[SDI LOGO] SECURITY DISTRIBUTORS, INC.
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A MEMBER OF THE SECURITY ONE SECURITY BENEFIT PLACE
BENEFIT GROUP XX XXXXXXXXX XXXXXX, XXXXXX 00000-0000
000-000-0000
MARKETING ORGANIZATION AGREEMENT
COMMISSION SCHEDULE
AdvanceDesigns(SM) Variable Annuity (the "Contract")
Issued by First Security Benefit Life Insurance
and Annuity Company of New York
Marketing Organization:
EFFECTIVE DATE OF COMMISSION SCHEDULE:
COMMISSIONS - This Commission Schedule is hereby made a part of and amends your
Marketing Organization Agreement (hereinafter called the "Agreement"), with
Security Distributors, Inc. (hereinafter called "SDI"), 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. UP FRONT COMMISSIONS: The rate of commissions paid on Purchase Payments
made with respect to each particular Contract is based on the issue age of
the Owner (or of the Annuitant if the Contract is owned by a non-natural
person) as set forth in the tables below. 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, SDI WILL
PAY YOU PURSUANT TO OPTION B. You may select a different option for each
Contract but may not change the Option in effect after the Contract is
issued.
COMMISSION OPTION OPTION A OPTION B OPTION C OPTION D
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OWNER ISSUE AGE 0-80 81-85 0-80 81-85 0-80 81-85 0-80 81-85
6.50% 0.00% 5.00% 2.50% 2.50% 0.00% 0.00% 0.00%
*No Commission will be paid on Purchase Payments made that are less than the
minimum specified in the applicable prospectus and Contract.
**Option A is not available in connection with a Contract qualified under
Section 401, 403 or 457 of the Internal Revenue Code. Option A is available,
however, in connection with a Contract issued as an individual retirement
annuity under Section 408 or 408A of the Code.
2. ASSET-BASED COMMISSIONS: Under Commission Options B, C and D, SDI will pay
an asset-based commission as of the end of each calendar month. The amount
of the asset-based commission under each Option is equal to 1/12 of the
applicable percentage set forth in the table below times the aggregate
Contract Value of those Contracts sold under the applicable Commission
Option for which Marketing Organization is the broker of record and, with
respect to Options B and C only, the initial Purchase Payment is more than
12 months old. For Option D only, 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 is equal to the amount set forth
in the Table below. No asset-based commission will be paid on Contracts
that have annuitized under a life contingent annuity option. An
Annuitization Fee may be available as discussed in paragraph 7.
COMMISSION OPTION OPTION A OPTION B OPTION C OPTION D
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OWNER ISSUE AGE 0-80 81-85 0-80 81-85 0-80 81-85 0-80 81-85
0 bps 0 bps 25 bps 25 bps 45 bps 0 bps 65 bps 60 bps
3. ALTERNATE WITHDRAWAL CHARGE RIDER: For a Contract sold with an Alternate
Withdrawal Charge Rider, the commission and asset-based commission
schedules set forth above do not apply. The following commission and
asset-based commission schedules will apply in lieu of those set forth
above if an Alternate Withdrawal Charge Rider is in effect. The following
commission rates are applicable based upon the Alternate Withdrawal Charge
Rider selected. The amount of commission and asset-based commission varies
based upon the Duration of the Contract as set forth below, which is
measured from the Contract Date.
UP FRONT ASSET BASED
COMMISSION* COMMISSION**
BASED ON OWNER BASED ON OWNER
ALTERNATE AGE AT ISSUE AGE AT ISSUE
WITHDRAWAL -------------- --------------
CHARGE RIDER DURATION OF THE CONTRACT 0-80 81+ 0-80 81+
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0-year 0-12 months 1.50% 1.0% 0% 0%
13-24 months 0% 0% 1.0% 0.90%
25 months and thereafter 0% 0% 1.25% 1.15%
UP FRONT ASSET BASED
COMMISSION* COMMISSION**
BASED ON OWNER BASED ON OWNER
ALTERNATE ISSUE AGE ISSUE AGE
WITHDRAWAL -------------- --------------
CHARGE RIDER DURATION OF THE CONTRACT 0-80 81+ 0-80 81+
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4-year 0-12 months 5% 2.5% 0% 0%
13-24 months 4% 2.0% 0% 0%
25-36 months 3% 1.5% 0% 0%
37- 48 months 2% 1.0% 0% 0%
49 months and thereafter 0% 0% 1% 1%
*The up front commission is equal to the applicable percentage of each Purchase
Payment written by Marketing Organization based upon the applicable Alternate
Withdrawal Charge Rider in effect and the Contract Duration upon receipt of
the Purchase Payment.
**The amount of the asset-based commission is equal to 1/12 of the applicable
percentage set forth in the table above times the aggregate Contract Value of
those Contracts sold under the applicable Alternate Withdrawal Charge Rider
for which Marketing Organization is the broker of record.
4. CONTRACT DATE: For the purpose of this Commission Schedule, the term
"Contract Date" shall be the date the first Purchase Payment is credited
to the Contract.
5. DEATH BENEFIT APPLIED TO 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 7.
6. 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 insurer 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.
7. COMMISSION CHARGEBACK PROVISIONS: No Commission chargebacks are applicable
to any partial withdrawals, full surrenders or death claims except in the
event of a free look surrender or for Contracts that have selected a
0-Year Alternate Withdrawal Charge Rider. In the event of a full
withdrawal during the first 18 months of a Contract with a 0-Year
Alternate Withdrawal Charge rider, SDI will charge back 100% of
commissions paid in connection with the Contract. In the event of a
partial withdrawal that exceeds the Free Withdrawal Amount as defined in
the Contract during the first eighteen (18) months of a Contract with a
0-Year Alternate Withdrawal Charge Rider, SDI will charge back 100% of
commissions paid in connection with the withdrawal amount that exceeds the
Free Withdrawal Amount. SDI also will charge back 100% of commissions in
the event of a free look surrender.
8. CHANGE OF COMMISSION SCHEDULE: Notwithstanding any other provision of the
Agreement to the contrary, the following provisions shall apply. SDI
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.
9. 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 SDI.
Upon written notice to SDI 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
SDI by the Contract Owner of termination of Marketing Organization,
without designating a new marketing organization, SDI shall cease paying
commissions and asset based commissions to Marketing Organization.
10. 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 SDI; (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 10 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.
By: /s/ Xxxxxxx Xxxxxx
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Title: President
8859 (R10-01)
