for the Contracts; and
WHEREAS, the Company, the Issuer and the Distributor wish to supplement the
Agreement as provided herein;
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows:
1. ADDITION OF PRODUCT. The first Whereas clause of the Agreement is
hereby amended to read "WHEREAS, the Company offers to the public certain group
and individual variable annuity contracts and variable life insurance contracts
(collectively, the "Contracts").
2. ADDITION OF ACCOUNTS. The definition of "Accounts" contained in
Section 6(a)(ii) of the Agreement is hereby amended to include Separate Account
SL. The Company represents and warrants that each of the Accounts is a separate
account under Washington State Insurance law, each has been registered as a unit
investment trust under the 1940 Act to serve as an investment vehicle for the
Contracts, and that all other representations and warranties contained in the
Agreement are true for all of the Accounts, as that term is now defined.
3. RATIFICATION AND CONFIRMATION OF AGREEMENT. In the event of a conflict
between the terms of is Amendment No. 2 and the Agreement, it is the intention
of the parties that the terms of this Amendment No. 2 shall control and the
Agreement shall be interpreted on that basis. To the extent the provisions of
the Agreement have not been amended by this Amendment No. 2, the parties hereby
confirm and ratify the Agreement.
4. COUNTERPARTS. This Amendment No. 2 may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
5. FULL FORCE AND EFFECT. Except as expressly supplemented, amended
or consented to hereby, all of the representations, warranties, terms,
covenants and conditions of the Agreement shall remain unamended and shall
continue to be in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 2 as of the
date first above written.
SAFECO LIFE INSURANCE COMPANY AMERICAN CENTURY INVESTMENT
SERVICES, INC.
By: By:
------------------------------ ------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------- Executive Vice President
Title:
------------------------
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.
By:
-----------------------------
Xxxxxxx X. Xxxxx
Executive Vice President
2
