SHAREHOLDER INFORMATION AGREEMENT
THIS SHAREHOLDER INFORMATION AGREEMENT entered into as of March 6, 2007 by and
between Federated Securities Corp., ("FSC") a Pennsylvania corporation, and
Fidelity Security Life Insurance Company ("Insurer"), a Missouri corporation.
WHEREAS, Insurer has entered into fund participation agreement(s) with FSC to
make certain mutual funds available to retirement benefit plans and annuity
policies serviced by Insurer;
WHEREAS, the Funds have adopted policies and procedures to protect the Funds and
their respective shareholders from potentially harmful frequent trading;
WHEREAS, such policies and procedures include reserving the right to reject
certain transactions initiated by plan participants and individual annuity
owners;
WHEREAS, this Agreement is being entered into to assist the Funds in meeting
their goal of restricting potentially harmful frequent trading within the Funds;
NOW THEREFORE, in consideration of the terms covenants and conditions contained
herein and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Definitions. The term "Fund" shall mean an open-ended management investment
company that is registered or required to register under section 8 of the
Investment Company Act of 1940 and includes (i) an investment adviser to or
administrator for the Fund; (ii) the principal underwriter or distributor for
the Fund; or (iii) the transfer agent for the Fund. The term not does include
any "excepted funds" as defined in SEC Rule 22c-2(b) under the Investment
Company Act of 1940. (1)
The term "Shares" means the interests of Shareholders corresponding to the
redeemable securities of record issued by the Fund under the Investment Company
Act of 1940 that are held by the Intermediary.
The term "Shareholder" means the holder of interests in a variable annuity or
variable life insurance contract issued by the Insurer ("Contract"), or a
participant in an employee benefit plan with a beneficial interest in a
contract.
The term "Shareholder-Initiated Transfer Purchase" means a transaction that is
initiated or directed by a Shareholder that results in a transfer of assets
within a Contract to a Fund, but does not include transactions that are
executed: (i) pursuant to a Contract death benefit; (ii) one-time step-up in
Contract value pursuant to a Contract death benefit; (iii) 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 (iv) prearranged transfers at the
conclusion of a required free look period.
The term "Shareholder-Initiated Transfer Redemption" means a transaction that is
initiated or directed by a Shareholder 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, or systematic withdrawal 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.
The term "written" includes electronic writings and facsimile transmissions.
2. Agreement to Provide Information. Insurer agrees to provide the Fund or its
designee, 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 associated with the Shareholder, if known, of any or
all Shareholder(s) of the account, 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 the
Insurer during the period covered by the request. Unless otherwise specifically
requested by the Fund, the Insurer shall only be required to provide information
relating to Shareholder-Initiated Transfer Purchases or Shareholder- Initiated
Transfer Redemptions.
3. Period Covered by Request. Requests must set forth a specific period, not to
exceed 180 days from the date of the request, for which transaction information
is sought. The Fund may request transaction information older than 180 days from
the date of the request as it deems necessary to investigate compliance with
policies established by the Fund for the purpose of eliminating or reducing any
dilution of the value of the outstanding shares issued by the Fund.
4. Timing of Requests. Fund requests for Shareholder information shall be made
no more frequently than quarterly except as the Fund deems necessary to
investigate compliance with policies established by the Fund for the purpose of
eliminating or reducing any dilution of the value of the outstanding shares
issued by the Fund.
5. Form and Timing of Response. (a) Insurer agrees to provide, promptly upon
request of the Fund or its designee, the requested information specified in
paragraph 2 hereof. If requested by the Fund or its designee, Insurer agrees to
use best efforts to determine promptly whether any specific person about whom it
has received the identification and transaction information specified in
paragraph 2 hereof is itself a financial intermediary ("indirect intermediary")
and, upon further request of the Fund or its designee, promptly either (i)
provide (or arrange to have provided) the information set forth in paragraph 2
hereof for those shareholders who hold an account with an indirect intermediary
or (ii) restrict or prohibit the indirect intermediary from purchasing, in
nominee name on behalf of other persons, securities issued by the Fund. Insurer
additionally agrees to inform the Fund whether it plans to perform (i) or (ii);
(b) Responses required by this paragraph must be communicated in writing and in
a format mutually agreed upon by the Fund or its designee and the Insurer; and
(c) To the extent practicable, the format for any transaction information
provided to die Fund should be consistent with the NSCC Standardized Data
Reporting Format.
6. Limitations on Use of Information. The Fund agrees not to use the information
received pursuant to this Agreement for any purpose other than as necessary to
comply with the provisions of Rule 22c-2 or to fulfill other regulatory or legal
requirements subject to the privacy provisions of Title V of the
Xxxxx-Xxxxx-Xxxxxx Act (Public Law 106-102) and comparable state laws.
7. Agreement to Restrict Trading. Insurer agrees to execute written instructions
from the Fund to restrict or prohibit further purchases or exchanges of Shares
by a Shareholder that has been identified by the Fund as having engaged in
transactions of the Fund's Shares (directly or indirectly through the Insurer's
account) that violate policies established by the Fund for the purpose of
eliminating or reducing any dilution of the value of the outstanding Shares
issued by the Fund. Unless otherwise directed by the Fund, any such restrictions
or prohibitions shall only apply to Shareholder-Initiated Transfer Purchases or
Shareholder-Initiated Transfer Redemptions that are effected directly or
indirectly through Insurer. Instructions must be received by Insurer at the
following address, or such other address that Insurer may communicate to you in
writing from time to time, including, if applicable, an e-mail and/or facsimile
telephone number:
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8. Form of Instructions. Instructions must include the TIN, ITIN, or GII and the
specific individual Contract owner number or participant account number
associated with the Shareholder, if known, and the specific restriction(s) to be
executed, including how long the restriction(s) is(are) to remain in place. If
the TIN, ITIN, GII or the specific individual Contract owner number or
participant account number associated with the Shareholder is not known, the
instructions must include an equivalent identifying number of the Shareholder(s)
or account(s) or other agreed upon information to which the instruction relates.
Upon request of the Insurer, Fund agrees to provide to the Insurer, along with
any written instructions to prohibit further purchases or exchanges of Shares by
Shareholder, information regarding those trades of the contract holder that
violated the Fund's policies relating to eliminating or reducing any dilution of
the value of the Fund's outstanding Shares.
9. Timing of Response. Insurer agrees to execute instructions as soon as
reasonably practicable, but not later than five business days after receipt of
the instructions by the Insurer.
10. Confirmation by Insurer. Insurer must provide written confirmation to the
Fund that instructions have been executed. Insurer agrees to provide
confirmation as soon as reasonably practicable, but not later than ten business
days after the instructions have been executed.
11. Construction of the Agreement -Fund Participation Agreements. The parties
have entered into one or more Fund Participation Agreements between or among
them for the purchase and redemption of shares of the Funds by the Accounts in
connection with the Contracts. This Agreement supplements those Fund
Participation Agreements. To the extent the terms of this Agreement conflict
with the terms of a Fund Participation Agreement, the terms of this Agreement
shall control.
12. Termination. This Agreement will terminate upon the termination of the Fund
Participation Agreement(s).
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed as
of the date first above written.
FEDERATED SECURITIES CORP.
By: /s/XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
Title: President
INSURER NAME: FIDELITY SECURITY LIFE INSURANCE COMPANY
By: /s/XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx, CLU
Title: Director of Admin./CCO for Separate Accounts
(1) As defined in SEC Rule 22c-2(b), term "excepted fund" means any: (1) money
market fund; (2) fund that issues securities that are listed on a national
exchange; and (3) fund that affirmatively permits short-term trading of its
securities, if its prospectus clearly and prominently discloses that the fund
permits short-term trading of its securities and that such trading may result in
additional costs for the fund.
*According to the IRS' website, the ITIN refers to the Individual Taxpayer
Identification number, which is a nine-digit number that always begins with the
number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX. The IRS
issues ITINs to individuals who are required to have a U.S. taxpayer
identification number but who do not have, and are not eligible to obtain a
Social Security Number (SSN) from the Social Security Administration (SSA). SEC
Rule 22c-2 inadvertently refers to the ITIN as the International Taxpayer
Identification Number.
