EXHIBIT 99-B.8.72
FUND PARTICIPATION AGREEMENT
BETWEEN
XXXX XXXXX XXXX XXXXXX, INC.
AND
AETNA LIFE INSURANCE AND ANNUITY COMPANY
THIS AGREEMENT, made and entered into as of the first day of February, 2001
by and between Aetna Life Insurance and Annuity Company ("Aetna") and Xxxx Xxxxx
Xxxx Xxxxxx, Inc. (the "Distributor"), acting as agent for the registered
open-end management investment companies whose shares are or may be written by
Distributor (each a "Fund" or collectively the Funds").
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND.
Aetna represents that it has established Variable Annuity Accounts B, C, D
and F and may establish such other accounts as may be set forth in Schedule
A attached hereto and as may be amended from time to time with the mutual
consent of the parties hereto (the "Accounts"), each of which is a separate
account under Connecticut Insurance law, and has registered or will
register each of the Accounts (except for such Accounts for which no such
registration is required) as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act"), to serve as an investment vehicle for
the Contracts. Each Contract provides for the allocation of net amounts
received by Aetna to an Account for investment in the shares of one of more
specified open-end management investment companies available through that
Account as underlying investment media. Selection of a particular
investment management company and changes therein from time to time are
made by the participant or Contract owner, as applicable under a particular
Contract.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) The Distributor will make Fund shares available to be purchased by
Aetna, and will accept redemption orders from Aetna, on behalf of each
Account at the net asset value applicable to each order on those days
on which the Fund calculates its net asset value (a "Business Day").
Fund shares shall be purchased and redeemed in such quantity and at
such time determined by Aetna to be necessary to meet the requirements
of those Contracts for which the Fund(s) serve as underlying
investment media, provided, however, that the Board of Trustees of the
Fund (hereinafter the "Trustees") may upon reasonable notice to Aetna,
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 Trustees, acting in good faith and
in the best interests of the shareholders of any Portfolio and is
acting in compliance with their fiduciary obligations under federal
and/or any applicable state laws.
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(b) The Distributor will provide to Aetna closing net asset value,
dividend and capital gain information at the close of trading each day
that the New York Stock Exchange (the "Exchange") is open (each such
day a "Business Day"), and will use its best efforts to provide such
information by 6:30 p.m. East Coast time on such Business Day, but in
no event later than 7:00 p.m. East Coast time, absent extraordinary
circumstances. In the event of an anticipated delay past 7:00 p.m.,
Distributor shall notify Aetna by 7:00 p.m. of such delay. Aetna will
send via facsimile or electronic transmission to the Fund or its
specified agent orders to purchase and/or redeem Fund shares by 9:00
a.m. East Coast time the following business day. Payment for net
purchases will be wired by Aetna to an account designated by the
Distributor to coincide with the order for shares of the Fund.
(c) The Distributor hereby appoints Aetna as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants. Orders
from Contract owners or participants received from any distributor of
the Contracts (including affiliates of Aetna) by Aetna, acting as
agent for the Distributor, prior to the close of the Exchange on any
given business day will be executed by the Fund at the net asset value
determined as of the close of the Exchange on such Business Day,
provided that the Distributor receives written (or facsimile) notice
of such order by 9:00 a.m. East Coast Time on the next following
Business Day. Any orders received by Aetna acting as agent on such day
but after the close of the Exchange will be executed by the Fund at
the net asset value determined as of the close of the Exchange on the
next business day following the day of receipt of such order, provided
that the Distributor receives written (or facsimile) notice of such
order by 9:00 a.m. East Coast Time within two days following the day
of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired by
the Distributor to an account designated by Aetna on the same Business
Day Aetna places an order to redeem Fund Shares. Payments for net
purchases of the Fund will be wired by Aetna to an account designated
by the Distributor on the same Business Day Aetna places an order to
purchase Fund shares. Payments shall be in federal funds transmitted
by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a) through
2(d) above, the parties may agree to provide pricing information,
execute orders and wire payments for purchases and redemptions through
National Securities Clearing Corporation's Fund/SERV system in which
case such activities will be governed by the provisions set forth in
Exhibit I to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other party),
and shall not be liable in the event that an error is a result of any
misinformation supplied by the other party
(g) The Distributor shall indemnify and hold Aetna harmless, from the
effective date of this Agreement, against any amount Aetna is required
to pay to Contract owners or participants due to: (i) an incorrect
calculation of a Fund's daily net asset value, dividend rate, or
capital gains distribution rate or (ii) incorrect or late reporting of
the
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daily net asset value, dividend rate, or capital gain distribution
rate of a Fund, upon written notification by Aetna, with supporting
data, to Distributor. In addition, the Distributor shall be liable to
Aetna for systems and out of pocket costs incurred by Aetna in making
a Contract owners's or a participant's account whole, if such costs or
expenses are a result of the Distributor's failure to provide timely
or correct net asset values, dividend and capital gains or financial
information and if such information is not corrected by 4:00 p.m. East
Coast time of the next business day after releasing such incorrect
information provided the incorrect NAV as well as the correct NAV for
each day that the error occurred is provided. If a mistake is caused
in supplying such information or confirmations, which results in a
reconciliation with incorrect information, the amount required to make
a Contract owner's or a participant's account whole shall be borne by
the party providing the incorrect information, regardless of when the
error is corrected.
(h) Aetna agrees to purchase and redeem the shares of the Funds offered by
the then current prospectus and statement of additional information of
the Fund in accordance with the provisions of such prospectus and
statement of additional information.
3. FEES.
In consideration of services provided by Aetna under this Agreement, the
Distributor shall pay fees to Aetna as set forth in Schedule B.
4. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by the Fund or the Distributor under this Agreement
shall be paid by the Fund or the Distributor, including the cost of
registration of Fund shares with the Securities and Exchange
Commission (the "SEC") and in states where required. The Fund and
Distributor shall pay no fee or other compensation to Aetna under this
Agreement, and Aetna shall pay no fee or other compensation to the
Fund or Distributor, except as provided herein and in Schedule B
attached hereto and made a part of this Agreement as may be amended
from time to time with the mutual consent of the parties hereto. All
expenses incident to performance by each party of its respective
duties under this Agreement shall be paid by that party, unless
otherwise specified in this Agreement.
(b) The Distributor shall provide to Aetna, at Distributor's own expense,
to the central location designated by Aetna, periodic fund reports to
shareholders and other materials that are required by law to be sent
to Contract owners or participants. In addition, Distributor shall
provide Aetna, at Distributor's own expense and to a central location
as designated by Aetna, with a sufficient quantity of its
prospectuses, statements of additional information and any supplements
to any of these materials, to be used in connection with the offerings
and transactions contemplated by this Agreement
(c) The Distributor shall provide Aetna with a sufficient quantity of its
proxy material that is required to be sent to Contract owners or
participants. Reasonable cost
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associated with proxy preparation, group authorization letters,
programming for tabulation and necessary materials (including postage)
will be paid by the Fund or Distributor.
5. REPRESENTATIONS.
Aetna agrees that it and its agents shall not, without the written consent
of the Distributor, make representations concerning the Fund, or its shares
except those contained in the then current prospectuses and in current printed
sales literature approved by the Distributor.
6. TERMINATION.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either Aetna or the Distributor, upon six months
advance written notice to the other parties;
(b) at the option of Aetna, upon one week advance written notice to the
Distributor and the Fund, if Fund shares are not available for any
reason to meet the requirement of Contracts as determined by Aetna.
Reasonable advance notice of election to terminate shall be furnished
by Company;
(c) at the option of either Aetna, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the Account,
Aetna, the Fund or the Distributor by the National Association of
Securities Dealers, Inc. (the "NASD"), the SEC or any other regulatory
body;
(d) upon the determination of the Accounts to substitute for the Fund's
shares the shares of another investment company in accordance with the
terms of the applicable Contracts. Aetna will give 60 days written
notice to the Fund and the Distributor of any decision to replace the
Fund's' shares;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance with
Federal law or such law precludes the use of Fund shares as an
underlying investment medium for Contracts issued or to be issued by
Aetna. Prompt notice shall be given by the appropriate party should
such situation occur; or
(g) Upon thirty (30) days written notice to Distributor and Aetna, at the
option of the Board of Directors of any Fund, by vote of whose members
of the Board who are not "interested persons" of the Fund, or by vote
of a majority of the outstanding voting securities of any Fund.
7. CONTINUATION OF AGREEMENT.
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Termination as the result of any cause listed in Section 6 shall not affect
the Fund's obligation to furnish its shares to Contracts then in force for
which its shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other
regulatory body; however, Distributor's obligation to pay the fees to Aetna
as described in Section 3 hereof shall terminate if the applicable Fund's
12b-1 Plan is terminated.
8. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared by
Aetna or its agents for use in marketing its Contracts (except any
material that simply lists the Funds' names) shall be submitted to the
Distributor for review and approval before such material is used with
the general public or any Plan. Distributor shall advise the
submitting party in writing within three (3) Business Days of receipt
of such materials of its approval or disapproval of such materials.
(b) The Fund will provide additional copies of its financials as soon as
available to Aetna and at least one complete copy of all registration
statements, prospectuses, statements of additional information, annual
and semi-annual reports, proxy statements and all amendments or
supplements to any of the above that relate to the Fund promptly after
the filing of such document with the SEC or other regulatory
authorities.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to Aetna at least
quarterly portfolio information necessary to update Fund profiles with
seven business days following the end of each quarter.
9. PROXY VOTING.
(a) Aetna shall provide pass-through voting privileges on Fund shares held
by registered separate accounts to all Contract owners and
participants to the extent the SEC continues to interpret the 1940 Act
as requiring such privileges. Aetna shall provide pass-through voting
privileges on Fund shares held by unregistered separate accounts to
all Contract owners.
(b) Aetna will distribute to Contract owners and participants, as
appropriate, all proxy material furnished by the Fund and will vote
Fund shares in accordance with instructions received from such
Contract owners and participants. If and to the extent required by
law, Aetna, with respect to each group Contract and in each Account,
shall vote Fund shares for which no instructions have been received in
the same proportion as shares for which such instructions have been
received. Aetna and its agents shall not oppose or interfere with the
solicitation of proxies for Fund shares held for such Contract owners
and participants.
10. INDEMNIFICATION.
(a) Aetna agrees to indemnify and hold harmless the Fund and the
Distributor, and its directors, officers, employees, agents and each
person, if any, who controls the Fund
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or its Distributor within the meaning of the Securities Act of 1933
(the "1933 Act") against any losses, claims, damages or liabilities to
which the Fund 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) arise out of or are based upon any untrue
statement of any material fact contained in the Registration
Statement, prospectus or sales literature of Aetna or arise out of or
are based upon the omission to state a material fact that is necessary
to make the statements therein not misleading, or arise out of or as a
result of conduct, statements or representations of Aetna or its
agents (other than statements or representations contained in the
prospectuses or sales literature of the Fund), with respect to the
sale and distribution of Contracts for which Fund shares are the
underlying investment. Aetna will reimburse any legal or other
expenses reasonably incurred by the Fund or any such director,
officer, employee, agent, investment Distributor, or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that Aetna 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 (i) an
untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to Aetna by the Fund specifically for use therein
or (ii) the willful misfeasance, bad faith, or gross negligence by the
Fund or Distributor in the performance of its duties or the Fund's or
Distributor's reckless disregard of obligations or duties under this
Agreement or to Aetna, whichever is applicable. This indemnity
agreement will be in addition to any liability which Company may
otherwise have.
(b) The Distributor agrees to indemnify and hold harmless Aetna and its
directors, officers, employees, agents and each person, if any, who
controls Aetna within the meaning of the 1933 Act against any losses,
claims, damages or liabilities to which Aetna 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) arise out of or
are based upon any untrue statement of any material fact contained in
the Registration Statement, prospectuses or sales literature of the
Fund or arise out of or are based upon the omission to state a
material fact that is necessary to make the statements therein not
misleading. The Fund will reimburse any legal or other expenses
reasonably incurred by Aetna 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 or prospectuses which are in conformity
with written materials furnished to the Fund by Aetna specifically for
use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise
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than under this Section 10. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish to, assume the
defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 10 for
any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation.
11. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by
telex, telecopier or registered or certified mail, postage prepaid,
return receipt requested, or recognized overnight courier service to
the party or parties to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice
from such party to all other parties.
To Aetna:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Distributor:
Xxxx Xxxxx Xxxx Xxxxxx, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Legal and Compliance
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by signing
any such counterpart.
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(e) SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior
agreement and understandings relating to the subject matter hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) NON EXCLUSIVITY. It is understood by the parties that this Agreement
is not an exclusive arrangement in any respect.
(i) CONFIDENTIALITY. The terms of this Agreement and the Schedules thereto
will be held confidential by each party except to the extent that
either party or its counsel may deem it necessary to disclose such
terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the date first written above.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
XXXX XXXXX XXXX XXXXXX, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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SCHEDULE A
(For any future separate accounts - See Section 1(a)
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SCHEDULE B
SERVICING FEES TO AETNA
SERVICING FEES
As provided in Section 3 of the Agreement, Distributor shall pay servicing
fees to Aetna in the amounts shown below. Distributor shall make such payments
within 30 days after the end of each calendar quarter, accompanied by a
statement showing the calculation of the fee payable for the quarter and such
other supporting data as may be reasonably requested by Aetna:
A. FINANCIAL INTERMEDIARY CLASS SHARES:
An annual rate of ___% (____% quarterly) of the average net assets invested
in all shares of Financial Intermediary Class Shares of the Funds in each
calendar quarter. With respect to Xxxx Xxxxx'x equity and balanced funds, this
amount will be increased to an annual rate of ___% upon each mutual fund's Board
of Directors approval regarding payment of up to ___% attributable to the
Financial Intermediary Class of Shares.
B. PRIMARY CLASS SHARES:
An annual rate as set forth below of the average net assets invested in all
shares of the Primary Class Shares of the Funds through Aetna's products
(including the business covered under the Selling and Services Agreement among
Distributor, Aetna and Aetna Investment Services, LLC) each calendar quarter:
AVERAGE NET ASSETS IN ALL PRIMARY ANNUAL RATE FOR
SHARES IN THE AGGREGATE EQUITY/BALANCED FUNDS
Amounts up to $100 million ___%
Amounts between $100-$250 million ___%
Amounts between $250-$400 million ___%
Amounts greater than $400 million ___%
AVERAGE NET ASSETS IN ALL PRIMARY
SHARES IN THE AGGREGATE ANNUAL RATE FOR FIXED FUNDS
Amounts up to $100 million ___%
Amounts between $100-$250 million ___%
Amounts between $250-$400 million ___%
Amounts greater than $400 million ___%
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EXHIBIT I
Procedures for Pricing and Order/Settlement Through National Securities Clearing
Corporation's Mutual Fund Profile System and Mutual Fund Settlement, Entry and
Registration Verification System
1. As provided in Section 2(e) of the
Fund Participation Agreement, the
parties hereby agree to provide pricing information, execute orders and wire
payments for purchases and redemptions of Fund shares through National
Securities Clearing Corporation ("NSCC") and its subsidiary systems as follows:
(a) Distributor or the Funds will furnish to Aetna or its affiliate through
NSCC's Mutual Fund Profile System ("MFPS") (1) the most current net asset
value information for each Fund, (2) a schedule of anticipated dividend and
distribution payment dates for each Fund, which is subject to change
without prior notice, ordinary income and capital gain dividend rates on
the Fund's ex-date, and (3) in the case of fixed income funds that declare
daily dividends, the daily accrual or the interest rate factor. All such
information shall be furnished to Aetna or its affiliate by 6:30 p.m.
Eastern Time on each business day that the Fund is open for business (each
a "Business Day") or at such other time as that information becomes
available. Changes in pricing information will be communicated to both NSCC
and Aetna.
(b) Upon receipt of Fund purchase, exchange and redemption instructions for
acceptance as of the time at which a Fund's net asset value is calculated
as specified in such Fund's prospectus ("Close of Trading") on each
Business Day ("Instructions"), and upon its determination that there are
good funds with respect to Instructions involving the purchase of Shares,
Aetna or its affilaite will calculate the net purchase or redemption order
for each Fund. Orders for net purchases or net redemptions derived from
Instructions received by Aetna or its affiliate prior to the Close of
Trading on any given Business Day will be sent to the Defined Contribution
Interface of NSCC's Mutual Fund Settlement, Entry and Registration
Verification System ("Fund/SERV") by 5:00 a.m. Eastern Time on the next
Business Day. Subject to Aetna's or its affiliate's compliance with the
foregoing, Aetna or its affiliate will be considered the agent of the
Distributor and the Funds, and the Business Day on which Instructions are
received by Aetna or its affiliate in proper form prior to the Close of
Trading will be the date as of which shares of the Funds are deemed
purchased, exchanged or redeemed pursuant to such Instructions.
Instructions received in proper form by Aetna or its affiliate after the
Close of Trading on any given Business Day will be treated as if received
on the next following Business Day. Dividends and capital gains
distributions will be automatically reinvested at net asset value in
accordance with the Fund's then current prospectuses.
(c) Aetna or its affiliate will wire payment for net purchase orders by the
Fund's NSCC Firm Number, in immediately available funds, to an NSCC
settling bank account designated by Aetna or its affiliate no later than
5:00 p.m. Eastern time on the same Business Day such purchase orders are
communicated to NSCC. For purchases of shares of daily dividend accrual
funds, those shares will not begin to accrue dividends until the day the
payment for those shares is received.
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(d) NSCC will wire payment for net redemption orders by Fund, in immediately
available funds, to an NSCC settling bank account designated by Aetna or
its affiliate, by 5:00 p.m. Eastern Time on the Business Day such
redemption orders are communicated to NSCC, except as provided in a Fund's
prospectus and statement of additional information.
(e) With respect to (c) or (d) above, if Distributor does not send a
confirmation of Aetna's or its affiliate's purchase or redemption order to
NSCC by the applicable deadline to be included in that Business Day's
payment cycle, payment for such purchases or redemptions will be made the
following Business Day.
(f) If on any day Aetna or its affiliate, or Distributor is unable to meet the
NSCC deadline for the transmission of purchase or redemption orders, it may
at its option transmit such orders and make such payments for purchases and
redemptions directly to Distributor or Aetna or its affiliate, as
applicable, as is otherwise provided in the Agreement.
(g) These procedures are subject to any additional terms in each Fund's
prospectus and the requirements of applicable law. The Funds reserve the
right, at their discretion and without notice, to suspend the sale of
shares or withdraw the sale of shares of any Fund.
2. Aetna or its affiliate, Distributor and clearing agents (if applicable) are
each required to have entered into membership agreements with NSCC and met all
requirements to participate in the MFPS and Fund/SERV systems before these
procedures may be utilized. Each party will be bound by the terms of their
membership agreement with NSCC and will perform any and all duties, functions,
procedures and responsibilities assigned to it and as otherwise established by
NSCC applicable to the MFPS and Fund/SERV system and the Networking Matrix Level
utilized.
3. Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated herein, the
terms defined in the Agreement shall have the same meaning as in this Exhibit.
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