EXHIBIT 99-B.8.56
PARTICIPATION AGREEMENT
Aetna Insurance Company of America (the "Company"), OppenheimerFunds
Distributor, Inc. (the "Distributor") and OppenheimerFunds Services ("OFS"), a
division of OppenheimerFunds, Inc., hereby agree to an arrangement whereby Class
A shares of certain registered investment companies listed in Schedule B
(individually a "Fund" and collectively, the "Funds") shall be made available to
serve as underlying investment media for Variable Annuity Contracts
("Contracts") to be issued by the Company.
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND SHARES.
(a) The Company represents that it has established Variable Annuity
Account I and may establish such other accounts as may be set forth in
Schedule A attached hereto and as may be amended from time to time
with the mutual consent of the parties hereto (the "Accounts"), each
of which is a separate account under Florida Insurance law, and has
registered or will register each of the Accounts (except for such
Accounts for which no such registration is required) as a unit
investment trust under the Investment Company Act of 1940 (the "1940
Act"), to serve as an investment vehicle for the Contracts. Each
Contract provides for the allocation of net amounts received by the
Company to an Account for investment in the shares of one of more
specified open-end management investment companies available through
that Account as underlying investment media. Selection of a particular
investment management company and changes therein from time to time
are made by the participant or Contract owner, as applicable under a
particular Contract.
(b) Distributor shall make Class A shares of the Funds available for
purchase by each Account through the broker/dealer of record, if any,
at net asset value without sales charge (and without the payment of a
sales commission) in accordance with the terms of each Fund's then
current prospectus and statement of additional information. It is
acknowledged and agreed that the availability of the shares of any
Fund shall be subject to such Fund's then current prospectus and
statement of additional information, federal and state securities laws
and applicable rules and regulations of the National Association of
Securities Dealers, Inc.
(c) The Company understands that the investments of the Funds will not be
diversified within the meaning of Section 817(h) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations
under the Code. The Company further understands that all beneficial
interests in the Funds will not be owned by one or more insurance
companies or other parties permitted under Regulation 1.817-5(f)(3)
under the Code.
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2. (a) SERVICES PROVIDED BY THE COMPANY. The Company shall maintain the
account records for each Contract owner, including a daily record of
the number of shares of a Fund owned by the Contract owner, the value
of each Contract owner's account, the dividends accrued on such
accounts, and a record of all exchanges, purchases, and redemptions
for each Contract owner account. Distributor, OFS, and the Funds shall
not have any responsibility with respect to the provision of
administrative services, or recordkeeping services for Contract
owners, including tax reporting or tax withholding. The Company shall
maintain one omnibus account per Account in each Fund registered in
the name of the Account. Distributor, OFS, and the Funds shall not
maintain separate accounts for Contract owners.
(b) REPORTING. The Company shall maintain and preserve all records as
required by applicable law, rules and regulations and/or this
Agreement to be maintained and preserved in connection with providing
the services described herein, and will otherwise comply with all
laws, rules and regulations applicable thereto. At OFS' request, the
Company shall provide OFS with any and all information about the
Accounts and number of participants, as may be reasonably necessary to
permit OFS or the Funds to comply with any request of the board of
directors or trustees of the Funds or of a governmental body, or
self-regulatory organization. The parties acknowledge that the Company
shall have no duty to provide any information about the participants
to the board of directors or trustees other than the number of
participants invested in the Funds. The Company shall have its
recordkeeping system audited annually by an independent accounting
firm qualified to conduct such audits and shall provide OFS with a
copy of the auditor's SAS 70 report within 30 days of its issuance.
The Company shall provide OFS or its designated agent reasonable
access to its records relating to the Accounts invested in the Funds
to permit OFS to audit or review (i) the Company's compliance with the
terms of this Agreement and any other agreement between the parties,
(ii) the accuracy of the Company's recordkeeping system, and (iii) the
accuracy of the invoices submitted to OFS and Distributor for payment.
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3. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) The Distributor will make Class A shares of the Funds available to be
purchased by the Company, on behalf of each Account, and will accept
redemption orders from the Company, on behalf of each Account, at the
net asset value applicable to each order on those days on which the
Fund calculates its net asset value (a "Business Day"). Fund shares
shall be purchased and redeemed in such quantity and at such time
determined by the Company to be necessary to meet the requirements of
those Contracts for which the Fund(s) serve as underlying investment
media, provided, however, that the Board of Trustees/Directors of a
Fund (hereinafter the "Trustees") may without notice to the Company,
refuse to sell shares of any Fund to any person, or suspend or
terminate the offering of shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Trustees, acting in good faith and
in the best interests of the shareholders of any Fund and is acting in
compliance with their fiduciary obligations under federal and/or any
applicable state laws.
(b) The Distributor will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each day
that the New York Stock Exchange (the "Exchange") is open (each such
day a "Business Day"), and use its best efforts to provide or cause to
be provided by 6:30 p.m. Eastern Standard time on each Business Day,
but in no event shall communicate such information later than 7:00
p.m. Eastern Standard time on such Business Day unless the delay is
due to extraordinary circumstances. The Company will send via
facsimile or electronic transmission to OFS or its specified agent
orders to purchase and/or redeem Fund shares by 9:00 a.m. Eastern
Standard Time the following business day. Payment for net purchases
will be wired by the Company to an account designated by the
Distributor to coincide with the order for shares of the Fund.
(c) The Distributor hereby appoints the Company as its agent for the sole
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners. Except as provided in
the foregoing sentence, the Company shall not be, nor hold itself out
to the public or engage in any activity as, an agent or distributor
for the Funds, or agent for OFS or Distributor or any of their
affiliates. Orders from Contract owners received from any distributor
of the Contracts (including affiliates of the Company) by the Company,
acting as agent for the Distributor, prior to the close of the
Exchange (as indicated by date and time stamping) on any given
business day will be executed by the OFS, as transfer agent for the
Funds, at the net asset value determined as of the close of the
Exchange on such Business Day, provided that the OFS receives written
(or facsimile) notice of such order by 9 a.m. Eastern Standard Time on
the next following Business Day. Any orders received by the Company
acting as agent on such day but after the close of the
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Exchange will be executed by OFS at the net asset value determined as
of the close of the Exchange on the next business day following the
day of receipt of such order, provided that OFS receives written (or
facsimile) notice of such order by 9 a.m. Eastern Standard Time on the
next Business Day following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired by
OFS to an account designated by the Company on the same Business Day
the Company places an order to redeem Fund shares. Payments for net
purchases of the Fund shares will be wired by the Company to an
account designated by OFS on the same Business Day the Company places
an order to purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 3(a) through
3(d) above, the parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through
National Securities Clearing Corporation's Fund/SERV system in which
case such activities will be governed by the provisions set forth in
an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party),
and shall not be liable in the event that an error is a result of any
misinformation supplied by the other party
(g) The Distributor shall indemnify and hold the Company harmless, from
the effective date of this Agreement, against any amount the Company
is required to pay to Contract owners due to: (i) an incorrect
calculation of a Fund's daily net asset value, dividend rate, or
capital gains distribution rate or (ii) incorrect or unreasonably late
reporting of the daily net asset value, dividend rate, or capital gain
distribution rate of a Fund, upon written notification by the Company,
with supporting data, to Distributor; provided, however, that no such
amounts shall be returned if they are not deemed material pursuant to
the then prevailing pricing error guidelines as set forth by the
Securities and Exchange Commission and its staff. In addition, subject
to the limits described in this subparagraph, OFS or the Distributor
shall be liable to the Company for systems and out of pocket costs
incurred by the Company in making a Contract owners's or a
participant's account whole, if such costs or expenses are a result of
OFS's or the Distributor's failure to provide timely or correct net
asset values, dividend and capital gains or financial information and
if such information is not corrected by 4:00 p.m. East Coast time of
the next business day after releasing such incorrect information
provided the incorrect NAV as well as the correct NAV for each day
that the error occurred is provided. If a mistake is caused in
supplying such information or confirmations, which results in a
reconciliation with incorrect information, the amount required to make
a Contract owner's account whole shall be
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borne by the party providing the incorrect information, regardless of
when the error is corrected. Any gain by a Contract owner attributable
to the incorrect calculation or reporting of the daily net asset
value, dividend rate or capital gains distribution rate shall, to the
extent permissible promptly be returned to the Fund(s) involved;
provided, however, that no such amounts shall returned if they are not
deemed material pursuant to the then prevailing pricing error
guidelines as set forth by the Securities and Exchange Commission and
its staff.
The following limits shall apply to the collective liabilities of the
Distributor and/or OFS , as appropriate, to the Company for systems
and out of pocket costs incurred by the Company if such costs or
expenses are a result of the Distributor or OFS's failure to provide
the Company with such correct or timely information: (i) $1,000 per
day for each day that incorrect information provided by the
Distributor or OFS is not corrected, if such period does not include a
month-end or a fiscal quarter-end, (ii) $1,500 per day for each day
that such incorrect information provided by the Distributor or OFS is
not corrected, if such period does include a month-end or a fiscal
quarter-end, and (iii) up to $50,000 per occurrence in the aggregate
under (i) or (ii) above. Any incorrect information that has as a
common nexus any single error shall be deemed to be one occurrence for
these purposes provided all corrections are provided at the same time.
(g) The Company shall assume responsibility for any loss to Distributor or
to OFS caused by the cancellation or correction made to an order
subsequent to the date on which such order has been received by the
Company and originally relayed to Distributor, and the Company will
immediately pay such loss to Distributor or OFS upon receipt of
written notification with supporting data.
(h) The Company agrees to purchase and redeem the shares of the Funds
named in Schedule B offered by the then current prospectus and
statement of additional information of the Fund in accordance with the
provisions of such prospectus and statement of additional information.
(i) The Company acknowledges that the Funds or their designated agent will
accept instructions only from the Company and that neither the Funds
nor their designated agent will accept instructions directly from a
Contract owner or participant.
4. FEES.
In consideration of services provided by the Company under this Agreement,
the Company shall receive fees as set forth in Schedule C.
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5. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by the Distributor or OFS under this Agreement
shall be paid by the Distributor or the Fund as the case may be,
including the cost of registration of Fund shares with the Securities
and Exchange Commission (the "SEC") and in states where required. The
Company shall pay no fee or other compensation to the Distributor or
OFS under this Agreement, and the Distributor or OFS shall pay no fee
or other compensation to the Company, except as provided herein and in
Schedule C attached hereto and made a part of this Agreement as may be
amended from time to time with the mutual consent of the parties
hereto. All expenses incident to performance by each party of its
respective duties under this Agreement shall be paid by that party,
unless otherwise specified in this Agreement.
(b) The Distributor shall provide to the Company, at the location
designated by the Company, periodic fund reports to shareholders and
other materials that are required by law to be sent to Contract owners
or participants. In addition, the Distributor shall provide the
Company, at the Company's reasonable request, with a sufficient
quantity of Fund prospectuses, statements of additional information
and any supplements to any of these materials, to be used in
connection with the offerings and transactions contemplated by this
Agreement.
(c) The Distributor shall provide the company with a sufficient quantity
of Fund proxy material that is required to be sent to Contract owners
or participants. The cost associated with proxy preparation, group
authorization letters, programming for tabulation and necessary
materials (including postage) will be paid by the Distributor.
6. REPRESENTATIONS.
(a) The Company agrees that it and its agents shall not, without the
written consent of the Distributor, make representations concerning
the Fund, or its shares except those contained in the then current
prospectuses and in current printed sales literature approved by or
deemed approved by the Distributor.
(b) The parties hereto represent and warrant that (i) they have examined
and tested their systems and made reasonable inquiry of their business
partners and other entities with whom they conduct business with
respect to Year 2000 problems and (ii) their ability to perform their
obligations under this Agreement will not be interrupted or disrupted
as a result of any business interruptions or other business problems
relating to specific dates or days before, during and after the Year
2000.
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7. TERMINATION.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or OFS, upon
sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice to
the Distributor and OFS, if Fund shares are not available for any
reason to meet the requirement of Contracts as determined by the
Company (reasonable advance notice of election to terminate shall be
furnished by Company);
(c) at the option of either the Company, the Distributor or OFS,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, an Account,
the Company, OFS or the Distributor by the National Association of
Securities Dealers, Inc. (the "NASD"), the SEC or any other regulatory
body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with the
terms of the applicable Contracts (the Company will give 60 days
written notice to OFS and the Distributor of any decision to replace
the Fund's shares);
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance with
Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued by
the Company (prompt notice shall be given by the appropriate party
should such situation occur).
8. CONTINUATION OF AGREEMENT.
Termination as the result of any cause listed in Section 7 shall not affect
Distributor's obligation to furnish its shares to Contracts then in force
for which its shares serve or may serve as the underlying medium unless
such further sale of Fund shares is prohibited by law or the SEC or other
regulatory body.
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9. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared by
the Company or its agents for use in marketing its Contracts, other
than any materials that merely reference the Funds' names, will be
submitted to Distributor or its designee for review before such
material is submitted to any regulatory body for review. No such
material shall be used if the Distributor or its designee reasonably
object to such use in writing, transmitted by facsimile within five
business days after receipt of such material.
(b) The Distributor will provide additional copies of the Fund's
financials as soon as available to the Company and at least one
complete copy of all registration statements, prospectuses, statements
of additional information, annual and semi-annual reports, proxy
statements and all amendments or supplements to any of the above that
relate to the Fund promptly after the filing of such document with the
SEC or other regulatory authorities. At the Distributor's request, the
Company will provide to the Distributor at least one complete copy of
all registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, and all
amendments or supplements to any of the above that relate to the
Account promptly after the filing of such document with the SEC or
other regulatory authority.
(c) The Distributor will provide via Excel spreadsheet diskette format or
in electronic transmission to the Company at least quarterly portfolio
information necessary to update Fund profiles within fourteen (14)
business days following the end of each quarter.
10. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners to
the extent the SEC continues to interpret the 1940 Act as requiring
such privileges. The Company shall provide pass-through voting
privileges on Fund shares held by unregistered separate accounts to
all Contract owners.
(b) The Company will distribute to Contract owners, as appropriate, all
proxy material furnished by the Distributor and will vote Fund shares
in accordance with instructions received from such Contract owners. If
and to the extent required by law, the Company, with respect to each
group Contract and in each Account, shall vote Fund shares for which
no instructions have been 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.
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11. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless OFS, the Funds and
the Distributor, and their respective directors, officers, employees,
agents and each person, if any, who controls OFS or the Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the
Distributor or OFS or any such director, officer, employee, agent, or
controlling person of them may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, prospectus or sales literature of the
Company or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arise out of or as a result of conduct, statements or representations
(other than statements or representations contained in the
prospectuses or sales literature of the Fund) of the Company or its
agents, with respect to the sale and distribution of Contracts for
which Fund shares are the underlying investment. The Company will
reimburse any legal or other expenses reasonably incurred by the
Distributor, the Fund or OFS or any such director, officer, employee,
agent, investment adviser, or controlling person of them in connection
with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon (i) an untrue
statement or omission or alleged omission made in such Registration
Statement or prospectus in conformity with written materials furnished
to the Company by the Fund specifically for use therein or (ii) the
willful misfeasance, bad faith, or gross negligence by OFS or the
Distributor in the performance of its duties or OFS' or the
Distributor's reckless disregard of obligations or duties under this
Agreement or to the Company, whichever is applicable. This indemnity
agreement will be in addition to any liability, which Company may
otherwise have.
(b) The Distributor and OFS agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, prospectuses or sales literature of the
Fund or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or material fact required to be stated therein or necessary to
make the statements therein not misleading. The Distributor will
reimburse any legal or other expenses reasonably incurred by the
Company or any
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such director, officer, employee, agent, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Distributor
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectuses which are in conformity with
written materials furnished to the Fund by the Company specifically
for use therein or (ii) the willful misfeasance, bad faith, or gross
negligence of the Company.
(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 to so 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 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.
12. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. 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 parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service 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:
Aetna Insurance Company of America
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
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To OFS:
OppenheimerFunds Services
0000 Xxxxx Xxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
To the Distributor:
OppenheimerFunds Distributor, Inc.
Two World Trade Center, 34th Floor
New York, New York 10048
Attention: Xxxxxx X. Xxxxxxx
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) 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.
(e) 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.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) NON EXCLUSIVITY. It is understood by the parties that this Agreement
is not an exclusive arrangement in any respect.
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(i) USE OF NAME. Except as otherwise provided in this Agreement, the
Company shall not use the Xxxxxxxxxxx name or any trademark or service
xxxx of Xxxxxxxxxxx without the Distributor's prior written consent.
In the event this Agreement is terminated, the Company shall not use
Xxxxxxxxxxx'x name, trademark, service xxxx or any other inference
that may be reasonably construed to imply a continuing relationship.
(j) CONFIDENTIALITY. The terms of this Agreement and the Schedules thereto
will be held confidential by each party except to the extent that
either party or its counsel may deem it necessary to disclose such
terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 15th day of August, 2000.
AETNA INSURANCE COMPANY OF AMERICA
By:
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Pursuant to a Delegation of
Authority dated August 12, 1998
OFS
By:
Name:
Title:
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
By:
Name:
Title:
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SCHEDULE A
Variable Annuity Account I
(Or any future separate accounts - See Section 1(a))
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SCHEDULE B
(List of funds available--See Section 1(b))
Xxxxxxxxxxx Bond Fund (Class A)
Xxxxxxxxxxx Capital Appreciation Fund (Class A)
Xxxxxxxxxxx Capital Income Fund (Class A)
Xxxxxxxxxxx Developing Markets Fund (Class A)
Xxxxxxxxxxx Global Fund (Class A)
Xxxxxxxxxxx High Yield Fund (Class A)
Xxxxxxxxxxx Xxxx Xxxxxx Xxxxxx & Xxxxxx Xxxx (Xxxxx X)
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SCHEDULE C
Fees to the Company
1. SERVICE FEE.
Administrative services to Contract owners shall be the responsibility of
the Company solely and shall not be the responsibility of OFS, the Distributor
or the Funds. The Funds, the Distributor and OFS recognize the Company as the
sole shareholder of Fund shares issued under this Participation Agreement, and
that substantial savings will be derived in administrative expenses, such as
significant reductions in postage expense and shareholder communications, by
virtue of having a sole shareholder for each of the Accounts rather than
multiple shareholders. In consideration of the administrative savings resulting
from such arrangement, OFS agrees to pay to the Company an annual fee of $12.00
per participant per Xxxxxxxxxxx fund investment account, provided that such fee
does not exceed % per Xxxxxxxxxxx investment account on an annual basis. OFS
agrees to pay such fee on a quarterly basis. The service fee is intended to
compensate the Company for administrative services only and is not intended to
constitute payment in any manner for investment advisory or distribution
services. Within forty-five (45) days after the end of the year, Company will
send a report to Distributor indicating the number of participants during the
year and the amount, if any, Company was overpaid by Distributor. In the event
of an overpayment, Distributor will deduct any overpaid amount from the next
quarterly payment due. Each payment will be accompanied by a statement showing
the calculation of the fee payable to Company for the quarter and such other
supporting data as may be reasonably requested by Company.
OFS will make such payments to the Company within thirty (30) days after
the end of each calendar quarter. Each payment will be accompanied by a
statement showing the calculation of the fee payable to the Company for the
quarter and such other supporting data as may be mutually agreed upon by OFS and
the Company.
Payment of the service fee shall be made only for those participant
accounts that are actively funded (i.e., accounts holding at least one full
share of an Xxxxxxxxxxx fund). The payment of this fee shall not apply to loan
repayment accounts or forfeiture accounts. The Company shall determine the
participant account fee to be paid hereunder by taking the number of actively
funded Xxxxxxxxxxx fund accounts maintained on its recordkeeping system at the
end of each month for the calendar quarter and dividing by three. The Company
shall then determine whether such per participant account fee for each
Xxxxxxxxxxx fund omnibus investment account exceeds the % cap by dividing
the per participant account fee for each Xxxxxxxxxxx fund omnibus investment
account for the quarter, as calculated above, by the assets in each such
Xxxxxxxxxxx fund omnibus investment account for the quarter, as calculated
above. If the fee exceeds % ( % on an annual basis), the Company shall
only be paid % of assets
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invested per Xxxxxxxxxxx fund omnibus investment account for that quarter. The
Company will provide OFS an invoice after the end of each quarter, identifying
the broker-dealer of record and representative of record, if applicable, and
outlining the number of subaccounts and/or assets subject to the aforementioned
fees and OFS will make such payment to the Company within 30 business days of
receipt of the invoice. Invoices submitted in excess of 60 days of the time
period to which the invoice relates are subject to non-payment.
Such fee is subject to periodic review of services provided by the Company
and cost savings to OFS and may be revised by OFS at any time upon notice to the
Company.
2. 12b-1 FEES.
The prospectus of each Fund provides that the Distributor compensates
dealers, brokers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Fund
shares. In accordance with the Fund's respective plans pursuant to Rule 12b-1
under the Investment Company Act of 1940, the Distributor will make payments to
the Company, or to an affiliate as directed by the Company, at an annual rate of
% ( % quarterly) of the average net assets invested in the Funds
through the Contracts in each calendar quarter. Distributor will make such
payments to the Company or its affiliate within thirty (30) days after the end
of each calendar quarter. Each payment will be accompanied by a statement
showing the calculation of the fee payable to the Company or its affiliate for
the quarter and such other supporting data as may be mutually agreed upon by the
Distributor and the Company.
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