Exhibit 1.A(8)(c)(v)
SERVICE AGREEMENT
This Agreement is entered into and effective as of the 1st day of
January, 1999, by and between FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS
COMPANY, INC. ("FIIOC") and SECURITY LIFE OF DENVER INSURANCE COMPANY
("Company").
WHEREAS, FIIOC provides transfer agency and other services to
Fidelity's Variable Insurance Products Fund, Variable Insurance Products Fund II
and Variable Insurance Products Fund III (collectively "Funds"); and
WHEREAS, the services provided by FIIOC on behalf of the Funds include
responding to inquiries about the Funds, including the provision of information
about the Funds' investment objectives, investment policies, portfolio holdings,
etc.; and
WHEREAS, Company and Southland Life Insurance Company (together
"Affiliates") hold shares of the Funds in order to fund certain variable annuity
contracts, group annuity contracts, and/or variable life insurance policies, the
beneficial interests in which are held by individuals, plan trustees, or others
who look to Affiliates to provide information about the Funds similar to the
information provided by FIIOC; and
WHEREAS, Affiliates and one or more of the Funds have entered into one
or more Participation Agreements, under which Affiliates agree not to provide
information about the Funds except for information provided by the Funds or
their designees; and
WHEREAS, FIIOC desires that Company shall cause Affiliates to be able
to respond to inquiries about the Funds from individual variable annuity owners,
participants in group annuity contracts issued by Affiliates and owners and
participants under variable life insurance policies issued by Affiliates, and
prospective customers for any of the above; and
WHEREAS, FIIOC and Company recognize that Affiliates' efforts in
responding to customer inquiries will reduce the burden that such inquiries
would place on FIIOC should such inquiries be directed to FIIOC.
NOW, THEREFORE, the parties do agree as follows:
1. Information to be Provided to Affiliates. FIIOC agrees to provide to
Affiliates, on a periodic basis, directly or through a designee, information
about the Funds' investment objectives, investment policies, portfolio holdings,
performance, etc. The content and format of such information shall be as FIIOC,
in its sole discretion, shall choose. FIIOC may change the format and/or content
of such informational reports, and the frequency with which such information is
provided. For purposes of Section 4.2 of each of Affiliates' Participation
Agreement(s) with the Funds, FIIOC represents that it is the designee of the
Funds, and Affiliates may therefore use the information provided by FIIOC
without seeking additional permission from the Funds.
2. Use of Information by Affiliates. Affiliates may use the information
provided by FIIOC in communications to individuals, plan trustees, or others who
have legal title or beneficial interest in the annuity or life insurance
products issued by Affiliates, and to prospective purchasers of such products or
beneficial interests thereunder. If such information is contained as part of
larger pieces of sales literature, advertising, etc., such pieces shall be
furnished for review to the Funds in accordance with the terms of Affiliates'
Participation Agreements with the Funds. Nothing herein shall give Affiliates
the right to expand upon, reformat or otherwise alter the information provided
by FIIOC. Affiliates acknowledge that the information provided them by FIIOC may
need to be supplemented with additional qualifying
information, regulatory disclaimers, or other information before it may be
conveyed to persons outside Affiliates.
3. Compensation to Company. In recognition of the fact that Company
will cause Affiliates to respond to inquiries that otherwise would be handled by
FIIOC, FIIOC agrees to pay Company a quarterly fee computed as follows:
At the close of each calendar quarter, FIIOC will determine the Average
Daily Assets held in the Funds by Affiliates. Average Daily Assets shall be the
sum of the daily assets for each calendar day in the quarter divided by the
number of calendar days in the quarter. The Average Daily Assets shall be
multiplied by 0.0004 (4 basis points) and that sum shall be divided by four. The
resulting number shall be the quarterly fee for that quarter, which shall be
paid to Company during the following month.
Should any Participation Agreement(s) between an Affiliate and any
Fund(s) be terminated effective before the last day of a quarter, Company shall
be entitled to a fee for that portion of the quarter during which the
Participation Agreement was still in effect unless such termination is due to
misconduct on the part of the Affiliate. For such a stub quarter, Average Daily
Assets shall be the sum of the daily assets for each calendar day in the quarter
through and including the date of termination of the Participation Agreement(s),
divided by the number of calendar days in that quarter for which the
Participation Agreement was in effect. Such Average Daily Assets shall be
multiplied by 0.0004 (4 basis points) and that number shall be multiplied by the
number of days in such quarter that the Participation Agreement was in effect,
then divided by three hundred sixty-five. The resulting number shall be the
quarterly fee for the stub quarter, which shall be paid to Company during the
following month.
Notwithstanding the foregoing, compensation for each calendar quarter
will not exceed one million dollars ($ 1,000,000).
4. Termination. This Agreement may be terminated by Company at any
time upon written notice to FIIOC. FIIOC may terminate this Agreement at any
time upon ninety (90) days' written notice to Company. FIIOC may terminate this
Agreement immediately upon written notice to Company (1) if required by any
applicable law or regulation, (2) if so required by action of the Fund(s) Board
of Trustees, (3) if Company engages in any material breach of this Agreement or
(4) if any Affiliate engages in any conduct which would constitute a material
breach of this Agreement were the Affiliate a party to the Agreement. This
Agreement shall terminate immediately and automatically with respect to an
Affiliate upon the termination of that Affiliate's Participation Agreement(s)
with the Funds, and in such event no notice need be given hereunder.
5. Indemnification. Company agrees to indemnify and hold harmless FIIOC
for any misuse by any Affiliate, their agents and/or brokers, and any persons
controlling Company, under common control with Company, or controlled by
Company, of the information provided by FIIOC under this Agreement.
6. Applicable Law. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
7. Assignment. This Agreement may not be assigned, except that it shall
be assigned automatically to any successor to FIIOC as the Funds' transfer
agent, and any such successor shall be bound by the terms of this Agreement.
IN WITNESS WHEREOF, the parties have set their hands as of the date first
written above.
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Vice President
SECURITY LIFE OF DENVER INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxxx
Title: President
SERVICE CONTRACT
With Respect to Initial Class Shares of:
( ) Variable Insurance Products Fund - High Income Portfolio
( ) Variable Insurance Products Fund - Equity-Income Portfolio
( ) Variable Insurance Products Fund - Growth Portfolio
( ) Variable Insurance Products Fund - Overseas Portfolio
( ) Variable Insurance Products Fund II - Investment Grade Bond Portfolio
( ) Variable Insurance Products Fund II - Asset Manager Portfolio
( ) Variable Insurance Products Fund II - Contrafund Portfolio
( ) Variable Insurance Products Fund II - Asset Manager: Growth Portfolio
( ) Variable Insurance Products Fund III - Growth Opportunities Portfolio
( ) Variable Insurance Products Fund III - Balanced Portfolio
( ) Variable Insurance Products Fund III - Growth & Income Portfolio
( ) Variable Insurance Products Fund III - Mid Cap Portfolio
To Fidelity Distributors Corporation:
We desire to enter into a Contract with you for activities in connection with
(i) the distribution of shares of the funds noted above (the "Funds") of which
you are the principal underwriter as defined in the Investment Company Act of
1940 (the "Act ") and for which you are the agent for the continuous
distribution of shares, and (ii) the servicing of holders of shares of the Funds
and existing and prospective holders of Variable Products (as defined below).
THE TERMS AND CONDITIONS OF THIS CONTRACT ARE AS FOLLOWS:
1. We shall provide distribution and certain shareholder services for our
clients who own or are considering the purchase of variable annuity contracts or
variable life insurance policies for which shares of the Funds are available as
underlying investment options ("Variable Products"), which services may include,
without limitation, answering questions about the Funds from owners of Variable
Products; receiving and answering correspondence (including requests for
prospectuses and statements of additional information for the Funds); performing
subaccounting with respect to Variable Products' values allocated to the Funds;
preparing, printing and distributing reports of values to owners of Variable
Products who have contract values allocated to the Funds; printing and
distributing prospectuses, statements of additional information, any supplements
to prospectuses and statements of additional information, and shareholder
reports; preparing, printing and distributing marketing materials for Variable
Products; assisting customers in completing applications for Variable Products
and selecting underlying mutual fund investment options; preparing, printing and
distributing subaccount performance figures for subaccounts investing in Fund
shares; and providing other reasonable assistance in connection with the
distribution of Fund shares to insurers.
2. We shall provide such office space and equipment, telephone facilities and
personnel (which may be all or any part of the space, equipment and facilities
currently used in our business, or all or any personnel employed by us) as is
necessary or beneficial for us to provide information and services to existing
and prospective owners of Variable Products, and to assist you in providing
services with respect to Variable Products.
3. We agree to indemnify and hold you, the Funds, and the agents and affiliates
of each, harmless from any and all direct or indirect liabilities or losses
resulting from requests, directions, actions or inactions, of or by us or our
officers, employees or agents regarding the purchase, redemption, transfer or
registration of Fund shares that underlie Variable Products of our clients. Such
indemnification shall survive the termination of this Contract.
Neither we nor any of our officers, employees or agents are authorized
to make any representation concerning Fund shares except those contained in the
registration statement or prospectus for the Fund shares, as such registration
statement and prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee or by you, except with
the permission of the Fund or you or the designee of either.
4. In consideration of the services and facilities described herein, we shall be
entitled to receive, and you shall pay or cause to be paid to us, fees at an
annual rate as set forth on the accompanying fee schedule. We understand that
the payment of such fees has been authorized pursuant to, and shall be paid in
accordance with, a Distribution and Service Plan approved by the Board of
Trustees of the applicable Fund, by those Trustees who are not "interested
persons" of the Fund (as defined in the 0000 Xxx) and who have no direct or
indirect financial interest in the operation of the Distribution and Service
Plan or in any agreements related to the Distribution and Service Plan
("Qualified Trustees"), and by shareholders of such class; and that such fees
are subject to change during the term of this Contract and shall be paid only so
long as this Contract is in effect. We also understand and agree that,
notwithstanding anything to the contrary, if at any time payment of all such
fees would, in your reasonable determination, conflict with the limitations on
sales or service charges set forth in Section 2830(d) of the NASD Conduct Rules,
then such fees shall not be paid; provided that in such event each Fund's Board
of Trustees may, but is not required to, establish procedures to pay such fees,
or a portion thereof, in such manner and amount as they shall deem appropriate.
5. We agree to conduct our activities in accordance with any applicable federal
or state laws and regulations, including securities laws and any obligation
thereunder to disclose to our clients the receipt of fees in connection with
their investment in Variable Products.
6. This Contract shall continue in force for one year from the effective date
(see below), and thereafter shall continue automatically for successive annual
periods, provided such continuance is specifically subject to termination
without penalty at any time if a majority of each Fund's Qualified Trustees or a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the applicable class vote to terminate or not to continue the Distribution and
Service Plan. Either of us also may cancel this Contract without penalty upon
telephonic or written notice to the other; and upon telephonic or written notice
to us, you may also amend or change any provision of this Contract. This
Contract will also terminate automatically in the event of its assignment (as
defined in the 1940 Act).
7. All communications to you shall be sent to you at your offices, 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx, XX 00000. Any notice to us shall be duly given if mailed or
telegraphed to us at the address shown in this Contract.
8. This Contract shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
Very truly yours,
Security Life of Denver Insurance Company By /s/ Xxxxxxx X. Xxxxxxxxxxx
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Name of Qualified Recipient (Please Print or Type) Xxxxxxx X. Xxxxxxxxxxx
0000 Xxxxxxxx
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Xxxxxx
Xxxxxx XX 00000-0000
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City State Zip Code
Date: effective as of January 1, 1999
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FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
NOTE: Please return TWO signed copies of this Service Contract to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy will be
returned to you.
FOR INTERNAL USE ONLY:
EFFECTIVE DATE:
FEE SCHEDULE FOR QUALIFIED RECIPIENTS OF
Variable Insurance Products Fund - High Income Portfolio
Variable Insurance Products Fund - Equity-Income Portfolio
Variable Insurance Products Fund - Growth Portfolio
Variable Insurance Products Fund - Overseas Portfolio
Variable Insurance Products Fund II - Investment Grade Bond Portfolio
Variable Insurance Products Fund II - Asset Manager Portfolio
Variable Insurance Products Fund II -Contrafund Portfolio
Variable Insurance Products Fund II - Asset Manager: Growth Portfolio
Variable Insurance Products Fund III - Growth Opportunities Portfolio
Variable Insurance Products Fund III - Balanced Portfolio
Variable Insurance Products Fund III - Growth & Income Portfolio
Variable Insurance Products Fund III - Mid Cap Portfolio
(1) Those who have signed the Service Contract and who render
distribution, administrative support and recordkeeping services as described in
paragraph I of the Service Contract will hereafter be referred to as "Qualified
Recipients."
(2) A Qualified Recipient providing services pursuant to the Service
Contract will be paid a quarterly fee at an annualized rate of six (6) basis
points of the average aggregate net assets of its clients invested in Initial
Class shares of the Funds listed above. In order to be assured of receiving full
payment under this paragraph (2) for a given calendar quarter, a Qualified
Recipient must have insurance company clients with a minimum of $ 1 00 million
of average net assets in the aggregate in the Funds listed below. For any
calendar quarter during which assets in these Funds are in the aggregate less
than $ 1 00 million, the amount of qualifying assets may be considered to be
zero for the purpose of computing the payments due under this paragraph (2), and
the payments under this paragraph (2) may be reduced or eliminated.
Variable Insurance Products Fund - Equity-income Portfolio
Variable Insurance Products Fund - Growth Portfolio
Variable Insurance Products Fund - Overseas Portfolio
Variable Insurance Products Fund II - Asset Manager Portfolio
Variable Insurance Products Fund II - Contrafund Portfolio
Variable Insurance Products Fund II - Asset Manager: Growth Portfolio
Variable Insurance Products Fund III - Growth Opportunities Portfolio
Variable Insurance Products Fund III - Balanced Portfolio
Variable Insurance Products Fund III - Growth & Income Portfolio
Variable Insurance Products Fund III- Mid Cap Portfolio
(3) The fees paid to each Qualified Recipient will be calculated and
paid quarterly. Checks will be mailed to each Qualified Recipient by the 30th of
the following month.