AMENDED AND RESTATED PARTICIPATION AGREEMENT
as of May 1, 2004
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin/Xxxxxxxxx Distributors, Inc.
The Travelers Life and Annuity Company
The Travelers Insurance Company
Travelers Distribution LLC
CONTENTS
Section Subject Matter
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1. Parties and Purpose
2. Representations and Warranties
3. Purchase and Redemption of Trust Portfolio Shares
4. Fees, Expenses, Prospectuses, Proxy Materials and Reports
5. Voting
6. Sales Material, Information and Trademarks
7. Indemnification
8. Notices
9. Termination
10. Miscellaneous
SCHEDULES TO THIS AGREEMENT
A. The Company and its Distributor
B. Accounts of the Company
C. Available Portfolios and Classes of Shares of the Trust; Investment Advisers
D. Contracts of the Company
E. [this schedule is not used]
F. Rule 12b-1 Plans of the Trust
G. Addresses for Notices
H. Shared Funding Order
1. PARTIES AND PURPOSE
THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT (the "Agreement")
supercedes and replaces the Participation Agreement, dated as of May 1, 2000,
together with all subsequent amendments ("Prior Agreement"), by and between
certain portfolios and classes of Franklin Xxxxxxxxx Variable Insurance Products
Trust specified in Schedule C of the Prior Agreement, Franklin/Xxxxxxxxx
Distributors, Inc. and the insurance companies identified in Schedule A of the
Prior Agreement on their own behalf and behalf of
each segregated asset account listed in Schedule B of the Prior Agreement. This
Agreement is entered by and between certain portfolios and classes thereof,
specified below and in Schedule C, of Franklin Xxxxxxxxx Variable Insurance
Products Trust, an open-end management investment company organized as a
business trust under Massachusetts law (the "Trust"), Franklin/Xxxxxxxxx
Distributors, Inc., a California corporation which is the principal underwriter
for the Trust (the "Underwriter," and together with the Trust, "we" or "us") and
the insurance company identified on Schedule A ("you") and your distributor, on
your own behalf and on behalf of each segregated asset account maintained by you
that is listed on Schedule B, as that schedule may be amended from time to time
("Account" or "Accounts").
The purpose of this Agreement is to entitle you, on behalf of the Accounts,
to purchase the shares, and classes of shares, of portfolios of the Trust
("Portfolios") that are identified on Schedule C, consistent with the terms of
the prospectuses of the Portfolios, solely for the purpose of funding benefits
of your variable life insurance policies or variable annuity contracts
("Contracts") that are identified on Schedule D. This Agreement does not
authorize any other purchases or redemptions of shares of the Trust.
2. REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES BY YOU
You represent and warrant that:
2.1.1 You are an insurance company duly organized and in good standing
under the laws of your state of incorporation.
2.1.2 All of your directors, officers, employees, and other
individuals or entities dealing with the money and/or securities of the Trust
are and shall be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Trust, in an amount not less than $5 million.
Such bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company. You agree to make all reasonable efforts
to see that this bond or another bond containing such provisions is always in
effect, and you agree to notify us in the event that such coverage no longer
applies.
2.1.3 Each Account is a duly organized, validly existing segregated
asset account under applicable insurance law, and interests in each Account are
offered exclusively through the purchase of or transfer into a "variable
contract" within the meaning of such terms under Section 817 of the Internal
Revenue Code of 1986, as amended ("Code") and the regulations thereunder. You
will continue to meet such definitional requirements, and will notify us
immediately upon having a reasonable basis for believing that such requirements
have ceased to be met or that they might not be met in the future.
2.1.4 Each Account either: (i) has been registered or, prior to any
issuance or sale of the pertinent Contracts, will be registered as a unit
investment trust under the Investment Company Act of 1940 ("1940 Act"); or (ii)
has not been so registered in proper reliance upon an exemption from
registration under Section 3(c) of the 1940 Act; if the
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Account is exempt from registration as an investment company under Section 3(c)
of the 1940 Act, you will use your best efforts to maintain such exemption and
will notify us immediately upon having a reasonable basis for believing that
such exemption no longer applies or might not apply in the future.
2.1.5 The Contracts or interests in the Accounts: (i) are or, prior to
any issuance or sale will be, registered as securities under the Securities Act
of 1933, as amended (the "1933 Act"); or (ii) are not registered because they
are properly exempt from registration under Section 3(a)(2) of the 1933 Act or
will be offered exclusively in transactions that are properly exempt from
registration under Section 4(2) or Regulation D of the 1933 Act, in which case
you will make every effort to maintain such exemption and will notify us
immediately upon having a reasonable basis for believing that such exemption no
longer applies or might not apply in the future.
2.1.6 The Contracts: (i) will be sold by broker-dealers, or their
registered representatives, who are registered with the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934, as amended
(the "1934 Act") and who are members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); (ii) will be issued and
sold in compliance in all material respects with all applicable federal and
state laws; and (iii) will be sold in compliance in all material respects with
state insurance suitability requirements and NASD suitability guidelines.
Without limiting the foregoing, you agree that in the selling agreements with
broker-dealers governing shares of the Contracts you require that the
broker-dealers are in compliance with the federal securities laws, including the
NASD Conduct Rules and, in particular, Rule 2310.
2.1.7 The Contracts currently are and will be treated as annuity
contracts or life insurance contracts under applicable provisions of the Code
and you will use your best efforts to maintain such treatment; you will notify
us immediately upon having a reasonable basis for believing that any of the
Contracts have ceased to be so treated or that they might not be so treated in
the future.
2.1.8 The fees and charges deducted under each Contract, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by you.
2.1.9 You will use shares of the Trust only for the purpose of funding
benefits of the Contracts through the Accounts.
2.1.10 Contracts will not be sold outside of the United States.
2.1.11 With respect to any Accounts which are exempt from registration
under the 1940 Act in reliance on 3(c)(1) or Section 3(c)(7) thereof:
2.1.11.1 the principal underwriter for each such Account and any
subaccounts thereof is a registered broker-dealer with
the SEC under the 1934 Act;
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2.1.11.2 the shares of the Portfolios of the Trust are and will
continue to be the only investment securities held by
the corresponding subaccounts; and
2.1.11.3 with regard to each Portfolio, you, on behalf of the
corresponding subaccount, will:
(a) vote such shares held by it in the same proportion
as the vote of all other holders of such shares;
and
(b) refrain from substituting shares of another
security for such shares unless the SEC has
approved such substitution in the manner provided
in Section 26 of the 0000 Xxx.
2.1.12 As covered financial institutions we, only with respect to
Portfolio shareholders, and you each undertake and agree to comply, and to take
full responsibility in complying with any and all applicable laws, regulations,
protocols and other requirements relating to money laundering including, without
limitation, the International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001 (Title III of the USA PATRIOT Act).
2.2 REPRESENTATIONS AND WARRANTIES BY THE TRUST
The Trust represents and warrants that:
2.2.1 It is duly organized and in good standing under the laws of the
State of Massachusetts.
2.2.2 All of its directors, officers, employees and others dealing
with the money and/or securities of a Portfolio are and shall be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust in an amount not less than the minimum coverage required by Rule 17g-1 or
other regulations under the 1940 Act. Such bond shall include coverage for
larceny and embezzlement and be issued by a reputable bonding company.
2.2.3 It is registered as an open-end management investment company
under the 0000 Xxx.
2.2.4 Each class of shares of the Portfolios of the Trust is
registered under the 0000 Xxx.
2.2.5 It will amend its registration statement under the 1933 Act and
the 1940 Act from time to time as required in order to effect the continuous
offering of its shares.
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2.2.6 It will comply, in all material respects, with the 1933 and 1940
Acts and the rules and regulations thereunder.
2.2.7 It is currently qualified as a "regulated investment company"
under Subchapter M of the Code, it will make every effort to maintain such
qualification, and will notify you immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
2.2.8 The Trust will comply with the diversification requirements for
variable annuity, endowment or life insurance contracts set forth in Section
817(h) of the Code, and the rules and regulations thereunder, including without
limitation Treasury Regulation 1.817-5. Upon having a reasonable basis for
believing any Portfolio has ceased to comply and will not be able to comply
within the grace period afforded by Regulation 1.817-5, the Trust will notify
you immediately and will take all reasonable steps to adequately diversify the
Portfolio to achieve compliance.
2.2.9 It currently intends for one or more classes of shares (each, a
"Class") to make payments to finance its distribution expenses, including
service fees, pursuant to a plan ("Plan") adopted under rule 12b-1 under the
1940 Act ("Rule 12b-1"), although it may determine to discontinue such practice
in the future. To the extent that any Class of the Trust finances its
distribution expenses pursuant to a Plan adopted under rule 12b-1, the Trust
undertakes to comply with any then current SEC interpretations concerning rule
12b-1 or any successor provisions.
2.3 REPRESENTATIONS AND WARRANTIES BY THE UNDERWRITER
The Underwriter represents and warrants that:
2.3.1 It is registered as a broker dealer with the SEC under the 1934
Act, and is a member in good standing of the NASD.
2.3.2 Each investment adviser listed on Schedule C (each, an
"Adviser") is duly registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and any applicable state securities law.
2.4 WARRANTY AND AGREEMENT BY BOTH YOU AND US
We received an order from the SEC dated November 16, 1993 (file no.
812-8546), which was amended by a notice and an order we received on September
17, 1999 and October 13, 1999, respectively (file no. 812-11698) (collectively,
the "Shared Funding Order," attached to this Agreement as Schedule H). The
Shared Funding Order grants exemptions from certain provisions of the 1940 Act
and the regulations thereunder to the extent necessary to permit shares of the
Trust to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
and qualified pension and retirement plans outside the separate account context.
You and we both warrant and agree that both you and we will comply with the
"Applicants' Conditions" prescribed in the Shared Funding Order as though such
conditions were set forth verbatim in this Agreement, including, without
limitation, the provisions regarding potential
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conflicts of interest between the separate accounts which invest in the Trust
and regarding contract owner voting privileges. In order for the Trust's Board
of Trustees to perform its duty to monitor for conflicts of interest, you agree
to inform us of the occurrence of any of the events specified in condition 2 of
the Shared Funding Order to the extent that such event may or does result in a
material conflict of interest as defined in that order.
3. PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
3.1 AVAILABILITY OF TRUST PORTFOLIO SHARES
3.1.1 We will make shares of the Portfolios available to the Accounts
for the benefit of the Contracts. The shares will be available for purchase at
the net asset value per share next computed after we (or our agent, or you as
our designee) receive a purchase order, as established in accordance with the
provisions of the then current prospectus of the Trust. All orders are subject
to acceptance by us and by the Portfolio or its transfer agent, and become
effective only upon confirmation by us. Notwithstanding the foregoing, the
Trust's Board of Trustees ("Trustees") may refuse to sell shares of any
Portfolio to any person, or may suspend or terminate the offering of shares of
any Portfolio if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Trustees, they deem
such action to be in the best interests of the shareholders of such Portfolio.
3.1.2 Without limiting the other provisions of this Section 3.1, among
other delegations by the Trustees, the Trustees have determined that there is a
significant risk that the Trust and its shareholders may be adversely affected
by investors with short term trading activity and/or whose purchase and
redemption activity follows a market timing pattern as defined in the prospectus
for the Trust, and have authorized the Trust, the Underwriter and the Trust's
transfer agent to adopt the "Market Timing Trading Policy" and procedures and
take other action (including, without limitation, rejecting specific purchase
orders in whole or in part) as they deem necessary to reduce, discourage,
restrict or eliminate such trading and/or market timing activity. You agree that
your purchases and redemptions of Portfolio shares are subject to, and that you
will assist us, to the extent permitted by the Contract, in implementing, the
Market Timing Trading Policy and Additional Policies (as described in the
Trust's prospectus) and the Trust's restrictions on excessive and/or short term
trading activity and/or purchase and redemption activity that follows a market
timing pattern. We will make reasonable efforts to provide a description of the
Market Timing Trading Policy to you and any changes in it to you.
3.1.3 We agree that shares of the Trust will be sold only to life
insurance companies which have entered into fund participation agreements with
the Trust ("Participating Insurance Companies") and their separate accounts or
to qualified pension and retirement plans in accordance with the terms of the
Shared Funding Order. No shares of any Portfolio will be sold to the general
public.
3.2 MANUAL OR AUTOMATED PORTFOLIO SHARE TRANSACTIONS
3.2.1 Section 3.3 of this Agreement shall govern and Section 3.4 shall
not be operative, unless we receive from you at the address provided in the next
sentence, written
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notice that you wish to communicate, process and settle purchase and redemptions
for shares (collectively, "share transactions") via the Fund/SERV and Networking
systems of the National Securities Clearing Corporation ("NSCC"). The address
for you to send such written notice shall be: Retirement Services, Franklin
Xxxxxxxxx Investments, 000 Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000-0000. After giving ten (10) days' advance written notice at the address
provided in the previous sentence of your desire to use NSCC processing, Section
3.4 of this Agreement shall govern and Section 3.3 shall not be operative.
3.2.2 At any time when, pursuant to the preceding paragraph, Section
3.4 of this Agreement governs, any party to this Agreement may send written
notice to the other parties that it chooses to end the use of the NSCC Fund/SERV
and Networking systems and return to manual handling of share transactions. Such
written notice shall be sent: (i) if from you to us, to the address provided in
the preceding paragraph; (ii) if from us to you, to your address in Schedule G
of this Agreement. After giving ten (10) days' advance written notice at the
address as provided in the previous sentence, Section 3.3 of this Agreement
shall govern and Section 3.4 shall not be operative.
3.3 MANUAL PURCHASE AND REDEMPTION
3.3.1 You are hereby appointed as our designee for the sole purpose of
receiving from Contract owners purchase and exchange orders and requests for
redemption resulting from investment in and payments under the Contracts that
pertain to subaccounts that invest in Portfolios ("Instructions"). "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the SEC and its current prospectus. "Close of Trading" shall mean the close of
trading on the New York Stock Exchange, generally 4:00 p.m. Eastern Time. You
represent and warrant that all Instructions transmitted to us for processing on
or as of a given Business Day ("Day 1") shall have been received in proper form
and time stamped by you prior to the Close of Trading on Day 1. Such
Instructions shall receive the share price next calculated following the Close
of Trading on Day 1, provided that we receive such Instructions from you before
9:30 a.m. Eastern Time on the next Business Day ("Day 2"). You represent and
warrant that Instructions received in proper form and time stamped by you after
the Close of Trading on Day 1 shall be treated by you and transmitted to us as
if received on Day 2. Such Instructions shall receive the share price next
calculated following the Close of Trading on Day 2. You represent and warrant
that you have in place, maintain and periodically test, procedures reasonably
designed to prevent Instructions received after the Close of Trading on Day 1
from being executed with Instructions received before the Close of Trading on
Day 1. All Instructions we receive from you after 9:30 a.m. Eastern Time on Day
2 shall be processed by us on the following Business Day and shall receive the
share price next calculated following the Close of Trading on Day 2.
3.3.2 We shall calculate the net asset value per share of each
Portfolio on each Business Day, and shall communicate these net asset values to
you or your designated agent on a daily basis as soon as reasonably practical
after the calculation is completed (normally by 6:30 p.m. Eastern Time).
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3.3.3 You shall submit payment for the purchase of shares of a
Portfolio on behalf of an Account in federal funds transmitted by wire to the
Trust or to its designated custodian, which must receive such wires no later
than the close of the Reserve Bank, which is 6:00 p.m. Eastern Time, on the
Business Day following the Business Day as of which such purchases orders are
made.
3.3.4 We will redeem any full or fractional shares of any Portfolio,
when requested by you on behalf of an Account, at the net asset value next
computed after receipt by us (or our agent or you as our designee) of the
request for redemption, as established in accordance with the provisions of the
then current prospectus of the Trust. We shall make payment for such shares in
the manner we establish from time to time, but in no event shall payment be
delayed for a greater period than is permitted by the 1940 Act. Payments for the
purchases of shares by you may be aggregated, payments for the redemptions of
shares by you may be aggregated, and payments for the purchase or redemption of
shares by you may not be netted against one another, on any Business Day for the
purpose of determining the amount of any wire transfer on that Business Day.
3.3.5 Issuance and transfer of the Portfolio shares will be by book
entry only. Stock certificates will not be issued to you or the Accounts.
Portfolio shares purchased from the Trust will be recorded in the appropriate
title for each Account or the appropriate subaccount of each Account.
3.3.6 We shall furnish, on or before the ex-dividend date, notice to
you of any income dividends or capital gain distributions payable on the shares
of any Portfolio. You hereby elect to receive all such income dividends and
capital gain distributions as are payable on shares of a Portfolio in additional
shares of that Portfolio, and you reserve the right to change this election in
the future. We will notify you of the number of shares so issued as payment of
such dividends and distributions.
3.3.7 Each party to this Agreement agrees that, in the event of a
material error resulting from incorrect information or confirmations, the
parties will seek to comply in all material respects with the provisions of
applicable federal securities laws.
3.4 AUTOMATED PURCHASE AND REDEMPTION
3.4.1 "Fund/SERV" shall mean NSCC's Mutual Fund Settlement, Entry and
Registration Verification System, a system for automated, centralized processing
of mutual fund purchase and redemption orders, settlement, and account
registration; "Networking" shall mean NSCC's system that allows mutual funds and
life insurance companies to exchange account level information electronically;
and "Settling Bank" shall mean the entity appointed by the Trust or you, as
applicable, to perform such settlement services on behalf of the Trust and you,
as applicable, which entity agrees to abide by NSCC's then current rules and
procedures insofar as they relate to same day funds settlement. In all cases,
processing and settlement of share transactions shall be done in a manner
consistent with applicable law.
3.4.2 You are hereby appointed as our designee for the sole purpose of
receiving from Contract owners purchase and exchange orders and requests for
redemption
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resulting from investment in and payments under the Contracts that
pertain to subaccounts that invest in Portfolios ("Instructions"). "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the SEC and its current prospectus. "Close of Trading" shall mean the close of
trading on the New York Stock Exchange, generally 4:00 p.m. Eastern Time. Upon
receipt of Instructions, and upon your determination that there are good funds
with respect to Instructions involving the purchase of shares, you will
calculate the net purchase or redemption order for each Portfolio.
3.4.3 On each Business Day, you shall aggregate all purchase and
redemption orders for shares of a Portfolio that you received prior to the Close
of Trading. You represent and warrant that all orders for net purchases or net
redemptions derived from Instructions received by you and transmitted to
Fund/SERV for processing on or as of a given Business Day ("Day 1") shall have
been received in proper form and time stamped by you prior to the Close of
Trading on Day 1. Such orders shall receive the share price next calculated
following the Close of Trading on Day 1, provided that we receive Instructions
from Fund/SERV by 6:30 a.m. Eastern Time on the next Business Day ("Day 2"). You
represent and warrant that orders received in good order and time stamped by you
after the Close of Trading on Day 1 shall be treated by you and transmitted to
Fund/SERV as if received on Day 2. Such orders shall receive the share price
next calculated following the Close of Trading on Day 2. All Instructions we
receive from Fund/SERV after 6:30 a.m. Eastern Time on Day 2 shall be processed
by us on the following Business Day and shall receive the share price next
calculated following the close of trading on Day 2. You represent and warrant
that you have, maintain and periodically test, procedures and systems in place
reasonably designed to prevent orders received after the Close of Trading on Day
1 from being executed with orders received before the Close of Trading on Day 1,
and periodically monitor the systems to determine their effectiveness. Subject
to your compliance with the foregoing, you will be considered the designee of
the Underwriter and the Portfolios, and the Business Day on which Instructions
are received by you in proper form prior to the Close of Trading will be the
date as of which shares of the Portfolios are deemed purchased, exchanged or
redeemed pursuant to such Instructions. Dividends and capital gain distributions
will be automatically reinvested at net asset value in accordance with the
Portfolio's then current prospectus.
3.4.4 We shall calculate the net asset value per share of each
Portfolio on each Business Day, and shall furnish to you through NSCC's
Networking or Mutual Fund Profile System: (i) the most current net asset value
information for each Portfolio; and (ii) in the case of fixed income funds that
declare daily dividends, the daily accrual or the interest rate factor. All such
information shall be furnished to you by 6:30 p.m. Eastern Time on each Business
Day or at such other time as that information becomes available.
3.4.5 You will wire payment for net purchase orders by the Trust's
NSCC Firm Number, in immediately available funds, to an NSCC settling bank
account designated by you in accordance with NSCC rules and procedures on the
same Business Day such purchase orders are communicated to NSCC. For purchases
of shares of daily dividend accrual funds, those shares will not begin to accrue
dividends until the day the payment for those shares is received.
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3.4.6 We will redeem any full or fractional shares of any Portfolio,
when requested by you on behalf of an Account, at the net asset value next
computed after receipt by us (or our agent or you as our designee) of the
request for redemption, as established in accordance with the provisions of the
then current prospectus of the Trust. NSCC will wire payment for net redemption
orders by the Trust, in immediately available funds, to an NSCC settling bank
account designated by you in accordance with NSCC rules and procedures on the
Business Day such redemption orders are communicated to NSCC, except as provided
in the Trust's prospectus and statement of additional information.
3.4.7 Issuance and transfer of the Portfolio shares will be by book
entry only. Stock certificates will not be issued to you or the Accounts.
Portfolio shares purchased from the Trust will be recorded in the appropriate
title for each Account or the appropriate subaccount of each Account.
3.4.8 We shall furnish through NSCC's Networking or Mutual Fund
Profile System on or before the ex-dividend date, notice to you of any income
dividends or capital gain distributions payable on the shares of any Portfolio.
You hereby elect to receive all such income dividends and capital gain
distributions as are payable on shares of a Portfolio in additional shares of
that Portfolio, and you reserve the right to change this election in the future.
We will notify you of the number of shares so issued as payment of such
dividends and distributions.
3.4.9 All orders are subject to acceptance by Underwriter and become
effective only upon confirmation by Underwriter. Underwriter reserves the right:
(i) not to accept any specific order or part of any order for the purchase or
exchange of shares through Fund/SERV; and (ii) to require any redemption order
or any part of any redemption order to be settled outside of Fund/SERV, in which
case the order or portion thereof shall not be "confirmed" by Underwriter, but
rather shall be accepted for redemption in accordance with Section 3.4.11 below.
3.4.10 All trades placed through Fund/SERV and confirmed by
Underwriter via Fund/SERV shall settle in accordance with Underwriter's profile
within Fund/SERV applicable to you. Underwriter agrees to provide you with
account positions and activity data relating to share transactions via
Networking.
3.4.11 If on any specific day you or Underwriter are unable to meet
the NSCC deadline for the transmission of purchase or redemption orders for that
day, a party may at its option transmit such orders and make such payments for
purchases and redemptions directly to you or us, as applicable, as is otherwise
provided in the Agreement; provided, however, that we must receive written
notification from you by 9:00 a.m. Eastern Time on any day that you wish to
transmit such orders and/or make such payments directly to us.
3.4.12 In the event that you or we are unable to or prohibited from
electronically communicating, processing or settling share transactions via
Fund/SERV, you or we shall notify the other, including providing the
notification provided above in Section 3.4.11. After all parties have been
notified, you and we shall submit orders using manual transmissions as are
otherwise provided in the Agreement.
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3.4.13 These procedures are subject to any additional terms in each
Portfolio's prospectus and the requirements of applicable law. The Trust
reserves the right, at its discretion and without notice, to suspend the sale of
shares or withdraw the sale of shares of any Portfolio.
3.4.14 Each party to the Agreement agrees that, in the event of a
material error resulting from incorrect information or confirmations, the
parties will seek to comply in all material respects with the provisions of
applicable federal securities laws.
3.4.15 You and Underwriter represent and warrant that each: (a) has
entered into an agreement with NSCC; (b) has met and will continue to meet all
of the requirements to participate in Fund/SERV and Networking; (c) intends to
remain at all times in compliance with the then current rules and procedures of
NSCC, all to the extent necessary or appropriate to facilitate such
communications, processing, and settlement of share transactions; and (d) will
notify the other parties to this Agreement if there is a change in or a pending
failure with respect to its agreement with NSCC.
4. FEES, EXPENSES, PROSPECTUSES, PROXY MATERIALS AND REPORTS
4.1 We shall pay no fee or other compensation to you under this Agreement
except as provided on Schedule F, if attached.
4.2 We shall prepare and be responsible for filing with the SEC, and any
state regulators requiring such filing, all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of the Trust.
We shall bear the costs of preparation and filing of the documents listed in the
preceding sentence, registration and qualification of the Trust's shares of the
Portfolios.
4.3 We shall use reasonable efforts to provide you, on a timely basis, with
such information about the Trust, the Portfolios and each Adviser, in such form
as you may reasonably require, as you shall reasonably request in connection
with the preparation of disclosure documents and annual and semi-annual reports
pertaining to the Contracts.
4.4 At your option, we shall provide you, at our expense, with either: (i)
for each Contract owner who is invested through the Account in a subaccount
corresponding to a Portfolio ("designated subaccount"), one copy of each of the
following documents on each occasion that such document is required by law or
regulation to be delivered to such Contract owner who is invested in a
designated subaccount: the Trust's current prospectus, annual report,
semi-annual report and other shareholder communications, including any
amendments or supplements to any of the foregoing, pertaining specifically to
the Portfolios ("Designated Portfolio Documents"); or (ii) a camera ready copy
of such Designated Portfolio Documents in a form suitable for printing and from
which information relating to series of the Trust other than the Portfolios has
been deleted to the extent practicable. In connection with clause (ii) of this
paragraph, we will pay for proportional printing costs for such Designated
Portfolio Documents in order to provide one copy for each Contract owner who is
invested in a
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designated subaccount on each occasion that such document is required by law or
regulation to be delivered to such Contract owner, and provided the appropriate
documentation is provided and approved by us. We shall provide you with a copy
of the Trust's current statement of additional information, including any
amendments or supplements, in a form suitable for you to duplicate. The expenses
of furnishing, including mailing, to Contract owners the documents referred to
in this paragraph shall be borne by you. For each of the documents provided to
you in accordance with clause (i) of this paragraph 4.4, we shall provide you,
upon your request and at your expense, additional copies. In no event shall we
be responsible for the costs of printing or delivery of Designated Portfolio
Documents to potential or new Contract owners or the delivery of Designated
Portfolio Documents to existing contract owners.
4.5 We shall provide you, at our expense, with copies of any
Trust-sponsored proxy materials in such quantity as you shall reasonably require
for distribution to Contract owners who are invested in a designated subaccount.
You shall bear the costs of distributing proxy materials (or similar materials
such as voting solicitation instructions) to Contract owners.
4.6 You assume sole responsibility for ensuring that the Trust's
prospectuses, shareholder reports and communications, and proxy materials are
delivered to Contract owners in accordance with applicable federal and state
securities laws.
5. VOTING
5.1 All Participating Insurance Companies shall have the obligations and
responsibilities regarding pass-through voting and conflicts of interest
corresponding to those contained in the Shared Funding Order.
5.2 If and to the extent required by law, you shall: (i) solicit voting
instructions from Contract owners; (ii) vote the Trust shares in accordance with
the instructions received from Contract owners; and (iii) vote Trust shares for
which no instructions have been received in the same proportion as Trust shares
of such Portfolio for which instructions have been received; so long as and to
the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners. You reserve the
right to vote Trust shares held in any Account in your own right, to the extent
permitted by law.
5.3 So long as, and to the extent that, the SEC interprets the 1940 Act to
require pass-through voting privileges for Contract owners, you shall provide
pass-through voting privileges to Contract owners whose Contract values are
invested, through the Accounts, in shares of one or more Portfolios of the
Trust. We shall require all Participating Insurance Companies to calculate
voting privileges in the same manner and you shall be responsible for assuring
that the Accounts calculate voting privileges in the manner established by us.
With respect to each Account, you will vote shares of each Portfolio of the
Trust held by an Account and for which no timely voting instructions from
Contract owners are received in the same proportion as those shares held by that
Account for which voting instructions are received. You and your agents will in
no way recommend or oppose or interfere with the
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solicitation of proxies for Portfolio shares held to fund the Contracts without
our prior written consent, which consent may be withheld in our sole discretion.
6. SALES MATERIAL, INFORMATION AND TRADEMARKS
6.1 For purposes of this Section 6, "Sales literature or other Promotional
material" includes, but is not limited to, portions of the following that use
any logo or other trademark related to the Trust, or Underwriter or its
affiliates, or refer to the Trust: advertisements (such as material published or
designed for use in a newspaper, magazine or other periodical, radio,
television, telephone or tape recording, videotape display, signs or billboards,
motion pictures, electronic communication or other public media), sales
literature (i.e., 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 or
any other advertisement, sales literature or published article or electronic
communication), educational or training materials or other communications
distributed or made generally available to some or all agents or employees in
any media, and disclosure documents, shareholder reports and proxy materials.
6.2 At our request, you shall furnish, or cause to be furnished to us or
our designee, at least one complete copy of each registration statement,
prospectus, statement of additional information, private placement memorandum,
retirement plan disclosure information or other disclosure documents or similar
information, as applicable (collectively "Disclosure Documents"), as well as any
report, solicitation for voting instructions, Sales literature or other
Promotional materials, and all amendments to any of the above that relate to the
Contracts or the Accounts prior to its first use. At least fifteen (15) Business
Days prior to its proposed use, you shall furnish, or shall cause to be
furnished, to us or our designee each piece of Sales literature or other
Promotional material in which the Trust or an Adviser is named. No such material
shall be used unless we or our designee approve such material and its proposed
use.
6.3 You and your agents shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust,
the Underwriter or an Adviser, other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Trust shares (as such registration statement and prospectus
may be amended or supplemented from time to time), annual and semi-annual
reports of the Trust, Trust-sponsored proxy statements, or in Sales literature
or other Promotional material approved by the Trust or its designee, except as
required by legal process or regulatory authorities or with the written
permission of the Trust or its designee. Upon our request, you shall send us a
complete copy of each Disclosure Document and item of Sales literature or other
Promotional materials in its final form within twenty (20) days of its first
use.
6.4 We shall not give any information or make any representations or
statements on behalf of you or concerning you, the Accounts or the Contracts
other than information or representations, including naming you as a Trust
shareholder, contained in and accurately derived from Disclosure Documents for
the Contracts (as such Disclosure Documents may be amended or supplemented from
time to time), or in materials approved by you for
13
distribution, including Sales literature or other Promotional materials, except
as required by legal process or regulatory authorities or with your written
permission.
6.5 Except as provided in Section 6.2, you shall not use any designation
comprised in whole or part of the names or marks "Franklin" or "Xxxxxxxxx" or
any logo or other trademark relating to the Trust or the Underwriter without
prior written consent, and upon termination of this Agreement for any reason,
you shall cease all use of any such name or xxxx as soon as reasonably
practicable.
6.6 You shall furnish to us ten (10) Business Days prior to its first
submission to the SEC or its staff, any request or filing for no-action
assurance or exemptive relief naming, pertaining to, or materially affecting,
the Trust, the Underwriter or any of the Portfolios.
6.7 You agree that any posting of Portfolio prospectuses on your website
will result in the Portfolio prospectuses: (i) appearing identical to the hard
copy printed version, (ii) being clearly associated with the particular
Contracts in which they are available and posted in close proximity to the
applicable Contract prospectuses (iii) having no less prominence than
prospectuses of any other underlying funds available under the Contracts, and
(iv) being used in an authorized manner. Notwithstanding the above, you
understand and agree that you are responsible for ensuring that participation in
the Portfolios, and any website posting, or other use, of the Portfolio
prospectuses is in compliance with this Agreement and applicable state and
federal securities and insurance laws and regulations, including as they relate
to paper or electronic use of fund prospectuses. The format of such
presentation, the script and layout for any website that mentions the Trust, the
Underwriter, an Adviser or the Portfolios shall be routed to us as sales
literature or other promotional materials, pursuant to Section 6 of the
Agreement.
In addition, you agree to be solely responsible for maintaining and
updating the Portfolio prospectuses' PDF files (including prospectus
supplements) and removing and/or replacing promptly any outdated prospectuses,
as necessary, ensuring that any accompanying instructions by us, for using or
stopping use are followed. You agree to designate and make available to us a
person to act as a single point of communication contact for these purposes. We
are not responsible for any additional costs or additional liabilities that may
be incurred as a result of your election to place the Portfolio prospectuses on
your website. We reserve the right to revoke this authorization, at any time and
for any reason, although we may instead make our authorization subject to new
procedures.
6.8 Each of your and your distributor's registered representatives, agents,
independent contractors and employees, as applicable, will have access to our
websites at xxxxxxxxxxxxxxxxx.xxx, and such other URLs through which we may
permit you to conduct business concerning the Portfolios from time to time
(referred to collectively as the "Site") as provided herein, (i) upon
registration by such individual on a Site, (ii) if you cause a Site Access
Request Form (an "Access Form") to be signed by your authorized supervisory
personnel and submitted to us, as a Schedule to, and legally a part of, this
Agreement, or (iii) if you provide such individual with the necessary access
codes or other information necessary to access the Site through any generic or
firm-wide authorization we may grant you from time to time. Upon receipt by us
of a completed registration submitted by an individual through
14
the Site or a signed Access Form referencing such individual, we shall be
entitled to rely upon the representations contained therein as if you had made
them directly hereunder and we will issue a user identification, express number
and/or password (collectively, "Access Code"). Any person to whom we issue an
Access Code or to whom you provide the necessary Access Codes or other
information necessary to access the Site through any generic or firm-wide
authorization we may grant you from time to time shall be an "Authorized User."
We shall be entitled to assume that such person validly represents you and
that all instructions received from such person are authorized, in which case
such person will have access to the Site, including all services and information
to which you are authorized to access on the Site. All inquiries and actions
initiated by you (including your Authorized Users) are your responsibility, are
at your risk and are subject to our review and approval (which could cause a
delay in processing). You agree that we do not have a duty to question
information or instructions you (including Authorized Users) give to us under
this Agreement, and that we are entitled to treat as authorized, and act upon,
any such instructions and information you submit to us. You agree to take all
reasonable measures to prevent any individual other than an Authorized User from
obtaining access to the Site. You agree to inform us if you wish to restrict or
revoke the access of any individual Access Code. If you become aware of any loss
or theft or unauthorized use of any Access Code, you agree to contact us
immediately. You also agree to monitor your (including Authorized Users') use of
the Site to ensure the terms of this Agreement are followed. You also agree that
you will comply with all policies and agreements concerning Site usage,
including without limitation the Terms of Use Agreement(s) posted on the Site
("Site Terms"), as may be revised and reposted on the Site from time to time,
and those Site Terms (as in effect from time to time) are a part of this
Agreement. Your duties under this section are considered "services" required
under the terms of this Agreement. You acknowledge that the Site is transmitted
over the Internet on a reasonable efforts basis and we do not warrant or
guarantee their accuracy, timeliness, completeness, reliability or
non-infringement. Moreover, you acknowledge that the Site is provided for
informational purposes only, and are not intended to comply with any
requirements established by any regulatory or governmental agency.
7. INDEMNIFICATION
7.1 INDEMNIFICATION BY YOU
7.1.1 You agree to indemnify and hold harmless the Underwriter, the
Trust and each of its Trustees, officers, employees and agents and each person,
if any, who controls the Trust within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" and individually the "Indemnified
Party" for purposes of this Section 7) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with your written
consent, which consent shall not be unreasonably withheld) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses are related to the sale or acquisition of
shares of the Trust or the Contracts and
15
7.1.1.1 arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a Disclosure
Document for the Contracts or in the Contracts themselves or in sales literature
generated or approved by you on behalf of the Contracts or Accounts (or any
amendment or supplement to any of the foregoing) (collectively, "Company
Documents" for the purposes of this Section 7), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and was accurately derived from written information
furnished to you by or on behalf of the Trust for use in Company Documents or
otherwise for use in connection with the sale of the Contracts or Trust shares;
or
7.1.1.2 arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined below in Section 7.2) or wrongful conduct of you
or persons under your control, with respect to the sale or acquisition of the
Contracts or Trust shares; or
7.1.1.3 arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Trust Documents as
defined below in Section 7.2 or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was made in
reliance upon and accurately derived from written information furnished to the
Trust by or on behalf of you; or
7.1.1.4 arise out of or result from any failure by you to provide
the services or furnish the materials required under the terms of this
Agreement;
7.1.1.5 arise out of or result from any material breach of any
representation and/or warranty made by you in this Agreement or arise out of or
result from any other material breach of this Agreement by you; or
7.1.1.6 arise out of or result from a Contract failing to be
considered a life insurance policy or an annuity Contract, whichever is
appropriate, under applicable provisions of the Code thereby depriving the Trust
of its compliance with Section 817(h) of the Code.
7.1.2 You shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Trust or Underwriter, whichever is applicable.
You shall also not be liable under this indemnification provision with respect
to any claim made against an Indemnified Party unless such Indemnified Party
shall have notified you in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have
16
been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify you of any such claim shall not relieve you from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, you shall be entitled to
participate, at your own expense, in the defense of such action. Unless the
Indemnified Party releases you from any further obligations under this Section
7.1, you also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from you to such
party of your election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
you will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
7.1.3 The Indemnified Parties will promptly notify you of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust shares or the Contracts or the operation of
the Trust.
7.2 INDEMNIFICATION BY THE UNDERWRITER
7.2.1 The Underwriter agrees to indemnify and hold harmless you, and
each of your directors and officers and each person, if any, who controls you
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" and individually an "Indemnified Party" for purposes of this Section
7.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter, which consent
shall not be unreasonably withheld) or expenses (including the reasonable costs
of investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses") to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such Losses are
related to the sale or acquisition of the shares of the Trust or the Contracts
and:
7.2.1.1 arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
Registration Statement, prospectus or sales literature of the Trust (or any
amendment or supplement to any of the foregoing) (collectively, the "Trust
Documents") or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission of such alleged statement or omission was made in
reliance upon and in conformity with information furnished to us by or on
behalf of you for use in the Registration Statement or prospectus for the
Trust or in sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Trust shares; or
7.2.1.2 arise out of or as a result of statements or
representations (other than statements or representations contained in the
Disclosure Documents or sales
17
literature for the Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Trust, Adviser or Underwriter
or persons under their control, with respect to the sale or distribution of
the Contracts or Trust shares; or
7.2.1.3 arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Disclosure Document or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission was made
in reliance upon information furnished to you by or on behalf of the Trust;
or
7.2.1.4 arise as a result of any failure by us to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or otherwise,
to comply with the qualification representation specified above in Section
2.2.7 and the diversification requirements specified above in Section
2.2.8); or
7.2.1.5 arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Underwriter; as limited by and in accordance with the provisions of
Sections 7.2.2 and 7.2.3 hereof.
7.2.2 The Underwriter shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to you or the Accounts, whichever
is applicable.
7.2.3 The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. Unless the Indemnified
Party releases the Underwriter from any further obligations under this Section
7.2, the Underwriter also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Underwriter to such party of the Underwriter's election to assume the defense
thereof, the Indemnified Party shall bear the expenses of any additional counsel
retained by it, and the Underwriter will not be liable to such party under this
Agreement for any legal or other
18
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
7.2.4 You agree promptly to notify the Underwriter of the commencement
of any litigation or proceedings against you or the Indemnified Parties in
connection with the issuance or sale of the Contracts or the operation of each
Account.
7.3 INDEMNIFICATION BY THE TRUST
7.3.1 The Trust agrees to indemnify and hold harmless you, and each of
your directors and officers and each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 7.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Trust, which consent shall not be unreasonably withheld) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements result from the gross negligence, bad faith or willful misconduct of
the Board or any member thereof, are related to the operations of the Trust, and
arise out of or result from any material breach of any representation and/or
warranty made by the Trust in this Agreement or arise out of or result from any
other material breach of this Agreement by the Trust; as limited by and in
accordance with the provisions of Sections 7.3.2 and 7.3.3 hereof. It is
understood and expressly stipulated that neither the holders of shares of the
Trust nor any Trustee, officer, agent or employee of the Trust shall be
personally liable hereunder, nor shall any resort be had to other private
property for the satisfaction of any claim or obligation hereunder, but the
Trust only shall be liable.
7.3.2 The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against any Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
you, the Trust, the Underwriter or each Account, whichever is applicable.
7.3.3 The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Trust in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Trust of any
such claim shall not relieve the Trust from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Trust will be entitled to participate, at
its own expense, in the defense thereof. Unless the Indemnified Party releases
the Trust from any further obligations under this Section 7.3, the Trust also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Trust to such party of the
Trust's election to assume the defense thereof, the Indemnified
19
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Trust will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
7.3.4 You agree promptly to notify the Trust of the commencement of
any litigation or proceedings against you or the Indemnified Parties in
connection with this Agreement, the issuance or sale of the Contracts, with
respect to the operation of the Account, or the sale or acquisition of shares of
the Trust.
8. NOTICES
Any notice, except for those provided in Sections 3.2.1 and 3.2.2 of the
Agreement, shall be sufficiently given when sent by registered or certified
mail, or by nationally recognized overnight courier services, to the other party
at the address of such party set forth in Schedule G below or at such other
address as such party may from time to time specify in writing to the other
party.
9. TERMINATION
9.1 This Agreement may be terminated by any party in its entirety or with
respect to one, some or all Portfolios for any reason by sixty (60) days advance
written notice delivered to the other parties. This Agreement shall terminate
immediately in the event of its assignment by any party without the prior
written approval of the other parties, or as otherwise required by law.
9.2 This Agreement may be terminated immediately by us upon written notice
to you if:
9.2.1 (i) you notify the Trust or the Underwriter that the exemption
from registration under Section 3(c) of the 1940 Act no longer applies, or
might not apply in the future, to the unregistered Accounts, or that the
exemption from registration under Section 4(2) or Regulation D promulgated
under the 1933 Act no longer applies or might not apply in the future, to
interests under the unregistered Contracts; provided, however, that this
clause (i) of Section 9.2.1 shall not apply if the exemptions from
registration do not apply solely because you have determined to, and have,
registered the Accounts and the Contracts pursuant to the 1933 and 1940
Acts; or (ii) the statements made in Section 2.1.3 of this Agreement are no
longer true or may no longer be true or you notify us that the definitional
requirements referred to in that section have ceased to be met or that they
might not be met in the future; or
9.2.2 either one or both of the Trust or the Underwriter respectively,
shall determine, in their sole judgment exercised in good faith, that you
have suffered a material adverse change in your business, operations,
financial condition or prospects since the date of this Agreement or are
the subject of material adverse publicity; or
9.2.3 you breach any of the provisions of Section 2.1.12 of this
Agreement or any of the warranties and representations you make in that
Section: (i) were not true
20
on the date such warranties and representations were made; (ii) are no
longer true; or (iii) have not been true during any time since such
warranties and representations were made.
9.3 If this Agreement is terminated for any reason, except as required by
the Shared Funding Order or pursuant to Section 9.2.1 or Section 9.2.3, above,
we shall, at your option, continue to make available additional shares of any
Portfolio and redeem shares of any Portfolio pursuant to all of the terms and
conditions of this Agreement for all Contracts in effect on the effective date
of termination of this Agreement. If this Agreement is terminated as required by
the Shared Funding Order, its provisions shall govern.
9.4 The provisions of Sections 2 (Representations and Warranties) and 7
(Indemnification) shall survive the termination of this Agreement. All other
applicable provisions of this Agreement shall survive the termination of this
Agreement, as long as shares of the Trust are held on behalf of Contract owners
in accordance with Section 9.3, except that we shall have no further obligation
to sell Trust shares with respect to Contracts issued after termination.
9.5 You shall not redeem Trust shares attributable to the Contracts (as
opposed to Trust shares attributable to your assets held in the Account) except:
(i) as necessary to implement Contract owner initiated or approved transactions;
(ii) as required by state and/or federal laws or regulations or judicial or
other legal precedent of general application (hereinafter referred to as a
"Legally Required Redemption"); or (iii) as permitted by an order of the SEC
pursuant to Section 26(b) of the 1940 Act. Upon request, you shall promptly
furnish to us the opinion of your counsel (counsel which is stated as your
counsel in the registration statements for the Contracts) to the effect that any
redemption pursuant to clause (ii) of this Section 9.5 is a Legally Required
Redemption. Furthermore, except in cases where permitted under the terms of the
Contracts, you shall not prevent Contract owners from allocating payments to any
Portfolio that has been available under a Contract without first giving us
ninety (90) days advance written notice of your intention to do so.
10. MISCELLANEOUS
10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions of this
Agreement or otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, all of which taken together shall constitute one and the same
instrument.
10.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
10.4 This Agreement shall be construed and its provisions interpreted under
and in accordance with the laws of the State of California. It shall also be
subject to the provisions of the federal securities laws and the rules and
regulations thereunder, to any orders of the
21
SEC on behalf of the Trust granting it exemptive relief, and to the conditions
of such orders. We shall promptly forward copies of any such orders to you.
10.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities.
10.6 The parties to this Agreement agree that the assets and liabilities of
each Portfolio of the Trust are separate and distinct from the assets and
liabilities of each other Portfolio. No Portfolio shall be liable or shall be
charged for any debt, obligation or liability of any other Portfolio.
10.7 Each party to this Agreement shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
10.8 Each party to this Agreement shall treat as confidential all
information reasonably identified as confidential in writing by any other party
to this Agreement, and, except as permitted by this Agreement or as required by
legal process or regulatory authorities, shall not disclose, disseminate, or use
such names and addresses and other confidential information until such time as
they may come into the public domain, without the express written consent of the
affected party to this Agreement. Without limiting the foregoing, no party to
this Agreement shall disclose any information that such party has been advised
is proprietary, except such information that such party is required to disclose
by any appropriate governmental authority (including, without limitation, the
SEC, the NASD, and state securities and insurance regulators).
10.9 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties to this Agreement are entitled to under
state and federal laws.
10.10 The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
10.11 Neither this Agreement nor any rights or obligations created by it
may be assigned by any party without the prior written approval of the other
parties.
10.12 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties. Notwithstanding the foregoing, the Site Terms may be separately amended
as provided therein and, as so amended and in effect from time to time, shall be
a part of this Agreement.
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10.13 Each party to the Agreement agrees to limit the disclosure of
nonpublic personal information of Contract owners and customers consistent with
its policies on privacy with respect to such information and Regulation S-P of
the SEC. Each party hereby agrees that it will comply with all applicable
requirements under the regulations implementing Title V of the
Xxxxx-Xxxxx-Xxxxxx Act and any other applicable federal and state consumer
privacy acts, rules and regulations. Each party further represents that it has
in place, and agrees that it will maintain, information security policies and
procedures for protecting nonpublic personal customer information adequate to
conform to applicable legal requirements.
23
IN WITNESS WHEREOF, each of the parties have caused their duly authorized
officers to execute this Agreement.
The Company: The Travelers Insurance Company
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President & Secretary
The Travelers Life and Annuity Company
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Secretary
Distributor for the Company: Travelers Distribution LLC
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
The Trust: Franklin Xxxxxxxxx Variable Insurance
Products Trust
ONLY ON BEHALF OF EACH
PORTFOLIO LISTED ON
SCHEDULE C HEREOF.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
The Underwriter: Franklin/Xxxxxxxxx Distributors, Inc.
By: /s/ Xxxxx X. Xxx
----------------------------------
Name: Xxxxx X. Xxx
Title: Senior Vice President
24
SCHEDULE A
THE COMPANY AND ITS DISTRIBUTOR
THE COMPANY
The Travelers Insurance Company
Xxx Xxxxxxxxx
Xxxxxxxx, XX 00000
A life insurance company organized under Connecticut laws.
The Travelers Life and Annuity Company
Xxx Xxxxxxxxx
Xxxxxxxx, XX 00000
A life insurance company organized under Connecticut laws.
THE DISTRIBUTOR
Travelers Distribution LLC.
Xxx Xxxxxxxxx
Xxxxxxxx, XX 00000
A corporation organized under Connecticut laws.
A
SCHEDULE B
ACCOUNTS OF THE COMPANY
1. Name: The Travelers Fund ABD for Variable Annuities
Date Established: 10/17/95
SEC Registration Number: 811-07465
2. Name: The Travelers Fund ABD II for Variable
Annuities
Date Established: 10/17/95
SEC Registration Number: 811-07463
3. Name: The Travelers Fund BD III for Variable
Annuities
Date Established: 3/27/97
SEC Registration Number: 811-08225
4. Name: The Travelers Fund XX XX for Variable Annuities
Date Established: 3/27/97
SEC Registration Number: 811-08223
5. Name: The Travelers Fund U for Variable Annuities
Date Established: 9/2/82
SEC Registration Number: 811-3575
6. Name: The Travelers Fund UL for Variable Life
Insurance
Date Established: 11/10/83
SEC Registration Number: 811-03927
7. Name: The Travelers Fund UL II for Variable Life
Insurance
Date Established: 10/17/95
SEC Registration Number: 811-07411
8. Name: The Travelers Fund UL III for Variable Life
Insurance
Date Established: 1/15/99
SEC Registration Number: 811-09215
9. Name: The Travelers Separate Account Eight for
Variable Annuities
Date Established: 06/30/98
SEC Registration Number: 811-08907
B-1
10. Name: The Travelers Separate Account Eleven for
Variable Annuities
Date Established: 11/14/02
SEC Registration Number: 811-21262
11. Name: The Travelers Separate Account Five for
Variable Annuities
Date Established: 6/8/98
SEC Registration Number: 811-08867
12. Name: The Travelers Separate Account Fourteen for
Variable Annuities
Date Established: 11/14/02
SEC Registration Number: 811-21267
13. Name: The Travelers Separate Account Nine for
Variable Annuities
Date Established: 6/18/99
SEC Registration Number: 811-09411
14. Name: The Travelers Separate Account PF for Variable
Annuities
Date Established: 7/30/97
SEC Registration Number: 811-8313
15. Name: The Travelers Separate Account XX XX for
Variable Annuities
Date Established: 7/30/97
SEC Registration Number: 811-8317
16. Name: The Travelers Separate Account QP for Variable
Annuities
Date Established: 12/26/95
SEC Registration Number: 811-07487
17. Name: The Travelers Separate Account QPN for
Variable Annuities
Date Established: 12/26/95
SEC Registration Number: Unregistered
18. Name: The Travelers Separate Account Seven for
Variable Annuities
Date Established: 06/30/98
SEC Registration Number: 811-08909
19. Name: The Travelers Separate Account Six for
Variable Annuities
Date Established: 6/8/98
SEC Registration Number: 811-08869
B-2
20. Name: The Travelers Separate Account Ten for
Variable Annuities
Date Established: 6/18/99
SEC Registration Number: 811-09413
21. Name: The Travelers Separate Account Thirteen for
Variable Annuities
Date Established: 11/14/02
SEC Registration Number: 811-21263
22. Name: The Travelers Separate Account TM for Variable
Annuities
Date Established: 11/5/97
SEC Registration Number: 811-08477
23. Name: The Travelers Separate Account XX XX for
Variable Annuities
Date Established: 11/5/97
SEC Registration Number: 811-08479
24. Name: The Travelers Separate Account Twelve for
Variable Annuities
Date Established: 11/14/02
SEC Registration Number: 811-21266
25. Name: TIC Variable Annuity Separate Account 2002
Date Established: 9/17/02
SEC Registration Number: 811-21220
26. Name: TLAC Variable Annuity Separate Account 2002
Date Established: 9/17/02
SEC Registration Number: 811-21221
27. Name: Travelers Separate Account CPPVUL1
Date Established: 9/1/02
SEC Registration Number: Unregistered
B-3
SCHEDULE C
AVAILABLE PORTFOLIOS AND CLASSES OF SHARES OF THE TRUST; INVESTMENT ADVISERS
Franklin Xxxxxxxxx Variable Insurance Products Trust Investment Adviser
---------------------------------------------------- ------------------
Franklin Rising Dividends Securities Fund - Class 2 Franklin Advisory Services, LLC
Franklin Small Cap Fund - Class 2 Franklin Advisers, Inc.
Mutual Shares Securities Fund -Class 2 Franklin Mutual Advisers, LLC
Templeton Developing Markets Securities Fund - Class 2 Xxxxxxxxx Asset Management, Ltd.
Templeton Global Asset Allocation Fund - Class 1 Xxxxxxxxx Investment Counsel, LLC
Templeton Global Income Securities Fund - Class 1 Franklin Advisers, Inc.
Templeton Growth Securities Fund - Class 1 Xxxxxxxxx Global Advisors Limited
Templeton Growth Securities Fund - Class 2 Xxxxxxxxx Global Advisors Limited
Templeton Foreign Securities Fund - Class 2 Xxxxxxxxx Investment Counsel, LLC
C
SCHEDULE D
CONTRACTS OF THE COMPANY
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
1. Travelers Travelers Separate COLI Private Class 2 shares
Insurance Account CPPVUL1 Placement Franklin Small Cap Fund
Company Unregistered Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
2. Travelers The Travelers Separate Gold Track Class 2 shares
Insurance Account QP for 333-00165 Xxxxxxxxx Developing Markets Securities Fund
Company Variable Annuities Xxxxxxxxx Foreign Securities Fund
811-07487
Class 1 shares
Templeton Global Asset Allocation Fund
Templeton Growth Securities Fund
3. Travelers The Travelers Separate Gold Track Express Class 2 shares
Insurance Account QPN for Franklin Small Cap Fund
Company Variable Annuities (Unregistered) Mutual Shares Securities Fund
(Unregistered) Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
4. Travelers The Travelers Separate Gold Track Select Class 2 shares
Insurance Account QP for 333-00165 Mutual Shares Securities Fund
Company Variable Annuities Xxxxxxxxx Developing Markets Securities Fund
811-07487 Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
5. Travelers TIC Separate Account Pioneer Annuistar Class 2 shares
Insurance Thirteen for Variable 333-101777 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small Cap Fund
811-21263 Xxxxxxxxx Foreign Securities Fund
6. Travelers Life TLAC Separate Account Pioneer Annuistar Class 2 shares
& Annuity Fourteen for Variable 333-101815 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small Cap Fund
811-21267 Xxxxxxxxx Foreign Securities Fund
D-1
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
7. Travelers TIC Separate Account Pioneer Annuistar Plus Class 2 shares
Insurance Eleven for Variable 333-101778 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small Cap Fund
811-21262 Xxxxxxxxx Foreign Securities Fund
8. Travelers Life TLAC Separate Account Pioneer Annuistar Plus Class 2 shares
& Annuity Twelve for Variable 333-101814 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small Cap Fund
811-21266 Xxxxxxxxx Foreign Securities Fund
9. Travelers TIC Separate Account Pioneer Annuistar Class 2 shares:
Insurance Thirteen for Variable Value Annuity Franklin Rising Dividends Securities Fund
Company Annuities 333-101777 Franklin Small Cap Fund
811-21263 Xxxxxxxxx Foreign Securities Fund
10. Travelers Life TLAC Separate Account Pioneer Annuistar Class 2 shares:
& Annuity Fourteen for Variable Value Annuity Franklin Rising Dividends Securities Fund
Company Annuities 333-101815 Franklin Small Cap Fund
811-21267 Xxxxxxxxx Foreign Securities Fund
11. Travelers TIC Variable Annuity Portfolio Architect Class 2 shares
Insurance Separate Account 2002 Access Mutual Shares Securities Fund
Company 811-21220 333-100435 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
12. Travelers Life TLAC Variable Annuity Portfolio Architect Class 2 shares
& Annuity Separate Account 2002 Access Mutual Shares Securities Fund
Company 811-21221 333-100434 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
13. Travelers TIC Separate Account Portfolio Architect II Class 2 shares
Insurance Thirteen for Variable 333-101777 Mutual Shares Securities Fund
Company Annuities Xxxxxxxxx Developing Markets Securities
811-21263 Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
14. Travelers Life TLAC Separate Account Portfolio Architect II Class 2 shares
& Annuity Fourteen for Variable 333-101815 Mutual Shares Securities Fund
Company Annuities Xxxxxxxxx Developing Markets Securities
811-21267 Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
D-2
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
15. Travelers TIC Separate Account Portfolio Architect Class 2 shares
Insurance Eleven for Variable Plus Mutual Shares Securities Fund
Company Annuities 333-101778 Xxxxxxxxx Developing Markets Securities
811-21262 Fund
Templeton Growth Securities Fund
Xxxxxxxxx Foreign Securities Fund
16. Travelers Life TLAC Separate Account Portfolio Architect Class 2 shares
& Annuity Twelve for Variable Plus Mutual Shares Securities Fund
Company Annuities 333-101814 Xxxxxxxxx Developing Markets Securities
811-21266 Fund
Templeton Growth Securities Fund
Xxxxxxxxx Foreign Securities Fund
17. Travelers The Travelers Separate Prime Builder Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small Cap Fund
Company Variable Annuities Mutual Shares Securities Fund
(Unregistered) Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
18. Travelers The Travelers Separate Prime Builder II Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small Cap Fund
Company Variable Annuities Mutual Shares Securities Fund
(Unregistered) Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
19. Travelers The Travelers Fund ABD The Travelers Life & Class 2 shares:
Insurance for Variable Annuities Annuity Access Annuity Mutual Shares Securities Fund
Company 811-07465 333-23311 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
20. Travelers Life The Travelers Fund ABD The Travelers Life & Class 2 shares:
& Annuity II for Variable Annuity Access Annuity Mutual Shares Securities Fund
Company Annuities 333-23327 Xxxxxxxxx Developing Markets Securities Fund
811-07463 Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
21. Travelers Life The Travelers Separate Travelers Premier Class 2 shares:
& Annuity Account Eight for Advisers L Annuity Xxxxxxxxx Foreign Securities Fund
Company Variable Annuities 333-60215 Mutual Shares Securities Fund
811-08907
D-3
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
22. Travelers The Travelers Fund ABD Travelers Access Class 2 shares
Insurance for Variable Annuities Annuity Mutual Shares Securities Fund
Company 811-07465 333-23311 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
23. Travelers Life The Travelers Fund ABD Travelers Access Class 2 shares
& Annuity II for Variable Annuity Mutual Shares Securities Fund
Company Annuities 333-23327 Xxxxxxxxx Developing Markets Securities
811-07463 Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
24. Travelers The Travelers Separate Travelers Blueprint Class 2 shares
Insurance Account QPN for Unregistered Franklin Small Cap Fund
Company Variable Annuities Mutual Shares Securities Fund
Unregistered Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
25. Travelers The Travelers Separate Travelers Blueprint II Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small Cap Fund
Company Variable Annuities Mutual Shares Securities Fund
(Unregistered) Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
26. Travelers The Travelers Fund UL Travelers Corporate Class 2 shares
Insurance III for Variable Life Benefit Life Franklin Small Cap Fund
Company Insurance (Mid-Size) Xxxxxxxxx Developing Markets Securities Fund
811-09215 333-64364 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
27. Travelers The Travelers Fund UL Travelers Corporate Class 2 shares
Insurance III for Variable Life Variable Life Franklin Small Cap Fund
Company Insurance 333-71349 Xxxxxxxxx Developing Markets Securities Fund
811-09215 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
D-4
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
28. Travelers The Travelers Fund UL Travelers Corporate Class 2 shares
Insurance III for Variable Life Variable Life 2000 Franklin Small Cap Fund
Company Insurance 333-94779 Xxxxxxxxx Developing Markets Securities
811-09215 Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
29. Travelers The Travelers Fund UL Travelers InVest Class 1 shares:
Insurance for Variable Life 002-88637 Xxxxxxxxx Global Asset Allocation Fund
Company Insurance Xxxxxxxxx Global Income Securities Fund
811-03927 Xxxxxxxxx Growth Securities Fund
30. Travelers The Travelers Fund UL Travelers L &A Class 2 shares:
Insurance III for Variable Life Variable Life III Franklin Small Cap Fund
Company Insurance 333-94779 Xxxxxxxxx Developing Markets Securities Fund
811-09215 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
31. Travelers The Travelers Fund UL Travelers Life & Class 2 shares:
Insurance III for Variable Life Annuity Corporate Franklin Small Cap Fund
Company Insurance Owned Variable Xxxxxxxxx Developing Markets Securities Fund
811-09215 Universal Life Xxxxxxxxx Foreign Securities Fund
Insurance IV Xxxxxxxxx Growth Securities Fund
333-113533
Class 1 shares:
Xxxxxxxxx Global Income Securities Fund
32. Travelers The Travelers Fund UL Travelers Life & Class 2 shares:
Insurance III for Variable Life Annuity Corporate Franklin Small Cap Fund
Company Insurance Select Xxxxxxxxx Developing Markets Securities Fund
811-09215 333-105335 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares:
Xxxxxxxxx Global Income Securities Fund
33. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Pioneer Franklin Rising Dividends Securities Fund
Company Variable Annuities Annuistar Flex Franklin Small Cap Fund
811-09411 Variable Annuity Xxxxxxxxx Foreign Securities Fund
333-65926
D-5
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
34. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Pioneer Franklin Rising Dividends Securities Fund
Company Variable Annuities Annuistar Flex Franklin Small Cap Fund
811-09413 Variable Annuity Xxxxxxxxx Foreign Securities Fund
333-65922
35. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect L Variable Xxxxxxxxx Developing Markets Securities Fund
811-09411 Annuity Xxxxxxxxx Foreign Securities Fund
333-65926 Xxxxxxxxx Growth Securities Fund
36. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Seven for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect L Variable Xxxxxxxxx Developing Market Securities Fund
811-08909 Annuity Xxxxxxxxx Foreign Securities Fund
333-60227
37. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect L Variable Xxxxxxxxx Developing Markets Securities Fund
811-09413 Annuity Xxxxxxxxx Foreign Securities Fund
333-65922
38. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Twelve for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect Plus Xxxxxxxxx Developing Markets Securities Fund
811-21266 333-101814 Xxxxxxxxx Foreign Securities Fund
39. Travelers The Travelers Fund ABD Travelers Life & Class 2 shares:
Insurance for Variable Annuities Annuity Premier Mutual Shares Securities Fund
Company 811-07465 Advisers III Annuity Xxxxxxxxx Foreign Securities Fund
33-65506
40. Travelers Life The Travelers Fund ABD Travelers Life & Class 2 shares:
& Annuity II for Variable Annuity Premier Mutual Shares Securities Fund
Company Annuities Advisers III Annuity Xxxxxxxxx Foreign Securities Fund
811-07463 333-65500
41. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Eight for Annuity Premier Mutual Shares Securities Fund
Company Variable Annuities Advisers L Annuity
811-08907 333-60215
D-6
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
42. Travelers The Travelers Separate Travelers Life & Class 2 shares
Insurance Account PF for Annuity PrimElite II Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Growth Securities Fund
811-8313 333-72334
43. Travelers Life The Travelers Separate Travelers Life & Class 2 shares
& Annuity Account XX XX for Annuity PrimElite II Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Growth Securities Fund
811-8317 333-72336
44. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Vintage II Franklin Small Cap Fund
Company Variable Annuities (Series II) Variable Mutual Shares Securities Fund
811-09413 Annuity Xxxxxxxxx Developing Markets Securities Fund
333-82013 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
45. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Vintage L Franklin Small Cap Fund
Company Variable Annuities Variable Annuity Mutual Shares Securities Fund
811-09411 333-65926 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
46. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Vintage L Franklin Small Cap Fund
Company Variable Annuities Variable Annuity Mutual Shares Securities Fund
811-09413 333-65922 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
47. Travelers The Travelers Fund BD Travelers Life & Class 2 shares:
Insurance III for Variable Annuity Vintage Xtra Franklin Small Cap Fund
Company Annuities (Series II) Annuity Mutual Shares Securities Fund
811-08225 333-70657 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
48. Travelers Life The Travelers Fund BD Travelers Life & Class 2 shares:
& Annuity IV for Variable Annuity Vintage Xtra Franklin Small Cap Fund
Company Annuities (Series II) Annuity Mutual Shares Securities Fund
811-08223 333-70659 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
D-7
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
49. Travelers The Travelers Fund UL Travelers MarketLife Class 1 shares:
Insurance for Variable Life 002-88637 Xxxxxxxxx Global Asset Allocation Fund
Company Insurance Xxxxxxxxx Global Income Securities Fund
811-03927 Xxxxxxxxx Growth Securities Fund
50. Travelers Life The Travelers Fund UL Travelers MarketLife Class 1 shares:
& Annuity II for Variable Life 033-63927 Xxxxxxxxx Global Asset Allocation Fund
Company Insurance Xxxxxxxxx Global Income Securities Fund
811-07411 Xxxxxxxxx Growth Securities Fund
51. Travelers The Travelers Separate Travelers Marquis Class 2 shares
Insurance Account TM for Portfolios Franklin Small Cap Fund
Company Variable Annuities 333-40193 Mutual Shares Securities Fund
811-08477 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
52. Travelers Life The Travelers Separate Travelers Marquis Class 2 shares
& Annuity Account XX XX for Portfolios Franklin Small Cap Fund
Company Variable Annuities 333-40191 Mutual Shares Securities Fund
811-08479 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
53. Travelers The Travelers Separate Travelers Portfolio Class 2 shares
Insurance Account Nine for Architect 3 Variable Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Developing Markets Securities Fund
811-09411 333-65926 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
54. Travelers Life The Travelers Separate Travelers Portfolio Class 2 shares
& Annuity Account Ten for Architect 3 Variable Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Developing Markets Securities
811-09413 333-65922 Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
55. Travelers The Travelers Fund ABD Travelers Portfolio Class 2 shares
Insurance for Variable Annuities Architect Annuity Mutual Shares Securities Fund
Company 811-07465 33-65343 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
56. Travelers Life The Travelers Fund ABD Travelers Portfolio Class 2 shares
& Annuity II for Variable Architect Annuity Mutual Shares Securities Fund
Company Annuities 33-65339 Xxxxxxxxx Foreign Securities Fund
811-07463 Xxxxxxxxx Growth Securities Fund
D-8
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
57. Travelers The Travelers Fund BD Travelers Portfolio Class 2 shares
Insurance III for Variable Architect XTRA Annuity Mutual Shares Securities Fund
Company Annuities 333-70657 Xxxxxxxxx Developing Markets Securities Fund
811-08225 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
58. Travelers Life The Travelers Fund BD Travelers Portfolio Class 2 shares
& Annuity IV for Variable Architect XTRA Annuity Mutual Shares Securities Fund
Company Annuities 333-70659 Xxxxxxxxx Developing Markets Securities Fund
811-08223 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
59. Travelers The Travelers Separate Travelers Retirement Class 2 shares
Insurance Account Five for Account Mutual Shares Securities Fund
Company Variable Annuities 333-58783 Xxxxxxxxx Developing Markets Securities Fund
811-08867 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
60. Travelers Life The Travelers Separate Travelers Retirement Class 2 shares
& Annuity Account Six for Account Mutual Shares Securities Fund
Company Variable Annuities 333-58809 Xxxxxxxxx Developing Markets Securities Fund
811-08869 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
61. Travelers The Travelers Separate Travelers Retirement Class 2 shares
Insurance Account QPN for Perspectives Franklin Small Cap Fund
Company Variable Annuities (Unregistered) Mutual Shares Securities Fund
(Unregistered) Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
62. Travelers The Travelers Fund UL Travelers Variable Life Class 2 shares
Insurance for Variable Life 333-96519 Franklin Small Cap Fund
Company Insurance Mutual Shares Securities Fund
811-03927 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
63. Travelers Life The Travelers Fund UL Travelers Variable Life Class 2 shares
& Annuity II for Variable Life 333-96517 Franklin Small Cap Fund
Company Insurance Mutual Shares Securities Fund
811-07411 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
D-9
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
64. Travelers The Travelers Fund UL Travelers Variable Class 2 shares
Insurance for Variable Life Life Accumulator Franklin Small Cap Fund
Company Insurance 333-96515 Mutual Shares Securities Fund
811-03927 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
65. Travelers Life The Travelers Fund UL Travelers Variable Class 2 shares
& Annuity II for Variable Life Life Accumulator Franklin Small Cap Fund
Company Insurance 333-96521 Mutual Shares Securities Fund
811-07411 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
66. Travelers The Travelers Fund UL Travelers Variable Class 2 shares:
Insurance 811-03927 Life Accumulator - Franklin Small Cap Fund
Company Series 2 Mutual Shares Securities Fund
333-96515 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
67. Travelers Life The Travelers Fund UL Travelers Variable Class 2 shares:
& Annuity II Life Accumulator - Franklin Small Cap Fund
Company 811-07411 Series 2 Mutual Shares Securities Fund
333-96521 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
68. Travelers The Travelers Fund UL Travelers Variable Xxxxxxxxx Growth Securities Fund - Class 1
Insurance for Variable Life Survivorship Life
Company Insurance 333-69771
811-03927
69. Travelers Life The Travelers Fund UL Travelers Variable Xxxxxxxxx Growth Securities Fund - Class 1
& Annuity II for Variable Life Survivorship Life
Company Insurance 333-69773
811-07411
70. Travelers The Travelers Fund UL Travelers Variable Class 2 shares
Insurance for Variable Life Survivorship Life II Franklin Small Cap Fund
Company Insurance 333-56952 Mutual Shares Securities Fund
811-03927 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
D-10
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
71. Travelers Life The Travelers Fund UL Travelers Variable Class 2 shares
& Annuity II for Variable Life Survivorship Life II Franklin Small Cap Fund
Company Insurance 333-56958 Mutual Shares Securities Fund
811-07411 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
72. Travelers The Travelers Separate Travelers Vintage 3 Class 2 shares
Insurance Account Nine for Variable Annuity Franklin Small Cap Fund
Company Variable Annuities 333-65926 Mutual Shares Securities Fund
811-09411 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
73. Travelers Life The Travelers Separate Travelers Vintage 3 Class 2 shares
& Annuity Account Ten for Variable Annuity Franklin Small Cap Fund
Company Variable Annuities 333-65922 Mutual Shares Securities Fund
811-09413 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
74. Travelers The Travelers Separate Travelers Vintage II Class 2 shares
Insurance Account Nine for Variable Annuity Franklin Small Cap Fund
Company Variable Annuities 333-82009 Mutual Shares Securities Fund
811-09411 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
75. Travelers Life The Travelers Separate Travelers Vintage II Class 2 shares
& Annuity Account Ten for Variable Annuity Franklin Small Cap Fund
Company Variable Annuities 333-82013 Mutual Shares Securities Fund
811-09413 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
76. Travelers The Travelers Fund BD Travelers Vintage Xtra Class 2 shares:
Insurance III for Variable Annuity Franklin Small Cap Fund
Company Annuities 333-70657 Mutual Shares Securities Fund
811-08225 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
D-11
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME 1933
# COMPANY 1940 ACT # ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
77. Travelers Life The Travelers Fund BD Travelers Vintage Xtra Class 2 shares:
& Annuity IV for Variable Annuity Franklin Small Cap Fund
Company Annuities 333-70659 Mutual Shares Securities Fund
811-08223 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
78. Travelers The Travelers Fund U Universal Annuity Class 2 shares:
Insurance for Variable Annuities 002-79529 Mutual Shares Securities Fund
Company 811-07487 Franklin Small Cap
Xxxxxxxxx Developing Markets
Xxxxxxxxx Foreign Securities
Class 1 shares:
Xxxxxxxxx Global Asset Allocation Fund
Xxxxxxxxx Growth Securities Fund
79. Travelers TIC Variable Annuity Vintage Access Class 2 shares
Insurance Separate Account 2002 333-100435 Franklin Small Cap Fund
Company 811-21220 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
80. Travelers Life TLAC Variable Annuity Vintage Access Class 2 shares
& Annuity Separate Account 2002 333-100434 Franklin Small Cap Fund
Company 811-21221 Franklin Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
D-12
SCHEDULE E
THIS SCHEDULE IS NOT USED
E
SCHEDULE F
RULE 12B-1 PLANS
COMPENSATION SCHEDULE
Each Portfolio named below shall pay the following amounts pursuant to the terms
and conditions referenced below under its Class 2 Rule 12b-1 Distribution Plan,
stated as a percentage per year of Class 2's average daily net assets
represented by shares of Class 2.
PORTFOLIO NAME MAXIMUM ANNUAL PAYMENT RATE
-------------------------------------------- ---------------------------
Franklin Rising Dividends Securities Fund 0.25%
Franklin Small Cap Fund 0.25%
Mutual Share Securities Fund 0.25%
Xxxxxxxxx Developing Markets Securities Fund 0.25%
Xxxxxxxxx Foreign Securities Fund 0.25%
Xxxxxxxxx Growth Securities Fund 0.25%
AGREEMENT PROVISIONS
If the Company, on behalf of any Account, purchases Trust Portfolio shares
("Eligible Shares") which are subject to a Rule 12b-1 plan adopted under the
1940 Act (the "Plan"), the Company may participate in the Plan.
To the extent the Company or its affiliates, agents or designees
(collectively "you") provide any activity or service which is primarily intended
to assist in the promotion, distribution or account servicing of Eligible Shares
("Rule 12b-1 Services") or variable contracts offering Eligible Shares, the
Underwriter, the Trust or their affiliates (collectively, "we") may pay you a
Rule 12b-1 fee. "Rule 12b-1 Services" may include, but are not limited to,
printing of prospectuses and reports used for sales purposes, preparing and
distributing sales literature and related expenses, advertisements, education of
dealers and their representatives, and similar distribution-related expenses,
furnishing personal services to owners of Contracts which may invest in Eligible
Shares ("Contract Owners"), education of Contract Owners, answering routine
inquiries regarding a Portfolio, coordinating responses to Contract Owner
inquiries regarding the Portfolios, maintaining such accounts or providing such
other enhanced services as a Trust Portfolio or Contract may require, or
providing other services eligible for service fees as defined under NASD rules.
Your acceptance of such compensation is your acknowledgment that eligible
services have been rendered. All Rule 12b-1 fees, shall be based on the value of
Eligible Shares owned by the Company on behalf of its Accounts, and shall be
calculated on the basis and at the rates set forth in the Compensation Schedule
stated above. The aggregate annual fees paid pursuant to each Plan shall not
exceed the amounts stated as the "annual maximums" in the Portfolio's
prospectus, unless an increase is approved by shareholders as provided in the
Plan. These maximums shall be a specified percent of the value of a Portfolio's
net assets attributable to Eligible Shares owned by the Company on behalf of its
Accounts (determined in the same manner as the Portfolio uses to compute its net
assets as set forth in its effective Prospectus). The Rule
F-1
12b-1 fee will be paid to you within thirty (30) days after the end of the
three-month periods ending in January, April, July and October.
You shall furnish us with such information as shall reasonably be requested
by the Trust's Boards of Trustees ("Trustees") with respect to the Rule 12b-1
fees paid to you pursuant to the Plans. We shall furnish to the Trustees, for
their review on a quarterly basis, a written report of the amounts expended
under the Plans and the purposes for which such expenditures were made.
The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Trustees, including the Trustees who are not
interested persons of the Trust and who have no financial interest in the Plans
or any related agreement ("Disinterested Trustees"). Each Plan may be terminated
at any time by the vote of a majority of the Disinterested Trustees, or by a
vote of a majority of the outstanding shares as provided in the Plan, on sixty
(60) days' written notice, without payment of any penalty. The Plans may also be
terminated by any act that terminates the Underwriting Agreement between the
Underwriter and the Trust, and/or the management or administration agreement
between Franklin Advisers, Inc. and its affiliates and the Trust. Continuation
of the Plans is also conditioned on Disinterested Trustees being ultimately
responsible for selecting and nominating any new Disinterested Trustees. Under
Rule 12b-1, the Trustees have a duty to request and evaluate, and persons who
are party to any agreement related to a Plan have a duty to furnish, such
information as may reasonably be necessary to an informed determination of
whether the Plan or any agreement should be implemented or continued. Under Rule
12b-1, the Trust is permitted to implement or continue Plans or the provisions
of any agreement relating to such Plans from year-to-year only if, based on
certain legal considerations, the Trustees are able to conclude that the Plans
will benefit each affected Trust Portfolio and class. Absent such yearly
determination, the Plans must be terminated as set forth above. In the event of
the termination of the Plans for any reason, the provisions of this Schedule F
relating to the Plans will also terminate. You agree that your selling
agreements with persons or entities through whom you intend to distribute
Contracts will provide that compensation paid to such persons or entities may be
reduced if a Portfolio's Plan is no longer effective or is no longer applicable
to such Portfolio or class of shares available under the Contracts.
Any obligation assumed by the Trust pursuant to this Agreement shall be limited
in all cases to the assets of the Trust and no person shall seek satisfaction
thereof from shareholders of the Trust. You agree to waive payment of any
amounts payable to you by Underwriter under a Plan until such time as the
Underwriter has received such fee from the Trust.
The provisions of the Plans shall control over the provisions of the
Participation Agreement, including this Schedule F, in the event of any
inconsistency.
You agree to provide complete disclosure as required by all applicable statutes,
rules and regulations of all rule 12b-1 fees received from us in the prospectus
of the Contracts.
F-2
SCHEDULE G
ADDRESSES FOR NOTICES
To the Company: The Travelers Insurance Company
Xxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
The Travelers Life and Annuity Company
Xxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
To the Distributor: Travelers Distribution LLC
Xxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: President
To the Trust: Franklin Xxxxxxxxx Variable Insurance Products Trust
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Assistant Vice President
To the Underwriter: Franklin Xxxxxxxxx Distributors, Inc.
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxx, Senior Vice President
IF TO THE TRUST OR UNDERWRITER
WITH A COPY TO: XXXXXX XXXXXXX, GENERAL COUNSEL
FRANKLIN XXXXXXXXX XXXXXXXXXXX
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
G
SCHEDULE H
SHARED FUNDING ORDER
Templeton Variable Products Series Fund, et al.
File No. 812-11698
SECURITIES AND EXCHANGE COMMISSION
Release No. IC-24018
1999 SEC LEXIS 1887
September 17, 1999
ACTION: Notice of application for an amended order of exemption pursuant to
Section 6(c) of the Investment Company Act of 1940 (the "1940 Act") from the
provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder.
TEXT: Summary of Application: Templeton Variable Products Series Fund (the
"Templeton Trust"), Franklin Xxxxxxxxx Variable Insurance Products Trust
(formerly Franklin Valuemark Funds) (the "VIP Trust," and together with the
Templeton Trust, the "Funds"), Xxxxxxxxx Funds Annuity Company ("TFAC") or any
successor to TFAC, and any future open-end investment company for which TFAC or
any affiliate is the administrator, sub-administrator, investment manager,
adviser, principal underwriter, or sponsor ("Future Funds") seek an amended
order of the Commission to (1) add as parties to that order the VIP Trust and
any Future Funds and (2) permit shares of the Funds and Future Funds to be
issued to and held by qualified pension and retirement plans outside the
separate account context.
Applicants: Templeton Variable Products Series Fund, Franklin Xxxxxxxxx
Variable Insurance Products Trust, Xxxxxxxxx Funds Annuity Company or any
successor to TFAC, and any future open-end investment company for which TFAC or
any affiliate is the administrator, sub-administrator, investment manager,
adviser, principal underwriter, or sponsor (collectively, the "Applicants").
Filing Date: The application was filed on July 14, 1999, and amended and
restated on September 17, 1999.
Hearing or Notification of Hearing: An order granting the application will
be issued unless the Commission orders a hearing. Interested persons may request
a hearing by writing to the Secretary of the Commission and serving Applicants
with a copy of the request, personally or by mail. Hearing requests should be
received by the Commission by 5:30 p.m., on October 12, 1999, and should be
accompanied by proof of service on the Applicants in the form of an affidavit
or, for lawyers, a certificate of service. Hearing requests should state the
nature of the writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request notification
by writing to the Secretary of the Commission.
Addresses: Secretary, Securities and Exchange Commission, 000 Xxxxx Xxxxxx,
XX, Xxxxxxxxxx, X.X. 00000-0000.
Applicants: Templeton Variable Products Series Fund and Franklin Xxxxxxxxx
Variable Insurance Products Trust, 000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, Attn: Xxxxx X. Xxxxxxxx, Esq.
For Further Information Contact: Xxxxx X. XxXxxxx, Senior Counsel, or Xxxxx
X. Xxxxx, Branch Chief, Office of Insurance Products, Division of Investment
Management, at (000) 000-0000.
H-1
Supplementary Information: The following is a summary of the application.
The complete application is available for a fee from the SEC's Public Reference
Branch, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000 (tel. (202)
000-0000).
Applicants' Representations:
1. Each of the Funds is registered under the 1940 Act as an open-end
management investment company and was organized as a Massachusetts business
trust. The Templeton Trust currently consists of eight separate series, and the
VIP Trust consists of twenty-five separate series. Each Fund's Declaration of
Trust permits the Trustees to create additional series of shares at any time.
The Funds currently serve as the underlying investment medium for variable
annuity contracts and variable life insurance policies issued by various
insurance companies. The Funds have entered into investment management
agreements with certain investment managers ("Investment Managers") directly or
indirectly owned by Franklin Resources, Inc. ("Resources"), a publicly owned
company engaged in the financial services industry through its subsidiaries.
2. TFAC is an indirect, wholly owned subsidiary of Resources. TFAC is the
sole insurance company in the Franklin Xxxxxxxxx organization, and specializes
in the writing of variable annuity contracts. The Templeton Trust has entered
into a Fund Administration Agreement with Franklin Xxxxxxxxx Services, Inc. ("FT
Services"), which replaced TFAC in 1998 as administrator, and FT Services
subcontracts certain services to TFAC. FT Services also serves as administrator
to all series of the VIP Trust. TFAC and FT Services provide certain
administrative facilities and services for the VIP and Templeton Trusts.
3. On November 16, 1993, the Commission issued an order granting exemptive
relief to permit shares of the Templeton Trust to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies (Investment Company Act
Release No. 19879, File No. 812-8546) (the "Original Order"). Applicants
incorporate by reference into the application the Application for the Original
Order and each amendment thereto, the Notice of Application for the Original
Order, and the Original Order, to the extent necessary, to supplement the
representations made in the application in support of the requested relief.
Applicants represent that all of the facts asserted in the Application for the
Original Order and any amendments thereto remain true and accurate in all
material respects to the extent that such facts are relevant to any relief on
which Applicants continue to rely. The Original Order allows the Templeton Trust
to offer its shares to insurance companies as the investment vehicle for their
separate accounts supporting variable annuity contracts and variable life
insurance contracts (collectively, the "Variable Contracts"). Applicants state
that the Original Order does not (i) include the VIP Trust or Future Funds as
parties, nor (ii) expressly address the sale of shares of the Funds or any
Future Funds to qualified pension and retirement plans outside the separate
account context including, without limitation, those trusts, plans, accounts,
contracts or annuities described in Sections 401(a), 403(a), 403(b), 408(b),
408(k), 414(d), 457(b), 501(c)(18) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any other trust, plan, contract, account or annuity
that is determined to be within the scope of Treasury Regulation
1.817.5(f)(3)(iii) ("Qualified Plans").
4. Separate accounts owning shares of the Funds and their insurance company
depositors are referred to in the application as "Participating Separate
Accounts" and "Participating Insurance Companies," respectively. The use of a
common management investment company as the underlying investment medium for
both variable annuity and variable life insurance separate accounts of a single
insurance company (or of two or more affiliated insurance companies) is referred
to as "mixed funding." The use of a common management investment company as the
underlying investment medium for variable annuity and/or variable life insurance
separate accounts of unaffiliated insurance companies is referred to as "shared
funding."
Applicants' Legal Analysis:
1. Applicants request that the Commission issue an amended order pursuant
to Section 6(c) of the 1940 Act, adding the VIP Trust and Future Funds to the
Original Order and exempting scheduled premium variable life insurance separate
accounts and flexible premium variable life insurance separate accounts of
Participating Insurance Companies (and, to the extent necessary, any principal
underwriter and depositor of such an account) and the Applicants from Sections
9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and
6e-3(T)(b)(15)
H-2
(and any comparable rule) thereunder, respectively, to the extent necessary to
permit shares of the Funds and any Future Funds to be sold to and held by
Qualified Plans. Applicants submit that the exemptions requested are appropriate
in the public interest, consistent with the protection of investors, and
consistent with the purposes fairly intended by the policy and provisions of the
1940 Act.
2. The Original Order does not include the VIP Trust or Future Funds as
parties nor expressly address the sale of shares of the Funds or any Future
Funds to Qualified Plans. Applicants propose that the VIP Trust and Future Funds
be added as parties to the Original Order and the Funds and any Future Funds be
permitted to offer and sell their shares to Qualified Plans.
3. Section 6(c) of the 1940 Act provides, in part, that the Commission, by
order upon application, may conditionally or unconditionally exempt any person,
security or transaction, or any class or classes of persons, securities or
transactions from any provisions of the 1940 Act or the rules or regulations
thereunder, if and to the extent that such exemption is necessary or appropriate
in the public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the 1940 Act.
4. In connection with the funding of scheduled premium variable life
insurance contracts issued through a separate account registered under the 1940
Act as a unit investment trust ("UIT"), Rule 6e-2(b)(15) provides partial
exemptions from various provisions of the 1940 Act, including the following: (1)
Section 9(a), which makes it unlawful for certain individuals to act in the
capacity of employee, officer, or director for a UIT, by limiting the
application of the eligibility restrictions in Section 9(a) to affiliated
persons directly participating in the management of a registered management
investment company; and (2) Sections 13(a), 15(a) and 15(b) of the 1940 Act to
the extent that those sections might be deemed to require "pass-through" voting
with respect to an underlying fund's shares, by allowing an insurance company to
disregard the voting instructions of contractowners in certain circumstances.
5. These exemptions are available, however, only where the management
investment company underlying the separate account (the "underlying fund")
offers its shares "exclusively to variable life insurance separate accounts of
the life insurer, or of any affiliated life insurance company." Therefore, Rule
6e-2 does not permit either mixed funding or shared funding because the relief
granted by Rule 6e-2(b)(15) is not available with respect to a scheduled premium
variable life insurance separate account that owns shares of an underlying fund
that also offers its shares to a variable annuity or a flexible premium variable
life insurance separate account of the same company or of any affiliated life
insurance company. Rule 6e-2(b)(15) also does not permit the sale of shares of
the underlying fund to Qualified Plans.
6. In connection with flexible premium variable life insurance contracts
issued through a separate account registered under the 1940 Act as a UIT, Rule
6e-3(T)(b)(15) also provides partial exemptions from Sections 9(a), 13(a), 15(a)
and 15(b) of the 1940 Act. These exemptions, however, are available only where
the separate account's underlying fund offers its shares "exclusively to
separate accounts of the life insurer, or of any affiliated life insurance
company, offering either scheduled contracts or flexible contracts, or both; or
which also offer their shares to variable annuity separate accounts of the life
insurer or of an affiliated life insurance company." Therefore, Rule 6e-3(T)
permits mixed funding but does not permit shared funding and also does not
permit the sale of shares of the underlying fund to Qualified Plans. As noted
above, the Original Order granted the Templeton Trust exemptive relief to permit
mixed and shared funding, but did not expressly address the sale of its shares
to Qualified Plans.
7. Applicants note that if the Funds were to sell their shares only to
Qualified Plans, exemptive relief under Rule 6e-2 and Rule 6e-3(T) would not be
necessary. Applicants state that the relief provided for under Rule 6e-2(b)(15)
and Rule 6e-3(T)(b)(15) does not relate to qualified pension and retirement
plans or to a registered investment company's ability to sell its shares to such
plans.
8. Applicants state that changes in the federal tax law have created the
opportunity for each of the Funds to increase its asset base through the sale of
its shares to Qualified Plans. Applicants state that Section 817(h) of the
Internal Revenue Code of 1986, as amended (the "Code"), imposes certain
diversification standards on the assets underlying Variable Contracts. Treasury
Regulations generally require that, to meet the diversification requirements,
H-3
all of the beneficial interests in the underlying investment company must be
held by the segregated asset accounts of one or more life insurance companies.
Notwithstanding this, Applicants note that the Treasury Regulations also contain
an exception to this requirement that permits trustees of a Qualified Plan to
hold shares of an investment company, the shares of which are also held by
insurance company segregated asset accounts, without adversely affecting the
status of the investment company as an adequately diversified underlying
investment of Variable Contracts issued through such segregated asset accounts
(Treas. Reg. 1.817-5(f)(3)(iii)).
9. Applicants state that the promulgation of Rules 6e-2(b)(15) and
6e-3(T)(b)(15) under the 1940 Act preceded the issuance of these Treasury
Regulations. Thus, Applicants assert that the sale of shares of the same
investment company to both separate accounts and Qualified Plans was not
contemplated at the time of the adoption of Rules 6e-2(b)(15) and
6e-3(T)(b)(15).
10. Section 9(a) provides that it is unlawful for any company to serve as
investment adviser or principal underwriter of any registered open-end
investment company if an affiliated person of that company is subject to a
disqualification enumerated in Section 9(a)(1) or (2). Rules 6e-2(b)(15) and
6e-3(T)(b)(15) provide exemptions from Section 9(a) under certain circumstances,
subject to the limitations on mixed and shared funding. These exemptions limit
the application of the eligibility restrictions to affiliated individuals or
companies that directly participate in the management of the underlying
portfolio investment company.
11. Applicants state that the relief granted in Rule 6e-2(b)(15) and
6e-3(T)(b)(15) from the requirements of Section 9 limits, in effect, the amount
of monitoring of an insurer's personnel that would otherwise be necessary to
ensure compliance with Section 9 to that which is appropriate in light of the
policy and purposes of Section 9. Applicants submit that those Rules recognize
that it is not necessary for the protection of investors or the purposes fairly
intended by the policy and provisions of the 1940 Act to apply the provisions of
Section 9(a) to the many individuals involved in an insurance company complex,
most of whom typically will have no involvement in matters pertaining to
investment companies funding the separate accounts.
12. Applicants to the Original Order previously requested and received
relief from Section 9(a) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) to the extent
necessary to permit mixed and shared funding. Applicants maintain that the
relief previously granted from Section 9(a) will in no way be affected by the
proposed sale of shares of the Funds to Qualified Plans. Those individuals who
participate in the management or administration of the Funds will remain the
same regardless of which Qualified Plans use such Funds. Applicants maintain
that more broadly applying the requirements of Section 9(a) because of
investment by Qualified Plans would not serve any regulatory purpose. Moreover,
Qualified Plans, unlike separate accounts, are not themselves investment
companies and therefore are not subject to Section 9 of the 1940 Act.
13. Applicants state that Rules 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii)
provide exemptions from the pass-through voting requirement with respect to
several significant matters, assuming the limitations on mixed and shared
funding are observed. Rules 6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(15)(iii)(A)
provide that the insurance company may disregard the voting instructions of its
contractowners with respect to the investments of an underlying fund or any
contract between a fund and its investment adviser, when required to do so by an
insurance regulatory authority (subject to the provisions of paragraphs
(b)(5)(i) and (b)(7)(ii)(A) of the Rules). Rules 6e-2(b)(15)(iii)(B) and
6e-3(T)(b)(15)(iii)(A)(2) provide that the insurance company may disregard
contractowners' voting instructions if the contractowners initiate any change in
such company's investment policies, principal underwriter, or any investment
adviser (provided that disregarding such voting instructions is reasonable and
subject to the other provisions of paragraphs (b)(5)(ii) and (b)(7)(ii)(B) and
(C) of the Rules).
14. Applicants assert that Qualified Plans, which are not registered as
investment companies under the 1940 Act, have no requirement to pass-through the
voting rights to plan participants. Applicants state that applicable law
expressly reserves voting rights to certain specified persons. Under Section
403(a) of the Employment Retirement Income Security Act ("ERISA"), shares of a
fund sold to a Qualified Plan must be held by the trustees of the Qualified
Plan. Section 403(a) also provides that the trustee(s) must have exclusive
authority and discretion to manage and control the Qualified Plan with two
exceptions: (1) when the Qualified Plan expressly provides that the trustee(s)
are subject to the direction of a named fiduciary who is not a trustee, in which
case the trustees are subject to proper directions made in accordance with the
terms of the Qualified Plan and not contrary to ERISA; and (2)
H-4
when the authority to manage, acquire or dispose of assets of the Qualified Plan
is delegated to one or more investment managers pursuant to Section 402(c)(3) of
ERISA. Unless one of the two above exceptions stated in Section 403(a) applies,
Qualified Plan trustees have the exclusive authority and responsibility for
voting proxies. Where a named fiduciary to a Qualified Plan appoints an
investment manager, the investment manager has the responsibility to vote the
shares held unless the right to vote such shares is reserved to the trustees or
the named fiduciary. Where a Qualified Plan does not provide participants with
the right to give voting instructions, Applicants do not see any potential for
material irreconcilable conflicts of interest between or among variable contract
holders and Qualified Plan investors with respect to voting of the respective
Fund's shares. Accordingly, Applicants state that, unlike the case with
insurance company separate accounts, the issue of the resolution of material
irreconcilable conflicts with respect to voting is not present with respect to
such Qualified Plans since the Qualified Plans are not entitled to pass-through
voting privileges.
15. Even if a Qualified Plan were to hold a controlling interest in one of
the Funds, Applicants believe that such control would not disadvantage other
investors in such Fund to any greater extent than is the case when any
institutional shareholder holds a majority of the voting securities of any
open-end management investment company. In this regard, Applicants submit that
investment in a Fund by a Qualified Plan will not create any of the voting
complications occasioned by mixed funding or shared funding. Unlike mixed or
shared funding, Qualified Plan investor voting rights cannot be frustrated by
veto rights of insurers or state regulators.
16. Applicants state that some of the Qualified Plans, however, may provide
for the trustee(s), an investment adviser (or advisers), or another named
fiduciary to exercise voting rights in accordance with instructions from
participants. Where a Qualified Plan provides participants with the right to
give voting instructions, Applicants see no reason to believe that participants
in Qualified Plans generally or those in a particular Qualified Plan, either as
a single group or in combination with participants in other Qualified Plans,
would vote in a manner that would disadvantage Variable Contract holders. In
sum, Applicants maintain that the purchase of shares of the Funds by Qualified
Plans that provide voting rights does not present any complications not
otherwise occasioned by mixed or shared funding.
17. Applicants do not believe that the sale of the shares of the Funds to
Qualified Plans will increase the potential for material irreconcilable
conflicts of interest between or among different types of investors. In
particular, Applicants see very little potential for such conflicts beyond that
which would otherwise exist between variable annuity and variable life insurance
contractowners.
18. As noted above, Section 817(h) of the Code imposes certain
diversification standards on the underlying assets of variable contracts held in
an underlying mutual fund. The Code provides that a variable contract shall not
be treated as an annuity contract or life insurance, as applicable, for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the Treasury Department, adequately
diversified.
19. Treasury Department Regulations issued under Section 817(h) provide
that, in order to meet the statutory diversification requirements, all of the
beneficial interests in the investment company must be held by the segregated
asset accounts of one or more insurance companies. However, the Regulations
contain certain exceptions to this requirement, one of which allows shares in an
underlying mutual fund to be held by the trustees of a qualified pension or
retirement plan without adversely affecting the ability of shares in the
underlying fund also to be held by separate accounts of insurance companies in
connection with their variable contracts (Treas. Reg. 1.817-5(f)(3)(iii)). Thus,
Applicants believe that the Treasury Regulations specifically permit "qualified
pension or retirement plans" and separate accounts to invest in the same
underlying fund. For this reason, Applicants have concluded that neither the
Code nor the Treasury Regulations or revenue rulings thereunder presents any
inherent conflict of interest.
20. Applicants note that while there are differences in the manner in which
distributions from Variable Contracts and Qualified Plans are taxed, these
differences will have no impact on the Funds. When distributions are to be made,
and a Separate Account or Qualified Plan is unable to net purchase payments to
make the distributions, the Separate Account and Qualified Plan will redeem
shares of the Funds at their respective net asset value in
H-5
conformity with Rule 22c-1 under the 1940 Act (without the imposition of any
sales charge) to provide proceeds to meet distribution needs. A Qualified Plan
will make distributions in accordance with the terms of the Qualified Plan.
21. Applicants maintain that it is possible to provide an equitable means
of giving voting rights to Participating Separate Account contractowners and to
Qualified Plans. In connection with any meeting of shareholders, the Funds will
inform each shareholder, including each Participating Insurance Company and
Qualified Plan, of information necessary for the meeting, including their
respective share of ownership in the relevant Fund. Each Participating Insurance
Company will then solicit voting instructions in accordance with Rules 6e-2 and
6e-3(T), as applicable, and its participation agreement with the relevant Fund.
Shares held by Qualified Plans will be voted in accordance with applicable law.
The voting rights provided to Qualified Plans with respect to shares of the
Funds would be no different from the voting rights that are provided to
Qualified Plans with respect to shares of funds sold to the general public.
22. Applicants have concluded that even if there should arise issues with
respect to a state insurance commissioner's veto powers over investment
objectives where the interests of contractowners and the interests of Qualified
Plans are in conflict, the issues can be almost immediately resolved since the
trustees of (or participants in) the Qualified Plans can, on their own, redeem
the shares out of the Funds. Applicants note that state insurance commissioners
have been given the veto power in recognition of the fact that insurance
companies usually cannot simply redeem their separate accounts out of one fund
and invest in another. Generally, time-consuming, complex transactions must be
undertaken to accomplish such redemptions and transfers. Conversely, the
trustees of Qualified Plans or the participants in participant-directed
Qualified Plans can make the decision quickly and redeem their interest in the
Funds and reinvest in another funding vehicle without the same regulatory
impediments faced by separate accounts or, as is the case with most Qualified
Plans, even hold cash pending suitable investment.
23. Applicants also state that they do not see any greater potential for
material irreconcilable conflicts arising between the interests of participants
under Qualified Plans and contractowners of Participating Separate Accounts from
possible future changes in the federal tax laws than that which already exist
between variable annuity contractowners and variable life insurance
contractowners.
24. Applicants state that the sale of shares of the Funds to Qualified
Plans in addition to separate accounts of Participating Insurance Companies will
result in an increased amount of assets available for investment by the Funds.
This may benefit variable contractowners by promoting economies of scale, by
permitting increased safety of investments through greater diversification, and
by making the addition of new portfolios more feasible.
25. Applicants assert that, regardless of the type of shareholders in each
Fund, each Fund's Investment Manager is or would be contractually and otherwise
obligated to manage the Fund solely and exclusively in accordance with that
Fund's investment objectives, policies and restrictions as well as any
guidelines established by the Board of Trustees of such Fund (the "Board"). The
Investment Manager works with a pool of money and (except in a few instances
where this may be required in order to comply with state insurance laws) does
not take into account the identity of the shareholders. Thus, each Fund will be
managed in the same manner as any other mutual fund. Applicants therefore see no
significant legal impediment to permitting the sale of shares of the Funds to
Qualified Plans.
26. Applicants state that the Commission has permitted the amendment of a
substantially similar original order for the purpose of adding a party to the
original order and has permitted open-end management investment companies to
offer their shares directly to Qualified Plan in addition to separate accounts
of affiliated or unaffiliated insurance companies which issue either or both
variable annuity contracts or variable life insurance contracts. Applicants
state that the amended order sought in the application is identical to precedent
with respect to the conditions Applicants propose should be imposed on Qualified
Plans in connection with investment in the Funds.
Applicants' Conditions:
If the requested amended order is granted, Applicants consent to the
following conditions:
H-6
1. A majority of the Board of each Fund shall consist of persons who are
not "interested persons" thereof, as defined by Section 2(a)(19) of the 1940
Act, and the rules thereunder and as modified by any applicable orders of the
Commission, except that if this condition is not met by reason of the death,
disqualification or bona fide resignation of any Board Member or Members, then
the operation of this condition shall be suspended: (a) for a period of 45 days
if the vacancy or vacancies may be filled by the remaining Board Members; (b)
for a period of 60 days if a vote of shareholders is required to fill the
vacancy or vacancies; or (c) for such longer period as the Commission may
prescribe by order upon application.
2. The Board will monitor their respective Fund for the existence of any
material irreconcilable conflict among the interests of the Variable Contract
owners of all Separate Accounts investing in the Funds and of the Qualified Plan
participants investing in the Funds. The Board will determine what action, if
any, shall be taken in response to such conflicts. A material irreconcilable
conflict may arise for a variety of reasons, including: (a) an action by any
state insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretive letter, or any similar action
by insurance, tax or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of the Funds are being managed; (e) a difference in voting
instructions given by variable annuity contract owners, variable life insurance
contract owners, and trustees of Qualified Plans; (f) a decision by an insurer
to disregard the voting instructions of Variable Contract owners; or (g) if
applicable, a decision by a Qualified Plan to disregard the voting instructions
of Qualified Plan participants.
3. Participating Insurance Companies, the Investment Managers, and any
Qualified Plan that executes a fund participation agreement upon becoming an
owner of 10 percent or more of the assets of an Fund (a "Participating Qualified
Plan"), will report any potential or existing conflicts of which it becomes
aware to the Board of any relevant Fund. Participating Insurance Companies, the
Investment Managers and the Participating Qualified Plans will be responsible
for assisting the Board in carrying out its responsibilities under these
conditions by providing the Board with all information reasonably necessary for
the Board to consider any issues raised. This responsibility includes, but is
not limited to, an obligation by each Participating Insurance Company to inform
the Board whenever voting instructions of Contract owners are disregarded and,
if pass-through voting is applicable, an obligation by each Participating
Qualified Plan to inform the Board whenever it has determined to disregard
Qualified Plan participant voting instructions. The responsibility to report
such information and conflicts, and to assist the Board, will be contractual
obligations of all Participating Insurance Companies investing in the Funds
under their agreements governing participation in the Funds, and such agreements
shall provide that these responsibilities will be carried out with a view only
to the interests of the Variable Contract owners. The responsibility to report
such information and conflicts, and to assist the Board, will be contractual
obligations of all Participating Qualified Plans under their agreements
governing participation in the Funds, and such agreements will provide that
their responsibilities will be carried out with a view only to the interests of
Qualified Plan participants.
4. If it is determined by a majority of the Board of a Fund, or by a
majority of the disinterested Board Members, that a material irreconcilable
conflict exists, the relevant Participating Insurance Companies and
Participating Qualified Plans will, at their own expense and to the extent
reasonably practicable as determined by a majority of the disinterested Board
Members, take whatever steps are necessary to remedy or eliminate the material
irreconcilable conflict, which steps could include: (a) in the case of
Participating Insurance Companies, withdrawing the assets allocable to some or
all of the Separate Account s from the Fund or any portfolio thereof and
reinvesting such assets in a different investment medium, including another
portfolio of an Fund or another Fund, or submitting the question as to whether
such segregation should be implemented to a vote of all affected Variable
Contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., variable annuity contract owners or variable life insurance
contract owners of one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Variable Contract owners
the option of making such a change; (b) in the case of Participating Qualified
Plans, withdrawing the assets allocable to some or all of the Qualified Plans
from the Fund and reinvesting such assets in a different investment medium; and
(c) establishing a new registered management investment company or managed
Separate Account. If a material irreconcilable conflict arises because of a
decision by a Participating Insurance Company to disregard Variable Contract
owner voting instructions, and that decision represents a minority position or
would preclude a majority vote, then the insurer may be required, at the Fund's
election, to withdraw the insurer's Separate Account investment in such Fund,
and no charge or penalty will be imposed as a result of such withdrawal. If a
material irreconcilable conflict arises because of a Participating
H-7
Qualified Plan's decision to disregard Qualified Plan participant voting
instructions, if applicable, and that decision represents minority position or
would preclude a majority vote, the Participating Qualified Plan may be
required, at the Fund's election, to withdraw its investment in such Fund, and
no charge or penalty will be imposed as a result of such withdrawal. The
responsibility to take remedial action in the event of a determination by a
Board of a material irreconcilable conflict and to bear the cost of such
remedial action will be a contractual obligation of all Participating Insurance
Companies and Participating Qualified Plans under their agreements governing
participation in the Funds, and these responsibilities will be carried out with
a view only to the interest of Variable Contract owners and Qualified Plan
participants.
5. For purposes of Condition 4, a majority of the disinterested Board
Members of the applicable Board will determine whether or not any proposed
action adequately remedies any material irreconcilable conflict, but in no event
will the relevant Fund or the Investment Managers be required to establish a new
funding medium for any Contract. No Participating Insurance Company shall be
required by Condition 4 to establish a new funding medium for any Variable
Contract if any offer to do so has been declined by vote of a majority of the
Variable Contract owners materially and adversely affected by the material
irreconcilable conflict. Further, no Participating Qualified Plan shall be
required by Condition 4 to establish a new funding medium for any Participating
Qualified Plan if (a) a majority of Qualified Plan participants materially and
adversely affected by the irreconcilable material conflict vote to decline such
offer, or (b) pursuant to governing Qualified Plan documents and applicable law,
the Participating Qualified Plan makes such decision without a Qualified Plan
participant vote.
6. The determination of the Board of the existence of a material
irreconcilable conflict and its implications will be made known in writing
promptly to all Participating Insurance Companies and Participating Qualified
Plans.
7. Participating Insurance Companies will provide pass-through voting
privileges to Variable Contract owners who invest in registered Separate
Accounts so long as and to the extent that the Commission continues to interpret
the 1940 Act as requiring pass-through voting privileges for Variable Contract
owners. As to Variable Contracts issued by unregistered Separate Accounts,
pass-through voting privileges will be extended to participants to the extent
granted by issuing insurance companies. Each Participating Insurance Company
will also vote shares of the Funds held in its Separate Accounts for which no
voting instructions from Contract owners are timely received, as well as shares
of the Funds which the Participating Insurance Company itself owns, in the same
proportion as those shares of the Funds for which voting instructions from
contract owners are timely received. Participating Insurance Companies will be
responsible for assuring that each of their registered Separate Accounts
participating in the Funds calculates voting privileges in a manner consistent
with other Participating Insurance Companies. The obligation to calculate voting
privileges in a manner consistent with all other registered Separate Accounts
investing in the Funds will be a contractual obligation of all Participating
Insurance Companies under their agreements governing their participation in the
Funds. Each Participating Qualified Plan will vote as required by applicable law
and governing Qualified Plan documents.
8. All reports of potential or existing conflicts received by the Board of
a Fund and all action by such Board with regard to determining the existence of
a conflict, notifying Participating Insurance Companies and Participating
Qualified Plans of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of the
meetings of such Board or other appropriate records, and such minutes or other
records shall be made available to the Commission upon request.
9. Each Fund will notify all Participating Insurance Companies that
separate disclosure in their respective Separate Account prospectuses may be
appropriate to advise accounts regarding the potential risks of mixed and shared
funding. Each Fund shall disclose in its prospectus that (a) the Fund is
intended to be a funding vehicle for variable annuity and variable life
insurance contracts offered by various insurance companies and for qualified
pension and retirement plans; (b) due to differences of tax treatment and other
considerations, the interests of various Contract owners participating in the
Fund and/or the interests of Qualified Plans investing in the Fund may at some
time be in conflict; and (c) the Board of such Fund will monitor events in order
to identify the existence of any material irreconcilable conflicts and to
determine what action, if any, should be taken in response to any such conflict.
H-8
10. Each Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders (which, for these purposes, will be the persons having a
voting interest in the shares of the Funds), and, in particular, the Funds will
either provide for annual shareholder meetings (except insofar as the Commission
may interpret Section 16 of the 1940 Act not to require such meetings) or comply
with Section 16(c) of the 1940 Act, although the Funds are not the type of trust
described in Section 16(c) of the 1940 Act, as well as with Section 16(a) of the
1940 Act and, if and when applicable, Section 16(b) of the 1940 Act. Further,
each Fund will act in accordance with the Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of Board
Members and with whatever rules the Commission may promulgate with respect
thereto.
11. If and to the extent Rules 6e-2 or 6e-3(T) under the 1940 Act is
amended, or proposed Rule 6e-3 under the 1940 Act is adopted, to provide
exemptive relief from any provision of the 1940 Act or the rules promulgated
thereunder, with respect to mixed or shared funding on terms and conditions
materially different from any exemptions granted in the order requested in the
application, then the Funds and/or Participating Insurance Companies and
Participating Qualified Plans, as appropriate, shall take such steps as may be
necessary to comply with such Rules 6e-2 and 6e-3(T), as amended, or proposed
Rule 6e-3, as adopted, to the extent that such Rules are applicable.
12. The Participating Insurance Companies and Participating Qualified Plans
and/or the Investment Managers, at least annually, will submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out obligations imposed upon it by the conditions contained in
the application. Such reports, materials and data will be submitted more
frequently if deemed appropriate by the Board. The obligations of the
Participating Insurance Companies and Participating Qualified Plans to provide
these reports, materials and data to the Board, when the Board so reasonably
requests, shall be a contractual obligation of all Participating Insurance
Companies and Participating Qualified Plans under their agreements governing
participation in the Funds.
13. If a Qualified Plan should ever become a holder of ten percent or more
of the assets of a Fund, such Qualified Plan will execute a participation
agreement with the Fund that includes the conditions set forth herein to the
extent applicable. A Qualified Plan will execute an application containing an
acknowledgment of this condition upon such Qualified Plan's initial purchase of
the shares of any Fund.
Conclusion:
Applicants assert that, for the reasons summarized above, the requested
exemptions are appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy and
provisions of the 1940 Act.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
H-9
Templeton Variable Products Series Fund, et al.
File No. 812-11698
SECURITIES AND EXCHANGE COMMISSION
Release No. IC-24079
1999 SEC LEXIS 2177
October 13, 1999
ACTION: Order Granting Exemptions
TEXT: Templeton Variable Products Series Fund ("Templeton Trust"), Franklin
Xxxxxxxxx Variable Insurance Products Trust ("VIP Trust"), Xxxxxxxxx Funds
Annuity Company ("TFAC") or any successor to TFAC, and any future open-end
investment company for which TFAC or any affiliate is the administrator,
sub-administrator, investment manager, adviser, principal underwriter, or
sponsor ("Future Funds") filed an application on July 14, 1999, and an amendment
on September 17, 1999 seeking an amended order of the Commission pursuant to
Section 6(c) of the Investment Company Act of 1940 ("1940 Act") exempting them
from the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15). The prior order (Rel. No. IC-19879)
granted exemptive relief to permit shares of the Templeton Trust to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies. The proposed relief
would amend the prior order to add as parties to that order the VIP Trust and
any Future Funds and to permit shares of the Templeton Trust, the VIP Trust, and
Future Funds to be issued to and held by qualified pension and retirement plans
outside the separate account context.
A notice of the filing of the application was issued on September 17, 1999
(Rel. No. IC-24018). The notice gave interested persons an opportunity to
request a hearing and stated that an order granting the application would be
issued unless a hearing should be ordered. No request for a hearing has been
filed, and the Commission has not ordered a hearing.
The matter has been considered, and it is found that granting the requested
exemptions is appropriate in the public interest and consistent with the
protection of investors and the purposes intended by the policy and provisions
of the 1940 Act.
Accordingly,
IT IS ORDERED, pursuant to Section 6(c) of the 1940 Act, that the requested
exemptions from Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, be, and hereby are, granted,
effective forthwith.
For the Commission, by the Division of Investment Management, pursuant to
delegated authority.
H-10
AMENDMENT NO. 1 TO THE
AMENDED AND RESTATED PARTICIPATION AGREEMENT
Franklin Xxxxxxxxx Variable Insurance Products Trust
Franklin/Xxxxxxxxx Distributors, Inc.
The Travelers Life and Annuity Company
The Travelers Insurance Company
Travelers Distribution LLC
Franklin Xxxxxxxxx Variable Insurance Products Trust (the "Trust"),
Franklin/Xxxxxxxxx Distributors, Inc. (the "Underwriter," and together with the
Trust, "we" or "us"), the Travelers Life Insurance and Annuity Company, The
Travelers Insurance Company ("you"), and Travelers Distribution LLC, your
distributor, on your behalf and on behalf of certain Accounts, have previously
entered into an Amended and Restated Participation Agreement dated May 1, 2004
(the "Agreement"). The parties now desire to amend the Agreement in this
amendment (the "Amendment").
Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect. Unless otherwise indicated, the terms
defined in the Agreement shall have the same meaning in this Amendment.
AMENDMENT
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
1. Schedules C, D and F of the Agreement are deleted and replaced in their
entirety with the Schedules C, D and F attached hereto, respectively.
2. All other terms and provisions of the Agreement not amended herein shall
remain in full force and effect.
This Amendment is executed effective as of May 2, 2005.
IN WITNESS WHEREOF, each of the parties have caused their duly authorized
officers to execute this Agreement.
The Company: The Travelers Insurance Company
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP, Secretary & Counsel
The Travelers Life and Annuity Company
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP, Secretary & Counsel
Distributor for the Company: Travelers Distribution LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP, Secretary & Counsel
The Trust: Franklin Xxxxxxxxx Variable Insurance
Products Trust
ONLY ON BEHALF OF EACH PORTFOLIO
LISTED ON SCHEDULE C HEREOF.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
The Underwriter: Franklin/Xxxxxxxxx Distributors, Inc.
By: /s/ Xxxxx X. Xxx
------------------------------------
Name: Xxxxx X. Xxx
Title: Senior Vice President
2
SCHEDULE C
AVAILABLE PORTFOLIOS AND CLASSES OF SHARES OF THE TRUST; INVESTMENT ADVISERS
Franklin Xxxxxxxxx Variable Insurance Products Trust Investment Adviser
---------------------------------------------------- ---------------------------------
Franklin Income Securities Fund - Class 2 Franklin Advisers, Inc.
Franklin Rising Dividends Securities Fund - Class 2 Franklin Advisory Services, LLC
Franklin Small-Mid Cap Growth Securities Fund - Class 2 Franklin Advisers, Inc.
Mutual Shares Securities Fund -Class 2 Franklin Mutual Advisers, LLC
Templeton Developing Markets Securities Fund - Class 2 Xxxxxxxxx Asset Management, Ltd.
Templeton Global Asset Allocation Fund - Class 1 Xxxxxxxxx Investment Counsel, LLC
Templeton Global Income Securities Fund - Class 1 Franklin Advisers, Inc.
Templeton Growth Securities Fund - Class 1 Xxxxxxxxx Global Advisors Limited
Templeton Growth Securities Fund - Class 2 Xxxxxxxxx Global Advisors Limited
Templeton Foreign Securities Fund - Class 2 Xxxxxxxxx Investment Counsel, LLC
3
SCHEDULE D
CONTRACTS OF THE COMPANY
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
1. Travelers Travelers Separate COLI Private Placement Class 2 shares
Insurance Account CPPVUL1 Franklin Small-Mid Cap Growth Securities
Company Unregistered Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
2. Travelers The Travelers Separate Gold Track Class 2 shares
Insurance Account QP for 333-00165 Xxxxxxxxx Developing Markets Securities Fund
Company Variable Annuities Xxxxxxxxx Foreign Securities Fund
811-07487
Class 1 shares
Templeton Global Asset Allocation Fund
Templeton Growth Securities Fund
3. Travelers The Travelers Separate Gold Track Express Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small-Mid Cap Growth Securities
Company Variable Annuities Fund
(Unregistered) Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
4. Travelers The Travelers Separate Gold Track Select Class 2 shares
Insurance Account QP for 333-00165 Mutual Shares Securities Fund
Company Variable Annuities Xxxxxxxxx Developing Markets Securities Fund
811-07487 Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
5. Travelers TIC Separate Account Pioneer Annuistar Class 2 shares
Insurance Thirteen for Variable 333-101777 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small-Mid Cap Growth Securities
811-21263 Fund
Xxxxxxxxx Foreign Securities Fund
4
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
6. Travelers Life TLAC Separate Account Pioneer Annuistar Class 2 shares
& Annuity Fourteen for Variable 333-101815 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small-Mid Cap Growth Securities
811-21267 Fund
Xxxxxxxxx Foreign Securities Fund
7. Travelers TIC Separate Account Pioneer Annuistar Plus Class 2 shares
Insurance Eleven for Variable 333-101778 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small-Mid Cap Growth Securities
811-21262 Fund
Xxxxxxxxx Foreign Securities Fund
8. Travelers Life TLAC Separate Account Pioneer Annuistar Plus Class 2 shares
& Annuity Twelve for Variable 333-101814 Franklin Rising Dividends Securities Fund
Company Annuities Franklin Small-Mid Cap Growth Securities
811-21266 Fund
Xxxxxxxxx Foreign Securities Fund
9. Travelers TIC Separate Account Pioneer Annuistar Class 2 shares:
Insurance Thirteen for Variable Value Annuity Franklin Rising Dividends Securities Fund
Company Annuities 333-101777 Franklin Small-Mid Cap Growth Securities
811-21263 Fund
Xxxxxxxxx Foreign Securities Fund
10. Travelers Life TLAC Separate Account Pioneer Annuistar Class 2 shares:
& Annuity Fourteen for Variable Value Annuity Franklin Rising Dividends Securities Fund
Company Annuities 333-101815 Franklin Small-Mid Cap Growth Securities
811-21267 Fund
Xxxxxxxxx Foreign Securities Fund
11. Travelers TIC Variable Annuity Portfolio Architect Class 2 shares
Insurance Separate Account 2002 Access Mutual Shares Securities Fund
Company 811-21220 333-100435 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
12. Travelers Life TLAC Variable Annuity Portfolio Architect Class 2 shares
& Annuity Separate Account 2002 Access Mutual Shares Securities Fund
Company 811-21221 333-100434 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
13. Travelers TIC Separate Account Portfolio Architect II Class 2 shares
Insurance Thirteen for Variable 333-101777 Mutual Shares Securities Fund
Company Annuities Xxxxxxxxx Developing Markets Securities
811-21263 Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
5
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
14. Travelers Life TLAC Separate Account Portfolio Architect II Class 2 shares
& Annuity Fourteen for Variable 333-101815 Mutual Shares Securities Fund
Company Annuities Xxxxxxxxx Developing Markets Securities
811-21267 Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
15. Travelers TIC Separate Account Portfolio Architect Class 2 shares
Insurance Eleven for Variable Plus Mutual Shares Securities Fund
Company Annuities 333-101778 Xxxxxxxxx Developing Markets Securities
811-21262 Fund
Xxxxxxxxx Growth Securities Fund
Xxxxxxxxx Foreign Securities Fund
16. Travelers Life TLAC Separate Account Portfolio Architect Class 2 shares
& Annuity Twelve for Variable Plus Mutual Shares Securities Fund
Company Annuities 333-101814 Xxxxxxxxx Developing Markets Securities
811-21266 Fund
Xxxxxxxxx Growth Securities Fund
Xxxxxxxxx Foreign Securities Fund
17. Travelers The Travelers Separate Prime Builder Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small-Mid Cap Growth Securities
Company Variable Annuities Fund
(Unregistered) Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
18. Travelers The Travelers Separate Prime Builder II Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small-Mid Cap Growth Securities
Company Variable Annuities Fund
(Unregistered) Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
19. Travelers The Travelers Fund ABD The Travelers Life & Class 2 shares:
Insurance for Variable Annuities Annuity Access Annuity Mutual Shares Securities Fund
Company 811-07465 333-23311 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
20. Travelers Life The Travelers Fund ABD The Travelers Life & Class 2 shares:
& Annuity II for Variable Annuity Access Annuity Mutual Shares Securities Fund
Company Annuities 333-23327 Xxxxxxxxx Developing Markets Securities Fund
811-07463 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
6
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
21. Travelers Life The Travelers Separate Travelers Premier Class 2 shares:
& Annuity Account Eight for Advisers L Annuity Xxxxxxxxx Foreign Securities Fund
Company Variable Annuities 333-60215 Mutual Shares Securities Fund
811-08907
22. Travelers The Travelers Fund ABD Travelers Access Class 2 shares
Insurance for Variable Annuities Annuity Mutual Shares Securities Fund
Company 811-07465 333-23311 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
23. Travelers Life The Travelers Fund ABD Travelers Access Class 2 shares
& Annuity II for Variable Annuity Mutual Shares Securities Fund
Company Annuities 333-23327 Xxxxxxxxx Developing Markets Securities
811-07463 Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
24. Travelers The Travelers Separate Travelers Blueprint Class 2 shares
Insurance Account QPN for Unregistered Franklin Small-Mid Cap Growth Securities
Company Variable Annuities Fund
Unregistered Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
25. Travelers The Travelers Separate Travelers Blueprint II Class 2 shares
Insurance Account QPN for (Unregistered) Franklin Small-Mid Cap Growth Securities
Company Variable Annuities Fund
(Unregistered) Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
26. Travelers The Travelers Fund UL Travelers Corporate Class 2 shares
Insurance III for Variable Life Benefit Life Franklin Small-Mid Cap Growth Securities
Company Insurance (Mid-Size) Fund
811-09215 333-64364 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
7
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
27. Travelers The Travelers Fund UL Travelers Corporate Class 2 shares
Insurance III for Variable Life Variable Life Franklin Small-Mid Cap Growth Securities
Company Insurance 333-71349 Fund
811-09215 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
28. Travelers The Travelers Fund UL Travelers Corporate Class 2 shares
Insurance III for Variable Life Variable Life 2000 Franklin Small-Mid Cap Growth Securities
Company Insurance 333-94779 Fund
811-09215 Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
29. Travelers The Travelers Fund UL Travelers InVest Class 1 shares:
Insurance for Variable Life 002-88637 Xxxxxxxxx Global Asset Allocation Fund
Company Insurance Xxxxxxxxx Global Income Securities Fund
811-03927 Xxxxxxxxx Growth Securities Fund
30. Travelers The Travelers Fund UL Travelers L &A Class 2 shares:
Insurance III for Variable Life Variable Life III Franklin Small-Mid Cap Growth Securities
Company Insurance 333-94779 Fund
811-09215 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares
Xxxxxxxxx Global Income Securities Fund
31. Travelers The Travelers Fund UL Travelers Life & Class 2 shares:
Insurance III for Variable Life Annuity Corporate Franklin Small-Mid Cap Growth Securities
Company Insurance Owned Variable Fund
811-09215 Universal Life Xxxxxxxxx Developing Markets Securities Fund
Insurance IV Xxxxxxxxx Foreign Securities Fund
333-113533 Xxxxxxxxx Growth Securities Fund
Class 1 shares:
Xxxxxxxxx Global Income Securities Fund
8
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
32. Travelers The Travelers Fund UL Travelers Life & Class 2 shares:
Insurance III for Variable Life Annuity Corporate Franklin Small-Mid Cap Growth Securities
Company Insurance Select Fund
811-09215 333-105335 Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
Class 1 shares:
Xxxxxxxxx Global Income Securities Fund
33. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Pioneer Franklin Rising Dividends Securities Fund
Company Variable Annuities Annuistar Flex Franklin Small-Mid Cap Growth Securities
811-09411 Variable Annuity Fund
333-65926 Xxxxxxxxx Foreign Securities Fund
34. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Pioneer Franklin Rising Dividends Securities Fund
Company Variable Annuities Annuistar Flex Franklin Small-Mid Cap Growth Securities
811-09413 Variable Annuity Fund
333-65922 Xxxxxxxxx Foreign Securities Fund
35. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect L Variable Xxxxxxxxx Developing Markets Securities Fund
811-09411 Annuity Xxxxxxxxx Foreign Securities Fund
333-65926 Xxxxxxxxx Growth Securities Fund
36. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Seven for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect L Variable Xxxxxxxxx Developing Market Securities Fund
811-08909 Annuity Xxxxxxxxx Foreign Securities Fund
333-60227
37. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect L Variable Xxxxxxxxx Developing Markets Securities Fund
811-09413 Annuity Xxxxxxxxx Foreign Securities Fund
333-65922
38. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Twelve for Annuity Portfolio Mutual Shares Securities Fund
Company Variable Annuities Architect Plus Xxxxxxxxx Developing Markets Securities Fund
811-21266 333-101814 Xxxxxxxxx Foreign Securities Fund
9
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
39. Travelers The Travelers Fund ABD Travelers Life & Class 2 shares:
Insurance for Variable Annuities Annuity Premier Mutual Shares Securities Fund
Company 811-07465 Advisers III Annuity Xxxxxxxxx Foreign Securities Fund
33-65506
40. Travelers Life The Travelers Fund ABD Travelers Life & Class 2 shares:
& Annuity II for Variable Annuity Premier Mutual Shares Securities Fund
Company Annuities Advisers III Annuity Xxxxxxxxx Foreign Securities Fund
811-07463 333-65500
41. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Eight for Annuity Premier Mutual Shares Securities Fund
Company Variable Annuities Advisers L Annuity
811-08907 333-60215
42. Travelers The Travelers Separate Travelers Life & Class 2 shares
Insurance Account PF for Annuity PrimElite II Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Growth Securities Fund
811-8313 333-72334
43. Travelers Life The Travelers Separate Travelers Life & Class 2 shares
& Annuity Account XX XX for Annuity PrimElite II Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Growth Securities Fund
811-8317 333-72336
44. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Vintage II Franklin Income Securities Fund
Company Variable Annuities (Series II) Variable Franklin Small-Mid Cap Growth Securities
811-09413 Annuity Fund
333-82013 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
45. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Vintage L Franklin Income Securities Fund
Company Variable Annuities Variable Annuity Franklin Small-Mid Cap Growth Securities
811-09411 333-65926 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
10
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
46. Travelers Life The Travelers Separate Travelers Life & Class 2 shares:
& Annuity Account Ten for Annuity Vintage L Franklin Income Securities Fund
Company Variable Annuities Variable Annuity Franklin Small-Mid Cap Growth Securities
811-09413 333-65922 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
47. Travelers The Travelers Fund BD Travelers Life & Class 2 shares:
Insurance III for Variable Annuity Vintage Xtra Franklin Income Securities Fund
Company Annuities (Series II) Annuity Franklin Small-Mid Cap Growth Securities
811-08225 333-70657 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
48. Travelers Life The Travelers Fund BD Travelers Life & Class 2 shares:
& Annuity IV for Variable Annuity Vintage Xtra Franklin Income Securities Fund
Company Annuities (Series II) Annuity Franklin Small-Mid Cap Growth Securities
811-08223 333-70659 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities
Xxxxxxxxx Growth Securities Fund
49. Travelers The Travelers Fund UL Travelers MarketLife Class 1 shares:
Insurance for Variable Life 002-88637 Xxxxxxxxx Global Asset Allocation Fund
Company Insurance Xxxxxxxxx Global Income Securities Fund
811-03927 Xxxxxxxxx Growth Securities Fund
50. Travelers Life The Travelers Fund UL Travelers MarketLife Class 1 shares:
& Annuity II for Variable Life 033-63927 Xxxxxxxxx Global Asset Allocation Fund
Company Insurance Xxxxxxxxx Global Income Securities Fund
811-07411 Xxxxxxxxx Growth Securities Fund
51. Travelers The Travelers Separate Travelers Marquis Class 2 shares
Insurance Account TM for Portfolios Franklin Small-Mid Cap Growth Securities
Company Variable Annuities 333-40193 Fund
811-08477 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
11
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
52. Travelers Life The Travelers Separate Travelers Marquis Class 2 shares
& Annuity Account XX XX for Portfolios Franklin Small-Mid Cap Growth Securities
Company Variable Annuities 333-40191 Fund
811-08479 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
53. Travelers The Travelers Separate Travelers Portfolio Class 2 shares
Insurance Account Nine for Architect 3 Variable Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Developing Markets Securities Fund
811-09411 333-65926 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
54. Travelers Life The Travelers Separate Travelers Portfolio Class 2 shares
& Annuity Account Ten for Architect 3 Variable Mutual Shares Securities Fund
Company Variable Annuities Annuity Xxxxxxxxx Developing Markets Securities
811-09413 333-65922 Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
55. Travelers The Travelers Fund ABD Travelers Portfolio Class 2 shares
Insurance for Variable Annuities Architect Annuity Mutual Shares Securities Fund
Company 811-07465 33-65343 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
56. Travelers Life The Travelers Fund ABD Travelers Portfolio Class 2 shares
& Annuity II for Variable Architect Annuity Mutual Shares Securities Fund
Company Annuities 33-65339 Xxxxxxxxx Foreign Securities Fund
811-07463 Xxxxxxxxx Growth Securities Fund
57. Travelers The Travelers Fund BD Travelers Portfolio Class 2 shares
Insurance III for Variable Architect XTRA Annuity Mutual Shares Securities Fund
Company Annuities 333-70657 Xxxxxxxxx Developing Markets Securities Fund
811-08225 Xxxxxxxxx Foreign Securities Fund
Templeton Growth Securities Fund
58. Travelers Life The Travelers Fund BD Travelers Portfolio Class 2 shares
& Annuity IV for Variable Architect XTRA Annuity Mutual Shares Securities Fund
Company Annuities 333-70659 Xxxxxxxxx Developing Markets Securities Fund
811-08223 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
12
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
59. Travelers The Travelers Separate Travelers Retirement Class 2 shares
Insurance Account Five for Account Mutual Shares Securities Fund
Company Variable Annuities 333-58783 Xxxxxxxxx Developing Markets Securities Fund
811-08867 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
60. Travelers Life The Travelers Separate Travelers Retirement Class 2 shares
& Annuity Account Six for Account Mutual Shares Securities Fund
Company Variable Annuities 333-58809 Xxxxxxxxx Developing Markets Securities Fund
811-08869 Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
61. Travelers The Travelers Separate Travelers Retirement Class 2 shares
Insurance Account QPN for Perspectives Franklin Small-Mid Cap Growth Securities
Company Variable Annuities (Unregistered) Fund
(Unregistered) Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
62. Travelers The Travelers Fund UL Travelers Variable Life Class 2 shares
Insurance for Variable Life 333-96519 Franklin Small-Mid Cap Growth Securities
Company Insurance Fund
811-03927 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
63. Travelers Life The Travelers Fund UL Travelers Variable Life Class 2 shares
& Annuity II for Variable Life 333-96517 Franklin Small-Mid Cap Growth Securities
Company Insurance Fund
811-07411 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
64. Travelers The Travelers Fund UL Travelers Variable Class 2 shares
Insurance for Variable Life Life Accumulator Franklin Small-Mid Cap Growth Securities
Company Insurance 333-96515 Fund
811-03927 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
13
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
65. Travelers Life The Travelers Fund UL Travelers Variable Class 2 shares
& Annuity II for Variable Life Life Accumulator Franklin Small-Mid Cap Growth Securities
Company Insurance 333-96521 Fund
811-07411 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
66. Travelers The Travelers Fund UL Travelers Variable Class 2 shares:
Insurance 811-03927 Life Accumulator - Franklin Small-Mid Cap Growth Securities
Company Series 2 Fund
333-96515 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
67. Travelers Life The Travelers Fund UL Travelers Variable Class 2 shares:
& Annuity II Life Accumulator - Franklin Small-Mid Cap Growth Securities
Company 811-07411 Series 2 Fund
333-96521 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
68. Travelers The Travelers Fund UL Travelers Variable Xxxxxxxxx Growth Securities Fund - Class 1
Insurance for Variable Life Survivorship Life
Company Insurance 333-69771
811-03927
69. Travelers Life The Travelers Fund UL Travelers Variable Xxxxxxxxx Growth Securities Fund - Class 1
& Annuity II for Variable Life Survivorship Life
Company Insurance 333-69773
811-07411
70. Travelers The Travelers Fund UL Travelers Variable Class 2 shares
Insurance for Variable Life Survivorship Life II Franklin Small-Mid Cap Growth Securities
Company Insurance 333-56952 Fund
811-03927 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
71. Travelers Life The Travelers Fund UL Travelers Variable Class 2 shares
& Annuity II for Variable Life Survivorship Life II Franklin Small-Mid Cap Growth Securities
Company Insurance 333-56958 Fund
811-07411 Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
14
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
72. Travelers The Travelers Separate Travelers Vintage 3 Class 2 shares
Insurance Account Nine for Variable Annuity Franklin Income Securities Fund
Company Variable Annuities 333-65926 Franklin Small-Mid Cap Growth Securities
811-09411 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
73. Travelers Life The Travelers Separate Travelers Vintage 3 Class 2 shares
& Annuity Account Ten for Variable Annuity Franklin Income Securities Fund
Company Variable Annuities 333-65922 Franklin Small-Mid Cap Growth Securities
811-09413 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
74. Travelers The Travelers Separate Travelers Vintage II Class 2 shares
Insurance Account Nine for Variable Annuity Franklin Income Securities Fund
Company Variable Annuities 333-82009 Franklin Small-Mid Cap Growth Securities
811-09411 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
75. Travelers Life The Travelers Separate Travelers Vintage II Class 2 shares
& Annuity Account Ten for Variable Annuity Franklin Income Securities Fund
Company Variable Annuities 333-82013 Franklin Small-Mid Cap Growth Securities
811-09413 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
76. Travelers The Travelers Fund BD Travelers Vintage Xtra Class 2 shares:
Insurance III for Variable Annuity Franklin Income Securities Fund
Company Annuities 333-70657 Franklin Small-Mid Cap Growth Securities
811-08225 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
15
INSURANCE SEPARATE ACCOUNT NAME PRODUCT NAME
# COMPANY 1940 ACT # 1933 ACT # CLASS AND FUNDS OF THE TRUST
--- -------------- ---------------------- ---------------------- --------------------------------------------
77. Travelers Life The Travelers Fund BD Travelers Vintage Xtra Class 2 shares:
& Annuity IV for Variable Annuity Franklin Income Securities Fund
Company Annuities 333-70659 Franklin Small-Mid Cap Growth Securities
811-08223 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
78. Travelers The Travelers Fund U Universal Annuity Class 2 shares:
Insurance for Variable Annuities 002-79529 Mutual Shares Securities Fund
Company 811-07487 Franklin Small-Mid Cap Growth Securities
Fund
Xxxxxxxxx Developing Markets
Xxxxxxxxx Foreign Securities
Class 1 shares:
Xxxxxxxxx Global Asset Allocation Fund
Xxxxxxxxx Growth Securities Fund
79. Travelers TIC Variable Annuity Vintage Access Class 2 shares
Insurance Separate Account 2002 333-100435 Franklin Income Securities Fund
Company 811-21220 Franklin Small-Mid Cap Growth Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
80. Travelers Life TLAC Variable Annuity Vintage Access Class 2 shares
& Annuity Separate Account 2002 333-100434 Franklin Income Securities Fund
Company 811-21221 Franklin Small-Mid Cap Growth Securities
Fund
Franklin Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities
Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
81. Travelers The Travelers Separate Travelers Life & Class 2 shares:
Insurance Account Nine for Annuity Vintage II Franklin Income Securities Fund
Company Variable Annuities (Series II) Franklin Small-Mid Cap Growth Securities
811-09411 333-82009 Fund
Mutual Shares Securities Fund
Xxxxxxxxx Developing Markets Securities Fund
Xxxxxxxxx Foreign Securities Fund
Xxxxxxxxx Growth Securities Fund
16
SCHEDULE F
RULE 12B-1 PLANS
COMPENSATION SCHEDULE
Each Portfolio named below shall pay the following amounts pursuant to the terms
and conditions referenced below under its Class 2 Rule 12b-1 Distribution Plan,
stated as a percentage per year of Class 2's average daily net assets
represented by shares of Class 2.
MAXIMUM
ANNUAL
PORTFOLIO NAME PAYMENT RATE
-------------- ------------
Franklin Income Securities Fund 0.25%
Franklin Rising Dividends Securities Fund 0.25%
Franklin Small-Mid Cap Growth Securities Fund 0.25%
Mutual Share Securities Fund 0.25%
Xxxxxxxxx Developing Markets Securities Fund 0.25%
Xxxxxxxxx Foreign Securities Fund 0.25%
Xxxxxxxxx Growth Securities Fund 0.25%
AGREEMENT PROVISIONS
If the Company, on behalf of any Account, purchases Trust Portfolio shares
("Eligible Shares") which are subject to a Rule 12b-1 plan adopted under the
1940 Act (the "Plan"), the Company may participate in the Plan.
To the extent the Company or its affiliates, agents or designees
(collectively "you") provide any activity or service which is primarily intended
to assist in the promotion, distribution or account servicing of Eligible Shares
("Rule 12b-1 Services") or variable contracts offering Eligible Shares, the
Underwriter, the Trust or their affiliates (collectively, "we") may pay you a
Rule 12b-1 fee. "Rule 12b-1 Services" may include, but are not limited to,
printing of prospectuses and reports used for sales purposes, preparing and
distributing sales literature and related expenses, advertisements, education of
dealers and their representatives, and similar distribution-related expenses,
furnishing personal services to owners of Contracts which may invest in Eligible
Shares ("Contract Owners"), education of Contract Owners, answering routine
inquiries regarding a Portfolio, coordinating responses to Contract Owner
inquiries regarding the Portfolios, maintaining such accounts or providing such
other enhanced services as a Trust Portfolio or Contract may require, or
providing other services eligible for service fees as defined under NASD rules.
Your acceptance of such compensation is your acknowledgment that eligible
services have been rendered. All Rule 12b-1 fees, shall be based on the value of
Eligible Shares owned by the Company on behalf of its Accounts, and shall be
calculated on the basis and at the rates set forth in the Compensation Schedule
stated above. The aggregate annual fees paid pursuant to each Plan shall not
exceed the amounts stated as the "annual maximums" in the Portfolio's
prospectus, unless an increase is approved by shareholders as provided in the
Plan. These maximums shall be a specified percent of the value of a Portfolio's
net assets attributable to Eligible Shares owned by the Company on behalf of its
Accounts (determined in the same manner as
17
the Portfolio uses to compute its net assets as set forth in its effective
Prospectus). The Rule 12b-1 fee will be paid to you within thirty (30) days
after the end of the three-month periods ending in January, April, July and
October.
You shall furnish us with such information as shall reasonably be requested
by the Trust's Boards of Trustees ("Trustees") with respect to the Rule 12b-1
fees paid to you pursuant to the Plans. We shall furnish to the Trustees, for
their review on a quarterly basis, a written report of the amounts expended
under the Plans and the purposes for which such expenditures were made.
The Plans and provisions of any agreement relating to such Plans must be
approved annually by a vote of the Trustees, including the Trustees who are not
interested persons of the Trust and who have no financial interest in the Plans
or any related agreement ("Disinterested Trustees"). Each Plan may be terminated
at any time by the vote of a majority of the Disinterested Trustees, or by a
vote of a majority of the outstanding shares as provided in the Plan, on sixty
(60) days' written notice, without payment of any penalty. The Plans may also be
terminated by any act that terminates the Underwriting Agreement between the
Underwriter and the Trust, and/or the management or administration agreement
between Franklin Advisers, Inc. and its affiliates and the Trust. Continuation
of the Plans is also conditioned on Disinterested Trustees being ultimately
responsible for selecting and nominating any new Disinterested Trustees. Under
Rule 12b-1, the Trustees have a duty to request and evaluate, and persons who
are party to any agreement related to a Plan have a duty to furnish, such
information as may reasonably be necessary to an informed determination of
whether the Plan or any agreement should be implemented or continued. Under Rule
12b-1, the Trust is permitted to implement or continue Plans or the provisions
of any agreement relating to such Plans from year-to-year only if, based on
certain legal considerations, the Trustees are able to conclude that the Plans
will benefit each affected Trust Portfolio and class. Absent such yearly
determination, the Plans must be terminated as set forth above. In the event of
the termination of the Plans for any reason, the provisions of this Schedule F
relating to the Plans will also terminate. You agree that your selling
agreements with persons or entities through whom you intend to distribute
Contracts will provide that compensation paid to such persons or entities may be
reduced if a Portfolio's Plan is no longer effective or is no longer applicable
to such Portfolio or class of shares available under the Contracts.
Any obligation assumed by the Trust pursuant to this Agreement shall be limited
in all cases to the assets of the Trust and no person shall seek satisfaction
thereof from shareholders of the Trust. You agree to waive payment of any
amounts payable to you by Underwriter under a Plan until such time as the
Underwriter has received such fee from the Trust.
The provisions of the Plans shall control over the provisions of the
Participation Agreement, including this Schedule F, in the event of any
inconsistency.
You agree to provide complete disclosure as required by all applicable statutes,
rules and regulations of all rule 12b-1 fees received from us in the prospectus
of the Contracts.
18
