Exhibit 99-(8)(y): Administrative and Shareholder Services Agreement
dated as of May 1, 2001 by and between
ING Pilgrim Group, LLC and ReliaStar Life Insurance Company
Administrative and Shareholder Services Agreement
This Agreement is made as of the 1st day of May 2001, by and between ING Pilgrim
Group, LLC (the "Administrator") and ReliaStar Life Insurance Company
("Company"), collectively, the "Parties."
WHEREAS, the Administrator serves as the Administrator for Pilgrim Variable
Products Trust ("Trust") which currently consists of 8 separate series (the
"Portfolios"); and
WHEREAS, the Company has entered into a Participation Agreement, dated May 1st ,
2001, with the Trust (a "Participation Agreement") pursuant to which the Trust
will make shares of each Portfolio listed from time to time on Schedule A of the
Agreement available to the Company at net asset value and with no sales charges,
subject to the terms of the Participation Agreement, to fund benefits under
variable life insurance policies and variable annuity Contracts (each, a
"Contract," and collectively, the "Contracts") to be issued by the Company; and
WHEREAS, the Participation Agreement provides that the Trust will bear the costs
of preparing and filing with the Securities and Exchange Commission the Trust's
prospectus, registration statement, proxy materials and reports, setting the
prospectus and shareholder reports in type, setting in type and printing the
proxy materials, and preparing all statements and notices required by any
federal or state law to be, in each case as may reasonably be necessary for the
performance of its obligations under the Participation Agreement (collectively,
the "Trust Materials"), and providing the Company with copies of the Trust
Materials; and
WHEREAS, the Participation Agreement provides that the Trust shall pay for the
cost of typesetting, printing and distributing periodic fund reports to
shareholders, prospectuses and supplements thereto, statements of additional
information, proxy statements and other materials that are required by law to be
sent to existing owners of Contracts ("Contract owners"), as well as the cost of
distributing such materials; and
WHEREAS, the Participation Agreement makes no provision for which party shall
incur various administrative expenses in connection with the servicing of
Contract owners or Participants who have allocated Contract value to a
Portfolio, including, but not limited to, responding to various Contract owner
inquiries regarding a Portfolio; and
WHEREAS, ING Pilgrim Investments, LLC ("Pilgrim Investments"), investment
adviser to the Portfolios and a subsidiary of the Administrator, has entered
into an Expense Limitation Agreement with the Trust, a copy of which has been
provided to the Company, and which may be renewed or amended from time to time
("Expense Limitation Agreement") under which Pilgrim Investments has agreed to
limit the expenses of all of the Portfolios;
WHEREAS, the Parties wish to allocate expenses in a manner that is fair and
equitable, consistent with the best interests of Contract owners and
participants, and that does not entail the
expense and inconvenience of separately identifying and accounting for each item
of Trust expenses;
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein, the Parties hereto agree as follows:
I. Services Provided:
The Company agrees to provide services including, but not limited to:
a) delivering and responding to inquiries respecting Trust prospectuses,
Statements of Additional Information, reports, notices, proxies and
proxy statements and other information respecting the Portfolios (but
not including services paid for by the Trust);
b) facilitating the tabulation of Contract owners' and participants' votes
in the event of a meeting of Trust shareholders;
c) providing and administering Contract features for the benefit of
Contract owners and participants participating in the Trust, including
fund transfers, dollar cost averaging, asset allocation, portfolio
rebalancing, earnings sweep, and pre-authorized deposits and
withdrawals;
d) responding to inquiries from Contract owners and participants using one
or more of the Portfolios as an investment vehicle regarding the
services performed by the Company as they relate to the Trust or its
Portfolios;
e) teleservicing support in connection with the Portfolios;
f) maintenance of Company records reflecting shares purchased and redeemed
and share balances held by separate accounts of the Company and the
conveyance of that information to the Trust, its transfer agent, or the
Administrator as may be reasonably requested;
g) facilitating the printing and mailing of reports to shareholders and
other shareholder communications from the Trust as may be required
pursuant to the Participation Agreement;
h) responding to inquiries from Contract owners or participants concerning
the Trust and its operations; and
i) providing such similar services as the Administrator or Trust may
reasonably request to the extent permitted or required under applicable
statutes, rules and regulations.
II. Expense Allocations:
Subject to Section III, the Company or its affiliates shall bear the
costs of:
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a) printing and distributing all Trust Materials to be distributed to
prospective Contract owners as discussed in the Participation Agreement
as being distributed at the Company's expense;
b) printing and distributing all sales literature or promotional material
developed by the Company or its affiliates and relating to the
Contracts; and
c) servicing Contract owners who have allocated Contract value to a
Portfolio, which servicing shall include, but is not limited to, the
items listed above
III. Payment of Expenses:
a) The Administrator shall pay to the Company a quarterly fee ("Service
Fee") equal to a percentage of the average cumulative new assets in
excess of the assets in the Portfolio as of 4/30/01,as shown on
Schedule B, due to investment in a class of the Portfolio attributable
to Contracts issued by the Company at the annual rates shown in the
attached Schedules A (for Class R Shares of the Portfolios). Such
Service Fee shall be calculated for each month and paid quarterly.
b) Administrator represents that under the terms of the Expense Limitation
Agreement, Pilgrim Investments has agreed that to the extent that
ordinary operating expenses incurred by a class of a Portfolio in any
fiscal year, including, but not limited to, investment management fees
payable to Pilgrim Investments, but excluding interest, taxes,
brokerage commissions and extraordinary expenses, exceed the operating
expense limits specified in that agreement (the "Excess Amount"),
Pilgrim Investments shall waive or reduce its fee and/or promptly remit
to the Portfolio an amount that is equal to the Excess Amount.
In the event that Pilgrim Investments pays Administrator an Excess
Amount under the terms of the Expense Limitation Agreement, Company
agrees that any Service Fee owed by Administrator to the Company
pursuant to Section III(a) above shall be reduced by an amount that is
equal to the Company's pro rata portion of XX% of such Excess Amount,..
However, any reduction of the Service Fee shall not exceed an amount
equal to an annual rate of .XX% calculated in the same manner as
outlined in (a) and shall be calculated as an offset against any
amounts payable under (a) quarterly. In the event that the expense
offset hereunder exceeds the revenue owing under (a), it shall not be
charged by Administrator for that month.. Administrator agrees that any
recoupment of the Excess Amount by Pilgrim Investments under the terms
of the Expense Limitation Agreement shall be paid to the Company
commensurate with Company's share of the Excess Amount described above.
Administrator shall calculate amounts owing quarterly and provide a
copy of that calculation to Company.
c) The Company will provide Administrator with reports for each calendar
month indicating the net assets in each class of a Portfolio at the end
of the month in
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excess of those in each class of a Portfolio on 4/30/2001 as shown in
the attached Schedule B and attributable to Contracts issued by the
Company.
d) The Administrator will calculate the Service Fee contemplated by this
Section at the end of each calendar month and will make such payment,
as appropriate, to the Company within thirty (30) days after the last
business day of each calendar quarter thereafter. Each payment will be
accompanied by a statement showing the calculation of the Service Fee
payable by the Administrator, if any, and any reduction thereto
pursuant to Section III(b) above, and such other supporting data as may
be reasonably requested by the Company.
e) The Company agrees to make appropriate disclosure in its prospectus and
registration statement as to the payments for services provided
pursuant to this Agreement as required by the federal securities laws
or other applicable law.
f) From time to time, the Parties hereto shall review the Service Fee to
determine whether it reasonably approximates the incurred and
anticipated costs, over time, of the Company in connection with its
duties hereunder. The Parties agree to negotiate in good faith any
change to the Service Fee proposed by one of the Parties in good faith.
g) The Parties agree that the Administrator's payments to the Company are
for administrative services only and do not constitute payment in any
manner for investment advisory services or costs of distribution.
h) This Agreement shall not modify any of the provisions of the
Participation Agreement, but shall supplement those provisions.
IV. Term of Agreement:
This Agreement shall continue in effect for so long as the Company or
its successor(s) in interest, or any affiliate thereof, continues to
hold shares of the Trust or its Portfolios, and continues to perform in
a similar capacity for the Company and Trust.
V. Indemnification:
a) The Company agrees to indemnify and hold harmless the Administrator and
its officers and directors, from any and all loss, liability and
expense resulting from the gross negligence or willful wrongful act of
the Company under this Agreement, except to the extent such loss,
liability or expense is the result of the willful misfeasance, bad
faith or gross negligence of the Administrator in the performance of
its duties, or by reason of the reckless disregard of its obligations
and duties under this Agreement.
b) The Administrator agrees to indemnify and hold harmless the Company and
its officers and directors from any and all loss, liability and expense
resulting from the gross negligence or willful wrongful act of the
Administrator under this Agreement, except to the extent such loss,
liability or expense is the result of the
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willful misfeasance, bad faith or gross negligence of the Company in
the performance of its duties, or by reason of the reckless disregard
of its obligations and duties under this Agreement.
VI. Amendment
This Agreement may be amended only upon mutual agreement of the Parties
hereto in writing.
VII. Standard of Care
The Parties shall exercise reasonable care in the performance of their
duties under this Agreement.
VIII. Confidentiality
The terms of this arrangement will be held confidential by each Party
except to the extent that either Party or the Trust may deem it necessary
to disclose this arrangement.
IX. Notices:
Notices and communications required or permitted hereby will be given
to the following persons at the following addresses, or such other
persons as the Party receiving such notices or communications may
subsequently direct in writing:
If to the Trust:
Pilgrim Variable Products Trust
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx X. Xxxxxxxx
If to the Administrator:
ING Pilgrim Group, LLC.
0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx X. Xxxxxxxx
If to the Company:
ING Life Companies
0000 Xxxxxxxx
Xxxxxx, XX 00000
Attn: Variable Counsel
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X. Applicable Law:
Except insofar as the Investment Company Act of 1940 or other federal
laws and regulations may be controlling, this Agreement will be
construed and the provisions hereof interpreted under and in accordance
with Delaware law, without regard for that state's principles of
conflict of laws.
XI. Execution in Counterparts:
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the
same instrument.
XII. Severability:
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby.
XIII. Cumulative Rights:
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to
under federal and state laws.
XIV. Headings
The headings used in this Agreement are for purposes of reference only
and shall not limit or define, the meaning of the provisions of this
Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers signing below.
ING PILGRIM GROUP, LLC RELIASTAR LIFE INSURANCE COMPANY
By: _______________________________ By: _______________________________
Name: ___________________________ Name: ___________________________
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SCHEDULE A FOR CLASS R SHARES
PILGRIM VARIABLE PRODUCTS TRUST
ANNUAL RATE PORTFOLIOS
----------- ----------
X.XX% Pilgrim VP MagnaCap Portfolio
X.XX% Pilgrim VP Research Enhanced Index Portfolio
X.XX% Pilgrim VP Growth Opportunities Portfolio
X.XX% Pilgrim XX XxxXxx Opportunities Portfolio
X.XX% Pilgrim VP Growth + Value Portfolio
X.XXX% Pilgrim VP SmallCap Opportunities Portfolio
X.XX% Pilgrim VP International Value Portfolio
X.XXX% Pilgrim VP High Yield Bond Portfolio
Schedule dated: May 1, 2001
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SCHEDULE B
COMPANY ASSETS IN PILGRIM VARIABLE PRODUCTS TRUST PORTFOLIOS
AS OF 4/30/2001
ASSETS AS OF 4/30/2001 PORTFOLIO - CLASS R
---------------------- -------------------
$ Pilgrim VP MagnaCap Portfolio
$ Pilgrim VP Research Enhanced Index Portfolio
$ Pilgrim VP Growth Opportunities Portfolio
$ Pilgrim XX XxxXxx Opportunities
$ Pilgrim VP Growth + Value Portfolio
$ Pilgrim VP SmallCap Opportunities Portfolio
$ Pilgrim VP International Value Portfolio
$ Pilgrim VP High Yield Bond Portfolio
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