FUND PARTICIPATION AGREEMENT
THIS FUND PARTICIPATION AGREEMENT made as of the _____ day of April,
2005 by and between AXA EQUITABLE LIFE INSURANCE COMPANY, a New York corporation
(the "Company"), and THE VANGUARD GROUP, INC., a Pennsylvania corporation, on
its own behalf and on behalf of each Vanguard Fund (as defined below) identified
in Schedule A attached hereto ("Vanguard").
W I T N E S S E T H:
WHEREAS, Vanguard provides services as transfer agent, dividend
disbursement agent, and shareholder servicing agent for the open-end, management
investment companies registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), that are included in the Vanguard Group of investment
companies (each, a "Vanguard Fund" and collectively, the "Vanguard Funds");
WHEREAS, the Company is a life insurance company which is supervised
and examined by state authorities having supervision over insurance companies;
WHEREAS, the Company provides participant accounting, recordkeeping and
administrative services with respect to the American Dental Association Members
Retirement Program, which meets the requirements of Sections 401(a) of the
Internal Revenue Code of 1986, as amended (the "Plan"); and
WHEREAS, the Plan allows for the allocation of net amounts received by
the Company to the Vanguard Funds identified on Schedule A hereto (the "Funds")
for investment in shares of those Funds; and
WHEREAS, selection of a particular Fund is made by the Plan participant
and such Plan participants may reallocate their investment options among the
Funds in accordance with the terms of the Plan; and
WHEREAS, the Company and Vanguard mutually desire the inclusion of the
Funds as investment options for the Plan; and
WHEREAS, it is intended that the Company will establish individual
accounts on its record-keeping system reflecting all transactions by or on
behalf of Plan participants and beneficiaries which result in purchases,
redemptions or current-day exchanges by the Plan of shares of the Funds;
WHEREAS, Vanguard will establish an account or accounts on its mutual
fund shareholder accounting system to reflect the Plan's ownership of shares of
the Funds and all transactions by the Plan involving such shares;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto, intending to be legally bound, hereby agree and
declare as follows:
1. Sale and Redemption of Fund Shares.
(a) Appointment of Company as Limited Agent. Subject to and in
accordance with the terms and procedures hereof, the Company is hereby appointed
as the limited agent of Vanguard, and the Company hereby accepts such
appointment, for the purpose of treating instructions received by the Company
from Plan participants (to the extent such instructions would result in the
purchase or redemption of Fund shares) ("Instructions") as receipt by Vanguard
of purchase and redemption orders for shares of the Funds. Notwithstanding the
Company's appointment hereunder as the limited agent of Vanguard for the sole
purpose of receiving Instructions for the purchase and redemption by the Plan of
shares of the Funds, the Company shall not be, nor hold itself out to the public
or engage in any activity as, an agent for Vanguard in respect of or in
connection with the distribution or marketing of shares of the Funds.
It is acknowledged and agreed by the parties that the
availability of shares of any Fund shall be subject to such Fund's then current
prospectus and Statement of Additional Information, federal and state securities
laws and applicable rules and regulations of the Securities and Exchange
Commission (the "SEC") and the National Association of Securities Dealers, Inc.
(the "NASD").
(b) Receipt of Instructions by Company. In the case of any
orders resulting from Instructions received by the Company on any day on which
the New York Stock Exchange is open for trading (a "Business Day") prior to the
time the net asset values of shares of the Funds are determined (the close of
trading on the New York Stock Exchange, generally 4:00 p.m. Eastern Time) (the
"Market Close"), such orders shall be accorded a trade date on Vanguard's
accounting system that is the date of receipt of the Instructions by the
Company, except as set forth in Section 3(e) below; provided that Vanguard
receives notice of such orders in accordance with the provisions of Section 3(d)
below. Any purchase or redemption order resulting from Instructions received by
the Company on any Business Day after the Market Close shall be accorded a trade
date on Vanguard's accounting system that is the next Business Day.
(c) Issuance of Fund Shares. Issuance and transfer of shares
of the Funds shall be by book entry only. Stock certificates will not be issued
to the Plan. Shares purchased from the Funds will be recorded on Vanguard's
accounting system in the appropriate Plan account based upon information
provided to Vanguard by the Company.
(d) Transmission of Orders by Company. Based on the
Instructions received by the Company on each Business Day, the Company shall
transmit to Vanguard by 8:30 a.m. Eastern Time on the following Business Day a
fax transmission containing the net purchase or redemption order, in dollars,
for shares of each Fund for the preceding Business Day. Each transmission by the
Company of a net purchase or redemption order shall constitute a representation
by the Company that such net order was based solely on Instructions from Plan
participants received by the Company prior to the Market Close on the previous
Business Day, and that such net order included
all Instructions so received by the Company. The Company shall maintain records
sufficient to identify the date and time of receipt of all Instructions
involving the Funds and shall make such records available upon request for
examination by Vanguard or its designated representative or, at the request of
Vanguard, by appropriate governmental authorities.
(e) Extraordinary Plan Events. The Company is not authorized
to accept as Vanguard's agent any individual purchase or redemption of shares in
an amount which equals or exceeds the "Large Transaction Amount" for a Fund (as
specified in Schedule B), where such order is the result of an "Extraordinary
Plan Event" of which the Company is aware, unless the Company has notified
Vanguard of such order, by calling the Company's assigned Vanguard associate, as
soon as practicable following the Company becoming aware of the Extraordinary
Event, and in no event later than 3:00 p.m. Eastern time on the trade date. For
these purposes, an "Extraordinary Plan Event" shall mean an event outside the
normal operation of the Plan such as the Plan moving into or out of a Fund or an
asset transfer arising from a Plan sponsor's merger, acquisition or divestiture.
In accordance with the prospectus of each Fund, Vanguard reserves the right to
refuse any purchase order, or to delay settlement of any redemption order, which
equals or exceeds the applicable Large Transaction Amount and results from an
Extraordinary Plan Event, which Vanguard, in its sole discretion, deems
disruptive or detrimental to the applicable Fund. In connection with any
redemption order that equals or exceeds the applicable Large Transaction Amount,
Vanguard reserves the right to delay delivery of redemption proceeds for up to
seven days or to effect the redemption through an in-kind distribution of
securities. Vanguard reserves the right to amend or revise Schedule B at any
time and will provide at least 24 hours' notice of such revision to the Company.
(f) Wiring of Funds. In the case of a net purchase order, the
Company shall remit or cause to be remitted to Vanguard the exact amount of
requisite funds to cover such order by Federal Funds wire by 4:00 p.m. Eastern
Time on the next Business Day after the net purchase order is received by the
Company in accordance with the provisions of Sections 3(b) and (d) hereof (the
"Settlement Date"). If a wire transfer relating to an aggregate purchase order
is not received by Vanguard prior to Market Close on the Settlement Date,
Vanguard reserves the right to (i) charge the Company interest on the amount of
the delayed wire as provided below or (ii) redeem the shares for which payment
has not been received.
In the case of a net redemption order, Vanguard shall remit or
cause to be remitted to the Company or its designee the exact amount of
requisite funds to cover such order by Federal Funds wire sent by Vanguard by
4:00 p.m. Eastern Time on the next Business Day after the net redemption order
is received by the Company in accordance with the provisions of Sections 3(b)
and (d) hereof; provided, however, that in the event that the Plan's account in
a Fund is redeemed in full such that it will have a zero balance on such
Business Day, Vanguard reserves the right to wire, or to cause to be wired, the
redemption proceeds within the time frame set forth in the applicable Fund
prospectus. If net redemption proceeds are not received by the Company or its
designee by Market Close on the Settlement Date, Vanguard shall pay the Company
or its designee interest on the amount of the delayed wire as provided below.
In the event that a wire is delayed, the interest owed shall
be deemed to be the interest cost on the delayed funds until paid, charged at
the Federal Funds "offered" rate as published by The Wall Street Journal.
(g) Transmission by Vanguard of Share Price and Distribution
Information. Vanguard shall transmit to the Company by 7:00 p.m. Eastern Time on
each Business Day a file identifying the net asset value per share (or "share
price") of the Funds as of the Market Close on that Business Day. Vanguard shall
also transmit to the Company by 7:00 p.m. Eastern Time on the first Business Day
following each record date established for the payment of dividends or capital
gains distributions by a Fund a file containing the dividend or capital gains
distribution rate for such payment. The Company shall not be entitled to rely on
any source of share price or distribution information other than such
transmission by Vanguard.
(h) Confirmations. Vanguard shall transmit to the Company by
8:30 a.m. Eastern Time on each Business Day a confirmation of any net purchase
or redemption orders for shares of the Funds with a trade date of the second
preceding Business Day. However, on any Business Day that is the first Business
Day of the month, Vanguard shall transmit such confirmation by 11:00 a.m.
Eastern Time.
(i) Processing Adjustments. Each business day the Company and
Vanguard will reconcile their records so that an appropriate number of shares of
each of the Funds is credited to the Plan accounts invested in the various Funds
with Vanguard.
(i) In the event of any error (other than a Pricing
Error, as hereinafter defined) or delay with respect to the
procedures outlined in this Section 3 which is caused by
Vanguard, Vanguard shall make any adjustments on its
accounting system necessary to correct such error or delay and
shall reimburse the Plan for any losses or reasonable costs
incurred directly as a result of the error or delay.
(ii) In the event of any error or delay with respect
to the procedures outlined in this Section 3 that is caused by
the Company, the Company shall adjust its records accordingly
in order to correct such error or delay. The Company will
notify Vanguard of the error and required correction and shall
reimburse Vanguard and the Funds for any losses or reasonable
costs incurred as a result of the error or delay. In the event
of an error or delay caused by the Company, Vanguard will
process any adjustment with the trade date of the day such
error or delay is identified by the Company to Vanguard.
(iii) The Company and Vanguard, respectively, each
agree to provide the other prompt notice of any errors or
delays of the type referred to in this Section 3(i) and to
use reasonable efforts to take such action as may be
appropriate to avoid or mitigate any such costs or losses.
(j) Pricing Errors. In the event of an error in the
computation of a Fund's net asset value per share which, in accordance with
procedures adopted by the Fund's Board of Trustees consistent with views
expressed by the staff of the Securities and Exchange Commission regarding
appropriate error correction standards, as shall be in effect or amended from
time to time, requires adjustment to transactions previously effected on behalf
of the Plan (a "Pricing Error"), Vanguard shall notify the Company as soon as
possible after discovery of the
Pricing Error. Such notification may be oral, but shall be confirmed promptly in
writing. In such event, Vanguard shall reimburse the affected Fund for any loss
and shall make appropriate adjustments to the Plan's accounts, which adjustments
shall net the impact of individual Plan participant gains and losses; this will
result in either a net payment to the Plan from Vanguard (in the event of net
Plan participant losses) or from the Plan to Vanguard (in the event of net Plan
participant gains). If any Plan participant receives, solely as a result of a
Pricing Error and prior to the Company's receipt of notice of such Pricing
Error, an amount in excess of the amount to which such participant is entitled
(an "overpayment"), the Company will make a good faith attempt to collect the
overpayment from such participant to the extent practicable and permitted by
law. If the Company's collection efforts are unsuccessful, the Company shall not
be required to repay the overpayment out of its own funds, provided the
overpayment was not the result of an error or other negligent act or omission on
the part of the Company, but shall provide Vanguard with the name and address of
the Plan participant to whom such overpayment was made. In the event that the
Pricing Error causes the Company to incur any direct costs for re-processing
Plan accounts, such as preparing and mailing revised statements or attempting to
collect material overpayments, Vanguard shall reimburse the Company for all such
reasonable costs upon receipt from the Company of an invoice or other statement
documenting such costs in reasonable detail.
4. Expenses.
(a) Except as otherwise provided in this Agreement, all
expenses incident to the performance by any Fund under this Agreement shall be
paid by such Fund or Vanguard, including the cost of registration of such Fund's
shares with the SEC and in states where required. All expenses incident to the
performance by the Company under this Agreement shall be paid by the Company.
(b) Vanguard will provide for an annual education allocation
for the Plan to be used in meeting specific communication objectives for Plan
participants, which may be in the form of education meetings, written literature
and other education services suggested or agreed to by the Plan sponsor.
Additional education services for which the costs are in excess of the
allocation amount will be disclosed to the Plan sponsor by Vanguard prior to
providing such services.
(c) Vanguard shall provide the Company, upon request, with
sufficient copies of the Funds' proxy material, periodic reports to shareholders
and other materials that are required by law to be sent to Fund shareholders. To
the extent a proxy solicitation is required by law, Vanguard shall distribute,
or cause to be distributed, the Fund's proxy materials and any accompanying
reports to then-existing Plan participants at its own expense, provided the
Company furnishes Vanguard with such information as may be necessary for
Vanguard to effect such distribution. In addition, Vanguard shall provide the
Company, upon request, with a sufficient quantity of the Funds' prospectuses to
be used in connection with the transactions contemplated by this Agreement. The
cost of preparing and printing such materials shall be paid by the Funds, and
the cost of distributing such materials shall be paid by the Company; provided,
however, that if at any time a Fund reasonably deems the usage of such items to
be excessive, Vanguard may request that the Company pay the cost of printing
(including press time and paper) of any additional copies of such materials
requested by the Company.
5. Company Use of Vanguard Name. The Company agrees and acknowledges
that Vanguard is the sole owner of its name and marks and those of the Funds,
and that any and all use of any designation comprised in whole or in part of the
use of those names and marks under this Agreement shall inure to the benefit of
Vanguard. The use by the Company of those names and marks in any advertisement
or sales literature or other promotional materials shall occur only with the
prior written consent of a Managing Director or higher ranking officer of
Vanguard. Except to the extent required by law, the Company shall not, without
the prior written consent of Vanguard, make written representations regarding
the Funds, Vanguard, or any of their affiliates, other than those contained in
the then current registration statement and prospectus for the Funds, or in
reports or proxy statements for the Funds, or in sales literature or other
promotional material approved by Vanguard. Upon termination of this Agreement
for any reason, the Company shall cease all use of any such names and marks as
soon as reasonably practicable.
6. Administration of Plan. Administrative services to Plan
participants, including without limitation all record keeping, shall be the
responsibility of the Company and shall not be the responsibility of any Fund or
Vanguard. Vanguard and the Funds shall recognize the Plan as the sole
shareholder of each of the respective Fund shares issued under this Agreement.
7. Representations and Warranties. Vanguard and the Company,
respectively, each represent that it has obtained and shall maintain all
authorizations, licenses, qualifications or registrations of any governmental
body required of it in connection with this Agreement and that such
registrations are and will remain in full force and effect during the term of
this Agreement, and that it will promptly notify the other party in the event
that it is unable to perform any of its obligations under this Agreement.
(a) The Company further represents and warrants that:
(i) it has full power and authority to enter into and
perform this Agreement;
(ii) it is not required to be registered as
broker-dealer under any applicable federal securities laws as
a result of entering into and performing the services set
forth in this Agreement; and
(iii) all purchases and redemptions of Fund shares
contemplated by this Agreement shall be effected in accordance
with the Fund's then current prospectus.
(b) Vanguard further represents and warrants that:
(i) it is duly registered as a transfer agent under
Section 17A of the Securities Exchange Act of 1934, as
amended;
(ii) it is authorized to enter into this Agreement on
behalf of the Funds, and the performance of its obligations
hereunder does not and will not violate or conflict with any
governing documents or agreements with respect to
(A) the Funds or (B) any applicable law;
(iii) each Fund is an open-end investment company
registered under the 1940 Act; and
(iv) a registration statement under the Securities
Act of 1933, as amended (the "1933 Act"), is current and
appropriate state securities law filings have been made and
will continue to be made with respect to all shares of the
Funds being offered for sale.
8. Termination. This Agreement shall terminate:
(a) at the option of either the Company or Vanguard upon
ninety days' advance written notice to the other, or any mutually agreed upon
time period;
(b) at the option of the Company if the Funds' shares are not
available for any reason to meet the requirements of the Plan as determined by
the Company, provided that reasonable advance notice of election to terminate
shall be furnished by the Company;
(c) at the option of either the Company or Vanguard upon the
taking of any material action or the institution of proceedings against the
Plan, Vanguard or the Funds by the NASD, the SEC or any other regulatory body;
(d) upon assignment of this Agreement unless made with the
written consent of the other party hereto; or
(e) if the Funds' shares are not registered, issued or sold in
compliance with federal law or such law precludes the use of Fund shares as an
underlying investment medium of the Plan, provided that prompt notice shall be
given by either party should such situation occur.
9. Continuation of Agreement. Termination as a result of any cause
listed in the preceding paragraph shall not affect Vanguard's obligation to
furnish shares of the Funds to the Plan to the extent that shares of one or more
Funds then serve or may serve as investment options under the Plan unless such
further sale of Fund shares is proscribed by law or the SEC or other regulatory
body.
10. Plan Materials; Filed Documents.
(a) All materials and literature prepared by the Company or
its agents for use in or servicing the Plan and referencing or describing
Vanguard and/or the Funds will be submitted to Vanguard for review and
acceptance in Vanguard's sole discretion before such materials are first used.
(b) Vanguard will provide to the Company at least one complete
copy of all registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and all amendments
or supplements to any of the above that
relate to the Funds promptly after the filing of such documents with the SEC or
other regulatory authorities.
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless Vanguard
and the Funds and each of their respective directors, officers, employees,
agents and each person, if any, who controls a Fund or Vanguard within the
meaning of the 1933 Act (collectively, the "Vanguard Indemnified Parties")
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses) to which the Vanguard Indemnified Parties may become
subject under any statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements arise out of or are based upon (i) the Company's lack of
good faith, negligence or willful misconduct in carrying out its duties and
responsibilities under this Agreement, (ii) any material breach by the Company
of this Agreement, or (iii) any material breach by the Company of any
representation, warranty or covenant made in this Agreement. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have.
(b) Vanguard agrees to indemnify and hold harmless the Company
and each of its directors, officers, employees, agents and each person, if any,
who controls the Company within the meaning of the 1933 Act (collectively, the
"Company Indemnified Parties") against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
Vanguard) or litigation (including legal and other expenses) to which the
Company Indemnified Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements arise out of or are
based upon (i) Vanguard's lack of good faith, negligence or willful misconduct
in carrying out its duties and responsibilities under this Agreement, (ii) any
material breach by Vanguard of this Agreement, or (iii) any material breach by
Vanguard of any representation, warranty or covenant made in this Agreement.
This indemnity agreement will be in addition to any liability that Vanguard may
otherwise have.
(c) Neither party shall be liable under the indemnification
provisions of this Section 11 with respect to any claim made against an
indemnified party unless such indemnified party shall have notified the
indemnifying party 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 a designated agent), but failure
to notify the indemnifying party of any such claim shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
against whom such action is brought otherwise than on account of the
indemnification provisions of this Section 11. In case any such action is
brought against indemnified parties, the indemnifying party shall be entitled to
participate, at its own expense, in the defense of such action. The indemnifying
party also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
indemnifying party to an indemnified party of the indemnifying party's election
to assume the defense thereof, the indemnified party shall bear the fees and
expenses of any additional counsel
retained by it, and the indemnifying party 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.
12. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any
provision hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder
shall be given or made in writing and shall be delivered personally, or sent by
fax, telex, telecopier or registered or certified mail, postage prepaid, return
receipt requested, to the party to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice from such
party to the other party:
To the Company:
AXA Equitable Life Insurance Company
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx XxXxxxx
To Vanguard or any Fund:
The Vanguard Group, Inc.
X.X. Xxx 0000 - X00
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Any notice, demand or other communication given in a manner prescribed in this
subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This Agreement shall be binding
upon and insure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without giving effect to the principles of conflicts of law thereof.
(e) Compliance with Applicable Laws. The Company and Vanguard
will conduct each of the activities pursuant to this Agreement in compliance
with all applicable laws, rules and regulations, including, but not limited to,
the securities laws governing the sale of mutual fund shares.
(f) Anti-Money Laundering Policies. To the extent legally
required, each party agrees to comply with all applicable anti-money laundering
rules, regulations and government guidance, including but not limited to, cash
and suspicious activity reporting and recordkeeping requirements, as well as
creation and implementation of policies, procedures and internal controls in
order to ensure compliance.
(g) Authorized Persons. For purposes of this Agreement, the
Company will designate "Authorized Persons" entitled to act on its behalf in
connection with this Agreement. "Authorized Person" will mean any officer or
employee of the Company designated by providing Vanguard with the following: (a)
a properly certified copy of a corporate resolution reflecting the vote of the
Board of Directors of the Company authorizing the officer or employee to act in
connection with this Agreement; and (b) a specimen signature of such officer or
employee. Vanguard shall be entitled to act upon all instructions received from
such Authorized Persons until it receives and has had a reasonable opportunity
to act upon written notice from the Company that such persons are no longer
authorized to act.
(h) Confidentiality. Subject to the requirements of legal
process and regulatory authority, each party hereto shall treat as confidential
the names and addresses of the Plan participants and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not (unless it has obtained the express
written consent of the affected party) disclose, disseminate or utilize such
names and addresses and other confidential information, except as may be
required in order to fulfill its obligations under this Agreement, until such
time as it may come into the public domain, except to the extent that such names
and addresses were rightfully in a party's possession free of any obligation of
confidentiality at or subsequent to the time such names and addresses were
communicated to such party by the other party.
(i) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
(j) Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
(k) Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the parties hereto with regard to the
Company's utilizing the Funds identified herein in the Plan and supersedes all
prior agreements and understandings relating to the subject matter hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by
their duly authorized officers as of the day and year first above written.
AXA EQUITABLE LIFE INSURANCE COMPANY
By:__________________________________
Its:__________________________________
THE VANGUARD GROUP, INC.
By:__________________________________
Its:__________________________________
SCHEDULE A
THE FUNDS
Vanguard LifeStrategy Income Fund Investor Shares
Vanguard LifeStrategy Moderate Growth Fund Investor Shares
Vanguard Institutional Index Fund Institutional Shares
SCHEDULE B
LARGE TRANSACTION AMOUNTS
Large Transaction
Fund Amount
----------- -----------------
Vanguard LifeStrategy Income Fund Investor Shares $ 500,000
Vanguard LifeStrategy Moderate Growth Fund Investor Shares 1,000,000
Vanguard Institutional Index Fund Institutional Shares 1,000,000
