Ex-99.m(6)
THE VICTORY VARIABLE INSURANCE FUNDS
CONTRACT OWNER ADMINISTRATIVE SERVICES AGREEMENT
May 1, 2004
Executives:
This letter sets forth the agreement between The Victory Variable Insurance
Funds (the "Trust"), on behalf of its series portfolios listed on Schedule B, as
the parties may amend by mutual written agreement from time to time (each a
"Fund"), and New York Life Insurance and Annuity Corporation (the "Company")
concerning certain administrative services to be provided by the Company for the
benefit of the Funds.
1. Introduction. The Trust is an open-end management investment company
organized under the laws of the State of Delaware. The Trust issues
shares of beneficial interest of each Fund ("Shares"). The Trust has
agreed to sell Shares of each Fund to, and redeem Shares of each Fund
from, the Company in accordance with the Participation Agreement, dated
as of April 2, 2004, by and among the Trust, the Company, BISYS Fund
Services Limited Partnership, and Victory Capital Management, Inc.
("Participation Agreement"). The Company intends to purchase Shares for
the purpose of funding variable annuity contracts and variable life
insurance policies that the Company may issue (collectively referred to
herein as "Variable Contracts") through one or more of its separate
accounts ("Separate Accounts"). The Shares of each Fund may be issued
in multiple classes. In this agreement, the beneficial owners of the
Variable Contracts are referred to as the "Contract Owners."
2. Administrative Services. Subject to the terms and conditions of this
letter agreement ("Agreement"), the Company hereby agrees to provide
the administrative services set forth in Schedule A hereto, as the
parties may amend by mutual written agreement from time to time
("Services") to the Trust, with respect to each Fund. The parties
acknowledge and agree that to the extent the Services provided
hereunder overlap with the services the Trust has agreed to perform in
accordance with Schedule C of the Participation Agreement, that this
Agreement shall control, provided the Trust continues to make the
payments required of it hereunder.
3. Administrative Expense Payments. In consideration of the Services
provided by the Company, which the Trust believes will result in
expense savings for the Trust and its Shareholders, the Trust, on
behalf of each Fund, individually and not jointly, agrees to pay the
Company a quarterly fee computed by multiplying the total average daily
net assets of each class of Shares held by the Accounts during each
quarter, by the annual rate shown in Schedule B hereto (as the parties
may amend from time to time by mutual written agreement), and then
multiplying the product by the actual number of days in the
period divided by 365. The fee shall be pro-rated in the event this
Agreement is terminated prior to the end of` a quarter; it being
understood and agreed to by the parties that notwithstanding any
termination of this Agreement, the Trust shall remain liable to the
Company for any amounts owed hereunder pursuant to the terms of Section 6
hereof.
The Trust will calculate the quarterly fee payment as to any Fund
contemplated by this Paragraph 3 at the end of each quarter and will pay
the Company within 30 days thereafter. Payment will be accompanied by a
statement showing the calculation of the quarterly amount payable by the
Trust and such other supporting data as the Company may reasonably
request.
4. Nature of Payments. The Trust and the Company recognize and agree that
payments made by the Trust to the Company hereunder are to compensate the
Company for providing the Services only. The amount of administrative
expense payments made by the Trust to the Company pursuant to Paragraph 3
of this agreement shall not be deemed to be conclusive with respect to
actual administrative expenses or savings of the Trust.
5. Term. This agreement shall become effective as of the date first above
written and shall continue in effect until terminated in accordance with
Paragraph 6 of this letter agreement; provided that a majority of the
Trust's Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940, as
amended) of the Trust (the "Independent Trustees") specifically approve
this agreement at least annually.
6. Termination. This Agreement will terminate only upon written notice
following: (i) failure of the Trust's Trustees to approve the
Agreement in accordance with Paragraph 5; and (ii) termination or
assignment of the Participation Agreement by and among the Company, the
Trust and BISYS Fund Services Limited Partnership. Notwithstanding the
termination of this agreement, the Trust will continue to pay the
administrative expense payments required under Section 3 hereof as long
as any Account owns Shares of a Fund and the Company continues to
perform the Services. This Agreement may terminate immediately upon
either party's determination (with the advice of counsel) that
applicable law no longer permits the payment of the quarterly fee
contemplated under this Agreement.
7. Representations. The Company represents, warrants and agrees that:
a) it will maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the Services, and
will otherwise comply with all laws, rules and regulations applicable
to the Services; and
b) the Services it provides under this Agreement are not primarily
intended to result in the sale of Fund Shares.
The Trust represents, warrants and agrees that any payments made to the
Company pursuant to this Agreement constitute compensation for legitimate
services required by the Trust related to the Funds, consistent with the
services rendered or the cost savings
resulting from the arrangement, and is not in any way intended to
compensate any party for the purchase of Fund Shares.
8. Subcontractors. The Company may, with the consent of the Trust, contract
with or establish relationships with other parties to provide the Services
or other activities, if any, required of the Company by this Agreement,
provided that the Company shall be fully responsible for the acts and
omissions of such other parties.
9. Authority. This Agreement shall in no way limit the authority of the Trust
to take any action it may deem appropriate or advisable in connection with
all matters relating to the operations of the Trust and/or sale of its
Shares.
10. Indemnification. The parties to this Agreement shall indemnify and hold
harmless each other to the same degree and under the same conditions as
provided for in the Participation Agreement to the extent those provisions
apply to the party.
11. Miscellaneous. This Agreement may be amended only upon mutual
agreement of the parties hereto in writing. This Agreement may not be
assigned (as that term is defined in the Investment Company Act of
1940) by any party without the prior written approval of the other
party, which approval will not be unreasonably withheld. Except where
specifically provided for in this Agreement, this Agreement, including
Schedule A and Schedule B, constitutes the entire agreement between the
Trust and the Company with respect to the matters dealt with herein,
and supersedes any previous agreements and documents with respect to
such matters. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall together
constitute one and the same instrument. The Company agrees to notify
the Trust promptly if for any reason it is unable to perform fully and
promptly any of its obligations under this Agreement.
12. Notices. Any notices required to be sent hereunder shall be sent in
accordance with the Participation Agreement.
13. Choice of Law. This letter agreement will be construed in accordance with
the laws of the State of New York.
14. Board Approval. This Agreement has been approved by a vote of a majority
of the Board of Trustees of the Trust, including a majority of the
Independent Trustees.
15. Non-Exclusivity. The Trust and the Company may enter into other similar
servicing agreements with any other person or persons.
16. Organization; Limitation of Liability. The names "The Victory Variable
Insurance Funds" and the "Board of Trustees" refer respectively to the
Trust created, and the Trustees, as trustees but not individually or
personally, acting from time to time under a Certificate of Trust filed at
the office of the Secretary of the State of Delaware on February 11, 1998,
as amended as of October 5, 1998.
The obligations of "The Victory Variable Insurance Funds" entered into in
the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually but in such capacities, and are not
binding upon any of the Trustees, agents or representatives of the Trust
personally, but bind only the "Trust Property" (as defined in the Trust
Instrument of the Trust), and all persons dealing with any class of Shares
of the Trust must look solely to the Trust Property belonging to such
class for the enforcement of any claims against the Trust.
If this Agreement reflects the Company's understanding, please sign below and
return a signed copy to the Trust.
Very truly yours,
THE VICTORY VARIABLE INSURANCE FUNDS,
on behalf of each Fund listed on
Schedule B, individually and not jointly
/s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
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Title: President
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Acknowledged and Agreed:
New York Life Insurance and Annuity Corporation
/s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Sr. V.P.
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Attachment: Schedule A
Schedule B
SCHEDULE A
ADMINISTRATIVE SERVICES PROVIDED
WITH RESPECT TO
THE VICTORY VARIABLE INSURANCE FUNDS
Maintenance of Books and Records
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o Assist, as reasonably requested by the Trust, in maintaining book entry
records on behalf of a Fund regarding issuance to, transfer within (via net
purchase orders) and redemption by an Account of Fund Shares.
o Maintain general ledgers regarding each Account's holdings of Fund Shares,
coordinate and reconcile information, and coordinate maintenance of ledgers
by financial institutions and other contract owner service providers.
Communication with the Fund
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o Serve as the designee of the Fund for receipt of purchase and redemption
Share orders from each Account and to transmit such orders, and payment
therefor, to the Fund.
o Coordinate with the Fund's agents respecting daily valuation of the Fund's
Shares and an Account's units.
Purchase Orders
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o Determine net amount available from the Company, on behalf of each Account,
for investment in the Fund.
o Deposit receipts from the Company, on behalf of each Account, at the Fund's
custodians (generally by wire transfer).
o Notify the custodians of the estimated amount required to pay any dividend or
distribution to the Accounts or the Company.
o Purchase Shares of the Funds on behalf of each Account at the applicable
price computed in accordance with the Participation Agreement.
Redemption Orders
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o Determine net amount of redemptions of Fund shares by the Company, on
behalf of each Account
o Notify the custodian and Fund of cash required to meet redemption payments to
the Company, on behalf of each Account.
o Redeem Shares of the Funds on behalf of each Account at the applicable price
computed in accordance with the Participation Agreement.
o Participate in any action plan as may be mutually agreed upon in writing from
time to time by the Trust and the Company to address market timing
transactions in the Fund's Shares.
Processing Distributions from the Funds
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o Process ordinary dividends and capital gains received on behalf of each
Account.
o Reinvest the Fund's distributions on behalf of each Account, to the extent
the Company continues to desire reinvestment.
Reports
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o Periodic information reporting to the Fund, including, but not limited to,
furnishing registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales or
promotional materials and any other SEC filings with respect to the Accounts
invested in the Fund.
Fund-related Contract Owner Services
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o Provide general information with respect to Fund inquiries (not including
information about performance or related to sales).
o Provide information regarding performance of the Fund and the related
subaccount(s) of the Accounts.
o Respond to inquiries from Contract Owners relating to Fund proxy statements.
Other Administrative Support
----------------------------
o Provide other administrative and legal compliance support for the Fund as
mutually agreed upon in writing by the Company and the Trust, on behalf of the
Fund, to the extent permitted or required under applicable statutes.
SCHEDULE B
THE VICTORY VARIABLE INSURANCE FUNDS
COMPENSATION UNDER THE
CONTRACT OWNER ADMINISTRATIVE SERVICES AGREEMENT
The Victory Variable Insurance Funds agrees to pay New York Life Insurance
and Annuity Corporation a quarterly fee calculated as a percentage of the total
average daily net assets of the relevant Fund and Class thereof held in the
Accounts at the following annual rate:
Fund Class A
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Diversified Stock Fund 0.25%
