AMENDMENT NO.2 TO SHAREHOLDER SERVICES AGREEMENT
THIS AMENDMENT NO. 2 TO SHAREHOLDER SERVICES
AGREEMENT ("Amendment") effective as of May 1, 2002, by and between
PRINCIPAL LIFE INSURANCE COMPANY (the "Company") and AMERICAN
CENTURY INVESTMENT MANAGEMENT, INC. ("ACIM").
RECITALS
WhEREAS, the Company and ACIM are parties to a certain Shareholder Services
Agreement dated April 1, 1999 and amended May 1, 2000 (the "Agreement"), in
which the Company offers to the public certain variable annuity contracts and
variable life insurance contracts (the "Contracts");
WHEREAS, the Company desires to revise the number of American Century Funds
made available by the Company to its clients under this Contract; and
WHEREAS, in connection with the revision of Funds available, the parties
agree to revise the reimbursement as set forth herein;
WHEREAS, the parties now desire to further modify the Agreement as provided
herein.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows:
1. Available Funds. The second "WHEREAS" clause of the Agreement is
hereby deleted in its entirety and the following is substituted in
lieu thereof:
"WHEREAS, the Company wishes to make available as investment options
under the Contracts Class I of the VP Balanced Fund, VP Value Fund, VP
Capital Appreciation Fund, VP Income & Growth Fund, VP International Fund
and the VP Ultra Fund and Class II of the VP Value Fund, VP Income & Growth
Fund, VP International Fund and the VP Ultra Fund (the "Funds"), and 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"
2. Compensation and Expenses. Sections 6(b) and 6(c) are hereby deleted
in their entirety and the following Sections 6(b) and 6(c) are
substituted in lieu thereof:
"(b) ACIM 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, ACIM will pay the Company a fee (the
"Administrative Services Fee") equal to 25 basis points (0.25%) per annum
of the average aggregate amount invested by the Company in Class I shares
and 15 basis points (0.15%) per annum of the average aggregate amount
invested by the Company in Class II shares of the Funds under this
Agreement.
"(c) In consideration of performance of the Distribution Services
specified on EXHIBIT B by the Company, ACIM will pay the Company a fee (the
"Distribution Fee") of 25 basis points (0.25%) of the average aggregate
amount invested by the Company in Class II shares of the Funds under this
Agreement."
3. Termination~ Withdrawal of Offering. The first sentence of Section 13
is hereby revised by deleting the word "parties." at the end of the
sentence and replacing it with the following language: "party, or, on
60 days' written notice pursuant to a vote of a majority of the
outstanding securities of the Fund."
Delete the period at the end of Section 1 3(B)(ii) and replace it with the
following language:
"; (iii) by a vote of a majority of the independent directors, or (iv) upon
assignment by either party."
4. Successors and Assigns. The language in Section 18 of the Agreement is
hereby deleted in its entirety and the following language is
substituted in lieu thereof:
"This Agreement may not be assigned and will be terminated
automatically upon any attempted assignment. This Agreement shall be
binding upon and inure to the benefit of both parties hereto."
5. Ratification and Confirmation of Agreement. In the event of a conflict
between the terms of this Amendment and the Agreement, it is the
intention of the parties that the terms of this Amendment 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, the parties hereby confirm and ratify the Agreement.
6. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be an original and all of which
together shall constitute one instrument.
7. 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.
PRINCIPAL LIFE INSURANCE
COMPANY
By: /s/Xxxxx Xxxxx
Name:Xxxxx Xxxxx
Title:Asst. Director
AMERICAN CENTURY
INVESTMENT MANAGEMENT, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title:Executive Vice President
EXHIBiT B
DISTRIBUTION SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
distribution services for Class II shares of the Funds, including, but not
limited to, the following:
1. Receive and answer correspondence from prospective shareholders, including
distributing prospectuses, statements of additional information, and
shareholder reports.
2. Provide facilities to answer questions from prospective investors about
Fund shares.
3. Assist investors in completing application forms and selecting dividend and
other account options.
4. Provide other reasonable assistance in connection with the distribution of
Fund shares.
AMENDMENT
TO
SHAREHOLDER SERVICES AGREEMENT
This amendment (the "Amendment") is made and entered into as of May
1,2001, by and among American Century Investment Management, Inc.
("ACIM") and Principal Life Insurance Company (the "Company")
(collectively, the "parties") in order to modify~' that certain
Shareholder Services Agreement (the "Agreement") entered into by the
parties as of April 1, 1999. Capitalized terms used but not defined
herein have the meanings given to them in the Agreement.
The parties agree to amend the Agreement as follows:
1. The term "Funds" shall also include VP Ultra.
2. Section 7(a)(ii) is deleted in its entirety and the
following inserted in lieu thereof: "(ii) it has established
the separate accounts listed on Schedule A attached hereto
and incorporated herein by reference (the "Accounts" or
"Account"), which are duly authorized and established
separate accounts under Iowa Insurance law, and has
registered the Accounts as unit investment trusts under the
Investment Company Act of 1940 (the "1940 Act") to serve as
investment vehicles for the Contracts;"
3. Section 17 (Notices) is changed with respect to the Company
as follows:
Principal Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxx, Counsel
Telephone: (000)000-0000
Facsimile: 000-000-0000
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
American Century Investment Management, Inc
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Tide: Sr. Vice President
Principal Life Insurance Company
By:/s/Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Assistant Director
SCHEDULE A
SEPARATE ACCOUNTS UTILIZING FUNDS
(1) Principal Life Insurance Company Separate Account B
(2) Principal Life Insurance Company Variable Life Separate Account
SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT is made and entered into as of April 1,
1999 by and between THE PRINCIPAL LIFE INSURANCE COMPANY (the "Company"), and
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. ("ACIM").
WHEREAS, the Company offers to the public certain group and individual
variable annuity and variable life insurance contracts (the "Contracts"); and
WHEREAS, the Company wishes to make available as investment options under
the Contracts VP Balanced, VP Capital Appreciation, VP Income & Growth, VP
International and VP Value (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, ACIM 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 ACIM agree as follows:
1. Transactions in the Funds. Subject to the terms and conditions of this
Agreement, ACIM will cause the Issuer to make shares of the Funds available to
be purchased, exchanged, or redeemed, by or on behalf of the Account (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 Contracts 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 aM administrative
services for the Contract owners, including but not limited to those services
specified in EXHIBIT A (the "Administrative Services"). Neither ACIM nor the
Issuer shall 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
ACIM or its representatives reasonable information regarding the quality of the
Administrative Services being provided and its compliance with the terms of this
Agreement.
3. Timing of Transactions. ACIM hereby appoints the Company as 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 Funds' transfer agent by 9:30 am. Eastern time on the next
Business Day will be executed at the net asset value determined as of the Close
of Trading on the immediately prior 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 Funds' transfer agent after 9:30 a.m. Eastern time on the
next 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 by the Funds' transfer agent. The day as of which an Order is executed by
the Funds' transfer agent 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, between Company and American Century Services Corporation, 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, ACIM (or one of
its affiliates) will provide to the Company via direct electronic transmission
acceptable to the Company, or if such transmission is unavailable for any
reason, via facsimile, 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. In the event any
adjustment is required to correct any error in the computation of the net asset
value of a Fund's shares at the shareholder level as a result of a pricing error
that is deemed to be material under the pricing policy of the Fund's Board of
Directors or which ACIM otherwise deems necessary to correct at the Account
level, ACIM and the Company shall work together to correct the Accounts. ACIM
shall reimburse the Company its reasonable out-of-pocket expenses, not including
overtime wages, incurred in correcting the Accounts.
(2) By 9:30 am. Eastern time on each Business Day, the Company will
provide to ACIM via direct electronic transmission acceptable to ACIM, or if
such transmission is unavailable for any reason, via facsimile a report stating
whether the instructions received by the
Company from Contract owners by the Close of Trading on the prior Business Day
resu1~d in the Account being a net purchaser or net seller of shares of the
Funds.
(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 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 Funds 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 Issuer to the account(s) designated by the
Company on T+l; provided, however, the Issuer reserves 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) ACIM 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, ACIM 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, ACIM 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 ACIM or its agents or affiliates; provided, however,
that if at any time ACIM 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 ACIM 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, ACIM may refuse to
supply such additional materials and ACIM 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 ACIM or the Issuer.
6. Compensation and Expenses.
(a) The Account 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 ACIM
or the Issuer from time to time.
(b) ACIM 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 Account 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, ACIM
will pay the Company a fee (the "Administrative Services Fee") equal to 25 basis
points (0.25%) 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 Account 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) ACIM 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
ACIM for the relevant months and such other supporting data as may be reasonably
requested by the Company and shall be mailed to:
Principal Life Insurance Company
000 Xxxx Xx.
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxx McComba
Phone No.: (000) 000-0000
FaxNo.: (000) 000-0000
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
Separate Account B (the "Account"), which is a duly authorized and established
separate account under Iowa Insurance law, and has registered the 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) ACIM 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 ACIM, enforceable in
accordance with its terms; (ii) the investments of the Funds will at all times
be adequately diversified within the meaning of Section 817(h) of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations thereunder,
and that at all times while this Agreement is in effect, all beneficial
interests in each of the Funds will be owned by one or more insurance companies
or by any other party permitted under Section 1.817-5(g)(3) of the regulations
promulgated under the Code; (iii) the prospectus of each Fund complies in all
material respects with federal and state securities laws, and (iv) 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 Orders transmitted to the
Issuer, whether by telephone, telecopy, or other electronic transmission
acceptable to ACIM, shall be sent by or under the authority and direction of a
person designated by the Company as being duly authorized to act on behalf of
the owner of the Account. ACIM 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 ACIM by the Company by telephone, telecopy or other
electronic transmission acceptable to ACIM.
(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 Account, 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 ACIM, 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 ACIM 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 ACIM for review and approval before such material is used.
9. Use of Name& Except as otherwise expressly provided for in this
Agreement, neither ACIM nor any of its affiliates or 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, ACIM or any of its affiliates or any variation of any such trademarks,
trade names, service marks, or logos, without the prior written consent of
either the Issuer or ACIM, as appropriate, the granting of which shall be at the
sole option of ACIM 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 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 ACIM 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) ACIM 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 ACIM of a material
provision of this Agreement. ACIM will reimburse any legal or other expenses
reasonably incurred by the Indemnified Parties in connection with investigating
or defending any such Losses. ACIM 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 ACIM and the Issuer,
and their respective officers, directors, employees, agents, affiliates and each
person, if any, who controls Issuer or ACIM 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. 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 ACIM or the Issuer 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 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 the Issuer 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 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 Account 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, the 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,
ACIM, affiliates of ACIM, or the Issuer, which proceedings ACIM reasonably
believes may have a material adverse impact on the ability of ACIM, the Issuer
or the Company to perform its obligations under this Agreement or (B) in the
judgment of ACIM, declining to accept any additional instructions for the
purchase or sale of shares of any such Fund is warranted by market, economic 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 Account as set forth by this
Agreement. Following termination, ACIM 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:
Principal Life Insurance Company
000 Xxxx Xx.
Xxx Xxxxxx, Xxxx 00000 ATTN: Xxxxxxx Xxxxxxxx S-006-W81
(000) 000-0000 (office number)
(5l5) 248-3011 (telecopy number)
To the Issuer or ACIM:
American Century Investment Management, 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 Assign& 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.
THE PRINCIPAL LIFE INSURANCE
COMPANY
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Asst. Director, Annuity Marketing
AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
By: /s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Executive Vice President
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.
