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EXHIBIT (8)
FUND PARTICIPATION AGREEMENT
AGREEMENT, made on this l8th day of January, 1990, between
FIRST SUNAMERICA LIFE INSURANCE COMPANY ("First SunAmerica"), a life
insurance company organized under the laws of the State of New York,
on behalf of itself and on behalf of VARIABLE ANNUITY ACCOUNT ONE
("Variable Account"), a separate account of First SunAmerica
existing pursuant to the laws of the State of New York, and ANCHOR
SERIES TRUST ("Fund"), an open-end management investment company
established pursuant to the laws of the Commonwealth of
Massachusetts under a Declaration of Trust dated August 26, 1983 and
amended as of September 1, 1988, and January 19, 1990, and
which is composed of multiple investment series ("Portfolios").
WITNESSETH:
WHEREAS, First SunAmerica, by resolution, has established the
Variable Account on its books of account for the purpose of funding
certain variable annuity contracts issued by it (collectively with
other contracts and policies that may be funded through the Fund,
"Contracts"); and
WHEREAS, the Variable Account is divided into Sub-accounts,
under which the income, gain and losses, whether or not realized,
from assets allocated to each such Sub-account are, in accordance
with the applicable Contracts, credited to or charged against such
Sub-account without regard to any income, gains or losses of other
Sub-accounts or separate accounts or of First SunAmerica; and
WHEREAS, the Variable Account and its Sub-accounts are divided
into various "Divisions" under which the income, gains and losses,
whether or not realized, from assets allocated to each such Division
are, in accordance with the applicable Contracts, credited to or
charged against such Division without regard to any income, gains or
losses of other Divisions or separate accounts or of First
SunAmerica; and
WHEREAS, the Variable Account is registered with the
Securities and Exchange Commission as a unit investment trust under
the Investment Company Act of 1940 ("Act"); and
WHEREAS, the Fund, a registered, open-end, diversified
management investment company, is divided into various Portfolios,
each Portfolio being subject to separate investment objectives and
restrictions which may not be changed without a majority vote of the
shareholders of such Portfolio; and
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WHEREAS, the Variable Account desires to purchase shares of the Fund;
and
WHEREAS, the Fund agrees to make its shares available to serve as
underlying investment media for the various Divisions of the Variable Account
with each Portfolio of the Fund serving as the underlying investment medium for
the corresponding Division of the Variable Account; and
WHEREAS, Royal Alliance Associates, Inc. ("Distributor"), which serves
as the distributor for the Contracts funded in the Variable Account pursuant to
an agreement with First SunAmerica on behalf of itself and the Variable Account
is a broker-dealer registered as such under the Securities Exchange Act of 1934
and are members of the National Association of Securities Dealers, Inc.; and
WHEREAS, the Fund's shares are available for investment by separate
accounts of other insurance companies, which may or may not be affiliated
persons (as that term is defined in the Act) of First SunAmerica; and
WHEREAS, the Fund has undertaken that its Board of Trustees ("Board")
will monitor the Fund for the existence of material irreconcilable conflicts
that may arise between the Contract owners of separate accounts of insurance
companies that invest in the Fund, for the purpose of identifying and remedying
any such conflict;
NOW, THEREFORE, in consideration of the foregoing and of mutual
covenants and conditions set forth herein and for other good and valuable
consideration, First SunAmerica (on behalf of itself and the Variable Account)
and the Fund hereby agree as follows:
1. The Contracts funded by the Variable Account will provide for the
allocation of net amounts among the various Divisions of the Variable Account
for investment in the shares of the particular portfolio of the Fund underlying
each Division. The selection of a particular Division is to be made (and such
selection may be changed) in accordance with the terms of the applicable
Contract.
2. No representation is made as to the number of amount of such
Contracts to be sold. First SunAmerica, pursuant to its agreement with
Distributors, will make reasonable efforts to market those Contracts it
determines from time to time to offer for sale and, although it is not required
to offer for sale new Contracts, will accept payments and otherwise service
existing Contracts funded in the Variable Account.
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3. Fund shares to be made available to the respective Divisions of the
Variable Account shall be sold by each of the respective Portfolios of the Fund
and purchased by First SunAmerica for that Division at the net asset value next
computed after receipt of each order, as established in accordance with the
provisions of the then current prospectus of the Fund. Shares of a particular
Portfolio of the Fund shall be ordered in such quantities and at such times as
determined by First SunAmerica to be necessary to meet the requirements of those
Contracts having amounts allocated to the Division for which the Fund Portfolio
shares serve as the underlying investment medium. Orders and payments for shares
purchased will be sent promptly to the Fund and will be made payable in the
manner established from time to time by the Fund for the receipt of such
payments. The Fund reserves the right to delay transfer of its shares until the
payment check has cleared. The Fund has the obligation to insure that its shares
are registered at all times under the Securities Act of 1933 ("1933 Act").
4. The Fund will redeem the shares of the various Portfolios when
requested by First SunAmerica on behalf of the corresponding Division of the
Variable Account at the net asset value next computed after receipt of each
request for redemption, as established in accordance with the provisions of the
then current prospectus of the Fund. The Fund will make payment in the manner
established from time to time by the Fund for the receipt of such redemption
requests, but in no event shall payment be delayed for a greater period than is
permitted by the Act.
5. Transfer of the Fund's shares will be by book entry only. No stock
certificates will be issued to the Variable Account. Shares ordered from a
particular Portfolio to the Fund will be recorded in an appropriate title for
the corresponding Division of the Variable Account.
6. The Fund shall furnish notice promptly to First SunAmerica of any
dividend or distribution payable on its shares. All of such dividends and
distributions as are payable on each of the Portfolio shares in the title for
the corresponding Division of the Variable Account shall be automatically
reinvested in additional shares of that Portfolio of the Fund. The Fund shall
notify First SunAmerica of the number of shares so issued.
7. All expenses incident to the performance of the Fund under this
Agreement shall be paid by the Fund. The Fund shall ensure that all of its
shares are registered and authorized for issue in accordance with applicable
federal and state laws prior to their purchase by the Variable Account. First
SunAmerica shall bear none of the expenses for the cost of registration of the
Fund's shares, preparation of the Fund's prospectuses, proxy materials and
reports, the distribution of such items to shareholders, the preparation of all
statements and notices
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required by any federal or state law or any taxes on the issue or transfer of
the Fund's shares subject to this Agreement.
8. First SunAmerica, either directly or through Distributors, shall make
no representations concerning the Fund's shares other than those contained in
the then current prospectus of the Fund and in printed information subsequently
issued by the Fund as supplemental to such prospects.
9. First SunAmerica shall provide pass-through voting privileges to all
variable Contract owners so long as the U.S. Securities and Exchange Commission
continues to interpret the Act to require pass-through voting privileges for
variable Contract owners. First SunAmerica shall be responsible for assuring
that the Variable Account calculates voting privilege in a manner consistent
with separate accounts of other insurance companies that are invested in the
Fund, which other insurance companies may or may not be affiliated with First
SunAmerica (collectively with First SunAmerica, "Participating Insurers"), as
determined by the Board. First SunAmerica will vote shares for which it has not
received voting instructions in the same proportion as it votes shares for which
it has received instructions.
10. First SunAmerica will report to the Board any potential or existing
conflicts of which it is or becomes aware between any of its Contract owners, or
between any of its Contract owners and Contract owners of other Participating
Insurers. First SunAmerica will be responsible for assisting the Board in
carrying out its responsibilities to identify material conflicts by providing
the Board with all information available to it that is reasonably necessary for
the Board to consider any issues raised, including information as to a decision
by First SunAmerica to disregard voting instructions of its Contract owners.
11. The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly by it to
First SunAmerica and other Participating Insurers. 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, 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 owners and variable life insurance Contract owners or by
Contract owners of different Participating Insurers; or (f) a decision by a
Participating Insurer to disregard the voting instructions of variable Contract
owners.
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12. If it is determined by a majority of the Board or a majority of its
disinterested Trustees that a material irreconcilable to conflict exists that
affects the interests of First SunAmerica Contract owners, First SunAmerica
shall, in cooperation with other Participating Insurers whose Contract owners'
interests are also affected by the conflict, take whatever steps are necessary
to remedy or eliminate the irreconcilable material conflict, which steps could
include: (a) withdrawing the assets allocable to the Variable Account from the
Fund or any portfolio and reinvesting such assets in a different investment
medium, including another Portfolio of the Fund, or submitting the question 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 (e.g., annuity Contract owners or life insurance Contract owners) that
votes in favor of such segregation, or offering to the affected Contract owners
of the option of making such a change; and (b) establishing a new registered
management investment company or managed separate account. First SunAmerica
shall take such steps at its expense if the conflict affects solely the
interests of the owners of First SunAmerica Contracts, but shall bear only its
equitable portion of any such expense if the conflict also affects the interest
of the Contract owners of one or more Participating Insurers other than First
SunAmerica, provided: that this sentence shall not be construed to require the
Fund to bear any portion of such expense. If a material irreconcilable conflict
arises because of First SunAmerica's decision to disregard Contract owner voting
instructions and that decision represents a minority position or would preclude
a majority vote, First SunAmerica may be required, at Fund's election, to
withdraw the Variable Account's investment in the Fund, and no charge or penalty
will be imposed against the Variable Account as a result of such a withdrawal.
First SunAmerica agrees to take such remedial action as may be required under
this paragraph 12 with a view only to the interests of its Contract owners. For
purposes of this paragraph 12, a majority of the disinterested members of the
Board shall determine whether or not any proposed action adequately remedies any
irreconcilable conflict, but in no event will Fund be required to establish a
new funding medium for any variable Contracts. First SunAmerica shall not be
required by this paragraph 12 to establish a new funding medium for any variable
Contract if an offer to do so has been declined by vote of a majority of
affected Contract owners.
13. In discharging its responsibilities under paragraphs 9, 10 and 12
hereinabove, First SunAmerica will cooperate and coordinate, to the extent
necessary, with the Board and with other participating Insurers. Fund agrees
that it will require, as a condition to participation, that all Participating
Insurers shall have obligations and responsibilities regarding conflicts of
interest corresponding to those that are agreed to herein by First SunAmerica
pursuant to such paragraphs 9, 10 and 12 and pursuant to this paragraph 13.
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14. This Agreement shall terminate:
(a) at the option of First SunAmerica or the Fund upon 60 days'
advance written notice to all other parties to this Agreement;
or
(b) at the option of First SunAmerica if any of the Fund's shares
are not reasonably available to meet the requirements of the
Contracts funded in the Variable Account as determined by First
SunAmerica. Prompt notice of election to terminate shall be
furnished by First SunAmerica; or
(c) at the option of First SunAmerica upon institution of formal
proceedings against the Fund by the Securities and Exchange
Commission; or
(d) upon the vote of Contract owners having an interest in a
particular Division of the Variable Account to substitute the
shares of another investment company for the corresponding Fund
Portfolio shares in accordance with the terms of the Contracts
for which those Fund shares had been selected to serve as the
underlying investment medium. First SunAmerica will give 30
days' prior written notice to the Fund of the date of any
proposed action to replace the Fund's shares; or
(e) in the event 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 medium of the Contracts funded in the Variable
Account. Prompt notice shall be given by each party to all
other parties in the event that the conditions stated in
subsections (b), (c) or (d) of this paragraph 14 should occur.
15. Notwithstanding any other provisions of this Agreement, the
obligations of the Fund hereunder are not personally binding upon any of the
trustees, shareholders, officers, employees or agents of the Fund; resort in
satisfaction of such obligations shall be had only to the assets and property of
the Fund and not to the private property of any of such Fund's trustees,
shareholders, officers, employees or agents.
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16. This Agreement shall be construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
FIRST SUNAMERICA LIFE INSURANCE COMPANY
By: XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
VARIABLE ANNUITY ACCOUNT ONE
BY: FIRST SUNAMERICA LIFE INSURANCE
COMPANY
By: XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
ANCHOR SERIES TRUST
By: XXXX XXXXXXX
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Xxxx Xxxxxxx
Vice President
Acknowledged and Agreed:
ROYAL ALLIANCE ASSOCIATES, INC.
By: XXXXX X. XXXXXX Dated: January 18, 1990
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Xxxxx X. Xxxxxx
Secretary
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