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EX.1-A(8)(b)
SERVICE AGREEMENT
This SERVICE AGREEMENT, as of June 7, 1995 between Xxxxxx Investors Life
Insurance Company, ("KILICO") an Illinois insurance corporation having its
principal offices and place of business at 0 Xxxxxx Xxxxx, X-0, Xxxx Xxxxx, XX
00000, and American Skandia Investment Services, Incorporated ("ASISI"), as
Investment Advisor for the American Skandia Trust (the "Fund"), a Connecticut
corporation having its principal office and place of business at Xxx Xxxxxxxxx
Xxxxx, Xxxxxxx, XX 00000.
In consideration of the promises and mutual covenants set forth in this
Service Agreement, KILICO and ASISI agree as follows:
1. KILICO agrees to provide services to beneficial shareholders of
Portfolios of the Fund ("Beneficial Holders") on behalf of ASISI, to the same
extent ASISI is authorized to provide such services, including the following
services:
a) responding to inquiries from Beneficial Holders regarding the
services performed by KILICO or any affiliate of KILICO, as they
relate to the Fund;
b) providing information to ASISI and to Beneficial Holders with
respect to shares beneficially owned by Beneficial Holders;
c) communicating directly with Beneficial Holders concerning the Fund's
operations, and portfolio composition and performance;
d) including the Fund portfolios that are offered as underlying
investment options for accounts that serve as investment vehicles
for certain variable life and/or variable annuity contracts (the
"Variable Insurance Contracts") and qualified plan funding
agreements offered by KILICO, as well as relevant financial and
performance data, in any software program currently available or
proposed, that are or will be made available by KILICO to financial
professionals that sell products or provide investment allocation
services in relation to such products ("Portfolio Support
Services");
e) updating any Portfolio Support Services and other printed portfolio
information on a quarterly basis; and
f) providing such other similar services in connection with the Fund as
ASISI may reasonably request, to the extent permitted under
applicable statutes, rules and regulations.
2. KILICO also agrees to consult, either directly or through one of its
affiliates, with ASISI in connection with the design and implementation of
shareholder servicing arrangements relating to shares issued by the Fund,
including without limitation, sponsoring and/or participating in seminars
and/or sales meetings relating to the distribution of shares of the Fund and
servicing of Fund Portfolios.
3. ASISI agrees to provide or arrange to provide, to KILICO, or its
designated representative, with the portfolio information reasonably requested
to support any Portfolio Support Services.
4. ASISI recognizes KILICO as the sole legal shareholder of the shares of
the Fund purchased pursuant to the Variable Insurance Contracts offered by
KILICO. ASISI also recognizes that substantial savings in administrative and
shareholder servicing support expenses will be derived by virtue of the Fund
having a sole legal shareholder of such shares rather than multiple legal
shareholders. These substantial savings to ASISI will be the result of
KlLICO's performing the services set forth in Paragraphs 1 and 2 above. In
consideration of the administrative and shareholder servicing support savings
resulting from such arrangement, ASISI agrees to pay KILICO a fee (the
"Portfolio Servicing Fee") calculated as a percentage of the average daily
net asset value of all shares in Portfolios of the Fund purchased by
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KILICO, including such shares purchased through reinvestment of dividends and
distributions, which fee shall be payable monthly. The current Portfolio
Servicing Fee Schedule is set forth in Appendix A. The Portfolio Servicing
Fee, which is payable ten (10) days after the end of a calendar month, shall
be payable only so long as the portfolios of the Fund continue to be available
as investment options for accounts that serve as investment vehicles for the
Variable Insurance Contracts and qualified plan funding agreements offered by
KILICO as set forth in Schedule A ("Investment Option(s)"). If a new portfolio
of the Fund becomes available or ceases to be available as an Investment
Option during a calendar month, the Portfolio Servicing Fee payable shall be
pro-rated for the time period such portfolio was available as an Investment
Option. Any Investment Option additions or deletions will be reflected in
Schedule A. Fees described in this Paragraph 4 shall cease to accrue with
respect to shares that are redeemed. Any overpayment of compensation and fees
pursuant to this Paragraph 4 shall reduce amounts payable to KILICO in
subsequent months. ASISI and KILICO agree that the services provided
thereunder will be reviewed not less than annually. Neither ASISI nor KILICO
will agree to waive any portion of the Portfolio Servicing Fee unless clearly
mandated by law, without the consent and concurrence of the other, which
consent and concurrence will not be unreasonably withheld.
5. KILICO represents, warrants and covenants that it is a corporation
organized under the laws of the State of Illinois, and has the authority,
pursuant to such laws, to enter into and perform services under this Service
Agreement, and that it may lawfully receive the Portfolio Servicing Fee under
all applicable laws.
6. ASISI represents, warrants and covenants that it is a corporation
organized under the laws of the State of Connecticut, and has the authority,
pursuant to such laws, to enter into and perform services under this Service
Agreement, and that it may lawfully pay the Portfolio Servicing Fee under all
applicable laws.
7. ASISI agrees to indemnify and hold harmless KILICO and its officers,
directors and each affiliated person of KILICO within the meaning of Section
2(a)(3) of the Investment Company Act of 1940, as amended (collectively, the
"KILICO Indemnified Parties"), from any and all loss, liability and expense
resulting from willful misfeasance, bad faith or gross negligence, or by
reason of the reckless disregard of the respective obligations and duties of
the ASISI Indemnified Parties, as defined below, under this Service Agreement,
or breach of a representation, warranty or covenant contained in paragraph 6,
except to the extent such loss, liability or expense is the result of (a) the
breach of a representation, warranty or covenant contained in paragraph 5
hereof, or (b) the willful misfeasance, bad faith or gross negligence of any
of the KILICO Indemnified Parties in the performance of their respective
duties, or by reason of the reckless disregard of respective obligations and
duties of the KILICO Indemnified Parties under this Service Agreement.
8. KILICO agrees to indemnify and hold harmless ASISI and its officers,
directors and each affiliated person of ASISI within the meaning of Section
2(a)(3) of the Investment Company Act of 1940, as amended (collectively, the
"ASISI Indemnified Parties"), from any and all loss, liability and expense
resulting from willful misfeasance, bad faith or gross negligence, or by
reason of the reckless disregard of the respective obligations and duties of
the KILICO Indemnified Parties under this Service Agreement, or breach of a
representation, warranty or convenant contained in paragraph 5, except to the
extent such loss, liability or expense is the result of (a) the breach of a
representation, warranty or covenant contained in paragraph 6 hereof, or (b)
the willfull misfeasance, bad faith or gross negligence of any of the ASISI
Indemnified Parties in the performance of their respective duties, or by
reason of the reckless disregard or respective obligations and duties of the
ASISI Indemnified Parties under this Service Agreement.
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9. Either party may terminate this Service Agreement on six (6) months'
written notice to the other party. Any notice shall be sufficiently given when
sent by registered or certified mail to KILICO at:
Xxxxxx Investors Life Insurance Company
0 Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: General Counsel
or to ASISI at:
American Skandia Investment Services, Incorporated
Xxx Xxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxxxx
Telecopy Number: (000) 000-0000
or to such other address furnished to the other party pursuant hereto.
10. In the event that ASISI ceases to act as Investment Advisor for the
Fund, this Service Agreement will terminate at the option of KILICO on thirty
(30) days written notice. This Service Agreement is terminable immediately
upon notice by one party to another upon (a) dissolution or bankruptcy of
either party, (b) a material breach of this Service Agreement by either party,
or (c) termination of the Participation Agreement, dated June , 1996, between
the parties and the Fund.
11. ASISI, unless otherwise objecting, agrees that an affiliate of KILICO
may provide any of the services set forth in paragraphs 1 and 2, subject to
KILICO's reasonable and good faith determination that its affiliate will
provide such services in a manner consistent with this Agreement
12. No waiver by either party of any provision of this Service Agreement
shall operate as, or be construed as, a waiver of any subsequent breach
thereof, or waiver of any other provision of this Service Agreement.
13. In the event that any provision of this Service Agreement shall be
held invalid, the same shall not affect in any respect whatsoever the validity
of the remainder of this Service Agreement and such provision, to the extent
that the rights and mutual obligations of the parties hereto are not
materially adversely affected, shall be deemed to be severable therefrom.
14. Except as set forth in Paragraph 11, neither this Service Agreement
nor any rights or obligations hereunder shall be assignable by either ASISI or
KILICO without prior written consent of the other party thereto.
15. KILICO and ASISI agree to attempt to resolve any dispute that may
arise under the Service Agreement amicably between themselves. If such
discussions fail to result in an amicable settlement, then the parties shall
arbitrate such dispute in Shelton, Connecticut. Each party shall select an
arbitrator from among the business community familiar with the type of
business conducted by ASISI and KILICO, and such two arbitrators shall select
a third arbitrator. The American Arbitration Association rules shall govern
the procedures to be followed. However, arbitration shall not be under the
auspices of the American Arbitration Association.
16. This Service Agreement shall be construed in accordance with, and its
performance shall be governed by, the laws of the State of Connecticut.
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17. This Service Agreement may be amended or modified in whole or in part
only by a written Service Agreement executed by both parties.
IN WITNESS WHEREOF, the parties to this Service Agreement have caused this
Service Agreement to be executed by their authorized officers as of the day
and year first above written.
XXXXXX INVESTORS LIFE INSURANCE COMPANY
By: /s/XXXX X. XXXXXXX, XX.
--------------------------------
Authorized Signature
Print Name: XXXX X. XXXXXXX, XX.
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Print Title: MARKETING OFFICER
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AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
By: /s/[SIGNATURE]
--------------------------------
Authorized Signature
Print Name:
------------------------
Print Title:
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APPENDIX A
Portfolio Servicing Fee Schedule
The breakpoints listed below are determined by the total value of portfolio
shares of the Fund owned by KILICO. The annual fee is listed as a percentage
of that value, and is calculated in accordance with Paragraph 4 of the Service
Agreement. Each annual fee, as listed below, is paid only on those assets
which exceed the indicated breakpoint.
Breakpoint (millions) Annual Fee
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$0 - $49.9 0.00%
$50.0 - $99.9 0.10%
$100.0 - $499.99 0.15%
$500.0 - + 0.20%
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SCHEDULE A
Investment Options Fund Portfolios
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Founders Capital Appreciation Portfolio Founders Capital Appreciation Portfolio
Xxxxxx Capital Growth Portfolio Xxxxxx Capital Growth Portfolio
JanCap Growth Portfolio JanCap Growth Portfolio
Lord Xxxxxx Growth and Income Portfolio Lord Xxxxxx Growth and Income Portfolio
INVESCO Equity Income Portfolio INVESCO Equity Income Portfolio
X. Xxxx Price International Equity Portfolio X. Xxxx Price International Equity Portfolio
X. Xxxx Price Asset Allocation Portfolio X. Xxxx Price Asset Allocation Portfolio
PIMCO Limited Maturity Bond Portfolio PIMCO Limited Maturity Bond Portfolio
PIMCO Total Return Bond Portfolio PIMCO Total Return Bond Portfolio
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