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EXHIBIT (11)(iii)
SECOND AMENDMENT TO INVESTMENT ACCOUNTING AGREEMENT
THIS SECOND AMENDMENT TO INVESTMENT ACCOUNTING AGREEMENT (the
"Amendment") is made and entered into as of July 1, 1998 by and among THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Company"), a New Jersey corporation,
and INVESTORS FIDUCIARY TRUST COMPANY, a Missouri trust company ("IFTC").
RECITALS:
A. Company and IFTO are parties to that certain Investment Accounting
Agreement dated as of January 2, 1996, amended as of June 1, 1997 (the
"Agreement") for investment accounting and recordkeeping services for certain
Registered Accounts, as defined in the Agreement;
B. Company and IFTC desire to amend and supplement the Agreement upon the
following terms and conditions.
AGREEMENTS:
In consideration of mutual promises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Company and IFTC
hereby agree that the Agreement is amended and supplemented as follows:
1. Schedule I shall be replaced in its entirety by the Schedule I dated July
1, 1998 attached hereto and incorporated herein by reference.
2. Section 1 is hereby amended to read:
1. Appointment of Recordkeeping Agent. The Company hereby constitutes and
appoints IFTC as investment accounting and recordkeeping agent for the
Registered Accounts to calculate the values and, if applicable, unit
values of the Registered Accounts and to perform certain other accounting
and recordkeeping functions for the Registered Accounts as set forth more
fully on Schedule II or Schedule IIA hereto and as required of such
Registered Account under Rule 3la of the 1940 Act with respect to
portfolio transactions.
3. Section 3.A. is hereby amended to read:
"That it is a trust company organized and existing and in good standing
under the laws of the State of Missouri."
4. Section 14.I. is hereby amended to read:
"This Agreement may not be assigned by either party without the prior
written consent of the other."
5. Section 11 is hereby amended to read:
"11. Notices. Notices, requests, instructions and other writings
addressed to the Company, c/o The Prudential Asset Management Company, 00
Xxxxxxx Xxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000 or at such address as the
Company may have designated to IFTC in writing, shall be deemed to have
been properly given to the Company hereunder. Notices, requests,
instructions and other writings addressed to an individual Registered
Account at the address
Copied for Microfisch on
11-9-98
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SCHEDULE 1A
Date: July 1, 1998
Name: Address if different from Company:
Prudential Variable Contract Account - 2
Prudential Variable Contract Account - 10
Prudential Variable Contract Account - 11
Attn: Xxxxx X. Xxxxxxxx
Prudential Group Variable Universal Life Vice President, Marketing
000 Xxxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
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SCHEDULE IIA
ACCOUNTING AND RECORDKEEPING FUNCTIONS FOR PRUDENTIAL GROUP VARIABLE LIFE
SEPARATE ACCOUNT (GVUL):
I. Review trading information received daily from Prudential's Group Life
and Disability Insurance unit responsible for the administration of the
Prudential Group Variable Life separate account or such other agent as
Prudential may designate (the "Administrator").
II. As instructed by the Administrator, initiate and execute trades on behalf
of GVUL, making and receiving payment, as necessary, with the transfer
agents of the investment companies (the "Funds") underlying the
investment options available to GVUL participants, as agreed to by the
parties and set forth in the flow chart attached to this Schedule as
Appendix A.
III. Perform the appropriate accounting activities with respect to required
recordkeeping for GVUL including:
A. Accrual of expenses.
B. Recording of capital activity, including sub-accounts
C. Recording of investment activity of GVUL.
D. Obtain and record the daily net asset values (NAVs) of the Funds.
E. Compute daily unit values of each sub-account based on the Fund's
NAVs.
F. Transmit daily unit values of the GVUL sub-accounts to the
Administrator.
G. Post the relevant accounting information to the Administrator's
general ledger system.
H. Review such records on a regular basis for "reasonableness."
I. Periodically compute rate of return calculations s may be agreed
upon from time to time with the administrator
IV. Perform a reconciliation, not less frequently than monthly, of the
accounting records maintained by IFTC and the general ledger system of
the Administrator.
V. Prepare and transmit a monthly reporting package to the Administrator
with such reports as the parties agree.
VI. Provide schedules supporting the accounting records on an "as needed"
basis to respond to requests from external auditors and in response to
reasonable requests from the Administrator.
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set forth on Schedule I, hereto, or if, none, to the Company, or at such
address as the individual Registered Account may have designated to IFTC
in writing, shall be deemed to have been properly given to the individual
Registered Account hereunder. Notices, requests, instructions and other
writings addressed to IFTC at its offices at 000 Xxxxxxxxxxxx, Xxxxxx
Xxxx, XX 00000, Attn: Investment Accounting Department, or to such other
address as it may have designated to the Company (or the individual
Registered Account if its address differs from the Company) in writing,
shall be deemed to have been properly given to IFTC hereunder.
In all other respects, the Agreement is hereby ratified and confirmed and
remains in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized officers to be effective as of the date first above
written.
INVESTORS FIDUCIARY TRUST COMPANY
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx, Executive Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ XXXXXXXX X. XXXXXXX
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Xxxxxxxx X. Xxxxxxx
Vice President & Assistant Treasurer
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APPENDIX A
PROCESS OVERVIEW
DAY 1 ACTIVITIES DAY 2 ACTIVITIES MONTHLY/OTHER
----------------------------------------- ---------------------------------------------------------------------- -----------------
FREQUENCY
E) IFTC accrues the
daily expenses on
the XXX system IFTC prepares
reports for the
LINX summarizes F) IFTC records the compliance and
PGLS accounting for capital activity on statutory dept.,
the "capital activity" to the XXX system at
a portfolio level J) IFTC computes
Investor activity Application/Additional A) LINX transmits the B) IFTC initiates the NET Unit
received by funds are processed by Product/Portfolio and executes mutual G) IFTC records the Value
Prudential Prudential on the LINX level activity for fund trade orders investment activity
System the mutual fund buy at the previous onto the XXX system IFTC posts
Unit value or sell. day's NAV activity to POLS
received for IFTC H) IFTC obtains the in a summary
for the day LINX communicates C) Incoming Funds- NAV from the mutual basis
cash activity thru Corp Treasury moves fund complexes
the TTT process funds to IFTC K) IFTC transmits
I) Wires are sent the Net Unit
C) Outgoing Funds- to/from Mutual Values to the
IFTC moves funds to Fund Complexes to LINX System
wire to BONY settle trades
D) Cash file sent to
Prudential nightly
to summarize bank
activity
Approximate Time Table - All are coded in E.S.T.
A) 7:00 AM
B) 9:00 AM
C) 12:00 AM - 4:00 PM
D) 10:00 PM
E) 11:00 AM
F) 12:00 AM
G) 2:00 PM
H) 7:00 PM
I) 9:00 AM - 4:00 PM
J) 7:30 PM
K) 8:00 PM
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[IFTC INVESTORS FIDUCIARY TRUST COMPANY LETTERHEAD]
July 30, 1998
Xx. Xxxxx Xxxxxx
Prudential Investments
000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx 0
Xxxxxx, XX 00000-0000
Dear Grace:
Following are the proposed changes to the existing fee scheduled between State
Street and Prudential regarding the accounting charges for the Separate Accounts
that we have been discussing:
Section IV. Accounting Charges: Item B. addresses the charges related to the
Separate Accounts that are maintained on the XXX for Mutual Funds system. Due to
the addition of the types of separate accounts that are being serviced, the
pricing structure needs to be expanded to address the new services.
The current account type which is identified as "All other accounts"
needs to be renamed to be "Global and leveraged portfolios" with the
annual charge being $46,200.
A new category needs to be added which will cover the charges for the
portfolios that hold relatively few securities, such as mutual fund
related portfolios, outside managed mutual funds, real estate investment
trust portfolios, etc. This category will be identified as:
Other portfolios (including mutual fund and REIT portfolios): (Annual
Charges)
First 50 portfolios $7,200 per portfolio
Next 50 portfolios $4,200 per portfolio
Next 25 portfolios $3,000 per portfolio
Excess of 125 portfolios $2,400 per portfolio
An additional category needs to be added which will cover the charges for
the portfolios that will be maintained for the Group Variable Universal
Life product. This category will be identified as:
Group Variable Universal Life portfolios (Annual Charges)
First 50 portfolios $4,200 per portfolio 350
Next 25 portfolios $3,000 per portfolio 250
Excess of 75 portfolios $2,400 per portfolio 200
Please let me know how you would like to accomplish the actual amendment to the
fee schedule between our two organizations. If you have any questions, please
feel free to contact me at (000) 000-0000.
Best regards,
/s/ XXXX DARK
Xxxxxxx X. Dark
Vice President
