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EX-99.24.C.8.N.III
8
dex9924c8niii.txt
THIRD AMENDMENT TO TARGET FUNDS PARTICIPATION AGREEMENT
EXHIBIT 24(C)(8)(N)(III)
THIRD AMENDMENT TO TARGET FUNDS PARTICIPATION AGREEMENT
(EXCLUDES PRODUCTS SOLD THROUGH W&R DISTRIBUTION SYSTEM)
This Third Amendment ("Amendment") is entered into this 1/st/ day of September,
2010, by and among MINNESOTA LIFE INSURANCE COMPANY ("Company"), WADDELL &
REED, INC. ("W&R"), and IVY FUNDS VARIABLE INSURANCE PORTFOLIOS (the "Trust" or
"Portfolios").
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 13, 2008, all references to W&R Target Funds or Target
Funds shall be replaced with Ivy Funds Variable Insurance Portfolios.
2. Effective as of July 13, 2008, all references to W&R Target Funds, Inc.
shall be replaced with Ivy Funds Variable Insurance Portfolios, Inc.
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 (excludes Products Sold Through W&R
Distribution System).
4. 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.
5. 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 reason, including 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) 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. 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 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.
6. 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 subsection 9(j), shall survive termination of this Agreement.
7. Sections 14 and 6, as well as all other references to the Trust's domicile
in the Agreement are 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.
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.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first written above.
WADDELL & REED, INC.
/s/ Thomas W. Butch
---------------------------------------
Thomas W. Butch
President
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
/s/ Henry J. Hermann
---------------------------------------
Henry J. Hermann
President
MINNESOTA LIFE INSURANCE COMPANY
/s/ Bruce P. Shay
---------------------------------------
By: Bruce P. Shay
Title: Executive Vice
President
EXHIBIT B
(AS AMENDED SEPTEMBER 1, 2010)
TO THE
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS PARTICIPATION AGREEMENT
(EXCLUDES PRODUCTS SOLD THROUGH W&R DISTRIBUTION SYSTEM)
AMONG
MINNESOTA LIFE INSURANCE COMPANY
WADDELL & REED, INC.
AND
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
Portfolios Available to Variable Accounts
Ivy Funds Variable Insurance Portfolios
excluding the following Portfolios:
Ivy Funds VIP Pathfinder Aggressive
Ivy Funds VIP Pathfinder Moderately Aggressive
Ivy Funds VIP Pathfinder Conservative
Ivy Funds VIP Pathfinder Moderate
Ivy Funds VIP Pathfinder Moderately Conservative
Ivy Funds VIP Money Market