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Exhibit 10.11
MARKETING AGREEMENT
This Marketing Agreement (the "Agreement") dated March 28, 1997, is by and
between SunAmerica Life Insurance Company (the "Company") and NSM Sales
Corporation ("NSM").
I. Appointment. NSM is appointed to promote the Company and its annuity
policies described on Schedule 1 and Schedule 2 (collectively the "Fee
Schedules"), attached hereto and incorporated herein by reference (the
"Policies"), to qualified agents recruited by NSM to solicit and procure
applications for the Policies. This appointment is limited to those
jurisdictions in which the Company and NSM are both licensed as required
by prevailing regulatory requirements and in which the Policies identified
on the Fee Schedules have been approved for sale. Except as provided in
Section V below, this appointment is not exclusive and the Company
reserves the right to appoint other agents in the same territory.
II. Duties and Responsibilities of NSM. NSM understands and agrees that its
responsibilities under this Agreement include the following:
A. NSM will recommend for appointment appropriately licensed individuals
or entities (each an "Agent" to solicit sales of Policies issued by
the Company. NSM is responsible for collecting the information
required by the Company to investigate the character, work experience
and background of any proposed Agent prior to appointment by the
Company. No Agent may act on behalf of the Company until properly
appointed by the Company. The Company reserves the right to refuse to
appoint any proposed Agent and to terminate the appointment of any
Agent, with or without cause, at any time. NSM may assume that each
Agent will be properly appointed by the Company within 10 days of
receiving the appropriate and necessary information, unless the
Company notifies it otherwise.
B. NSM shall use reasonable efforts to supervise and monitor the Agent
force and will instruct the Agent force to act in a manner which
complies with all applicable federal, state and local laws and
regulations and all Company rules and procedures. NSM shall
immediately notify the Company of any known act or omission of any
Agent that may violate any federal, state or local law or regulation
or any Company rule or procedure, will instruct such Agent to remedy
such violation and will recommend to the Company that such Agent be
terminated if NSM deems termination appropriate.
C. NSM may not use the Company service marks or logos except as approved
by the Company in writing.
D. Except where permitted by and in full compliance with applicable law
or regulation, NSM and its Agents may not pay or allow any rebate of
premium or commission, directly or indirectly, or, share any
commission with any person or entity not licensed and appointed to
represent the Company.
E. NSM will forward to the Company, within 2 business days of receipt,
any papers or notice served upon or sent to NSM in connection with any
regulatory or legal proceeding, hearing, action or policyholder
complaint filed against or involving the Company or any Policy issued
by the Company.
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F. If any Agent is a federal or state chartered bank, thrift or savings
and loan institution (collectively, "Bank") or will be marketing any
Policies on the premises of any Bank, NSM shall instruct each such
Agent to comply and cause Bank to comply with the Interagency
Statement on Retail Sales of Nondeposit Investment Products (Board
of Governors of the Federal Reserve System, Federal Deposit
Insurance Corporation, Office of the Comptroller of the Currency,
and Office of Thrift Supervision, February 14, 1994) and any
additional or subsequent release from any agency or regulatory body
with authority over such entities, which is designed to provide
governance to financial institutions in connection with the sale of
nondeposit investment products on the premises of such institutions.
Such compliance to include, without limitation, ensuring that all
sales materials used by such Agent are in compliance with all
applicable requirements of federal and state banking laws.
G. NSM will arrange for or provide training to the Agents to become
familiar with the Policies, including provision of all necessary
training materials; provide marketing support for the Agents in the
distribution of the Policies; provide ongoing service support for
the Agents as it relates to the Policies; and provide assistance to
the Company in resolving any disputes between the Company and any
Agent.
H. NSM is responsible for all funds relating to the Company business
received by NSM and shall ensure that such funds are remitted to the
Company. NSM is not authorized to collect cash on behalf of the
Company and all checks relating to the Company business shall be
made payable to the Company. If NSM receives money in any form for
or on account of the Company, such money shall constitute trust
funds for the Company and shall be remitted immediately to the
Company.
I. NSM will promptly deliver all Policy applications it receives to the
Company. NSM shall, and shall instruct its Agents to, follow the
instructions on the application with the highest degree of care and
comply with the Company's underwriting and administrative
guidelines, policies and procedures. Neither NSM nor its Agents are
authorized to alter or waive any question or answer on any
application for insurance or any provision of any Policy issued by
the Company. The Company reserves the right, in the Company's sole
discretion, to refuse to process any application, to reject any
application or to cancel any Policy and refund any premium, in whole
or in part. NSM shall and shall instruct its Agents to promptly
return to the Company any Policy that is not delivered to the
customer or which is otherwise returned by the customer during any
"free look" period.
J. During the term of this Agreement and for (1) year thereafter, NSM
will not actively solicit or recruit for employment any employee of
the Company or any affiliate of the Company who had been employed in
a marketing or marketing support capacity during the one-year period
immediately preceding the proposed date of employment. A pattern of
frequently employing such individuals will be deemed to be
conclusive proof of active recruitment.
III. Duties and Obligations of the Company. The Company understands and
agrees that its responsibilities under this Agreement include the
following:
A. The Company will promptly file for approval in all states, except
New York, the policies identified on Schedule 1 (the "Exclusive
Policies") and will make the Exclusive Policies available to NSM in
accordance with the terms of this Agreement. The Company will use
its best efforts to obtain regulatory approval to sell the Exclusive
Policies in every state except
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New York promptly as possible. Additionally, the Company will make
available to NSM for marketing policies identified on Schedule 2.
B. The Company will extend every reasonable effort to support NSM in its
marketing of the Policies.
C. The Company will apprise NSM of any applicable laws or regulations
with which NSM or the Agents are obligated to comply which become
effective after the date of this Agreement.
D. During the term of this Agreement and unless this Agreement is
terminated for cause (as defined in Section VIII below), for a period
of one year after termination, the Company and its affiliates will
(i) keep confidential the list of Agents appointed through NSM (the
"NSM Agent List"); and (ii) not actively market, for purposes of
selling the Policies, to any Agent who submitted business through NSM
in the two years prior to termination of the Agreement. If the
Agreement is terminated for cause (as defined in Section VIII below)
or, if on the date of termination NSM no longer has the exclusive
rights to sell the Exclusive Policies due to its failure to meet the
minimum sales levels as set forth in Section V.A. of the Agreement,
for a period of six months, the Company and its affiliates will (i)
keep confidential the NSM Agent List; and (ii) will not actively
market, for purposes of selling the Policies, to any Agent who
submitted business through NSM in the two years prior to termination
of the Agreement. Notwithstanding the above, if an Agent submits an
application for a Policy after the Agreement is terminated, either
directly (and neither the Company nor any affiliate of the Company
has directly marketed to such Agent) or through a marketing company,
managing general agent, general agency arrangement or otherwise
(provided such marketing company, managing general agent or general
agency arrangement has not utilized the NSM Agent List to recruit
such agent), the Company is not prohibited from accepting and
processing such business. NSM shall not be entitled to any fee
payment for such business.
E. During the term of this Agreement and for (1) year thereafter, the
Company will not actively solicit or recruit for employment any
employee of NSM or any affiliate of NSM who had been employed in a
marketing or marketing support capacity during the one-year period
immediately preceding the proposed date of employment. A pattern of
frequently employing such individuals will be deemed to be conclusive
proof of active recruitment.
IV. Sales and Promotional Materials.
A. The Company will develop and provide all "consumer" sales and
promotional material for use in marketing the Policies which, in its
discretion, it deems appropriate; provided, however, such material
will include a separate and fully descriptive brochure for each
Policy. In addition, the Company will develop software applications
for use in marketing the Exclusive Policies. NSM shall be responsible
for the creation of any other sales and promotional material it
desires to use in the marketing of the Policies, including all
expenses associated with the creation of such sales and promotional
materials; provided, however, that every piece of sales and
promotional material must be approved by the Company prior to the use
of such materials in accordance with Section IV, C, below. The
Company shall be responsible for delivering all sales and promotional
materials it creates to NSM in such quantities as NSM requires. NSM
shall be responsible for storing all sales and promotional materials
and for fulfilling requests from Agents for copies of the same.
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B. For purposes of this section "sales and promotional material"
includes, without limitation, any of the following that refer to the
Company or any Policy: advertisements (such as material published or
designed for use in, a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape or
electronic display, signs or billboards or other public media), sales
literature (any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or
published article), marketing literature or software used in the
recruitment of Agents, educational or training materials or other
communications distributed or made generally available to some or all
Agents or employees or otherwise used in marketing the Policies.
C. The Company retains the full right to approve or disapprove any piece
of sales or promotional material. All sales and promotional material
must be submitted to the Company for approval at least five (5)
business days prior to use. The Company will be deemed to have
approved any sales or promotional material submitted to the Company
in writing unless it notifies NSM, in writing, of its disapproval or
required changes within the five (5) business day review period;
provided, however, that if approval or submission of any sales or
promotional material by any state regulatory agency is required prior
to use, no sales or promotional material may be used before
compliance with such obligation. Fifteen copies of each final piece
of sales or promotional material must be submitted to the address
below within 14 business days of its use, together with information
regarding the extent and time period of its use. All sales and
promotional materials must be submitted to the Company pursuant to
this Section IV to the following address: (or to such other address
of which the Company notifies NSM in writing):
SunAmerica Marketing, Inc.
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
V. Exclusivity Rights and Obligations.
A. The Company and NSM agree that NSM shall be given the exclusive right
to market the Exclusive Policies listed on Schedule 1 to
appropriately licensed independent insurance agents. No other
products will be subject to the exclusivity rights and obligations of
this Section V. In order for NSM to retain this exclusive right, NSM
must meet the following minimum sales levels of the Exclusive
Policies (inclusive of all sales by Agents) by the end of the
applicable period (the Company fiscal year is the period from October
1 through September 30):
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Minimum Sales Levels*
(by total premium based on sales
Sales Period of the Exclusive Policies only)
------------ --------------------------------
4/1/97 - 9/30/97 $100,000,000
Company Fiscal Year 1998 $350,000,000
Company Fiscal Year 1999 $400,000,000
Thereafter A number to be agreed upon by the parties
* Sales figures include the sale of the All Purpose Plus and Income
Advantage products underwritten by Xxxx Xxxxx Life Insurance Company
during any period the Exclusive Policies are not being underwritten by
the Company.
If NSM fails to meet the minimum sales levels in any given period, the
Company may terminate the exclusivity rights granted to NSM as set forth
above.
B. NSM agrees that it will not market any annuity product not issued by the
Company which is substantially similar to the Exclusive Policies. If NSM
wants to market an annuity issued by an insurer other than the Company,
it will provide the Company, or an affiliate of the Company, the first
opportunity to make available to NSM such annuity for marketing, (the
"Additional Product"). The Company will promptly review any proposal by
NSM for an Additional Product. If the Company does not make available to
NSM the Additional Product and NSM desires to market the Additional
Product (to be underwritten by a different insurer), the parties will
negotiate in good faith to determine whether the Additional Product is
substantially similar to either of the Exclusive Policies, taking into
consideration such features as the interest rate guarantee period and
crediting rate structure, surrender charge period and bonus interest rate
structure. If NSM markets an annuity product of another insurer which is
substantially similar to the Exclusive Policies, the Company will no
longer be bound by the provisions of this Section V if NSM markets the
Additional Product.
C. NSM will submit to the Company by July 31* of each year a sales plan
which identifies NSM's sales objectives and marketing plans for the
Company's ensuing fiscal year.
VI. Agent Recruitment.
A. Each Agent recruited by NSM must be appointed by the Company and must
execute an Agent's Agreement in the form provided by the Company. NSM may
not modify the form of Agent's Agreement or preliminary data sheet in any
manner. The Company will pay all appointment fees associated with the
appointment of such Agents.
B. If NSM recruits an Agent who has an existing contractual or business
relationship with the Company or any affiliate of the Company as of April
1, 1997, then NSM shall be entitled to compensation only with respect to
premiums received and accepted by the Company with respect to the
Exclusive Policies, unless the Agent is released from its existing agency
relationship and thereafter submits business through NSM.
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VII. Compensation.
A. As full compensation for services performed by NSM under this
Agreement, the Company shall pay NSM pursuant to the Fee Schedules
(as they may be modified from time to time) based upon premiums
received and accepted by the Company for Policies issued upon
applications submitted either directly by NSM or by Agents recruited
by NSM.
B. The Company reserves the right to amend Schedule 2 to add or delete
product which either become available or which the Company is no
longer underwriting at any time by giving written notice of such
modification to NSM. Such amended Schedule shall be incorporated
into this Agreement as if attached hereto.
C. In no event shall the Company be liable for the payment of any fee
or commission with respect to any solicitation made, in whole or in
part, by any person not appropriately licensed and appointed by the
Company prior to the commencement of such solicitation. Commissions
shall be payable only on premiums actually received by the Company
for Policies issued, delivered and accepted by the Company.
D. If any Policy is returned to the Company pursuant to a "free look"
provision, the full fee and commission paid by the Company will be
unearned and NSM shall return such unearned fee to the Company upon
demand or, in the absence of such demand or failure of NSM or return
such unearned fee, the unearned fee will be charged back to NSM. The
Company shall demand that the respective Agent return the unearned
commission and shall use best efforts, including the use of a
collection agency, to recover such funds from the Agent; provided,
however, if the Company uses a collection agency, the costs
associated therewith will be split equally between the Company and
NSM. If, despite using its best efforts for one year, the Company
remains unable to recover such funds from the Agent, the Company may
recover the original amount of such unearned commission from NSM. In
the event that the Company returns all or a part of any premium
received on any Policy predicated upon the negligence or other error
of NSM or its Agents (other than under circumstances pursuant to
which the Policy owner is obligated to pay a surrender charge to the
Company) or if premiums received are not good funds, NSM shall
promptly repay to the Company all or any corresponding part of the
unearned fee received by NSM on account of such Policy.
E. If any premium is returned by the Company as set forth above, the
full fee and commission paid by the Company will be unearned and NSM
shall return such unearned fee to the Company upon demand or, in the
absence of such demand or failure of NSM or return such unearned
fee, the unearned fee will be charged back to NSM. The Company shall
demand that the respective Agent return the unearned commission and
shall use best efforts, including the use of a collection agency, to
recover such funds from the Agent; provided, however, if the Company
uses a collection agency, the costs associated therewith will be
split equally between the Company and NSM. If, despite using its
best efforts for one year, the Company remains unable to recover
such funds from the Agent, the Company may recover the original
amount of such unearned commission from NSM.
F. Compensation on any Policy renewal, change, exchange, conversion, or
any situation not specifically provided for in the Fee Schedules
shall be paid according to the Company's guidelines and practices.
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G. The Company shall provide a fee statement to NSM for each pay period.
Such statements shall be grouped by NSM "Annuity Specialist" and
shall be considered complete and accurate unless NSM provides the
Company with written notice specifying any errors or objections
within 60 days from the date of the statement.
VIII. Termination.
A. The term of this Agreement shall be for one year and will be renewed
automatically unless either party hereto provides the other with
notice of its intent not to renew at least 90 days prior to the date
of renewal. NSM shall continue to receive fee payments in accordance
with the terms of Schedule 1 and Schedule 2 on all additional premium
received after non-renewal for Policies written during the term of
this Agreement.
B. Both NSM and the Company have the right at any time to terminate this
Agreement, without stating any cause, by mailing to the other party a
notice of termination. The notice of termination shall be effective
upon 180 days from the date notice is sent. Any termination shall be
without prejudice to any application submitted by NSM prior to notice
of termination becoming effective unless NSM requests that the
processing of any application be discontinued. If the Company or NSM
terminates the Agreement pursuant to this provision, NSM shall
continue to receive fee payments in accordance with the terms of
Schedule 1 and Schedule 2 on all additional premium received for
Policies written during the term of this Agreement.
C. This Agreement shall automatically terminate "for cause" upon (1) the
dissolution or the transfer of control of NSM or the Company, other
than transfer of control to an affiliate; or (2) the filing for
protection under any state or federal Bankruptcy law by NSM, the
insolvency of NSM, or the filing of any petition in bankruptcy or
receivership against NSM; or (3) a material breach of this Agreement;
or (4) misapplication, misdirection or misappropriation by NSM of
funds or property of the Company or funds received by NSM from policy
owners as premiums for the issuance of a Company Policy or additional
premiums to be applied to an existing Policy; or (5) receipt by the
Company of excessive policy owner complaints relating to NSM's
performance and or service of policy owner issues; or (6) the Company
making the Exclusive Policies available to any marketing agency or
agent other than through NSM; or (7) NSM marketing any product which
is substantially similar to the Exclusive Policies. Upon termination
by the Company of this Agreement for any of the reasons specified
above, NSM will not be entitled to further fee payments. If NSM
terminates this Agreement for any of the reasons specified above, NSM
shall continue to receive fee payments in accordance with the terms
of Schedule 1 and Schedule 2 on all additional premium received for
Policies written during the term of this Agreement.
D. Upon termination of this Agreement, NSM shall (i) promptly return any
and all materials furnished by the Company, including, but not
limited to, all manuals, forms, computer software not purchased by
NSM, promotional materials, supplies and customer records and (ii)
not represent itself as an authorized marketing company of the
Company or as having any affiliation with the Company.
E. Termination of this Agreement shall not release either party from any
liability that is incurred prior to the termination of this
Agreement.
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F. Upon termination of this Agreement, NSM shall not and shall advise the
Agents to not solicit, induce or attempt to solicit or induce any
policyholder to relinquish or replace any policy issued by the Company
or any affiliate of the Company. Furthermore, NSM shall not sell or
transfer to any third party any customer list containing the names of
any policyholders. NSM and the Company agree that the customer
information is a proprietary trade secret of the Company and the Company
will protect this right to the fullest extent permitted by law. NSM
explicitly agrees that it will not disclose and it shall advise the
Agents to not disclose this information to any competitor of the
Company. NSM acknowledges and agrees that this provision may be enforced
by an action for an injunction, as well as or in addition to any action
for damages.
G. The Company may communicate directly with any Policy holder at any time
for purposes of servicing a Policy or to attempt to conserve business.
IX. Indemnification.
A. NSM shall be responsible to the Company for all acts and omissions of
NSM and any employee of NSM. NSM shall indemnify the Company and hold it
harmless from and against any loss, expense, cost (including reasonable
attorneys' fees and expenses), cause of action and/or damage, resulting
or arising from the acts and/or omissions, including any breach of this
Agreement, of NSM and any employee in fulfilling its obligations and
responsibilities under this Agreement. This provision shall survive the
termination of this Agreement. In addition to and without limiting the
above, NSM shall indemnify the Company and hold it harmless from and
against any loss, expense, cost (including reasonable attorneys' fees
and expenses), cause of action and/or damage resulting or arising from
the act and/or omission of any Agent of which NSM should have known had
NSM fulfilled its obligations under Section II B. of this Agreement.
B. The Company shall be responsible to NSM for all acts and omissions of
the Company and any employee of the Company. The Company shall indemnify
NSM and hold it harmless from and against any loss, expense, cost
(including reasonable attorney's fees and expenses), cause of action
and/or damage, resulting or arising from the acts and/or omissions,
including any breach of this Agreement, of the Company or any employee
of the Company in fulfilling its obligations and responsibilities under
this Agreement. This provision shall survive the termination of this
Agreement.
X. General Provisions.
A. All data, information and materials ("Confidential Materials") supplied
by any of the parties under this Agreement or otherwise, shall be kept
in confidence and shall not be disclosed or disseminated to any third
parties without the prior written consent of the furnishing party except
in conformity to any requirements of state or federal law. No party
shall use the Confidential Materials for any purpose other than to
fulfill the terms of this Agreement except in conformity to any
requirements of state or federal law. Confidential Information shall not
include (i) any information that is or becomes generally available to
the public, other than as a result of a breach of this Agreement, or (b)
any information that is lawfully obtained from a third party with a
right to disclose such information, or (c) any information that each
party either possessed prior to the effective date of this Agreement or
independently developed at any time. Upon termination of this Agreement
for any reason, the parties shall immediately cease
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their use of and return all Confidential Materials to the furnishing
party without the retention of any copies.
B. Nothing in this Agreement shall be construed as creating a relationship
of either employee and employer or partnership between NSM or any Agent
and the Company. NSM is an independent contractor and has no authority
except that which is expressly set forth in this Agreement.
C. This Agreement, including any exhibits or addendums hereto and the Fee
Schedules, constitutes the entire agreement and supersedes all previous
agreements, both verbal and written, if any, between NSM and the Company
with respect to the subject matter hereof.
D. This Agreement shall be binding upon and inure to the benefit of NSM
and the Company and their respective successors and assigns; provided,
however that neither this Agreement nor any rights or obligations under
this Agreement, may be assigned or delegated by either NSM or the
Company, except by the Company as to affiliates and subsidiaries of the
Company, without the prior written consent of the other.
E. In the event that any term or provision of this Agreement is held to be
invalid or in conflict with any law or regulation, the validity of the
remaining provisions of this Agreement shall not be affected.
F. The failure of the Company to enforce or insist upon strict compliance
with any provision of this Agreement shall not constitute a waiver of
the right to enforce or insist upon strict compliance with any such
provision in the future.
G. Except as otherwise provided for herein, the terms of this Agreement
may be modified only in a writing executed by both parties.
H. Subject to the provisions of Sections IV, all notices pertaining to
this Agreement shall be valid when given at the address set forth on the
signature page hereof, unless prior written notice is received that
notices should be sent to an alternative address: Any notice by
certified mail shall be deemed to have been given three (3) days after
the date of mailing and any notice personally delivered shall be deemed
to have been given when received.
I. Where a party has reserved rights under this Agreement or where a
party's consent is required, each such party have the right to exercise
its sole discretion.
J. This Agreement shall be construed under the laws of the State of
California.
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K. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute
one and the same instrument.
NSM SALES CORPORATION
By: /s/ Xxxx Xxxxx
-------------------------------------
Xxxx Xxxxx, Senior Vice President
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx, President
SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ Xxx Tumbler
-------------------------------------
Xxx Tumbler, Executive Vice President
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx,
Senior Vice President and General Counsel-Corporate Affairs
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SCHEDULE 1
This Schedule I is attached to and made a part of that certain Marketing
Agreement (the "Agreement") by and between SunAmerica Life Insurance Company
(the "Company") and NSM Sales Corporation ("NSM"), dated as of March 28, 1997.
Capitalized terms are used as defined in the Agreement.
The Company shall pay, as the compensation specified in Section VII of the
Agreement, the fees set forth below:
Fee Payable to NSM as a
Product Name Percentage of Premiums Collected
Income Advantage 1.15%
(Form # SA-918C)
Plus Annuity
(Form # SA-916C) 1.15%
FEES ARE PAID ON PREMIUMS COLLECTED DURING THE FIRST FOUR POLICY YEARS ONLY
As to any Policy which is surrendered in the first policy year, the
compensation paid by the Company will be unearned as set forth below and shall
be charged back to NSM as set forth below:
(1) Within the first 6 months from Policy issuance - 100% of the
compensation.
(2) 6 months to 1 year from Policy issuance - 50% of the compensation.
Schedule 1
Page 1 of 1
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Schedule 2
This Schedule 2 is attached to and made a part of that certain Marketing
Agreement (the "Agreement") by and between SunAmerica Life Insurance Company
(the "Company") and NSM Sales Corporation ("NSM"), dated as of March 28, 1997.
Capitalized terms are used as defined in the Agreement.
The Company shall pay, as the compensation specified in Section VII of the
Agreement, the fees set forth below, which is the total compensation that the
Company will pay on business submitted through NSM, any Agent or any agency
directly appointed by the Company as a result of such agent's or agency's
relationship with NSM and to the extent any portion of such compensation is
payable directly to an Agent or others, the fee payable to NSM will be
correspondingly reduced.
Fee Payable as a MAximum Commission Payable to Agent as
Product Name Percentage of Premiums Collected A Percentage of Premium Collected
----------------------------------- -------------------------------- --------------------------------------
SINGLE PREMIUM IMMEDIATE ANNUITY
5-Year 3.50 3.00
6-9 Year 4.00 3.50
10 Year Plus/Life 4.50 4.00
STERLING SELECT PLUS
(Flexible Premium Deferred Annuity) Issue Age Issue Age Issue Age Issue Age
0-80 81-85 0-80 81-85
5.50 2.50 5.00 2.00
STERLING SELECT/STERLING SELECT II Issue Age Issue Age Issue Age Issue Age
(Single Premium Deferred Annuity) 0-80 81-85 0-80 81-85
3-Year Maturity 2.75 2.50 2.25 2.00
5-Year Maturity 4.75 2.50 4.25 2.00
7-Year Maturity 5.50 2.50 5.00 2.00
10-Year Maturity 5.50 2.50 5.00 2.00
Renewal Commission/3-Year Maturity* 2.50 2.50 2.00 2.00
INDEXAMERICA
Issue Age Issue Age Issue Age Issue Age
0-80 81-85 0-80 81-85
5.50 3.50 5.00 3.00
Schedule 2
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* A renewal fee based on account value on the third anniversary will be paid if
a 3-Year Maturity Sterling Select Single Premium Deferred Annuity is renewed
with 30 days after the end of the initial 3 year term. The renewal commission
will be paid 60 days after the end of the initial term if the policy is renewed
into a 3,5,7, or 10-Year Sterling Select Single Premium Deferred Annuity. No
renewal commission is paid on renewals of the 5,7, or 10-Year Sterling Select
Single Premium Deferred Annuity. As to any Policy which is surrendered in the
first policy year, the compensation paid by the Company will be unearned as set
forth below and shall be charged back to NSM as set forth below:
(1) Within the first 6 months from the Policy issuance - 100% of the
compensation.
(2) 6 months to 1 year from Policy issuance - 50% of the compensation.
Schedule 2
Page 2 of 2
