EXHIBIT 99.(h)(4)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DISTRIBUTORS INC.
SHAREHOLDER SERVICE AGREEMENT
This SHAREHOLDER SERVICE AGREEMENT ("Agreement") is made and entered into
as of this 15th day of September, 2003, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Distributors Inc. (the "Distributor") and The Travelers Insurance Company (the
"Company").
WHEREAS, the Distributor is the principal underwriter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Variable Investment Series (the "Fund"), an open-end investment company that
serves as an investment vehicle for separate accounts established by insurance
companies; and
WHEREAS, the Fund has entered into a participation agreement with the
Company, dated September 15, 2003, as may be amended from time to time (the
"Participation Agreement"), providing for the purchase by the Company of shares
of certain series of the Fund ("Portfolios") on behalf of its separate
account(s) to fund certain variable life and annuity contracts ("Contracts"),
each as specified in the Participation Agreement; and
WHEREAS, the Fund has adopted a Plan of Distribution pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, relating to Class Y
Shares of the Portfolios (the "Plan"), as described in the Portfolios' Class Y
Shares Prospectus and Statement of Additional Information; and
WHEREAS, the Plan authorizes the Distributor to enter into shareholder
service agreements (such as this Agreement) with organizations selected by the
Distributor (such as the Company) whereby the Distributor may make payments to
the Company at a specified rate in consideration of shareholder services
rendered.
NOW, THEREFORE, in consideration of their mutual promises, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Distributor and the Company agree as follows:
1. The Distributor agrees to pay a fee to the Company with respect to
Class Y Shares of a Portfolio, in accordance with Section 2 below, for providing
shareholder services in connection with Contract owner accounts (the "Service
Activities") as described in the Plan. The Service Activities may include,
without limitation: (a) education of agents concerning Portfolios of the Fund,
(b) compensation of agents, and (c) servicing of Contract Owners, including,
without limitation: (i) responding to customer inquiries; (ii) providing
information to customers with respect to their investment in Class Y Shares of a
Portfolio; and (iii) servicing the account of each client or customer who has an
investment in Class Y Shares of a Portfolio. The Company acknowledges that it is
responsible for all costs and expenses associated with the provision of the
Service Activities hereunder.
2. Subject to the Company's continuing compliance with its
obligations pursuant to Section 1 above, the Distributor will pay a fee to the
Company for providing the Service Activities, during the term of the
Participation Agreement, at an annual rate of 0.25% of the average daily net
assets invested in Class Y Shares of the then offered Portfolios under the
Contracts identified in the Participation Agreement (excluding all assets
invested during the guarantee (free look) periods available under the Contracts)
(the "Service Fee").
The Service Fee will be paid to the Company for providing the Service
Activities and is not payment for any distribution-related services that the
Company may provide. Payment will be made on a monthly basis during the month
following the end of each month and shall be prorated for any portion of such
period during which this Agreement is in effect for less than the full month.
The Service Fee will be calculated based on the average daily net assets
invested in Class Y Shares of the applicable Portfolio(s) under the Contracts
over a month (which shall be computed by totaling daily balances during the
month and dividing such total by the actual days in the month). The Distributor
will not be required to pay the Service Fee with respect to assets invested in
Class Y Shares of a Portfolio upon the termination of the Plan with respect to
Class Y Shares of the Portfolio or if, at any time, the fee payable by the Fund
under the Plan with respect to Class Y Shares of the Portfolio is reduced.
3. It is understood and agreed that the Distributor, acting
reasonably and in good faith, may make final and binding determinations as to
the Company's continuing compliance under Section 1 above and as to the specific
amount of the Company's assets invested in Class Y Shares of the Portfolios that
will be considered in determining the Service Fee.
4. The Company and the Distributor acknowledge that the Fund
maintains the right, at any time and without notice to the Company, to amend its
current Prospectus, Statement of Additional Information or the Plan subject to
the terms thereof.
5. The Company represents and agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Service Activities, and will otherwise comply with
all laws, rules and regulations applicable to such Service Activities.
6. The Company agrees to provide copies of all historical records
relating to the Company's provision of the Service Activities in accordance with
this Agreement, and all written communications and other related materials
regarding the Fund or a Portfolio to or from Contract owners, as reasonably
requested by the Distributor or its representatives (which representatives may
include, without limitation, the auditors or legal counsel of the Fund or the
Distributor) to enable the Distributor, the Fund or their respective
representatives to monitor and review the Service Activities provided by the
Company, or comply with any request of the Board of Trustees or "disinterested"
Trustees of the Fund, or a governmental body or a self-regulatory organization.
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7. The Company agrees that it will permit the Distributor, the Fund
or their respective representatives to have reasonable access to the Company's
personnel and records in order to facilitate the monitoring of the quality of
the Service Activities.
8. The Company hereby agrees to notify the Distributor promptly if
for any reason it is unable to perform fully and promptly any of its obligations
under this Agreement.
9. This Agreement may be amended only by mutual consent of the
parties hereto in writing and will terminate: (i) upon mutual agreement of the
parties hereto, (ii) upon thirty (30) days advance written notice by either
party delivered to the other party, or (iii) automatically upon the termination
of the Participation Agreement.
10. The provisions, construction, validity and effect of this
Agreement will be construed in accordance with and governed by the laws of
NewYork.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
THE TRAVELERS INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President & Secretary
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Tax ID:
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Company Address:
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City, State, Zip:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DISTRIBUTORS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇ III
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Name: ▇▇▇▇ ▇. ▇▇▇▇ III
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Title: President
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c/o Morgan ▇▇▇▇▇▇▇ Investment Management Inc.
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