AMENDED AND RESTATED
PARTICIPATION AGREEMENT
BY AND AMONG
AID ASSOCIATION FOR LUTHERANS
AND
AID ASSOCIATION FOR LUTHERANS SAVINGS PLAN
AND
AAL CAPITAL MANAGEMENT CORPORATION
AND
AAL VARIABLE PRODUCT SERIES FUND, INC.,
DATED JANUARY 1, 2000
TABLE OF CONTENTS
Page
1. Sale of FUND Shares.....................................................3
2. Representations and Warranties..........................................4
3. Prospectus and Proxy Statements: Voting.................................5
4. Sales Material and Information..........................................5
5. Monitoring of Material Irreconcilable Conflicts.........................6
6. Fees and Expenses.......................................................7
7. Diversification.........................................................8
8. Indemnification.........................................................9
9. Term and Termination of This Agreement.................................12
10. Notices................................................................13
11. Miscellaneous..........................................................13
PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT, is made and entered into as of this 1st day
of January, 2000, by and among AID ASSOCIATION FOR LUTHERANS ("AAL"), on its own
behalf and as plan sponsor of the Aid Association for Lutherans Savings Plan and
AID ASSOCIATION FOR LUTHERANS SAVINGS PLAN (the "PLAN"), AAL CAPITAL MANAGEMENT
CORPORATION ("AAL CMC"), and AAL VARIABLE PRODUCT SERIES FUND, INC. (the
"FUND"), (collectively the "Parties").
WITNESSETH:
WHEREAS, AAL is a fraternal benefit society organized under the laws of the
State of Wisconsin engaged in the writing of life insurance, annuity contracts,
and other insurance products, and serves as plan sponsor of the;
WHEREAS, the PLAN is a qualified retirement plan established under Section
401(k) of the Internal Revenue Code by AAL for the benefit of its employees and
the employees of its subsidiaries and affiliates;
WHEREAS, the FUND, is registered with the Securities and Exchange
Commission (the "SEC"), as a diversified, open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act"), and its shares are
registered with the SEC under the Securities Act of 1933 (the "1933 Act");
WHEREAS, the FUND is a series company, meaning its Board of Directors may
designate various series ("Portfolios") into which the FUND's authorized shares
are to be divided from time to time, with each such Portfolio consisting of a
specific number of the FUND's authorized shares, representing an interest in a
separate portfolio of securities and other assets, and having its own investment
objectives, policies and restrictions;
WHEREAS, to the extent permitted by applicable insurance, tax, ERISA, and
other laws and regulations, the PLAN intends to purchase shares in the FUND on
behalf of the PLAN's participants, and the FUND is authorized to sell such
shares to the PLAN at net asset value;
WHEREAS, the FUND has entered into an Investment Advisory Agreement with
AAL CMC, dated the 1st day of January, 2000, as amended, wherein AAL CMC has
agreed to serve as investment adviser to the FUND, and to accept certain
obligations of the FUND as set forth herein, i.e., to compute the daily net
asset value and the net asset value per share for each Portfolio and to comply
with Subchapter M and Section 817(h) of the Internal Revenue Code of 1986 (the
"Code"), as amended;
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein, and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the Parties agree as follows:
1. SALE OF FUND SHARES
1.1 The PLAN will provide for the allocation of net amounts among
certain Portfolios as may be offered from time to time in the
PLAN's document. The selection of the particular Portfolio is to
be made by the Plan Participant, and such selection may be changed
in accordance with the terms of the PLAN's document.
1.2 The FUND will sell to the PLAN those shares of each available
Portfolio that the PLAN administrator or its delegate orders based
on authorizations from its participants, effecting such orders on
a daily basis at the Portfolio's net asset value per share next
computed as provided in the FUND prospectus.
1.3 The Board of Directors of the FUND (the "Board") may refuse to
sell shares of any Portfolio to the PLAN, or suspend or terminate
the offering of shares of any Portfolio, if such action is
required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board, acting in good faith
and in light of their fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the
shareholders of the FUND.
1.4 The FUND agrees that its shares will be sold only to: (a) AAL, on
its own behalf and on behalf of separate accounts that it
maintains to fund variable annuity contracts and variable life
insurance contracts of AAL; (b) other life insurance companies;
whether affiliated or unaffiliated with AAL, on behalf of separate
accounts funding variable annuity contracts and variable life
insurance contracts of such other insurance companies; (c) the
PLAN; and (d) other qualified pension or retirement plans. AAL
separate accounts and separate accounts of other life insurance
companies eligible to purchase shares of the FUND are referred to
in this Agreement as "Separate Accounts," and the PLAN and other
qualified pension and or retirement plans eligible to purchase
shares of the FUND are referred to together in this Agreement as
"Qualified Plans." No shares of any Portfolio will be sold to the
general public or to any life insurance company on its own behalf
(as opposed to a Separate Account it maintains) other than AAL.
1.5 The FUND will redeem for cash from the PLAN those full or
fractional shares of each Portfolio that the PLAN requests based
on transactions of the PLAN's participants, effecting such
requests on a daily basis at the Portfolio's net asset value per
share next computed as provided in the FUND prospectus.
1.6 Issuance and transfer of the FUND's shares will be by book entry
only. Stock certificates will not be issued to the PLAN. Shares
ordered from the FUND will be recorded in an appropriate title for
the PLAN.
1.7 The FUND shall furnish notice promptly to the PLAN administrator
or its delegate of any income, dividends or capital gain
distributions payable on the shares of any Portfolio. The PLAN
hereby elects to receive all such income, dividends and capital
gain distributions as are payable on FUND shares in additional
shares of that Portfolio. The PLAN reserves the right to revoke
this election and to receive all such income, dividends and
capital gain distributions in cash. The FUND shall notify the PLAN
administrator or its delegate of the number of shares so issued as
payment of such income, dividends and distributions.
1.8 The FUND shall make the net asset value per share for each
applicable Portfolio available to PLAN on a daily basis, as soon
as reasonably practical after the net asset value per share is
calculated.
1.9 The FUND may establish additional Portfolios to provide additional
funding media for the PLAN, or delete, combine, or modify existing
Portfolios. The shares of any additional Portfolio may be made
available to the PLAN by the FUND, pursuant to the terms of this
Agreement, and any applicable reference to any Portfolio, the FUND
or its shares herein shall include a reference to any such
Portfolio.
2. REPRESENTATIONS AND WARRANTIES
2.1 AAL represents and warrants that it is a fraternal benefit society
organized under the laws of the State of Wisconsin and engaged in
the writing of life insurance, annuity contracts, and other
insurance products; that it has legally and validly established
its PLAN as a qualified retirement plan under section 401(k) of
the Internal Revenue Code of 1986, as amended. AAL has applied for
and received a valid determination letter from the Internal
Revenue Service for the PLAN. The PLAN complies with the Employee
Retirement Income Security Act of 1974 and all relevant federal
and state statutory provisions.
2.2 The FUND represents and warrants that its shares sold pursuant to
this Agreement are or will be registered under the 1933 Act to the
extent required by the 1933 Act, duly authorized for issuance and
sold in compliance with the laws of the state of Maryland and all
applicable federal securities laws and that the FUND is or will be
registered under the 1940 Act to the extent required by the 1940
Act. The FUND will amend the registration statement for its shares
under the 1933 Act, as well as its registration statement under
the 1940 Act, as required in order to effect the continuous
offering of its shares. The FUND will register or qualify the
shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by the FUND.
2.3 The FUND represents and warrants that each of its Portfolios will
qualify as a regulated investment company under Subchapter M of
the Code and that the investments of each of its Portfolios will
comply with the diversification requirements of Section 817(h) of
the Code and the regulations thereunder, and that it will notify
the PLAN immediately upon having a reasonable basis for believing
that it has ceased to so qualify or that it might not so qualify
in the future.
3. PROSPECTUS AND PROXY STATEMENTS: VOTING
3.1 The FUND will provide the PLAN administrator or its delegate with
current FUND prospectus, statement of additional information and
any supplement thereto in a manner so as to allow the PLAN
administrator or its delegate to timely distribute the current
FUND prospectus, SAI and any supplement thereto, to each current
and prospective PLAN participant.
3.2 The FUND will provide a final copy of any proxy material, report
to shareholders, and other communication to shareholders to the
PLAN administrator or its delegate in a timely manner.
3.3 The FUND reserves the right to take all actions, including but not
limited to the dissolution, merger, and sale of all assets of the
FUND solely upon the authorization of its Board and/or
shareholders as required by the 0000 Xxx.
3.4 The PLAN will vote Portfolio shares in accordance with the terms
of the PLAN documents.
4. SALES MATERIAL AND INFORMATION
4.1 The PLAN administrator or its delegate will furnish, or will cause
to be furnished, to the FUND or its designee, each piece of sales
literature or other promotional material in which the FUND, or the
PLAN is named, at least fifteen (15) days prior to its intended
use. No such material will be used if the FUND or its designee
objects to such intended use within fifteen (15) days after
receipt of such material.
4.2 The PLAN will not give any information or make any representation
or statement, or cause such information to be given or
representation to be made, on behalf of the FUND or concerning any
Portfolio in connection with the sale of FUND shares other than
the information or representations contained in the registration
statement, prospectus, and SAI for FUND shares, as such
registration statement, prospectus, and SAI may be amended or
supplemented from time to time, or in reports or proxy materials
for the FUND, or in sales literature or other promotional material
approved by the FUND or its designee, except with the permission
of the FUND or its designee.
4.3 The FUND or its designee will furnish, or will cause to be
furnished, to the PLAN administrator or its delegate, each piece
of sales literature or other promotional material of the FUND in
which the PLAN is named, at least fifteen (15) days prior to its
intended use. No such material will be used if the PLAN
administrator or its delegate objects to such intended use within
fifteen (15) days after receipt of such material.
4.4 The FUND will not give any information or make any representations
or statements, or cause such information to be given or
representations to be made, on behalf of or concerning the PLAN
other than the information or representations contained in a
registration statement or prospectus, as such registration
statement and prospectus may be amended or supplemented from time
to time, or in published reports for the PLAN that are in the
public domain or approved by the PLAN administrator or its
delegate for distribution to PLAN Participants, or in sales
literature or other promotional material approved by the PLAN
administrator or its delegate, except with the permission of the
PLAN administrator or its delegate.
4.5 The FUND will provide to the PLAN one complete copy of all
registration statements, prospectuses, SAI's, reports, proxy
material, sales literature and other promotional material,
applications for exemptions, requests for no-action letters, 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.
4.6 The PLAN will provide to the FUND one complete copy of all
reports, sales literature and other promotional material,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the PLAN and
the FUND, contemporaneously with the filing of such document with
the SEC, IRS or other regulatory authorities.
5. MONITORING OF MATERIAL IRRECONCILABLE CONFLICTS
5.1 The FUND's Board of Directors will monitor the FUND for the
existence of any materials irreconcilable conflict between and
among the interests of the Certificateholders of the Separate
Accounts investing in the FUND and the participants of the PLAN,
and any other Qualified Plans investing in the FUND. A material
irreconcilable conflict may arise for a variety of reasons,
including: (a) 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, no-action or interpretive 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 investment of the FUND are being
managed; (e) a difference in voting instructions given by variable
annuity Certificateholders and variable universal life
Certificateholders of the Separate Accounts vis-a-vis voting
instructions provided by the trustees of the Qualified Plans; (f)
a decision by AAL or another life insurance company to disregard
the voting instructions of Certificateholders in one or more of
the Separate Accounts; or (g) if applicable, a decision by the
trustee of a Qualified Plan to disregard the voting instructions
of the participants of such Qualified Plan. A determination by the
FUND's Board that a material irreconcilable conflict exists will
be a final determination.
5.2 If it is determined by a majority of the FUND's Board, or by a
majority of its disinterested directors, that a material
irreconcilable conflict exists, the PLAN shall, at its expense and
to the extent reasonably practicable (as determined by a majority
of the disinterested directors of the FUND), take whatever steps
are necessary to remedy or eliminate the material irreconcilable
conflict. Such steps could include withdrawing the assets
allocable to the PLAN from the FUND or any Portfolio of the FUND
(but no charge or penalty shall be imposed as a result of
withdrawal) and reinvesting such assets in a different investment
medium, which could include another Portfolio of the FUND.
5.3 The PLAN is responsible, to the extent permitted by applicable
law, for taking remedial action in the event that the FUND's Board
determines a material irreconcilable conflict exists. The PLAN
will take remedial action only as it pertains to PLAN assets and
in accordance with its fiduciary responsibility to the PLAN
participants. The PLAN will be responsible for the cost of any
such remedial action. For the purposes of this Section, a majority
of the disinterested members of the FUND's Board will determine
whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event shall the FUND or
AAL be required to establish a new Portfolio or new funding medium
for any variable annuity or variable universal life contract. The
PLAN will not be required by this Section to establish a new
funding medium if (a) a majority of its participants materially
and adversely affected by the irreconcilable material conflict
vote to decline such offer or (b) pursuant to the PLAN's documents
and applicable law, the PLAN makes such decision without a vote of
its participants.
5.4 The FUND's Board determination of the existence of a material
irreconcilable conflict and its implications will be made known
promptly and in writing to the PLAN administrator.
5.5 All reports of potential or existing conflicts received by the
FUND's Board and all Board actions with regard to, or determining
the existence of, a conflict of interest, notifying the PLAN of a
conflict, and determining whether any proposed action adequately
remedies a conflict, will be properly recorded in the minutes of
the FUND's Board or other appropriate records, and such minutes or
other records will be made available to the SEC upon request.
5.6 The FUND will disclose in its prospectus that (a) shares of the
FUND may be offered to both Separate Accounts and to Qualified
Plans; (b) material irreconcilable conflicts may arise between the
interest of various Certificateholders investing in the Separate
Accounts and the interests of Qualified Plans participants
investing in the FUND; and (c) the FUND's Board will monitor
events in order to identify the existence of any material conflict
and determine what action, if any, should be taken in response to
such material irreconcilable conflict.
5.7 No less than annually, the PLAN will submit to the FUND's Board
such reports, materials and data as the Board may reasonably
request so that the Board may carry out fully its obligations
under this Section. Such reports, materials and data will be
submitted more frequently if deemed appropriate by the FUND's
Board. In any event, the PLAN promptly will notify the FUND's
Board in writing if it becomes aware of any facts or circumstances
that could give rise to a material irreconcilable conflict between
the interests of various Certificateholders in the Separate
Accounts and the interests of the Qualified Plan participants
investing in the FUND. All reports submitted to the FUND's Board
under this Section 5.7 shall include all information reasonably
necessary for the Board to consider the conflict issues raised. In
this regard, if the PLAN documents ever permit pass-through voting
to plan participants, the PLAN promptly shall notify the FUND's
Board whenever the PLAN trustee has determined to disregard PLAN
participant voting instructions on any matter submitted to a vote
of shareholders of the FUND.
6. FEES AND EXPENSES
6.1 The FUND will pay all expenses incident to the FUND's performance
under this Agreement. In addition to the investment advisory fee,
subject to the expense reimbursement arrangement discussed below,
each Portfolio will bear all of its operating expenses that are
not specifically assumed by AAL, including the following: (i)
interest and taxes (ii) brokerage commissions; (iii) insurance
premiums; (iv) compensation and expenses for those Directors who
are not "interested" persons under Section 2(a)(19) of the Act;
(v) independent legal and audit expenses; (vi) fees and expenses
of the FUND's custodian, shareholder servicing or transfer agent
and accounting services agent; (vii) expenses incident to the
issuance of its shares, including stock certificates and issuance
of shares on the payment of, or reinvestment of dividends; (viii)
fees and expenses incident to the registration under Federal or
state securities laws of the FUND or its shares; (ix) FUND or
portfolio organizational expenses; (x) FUND expenses of preparing,
printing and mailing reports and notices, proxy material and
prospectuses to shareholders of the FUND; (xi) all other expenses
incidental to holding meetings of the FUND's shareholders; (xii)
dues or assessments of or contributions to the Investment Company
Institute or any successor or other industry association; (xiii)
such non-recurring expenses as may arise, including litigation
affecting the FUND and the legal obligations which the FUND may
have to indemnify its officers and Directors with respect thereto;
and (xiv) cost of daily valuation of each of the Portfolio's
securities and net asset value per share.
6.2 AAL will pay all expenses incident to AAL's performance under this
Agreement. In addition, AAL will pay for all expenses for the
printing and distribution to the PLAN administrator or its
delegate the FUND proxy materials, proxy cards and voting
instructions forms (collectively "proxy information"), tabulating
the results of proxy solicitations, printing and distributing to
the PLAN administrator or its delegate the FUND prospectus, SAI,
supplements, proxy materials, report to shareholders and other
communication to shareholders.
6.3 The PLAN will pay all expenses incident to the PLAN's performance
under this Agreement. In addition, the PLAN will bear any expenses
associated with administration of the PLAN.
7. DIVERSIFICATION
7.1 The Portfolios will be invested in accordance with the terms of
the FUND's prospectus and the PLAN document. Without limiting the
scope of the foregoing, the Portfolios will at all times comply
with Section 817(h) of the Code and Treasury Regulations Section
1.817-5 relating to the diversification requirements for
segregated asset accounts and any amendments or other
modifications to such Section or Regulations.
7.2 The FUND shall furnish to the PLAN, on a regular basis, reports of
all of the investments of each Portfolio in a form sufficient to
permit the PLAN to determine whether each Portfolio is in
compliance with the diversification requirements of Section 817(h)
of the Code and the Regulations thereunder and shall take
immediate action, on learning through its own monitoring, or on
advice from AAL or the PLAN, that any Portfolio is not in
compliance with such requirements, to return to compliance with
such requirements.
7.3 If any Portfolio is found not to comply with the diversification
requirements at the end of a calendar quarter and the 30-day grace
period allowed under the Regulations, the FUND shall take all
appropriate efforts immediately to restore any such Portfolio to
compliance and shall fully cooperate with the PLAN in any effort
to correct such diversification failure under procedures
established by the Internal Revenue Service, including those set
forth in Revenue Procedure 92-25.
8. INDEMNIFICATION
8.1 Indemnification by AAL, as PLAN Sponsor
(a) AAL, as PLAN sponsor, will indemnify and hold harmless the
FUND and each of its Directors, officers, and employees and
each person, if any, who controls the FUND (collectively, the
"Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent
of AAL and the PLAN), or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, and
which:
(i) arise out of or are based upon any failure by the PLAN or
AAL to perform the duties or assume the general business
responsibilities of the PLAN with respect to the design,
drafting, federal approvals, issuance, servicing and
administration of the PLAN, or the establishment and
maintenance of the PLAN; or
(ii) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained
in the registration statement, prospectus, or SAI
regarding the PLAN, or contained in the sales literature
for the PLAN (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 will 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 in writing to
AAL or the PLAN by or on behalf of the FUND for use in the
registration statement, prospectus, or SAI for the PLAN or
in the PLAN or sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the FUND shares to PLAN participants; or
(iii) arise out of or are based upon statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI,
or sales literature of the FUND not supplied by the PLAN,
or persons under its control), or wrongful conduct of the
PLAN or persons under its control, or failure to supervise
persons under AAL's or the PLAN's control or entities or
individuals with which the PLAN contracts, with respect to
the sale or distribution of the FUND shares to PLAN
participants; or
(iv)arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the FUND or
any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement
or omission was made in reliance upon information
furnished in writing to the FUND by or on behalf of AAL;
or
(v) arise out of or result from any failure by AAL or the PLAN
to provide the services and furnish the materials
contemplated by this Agreement; or
(vi)arise out of or result from any material breach of any
representation and/or warranty made by AAL: in this
Agreement or arise out of or result from any other
material breach of this Agreement by AAL or the PLAN, as
limited by and in accordance with the provisions of
Sections 8.1(b). and 8.1(c) hereof.
(b) AAL will not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would be subject by
reason of such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this
Agreement or to the FUND, whichever is applicable.
(c) AAL will not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified the AAL in
writing within a reasonable time after the summons or other
first legal process giving information of the nature of the
claim 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
AAL of any such claim will not relieve AAL from any liability
that it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the AAL and or the PLAN shall
be entitled to participate, at its own expense, in the defense
thereof. AAL also will be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from AAL to such party of the AAL's
election to assume the defense thereof, the Indemnified Party
will bear the fees and expenses of any additional counsel
retained by it, and AAL will not be liable to such party under
this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
(d) The Indemnified Party will promptly notify the AAL of the
commencement of any litigation or proceeding against it or any
of its respective officers or directors in connection with
transactions that are the subject of this Agreement whether or
not indemnification is being sought hereunder.
8.2 Indemnification by the FUND
(a) The FUND will indemnify and hold harmless the PLAN and each of
its directors, officers and employees and each person, if any,
who controls the PLAN (collectively, the "Indemnified Parties"
for purposes of this Section 8.2) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of FUND) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, regulation, at
common law or otherwise, which:
(i) arise out of or are based upon any failure by the FUND to
perform the duties or assume the general business
responsibilities required by this Agreement with respect
to the sale of shares of the FUND to the PLAN; or
(ii) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained
in the sales literature for the FUND and/or the
Certificates, 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 will 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 in writing to
the FUND by or on behalf of the PLAN for use in the
registration statement, prospectus, or SAI for use in the
sales literature or otherwise for use in connection with
the sale of Portfolio shares; or
(iii) arise out of or are based upon statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI,
or sales literature of the FUND not supplied by the FUND,
or persons under its control) or wrongful conduct of the
FUND or persons under its control, or failure to supervise
persons under the FUND's control or entities or
individuals with which the FUND contracts, with respect to
the sale or distribution of the Certificates or FUND
shares; or
(iv) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the FUND or
any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement
or omission was made in reliance upon information
furnished in writing to the PLAN by or on behalf of the
PLAN; or
(v) arise out of or result from any failure by the FUND to
provide the services and furnish the materials
contemplated by this Agreement; or
(vi) arise out of or result from any material breach of any
representation and/or warranty made by the FUND in this
Agreement or arise out of or result from any other
material breach of this Agreement by the FUND, except to
the extent provided in Section 8.2(b) and 8.2(c) hereof.
(b) The FUND will not be liable under this indemnification
provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would
be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations or
duties under this Agreement or to the FUND, whichever is
applicable.
(c) The FUND will not be liable under this indemnification
provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have
notified the FUND in writing within a reasonable time after
the summons or other first legal process giving information of
the nature of the claim 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 the FUND of any such claim will not relieve
the FUND from any liability that it may have to the
Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the FUND shall be entitled to participate, at its own
expense, in the defense thereof. The FUND also will be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the FUND to such party of the FUND's election to assume
the defense thereof, the Indemnified Party will bear the fees
and expenses of any additional counsel retained by it, and the
FUND will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Indemnified Party will promptly notify the FUND of the
commencement of any litigation or proceeding against it or any
of its respective officers or directors in connection with
transactions that are the subject of this Agreement whether or
not indemnification is being sought hereunder.
9. TERM AND TERMINATION OF THIS AGREEMENT
9.1 This Agreement will terminate:
(a) as to any party hereto, at the option of that party, upon
prior written notice to the other party as provided in Section
9.3 herein; or
(b) at the option of the FUND in the event that formal
administrative proceedings are instituted against the PLAN by
the IRS, DOL or any other regulatory body regarding the PLAN's
duties under this Agreement or related to the sale of shares
to PLAN participants, the operation of the PLAN, provided,
however, that the FUND determines, in its sole judgment
exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the
ability of the PLAN to perform its obligations under this
Agreement; or
(c) at the option of the PLAN in the event that formal
administrative proceedings are instituted against the FUND by
the NASD, the SEC, or any state securities or insurance
commission or any other regulatory body, regarding the FUND's
duties under this Agreement or related to the sale of FUND
shares or the operation of the FUND, provided, however, that
the PLAN determines, in its sole judgment exercised in good
faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the FUND to
perform its obligations under this Agreement; or
(d) at the option of the PLAN, upon requisite authority to
substitute the shares of another investment company for shares
of the FUND in accordance with the PLAN investment policy or
standards of conduct; or
(e) at the option of the PLAN, in the event any of the FUND's
shares are not registered, issued, or sold in accordance with
applicable federal and any state law or such law precludes the
use of such shares as an investment of the PLAN; or
(f) at the option of the PLAN, if the FUND fails to meet the
requirements specified in Section 2.2 or 2.3 hereof; or
(g) at the option of the FUND, if the investments of the PLAN
fail to satisfy the diversification requirements of the Code
and the regulations thereunder, or
(h) at the option of the PLAN, if the FUND dissolves or becomes
otherwise unable to sell shares to fund the PLAN.
9.2 It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 9.1(a) may be
exercised for any reason or for no reason.
9.3 Notice Requirement for Termination. No termination of this
Agreement will be effective unless and until the party terminating
this Agreement gives prior written notice to the other party to
this Agreement of its intent to terminate, and such notice shall
set forth the basis for such termination. Furthermore,
(a) in the event that any termination is based upon the provisions
of Section 9.1(a) hereof, such prior written notice shall be
given at least sixty (60) days in advance of the effective
date of termination as required by such provision;
(b) in the event that any termination is based upon the provisions
of Section 9.1(b) or Section 9.1(c) hereof, such prior written
notice shall be given at least sixty (60) days in advance of
the effective date of termination;
(c) in the event that any termination is based upon the provisions
of Section 9.1(d) hereof, the PLAN will give at least sixty
(60) days prior written notice to the FUND of the date of any
proposed action to substitute FUND shares, including the
filing of any applicable exemptive application under the 1940
Act relating to the PLAN; and the PLAN will provide the FUND
with a copy of any such exemptive application; and
(d) in the event that any termination is based upon the provisions
of Section 9.1(e), Section 9.1(f), or Section 9.1(g) hereof,
such prior written notice shall be given as soon as possible
within twenty-four (24) hours after the terminating party
learns of the event causing termination to be required.
9.4 Partial Termination. It is also understood that this Agreement may
be terminated with regard to a specific Portfolio or Portfolios of
the FUND, or the entire FUND at the discretion of the terminating
party. Notwithstanding any termination of this Agreement, the
FUND, or any Portfolio, provided its shares are then available for
sale to any persons, shall at the option of the PLAN, continue to
make available additional shares of the FUND pursuant to the terms
and conditions of this Agreement, for all PLAN participants who
own FUND shares on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Shares").
Specifically, without limitation, the owners of Existing Shares
shall be permitted to transfer or reallocate investments under
terms of the PLAN, redeem investments in the FUND and/or invest in
the FUND upon the making of additional purchase payments under the
Existing Shares.
10. NOTICES
Any notice will be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to AAL or the PLAN: 0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
If to AAL CMC: 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Same
If to the FUND: 0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Same
11. MISCELLANEOUS
11.1 This Agreement will be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
Wisconsin, where the sale of any FUND share shall be deemed to
have been made; provided, however, that if such laws or any of the
provisions of this Agreement conflict with applicable Provisions
of the 1940 Act, the latter shall control.
11.2 If any provision of this Agreement will be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the
Agreement will not be effected thereby.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the 1st day of January, 2000.
AID ASSOCIATION FOR LUTHERANS AAL CAPITAL MANAGEMENT CORPORATION
By: /s/Xxxx X. Xxxxxxx By: /s/Xxxxxx X. Same
------------------------- -----------------------------
Xxxx X. Xxxxxxx Xxxxxx X. Same
President and President
Chief Executive Officer
By: /s/Xxxxxx X. Xxx By: /s/Xxxxxxxxx X. Xxxxxxx
------------------------- -----------------------------
Xxxxxxx X. Xxx Xxxxxxxxx X. Xxxxxxx
Senior Vice President, Secretary
Secretary and General Counsel
AID ASSOCIATION FOR LUTHERANS SAVINGS PLAN
By: /s/Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
Benefit Plan Administrative Officer
By: /s/Xxxxxxx X. Xxx
-------------------------
Xxxxxxx X. Xxx
Senior Vice President,
Secretary and General Counsel
