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EXHIBIT (8)(b)
FUND PARTICIPATION AGREEMENT
AGREEMENT, made on this 14th day of May, 1997, between ANCHOR NATIONAL
LIFE INSURANCE COMPANY ("Anchor National"), a life insurance company organized
under the laws of the State of Arizona, on behalf of itself and on behalf of
VARIABLE SEPARATE ACCOUNT ("Variable Account"), a separate account of Anchor
National existing pursuant to the laws of the State of Arizona, and SUNAMERICA
SERIES TRUST ("Fund"), an open-end management investment company established
pursuant to the laws of the Commonwealth of Massachusetts under a Declaration
of Fund dated September 11, 1992, which is composed of multiple investment
series ("Portfolios").
WITNESSETH:
WHEREAS, Anchor National, by resolution, 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 Anchor National; 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") to fund variable annuity contracts marketed under the name the
POLARIS II VARIABLE ANNUITY; 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 Anchor Advisor (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 CAPITAL SERVICES, INC. ("Distributor"), which
serves as the distributor for the Contracts funded in the Variable Account
pursuant to
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an agreement with Anchor National on behalf of itself and the Variable Account
is a broker-dealer registered as such under the Securities Exchange Act of 1934
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, Anchor National (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. Anchor National, 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, Anchor National 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 Anchor National 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 Anchor National 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 ("1933 Act").
4. The Fund will redeem the shares of the various Portfolios when
requested by Anchor National 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.
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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 Anchor National 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 Anchor National 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. Anchor National 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. Anchor National, 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 prospects.
9. Anchor National and the Fund acknowledge that in the future,
the Fund's shares 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 Anchor National (collectively with Anchor
National, "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,
Anchor National 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 Anchor National pursuant to
such paragraphs 10, 11 and 12 and pursuant to this paragraph 9.
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10. Anchor National 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. Anchor National 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. Anchor National 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. Anchor National 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. Anchor National 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 Anchor National 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 Anchor National 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 Anchor National Contract owners, Anchor National
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
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managed separate account. Anchor National shall take such steps at its expense
if the conflict affects solely the interests of the owners of Anchor National
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 Anchor National, 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 Anchor
National's decision to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote,
Anchor National 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. Anchor National
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. Anchor National shall not be
required by this paragraph 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 Anchor National or the Fund upon 60
days' advance written notice to all other parties to
this Agreement; or
(b) at the option of Anchor National 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 Anchor National. Prompt
notice of election to terminate shall be furnished by
Anchor National; or
(c) at the option of Anchor National 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. Anchor National will
give 30 days' prior written notice to the Fund of the
date of any proposed action to replace the Fund's
shares; or
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(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.
16. This Agreement shall be construed in accordance with the laws
of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ANCHOR NATIONAL LIFE INSURANCE COMPANY
By: ___________________________________
Xxxxx X. Xxxxxx
Senior Vice President
VARIABLE SEPARATE ACCOUNT
BY: ANCHOR NATIONAL LIFE INSURANCE
COMPANY
By: ___________________________________
Xxxxx X. Xxxxxx
Senior Vice President
SUNAMERICA SERIES TRUST
By: ___________________________________
Xxxxxx X. Xxxxx
Assistant Secretary
Acknowledged and Agreed:
SUNAMERICA CAPITAL SERVICES, INC.
By: __________________________ Dated: _____________________________
J. Xxxxxx Xxxxxx
President
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