SERVICE AGREEMENT
SERVICE AGREEMENT |
This Service Agreement (the "Agreement"), dated as of the 28th day of November, |
2007, is made by and among Principal Life Insurance Company ("Company") and Xxx |
Xxx Securities Corporation (the Distributor") ; |
WHEREAS, Distributor is the distributor of the shares of each of the investment |
companies (each a "Fund") set forth on Exhibit A, which may be amended from time to |
time; and |
WHEREAS, Company provides administrative services to the owners of certain |
variable annuity and variable life insurance contracts (the "Contracts") issued by |
Company through certain of Company's accounts (the "Variable Accounts") set forth |
on Exhibit B ; and |
WHEREAS, the Funds will be included as underlying mutual fund options for the |
Contracts issued by Company through the Variable Accounts pursuant to a Fund |
Participation Agreement previously entered into by the Distributor, on behalf of the |
Funds, and Company; and |
WHEREAS, the Distributor recognizes substantial savings of administrative expenses |
as a result of Company performing certain administrative services (the "Services") on |
behalf of the Funds; and |
NOW, THEREFORE, the Funds will be available for purchase and sale by Variable |
Accounts, subject to the following conditions: |
1. Company agrees to provide services for the contract owners of the Variable |
Accounts who choose the Funds as underlying investment options in the contracts . |
Such services will include those described on Exhibit C. |
2. Company shall not bear any of the expenses for the cost of registration of the |
Funds' shares, preparation of the Funds' prospectuses, proxy materials, and reports, |
and the preparation of other related statements and notices required by law, except as |
otherwise agreed upon by the parties to this Agreement . |
3. In consideration for the services to be provided by Company to the Contract |
owners pursuant to this Agreement, the Distributor will calculate and pay, or cause one |
of its affiliates to pay, and Company will be entitled to receive from the Distributor a fee |
at an annualized rate equal to 0.25% ("Service Fee") of the average aggregate amount |
invested in the Funds under the Contracts issued by the Variable Accounts for the |
applicable period. The average aggregate amount shall be computed by totaling the |
aggregate investment (net asset value multiplied by total number of Fund shares held |
in the Variable Accounts) on each calendar day during the period and dividing by the |
total number of calendar days during the period . |
4. If in the good faith opinion of the Distributor or the Funds, based upon an |
opinion of counsel reasonably acceptable to Company, it is determined that payments |
under this Agreement are, will be in contravention or violation of any law, rule, |
regulation, court decision or order, out-of-court settlement of actual or threatened |
litigation or enforcement position of any regulatory body having jurisdiction over the |
Distributor or the Funds or their affiliates (taken together, "Change in Law"), the | |
Service Fee shall be adjusted accordingly to conform to such Change in Law on terms | |
and conditions deemed fair and equitable by the Distributor or the Funds, as the case | |
may be. | |
5. The Service Fees will be paid to Company by electronic funds transfer as soon | |
as practicable, but no later than 30 days after the end of the period in which they were | |
earned. If the assets held in the Variable Accounts are less than $1 billion as of | |
December 31 of the prior calendar year, the Service Fees for the following year will be | |
paid on a quarterly basis; if the assets held in the Variable Accounts are greater than $1 | |
billion as of December 31 of the prior calendar year, the Service Fees for the following | |
year will be paid on a monthly basis . The Service Fee payment will be accompanied or | |
preceded by a statement showing the calculation of the amounts being paid by the | |
Distributor for the relevant period and such other supporting data as may be reasonably | |
requested by Company. | |
6. The Service Fee shall be paid either by (a) the Distributor or one of its affiliates | |
from general operating funds, or (b) directly by the Funds pursuant to a shareholder | |
service plan adopted by the Board of Directors/Trustees of the Funds ("Boards") . | |
7. The effective date of this Agreement With regard to a Contract will be the later of | |
November 28, 2007, or the launch date of each Contract. | |
8. The parties agree that a Service Fee will be paid to Company according to this | |
Agreement with respect to each Fund as long as shares of such Fund are held by the | |
Variable Accounts except in the event Company terminates this Agreement, provided | |
that payments will continue for six months after such termination based on shares of the | |
Fund held by the Variable Accounts during that period, or payment is prohibited by a | |
Change in Law. This provision will survive the termination of this Agreement and the | |
termination of the Distributor's Fund Participation Agreements with Company . | |
9. Company and Distributor agree that the Service Fees described in the | |
Agreement are for administrative services only and do not constitute payment in any | |
manner for investment advisory services or for the cost of distribution of the Funds or the | |
Contracts. | |
10. This Agreement may be terminated by Company at any time upon written notice | |
to the Distributor and by Distributor upon at least 30 days' written notice to Company . In | |
addition, Distributor 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 Board, (3) If Company engages in any material breach of this Agreement or (4) if | |
Company or any other Company affiliates engages in conduct which would constitute a | |
material breach of this Agreement were Company or the affiliate a party to this | |
Agreement. This Agreement will terminate immediately and automatically with respect to | |
Funds held in the Variable Accounts upon the termination of the Fund Participation | |
Agreement which governs a Fund's inclusion as an investment option in the Variable | |
Account and in such event no notice is required under this Agreement. | |
11. Each notice required by this Agreement shall be given by wire and confirmed in | |
writing to: |
If to Company: |
Xxxx Xxxxxx |
Principal Life Insurance Company |
000 Xxxx Xxxxxx |
Xxx Xxxxxx, XX 00000-0000 |
If to Distributor : |
Xxxxx X. Xxxxxxx |
Xxx Xxx Securities Corporation |
00 Xxxx Xxxxxx |
Xxx Xxxx, Xxx Xxxx 00000 |
12. This Agreement shall be construed and the provisions hereof interpreted under | |
and in accordance with the laws of New York. This Agreement shall be subject to the | |
provisions of the federal securities statutes, rules and regulations, including such | |
exemptions from those statutes, rules and regulations as the SEC may grant and the | |
terms hereof shall be interpreted and construed in accordance therewith . | |
13. Each of the parties to this Agreement acknowledges and agrees that this | |
Agreement and the arrangements described herein are intended to be non-exclusive | |
and that each of the parties is free to enter into similar agreements or arrangements | |
with other entities . |
![](https://www.sec.gov/Archives/edgar/data/9713/000089874510000129/vanecksrcveamgtdtd112807x3x1.jpg)
3
EXHIBIT A |
TO SERVICE AGREEMENT |
Name of Fund |
Worldwide Hard Assets Fund - Initial Class |
EXHIBIT B |
TO SERVICE AGREEMENT |
Name of Variable Account/Contracts |
Executive VUL |
Executive VUL II |
Benefit VUL |
Benefit VUL II |
EXHIBIT C |
TO SERVICE AGREEMENT |
Services Provided by Company | |
Pursuant to the Agreement, Company shall perform all administrative and shareholder | |
services with respect to the contracts, including but not limited to, the following : | |
1. Maintaining separate records for each contract owner, which shall reflect the | |
Fund shares purchased and redeemed and Fund share balances of such | |
contract owners . Company will maintain a single master account with each Fund | |
on behalf of contract owners and such account shall be in the name of Company | |
(or its nominee) as the record owner of shares owned by contract owners . | |
2. Disbursing or crediting to 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. | Preparing and transmitting to contract owners, as required by law, periodic |
statements showing the total number of shares owned by 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 contract owners. | |
4. Supporting and responding to service Inquiries from contract owners. | |
5. | Maintaining and preserving all records required by law to be maintained and |
preserved in connection with providing the services for contract owners . | |
6. | Generating written confirmations and quarterly statements to contract owners. |
7. | Printing and distributing to contract owners, to the extent required by applicable |
law, Funds' prospectuses, 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 . | |
8. | Transmitting purchase and redemption orders to the Funds on behalf of the |
contract owners. | |
9. | Federal and state income tax withholding and reporting . |
10. | Providing such other assistance and services as may reasonably be requested |
by the Funds. |