AMERICAN DENTAL ASSOCIATION MEMBERS RETIREMENT PROGRAM
OPERATIONS AGREEMENT FOR GUARANTEED RATE ACCOUNTS
I. INVESTMENT CELL DEFINITION
--------------------------
Each contract will consist of fifty-two class year investment cells.
There will be a one-day lag between the open dates of the cells at AXA
Equitable and the corresponding open dates at Principal. AXA Equitable
open periods will run from Wednesday until the close of business
Tuesday of the following week. The corresponding open periods at
Principal will run from Thursday to the close of business Wednesday of
the following week. Participant contributions will be made during the
AXA Equitable open period (Wednesday - Tuesday) at the interest rate
set by Principal for the corresponding open period. Similarly, all
maturities will occur at AXA Equitable on a Tuesday and at Principal on
the Wednesday, one business day later. The contract period will begin
with the first cell established on Thursday, July 19, 2007 (for monies
received at AXA Equitable from July 18, 2007 to July 24, 2007) and end
with the last cell established on July 17, 2008, (for monies received
at AXA Equitable from July 9, 2008 to July 15, 2008).
II. INVESTMENT CELL IDENTIFICATION
------------------------------
A joint numbering system is essential for proper reconciliation between
Principal and AXA Equitable. We have agreed, for each contract, that a
number system from 1-52 will be used, assuming a one-year period. The
first cell for the three-year GRA and the first for the five-year GRA
will, therefore, be identified as cell #1 under each contract.
III. CASHFLOW ESTIMATE COMMUNICATION
-------------------------------
Each business day starting July 19, 0000, Xxxxxxx Xxxx or her designee
at AXA Equitable, will call Xxxxx Xxxxxxxx at Principal to advise her
of the net cash flows and maturities, if any, to be added to the three
and five year GRAs. A worksheet will be faxed to Principal to confirm
the information and provide the necessary detail by investment cell. As
part of this transmission, AXA Equitable will clearly communicate to
Principal which cells money is to be added to and which cells money is
to be withdrawn from. Withdrawals will be administered on a last in
first out basis from the various investment cells in which that
participant's balances are held. This transmission of information to
Principal will occur as early in the day as possible. Generally, it is
agreed this will occur before 11:00 a.m. EST.
AXA Equitable will provide an estimate of the amount held in existing
weekly GRAs scheduled for rollover to a new GRA. These estimates will
be e-mailed to Principal on the Friday preceding each such maturity.
IV. ELECTRONIC FUNDS TRANSFER FACILITY
----------------------------------
Each day there will be one wire transfer either from AXA Equitable to
Principal or from Principal to AXA Equitable. Such transfer will
combine transactions in the Three-Year and Five-Year GRAs and will be a
net amount including contributions and withdrawals. If such net amount
is positive, AXA Equitable will transfer the amount to Principal. If
such is negative, Principal will send the amount to AXA Equitable. For
disbursements, Principal agrees that it will wire funds on the same
day, provided AXA Equitable gives notice before 11:00 a.m. All wires
will be preceded by detailed faxed information from AXA Equitable to
Principal specifying contributions and withdrawals by cell.
V. INTEREST RATE ESTABLISHMENT
---------------------------
Xxxxx Xxxxxxxx, or her designee at Principal, will establish the weekly
interest rates in accordance with the pricing formula. Each Tuesday,
Principal will determine the Three-Year and Five-Year Treasury Note
constant maturity as reported in the WALL STREET JOURNAL. The yield
will be calculated in accordance with contract specifications.
For the Three-Year Weekly GRAs the guaranteed pricing formula calls for
Principal to guarantee a positive spread of 90 (Ninety) basis points
over the three year Treasury Note rate. For the Five-Year Weekly GRAs,
a guaranteed positive spread of 110 (One Hundred and Ten) basis points
over the five year Treasury Note rate will apply. These guaranteed
credited interest rates are net of Principal's administrative fees but
do not reflect the deduction of AXA Equitable's Program Expense and
Administration Charges which will be calculated by AXA Equitable,
payable to AXA Equitable monthly as a withdrawal from each of the cells
established under these contracts, and deducted by AXA Equitable from
the rate payable to participants.
The interest rate to be credited will be an effective annual yield
based on a 365-day year. AXA Equitable understands that, during a leap
year, such as 2008, Principal will use daily interest factors based on
a 366-day year, and Principal will credit interest for February 29.
Principal's daily interest factors extend 9 (nine) places from the
decimal point. AXA Equitable (the recordkeeper) will absorb any
residual interest differences resulting from cash flow timing, leap
year or from daily interest factors being slightly different at the
fund level.
VI. INTEREST RATE COMMUNICATION TO AXA EQUITABLE
--------------------------------------------
Each Tuesday, starting July 17, 2007, Xxxxx Xxxxxxxx or her designee
from Principal, will e-mail Xxxxx Xxxx at AXA Equitable with the
current GRA rates for the three and five year offerings on Tuesday
morning no later than 10AM EST. Peter's backups are Xxxx Xxxxxxx and /
or Xxxxx Xxxxxxxx.
AXA Equitable Contacts
PRIMARY BACK-UP
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Xxxxx Xxxx Xxxxxxx Xxxxxxx
xxxxx.xxxx@xxx-xxxxxxxxx.xxx xxxxxxx.xxxxxxx@xxx-xxxxxxxxx.xxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
Xxxxx Xxxxxxxx
Xxxxx.Xxxxxxxx@xxx-xxxxxxxxx.xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
VII. INTEREST ADJUSTMENT CONTRIBUTIONS
---------------------------------
Principal credits interest on its GRAs from date of deposit up to but
not including date of withdrawal. AXA Equitable accounts for interest
beginning the date after deposit up to and including the date of
withdrawal. For most deposit transactions, this will not produce any
interest differences between AXA Equitable and Principal. However, a
difference in the amount of interest credited will exist on
contributions received on Fridays and on any business day preceding a
holiday on which AXA Equitable or Principal is closed. For example, if
AXA Equitable receives a deposit on Friday, interest will be credited
to participants on Saturday and Sunday. Principal would receive this
same contribution from AXA Equitable on Monday and would begin
crediting interest then. This will produce an interest difference,
which, to some extent, will be offset by withdrawals being paid out
Fridays. It is estimated the total difference will be not greater than
$5,000 for both contracts at the end of the accumulation period.
In order to reconcile this difference, AXA Equitable will make a
onetime payment to these contracts, or request a withdrawal,
representing the amount of difference. AXA Equitable will determine
these amounts in July 2008 at the end of the last open period, and
forward them in one wire per contract to Principal. A letter indicating
the amount to be allocated to each cell will also be sent. Principal
agrees to process these adjustments to the appropriate cells. Principal
will record this one time principal payment or withdrawal as a
contribution or withdrawal.
VIII. PREMATURE WITHDRAWAL PENALTY
----------------------------
Certain types of withdrawals are subject to a premature withdrawal
penalty. The plan provisions that govern these withdrawals and the
penalty formula are described in the GRA specifications prepared by
Xxxxxxx Xxxxxx Asset Planning.
AXA Equitable will calculate the premature penalty in its participant
recordkeeping area in accordance with the formula. Principal agrees
that no penalties will be taken from contracts other than that
currently open for contributions.
Xxxxxxx Xxxx will communicate the withdrawal and penalty amount to
Principal. Principal will withdraw from the contract(s) the withdrawal
amount and the penalty amount and, for fund balance reporting purposes,
reduce the cell(s) by both amounts. However, only the withdrawal amount
will actually be paid out to AXA Equitable. Principal will retain the
penalty amount.
IX. DEDUCTION OF AXA EQUITABLE FEES
-------------------------------
Principal acknowledges that fee deductions will be withdrawn from each
of the cells established under both contracts. These fees include the
Program Expense Charge, the investment accounting fee and certain other
charges described in the Prospectus. These amounts will not be reported
to Principal as a separate transaction, but will be combined with other
benefit withdrawals. As with such withdrawals, Principal will reduce
the cells by the appropriate amounts and wire these amounts to AXA
Equitable the same day they are reported, if they are reported before
11:00 a.m.
X. FUND BALANCE REPORTING
----------------------
Xxxxx Xxxxxxxx or her designee at Principal, will prepare a monthly
fund balance statement for each investment cell under each contract
(Once contributions have been added to all investment cells Principal
will prepare 104 fund balance statements).
These reports will include: 1) beginning balance, 2) details of all
transactions, 3) interest credited, 4) ending balance. The monthly fund
balance information will be released to Xxxxxxx Xxxx, or her designee
at AXA Equitable, by the third business day after the end of each
reporting month. All questions concerning the fund balance statements
should be directed to Xxxxx Xxxxxxxx at Principal.
XI. INVESTMENT CELL MATURITY
------------------------
For the 3-Year Contract, Principal will make payment of the entire
balance in each investment cell on the Wednesday, which is 156 weeks
after the close of the cell's contribution term. For the 5-Year
Contract Principal will make payment of the entire balance in each
investment cell on the Wednesday which is 260 weeks after the close of
the cell's contribution term.
XII. FORM 5500 REPORTING
-------------------
Principal will prepare its normal 5500 report for both contracts.
Principal will record the one time interest adjustment contribution,
defined in item VII of this agreement, as a contribution. Fee
deductions from each contract will be reported as
withdrawals for Form 5500 reporting purposes. Form 5500 reports will be
sent to Xxxxxxx Xxxxxxx at AXA Equitable.
XIII. HOLIDAY PROCEDURES
------------------
If a Principal holiday or a state bank holiday prevents AXA Equitable
from forwarding amounts to Principal and such delay results in a weekly
cell having been closed, Principal agrees to treat those amounts as if
they had been received for the cell, which would have been opened
except for the holiday closing. This will avoid increasing the
differences in Principal's and AXA Equitable fund balances as a result
of timing differences. Following is a list of the bank and company
holidays. Note, if one of those holidays falls on a Saturday or Sunday,
Principal will be open on either the preceding Friday or following
Monday. The days in 2007 and 2008 on which Principal is closed are
noted.
AXA EQUITABLE XXXXXXXX-0000 XXXXXXXXX XXXXXXXX-0000
--------------------------- -----------------------
New Years Day New Year's Day
Xx. Xxxxxx Xxxxxx Xxxx Birthday Xx. Xxxxxx Xxxxxx Xxxx'x Birthday
President's Day President's Day
Memorial Day Memorial Day
Independence Day Independence Day
AXA EQUITABLE HOLIDAYS-2007 PRINCIPAL HOLIDAYS-2007
--------------------------- -----------------------
Labor Day Labor Day
Thanksgiving Day Thanksgiving Day
Half-day November 23, 2007 Day after Thanksgiving
Half-day December 24, 2007 Half-day Christmas Eve
December 25 (Christmas) Christmas Day
ADDITIONAL N.Y. STATE BANK HOLIDAYS ADDITIONAL STATE BANK HOLIDAYS
----------------------------------- ------------------------------
Veteran's Day, November 11 None
XIV. CONTACTS
--------
A list of contacts at each organization is part of this agreement.
Primary contacts for any future changes to this agreement are noted.
XV. PRINCIPAL REPRESENTATIVES
-------------------------
CONTACTS FOR MONTHLY REPORTS AND CASH FLOW ACCOUNTING DATA:
PRIMARY BACK-UP
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Xxxxx Xxxxxxxx Xxxxxxx Xxxxxx
(000) 000-0000 (000) 000-0000
CONTACTS FOR INTEREST RATES AND UNDERWRITING DATA:
PRIMARY BACK-UP
------- -------
Xxxxx Xxxxxxxx Xxxxxxx Xxxxxx
(000) 000-0000 (000) 000-0000
CONTACTS FOR UNDERWRITING DATA:
PRIMARY BACK-UP
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Xxxxx Star Xxxxx Xxxxxxxxx
(000) 000-0000 (000) 000-0000
XVI. AXA EQUITABLE REPRESENTATIVES
-----------------------------
OPERATIONS MANAGER
------------------
Xxxxx Xxxxxx
Assistant Vice President
Tele: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxx.xxxxxx@xxx-xxxxxxxxx.xxx
CONTACTS FOR DAILY CASH FLOW & WIRE TRANSFERS
---------------------------------------------
Xxxxxxx Xxxx BACK-UP
AXA Equitable Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx 0000 XXX Equitable
Xxxxxxxx, XX 00000 000 Xxxxxxx Xxxxxx Xxxxx 0000
Tele: (000) 000-0000 Xxxxxxxx, XX 00000
Fax: (000) 000-0000 Tel: (000) 000-0000
e-mail: xxxxxxx.xxxx@xxx-xxxxxxxxx.xxx Fax: (000) 000-0000
e-mail:
Xxxxxxx.xxxxx@xxx-xxxxxxxxx.xxx
CONTACTS FOR RATES AND WEEKLY GRA MATURITY ESTIMATES
----------------------------------------------------
Xxxxx Xxxx BACK-UP
Financial Control Analyst Xxxx Xxxxxxx
Manager
AXA Equitable AXA Equitable
000 Xxxxx Xxxxx 200 Plaza Drive
Secaucus, NJ 07096 Xxxxxxxx, XX 00000
Tele: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
e-mail: xxxxx.xxxx@xxx-xxxxxxxxx.xxx e-mail:
xxxx.xxxxxxx@xxx-xxxxxxxxx.xxx
Xxxxx Xxxxxxxx
Account Information Analyst
AXA Equitable
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
e-mail:
Xxxxx.Xxxxxxxx@xxx-xxxxxxxxx.xxx
XVII. SIGNATURES OF ACCEPTANCE
------------------------
FOR AXA EQUITABLE LIFE INSURANCE FOR PRINCIPAL
COMPANY LIFE INSURANCE COMPANY
--------------------------- ------------------------
XXXXX X. XXXXXX
ASSISTANT VICE PRESIDENT
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Date Date
