Exhibit 10.2
ADMNISTRATIVE SERVICES
AGREEMENT
This Agreement is entered into
effective the 20 th
day of October, 2008, by and
between Nationwide Life Insurance Company and Nationwide Life and
Annuity Insurance Company (collectively referred to hereinafter
“NWL”) and Waddell & Reed, Inc.
(hereinafter “Waddell & Reed”), on its own
behalf and on behalf of its affiliated corporate insurance
agencies.
WHEREAS, NWL agrees to develop, issue and administer
certain annuity contracts life policies and qualified
employer-sponsored retirement plan trust products (identified in
Appendix A attached hereto and collectively, referred to
hereinafter as (“the Products”); and
WHEREAS, Waddell & Reed supports the agreement
of NWL to develop, issue and administer the Products listed in
Appendix A attached hereto.
NOW, THEREFORE,
in consideration of the promises,
covenants and undertakings contemplated herein, NWL and
Waddell & Reed agree as follows:
APPOINTMENT OF PRODUCT
DEVELOPER
NWL is hereby appointed Product
Developer for the products referenced above and described in the
attached Appendix A. The role of Product Developer means NWL shall
develop and support the products for distribution exclusively by
Waddell & Reed and perform those functions enumerated in
the attached Exhibit A.
RELATIONSHIP AND WHOLESALER
SUPPORT
NWL will dedicate one person to
manage the relationship with Waddell & Reed during the
term of the Exclusivity provision below. NWL will provide
wholesaling and service support for the Products that is reasonably
satisfactory to Waddell & Reed. Nationwide will
sponsor and participate in periodic meetings of Waddell &
Reed’s sales representatives, as requested from time to time
by Waddell & Reed during the term of the Exclusivity
period below.
EXCLUSIVITY
Except as otherwise provided herein,
NWL will be the exclusive provider to Waddell & Reed of
the product types listed in the Appendix A attached hereto for a
period of three (3) years from October 2008. During this
three- (3) year period, Waddell & Reed will not offer
any other competitor’s products to its clients, except as
otherwise provided herein. Notwithstanding the foregoing, this
exclusivity provision will not apply to (a) clients
transferring similar investment products from one investment
advisor and/or broker-dealer to Waddell & Reed,
(b) additions made by Waddell & Reed clients to
products owned prior to the commencement of distribution of like
NWL products by Waddell &
Reed pursuant to the General Agent
Agreement, (c) sales made by new Waddell & Reed
financial advisors to prospects to which non-NWL products were
offered prior to their engagement by Waddell & Reed,
(d) products offered by Securian/Minnesota Life Insurance
Company and its affiliates, (e) products offered by one
(1) additional insurance company manufacturer to be identified
by Waddell & Reed following the effective date of this
Agreement, and (f) exception sales of products offered by
other insurance companies where the sale of a NWL product is
rejected by Waddell & Reed clients due to product feature
or other reasons.
Waddell & Reed will make a
good faith effort to monitor and report these exceptions to ensure
that the principle of overall exclusivity is maintained. NWL will
provide sufficient resources to fulfill mutually agreed upon
product feature, support and service level standards. It is
understood and agreed that such exclusivity shall terminate at
Waddell & Reed’s option if (a) NWL fails to
meet the agreed upon product feature, support and service standards
or (b) NWL experiences a change of control involving an
unaffiliated organization. NWL may also terminate its exclusive
relationship with Waddell & Reed if Waddell &
Reed fails to meet its obligations as set forth herein.
Notwithstanding the foregoing, if
Waddell & Reed experiences a change of control involving
an unaffiliated organization and such organization desires for
Waddell & Reed to sell its products or the products of one
or more of its affiliates (“Acquirer Products”), this
exclusivity provision will not apply to the Acquirer Products. It
is understood and agreed that if such a change of control should
occur, and Waddell & Reed commences offering Acquirer
Products, Waddell & Reed shall use its best efforts to
ensure that NWL’s products receive and maintain an equitable
competitive position in Waddell & Reed’s
distribution system throughout the exclusive period. For purposes
of this provision, an “equitable competitive position”
shall mean the opportunity for NWL to provide products with
substantially similar costs, features, commissions, fund
diversification and positioning as the Acquirer Products. In the
event such a change of control occurs and Waddell & Reed
commences offering Acquirer Products, the exception from this
exclusivity provision identified in Section (b) above,
regarding a change of control at NWL involving an unaffiliated
organization, shall cease to apply. The terms of the Exclusivity
provision may be modified only in writing once mutually agreed upon
by both parties.
Waddell & Reed agrees
that, at all times during the term of this Agreement, both
the level of marketing and promotional services and
the level of product and other administrative support services
provided by Waddell & Reed to NWL will be at least equal
to the level of such
services provided in each case by Waddell & Reed to Minnesota Life and its affiliated companies (“Minneso.ta Life Companies”), and any other co-exclusive
provider permitted under this Agreement (“Co-Exclusive
Provider”). Waddell & Reed shall provide NWL
with such relevant information as NWL may reasonably request about
the nature, scope and frequency of all marketing, promotional and
administrative services provided by Waddell & Reed to the
Minnesota Life Companies and/or the Co-Exclusive Provider, and
shall keep NWL reasonably informed about changes in the levels of
such services.
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SALES MATERIAL AND OTHER
DOCUMENTS
Waddell & Reed shall not
print, publish or distribute any advertisement, circular or any
document relating to the products distributed pursuant to this
Agreement or relating to NWL unless such advertisement, circular or
document shall have been approved in writing by NWL, which approval
shall not be unreasonably withheld and shall be given as promptly
as possible. Neither NWL nor any of its affiliates shall print,
publish or distribute any advertisement, circular or any document
relating to the products distributed pursuant to this Agreement or
relating to Waddell & Reed unless such advertisement,
circular or document shall have been approved in writing by
Waddell & Reed, which approval shall not be unreasonably
withheld and shall be given as promptly as possible. However,
nothing herein shall prohibit any person from advertising the
products in general or on a generic basis.
SALES MATERIAL
1. NWL shall develop and prepare promotional
material to be used in the distribution of the products, in
consultation with Waddell & Reed.
2. NWL is responsible for the printing of such
promotional material.
3. NWL is responsible for the expense of providing
such promotional material.
4. NWL is responsible for approval of promotional
material by state insurance regulators, where required.
5. Waddell & Reed is responsible for the
filing of all appropriate promotional material with federal
securities regulators.
6. All promotional material relating to the
products shall be subject to prior approval by Waddell &
Reed.
7. Waddell & Reed and NWL agree to abide
by the Advertising and Sales Promotion Material Guidelines,
attached hereto as EXHIBIT B, and incorporated herein by
reference.
PROSPECTUSES
NWL represents that the Contracts
and Policies for the products, (collectively referred to
hereinafter as “the Contracts”), are or shall be
properly registered under the 1933 Act and/or the 1940 Act and
agrees that the registration statements under the 1933 Act and/or
the 1940 Act for the Contracts will remain in full force and effect
for the duration of this Agreement. If any state should amend its
current securities laws to require registration of insurance
contracts, then NWL will comply with the amended state
law.
Combined Product and Underlying
Sub Account Prospectus -
NWL shall be responsible for printing the product prospectuses and
the underlying sub account prospectuses as a combined document.
Waddell & Reed shall be responsible for providing a
camera-ready copy of the underlying sub account prospectuses, as
amended from time to time, to NWL for its use in printing the
combined document.
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This document will be used in sales
kits and in the contract package for newly issued contracts. The
total printing expense for the combined document shall be borne by
NWL. Any annual product prospectus mailing required to be
distributed to policyholders (Shareholders) by applicable law will
not be produced as a combined document.
Product Prospectus
- NWL shall be responsible for
printing the product prospectuses for the annual product prospectus
mailing required to be distributed to policyholders (Shareholders)
by applicable law. The total printing expense and mailing expense
(postage) for the product prospectuses will be borne by
NWL.
Underlying Sub Account
Prospectus -
Waddell & Reed will print the underlying sub account
prospectuses, and shall bear the total printing expense relating to
any annual underlying sub account prospectus mailing required to be
distributed to policyholders (Shareholders) by applicable law. NWL
within ten (10) business days of a request by
Waddell & Reed, shall send to Waddell & Reed an
electronic file in a format reasonably acceptable to
Waddell & Reed containing the names and mailing addresses
of then-current policyholders to enable it to mail the underlying
sub account prospectuses. NWL will reimburse
Waddell & Reed for the postage expense of the annual
underlying sub account prospectus mailing required to be
distributed to policyholders (Shareholders) by applicable law.
Waddell & Reed and NWL shall share equally that portion of
total printing expenses relating to the underlying sub account
prospectuses produced for soliciting prospective policyholders
(Marketing).
Supplements to Underlying Sub
Account Prospectus -
Waddell & Reed is responsible for the printing and mailing
of any supplements to underlying sub account prospectuses required
to be distributed to policyholders (Shareholders) by applicable
law. NWL within ten (10) business days of a request by
Waddell & Reed, shall send to Waddell & Reed an
electronic file in a format reasonably acceptable to
Waddell & Reed containing the names and mailing addresses
of then-current policyholders to enable it to mail the underlying
sub account prospectus supplement. Waddell & Reed
shall be responsible for providing NWL a camera-ready copy of the
supplement to the underlying sub account prospectuses to update the
combined product and underlying sub account prospectus. NWL shall
reimburse Waddell & Reed for associated postage expense of
any supplements to underlying sub account prospectuses.
Underlying Sub Account Semiannual
and Annual Reports -
Waddell & Reed will print and bear the printing expense
for the underlying sub account semiannual and annual reports
distributed to policyholders (Shareholders) and NWL will reimburse
Waddell & Reed for the postage expense of the underlying
sub acccount semiannual and annual reports distributed to
policyholders (Shareholders).
Upon request, NWL will provide
Waddell & Reed copies of all registration statements,
prospectuses, statements of additional information, reports, sales
literature and other promotional materials, applications of
exemption, requests for no action letters, and all amendments to
any of the above, that relate to the Contracts or a Variable
Account.
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Upon request, NWL will provide
Waddell & Reed with a report, in a format reasonably
acceptable to Waddell & Reed, listing the total number of
Contract policyholders who have selected each of the sub
accounts.
NWL, during the term of this
Agreement, will immediately notify Waddell & Reed of the
following: (i) When the Registration Statement for any
Contract has become effective or when any amendment with respect to
the Registration Statement thereafter becomes effective;
(ii) Any request by the SEC for any amendments or supplements
to the Registration Statement for any Contract or any request for
additional information that must be provided by Waddell &
Reed; and (iii) The issuance by the SEC of any stop order with
respect to the Registration Statement for any Contact or any
amendments thereto or the initiation of any proceedings for that
purpose or for any other purpose relating to the registration
and/or offering of the Contracts.
CONTRACTS, APPLICATIONS AND
RELATED FORMS
NWL is responsible for the design of
product applications, contracts and related service forms in
consultation with Waddell & Reed;
NWL is responsible for the printing
of adequate supplies of product applications, contracts and related
service forms;
NWL will, during the term of this
Agreement, immediately notify Waddell & Reed of the
following: (i) The states or jurisdictions where approval of
the product contract forms is required under applicable insurance
laws and regulations, and whether and when such approvals have been
obtained; and (ii) The states or jurisdictions where any
product contract form may not lawfully be sold.
NWL is responsible for the design
and printing of service forms which the parties jointly determine
to be necessary.
NWL is responsible for supplying
adequate quantities of service forms and will arrange for delivery
of such forms in bulk to any location designated by
Waddell & Reed.
PRODUCTION REPORTS
NWL will provide periodic production
reports to Waddell & Reed during the term of this
Agreement. The frequency, content and format of such
production reports shall be reasonably satisfactory to
Waddell & Reed.
COMPLAINT HANDLING
NWL and Waddell & Reed
shall inform the other party of (i) any complaints made to
such party relating to the Services or Products provided under this
Agreement, (ii) any actions, proceedings, claims, demands or
complaints brought by a third party relating to the services or
products provided under this Agreement, or to (iii) any
complaints
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brought by a regulatory body
relating to the Services or Products provided under this Agreement;
and cooperate with the other party with respect to the resolution
of such complaints and when possible adhering to regulatory
deadlines.
MARKETING
ALLOWANCE
NWL agrees to provide
Waddell & Reed, promptly upon written request, records to
verify the accuracy of the marketing allowance
calculations.
Variable Annuities
In addition to the compensation
payable to Waddell & Reed by NWL under the Distribution
Agreement, NWL shall calculate and pay to Waddell & Reed
marketing allowance compensation in an amount equal to 0.25%
annually of the average monthly account value of all variable
annuity assets for the products listed below distributed by
Waddell & Reed. The marketing allowance shall be
paid by NWL to Waddell & Reed monthly and shall survive
termination of this Agreement and the Distribution
Agreement.
|
Variable Annuity Products
|
|
Waddell & Reed Advisors
Select Annuity
Waddell & Reed Advisors
Select Plus Annuity
Waddell & Reed Advisors
Select Plus Annuity NY
Waddell & Reed Advisors
Select Preferred Annuity
Fixed Annuities
In addition to the compensation
payable to Waddell & Reed by NWL under the General Agent
Agreement, NWL shall calculate and pay to Waddell & Reed
marketing allowance compensation in an amount equal to 0.25% of
gross sales of the fixed annuities listed below distributed by
Waddell & Reed.
Waddell & Reed Advisors
Nationwide Platinum V Fixed Annuity
Waddell & Reed Advisors
Nationwide Platinum V Fixed Annuity NY
Nationwide Platinum V Plus Fixed
Annuity
Nationwide Quatro Select
Nationwide Quatro Select
NY
Nationwide will pay
Waddell & Reed asset based marketing allowance
compensation in an amount based upon the chart below. The
payment will be a percentage of the average monthly account value
of specified fixed annuities. The applicable annuities are the
Waddell & Reed Advisors Nationwide Platinum V Fixed
Annuity and Waddell & Reed Advisors Nationwide Platinum V
Fixed Annuity NY distributed by Waddell & Reed. It is
hereby recognized that the marketing allowance based on assets will
reduce the effective interest rates on affected contracts by a
corresponding amount.
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Annual percentage of W&R
Advisors Platinum V and Platinum V NY assets
|
Effective date
|
%
|
|
October 1, 2001 – September 30, 2002
|
0.25%
|
|
October 1, 2002 – October 14, 2002
|
0.10%
|
|
October 15, 2002 – October 23, 2002
|
0.00%
|
|
October 24, 2002 – December 4, 2002
|
0.10%
|
|
December 5, 2002 – January 5, 2003
|
0.25%
|
|
January 6, 2003 – January 31, 2003
|
0.20%
|
|
February 1, 2003 and later
|
0.00%
|
Variable Immediate
Annuity
NWL will pay Waddell & Reed
marketing allowance compensation in an amount equal to 0.25%
annually of the average daily assets in the variable funds of the
Waddell & Reed Advisors Select Income Annuity. The
marketing allowance shall be paid by NWL to Waddell & Reed
monthly and shall survive termination of this Agreement and the
Distribution Agreement.
WEBSITE HOSTING AND
MAINTENANCE
NWL shall have sole control over the
internet site at www.nationwidefinancial.com/waddellreed
(the “Web Site”). Both parties agree that NWL will
conduct regular performance updates and Web Site enhancements.
Modifications in the Web Site shall be deemed approved if Waddell
and Reed fails, within 10 business days, to object in writing to
NWL’s Web Site changes. In the event Waddell and Reed objects
to certain updates or enhancements, the parties shall negotiate in
good faith, without penalty, and agree in writing to a Web Site
solution acceptable to both parties.
NWL shall be responsible for
compliance with the security, privacy and user access policies of
the Web Site and compliance with all applicable state and federal
laws pertaining to the Web Site, with the exception of the form and
content of materials created by and obtained from
Waddell & Reed.
No compensation shall be paid and
each party shall bear its own costs with respect to the creation,
maintenance and operation of the Web Site.
Both parties expressly agree that
the indemnifications and representations of the Agreement are
extended to include the Web Site activities. In addition, the
following acknowledgements and representations are made,
specifically relating to the Web Site:
Ownership of the Web Site. As
between Waddell & Reed and NWL, Waddell & Reed
acknowledges that NWL is the exclusive owner of the Web Site, its
services and content. NWL acknowledges that content given to NWL by
Waddell & Reed for the Web Site shall remain the property
of Waddell & Reed or its licensor. Neither NWL
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nor Waddell & Reed shall
have any rights in the other party’s content other than the
limited right to use such content as required to perform the terms
of this Agreement.
Since NWL has customized this
particular Web Site for Waddell & Reed, Waddell &
Reed hereby grants to NWL the nonexclusive, nontransferable,
nonassignable right during the term of this Agreement to use (i.e.,
to copy, transmit, distribute, display and perform both privately
and publicly), the Waddell & Reed icon, the
Waddell & Reed name and any other related textual and
graphic materials, if any, that are provided by Waddell &
Reed to NWL for the express purpose of inclusion on the Web
Site.
To further the purpose, and subject
to the terms of this Agreement, each party hereby grants to the
other party a limited, non-exclusive, nonsublicenseable,
royalty-free, worldwide license to use such party’s
trademarks, service mark
