AGREEMENT
AGREEMENT effective August 15, 1986, between Bankers Security Life
Insurance Society ("Bankers"), having its principal place of business at 0000
Xxxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, and Xxxxxxxxxxx Management
Corporation, having its principal place of business at Xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 ("OMC").
WHEREAS, Bankers intends to utilize Xxxxxxxxxxx Variable Account Funds
(the "Fund") as the underlying investment vehicle for premiums and additional
payments allocated to any separate account Bankers has or may create to utilize
the Fund, and
WHEREAS, OMC is the Investment Adviser to the Fund;
WHEREAS, OMC makes shares of the Fund available for sale only to
variable life insurance separate accounts and variable annuity separate
accounts, and that such variable annuity separate accounts may be of insurance
companies not affiliated with Bankers or any of Bankers' affiliated companies
(hereinafter referred to as "shared funding") while such variable life separate
accounts are of insurance companies not affiliated with Bankers or any of
Bankers' affiliated companies (hereinafter referred to as "mixed funding");
WHEREAS, a majority of the Board of Trustees of the Fund shall consist
of persons who are not "interested persons" of the Fund as defined by Section
2(a)(19) of the Investment Company Act of 1940 ("Independent Trustees"), except
that if this condition is not met by reason of the death, disqualification, or
bona fide resignation of any trustee(s), then the operation of this condition
shall be suspended (a) for a period of 45 days if the vacancy or vacancies may
be filled by the Board of Trustees; (b) for a period of 60 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for such
longer period as the Securities and Exchange Commission (the "Commission") may
prescribe by order upon application;
WHEREAS, the Board of Trustees of the Fund will monitor the Fund of the
existence of any material irreconcilable conflict between the interests of the
policyowners of all separate accounts investing in the Fund, which conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any portfolio are being managed; (e) a difference in voting instructions given
by participating insurance companies or owners of variable annuity contracts and
owners of variable life contracts; or (f) a decision by an insurer to disregard
the voting instructions of policyowners.
WHEREAS, the Fund and/or Bankers shall comply with Rules 6e-2, 6e-3(T)
and, if adopted, 6e-3, promulgated pursuant to the Investment Company Act of
1940, if and to the extent they are amended to provide exemptive relief with
respect to mixed or shared funding; and
WHEREAS, the Board of Trustees' determination of the existence of a
material irreconcilable conflict and its implications shall be made known
promptly in writing to Bankers and any other participating insurance companies,
and all reports received by the Board of Trustees of the Fund and all action
with regard to a conflict will be properly recorded in the minutes of the Board
of Trustees or other appropriate records, which will be made available to the
Securities and Exchange Commission upon request;
WHEREAS, no penalty will be imposed by the Fund on Bankers for
withdrawing assets from the Fund (or any portfolio of the Fund) in the event of
a material irreconcilable conflict should this said withdrawal be determined as
necessary to remedy or eliminate such conflict.
NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree, as follows:
1. Bankers and OMC, as a matter of ongoing responsibility, will
undertake and shall promptly report to the Fund's Board of Trustees any
potential or existing material irreconcilable conflict between the policyowners.
Bankers and OMC will be responsible for assisting the Board in carrying out its
responsibilities in monitoring such conflicts, by providing the Board in a
timely manner with all information reasonably necessary for the Board to
consider any issues raised, INCLUDING INFORMATION AS TO A DECISION BY BANKERS TO
DISREGARD VOTING INSTRUCTIONS OF POLICYOWNERS.
2. If it is determined by either a majority of the Board of Trustees of
the Fund or a majority of its Independent Trustees that a material
irreconcilable conflict exists, Bankers, at its own expense and to the extent
reasonably practicable (as determined by a majority of the Fund's Independent
Trustees) will take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, up to and including: (a) withdrawing the
assets allocable to some or all of its separate account from the Fund (or any
portfolio of the Fund) and reinvesting such assets in a different investment
medium, including another portfolio of the Fund, or submitting the question of
whether such segregation should be implemented to a vote of all affected
policyowners and, as appropriate, segregating the assets of any group voting in
favor of segregation, or offering to the affected policyowners the option of
making such a change; and (b) establishing a new registered management
investment company or managed separate account.
For purposes of this paragraph 2, a majority of the Independent
Trustees shall determine whether any proposed action adequately remedies any
material irreconcilable conflict, but in no event will the Fund or OMC be
required to establish a new funding medium for any variable contract. Bankers
shall not be required by this paragraph 2 to establish a new funding medium for
any variable annuity contract if an offer to do so has been declined by vote of
a majority of the policyowners adversely affected by the material irreconcilable
conflict. Bankers will recommend to its policyowners that they decline an offer
to establish a new funding medium only if it believes it is in the best
interests of the policyowners to do so.
3. Bankers will provide pass-through voting privileges to all variable
policyowners so long as the Commission continues to interpret the Act to require
pass-through voting privileges for variable policyowners. Bankers shall be
responsible for assuring that each of its separate accounts investing in the
Fund calculates voting privileges in a manners consistent with other
participating companies, and will vote shares of the Fund held in its separate
account for which no timely voting instructions are received from policyowners,
as well as shares it owns, in the same proportion for which voting instructions
are received.
4. OMC and Bankers shall at least annually submit to the Fund's Board
of Trustees such reports, materials or data as the Trustees may reasonably
request so that the Trustees may fully carry out the obligations imposed upon
them herein, and said reports, materials and data shall be submitted more
frequently if deemed appropriate by the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BANKERS SECURITY LIFE INSURANCE SOCIETY
/s/ Xxxxxxx X. Xxxxxxxxx
By:------------------------------------
Vice President
Attest:
/s/ Xxxxxx X. Saginaw
------------------------------------
XXXXXXXXXXX MANAGEMENT CORPORATION
(illegible)
By:------------------------------------
Executive Vice President
Attest:
(illegible)
------------------------------------
Secretary
