SHAREHOLDER INFORMATION AGREEMENT
THIS SHAREHOLDER INFORMATION AGREEMENT entered into as of April 16, 2007 by and
between Federated Securities Corp., ("FSC"), a Pennsylvania corporation, and
Phoenix Life Insurance Company, a New York corporation, and agent for Valley
Forge Life Insurance Company ("Intermediary").
WHEREAS, Intermediary has entered into fund participation agreement(s) with FSC
to make certain mutual funds available to retirement benefit plans and variable
life and variable annuity policies issued by Intermediary;
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 potential harmful frequent trading within the Funds;
NOW THEREFORE, in consideration of the terms covenants and conditions contained
herein and other valuable considerations, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Definitions.
The term "Intermediary" means an insurance company separate account offering any
of the Fund's insurance dedicated mutual funds ("Separate Account") and/or the
insurance company acting as the depositor for the Separate Account.
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 does not include any "excepted funds" as
defined in SEC Rule 22c-2(b) under the Investment Company Act of 1940.(1)
The term "promptly" shall mean no later than 10 business days.
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 Intermediary ("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, 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. Intermediary 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 Intermediary during the period covered by the
request ("Transaction Information"). Unless otherwise specifically
requested by the Fund, the Intermediary shall only be required to provide
Transaction 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 90 days from the date of the request, for which Transaction
Information is sought. The Fund may request Transaction Information older
then 90 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 Transaction 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) Intermediary agrees to provide, promptly
upon request of the Fund or its designee, the requested Transaction
Information specified in paragraph 2 hereof. If requested by the Fund or
its designee, Intermediary 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) Transaction 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.
Intermediary 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 Intermediary; and (c) To the extent practicable, the
format for any Transaction Information provided to the Fund should be
consistent with the NSCC Standardized Data Reporting Format.
6. Limitations on Use of Transaction Information. The Fund agrees to only use
Transaction Information for the purposes of identifying Shareholders who
may be violating the Funds policies and procedures with respect to dilution
of the Fund's value as contemplated by 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.
The Fund agrees that the Transaction Information is confidential and that
the Fund will not share the Transaction Information externally, unless the
Intermediary provides the Fund with prior written consent to share such
Transaction Information. The Fund agrees not to share the Transaction
Information internally, except on a "need to know basis. The Fund further
agrees to notify the Intermediary immediately in the event that the
confidentiality of the Transaction Information is breached.
7. (A). Agreement to Prohibit Trading. Intermediary agrees to execute written
instructions from the Fund to 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 Intermediary'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 prohibitions shall only apply to
Shareholder-Initiated Transfer Purchases or Shareholder-Initiated Transfer
Redemptions that are effected directly or indirectly through
Intermediaries. Instructions must be received to you in writing at the
following address, or such other address that Intermediary may communicate
to you in writing from time to time, including, if applicable, an e-mail
and/or facsimile telephone number:
Phoenix Life Insurance Companies
Attention: Xxxxxxx Xxxxxxxx
00 Xxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000
(B.) Redemption Fees. If the Fund implements a redemption fee in the future that
the Intermediary cannot implement within the requested timeframe despite
the Intermediary's best efforts, the Fund agrees to negotiate, in good
faith, an interim solution until such time that the redemption fee can be
successfully administered.
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 prohibition(s)
to be executed, including how long the prohibition(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 Intermediary, Fund agrees to
provide to the Intermediary, along with any written instructions to
prohibit further purchases or exchanges of Shares by Shareholder,
Transaction 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. Intermediary agrees to execute instructions as soon as
reasonably practicable, but not later than five business days after receipt
of the instructions by the Intermediary.
10. Confirmation by Intermediary. Intermediary must provide written
confirmation to the Fund that instructions have been executed. Intermediary
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. The Fund Participation
Agreements are hereby incorporated by reference into this Agreement, as
this Agreement is intended to supplement 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. Indemnification:
(a) In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of FSC
and the Funds and their respective officers, directors, or employees (each
a "Fund Indemnified Party"), Agent agrees to indemnify each Fund
Indemnified Party against any and all claims, demands, liabilities
(including the amount of any resulting dilution in a Fund's net asset
value) and reasonable expenses (including attorneys' fees) which any Fund
Indemnified Party may incur arising from, related to, or otherwise
connected with any breach by Agent of any provision of this Agreement. In
no event shall Agent be liable to FSC for special, indirect or
consequential damages, or lost profits or loss of business, arising under
or in connection with any such breach.
(b) In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of Agent
and its officers, directors, or employees (each a "Agent Indemnified
Party"), FSC agrees to indemnify each Agent Indemnified Party against any
and all claims, demands, liabilities and reasonable expenses (including
attorneys' fees) which any Agent Indemnified Party may incur arising from,
related to, or otherwise connected with, any breach by FSC of any provision
of this Agreement. In no event shall FSC be liable to Agent for special,
indirect or consequential damages, or lost profits or loss of business,
arising under or in connection with any such breach.
(c) The parties' agreement in this Paragraph to indemnify each other is
conditioned upon the party entitled to indemnification ("Claimant") giving
notice to the party required to provide indemnification ("Indemnifier")
promptly after the summons or other first legal process for any claim as to
which indemnity may be sought is served on the Claimant. The Claimant shall
permit the Indemnifier to assume the defense of any such claim or any
litigation resulting from it, provided that Indemnifier's counsel that is
conducting the defense of such claim or litigation shall be approved by the
Claimant (which approval shall not unreasonably be withheld), and that the
Claimant may participate in such defense at its expense. The failure of the
Claimant to give notice as provided in this subparagraph (c) shall not
relieve the Indemnifier from any liability other than its indemnity
obligation under this Paragraph. No Indemnifier, in the defense of any such
claim or litigation, shall, without the consent of the Claimant, consent to
entry of any judgment or enter into any settlement that does not include as
an unconditional term the giving by the alleging party or plaintiff to the
Claimant of a release from all liability in respect to such claim or
litigation.
(d) The provisions of this Section shall survive the termination of this
Agreement.
13. 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/ Xxxxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
-----------------------------------
Title: Senior Vice President
Date: 4/13/07
PHOENIX LIFE INSURANCE COMPANY, AS AGENT FOR VALLEY FORGE LIFE INSURANCE COMPANY
By: /s/ Xxxx Xxxxxxx X'Xxxxxxx
Name: Xxxx Xxxxxxx X'Xxxxxxx
Title: Senior Vice President
Date: April 12, 2007
(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.
