DISTRIBUTION AND SHAREHOLDER SERVICES AGREEMENT Service Shares of Janus Aspen Series (for Insurance Companies)
DISTRIBUTION
AND SHAREHOLDER SERVICES AGREEMENT
Service
Shares of Janus Aspen Series
(for
Insurance Companies)
This
Agreement is made as of December 31, 1999, by and between Janus Distributors,
Inc. (the “Distributor”), a Colorado corporation, and Nationwide Financial
Services, Inc. (“NFS”), a Delaware corporation.
Recitals
A. Nationwide
Life Insurance Company and Nationwide Life and Annuity Insurance Company
(collectively, “Nationwide”), subsidiaries of NFS, have entered into a
participation agreement with Janus Aspen Series (the “Trust”), an open-end
investment company registered under the Investment Company Act of 1940 (the
“1940 Act”) with respect to the purchase of a class of shares designated
“Service Shares” of one or more services of the Trust (each a “Portfolio”) by
certain separate accounts of Nationwide (“Accounts”).
B. The
Distributor serves as the distributor to Service Shares.
C. NFS
desires to provide certain distribution and shareholder services to owners
(“Contract Owners”) of variable life insurance policies or variable annuity
contracts (“Contracts”) in connection with their allocation of contract values
in the Service Shares of the Portfolio and Distributor desires NFS, or an
affiliate or subsidiary thereof, to provide such services, subject to the
conditions of this Agreement.
D. Pursuant
to Rule 12b-1 under the 1940 Act, the Service Shares of each Portfolio have
adopted a Distribution and Shareholder Servicing Plan (the “12b-1 Plan”) which,
among other things, authorizes the Distributor to enter into this Agreement
with
organizations such as NFS and to compensate such organizations out of each
Portfolio’s average daily net assets attributable to the Service
Shares.
Agreement
1. Service
of NFS
(a) NFS
or an affiliate or subsidiary thereof shall provide any combination of the
following support services, as agreed upon by the parties from time to time,
to
Contract Owners who allocate contract values to the Service Shares of the
Portfolios: delivering prospectuses, statements of additional information,
shareholder reports, proxy statements and marketing materials to prospective
and
existing Contract Owners; providing educational materials regarding the Service
Shares; providing facilities to answer questions from prospective and existing
Contract Owners about the Portfolios; receiving and answering correspondence;
complying with federal and state securities laws pertaining to the sale of
Service Shares; assisting Contract Owners in completing application forms and
selecting account options; and providing Contract Owner record-keeping and
similar administrative services.
(b) NFS
will provide such office space and equipment, telephone facilities, and
personnel as may be reasonably necessary or beneficial in order to provide
such
services to Contract Owners.
(c) NFS,
or an affiliate or subsidiary thereof, will furnish to the Distributor, the
Trust or their designees such information as the Distributor may reasonably
request, and will otherwise cooperate with the Distributor in the preparation
of
reports to the Trust’s Board of Trustees concerning this Agreement, as well as
any other reports or filings that may be required by law.
2. Indemnification. NFS
shall indemnify Distributor, the Trust, and their affiliates, directors,
trustees, employees and shareholders for any loss (including without limitation,
litigation costs, and expenses and attorneys’ and experts’ fees) directly
resulting from NFS’ negligent or willful act, omission or error, or NFS’ breach
of this Agreement. Such indemnification shall survive termination of
the Agreement.
3. Maintenance
of Records. NFS, or an affiliate or subsidiary thereof, shall
maintain and preserve all records as required by law to be maintained and
preserved in connection with providing the services herein. Upon
reasonable request of Distributor or the Trust, NFS shall provide the
Distributor, the Trust or the representative of either, copies of all such
records.
4. Fees. In
consideration of NFS’ performance of the services described in this Agreement,
Distributor shall pay to NFS a monthly fee (“Distribution Fee”) calculated as
follows: the average aggregate amount invested in each month in the Service
Shares of each Portfolio by the Accounts is multiplied by a pro-rata fee
factor. The pro-rata fee factor is calculated by: (a) dividing the
per annum factor set forth on Exhibit A for the Service Shares of each Portfolio
by the number of days in the applicable year, and (b) multiplying the result
by
the actual number of days in the applicable month. The average
aggregate amount invested over a one-month period shall be computed by totaling
the aggregate investment by the Accounts (share net asset value multiplied
by
total number of shares held) on each calendar days during such
month.
Distributor
will calculate the fee at the end of each month and will make such reimbursement
to the NFS. The reimbursement check will be accompanied by a
statement showing the calculation of the monthly amounts payable by Distributor
and such other supporting data as may be requested by the NFS.
5. Representations,
Warranties and Agreements. NFS represents, warrants, and
covenants that:
(a) It
and its employees and agents meet the requirements of applicable law, including
but not limited to federal and state securities law and state insurance law,
for
the performance of services contemplated herein;
(b) It
will not purchase Service Shares with Account assets derived from tax-qualified
retirement plan except indirectly, through Contracts purchased in connection
with such plans and the Service Fee does not include any payments to NFS that
is
prohibited under the Employee Retirement Income Securities Act of 1974 (“ERISA”)
with respect to any assets of a Contract Owner invested in a Contract using
the
Portfolios as investment vehicles;
(c) If
required by applicable law, NFS will disclose to each Contract Owner the
existence of the Distribution Fee received by NFS pursuant to this Agreement
in
a form consistent with the requirements of applicable law.
6. Termination.
(a) Unless
sooner terminated with respect to any Portfolio, this Agreement will continue
with respect to a Portfolio if only the continuance of a form of this Agreement
is specifically approved at least annually by the vote of a majority of the
members of the Board of Trustees of the Trust who are not “interested persons”
(as such term is defined in the ▇▇▇▇ ▇▇▇) and who have no direct or indirect
financial interest in the 12b-1 Plan relating to such Portfolio or any agreement
relating to such 12b-1 Plan, including this Agreement, cast in person at a
meeting called for the purpose of voting on such approval.
(b) This
Agreement will automatically terminate with respect to a Portfolio in the event
of its assignment (as such term is defined in the ▇▇▇▇ ▇▇▇) with respect to
such
Portfolio. This Agreement may be terminated with respect to any
Portfolio by the Distributor or by NFS, without penalty, upon 60 days’ prior
written notice to the other party. This Agreement may also be
terminated with respect to any Portfolio at any time without penalty by the
vote
of a majority of the members of the Board of Trustees of the Trust who are
not
“interested persons” (as such term is defined in the ▇▇▇▇ ▇▇▇) and who have no
direct or indirect financial interest in the 12b-1 Plan relating to such
Portfolio or any agreement relating to such Plan, including this Agreement,
or
by a vote of a majority of the Service Shares of such Portfolio on 60 days’
written notice.
(c) In
addition, either party may terminate this Agreement immediately if at any time
it is determined by any federal or state regulatory authority that compensation
to be paid under this Agreement is in violation of or inconsistent with any
federal or state law.
7. Miscellaneous.
(a) No
modification of any provision of this Agreement will be binding unless in
writing or executed by the parties. No waiver of any provision of
this Agreement will be binding unless in writing and executed by the party
granting such waiver.
(b) This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns; provided, however, that neither
this Agreement nor any rights, privileges, duties, or obligations of the parties
may be assigned by either party without the written consent of the other party
or as expressly contemplated by this Agreement.
(c) This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of Colorado, exclusive of conflicts of laws.
(d) This
Agreement may be executed in several counterparts, each of which shall be an
original but all of which together shall constitute one and the same
instrument.
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JANUS
DISTRIBUTORS, INC.
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NATIONWIDE
FINANCIAL SERVICES, INC.
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By:
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By:
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice
President
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Title: Senior
Vice President – Sales
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Financial
Services
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Exhibit
A to Distribution and Shareholder Services Agreement
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Name
of Portfolio
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Fee
Factor*
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All
Portfolios of Janus Aspen Series
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____%
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(Service
Shares)
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*Shall
not exceed ____%
December
31, 1999
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior
Vice President, Sales, Financial Services
Nationwide
Financial Services, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear
▇▇.
▇▇▇▇▇:
This
letter sets forth the agreement between Nationwide Financial Services, Inc.
(the
“Company”), and Janus Capital Corporation (the “Advisor”), concerning certain
administrative services.
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1.
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Administrative
Services and Expenses. Administrative services for the
separate accounts of an insurance company affiliated with the Company
(the
“Accounts”) which invest in Service Shares (a separate class of shares) of
one or more portfolios (collectively, the “Portfolios”) of Janus Aspen
Series (the “Trust”) pursuant to the Participation Agreement between such
insurance company and the Trust dated December 31, 1999 (the
“Participation Agreement”), and for purchases of variable annuity or life
insurance contracts (the “Contracts”) issued through the Accounts are the
responsibility of the Company. Administrative services for the
Portfolios, in which the Accounts invest, and for purchasers of shares
of
the Portfolios, are the responsibility of the Trust. The
administrative services the Company intends to provide to the Trust,
its
Portfolios and the Service Shares are set forth in Schedule A attached
to
this letter agreement, which may be amended from time to
time.
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2.
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Service
Fee. In consideration of the anticipated administrative
expense savings resulting to the Trust from the Company’s services, the
Advisor agrees to pay the Company a fee (“Service Fee”), computed daily
and paid monthly in arrears, at an annual rate equal to ten (__)
basis
points (____%) of the average monthly value of the Service Shares
of the
Portfolios held in the Accounts.
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For
purposes of this Paragraph 2, the average monthly value of the Service Shares
of
the Portfolios will be based on the sum of the daily net asset values of the
Service Shares of the Portfolios (as calculated by the Portfolios) on each
calendar day in a month divided by the number of calendar days in the
month.
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3.
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Representations
and Warranties.
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a.
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The
Company represents and warrants that: (1) it and its employees and
agents
meet the requirements of applicable law, including but not limited
to
federal and state securities law and state insurance law, for the
performance of services contemplated herein; and (2) it will not
purchase
Trust shares of the Portfolios with Account assets derived from
tax-qualified retirement plans except indirectly, through the Contracts
issued through the Accounts, and that the Service Fee does not include
any
payment to the Company that is prohibited under the Employee Retirement
Income Securities Act of 1974 (“ERISA”) with respect to any assets of a
Contract owner invested in a Contract using the Portfolios as investment
vehicles.
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b.
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The
Company represents, warrants and agrees that: (1) the payment of
the
Service Fee by the Advisor is designed to reimburse the Company for
providing administrative services to the Trust that the Trust would
customarily pay and does not represent reimbursement to the Company
for
providing administrative services to the Contract or Account as described
in Section 26 of the Investment Company Act of 1940 (the “1940 Act”) and
the rules and regulations thereunder; (2) no portion of the Service
Fee
will be rebated by the Company to any Contract owner; and (3) if
required
by applicable law, the Company will disclose to each Contract owner
the
existence of the Service Fee received by the Company pursuant to
this
letter agreement in a form consistent with the requirements of applicable
law and will disclose the amount of the Service Fee, if any, that
is paid
by the Trust.
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4.
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Indemnification.
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a.
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The
Company agrees to indemnify and hold harmless the Advisor and its
directors, officers, and employees from any and all loss, liability
and
expense resulting from any gross negligence or willful wrongful act
of the
Company in performing its services under this letter agreement, from
the
inaccuracy or breach of any representation made in this letter agreement,
or from a breach of a material provision of this letter agreement,
except
to the extent such loss, liability or expense is the result of the
Advisor’s willful misfeasance, bad faith or gross negligence in the
performance of its duties.
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b.
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The
Advisor agrees to indemnify and hold harmless the Company and its
directors, officers, agents and employees from any and all loss,
liability
and expense resulting from any gross negligence or willful wrongful
act of
the Advisor in performing its services under this letter agreement,
from
the inaccuracy or breach of any representation made in this letter
agreement, or from a breach of a material provision of this letter
agreement, except to the extent such loss, liability or expense is
the
result of the Company’s willful misfeasance, bad faith or gross negligence
in the performance of its duties.
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5.
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Termination.
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a.
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Either
party may terminate this letter agreement, without penalty, on sixty
(60)
days’ written notice to the other
party.
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b.
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This
letter agreement will terminate at the option of either party in
the event
of the termination of the Participation
Agreement.
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c.
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This
letter agreement will terminate immediately upon the determination
of
either party, with the advice of counsel, that the payment of the
Service
Fee is in conflict with applicable
law.
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6.
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Amendment. This
letter agreement may be amended only upon mutual agreement of the
parties
hereto in writing.
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7.
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Confidentiality. The
terms of this letter agreement will be treated as confidential and
will
not be disclosed to the public or any outside party except with each
party’s prior written consent, as required by law or judicial process or
as provided in paragraph 4b herein.
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8.
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Assignment. This
letter agreement may not be assigned (as that term is defined in
the ▇▇▇▇
▇▇▇) by either party without the prior written approval of the other
party, which approval will not be unreasonably withheld, except that
the
Advisor may assist its obligations under this letter agreement, including
the payment of all or any portion of the Service Fee, to the Trust
upon
thirty (30) days’ written notice to the
Company.
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9.
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Governing
Law. This letter agreement will be construed and the
provisions hereof interpreted under and in accordance with the laws
of the
State of Ohio.
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10.
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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.
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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,
JANUS
CAPITAL CORPORATION
By:
Name:
[▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇]
Title:
[Vice
President]
NATIONWIDE
FINANCIAL SERVICES, INC.
By:
Name:
[▇▇▇▇▇▇▇ ▇
▇▇▇▇▇]
Title:
Senior Vice President – Sales – Financial Services
Attachment:
Schedule A
Schedule
A
Pursuant
to the letter agreement to which this Schedule is attached, the Company will
perform administrative services including, but not limited to, the
following:
1. Distribute
to Contract owners copies of the Portfolios’ prospectuses, proxy materials,
period fund reports to shareholders and other materials that the Trust is
required by law or otherwise to provide to its shareholders.
2.
Provide Contract owner services including, but not limited to, financial
consultants’ advice with respect to inquiries related to the Portfolios (not
including information about performance or related to sales) and communicating
with Contract owners about Portfolio (and subaccount) performance.
3.
Provide other administrative support for the Trust as mutually agreed to by
the
Company and the Advisor and relieve the Trust of other usual or incidental
administrative services provided to individual Contract owners.
December
31, 1999
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇
Senior
Vice President, Sales, Financial Services
Nationwide
Financial Services, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear
▇▇.
▇▇▇▇▇:
This
letter sets forth certain supplemental understandings among Nationwide Life
Insurance Company and Nationwide Life and Annuity Insurance Company
(collectively, “Nationwide”), and Janus Capital Corporation (“Janus Capital”),
concerning arrangements governed by the Fund Participation Agreement between
Nationwide and Janus Aspen Series (the “Trust”) dated December 31, 1999 (the
“Participation Agreement”). Under the Participation Agreement, the
Trust agrees to make two of its classes of shares, designated Institutional
Shares and Service Shares, available to serve as investment vehicles for certain
variable life insurance policies and variable annuity contracts offered by
Nationwide (the “Contracts”).
Section
2.3(a) of the Participation Agreement provides that Nationwide shall bear the
costs of printing and distributing the Trust’s prospectus, statement of
additional information, shareholder reports and other shareholder communications
to owners of and applicants for Contracts.
Janus
Capital hereby agrees to reimburse Nationwide for the costs of printing the
Trust’s prospectus, statement of additional information, shareholder reports and
shareholder communications to owners of and applicants for
Contracts. Notwithstanding the foregoing, Nationwide agrees to pay
___% of the printing costs for the Trust prospectus and statement of additional
information associated with the shares of the Trust ordered by Nationwide on
behalf of Contact owners between December 21, 1999 and April 30,
2000.
Either
party may terminate this letter agreement, without penalty, on sixty (60) days’
written notice to the other party. This letter agreement will
terminate in the event of the termination of the Participation
Agreement.
The
terms
of this letter agreement will be treated as confidential and will not be
disclosed to the public or any outside party except with each party’s prior
written consent, or as required by law or judicial process.
If
this
letter agreement is consistent with your understanding of the matters we
discussed, kindly sign below and return a signed copy to us.
Very
truly yours,
JANUS
CAPITAL CORPORATION
By:
Name:
[▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇]
Title:
[Vice
President]
NATIONWIDE
LIFE INSURNACE COMPANY and NATIONWIDE
LIFE
AND
ANNUITY INSURANCE COMPANY
By:
Name:
[▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇]
Title:
[President – NFS Distributors,
Inc.]