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Exhibit 10(d)
SALES AGREEMENT
THIS AGREEMENT is made by and between XXXXXXXXX & XXXXXX ADVISERS
MANAGEMENT TRUST ("TRUST"), a Massachusetts business trust and PROVIDENT MUTUAL
LIFE INSURANCE COMPANY OF PHILADELPHIA ("LIFE COMPANY"), a life insurance
company organized under the laws of the State of Pennsylvania.
WHEREAS, TRUST is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended ("'40 Act"), as an open-end
diversified management investment company; and
WHEREAS, TRUST is organized as a series fund, currently with
four Portfolios: Liquid Asset Portfolio, Limited Maturity Bond
Portfolio, Growth Portfolio and Balanced Portfolio; and
WHEREAS, TRUST was organized to act as a funding vehicle for certain
variable contracts offered by life insurance companies through separate accounts
of such life insurance companies; and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer variable contracts
participating in such Separate Accounts and is desirous of having TRUST as an
underlying funding vehicle for such variable contracts.
NOW, THEREFORE, it is hereby agreed by and between TRUST and LIFE
COMPANY as follows:
1. TRUST represents and warrants that TRUST shares sold pursuant to this
Agreement shall be registered under the Securities Act of 1933 and duly
authorized for issuance, and shall be issued, in compliance in all material
respects with applicable law, and that TRUST is and shall remain registered
under the '40 Act for so long as required thereunder. TRUST further represents
and warrants that TRUST currently qualifies and will make every effort to
continue to qualify as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), and to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that TRUST will notify LIFE 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. TRUST further represents and warrants that TRUST will comply with
Section 817(h) of the Code, and all regulations issued thereunder, and that
TRUST will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that TRUST has ceased to so qualify or that TRUST might not so qualify
in the future.
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2. TRUST will make available to the Separate Accounts shares of the
selected Portfolios for investment of purchase payments of variable contracts
allocated to the Separate Accounts.
3. TRUST will make the shares available to the Separate Accounts on a
daily basis at the net asset value next computed after receipt of each order by
the Trust.
4. Orders shall be placed for such shares with the Trust's custodian
pursuant to procedures which are then in effect and which may be modified as is
reasonable from time to time. TRUST shall make the net asset value per share for
each Portfolio available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after calculation thereof and shall use its best efforts to make
such net asset value per share available by 6:30 p.m. Eastern time.
5.(a) TRUST will bear the printing costs (or duplicating costs
with respect to the statement of additional information) and
mailing costs associated with the delivery of the following
TRUST (or individual Portfolio) documents, and any supplements
thereto, to the then existing shareholders or beneficial owners
of shares of TRUST including the variable contract owners of
LIFE COMPANY whose contracts use one or more Portfolios of TRUST
as a funding vehicle:
(i) prospectuses and statements of additional
information;
(ii) annual and semi-annual reports; and
(iii) proxy materials.
LIFE COMPANY will submit any bills for printing, duplicating
and/or mailing costs, relating to the TRUST documents described
above, to the TRUST for reimbursement by the TRUST. LIFE COMPANY
shall monitor such costs and shall use its best efforts to
control these costs. LIFE COMPANY will provide the TRUST on a
semi-annual basis, or more frequently as reasonably requested by
the TRUST, with a current tabulation of the number of existing
policyowners of LIFE COMPANY whose policy values are invested in
the TRUST. This tabulation will be sent to the TRUST in the form
of a letter signed by a duly authorized officer of LIFE COMPANY
attesting to the accuracy of the information contained in the
letter.
(b) TRUST will provide LIFE COMPANY, with respect to prospective
variable contract owners of LIFE COMPANY,
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the following TRUST ( or individual Portfolio) documents, and
any supplements thereto:
(i) camera ready copy of the current prospectus for
printing by the LIFE COMPANY;
(ii) a copy of the statement of additional information
suitable for duplication;
(iii) camera ready copy of proxy material suitable for
printing; and
(iv) annual and semi-annual reports in camera ready
form.
6. Any materials utilized by LIFE COMPANY which describe TRUST (or its
individual Portfolios), its shares, or TRUST's investment adviser shall be
submitted to TRUST and TRUST's distributor for approval prior to use, not less
than five (5) business days before such approval is needed by LIFE COMPANY.
Advertising and literature, if and to the extent that it describes LIFE COMPANY,
the Separate Accounts or the variable contracts, prepared by TRUST's distributor
for use in marketing TRUST or the Portfolios, will be submitted to LIFE COMPANY
for approval before use, not less than five (S) business days before such
approval is needed by TRUST's distributor.
7. LIFE COMPANY and its agents will not make any representations
concerning the TRUST (or its individual Portfolios) or TRUST shares except those
contained in the then current prospectus of the TRUST (or its individual
Portfolios) and in current printed sales literature of the TRUST (or its
individual Portfolios).
8. LIFE COMPANY agrees to inform the Board of Trustees of TRUST of the
existence of or any potential for any material irreconcilable conflict of
interest between the interests of the contract owners of the Separate Accounts
investing in TRUST and/or any other separate account of any other insurance
company investing in TRUST.
Any material irreconcilable 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, or any similar action by insurance, tax or
securities regulatory authorities;
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(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 owners and variable life insurance contract owners or
by contract owners of different life insurance companies
utilizing TRUST; or
(f) a decision by LIFE COMPANY to disregard the voting instructions
of contract owners.
LIFE COMPANY will be responsible for assisting the Board of Trustees of
TRUST in carrying out its responsibilities by providing the Board with all
information reasonably necessary for the Board to consider any issue raised
including information as to a decision by LIFE COMPANY to disregard voting
instructions of contract owners.
It is agreed that if it is determined by a majority of the members of
the Board of Trustees of TRUST or a majority of its disinterested Trustees that
a material irreconcilable conflict exists affecting LIFE COMPANY, LIFE COMPANY
shall, at its own expense, take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, which steps may include, but are
not limited to,
(a) withdrawing the assets allocable to some or all of the Separate
Accounts from TRUST or any Portfolio and reinvesting such assets
in a different investment medium, including another Portfolio of
the TRUST or submitting the questions of whether such
segregation should be implemented to a vote of all affected
contract owners and, as appropriate, segregating the assets of
any particular group (i.e. annuity contract owners, life
insurance contract owners or qualified contract owners) that
votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change;
(b) establishing a new registered management investment company or
managed separate account.
If a material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the LIFE
COMPANY may be required, at the TRUST's election, to withdraw a Separate
Account's investment
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in TRUST. No charge or penalty will be imposed against a Separate Account as a
result of such a withdrawal. LIFE COMPANY agrees that any remedial action taken
by it in resolving any material conflicts of interest will be carried out with a
view only to the interests of contract owners.
For purposes hereof, a majority of the disinterested members of the
Board of Trustees of TRUST shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict. In no event will TRUST
be required to establish a new funding medium for any variable contracts. LIFE
COMPANY shall not be required by the terms hereof to establish a new funding
medium for any variable contracts if an offer to do so has been declined by vote
of a majority of affected contract owners.
TRUST will undertake to promptly make known to LIFE COMPANY the Board of
Trustees' determination of the existence of a material irreconcilable conflict
and its implications.
9. LIFE COMPANY shall provide pass-through voting privileges to all
variable contract owners so long as the Securities and Exchange Commission
continues to interpret the '40 Act to require such pass-through voting
privileges for variable contract owners. LIFE COMPANY shall be responsible for
assuring that each of its Separate Accounts calculates voting privileges in a
manner consistent with other life companies utilizing TRUST. It is a condition
of this Agreement that LIFE COMPANY will vote shares, for which it has not
received voting instructions as well as shares attributable to it, in the same
proportion as it votes shares for which it has received instructions.
10. This Agreement shall terminate automatically in the event of its
assignment unless made with the written consent of LIFE COMPANY and TRUST.
11. This Agreement may be terminated at any time on 90 days' written
notice to the other party hereto, without the payment of any penalty.
12. This Agreement shall be subject to the provisions of the '40 Act and
the rules and regulations thereunder, including any exemptive relief therefrom
and the orders of the Securities and Exchange Commission setting forth such
relief.
13. It is understood by the parties that this Agreement is not to be
deemed an exclusive arrangement.
14. This Agreement is made by TRUST pursuant to authority granted by the
Trustees, and the obligations created hereby are
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not binding on any of the Trustees or shareholders of TRUST individually, but
bind only the property of TRUST.
Executed this day of ___________, 1993.
XXXXXXXXX & XXXXXX
ADVISERS MANAGEMENT TRUST
ATTEST :___________________ By:___________________________
Xxxxxxx Xxxxxx, Chairman
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY OF PHILADELPHIA
ATTEST :___________________ By:____________________________
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