ADMINISTRATIVE SERVICES AND SUPPORT AGREEMENT
This Agreement is made as of the 18th day of October, 1999, by and between
INVESCO Funds Group, Inc. ("INVESCO"), and American Skandia Life Assurance
Corporation ("American Skandia"), a Connecticut corporation, collectively, the
"Parties."
WITNESSETH:
WHEREAS INVESC0 serves as the administrator for the INVESCO Variable
Investment Funds, Inc. (the "Company"); and
WHEREAS American Skandia has entered into an agreement, dated October 18,
1999, with the Company and INVESCO (the " Fund Participation Agreement")
pursuant to which INVESCO will make shares of certain of the Portfolios of the
Company (the "Portfolios") available to certain variable life insurance and/or
variable annuity contracts offered by American Skandia through certain separate
accounts (the "Separate Accounts") at net asset value and with no sales charges,
subject to the terms of the Fund Participation Agreement; and
WHEREAS the Fund Participation Agreement provides that the Company will
bear the costs of preparing, filing with the Securities and Exchange Commission,
printing or duplicating and mailing the Company's (or the Portfolios')
prospectus, statement of additional information and any amendments or
supplements thereto, periodic reports to shareholders, Fund proxy material and
other shareholder communications (collectively, the "Fund Materials") required
by law to be sent to owners of Contracts ("Contract Owners") who have allocated
any Contract value under their Contracts to a Portfolio; and
WHEREAS the Fund Participation Agreement provides that American Skandia, at
its expense, will provide various administrative and shareholder services with
respect to prospective and actual Contract Owners of American Skandia; and
WHEREAS the Fund Participation Agreement makes no provision for the rate at
which each party shall incur expenses in connection with the servicing of
Contract Owners who have allocated Contract value to a Portfolio, including, but
not limited to, responding to various Contract Owner inquiries regarding a
Portfolio; and
WHEREAS the Parties hereto wish to allocate the expenses in a manner that
is fair and equitable, and consistent with the best interests of Contract
Owners; and
WHEREAS the Parties hereto wish to establish a means for allocating the
expenses that does not entail the expense and inconvenience of separately
identifying and accounting for each item of Fund expense;
NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
I. SERVICES PROVIDED:
American Skandia agrees to provide services to the Company and INVESC0 including
the following:
a) responding to inquiries from American Skandia Contract Owners who choose to
allocate Contract Value to one or more of the Portfolios as an investment
vehicle regarding the services performed by American Skandia as they relate
to INVESCO, the Company or the Portfolios;
b) providing information to H,1VESC0 or the Company and to Contract Owners
with respect to shares attributable to Contract Owner accounts, including
those items identified in Appendix A;
c) communication directly with Contract Owners concerning INVESCO or the
Company's operations;
d) providing such similar services as INVESCO or the Company may reasonably
request to the extent permitted or required under applicable statutes,
rules and regulations; and
e) providing analytical, statistical and performance oriented information and
materials to Contract Owners related to the Portfolios via electronic means
through American Skandia's proprietary fund analytics software program,
ASSESS(TM), as described in Appendix B.
II. EXPENSE ALLOCATIONS:
Subject to Section III hereof, and the provisions of Article IV and Article VI
of the Fund Participation Agreement, American Skandia or its affiliates shall
initially bear the costs of the following:
a) printing and distributing all Fund Materials to be distributed to
prospective Contract owners except as may otherwise be provided in the Fund
Participation Agreement;
b) printing and distributing all sales literature or promotional material
developed by American Skandia. or its affiliates and relating to the
Contracts;
c) servicing Contract Owners who have allocated Contract value to a Portfolio,
which servicing shall include, but is not limited to, the items listed in
Paragraph I of this Agreement.
III. PAYMENT OF EXPENSES:
In recognition of the substantial savings in administrative expenses to INVESCO
and the Company by virtue of having a sole shareholder, American Skandia, and
having that shareholder be responsible for the servicing of the Contract Owners,
INVESCO will pay an administrative service fee to American Skandia, as described
below:
a) INVESCO shall pay to American Skandia an Administrative Services Fee
(hereinafter, the "Administration Fee") equal to a percentage of the
average daily net assets of the Portfolio attributable to Contracts offered
by American Skandia, at the annual rate of 0.265% on the aggregate net
assets placed by American Skandia in the INVESCO VIF Funds designated in
Schedule B of the Fund Participation Agreement, as may be amended from time
to time. The Administration Fee is in consideration of the expenses
incurred by American Skandia pursuant to Section H hereof The payment of
the Administration Fee shall commence on the date first indicated above.
b) INVESCO shall pay to American Skandia an additional Support Fee
(hereinafter, the "Support Fee") equal to a percentage of the average daily
net assets of the Portfolio attributable to Contracts offered by American
Skandia, at the annual rate of 0.235% on the aggregate net assets placed by
American Skandia in the INVESCO VIF Funds designated in Schedule B of the
Fund Participation Agreement, as may be amended from time to time. The
Support Fee is in consideration of the expenses incurred by American
Skandia pursuant to Section II hereof. The payments of the Fee shall
commence on the date first indicated above and shall continue for so long
as American Skandia shall continue to offer the Portfolios in any of its
variable annuity or variable life insurance contracts.
c) From time to time, the Parties hereto shall review the Administration Fee
and the Support Fee to determine whether it reasonably approximates the
incurred and anticipated costs, over time, of American Skandia. in
connection with its duties hereunder. The Parties agree to negotiate in
good faith any change to the Administration Fee and Support Fee proposed by
another Party in good faith.
c) This Agreement shall not modify any of the provisions of Article IV or
Article VI of the Fund Participation Agreement, but shall supplement those
provisions.
IV. TERM OF AGREEMENT:
This Agreement shall continue in effect for so long as American Skandia or its
successor(s) in interest, or any affiliate thereof, continues to hold shares of
the Company or its portfolios, and continues to perform in a similar capacity
for the Company and INVESCO.
V. INDEMNIFICATION:
a) American Skandia agrees to indemnify and hold harmless the Company and
INVESCO, and their officers, employees, and directors, from any and all
loss, liability and expense resulting from the gross negligence or willful
wrongful act of American Skandia 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 Company or INVESCO in the performance
of its duties, or by reason of the reckless disregard of their obligations
and duties under this Agreement.
b) The Company and INVESCO agree to indemnify and hold harmless American
Skandia and its officers, employees, and directors from any and all loss,
liability and expense resulting from the gross negligence or willful
wrongful act of the Company or INVESCO 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 American Skandia in the
performance of its duties, or by reason of the reckless disregard of its
obligations and duties under this Agreement.
VI. NOTICES:
Notices and communications required or permitted hereby will be given to the
following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
INVESCO FUNDS GROUP, INC.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx - Senior Vice President
FAX: 000 000-0000
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
0 Xxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxx Xxxxxxxxxxx 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx
VII. APPLICABLE LAW:
Except insofar as the Investment Company Act of 1940 or other federal laws and
regulations 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.
VIII. EXECUTION IN COUNTERPARTS:
This Agreement may be executed simultaneously in two or more counterparts, each
of which together will constitute one and the same instrument.
IX. 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.
X. RIGHTS CUMULATIVE:
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.
XI. 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.
INVESCO FUNDS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Senior Vice President & Treasurer
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Treasurer
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
By: /s/ Xxxxxx Xxxxxxx
-------------------
Xxxxxx X. Xxxxxxx
President and Deputy Chief Executive Officer
APPENDIX A
MAINTENANCE OF BOOKS AND RECORDS
o Record issuance of shares
o Record transfers (via net purchase orders)
o Reconciliation and balancing of the separate account at the fund level in
the general ledger
PURCHASE ORDERS
o Determination of net amount available for investment by the Fund(s)
o Deposit of receipts at the Funds' custodian (generally by wire transfer)
REDEMPTION ORDERS
o Determination of net amount required for redemptions by the Fund(s)
o Notification of the custodian and Fund(s) of cash required to meet payments
o Cost of share redemptions
PROCESSING DISTRIBUTIONS FROM THE FUND(S)
o Allocate ordinary dividends and capital gains to contractowners
FUND-RELATED CONTRACTOWNER SERVICES
o Financial consultant's advice to contractowners with respect to inquiries
related to Fund(s) (not including information about performance or related
to sales)
o Communications to contractowners regarding Fund and subaccount performance
OTHER ADMINISTRATIVE SUPPORT
o Providing other administrative support for the Funds as mutually agreed
between the Company and the Funds or Adviser
o Relieving the Funds of other usual or incidental administrative services
provided to individual contractowners
APPENDIX B
PORTFOLIO SUPPORT SERVICES
o Including the Fund(s) that are offered as underlying investment options for
the Separate Accounts in the ASSESS(TM) software program ("Support
Services"). Such Support Services are described in Appendix A to this
Schedule A and are made available to financial professionals that service
the Company's products or provide investment allocation services to
contractowners in relation to such products.
o Updating the Portfolio Support Services and other printed Fund Information
on a quarterly basis
o Provide name and address changes
o Provide change of distribution of contractowner payments to the Account
Support Services consist of supplying ASSESS(TM) or any successor program as
described below.
ASSESS(TM) is a package of detailed statistical information regarding the
performance and portfolio characteristics of certain sub-accounts which serve as
investment options of various annuities issued by the American Skandia, as well
as the underlying mutual fund portfolios in which such sub-accounts invest. This
package of information may be made available through various means, including
computer disks, electronic transmission, video, CD-ROM, or other means American
Skandia or an affiliate makes ASSESS(TM) available to financial professionals,
among others, who sell the American Skandia's products in order for the
financial professionals to monitor and compare the performance of investments so
that they may (a) assist contractowners with asset allocation in particular; (b)
assist in evaluating the suitability of both the annuities and of particular
sub-accounts for contractowners initially and on an ongoing basis; and (c)
enhance risk management in general. Certain portions of ASSESS(TM) have been
filed by the American Skandia's affiliate, American Skandia Marketing,
Incorporated, with the National Association of Securities Dealers for client
use, therefore, the financial professional can use these portions of the
ASSESS(TM) program with their clients, which directly aids in the initial and
ongoing servicing of the annuities and the portfolios thereby assisting their
clients in meeting their personal investment goals.
The services provided to the financial professional through ASSESS(TM) include a
quarterly analysis with respect to the performance of each of the portfolios.
There are over 25 discrete displays on each investment option American Skandia
offers, beginning with an analyst's report of quarterly performance and ending
with stock listings of each market sector. Types of information displayed
includes, but is not limited to:
1. An Analyst's Report on how the Fund performed during the past quarter under
its current management.
2. Performance - Historical and annualized performance is available in charts
and tables. A risk return rating is provided. Comparisons to other
sub-accounts and to applicable indices (i.e. Standard & Poor's 500) are
available.
3. Characteristics - The characteristics section includes such information as
Price/Earnings Ratio, Earnings per Share, 3 Year Dividend Yield,
Debt-to-Equity Ratio, Capitalization, 5 Year Return on Equity, etc.
4. Sections - Information on the breakdown of the percentages in each
investment sector that comprises a portfolio is available. Information on
types of debt instruments and ratings is available for bond type options. A
percentages option can show a bar graph of the percentages in each sector
vs. a standard market index such as the S&P 500 Index. The return and table
options display the quarterly returns by sector vs. the index. A breakdown
of each sector, as well as the 3, 6 and 12 month returns are available.
5. Investment Selections - For equity sub-accounts, the stock selection
section includes three options, largest issue, best performance and worst
performance. All three options are represented in table format. Largest
issues also include a 3 month return and best performance and worst
performance include a 3, 6 and 12 month return.
