EXHIBIT 26(h)(14)(iv)
AMENDMENT NO. 3 TO PARTICIPATION AGREEMENT
by and among
Franklin ▇▇▇▇▇▇▇▇▇ Variable Insurance Products Trust
Franklin/▇▇▇▇▇▇▇▇▇ Distributors, Inc.
Minnesota Life Insurance Company
Securian Financial Services, Inc.
Franklin ▇▇▇▇▇▇▇▇▇ Variable Insurance Products Trust (the "Trust"),
Franklin/▇▇▇▇▇▇▇▇▇ Distributors, Inc. (the "Underwriter," and together with the
Trust, "we" or "us") and Minnesota Life Insurance Company ("you") and Securian
Financial Services, Inc., ("Distributor"), on your behalf and on behalf of
certain Accounts, have previously entered into a Participation Agreement dated
as of May 1, 2000 (the "Agreement"). The parties now desire to amend the
Agreement in this amendment (the "Amendment").
Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect. Unless otherwise indicated, the
terms defined in the Agreement shall have the same meaning in this Amendment.
A M E N D M E N T
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
1. SECTION 2.1.6 OF THE AGREEMENT IS HEREBY DELETED IN ITS ENTIRETY AND
REPLACED WITH THE FOLLOWING SECTION 2.1.6:
"2.1.6 The Contracts: (i) will be sold by broker-dealers, or their
registered representatives, who are registered with the Securities and
Exchange Commission ("SEC") under the Securities and Exchange Act of
1934, as amended (the "1934 Act") and who are members in good standing
of the National Association of Securities Dealers, Inc. (the "NASD");
(ii) will be issued and sold in compliance in all material respects
with all applicable federal and state laws; and (iii) will be sold in
compliance in all material respects with state insurance suitability
requirements and NASD suitability guidelines including the rules
relating to recommendations to Customers under the NASD Manual Conduct
Rule 2310."
2. A new Section 2.1.12 is hereby added to the Agreement as follows:
"2.1.12 As covered financial institutions we, only
with respect to Portfolio shareholders, and you, each undertake and
agree to comply with any and all applicable laws, regulations,
protocols and other requirements relating to money laundering
including, without limitation, the International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 (Title III of the
USA PATRIOT Act)."
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3. Section 3 of the Agreement is hereby deleted in its entirety and
replaced with the following Section 3:
"3. PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
3.1 AVAILABILITY OF TRUST PORTFOLIO SHARES
3.1.1 We will make shares of the Portfolios available
to the Accounts for the benefit of the Contracts. The shares will be
available for purchase at the net asset value per share next computed
after we (or our agent, or you as our designee) receive a purchase
order, as established in accordance with the provisions of the then
current prospectus of the Trust. All orders are subject to acceptance
by us and by the Portfolio or its transfer agent, and become effective
only upon confirmation by us. Notwithstanding the foregoing, the
Trust's Board of Trustees ("Trustees") may refuse to sell shares of any
Portfolio to any person, or may suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole
discretion of the Trustees, they deem such action to be in the best
interests of the shareholders of such Portfolio.
3.1.2 Without limiting the other provisions of this
Section 3.1, among other delegations by the Trustees, the Trustees have
determined that there is a significant risk that the Trust and its
shareholders may be adversely affected by investors with short term
trading activity and/or whose purchase and redemption activity follows
a market timing pattern as defined in the prospectus for the Trust, and
have authorized the Trust, the Underwriter and the Trust's transfer
agent to adopt procedures and take other action (including, without
limitation, rejecting specific purchase orders in whole or in part) as
they deem necessary to reduce, discourage, restrict or eliminate such
trading and/or market timing activity. You agree that your purchases
and redemptions of Portfolio shares are subject to, and that you will
assist us in implementing, the Market Timing Trading Policy and
Additional Policies (as described in the Trust's prospectus) and the
Trust's restrictions on excessive and/or short term trading activity
and/or purchase and redemption activity that follows a market timing
pattern.
3.1.3 We agree that shares of the Trust will be sold
only to life insurance companies which have entered into fund
participation agreements with the Trust ("Participating Insurance
Companies") and their separate accounts or to qualified pension and
retirement plans in accordance with the terms of the Shared Funding
Order. No shares of any Portfolio will be sold to the general public.
3.2 MANUAL OR AUTOMATED PORTFOLIO SHARE TRANSACTIONS
3.2.1 Section 3.3 of this Agreement shall govern and Section
3.4 shall not be operative, unless we receive from you at the address
provided in the
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next sentence, written notice that you wish to communicate, process and
settle purchase and redemptions for shares (collectively, "share
transactions") via the Fund/SERV and Networking systems of the National
Securities Clearing Corporation ("NSCC"). The address for you to send
such written notice shall be: Retirement Services, Franklin ▇▇▇▇▇▇▇▇▇
Investments, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇. After giving ten (10) days' advance written notice at the
address provided in the previous sentence of your desire to use NSCC
processing, Section 3.4 of this Agreement shall govern and Section 3.3
shall not be operative.
3.2.2 At any time when, pursuant to the preceding
paragraph, Section 3.4 of this Agreement governs, any party to this
Agreement may send written notice to the other parties that it chooses
to end the use of the NSCC Fund/SERV and Networking systems and return
to manual handling of share transactions. Such written notice shall be
sent: (i) if from you to us, to the address provided in the preceding
paragraph; (ii) if from us to you, to your address in Schedule G of
this Agreement. After giving ten (10) days' advance written notice at
the address as provided in the previous sentence, Section 3.3 of this
Agreement shall govern and Section 3.4 shall not be operative.
3.3 MANUAL PURCHASE AND REDEMPTION
3.3.1 You are hereby appointed as our designee for
the sole purpose of receiving from Contract owners purchase and
exchange orders and requests for redemption resulting from investment
in and payments under the Contracts that pertain to subaccounts that
invest in Portfolios ("Instructions"). "Business Day" shall mean any
day on which the New York Stock Exchange is open for trading and on
which the Trust calculates its net asset value pursuant to the rules of
the SEC and its current prospectus. "Close of Trading" shall mean the
close of trading on the New York Stock Exchange, generally 4:00 p.m.
Eastern Time. You represent and warrant that all Instructions
transmitted to us for processing on or as of a given Business Day ("Day
1") shall have been received in proper form and time stamped by you
prior to the Close of Trading on Day 1. Such Instructions shall receive
the share price next calculated following the Close of Trading on Day
1, provided that we receive such Instructions from you before 9:30 a.m.
Eastern Time on the next Business Day ("Day 2"). You represent and
warrant that Instructions received in proper form and time stamped by
you after the Close of Trading on Day 1 shall be treated by you and
transmitted to us as if received on Day 2. Such Instructions shall
receive the share price next calculated following the Close of Trading
on Day 2. You represent and warrant that you have, maintain and
periodically test, procedures and systems in place reasonably designed
to prevent Instructions received after the Close of Trading on Day 1
from being executed with Instructions received before the Close of
Trading on Day 1. All Instructions we receive from you after 9:30 a.m.
Eastern Time on Day 2 shall be processed by us on the following
Business Day and shall receive the share price next calculated
following the Close of Trading on Day 2.
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3.3.2 We shall calculate the net asset value per
share of each Portfolio on each Business Day, and shall communicate
these net asset values to you or your designated agent on a daily basis
as soon as reasonably practical after the calculation is completed
(normally by 6:30 p.m. Eastern Time).
3.3.3 You shall submit payment for the purchase of
shares of a Portfolio on behalf of an Account in federal funds
transmitted by wire to the Trust or to its designated custodian, which
must receive such wires no later than the close of the Reserve Bank,
which is 6:00 p.m. Eastern Time, on the Business Day following the
Business Day as of which such purchases orders are made.
3.3.4 We will redeem any full or fractional shares of
any Portfolio, when requested by you on behalf of an Account, at the
net asset value next computed after receipt by us (or our agent) of the
request for redemption, as established in accordance with the
provisions of the then current prospectus of the Trust. We shall make
payment for such shares in the manner we establish from time to time,
but in no event shall payment be delayed for a greater period than is
permitted by the ▇▇▇▇ ▇▇▇.
3.3.5 Issuance and transfer of the Portfolio shares
will be by book entry only. Stock certificates will not be issued to
you or the Accounts. Portfolio shares purchased from the Trust will be
recorded in the appropriate title for each Account or the appropriate
subaccount of each Account.
3.3.6 We shall furnish, on or before the ex-dividend
date, notice to you of any income dividends or capital gain
distributions payable on the shares of any Portfolio. You hereby elect
to receive all such income dividends and capital gain distributions as
are payable on shares of a Portfolio in additional shares of that
Portfolio, and you reserve the right to change this election in the
future. We will notify you of the number of shares so issued as payment
of such dividends and distributions.
3.3.7 Each party to this Agreement agrees that, in
the event of a material error resulting from incorrect information or
confirmations, the parties will seek to comply in all material respects
with the provisions of applicable federal securities laws.
3.4 AUTOMATED PURCHASE AND REDEMPTION
3.4.1 "Fund/SERV" shall mean NSCC's Mutual Fund
Settlement, Entry and Registration Verification System, a system for
automated, centralized processing of mutual fund purchase and
redemption orders, settlement, and account registration; "Networking"
shall mean NSCC's system that allows mutual funds and life insurance
companies to exchange account level information electronically; and
"Settling Bank" shall mean the entity appointed by the Trust or you, as
applicable, to perform such settlement services on behalf of the Trust
and you, as applicable, which entity agrees to abide by NSCC's then
current rules and
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procedures insofar as they relate to same day funds settlement. In all
cases, processing and settlement of share transactions shall be done in
a manner consistent with applicable law.
3.4.2 You are hereby appointed as our designee for
the sole purpose of receiving from Contract owners purchase and
exchange orders and requests for redemption resulting from investment
in and payments under the Contracts that pertain to subaccounts that
invest in Portfolios ("Instructions"). "Business Day" shall mean any
day on which the New York Stock Exchange is open for trading and on
which the Trust calculates its net asset value pursuant to the rules of
the SEC and its current prospectus. "Close of Trading" shall mean the
close of trading on the New York Stock Exchange, generally 4:00 p.m.
Eastern Time. Upon receipt of Instructions, and upon your determination
that there are good funds with respect to Instructions involving the
purchase of shares, you will calculate the net purchase or redemption
order for each Portfolio.
3.4.3 On each Business Day, you shall aggregate all
purchase and redemption orders for shares of a Portfolio that you
received prior to the Close of Trading. You represent and warrant that
all orders for net purchases or net redemptions derived from
Instructions received by you and transmitted to Fund/SERV for
processing on or as of a given Business Day ("Day 1") shall have been
received in proper form and time stamped by you prior to the Close of
Trading on Day 1. Such orders shall receive the share price next
calculated following the Close of Trading on Day 1, provided that we
receive Instructions from Fund/SERV by 6:30 a.m. Eastern Time on the
next Business Day ("Day 2"). You represent and warrant that orders
received in good order and time stamped by you after the Close of
Trading on Day 1 shall be treated by you and transmitted to Fund/SERV
as if received on Day 2. Such orders shall receive the share price next
calculated following the Close of Trading on Day 2. All Instructions we
receive from Fund/SERV after 6:30 a.m. Eastern Time on Day 2 shall be
processed by us on the following Business Day and shall receive the
share price next calculated following the close of trading on Day 2.
You represent and warrant that you have, maintain and periodically
test, procedures and systems in place reasonably designed to prevent
orders received after the Close of Trading on Day 1 from being executed
with orders received before the Close of Trading on Day 1, and
periodically monitor the systems to determine their effectiveness.
Subject to your compliance with the foregoing, you will be considered
the designee of the Underwriter and the Portfolios, and the Business
Day on which Instructions are received by you in proper form prior to
the Close of Trading will be the date as of which shares of the
Portfolios are deemed purchased, exchanged or redeemed pursuant to such
Instructions. Dividends and capital gain distributions will be
automatically reinvested at net asset value in accordance with the
Portfolio's then current prospectus.
3.4.4 We shall calculate the net asset value per
share of each Portfolio on each Business Day, and shall furnish to you
through NSCC's Networking or Mutual Fund Profile System: (i) the most
current net asset value
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information for each Portfolio; and (ii) in the case of fixed income
funds that declare daily dividends, the daily accrual or the interest
rate factor. All such information shall be furnished to you by 6:30
p.m. Eastern Time on each Business Day or at such other time as that
information becomes available.
3.4.5 You will wire payment for net purchase orders
by the Trust's NSCC Firm Number, in immediately available funds, to an
NSCC settling bank account designated by you in accordance with NSCC
rules and procedures on the same Business Day such purchase orders are
communicated to NSCC. For purchases of shares of daily dividend accrual
funds, those shares will not begin to accrue dividends until the day
the payment for those shares is received.
3.4.6 We will redeem any full or fractional shares of
any Portfolio, when requested by you on behalf of an Account, at the
net asset value next computed after receipt by us (or our agent or you
as our designee) of the request for redemption, as established in
accordance with the provisions of the then current prospectus of the
Trust. NSCC will wire payment for net redemption orders by the Trust,
in immediately available funds, to an NSCC settling bank account
designated by you in accordance with NSCC rules and procedures on the
Business Day such redemption orders are communicated to NSCC, except as
provided in the Trust's prospectus and statement of additional
information.
3.4.7 Issuance and transfer of the Portfolio shares
will be by book entry only. Stock certificates will not be issued to
you or the Accounts. Portfolio shares purchased from the Trust will be
recorded in the appropriate title for each Account or the appropriate
subaccount of each Account.
3.4.8 We shall furnish through NSCC's Networking or
Mutual Fund Profile System on or before the ex-dividend date, notice to
you of any income dividends or capital gain distributions payable on
the shares of any Portfolio. You hereby elect to receive all such
income dividends and capital gain distributions as are payable on
shares of a Portfolio in additional shares of that Portfolio, and you
reserve the right to change this election in the future. We will notify
you of the number of shares so issued as payment of such dividends and
distributions.
3.4.9 All orders are subject to acceptance by
Underwriter and become effective only upon confirmation by Underwriter.
Underwriter reserves the right: (i) not to accept any specific order or
part of any order for the purchase or exchange of shares through
Fund/SERV; and (ii) to require any redemption order or any part of any
redemption order to be settled outside of Fund/SERV, in which case the
order or portion thereof shall not be "confirmed" by Underwriter, but
rather shall be accepted for redemption in accordance with Section
3.4.11 below.
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3.4.10 All trades placed through Fund/SERV and
confirmed by Underwriter via Fund/SERV shall settle in accordance with
Underwriter's profile within Fund/SERV applicable to you. Underwriter
agrees to provide you with account positions and activity data relating
to share transactions via Networking.
3.4.11 If on any specific day you or Underwriter are
unable to meet the NSCC deadline for the transmission of purchase or
redemption orders for that day, a party may at its option transmit such
orders and make such payments for purchases and redemptions directly to
you or us, as applicable, as is otherwise provided in the Agreement;
provided, however, that we must receive written notification from you
by 9:00 a.m. Eastern Time on any day that you wish to transmit such
orders and/or make such payments directly to us.
3.4.12 In the event that you or we are unable to or
prohibited from electronically communicating, processing or settling
share transactions via Fund/SERV, you or we shall notify the other,
including providing the notification provided above in Section 3.4.11.
After all parties have been notified, you and we shall submit orders
using manual transmissions as are otherwise provided in the Agreement.
3.4.13 These procedures are subject to any additional
terms in each Portfolio's prospectus and the requirements of applicable
law. The Trust reserves the right, at its discretion and without
notice, to suspend the sale of shares or withdraw the sale of shares of
any Portfolio.
3.4.14 Each party to the Agreement agrees that, in
the event of a material error resulting from incorrect information or
confirmations, the parties will seek to comply in all material respects
with the provisions of applicable federal securities laws.
3.4.15 You and Underwriter represent and warrant that
each: (a) has entered into an agreement with NSCC; (b) has met and will
continue to meet all of the requirements to participate in Fund/SERV
and Networking; (c) intends to remain at all times in compliance with
the then current rules and procedures of NSCC, all to the extent
necessary or appropriate to facilitate such communications, processing,
and settlement of share transactions; and (d) will notify the other
parties to this Agreement if there is a change in or a pending failure
with respect to its agreement with NSCC."
4. A new Section 6.6 is hereby added to the Agreement as follows:
"6.6 You agree that any posting of Portfolio prospectuses on
your website will result in the Portfolio prospectuses: (i) appearing
identical to the hard copy printed version; (ii) being clearly
associated with the particular Contracts in which they are available
and posted in reasonable proximity to the applicable Contract
prospectuses; (iii) having no less prominence than prospectuses of any
other underlying funds available under the Contracts; and (iv) being
used in an
7
authorized manner. Notwithstanding the above, you understand and agree
that you are responsible for ensuring that participation in the
Portfolios, and any website posting, or other use, of the Portfolio
prospectuses is in compliance with this Agreement and applicable state
and federal securities and insurance laws and regulations, including as
they relate to paper or electronic use of fund prospectuses. The format
of such presentation, the script and layout for any website that
mentions the Trust, the Underwriter, an Adviser or the Portfolios shall
be routed to us as sales literature or other promotional materials,
pursuant to Section 6 of this Agreement or similar Agreement addressing
sales material review entered into by the parties.
In addition, you agree to be solely responsible for
maintaining and updating the Portfolio prospectuses' PDF files
(including prospectus supplements) and removing and/or replacing
promptly any outdated prospectuses, as necessary, ensuring that any
accompanying instructions by us, for using or stopping use are
followed. You agree to designate and make available to us a person to
act as a single point of communication contact for these purposes. We
are not responsible for any additional costs or additional liabilities
that may be incurred as a result of your election to place the
Portfolio prospectuses on your website. We reserve the right to revoke
this authorization, at any time and for any reason, although we may
instead make our authorization subject to new procedures."
5. A new paragraph is added at the end of Section 10.8 of the Agreement as
follows:
"Each party to this Agreement agrees to limit the disclosure
of nonpublic personal information of Contract owners consistent with
its policies on privacy with respect to such information and Regulation
S-P of the SEC. Each party hereby agrees that it will comply with all
applicable requirements under the regulations implementing Title V of
the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and any other applicable federal and state
consumer privacy acts, rules and regulations. Each party further
represents that it has in place, and agrees that it will maintain,
information security policies and procedures for protecting nonpublic
personal customer information adequate to conform to applicable legal
requirements."
6. Schedule D of the Agreement is superceded and replaced in its entirety
by the Schedule D attached hereto; and
All other terms and provisions of the Agreement not amended herein shall remain
in full force and effect.
This Amendment is executed effective as of November 30, 2004.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized officers
to execute this Amendment.
The Company: MINNESOTA LIFE INSURANCE COMPANY
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By:
-----------------------------------------
Name:
Title:
The Distributor: SECURIAN FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Name:
Title:
The Trust: FRANKLIN ▇▇▇▇▇▇▇▇▇ VARIABLE INSURANCE
PRODUCTS TRUST
Only on behalf of
each Portfolio listed
on Schedule C of
the Agreement. By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
The Underwriter: FRANKLIN/▇▇▇▇▇▇▇▇▇ DISTRIBUTORS, INC.
By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President
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SCHEDULE D
(AS AMENDED NOVEMBER 30, 2004
CONTRACTS OF THE COMPANY
PRODUCT NAME SEPARATE ACCOUNT NAME
# REGISTERED Y/N REGISTERED Y/N CLASSES OF SHARES AND PORTFOLIOS
1933 ACT #, STATE FORM ID 1940 ACT #
--- ------------------------- --------------------- ---------------------------------
01 MultiOption Flex/Single Variable Annuity Account Class 2 shares:
--------------
Annuity Yes Franklin Small Cap Fund
Yes 811-4294 ▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
2-97564 ▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
84-9091
02 MultiOption Select Annuity Variable Annuity Account Class 2 shares:
--------------
Yes Yes Franklin Small Cap Fund
33-80733 811-4294 ▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
MHC 92-9307 ▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
03 MegAnnuity Variable Annuity Account Class 2 shares:
--------------
Yes Yes Franklin Small Cap Fund
33-12333 811-4294 ▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
87-9254 ▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
04 MultiOption Achiever Annuity Variable Annuity Account Class 2 shares:
--------------
Yes Yes Franklin Small Cap Fund
333-79049 811-4294 Franklin Large Cap Growth Securities Fund
99-70017 Mutual Shares Securities Fund
▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
05 MultiOption Classic Annuity Variable Annuity Account Class 2 shares:
--------------
Yes Yes Franklin Small Cap Fund
333-79069 811-4294 Franklin Large Cap Growth Securities Fund
99-70016 Mutual Shares Securities Fund
▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
06 MultiOption Advisor Annuity Variable Annuity Account Class 2 shares:
--------------
Yes Yes Franklin Small Cap Fund
333-91784 811-4294 Franklin Large Cap Growth Securities Fund
02-70067 Mutual Shares Securities Fund
▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
07 Variable Adjustable Life Minnesota Life Variable Class 2 shares:
--------------
Yes Account Franklin Small Cap Fund
33-3233 Yes Franklin Large Cap Growth Securities Fund
99-680 811-4585 Mutual Shares Securities Fund
▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
08 Variable Adjustable Life Minnesota Life Variable Class 2 shares:
--------------
Second Death Account Franklin Small Cap Fund
Yes Yes Franklin Large Cap Growth Securities Fund
33-64395 811-4585 Mutual Shares Securities Fund
MHC 98-690 ▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
D-1
PRODUCT NAME SEPARATE ACCOUNT NAME
# REGISTERED Y/N REGISTERED Y/N CLASSES OF SHARES AND PORTFOLIOS
1933 ACT #, STATE FORM ID 1940 ACT #
--- ------------------------- --------------------- ---------------------------------
09 Variable Adjustable Minnesota Life Variable Class 2 shares:
--------------
Life--Horizon Account Franklin Small Cap Fund
Yes Yes Franklin Large Cap Growth Securities Fund
333-96383 811-4585 Mutual Shares Securities Fund
99-680 ▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
10 Variable Adjustable Life Minnesota Life Variable Class 2 shares:
--------------
Summit Life Account Franklin Small Cap Fund
Yes Yes Franklin Large Cap Growth Securities Fund
333-109853 811-4585 Mutual Shares Securities Fund
03-640 ▇▇▇▇▇▇▇▇▇ Developing Markets Securities Fund
▇▇▇▇▇▇▇▇▇ Global Asset Allocation Fund
D-2