PARTICIPATION AGREEMENT
Among
THE OHIO NATIONAL LIFE INSURANCE COMPANY,
THE PRUDENTIAL SERIES FUND, INC.,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
and
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC
THIS AGREEMENT, made and entered into as of this 3rd day of January, 2000,
by and among THE OHIO NATIONAL LIFE INSURANCE COMPANY (hereinafter "Ohio
National"), an Ohio life insurance company, on its own behalf and on behalf of
its Ohio National Variable Account A (the "Account"); THE PRUDENTIAL SERIES
FUND, INC., an open-end management investment company organized under the laws
of Maryland (hereinafter the "Fund"); THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA (hereinafter the "Adviser"), a New Jersey mutual insurance company; and
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC (hereinafter the "Distributor"), a
Delaware limited liability company.
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/or variable annuity
contracts (collectively, the "Variable Insurance Products") to be offered by
insurance companies, including Ohio National, which have entered into
participation agreements similar to this Agreement (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
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WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission (hereinafter the "SEC"), dated March 5, 1999 (File No. IC-23728),
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
life insurance companies that may or may not be affiliated with one another and
qualified pension and retirement plans ("Qualified Plans") (hereinafter the
`Mixed and Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolio(s) are registered under
the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
WHEREAS, the Distributor is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, Ohio National has registered certain variable annuity contracts
supported wholly or partially by the Account (the "Contracts") under the 1933
Act and said Contracts are listed in Schedule A attached hereto and incorporated
herein by reference, as such Schedule may be amended from time to time by mutual
written agreement; and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of Ohio
National on August 1, 1969, under the insurance laws of the State of Ohio, to
set aside and invest assets attributable to the Contracts; and
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WHEREAS, Ohio National has registered the Account as a unit investment
trust under the 1940 Act and has registered the securities deemed to be issued
by the Account under the 1933 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, Ohio National intends to purchase shares in the Portfolio(s) listed
in Schedule B attached hereto and incorporated herein by reference, as such
Schedule may be amended from time to time by mutual written agreement (the
"Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and
the Fund is authorized to sell such shares to unit investment trusts such as the
Account at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Account also intends to purchase shares in other open-end
investment companies or series thereof not affiliated with the Fund (the
"Unaffiliated Funds") on behalf of the Account to fund the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, Ohio National,
the Fund, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares.
1.1. The Fund agrees to sell to Ohio National those shares of the
Designated Portfolio(s) which the Account orders, executing such orders on each
Business Day at the net asset value next computed after receipt by the Fund or
its designee of the order for the shares of the Designated Portfolios. For
purposes of this Section 1.1, Ohio National shall be the designee of the Fund
for receipt of such orders and receipt by such designee shall constitute receipt
by the Fund, provided that the Fund receives notice of any such order by 9:00
a.m. Eastern 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 Designated Portfolio calculates its net asset value pursuant to the rules of
the SEC.
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1.2. The Fund agrees to make shares of the Designated Portfolio(s)
available for purchase at the applicable net asset value per share by Ohio
National and the Account on those days on which the Fund calculates its
Designated Portfolio(s), net asset value pursuant to rules of the SEC, and the
Fund shall calculate such net asset value on each day which the New York Stock
Exchange is open for trading. Notwithstanding the foregoing, the Board of
Directors of the Fund (hereinafter the "Board") may refuse to sell shares of
any Designated Portfolio to any person, or suspend or terminate the offering of
shares of any Designated Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, necessary in the best interests of the
shareholders of such Designated Portfolio.
1.3. The Fund will not sell shares of the Designated Portfolio(s) to any
other Participating Insurance Company separate account unless an agreement
containing provisions the substance of which are the same as Sections 2.1
(except with respect to New Jersey law), 3.5, 3.6, 3.7, and Article VII of this
Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on Ohio National's request, any
full or fractional shares of the Fund held by Ohio National, executing such
requests on each Business Day at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption. Requests for
redemption identified by Ohio National, or its agent, as being in connection
with surrenders, annuitizations, or death benefits under the Contracts, upon
prior written notice, may be executed within seven (7) calendar days after
receipt by the Fund or its designee of the requests for redemption. This Section
1.4 may be amended, in writing, by the parties consistent with the requirements
of the 1940 Act and interpretations thereof For purposes of this Section 1.4,
Ohio National shall be the designee of the Fund for receipt of requests for
redemption and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of any such request for redemption by
9:00 a.m. Eastern time on the next following Business Day.
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1.5. The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
Participating Insurance Companies (subject to Section 1.3) and the cash value of
the Contracts may be invested in other investment companies.
1.6. Ohio National shall pay for Fund shares by 3:00 p.m. Eastern time 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 and/or by a credit for any shares redeemed the
same day as the purchase.
1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund
shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption
order is received in accordance with Section 1.4 hereof Payment shall be in
federal funds transmitted by wire and/or a credit for any shares purchased the
same day as the redemption.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to Ohio National or the Account.
Shares purchased from the Fund will be recorded in an appropriate title for the
Account or the appropriate sub-account of the Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to Ohio National of any income, dividends or
capital gain distributions payable on the Designated Portfolio(s)' shares. Ohio
National hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Designated Portfolio shares in additional
shares of that Designated Portfolio. Ohio National reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify Ohio National by the end of the
next following Business Day 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
Designated Portfolio available to Ohio National on each Business Day as soon as
reasonably practical after the net
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asset value per share is calculated and shall use its best efforts to make such
net asset value per share available by 6:00 p.m. Eastern time. In the event of
an error in the computation of a Designated Portfolio's net asset value per
share ("NAV") or any dividend or capital gain distribution (each, a "pricing
error), the Adviser or the Fund shall immediately notify Ohio National as soon
as possible after discovery of the error. Such notification may be verbal, but
shall be confirmed promptly in writing in accordance with Article XI of this
Agreement. A pricing error shall be corrected as follows: (a) if the pricing
error results in a difference between the erroneous NAV and the correct NAV of
less than $0.01 per share, then no corrective action need be taken; (b) if the
pricing error results in a difference between the erroneous NAV and the correct
NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the
Designated Portfolio's NAV at the time of the error, then the Adviser shall
reimburse the Designated Portfolio for any loss, after taking into consideration
any positive effect of such error, however, no adjustments to Contract owner
accounts need be made; and (c) if the pricing error results in a difference
between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1%
of the Designated Portfolio's NAV at the time of the error, then the Adviser
shall reimburse the Designated Portfolio for any loss (without taking into
consideration any positive effect of such error) and shall reimburse Ohio
National for the costs of adjustments made to correct Contractowner accounts in
accordance with the provisions of Schedule D. If an adjustment is necessary to
correct a material error which has caused Contractowners to receive less than
the amount to which they are entitled, the number of shares of the applicable
sub-account of such Contractowners will be adjusted and the amount of any
underpayments shall be credited by the Adviser to Ohio National for crediting of
such amounts to the applicable Contractowners accounts. Upon notification by the
Adviser of any overpayment due to a material error, Ohio National shall promptly
remit to Adviser any overpayment that has not been paid to Contractowners. In no
event shall Ohio National be liable to Contractowners for any such adjustments
or underpayment amounts. A pricing error within categories (b) or (c) above
shall be deemed to be "materially incorrect" or constitute a "material error"
for purposes of this Agreement.
The standards set forth in this Section 1.10 are based on the Parties'
understanding of the views expressed by the staff of the SEC as of the date of
this Agreement. In the event the views of the SEC staff are later modified or
superseded by SEC or judicial interpretation, the parties
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shall amend the foregoing provisions of this Agreement to comport with the
appropriate applicable standards, on terms mutually satisfactory to all Parties.
ARTICLE II. Representations and Warranties
2.1. Ohio National represents and warrants that the Contracts and the
securities deemed to be issued by the Account under the Contracts are or will be
registered under the 1933 Act; 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. Ohio National 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 the Account
prior to any issuance or sale of units thereof as a segregated asset account
under Section 3907.15, Ohio Revised Code, and has registered the Account as a
unit investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts and that it will maintain
such registration for so long as any Contracts are outstanding as required by
applicable law.
2.2. The Fund represents and warrants that Designated Portfolio(s) shares
sold pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act 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.
2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-13
under the 1940 Act and to impose an asset-based or other charge to finance
distribution expenses as permitted by applicable law and regulation. In any
event, the Fund and Adviser agree to comply with applicable provisions and SEC
staff interpretations of the 1940 Act to assure that the investment advisory or
management fees paid to the Adviser by the Fund are in accordance with the
requirements of the 1940 Act. To the extent that the Fund decides to finance
distribution