Independent Broker/Dealers The Penn Mutual Life Insurance Company
Philadelphia, PA 19172
SCHEDULE A TO THE FOLLOWING SELLING AGREEMENTS:
BROKER-DEALER SELLING AGREEMENT
BROKER-DEALER SELLING AGREEMENT - FORM A-2
CORPORATE INSURANCE AGENT SELLING AGREEMENT - FORM A-1
(EDITION OF APRIL 2001)
Subject to the conditions and limitations of the Broker's Selling Agreement,
Broker is authorized to solicit applications for the following contracts issued
by Penn Mutual (hereinafter referred to as "contracts"), prior to termination of
Broker's Selling Agreement. No fee shall be paid with respect to a purchase
payment made after the Broker's Selling Agreement has been terminated. Amounts
transferred among contracts are not purchase payments within the meaning of the
Broker's Selling Agreement or this Schedule. This Schedule replaces and
supersedes any and all prior Schedules attached to the Broker's Selling
Agreement.
1. INDIVIDUAL ANNUITY CONTRACTS - DIVERSIFIER II
A. Subject to the conditions and limitations of the Broker's Selling
Agreement and this Schedule, Broker shall be paid a fee for placing or
servicing a Diversifier II Individual Variable and Fixed Annuity
Contract (Policy Form DV790, DI1182-V, DI783-V) issued on or before
November 5, 1999 equal to 6% of any purchase payment made under such
contract and a fee for placing and servicing a Diversifier II Fixed
Annuity Contract (DV-790-F, DI 283-F, DI 883-F) equal to 5% of any
purchase payment under such contract. If the Annuitant or Contractowner
(other than a trustee of a qualified plan) is over age 81 on the date
the Diversifier II contract is issued, the fee shall be limited as
follows: 80% of such fee if the Annuitant or contractowner is age 82;
60% of such fee if the Annuitant or contractowner is age 83; 40% of
such fee if the Annuitant or contractowner is age 84; 20% of such fee
if the Annuitant or contractowner is age 85. The above referenced
compensation will continue to apply for Diversifier II Individual
Variable and Fixed Annuity Contracts (Policy Form DV-790 (NY))
solicited in New York until such time as Penn Mutual publishes written
notice to the contrary.
B. Subject to the conditions and limitations of the Broker's Selling
Agreement and this Schedule, Broker shall be paid a fee for placing or
servicing a Diversifier II Individual Variable and Fixed Annuity
Contract issued (Policy Form DV790) on or after November 8, 1999 as
follows:
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(a) FIRST YEAR COMPENSATION.
A fee for the first contract year equal to 6.7% of any
purchase payment made under such contract during the first
contract year where the Annuitant or Contractowner (other than
a trustee of a qualified plan) is less than age 81 on the date
the Diversifier II contract is issued.
(b) RENEWAL COMPENSATION.
A fee for the second and later contract years equal to 2.85%
of any purchase payment made under such contract during the
second and later contract year where the Annuitant or
Contractowner (other than a trustee of a qualified plan) is
less than age 81 on the date the Diversifier II contract is
issued.
C. Diversifier II contracts (DV-790) [but not DV-790-F], will continue to
be issued using the previous compensation schedule for those Employer
Sponsored Retirement Plans/Programs whose initial Diversifier II
contract application was submitted on or before November 5, 1999 and
subsequently issued. Employer Sponsored Plans/Programs shall mean
"SIMPLE IRAs, SEPs, 403(b)s, 457/PEDC and plans qualified under 401(a)
of the Internal Revenue Code."
2. INDIVIDUAL FIXED ANNUITY CONTRACTS - TRADEWIND(TM)
Subject to the conditions and limitations of the Broker's Selling Agreement and
this Schedule, Broker shall be paid a fee for placing or servicing TradeWind(TM)
Annuity Contract (Policy Form SPDA96) equal to 6% of any purchase payment under
such contact. If the Annuitant or Contractowner (other than a trustee of a
qualified plan) is over age 81 on the date the TradeWind(TM) contract is issued,
the fee shall be limited as follows: 80% of such fee if the Annuitant or
contractowner is age 82; 60% of such fee if the Annuitant or contractowner is
age 83; 40% of such fee if the Annuitant or contractowner is age 84; 20% of such
fee if the Annuitant or contractowner is age 85.
3. SINGLE PREMIUM IMMEDIATE ANNUITIES
Subject to the conditions and limitations of the Broker's Selling Agreement and
this Schedule, Broker shall be paid a fee for placing a Single Premium Immediate
Annuity Contracts (Policy Forms AC-80, A-81, A-82, A-83, A-84) equal to 4% of
the single premium received under such contract.
4. GROUP COVERAGES
Subject to the conditions and limitations of the Broker's Selling Agreement and
this Schedule, Broker shall be paid a fee for placing, or servicing group
annuity policies, specifically, a group annuity contract of Penn Mutual on
Contract Forms D1-1088 (N.Y.), D1-1088A (N.Y.) and any other policies in the
D1-1088 series, (a contract on any such form being hereinafter called a
"Diversifier I Flex Group Annuity"), placed in force through Broker under this
agreement in amounts equivalent to a percentage of such premiums. Such
percentage or table of percentages shall be as agreed in amounts equivalent to a
percentage of such premiums. Said written documentation of Xxxxxx's fee shall be
submitted to Penn Mutual with the Diversifier I Flex Group Annuity application
on a form signed by the plan trustee and agreed to by the Penn Mutual home
office. No compensation shall be payable pursuant to this agreement which would
be in excess of the limits of Section 4228 of the Insurance Law of the State of
New York for the sale of insurance products.
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5. VARIABLE ESTATEMAX
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be
compensated as follows with respect to a policy of Penn Mutual known as the Last
Survivor Flexible Premium Adjustable Variable Life Insurance Policy (Policy
Forms VALJ-94(S) and VALJ-94(U)), (a policy on any such form being hereinafter
called a "Variable EstateMax Policy"), that is placed in force under this
agreement. With respect to each Variable EstateMax Policy, Broker-Dealer may
elect to receive fees under Option 1 or 2. If no option is selected the default
will be Option 1. Once each policy is in force, no changes will be permitted to
the choice of compensation.
A. OPTION 1
(a) BASIC FIRST YEAR COMPENSATION
A fee for the first policy year of 50% of A plus 2.0% of B
where:
A is equal to the lesser of:
(i) the premium paid in year 1 or
(ii) the target premium for the policy, and
B is equal to the excess of the premium paid in year 1 over A.
Target premiums are maintained on file in Penn Mutual's Home
Office.
(b) RENEWAL COMPENSATION
A fee for the second through fifteenth years equal to 2.0% of
the premium paid for the policy year in question, and a fee
for the sixteenth and later policy years equal to 1.2% of the
premium paid for the policy year in question.
B. OPTION 2
(a) BASIC FIRST YEAR COMPENSATION
Basic First Year Compensation is the same as in Option 1.
(b) RENEWAL COMPENSATION
Additionally, for the second through tenth policy years equal
to 1.0% of the premium paid for the policy year in question,
and no fee for the eleventh and later policy years.
Additionally, for the second through tenth policy years, a fee
equal to 0.008333% of the policy value on each monthly
anniversary. Monthly anniversary is defined as the day in each
calendar month that is the same day of the month as the Policy
Date. For the eleventh and later policy years, fee equal to
0.020833% of the policy value on each monthly anniversary.
Policy value is as defined in the policy.
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C. EXPENSE ALLOWANCE
For each calendar month while Broker-Dealer Selling Agreement is in
effect and before its termination, Broker-Dealer shall be entitled to
the expense from Penn Mutual described below, provided that the amount
payable as an expense allowance shall be limited to the total of
reasonable business expenses incurred by Broker-Dealer that are
directly related to the sale or service of Penn Mutual policies, and
provided further that no such allowance shall be payable to
Broker-Dealer that would cause the total of such allowances to exceed
the limits of Section 4228 of the Insurance Law of the State of New
York. No payment pursuant to this agreement will be used by
Broker-Dealer to effect compensation for the sale of insurance in
excess of the limits of said Section 4228. Such allowance shall be 60%
of an amount equal to the Basic First Year Compensation during the
calendar month for which this allowance is being calculated.
D. COMPENSATION CHARGEBACKS
A percentage of total compensation (including expense allowance, if
any) will be charged back for lapses, surrenders or if a policy is
unwound during the first policy year and during the 12 policy months
following an increase. The percentage is shown below and will vary
depending on the policy month of lapse/surrender/unwind.
MONTH OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
0 - 6 100%
7 - 12 50%
6. CORNERSTONE VARIABLE UNIVERSAL LIFE
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be
compensated as follows with respect to a policy of Penn Mutual know as the
Flexible Premium Adjustable Variable Life Insurance Policy (Policy Forms
VU-90(S) and VU-90(U)), (a policy on any such form being hereinafter called a
"Cornerstone VUL Policy"), that is placed in force through Agent under this
agreement:
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A. OPTION 1
(a) BASIC FIRST YEAR COMPENSATION
A fee for the first policy year of 50% of A plus 3.75% of B
where:
A is equal to the lesser of:
(i) the premium paid in year 1, or
(ii) the target premium for the policy, and
B is equal to the excess of the premium paid in year 1 over A.
Target premiums are maintained on file in Penn Mutual's Home
Office.
(b) RENEWAL COMPENSATION
A fee for the second and third policy years of 4% of an amount
equal to premium paid for the policy year in question, a fee
for the fourth through fifteenth years, equal to 4.0% of the
premium paid for the policy year in question, and a fee for
the sixteenth and later policy years equal to 1.2% of the
premium paid for the policy year in question.
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 46% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
B. OPTION 2
(a) BASIC FIRST YEAR COMPENSATION
Basic First Year Compensation is the same as in Option 1.
(b) RENEWAL COMPENSATION
A fee for the second through tenth policy years equal to 3.0%
of the premium paid for the policy year in question, and no
fee for the eleventh and later policy years. Additionally, for
the second through tenth policy years, a fee equal to
0.008333% of the policy value on each monthly anniversary.
Monthly anniversary is defined as the day in each calendar
month that is the same day of the month as the Policy Date.
For the eleventh and later policy years, fee equal to
0.020833% of the policy value on each monthly anniversary.
Policy value is as defined in the policy.
5
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 47% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
C. EXPENSE ALLOWANCE
For each calendar month while Broker-Dealer Selling Agreement is in
effect and before its termination, Broker-Dealer shall be entitled to
the expense from Penn Mutual described below, provided that the amount
payable as an expense allowance shall be limited to the total of
reasonable business expenses incurred by Broker-Dealer that are
directly related to the sale or service of Penn Mutual policies, and
provided further that no such allowance shall be payable to
Broker-Dealer that would cause the total of such allowances to exceed
the limits of Section 4228 of the Insurance Law of the State of New
York. No payment pursuant to this agreement will be used by
Broker-Dealer to effect compensation for the sale of insurance in
excess of the limits of said Section 4228. Such allowance shall be 60%
of an amount equal to the Basic First Year Compensation during the
calendar month for which this allowance is being calculated.
D. COMPENSATION CHARGEBACKS
A percentage of total compensation (including expense allowance, if
any) will be charged back for lapses, surrenders or if a policy is
unwound during the first policy year and during the 12 policy months
following an increase. The percentage is shown below and will vary
depending on the policy month of lapse/surrender/unwind.
MONTH OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
0 - 3 100%
4 - 6 75%
7 - 9 50%
10 - 12 25%
7. CORNERSTONE VARIABLE UNIVERSAL LIFE II
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing a policy of Penn Mutual known as
the Flexible Premium Adjustable Variable Universal Life Insurance Policy (Policy
Forms VU-94(S) and VU-94(U)), (a policy on any such form being hereinafter
called a "Cornerstone VUL II Policy"), that is placed in force before
termination of this agreement. With respect to each Cornerstone VUL II Policy,
Broker-Dealer may elect to receive fees under Option 1 or 2. If no option is
selected the default will be Option 1. Once each policy is in force, no changes
will be permitted to the choice of compensation.
6
A. OPTION 1
(a) BASIC FIRST YEAR COMPENSATION
A fee for the first policy year equal to 50% of A plus 3.3% of
B where:
A is equal to the lesser of:
(i) the premium paid in year 1 or
(ii) the target premium for the policy, and
B is equal to the excess of the premium paid in year 1 over A.
Target premiums are maintained on file in Penn Mutual's Home
Office.
(b) RENEWAL COMPENSATION
A fee for the second through fifteenth years equal to 3.0% of
the premium paid for the policy year in question, and a fee
for the sixteenth and later policy years equal to 1.2% of the
premium paid for the policy year in question.
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 47% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
B. OPTION 2
(a) BASIC FIRST YEAR COMPENSATION
Basic First Year Compensation is the same as in Option 1.
(b) RENEWAL COMPENSATION
A fee for the second through tenth policy years equal to 2.0%
of the premium paid for the policy year in question, and no
fee for the eleventh and later policy years. Additionally, for
the second through tenth policy years, a fee equal to
0.008333% of the policy value on each monthly anniversary.
Monthly anniversary is defined as the day in each calendar
month that is the same day of the month as the Policy Date.
For the eleventh and later policy years, fee equal to
0.020833% of the policy value on each monthly anniversary.
Policy value is as defined in the policy.
7
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 47% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
C. EXPENSE ALLOWANCE
For each calendar month while Broker-Dealer Selling Agreement is in
effect and before its termination, Broker-Dealer shall be entitled to
the expense from Penn Mutual described below, provided that the amount
payable as an expense allowance shall be limited to the total of
reasonable business expenses incurred by Broker-Dealer that are
directly related to the sale or service of Penn Mutual policies, and
provided further that no such allowance shall be payable to
Broker-Dealer that would cause the total of such allowances to exceed
the limits of Section 4228 of the Insurance Law of the State of New
York. No payment pursuant to this agreement will be used by
Broker-Dealer to effect compensation for the sale of insurance in
excess of the limits of said Section 4228. Such allowance shall be 60%
of an amount equal to the Basic First Year Compensation during the
calendar month for which this allowance is being calculated.
D. COMPENSATION CHARGEBACKS
A percentage of total compensation (including expense allowance, if
any) will be charged back for lapses, surrenders or if a policy is
unwound during the first policy year and during the 12 policy months
following an increase. The percentage is shown below and will vary
depending on the policy month of lapse/surrender/unwind.
MONTH OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
0 - 3 100%
4 - 6 75%
7 - 9 50%
10 - 12 25%
8
8. CORNERSTONE VARIABLE UNIVERSAL LIFE III
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing a policy of Penn Mutual known as
the Flexible Premium Adjustable Variable Universal Life Insurance Policy (Policy
Forms VU-99(S) and VU-99(U)), (a policy on any such form or in that series being
hereinafter called a "Cornerstone VUL III Policy"), that is placed in force
before termination of this agreement. With respect to each Cornerstone VUL III
Policy, Broker-Dealer may elect to receive fees under Option 1 or 2. If no
option is selected the default will be Option 1. Once each policy is in force,
no changes will be permitted to the choice of compensation.
A. OPTION 1
(a) BASIC FIRST YEAR COMPENSATION
A fee for the first policy year equal to 53.5% of A plus 3.3%
of B where:
A is equal to the lesser of:
(i) the premium paid in year 1 or
(ii) the target premium for the policy, and
B is equal to the excess of the premium paid in year 1 over A.
Target premiums are maintained on file in Penn Mutual's Home
Office.
(b) RENEWAL COMPENSATION
A fee for the second through fifteenth years equal to 3.0% of
the premium paid for the policy year in question, and a fee
for the sixteenth and later policy years equal to 1.2% of the
premium paid for the policy year in question.
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 50.5% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
9
B. OPTION 2
(a) BASIC FIRST YEAR COMPENSATION
Basic First Year Compensation is the same as in Option 1.
(b) RENEWAL COMPENSATION
A fee for the second through tenth policy years equal to 2.0%
of the premium paid for the policy year in question, and no
fee for the eleventh and later policy years. Additionally, for
the second through tenth policy years, a fee equal to
0.008333% of the Policy Value on each monthly anniversary.
Monthly anniversary is defined as the day in each calendar
month that is the same day of the month as the Policy Date.
For the eleventh and later policy years, fee equal to
0.020833% of the Policy Value on each monthly anniversary.
Policy Value is as defined in the policy.
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 50.5% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
C. EXPENSE ALLOWANCE
For each calendar month while Broker-Dealer Selling Agreement is in
effect and before its termination, Broker-Dealer shall be entitled to
the expense allowance from Penn Mutual described below, provided that
the amount payable as an expense allowance shall be limited to the
total of reasonable business expenses incurred by Broker-Dealer that
are directly related to the sale or service of Penn Mutual policies,
and provided further that no such allowance shall be payable to
Broker-Dealer that would cause the total of such allowances to exceed
the limits of Section 4228 of the Insurance Law of the State of New
York. No payment pursuant to this agreement will be used by
Broker-Dealer to effect compensation for the sale of insurance in
excess of the limits of said Section 4228. Such allowance shall be 60%
of an amount equal to the Basic First Year Compensation during the
calendar month for which this allowance is being calculated.
10
D. COMPENSATION CHARGEBACKS
(a) ALL POLICIES:
A percentage of total compensation (including expense
allowance, if any) will be charged back for lapses, surrenders
or if a policy is unwound during the first policy year and
during the 12 policy months following an increase. The
percentage is shown below and will vary depending on the
policy month of lapse/surrender/unwind.
MONTH OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
0 - 3 100%
4 - 6 75%
7 - 9 50%
10 - 12 25%
(b) POLICIES WITH AN ENDORSEMENT - BUSINESS ACCOUNTING BENEFIT:
For policies containing an Endorsement - Business Accounting
Benefit, Penn Mutual reserves the right to charge back a
percentage of total compensation (including expense allowance,
if any) for lapses, surrenders or if a policy is unwound
during the first three policy years and during the 12 policy
months following an increase in lieu of the chargebacks
described in paragraph 8D(a) above. The maximum percentage is
shown below and will vary depending on the policy year of
lapse/surrender/unwind.
YEAR OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
1 100%
2 75%
3 50%
9. CORNERSTONE VARIABLE UNIVERSAL LIFE IV
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing a policy of Penn Mutual known as
the Flexible Premium Adjustable Variable Universal Life Insurance Policy (Policy
Forms VU-01(S) and VU-01(U)), (a policy on any such form or in that series being
hereinafter called a "Cornerstone VUL IV Policy"), that is placed in force
before termination of this agreement. With respect to each Cornerstone VUL IV
Policy, Broker-Dealer may elect to receive fees under Option 1 or 2. If no
option is selected the default will be Option 1. Once each policy is in force,
no changes will be permitted to the choice of compensation.
11
A. OPTION 1
(a) BASIC FIRST YEAR COMPENSATION
A fee for the first policy year equal to 53.5% of A plus 3.3%
of B where:
A is equal to the lesser of:
(i) the premium paid in year 1 or
(ii) the target premium for the policy, and
B is equal to the excess of the premium paid in year 1 over A.
Target premiums are maintained on file in Penn Mutual's Home
Office.
(b) RENEWAL COMPENSATION
A fee for the second through fifteenth years equal to 3.0% of
the premium paid for the policy year in question, and a fee
for the sixteenth and later policy years equal to 1.2% of the
premium paid for the policy year in question.
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 50.5% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
B. OPTION 2
(a) BASIC FIRST YEAR COMPENSATION
Basic First Year Compensation is the same as in Option 1.
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(b) RENEWAL COMPENSATION
A fee for the second through tenth policy years equal to 2.0%
of the premium paid for the policy year in question, and no
fee for the eleventh and later policy years. Additionally, for
the second through tenth policy years, a fee equal to
0.008333% of the Net Policy Value on each monthly anniversary.
Monthly anniversary is defined as the day in each calendar
month that is the same day of the month as the Policy Date.
For the eleventh and later policy years, fee equal to
0.020833% of the Net Policy Value on each monthly anniversary.
Net Policy Value is as defined in the policy.
(c) BASIC COMPENSATION ON INCREASES
In the case of an increase in the Specified Amount of
insurance, a fee of 50.5% of C where:
C is equal to the lesser of:
(i) the premium paid in the twelve months following the
effective date of the increase, or
(ii) the target premium for the amount of the increase.
C. EXPENSE ALLOWANCE
For each calendar month while Broker-Dealer Selling Agreement
is in effect and before its termination, Broker-Dealer shall
be entitled to the expense allowance from Penn Mutual
described below, provided that the amount payable as an
expense allowance shall be limited to the total of reasonable
business expenses incurred by Broker-Dealer that are directly
related to the sale or service of Penn Mutual policies, and
provided further that no such allowance shall be payable to
Broker-Dealer that would cause the total of such allowances to
exceed the limits of Section 4228 of the Insurance Law of the
State of New York. No payment pursuant to this agreement will
be used by Broker-Dealer to effect compensation for the sale
of insurance in excess of the limits of said Section 4228.
Such allowance shall be 60% of an amount equal to the Basic
First Year Compensation during the calendar month for which
this allowance is being calculated.
D. COMPENSATION CHARGEBACKS
(a) ALL POLICIES:
A percentage of total compensation (including expense
allowance, if any) will be charged back for lapses, surrenders
or if a policy is unwound during the first policy year and
during the 12 policy months following an increase. The
percentage is shown below and will vary depending on the
policy month of lapse/surrender/unwind.
MONTH OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
0 - 3 100%
4 - 6 75%
7 - 9 50%
10 - 12 25%
13
(b) POLICIES WITH AN ENDORSEMENT - BUSINESS ACCOUNTING BENEFIT:
For policies containing an Endorsement - Business Accounting
Benefit, Penn Mutual reserves the right to charge back a
percentage of total compensation (including expense allowance,
if any) for lapses, surrenders or if a policy is unwound
during the first three policy years and during the 12 policy
months following an increase in lieu of the chargebacks
described in paragraph 9D(a) above. The maximum percentage is
shown below and will vary depending on the policy year of
lapse/surrender/unwind.
YEAR OF LAPSE/
SURRENDER/UNWIND CHARGEBACK PERCENTAGE
---------------- ---------------------
1 100%
2 75%
3 50%
10. PENNANT SELECT(TM)
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing the Pennant Select Individual
Variable and Fixed Annuity Contracts Policy Form VAA-98, and any variation
thereof, (a policy on any such form being hereinafter called a "Pennant Select
Annuity Contract"), that are placed in force before termination of this
agreement. With respect to each Pennant Select Annuity Contract, Broker-Dealer
may elect to receive fees under Option 1, 2 or 3. If no option is selected the
default will be Option 1. Once each policy is in force, no changes will be
permitted to the choice of compensation.
A. OPTION 1
(a) 7.00% (4.2% where the insured has an attained age greater than
80) of aggregate purchase payments up to $1,000,000 per
Contract; aggregate purchase payments in excess of $1,000,000
require a separate written agreement with the Home Office.
14
B. OPTION 2
(a) For Pennant Select Annuity Contracts placed in force before May 1, 2001,
I. 6.7% (4.0% where the insured has an attained age greater than
80) of aggregate purchase payments up to $1,000,000 per
Contract; aggregate purchase payments in excess of $1,000,000
require a separate written agreement with the Home Office.
II. 0.50% of the Account Value, for the eighth and later contract
years, calculated on a quarterly basis and paid at a quarter
of the stated rate, and commencing with the first calendar
quarter following the eighth Contract anniversary and payable
at the end of each calendar quarter.
(b) For Pennant Select Annuity Contracts placed in force on and after May 1,
2001,
I. 3.7% (2.20% where the insured has an attained age greater than
80) of aggregate purchase payments up to $1,000,000 per
Contract; aggregate purchase payments in excess of $1,000,000
require a separate written agreement with the Home Office.
II. (i) 0.50% of the Account Value, for the second through seventh
contract years, calculated on a quarterly basis and paid at a
quarter of the stated rate, and commencing with the first
calendar quarter following the seventh Contract anniversary
year and payable at the end of each calendar quarter and (ii)
1.00% of the Account Value, for the eighth and later contract
years, calculated on a quarterly basis and paid at a quarter
of the stated rate, and commencing with the first calendar
quarter following the eighth Contract anniversary and payable
at the end of each calendar quarter.
C. OPTION 3
(a) For Pennant Select Annuity Contracts placed in force before May 1, 2001,
I. 5.85% (3.5% where the insured has an attained age greater than
80) of aggregate purchase payments up to $1,000,000 per
Contract; aggregate purchase payments in excess of $1,000,000
require a separate written agreement with the Home Office.
II. (i) 0.20% of the Account Value, for the second through seventh
contract years, calculated on a quarterly basis and paid at a
quarter of the stated rate, and commencing with the first
calendar quarter following the first Contract anniversary year
and payable at the end of each calendar quarter and (ii) 0.50%
of the Account Value, for the eighth and later contract years,
calculated on a quarterly basis and paid at a quarter of the
stated rate, and commencing with the first calendar quarter
following the eighth Contract anniversary and payable at the
end of each calendar quarter.
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(b) For Pennant Select Annuity Contracts placed in force on and after May 1,
2001,
I. 1.75% (1.05% where the insured has an attained age greater
than 80) of aggregate purchase payments up to $1,000,000 per
Contract; aggregate purchase payments in excess of $1,000,000
require a separate written agreement with the Home Office.
II. 1.00% of the Account Value, for the second and later contract
years, calculated on a quarterly basis and paid at a quarter
of the stated rate, and commencing with the first calendar
quarter following the second Contract anniversary year and
payable at the end of each calendar quarter.
11. PENNANT SELECT(TM) SOLD UNDER SPOUSAL CONTINUATION ENDORSEMENT
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing Pennant Select Individual Variable
and Fixed Annuity Contracts (Contract Form VAA-98), and any variation thereof,
issued under Penn Mutual's Spousal Continuation Endorsement (hereinafter
referred to as "Pennant Select (Spousal Continuation) Contract"), that are
placed in force before termination of this agreement. With respect to each
Pennant Select (Spousal Continuation) Contract, Broker-Dealer will receive fees
under Option 1, 2 or 3 based on the election made for the deceased spouse's
contract. No changes will be permitted to the choice of compensation.
A. OPTION 1
(a) 7.00% (4.20% where the deceased spouse was age 81 to 85 at the
issue date of their contract) of aggregate purchase payments
up to $1,000,000 per Contract, exclusive of purchase payments
attributable to death benefit proceeds paid under another Penn
Mutual contract; aggregate purchase payments in excess of
$1,000,000 require a separate written agreement with the Home
Office.
(b) 0.25% of the Account Value for the first and later contract
years, calculated on a quarterly basis and paid at a quarter
of the stated rate, and commencing with the first calendar
quarter following the Contract issue date and payable at the
end of each calendar quarter.
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B. OPTION 2
(a) 3.70% (2.20% where the deceased spouse was age 81 to 85 at the
issue date of their contract) of aggregate purchase payments
up to $1,000,000 per Contract, exclusive of purchase payments
attributable to death benefit proceeds paid under another Penn
Mutual contract; aggregate purchase payments in excess of
$1,000,000 require a separate written agreement with the Home
Office.
(b) 0.75% of the Account Value for the first through seventh
contract years and 1.25% for eighth and later contract years,
calculated on a quarterly basis and paid at a quarter of the
stated rate, and commencing with the first calendar quarter
following the Contract issue date and payable at the end of
each calendar quarter.
C. OPTION 3
(a) 1.75% (1.05% where the deceased spouse was age 81 to 85 at the
issue date of their contract) of aggregate purchase payments
up to $1,000,000 per Contract, exclusive of purchase payments
attributable to death benefit proceeds paid under another Penn
Mutual contract; aggregate purchase payments in excess of
$1,000,000 require a separate written agreement with the Home
Office.
(b) 1.25% of the Account Value for the first and later contract
years, calculated on a quarterly basis and paid at a quarter
of the stated rate, and commencing with the first calendar
quarter following the Contract issue date and payable at the
end of each calendar quarter.
12. COMMANDER(TM)
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing Contracts of Penn Mutual known as
the Commander Individual Variable and Fixed Annuity Flexible Purchase Payment
Annuity Contract (Policy Forms VAB-98 and any variation thereof), (a policy on
any such form being hereinafter called a "Commander Annuity Contract"), that is
placed in force before termination of this agreement.
A. 1.00% of aggregate purchase payments up to $1,000,000 per Contract;
aggregate purchase payments in excess of $1,000,000 require a separate
written agreement with the Home Office; and
B. 1.00% of the Account Value, for the second and later contract years,
calculated on a quarterly basis and paid at a quarter of the stated rate,
and commencing with the first calendar quarter following the first Contract
anniversary and payable at the end of each calendar quarter.
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13. OLYMPIA XT
During the period the Broker-Dealer Selling Agreement is in effect, and subject
to and in accordance with the provisions thereof, Broker-Dealer shall be paid a
fee for soliciting applications and servicing Contracts of Penn Mutual, known as
the Olympia XT Individual Variable and Fixed Annuity (Policy Form BVA-00 and any
variation thereof), that is placed in force before termination of the Agreement.
With respect to each Olympia XT Contract, Broker Dealer may elect to receive
fees under Option 1, 2 or 3. If no option is selected, the default will be
Option 1. Once each Contract is in force, no changes will be permitted to the
choice of compensation.
A. OPTION 1
(a) 5.5% of aggregate purchase payments up to $2,000,000 per contract
(4.5% if purchase payment on the initial application is
$2,000,000 or more). If the Annuitant or Contractowner (other
than a trustee of a qualified plan) is over age 81 on the date
the Olympia XT contract is issued, the fee shall be 2.20% of
aggregate purchase payment up to $2,000,000 per contract. (1.80%
if purchase payment on the initial application is $2,000,000 or
more). Aggregate purchase payment in excess of $2,000,000 require
separate written agreement with Penn Mutual.
B. OPTION 2
(a) 3.65% of aggregate purchase payments up to $2,000,000 per
contract (2.65% if purchase payment on the initial application is
$2,000,000 or more). If the Annuitant or Contractowner (other
than a trustee of a qualified plan) is over age 81 on the date
the Olympia XT contract is issued, the fee shall be 1.45% of
aggregate purchase payment up to $2,000,000 per contract. (1.05%
if purchase payment on the initial application is $2,000,000 or
more). Aggregate purchase payments in excess of $2,000,000
require separate written agreement with Penn Mutual.
(b) 0.25% of Account Value, for the second through ninth contract
years, calculated on a quarterly basis and paid at a quarter of
the stated rate, and commencing with the first calendar quarter
following the first Contract anniversary year and payable at the
end of each calendar quarter.
(c) 0.50% of Account Value, for the tenth and later contract years,
calculated on a quarterly basis and paid at a quarter of the
stated rate, and commencing with the first calendar quarter
following the tenth Contract anniversary year and payable at the
end of each calendar quarter.
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C. OPTION 3
(a) 2.50% of aggregate purchase payments up to $2,000,000 per
contract (1.50% if purchase payment on the initial application is
$2,000,000 or more). If the Annuitant or Contractowner (other
than a trustee of a qualified plan) is over age 80 on the date
the Olympia XT contract is issued, the fee shall be 1.00% of
aggregate purchase payment up to $2,000,000 per contract (0.60%
if purchase payment on the initial application is $2,000,000 or
more). Aggregate purchase payments in excess of $2,000,000
require separate written agreement with Penn Mutual.
(b) 0.35% of Contract Value, for the second through ninth contract
years, calculated on a quarterly basis and paid at a quarter of
the stated rate, and commencing with the first quarter following
the first Contract anniversary year and payable at the end of
each calendar quarter.
(c) 1.00% of Contract Value, for the tenth and later contract years,
calculated on a quarterly basis and paid at a quarter of the
stated rate, and commencing with the first calendar quarter
following the tenth Contract anniversary year and payable at the
end of each calendar quarter.
14. REPLACEMENT OF PENN MUTUAL POLICES
It is agreed that the compensation otherwise payable to Broker-Dealer for any
policy shall be reduced in accordance with the replacement control program in
effect at the time such policy is placed in force. It is anticipated that such
replacement control program may be changed from time to time as to policies in
force after such change.
15. POLICY DELIVERY RECEIPT
It is agreed that the Broker-Dealer shall be responsible for obtaining a signed
policy delivery receipt in accordance with Company policy.
PM 5749 04/01
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