AMENDMENT NO. 5
TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 5 TO THE PARTICIPATION AGREEMENT is entered into as of
March 12, 2007, by and between Allianz Global Investors Distributors LLC
("AGID"), the principal underwriter for Premier VIT and PIMCO Variable Insurance
Trust (each a "Trust" and, collectively, the "Trusts") and Security Benefit Life
Insurance Company ("Company").
WHEREAS, the Company and AGID are parties to that certain Participation
Agreement dated April 25, 2002, as amended, and
WHEREAS, AGID and Company (each a "Party" and, together, the "Parties")
seek to enter into this Amendment in order for the Trusts, AGID and Company to
comply with the requirements of Rule 22c-2 ("Rule 22c-2") under the Investment
Company Act of 1940, as amended (the "1940 Act"), and to make other changes to
the Participation Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
which consideration is full and complete, AGID and Company hereby agree as
follows:
A. CONTRACTHOLDER INFORMATION
A.1. AGREEMENT TO PROVIDE INFORMATION. Company agrees to provide Fund Agent,
upon written request, the taxpayer identification number ("TIN"), the
Individual/International Taxpayer Identification Number ("ITIN"), or other
government-issued identifier ("GII") and the Contract owner number or
participant account number, if known, of any or all Contractholder(s) of
the account, the name or other identifier of any investment professional(s)
associated with the Contractholder(s) or account (if known), and the
amount, date and transaction type (purchase, redemption, transfer, or
exchange) of every purchase, redemption, transfer, or exchange of Shares
held through an account maintained by Company during the period covered by
the request. Unless otherwise specifically requested by the Fund Agent, the
Company shall only be required to provide information relating to
Contractholder-Initiated Transfer Purchases or Contractholder-Initiated
Transfer Redemptions.
A.1.1. PERIOD COVERED BY REQUEST. Requests must set forth a specific
period, not to exceed 90 days from the date of the request, for which
transaction information is sought. Fund Agent may request transaction
information older than 90 days from the date of the request as it
deems necessary to investigate compliance with policies established or
utilized by a Trust or Fund Agent for the purpose of eliminating or
reducing any dilution of the value of the outstanding shares issued by
a Fund.
If requested by Fund Agent, Company will provide the information
specified in Section A.1 above for each trading day.
A.1.2. FORM AND TIMING OF RESPONSE. Company agrees to provide, promptly
upon request of Fund Agent, the requested information specified in
Section A.1. Intermediary agrees to use its best efforts to determine
promptly whether any specific person about whom it has received the
identification and transaction information specified in Section A.1 is
itself a "financial intermediary," as that term is defined in Rule
22c-2 (an "Indirect Intermediary") and, upon request of Fund Agent,
promptly either (i) provide (or arrange to have provided) the
information set forth in Section A.1 for those Contractholders who
hold an account with an Indirect Intermediary or (ii) restrict or
prohibit the Indirect Intermediary from purchasing Shares in nominee
name on behalf of other persons. Intermediary additionally agrees to
inform Fund Agent whether it plans to perform (i) or (ii) above.
Responses required by this paragraph must be communicated in writing
and in a format mutually agreed upon by the Parties. To the extent
practicable, the format for any Contractholder and transaction
information provided to Fund Agent should be consistent with the NSCC
Standardized Data Reporting Format.
A.1.3. LIMITATIONS ON USE OF INFORMATION. Fund Agent agrees not to use the
information received hereunder for marketing or any other similar
purpose without the prior written consent of Company; provided,
however, that this provision shall not limit the use of publicly
available information, information already in the possession of Fund
Agent, a Trust or their affiliates (and not received from Company)at
the time the information is received pursuant to this Amendment or
information which lawfully comes into the possession of Fund Agent, a
Trust or their affiliates from a third party who is under no duty
(contractual or otherwise) of confidentiality.
B. EXECUTION OF TRADING RESTRICTION INSTRUCTIONS
B.1. AGREEMENT TO RESTRICT TRADING. Company agrees to execute written
instructions from Fund Agent to restrict or prohibit further purchases or
exchanges of Shares by a Contractholder that has been identified by Fund
Agent as having engaged in transactions in Shares (directly or indirectly
through Intermediary's account) that violate policies established or
utilized by a Trust or Fund Agent for the purpose of eliminating or
reducing any dilution of the value of the outstanding Shares issued by a
Fund. Unless otherwise directed by Fund Agent, any such restrictions or
prohibitions shall only apply to Contractholder-Initiated Transfer
Purchases or Contractholder-Initiated Transfer Redemptions that are
effected directly or indirectly through Company.
B.1.1. FORM OF INSTRUCTIONS. Instructions must include the TIN, ITIN or GII
and the specific individual Contractholder number or participant
account number associated with the Contractholder, if known, and the
specific restriction(s) to be executed. If the TIN, ITIN, GII or the
specific individual Contractholder number or participant account
number
2
associated with the Contractholder is not known, the instructions must
include an equivalent identifying number of the Contractholder(s) or
account(s) or other agreed upon information to which the instruction
relates.
B.1.2. TIMING OF RESPONSE. Company agrees to execute instructions from Fund
Agent as soon as reasonably practicable, but not later than five (5)
business days after receipt of the instructions by Company.
B.1.3. CONFIRMATION BY INTERMEDIARY. Company must provide written
confirmation to Fund Agent that Fund Agent's instructions to restrict
or prohibit trading have been executed. Company agrees to provide
confirmation as soon as reasonably practicable, but not later than ten
(10) business days after the instructions have been executed.
C. DEFINITIONS
For purposes of this Amendment, certain terms are used as defined in the
preamble or body of this Amendment. The following terms shall have the following
meanings, unless a different meaning is clearly required by the context:
C.1. The term "Contractholder" means the holder of interests in a Contract or a
participant in an employee benefit plan with a beneficial interest in a
Contract.
C.2. The term "Contractholder-Initiated Transfer Purchase" means a transaction
that is initiated or directed by a Contractholder that results in a
transfer of assets within a Contract to a Fund, but does not include
transactions that are executed: (i) automatically pursuant to a contractual
or systematic program or enrollment such as a transfer of assets within a
Contract to a Fund as a result of "dollar cost averaging" programs,
insurance company approved asset allocation programs, or automatic
rebalancing programs; (ii) pursuant to a Contract death benefit; (iii) as a
result of a one-time step-up in Contract value pursuant to a Contract death
benefit; (iv) as a result of an allocation of assets to a Fund through a
Contract as a result of payments such as loan repayments, scheduled
contributions, retirement plan salary reduction contributions, or planned
premium payments to the Contract; or (v) pre-arranged transfers at the
conclusion of a required "free look" period.
The term "Contractholder-Initiated Transfer Redemption" means a transaction
that is initiated or directed by a Contractholder that results in a
transfer of assets within a Contract out of a Fund, but does not include
transactions that are executed: (i) automatically pursuant to a contractual
or systematic program or enrollments such as transfers of assets within a
Contract out of a Fund as a result of annuity payouts, loans, systematic
withdrawal programs, insurance company approved asset allocation programs
and automatic rebalancing programs; (ii) as a result of any deduction of
charges or fees under a Contract; (iii) within a Contract out of a Fund as
a result of scheduled withdrawals or surrenders from a Contract; or (iv) as
a result of payment of a death benefit from a Contract.
3
C.3. The term "Funds" shall mean the constituent series of the Trusts, but for
purposes of Section A of this Amendment shall not include Funds excepted
from the requirements of paragraph (a) of Rule 22c-2 by paragraph (b) of
Rule 22c-2.
C.4. The term "Fund Agent" shall mean AGID or such other persons or entities as
may be designated as such by the Trusts for purposes of this Amendment from
time to time.
C.5. The term "Participation Agreement" shall mean the Participation Agreement
and/or other similar agreement(s) relating to transactions in Shares to
which Company is a party.
C.6. The term "promptly" shall mean as soon as practicable but in no event later
than five (5) business days from Company's receipt of the request for
information from Fund Agent
C.7. The term "Shares" means the interests of Contractholders corresponding to
the redeemable securities of record issued by a Fund.
C.8. The term "written" includes electronic writings and facsimile
transmissions.
In addition, for purposes of this Amendment, the term "purchase" does not
include the automatic reinvestment of dividends or distributions.
D. ADDITIONAL AMENDMENTS TO PARTICIPATION AGREEMENT
The Participation Agreement is hereby further amended to incorporate the
provisions set forth in Exhibit A hereto.
E. SCOPE OF AMENDMENT
Company acknowledges and agrees that this Amendment shall apply to the
handling of all transactions in Shares, whether authorized under the
Participation Agreement or any other agreement between or among Company and a
Trust, any transfer agent of a Trust, AGID, any other Fund Agent or any of their
affiliates, and further acknowledges and agrees that the Participation Agreement
and any other such agreement is hereby modified to the extent necessary to
reflect the agreements herein.
F. EFFECTIVE DATE
This Amendment shall be effective upon its execution hereof or, if later,
upon the effectiveness of the provisions of Rule 22c-2 relating to agreements
with "financial intermediaries" (as such term is defined in Rule 22c-2). Prior
to the effective date of this Amendment, AGID and Company agree that any request
made to Company by AGID for Contractholder transaction information, and
Company's response to such request, shall be governed by whatever practices AGID
and Company had utilized in the absence of a formal agreement, if any, to govern
such requests.
4
G. AMENDMENTS TO COMPLY WITH RULE 22C-2
This Agreement may not be amended without written consent of the parties
hereto.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
5
IN WITNESS WHEREOF, the undersigned has caused this Amendment No. 5 to be
executed as of the date first above written.
ALLIANZ GLOBAL INVESTORS
DISTRIBUTORS LLC
---------------------------
By:
Title:
Legal name of Intermediary:
Security Benefit Life Insurance Company
------------------------------
By:
Title:
6
EXHIBIT A
ADDITIONAL AMENDMENTS TO PARTICIPATION AGREEMENT
Capitalized terms used in the provisions set forth below are used as
defined in the Participation Agreement.
COMPLIANCE MATTERS. As required by the Participation Agreement, Company
shall comply with provisions of the Prospectuses and Statement of
Additional Information of each Trust, and with applicable federal and state
securities laws. Among other things, Company shall be responsible for
reasonably assuring that: (a) only orders to purchase, redeem or exchange
Shares received by Company or any Indirect Intermediary prior to the
Valuation Time shall be submitted directly or indirectly by Company to the
Fund or its transfer agent or other applicable agent for receipt of a price
based on the net asset value per Share calculated for that day in
accordance with Rule 22c-1 under the 1940 Act(1); and (b) Company shall
cause to be imposed and/or waived applicable redemption fees, if any, only
in accordance with the relevant Fund's then current Prospectuses or
Statement of Additional Information and/or as instructed by Fund Agent.
Company further agrees to make reasonable efforts to assist the Funds and
their service providers (including but not limited to Fund Agent) to
detect, prevent and report market timing or excessive short-term trading of
Shares. To the extent Company has actual knowledge of violations of Fund
policies (as set forth in the applicable Fund's then current Prospectuses
or Statement of Additional Information) regarding (i) the timing of
purchase, redemption or exchange orders and pricing of Shares, (ii) market
timing or excessive short-term trading, or (iii) the imposition of
redemption fees, if any, Company agrees to report such known violations to
Fund Agent. For purposes of this provision, the term "Valuation Time"
refers to the time as of which the Shares are valued on each business day,
currently the close of regular trading on the New York Stock Exchange
(normally, 4:00 p.m., Eastern Time) on each day that the New York Stock
Exchange is open for business.
--------------------
(1) Orders to purchase, redeem or exchange Fund shares received by Company
subsequent to the Valuation Time on any given day shall receive a price based on
the next determined net asset value per Share in accordance with Rule 22c-1
under the 1940 Act.