THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
MEMORANDUM OF AGREEMENT
Agreement made this _________ day of ____________, 20___ by and between The
Guardian Insurance & Annuity Company, Inc. ("GIAC"), a Delaware corporation and
a wholly-owned subsidiary of The Guardian Life Insurance Company of America
("Guardian Life"), having its Principal office located at 0 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000 and ________________ ("AGENT").
1. The undersigned Agent is presently a Career Development Manager ("CDM") of
Guardian Life in accordance with a Memorandum of Agreement bearing an
effective date of _______________ ("Guardian Life CDM Agreement").
2. GIAC hereby appoints the Agent CDM of GIAC for the limited purpose of
conducting and overseeing the business relating to the products specified
in Appendix A of this Agreement.
3. The CDM shall at all times be associated with Park Avenue Securities LLC
("PAS"), a Broker-Dealer registered with the Securities and Exchange
Commission ("SEC") and a member of the National Association of Securities
Dealers, Inc. ("NASD") as an NASD Registered Representative or NASD
Registered Principal and, if the particular jurisdiction requires, shall
be licensed or registered as a securities agent of PAS. The CDM must at
all times be validly licensed, registered or appointed by GIAC as a
variable contracts agent in accordance with the requirements of the
jurisdiction where solicitations for contracts occur. The CDM, his agents,
brokers and Field Representatives may solicit for and sell contracts in
any jurisdiction where such contracts are filed and approved for sale by
the governmental authorities having jurisdiction, provided the CDM, his
agents, brokers and Field Representatives are all validly licensed,
registered or otherwise qualified as required for the solicitation and
sale of the contracts in such jurisdictions.
4. To the extent applicable, the CDM shall comply strictly with: (a) the
laws, rules and regulations of all jurisdictions (state and local) in
which the CDM, his agents, brokers and Field Representatives solicit
applications for and sell contracts; (b) federal laws and the rules and
regulations of the SEC; (c) the rules of the NASD; (d) the rules and
procedures of PAS, and (e) the rules and procedures of GIAC. The CDM
understands that failure to comply with such laws, rules, regulations and
procedures may result in disciplinary action against the CDM by the SEC, a
state or other local regulatory agency that has jurisdiction, the NASD,
PAS or GIAC. Before any solicitations or sales of contracts are made, the
CDM shall become familiar with and abide by the laws, rules, regulations
and
1
procedures of all the above mentioned agencies or parties as are currently
in effect and as they may be changed from time to time.
5. The CDM shall have all applications for contracts accurately completed or
reviewed and signed by the applicant and shall submit the applications to
GIAC through PAS together with all payments received from applicants
without any reductions. The CDM, his agents, brokers and Field
Representatives shall cause all checks or orders for contracts to be made
payable to GIAC. GIAC shall reject any application that is submitted by or
on behalf of a CDM, his agents, brokers and Field Representatives not
appropriately licensed as required by paragraph 3 of this Agreement.
6. The CDM, his agents, brokers and Field Representatives shall not make any
statements concerning the products except those that are contained in the
current prospectuses for them and the prospectuses for their underlying
variable investment options and they shall not solicit for applications or
make sales through the use of mailings, advertisements or sales literature
or any other method of contact unless the material or a complete
description of the method has been filed wit the NASD and received written
approval of PAS from a Registered Principal whose office is located in a
PAS Office of Supervisory Jurisdiction as that term is defined by NASD
rules.
7. In connection with the agent's appointment as a GIAC CDM for the purpose
set forth in paragraph 2 above, the entire Guardian Life CDM Agreement
referred to above and attached hereto as the Exhibit, including all
compensation adjustment provisions, is incorporated herein by reference.
Guardian Life CDM Agreement compensation provisions that do not apply to
the products in Appendix A are as noted below. All references to "Company"
within the Guardian Life CDM Agreement shall apply with full force and
effect to GIAC. Additionally, the Registered Representative's Agreement
between the CDM and PAS and the Agent's Agreement between the CDM and GIAC
are incorporated herein by reference and attached hereto as Exhibits.
8. This Agreement may be terminated as outlined in Section IV of the Guardian
Life CDM Agreement. In addition, it shall be automatically terminated if
the Guardian Life CDM Agreement, PAS Registered Representative Agreement
or GIAC Agent's Agreement is terminated.
2
IT SHALL BE EXPRESSLY UNDERSTOOD BY THE AGENT THAT THIS AGREEMENT SHALL NOT BE
EFFECTIVE UNLESS THE AGENT IS VALIDLY LICENSED IN ACCORDANCE WITH THE
REQUIREMENTS OF THE JURISDICTIONS WHERE SOLICITATIONS BY THE CDM AND THE AGENTS,
BROKERS AND FIELD REPRESENTATIVES OF THE CDM FOR CONTRACTS OCCUR.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
as of the day and year first written above.
___________________ ____________________________
WITNESS Authorized Company Officer
___________________ ____________________________
WITNESS Career Development Manager
3
APPENDIX A
List of Products
1. Variable Whole Life Insurance Policies with Modified Scheduled Premiums
marketed under the name Park Avenue Life ("PAL").
2. Flexible Premium Adjustable Variable Life Insurance Policies marketed
under the name Park Avenue Variable Universal Life - Millennium Series
("VUL")*
3. Survivorship Flexible Premium Adjustable Variable Life Insurance Policies
marketed under the name Park Avenue Survivorship Variable Universal Life -
Millennium Series ("SVUL")*
*Enhanced Cash Value versions of these products are also available. Where
applicable herein, these versions are designated "eVUL" and "eSVUL"
respectively.
4
APPENDIX B
PAL COMPENSATION
A. CDM Additional Compensation (Percentages of First Year Premium)
------------------------------------------------------------
Type Rate
------------------------------------------------------------
PAL Policy Premiums 20%
------------------------------------------------------------
PAL Unscheduled Payments 1%
------------------------------------------------------------
Section IIIB, Paragraph (K) Additional 30%
Compensation
------------------------------------------------------------
B. Commission Schedule (Percentages of Premium)
--------------------------------------------------------
Policy Years PAL Policy PAL Unscheduled
Premiums Payments
--------------------------------------------------------
1 50% 3%
--------------------------------------------------------
2 through 10 5% 3%
--------------------------------------------------------
The first policy year commission rate of 50% shall be reduced where policies are
issued at ages over 70 with actual rates payable determined by deducting from
the figure 120 ages of applicable insureds as of policy issue dates.
No compensation shall be payable on PAL policy premiums skipped under the
Premium Skip Option of PAL policies. If unscheduled payments are received when
policies should be on the Premium Skip Option, renewal commissions on such
payments shall be based on renewal rates of PAL policy premiums applied up to
amounts of premium that correspond to renewal PAL policy premiums that would
otherwise have been paid if not for the Premium Skip Option being in effect with
standard renewal rates on unscheduled payments applied to any premiums received
above such PAL policy premium levels.
5
APPENDIX C
VUL & SVUL COMPENSATION
A. CDM Additional Compensation (Percentages of First Year Premium)
------------------------------------------------------------
Type Rate
------------------------------------------------------------
Target Premiums 20%
------------------------------------------------------------
Excess Premiums 1%
------------------------------------------------------------
Section IIIB, Paragraph (K) Additional 40%
Compensation
------------------------------------------------------------
B. Commission Schedule (Percentages of Premium)
--------------------------------------------------------
Policy Years VUL & SVUL Target VUL & SVUL Excess
Premiums Premiums
--------------------------------------------------------
1 55% 3%
--------------------------------------------------------
2 through 10 4% 3%
--------------------------------------------------------
In addition, .0125% of unloaned account values shall be payable monthly policy
years 11 and over as long as the producer contract shall not have been
terminated.
The first policy year commission rate of 55% shall be reduced where policies are
issued at ages over 70 with actual rates payable determined by deducting from
the figure 125 ages of applicable insureds as of policy issue dates.
6
APPENDIX D
eVUL & eSVUL COMPENSATION
A. CDM Additional Compensation (Percentages of First Year Premium)
------------------------------------------------------------
Type Rate
------------------------------------------------------------
Target Premiums 20%
------------------------------------------------------------
Excess Premiums 1%
------------------------------------------------------------
Section IIIB, Paragraph (K) Additional 5%*
Compensation
------------------------------------------------------------
*Also applicable to target premiums paid in policy years 2 through 4
B. Commission Schedule (Percentages of Premium)
--------------------------------------------------------
Policy Years eVUL & eSVUL eVUL & eSVUL
Target Premiums Excess Premiums
--------------------------------------------------------
1 through 4 20% 3%
--------------------------------------------------------
5 through 10 7% 3%
--------------------------------------------------------
In addition, .0125% of unloaned account values shall be payable monthly policy
years 11 and over as long as the producer contract shall not have been
terminated.
The first policy year commission rate of 20% shall be reduced where policies are
issued at ages over 70 with actual rates payable determined by deducting from
the figure 90 ages of applicable insureds as of policy issue dates.
7
APPENDIX E
ALLOCATION OF PREMIUMS AND THEIR EFFECT
ON VUL, SVUL, eVUL & eSVUL COMPENSATION
A. General
In a first policy year, premiums will first be applied to policy target
premium. These will be compensated at first year rates. Any premiums
received in the first year of a policy exceeding policy target premium
will be considered excess premium to be compensated at excess rates.
In policy years 2 through 10, any premium received up to the policy target
premium will be applied as policy target premium and receive compensation
at target premium renewal rates. Any premium exceeding the policy target
premium in policy years two through ten will be considered excess premium
to be compensated at excess rates.
B. Increases In Coverage
Coverage increases will be reflected in self-contained segments of
policies that have their own policy effective dates, policy year durations
and target premiums. Premiums for policies with increases in coverage will
be applied to each coverage and associated target premiums in the order
the coverages were issued (earliest first). When the sum of the premiums
during a given policy year exceeds the sum of all applicable target
premiums, any additional amount will be allocated prorata based on target
premiums for each coverage. The amount thus allocated will be processed as
outlined in the above general description (i.e. it will be processed with
reference to policy years of the coverages and amounts of applicable
target premiums paid).
C. Decreases In Coverage
A coverage decrease will be applied to a last previous coverage increase,
if any, or to the initial coverage should no coverage increase have taken
place. Such decrease will not reduce target premium.
8
