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EXHIBIT 8
FUND PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, is made on this 23rd day of
January, 1996, between PRESEDENTIAL LIFE INSURANCE COMPANY ("Presidential"), a
life insurance company organized under the laws of the State of New York, on
behalf of itself and on behalf of PRESIDENTIAL VARIABLE ACCOUNT ONE ("Variable
Account"), a separate account of Presidential existing pursuant to the laws of
the State of New York, and ANCHOR SERIES TRUST ("the Fund"), an open-end
management investment company established pursuant to the laws of the
Commonwealth of Massachusetts under a Declaration of Trust, as amended, dated
August 26, 1983, which is composed of multiple investment series ("Portfolios").
WITNESSETH:
WHEREAS, Presidential has established the Variable Account on its books
of account for the purpose of funding certain variable annuity contracts issued
by it; and
WHEREAS, the Variable Account is divided into various portfolios
("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 variable annuity contracts, credited to or charged against such
Division without regard to any income, gains or losses of other Divisions or
separate accounts of Presidential; 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, as amended ("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 each such Portfolio; and
WHEREAS, the Variable Account desires to purchase shares of the Fund in
connection with the issuance of certain variable annuity contracts to be
marketed under the name ICAP (collectively with other contracts and policies
that may be funded through the Fund, "Contracts"); and
WHEREAS, the Fund agrees to make shares of certain of its Portfolios
available to serve as underlying investment media for the corresponding
Divisions of the Variable Account; and
WHEREAS, SUNAMERICA SECURITIES, INC. ("Distributor"), which serves as
the distributor for the Contracts funded in the Variable Account pursuant to an
agreement with Presidential on behalf of itself and the Variable Account is a
broker-dealer registered as such under
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the Securities Exchange Act of 1934, as amended, and a member of the National
Association of Securities Dealers, Inc.;
NOW, THEREFORE, in consideration of the foregoing and of mutual
covenants and conditions set forth herein and for other good and valuable
consideration, Presidential (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 certain Divisions of the Variable Account
for investment in the shares of the particular portfolio of the Fund underlying
each such 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 or amount of such
Contracts to be sold. Presidential, pursuant to its agreement with Distributor,
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, Presidential will accept payments and otherwise service existing
Contracts funded in the Variable Account.
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 Presidential 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 Presidential 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
to be made available to the appropriate Division(s) under the Contracts are
registered at all times under the Securities Act of 1933, as amended ("1933
Act").
4. The Fund will redeem the shares of the various Portfolios when
requested by Presidential 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.
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6. The Fund shall furnish notice promptly to Presidential of any
dividend or distribution payable on its shares which are subject to this
Agreement. 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 Presidential 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 which are subject to this Agreement are registered and authorized for
issue in accordance with applicable federal and state laws prior to their
purchase by the Variable Account. Presidential 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 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. Presidential, either directly or through Distributor, shall make
no representations concerning the Fund's shares which are subject to this
Agreement 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 prospectus.
9. Presidential and the Fund acknowledge that, the Fund's shares
have been made or may become 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 Presidential (collectively with Presidential,
"Participating Insurers"). In such event, (a) the Fund shall undertake 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
Participating Insurers, for the purpose of identifying and remedying any such
conflict and (b) paragraphs 10, 11 and 12 shall apply. In discharging its
responsibilities under paragraphs 10, 11 and 12 hereinafter, Presidential will
cooperate and coordinate, to the extent necessary, with the Board and with other
Participating Insurers. The 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 Presidential pursuant to such paragraphs 10, 11 and 12 and
pursuant to this paragraph 9.
10. Presidential 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. Presidential shall be responsible for assuring that
the Variable Account calculates voting privilege in a manner consistent with
separate accounts of other Participating Insurers, as determined by the Board.
Presidential 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.
11. Presidential 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
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Contract owners of other Participating Insurers. Presidential 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 Presidential to
disregard voting instructions of its Contract owners.
12. The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly by it to
Presidential 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.
13. If it is determined by a majority of the Board or a majority of
its disinterested Trustees that a material irreconcilable conflict exists that
affects the interests of Presidential Contract owners, Presidential 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 (eg.,
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. Presidential shall take such
steps at its expense if the conflict affects solely the interests of the owners
of Presidential 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 Presidential, 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 Presidential's
decision to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, Presidential
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. Presidential agrees to take
such remedial action as may be required under this paragraph 13 with a view only
to the interests of its Contract owners. For purposes of this paragraph 13, 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. Presidential shall not be required by this paragraph
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13 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.
14. This Agreement shall terminate:
(a) at the option of Presidential or the Fund upon 60 days'
advance written notice to all other parties to this
Agreement; or
(b) at the option of Presidential 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 Presidential. Prompt notice of
election to terminate shall be furnished by
Presidential; or
(c) at the option of Presidential 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. Presidential 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) or 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.
16. This Agreement shall be construed in accordance with the laws of
the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PRESIDENTIAL L1FE INSURANCE COMPANY
By: /s/ XXXXXXX XXXXXX
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Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer
PRESIDENTIAL VARIABLE ACCOUNT ONE
By: PRESIDENTIAL LIFE INSURANCE COMPANY
By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
ANCHOR SERIES TRUST
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Secretary
Acknowledged and Agreed:
SUNAMERICA SECURITIES, INC.
By: /s/ XXXXXXX X. XXXXXXX Dated: 1/25/96
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Xxxxxxx X. Xxxxxxx
Xx. Vice President
General Counsel
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