77Q1. Exhibits
(g) Form of Agreement and Plan of Reorganization among Separate Account 10
of Integrity Life Insurance Company, Separate Account II of Integrity
Life Insurance Company and Touchstone Variable Series Trust
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), entered
into this ____ day of _________, 2003, by and among Separate Account Ten of
Integrity Life Insurance Company ("Separate Account Ten"), Separate Account II
of Integrity Life Insurance Company ("Separate Account II", and, together with
Separate Account Ten, the "Accounts"), both separate accounts and integral parts
of Integrity Life Insurance Company ("Integrity"), a stock life insurance
company organized and existing under the insurance laws of the State of Ohio,
with its principal place of business at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, and Touchstone Variable Series Trust (the "Trust"), a business
trust organized and existing under the laws of the State of Massachusetts, with
its principal place of business at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
00000.
WHEREAS, the Trust is a series mutual fund consisting of twelve
separate portfolios, including the Touchstone Enhanced 30 Fund (the "Fund"), and
is registered with the Securities and Exchange Commission (the "Commission") as
an open-end, management investment company under the Investment Company Act of
1940 (the "1940 Act");
WHEREAS, Separate Account Ten is registered with the Commission as an
open-end, non-diversified management investment company under the 1940 Act;
WHEREAS, Separate Account II is registered with the Commission as a
unit investment trust that is divided into investment divisions, each of which
invests in the shares of an open-end management investment company;
WHEREAS, the Enhanced 30 Investment Division of Separate Account II
invests all of its assets in the Fund;
WHEREAS, this transaction is being characterized as a "reorganization"
although the Accounts are integral parts of Integrity and are not separate
corporate entities;
WHEREAS, the Board of Managers of Separate Account Ten, having
concluded that the reorganization is in the best interests of Separate Account
Ten and that the interests of Separate Account Ten's existing unitholders will
not be diluted as a result of the reorganization, has unanimously approved
Separate Account Ten's reorganization into an investment division of Separate
Account II investing exclusively in shares of the Fund;
WHEREAS, the Board of Trustees of the Trust has unanimously determined
that the transactions contemplated herein will be in the best interests of the
Fund and its shareholders, and the Board of Managers and the Board of Trustees
have each authorized the actions contemplated by this Agreement; and
WHEREAS, in accordance with the rules and regulations of Separate
Account Ten and any other applicable statutory provisions, the Agreement is
conditioned upon approval of the reorganization by persons holding the voting
interests under contracts funded by Separate Account Ten (hereinafter the
"contractholders"), at a meeting called for that purpose, or any adjournments
thereof.
NOW THEREFORE, in consideration of the mutual promises made herein, the
parties hereto agree as follows:
ARTICLE I
CLOSING DATE
SECTION 1.01. The reorganization contemplated by this Agreement shall
be effective on December 12, 2003, or at such other date as may be mutually
agreed upon by all parties to this Agreement (the "Closing Date"). The time on
the Closing Date as of which the reorganization is consummated is referred to
hereinafter as the "Effective Time."
SECTION 1.02. The parties agree to use their best efforts to obtain all
regulatory and contractholder approvals and perform all other acts necessary or
desirable to complete the reorganization as of the Closing Date.
ARTICLE II
REORGANIZATION
SECTION 2.01. As of the Effective Time, Integrity, on behalf of
Separate Account Ten will transfer all of Separate Account Ten's net assets as
set forth in paragraph 2.02 to the Fund in exchange for full and fractional
shares of the Fund based upon the value of the net assets of Separate Account
Ten and the net asset value of the Fund as of the close of the business day
immediately preceding the Closing Date (such time and date hereinafter called
the "Valuation Date"). The number of shares of the Fund to be issued to Separate
Account Ten in exchange will be determined by dividing the value of the net
assets received from Separate Account Ten by the net asset value of the Fund
shares. These valuations shall be computed using the valuation procedures set
forth in Separate Account Ten's and the Fund's then current prospectus and
statement of additional information or such other valuation procedures as shall
be mutually agreed upon by the parties.
SECTION 2.02. The assets of Separate Account Ten to be acquired by the
Fund shall consist of all property, including, without limitation, all cash,
securities, commodities, interests in futures and dividends or interest
receivables, that is owned by Separate Account Ten and any deferred or prepaid
expenses shown as an asset on the books of Separate Account Ten on the Closing
Date.
Separate Account Ten has provided the Fund with its most recent
unaudited financial statements, which contain a list of all of Separate Account
Ten's assets as of the date thereof. Separate Account Ten hereby represents that
as of the date of the execution of this Agreement there have been no material
changes in its financial position as reflected in said financial statements
other than those occurring in the ordinary course of its business in connection
with the purchase and sale of securities and the payment of its normal operating
expenses. Separate Account Ten reserves the right to sell any of such
securities, but will not, without the prior written approval of the Fund,
acquire any additional securities other than securities of the type in which the
Fund is permitted to invest.
The Fund will, within a reasonable time prior to the Closing Date,
furnish Separate Account Ten with a list of the securities, if any, on Separate
Account Ten's list referred to in the first sentence of the prior paragraph that
do not conform to the Fund's investment objectives, policies, and restrictions.
Separate Account Ten will, within a reasonable period of time (not less than 30
days) prior to the Closing Date, furnish the Fund with a list of its portfolio
securities and other investments. In the event that Separate Account Ten holds
any investments that the Fund may not hold, Separate Account Ten, if requested
by the Fund, will dispose of such securities prior to the Closing Date. In
addition, if it is determined that Separate Account Ten and the Fund portfolios,
when aggregated, would contain investments exceeding certain percentage
limitations imposed upon the Fund with respect to such investments, Separate
Account Ten, if requested by the Fund, will dispose of a sufficient amount of
such investments as may be necessary to avoid violating such limitations as of
the Closing Date.
Notwithstanding the foregoing, nothing herein will require
Separate Account Ten to dispose of any investments or securities if, in the
reasonable judgment of Separate Account Ten, such disposition would violate
Separate Account Ten's fiduciary duty to its shareholders.
SECTION 2.03. As of the Effective Time, Integrity on behalf of Separate
Account Ten shall cause the shares Separate Account Ten receives from the Trust
pursuant to Section 2.01 above to be transferred to and duly and validly
recorded and held on the records of Separate Account II as assets of its
Enhanced 30 Investment Division such that the contractholders' interests in the
Enhanced 30 Investment Division will then be equivalent to their former
interests in Separate Account Ten. Separate Account II will issue to Separate
Account Ten units of the Enhanced 30 Investment Division equal in value to the
shares received. Separate Account Ten will redeem its outstanding units in
exchange for units of the Enhanced 30 Investment Division of Separate Account II
of equal value. Integrity shall take all actions necessary to ensure that such
interests in the Enhanced 30 Investment Division, immediately following the
Effective Time, are duly and validly recorded on the contractholders' individual
account records. The unit value of the Enhanced 30 Investment Division will be
determined consistent with the formula for unit values contained in the
contracts participating in the Accounts. Such unit values will be determined
without regard to the determination of unit values of any other investment
division of Separate Account II. After the Effective Time, Integrity shall
thereafter file with the Commission an application to deregister Separate
Account Ten under Section 8(f) of the 1940 Act.
SECTION 2.04. The Fund shares to be issued hereunder shall be issued in
open account form by book entry without the issuance of certificates. Each Fund
share that is issued pursuant to Section 2.01 above will be deemed to have been
issued for a consideration equal to the net asset value of the Fund on the
Valuation Date.
SECTION 2.05. If, at any time after the Closing Date, the Trust or
Integrity shall determine that any further conveyance, assignment, documentation
or action is necessary or desirable to complete the reorganization contemplated
by this Agreement or confirm full title to the assets transferred, the
appropriate party or parties shall execute and deliver all such instruments and
take all such actions.
ARTICLE III
WARRANTIES AND CONDITIONS
SECTION 3.01. The Accounts, Integrity, and the Trust, as appropriate,
make the following representations and warranties, which shall survive the
closing of the reorganization:
(a) There are no suits, actions or proceedings pending or
threatened against any party to this Agreement which, to its knowledge,
if adversely determined, would materially and adversely affect its
financial condition, the conduct of its business or its ability to
carry out its obligations hereunder;
(b) There are no investigations or administrative proceedings
by the Commission or by any insurance or securities regulatory body of
any state, territory or the District of Columbia pending against any
party to this Agreement which, to its knowledge, would lead to any
suit, action or proceeding that would materially and adversely affect
its financial condition, the conduct of its business or its ability to
carry out its obligations hereunder.
(c) Should any party to this Agreement become aware, prior to
the Effective Time, of any suit, action or proceeding, of the types
described in paragraphs (a) or (b) above, instituted or commenced
against it, such party shall immediately advise all other parties to
this Agreement;
(d) Immediately prior to the Effective Time, Integrity shall
have valid and unencumbered title to the portfolio assets of Separate
Account Ten, except with respect to those assets for which payment has
not yet been made; and
(e) Each party shall make available all information concerning
itself which may be required in any application, registration statement
or other filing with a governmental body to be made by the Trust, by
Integrity, or by the Accounts, or any or all of them, in connection
with any of the transactions contemplated by this Agreement and shall
join in all such applications or filings, subject to reasonable
approval by their counsel. Each party represents and warrants that all
of such information so furnished shall be correct in all material
respects and that it shall not omit any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
SECTION 3.02. The obligations of the parties hereunder shall be subject
to satisfaction of each of the following conditions.
(a) The representations contained herein shall be true as of
the Effective Time with the same effect as though made at such time,
and such parties shall have performed all obligations required by this
Agreement to be performed by each of them prior to such time;
(b) The Commission shall not have issued an unfavorable
advisory report under Section 25(b) of the 1940 Act or instituted any
proceeding seeking to enjoin consummation of the reorganization
contemplated hereby;
(c) The Trust and Separate Account II shall make such filings
with the Commission under the Securities Act of 1933 (the "1933 Act")
as are deemed necessary or desirable in connection with the
reorganization contemplated by this Agreement;
(d) At a contractholders' meeting called for such purposes (or
any adjournments thereof), this Agreement, and the reorganization
contemplated hereby, shall have received the required approval from
contractholders with interests in Separate Account Ten;
(e) The Board of Trustees of the Trust shall have taken the
following actions at a meeting duly called for such purposes:
(1) approve this Agreement and adopt it as a valid
obligation of the Trust and legally binding upon it; and
(2) authorize the issuance by the Trust of shares at
net asset per share value on the Closing Date in exchange for
the portfolio assets of Separate Account Ten as contemplated
by this Agreement.
(f) At a meeting of the shareholders of the Fund called for
such purpose (or any adjournments thereof) the shareholders will have
approved a change in the Fund's subclassification under the 1940 Act
from a diversified company to a non-diversified company; and
(g) Each party shall have furnished, as reasonably requested
by any other party, other legal opinions, officers' certificates,
incumbency certificates, certified copies of board and committee
resolutions, good standing certificates, and other closing
documentation as may be appropriate for a transaction of this type.
ARTICLE IV
COVENANTS OF THE FUND AND SEPARATE ACCOUNT TEN
SECTION 4.01. The Fund and Separate Account Ten each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include customary
dividends and distributions.
SECTION 4.02. Separate Account Ten will call a meeting of its
contractholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
SECTION 4.03. Separate Account Ten covenants that the Fund shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
SECTION 4.04. Separate Account Ten will assist the Fund in obtaining
such information as the Fund reasonably requests concerning the beneficial
ownership of Separate Account Ten units.
SECTION 4.05. Subject to the provisions of this Agreement, the Fund and
Separate Account Ten will each take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including any actions required to be taken after the Closing Date.
ARTICLE V
EXPENSES
SECTION 5.01. Except as otherwise provided herein, all expenses of the
transactions contemplated by this Agreement incurred by Integrity and Separate
Account Ten and the Trust, whether incurred before or after the date of this
Agreement, will be borne by Touchstone Advisors, Inc. or one of its affiliates.
Such expenses include, without limitation, (a) expenses incurred in connection
with the entering into and the carrying out of the provisions of this Agreement,
(b) expenses associated with the preparation and filing of the registration
statement under the 1933 Act covering the Fund shares to be issued pursuant to
the provisions of this Agreement, (c) postage, (d) printing, (e) accounting
fees, (f) legal fees, and (g) solicitation costs of the transaction.
Notwithstanding the foregoing, the Trust shall pay its own federal registration
fees.
ARTICLE VI
TERMINATION
SECTION 6.01. This Agreement may be terminated and the reorganization
abandoned at any time prior to the Effective Time, notwithstanding approval by
contractholders,
(1) by mutual consent of the parties hereto;
(2) by any of the parties if any condition set forth in
Section 3.02 has not been fulfilled by the other parties;
(3) by any of the parties if the reorganization does not occur
as of January 31, 2004 and no subsequent date can be mutually agreed
upon.
SECTION 6.02. At any time prior to the Effective Time, any of the terms
or conditions of this Agreement may be waived by the party or parties entitled
to the benefit thereof if such waiver will not have a material adverse effect on
the interests of the contractholders or shareholders of the Trust.
ARTICLE VII
GENERAL
SECTION 7.01. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed as of the day and year set forth above.
SEPARATE ACCOUNT TEN OF INTEGRITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT II OF INTEGRITY LIFE INSURANCE COMPANY
BY INTEGRITY LIFE INSURANCE COMPANY
By: ____________________________
Name: _________________________
Title: __________________________
TOUCHSTONE VARIABLE SERIES TRUST
By: ____________________________
Name: _________________________
Title: __________________________
