[SBL LOGO] SECURITY BENEFIT LIFE
INSURANCE COMPANY
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A MEMBER OF THE SECURITY 000 XX XXXXXXXX XX.
BENEFIT GROUP XX XXXXXXXXX XXXXXX, XXXXXX 00000-0000
(000) 000-0000
MARKETING ORGANIZATION AGREEMENT
COMMISSION SCHEDULE
VARIFLEX EXTRA CREDIT VARIABLE ANNUITY
Marketing Organization:
(Broker/Dealer)
EFFECTIVE DATE OF COMMISSION SCHEDULE:
COMMISSIONS - This Commission Schedule is hereby made a part of and amends your
selling agreement including, but not limited to, the SBL Variable Products Sales
Agreement and/or Marketing Organization Agreement, as applicable (hereinafter
called the "Agreement"), with Security Benefit Life Insurance Company and
Security Distributors, Inc. (hereinafter jointly called "SBL"), and commissions
payable hereunder are subject to the provisions contained in the Agreement and
this Commission Schedule. Minimum Purchase Payments are as set out in the
applicable prospectus and contract. Commissions to a Marketing Organization are
equal to a percentage of each Purchase Payment written by Marketing
Organization, as follows:
1. The rate of commission paid on each Purchase Payment made with respect to
each particular Variflex Extra Credit Contract (the "Contract") will be as
set forth in the Table below based upon the total Purchase Payments made
into the Contract, including the current Purchase Payment, as of the date of
the Purchase Payment. You may select one of Commission Options A through D
as shown in the table below at the time of application for each Contract. If
no selection is made on the application, SBL will pay you pursuant to Option
A. You may select a different option for each Contract but may not change
the Option in effect after the Contract is issued.
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OPTION A OPTION B OPTION C OPTION D
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TOTAL
PURCHASE COMMIS- COMMIS- COMMIS- COMMIS-
PAYMENTS* SION TRAIL SION TRAIL SION TRAIL SION TRAIL
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$0.00 to
$49,999.99..... 5.00% N/A 3.00% 25 bps 1.00% 50 bps 0.00% 70 bps
$50,000 to
$99,999.99..... 5.50% N/A 3.50% 25 bps 1.50% 50 bps 0.00% 70 bps
$100,000 to
$999,999.99.... 6.00% N/A 4.00% 25 bps 2.00% 50 bps 0.00% 70 bps
$1,000,000+...... 5.00% N/A 3.00% 25 bps 1.00% 50 bps 0.00% 70 bps
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*No Commission will be paid on Purchase Payments made that are less than the
minimum specified in the applicable prospectus and Contract. The commission
rate is determined as of the date each Purchase Payment is applied based
upon the total Purchase Payments made into the Contract, including the
current Purchase Payment, as of that date. For example, under Option A, an
initial Purchase Payment of $45,000 applied to a Contract would earn a
commission equal to 5.0% of that Purchase Payment. A subsequent Purchase
Payment of $65,000 to the same Contract would earn a commission equal to
6.0% of the subsequent Purchase Payment of $65,000, based upon total
Purchase Payments of $110,000 as of that date.
2. ASSET-BASED COMMISSIONS: Under Commission Options B and C only, SBL will pay
an asset-based commission (also referred to herein as a "trail") as of the
end of each calendar month on the aggregate Contract Value of Variflex Extra
Credit Contracts for which the initial Purchase Payment is more than 12
months old and Marketing Organization is the broker of record. For
Commission Option D, the asset-based commission will be paid as of the end
of the first calendar month of the Contract Date. On an annual basis, the
asset-based commission will be equal to the amount set forth in the Table
above. No asset-based commission will be paid on Contracts which have
annuitized under a life contingent annuity option. An Annuitization Fee may
be available as discussed in paragraph 5.
3. CONTRACT YEAR: For the purpose of this Commission Schedule, the term
"Contract Year" shall be measured from the date the first Purchase Payment
is credited to the Contract ("Contract Date").
4. TRANSFER OF SBL CONTRACT VALUES: No commission (including asset-based
commission) is paid on the transfer of cash, loan or surrender value of a
life insurance or annuity contract issued by SBL or other members of The
Security Benefit Group of Companies applied to a Contract under this
Commission Schedule.
Death Benefit Applied to an Annuity Option: In the event that a beneficiary
of a Contract under this Commission Schedule applies the death benefit to
one of the annuity options under the Contract, no commission will be payable
upon such application. An Annuitization Fee may be available as discussed in
paragraph 5.
5. ANNUITIZATION: An Annuitization Fee will be paid to a Marketing Organization
who secures from the Contract Owner (or his or her beneficiary) the proper
forms and information to commence an immediate life contingent annuity
option under the Contract and significantly assists the client and SBL in
such settlement. The Annuitization Fee will be equal to 4% of the amount
applied to a fixed life contingent annuity option and 2% of the amount
applied to a variable life contingent annuity option.
6. COMMISSION CHARGEBACK PROVISIONS:
Full Withdrawals from the Contract: Any commissions paid on Purchase
Payments received will be charged back to the Marketing Organization in the
event of a full withdrawal within the first two Contract Years based on the
schedule below.
Partial Withdrawals: Commission chargebacks will be made in the first two
Contract Years on partial withdrawals which exceed the Free Withdrawal
amount as defined in the Contract. The amount of the chargeback shall be
calculated as follows: The amount by which the partial withdrawal exceeds
the Free Withdrawal amount shall be multiplied by (1) the average commission
rate paid and then by (2) the applicable Commission Chargeback Rate set
forth in the schedule below. The average commission rate paid is equal to
the total commissions paid on the Contract divided by the total Purchase
Payments under the Contract as of the date of the partial withdrawal.
CONTRACT YEAR COMMISSION CHARGEBACK RATE
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1 100%
2 50%
7. CHANGE OF COMMISSION SCHEDULE: Notwithstanding any other provision of the
Agreement to the contrary, the following provisions shall apply. SBL
reserves the right at any time, with or without notice, to change, modify or
discontinue the commissions, asset-based commissions or any other
compensation payable under this Commission Schedule. However, any such
change will not apply to the commissions or asset-based commissions
applicable to Contracts issued before the effective date of such change.
8. CHANGE OF DEALER: A Contract Owner shall have the right to designate a new
marketing organization, or terminate a marketing organization without
designating a replacement, by sending written notice of such designation or
termination to SBL. Upon written notice to SBL by the owner of the
designation of a new marketing organization, all the commissions and
asset-based commissions shall be payable to the new marketing organization.
Upon written notice to SBL by the Contract Owner of termination of Marketing
Organization, without designating a new marketing organization, SBL shall
cease paying commissions and asset-based commissions to Marketing
Organization.
9. TERMINATION OF THE AGREEMENT/VESTING: In the event of termination of the
Agreement for any reason, all rights to receive commissions, asset-based
commissions or other compensation under this Commission Schedule shall be
terminated, unless each of the following requirements is met: (i) the
Agreement has been in force for at least one year; (ii) Marketing
Organization is at the time such commissions are payable properly licensed
to receive such commissions; (iii) Marketing Organization is providing
service to the Contract Owner and performing its duties in a manner
satisfactory to SBL; (iv) commissions paid to Marketing Organization in the
previous calendar year amounted to at least $500; and (v) Marketing
Organization has not been terminated, nor a new marketing organization
designated, by the Contract Owner as set forth in paragraph 8 above.
THIS COMMISSION SCHEDULE replaces any previous Commission Schedule for the
Variable Annuity Contract listed above as of the Effective Date set forth above.
SECURITY DISTRIBUTORS, INC. SECURITY BENEFIT LIFE INSURANCE COMPANY
By: XXXXXXX X. XXXXXX By: XXXXXXX X. XXXXXX
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Title: President Title: Senior Vice President
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9496 (R7-00)
