EXHIBIT 1. (8) (F)
Form of Participation Agreement in the
Xxxxxxx Variable Series, Inc. Social Portfolios
PARTICIPATION AGREEMENT
AMONG DRAFT
XXXXXXX VARIABLE SERIES, INC.
XXXXXXX DISTRIBUTORS, INC.
AND
AMERITAS VARIABLE LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 1st day of May, 2000 by and
among AMERITAS VARIABLE LIFE INSURANCE COMPANY, (hereinafter the "Company"), a
Nebraska corporation, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule C hereto as may be amended from
time to time (each such account hereinafter referred to as the "Account"), and
the XXXXXXX VARIABLE SERIES, a corporation organized under the laws of the State
of Maryland (hereinafter "CVS") and XXXXXXX DISTRIBUTORS, INC. (hereinafter the
"Underwriter"), a Maryland corporation.
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 substantially
identical to this Agreement (hereinafter "Participating Insurance Companies");
and
WHEREAS, the beneficial interest in CVS 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, only certain of the Portfolios of CVS set forth in Exhibit "A"
(the "Fund") are subject to this Participation Agreement; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated November 21, 1988 (File No. 812-7095), 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, XXXXXXX ASSET MANAGEMENT COMPANY, INC. (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
WHEREAS, each Account is 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 C hereto, to set aside and invest
assets attributable to the aforesaid variable life and annuity contracts; and
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WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission 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 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 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. Eastern time on the next
following Business Day and provided further that the Fund timely made the net
asset value available to the Company, pursuant to Section 1.10. "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 Directors of
the Fund (hereinafter the "Directors") 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 Directors acting in good faith
and 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 Sections 2.5 and 2.12 of
Article II of this Agreement is in effect to govern such sales.
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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 and provided further that the Fund
timely made the net asset value available to the Company, pursuant to Section
1.10. In situations involving late delivery of net asset value by the Fund,
Section 1.11 governs.
1.6 The Company agrees to purchase and redeem the shares of each Portfolio
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 A attached hereto and incorporated herein by this
reference, as such Schedule A 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, provided that such amounts may also be invested in an investment
company other than the Fund.
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
purposes 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. Fund agrees to confirm to Company
share balances on a daily basis.
1.9 The Fund shall furnish same day notice (by wire, telephone, followed by
written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Funds' 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 7:00 p.m. Eastern time. In the
event the Fund makes such net asset value available to the Company later than
7:00 p.m., but before 9:00 p.m. Eastern time, the additional time taken by the
Fund shall also be allowed to the Company in providing order information
required under Sections 1.1 and 1.5.
1.11 In the event the Fund fails to make such net asset value available by
9:00 p.m. Eastern time, the Fund acknowledges that its delivery of net asset
value is late. The Company will execute estimated trades in lieu of actual
trades. The following day (T+2), the Company will true-up, trading the
difference between the prior day's estimated trades and the prior day's actual
trades, including any gain/loss on the difference. The Fund and the Underwriter
agree to reimburse the Company for any market exposure it incurs to its
detriment on the true-up of actual trades due to the net asset values having
been provided late.
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1.12 If the Fund provides the Company with materially incorrect share net
asset value information (as determined under SEC guidelines), the Company, on
behalf of the Account, shall be entitled to an adjustment to the number of
shares purchased or redeemed to reflect the correct share net asset value and to
reimbursement to the extent necessary to cover losses of the Company resulting
from such incorrect net asset value information. Any material error in the
calculation of net asset value per share, dividend or capital gain information
shall be reported promptly upon discovery to the Company. Furthermore, the
Underwriter shall be liable for the reasonable administrative costs incurred by
the Company in relation to the correction of any material error.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that 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. 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 44- 402.01 of the Nebraska Insurance Code and has registered or,
prior to any issuance or sale of the Contracts, will register each 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.
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 Nebraska 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.
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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-1 Plan under which it makes no payments for
distribution expenses. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, 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 Nebraska 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 Nebraska 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 Nebraska and all applicable state
and federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 0000 Xxx.
2.8 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland 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
Nebraska 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 and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Section 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 individuals/entities dealing
with the money and/or securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Fund, in an amount not less than the minimal coverage as required currently
by Section 270.17g-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.
2.12 The Company represents and warrants that it will not purchase Fund
shares with Account assets derived from the sale of Contracts to deferred
compensation plans with respect to service for state and local governments which
qualify under Section 457 of the federal Internal Revenue Code, as may be
amended. The Company may purchase Fund shares with Account assets derived from
any sale of a Contract to any other type of tax-advantaged employee benefit
plan; provided however that such plan has no more than 500 employees who are
eligible to participate at the time of the first such purchase hereunder by the
Company of Fund shares derived from the sale of such Contract.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
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3.1 The Underwriter shall provide the Company (at the Company's expense)
with as many copies of the Fund's current prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus as set
in type at the Fund's expense) and other assistance as is reasonably necessary
in order for the Company once each year (or more frequently if the prospectus
for the Fund is amended) to have the Fund's prospectus printed either
separately, or together with the prospectus for the Contracts in one document.
The form of the Fund's prospectus and/or statement of additional information
provided to the Company shall be the final form of prospectus and statement of
additional information as filed with the Securities and Exchange Commission
which shall include either, individually or collectively, only those Portfolios
offered by the Company.
3.2 The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter (or in the Fund's
discretion, the Prospectus shall state that such Statement is available from the
Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3 The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to stockholders and other communications to stockholders
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 Investment Company 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 in Schedule B 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 the Act) as well as
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.
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 (15) Business Days prior to its use. No such material shall be used if
the Fund or its designee object to such use within fifteen (15) Business Days
after receipt of such material.
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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 and/or its separate account(s),
is named at least fifteen (15) Business Days prior to its use. No such material
shall be used if the Company or its designee object to such use within fifteen
(15) 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 a registration statement or prospectus for the Contracts, as such
registration statement and prospectus 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 all
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
Securities and Exchange Commission.
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.
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ARTICLE V. FEES AND EXPENSES
5.1 The Company shall pay no fee or other compensation to the Fund or
Underwriter under this Agreement, and the Fund and Underwriter shall pay no fee
or other compensation to the Company, 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 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
laws 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, all taxes on the issuance or
transfer of the Fund's shares.
5.3 The Fund shall bear the expenses of printing and distributing the
Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
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 ss. 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Section 6.1 by the Fund, it will take all reasonable
steps to adequately diversify the Fund so as to achieve compliance within the
grace period afforded by Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
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7.1 The Board of Directors of the Fund (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 Directors, 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 Directors), 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 Account's investment in
the Fund and terminate this Agreement; 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. 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 (6) 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 within six (6)
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 (6) 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.
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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 and/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.
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
8.1(A)The Company agrees to indemnify and hold harmless the Fund and
each of its Trustees 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 the Registration
Statement or prospectus 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 the 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
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(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 Contract 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 (v) arise out of or result from any material breach of any
representation and/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
provisions with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject to 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 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.
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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 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 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 result of
statements or representations (other than statements or representations
contained in the Registration Statement, prospectus 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 a
Registration Statement, prospectus, 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 by the Company by or on behalf of
the Fund; or (vi)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 and/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.
8.2(B). The Underwriter shall not be liable under this indemnification
provision with respect to any
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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 Indemnified
Party (or after such Indemnified Party shall have received notice of such
services 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.
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 State of Maryland.
9.2 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
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 terminate:
(a) at the option of any party, upon one year advance written notice to the
other parties; provided, however such notice shall not be given earlier than
one year following the date of this Agreement; or (b) at the option of the
Company, to the extent that shares of Portfolios are not reasonably
available to meet the requirements of the Contracts as determined by the
Company, provided, however that such termination shall apply only to the
Portfolio(s) not reasonably available. Prompt notice of the election to
terminate for such cause shall be furnished by the Company; or
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(c) at the option of the Fund, in the event that formal administrative
proceedings are instituted against the Company by the National Association
of Securities Dealers, Inc. ("NASD"), the Securities and Exchange
Commission, the Insurance Commissioner or any other regulatory body
regarding the Company's duties under this Agreement or related to the sale
of the Contracts, with respect to the operation of any Account, or the
purchase of the Fund shares, provided, however that the Fund determines in
its sole judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of the
Company to perform its obligations under this Agreement; or (d) at the
option of the Company, in the event that formal administrative proceedings
are instituted against the Fund or the Underwriter by the NASD, the
Securities and Exchange Commission, or any state securities or insurance
department or any other regulatory body, provided, however that the Company
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon the
ability of the Fund or Underwriter to perform its obligations under this
Agreement; or (e) with respect to any Account, upon requisite vote of the
Contract owners having an interest in such Account (or any subaccount) to
substitute the shares of another investment company for the corresponding
Portfolio shares of the Fund in accordance with the terms of the Contracts
for which those Portfolio shares had been selected to serve as the
underlying investment media. The Company will give thirty (30) days' prior
written notice to the Fund of the date of any proposed vote to replace the
Fund's shares; or (f) at the option of the Company, in the event any of the
Fund's shares are not registered, issued or sold in accordance with
applicable state and/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 (g) at the option of the Company, if the Fund
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 (h) at the
option of the Company, if the Fund fails to meet the diversification
requirements specified in Article VI hereof; or (i) at the option of either
the Fund or the Underwriter, if (1) the Fund or the Underwriter,
respectively, shall determine, in their sole judgment reasonably exercised
in good faith, that the Company has suffered a material adverse change in
its business or financial condition or is the subject of material adverse
publicity and such material adverse change or material adverse publicity
will have a material adverse impact upon the business and operations of
either the Fund or the Underwriter, (2) the Fund or the Underwriter shall
notify the Company in writing of such determination and its intent to
terminate this Agreement, and (3) after considering the actions taken by the
Company and any other changes in circumstances since the giving of such
notice, such determination of the Fund or the Underwriter shall continue to
apply on the sixtieth (60th) day following the giving of such notice, which
sixtieth (60th) day shall be the effective date of termination; or (j) at
the option of the Company, if (1) the Company shall determine, in its sole
judgment reasonably exercised in good faith, that either the Fund or the
Underwriter has suffered a material adverse change in its business or
financial condition or is the subject of material adverse publicity and such
material adverse change or material adverse publicity will have a material
adverse impact upon the business and operations of the Company, (2) the
Company shall notify the Fund and the Underwriter in writing of such
determination and its intent to terminate the Agreement, and (3) after
considering the actions taken by the Fund and/or the Underwriter and any
other changes in circumstances since the giving of such notice, such
determination shall continue to apply on the sixtieth (60th) day following
the giving of such notice, which sixtieth (60th) day shall be the effective
date of termination; or
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(k) at the option of either the Fund or the Underwriter, 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(k) shall be
effective forty-five (45) days after the notice specified in Section 1.6(b)
was given.
10.2 It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 10.1(a) may be exercised for any
reason or for no reason.
10.3 NOTICE REQUIREMENT. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to terminate
which notice shall set forth the basis for such termination. Furthermore,
(a) In the event that any termination is based upon the provisions of
Article VII, or the provision of Sections 10.1(a), 10.1(i), 10.1(j) or
10.1(k) of this Agreement, such prior written notice shall be given in
advance of the effective date of termination as required by such
provisions; and
(b) In the event that any termination is based upon the provisions of
Sections 10.1(c) or 10.1(d) of this Agreement, such prior written
notice shall be given at least ninety (90) days before the effective
date of termination.
10.4 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 and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.4 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.
10.5 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in either
Account) except (i) as necessary to implement Contract owner initiated
transactions, or (ii) as required by state and/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 ninety (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.
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If to the Fund: Xxxxxxx Variable Series, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Legal Department
If to the Company: Ameritas Variable Life Insurance Company
5900 "O" Street
X.X. Xxx 00000
Xxxxxxx, XX 00000
Attn: Legal Department
If to the Underwriter: Xxxxxxx Distributors, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Legal Department
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
directors, 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
Securities and Exchange Commission, 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 Commission 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.
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12.7 The Underwriter agrees 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, and Michigan, the Underwriter shall indemnify and reimburse the
Company for any out of pocket expenses and actual damages the Company has
incurred as a result of any such proceeding; provided, however that the
provisions of Section 8.2(b) 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 and/or 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.
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
as of the date specified below.
COMPANY:
AMERITAS VARIABLE LIFE INSURANCE COMPANY
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
-------------------------------------
Date:
--------------------------------------
FUND:
XXXXXXX VARIABLE SERIES, INC.
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxxx
Title: Vice President
-------------------------------------
Date:
--------------------------------------
UNDERWRITER:
XXXXXXX DISTRIBUTORS, INC.
By:
----------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
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SCHEDULE A
CONTRACTS
Contract Forms: Life: 4001 (Single Premium Variable Universal Life)
4010 (OVERTURE APPLAUSE! VUL)
4016 (OVERTURE APPLAUSE! II VUL)
4018 (OVERTURE ENCORE! VUL)
4065 (OVERTURE BRAVO! VUL)
4020 (Corporate Benefit VUL)
Annuity: 4780 (OVERTURE Annuity)
4782 (OVERTURE Annuity II)
4784 (OVERTURE Annuity III)
4786 (OVERTURE Annuity III-Plus)
4882 (OVERTURE ACCLAIM!)
4884 (OVERTURE ACCENT!)
v:\lawnorth\xxx\xxxxxxx\schedulea.wpd
SCHEDULE B
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 "Company" 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 (the "Record Date") 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/shares 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 voting instruction cards is determined by the activities
described in step #2. The Company will use its best efforts to
call in the number of Customers to Xxxxxxx, as soon as possible,
but no later than two weeks after the Record Date.
3. 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 a personalize the Voting Instruction Cards with the name, address,
and number of units/shares for each Customer. (This and related steps may
occur later in the chronological process due to possible uncertainties
relating to the proposals.)
4. Company will, at its expense, print account information on the Cards.
5. Allow approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
1. name (legal name as found on account registration)
2. address
3. Fund or account number
4. coding to state number of shares/units (depends upon tabulation process
used by the computer system, i.e. whether or not system knows number of
shares held just by "reading" the account number)
5. individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Fund)
Note: When the Cards are printed by the Fund, each card is numbered
individually to guard against potential Card/vote duplication.
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7. During this time, the Legal Department of the Underwriter or its affiliate
("Xxxxxxx 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 the 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:
1. Voting Instruction Card
2. proxy notice and statement (one document)
3. return envelope (postage pre-paid by Company) addressed to the Company
or its tabulation agent
4. "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.)
5. cover letter - optional, supplied by the Company and reviewed and
approved in advance by Xxxxxxx Legal.
8. 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 Xxxxxxx Legal.
9. Package mailed by the Company:
o The Fund must allow at least a 15-day solicitation time to the Company
as the shareowner. (A 5-week period is recommended, but not necessary,
to receive a proper response percentage.) Solicitation time is
calculated as days from (but not including) the meeting, counting
backwards.
o If the Customers were actually the shareholders, at least 50% of he
outstanding shares must be represented and 66 2/3% of that 50% must
have voted affirmatively on the proposals to have an effective vote.
However, since the Company is the shareholder, the Customers' votes
will (except in certain limited circumstances) be used to dictate how
the Company will vote.
10. Collection and tabulation of Cards begins. Tabulation usually takes place in
another department or another vendor depending on the process used. An often
used procedure is to sort Cards on arrival into vote categories of all yes,
no, and mixed replies, and to begin data entry.
o 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 Xxxxxxx in the past.
11. Signatures on Card checked against legal name on account registration which
was printed on the Card.
o This verifies whether an individual has signed correctly for self with
same name as is on the account registration.
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.
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12. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to the 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.
13. 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 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.
14. The actual tabulation of votes is done in units and in shares. (It is very
important that the Fund receives the tabulations stated in terms of a
percentage and the number of shares.)
15. Final tabulation in shares is verbally given by the Company to the Legal
Department on the morning of the meeting by 10:00 a.m. Eastern time.
16. Vote is verified by the Company and is sent to Xxxxxxx Legal.
17. Company then votes its proxy in accordance with the votes received from the
Customers the morning of the meeting (except in limited circumstances as
may be otherwise required by law). A letter documenting the Company's vote
is supplied to Xxxxxxx Legal and is sent to officer of company for
signature. This letter is normally sent after the meeting has taken place.
18. 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, Xxxxxxx will be
permitted reasonable access to such Cards.
19. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
20. During tabulation procedures, the Fund and Company determine if a
resolicitation is required and what form that resolicitation should take,
whether it should be by a mailing, or by recorded telephone line. A
resolicitation is considered when the vote response is slow and it appears
that not enough votes would be received by the meeting date. The meeting
could be adjourned to leave enough time for the resolicitation.
A determination is made by the Company and the Fund to find the most cost
effective candidates for resolicitation. These are Customers who have not
yet voted, but whose balances are large enough to bring in the required
vote with minimal costs.
a. By mail: Xxxxxxx Legal amends the voting instruction cards, if
necessary, and writes a resolicitation letter. The Fund supplies these
to the Company. The Company generates a mailing list etc., as per step
2 onward.
b. By phone: Rarely used. This must be done on a recorded line. Xxxxxxx
Legal and the Fund will supply the necessary procedures and script if
a phone resolicitation were to be required.
C:\PROGRAM FILES\COMPUSERVE\DOWNLOAD\XXXXXXX CDI PA.WPD
SCHEDULE C
ACCOUNTS
Name of Account Date Account Established
--------------- ------------------------
Ameritas Variable Life Insurance Company. Separate Account X Xxxxxx 00, 0000
Xxxxxxxx Variable Life Insurance Company Separate Account VA-2 May 28, 1987
C:\PROGRAM FILES\COMPUSERVE\DOWNLOAD\XXXXXXX CDI PA.WPD
EXHIBIT A
PORTFOLIOS
The following portfolios in Xxxxxxx Variable Series, Inc. ("CVS") are subject to
this Agreement:
1. Social Small Cap Growth Portfolio
1. Social Mid Cap Growth Portfolio
2. Social International Equity Portfolio
3. Social Balanced Portfolio
