Variable Insurance Funds
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Variable Contract Owner Servicing Agreement
[Name]
[Address]
[City, State and Zip Code]
Ladies and Gentlemen:
Variable Insurance Funds (the "Trust") is an open-end management investment
company organized as a Massachusetts business trust and registered with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940 (the "1940 Act"). On behalf of Variable Contract Owners with contract
value allocated to each of the investment portfolios of the Trust identified in
Schedule A hereto (individually, a "Fund" and collectively, the "Funds"), the
Trustees of the Trust have adopted a Variable Contract Owner Servicing Plan (the
"Plan") which, among other things, authorizes the Trust to enter into this
Agreement with _________________ (the "Participating Organization"), concerning
the provision of support services to the Participating Organization's customers
("Customers") who may from time to time be Variable Contract Owners. The terms
and conditions of this Agreement are as follows:
1. REFERENCE TO PROSPECTUS; DETERMINATION OF NET ASSET VALUE.
1.1 Reference is made to the prospectus for the Shares of each Fund
(individually, a "Prospectus" and collectively, the "Prospectuses") as
from time to time are effective under the Securities Act of 1933 (the
"1933 Act"). Terms defined therein and not otherwise defined herein
are used herein with the meaning so defined.
1.2 For purposes of determining the fees payable to the Participating
Organization under Section 3, the average daily net asset value of a
Fund's Shares will be computed in the manner specified in the Trust's
registration statement (as the same is in effect from time to time) in
connection with the computation of the net asset value of such Fund's
Shares for purposes of purchases and redemptions.
2. SERVICES AS PARTICIPATING ORGANIZATION.
2.1 The Participating Organization is hereby authorized and may from time
to time undertake to perform the following support services to
Customers in connection with investments in the Shares of a Fund: (i)
providing Customers with a service that directly or indirectly invests
the assets of their accounts in a Fund's Shares pursuant to specific
or pre-authorized instructions; (ii) processing dividend payments from
the Trust on behalf of Customers; (iii) providing information
periodically to Customers showing variable contract value or their
positions in a Fund's Shares; (iv) arranging for bank wire transfers
of funds to or from a Customer's account; (v) responding to inquiries
from Customers relating to the services performed by the Participating
Organization under this Agreement; (vi) providing subaccounting with
respect to a Fund's Shares beneficially owned by Customers or the
information to the Trust necessary for subaccounting; (vii) if
required by law, forwarding communications from the Trust (such as
proxies, Shareholder reports, annual and semi-annual financial
statements, and dividend, distribution, and tax notices) to Customers;
(viii) rendering ongoing advice respecting the suitability of
particular investment opportunities offered by the Trust in light of
the Customer's needs; and (ix) providing such other similar services
as may be reasonably requested to the extent the Participating
Organization is permitted to do so under applicable statutes, rules,
or regulations.
2.2 The Participating Organization will provide such office space and
equipment, telephone facilities, and personnel (which may be any part
of the space, equipment, and facilities currently used in the
Participating Organization's business, or any personnel employed by
the Participating Organization) as may be reasonably necessary or
beneficial in order to provide such support services.
2.3 All orders for a Fund's Shares are subject to acceptance or rejection
by the Trust in its sole discretion, and the Trust may, in its
discretion and without notice, suspend or withdraw the sale of a
Fund's Shares.
2.4 In no transaction shall the Participating Organization act as dealer
for its own account; the Participating Organization shall act solely
for, upon the specific or pre-authorized instructions of, and for the
account of, its Customers. For all purposes of this Agreement, the
Participating Organization will be deemed to be an independent
contractor, and will have no authority to act as agent for the Trust
or BISYS Fund Services (the "Distributor"), the underwriter of the
Trust's Shares, in any matter or in any respect. No person is
authorized to make any representations concerning the Distributor, the
Trust, or a Fund's Shares except those representations contained in
the Fund's then-current Prospectus and the Trust's Statement of
Additional Information and in such printed information as the
Distributor or the Trust may subsequently prepare.
2
2.5 The Participating Organization and its employees will, upon request,
be available during normal business hours to consult with the
Distributor or its designees concerning the performance of the
Participating Organization's responsibilities under this Agreement.
Any person authorized to direct the disposition of monies paid or
payable by the Trust pursuant to Section 3 of this Agreement will
provide to the Distributor and the Trust's Board of Trustees, and the
Trust's Trustees will review at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures
were made.
In addition, the Participating Organization will furnish to the
Distributor, the Trust or their designees such information as the
Distributor, the Trust or their designees may reasonably request
(including, without limitation, periodic certifications confirming the
rendering of support services described herein), and will otherwise
cooperate with the Distributor, the Trust and their designees
(including, without limitation, any auditors designated by the Trust),
in the preparation of reports to the Trust's Board of Trustees
concerning this Agreement and the monies paid or payable by the Trust
pursuant hereto, as well as any other reports or filings that may be
required by law.
3. FEES.
3.1 In consideration of the services and facilities provided by the
Participating Organization hereunder, the Trust will pay to the
Participating Organization a fee calculated at the applicable annual
rate set forth on Schedule A hereto with respect to the average daily
net asset value of each Fund's Shares which are attributable to
Customers, which fee will be computed daily and paid monthly. The fee
will not be paid to the Participating Organization with respect to (i)
Shares of a Fund that are redeemed or repurchased by the Trust or the
Distributor within seven business days of receipt of confirmation of
such sale, or (ii) a Customer if the amount of such fee on an annual
basis with respect to such Customer shall be less than $1.00.
3.2 The fee rate with respect to any Fund or Funds stated on Schedule A
hereto may be prospectively increased or decreased by the Trust, in
its sole discretion, at any time upon notice to the Participating
Organization.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
4.1 By written acceptance of this Agreement, the Participating
Organization represents, warrants, and agrees that: (i) the
Participating Organization will provide to Customers a schedule of the
services it will perform pursuant to this Agreement and a schedule of
3
any fees that the Participating Organization may charge directly to
Customers for services it performs in connection with investments in
the Trust on the Customer's behalf; and (ii) any and all compensation
payable to the Participating Organization by Customers in connection
with the investment of their assets in the Trust will be disclosed by
the Participating Organization to Customers and will be authorized by
Customers and will not result in an excessive fee to the Participating
Organization.
4.2 The Participating Organization agrees to comply with all requirements
applicable to it by reason of all applicable laws, including state
insurance laws and regulations, federal and state securities laws, the
Rules and Regulations of the SEC and the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD"), including,
without limitation, all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, the 1940 Act, and the provisions of
Rule 2830 of the Conduct Rules. The Distributor has furnished the
Participating Organization with a list of the states or other
jurisdictions in which the Distributor believes the Shares of the Fund
have been registered for sale or are otherwise qualified for sale, and
the Participating Organization agrees that it will not engage in any
transaction on behalf of a Customer's account resulting in the
purchase of a Fund's Shares in any jurisdiction in which such Shares
are not registered or otherwise qualified for sale. The Participating
Organization further agrees that it will maintain all records required
by applicable law or otherwise reasonably requested by the Trust or
the Distributor relating to the services provided by it pursuant to
the terms of this Agreement.
4.3 The Participating Organization agrees that under no circumstances
shall the Trust or the Distributor be liable to the Participating
Organization or any other person under this Agreement as a result of
any action by the SEC or the NASD affecting the operation or
continuation of the Plan.
5. EXCULPATION; INDEMNIFICATION.
5.1 The Trust shall not be liable to the Participating Organization and
the Participating Organization shall not be liable to the Trust except
for acts or failures to act which constitute lack of good faith or
gross negligence and for obligations expressly assumed by either party
hereunder. Nothing contained in this Agreement is intended to operate
as a waiver by the Trust or by the Participating Organization of
compliance with any applicable federal or state law, rule, or
regulation and the rules and regulations promulgated by the NASD.
4
5.2 The Participating Organization will indemnify the Trust and hold it
harmless from any claims or assertions relating to the lawfulness of
the Participating Organization's participation in this Agreement and
the transactions contemplated hereby or relating to any activities of
any persons or entities affiliated with the Participating Organization
performed in connection with the discharge of its responsibilities
under this Agreement. If any such claims are asserted, the Trust shall
have the right to manage its own defense, including the selection and
engagement of legal counsel of its choosing, and all costs of such
defense shall be borne by the Participating Organization.
6. EFFECTIVE DATE; TERMINATION.
6.1 This Agreement will become effective with respect to each Fund on the
date a fully executed copy of this Agreement is received by the Trust
or its designee. Unless sooner terminated with respect to any Fund,
this Agreement will continue with respect to a Fund until ________,
1998 and thereafter will continue automatically for successive annual
periods ending on _______, provided such continuance is specifically
approved at least annually by the vote of a majority of the members of
the Board of Trustees of the Trust who are not "interested persons"
(as such term is defined in the 0000 Xxx) of the Trust and who have no
direct or indirect financial interest in the Plan relating to such
Fund or any agreement relating to such Plan, including this Agreement,
cast in person at a meeting called for the purpose of voting on such
approval.
6.2 This Agreement will automatically terminate with respect to a Fund in
the event of its assignment (as such term is defined in the 1940 Act).
This Agreement may be terminated with respect to any Fund by the Trust
or by the Participating Organization, without penalty, upon sixty
days' prior written notice to the other party. This Agreement may also
be terminated with respect to any Fund at any time without penalty by
the vote of a majority of the members of the Board of Trustees of the
Trust who are not "interested persons" (as such term is defined in the
0000 Xxx) of the Trust and who have no direct or indirect financial
interest in the Plan relating to such Fund or any agreement relating
to such Plan, including this Agreement, on sixty days' written notice.
7. GENERAL.
7.1 All notices and other communications to either the Participating
Organization or the Trust will be duly given if mailed, telegraphed or
telecopied to the appropriate address set forth on page 1 hereof, or
at such other address as either party may provide in writing to the
other party.
5
7.2 The Trust may enter into other similar agreements for the provision of
Shareholder support services with any other person or persons without
the Participating Organization's consent.
7.3 Upon receiving the written consent of the Trust or its designee, the
Participating Organization may, at its expense, subcontract with any
entity or person concerning the provision of the services contemplated
hereunder; provided, however, that the Participating Organization
shall not be relieved of any of its obligations under this Agreement
by the appointment of such subcontractor and provided further, that
the Participating Organization shall be responsible, to the extent
provided in Article 5 hereof, for all acts of such subcontractor as if
such acts were its own.
7.4 This Agreement supersedes any other agreement between the Trust and
the Participating Organization relating to support services in
connection with a Fund's Shares and relating to any other matters
discussed herein. All covenants, agreements, representations, and
warranties made herein shall be deemed to have been material and
relied on by each party, notwithstanding any investigation made by
either party or on behalf of either party, and shall survive the
execution and delivery of this Agreement. The invalidity or
unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof. The
headings in this Agreement are for convenience of reference only and
shall not alter or otherwise affect the meaning hereof. This Agreement
may be executed in any number of counterparts which together shall
constitute one instrument and shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of
the State of Ohio and shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
7.5 The Amended and Restated Declaration of Trust establishing the Trust,
dated July 20, 1994 as amended and restated February 5, 1997, and all
amendments thereto (the "Declaration"), is filed with the Office of
the Secretary of the Commonwealth of Massachusetts and provides that
the obligations of the Trust under this instrument are not binding
upon any of the Trust's Trustees or shareholders individually, but
bind only the estate of the Trust or its Funds, as applicable.
6
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below.
VARIABLE INSURANCE FUNDS
By:____________________________
Title:_________________________
Date:__________________________
The foregoing Agreement is hereby accepted:
[Name of Participating Organization]
By:____________________________
Title:_________________________
Date:__________________________
7
Dated: _______, 1997
Schedule A
to the Variable Contract Owner Servicing Agreement
between Variable Insurance Funds
and [Participating Organization]
NAME OF FUND COMPENSATION*
Variable Insurance Allocated Balanced Fund
Variable Insurance Allocated Conservative Fund Annual rate of up to twenty-five
Variable Insurance Allocated Growth Fund one hundreds of one percent
Variable Insurance Allocated Aggressive Fund (0.25%) of the average daily net
Variable Insurance Money Market Fund assets of each Fund's Shares
BB&T Growth and Income Fund attributable to Customers of the
BB&T Capital Manager Fund Participating Organization.
AmSouth Regional Equity Fund
AmSouth Equity Income Fund
--------------------
* All fees are computed daily and paid monthly.
VARIABLE INSURANCE FUNDS [PARTICIPATING ORGANIZATION]
By: __________________________ By: _____________________________
Title:________________________ Title:___________________________
Date:_________________________ Date:____________________________
A-1
