BY AND AMONG
AID
ASSOCIATION FOR LUTHERANS
AND
AID
ASSOCIATION FOR LUTHERANS SAVINGS PLAN
AND
AAL VARIABLE
PRODUCT SERIES FUND, INC.,
DATED JANUARY 1, 2002
TABLE OF CONTENTS
Page
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1. Sale of FUND Shares.................................................... 3
2. Representations and Warranties......................................... 4
3. Prospectus and Proxy Statements: Voting................................ 5
4. Sales Material and Information......................................... 5
5. Monitoring of Material Irreconcilable Conflicts........................ 6
6. Fees and Expenses...................................................... 7
7. Diversification........................................................ 8
8. Indemnification........................................................ 9
9. Term and Termination of This Agreement................................ 12
10. Notices................................................................ 13
11. Miscellaneous.......................................................... 13
This PARTICIPATION AGREEMENT, is made and entered into as of this 1st day
of January, 2002, by and among AID ASSOCIATION FOR LUTHERANS ("AAL"), on its own
behalf and as plan sponsor of the Aid Association for Lutherans Savings Plan and
AID ASSOCIATION FOR LUTHERANS SAVINGS PLAN (the "PLAN"), and AAL VARIABLE
PRODUCT SERIES FUND, INC. (the "FUND"), (collectively the "Parties").
WITNESSETH:
WHEREAS, AAL is a fraternal
benefit society organized under the laws of the State of Wisconsin engaged in
the writing of life insurance, annuity contracts, and other insurance products,
and serves as plan sponsor of the;
WHEREAS, the PLAN is a qualified retirement plan established under Section
401(k) of the Internal Revenue Code by AAL for the benefit of its employees and
the employees of its subsidiaries and affiliates;
WHEREAS, the FUND, is registered with the Securities and Exchange
Commission (the "SEC"), as a diversified, open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act"), and its shares are
registered with the SEC under the Securities Act of 1933 (the "1933 Act");
WHEREAS, the FUND is a series company, meaning its Board of Directors may
designate various series ("Portfolios") into which the FUND's authorized shares
are to be divided from time to time, with each such Portfolio consisting of a
specific number of the FUND's authorized shares, representing an interest in a
separate portfolio of securities and other assets, and having its own investment
objectives, policies and restrictions;
WHEREAS, to the extent permitted by applicable insurance, tax, ERISA, and
other laws and regulations, the PLAN intends to purchase shares in the FUND on
behalf of the PLAN's participants, and the FUND is authorized to sell such
shares to the PLAN at net asset value;
WHEREAS, the FUND has
entered into an Investment Advisory Agreement with AAL, dated the 1st
day of January, 2002, as amended, wherein AAL has agreed to serve as investment
adviser to the FUND, and to accept certain obligations of the FUND as set forth
herein, i.e., to compute the daily net asset value and the net asset value per
share for each Portfolio and to comply with Subchapter M and Section 817(h) of
the Internal Revenue Code of 1986 (the “Code”), as amended;
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein, and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the Parties agree as follows:
1. Sale of
FUND Shares
| 1.1 |
The PLAN will provide
for the allocation of net amounts among certain Portfolios as may be offered
from time to time in the PLAN’s document. The selection of the particular
Portfolio is to be made by the Plan Participant, and such selection may be
changed in accordance with the terms of the PLAN’s document.
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| 1.2 |
The FUND will sell to
the PLAN those shares of each available Portfolio that the PLAN administrator or
its delegate orders based on authorizations from its participants, effecting
such orders on a daily basis at the Portfolio’s net asset value per share
next computed as provided in the FUND prospectus.
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| 1.3 |
The Board of Directors
of the FUND (the “Board”) may refuse to sell shares of any Portfolio
to the PLAN, or suspend or terminate the offering of shares of any Portfolio, if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board, acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of the FUND.
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| 1.4 |
The FUND agrees that
its shares will be sold only to: (a) AAL, on its own behalf and on behalf of
separate accounts that it maintains to fund variable annuity contracts and
variable life insurance contracts of AAL; (b) other life insurance companies;
whether affiliated or unaffiliated with AAL, on behalf of separate accounts
funding variable annuity contracts and variable life insurance contracts of such
other insurance companies; (c) the PLAN; and (d) other qualified pension or
retirement plans. AAL separate accounts and separate accounts of other life
insurance companies eligible to purchase shares of the FUND are referred to in
this Agreement as “Separate Accounts,” and the PLAN and other
qualified pension and or retirement plans eligible to purchase shares of the
FUND are referred to together in this Agreement as “Qualified Plans.”
No shares of any Portfolio will be sold to the general public or to any life
insurance company on its own behalf (as opposed to a Separate Account it
maintains) other than AAL.
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| 1.5 |
The FUND will redeem
for cash from the PLAN those full or fractional shares of each Portfolio that
the PLAN requests based on transactions of the PLAN’s participants,
effecting such requests on a daily basis at the Portfolio’s net asset value
per share next computed as provided in the FUND prospectus.
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| 1.6 |
Issuance and transfer
of the FUND’s shares will be by book entry only. Stock certificates will
not be issued to the PLAN. Shares ordered from the FUND will be recorded in an
appropriate title for the PLAN.
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| 1.7 |
The FUND shall furnish
notice promptly to the PLAN administrator or its delegate of any income,
dividends or capital gain distributions payable on the shares of any Portfolio.
The PLAN hereby elects to receive all such income, dividends and capital gain
distributions as are payable on FUND shares in additional shares of that
Portfolio. The PLAN reserves the right to revoke this election and to receive
all such income, dividends and capital gain distributions in cash. The FUND
shall notify the PLAN administrator or its delegate of the number of shares so
issued as payment of such income, dividends and distributions.
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| 1.8 |
The FUND shall make the
net asset value per share for each applicable Portfolio available to PLAN on a
daily basis, as soon as reasonably practical after the net asset value per share
is calculated.
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| 1.9 |
The FUND may establish
additional Portfolios to provide additional funding media for the PLAN, or
delete, combine, or modify existing Portfolios. The shares of any additional
Portfolio may be made available to the PLAN by the FUND, pursuant to the terms
of this Agreement, and any applicable reference to any Portfolio, the FUND or
its shares herein shall include a reference to any such Portfolio.
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2.
Representations and Warranties
| 2.1 |
AAL represents and
warrants that it is a fraternal benefit society organized under the laws of the
State of Wisconsin and engaged in the writing of life insurance, annuity
contracts, and other insurance products; that it has legally and validly
established its PLAN as a qualified retirement plan under section 401(k) of the
Internal Revenue Code of 1986, as amended. AAL has applied for and received a
valid determination letter from the Internal Revenue Service for the PLAN. The
PLAN complies with the Employee Retirement Income Security Act of 1974 and all
relevant federal and state statutory provisions.
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| 2.2 |
The FUND represents and
warrants that its shares sold pursuant to this Agreement are or will be
registered under the 1933 Act to the extent required by the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the state of
Maryland and all applicable federal securities laws and that the FUND is or will
be registered under the 1940 Act to the extent required by the 1940 Act. The
FUND will amend the registration statement for its shares under the 1933 Act, as
well as its registration statement under the 1940 Act, as required in order to
effect the continuous offering of its shares. The FUND will register or qualify
the shares for sale in accordance with the laws of the various states only if
and to the extent deemed advisable by the FUND.
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| 2.3 |
The FUND represents and
warrants that each of its Portfolios will qualify as a regulated investment
company under Subchapter M of the Code and that the investments of each of its
Portfolios will comply with the diversification requirements of Section 817(h)
of the Code and the regulations thereunder, and that it will notify the PLAN
immediately upon having a reasonable basis for believing that it has ceased to
so qualify or that it might not so qualify in the future.
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3. Prospectus
and Proxy Statements: Voting
| 3.1 |
The FUND will provide the
PLAN administrator or its delegate with current FUND prospectus, statement of
additional information and any supplement thereto in a manner so as to allow the
PLAN administrator or its delegate to timely distribute the current FUND
prospectus, SAI and any supplement thereto, to each current and prospective PLAN
participant.
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| 3.2 |
The FUND will provide a
final copy of any proxy material, report to shareholders, and other
communication to shareholders to the PLAN administrator or its delegate in a
timely manner.
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| 3.3 |
The FUND reserves the
right to take all actions, including but not limited to the dissolution, merger,
and sale of all assets of the FUND solely upon the authorization of its Board
and/or shareholders as required by the 0000 Xxx.
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| 3.4 |
The PLAN will vote
Portfolio shares in accordance with the terms of the PLAN documents.
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4. Sales
Material and Information
| 4.1 |
The PLAN administrator
or its delegate will furnish, or will cause to be furnished, to the FUND or its
designee, each piece of sales literature or other promotional material in which
the FUND, or the PLAN is named, at least fifteen (15) days prior to its intended
use. No such material will be used if the FUND or its designee objects to such
intended use within fifteen (15) days after receipt of such material.
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| 4.2 |
The PLAN will not give
any information or make any representation or statement, or cause such
information to be given or representation to be made, on behalf of the FUND or
concerning any Portfolio in connection with the sale of FUND shares other than
the information or representations contained in the registration statement,
prospectus, and SAI for FUND shares, as such registration statement, prospectus,
and SAI may be amended or supplemented from time to time, or in reports or proxy
materials for the FUND, or in sales literature or other promotional material
approved by the FUND or its designee, except with the permission of the FUND or
its designee.
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| 4.3 |
The FUND or its
designee will furnish, or will cause to be furnished, to the PLAN administrator
or its delegate, each piece of sales literature or other promotional material of
the FUND in which the PLAN is named, at least fifteen (15) days prior to its
intended use. No such material will be used if the PLAN administrator or its
delegate objects to such intended use within fifteen (15) days after receipt of
such material.
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| 4.4 |
The FUND will not give
any information or make any representations or statements, or cause such
information to be given or representations to be made, on behalf of or
concerning the PLAN other than the information or representations contained in a
registration statement or prospectus, as such registration statement and
prospectus may be amended or supplemented from time to time, or in published
reports for the PLAN that are in the public domain or approved by the PLAN
administrator or its delegate for distribution to PLAN Participants, or in sales
literature or other promotional material approved by the PLAN administrator or
its delegate, except with the permission of the PLAN administrator or its
delegate.
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| 4.5 |
The FUND will provide
to the PLAN one complete copy of all registration statements, prospectuses,
SAI’s, reports, proxy material, sales literature and other promotional
material, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the FUND or its shares,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
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| 4.6 |
The PLAN will provide
to the FUND one complete copy of all reports, sales literature and other
promotional material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the PLAN and the
FUND, contemporaneously with the filing of such document with the SEC, IRS or
other regulatory authorities.
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5. Monitoring
of Material Irreconcilable Conflicts
| 5.1 |
The FUND’s Board of
Directors will monitor the FUND for the existence of any materials
irreconcilable conflict between and among the interests of the
Certificateholders of the Separate Accounts investing in the FUND and the
participants of the PLAN, and any other Qualified Plans investing in the FUND. A
material irreconcilable conflict may arise for a variety of reasons, including:
(a) 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 interpretive 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 investment of the FUND are being managed; (e) a difference in
voting instructions given by variable annuity Certificateholders and variable
universal life Certificateholders of the Separate Accounts vis-à-vis voting
instructions provided by the trustees of the Qualified Plans; (f) a decision by
AAL or another life insurance company to disregard the voting instructions of
Certificateholders in one or more of the Separate Accounts; or (g) if
applicable, a decision by the trustee of a Qualified Plan to disregard the
voting instructions of the participants of such Qualified Plan. A determination
by the FUND’s Board that a material irreconcilable conflict exists will be
a final determination.
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| 5.2 |
If it is determined by
a majority of the FUND’s Board, or by a majority of its disinterested
directors, that a material irreconcilable conflict exists, the PLAN shall, at
its expense and to the extent reasonably practicable (as determined by a
majority of the disinterested directors of the FUND), take whatever steps are
necessary to remedy or eliminate the material irreconcilable conflict. Such
steps could include withdrawing the assets allocable to the PLAN from the FUND
or any Portfolio of the FUND (but no charge or penalty shall be imposed as a
result of withdrawal) and reinvesting such assets in a different investment
medium, which could include another Portfolio of the FUND.
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| 5.3 |
The PLAN is
responsible, to the extent permitted by applicable law, for taking remedial
action in the event that the FUND’s Board determines a material
irreconcilable conflict exists. The PLAN will take remedial action only as it
pertains to PLAN assets and in accordance with its fiduciary responsibility to
the PLAN participants. The PLAN will be responsible for the cost of any such
remedial action. For the purposes of this Section, a majority of the
disinterested members of the FUND’s Board will determine whether or not any
proposed action adequately remedies any material irreconcilable conflict. In no
event shall the FUND or AAL be required to establish a new Portfolio or new
funding medium for any variable annuity or variable universal life contract. The
PLAN will not be required by this Section to establish a new funding medium if
(a) a majority of its participants materially and adversely affected by the
irreconcilable material conflict vote to decline such offer or (b) pursuant to
the PLAN’s documents and applicable law, the PLAN makes such decision
without a vote of its participants.
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| 5.4 |
The FUND’s Board
determination of the existence of a material irreconcilable conflict and its
implications will be made known promptly and in writing to the PLAN
administrator.
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| 5.5 |
All reports of
potential or existing conflicts received by the FUND’s Board and all Board
actions with regard to, or determining the existence of, a conflict of interest,
notifying the PLAN of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of the
FUND’s Board or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
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| 5.6 |
The FUND will disclose
in its prospectus that (a) shares of the FUND may be offered to both Separate
Accounts and to Qualified Plans; (b) material irreconcilable conflicts may arise
between the interest of various Certificateholders investing in the Separate
Accounts and the interests of Qualified Plans participants investing in the
FUND; and (c) the FUND’s Board will monitor events in order to identify the
existence of any material conflict and determine what action, if any, should be
taken in response to such material irreconcilable conflict.
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| 5.7 |
No less than annually,
the PLAN will submit to the FUND’s Board such reports, materials and data
as the Board may reasonably request so that the Board may carry out fully its
obligations under this Section. Such reports, materials and data will be
submitted more frequently if deemed appropriate by the FUND’s Board. In any
event, the PLAN promptly will notify the FUND’s Board in writing if it
becomes aware of any facts or circumstances that could give rise to a material
irreconcilable conflict between the interests of various Certificateholders in
the Separate Accounts and the interests of the Qualified Plan participants
investing in the FUND. All reports submitted to the FUND’s Board under this
Section 5.7 shall include all information reasonably necessary for the Board to
consider the conflict issues raised. In this regard, if the PLAN documents ever
permit pass-through voting to plan participants, the PLAN promptly shall notify
the FUND’s Board whenever the PLAN trustee has determined to disregard PLAN
participant voting instructions on any matter submitted to a vote of
shareholders of the FUND.
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6. Fees and
Expenses
| 6.1 |
The FUND will pay all
expenses incident to the FUND’s performance under this Agreement. In
addition to the investment advisory fee, subject to the expense reimbursement
arrangement discussed below, each Portfolio will bear all of its operating
expenses that are not specifically assumed by AAL, including the following: (i)
interest and taxes (ii) brokerage commissions; (iii) insurance premiums; (iv)
compensation and expenses for those Directors who are not “interested”
persons under Section 2(a)(19) of the Act; (v) independent legal and audit
expenses; (vi) fees and expenses of the FUND’s custodian, shareholder
servicing or transfer agent and accounting services agent; (vii) expenses
incident to the issuance of its shares, including stock certificates and
issuance of shares on the payment of, or reinvestment of dividends; (viii) fees
and expenses incident to the registration under Federal or state securities laws
of the FUND or its shares; (ix) FUND or portfolio organizational expenses; (x)
FUND expenses of preparing, printing and mailing reports and notices, proxy
material and prospectuses to shareholders of the FUND; (xi) all other expenses
incidental to holding meetings of the FUND’s shareholders; (xii) dues or
assessments of or contributions to the Investment Company Institute or any
successor or other industry association; (xiii) such non-recurring expenses as
may arise, including litigation affecting the FUND and the legal obligations
which the FUND may have to indemnify its officers and Directors with respect
thereto; and (xiv) cost of daily valuation of each of the Portfolio’s
securities and net asset value per share.
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| 6.2 |
AAL will pay all
expenses incident to AAL’s performance under this Agreement. In addition,
AAL will pay for all expenses for the printing and distribution to the PLAN
administrator or its delegate the FUND proxy materials, proxy cards and voting
instructions forms (collectively “proxy information”), tabulating the
results of proxy solicitations, printing and distributing to the PLAN
administrator or its delegate the FUND prospectus, SAI, supplements, proxy
materials, report to shareholders and other communication to shareholders.
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| 6.3 |
The PLAN will pay all
expenses incident to the PLAN’s performance under this Agreement. In
addition, the PLAN will bear any expenses associated with administration of the
PLAN.
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7.
Diversification
| 7.1 |
The Portfolios will be
invested in accordance with the terms of the FUND’s prospectus and the PLAN
document. Without limiting the scope of the foregoing, the Portfolios will at
all times comply with Section 817(h) of the Code and Treasury Regulations
Section 1.817-5 relating to the diversification requirements for segregated
asset accounts and any amendments or other modifications to such Section or
Regulations.
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| 7.2 |
The FUND shall furnish
to the PLAN, on a regular basis, reports of all of the investments of each
Portfolio in a form sufficient to permit the PLAN to determine whether each
Portfolio is in compliance with the diversification requirements of Section
817(h) of the Code and the Regulations thereunder and shall take immediate
action, on learning through its own monitoring, or on advice from AAL or the
PLAN, that any Portfolio is not in compliance with such requirements, to return
to compliance with such requirements.
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| 7.3 |
If any Portfolio is
found not to comply with the diversification requirements at the end of a
calendar quarter and the 30-day grace period allowed under the Regulations, the
FUND shall take all appropriate efforts immediately to restore any such
Portfolio to compliance and shall fully cooperate with the PLAN in any effort to
correct such diversification failure under procedures established by the
Internal Revenue Service, including those set forth in Revenue Procedure 92-25.
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8.
Indemnification
| 8.1 |
Indemnification by AAL,
as PLAN Sponsor
|
- AAL, as PLAN sponsor,
will indemnify and hold harmless the FUND and each of its Directors, officers,
and employees and each person, if any, who controls the FUND (collectively, the
“Indemnified Parties” for purposes of this Section 8.1) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of AAL and the PLAN), or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise, and
which:
- arise out of or are
based upon any failure by the PLAN or AAL to perform the duties or assume the
general business responsibilities of the PLAN with respect to the design,
drafting, federal approvals, issuance, servicing and administration of the PLAN,
or the establishment and maintenance of the PLAN; or
- arise out of or are
based upon any untrue statements or alleged untrue statements of any material
fact contained in the registration statement, prospectus, or SAI regarding the
PLAN, or contained in the sales literature for the PLAN (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided that this Agreement to indemnify will not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished in writing to
AAL or the PLAN by or on behalf of the FUND for use in the registration
statement, prospectus, or SAI for the PLAN or in the PLAN or sales literature
(or any amendment or supplement) or otherwise for use in connection with the
sale of the FUND shares to PLAN participants; or
- arise out of or are
based upon statements or representations (other than statements or
representations contained in the registration statement, prospectus, SAI, or
sales literature of the FUND not supplied by the PLAN, or persons under its
control), or wrongful conduct of the PLAN or persons under its control, or
failure to supervise persons under AAL’s or the PLAN’s control or
entities or individuals with which the PLAN contracts, with respect to the sale
or distribution of the FUND shares to PLAN participants; or
- arise out of any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of the FUND or any
amendment thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement or omission was made
in reliance upon information furnished in writing to the FUND by or on behalf of
AAL; or
- arise out
of or result from any failure by AAL or the PLAN to provide the services and
furnish the materials contemplated by this Agreement; or
- arise out of or result
from any material breach of any representation and/or warranty made by AAL: in
this Agreement or arise out of or result from any other material breach of this
Agreement by AAL or the PLAN, as limited by and in accordance with the
provisions of Sections 8.1(b). and 8.1(c) hereof.
-
AAL will not be liable
under this indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party would be
subject by reason of such Indemnified Party’s willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party’s
duties or by reason of such Indemnified Party’s reckless disregard of
obligations or duties under this Agreement or to the FUND, whichever is
applicable.
- AAL will not be liable
under this indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the AAL in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify AAL of any such
claim will not relieve AAL from any liability that it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the AAL and or the PLAN shall be entitled to
participate, at its own expense, in the defense thereof. AAL also will be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from AAL to such party of the AAL’s
election to assume the defense thereof, the Indemnified Party will bear the fees
and expenses of any additional counsel retained by it, and AAL will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
- The Indemnified Party
will promptly notify the AAL of the commencement of any litigation or proceeding
against it or any of its respective officers or directors in connection with
transactions that are the subject of this Agreement whether or not
indemnification is being sought hereunder.
| 8.2 |
Indemnification by the FUND |
- The FUND will indemnify
and hold harmless the PLAN and each of its directors, officers and employees and
each person, if any, who controls the PLAN (collectively, the “Indemnified
Parties” for purposes of this Section 8.2) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement with the
written consent of FUND) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, which:
- arise out of or are
based upon any failure by the FUND to perform the duties or assume the general
business responsibilities required by this Agreement with respect to the sale of
shares of the FUND to the PLAN; or
- arise out of or are
based upon any untrue statements or alleged untrue statements of any material
fact contained in the sales literature for the FUND and/or the Certificates, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement to indemnify
will not apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in conformity with
information furnished in writing to the FUND by or on behalf of the PLAN for use
in the registration statement, prospectus, or SAI for use in the sales
literature or otherwise for use in connection with the sale of Portfolio shares;
or
- arise out of or are
based upon statements or representations (other than statements or
representations contained in the registration statement, prospectus, SAI, or
sales literature of the FUND not supplied by the FUND, or persons under its
control) or wrongful conduct of the FUND or persons under its control, or
failure to supervise persons under the FUND’s control or entities or
individuals with which the FUND contracts, with respect to the sale or
distribution of the Certificates or FUND shares; or
- arise out of any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature of the FUND or any
amendment thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement or omission was made
in reliance upon information furnished in writing to the PLAN by or on behalf of
the PLAN; or
- arise out of or result
from any failure by the FUND to provide the services and furnish the materials
contemplated by this Agreement; or
- arise out of or result
from any material breach of any representation and/or warranty made by the FUND
in this Agreement or arise out of or result from any other material breach of
this Agreement by the FUND, except to the extent provided in Section 8.2(b) and
8.2(c) hereof.
- The FUND will not be
liable under this indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified Party would be
subject by reason of such Indemnified Party’s willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party’s
duties or by reason of such Indemnified Party’s reckless disregard of
obligations or duties under this Agreement or to the FUND, whichever is
applicable.
- The FUND will not be
liable under this indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party shall have notified
the FUND in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to notify
the FUND of any such claim will not relieve the FUND from any liability that it
may have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the FUND shall be entitled to
participate, at its own expense, in the defense thereof. The FUND also will be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the FUND to such party of the FUND’s
election to assume the defense thereof, the Indemnified Party will bear the fees
and expenses of any additional counsel retained by it, and the FUND will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
- The Indemnified Party
will promptly notify the FUND of the commencement of any litigation or
proceeding against it or any of its respective officers or directors in
connection with transactions that are the subject of this Agreement whether or
not indemnification is being sought hereunder.
9. Term and
Termination of this Agreement
| 9.1 |
This Agreement will
terminate: |
- as to any party hereto,
at the option of that party, upon prior written notice to the other party as
provided in Section 9.3 herein; or
- at the option of the
FUND in the event that formal administrative proceedings are instituted against
the PLAN by the IRS, DOL or any other regulatory body regarding the PLAN’s
duties under this Agreement or related to the sale of shares to PLAN
participants, the operation of the PLAN, provided, however, that the FUND
determines, in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the ability
of the PLAN to perform its obligations under this Agreement; or
- at the option of the
PLAN in the event that formal administrative proceedings are instituted against
the FUND by the NASD, the SEC, or any state securities or insurance commission
or any other regulatory body, regarding the FUND’s duties under this
Agreement or related to the sale of FUND shares or the operation of the FUND,
provided, however, that the PLAN determines, in its sole judgment exercised in
good faith, that any such administrative proceedings will have a material
adverse effect upon the ability of the FUND to perform its obligations under
this Agreement; or
- at the option of the
PLAN, upon requisite authority to substitute the shares of another investment
company for shares of the FUND in accordance with the PLAN investment policy or
standards of conduct; or
- at the option of the
PLAN, in the event any of the FUND’s shares are not registered, issued, or
sold in accordance with applicable federal and any state law or such law
precludes the use of such shares as an investment of the PLAN; or
- at the option of the
PLAN, if the FUND fails to meet the requirements specified in Section 2.2 or 2.3
hereof; or
- at the option of the
FUND, if the investments of the PLAN fail to satisfy the diversification
requirements of the Code and the regulations thereunder, or
- at the option of the
PLAN, if the FUND dissolves or becomes otherwise unable to sell shares to fund
the PLAN.
| 9.2 |
It is understood and
agreed that the right of any party hereto to terminate this Agreement pursuant
to Section 9.1(a) may be exercised for any reason or for no reason. |
| 9.3 |
Notice Requirement for
Termination. No termination of this Agreement will be effective unless and until
the party terminating this Agreement gives prior written notice to the other
party to this Agreement of its intent to terminate, and such notice shall set
forth the basis for such termination. Furthermore, |
- in the event that any
termination is based upon the provisions of Section 9.1(a) hereof, such prior
written notice shall be given at least sixty (60) days in advance of the
effective date of termination as required by such provision;
- in the event that any
termination is based upon the provisions of Section 9.1(b) or Section 9.1(c)
hereof, such prior written notice shall be given at least sixty (60) days in
advance of the effective date of termination;
- in the event that any
termination is based upon the provisions of Section 9.1(d) hereof, the PLAN will
give at least sixty (60) days prior written notice to the FUND of the date of
any proposed action to substitute FUND shares, including the filing of any
applicable exemptive application under the 1940 Act relating to the PLAN; and
the PLAN will provide the FUND with a copy of any such exemptive application;
and
- in the event that any
termination is based upon the provisions of Section 9.1(e), Section 9.1(f), or
Section 9.1(g) hereof, such prior written notice shall be given as soon as
possible within twenty-four (24) hours after the terminating party learns of the
event causing termination to be required.
| 9.4 |
Partial Termination. It
is also understood that this Agreement may be terminated with regard to a
specific Portfolio or Portfolios of the FUND, or the entire FUND at the
discretion of the terminating party. Notwithstanding any termination of this
Agreement, the FUND, or any Portfolio, provided its shares are then available
for sale to any persons, shall at the option of the PLAN, continue to make
available additional shares of the FUND pursuant to the terms and conditions of
this Agreement, for all PLAN participants who own FUND shares on the effective
date of termination of this Agreement (hereinafter referred to as “Existing
Shares”). Specifically, without limitation, the owners of Existing Shares
shall be permitted to transfer or reallocate investments under terms of the
PLAN, redeem investments in the FUND and/or invest in the FUND upon the making
of additional purchase payments under the Existing Shares. |
10. Notices
Any notice will be
sufficiently given when sent by registered or certified mail to the other party
at the address of such party set forth below or at such other address as such
party may from time to time specify in writing to the other party.
If to AAL: 0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxx
Secretary, Senior Vice President and General Counsel
If to the PLAN: 0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Benefit Plan Administrative Officer
If to the FUND: 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Secretary
11.
Miscellaneous
| 11.1 |
This Agreement will be
construed and the provisions hereof interpreted under and in accordance with the
laws of the State of Wisconsin, where the sale of any FUND share shall be deemed
to have been made; provided, however, that if such laws or any of the provisions
of this Agreement conflict with applicable Provisions of the 1940 Act, the
latter shall control. |
| 11.2 |
If any provision of
this Agreement will be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of the Agreement will not be effected thereby. |
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 1st day of January,
2002.
AID ASSOCIATION FOR LUTHERANS
By: /s/ Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
President and
Chief Executive Officer
By: /s/ Xxxxxxx X. Xxx
Xxxxxxx X. Xxx
Senior Vice President,
Secretary and General Counsel
AID ASSOCIATION FOR LUTHERANS SAVINGS PLAN AAL VARIABLE PRODUCT
SERIES FUND, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Same
Xxxxxx X. Xxxxxx Xxxxxx X. Same
Benefit Plan Administrative Officer President
By: /s/ Xxxxxxx X. Xxx By: /s/ Xxxxx X. Xxxxx
Xxxxxxx X. Xxx Xxxxx X. Xxxxx
Senior Vice President, Secretary
Secretary and General Counsel
