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EXHIBIT 9(p)
[AMERICAN EXPRESS FINANCIAL ADVISORS LETTERHEAD]
October 30,1997
Xx. Xxxxxx X. Xxxxxx
President
A I M Advisors, Inc.
00 Xxxxxxxx Xxxxx Xxxxx 0000
Xxxxxxx, XX 00000
Mr. X. Xxxx Xxxxxxxxxx
Senior Vice President
A I M Distributors, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Dear Messrs. Xxxxxx and Xxxxxxxxxx:
This letter sets forth the agreement among American Enterprise Life Insurance
Company ("American Enterprise Life") and American Centurion Life Assurance
Company ("American Centurion Life") (American Enterprise Life and American
Centurion Life collectively are referred to as the "Insurance Companies"), A I M
Advisors, Inc. (the "Advisor") and A I M Distributors, Inc. (the "Distributor")
(the Advisor and the Distributor collectively are referred to as "A I M")
concerning certain administrative services.
1. Services and Expenses. The Advisor and the Distributor serve as
the investment advisor and principal underwriter, respectively, of the AIM
Variable Insurance Funds, Inc. ("AVIF"). The Insurance Companies have
entered into Participation Agreements with AVIF and the Distributor, each
dated October 30, 1997 (collectively, the "Participation Agreements"), as
these agreements may be amended from time to time, pursuant to which AVIF
will make shares of the AIM V.I. Growth and Income Fund, the AIM V.I.
International Equity Fund and the AIM V.I. Value Fund (collectively, the
"Funds") available to the Insurance Companies to fund variable annuity
contracts (the "Contracts") through the American Enterprise Variable
Annuity Account and ACL Variable Annuity Account 2 (collectively, the
"Accounts").
The Participation Agreements provide that the Insurance Companies will, at
their expense, print and deliver to existing owners of the
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Contracts (the "Contractowners") the Funds' prospectuses and will deliver,
at their expense, the Funds' statements of additional information,
shareholder reports, proxy materials and other Contractowner
communications. Further, the Insurance Companies will incur various
administrative expenses in connection with the servicing of Contractowners
who have allocated Contract value to the Funds. The types of services that
the Insurance Companies will perform in connection with making the Funds
available as investment options under the Contracts and with servicing the
Contractowners are set forth in Schedule A to this letter agreement.
2. Fees and Payments. The parties wish to allocate expenses in a manner
that is fair and equitable and consistent with the best interest of the
Contractowners. Further, the parties wish to establish a means for
allocating expenses that does not entail the expense and inconvenience of
separately identifying and accounting for each item of expense. In
consideration of the mutual benefits and promises contained in this letter
agreement, A I M agrees to pay the Insurance Companies a fee based on the
average daily net asset value of the shares of the Funds held in the
Accounts. The fee will be calculated based on the following schedule:
FUNDS' ASSETS (MILLIONS) ANNUALIZED FEE RATE
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$0 but less than $50 0%
$50 but less than $150 0.15% of 1%
$150 but less than $250 0.20% of 1%
$250 and over 0.25% of 1%
For each calendar year the Annualized Fee Rate to be used in calculating
the fee will be the Annualized Fee Rate applicable to the highest average
assets invested in the Funds by the Accounts during such calendar year. The
fee will be calculated and paid quarterly. If during a calendar year the
Annualized Fee Rate increases, any fee previously paid for such calendar
year at a lower Annualized Fee Rate will be recalculated and the difference
will be paid. Annualized Fee Rates will be adjusted if the investment
management fee rate paid by the Funds to the Advisor changes. Annualized
Fee Rates will be increased or decreased by a percentage, the numerator of
which is the basis point change in the existing investment management fee
and the denominator of which is the existing investment management fee paid
prior to such change. A I M and the Insurance Companies agree to review
this fee arrangement if at some future date, an AVIF fund is not promoted
in the Contracts or in a successor product. If, at some future date, an
AVIF fund is not included as an investment option,
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A I M may, at its option, terminate this letter agreement with respect to
such fund no longer included as an option.
As soon as practicable after the end of each calendar quarter, the
Insurance Companies will send A I M at the address and in the manner set
forth in the Participation Agreements, a statement of the average daily
value for the preceding quarter of shares of such Funds as to which the fee
is calculated, together with a statement of the amount of such fee
allocated to American Enterprise Life and American Centurion Life. If the
fee calculation made by the Insurance Companies does not agree with the fee
calculation made by A I M, the parties will work together to promptly
resolve any such difference.
A I M will pay American Enterprise Life and American Centurion Life each
Company's pro-rata share of such fee within thirty (30) days after the end
of the calendar quarter. Such payment will be by wire transfers unless the
amount thereof is less than $500. Wire transfers will be sent to the
accounts and in the manner specified by American Enterprise Life and
American Centurion Life. Such wire transfers will be separate from wire
transfers of redemption proceeds and distributions. Amounts less than $500
may be paid by check or by another method acceptable to the parties.
For purposes of this Paragraph 2, the average daily value of the shares of
the Funds will be based on the net asset values reported by such Funds to
the Insurance Companies. No adjustments will be made to such net asset
values to correct errors in the net asset values so reported for any day
unless such error is corrected and the corrected net asset value per share
is reported to the Insurance Companies before 5:00 p.m. Central time on the
first Business Day after the day to which the error relates.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that A I M's payments to the Insurance Companies relate to
administrative services only and do not constitute payment in any manner
for investment advisory or distribution services. The amount of the fee
payments made by A I M to the Insurance Companies pursuant to Paragraph 2 of
this letter agreement will not be deemed to be conclusive with respect to
actual administrative expenses or savings of A I M.
4. Term. This letter agreement will remain in full force and effect for so
long as assets of the Funds are attributable to amounts invested by the
Insurance Companies under the Participation Agreements, unless terminated
in accordance with Paragraphs 2 or 5 of this letter
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agreement. In accordance with Section 6.3 of the Participation Agreements,
this Service Fee will continue to be due and payable with respect to the
shares attributable to Existing Contracts.
5. Termination. This letter agreement will be terminated upon mutual
agreement of the parties hereto in writing, or as required by law.
6. Amendment. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
7. Counterparts. This letter agreement may be executed in counterparts, each
of which will be deemed an original but all of which will together
constitute one and the same instrument.
8. Governing Law. This letter agreement will be construed and the provisions
hereof will be interpreted under and in accordance with the laws of the
State of Minnesota.
9. Entire Agreement. This letter agreement, together with the attached
Schedules or attachments, contains the entire agreement among the parties
and supersedes any prior or inconsistent agreements, understandings or
arrangements among the parties with respect to the subject matter of this
letter agreement, all of which are merged herein.
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If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative expense payments, kindly sign below and
return a signed copy to us.
Very truly yours,
AMERICAN ENTERPRISE LIFE ATTEST:
INSURANCE COMPANY
Signature: /s/ XXXXXX X. XXXXXXXX Signature: /s/ XXXXXXX X. XXXXXXXXXX
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By: XXXXXX X. XXXXXXXX By: XXXXXXX X. XXXXXXXXXX
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Title: EXEC. V.P. Title: VP
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AMERICAN CENTURION LIFE ATTEST:
ASSURANCE COMPANY
Signature: /s/ XXXXXX X. XXXXXXXX Signature: /s/ XXXX X. XXXXXXX
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By: XXXXXX X. XXXXXXXX By: XXXX X. XXXXXXX
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Title: PRESIDENT Title: SECRETARY/GENERAL COUNSEL
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Acknowledged and Agreed:
A I M ADVISORS, INC. (For Both):
Signature: /s/ XXXXXX X. XXXXXX ATTEST:
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By: Xxxxxx X Xxxxxx Signature: /s/ XXXXX X. XXXXXX
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Title: President By: Xxxxx X. Xxxxxx
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Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
Signature: /s/ X. X. XXXXXXXXXX
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By: X. Xxxx Xxxxxxxxxx
Title: Senior Vice President
Attachment: Schedule A
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Schedule A
Pursuant to the letter agreement to which this Schedule is attached, the
Insurance Companies will perform the following administrative services:
1. Maintain master accounts with the Funds and such accounts will be in
the name of American Enterprise Life or American Centurion Life (or their
nominees) as the record owners of shares on behalf of the Accounts.
2. Determine the net amount to be transmitted to the Accounts as a
result of redemptions of shares of the Funds based on Contractowners' redemption
requests. Disburse or credit to the Accounts all proceeds of redemptions of
shares of the Funds. Notify the Funds of the cash required to meet payments.
3. Determine the net amount to be transmitted to the Funds as a result
of purchases of shares of the Funds based on Contractowners purchase payments
and transfers allocated to the Accounts investing in the Funds. Transmit net
purchase payment receipts to the Funds' custodian.
4. Distribute to Contractowners copies of the Funds' prospectuses,
proxy materials, periodic fund reports to Contractowners and other materials
that the Funds are required by law or otherwise to provide to its shareholders.
5. Maintain and preserve all records as required by law to be
maintained and preserved in connection with providing administrative services
including, but not limited to, recording the issuance of shares of the Funds,
recording transfers and redemptions, and reconciling and balancing the Accounts.
6. Provide Contractowner services including, but not limited to, advice
with respect to inquiries related to the Funds (not including information about
performance or related to sales) and communicating with Contractowners about
Funds' (and Accounts') performance.
7. Provide other administrative support for the Funds as mutually
agreed to by the Insurance Companies and the Funds and relieve the Funds of
other usual or incidental administrative services provided to individual
Contractowners.
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