CLASS B MASTER
PARTICIPATION AGREEMENT
AMONG
PHOENIX LIFE INSURANCE COMPANY
PHOENIX EQUITY PLANNING CORPORATION
ALLIANCEBERNSTEIN L.P.
AND
ALLIANCEBERNSTEIN INVESTMENTS, INC.
DATED AS OF
APRIL 1, 2008
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 1ST day of April 1, 2008
("Agreement"), by and among Phoenix Life Insurance Company, a New York life
insurance company ("Insurer") (on behalf of itself and its "Separate Account,"
defined below); Phoenix Equity Planning Corporation, a Connecticut corporation
("Contracts Distributor"), the principal underwriter with respect to the
Contracts referred to below; AllianceBernstein L.P., a Delaware limited
partnership ("Adviser"), the investment adviser of the Fund referred to below;
and AllianceBernstein Investments, Inc., a Delaware corporation
("Distributor"), the Fund's principal underwriter (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and AllianceBernstein Variable Products
Series Fund, Inc. (the "Fund") desire that Class B shares of the Fund's
Portfolios listed on Schedule A (the "Portfolios"; reference herein to the
"Fund" includes reference to each Portfolio to the extent the context requires)
be made available by Distributor to serve as underlying investment media for
those combination fixed and variable annuity contracts of Insurer that are the
subject of Insurer's Form N-4 registration statement filed with the Securities
and Exchange Commission (the "SEC"), (the "Contracts"), to be offered through
Contracts Distributor and other registered broker-dealer firms as agreed to by
Insurer and Contracts Distributor; and
WHEREAS the Contracts provide for the allocation of net amounts received by
Insurer to separate series (the "Divisions"; reference herein to the "Separate
Account" includes reference to each Division to the extent the context
requires) of the Separate Account for investment in Class B shares of
corresponding Portfolios of the Fund that are made available through the
Separate Account to act as underlying investment media,
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NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer for this purpose at net asset value and with no
sales charges, all subject to the following provisions:
Section 1. Additional Portfolios
The Fund has and may, from time to time, add additional Portfolios, which
will become subject to this Agreement, if, upon the written consent of each of
the Parties hereto, they are made available as investment media for the
Contracts.
Section 2. Processing Transactions
2.1 Timely Pricing and Orders.
The Adviser or its designated agent will provide closing net asset value,
dividend and capital gain information for each Portfolio to Insurer at the
close of trading on each day (a "Business Day") on which (a) the New York Stock
Exchange is open for regular trading, (b) the Fund calculates the Portfolio's
net asset value and (c) Insurer is open for business. The Fund or its
designated agent will use its best efforts to provide this information by 6:00
p.m., Eastern time. Insurer will use these data to calculate unit values, which
in turn will be used to process transactions that receive that same Business
Day's Separate Account Division's unit values. Such Separate Account processing
will be done the same evening, and corresponding orders with respect to Fund
shares will be placed the morning of the following Business Day. Insurer will
use its best efforts to place such orders with the Fund by 10:00 a.m., Eastern
time.
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2.2 Timely Payments.
Insurer will transmit orders for purchases and redemptions of Fund shares to
Distributor, and will wire payment for net purchases to a custodial account
designated by the Fund on the day the order for Fund shares is placed, to the
extent practicable. Payment for net redemptions will be wired by the Fund to an
account designated by Insurer on the same day as the order is placed, to the
extent practicable, and in any event be made within six calendar days after the
date the order is placed in order to enable Insurer to pay redemption proceeds
within the time specified in Section 22(e) of the Investment Company Act of
1940, as amended (the "1940 Act").
2.3 Redemptions In Cash. The Distributor agrees, on behalf of the fund, upon
the Company's request, to redeem for cash, any full or fractional Portfolio
shares held by the Contracts/Separate Accounts based on orders placed by
Contract owners on that Business Day.
2.4 Redemption in Kind.
Not withstanding Section 2.3, the Fund reserves the right to pay any portion
of a redemption in kind of portfolio securities, if the Fund's board of
directors (the "Board of Directors") determines that it would be detrimental to
the best interests of shareholders to make a redemption wholly in cash.
2.5 Applicable Price.
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the
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close of regular trading on the New York Stock Exchange on the Business Day
that Insurer receives such orders and processes such transactions, which,
Insurer agrees shall occur not earlier than the Business Day prior to
Distributor's receipt of the corresponding orders for purchases and redemptions
of Portfolio shares. For the purposes of this section, Insurer shall be deemed
to be the agent of the Fund for receipt of such orders from holders or
applicants of contracts, and receipt by Insurer shall constitute receipt by the
Fund. All other purchases and redemptions of Portfolio shares by Insurer, will
be effected at the net asset values next computed after receipt by Distributor
of the order therefor, and such orders will be irrevocable. Insurer hereby
elects to reinvest all dividends and capital gains distributions in additional
shares of the corresponding Portfolio at the record-date net asset values until
Insurer otherwise notifies the Fund in writing, it being agreed by the Parties
that the record date and the payment date with respect to any dividend or
distribution will be the same Business Day.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided herein, each Party will bear all
expenses incident to its performance under this Agreement.
3.2 Registration.
The Fund will bear the cost of its registering as a management investment
company under the 1940 Act and registering its shares under the Securities Act
of 1933, as amended (the "1933 Act"), and keeping such registrations current
and effective; including, without limitation, the preparation of and filing
with the SEC of Forms N-SAR and Rule 24f-2 Notices respecting the Fund and its
shares
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and payment of all applicable registration or filing fees with respect to any
of the foregoing. Insurer will bear the cost of registering the Separate
Account as a unit investment trust under the 1940 Act and registering units of
interest under the Contracts under the 1933 Act and keeping such registrations
current and effective; including, without limitation, the preparation and
filing with the SEC of Forms N-SAR and Rule 24f-2 Notices respecting the
Separate Account and its units of interest and payment of all applicable
registration or filing fees with respect to any of the foregoing.
3.3 Other (Non-Sales-Related) Expenses.
The Fund will bear the costs of preparing, filing with the SEC and setting
for printing the Fund's prospectus, statement of additional information and any
amendments or supplements thereto (collectively, the "Fund Prospectus"),
periodic reports to shareholders, Fund proxy material and other shareholder
communications and any related requests for voting instructions from
Participants (as defined below). Insurer will bear the costs of preparing,
filing with the SEC and setting for printing, the Separate Account's
prospectus, statement of additional information and any amendments or
supplements thereto (collectively, the "Separate Account Prospectus"), any
periodic reports to owners, annuitants or participants under the Contracts
(collectively, "Participants"), and other Participant communications. The Fund
and Insurer each will bear the costs of printing in quantity and delivering to
existing Participants the documents as to which it bears the cost of
preparation as set forth above in this Section 3.3, it being understood that
reasonable cost allocations will be made in cases where any such Fund and
Insurer documents are printed or mailed on a combined or coordinated basis. If
requested by Insurer, the Fund will provide annual Prospectus text to Insurer
on diskette for printing and binding with the Separate Account Prospectus.
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3.4 Other Sales-Related Expenses.
Expenses of distributing the Portfolio's shares and the Contracts will be
paid by Contracts Distributor and other parties, as they shall determine by
separate agreement.
3.5 Parties to Cooperate.
The Adviser, Insurer, Contracts Distributor, and Distributor each agrees to
cooperate with the others, as applicable, in arranging to print, mail and/or
deliver combined or coordinated prospectuses or other materials of the Fund and
Separate Account.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) The Adviser will use its best efforts to qualify and to maintain
qualification of each Portfolio as a regulated investment company ("RIC") under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Adviser or Distributor will notify Insurer immediately upon having a
reasonable basis for believing that a Portfolio has ceased to so qualify or
that it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the Contracts
will be treated as annuity contracts under applicable provisions of the Code
and that it will make every effort to maintain such treatment. Insurer will
notify the Fund and Distributor immediately upon having a reasonable basis for
believing that any of the Contracts have ceased to be so treated or that they
might not be so treated in the future.
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(c) The Fund will use its best efforts to comply and to maintain each
Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the
Code, and the Fund, Adviser or Distributor will notify Insurer immediately upon
having a reasonable basis for believing that a Portfolio has ceased to so
comply or that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the Separate
Account is a "segregated asset account" and that interests in the Separate
Account are offered exclusively through the purchase of or transfer into a
"variable contract," within the meaning of such terms under Section 817(h) of
the Code and the regulations thereunder. Insurer will make every effort to
continue to meet such definitional requirements, and it will notify the Fund
and Distributor immediately upon having a reasonable basis for believing that
such requirements have ceased to be met or that they might not be met in the
future.
(e) The Adviser will manage the Fund as a RIC in compliance with Subchapter
M of the Code and will use its best efforts to manage to be in compliance with
Section 817(h) of the Code and regulations thereunder. The Fund has adopted and
will maintain procedures for ensuring that the Fund is managed in compliance
with Subchapter M and Section 817(h) and regulations thereunder.
(f) Should the Distributor or Adviser become aware of a failure of Fund, or
any of its Portfolios, to be in compliance with Subchapter M of the Code or
Section 817(h) of the Code and regulations thereunder, they represent and agree
that they will immediately notify Insurer of such in writing.
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4.2 Insurance and Certain Other Laws.
(a) The Adviser will use its best efforts to cause the Fund to comply with
any applicable state insurance laws or regulations, to the extent specifically
requested in writing by Insurer. If it cannot comply, it will so notify Insurer
in writing.
(b) Insurer represents and warrants that (i) it is an insurance company duly
organized, validly existing and in good standing under the laws of the State of
Connecticut and has full corporate power, authority and legal right to execute,
deliver and perform its duties and comply with its obligations under this
Agreement, (ii) it has legally and validly established and maintains the
Separate Account as a segregated asset account under the State of Connecticut,
and (iii) the Contracts comply in all material respects with all other
applicable federal and state laws and regulations.
(c) Insurer and Contracts Distributor represent and warrant that Contracts
Distributor is a business corporation duly organized, validly existing, and in
good standing under the laws of the State of Connecticut and has full corporate
power, authority and legal right to execute, deliver, and perform its duties
and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and has full corporate power, authority and legal right to
execute, deliver, and perform its duties and comply with its obligations under
this Agreement.
(e) Distributor represents and warrants that the Fund is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Maryland and has full power, authority, and legal right to execute, deliver,
and perform its duties and comply with its obligations under this Agreement.
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(f) Adviser represents and warrants that it is a limited partnership, duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power, authority, and legal right to execute, deliver,
and perform its duties and comply with its obligations under this Agreement.
4.3 Securities Laws.
(a) Insurer represents and warrants that (i) interests in the Separate
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act and the Contracts will be duly authorized for
issuance and sold in compliance with the State of Connecticut law, (ii) the
Separate Account is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) the Separate Account does and will comply in
all material respects with the requirements of the 1940 Act and the rules
thereunder, (iv) the Separate Account's 1933 Act registration statement
relating to the Contracts, together with any amendments thereto, will, at all
times comply in all material respects with the requirements of the 1933 Act and
the rules thereunder, and (v) the Separate Account Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and the
rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund shares
sold pursuant to this Agreement will be registered under the 1933 Act to the
extent required by the 1933 Act and duly authorized for issuance and sold in
compliance with Maryland law, (ii) the Fund is and will remain registered under
the 1940 Act to the extent required by the 1940 Act, (iii) the Fund will amend
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the registration statement for its shares under the 1933 Act and itself under
the 1940 Act from time to time as required in order to effect the continuous
offering of its shares, (iv) the Fund does and will comply in all material
respects with the requirements of the 1940 Act and the rules thereunder,
(v) the Fund's 1933 Act registration statement, together with any amendments
thereto, will at all times comply in all material respects with the
requirements of the 1933 Act and rules thereunder, and (vi) the Fund Prospectus
will at all times comply in all material respects with the requirements of the
1933 Act and the rules thereunder.
(c) The Fund will register and qualify its shares for sale in accordance
with the laws of any state or other jurisdiction only if and to the extent
reasonably deemed advisable by the Fund, Insurer or any other life insurance
company utilizing the Fund.
(d) Distributor and Contracts Distributor each represents and warrants that
it is registered as a broker-dealer with the SEC under the Securities Exchange
Act of 1934, as amended, and is a member in good standing of the Financial
Industry Regulatory Authority (the "FINRA").
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) Distributor or the Fund shall immediately notify Insurer of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to the Fund's registration statement
under the 1933 Act or the Fund Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or Fund Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Fund's shares, or (iv) any
other action or circumstances that may prevent the lawful offer or sale of Fund
shares in any state or jurisdiction, including, without limitation, any
circumstances in which (x)
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the Fund's shares are not registered and, in all material respects, issued and
sold in accordance with applicable state and federal law or (y) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer. Distributor and the Fund will make
every reasonable effort to prevent the issuance of any such stop order, cease
and desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
(b) Insurer and Contracts Distributor shall immediately notify the Fund of
(i) the issuance by any court or regulatory body of any stop order, cease and
desist order or similar order with respect to the Separate Account's
registration statement under the 1933 Act relating to the Contracts or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment to
such registration statement or Separate Account Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Separate Account interests
pursuant to the Contracts, or (iv) any other action or circumstances that may
prevent the lawful offer or sale of said interests in any state or
jurisdiction, including, without limitation, any circumstances in which said
interests are not registered and, in all material respects, issued and sold in
accordance with applicable state and federal law. Insurer and Contracts
Distributor will make every reasonable effort to prevent the issuance of any
such stop order, cease and desist order or similar order and, if any such order
is issued, to obtain the lifting thereof at the earliest possible time.
4.5 Insurer to Provide Documents.
Upon request, Insurer will provide the Fund and the Distributor one complete
copy of SEC registration statements, Separate Account Prospectuses, reports,
any preliminary and final voting instruction solicitation material, and
amendments to any of the above, that relate to the Separate Account or the
Contracts, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
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4.6 Fund to Provide Documents.
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and final
proxy material 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 SEC
or other regulatory authorities.
4.7 Shareholder Information
(a) Agreement to Provide Information. The Insurer agrees to provide the
Distributor upon written request, the taxpayer identification number ("TIN"),
if known, of any or all Shareholder(s) of the account and the amount, date,
name or other identifier of any investment professional(s) associated with the
Shareholder(s) or account (if known), and transaction type (purchase,
redemption, transfer, or exchange) of every purchase, redemption, transfer, or
exchange of Shares held through an account maintained by the Insurer
("Transaction Information") during the period covered by the request.
(1) Frequency and Period Covered by Request. Requests for Transaction
Information must set forth a specific period, not to exceed 90 days from the
date of the request, for which Transaction Information is sought. The
Distributor may request Transaction Information older than 90 days from the
date of the request as it deems necessary to investigate compliance with
policies established by the Fund for purpose of eliminating or reducing any
dilution of the value of the outstanding shares issued by the Fund. Requests
for Transaction Information shall be made no more frequently than quarterly,
except to the extent that the Distributor or Fund needs to examine a specific
instance(s) which it believes may be harmful to the Fund.
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(2) Form and Timing of Response. The Insurer agrees to transmit the
requested information that is on its books and records to the Distributor or
their designee promptly, but in any event not later than 10 business days,
after receipt of a request. If the requested information is not on the
Insurer's books and records, the Insurer agrees to use reasonable efforts to:
(i) provide or arrange to provide to the Distributor the requested information
regarding Shareholders who hold an account with an indirect intermediary; or
(ii) if directed by the Distributor, block further purchase of Fund Shares from
such indirect intermediary.
In such instance, the Insurer agrees to inform the Distributor whether it plans
to perform (i) or (ii). Responses required by this paragraph must be
communicated in writing and in a format mutually agreed upon by the parties. To
the extent practicable, the format for any transaction information provided to
the Distributor should be consistent with the NSCC Standardized Data Reporting
Format. For purposes of this provision "indirect intermediary" has the same
meaning as in SEC Rule 22c-2 under the Investment Company Act of 1940.
(3) Limitations on Use of Information. The Distributor agrees to only use
Transaction Information for the purposes of identifying Shareholders who may be
violating the Fund's policies and procedures with respect to dilution of the
Fund's value as contemplated by Rule 22C-2 or to fulfill other regulatory or
legal requirements subject to the privacy provisions of Title V of the
Xxxxx-Xxxxx Xxxxxx Act (Public Law 106-102) and comparable state laws. The Fund
and Distributor agree that the Transaction Information is confidential and will
not share the Transaction Information externally, unless the Insurer provides
the Fund and Distributor with prior written consent. The Fund and the
Distributor agrees not to share the Transaction Information
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internally, except on a "need to know basis. The Fund and the Distributor
further agree to notify the Insurer's Chief Privacy Officer immediately in the
event that the confidentiality of the Transaction Information is breached.
(4) Transmitting Shareholder Information. The Fund and the Distributor agree
that when transmitting Transaction Information by electronic writing that the
Transaction Information will be protected by encryption, password, or some
other form of secure transmission, which will adequately protect the
confidentiality of the Transaction Information. The Fund agrees that it will
not send Shareholder Information by facsimile.
(b) Agreement to Prohibit Trading. The Insurer agrees to execute written
instructions from the Distributor to prohibit further purchase or exchanges of
Shares by a Shareholder that has been identified by the Distributor as having
engaged in transactions of the Fund's Shares (directly or indirectly through
the Insurer's account) that violate policies established by the Distributor for
the purpose of eliminating or reducing any dilution of the value of the
outstanding Shares issued by the Fund.
(1) Form of Instructions. Instructions must include the TIN, if known, and
the specific restriction(s) to be executed. If the TIN is not known, the
instructions must include an equivalent identifying number of the
Shareholder(s) or account(s) or other agreed upon information to which the
instruction relates.
(2) Timing of Response. The Insurer agrees to execute instructions as soon
as reasonably practicable, but not later than 5 business days after receipt of
the instructions by the Insurer.
(3) Confirmation by the Insurer. The Insurer must provide written
confirmation to the Distributor that instructions have been executed. The
Insurer agrees to provide confirmation as soon as reasonably practicable, but
no later than 10 business days after the instructions have been executed.
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(c) Definitions. For purposes of this Section:
(1) The term "Shares" means the interests of the Shareholders corresponding
to the redeemable securities of record issued by the Fund under the Investment
Company Act of 1940 that are held by the Insurer.
(2) The term "Shareholder" means the holder of interests in a variable
annuity or a variable life insurance contract issued by the Insurer.
(3) The term "written" includes electronic writings and facsimile
transmissions.
(d) Scope of This Section 4. The purpose of this Section 4 is to share
Transaction Information with the Fund to allow the Fund to allow the Fund to
administer its own definition of disruptive trading.
Section 5. Mixed and Shared Funding
5.1 General.
The Fund has obtained an order exempting it from certain provisions of the
1940 Act and rules thereunder so that the Fund is available for investment by
certain other entities, including, without limitation, separate accounts
funding variable life insurance policies and separate accounts of insurance
companies unaffiliated with Insurer ("Mixed and Shared Funding Order"). The
Parties recognize that the SEC has imposed terms and conditions for such orders
that are substantially identical to many of the provisions of this Section 5.
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5.2 Disinterested Directors.
The Fund agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of Adviser or Distributor within the meaning of Section 2(a)(19) of the
1940 Act.
5.3 Monitoring for Material Irreconcilable Conflicts.
The Fund agrees that its Board of Directors will monitor for the existence
of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing the
Fund, including the Separate Account. Insurer agrees to inform the Board of
Directors of the Fund of the existence of or any potential for any such
material irreconcilable conflict of which it is aware. The concept of a
"material irreconcilable conflict" is not defined by the 1940 Act or the rules
thereunder, but the Parties recognize that such a conflict may arise for a
variety of reasons, including, without limitation:
(a) an action by any state insurance or other 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;
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(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract participants or by participants of
different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to disregard
the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue raised,
including information as to a decision by Insurer to disregard voting
instructions of Participants.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, Insurer and the other life insurance
companies utilizing the Fund will, at their own 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
material irreconcilable conflict, which steps may include, but are not limited
to:
(i)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 another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented
to a vote of all affected participants and, as appropriate, segregating
the assets of any particular group (e.g., annuity contract
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owners or participants, life insurance contract owners or all contract
owners and participants of one or more life insurance companies
utilizing the Fund) that votes in favor of such segregation, or offering
to the affected contract owners or participants the option of making
such a change; and
(ii)establishing a new registered investment company of the type defined as
a "Management Company" in Section 4(3) of the 1940 Act or a new separate
account that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of Insurer's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, Insurer may
be required, at the Fund's election, to withdraw the Separate Account's
investment in the Fund. No charge or penalty will be imposed as a result of
such withdrawal. Any such withdrawal must take place within six months after
the Fund gives notice to Insurer that this provision is being implemented, and
until such withdrawal Distributor and the Fund shall continue to accept and
implement orders by Insurer for the purchase and redemption of shares of the
Fund.
(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to Insurer conflicts with the
majority of other state regulators, then Insurer will withdraw the Separate
Account's investment in the Fund within six months after the Fund's Board of
Directors informs Insurer that it has determined that such decision has created
a material irreconcilable conflict, and until such withdrawal Distributor and
Fund shall continue to accept and implement orders by Insurer for the purchase
and redemption of shares of the Fund.
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(d) Insurer agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will the Fund or Distributor be
required to establish a new funding medium for any Contracts. Insurer will not
be required by the terms hereof to establish a new funding medium for any
Contracts if an offer to do so has been declined by vote of a majority of
Participants materially adversely affected by the material irreconcilable
conflict.
5.5 Notice to Insurer.
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and the
implications of such conflict.
5.6 Information Requested by Board of Directors.
Insurer and the Fund will at least annually submit to the Board of Directors
of the Fund such reports, materials or data as the Board of Directors may
reasonably request so that the Board of Directors may fully carry out the
obligations imposed upon it by the provisions hereof, and said reports,
materials and data will be submitted at any reasonable time deemed appropriate
by the Board of Directors. All reports received by the Board of Directors of
potential or existing conflicts, and all Board of Directors actions with regard
to determining the existence of a conflict, notifying life insurance companies
utilizing the Fund of a conflict, and determining whether any proposed action
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adequately remedies a conflict, will be properly recorded in the minutes of the
Board of Directors or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
5.7 Compliance with SEC Rules.
If, at any time during which the Fund is serving as an investment medium for
variable life insurance policies, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to mixed and shared funding, the Parties agree that they will comply
with the terms and conditions thereof and that the terms of this Section 5
shall be deemed modified if and only to the extent required in order also to
comply with the terms and conditions of such exemptive relief that is afforded
by any of said rules that are applicable.
Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least six months advance
written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance written
notice to the other parties, and (ii) approval by (x) a majority of the
disinterested Directors upon a finding that a continuation of this Contract is
contrary to the best interests of the Fund, or (y) a majority vote of the
shares of the affected Portfolio in the corresponding Division of the Separate
Account (pursuant to the procedures set forth in Section 11 of this Agreement
for voting Trust shares in accordance with Participant instructions).
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(c) at the option of the Fund upon institution of formal proceedings against
Insurer or Contracts Distributor by the FINRA, the SEC, any state insurance
regulator or any other regulatory body regarding Insurer's obligations under
this Agreement or related to the sale of the Contracts, the operation of the
Separate Account, or the purchase of the Fund shares, if, in each case, the
Fund reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on the Portfolio to be terminated; or
(d) at the option of Insurer upon institution of formal proceedings against
the Fund, Adviser, or Distributor by the FINRA, the SEC, or any state insurance
regulator or any other regulatory body regarding the Fund's, Adviser's or
Distributor's obligations under this Agreement or related to the operation or
management of the Fund or the purchase of Fund shares, if, in each case,
Insurer reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on Insurer, Contracts Distributor or the Division
corresponding to the Portfolio to be terminated; or
(e) at the option of any Party in the event that (i) the Portfolio's shares
are not registered and, in all material respects, issued and sold in accordance
with any applicable state and federal law or (ii) such law precludes the use of
such shares as an underlying investment medium of the Contracts issued or to be
issued by Insurer; or
21
(f) upon termination of the corresponding Division's investment in the
Portfolio pursuant to Section 5 hereof; or
(g) at the option of Insurer if the Portfolio ceases to qualify as a RIC
under Subchapter M of the Code or under successor or similar provisions; or
(h) at the option of Insurer if the Portfolio fails to comply with
Section 817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer if Insurer reasonably believes that any change
in a Fund's investment adviser or investment practices will materially increase
the risks incurred by Insurer.
6.2 Funds to Remain Available.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with respect to any Portfolio
as to which this Agreement has terminated, Insurer shall not (x) redeem Fund
shares attributable to the Contracts, or (y) prevent Participants from
allocating payments to or transferring amounts from a Portfolio that was
otherwise available under the Contracts, until, in either case, 90 calendar
days after Insurer shall have notified the Fund or Distributor of its intention
to do so.
6.3 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
22
6.4 Continuance of Agreement for Certain Purposes.
Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (the "Existing Contracts"), except as
otherwise provided under Section 5 of this Agreement. Specifically, and without
limitation, the Distributor shall facilitate the sale and purchase of shares of
the Portfolios as necessary in order to process premium payments, surrenders
and other withdrawals, and transfers or reallocations of values under Existing
Contracts.
Section 7. Parties to Cooperate Respecting Termination
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
Section 8. Assignment
Except as provided for in the following situation, this Agreement may only
be assigned, by any Party, with the written consent of each Party. However, the
Insurer retains the right, in its sole discretion, to substitute the Contracts
Distributor for any other registered broker-dealer while this Agreement, or any
portion thereof, is in effect ("Substitution"). Insurer will provide 30 days
notice of such Substitution to Adviser or Distributor.
23
Section 9. Class B Distribution Payments
From time to time during the term of this Agreement the Distributor may make
payments to the Contracts Distributor pursuant to a distribution plan adopted
by the Fund with respect to the Class B shares of the Portfolios pursuant to
Rule 12b-1 under the 1940 Act (the "Rule 12b-1 Plan) in consideration of the
Contracts Distributor's furnishing distribution services relating to the Class
B shares of the Portfolios and providing administrative, accounting and other
services, including personal service and/or the maintenance of Participant
accounts, with respect to such shares. The Distributor has no obligation to
make any such payments, and the Contracts Distributor waives any such payment,
until the Distributor receives monies therefor from the Fund. Any such payments
made pursuant to this Section 9 shall be subject to the following terms and
conditions:
(a) Any such payments shall be in such amounts as the Distributor may from
time to time advise the Contracts Distributor in writing but in any event not
in excess of the amounts permitted by the Rule 12b-1 Plan. Such payments may
include a service fee in the amount of .25 of 1% per annum of the average daily
net assets of the Fund attributable to the Class B shares of a Portfolio held
by clients of the Contracts Distributor. Any such service fee shall be paid
solely for personal service and/or the maintenance of Participant accounts.
(b) The provisions of this Section 9 relate to a plan adopted by the Fund
pursuant to Rule 12b-1. In accordance with Rule 12b-1, any person authorized to
direct the disposition of monies paid or payable by the Fund pursuant to this
Section 9 shall provide the Fund's Board of Directors, and the Directors shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
24
(c) The provisions of this Section 9 shall remain in effect for not more
than a year and thereafter for successive annual periods only so long as such
continuance is specifically approved at least annually in conformity with Rule
12b-1 and the 1940 Act. The provisions of this Section 9 shall automatically
terminate in the event of the assignment (as defined by the 0000 Xxx) of this
Agreement, in the event the Rule 12b-1 Plan terminates or is not continued or
in the event this Agreement terminates or ceases to remain in effect. In
addition, the provisions of this Section 9 may be terminated at any time,
without penalty, by either the Distributor or the Contracts Distributor with
respect to any Portfolio on not more than 60 days' nor less than 30 days'
written notice delivered or mailed by registered mail, postage prepaid, to the
other party.
Section 10. Notices
Notices and communications required or permitted by Section 2 hereof will be
given by means mutually acceptable to the Parties concerned. Each other notice
or communication required or permitted by this Agreement will be given to the
following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
Phoenix Life Insurance Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000-0000
Att: Xxxx X. Xxxxx
FAX: (000) 000-0000
Phoenix Equity Planning Corporation
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000-0000
Att: Xxxx X. Xxxxx
FAX: (000) 000-0000
25
AllianceBernstein Investments, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn.: Xxxxxx X. Xxxxxxx
FAX: (000) 000-0000
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn: Xxxxxx X. Xxxxxxx
FAX: (000) 000-0000
Section 11. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof,
Insurer will distribute all proxy material furnished by the Fund to
Participants and will vote Fund shares in accordance with instructions received
from Participants. Insurer will vote Fund shares that are (a) not attributable
to Participants or (b) attributable to Participants, but for which no
instructions have been received, in the same proportion as Fund shares for
which said instructions have been received from Participants. Insurer agrees
that it will disregard Participant voting instructions only to the extent it
would be permitted to do so pursuant to Rule 6e-3 (T)(b)(15)(iii) under the
1940 Act if the Contracts were variable life insurance policies subject to that
rule. Other participating life insurance companies utilizing the Fund will be
responsible for calculating voting privileges in a manner consistent with that
of Insurer, as prescribed by this Section 11.
26
Section 12. Foreign Tax Credits
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
Section 13. Indemnification
13.1 Indemnification of Fund, Distributor and Adviser by Insurer.
(a) Except to the extent provided in Sections 13.1(b) and 13.1(c), below,
Insurer agrees to indemnify and hold harmless the Fund, Distributor and
Adviser, each of their directors and officers, and each person, if any, who
controls the Fund, Distributor or Adviser within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 13. 1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Insurer) or
actions in respect thereof (including, to the extent reasonable, 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 actions are related to the sale, acquisition,
or holding of the Fund's shares and:
(i)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Separate Account's 1933
Act registration statement, the Separate Account Prospectus, the
Contracts or, to the extent prepared by Insurer or Contracts
Distributor, sales literature or advertising 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
27
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 Insurer or Contracts
Distributor by or on behalf of the Fund, Distributor or Adviser for use
in the Separate Account's 1933 Act registration statement, the Separate
Account Prospectus, the Contracts, or sales literature or advertising
(or any amendment or supplement to any of the foregoing); or
(ii)arise out of or as a result of any other statements or representations
(other than statements or representations contained in the Fund's 1933
Act registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of Insurer or
Contracts Distributor) or the negligent, illegal or fraudulent conduct
of Insurer or Contracts Distributor or persons under their control
(including, without limitation, their employees and "Associated
Persons," as that term is defined in paragraph (m) of Article I of the
FINRA's By-Laws), in connection with the sale or distribution of the
Contracts or Fund shares; or
(iii)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or advertising
of the Fund, or any amendment or supplement to any of the foregoing, or
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
28
statements therein not misleading if such a statement or omission was
made in reliance upon and in conformity with information furnished to
the Fund, Adviser or Distributor by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act registration statement, Fund
Prospectus, sales literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing; or
(iv)arise as a result of any failure by Insurer or Contracts Distributor to
perform the obligations, provide the services and furnish the materials
required of them under the terms of this Agreement.
(b) Insurer shall not be liable under this Section 13.1 with respect to any
losses, claims, damages, liabilities or actions to which an Indemnified Party
would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance by that Indemnified Party of its duties or
by reason of that Indemnified Party's reckless disregard of obligations or
duties under this Agreement or to Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 13.1 with respect to any
action against an Indemnified Party unless the Fund, Distributor or Adviser
shall have notified Insurer in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
action 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 Insurer of any such action shall not relieve
Insurer from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 13. 1. In
case any such action is brought against an Indemnified Party, Insurer shall be
entitled to participate, at its own
29
expense, in the defense of such action. Insurer also shall be entitled to
assume the defense thereof, with counsel approved by the Indemnified Party
named in the action, which approval shall not be unreasonably withheld. After
notice from Insurer to such Indemnified Party of Insurer's election to assume
the defense thereof, the Indemnified Party will cooperate fully with Insurer
and shall bear the fees and expenses of any additional counsel retained by it,
and Insurer will not be liable to such Indemnified Party under this Agreement
for any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof, other than reasonable
costs of investigation.
13.2 Indemnification of Insurer and Contracts Distributor by Adviser.
(a) Except to the extent provided in Sections 13.2(d) and 13.2(e), below,
Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor, each of their directors and officers, and each person, if any, who
controls Insurer or Contracts Distributor within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 13.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Adviser) or
actions in respect thereof (including, to the extent reasonable, 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 actions are related to the sale, acquisition, or holding of the
Fund's shares and:
(i)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or advertising
of the Fund or, to the extent not prepared by Insurer or Contracts
Distributor, sales literature or advertising for the Contracts
30
(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
Distributor, Adviser or the Fund by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act registration statement, Fund
Prospectus, or in sales literature or advertising (or any amendment or
supplement to any of the foregoing); or
(ii)arise out of or as a result of any other statements or representations
(other than statements or representations contained in the Separate
Account's 1933 Act registration statement, Separate Account Prospectus,
sales literature or advertising for the Contracts, or any amendment or
supplement to any of the foregoing, not supplied for use therein by or
on behalf of Distributor, Adviser, or the Fund) or the negligent,
illegal or fraudulent conduct of the Fund, Distributor, Adviser or
persons under their control (including, without limitation, their
employees and Associated Persons), in connection with the sale or
distribution of the Contracts or Fund shares; or
(iii)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Separate Account's 1933
Act registration statement, Separate Account Prospectus, sales
literature or advertising covering the Contracts, or any amendment or
supplement to any of the foregoing, or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to
31
make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with information
furnished to Insurer or Contracts Distributor by or on behalf of the
Fund, Distributor or Adviser for use in the Separate Account's 1933 Act
registration statement, Separate Account Prospectus, sales literature or
advertising covering the Contracts, or any amendment or supplement to
any of the foregoing; or
(iv)arise as a result of any failure by the Fund, Adviser or Distributor to
perform the obligations, provide the services and furnish the materials
required of them under the terms of this Agreement;
(b) Except to the extent provided in Sections 13.2(d) and 13.2(e) hereof,
Adviser agrees to indemnify and hold harmless the Indemnified Parties from and
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement thereof with, except as set forth in Section 13.2(c) below,
the written consent of Adviser) or actions in respect thereof (including, to
the extent reasonable, legal and other expenses) to which the Indemnified
Parties may become subject directly or indirectly under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
actions directly or indirectly result from or arise out of the failure of any
Portfolio to operate as a regulated investment company in compliance with
(i) Subchapter M of the Code and regulations thereunder and (ii) Section 817(h)
of the Code and regulations thereunder (except to the extent that such failure
is caused by Insurer), including, without limitation, any income taxes and
related penalties, rescission charges, liability under state law to Contract
owners or Participants asserting liability against Insurer or Contracts
Distributor pursuant to the Contracts, the costs of any ruling and closing
agreement or other settlement with the Internal Revenue Service, and the cost of
32
any substitution by Insurer of shares of another investment company or
portfolio for those of any adversely affected Portfolio as a funding medium for
the Separate Account that Insurer deems necessary or appropriate as a result of
the noncompliance.
(c) The written consent of Adviser referred to in Section 13.2(b) above
shall not be required with respect to amounts paid in connection with any
ruling and closing agreement or other settlement with the Internal Revenue
Service.
(d) Adviser shall not be liable under this Section 13.2 with respect to any
losses, claims; damages, liabilities or actions to which an Indemnified Party
would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance by that Indemnified Party of its duties or
by reason of such Indemnified Party's reckless disregard of its obligations and
duties under this Agreement or to Insurer, Contracts Distributor or the
Separate Account.
(e) Adviser shall not be liable under this Section 13.2 with respect to any
action against an Indemnified Party unless Insurer or Contracts Distributor
shall have notified Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
action 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 Adviser of any such action shall not relieve
Adviser from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 13.2. In
case any such action is brought against an Indemnified Party, Adviser will be
entitled to participate, at its own expense, in the defense of such action.
Adviser also shall be entitled to assume the defense thereof (which shall
include, without limitation, the conduct of any ruling request and
33
closing agreement or other settlement proceeding with the Internal Revenue
Service), with counsel approved by the Indemnified Party named in the action,
which approval shall not be unreasonably withheld. After notice from Adviser to
such Indemnified Party of Adviser's election to assume the defense thereof, the
Indemnified Party will cooperate fully with Adviser and shall bear the fees and
expenses of any additional counsel retained by it, and Adviser will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
13.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party referred
to in Section 13.1(c) or 13.2(e) above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
Section 14. Applicable Law
This Agreement will be construed and the provisions hereof interpreted under
and in accordance with Connecticut law, without regard for that state's
principles of conflict of laws.
Section 15. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
34
Section 16. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 17. Rights Cumulative
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, that the Parties are entitled to under federal and state
laws.
Section 18. Restrictions on Sales of Fund Shares
Insurer agrees that the Fund will be permitted (subject to the other terms
of this Agreement) to make its shares available to separate accounts of other
life insurance companies.
Section 19. Headings
The Table of Contents and headings used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions
of this Agreement.
35
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below.
PHOENIX LIFE INSURANCE COMPANY,
By:
-----------------------------
Name: Xxxx Xxxxxxx X'Xxxxxxx
Title: Senior Vice President
PHOENIX EQUITY PLANNING CORPORATION
By:
-----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and Secretary
ALLIANCEBERNSTEIN LP
By:
-----------------------------
Name:
Title:
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By:
-----------------------------
Name:
Title:
36
SCHEDULE A
Available Portfolios:
AllianceBernstein VPS Balanced Wealth Strategy Portfolio
AllianceBernstein VPS Wealth Appreciation Strategy Portfolio
Participating Separate Accounts:
Phoenix Life Accumulation Account
Phoenix Life Variable Universal Life Account
37
