Form N-4, Item 24(b)
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EXHIBIT 8.11
Form of Participation Agreement with
The Vanguard Group and
American United Life Insurance Company
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FUND PARTICIPATION AGREEMENT
This agreement is entered into as of the 27th day of March among American United
Life Insurance Company, a life insurance company organized under the laws of
Indiana; certain Funds of The Vanguard Group of Investment Companies ("Fund"),
organized under the laws of Maryland or Pennsylvania; and The Vanguard Group,
Inc., ("Company"), organized under the laws of Pennsylvania.
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates
net asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a group annuity contract issued by American
United Life Insurance Company which uses the Fund as an
underlying investment medium. Individuals who participate under
Contract are "Participants".
1.6 "Contractholder" shall mean any entity to which a Contract is
issued.
1.7 "Prospectus" shall mean the Fund's current prospectus and
statement of additional information, as most recently filed with
the Commission.
1.8 "Separate Account" shall mean any separate account established by
American United Life Insurance Company in accordance with the
laws of the State of Indiana that invests in the Fund.
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ARTICLE II
REPRESENTATIONS
2.1 American United Life Insurance Company represents and warrants that (a)
it is organized and in good standing under applicable law; (b) it has or will
legally and validly establish the Separate Account pursuant to the Indiana
Insurance Code; and (c) each Separate Account is exempt from registration as a
unit investment trust under the Act.
2.2 American United Life Insurance Company represents and warrants that the
Contracts are exempt from registration under the Securities Act of 1933, as
amended (" 1933 Act").
2.3 American United Life Insurance Company represents and warrants that the
income, gains, and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the applicable Contracts, to be
credited to or charged against such Separate Account without regard to other
income, gains or losses from assets allocated to the general account or any
other separate accounts of American United Life Insurance Company. American
United Life Insurance Company represents and warrants that the assets of the
Separate Account are and will be kept separate from American United Life
Insurance Company's General Account and any other separate accounts American
United Life Insurance Company may have, and will not be charged with liabilities
from any other business that the American United Life Insurance Company may
conduct or the liabilities of any companies affiliated with American United Life
Insurance Company.
2.4 Fund and Company represent and warrant that the Fund is and will
continue to be registered with the Commission under the Act as an open-end,
diversified management investment company and possesses, or will possess, and
shall maintain, all legal and regulatory licenses, approvals, consents and/or
exemptions required for the Fund to operate and offer its shares as an
underlying investment medium for the Contracts.
2.5 Fund and Company represent and warrant that the Fund is currently, or
shall be 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 American United Life Insurance
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.
2.6 Company represents and warrants that it is a member in good standing of
the NASD and that its wholly-owned subsidiary, Vanguard Marketing Corporation,
is registered as a
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broker dealer with the Commission. Company further represents and warrants that
it will sell and distribute the Fund shares in accordance with all applicable
state and federal securities laws.
2.7 American United Life Insurance Company represents and warrants that it
is a member in good standing of the NASD and is registered as a broker dealer
with the Commission. Fund and Company represent and warrant that any of their
directors, officers, employees, investment advisers, and other
individuals/entities who deal 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 that
required by Rule 17g-1 under the Act. The aforesaid Bond shall include coverage
for larceny and embezzlement and shall be issued by a reputable bonding company.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide
Contractholders or Participants with the opportunity to direct American United
Life Insurance Company to invest certain amounts in the Fund's shares.
3.2 Fund agrees to make its shares available for purchase at the then
applicable net asset value per share by American United Life Insurance Company
and the Separate Account on each Business Day pursuant to rules of the
Commission. Notwithstanding the foregoing, the Fund may refuse to sell the
shares to any person, or suspend or terminate the offering of the shares 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 and
in the best interests of the shareholders of the Fund.
3.3 Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain information on a per-share basis to American United
Life Insurance Company by 6:30 p.m. Eastern time and on an exception basis only,
no later that 8:00 p.m. Eastern time on each Business Day. Any material errors
in the calculation of net asset value, dividend and capital gain information
shall be reported immediately upon discovery to American United Life Insurance
Company. Non-material errors will be corrected in the next Business Day's net
asset value per share.
3.4 At the end of each Business Day, American United Life Insurance Company
will use the information described in Section 3.2 and 3.3 to calculate the
Separate Account unit values for the day.
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3.5 Each Business Day, American United Life Insurance Company will
determine the net dollar amount which will be purchased, redeemed or exchanged.
American United Life Insurance Company shall be permitted to purchase, redeem or
exchange at that day's closing net asset value provided that the net purchase or
redemption orders are received by American United Life Insurance Company by 4:00
p.m. Eastern time on each Business Day, and provided Vanguard's daily valuation
requirements are met as set forth in Exhibit A. Orders received by American
United Life Insurance Company after 4:00 p.m. will be processed on the next
Business Day.
3.6 If American United Life Insurance Company requests a purchase, American
United Life Insurance Company shall transmit to the Fund payment in Federal
Funds by 4:00 p.m. Eastern time on the Business Day next following the day on
which American United Life Insurance Company places an order to purchase shares
with the Fund. If American United Life Insurance Company requests a redemption
of shares, Fund shall transmit to American United Life Insurance Company payment
in Federal Funds by 4:00 p.m. Eastern time on the Business Day next following
the day on which American United Life Insurance Company places an order to
redeem shares with the Fund.
3.7 Fund will confirm each purchase or redemption order made by American
United Life Insurance Company. Transfer of shares will be by book entry only. No
share certificates will be issued to American United Life Insurance Company.
3.8 Fund shall credit American United Life Insurance Company with the
appropriate number of shares.
3.9 On each ex-dividend date of the Fund, or, if not a Business Day, on the
first Business Day thereafter, Fund shall communicate to American United Life
Insurance Company the amount of dividend and capital gain, if any, per share.
American United Life Insurance Company elects that all dividends and capital
gains shall be automatically reinvested in additional shares of the Fund at the
applicable net asset value per share on the payable date. Fund shall, on the day
after the payable date or, if not a Business Day, on the first Business Day
thereafter, notify American United Life Insurance Company of the number of
shares so issued.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of each
month for all of
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American United Life Insurance Company's accounts by the fifteenth (15th)
calendar day of the following month.
4.2 Fund will provide to American United Life Insurance Company at least
one complete copy of all registration statements, Prospectuses, reports, proxy
statements, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund, contemporaneously with
the filing of such document with the Commission or other regulatory authorities.
4.3 Fund will provide to American United Life Insurance Company at least
one complete copy of all sales literature and other promotional materials on a
best effort basis.
ARTICLE V
EXPENSES AND FEES
5.1 Fund (or Company) shall bear the expenses for the cost of registration
and qualification of the Fund's shares under all applicable federal and state
laws.
ARTICLE VI
VOTING OF FUND SHARES
6.1 American United Life Insurance Company shall be entitled to vote all
Fund shares held by it on any applicable record date.
ARTICLE VII
MARKETING AND REPRESENTATIONS
7.1 Fund or Company shall periodically furnish American United Life
Insurance Company with the following documents, in quantities as American United
Life Insurance Company may reasonably request:
a. Current Prospectus and any supplements thereto; and
b. Other marketing materials
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7.2 American United Life Insurance Company shall furnish, or shall cause to
be furnished, to the Fund, each piece of sales literature or other promotional
material in which the Fund or its investment adviser is named, at least fifteen
Business Days prior to its use. No such material shall be used unless the Fund
approves in writing the use of such material or unless such material contains
only information derived directly, without alteration, from the Prospectus or
registration statement for the Fund, from semi-annual reports from the Fund or
Company providing performance information respecting the Fund.
7.3 American United Life Insurance 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, as 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 the Company.
7.4 Fund and the Company shall furnish, or shall cause to be furnished, to
American United Life Insurance Company, each piece of sales literature or other
promotional material in which American United Life Insurance Company or the
Separate Account is named, at least fifteen Business Days prior to its use. No
such material shall be used unless American United Life Insurance Company
approves in writing the use of such material.
7.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
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 (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
registration statements, prospectuses, statements of additional information,
shareholder reports and proxy materials, and any other material constituting
sales literature or advertising under National Association of Securities
Dealers, Inc. rules, the Act or the 1993 Act.
ARTICLE VIII
INDEMNIFICATION
8.1 American United Life Insurance Company agrees to indemnify and hold
harmless the Fund, and their affiliates, and each of their directors, trustees,
officers, employees, agents and each person, if any, who controls any of the
foregoing entities or persons within the meaning of the 1993 Act, against any
and all losses, claims, damages or liabilities joint or several (including any
investigative, legal and other expenses reasonably incurred in
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connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted) for which the Indemnified Parties may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect to thereof) (1) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in information furnished by American United Life Insurance
Company for use in the registration statement or Prospectus or sales literature
or advertisements of the Fund or for use with respect to the prospectus or
registration statement or sales literature of the Separate Account or contracts,
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; (2) arise out of or as a result of wrongful
conduct, statements or representations (other than statements or representations
contained in the Prospectus and sales literature or advertisements of the Fund)
of American United Life Insurance Company or its agents, with respect to the
sale and distribution of Contracts for which the Fund's shares are an underlying
investment; or (3) arise out of American United Life Insurance Company incorrect
calculation or reporting of net purchase or redemption orders. American United
Life Insurance Company will reimburse any legal or other expenses reasonably
incurred by the Fund or any of the Indemnified Parties in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that American United Life Insurance Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or omission or
alleged omission made in such Registration Statement, Prospectus, sales
literature or advertisements in conformity with written information furnished to
American United Life Insurance Company by the Fund specifically for use therein.
This indemnity agreement will be in addition to any liability which American
United Life Insurance Company may otherwise have.
8.2 The Company agrees to indemnify and hold harmless American United Life
Insurance Company, and each of their directors, officers, employees, agents and
each person, if any, who controls American United Life Insurance Company within
the meaning of the 1933 Act against any losses, claims, damages or liabilities
to which American United Life Insurance Company or any such director, officer,
employee, agent or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) (1) 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 or advertisements of the Fund; (2)
arise out of or based upon the omission to state in the registration statement
or Prospectus or sales literature or advertisements of the Fund any material
fact required to be stated therein or necessary to make the statements therein
not misleading; or (3) 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 or advertisements with respect to
the Separate Account or the Contracts and such statements were based on
information provided to American United Life Insurance Company by the Company;
and the Company will reimburse any legal or other expenses reasonably incurred
by American United Life Insurance Company or any such director, officer,
employee, agent or
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controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or omission or
alleged omission made in such Registration Statement, Prospectus, sales
literature or advertisements in conformity with written information furnished to
the Fund by American United Life Insurance Company specifically for use therein.
This indemnity agreement will be in addition to any liability which Company may
otherwise have.
8.3 The Company shall indemnify and hold American United Life Insurance
Company harmless against any and all liability, loss, damages, costs or expenses
which American United Life Insurance Company may incur, suffer or be required to
pay due to the Fund's (1) incorrect calculation of the daily net asset value,
dividend rate or capital gain distribution rate; (2) incorrect reporting of the
daily net asset value, dividend rate or capital gain distribution rate; and (3)
untimely reporting of the net asset value, dividend rate or capital gain
distribution rate, provided that the Company shall not have an obligation to
indemnify and hold harmless American United Life Insurance Company if the
incorrect calculation or incorrect or untimely reporting was the result of
incorrect information furnished by American United Life Insurance Company.
8.4 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Article, notify the indemnifying party of the commencement thereof. This
omission to so notify the indemnifying party will not relieve the indemnifying
party from any liability under this Article VIII, except to the extent that the
omission results in a failure of actual notice to the indemnifying party and
such indemnifying party is damaged solely as a result of the failure to give
such notice. In case any such action is brought against any indemnified party,
and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel satisfactory to such
indemnified party, and to the extent that the indemnifying party has given
notice to such effect to the indemnified party and is performing its obligations
under this Article, the indemnifying party shall not be liable for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (1)the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (2) the named parties to any such processing
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification in this Article VIII.
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ARTICLE IX
COMMENCEMENT AND TERMINATION
9.1 This Agreement shall be effective as of the date hereof and shall
continue in force until termination in accordance with the provisions herein.
9.2 This Agreement shall terminate:
(a) at the option of any party upon three (3) months advance
written notice to the other parties; or
(b) at the option of American United Life Insurance Company, to
the extent that the shares of the Fund are not reasonably
available to meet the requirements of the Contracts or are
not "appropriate funding vehicles" for the Contracts, as
determined by American United Life Insurance Company
reasonably and in good faith. Prompt notice of the election
to terminate for such cause and an explanation of such cause
shall be furnished by American United Life Insurance
Company.
(c) at the option of American United Life Insurance Company upon
any substitution of the shares of another investment company
or series thereof for shares of the Fund in accordance with
the terms of the Contracts, provided that American United
Life Insurance Company has given at least 30 days prior
written notice to the Fund or Company of the intended date
of the substitution.
(d) at the option of the Fund or Company upon a material breach
of this Agreement or of any representation herein by
American United Life Insurance Company, or at the option of
American United Life Insurance Company upon a material
breach of this Agreement or any representation herein by the
Fund or Company.
9.3 It is understood and agreed that the right of any party hereto
terminate this Agreement pursuant to 9.2(a) may be exercised with or without
cause.
9.4 Notwithstanding any termination of this Agreement, the Fund and Company
shall, at the option of American United Life Insurance 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 transfer or reallocate investments under the Contracts, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts.
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ARTICLE X
NOTICES
10.1 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.
If to the Fund: The Vanguard Group/Vanguard Explorer and VFIS
Short Term Federal
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx - M33
If to Company: The Vanguard Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx - M33
If to American United
Life Insurance Company: American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
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 and
its seal to be hereunder affixed hereto as of the date specified below.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxx
Title: V.P., Pension Marketing
Date: March 29, 1995
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VANGUARD FUND(S)
By: /s/ Xxxxxxx X. Xxxxxxxxx
Title: Secretary
Date: March 27, 1995
THE VANGUARD GROUP, INC.
By: /s/ Xxxx Xxxxxx
Title: Vice President
Date: March 27, 1995
EXHIBIT A
ADMINISTRATIVE SERVICES
A. TRANSACTION REQUESTS
1.0 Receipt of Transaction Request. American United Life Insurance Company
will receive participant and plan representative transaction requests through
their interactive voice response system or other methods.
1.1 Transaction requests may only be valued on the days the Funds are open
for business.
1.2 Requests received by the regular close of the New York Stock Exchange
(generally 4:00 p.m. Eastern time) will receive a current day trade date.
1.3 Requests received after the close of the Exchange, will receive the
next available trade
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date.
1.4 American United Life Insurance Company's voice response system shall
begin with a message indicating a current trade date, if the call is received by
the close of the New York Stock Exchange (generally 4:00 p.m.), or the next
available trade date, if the call is received after the close of the Exchange.
2.0 Transaction Changes. Agent shall not change, alter or manipulate any
particular initiated transaction, regardless of market conditions. Nor shall
American United Life Insurance Company change or alter any such transaction
figures based on instructions from the plan sponsor.
B. DATA TRANSMISSIONS (Applies to Vanguard's Daily Valuation Program Only)
1.0 Transmission of Prices and Accrual Factor. Vanguard shall use its best
efforts to transmit to American United Life Insurance Company a file containing
current day prices, Fund dividend rates, capital gain rates, and prior day ten
place daily accrual factors by 6:30 p.m. Eastern time and on an exception basis
only, no later than 8:00 p.m. Eastern time.
2.0 Electronic Transmission of Net Transaction File. American United Life
Insurance Company will transmit to Vanguard, in the daily valuation format
provided by Vanguard, a file containing net transactions ("trade order") by 4:00
a.m. Eastern time.
3.0 Notice of Confirmations. Vanguard shall furnish American United Life
Insurance Company and its designee an electronic Confirmation with respect to
each Trade Order transmitted by the start of regular trading (currently 9:30
a.m. ET) of the New York Stock Exchange on the second Business Day immediately
following communication of the Trade Order ("Start of Trading"). Promptly upon
receipt of each electronic Confirmation, American United Life Insurance Company
shall verify its accuracy and shall notify Vanguard of any errors. Upon request,
Vanguard shall furnish American United Life Insurance Company and its designee a
verbal Confirmation as to such Trade Orders on the Business Day immediately
following communication of such Trade Order.
