GROUP VARIABLE FUNDING AGREEMENT
This Group Variable Funding Agreement (the "Contract") is issued in
consideration of your application and the payment of Contributions in accordance
with the terms and conditions of this Contract.
This Contract is subject to the laws of the jurisdiction where it is delivered
as shown in the Contract Specifications.
Your application, the Contract Specifications and the conditions and provisions
on this and the following pages are part of the Contract.
Signed for the Company
GROUP VARIABLE FUNDING AGREEMENT
NONPARTICIPATING
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF THE FORMULA MAY RESULT IN A DOWNWARD ADJUSTMENT IN CASH SURRENDER
BENEFITS.
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CONTRACT SPECIFICATIONS
[CONTRACT OWNER: ABC ENTITY
CONTRACT EFFECTIVE DATE: MONTH, DAY, YEAR
CONTRACT JURISDICTION: ANY STATE
CONTRACT NUMBER: GC-XXXXXX
THE CONTRACT OWNER HAS CHOSEN [METHOD ONE] FOR THE DEDUCTION OF THE PROGRAM AND
ADMINISTRATIVE CHARGE SPECIFIED BELOW AND FOR THE DETERMINATION OF THE NET
INVESTMENT FACTOR SPECIFIED IN SECTION 6.4.]
GENERAL ACCOUNT: [We credit your Contributions with interest at a rate that we
declare for each calendar year (the "Declared Interest Rate"). This rate remains
in effect until the end of the applicable year. We determine the Declared
Interest Rate for any year. We may change the Declared Interest Rate for any
subsequent year, at our discretion, by giving you notice before the start of
that year. The Declared Interest Rate will not be less than the minimum
guaranteed interest rate of [3%] (the "Minimum Guaranteed Interest Rate").]
SEPARATE ACCOUNT:
ANNUAL MAINTENANCE FEE: [$0 PER PARTICIPANT ACCOUNT EACH CALENDAR YEAR
We deduct 25% of the Annual Maintenance Fee from the value of each Participant
Account on the last Valuation Day of each calendar quarter. We will deduct 25%
of the Annual Maintenance Fee from the proceeds of any full Surrender of a
Participant Account before the last Valuation Day of a calendar quarter. We
deduct the Annual Maintenance Fee on a pro rata basis from each Investment
Choice in a Participant Account.]
PROGRAM AND ADMINISTRATIVE CHARGE: [0.00% PER ANNUM OF THE DAILY SUB-ACCOUNT
VALUE
You chose the method used to deduct the Program and Administrative Charge from
the Sub-Accounts when you purchased your Contract. There are two methods to
choose from:
METHOD ONE: We deduct the Program and Administrative Charge each Valuation Day
as a percentage of the net asset value of each Fund when we determine
Accumulation Unit values.
METHOD TWO: We deduct the Program and Administrative Charge each calendar
quarter. We assess the Charge as a percentage of the average daily assets of the
Sub-Accounts during the quarter. We deduct the Charge by redeeming Accumulation
Units in proportion to the amount of the Charge.
We may decrease the Program and Administrative Charge, in our sole discretion
and we may increase the Program and Administrative Charge upon [90] days advance
notice to you. The Charge will never exceed 2.00% per year.]
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INSTALLATION CHARGE: [$0]
We may charge a one-time Installation Charge of up to [$0] to establish your
Plan or program on our recordkeeping system.
[CONTINGENT DEFERRED SALES CHARGE: We may assess a Contingent Deferred Sales
Charge when you request a full or partial Surrender before the sixth Contract
Year. The Contingent Deferred Sales Charge is a percentage of the amount you
Surrender, based on the number of Contract Years completed as set forth below:
CONTRACT YEARS CHARGE
--------------------------------------------------------------------------------
During the 1st year 0%
During the 2nd year 0%
During the 3rd year 0%
During the 4th year 0%
During the 5th year 0%
During the 6th year and after 0%
No Contingent Deferred Sales Charge will be assessed on a Benefit Payment or on
certain Payments for Plan Related Expenses.]
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TABLE OF CONTENTS
SECTION STARTING ON PAGE
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Contract Specifications 2
Table of Contents 4
[1 Definitions 5
2 Contribution Provisions 6
3 Surrender Provisions 7
4 Contract Control Provisions 8
5 General Provisions 8
6 Valuation Provisions 10
7 Contract Termination Provisions 11
Endorsements
Administrative Notice]
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SECTION 1.0 DEFINITIONS
[ACCUMULATION UNIT - An accounting unit we use to calculate Sub-Account values
under this Contract. We determine this value by using one of two methods,
described in Section 6. You selected the method used when you purchased your
Contract.
ADMINISTRATIVE OFFICE - Located at . Our
mailing address is or, for overnight mail,
.
BENEFIT PAYMENT - Any amount that you Surrender from the Contract to pay
benefits to a Participant or beneficiary under the terms of the Plan. Amounts
Surrendered for transfer to the funding vehicle of another investment provider
or on account of the termination of the Plan are not Benefit Payments.
CODE - The Internal Revenue Code of 1986, as amended.
COMPANY, WE, OUR OR US - .
CONTRACT OWNER OR YOU - The Employer or entity owning the Contract. The Contract
Owner is named in the Contract Specifications.
CONTRACT YEAR - A period of 12 months commencing with the Effective Date of this
Contract and with any subsequent anniversary.
CONTRIBUTION - Any amount you pay to us for investment under the Contract.
EMPLOYER - An employer maintaining an employee retirement or welfare benefit
plan or similar plan or program for its employees.
FUNDS - The underlying mutual funds in which the Separate Account invests.
GENERAL ACCOUNT - All of our assets other than those in the Separate Account, or
in any other separate investment account we establish. The General Account is
available to our creditors.
GOOD ORDER - Authorized instructions given to us on such forms as we may require
with such clarity and completeness that we are not required to exercise any
discretion.
INVESTMENT CHOICE - Any of the Sub-Accounts or the General Account.
PARTICIPANT - Any employee of former employee of an Employer or other individual
with a Participant Account under this Contract.
PARTICIPANT ACCOUNT - An account under this Contract to which General Account
values and Separate Account Accumulation Units are allocated on behalf of a
Participant.
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PLAN - The employee benefit plan or similar program that is funded by this
Contract.
SEPARATE ACCOUNT - An account we established to separate the assets funding the
variable benefits for the class of contracts to which this Contract belongs from
our other assets. The assets in the Separate Account are not chargeable with
liabilities arising out of any other business we may conduct. The name of the
Separate Account is shown in the Contract Specifications.
SUB-ACCOUNT - The subdivisions of the Separate Account which are used to
allocate your Contract value among the corresponding Funds.
SURRENDER - Any withdrawal of Contract values.
VALUATION DAY - Every day the New York Stock Exchange is open for trading. The
value of a Separate Account is determined as of the close of the New York Stock
Exchange (generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD - The period between close of trading on the New York Stock
Exchange from one Valuation Day to the next.]
SECTION 2.0 CONTRIBUTION PROVISIONS
2.1 CONTRIBUTIONS: You agree to send Contributions to us each Contract Year by
a method we deem acceptable. We agree to apply your Contributions to the General
Account and/or Separate Account in accordance with your instructions and Section
6.
2.2 ALLOCATION/INVESTMENT OF CONTRIBUTIONS: You must specify the percentage of
each Contribution that is to be allocated to the General Account and/ or to each
Sub-Account in multiples of [10%] or a lower multiple as specified by us from
time to time. The minimum amount of any Contribution that you may allocate to
any Sub-Account or the General Account is [1%] of such Contribution, provided
the dollar amount so allocated is not less than [$10.00.] You may change your
allocation instructions for Contributions by written notice received by us, or
by any other method prescribed by us.
2.3 TRANSFER OR RE-ALLOCATION OF CONTRACT VALUES WITHIN THE CONTRACT: You, and
Participants if permitted by your Plan, may transfer Contract values between the
Sub-Accounts and between the Sub-Accounts and the General Account under this
Contract, subject to Section 3.3, and any other restrictions, policies, and
procedures we establish relating to such transfers. We may establish, from time
to time, restrictions, policies, and procedures relating to transfers between
the Sub-Accounts and between the Sub-Accounts and the General Account, which we
may modify or terminate at any time. We may, according to our then current
policies and procedures, restrict or terminate your transfer privileges if we
determine that you have engaged in a pattern of transfers that is
disadvantageous or potentially harmful to other Contract Owners.
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We may establish, from time to time, restrictions, policies, and procedures,
which we may modify or terminate at any time, relating to transfers between any
accounts that we determine are competing Investment Choices. We may, according
to our then current policies and procedures, restrict or terminate your ability
to transfer Contract values between accounts that we determine are competing
Investment Choices. We may also establish time periods during which we may
restrict or terminate your ability to transfer any Contract values into an
account if, during the time period we establish, Contract values were
transferred out of a competing Investment Choice.
This Contract limits you and Participants to one financial transaction per
Valuation Day which involves the movement of the same assets into or out of a
particular Sub-Account.
SECTION 3.0 SURRENDER PROVISIONS:
3.1 SURRENDERS: You may request, in writing or by other means acceptable to us,
a Surrender of Contract values at any time. We agree to pay Surrenders from the
Contract upon your request, subject to any limitations and charges set forth in
the Contract. A full Surrender of this Contract will be paid as provided in the
Contract Termination Section of this Contract.
3.2 PARTIAL SURRENDERS: You may request, in writing or by other means
acceptable to us, a partial Surrender of Contract values at any time prior to
Contract Termination. We will deduct any applicable Contingent Deferred Sales
Charge. We waive the Contingent Deferred Sales Charge for Benefit Payments and
for Payments for Plan Related Expenses. Partial Surrenders may be paid in a
single sum or in installment payments for a designated period. The frequency of
payments and length of the designated period are determined by mutual agreement.
You and we may also agree to other payment options not prohibited by the Plan.
3.3 GENERAL ACCOUNT TRANSFER AND SURRENDER LIMITATIONS: The Contract does not
allow transfers and Surrenders of General Account values prior to Contract
Termination if the amount of any transfer of Surrender from the General Account,
when added to the sum of all transfers and Surrenders from the General Account
during the preceding [twelve months], exceeds [twelve percent (12%)] of the
General Account values [twelve months] earlier, unless we consent to the
transfer or Surrender. This restriction does not apply to Benefit Payments.
3.4 PAYMENT OF SEPARATE ACCOUNT SURRENDER VALUE: We pay any request for
Surrender of Contract values in the Sub-Accounts within seven days after we
receive your written request in Good Order. However, we may postpone payment:
(a) when the New York Stock Exchange is closed, or trading on the New York
Stock Exchange is restricted;
(b) when an emergency exists and as a result of which (1) disposal of the
securities held in the Sub-Accounts is not reasonably practicable, or
(2) it is not reasonably practicable for the value of the net assets of
the Separate Account to be fairly determined; or
(c) when the Securities and Exchange Commission may, by order, permit for
the protection of Contract Owners. The conditions under which trading
will be deemed to be restricted or an emergency is deemed to exist is
determined by rules and regulations of the Securities and Exchange
Commission.
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SECTION 4.0 CONTRACT CONTROL PROVISIONS
4.1 OWNER: You may exercise all the rights, privileges and options granted by
this Contract or permitted by us and to agree with us to any amendment to the
Contract. [You shall exercise this power in a manner consistent with the written
Plan adopted by you or the Employer for the exclusive benefit of Participants
and their beneficiaries. The assets and income of this Contract may not be used
for or diverted to purposes other than the exclusive benefit of Participants and
their beneficiaries, except as permitted under applicable law. The preceding
sentence does not limit our exercise of the rights granted to us by this
Contract, including the right to deduct and retain amounts specified in the
Contract.]
4.2 ASSIGNMENT: Amounts in a Participant Account are nontransferable and cannot
be sold, assigned, or pledged as security, for a loan or for any other purpose
to any person other than us, except as permitted under the Code, including any
rulings or regulations thereunder, other applicable law, and this Contract.
Your interest in this Contract may be assigned only if we agree. You agree to
give us such information as we reasonably request concerning any such proposed
assignment. We assume no responsibility for the validity of any assignment.
SECTION 5.0 GENERAL PROVISIONS
5.1 THE CONTRACT: This Contract, the application for the Contract, and any
endorsements or riders, constitute the entire Contract. All statements in the
application shall, in the absence of fraud, be deemed representations and not
warranties. No statement shall void this Contract or be used in defense of a
claim under it unless contained in the application. Contract Years are measured
from the Contract Effective Date.
5.2 CONTRACT MODIFICATION: This Contract may be modified at any time by written
agreement between you and us. In addition, we may modify this Contract at any
time to comply with applicable law or as necessary to reflect any change in the
Separate Account or any Sub-Account pursuant to Section 5.3, Section 5.4 or
Section 5.5. No modification may operate in a manner inconsistent with this
Section.
On and after the [fifth] Contract Year, we may modify any or all the terms of
this Contract upon [90 days'] advance written notice to you. Notwithstanding any
such changes, the Minimum Guaranteed Interest Rate applicable on the effective
date of the Contract will continue to apply to all Contributions, and earnings,
if any thereon, in effect at the time the Contribution was credited.
Any modification of this Contract requires the signature of our President, a
Vice President, an Assistant Vice President or Secretary.
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5.3 FUND SUBSTITUTION: We may, subject to compliance with applicable law,
substitute the shares of any other registered investment company for the shares
of any Fund held by the Separate Account. Substitution may occur if shares of
any Fund(s) become unavailable, or due to changes in the applicable law or
interpretations of law, or as we otherwise deem appropriate.
5.4 FUND MODIFICATION: We may, in our sole discretion and subject to compliance
with applicable law, add, replace, or eliminate any Separate Account or Fund
(with or without differing investment objectives) to or from this Contract, and
we may terminate ongoing Contributions to any Separate Account or Fund under
this Contract.
5.5 CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT: At our election and
subject to any necessary vote by persons having the right to give instructions
on the voting of the Fund shares held by the Sub-Accounts, the Separate Account
may be operated as a management company under the Investment Company Act of 1940
or any other form permitted by law, may be deregistered under the Investment
Company Act of 1940 in the event registration is no longer required, or may be
combined with one or more Separate Accounts.
5.6 NON-PARTICIPATING: This Contract does not share in our surplus earnings.
That portion of the Separate Account assets equal to the reserves and other
Contract liabilities are not chargeable with liabilities arising out of any
other business we may conduct.
5.7 OVERPAYMENTS/UNDERPAYMENTS: Any underpayments by us shall be made up
immediately and any overpayments are first charged against future amounts
payable.
5.8 REPORTS TO THE CONTRACT OWNER: We send you copies of any shareholder
reports of the Funds and of any other notices or documents required by law to be
sent to you. At least annually, we send you a statement of the Contract value.
5.9 VOTING RIGHTS: We notify you of any Fund shareholders' meetings at which
the Fund shares held for your account may be voted. We send proxy materials and
instructions for you to vote the Fund shares held for your account. We arrange
for the handling and tallying of proxies received from Contract Owners. We vote
the Fund shares held by us in accordance with the instructions received from
Contract Owners. You may attend any meeting, where shares held for your benefit
are voted.
If you give no instructions or leave the manner of voting discretionary, we vote
such shares of the appropriate Fund in the same proportion as shares of that
Fund for which instructions are received. We also vote Fund shares held by us
for our own account in this manner.
5.10 PAYMENTS FOR PLAN RELATED EXPENSES: If you direct and we agree, we may
deduct amounts held under this Contract to pay certain administrative expenses
or other Plan related expenses including, but not limited to, fees to
consultants, auditors, counsel, Hartford Life Insurance Company, its affiliates
and any other Plan service providers. We call these payments "Payments for Plan
Related Expenses". Such amounts are deducted under this Contract and paid to you
or paid as you direct. If we agree, amounts to be deducted pursuant to this
Section may be included as an adjustment to the Program and Administrative
Charge deducted from the Sub-Accounts. We do not assess a Contingent Deferred
Sales Charge on Payments for Plan Related Expenses.
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5.11 NONWAIVER: We may, in our sole discretion, elect not to exercise a right
or reservation specified in this Contract. Such election shall not constitute a
waiver of the right to exercise such right or reservation at any subsequent
time, nor shall it constitute a waiver of any other provisions of the Contract.
SECTION 6.0 VALUATION PROVISIONS
6.1 NET CONTRIBUTIONS: The Net Contribution is equal to your Contribution minus
any applicable taxes that we determine are allocable to this Contract. We apply
the Net Contribution to the General Account or to purchase Accumulation Units in
the Sub-Accounts that you have selected.
6.2 GENERAL ACCOUNT VALUES: We determine your General Account values by
crediting interest to amounts allocated to the General Accounts under your
Contract. The provisions of this Contract for crediting interest are shown in
the Contract Specifications.
6.3 SUB-ACCOUNT VALUES: Sub-Account values are determined by multiplying the
number of Accumulation Units by the Accumulation Unit Value.
(a) NUMBER OF ACCUMULATION UNITS: We determine the number of Accumulation
Units credited to each Sub-Account by dividing the Net Contribution
allocated to a Sub-Account by the dollar value of one Accumulation Unit
for the Sub-Account. The number of Accumulation Units is not affected
by any subsequent change in the value of such Accumulation Units.
(b) ACCUMULATION UNIT VALUE: We determine Accumulation Unit values by taking
the Accumulation Unit value for the prior Valuation Day and multiplying
it by the "Net Investment Factor" for the current Valuation Day. The Net
Investment Factor is used to measure the investment performance of a
Sub-Account from one Valuation Day to the next. The Accumulation Unit
value in any Sub-Account may increase or decrease from day to day based
on the Net Investment Factor.
6.4 NET INVESTMENT FACTOR: This Contract provides for two methods for
determining the Net Investment Factor. You chose the method that we use when you
purchased the Contract.
(a) METHOD ONE
The Net Investment Factor for each Sub-Account equals:
(1) the net asset value per share plus applicable distributions per share
of the corresponding Fund at the end of the current Valuation Day;
divided by
10
(2) the net asset value per share of the corresponding Fund at the end of
the prior Valuation Day; multiplied by
(3) the daily expense factor for the Program and Administrative Charge and
any other applicable charges adjusted for the number of days in the
period.
If you select Method One, we deduct the Program and Administrative Charge, and
any other applicable charges, when Accumulation Unit values are determined each
Valuation Day.
(b) METHOD TWO
The Net Investment Factor for each Sub-Account equals:
(1) the net asset value per share of the corresponding Fund at the end of
the current Valuation Day; divided by
(2) the net asset value per share of the corresponding Fund at the end of
the prior Valuation Day.
Under Method Two, the value of any applicable Fund distributions per share
creates additional Accumulation Units. If you select Method Two, we deduct the
Program and Administrative Charge, and any other applicable charges, each
calendar quarter by redeeming Accumulation Units in proportion to the amount of
the charges. We assess the charges as a percentage of the average daily assets
of the Sub-Accounts during the quarter.
SECTION 7.0 CONTRACT TERMINATION PROVISIONS
7.1 NOTICE AND DATE OF TERMINATION: You may terminate this Contract at any time
by giving us written notice. We may terminate this Contract by giving you
written notice, but only if you breach any material obligation or representation
under this Contract or fail to make any report or provide us with any
information otherwise required by this Contract and fail to cure such breach or
remedy such failure within [30] days from the day we notify you of such breach
or failure.
The "Date of Termination" is the later of the Valuation Day we receive your
notice of termination or the Valuation Day specified in such notice. If we
terminate this Contract, the Date of Termination will be [30] calendar days from
the date we provide you with notice of termination.
7.2 EFFECT OF CONTRACT TERMINATION: On and after the Date of Termination, no
Contributions may be made. As of the Date of Termination, we reduce all Contract
values by:
(a) any applicable taxes not previously deducted;
(b) the Annual Maintenance Fee as shown in the Contract Specifications;
(c) any applicable Contingent Deferred Sales Charge as shown in the
Contract Specifications; and
(d) any other accrued and unpaid fees or charges under the Contract.
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We call the resulting Contract values the "Surrender Value". We pay the
Surrender Value to you under Section 7.3 and Section 7.4 below.
7.3 PAYMENT OF SEPARATE ACCOUNT VALUES AFTER CONTRACT TERMINATION: We pay the
portion of your Surrender Value in the Separate Account within seven days after
the Date of Termination, unless payment is deferred under Section 3.4, or unless
otherwise agreed to by you and us.
7.4 PAYMENT OF GENERAL ACCOUNT VALUES AFTER CONTRACT TERMINATION: We call the
portion of your Surrender Value in the General Account the "Balance at
Termination". You can elect to receive the Balance at Termination under either
the Book Value Installment Alternative or the Market Value Lump Sum Alternative,
below. Your election must be in writing. If you fail to make an election, we pay
the Balance at Termination under the Book Value Installment Alternative.
(a) BOOK VALUE INSTALLMENT ALTERNATIVE: We pay the Balance at
Termination in [six (6)] equal installments, plus interest, annually
over a period of [five (5)] years. We pay the first installment
within [thirty (30)] days after the Date of Termination. We pay the
remaining [five] installments, plus interest, on each anniversary of
the Date of Termination. This Alternative does not allow any
Surrenders, including Benefit Payments. The [six] installments are
the only payments you receive.
We credit the Balance at Termination with interest at a rate of at
least [three (3) percent] per annum beginning on the Date of
Termination.
(b) MARKET VALUE LUMP SUM ALTERNATIVE: If you elect this Alternative, we
will pay you the discounted present value of the [six (6)] equal
installments described above in a single lump sum payment. We may
defer payment for a period that is not longer than [90] days from the
date you elect this Alternative in writing. The single lump sum
payment will be equal to the greater of:
(1) The present value of each of the installment payments discounted
back to the Date of Termination at a rate equal to the annualized
yield on the [U.S. Treasury Strip plus 75 basis points,] or
(2) The Contributions to the General Account less the transfers and
Surrenders from the General Account with interest on [90%] of this
result accrued at [3%,] less any applicable taxes and applicable
Contingent Deferred Sales Charges.
However, the single lump sum will not exceed the Balance at Termination.
[As used in this Section, "U.S. Treasury Strip" means an instrument reflecting
stripped coupon interest issued on U.S. Treasury obligations. If no such
instrument is available, then we will select a comparable substitute.
Also, for purposes of this Section, the applicable annualized yield is the yield
in the U.S. Treasury Strip with a maturity date that is closest to the date on
which such installment payment is due as published on the Valuation Day next
following the Date of Termination. We will select the source of such published
rate.]
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GROUP VARIABLE FUNDING AGREEMENT
NONPARTICIPATING
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTIANS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF THE FORMULA MAY RESULT IN A DOWNWARD ADUSTMENT IN CASH SURRENDER
BENEFITS.
