GE Investments Funds, Inc. (the “Company”) and each life insurance company listed on Schedule
A hereof (each, an “Insurer;” together, the “Insurers”) mutually agree to the arrangements set
forth in this agreement (the “Agreement”) made and entered into effective this 20th day of
November, 2009.
RECITALS
(A) The Company is a Virginia corporation registered under the Investment Company Act of 1940,
as amended, (the “1940 Act”) as an open-end management investment company consisting of a number of
investment portfolios. This Agreement relates exclusively to the Company’s Total Return Fund (the
“Fund”).
(B) GE Asset Management Incorporated (“GEAM”) is the investment adviser to the Fund. GE
Investment Distributors, Inc. (“GEID”) is the principal underwriter of the shares of the Fund.
(C) The Company issues several classes of shares in connection with the Fund. This Agreement
relates exclusively to Class 3 shares of the Fund (the “Shares”).
(D) Each Insurer issues variable annuity contracts (the “Contracts”) and/or variable life
insurance policies (the “Policies”) that offer the Fund as an investment option. As used herein,
references to owners of Contracts and Policies include participants under group Contracts and
Policies if such participants have either: (1) discretion to allocate purchase payments and
transfer Contract or Policy value attributable to them between and among investment options
available under the Contracts or Policies, or (2) only the Fund as an investment option.
(E) Each Insurer has entered into a participation agreement (the “Participation Agreement”)
with the Company, GEID and GEAM pursuant to which it purchases shares of the Fund (and other series
of the Company’s shares) for its separate accounts.
(F) Purchase payments made under the Contracts and Policies by their owners are invested in
separate accounts of the Insurers. At the direction of owners of Contracts and Policies, the
Insurer invests assets of its separate accounts in shares of the Fund.
(G) Each Insurer (or its agent) performs all of the services necessary to administer the
Contracts and Policies issued by it including record keeping and other administrative services that
benefit the Company and the Fund for which the Fund would have to pay if not provided by the
Insurer (or its agent).
(H) Each Insurer desires to be compensated for providing the aforementioned record keeping and
other administrative services.
(I) The Company has adopted a plan pursuant to which the Shares shall bear an expense for
shareholder services (the “Investor Services Plan”) provided to the Fund and the Company by the
Insurers.
NOW THEREFORE, the parties agree as follows:
1.
Investor Service Expense Payments
(a) Subject to paragraph (c) of this section, the Company agrees to pay each Insurer at the
end of each calendar quarter an amount equal, on an annual basis, to % of average daily net
assets supporting the Shares held by separate accounts of that Insurer throughout that
calendar quarter.
(b) The Company or GEAM shall calculate and make the payment described in paragraph (a) of
this section within 90 days of the end of each calendar quarter.
(c) The Company and each Insurer agrees that Shares will be offered only in connection with
Contracts and Policies shown on Schedule B hereof.
(d) The Insurers and the Company understand that the Company may enter into similar
agreements for record keeping and other administrative services with other insurance
companies with regard to the Shares, the Fund, or any other Fund of the Company.
2.
Services Provided by the Insurers
Each Insurer agrees to provide, including but not limited to, the following record keeping and
other administrative services to the Company and the Fund:
•
periodic reporting of information to the Company.
•
preparation, printing and distribution of confirmation and periodic account
statements to owners of Contracts and Policies indirectly invested in Shares of
the Fund.
•
solicitation of Contract owner and Policy owner voting instructions and
tabulation of the same.
•
attendance at and participation in meetings of holders of Shares of the Fund.
•
provide other administrative support to the Company or the Fund as mutually
agreed from time to time between the Company and each Insurer.
•
maintain records of daily transactions in separate account units and compute
the number of Shares that must be purchased or redeemed each day to support such
transactions.
•
to the extent necessary for the Company to comply with Rule 22c-2 under the
1940 Act and its policies on frequent trading, make available to the Company or
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its agents the records of daily transactions in separate account units, it being
understood that the Insurers shall not be obligated to violate any federal or state
law or rule or regulation thereunder concerning privacy of Contract owners.
•
assist the Company in complying with Section 314(b) of the USA Patriot Act by
implementing policies and procedures reasonably designed to identify owners or
prospective owners of Contracts or Policies suspected of possible terrorist or
money-laundering activities and prevent the same from indirectly investing in
Shares.
•
transmission of requests to purchase and redeem Shares to the Company’s
transfer agent or NSCC.
•
assist the Company’s transfer agent in recording the issuance of Shares by
maintaining a record of daily purchases and redemptions of Shares.
•
prepare and provide reports to third-party reporting services.
•
relieve the Company, the Fund, or the Company’s transfer agent of other
incidental record keeping or administrative services generally provided by mutual
funds (or their transfer agents) to their shareholders by providing the same to
owners of Contracts and Policies indirectly invested in Shares of the Fund.
3.
Third Party Service Providers
An Insurer may retain a third-party service provider to perform one or more of the services it
is obligated to perform under this Agreement, provided, however, that the retention does not
operate to relieve the Insurer of any obligation (including obligations arising from the Insurer’s
representations and warranties below) it has to the Company or its affiliates under this Agreement.
In addition, retention of unaffiliated third-party service providers is subject the following
conditions:
•
the retention must be pursuant to a written agreement (a “retention agreement”)
conforming in substance to the terms of this Agreement (i.e., not inconsistent with
any term or provision of this Agreement) and provided to the Company for its
approval at least seven (7) days in advance of its execution.
•
in the event that the Insurer retains a third-party to perform fewer than all of
the services provided for herein, any compensation under this Agreement that the
Insurer retains must be commensurate with the services it provides under this
agreement.
4.
Nature of Payments
The Insurers and the Company recognize and agree that the Company’s payments to each Insurer
under this Agreement are for record keeping and other administrative services only and do not
constitute payment in any manner for: (1) investment advisory services, (2) the cost of
distributing the Contracts and Policies, (3) the cost of distributing Shares, (4) the cost of
3
providing “personal services and/or the maintenance of shareholder accounts” as referenced in FINRA
Conduct Rule 2830(b)(9) (and having the same meaning given to it in NASD Notices to Members 90-56,
92-41 and 93-12) to owners or prospective owners of Contracts or Policies, or (5) the Insurers’
selection of the Fund. Likewise, the Insurers and the Company recognize and agree that the
Company’s payments under this Agreement are not otherwise related to investment advisory or
distribution services or expenses.
The Insurers and the Company recognize and agree that the services each Insurer provides under
this Agreement do not make an Insurer either an “administrator” or a “transfer agent” to the
Company under Rule 38a-1 under the 1940 Act.
5.
Representations and Warranties
The Company represents and warrants that:
•
the Company has the legal authority to make the payments under this
Agreement.
•
the Company will perform its obligations under this Agreement in compliance
with applicable law.
•
the payments made by the Company to each Insurer under this Agreement are
for the record keeping and other administrative services described herein and
are not “sales charges” as defined in FINRA Conduct Rule 2830(b)(8).
•
the payments made by the Company to each Insurer under this Agreement are
not compensation for the purchase or sale of Shares or other Fund shares to any
separate account of the Insurer.
Each Insurer represents and warrants that:
•
the Insurer has the legal authority to accept the payments made to it by the
Company under this Agreement.
•
the Insurer will perform its obligations under this Agreement in compliance
with applicable law.
•
payments received by the Insurer from the Company under this Agreement are
for the record keeping and other administrative services described herein and
are not “sales charges” as defined in FINRA Conduct Rule 2830(b)(8).
•
the Insurer will not use the payments made to it by the Company under this
Agreement for any purpose coming within the meaning of “personal services
and/or the maintenance of shareholder accounts” as referenced in FINRA Conduct
Rule 2830(b)(9) (and having the same meaning given to it in FINRA Notices to
Members 90-56, 92-41 and 93-12).
•
regarding use of payments made to the Insurer by the Company under this
Agreement:
4
o
the Insurer will not use the payments made to
it by the Company under this Agreement to finance sales or sales
promotion expenses of the Contracts, Policies or Shares, or to finance
any activity primarily intended to result in the sale or distribution
of the Contracts, Policies, or Shares.
o
in the case of group Contracts sold to sponsors
of employee benefit plans, the Insurer will not use the payments made
to it by the Company under this Agreement to finance sales or sales
promotion expenses of soliciting plan participants to become
participants under a group Contract held by their plan and thereby
invest indirectly in Shares, or to finance any activity primarily
intended to result in the sale or distribution of the Contracts or
Shares to plan participants.
o
in the event that the Insurer pays all or part
of the payments made to it by the Company under this Agreement to a
record keeper retained by an employee benefit plan holding a group
Contract, such record keeper will not be a broker-dealer.
•
payments received by the Insurer from the Company under this Agreement are
not compensation to the Insurer for the purchase or sale of Shares or other
Fund shares by it for any separate account of the Insurer.
•
the Insurer will not use the payments received from the Company under this
Agreement to finance any activity primarily intended to result in the
promotion, sale or distribution of Shares or otherwise promote the Fund to
owners of Contracts entitled to invest indirectly in Shares services provided
by the Insurer to the Company under this Agreement have not been financed or
paid for out of revenues received by the Insurer in the form of fees or charges
under the Contracts or the Policies, nor does the Insurer receive compensation,
except under this Agreement, for the services performed under this Agreement.
This provision, however, does not prohibit an Insurer from paying to an agent
acting as a third-party service provider pursuant to Section 3 hereof, an
amount for providing Investor Services in excess of the amount shown in Section
1(a) hereof.
•
the fees and charges deducted under the Contracts and the Policies, along
with the payments received by it from the Company under this Agreement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
the Insurer incurs or expects to incur, and the risks the Insurer assumes under
the Contracts and Policies.
•
the Insurer is solely responsible for the design of the Contracts and
Policies including the fees and charges assessed thereunder. The Insurer is
solely responsible for the selection of the Fund as a mutual fund investment
option for Contracts shown on Schedule B.
•
the Insurer is solely responsible for the selection of the Fund as the sole
mutual fund investment option for Contracts shown on Schedule B.
5
•
the Insurer’s written compliance policies and procedures include policies
and procedures reasonably designed to ensure that each representation and
warranty herein remains true throughout the term of this agreement.
6.
Annual Certification
Each Insurer shall provide to the Company upon request written certification of the continued
effectiveness of each representation and warranty made by it in section 5 of this Agreement.
Likewise, the Company shall provide to each Insurer upon request written certification of the
continued effectiveness of each representation and warranty made by it in section 5 of this
Agreement.
7. Indemnification
(a) The Company, the Funds and their affiliates shall not be responsible for, and each
Insurer shall indemnify and hold the Company, the Funds and their affiliates and their
officers, directors, employees, agents, and persons, if any, who control them (within the
meaning of the 1940 Act) harmless from an against any and all losses, damages, costs,
charges, counsel fees, payments, expenses, and liability, arising out of or attributable to:
•
the Insurer’s lack of good faith or willful misconduct in
carrying out its duties and responsibilities under this Agreement,
•
the failure of the Insurer to comply with any applicable law,
rule or regulation in connection with the discharge of any
obligations under this Agreement, or
•
any breach by the Insurer of any material provision of this
Agreement, including any breach by the Insurer of any representation
made by it in the Agreement.
(b) The Insurers shall not be responsible for, and the Company shall indemnify and hold each
Insurer and its affiliates and their officers, directors, employees, agents, and persons, if
any, who control them (within the meaning of the 1940 Act) harmless from an against any and
all losses, damages, costs, charges, counsel fees, payments, expenses, and liability,
arising out of or attributable to:
•
the Company’s lack of good faith or willful misconduct in
carrying out its duties and responsibilities under this Agreement,
•
the failure of the Company to comply with any applicable law,
rule or regulation in connection with the discharge of any
obligations under this Agreement, or
•
any breach by the Company of any material provision of this
Agreement, including any breach by the Company of any representation
made by it in the Agreement.
6
8.
Term
This Agreement shall remain in full force and effect for a period of one year from November20, 2009 and shall be automatically renewed thereafter for successive one-year periods, unless
otherwise terminated in accordance with Section 9.
9.
Termination
(a) This Agreement shall terminate upon mutual agreement of the Company and the Insurers in
writing.
(b) Any party to this Agreement may terminate this Agreement at the end of any one-year term
by written notice to the other party at least 30 days before the end of such term.
(c) This Agreement shall automatically terminate upon the termination of the Participation
Agreement or upon the termination of the Investor Services Plan.
(d) Section 7 of this Agreement shall survive any termination of this Agreement.
10.
Amendment
This Agreement may be amended only by mutual agreement of the Company and the Insurers in
writing.
11.
Notices
All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered:
Attention: General Counsel
Phone: (949) 219-3852 Facsimile: (949) 219-6952
(b) To the Company, at P.O. Box 7900, 3001 Summer Street, Stamford, CT06904-7900.
Attention: Senior Vice President and Deputy General Counsel
GE Asset Management Incorporated
Phone: (203) 708-3191 Facsimile: (203) 708-3234
12.
Miscellaneous
(a) Successors and Assigns. This Agreement shall be binding upon the parties hereto and
their transferees, successors and assigns. The benefits of and the right to enforce this
Agreement shall accrue to the parties and their transferees, successors and assigns.
7
(b) Assignment. No party may assign the Agreement, or any of the rights, obligations, or
liabilities under the Agreement, without the written consent of the other parties.
(c) Intended Beneficiaries. No provision of this Agreement shall be construed to give any
person or entity other than the parties hereto any legal or equitable claim, right or
remedy. The Agreement is intended for the exclusive benefit of the parties hereto.
(d) Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which shall together constitute one and the same
instrument.
(e) Applicable Law. This Agreement shall be interpreted, construed, and enforced in
accordance with the laws of the Commonwealth of Virginia, without reference to the conflict
of laws principles thereof.
(f) Severability. If any portion of this Agreement shall be found to be invalid or
unenforceable by a court or tribunal or regulatory agency of competent jurisdiction, the
remainder shall not be affected thereby, but shall have the same force and effect as if the
invalid or unenforceable portion had not been part of the Agreement.
[Remainder of page intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
PACIFIC LIFE AND ANNUITY
GE INVESTMENTS FUNDS, INC.
COMPANY
By:
By:
Name:
Name:
Title:
Assistant Vice President
Title:
Attest:
Name:
Title:
Corporate Secretary
PACIFIC LIFE INSURANCE
COMPANY
By:
Name:
Title:
Assistant Vice President
Attest:
Name:
Title:
Corporate Secretary
9
Schedule A
Life Insurance Companies
Pacific Life & Annuity Company
Pacific Life Insurance Company
10
Schedule B
Variable Annuity Contracts Registered Under the Securities Act of 1933
The following Contracts are offered by both Pacific Life Insurance Company and Pacific Life &
Annuity Company unless otherwise noted below. The variable annuity contracts are:
Pacific Value
Pacific Value Edge
Pacific Voyages
Pacific Innovations*
Pacific Innovations Select
Pacific Select Variable Annuity*
Pacific One*
Pacific One Select
Pacific Portfolios
Pacific Portfolios for Chase
Pacific Explorer
Pacific Journey
Pacific Odyssey
Pacific Destinations
*
These Contracts are only offered by Pacific Life Insurance Company.
11
Dates Referenced Herein and Documents Incorporated by Reference
