PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of this 11th day of November,
1994, by Aetna Life Insurance Company ("Aetna Life") and MFS Investor Services,
Inc. ("MFS");
WHEREAS, the MFS Total Return Fund ("Fund") is an open end investment
company registered under the Investment Company Act of 1940, as amended (" 1940
Act");
WHEREAS, MFS and its affiliates are engaged in the distribution of shares
of the Fund;
WHEREAS, Aetna Life is an insurance company that provides various
administrative services to employee pension benefit plans, including an employee
pension benefit plan covering its own employees (the "Plan); and
WHEREAS, Aetna Life and MFS desire to facilitate the purchase and
redemption of Fund shares on behalf of the Plan and its participants and
beneficiaries ("Participant"), subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Administration of Plan.
Aetna Life is authorized by the sponsor or other properly designated
fiduciary of the Plan ("Plan Representative") to provide administrative services
to the Plan. As part of these services, Aetna Life is authorized to make
available to each Plan Representative shares of registered investment companies
that the Plan Representative may select as investment options under the Plan.
The parties acknowledge and agree that the role of Aetna Life is only to make
such investment options available to Plan sponsors. The selection of particular
investment companies for inclusion under a Plan is made by a Plan Representative
and the decision to invest assets in a particular investment company included in
a Plan is made at the direction of a Participant in accordance with the terms of
the Plan. It is understood that both the Plan Representatives and the
Participants may change their respective selections from time to time. Plan
assets invested in such investment options will be held in the name of a nominee
or trustee of the Plan ("Nominee").
2. Omnibus Account.
The parties agree that a single omnibus account held in the name of the
Nominee shall be maintained for those Plan assets directed for investment in the
Fund ("Account"). MFS shall be registered as broker dealer of record on the
Account. Aetna Life, as service agent
for the Plan, shall facilitate purchase and sale transactions with respect to
the Account in accordance with the following terms.
3. Pricing Information, Orders, Settlement.
(a) MFS will make shares of the Fund available to be purchased by the
Nominee on behalf of the Account at the net asset value applicable to each
order. Fund shares shall be purchased and redeemed on a net basis in such
quantity and at such time determined by Aetna Life or the Nominee to correspond
with investment instructions received by Aetna Life from Plan Representatives or
Participants.
(b) MFS or an affiliate will use its best efforts to provide to Aetna Life
closing net asset value, dividend and capital gain information determined for
the Fund at the close of trading each day that the New York Stock Exchange
("Exchange") is open ("Business Day") no later than 6:30 p.m., Eastern Time, on
each Business Day. Aetna Life will send directly to MFS or a specified agent
orders to purchase or redeem Fund shares by 9:00 a.m., Eastern Time, the
following Business Day. Payment for net purchases will be wired by the Nominee
by 2:30 p.m., Eastern Time, to a custodial account designated by MFS or an
affiliate on the same Business Day that an order for shares of the Fund is
received by MFS.
(c) MFS or an affiliate hereby appoints Aetna Life as its agent for the
limited purpose of accepting purchase and redemption orders for Fund shares from
Plan Representatives or Participants. Orders from Plan Representatives or
Participants received by Aetna Life acting as agent for MFS or an affiliate
prior to the close of the Exchange on any given Business Day will be executed by
MFS or an affiliate at the net asset value determined as of the close of the
Exchange on such Business Day. Any such orders received by Aetna Life acting as
such agent after the close of the Exchange on a given Business Day will be
executed by the Fund at the net asset value determined as of the close of the
Exchange on the Business Day next following the day of receipt of such order.
(d) Payment for net redemption orders that are timely received by MFS or an
affiliate will be wired by MFS or an affiliate from the Fund's custodial account
to an account designated by the Nominee or its agent no later than 2:30 p.m.,
Eastern Time, the same Business Day such order is received by MFS or an
affiliate.
(e) Aetna Life and the Nominee shall not, without the written consent of
MFS, make representations concerning the Fund or its shares except those
contained in the then current prospectus and in current printed sales literature
approved by MFS.
4. Expenses.
(a) Except as otherwise provided in this Agreement, each party shall pay
its own expenses incident to its obligations hereunder. MFS or an affiliate will
pay all expenses
incident to the management and operation of the Fund, including the cost of
registration of the Fund shares with the SEC and in states where required.
(b) MFS or an affiliate shall provide advance notice of, and distribute to,
Aetna Life or the Nominee its proxy material, periodic Fund reports to
shareholders and other materials to be sent to Plan Representatives or
Participants. In addition, MFS or an affiliate shall provide Aetna Life or
Nominee with a sufficient quantity of Fund prospectuses to be used in connection
with the transactions contemplated by this Agreement. The cost of preparing and
printing all such materials shall be paid by the Fund or MFS or an affiliate,
and the cost of distributing such materials to Plan Representatives or
Participants shall be paid by Aetna Life; provided, however, that if at any time
MFS or an affiliate reasonably deems the usage of such items to be excessive,
each may require that Aetna Life pay the cost of printing (including press time
and paper) any additional copies of such materials that are requested by Aetna
Life or the Nominee.
5. Administration of Account.
(a) The provision of administrative services to the Plan shall be the
responsibility of Aetna Life or the Nominee and shall not be the responsibility
of the Fund or MFS. These administrative services include, but are not limited
to, maintenance of Plan and Participant records; preparation, maintenance, and
transmittal of periodic account statements; various services related to the
purchase and redemption of Fund shares; and other related services. MFS
recognizes the Nominee as the sole shareholder of Fund shares purchased under
this Agreement.
(b) MFS will pay Aetna Life an administrative service fee each quarter in
an amount equal to the average daily net assets invested in the Fund during the
quarter multiplied by the applicable per annum rate (i.e., up to, but not
necessarily all of, 0.25% of the average daily net asset value of shares of the
Fund held by the Plan during each quarter, as specified in writing from time to
time by MFS) by a fraction, the numerator of which is the number of days in the
quarter and the denominator of which is 365.
(c) Aetna Life or an affiliate will calculate the amount of the fee
described in Section 5(b) to be paid to Aetna Life at the end of each quarter
and MFS will make such payment to Aetna Life within thirty (30) days after its
receipt of an invoice therefore from Aetna Life. Each invoice will be
accompanied by a statement showing the calculation of the fee payable by MFS for
the relevant quarter and such other supporting data as may be reasonably
requested by MFS.
6. Termination.
This Agreement shall terminate as to the maintenance of the Account:
(a) At the option of either of Aetna Life or MFS, upon six (6) months'
advance written notice to the other;
(b) At the option of Aetna Life, if shares of the Fund are not available
for any reason to meet the investment requirements of the Plan; provided,
however, that prompt advance notice of election to terminate shall be furnished
by the terminating entity;
(c) At the option of either Aetna Life or MFS, upon institution of formal
disciplinary or investigative proceedings against Aetna Life, the Fund, or MFS
by the NASD, the SEC or any other regulatory body;
(d) At the option of MFS, if it shall reasonably determine in good faith
that shares of the Fund are not being offered in conformity with the terms of
this Agreement, the Fund's prospectus or applicable laws and regulations;
(e) At the option of Aetna Life, upon termination of the management
agreement between the Fund and its investment adviser, notice of the occurrence
of which shall be promptly furnished to Aetna Life; provided, however, that this
Subsection (e) shall not apply if contemporaneously with such termination a new
contract of substantially similar terms is entered into between the Fund and
such investment adviser;
(f) Upon assignment of this Agreement by any party, unless made with the
written consent of all other parties hereto; provided, however, that (i) Aetna
Life may assign, without agreement of MFS or an affiliate, its duties and
responsibilities under this Agreement to any Aetna Life affiliate, and (ii) MFS
may assign, without agreement of Aetna Life, its duties and responsibilities
under this Agreement to any of its affiliates; or
(g) If the Fund's shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as an investment
vehicle for the Plan; provided, however, that prompt notice shall be given by
any party should such situation occur.
7. Continuation of Agreement.
Termination as the result of any cause listed in Section 6 shall not affect
MFS' obligation to continue to maintain the Account as an investment option for
those Participants who purchased shares of the Fund prior to the termination of
this Agreement; provided, however, that MFS shall not be obligated to pay the
fee described in Section 5 to Aetna Life after such termination.
8. Advertising Materials.
(a) Advertising and literature with respect to the Fund prepared by Aetna
Life or the Nominee or its agents for use with the general public, the Plan, or
any Plan Representative or Participant shall be submitted to MFS for review and
approval before such material is used. MFS shall advise the submitting party in
writing within ten (10) Business Days of receipt of such materials by MFS of its
approval or disapproval of such
materials. MFS, its affiliates and agents shall not use the name or any
trademark of Aetna Life or any of its affiliates without Aetna Life's written
approval.
(b) MFS will provide to Aetna Life at least one complete copy of all
registration statements, (if requested), prospectuses, statements of additional
information, annual and semiannual reports and proxy statements of the Fund, and
all amendments or supplements to any of the above promptly after the completion
of each such document.
9. Proxy Voting.
Aetna Life or the Nominee will distribute to Plan Representatives or
Participants all proxy materials furnished by the Fund, MFS, or their
affiliates. Aetna Life shall use their best efforts to obtain the agreement of
Plan Representatives or Participants to pass through voting privileges of Plan
Representatives or Participants to vote Fund shares for which no voting
instructions are received from Plan Representatives or Participants in the same
proportion as shares for which such instructions have been received. Aetna Life
and the Nominee shall assist in the solicitation of proxies for Fund shares held
for such beneficial owners.
10. Indemnification.
(a) Aetna Life agrees to indemnify and hold harmless MFS, the Fund, the
Fund's investment adviser, transfer agent and/or custodian, and each of their
respective directors, officers, employees, agents and each person, if any, who
controls MFS, the Fund, the Fund's investment adviser, transfer agent and/or
custodian within the meaning of the Securities Act of 1933 (" 1933 Act") against
any losses, claims, damages or liabilities to which MFS, the Fund, the Fund's
investment adviser, transfer agent, and/or custodian or any such director,
officer, employee, agent, or controlling person may become subject, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof) (i)
arise out of or are based upon the provision of administrative services by Aetna
Life or (ii) result from a breach of a material provision of this Agreement.
Aetna Life will reimburse any legal or other expenses reasonably incurred by
MFS, the Fund, the Fund's investment adviser, transfer agent and/or custodian,
or any such director, officer, employee, agent, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that Aetna Life will not be liable for
indemnification hereunder to the extent that any such loss, claim, damage or
liability arises out of or is based upon the gross negligence or willful
misconduct of MFS, the Fund, the Fund's investment adviser, transfer agent
and/or custodian, or their respective directors, officers, employees, agents or
any controlling person herein defined in performing their obligations under this
Agreement.
(b) MFS agrees to indemnify and hold harmless Aetna Life, the Nominee and
each of their respective directors, officers, employees, agents and each person,
if any, who controls Aetna Life and the Nominee within the meaning of the 1933
Act against any losses, claims, damages or liabilities to which Aetna Life, the
Nominee, or any such
director, officer, employee, agent or controlling person may become subject,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of any material
fact contained in the registration statement, prospectus or sales literature of
the Fund or the omission to state therein a material fact required to be stated
therein or material fact required to be stated therein or necessary to make the
statements therein not misleading. MFS will reimburse any legal or other
expenses reasonably incurred by Aetna Life, the Nominee, or any such director,
officer, employee, agent, or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that MFS will not be liable for indemnification hereunder to the extent
that any such loss, claim, damage or liability arises out of, or is based upon,
the gross negligence or willful misconduct of Aetna Life, the Nominee, or their
respective directors, officers, employees, agents or any controlling person
herein defined in the performance of their obligations under this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability that it may have
to any indemnified party otherwise than under this Section 10. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish to, assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 10 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
11. Representations and Warranties.
(a) Representations of Aetna Life. Aetna Life represents and warrants:
(i) that it (1) is a life insurance company organized under the laws of
the State of Connecticut, (2) is in good standing in that jurisdiction, (3) is
in material compliance with all applicable federal laws and state securities and
insurance laws, (4) is duly licensed and authorized to conduct business in every
jurisdiction where such license or authorization is required, and will maintain
such license or authorization in effect at all times during the term of this
Agreement, and (5) has full authority to enter into this Agreement and carry out
its obligations pursuant to it terms;
(ii) that it is authorized under the Plan to (1) provide administrative
services to the Plan and (2) facilitate transactions in the Account through the
Fund; and
(iii) that the receipt of the fees described in Section 5 by Aetna Life
will not constitute a non-exempt "prohibited transaction" as such term is
defined in Section 406 of the Employee Retirement Income Security Act of 1974
and Section 4975 of the Internal Revenue Code of 1986, as amended.
(b) MFS Representations on behalf of the Fund. On behalf of the Fund, MFS
represents and warrants:
(i) that the Fund (1) is a duly organized Massachusetts business trust,
(2) is in good standing in that jurisdiction, (3) is in material compliance with
all applicable federal, state and securities laws, and (4) is duly licensed and
authorized to conduct business in every jurisdiction where such license or
authorization is required;
(ii) that the shares of the Fund are registered under the 1933 Act,
duly authorized for issuance and sale in compliance with all applicable federal,
state, and securities laws; that the Fund amends its registration statement
under the 1933 Act and the 1940 Act from time to time as required or in order to
effect the continuous offering of its shares; and that the Fund has registered
and qualified its shares for sale in accordance with the laws of each
jurisdiction where it is required to do so; and
(iii) that the Fund is currently qualified as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended, and
will make every effort to maintain such qualification; and that it will notify
Aetna Life immediately upon having a reasonable basis for believing that the
Fund has ceased to so qualify or that it might not qualify in the future.
(c) Representations of MFS. MFS represents and warrants:
(i) that it (1) is a corporation duly organized under the laws of the
State of Delaware, (2) is in good standing in that jurisdiction, (3) is in
material compliance with all applicable federal, state, and securities laws, (4)
is duly licensed or registered as a broker-dealer with the SEC and every
jurisdiction where such license or registration is required, (5) will maintain
such license or registration in effect at all times during the term of this
Agreement, (6) is and will continue to be a member in good standing of the NASD,
and (7) has full authority to enter into this Agreement and carry out its
obligations pursuant to the terms of this Agreement.
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 the 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 telex,
telecopier, express delivery
or registered or certified mail, postage prepaid, return receipt requested, to
the party or par-ties to whom they are directed at the following address, or at
such other addresses as may be designated by notice from such party to all other
parties.
To Aetna Life:
Aetna Life Insurance Company
000 Xxxxxxxxxx Xxxxxx, XX0X
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
To MFS:
MFS Investor Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Grip
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 inure
to the benefit of the parties hereto and their respective permitted successors
and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
(e) 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.
(f) Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreement and
understandings relating to the subject matter hereof.
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 representatives as
of the date specified below.
Aetna Life Insurance Company MFS Investor Services, Inc.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxx
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Name Xxxxx X. Xxxxx Name Xxxxxx X. Xxxxx
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Title Vice President Title Director
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