Exhibit 26(h)(1)(xi)
SIXTH AMENDMENT
TO TARGET FUNDS PARTICIPATION AGREEMENT
(FOR PRODUCTS SOLD THROUGH W&R DISTRIBUTION SYSTEM)
This Sixth Amendment ("Amendment") is effective the 1st day of October, 2013, by
and among MINNESOTA LIFE INSURANCE COMPANY ("Company"), XXXXXXX & XXXX, INC.
("W&R"), and IVY FUNDS VARIABLE INSURANCE PORTFOLIOS (the "Trust" or
"Portfolios").
WHEREAS, the Funds are currently sold to one or more separate accounts of life
insurance companies to fund benefits under private label variable life insurance
policies and/or private label variable annuity contracts ("Participating
Insurance Companies"); and
WHEREAS, effective July 31, 2008, W&R Target Funds, Inc. was changed to Ivy
Funds Variable Insurance Portfolios, Inc.; and
WHEREAS, Ivy Funds Variable Insurance Portfolios, Inc. ("Ivy VIP, Inc.") was
reorganized as a Delaware trust on April 30, 2009, and named Ivy Funds Variable
Insurance Portfolios; and
WHEREAS, the parties desire to amend the Agreement to reflect the current
parties and updates to certain provisions.
NOW, THEREFORE, the parties agree as follows:
1. Effective as of July 31, 2008, all references to W&R Target Funds, W&R
Target Funds, Inc. or Target Funds shall be replaced with Ivy Funds
Variable Insurance Portfolios, Inc. ("Ivy VIP, Inc.").
2. Effective as of April 30, 2009, Ivy VIP, Inc. acting on its own behalf
or on behalf of each of the Portfolios, as applicable, assigned,
transferred and set over to the Trust its duties, rights, obligations,
interest, powers, privileges and remedies under the Agreement. Company
hereby consents to such assignments. The Trust accepts all rights and
obligations pursuant to this assignment and represents and warrants that
it possesses all necessary ability and authority to become a party to
the Agreement. Nothing contained herein shall be construed to relieve
Ivy VIP, Inc. of any of its duties or obligations to Company under the
terms of the Agreement with respect to periods prior to April 30, 2009.
3. Effective as of April 30, 2009, all references to Ivy Funds Portfolios,
Inc. shall be replaced with "the Trust" or "the Portfolios," as
appropriate, and the Agreement title shall be changed to "IVY FUNDS
VARIABLE INSURANCE PORTFOLIOS PARTICIPATION AGREEMENT (For Products Sold
Through W&R Distribution System)."
4. Section 8 of the Agreement shall be deleted in its entirety and replaced
with the following new Section 8:
"8. MIXED AND SHARED FUNDING.
(a) GENERAL. The SEC has granted an order to the Trust exempting it
from certain provisions of the 1940 Act and rules thereunder
("Order") so that the Portfolios may be available for investment
by the Variable Accounts and by certain other entities, including,
without limitation, separate accounts funding variable annuity
contracts or variable life insurance contracts, separate accounts
of insurance companies unaffiliated with Company, and qualified
pension and retirement plans (collectively, "Mixed and Shared
Funding"). The parties recognize that the SEC has imposed terms
and conditions for such orders that are substantially identical to
many of the provisions of this Section 8. Sections 8(b) through
8(h) below shall apply pursuant to the Order. The Trust hereby
notifies Company that it may be appropriate to include in the
prospectus pursuant to which a Contract is offered disclosure
regarding the potential risks of Mixed and Shared Funding.
(b) MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS. Company agrees
to inform the Board of the existence of any potential or existing
material irreconcilable conflicts of which it is aware. The
concept of a "material irreconcilable conflict" is not defined by
the 1940 Act or the rules thereunder, but the parties recognize
that such a conflict may arise for a variety of reasons, which may
include without limitation:
(1) an action by any state insurance or other regulatory
authority;
(2) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax or securities regulatory
authorities;
(3) an administrative or judicial decision in any relevant
proceeding;
(4) the manner in which the investments of any Portfolios are
being managed;
(5) a difference in voting instructions given by variable annuity
contract participants, variable life insurance contract
participants to Participating Insurance Companies (as that
term is defined in the Order) and trustees of Participating
Plans (as that term is defined in the Order);
(6) a decision by a Participating Insurance Company to disregard
the voting instructions of participants; or
(7) a decision by a Participating Plan to disregard the voting
instructions of plan participants.
Consistent with the SEC's requirements in connection with exemptive
orders of the type referred to in Section 8(a) hereof, Company will
assist the Board in carrying out its responsibilities under the
Order by providing the Board with all information reasonably
necessary for the Board to consider any issue raised, including
information as to a decision by Company to disregard voting
instructions of Contract Owners. Company's responsibilities in
connection with the foregoing shall be carried out with a view only
to the interests of Contract Owners.
(d) CONFLICT REMEDIES.
(1) It is agreed that if it is determined by a majority of the
members of the Board or a majority of the disinterested trustees
that a material irreconcilable conflict exists, Company will, if
it is a Participating Insurance Company involved in the material
irreconcilable conflict, at its own expense and to the extent
reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to
remedy or eliminate the material irreconcilable conflict, which
steps may include, but are not limited to:
(ii) to the extent permitted by regulation, withdrawing the
assets allocable to some or all of the Variable Accounts from
the Trust or any Portfolio and reinvesting such assets in a
different investment medium, including another Portfolio, or
submitting the question whether such segregation should be
implemented to a vote of all affected participants and, as
appropriate, segregating the assets of any particular group
(e.g., annuity participants, life insurance participants or
all participants) that votes in favor of such segregation, or
offering to the affected participants the option of making
such a change; and
(ii) establishing a new registered investment company of the
type defined as a "management company" in Section 4(3) of the
1940 Act or a new separate account that is operated as a
management company.
(2) If the material irreconcilable conflict arises because of
Company's decision to disregard Contract Owner voting instructions
and that decision represents a minority position or would preclude
a majority vote, Company may be required at the Trust's election,
to withdraw each Variable Account's investment in any Portfolio.
No charge or penalty will be imposed as a result of such
withdrawal. To the extent permitted by regulation, any such
withdrawal must take place within six (6) months after the Trust
gives notice to Company that this provision is being implemented,
and until such withdrawal the Trust shall continue to accept and
implement orders by Company for the purchase and redemption of
shares of the Portfolios.
(3) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to
Company conflicts with the
majority of other state regulators, then to the extent
permitted by regulation, Company will withdraw each Variable
Account's investment in any Portfolio within six (6) months after
the Board informs Company that it has determined that such
decision has created a material irreconcilable conflict, and until
such withdrawal the Trust shall continue to accept and implement
orders by Company for the purchase and redemption of shares of the
Portfolios. No charge or penalty will be imposed as a result of
such withdrawal.
(4) Company agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out
at its expense and with a view only to the interests of
participants.
(5) For purposes hereof, a majority of the disinterested trustees
will determine whether or not any proposed action adequately
remedies any material irreconcilable conflict. In no event,
however, will the Trust or any of its affiliates be required to
establish a new funding medium for any Contracts. Company will not
be required by the terms hereof to establish a new funding medium
for any Contracts if an offer to do so has been declined by vote
of a majority of participants materially adversely affected by the
material irreconcilable conflict.
(e) NOTICE TO COMPANY. The Trust will promptly make known in writing
to Company the Board's determination of the existence of a
material irreconcilable conflict, a description of the facts that
give rise to such conflict and the implications of such conflict.
(f) INFORMATION REQUESTED BY BOARD. Company and W&R (or W&R's
affiliate) will at least annually submit to the Board such
reports, materials or data as the Board may reasonably request so
that the Board may fully carry out the obligations imposed upon it
by the provisions hereof, the Order or any other exemptive order
granted by the SEC to permit Mixed and Shared Funding, and said
reports, materials and data will be submitted at any reasonable
time deemed appropriate by the Board.
(g) COMPLIANCE WITH SEC RULES. If, at any time during which is the
Portfolios are serving as an investment medium for variable life
insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive
relief with respect to Mixed and Shared Funding, the Trust agrees
that it will comply with the terms and conditions thereof and
that the terms of this Section 8 shall be deemed modified if and
only to the extent required in order also to comply with the
terms and conditions of such exemptive relief that is afforded by
any of said rules that are applicable.
5. The following new subsections 9(i) and 9(j) are hereby added to the
Agreement.
(i) Notwithstanding any termination of this Agreement by Company, the
Trust will, at the option of Company, continue to make available
additional shares of any Portfolio offered under a Contract pursuant
to the terms and conditions of this Agreement, for any Contract that
is in effect on the effective date of termination of this Agreement
and that offers the particular Portfolio(s) as an investment option
under the Contract as of that date (hereinafter referred to as
"Existing Contracts"), unless W&R or the Board determines that doing
so would not serve the best interests of the shareholders of the
affected Portfolio(s) or would be inconsistent with applicable law or
regulation. Specifically, without limitation, the owners of the
Existing Contracts will be permitted to reallocate investments in the
Portfolio(s) (as in effect on such date), redeem investments in the
Portfolio(s) and/or invest in the Portfolio(s) upon the making of
additional purchase payments under the Existing Contracts. The parties
agree that this Section 9 will not apply to any (i) actions taken
pursuant to Section 8 and the effect of such actions will be governed
by Section 8 of this Agreement or (ii) any rejected purchase and/or
redemption order. If Company elects to continue to make available
Portfolio shares to Contract Owners after the effective date of
termination of this Agreement in accordance with this Section 9(i),
all provisions of this Agreement will survive any termination of this
Agreement solely with respect to transactions in such Portfolio shares
under the Existing Contracts.
(j) The first paragraph of Section 4, and all of Sections 9(i), 11, 16,
19, and this Section 9(j), shall survive termination of this
Agreement.
6. Section 6, as well as all other references to the Trust's domicile in
the Agreement, is hereby amended to replace "Maryland" with "Delaware."
7. Section 14, with respect to governing law, is hereby amended to replace
"Kansas with "Delaware".
8. Exhibit B to the Agreement is hereby deleted in its entirety and
replaced with Exhibit B, attached hereto.
9. Exhibit C to the Agreement is hereby deleted in its entirety and
replaced with Exhibit C, attached hereto.
Except as provided herein, the terms and conditions contained in the Agreement
shall remain in full force and effect. This Amendment may be executed in two or
more counterparts, which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written above.
XXXXXXX & XXXX, INC.
/s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
President
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
/s/ Xxxxx X. Xxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxx
President
MINNESOTA LIFE INSURANCE COMPANY
/s/ Xxxxx X. Xxxx
----------------------------
By: Xxxxx X. Xxxx
Title: Executive Vice President
EXHIBIT B
(AS AMENDED EFFECTIVE OCTOBER 1, 2013)
TO THE
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS PARTICIPATION AGREEMENT
(FOR PRODUCTS SOLD THROUGH W&R DISTRIBUTION SYSTEM)
AMONG
MINNESOTA LIFE INSURANCE COMPANY
XXXXXXX & XXXX, INC.
AND
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
PORTFOLIOS AVAILABLE TO ALL REGISTERED VARIABLE SEPARATE ACCOUNTS
All Ivy Funds Variable Insurance Portfolios
EXHIBIT C
(as amended effective October 1, 2013)
I. FEES OR OTHER COMPENSATION FOR VARIABLE ANNUITIES
(a) Compensation described in this Exhibit C shall apply to all assets
invested in the Funds (EXCLUDING IVY VIP MONEY MARKET) in connection with
variable annuities (hereinafter the "Aggregated Assets").
(b) Each month, W&R shall calculate and pay to Company a fee that shall be
equal to thirty-five (35) basis points, on an annualized basis, of the
average daily account value of the Aggregated Assets (including any seed
money provided by Company of any of its affiliates). If any portion of
the fee is attributable to 12b-1 fees, W&R may, at its option, pay such
portion of the fee to the underwriter of the variable annuity contracts.
(c) If there is a reduction in 12b-1 fees, either due to a change in the law
or due to a change in the amount of 12b-1 fees paid by the Fund(s), such
reduction in 12b-1 fees shall not reduce the amount of the fee owed by
W&R pursuant to paragraph (b) above.
II. FEES OR OTHER COMPENSATION FOR VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
(a) Compensation described in this Exhibit C shall apply to all assets
invested in the Funds (EXCLUDING IVY VIP MONEY MARKET) in connection with
the policies (hereinafter the "VUL Aggregated Assets").
(b) Each month, W&R shall calculate and pay to Company a fee that shall be
equal to forty-five (45) basis points, on an annualized basis, of the
average daily account value of the VUL Aggregated Assets (including any
seed money provided by Company or any of its affiliates). If any portion
of a Fund's fee is attributable to 12b-1 fees, W&R may, at its option,
pay such portion of the fee to the underwriter of the VUL policies.
(c) If there is a reduction in 12b-1 fees, either due to a change in the law
or due to a change in the amount of 12b-1 fees paid by the Fund(s), such
reduction in 12b-1 fees shall not reduce the amount of the fee owed by
W&R pursuant to paragraph (b) above.
