Exhibit 99.B8i
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of April 21, 1998, between American
National Insurance("Insurance Company"), a life insurance company organized
under the laws of the State of TX, and LAZARD RETIREMENT SERIES, INC. (the
"Fund"), a corporation organized under the laws of the State of Maryland, with
respect to the Fund's portfolios set forth on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Portfolio").
ARTICLE I
DEFINITIONS
"Act" shall mean the Investment Company Act of 1940, as amended.
"Board" shall mean the Board of Trustees of the Fund having the
responsibility for management and control of the Fund.
"Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
"Commission" shall mean the Securities and Exchange Commission.
"Contract" shall mean a variable annuity contract that uses the Fund as
an underlying investment medium. Individuals who participate under a group
Contract are "Participants".
"Contractholder" shall mean any entity that is a party to a Contract
with a Participating Company.
"Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as defined by the
Act.
"XXX" shall mean Lazard Asset Management, a division of Lazard Freres &
Co. LLC.
"Participating Companies" shall mean any insurance company (including
Insurance Company), which offers variable annuity and/or variable life insurance
contracts to the public and which has entered into an agreement with the Fund
for the purpose of making Fund shares available to serve as the underlying
investment medium for the aforesaid Contracts.
"Prospectus" shall mean the Fund's current prospectus and statement of
additional information, as most recently filed with the Commission, with respect
to the Portfolios.
"Separate Account" shall mean American National Insurance Company
Variable Annuity Separate Account, a separate account established by Insurance
Company in accordance with the laws of the State of TX.
"Software Program" shall mean the software program used by the Fund for
providing Fund and account balance information including net asset value per
share.
"Insurance Company's General Account(s)" shall mean the general
account(s) of Insurance Company and its affiliates which invest in the Fund.
ARTICLE II
REPRESENTATIONS
Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b) it has
legally and validly established the Separate Account pursuant to the TX
Insurance Code for the purpose of offering to the public certain individual
variable annuity contracts; (c) it has registered the Separate Account as a unit
investment trust under the Act to serve as the segregated investment account for
the Contracts; and (d) each Separate Account is eligible to invest in shares of
the Fund without such investment disqualifying the Fund as an investment medium
for insurance company separate accounts supporting variable annuity contracts or
variable life insurance contracts.
Insurance Company represents and warrants that (a) the Contracts will
be described in a registration statement filed under the Securities Act of 1933,
as amended ("1933 Act"); (b) the Contracts will be issued and sold in compliance
in all material respects with all applicable federal and state laws; and (c) the
sale of the Contracts shall comply in all material respects with state insurance
law requirements. Insurance Company agrees to inform the Fund promptly of any
investment restrictions imposed by state insurance law and applicable to the
Fund.
Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the Separate Account
are, in accordance with the applicable Contracts, to be credited to or charged
against such Separate Account without regard to other income, gains or losses
from assets allocated to any other accounts of Insurance Company. Insurance
Company represents and warrants that the assets of the Separate Account are and
will be kept separate from Insurance Company's General Account and any other
separate accounts Insurance Company may have, and will not be charged with
liabilities from any business that Insurance Company may conduct or the
liabilities of any companies affiliated with Insurance Company.
Fund represents that the Fund is registered with the Commission under
the Act as an open-end, management investment company and possesses, and shall
maintain, all legal and regulatory licenses, approvals, consents and/or
exemptions required for the Fund to operate and offer its shares as an
underlying investment medium for Participating Companies. The Fund has
established nine portfolios and may in the future establish other portfolios.
Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify Insurance Company 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.
Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life insurance
policies or annuity contracts, whichever is appropriate, under applicable
provisions of the Code, and that it will make every effort to maintain such
treatment and that it will notify the Fund and XXX immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future. Insurance Company agrees
that any prospectus offering a Contract that is a "modified endowment contract,"
as that term is defined in Section 7702A of the Code, will identify such
Contract as a modified endowment contract (or policy).
Fund agrees that each Portfolio's assets shall be managed and invested
in a manner that complies with the requirements of Section 817(h) of the Code.
Insurance Company agrees that the Fund shall be permitted (subject to
the other terms of this Agreement) to make the Portfolios' shares available to
other Participating Companies and contractholders.
Fund represents and warrants that any of its directors, officers,
employees, investment advisers, and other individuals/entities who deal with the
money and/or securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund in an amount not less than that required by Rule 17g-1 under the Act. The
aforesaid Bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
Insurance Company represents and warrants that all of its employees and
agents who deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than the coverage required to be maintained by
the Fund. The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
Insurance Company agrees that XXX shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights conferred by
virtue of this Agreement.
ARTICLE III
FUND SHARES
The Contracts funded through the Separate Account will provide for the
investment of certain amounts in the Portfolios' shares.
Fund agrees to make the shares of its Portfolios available for purchase
at the then applicable net asset value per share by Insurance Company and the
Separate Account on each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, the Fund may refuse to sell the shares of any
Portfolio to any person, or suspend or terminate the offering of the 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 its fiduciary duties under federal and any applicable
state laws, necessary and in the best interests of the shareholders of such
Portfolio.
Fund agrees that shares of the Portfolios will be sold only to
Participating Companies, their separate accounts, the general accounts of those
Participating Companies and their affiliates and to qualified pension and
retirement plans. No shares of any Portfolio will be sold to the general
public.
Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain information for each Portfolio available on a per-
share and Portfolio basis to Insurance Company by 6 p.m. Eastern Time on each
Business Day. Any material errors in the calculation of net asset value,
dividend and capital gain information shall be reported immediately upon
discovery to Insurance Company. Non-material errors will be corrected in the
next Business Day's net asset value per share for the Portfolio in question.
At the end of each Business Day, Insurance Company will use the
information described in Section 3.4 to calculate the Separate Account unit
values for the day. Using this unit value, Insurance Company will process the
day's Separate Account transactions received by it by the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m. Eastern time) to
determine the net dollar amount of Portfolio shares which will be purchased or
redeemed at that day's closing net asset value per share for such Portfolio.
The net purchase or redemption orders will be transmitted to the Fund by
Insurance Company by [11:00] a.m. Eastern Time on the Business Day next
following Insurance Company's receipt of that information. Subject to Sections
3.6 and 3.8, all purchase and redemption orders for Insurance Company's General
Accounts shall be effected at the net asset value per share of the relevant
Portfolio next calculated after receipt of the order by the Fund or its Transfer
Agent.
Fund appoints Insurance Company as its agent for the limited purpose of
accepting orders for the purchase and redemption of shares of each Portfolio for
the Separate Account. Fund will execute orders for any Portfolio at the
applicable net asset value per share
determined as of the close of trading on the day of receipt of such orders by
Insurance Company acting as agent ("effective trade date"), provided that the
Fund receives notice of such orders by [11:00] a.m. Eastern Time on the next
following Business Day and, if such orders request the purchase of Portfolio
shares, the conditions specified in Section 3.8, as applicable, are satisfied. A
redemption or purchase request for any Portfolio that does not satisfy the
conditions specified above and in Section 3.8, as applicable, will be effected
at the net asset value computed for such Portfolio on the Business Day
immediately preceding the next following Business Day upon which such conditions
have been satisfied.
Insurance Company will make its best efforts to notify Fund in advance
of any unusually large purchase or redemption orders.
If Insurance Company's order requests the purchase of Portfolio shares,
Insurance Company will pay for such purchases by wiring Federal Funds to Fund or
its designated custodial account on the day the order is transmitted. Insurance
Company shall make all reasonable efforts to transmit to the Fund payment in
Federal Funds by [12:00 noon] Eastern Time on the Business Day the Fund receives
the notice of the order pursuant to Section 3.5. Fund will execute such orders
at the applicable net asset value per share determined as of the close of
trading on the effective trade date if Fund receives payment in Federal Funds by
[12:00 noon] Eastern Time on the Business Day the Fund receives the notice of
the order pursuant to Section 3.5. If payment in Federal Funds for any purchase
is not received or is received by the Fund after [12:00 noon] Eastern Time on
such Business Day, Insurance Company shall promptly upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or borrowings or
overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a
result of portfolio transactions effected by the Fund based upon such purchase
request. If Insurance Company's order requests the redemption of Portfolio
shares valued at or greater than $1 million, the Fund will wire such amount to
Insurance Company within seven days of the order.
Fund has the obligation to ensure that Portfolio shares are registered
with the Commission at all times.
Fund will confirm each purchase or redemption order made by Insurance
Company. Transfer of Portfolio shares will be by book entry only. No share
certificates will be issued to Insurance Company. Insurance Company will record
shares ordered from Fund in an appropriate title for the corresponding account.
Fund shall credit Insurance Company with the appropriate number of
shares.
On each ex-dividend date of the Fund or, if not a Business Day, on the
first Business Day thereafter, Fund shall communicate to Insurance Company the
amount of dividend and capital gain, if any, per share of each Portfolio. All
dividends and capital gains of any Portfolio shall be automatically reinvested
in additional shares of the relevant Portfolio
at the applicable net asset value per share of such Portfolio on the payable
date. Fund shall, on the day after the payable date or, if not a Business Day,
on the first Business Day thereafter, notify Insurance Company of the number of
shares so issued.
ARTICLE IV
STATEMENTS AND REPORTS
Fund shall provide monthly statements of account as of the end of each
month for all of Insurance Company's accounts by the fifteenth (15th) Business
Day of the following month.
Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and other printed
materials (which the Fund customarily provides to its shareholders) in
quantities as Insurance Company may reasonably request for distribution to each
Contractholder and Participant.
Fund will provide to Insurance Company at least one complete copy of
all registration statements, Prospectuses, reports, proxy statements, sales
literature and other promotional materials, 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 Commission or other regulatory authorities.
Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Contracts or the Separate Account, contemporaneously with the
filing of such document with the Commission.
ARTICLE V
EXPENSES
The charge to the Fund for all expenses and costs of the Portfolios,
including but not limited to management fees, administrative expenses and legal
and regulatory costs, will be made in the determination of the relevant
Portfolio's daily net asset value per share.
Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly any expenses
of the Fund or expenses relating to the distribution of its shares. Insurance
Company shall pay the following expenses or costs:
a. Such amount of the production expenses of any Fund materials,
including the cost of printing the Fund's Prospectus, or marketing materials for
prospective Insurance Company Contractholders and Participants as XXX and
Insurance Company shall agree from time to time.
b. Distribution expenses of any Fund materials or marketing materials
for prospective Insurance Company Contractholders and Participants.
c. Distribution expenses of Fund materials or marketing materials for
Insurance Company Contractholders and Participants.
Except as provided herein and as may be reflected in each Portfolio's net
asset value per share, all other Fund expenses shall not be borne by Insurance
Company.
ARTICLE VI
EXEMPTIVE RELIEF
Insurance Company has reviewed a copy of the Application For an Order
of Exemption pending before the Commission under Section 6(c) of the Act and, in
particular, has reviewed the conditions to the requested relief set forth in the
related Notice. As set forth therein, Insurance Company agrees to report any
potential or existing conflicts promptly to the Board, and in particular
whenever contract voting instructions are disregarded, and recognizes that it
will be responsible for assisting the Board in carrying out its responsibilities
under such application. Insurance Company agrees to carry out such
responsibilities with a view to the interests of existing Contractholders. Fund
agrees to promptly inform Insurance Company of any additional conditions, if
any, imposed by the Commission in its Order granting the requested relief.
If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists with regard
to Contractholder investments in the Fund, the Board shall give prompt notice to
all Participating Companies. If the Board determines that Insurance Company is
responsible for causing or creating said conflict, Insurance Company shall at
its sole cost and expense, and to the extent reasonably practicable (as
determined by a majority of the Disinterested Board Members), take such action
as is necessary to remedy or eliminate the irreconcilable material conflict.
Such necessary action may include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account from the
Portfolios and reinvesting such assets in a different investment medium, or
submitting the question of whether such segregation should be implemented to a
vote or all affected Contractholders; and/or
b. Establishing a new registered management investment company.
If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder voting instructions and said
decision represents a minority position or would preclude a majority vote by all
Contractholders having an interest in the Fund, Insurance Company may be
required, at the Board's election, to withdraw the Separate Account's investment
in the Fund.
For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether or not any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the Fund be required
to bear the expense of establishing a new funding medium for any Contract.
Insurance Company shall not be required by this Article to establish a new
funding medium for any Contract if an offer to do so has been declined by vote
of a majority of the Contractholders materially adversely affected by the
irreconcilable material conflict.
No action by Insurance Company taken or omitted, and no action by the
Separate Account or the Fund taken or omitted as a result of any act or failure
to act by Insurance Company pursuant to this Article VI shall relieve Insurance
Company of its obligations under, or otherwise affect the operation of, Article
V.
ARTICLE VII
VOTING OF FUND SHARES
Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, reports to shareholders and
other communications to shareholders in such quantity as Insurance Company shall
reasonably require for distributing to Contractholders or Participants.
Insurance Company shall:
a. solicit voting instructions from Contractholders or Participants on a
timely basis and in accordance with applicable law;
b. vote Portfolio shares in accordance with instructions received from
Contractholders or Participants; and
c. vote Portfolio shares for which no instructions have been received in
the same proportion as Portfolio shares for which instructions have been
received.
Insurance Company agrees at all times to votes its General Account shares
in the same proportion as Portfolio shares for which instructions have been
received from Contractholders or Participants. Insurance Company further agrees
to be responsible for assuring that voting Portfolio shares for the Separate
Account is conducted in a manner consistent with other Participating Companies.
Insurance Company agrees that it shall not, without the prior written
consent of the Fund and XXX, solicit, induce or encourage Contractholders to (a)
change or supplement the Fund's current investment adviser or (b) change,
modify, substitute, add to or delete the Fund from the current investment media
for the Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance Company may
reasonably request:
a. Current Prospectus and any supplements thereto;
b. other marketing materials.
Expenses for the production of such documents shall be borne by Insurance
Company in accordance with Section 5.2 of this Agreement.
Insurance Company shall designate certain persons or entities which
shall have the requisite licenses to solicit applications for the sale of
Contracts. No representation is made as to the number or amount of Contracts
that are to be sold by Insurance Company. Insurance Company shall make
reasonable efforts to market the Contracts and shall comply with all applicable
federal and state laws in connection therewith.
Insurance Company shall furnish, or shall cause to be furnished, to the
Fund, each piece of sales literature or other promotional material in which the
Fund, its investment adviser or the administrator is named, at least fifteen
Business Days prior to its use. No such material shall be used unless the Fund
approves such material. Such approval (if given) must be in writing and shall
be presumed not given if not received within ten Business Days after receipt of
such material. The Fund shall use all reasonable efforts to respond within ten
days of receipt.
Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
any Portfolio in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or
Prospectus, as may be amended or supplemented from time to time, or in reports
or proxy statements for the Fund, or in sales literature or other promotional
material approved by the Fund.
Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other promotional material
in which Insurance Company or the Separate Account is named, at least fifteen
Business Days prior to its use. No such material shall be used unless Insurance
Company approves such material. Such approval (if given) must be in writing and
shall be presumed not given if not received within ten Business Days after
receipt of such material. Insurance Company shall use all reasonable efforts to
respond within ten days of receipt.
Fund shall not, in connection with the sale of Portfolio shares, give
any information or make any representations on behalf of Insurance Company or
concerning Insurance Company, the Separate Account, or the Contracts other than
the information or representations contained in a registration statement or
prospectus for the Contracts, as may be amended or supplemented from time to
time, or in published reports for the Separate Account which are in the public
domain or approved by Insurance Company for distribution to Contractholders or
Participants, or in sales literature or other promotional material approved by
Insurance Company.
For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc. rules, the
Act or the 1933 Act.
ARTICLE IX
INDEMNIFICATION
Insurance Company agrees to indemnify and hold harmless the Fund, XXX,
any sub-investment adviser of a Portfolio, and their affiliates, and each of
their directors, trustees, general members, officers, employees, agents and each
person, if any, who controls or is associated with any of the foregoing entities
or persons within the meaning of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section), against any and all losses, claims,
damages or liabilities joint or several (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted) for which
the Indemnified Parties may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect to
thereof) (i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in information furnished by
Insurance Company for use in the registration statement or Prospectus or sales
literature or advertisements of the Fund or with respect to the Separate Account
or Contracts, 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; (ii) arise out of or as
a result of conduct, statements or representations (other than statements or
representations contained in the Prospectus and sales literature or
advertisements of the Fund) of Insurance Company or its agents, with respect to
the sale and distribution of Contracts for which Portfolio shares are an
underlying investment; (iii) arise out of the wrongful conduct of Insurance
Company or persons under its control with respect to the sale or distribution of
the Contracts or Portfolio shares; (iv) arise out of Insurance Company's
incorrect calculation and/or untimely reporting of net purchase or redemption
orders; or (v) arise out of any breach by Insurance Company of a material term
of this Agreement or as a result of any failure by Insurance Company to provide
the services and furnish the materials or to make any payments provided for in
this Agreement. Insurance Company will reimburse any Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that with respect to clauses (i) and
(ii) above Insurance Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any untrue statement or omission or alleged omission made in such registration
statement, prospectus, sales literature, or advertisement in conformity with
written information furnished to Insurance Company by the Fund specifically for
use therein. This indemnity agreement will be in addition to any liability
which Insurance Company may otherwise have.
The Fund agrees to indemnify and hold harmless Insurance Company and
each of its directors, officers, employees, agents and each person, if any, who
controls Insurance Company within the meaning of the 1933 Act against any
losses, claims, damages or liabilities to which Insurance Company or any such
director, officer, employee, agent or controlling person may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (1) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the registration statement or Prospectus or sales literature or
advertisements of the Fund; (2) arise out of or are based upon the omission to
state in the registration statement or Prospectus or sales literature or
advertisements of the Fund any material fact required to be stated therein or
necessary to make the statements therein not misleading; or (3) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement or Prospectus or sales literature
or advertisements with respect to the Separate Account or the Contracts and such
statements were based on information provided in writing to Insurance Company by
the Fund specifically for use therein; and the Fund will reimburse any legal or
other expenses reasonably incurred by Insurance Company or any such director,
officer, employee, agent or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the Fund will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or omission or alleged omission made in such Registration
Statement, Prospectus, sales literature or advertisements in conformity with
written information furnished to the Fund by Insurance Company specifically for
use therein. This indemnity agreement will be in addition to any liability
which the Fund may otherwise have.
The Fund shall indemnify and hold Insurance Company harmless against
any and all liability, loss, damages, costs or expenses which Insurance Company
may incur, suffer or be required to pay due to the Fund's (1) incorrect
calculation of the daily net asset value, dividend rate or capital gain
distribution rate of a Portfolio; (2) incorrect reporting of the daily net asset
value, dividend rate or capital gain distribution rate; and (3) untimely
reporting of the net asset value, dividend rate or capital gain distribution
rate; provided that the Fund shall have no obligation to indemnify and hold
harmless Insurance Company if the incorrect calculation or incorrect or untimely
reporting was the result of incorrect information furnished by Insurance Company
or information furnished untimely by Insurance Company or otherwise as a result
of or relating to a breach of this Agreement by Insurance Company. In no event
will the Fund be liable for any consequential, incidental, special or indirect
damages resulting to Insurance Company hereunder.
Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Article, notify the indemnifying party of the commencement thereof. The
omission to so notify the indemnifying party will not relieve the indemnifying
party from any liability under this Article IX, except to the extent that the
omission results in a failure of actual notice to the indemnifying party and
such indemnifying party is damaged solely as a result of the failure to give
such notice. In case any such action is brought against any indemnified party,
and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel satisfactory to such
indemnified party, and to the extent that the indemnifying party has given
notice to such effect to the indemnified party and is performing its obligations
under this Article, the indemnifying party shall not be liable for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent.
A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article IX.
ARTICLE X
COMMENCEMENT AND TERMINATION
This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
This Agreement shall terminate without penalty as to one or more
Portfolios at the option of the terminating party:
a. At the option of Insurance Company or the Fund at any time from the
date hereof upon 180 days' notice, unless a shorter time is agreed to by the
parties;
b. At the option of Insurance Company, if shares of any Portfolio are
not reasonably available to meet the requirements of the Contracts as determined
by Insurance Company. Prompt notice of election to terminate shall be furnished
by Insurance Company, said termination to be effective ten days after receipt of
notice unless the Fund makes available a sufficient number of shares to meet the
requirements of the Contracts within said ten-day period;
c. At the option of Insurance Company, upon the institution of formal
proceedings against the Fund by the Commission, the National Association of
Securities Dealers, Inc. or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in Insurance Company's
reasonable judgment, materially impair the Fund's ability to meet and perform
the Fund's obligations and duties hereunder. Prompt notice of election to
terminate shall be furnished by Insurance Company with said termination to be
effective upon receipt of notice;
d. At the option of the Fund, upon the institution of formal proceedings
against Insurance Company by the Commission, the National Association of
Securities Dealers, Inc. or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in the Fund's reasonable
judgment, materially impair Insurance Company's ability to meet and perform
Insurance Company's obligations and duties hereunder. Prompt notice of election
to terminate shall be furnished by the Fund with said termination to be
effective upon receipt of notice;
e. At the option of the Fund, if the Fund shall determine, in its sole
judgment reasonably exercised in good faith, that Insurance Company has suffered
a material adverse change in its business or financial condition or is the
subject of material adverse publicity and such material adverse change or
material adverse publicity is likely to have a material adverse impact upon the
business and operation of the Fund or XXX, the Fund shall notify Insurance
Company in writing of such determination and its intent to terminate this
Agreement, and after considering the actions taken by Insurance Company and any
other changes in circumstances since the giving of such notice, such
determination of the Fund shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall be the effective
date of termination;
f. Upon termination of the Investment Management Agreement between the
Fund and XXX or its successors unless Insurance Company specifically approves
the selection of a new Fund investment adviser. The Fund shall promptly furnish
notice of such termination to Insurance Company;
g. In the event Portfolio shares are not registered, issued or sold in
accordance with applicable federal law, or such law precludes the use of such
shares as the underlying investment medium of Contracts issued or to be issued
by Insurance Company. Termination shall be effective immediately upon such
occurrence without notice;
h. At the option of the Fund upon a determination by the Board in good
faith that it is no longer advisable and in the best interests of shareholders
for the Fund to continue to operate pursuant to this Agreement. Termination
pursuant to this Subsection (h) shall be effective upon notice by the Fund to
Insurance Company of such termination;
i. At the option of the Fund if the Contracts cease to qualify as
annuity contracts or life insurance policies, as applicable, under the Code, or
if the Fund reasonably believes that the Contracts may fail to so qualify;
j. At the option of either party to this Agreement, upon another party's
breach of any material provision of this Agreement;
k. At the option of the Fund, if the Contracts are not registered,
issued or sold in accordance with applicable federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the written
consent of the non-assigning party.
Any such termination pursuant to this Article X shall not affect the
operation of Article V of this Agreement. Any termination of this Agreement
shall not affect the operation of Article IX of this Agreement.
Notwithstanding any termination of this Agreement pursuant to Section
10.2 hereof, the Fund and XXX may, at the option of the Fund, continue to make
available additional Portfolio shares for so long as the Fund desires pursuant
to the terms and conditions of this Agreement as provided below, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, if the Fund or XXX so elects to make additional Portfolio shares
available, the owners of the Existing Contracts or Insurance Company, whichever
shall have legal authority to do so, shall be permitted to reallocate
investments in the Portfolio, redeem investments in the Fund and/or invest in
the Fund upon the making of additional purchase payments under the Existing
Contracts. In the event of a termination of this Agreement pursuant to Section
10.2 hereof, the Fund and XXX, as promptly as is practicable under the
circumstances, shall notify Insurance
Company whether XXX and the Fund will continue to make Portfolio shares
available after such termination. If Portfolio shares continue to be made
available after such termination, the provisions of this Agreement shall remain
in effect and thereafter either the Fund or Insurance Company may terminate the
Agreement, as so continued pursuant to this Section 10.3, upon prior written
notice to the other party, such notice to be for a period that is reasonable
under the circumstances but, if given by the Fund, need not be for more than six
months.
ARTICLE XI
AMENDMENTS
Any changes in the terms of this Agreement shall be made by agreement
in writing between Insurance Company and Fund.
ARTICLE XII
NOTICE
Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the following
addresses:
Insurance Company: American National Insurance
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fund: Lazard Retirement Series, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
with copies to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the addresses as
evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund.
ARTICLE XIV
LAW
This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of conflict of
laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.
American National Insurance
By:
Attest:_____________________
LAZARD RETIREMENT SERIES, INC.
By:
Attest:_____________________
SCHEDULE 1
Name of Portfolio
-----------------
Lazard Retirement Bantam Value Portfolio
Lazard Retirement Emerging Markets Portfolio
Lazard Retirement Equity Portfolio
Lazard Retirement Global Equity Portfolio
Lazard Retirement International Equity Portfolio
Lazard Retirement International Fixed-Income Portfolio
Lazard Retirement International Small Cap Portfolio
Lazard Retirement Small Cap Portfolio
Lazard Retirement Strategic Yield Portfolio
1
DISTRIBUTION AND SERVICING PLAN AGREEMENT
LAZARD RETIREMENT SERIES, INC.
Lazard Freres & Co. LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We wish to enter into this Agreement with you for distribution and
certain other services with respect to the shares of each portfolio set forth on
Schedule 1 hereto, as such Schedule may be revised from time to time (each, a
"Portfolio"), of Lazard Retirement Series, Inc. (the "Fund") of which you are
the principal underwriter as defined in the Investment Company Act of 1940, as
amended (the "Act"), and the exclusive agent for the continuous distribution of
its shares.
The terms and conditions of this Agreement are as follows:
1. We agree to provide reasonable assistance in connection with the
sale of the Portfolios' shares, which assistance may include distributing sales
literature, marketing and advertising. If we are restricted or unable to
provide the services contemplated above, we agree not to perform such services
and not to accept fees thereafter. Our acceptance of any fees hereunder shall
constitute our representation (which shall survive any payment of such fees and
any termination of this Agreement and shall be reaffirmed each time we accept a
fee hereunder) that our receipt of such fee is lawful.
2. We agree to provide shareholder and administrative services for
our clients who own shares of any Portfolio ("clients"), which services may
include, without limitation, answering client inquiries about the Fund or any
Portfolio; assisting clients in changing dividend options, account designations
and addresses; performing sub-accounting; establishing and maintaining
shareholder accounts and records; processing purchase and redemption
transactions; investing client account cash balances automatically in Portfolio
shares; providing periodic statements showing a client's account balance and
integrating such statements with those of other transactions and balances in the
client's other accounts serviced by us; arranging for bank wires; and providing
such other information and services as the Fund reasonably may request, to the
extent we are permitted by applicable statute, rule or regulation. In this
regard, you recognize that to the extent we are subject to the provisions of the
Xxxxx-Xxxxxxxx Act and other laws governing, among other things, the conduct of
activities we may undertake and for which we may be paid, we intend to perform
only those activities as are consistent with our statutory and regulatory
obligations. We shall provide to clients a schedule of the services and of any
fees that we may charge directly to them for such services.
2
3. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the space, equipment
and facilities currently used in our business, or all or any personnel employed
by us) as is necessary or beneficial in order to provide such services
contemplated hereunder.
4. We agree that neither we nor any of our employees or agents are
authorized to make any representation concerning the Portfolios' shares, except
those contained in the Fund's then-current Prospectus and Statement of
Additional Information, copies of which will be supplied by you to us, or in
such supplemental literature or advertising materials as may be authorized by
you in writing.
5. For all purposes of this Agreement, we will be deemed to be an
independent contractor, and will have no authority to act as agent for you or
the Fund in any matter or in any respect. We and our employees will, upon
request, be available during normal business hours to consult with you or your
designees concerning the performance of our responsibilities under this
Agreement.
6. In consideration of the services and facilities described herein,
we shall be entitled to receive from you, and you agree to pay to us with
respect to each Portfolio, the fees set forth opposite such Portfolio's name on
Schedule 1 hereto. We understand that the payment of these fees has been
authorized and will be paid pursuant to a Distribution and Servicing Plan
approved by the Fund's Board and shareholders, and any payments pursuant to this
Agreement shall be paid only so long as this Agreement and the Distribution and
Servicing Plan adopted by the Fund is in effect.
7. You reserve the right, at your discretion and without notice, to
suspend or withdraw the sale of any Portfolio's shares.
8. We acknowledge that this Agreement shall become effective, as to a
Portfolio, only when approved by vote of a majority of (i) the Fund's Board and
(ii) the Board members who are not "interested persons" (as defined in the Act)
of the Fund and have no direct or indirect financial interest in this Agreement,
cast in person at a meeting called for the purpose of voting on such approval.
3
9. As to each Portfolio, this Agreement shall continue until the last
day of the calendar year next following the date of execution, and thereafter
shall continue automatically for successive annual periods ending on the last
day of each calendar year, provided such continuance is approved specifically at
least annually by a vote of a majority of (i) the Fund's Board and (ii) the
Directors who are not "interested persons" (as defined in the Act) of the Fund
and have no direct or indirect financial interest in this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such approval.
As to each Portfolio, this Agreement is terminable without penalty, at any time,
by vote of a majority of the Directors who are not "interested persons" (as
defined in the Act) and have no direct or indirect financial interest in this
Agreement or, on not more than 60 days' written notice, by vote of holders of a
majority of a Portfolio's outstanding shares, or, upon 15 days' notice, by you.
Notwithstanding anything contained herein, if the Distribution and Servicing
Plan adopted by the Fund is terminated by the Fund's Board, or the Distribution
and Servicing Plan, or any part thereof, is found invalid or is ordered
terminated by any regulatory or judicial authority, or we fail to perform the
distribution and servicing functions contemplated by the Fund or by you, this
Agreement shall be terminable effective upon receipt of notice thereof by us.
This Agreement also shall terminate automatically, as to the relevant Portfolio,
in the event of its assignment (as defined in the Act).
10. We understand that the Fund's Board will review, at least
quarterly, a written report of the amounts expended pursuant to this Agreement
and the purposes for which such expenditures were made. In connection with such
reviews, we will furnish you or your designees with such information as you or
they may reasonably request and will otherwise cooperate with you and your
designees (including, without limitation, any auditors designated by you), in
connection with the preparation of reports to the Fund's Board concerning this
Agreement and the monies paid or payable by you pursuant hereto, as well as any
other reports or filings that may be required by law.
11. All communications to you shall be sent to you at the address set
forth above. Any notice to us shall be duly given if mailed or telegraphed to
us at the address set forth below.
4
12. This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of conflict
of laws.
Very truly yours,
__________________________________________
(Please Print or Type Name of Entity)
__________________________________________
Address
__________________________________________
City State Zip Code
Date____________________ By:_______________________________________
Authorized Signature
NOTE: Please return both signed copies of this Agreement to Lazard Freres
& Co. LLC. Upon acceptance one countersigned copy will be returned for
your files.
Accepted:
LAZARD FRERES & CO. LLC
Date _________________________ By:____________________________
5
SCHEDULE 1
Distribution and Servicing Plan Agreement
between
LAZARD FRERES & CO. LLC
and
__________________________________
American National Insurance
Fee at an Annual Rate as a Percentage of Average Daily Net Asset Value of
Portfolio Shares Owned by Clients*
Name of Portfolio* Fee
------------------ ----
Lazard Retirement Bantam Value Portfolio .25
Lazard Retirement Emerging Markets Portfolio .25
Lazard Retirement Equity Portfolio .25
Lazard Retirement Global Equity Portfolio .25
Lazard Retirement International Equity Portfolio .25
Lazard Retirement International Fixed-Income Portfolio .25
Lazard Retirement International Small Cap Portfolio .25
Lazard Retirement Small Cap Portfolio .25
Lazard Retirement Strategic Yield Portfolio .25
Dated: April 21, 1998
* For purposes of determining the fees payable hereunder, the average daily
net asset value of each Portfolio's shares shall be computed in the manner
specified in the Fund's charter documents and then-current Prospectus and
Statement of Additional Information.
7
