EXHIBIT 1.(8)(b)
----------------
AMENDED AND RESTATED
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PARTICIPATION AGREEMENT
-----------------------
Among
VARIABLE INSURANCE PRODUCTS FUND,
---------------------------------
FIDELITY DISTRIBUTORS CORPORATION
---------------------------------
and
GENERAL AMERICAN LIFE INSURANCE COMPANY
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THIS AGREEMENT is made and entered into as of this 15th
day of February, 1995 by and among GENERAL AMERICAN LIFE
INSURANCE COMPANY, (hereinafter the "Company"), a Missouri
corporation, on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A hereto as
such schedule may be amended from time to time (each such
account hereinafter referred to as the "Account" and
collectively as the "Accounts"), and the VARIABLE INSURANCE
PRODUCTS FUND, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter the
"Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation. This Agreement
replaces and supersedes that certain Participation Agreement
among the parties dated as of August 3, 1992, as heretofore
amended, which agreement is hereby amended in its entirety.
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established for
variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered
by insurance companies which have entered into participation
agreements with the Fund and the Underwriter (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided
into several series of shares, each designated a "Portfolio"
and representing the interest in a particular managed portfolio
of securities and other assets; and
WHEREAS, the Fund has obtained an order from the
Securities and Exchange Commission, dated October 15, 1985
(File No.812-6102), granting Participating Insurance Companies
and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as
amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Fund to be sold to and held by variable annuity
and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are
registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the
"Adviser") is duly registered as an investment adviser under
the federal Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register
certain variable life and variable annuity contracts under the
1933 Act, and offers or will offer for sale certain other group
variable annuity contracts which are or will be exempt from
registration; and
WHEREAS, each Account is a duly organized, validly
existing segregated asset account, established by resolution of
the Board of Directors of the Company, on the date shown for
such Account on Schedule A hereto, to set aside and invest
assets attributable to one or more variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register
certain of the Accounts as a unit investment trust under the
1940 Act and certain of the Accounts are exempt from
registration; and
WHEREAS, the Underwriter is registered as a broker dealer
with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended, (hereinafter the
"1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company intends to purchase shares in
the Portfolios on behalf of each Account to fund certain of the
aforesaid variable life and variable annuity contracts and the
Underwriter is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual
promises, the Company, the Fund and the Underwriter agree as
follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company
those shares of the Fund which each Account orders, executing
such orders on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the order
for the shares of the Fund. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of
such orders from
2
each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of
such order by 9:30 a.m. Boston time on the next following
Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the
Fund calculates its net asset value pursuant to the rules of
the Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available
indefinitely for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which
the Fund calculates its net asset value pursuant to rules of
the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each
day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the
Fund (hereinafter the "Board") may refuse to sell shares of any
Portfolio to any person, 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 such Portfolio.
1.3. The Fund and the Underwriter agree that shares
of the Fund will be sold only to Participating Insurance
Companies and their separate accounts. No shares of any
Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund
shares to any insurance company or separate account unless an
agreement containing provisions substantially the same as
Articles I, III, V, VII and Section 2.5 of Article II of this
Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the
Company's request, any full or fractional shares of the Fund
held by the Company, executing such requests on a daily basis
at the net asset value next computed after receipt by the Fund
or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Fund
for receipt of requests for redemption from each Account and
receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such request for
redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the
shares of selected Portfolios offered by the then-current
prospectus of the Fund and in accordance with the provisions of
such prospectus. The Company agrees that all net amounts
available under the variable life and variable annuity
contracts with the form number(s) which are listed on Schedule
B attached hereto and incorporated herein by this reference, as
such Schedule B may be amended from time to time hereafter by
mutual written agreement of all the parties hereto, (the
"Contracts") shall be invested in the Fund, in such other Funds
advised by the Adviser as may be mutually agreed to in writing
by the parties hereto, or in the Company's general account or
in other separate accounts of the Company managed by the
Company or an affiliate, provided that such amounts may also be
invested in an investment company other than the Fund if (a)
such other investment company, or series thereof, has
investment objectives or policies that are substantially
different from the
3
investment objectives and policies of all the Portfolios of the
Fund; or (b) the Company gives the Fund and the Underwriter 45
days written notice of its intention to make such other
investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available
as a funding vehicle for the Contracts prior to the date of
this Agreement and the Company so informs the Fund and
Underwriter prior to their signing this Agreement; or (d) the
Fund or Underwriter consents to the use of such other
investment company.
1.7. The Company shall pay for Fund shares on the
next Business Day after an order to purchase Fund shares is
made in accordance with the provisions of Section 1.1 hereof.
Payment shall be in federal funds transmitted by wire. For
purpose of Section 2.10 and 2.11, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the
responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will
be by book entry only. Stock certificates will not be issued
to the Company or any Account. Shares ordered from the Fund
will be recorded in an appropriate title for each Account or
the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire
or telephone, followed by written confirmation) to the Company
of any income dividends or capital gain distributions payable
on the Fund's shares. The Company hereby elects to receive all
such income dividends and capital gain distributions as are
payable on the Portfolio shares in additional shares of that
Portfolio. The Company 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 Company
of the number of shares so issued as payment of such dividends
and distributions.
1.10. The Fund shall make the net asset value per
share for each Portfolio available to the Company on a daily
basis as soon as reasonably practical after the net asset value
per share is calculated and shall use its best efforts to make
such net asset value per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the
Contracts are registered under the 1933 Act or are exempt from
registration thereunder; that the Contracts will be issued and
sold in compliance in all material respects with all applicable
Federal and State laws and that the sale of the Contracts shall
comply in all material respects with state insurance
suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and
validly established each Account prior to any issuance or sale
thereof as a segregated asset account under Section 376.309 of
the Insurance Code of the State of Missouri and that each
Account is or will be registered as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts or is exempt
from registration thereunder.
4
2.2. The Fund represents and warrants that Fund
shares sold pursuant to this Agreement shall be registered
under the 1933 Act, duly authorized for issuance and sold in
compliance with the laws of the State of Missouri and all
applicable federal and state securities laws and that the Fund
is and shall remain registered under the 0000 Xxx. The Fund
shall amend the Registration Statement for its shares under the
1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its shares. The
Fund shall register and 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 or the Underwriter.
2.3. The 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 the 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.
2.4. The Company represents that the Contracts are
currently treated as endowment, annuity or life insurance
contracts, 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 the Underwriter 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.
2.5. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-
1 under the 1940 Act or otherwise, although it may make such
payments in the future. The Fund has adopted a "no fee" or
"defensive" Rule 12b-l Plan under which it makes no payments
for distribution expenses. To the extent that it decides to
finance distribution expenses pursuant to Rule 12b-l, the Fund
undertakes to have a board of trustees, a majority of whom are
not interested persons of the Fund, formulate and approve any
plan under Rule 12b-1 to finance distribution expenses.
2.6. The Fund makes no representation as to whether
any aspect of its operations (including, but not limited to,
fees and expenses and investment policies) complies with the
insurance laws or regulations of the various states except that
the Fund represents that the Fund's investment policies, fees
and expenses are and shall at all times remain in compliance
with the laws of the State of Missouri and the Fund and the
Underwriter represent that their respective operations are and
shall at all times remain in material compliance with the laws
of the State of Missouri to the extent required to perform this
Agreement.
2.7. The Underwriter represents and warrants that it
is a member in good standing of the NASD and is registered as a
broker-dealer with the SEC. The Underwriter further represents
that it will sell and distribute the Fund shares in accordance
with the laws of the State of Missouri and all applicable state
and federal securities laws, including without limitation the
1933 Act, the 1934 Act, and the 1940 Act.
5
2.8. The Fund represents that it is lawfully
organized and validly existing under the laws of the
Commonwealth of Massachusetts and that it does and will comply
in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the
Adviser is and shall remain duly registered in all material
respects under all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Fund
in compliance in all material respects with the laws of the
State of Missouri and any applicable state and federal
securities laws.
2.10. The Fund and Underwriter represent and warrant
that all of their directors, officers, employees, investment
advisers, and other individuals/entities dealing with the money
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 the
minimal coverage as required currently by Rule 17g-(1) of the
1940 Act or related provisions as may be promulgated from time
to time. The aforesaid Bond shall include coverage for larceny
and embezzlement and shall be issued by a reputable bonding
company.
2.11. The Company represents and warrants that all of
its directors, officers, employees, investment advisers, and
other entities dealing with the money 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 five million dollars ($5 million).
The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding
company.
ARTICLE III. Prospectuses and Proxy Statements Voting
----------------------------------------
3.1. The Underwriter shall provide the Company with
as many printed copies of the Fund's current prospectus and
Statement of Additional Information as the Company may
reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide camera-ready film or computer
diskettes containing the Fund's prospectus and Statement of
Additional Information, and such other assistance as is
reasonably necessary in order for the Company once each year
(or more frequently if the prospectus and/or Statement of
Additional Information for the Fund is amended during the year)
to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the
Statement of Additional Information for the Contracts printed
together in one document. Alternatively, the Company may print
the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies'
prospectuses and statements of additional information. Except
as provided in the following three sentences, all expenses of
printing and distributing Fund prospectuses and Statements of
Additional Information shall be the expense of the Company.
For prospectuses and Statements of Additional Information
provided by the Company to its existing owners of Contracts in
order to update disclosure as required by the 1933 Act and/or
the 1940 Act, the cost of printing shall be borne by the Fund.
If the Company chooses to receive camera-ready film or computer
diskettes in lieu of receiving printed copies of the Fund's
prospectus, the Fund will reimburse the Company in an amount
equal to the product of A and B where A is the number of such
prospectuses distributed to owners of
6
the Contracts, and B is the Fund's per unit cost of typesetting
and printing the Fund's prospectus. The same procedures shall
be followed with respect to the Fund's Statement of Additional
Information.
The Company agrees to provide the Fund or its designee
with such information as may be reasonably requested by the
Fund to assure that the Fund's expenses do not include the cost
of printing any prospectuses or Statements of Additional
Information other than those actually distributed to existing
owners of the Contracts.
3.2. The Fund's prospectus shall state that the
Statement of Additional Information for the Fund is available
from the Underwriter or the Company (or in the Fund's
discretion, the Prospectus shall state that such Statement is
available from the Fund).
3.3. The Fund, at its expense, shall provide the
Company with copies of its proxy statements, reports to
shareholders, and other communications (except for prospectuses
and Statements of Additional Information, which are covered in
Section 3.1) to shareholders in such quantity as the Company
shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company
shall:
(i) solicit voting instructions from
Contract owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract
owners; and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as
Fund shares of such portfolio for which
instructions have been received,
so long as and to the extent that the Securities and Exchange
Commission continues to interpret the 1940 Act to require pass-
through voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a
manner consistent with the standards set forth on Schedule C
attached hereto and incorporated herein by this reference,
which standards will also be provided to the other
Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the
1940 Act requiring voting by shareholders, and in particular
the Fund will either provide for annual meetings or comply with
Section 16(c) of the 1940 Act (although the Fund is not one of
the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b).
Further, the Fund will act in accordance with the Securities
and Exchange Commission's interpretation of the requirements of
Section 16(a) with respect to periodic elections of trustees
and with whatever rules the Commission may promulgate with
respect thereto.
7
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales
literature or other promotional material in which the Fund or
its investment adviser or the Underwriter is named, at least
fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee object to such use within
fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or
make any representations or statements on behalf of the Fund or
concerning the Fund in connection with the sale of the
Contracts other than the information or representations
contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus 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 or its designee or by
the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall
furnish, or shall cause to be furnished, to the Company or its
designee, each piece of sales literature or other promotional
material in which the Company or its separate account(s), is
named at least fifteen Business Days prior to its use. No such
material shall be used if the Company or its designee object to
such use within fifteen Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any
information or make any representations on behalf of the
Company or concerning the Company, each Account, or the
Contracts other than the information or representations
contained in any registration statement, prospectus or offering
materials for the Contracts, as such may be amended or
supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by the
Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the
Company or its designee, except with the permission of the
Company.
4.5. The Fund will provide to the Company at least
one complete copy of all registration statements, prospectuses,
Statements of Additional Information, 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 Securities and Exchange Commission or other
regulatory authorities.
4.6. The Company will provide to the Fund at least
one complete copy of any registration statements, prospectuses,
Statements of Additional Information, reports, solicitations
for voting instructions, 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 each Account, contemporaneously with the
filing of such document with the SEC or other regulatory
authorities. In the case of unregistered Contracts, in lieu of
providing prospectuses and Statements of Additional
Information, the Company shall provide the fund with one
complete copy of the offering materials for the Contracts.
8
4.7. For purposes of this Article IV, the phrase
"sales literature or other promotional material" includes, but
is not limited to, 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 (i.e., any written
----
communication distributed or made generally available to
customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
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, and registration
statements, prospectuses, Statements of Additional Information,
shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund and Underwriter shall pay no fee or
other compensation to the Company under this agreement, except
that if the Fund or any Portfolio adopts and implements a plan
pursuant to Rule 12b-1 to finance distribution expenses, then
the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by
the Underwriter in writing and such payments will be made out
of existing fees otherwise payable to the Underwriter, past
profits of the Underwriter or other resources available to the
Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund
under this Agreement shall be paid by the Fund. The Fund shall
see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and
to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of
the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and
printing the proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and
notices required by any federal or state law, and all taxes on
the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of
distributing the Fund's prospectus, proxy materials and reports
to owners of Contracts issued by the Company.
ARTICLE VI. Diversification
---------------
6.1. The Fund will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will
be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of
the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to
the
9
diversification requirements for variable annuity, endowment,
or life insurance contracts and any amendments or other
modifications to such Section or Regulations.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Fund for the
existence of any material irreconcilable conflict between the
interests of the contract owners of all separate accounts
investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any
state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are
being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract
owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly
inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or
existing conflicts of which it is aware to the Board. The
Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary
for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to inform
the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board,
or a majority of its disinterested trustees, that a material
irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a
majority of the disinterested trustees), take whatever steps
are necessary to remedy or eliminate the irreconcilable
material conflict, up to and including: (1), withdrawing the
assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to)
another Portfolio of the Fund, or submitting the question
whether such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners,
----
life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2),
establishing a new registered management investment company or
managed separate account.
7.4. If a material irreconcilable conflict arises
because of a decision by the Company to disregard contract
owner voting instructions and that decision represents a
minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw
the affected Account's investment in the Fund and terminate
this Agreement with respect to such Account; provided, however
that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable
conflict as determined by a majority
10
of the disinterested members of the Board. Any such withdrawal
and termination must take place within six (6) months after the
Fund gives written notice that this provision is being
implemented, and until the end of that six month period the
Underwriter and Fund shall continue to accept and implement
orders by the Company for the purchase (and redemption) of
shares of the Fund.
7.5. If a material irreconcilable conflict arises
because a particular state insurance regulator's decision
applicable to the Company conflicts with the majority of other
state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement
with respect to such Account within six months after the Board
informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict;
provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the
foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of the Board
shall determine whether any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the
Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contracts if an offer to
do so has been declined by vote of a majority of Contract
owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Fund and terminate
this Agreement within six (6) months after the Board informs
the Company in writing of the foregoing determination,
provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-
3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the Act or the rules promulgated
thereunder with respect to mixed or shared funding (as defined
in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund or the Participating
Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or
adopted.
11
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold
harmless the Fund and each trustee of the Board and officers
and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act (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 the
Company) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any
untrue statements or alleged untrue statements of any
material fact contained in any Registration Statement,
prospectus or other offering materials for the Contracts
or contained in the Contracts or sales literature for the
Contracts (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 shall 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 to the
Company by or on behalf of the Fund for use in any
Registration Statement or prospectus for the Contracts or
in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of
statements or representations (other than statements or
representations contained in the Registration Statement,
prospectus or sales literature of the Fund not supplied
by the Company, or persons under its control) or wrongful
conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or
Fund Shares; or
(iii) 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 to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by
the Company to provide the services and furnish the
materials under the terms of this Agreement; or
12
(v) arise out of or result from any
material breach of any representation or warranty made by
the Company in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Company, as limited by and in accordance with the
provisions of Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from 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.
8.1(c). The Company shall 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 Company 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 Company of any such claim
shall not relieve the Company from any liability which 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 Company shall be entitled to
participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company 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.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the
Fund Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
----------------------------------
8.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors and officers and
each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (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 the
Underwriter) or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any
statute, at common law
13
or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and:
(i) 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 of the Fund (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
shall 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 to the Underwriter or Fund by or on
behalf of the Company for use in the Registration
Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in any Registration Statement, prospectus,
other offering materials or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund,
Adviser or Underwriter or persons under their control,
with respect to the sale or distribution of the Contracts
or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in any
Registration Statement, prospectus, other offering
materials or sales literature covering the Contracts, 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 statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of
the Fund; or
(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach
of any representation or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
14
8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified
Party would otherwise 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
and duties under this Agreement or to each Company or the
Account, whichever is applicable.
8.2(c). The Underwriter shall 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 Underwriter 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 Underwriter of any
such claim shall not relieve the Underwriter from any liability
which 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 Underwriter will be
entitled to participate, at its own expense, in the defense
thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter 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.
8.2(d). The Company agrees promptly to notify the
Underwriter of the commencement of any litigation or
proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification By the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless
the Company, and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements
result from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to
the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials
under the terms of this Agreement (including a
failure to comply with the diversification
requirements specified in Article VI of this
Agreement); or
15
(ii) arise out of or result from any material breach
of any representation 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;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Fund shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from 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
and duties under this Agreement or to the Company, the Fund,
the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall 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 shall
not relieve the Fund from any liability which 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 will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall 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 shall 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.
8.3(d). The Company and the Underwriter agree promptly
to notify the Fund of the commencement of any litigation or
proceedings against it or any of its respective officers or
directors in connection with this Agreement, the issuance or
sale of the Contracts, with respect to the operation of any
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the
laws of the Commonwealth of Massachusetts.
9.2. To the extent they are applicable, this
Agreement shall be subject to the provisions of the 1933, 1934
and 1940 acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes,
rules and regulations as the Securities and
16
\
Exchange Commission may grant (including, but not limited to,
the Shared Funding Exemptive Order) and the terms hereof shall
be interpreted and construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and
effect until the first to occur of:
(a) termination by any party for any reason by sixty (60)
days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the
Fund and the Underwriter with respect to any
Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably
available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in
accordance with applicable state or federal law
or such law precludes the use of such shares as
the underlying investment media of the Contracts
issued or to be issued by the Company; or
(d) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event that such Portfolio
ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under
any successor or similar provision, or if the
Company reasonably believes that the Fund may
fail to so qualify; or
(e) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event that such Portfolio fails
to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or
both of the Fund or the Underwriter respectively,
shall determine, in their sole judgment exercised in
good faith, that the Company or its affiliated companies
has suffered a material adverse change in its business,
operations, financial condition or prospects since the
date of this Agreement or is the subject of material
adverse publicity; or
(g) termination by the Company by written notice to
the Fund and the Underwriter, if the Company shall
determine, in its sole judgment exercised in
good faith, that either the Fund or the
Underwriter has suffered a material adverse
change in its business, operations, financial
condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity; or
17
(h) termination by the Fund or the Underwriter by
written notice to the Company, if the Company gives
the Fund and the Underwriter the written notice
specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice
of termination outstanding under any other
provision of this Agreement; provided, however
any termination under this Section 10.1(h) shall
be effective forty five (45) days after the
notice specified in Section 1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any
---------------------
termination of this Agreement, the Fund and the Underwriter
shall at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the
Fund, redeem investments in the Fund or invest in the Fund upon
the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of
such Article VII terminations shall be governed by Article VII
of this Agreement.
10.3 The Company shall not redeem Fund shares
attributable to the Contracts (as opposed to Fund shares
attributable to the Company's assets held in any of the
Accounts) except (i) as necessary to implement Contract Owner
initiated transactions, or (ii) as required by state or federal
laws or regulations or judicial or other legal precedent of
general application (hereinafter referred to as a "Legally
Required Redemption"). Upon request, the Company will promptly
furnish to the Fund and the Underwriter the opinion of counsel
for the Company (which counsel shall be reasonably satisfactory
to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under
the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first
giving the Fund or the Underwriter 90 days notice of its
intention to do so.
ARTICLE XI. Notices
-------
Any notice shall 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 the Fund:
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
If to the Company:
00000 Xxxxxx Xxxxx Xxxx
Xx. Xxxxx, XX 00000
Attn: VUL Administrator
18
If to the Underwriter:
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Treasurer
ARTICLE XII. Miscellaneous
-------------
12.1 All persons dealing with the Fund must look
solely to the property of the Fund for the enforcement of any
claims against the Fund as neither the Board, officers, agents
or shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as
confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate
or utilize such names and addresses and other confidential
information until such time as it may come into the public
domain without the express written consent of the affected
party.
12.3 The captions in this Agreement are included for
convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their
construction or effect.
12.4 This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
12.5 If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected
thereby.
12.6 Each party hereto shall cooperate with each
other party and all appropriate governmental authorities
(including without limitation the SEC, the NASD and state
insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the
generality of the foregoing, each party hereto further agrees
to furnish the California Insurance Commissioner with any
information or reports in connection with services provided
under this Agreement which such Commissioner may request in
order to ascertain whether the variable life insurance
operations of the Company are being conducted in a manner
consistent with the California Variable Life Insurance
Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that to the
extent any advisory or other fees received by the Fund, the
Underwriter or the Adviser are determined to be unlawful in
legal or administrative proceedings under the 1973 NAIC model
variable life insurance regulation in the states of California,
Colorado, Maryland or Michigan, the Underwriter shall indemnify
and reimburse the Company for any out of pocket expenses and
actual damages the Company has
19
incurred as a result of any such proceeding; provided however
that the provisions of Section 8.2(1,) and 8.2(c) shall apply
to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in
addition to any other indemnification and reimbursement
obligations of the Fund or the Underwriter under this
Agreement.
12.8. The rights, remedies and obligations contained
in this Agreement are cumulative and are in addition to any and
all rights, remedies and obligations, at law or in equity,
which the parties hereto are entitled to under state and
federal laws.
12.9. This Agreement or any of the rights and
obligations hereunder may not be assigned by any party without
the prior written consent of all parties hereto; provided,
however; that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is
duly licensed and registered to perform the obligations of the
Underwriter under this Agreement.
12.10. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee copies of the following
reports:
(a) the Company's annual statement prepared
under statutory accounting principles), as soon
as practical and in any event within 90 days
after the end of each fiscal year;
(b) the Company's quarterly statements (statutory), as
soon as practical and in any event within 45 days
after the end of each quarterly period:
(c) any financial statement, proxy statement,
notice or report of the Company sent to stockholders
or policyholders, as soon as practical after the
delivery thereof;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with
the Securities and Exchange Commission or any state
insurance regulator, as soon as practical after the
filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any annual,
interim or special audit made by them of the books of
the Company, as soon as practical after the receipt
thereof.
20
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 date specified below.
GENERAL AMERICAN VARIABLE INSURANCE
LIFE INSURANCE COMPANY PRODUCTS FUND
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ J. Xxxx Xxxxxxxx
-------------------------------- -------------------------
By: Executive Vice President By: Senior Vice President
-------------------------------- -------------------------
By: February 21, 1995 By: March 14, 1995
-------------------------------- -------------------------
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Xxxx X. Xxxxx
-----------------------------
Title: President
--------------------------
Date: February 28, 1995
---------------------------
21
Schedule A
----------
Accounts
--------
Name of Account Date of Resolution of Company's Board which
Established the Account
General American January 24, 1985
Separate Account Eleven
General American January 26, 1995
Separate Account Thirty-Six
General American October 22, 1970
Separate Account Two
22
Schedule B
----------
Contracts
---------
1. Contract Form Numbers:
VUL-95 10004 (9/86)
PVUL-95 10005 (9/86)
VGSP 10077 (4/92)
VUL-100 10098 (1/95)
IVA (TQ) 10014 (7/87)
IVA (NTQ) 10013 (7/87)
TSA Contract 10015 (7/87)
TSA Certificate 10016 (7/87)
Master Plan 10096 (3/94)
2. Funds currently available to act as investment vehicles for
certain of the above-listed contracts:
Variable Insurance Products Fund II
General American Capital Company
Xxx Xxx Investment Trust
23
SCHEDULE C
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding
responsibilities for the handling of proxies relating to the
Fund by the Underwriter, the Fund and the Company. The defined
terms herein shall have the meanings assigned in the
Participation Agreement except that the term ~ shall also
include the department or third party assigned by the Insurance
Company to perform the steps delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by
the Fund for the shareholder meeting to facilitate the
establishment of tabulation procedures. At this time the
Underwriter will inform the Company of the Record,
Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform
a "tape run", or other activity, which will generate the names,
addresses and number of units which are attributed to
each contractowner/policyholder (the "Customer") as of
the Record Date. Allowance should be made for account
adjustments made after this date that could affect the
status of the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Company will use
its best efforts to call in the number of Customers to
Fidelity, as soon as possible, but no later than two
weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by
the Company either before or together with the Customers'
receipt of a proxy statement. Underwriter will provide
at least one copy of the last Annual Report to the
Company.
4. The text and format for the Voting Instruction Cards
("Cards" or "Card") is provided to the Company by the Fund.
The Company, at its expense, shall produce and personalize
the Voting Instruction Cards. The Legal Department of
the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as
printed by the Fund)
(This and related steps may occur later in the chronological
process due to possible uncertainties relating to the
proposals.)
24
5. During this time, Fidelity Legal will develop, produce,
and the Fund will pay for the Notice of Proxy and the Proxy
Statement (one document). Printed and folded notices and
statements will be sent to Company for insertion into
envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of
envelope sent to Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one
document)
c. return envelope (postage pre-paid by Company)
addressed to the Company or its tabulation
agent
d. "urge buckslip" - optional, but recommended. (This
is a small, single sheet of paper that
requests Customers to vote as quickly as
possible and that their vote is important.
One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and
reviewed and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company
approximately 3-5 business days before mail date. Individual
in charge at Company reviews and approves the contents of the
mailing package to ensure correctness and completeness.
Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
The Fund must allow at least a 15-day solicitation
----
time to the Company as the shareowner. (A 5-week
period is recommended.) Solicitation time is
calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation
usually takes place in another department or another vendor
depending on process used. An often used procedure is to
sort Cards on arrival by proposal into vote categories of
all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for
postmark information would be due to an insurance
company's internal procedure and has not been required by
Fidelity in the past.
9. Signatures on Card checked against legal name on account
registration which was printed on the Card.
Note: For Example, If the account registration is under
"Xxxxxxx X. Xxxxx, Trustee," then that is the exact legal
name to be printed on the Card and is the signature
needed on the Card.
25
10. If Cards are mutilated, or for any reason are illegible or
are not signed properly, they are sent back to Customer with
an explanatory letter, a new Card and return envelope. The
mutilated or illegible Card is disregarded and considered
to be not received for purposes of vote tabulation. Any
------------
Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as
to why they did not complete the system. Any questions
on those Cards are usually remedied individually.
11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The
most prevalent is to sort the Cards as they first arrive
into categories depending upon their vote; an estimate of
how the vote is progressing may then be calculated. If
the initial estimates and the actual vote do not
coincide, then an internal audit of that vote should
occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is
then converted to shares. (It is very important that the Fund
receives the tabulations stated in terms of a percentage
and the number of shares.) Fidelity Legal must review and
-------
approve tabulation format.
13. Final tabulation in shares is verbally given by the Company
to Fidelity Legal on the morning of the meeting not later
than 10:00 a.m. Boston time. Fidelity Legal may request
an earlier deadline if required to calculate the vote in
time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares
will be required from the Company as well as an original copy
of the final vote. Fidelity Legal will provide a
standard form for each Certification.
15. The Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is
challenged or if otherwise necessary for legal, regulatory,
or accounting purposes, Fidelity Legal will be permitted
reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but
must always be followed up in writing.
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