Table of Contents
As filed with the Securities and Exchange Commission on
October 16, 2007.
Registration No. 333-144162
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
Amendment No. 5
to
Form S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
SYMETRA FINANCIAL
CORPORATION
(Exact name of registrant as
specified in its charter)
| Delaware | 6311 | 20-0978027 | ||
|
(State or other jurisdiction
of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
777 108th Avenue NE,
Suite 1200
Bellevue, WA 98004
(425) 256-8000
(Address, including zip code,
and telephone number, including area code, of
registrant’s principal
executive offices)
Randall H. Talbot
President and Chief Executive
Officer
Symetra Financial
Corporation
777 108th Avenue NE,
Suite 1200
Bellevue, WA 98004
(425) 256-8000
(Name and address, including zip
code, and telephone number,
including area code, of agent
for service)
Copies to:
|
William J. Whelan III, Esq. Cravath, Swaine & Moore LLP Worldwide Plaza 825 Eighth Avenue New York, NY 10019 (212) 474-1000 |
George C. Pagos, Esq. Senior Vice President, General Counsel and Secretary Symetra Financial Corporation 777 108th Avenue NE, Suite 1200 Bellevue, WA 98004 (425) 256-8000 |
Gary I. Horowitz, Esq. Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 (212) 455-2000 |
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the
following box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration number of the
earlier effective registration statement for the same
offering. o
CALCULATION
OF REGISTRATION FEE
|
Title of Each Class of |
Proposed Maximum Aggregate |
Amount of |
||||
| Securities to be Registered | Offering Price(1)(2) | Registration Fee | ||||
|
Common Stock, $0.01 par value per share
|
$750,000,000 | $23,025(3) | ||||
| (1) | Includes shares to be sold upon exercise of the underwriters’ over-allotment option. See “Underwriting.” | |
| (2) | Estimated solely for the purposes of calculating the registration fee pursuant to Rule 457(o) of Regulation C under the Securities Act of 1933, as amended. | |
| (3) | Previously paid. |
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
Table of Contents
|
The
information in this preliminary prospectus is not complete and
may be changed. The selling stockholders may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities,
and we and the selling stockholders are not soliciting an offer
to buy these securities in any state where the offer or sale is
not permitted. |
SUBJECT TO COMPLETION, DATED
OCTOBER 16, 2007.
PRELIMINARY PROSPECTUS
Shares
Common Stock
This is Symetra Financial Corporation’s initial public
offering. The selling stockholders are selling all of the shares
in the offering. We will not receive any of the proceeds from
the sale of shares by the selling stockholders.
We expect the public offering price to be between
$ and
$ per share. Currently, no public
market exists for the shares. We expect the shares to trade on
the New York Stock Exchange under the symbol “SYA.”
Investing in our common stock involves risks that are
described in the “Risk Factors” section beginning on
page 10 of this prospectus.
| Per Share | Total | |||||||
|
Public offering price
|
$ | $ | ||||||
|
Underwriting discount
|
$ | $ | ||||||
|
Proceeds to selling stockholders
|
$ | $ | ||||||
The underwriters may also purchase up to an
additional shares
of common stock from the selling stockholders at the public
offering price, less the underwriting discount, within
30 days from the date of this prospectus to cover
overallotments.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed on the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The shares will be ready for delivery on or
about ,
2007.
| Merrill Lynch & Co. | Goldman, Sachs & Co. | JPMorgan | Lehman Brothers |
The date of this prospectus
is ,
2007.
TABLE OF
CONTENTS
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| F-1 | ||||||||
| G-1 | ||||||||
| EXHIBIT 3.1 | ||||||||
| EXHIBIT 3.2 | ||||||||
| EXHIBIT 4.1 | ||||||||
| EXHIBIT 4.12 | ||||||||
| EXHIBIT 10.1 | ||||||||
| EXHIBIT 10.15 | ||||||||
| EXHIBIT 10.16 | ||||||||
| EXHIBIT 10.17 | ||||||||
| EXHIBIT 23.1 | ||||||||
You should rely only on the information contained in this
prospectus or any free writing prospectus prepared by or on
behalf of us. We have not authorized anyone to provide you with
information that is different. We are not making an offer of our
common stock in any state where the offer is not permitted. You
should not assume that the information contained in this
prospectus is accurate as of any date other than the date on the
front cover of this prospectus.
“Symetra,” “Symetra Financial” and their
respective logos are our trademarks. Other service marks,
trademarks and trade names referred to in this prospectus are
the property of their respective owners.
Our insurance subsidiaries are domiciled in the states of
Washington and New York. These states have enacted laws that
require regulatory approval for the acquisition of
“control” of insurance companies. Under these laws,
there exists a presumption of “control” when an
acquiring party acquires 10% or more of the voting securities of
an insurance company or of a company which itself controls an
insurance company. Therefore, any person acquiring 10% or more
of our common stock would need the prior approval of the state
insurance regulators of these states or a determination from
such regulators that “control” has not been acquired.
Dealer
Prospectus Delivery Obligation
Through and
including ,
2007 (the 25th day after the date of this prospectus), all
dealers that effect transactions in our common stock, whether or
not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers’ obligation
to deliver a prospectus when acting as an underwriter and with
respect to unsold allotments or subscriptions.
Table of Contents
The following is a summary of the information contained in
this prospectus, and it may not contain all the information that
is important to you. You should read the entire prospectus
carefully, especially the “Risk Factors” section, the
consolidated financial statements and the accompanying notes
included in this prospectus.
Unless the context otherwise requires, references in this
prospectus to “Symetra” refer to Symetra Financial
Corporation on a stand-alone, non-consolidated basis. References
to “we,” “our,” “us” and “the
company” are to Symetra Financial Corporation together with
its subsidiaries, including our predecessor operations.
A glossary of selected insurance terms and defined terms used
throughout this prospectus can be found under “Glossary of
Selected Insurance and Defined Terms” on
page G-1.
Our
Business
We are a life insurance company focused on profitable growth in
select group health, retirement, life insurance and employee
benefits markets. Our first day of operations as an independent
company was August 2, 2004 when Symetra acquired a group of
life insurance and investment companies from Safeco Corporation
(the “Acquisition”). Our operations date back to 1957,
and many of our agency and distribution relationships have been
in place for decades. We are headquartered in Bellevue,
Washington and employ over 1,300 people in 25 offices
across the United States, serving over two million customers. As
of June 30, 2007, we had total stockholders’ equity of
$1.2 billion, regulatory capital of $1.5 billion and
total assets of $19.8 billion. Our operating return on
average equity, or operating ROAE, was 13.2%, 13.0%, and 11.9%,
for the twelve month periods ended June 30, 2007,
December 31, 2006 and December 31, 2005, respectively.
We define operating ROAE as net operating income, a non-GAAP
financial measure, divided by average stockholders’ equity
excluding accumulated other comprehensive income. For a
reconciliation of net operating income to net income, please see
page 8.
We manage our business through the following five segments, four
of which are operating:
| • | Group. We offer medical stop-loss insurance, limited medical benefit plans, group life insurance, accidental death and dismemberment insurance and disability insurance mainly to employer groups of 50 to 1,000 individuals. Our Group segment generated segment pre-tax income of $68.0 million during 2006 and $42.7 million during the six months ended June 30, 2007. As a result of our recent acquisition of Medical Risk Managers, Inc., we also offer managing general underwriting, or MGU, services. | |
| • | Retirement Services. We offer fixed and variable deferred annuities, including tax sheltered annuities, individual retirement accounts, or IRAs, and group annuities to qualified retirement plans, including Section 401(k) and 457 plans. We also provide record keeping services for qualified retirement plans invested in mutual funds. Our Retirement Services segment generated segment pre-tax income of $43.2 million during 2006 and $13.4 million during the six months ended June 30, 2007. | |
| • | Income Annuities. We offer single premium immediate annuities, or SPIAs, for customers seeking a reliable source of retirement income and structured settlement annuities to fund third-party personal injury settlements. Our Income Annuities segment generated segment pre-tax income of $62.6 million during 2006 and $52.5 million during the six months ended June 30, 2007. | |
| • | Individual. We offer a wide array of term, universal and variable life insurance as well as bank-owned life insurance, or BOLI. Our Individual segment generated segment pre-tax income of $62.6 million during 2006 and $28.6 million during the six months ended June 30, 2007. | |
| • | Other. This segment consists of unallocated corporate income, composed primarily of investment income on unallocated surplus, unallocated corporate expenses, interest expense on debt, the results of small, non-insurance businesses that are managed outside of our operating segments and inter-segment |
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| elimination entries. Our Other segment generated segment pre-tax income of $7.6 million during 2006 and $5.8 million during the six months ended June 30, 2007. |
We distribute our products nationally through an extensive and
diversified independent distribution network. Our distributors
include financial institutions, employee benefits brokers, third
party administrators, worksite specialists, specialty brokers
and independent agents. We believe that our multi-channel
distribution network allows us to access a broad share of the
distributor and consumer markets for insurance and financial
services products. For example, we currently distribute our
annuity and life insurance products through approximately 17,000
independent agents, 22 major financial institutions and 1,200
independent employee benefits brokers. We have recently signed
selling agreements with an additional 14 major financial
institutions.
Market
Environment and Opportunities
We believe we are well positioned to benefit from a number of
demographic and market trends, including the following:
| • | Growing demand for affordable health insurance. According to the Kaiser Family Foundation, health insurance premiums in the U.S. increased 87% from 2000-2006, while the Consumer Price Index increased only 17% over the same period. As increases in health care costs continue to outpace inflation, the demand for affordable health insurance options has increased. We believe we can grow our business by providing employees with affordable access to health insurance through employer-sponsored limited benefit employee health plans and by offering group medical stop-loss insurance to medium and large businesses. We also believe that the trend toward reductions in employer-paid benefits and the uncertainty over the future of government benefit programs provide us with the opportunity to successfully offer other attractive employee benefits products. | |
| • | Increasing retirement savings and income needs. According to the U.S. Census Bureau, approximately 77 million Americans born between 1946 and 1964 are approaching retirement age. However, according to the Employee Benefit Research Institute, in 2006, 52% of workers over the age of 55 and their spouses had accumulated less than $50,000 in retirement savings and only 14% of workers report that a traditional pension plan will be their primary source of retirement income. These projected demographic trends, along with a shift in the burden for funding retirement needs from governments and employers to individuals, increase the need for retirement savings and income. We expect greater demand for additional sources of retirement savings, such as our annuities and other investment products that will help consumers supplement their social security benefits with reliable retirement income. | |
| • | Expanding mass affluent market. As of June 2006, the mass affluent market included 13.7 million households with investible assets between $250,000 and $1.0 million, representing 28% of total financial assets. We believe that the mass affluent population is growing and that it underutilizes various financial products, such as insurance to protect assets, annuities to provide adequate income to support a desired future lifestyle and wealth transfer products to ensure its legacy. We believe we are well positioned to reach consumers in this target market given our relationships with financial institutions and independent agents, which are often their primary sources of guidance and advice. As such, we expect increased demand for our life insurance, variable and fixed annuity and wealth transfer products. |
Our
Competitive Strengths
We leverage the following competitive strengths to capitalize on
opportunities in our targeted markets:
| • | Innovative and collaborative product development capabilities. We design innovative products to meet the changing demands of the market. By working closely with our distributors, we are able to anticipate opportunities in the marketplace and rapidly address them. For example, we introduced Complete, an innovative variable life insurance policy designed for wealth transfer and centered on minimizing the |
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| inherent cost of insurance and thus maximizing the underlying account value. We also recently introduced our Focus variable annuity, which features low total cost to the contractholders, well-respected investment options and simplified product features. |
| • | High-quality distribution relationships. We offer consumers access to our products through a national multi-channel network, including financial institutions, employee benefits brokers, third party administrators, worksite specialists, specialty brokers and independent agents. By treating our distributors as clients and providing them with outstanding levels of service, we have cultivated strong relationships over decades and are able to avoid competing on price alone. | |
| • | Leading group medical stop-loss insurance provider. We believe we have been a leading provider of group medical stop-loss insurance since 1976. We have built a consistently profitable platform with high levels of customer service and disciplined underwriting practices. In the last 25 years, our group medical stop-loss insurance business has experienced only two calendar years of net losses. | |
| • | Diverse businesses provide flexibility, earnings stability and capital efficiency. We have an attractive and diverse mix of businesses that allows us to make profitability-driven decisions in each business across various market environments. We believe that this mix offers us a greater level of financial stability than many of our similarly-sized competitors across business and economic cycles. Our diverse business mix also allows us to reallocate our resources to product lines that generate the most attractive returns on capital invested while reducing our overall capital requirements. | |
| • | Flexible information technology platform integrated with our distributors. We have a flexible information technology platform that allows us to seamlessly integrate our products onto the operating platforms of our distributors, which we believe provides us with a competitive advantage in attracting new distributors. For example, our ExpressTM tool allows our distributors to capture all the necessary data to make products and services instantly available at the point of sale. We will continue to leverage our information technology platform to market our current and future product offerings. | |
| • | Experienced management team with investor-aligned compensation. We have a high-quality management team with an average of 25 years of insurance-industry experience, led by Randy Talbot who has been our chief executive officer since 1998. Mr. Talbot has spent a significant portion of his 30-year career in the insurance industry operating an insurance brokerage, providing him with the knowledge to intimately understand the needs of our distributors. We also have an experienced board of directors, consisting of industry professionals who have worked closely with us since the Acquisition to develop our strategies and operating philosophies. Our compensation structure aligns management’s incentives with our stockholders through our long-term incentive plan that rewards long-term growth in tangible book value and in the intrinsic value of our business. |
Our
Growth Strategies
To maximize stockholder value, we pursue the following
strategies:
| • | Target large and growing markets. We will continue to capitalize on favorable demographic trends, including the growing demand for affordable health insurance, increasing retirement savings and income needs and an expanding mass affluent market. We will continue to identify key opportunities within these markets and provide tailored solutions that address the evolving needs of these customers. | |
| • | Broaden and deepen distribution relationships. Our distribution strategy is to deliver multiple products through a single point of sale, thereby leveraging the cost of distribution. We utilize diverse distribution channels, including financial institutions, employee benefits brokers, third party administrators, worksite specialists, specialty brokers and independent agents. We intend to deepen our long-standing distribution relationships while adding new large-scale and high quality distributors. | |
| • | Be innovative in anticipating customer needs. We will continue to work closely with our distributors to develop customer-responsive products that meet our stringent return requirements, address our target markets and can be delivered efficiently across our information technology platforms. We will also |
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| continue to pursue non-traditional avenues of product development and be innovative in enhancing our product offering. For example, we recently began offering funding services to holders of our structured settlements to offer them an attractive financial alternative. |
| • | Effectively manage capital. We intend to manage our capital prudently to maximize our profitability and long-term growth in stockholder value. Our capital management strategy is to maintain financial strength through conservative and disciplined risk management practices while deploying or returning excess capital as situations warrant. We will also maintain our conservative investment management philosophy, which includes holding a high quality investment portfolio and carefully matching our investment assets against the duration of our insurance product liabilities. For example, we have a portfolio of equities that supports the longest duration benefits in our Income Annuities segment. We have experienced strong performance on this equity portfolio. | |
| • | Pursue complementary acquisitions. We will continue to seek acquisition opportunities that fit strategically within our existing business lines, provide us with a larger distribution presence and meet our stringent return objectives. We believe we have ample financial capacity to remain a prudent acquirer while maintaining a conservative balance sheet. |
Risks
Related to Our Business, Our Industry and this
Offering
Investing in shares of our common stock involves substantial
risk. The factors that could adversely affect our results and
performance are discussed under the heading “Risk
Factors” immediately following this summary. Before you
invest in our shares, you should carefully consider all of the
information in this prospectus, including matters set forth
under the heading “Risk Factors,” including:
| • | Exposure to interest rate fluctuations. Many of our insurance and investment products are sensitive to interest rate fluctuations. Generally, declines in interest rates would have an adverse effect on our financial condition, results of operations and cash flows. | |
| • | Reserve requirements. Our calculation of reserves for estimated future benefit payments are based upon estimates and assumptions with regard to our future experience. Future experience is subject to many uncertainties and we cannot predict the ultimate amounts we will pay for future benefits or the timing of the payments. If reserves are insufficient to cover actual benefits and payments, we could be required to increase our reserves, which could adversely affect our financial condition and results. | |
| • | Deviation from assumptions upon which pricing is established. The price and expected future profitability of our insurance and deferred annuity products are based in part upon expected patterns of premiums, expenses and benefits, using a number of assumptions, including those related to persistency, mortality and morbidity. Significant deviations from these assumptions could have an adverse affect on our financial condition, results of operations and cash flows. | |
| • | Amortization of deferred acquisition costs. Deferred acquisition costs, or DAC, represent certain costs which vary with, and are primarily related to, the sale and issuance of insurance policies and investment contracts and are deferred and amortized over the estimated policy and contract lives. Unfavorable experience with regard to expenses, investment returns, mortality, morbidity, withdrawals or lapses may increase the amortization of DAC, resulting in higher expenses and lower profitability. | |
| • | Potential downgrade in financial strength ratings. A downgrade in our financial strength ratings could have an adverse effect on our financial condition, results of operation, and cash flows in several ways, including reducing new sales of products; adversely affecting our relationship with sales agents; increasing the number of policy surrenders and withdrawals; requiring us to reduce prices and adversely impacting our ability to obtain reinsurance. | |
| • | Highly regulated industry. Our insurance businesses are subject to a wide variety of laws and regulations in various jurisdictions. Compliance with applicable laws and regulations is time consuming and personnel intensive, and changes in these laws and regulations may materially increase our direct and indirect compliance efforts and other expenses of doing business. |
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| • | Constraints related to holding company structure. As a holding company, we have no significant direct operations. Dividends and other permitted distributions from subsidiaries are expected to be our principal source of funds to meet ongoing cash requirements. These payments are limited by regulations in the jurisdictions in which our subsidiaries operate. If our subsidiaries are unable to pay dividends, we may have difficulty servicing our debt, paying dividends on our common stock and meeting our holding company expenses. |
Financial
Strength Ratings
As of September 30, 2007, the financial strength ratings of
our primary life insurance subsidiaries were “A”
(“Excellent,” the third highest of 15 ratings) with a
stable outlook from A.M. Best Company, Inc.,
“A–” (“Strong,” the seventh highest of
21 ratings) with a positive outlook from Standard &
Poor’s Rating Service, “A2” (“Good,”
the sixth highest of 21 ratings) with a stable outlook from
Moody’s Investors Service, Inc. and “A+”
(“Strong,” the fifth highest of 24 ratings) with a
stable outlook from Fitch, Inc. These financial strength ratings
should not be relied on with respect to making an investment in
our common stock.
Recent
Transactions
On August 16, 2007, we entered into a $200.0 million
senior unsecured revolving credit agreement with a syndicate of
lending institutions, led by Bank of America, N.A. The credit
facility has a five-year term, with varying interest rates and
fees based on our credit rating. The revolving credit facility
is available to provide support for working capital, capital
expenditures and other general corporate purposes. This new
credit facility replaced our prior $70.0 million revolving
credit facility.
On October 10, 2007, we issued $150.0 million
aggregate principal amount of Capital Efficient Notes due 2067
(the “CENts”). The CENts were purchased by a syndicate
of initial purchasers, led by J.P. Morgan Securities Inc.
and Lehman Brothers Inc., and may be resold to qualified
institutional buyers in compliance with applicable securities
laws. The CENts bear interest at a fixed annual rate of 8.30%
to, but not including, October 15, 2017, and thereafter at
a floating annual rate equal to three-month LIBOR plus 4.177%.
The CENts have a scheduled maturity date of October 15,
2037, subject to certain limitations, with a final maturity date
of October 15, 2067. We are using the net proceeds from the
CENts to pay a special cash dividend to our stockholders on
October 19, 2007.
The
Selling Stockholders
Symetra was formed for the purpose of acquiring our principal
subsidiaries from Safeco Corporation. Affiliates of White
Mountains Insurance Group, Ltd. and Berkshire Hathaway Inc. led
the investor group that formed Symetra to consummate the
Acquisition. In addition to the affiliates of White Mountains
Insurance Group, Ltd. and Berkshire Hathaway Inc., others from
the original investor group may participate in this offering as
selling stockholders. Upon consummation of this offering,
affiliates of White Mountains Insurance Group, Ltd. and
Berkshire Hathaway Inc. will continue to
own % of our outstanding common
stock.
Our
Executive Offices
Symetra was incorporated in 2004 under the laws of Delaware. Our
principal executive offices are located at 777 108th Ave
NE, Suite 1200, Bellevue, WA 98004. Our telephone number is
(425) 256-8000.
Our internet address is www.symetra.com. The information
contained on or accessible from our website does not constitute
a part of this prospectus and is not incorporated by reference
herein.
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The
Offering
| Common stock offered by the selling stockholders | shares |
| Common stock to be outstanding after this offering | 10,649,000 shares |
| Over-allotment option | The underwriters have an option to purchase a maximum of additional shares from the selling stockholders to cover over-allotments. | |
| Use of proceeds | We will not receive any proceeds from this offering. See “Use of Proceeds.” | |
| Listing | We have applied to list our common stock on the New York Stock Exchange, or NYSE, under the symbol “SYA.” | |
| Dividend policy | We intend to pay quarterly dividends on our common shares. The declaration, payment and amount of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend on many factors, including our financial condition and results of operations, liquidity requirements, market opportunities, capital requirements of our subsidiaries, legal requirements, regulatory constraints and other factors that our board of directors deems relevant. Dividends on our common shares will also be paid to holders of our outstanding warrants. | |
| Risk factors | See “Risk Factors” for a discussion of factors you should consider before investing in our common stock. |
All information in this prospectus, unless otherwise indicated
or the context otherwise requires:
| • | assumes the common stock will be sold at $ per share (the midpoint of the price range set forth on the cover of this prospectus); | |
| • | assumes no exercise of the underwriters’ over-allotment option; |
| • | excludes 900,000 shares of common stock reserved for issuance pursuant to awards granted under our Equity Plan, of which shares are subject to awards to be granted to employees under the IPO grant program on or about the date of this offering; |
| • | excludes 100,000 shares of common stock reserved for issuance pursuant to our Employee Stock Purchase Plan; |
| • | assumes no exercise of outstanding warrants to purchase 2,181,120 shares of common stock at an exercise price of $100 per share; and |
| • | assumes a for stock dividend that will occur prior to the date of this offering. |
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SUMMARY
HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA
The summary historical consolidated financial and other data,
except for non-GAAP financial measures, as of June 30, 2007
and for the six months ended June 30, 2007 and 2006 have
been derived from our unaudited interim historical consolidated
financial statements and the related notes, which have been
prepared on a basis consistent with our annual consolidated
financial statements and are included in this prospectus. In the
opinion of management such unaudited financial data, except for
non-GAAP financial measures, reflects all historical and
recurring adjustments necessary for a fair presentation of the
results for these periods. The results of operations for the six
months ended June 30, 2007 are not necessarily indicative
of the results to be expected for the full year or any future
period. The summary historical consolidated financial and other
data, except for non-GAAP financial measures, as of and for the
years ended December 31, 2006 and 2005, and for the period
from August 2, 2004 through December 31, 2004, and the
period from January 1, 2004 through August 1, 2004
have been derived from our audited consolidated financial
statements and the related notes that are included in this
prospectus. The summary historical consolidated financial and
other data, except for non-GAAP financial measures, as of
December 31, 2004 have been derived from our audited
consolidated financial statements and the related notes, which
are not included in this prospectus.
We do not believe the predecessor financial results for the
period from January 1, 2004 through August 1, 2004 are
comparable to the results of our new independent company,
primarily because during and after the Acquisition we
experienced significant changes in our operating costs and also
because of purchase accounting adjustments impacting net
investment income, policyholder benefits and claims, interest
credited, amortization of deferred policy acquisition costs,
intangible assets and net realized investment gains (losses).
Additionally, due to the short period from our inception as an
independent company to the end of 2004, as well as the effect of
transitional expense charges associated with the Acquisition, we
do not consider our financial results for the period from
August 2, 2004 through December 31, 2004 to be
comparable to those for the years ended December 31, 2006
and 2005. This summary data should be read in conjunction with
our historical consolidated financial statements and related
notes included in this prospectus, as well as our “Selected
Historical Consolidated Financial Data” and with
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations.”
| Predecessor | ||||||||||||||||||||||||
| Period from | ||||||||||||||||||||||||
|
August 2 |
January 1 |
|||||||||||||||||||||||
|
Six Months |
Year Ended |
through |
through |
|||||||||||||||||||||
| Ended June 30, | December 31, |
December 31, |
August 1, |
|||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2004 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| (Dollars in millions, except per share data) | ||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||
|
Premiums
|
$ | 265.0 | $ | 269.2 | $ | 525.7 | $ | 575.5 | $ | 263.2 | $ | 357.9 | ||||||||||||
|
Net investment income
|
490.9 | 490.5 | 984.9 | 994.0 | 411.1 | 693.7 | ||||||||||||||||||
|
Other revenues
|
32.7 | 29.7 | 56.1 | 58.6 | 27.1 | 43.9 | ||||||||||||||||||
|
Net realized investment gains (losses)
|
24.5 | (0.5 | ) | 1.7 | 14.1 | 7.0 | 34.9 | |||||||||||||||||
|
Total revenues
|
813.1 | 788.9 | 1,568.4 | 1,642.2 | 708.4 | 1,130.4 | ||||||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||||||
|
Policyholder benefits and claims
|
136.1 | 147.6 | 264.3 | 327.4 | 127.5 | 223.6 | ||||||||||||||||||
|
Interest credited
|
374.1 | 382.2 | 765.9 | 810.9 | 360.2 | 556.4 | ||||||||||||||||||
|
Other underwriting and operating expenses
|
141.2 | 129.8 | 260.5 | 273.2 | 123.3 | 182.3 | ||||||||||||||||||
|
Fair value of warrants issued to investors
|
— | — | — | — | 101.5 | — | ||||||||||||||||||
|
Interest expense
|
9.3 | 9.8 | 19.1 | 12.4 | 3.5 | — | ||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
9.4 | 7.6 | 14.6 | 11.9 | 1.6 | 34.2 | ||||||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | — | 4.9 | ||||||||||||||||||
|
Total benefits and expenses
|
670.1 | 677.0 | 1,324.4 | 1,435.8 | 717.6 | 1,001.4 | ||||||||||||||||||
7
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| Predecessor | ||||||||||||||||||||||||
| Period from | ||||||||||||||||||||||||
|
August 2 |
January 1 |
|||||||||||||||||||||||
|
Six Months |
Year Ended |
through |
through |
|||||||||||||||||||||
| Ended June 30, | December 31, |
December 31, |
August 1, |
|||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2004 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| (Dollars in millions, except per share data) | ||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes
|
143.0 | 111.9 | 244.0 | 206.4 | (9.2 | ) | 129.0 | |||||||||||||||||
|
Provisions for income taxes:
|
||||||||||||||||||||||||
|
Current
|
49.0 | 59.4 | 92.4 | 22.2 | 21.3 | 0.9 | ||||||||||||||||||
|
Deferred
|
(2.2 | ) | (20.2 | ) | (7.9 | ) | 39.7 | 10.7 | 30.5 | |||||||||||||||
|
Total provision for income taxes
|
46.8 | 39.2 | 84.5 | 61.9 | 32.0 | 31.4 | ||||||||||||||||||
|
Income (loss) from continuing operations
|
96.2 | 72.7 | 159.5 | 144.5 | (41.2 | ) | 97.6 | |||||||||||||||||
|
Income (loss) from discontinued operations (net of taxes)
|
— | — | — | 1.0 | (2.4 | ) | 2.3 | |||||||||||||||||
|
Net income (loss)
|
$ | 96.2 | $ | 72.7 | $ | 159.5 | $ | 145.5 | $ | (43.6 | ) | $ | 99.9 | |||||||||||
|
Net income per common share(1):
|
||||||||||||||||||||||||
|
Basic
|
$ | 7.50 | $ | 5.66 | $ | 12.43 | $ | 11.34 | ||||||||||||||||
|
Diluted
|
$ | 7.50 | $ | 5.66 | $ | 12.43 | $ | 11.34 | ||||||||||||||||
|
Weighted average common shares outstanding:
|
||||||||||||||||||||||||
|
Basic
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||||||
|
Diluted
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||||||
|
Non-GAAP Financial Measures(2):
|
||||||||||||||||||||||||
|
Net operating income (loss)
|
$ | 87.3 | $ | 78.5 | $ | 172.1 | $ | 141.9 | $ | (46.0 | ) | $ | 75.5 | |||||||||||
|
Reconciliation to Net Income (Loss):
|
||||||||||||||||||||||||
|
Net income (loss)
|
$ | 96.2 | $ | 72.7 | $ | 159.5 | $ | 145.5 | $ | (43.6 | ) | $ | 99.9 | |||||||||||
|
Less: Net realized investment gains (losses) (net of taxes)
|
15.9 | (0.3 | ) | 1.1 | 9.2 | 4.6 | 22.7 | |||||||||||||||||
|
Add:
|
||||||||||||||||||||||||
|
Net realized and unrealized investment gains (losses) on fixed
indexed annuities (FIA) options (net of taxes)
|
0.7 | (0.7 | ) | 1.4 | (2.9 | ) | 1.3 | (1.7 | ) | |||||||||||||||
|
Net realized and unrealized investment gains on equity
securities (net of taxes)
|
6.3 | 6.2 | 12.3 | 8.5 | 0.9 | — | ||||||||||||||||||
|
Net operating income (loss)
|
$ | 87.3 | $ | 78.5 | $ | 172.1 | $ | 141.9 | $ | (46.0 | ) | $ | 75.5 | |||||||||||
8
Table of Contents
|
As of June 30, |
As of December 31, | |||||||||||||||
| Consolidated Balance Sheet Data: | 2007 | 2006 | 2005 | 2004 | ||||||||||||
| (Unaudited) | ||||||||||||||||
| (Dollars in millions, except per share data) | ||||||||||||||||
|
Total investments
|
$ | 16,695.0 | $ | 17,305.3 | $ | 18,332.8 | $ | 19,244.8 | ||||||||
|
Total assets
|
19,845.8 | 20,114.6 | 20,980.1 | 22,182.0 | ||||||||||||
|
Total debt
|
298.8 | 298.7 | 300.0 | 300.0 | ||||||||||||
|
Separate account assets
|
1,268.5 | 1,233.9 | 1,188.8 | 1,228.4 | ||||||||||||
|
Accumulated other comprehensive income (loss) (net of taxes)
(AOCI)
|
(178.9 | ) | (0.5 | ) | 136.6 | 312.9 | ||||||||||
|
Total stockholders’ equity
|
$ | 1,247.6 | $ | 1,327.3 | $ | 1,404.9 | $ | 1,435.8 | ||||||||
|
Book value per common share:
|
||||||||||||||||
|
Basic(3)
|
$ | 133.96 | $ | 124.69 | $ | 119.10 | $ | 105.45 | ||||||||
|
Diluted(4)
|
$ | 128.18 | $ | 120.49 | $ | 115.85 | $ | 104.52 | ||||||||
|
U.S. Statutory Financial Information:
|
||||||||||||||||
|
Statutory capital and surplus
|
$ | 1,304.6 | $ | 1,266.2 | $ | 1,260.1 | $ | 1,138.4 | ||||||||
|
Asset valuation reserve (AVR)
|
177.4 | 158.4 | 140.9 | 107.6 | ||||||||||||
|
Statutory capital and surplus and AVR
|
$ | 1,482.0 | $ | 1,424.6 | $ | 1,401.0 | $ | 1,246.0 | ||||||||
| (1) | Net income per common share (basic and diluted) assumes that all participating securities, including warrants, have been outstanding since the beginning of the period, using the two-class method. |
| (2) | Management considers certain non-GAAP financial measures, including net operating income (loss), to be a useful supplement to comparable GAAP measures in evaluating our financial performance and condition. These measures have been reconciled to their most comparable GAAP financial measures. We believe that the non-GAAP presentation of net operating income is valuable because excluding certain realized capital gains and losses, many of which are driven by investment decisions and external economic developments unrelated to the insurance and underwriting aspects of the business, reveals trends that may be otherwise obscured. For a definition of these non-GAAP measures and other metrics used in our analysis, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of non-GAAP Financial Measures.” |
| (3) | Basic book value per common share is calculated based on total stockholders’ equity less AOCI divided by common shares outstanding of 10,649,000. |
| (4) | Diluted book value per common share is calculated based on total stockholders’ equity less AOCI plus the proceeds from the assumed exercise of outstanding warrants, divided by common shares and shares subject to outstanding warrants of 12,830,120 in the aggregate. |
9
Table of Contents
You should carefully consider the following risks and other
information in this prospectus before deciding to invest in
shares of our common stock. Any of the risks described below
could materially adversely affect our business, financial
condition, results of operations and cash flows. In this event,
the trading price of our common stock could decline and you
could lose part or all of your investment.
Risks
Related to Our Business
Interest
rate fluctuations could adversely affect our financial
condition, results of operations and cash flows.
Certain of our insurance and investment products, such as fixed
annuities and universal life insurance, are sensitive to
interest rate fluctuations and expose us to the risk that
falling interest rates will reduce the “spread,” or
the difference between the returns we earn on the investments
that support our obligations under these products and the
amounts that we must credit to policyholders and
contractholders. This risk is exacerbated due to the existence
of guaranteed minimum crediting rates established by regulatory
authorities and restrictions on the timing and frequency with
which we can adjust our crediting rates. Accordingly, falling
interest rates could have an adverse effect on our financial
condition, results of operations and cash flows.
Our interest rate spreads and gains related to these spreads
vary by product as follows:
| • | The interest rate spread on our Retirement Services segment’s fixed deferred annuity products was 1.70%, 1.76% and 1.58% for the six months ended June 30, 2007 and for the years ended December 31, 2006 and 2005, respectively, which yielded gains of $44.1 million, $102.3 million and $103.4 million, respectively. | |
| • | The interest rate spread on our Income Annuities segment’s variable annuity products was 0.90%, 0.76% and 0.67% for the six months ended June 30, 2007 and for the years ended December 31, 2006 and 2005, respectively, which yielded gains of $39.0 million, $66.3 million and $59.6 million, respectively. | |
| • | The interest rate spread on our Individual segment’s universal life insurance products was 1.20%, 1.31% and 0.66% for the six months ended June 30, 2007 and for the years ended December 31, 2006 and 2005, respectively, which yielded gains of $5.1 million, $10.8 million and $7.5 million, respectively. |
During periods of rising interest rates, we may determine to
offer higher crediting rates on new sales of interest-sensitive
products and to increase crediting rates on existing in-force
products, in each case in order to maintain or enhance product
competitiveness. In addition, periods of rising interest rates
may cause increased policy surrenders, withdrawals and requests
for policy loans as policyholders and contractholders allocate
their assets into higher yielding investments. Increases in
crediting rates, as well as surrenders and withdrawals, could
have an adverse effect on our financial condition, results of
operations and cash flows.
We calculate reserves for long-term disability and life waiver
of premium claims using net present value calculations based on
the actual interest rates in effect at the time claims are
funded, as well as our expectations for future interest rates.
Waiver of premium refers to a provision in a life insurance
policy pursuant to which an insured with total disability, which
has lasted for a minimum specified period, continues to receive
life insurance coverage but no longer has to pay premiums for
the duration of the disability or for a stated period. During
periods of declining interest rates, reserves for new claims are
calculated using lower discount rates thereby increasing the net
present value of those claims and the required reserves.
Further, if actual interest rates used to establish reserves on
open claims prove to be lower than our original expectations, we
would be required to increase such reserves accordingly. As
such, the increase in net present value calculations caused by
declines in interest rates could have an adverse effect on our
financial condition, results of operations and cash flows.
10
Table of Contents
Our term life insurance products also expose us to the risk of
interest rate fluctuations. The pricing and expected future
profitability of these products are based in part on expected
investment returns. Over time, term life insurance products
generally produce positive cash flows as customers pay periodic
premiums, which we invest as we receive them. Lower than
expected interest rates may reduce our ability to achieve our
targeted investment margins and may adversely affect our
financial condition, results of operations and cash flows.
If our
reserves for future policy benefits and claims are inadequate,
we may be required to increase our reserve
liabilities.
We calculate and maintain reserves for estimated future benefit
payments to our policyholders and contractholders in accordance
with U.S. GAAP and industry accounting practices. We
release these reserves as those future obligations are
extinguished. The reserves we establish necessarily reflect
estimates and actuarial assumptions with regard to our future
experience. These estimates and actuarial assumptions involve
the exercise of significant judgment. Our future financial
results depend upon the extent to which our actual future
experience is consistent with the assumptions we have used in
pricing our products and determining our reserves. Many factors
can affect future experience, including economic, political and
social conditions, inflation, healthcare costs and changes in
doctrines of legal liability and damage awards in litigation.
Therefore, we cannot predict the ultimate amounts we will pay
for actual future benefits or the timing of those payments.
We regularly monitor our reserves. If we conclude that our
reserves are insufficient to cover actual or expected policy and
contract benefits and claims payments, we would be required to
increase our reserves and incur income statement charges in the
period in which we make the determination, which could adversely
affect our financial condition and results of operations.
We may
face unanticipated losses if there are significant deviations
from our assumptions regarding the probabilities that our
insurance policies or annuity contracts will remain in-force
from one period to the next or if morbidity and mortality rates
differ significantly from our pricing
expectations.
The prices and expected future profitability of our insurance
and deferred annuity products are based in part upon expected
patterns of premiums, expenses and benefits, using a number of
assumptions, including those related to persistency, mortality
and morbidity. Persistency is the probability that a policy or
contract will remain in-force from one period to the next. The
effect of persistency on profitability varies for different
products. For most of our life insurance, group life and health
insurance and deferred annuity products, actual persistency that
is lower than our assumptions could have an adverse impact on
profitability, especially in the early years of a policy or
contract primarily because we would be required to accelerate
the amortization of expenses we deferred in connection with the
acquisition of the policy or contract. In addition, we may need
to sell investments at a loss to fund withdrawals. For some of
our health insurance policies, actual persistency in later
policy durations that is higher than our persistency assumptions
could have a negative impact on profitability. If these policies
remain in-force longer than we assumed, then we could be
required to make greater benefit payments than we had
anticipated when we priced these products.
In addition, we set prices for our insurance and certain annuity
products based upon expected claims and payment patterns, using
assumptions for, among other factors, morbidity rates and
mortality rates of our policyholders and contractholders. The
long-term profitability of these products depends upon how our
actual experience compares with our pricing assumptions. For
example, if morbidity rates are higher, or mortality rates are
lower, than our pricing assumptions, we could be required to
make greater payments under certain annuity contracts than we
had projected.
Because our assumptions are inherently uncertain, reserves for
future policy benefits and claims may prove to be inadequate if
actual experience is different from our assumptions. Although
certain of our products permit us to increase premiums during
the life of the policy or contract, these increases may not be
sufficient to maintain profitability. Moreover, many of our
products either do not permit us to increase premiums or limit
those increases during the life of the policy or contract.
Therefore, significant deviations in experience
11
Table of Contents
from our assumptions regarding persistency and mortality and
morbidity rates could have an adverse effect on our financial
condition, results of operations and cash flows.
We may
be required to accelerate the amortization of deferred
acquisition costs, which would increase our expenses and reduce
profitability.
Deferred acquisition costs, or DAC, represent certain costs
which vary with and are primarily related to the sale and
issuance of our insurance policies and investment contracts and
are deferred and amortized over the estimated life of the
related insurance policies and contracts. These costs include
commissions in excess of ultimate renewal commissions and
certain other sales incentives, solicitation and printing costs,
sales material and other costs, such as underwriting and
contract and policy issuance expenses. Under U.S. GAAP, DAC
is amortized through operations over the lives of the underlying
contracts in relation to the anticipated recognition of premiums
or gross profits.
Our amortization of DAC generally depends upon anticipated
profits from investments, surrender and other policy and
contract charges, mortality, morbidity and maintenance and
expense margins. Unfavorable experience with regard to expected
expenses, investment returns, mortality, morbidity, withdrawals
or lapses may cause us to increase the amortization of DAC,
resulting in higher expenses and lower profitability.
We regularly review our DAC asset balance to determine if it is
recoverable from future income. The portion of the DAC balance
deemed to be unrecoverable, if any, is charged to expense in the
period in which we make this determination. For example, if we
determine that we are unable to recover DAC from profits over
the life of a book of business of insurance policies or annuity
contracts, or if withdrawals or surrender charges associated
with early withdrawals do not fully offset the unamortized
acquisition costs related to those policies or annuities, we
would be required to recognize the additional DAC amortization
as a current-period expense. In general, we limit our deferral
of acquisition costs to costs assumed in our pricing
assumptions. As of June 30, 2007 and December 31,
2006, we had $107.1 million and $88.2 million of DAC,
respectively. Our amortization of DAC was $9.4 million
during the six months ended June 30, 2007 and
$14.6 million during the year ended December 31, 2006.
A
downgrade or a potential downgrade in our financial strength
ratings could result in a loss of business.
Financial strength ratings, which various ratings organizations
publish as measures of an insurance company’s ability to
meet contractholder and policyholder obligations, are important
to maintaining public confidence in our company and our
products, the ability to market our products and our competitive
position. As of September 30, 2007, our principal life
insurance company subsidiary, Symetra Life Insurance Company,
has financial strength ratings of “A”
(“Excellent”, third highest of 15 ratings) with a
stable outlook from A.M. Best, “A−”
(“Strong”, seventh highest of 21 ratings) with a
positive outlook from Standard & Poor’s, or
S&P, “A2” (“Good”, sixth highest of 21
ratings) with a stable outlook from Moody’s and
“A+” (“Strong”, fifth highest of 24 ratings)
with a stable outlook from Fitch.
A downgrade in our financial strength ratings, or the announced
potential for a downgrade, could have an adverse effect on our
financial condition, results of operations and cash flows in
several ways, including:
| • | reducing new sales of insurance products, annuities and other investment products; | |
| • | limiting our ability to offer structured settlement products; | |
| • | adversely affecting our relationships with independent sales intermediaries and our dedicated sales specialists; | |
| • | materially increasing the number or amount of policy surrenders and withdrawals by contractholders and policyholders; | |
| • | requiring us to reduce prices for many of our products and services to remain competitive; and | |
| • | adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance. |
12
Table of Contents
The
occurrence of natural disasters, disease pandemics, terrorism or
military actions could adversely affect our financial condition,
results of operations and cash flows.
Our financial condition and results of operations are at risk of
material adverse effects that could arise from catastrophic
mortality and morbidity due to natural disasters, including
floods, tornadoes, earthquakes and hurricanes, disease
pandemics, terrorism and military actions. Such events could
also lead to unexpected changes in persistency rates as
policyholders and contractholders who are affected by the
disaster may be unable to meet their contractual obligations,
such as payment of premiums on our insurance policies or
deposits into our investment products. The continued threat of
terrorism and ongoing military actions may cause significant
volatility in global financial markets, and a natural disaster
or a disease pandemic could trigger an economic downturn in the
areas directly or indirectly affected by the disaster. The
effectiveness of external parties, including governmental and
nongovernmental organizations, in combating the spread and
severity of a disease pandemic could have a material impact on
the losses experienced by us. Further, in our group insurance
operations, a localized event that affects the workplace of one
or more of our group insurance customers could cause a
significant loss due to mortality or morbidity claims.
Our
investment portfolio is subject to various risks that may
diminish the value of our invested assets and reduce investment
returns.
The performance of our investment portfolio depends in part upon
the level of and changes in interest rates, the overall
performance of the economy, the creditworthiness of the specific
obligors included in our portfolio, equity prices, liquidity and
other factors, some of which are beyond our control. Changes in
these factors could materially affect our investment results in
any period.
Interest
rate risk
Changes in interest rates can negatively affect the performance
of most of our investments. Interest rate volatility can reduce
unrealized gains or create unrealized losses in our portfolios.
Interest rates are highly sensitive to many factors, including
governmental monetary policies, domestic and international
economic and political conditions and other factors beyond our
control. Fluctuations in interest rates affect our returns on,
and the fair value of, our fixed maturity and short-term
investments, which comprised $15.4 billion, or 92.5% of the
fair value of our total invested assets as of June 30, 2007.
The fair value of the fixed maturity securities in our portfolio
and the investment income from these securities fluctuate
depending on general economic and market conditions. The fair
value generally increases or decreases in an inverse
relationship with fluctuations in interest rates, while net
investment income realized by us from future investments in
fixed maturity securities will generally increase or decrease in
step with interest rates. In addition, actual net investment
income or cash flows from investments that carry prepayment
risk, such as mortgage-backed and certain other asset-backed
securities, may differ from those anticipated at the time of
investment as a result of interest rate fluctuations. In periods
of declining interest rates, mortgage prepayments generally
increase and mortgage-backed securities, commercial mortgage
obligations and other bonds in our investment portfolio are more
likely to be prepaid or redeemed as borrowers seek to borrow at
lower interest rates, and we may be required to reinvest those
funds in lower interest-bearing investments. As of June 30,
2007, mortgage-backed and other asset-backed securities
represented $4.3 billion, or 25.5% of the fair value of our
total invested assets.
Because substantially all of our fixed maturity securities are
classified as available for sale, changes in the fair value of
these securities as described above are reflected as a component
of comprehensive income. However, U.S. GAAP does not permit
similar mark-to-market treatment to the insurance liabilities
that the fixed maturity securities support. Therefore, changes
in the fair value of our fixed maturity securities caused by
interest rate fluctuations are not offset in whole or in part by
similar adjustments to the fair value of our insurance
liabilities.
13
Table of Contents
We employ asset/liability matching strategies to reduce the
adverse effects of interest rate volatility and to ensure that
cash flows are available to pay claims as they become due. Our
asset/liability matching strategies include:
| • | asset/liability duration management; | |
| • | structuring our bond and commercial mortgage loan portfolios to limit the effects of prepayments; and | |
| • | consistent monitoring of, and making appropriate changes to, the pricing of our products. |
However, because these strategies may fail to eliminate or
reduce the adverse effects of interest rate volatility,
significant fluctuations in the level of interest rates may have
a material adverse effect on our financial condition, results of
operations and cash flows.
Credit
risk
From time to time, issuers of the fixed maturity securities that
we own may default on principal and interest payments. Defaults
by third parties in the payment or performance of their
obligations could reduce our investment income and realized
investment gains or result in realized investment losses.
Further, the value of any particular fixed maturity security is
subject to impairment based on the creditworthiness of a given
issuer. As of June 30, 2007, we held $15.4 billion of
fixed maturity securities, or 92.5% of the fair value of our
total invested assets at that date. Our fixed maturity portfolio
also includes below investment grade and non-rated securities,
which comprised 4.1% and 4.5%, respectively, of the fair value
of our total fixed maturity securities at June 30, 2007.
These investments generally provide higher expected returns, but
present greater risk and can be less liquid than investment
grade securities. Further, the current trend of private equity
buyouts could cause certain of our investment-grade fixed
maturities to present more significant credit risk than when we
first invested. A significant increase in defaults and
impairments on our fixed maturity securities portfolio could
materially adversely affect our financial condition, results of
operations and cash flows.
Liquidity
risk
Our investments in privately placed fixed maturities, mortgage
loans, policy loans and limited partnership interests are
relatively illiquid as compared to publicly-traded fixed
maturities and equities. These asset classes represented
approximately 10.1% of the carrying value of our total invested
assets as of June 30, 2007. If we require significant
amounts of cash on short notice in excess of our normal cash
requirements, we may have difficulty selling these investments
in a timely manner, be forced to sell them for less than we
otherwise would have been able to realize, or both.
Downturns
and volatility in equity markets could adversely affect the
marketability of our products and our
profitability.
Significant downturns and volatility in equity markets could
have an adverse effect on our business in various ways. Market
downturns and volatility may discourage purchases of separate
account products, such as variable annuities and variable life
insurance, which have returns linked to the performance of the
equity markets and may cause some existing customers to withdraw
cash values or reduce investments in those products.
Further, downturns and volatility in equity markets can have an
adverse effect on the revenues and returns from our separate
account products. Because these products depend on fees related
primarily to the value of assets under management, a decline in
the equity markets could reduce our revenues by reducing the
value of the investment assets we manage.
We hold equity and equity-like investments in our Income
Annuities and Other segments that represent 1.2% of the fair
value of our general account investments as of June 30,
2007. Investments in common stock or equity-like securities
generally provide higher expected total returns over the long
term, but present greater risk to preservation of principal than
do our fixed income investments.
14
Table of Contents
We
rely on reinsurance arrangements to help manage our business
risks, and failure to perform by the counterparties to our
reinsurance arrangements may expose us to risks we had sought to
mitigate.
We utilize reinsurance to mitigate our risks in various
circumstances. Reinsurance does not relieve us of our direct
liability to our policyholders, even when the reinsurer is
liable to us. Accordingly, we bear credit risk with respect to
our reinsurers. The total reinsurance recoverable amount due
from reinsurers was $249.1 million as of June 30, 2007
and $238.8 million as of December 31, 2006. Our
reinsurers may be unable or unwilling to pay the reinsurance
recoverable owed to us now or in the future or on a timely
basis. A reinsurer’s insolvency, inability or unwillingness
to make payments under the terms of its reinsurance agreement
with us could have an adverse effect on our financial condition,
results of operations and cash flows.
Reinsurance
may not be available, affordable or adequate to protect us
against losses.
As part of our overall risk management strategy, we purchase
reinsurance for certain risks underwritten by our various
business segments. For example, we currently reinsure up to 85%
of the mortality risk for new fully-underwritten individual term
life insurance policies. We reinsure the mortality risk in
excess of $0.5 million for most of the remainder of new
individual life insurance policies. While reinsurance agreements
generally bind the reinsurer for the life of the business
reinsured at generally fixed pricing, market conditions beyond
our control determine the availability and cost of the
reinsurance protection for new business. In certain
circumstances, the price of reinsurance for business already
reinsured may also increase. Any decrease in the amount of
reinsurance will increase our risk of loss and any increase in
the cost of reinsurance will, absent a decrease in the amount of
reinsurance, reduce our earnings. Accordingly, we may be forced
to incur additional expenses for reinsurance or may not be able
to obtain sufficient reinsurance on acceptable terms, which
could adversely affect our ability to write future business or
result in the assumption of more risk with respect to those
policies we issue.
The availability and cost of these reinsurance arrangements are
subject to market conditions that are beyond our control. As a
result, in the future, we may not be able to enter into
reinsurance arrangements on attractive terms, if at all.
We may
be unable to attract and retain independent sales intermediaries
and dedicated sales specialists.
We distribute our products through financial intermediaries,
independent producers and dedicated sales specialists. We
compete with other financial institutions to attract and retain
commercial relationships in each of these channels, and our
success in competing for sales through these sales
intermediaries depends upon factors such as:
| • | the amount of sales commissions and fees we pay; | |
| • | the breadth of our product offerings; | |
| • | the strength of our brand; | |
| • | our perceived stability and our financial strength ratings; | |
| • | the marketing and services we provide to them; and | |
| • | the strength of the relationships we maintain with individuals at those firms. |
Our competitors may be effective in providing incentives to
existing and potential distribution partners to favor their
products or to reduce sales of our products.
Our contracts with our distribution partners generally allow
either party to terminate the relationship upon short notice.
Our distribution partners do not make minimum purchase
commitments, and our contracts do not prohibit our partners from
offering products that compete with ours. Accordingly, our
distribution partners may choose not to offer our products
exclusively or at all, or may choose to exert insufficient
resources and attention to selling our products.
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Our future success is highly dependent on maintaining and
growing both existing and new distribution relationships. We may
have little or no contact with end customers of our products,
thereby resulting in little to no brand awareness with end
customers and making it more difficult to respond to evolving
customer needs, thereby increasing our reliance on our
distribution partners.
From time to time, due to competitive forces, we may experience
unusually high attrition in particular sales channels for
specific products. An inability to recruit productive
independent sales intermediaries and dedicated sales
specialists, or our inability to retain strong relationships
with the individual agents at our independent sales
intermediaries, could have an adverse effect on our financial
condition, results of operations and cash flows.
General
economic, financial market and political conditions may
adversely affect our business.
Our business may be materially adversely affected from time to
time by general economic, financial market and political
conditions, most of which are beyond our control. These
conditions include economic cycles such as:
| • | cyclical movements in the insurance industry; | |
| • | levels of unemployment; | |
| • | levels of consumer lending; | |
| • | levels of inflation; and | |
| • | movements of the financial markets. |
Fluctuations in interest rates, monetary policy, demographics,
and legislative and competitive factors also influence our
performance. During periods of economic downturn:
| • | individuals and businesses may choose not to purchase our insurance products and other related products and services, may terminate existing policies or contracts or permit them to lapse, may choose to reduce the amount of coverage purchased or, in our group employer health insurance, may have fewer employees requiring insurance coverage due to rising unemployment levels; | |
| • | new disability insurance claims and claims on other specialized insurance products tend to rise; | |
| • | there is a higher loss ratio due to rising unemployment levels; and | |
| • | insureds tend to increase their utilization of health benefits if they anticipate unemployment or loss of benefits. |
In addition, general inflationary pressures may affect medical
costs, increasing the costs of paying claims.
Intense
competition could adversely affect our ability to maintain or
increase our market share and profitability.
Our businesses are subject to intense competition. We believe
the principal competitive factors in the sale of our products
are product features, price, commission structure, marketing and
distribution arrangements, brand, reputation, financial strength
ratings and service. Many other companies actively compete for
sales in our retirement services, income annuity, individual and
group markets, including other major insurers, banks, other
financial institutions, mutual fund and money asset management
firms and specialty providers.
In many of our product lines, we face competition from companies
that have greater market share or breadth of distribution, offer
a broader range of products, services or features, assume a
greater level of risk, have lower profitability expectations or
have higher financial strength ratings than we do. Many
competitors offer similar products and use similar distribution
channels. The substantial expansion of banks’ and insurance
companies’ distribution capacities and expansion of product
features in recent years have intensified pressure on margins
and production levels and have increased the level of
competition in many of our product lines.
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Our
risk management policies and procedures may not be effective or
may leave us exposed to unidentified or unanticipated risk,
which could negatively affect our business.
We are subject to substantial operational, legal and regulatory
risks that require effective policies and procedures to record,
verify and report on a large number of transactions and events.
For instance, our distribution network consists of a large
number of third party agents and requires the implementation and
oversight of policies and procedures to ensure that we are not
unduly subjected to reputational, financial or other risks. We
must also monitor and accurately process large numbers of claims
which, if not properly processed, could subject us to financial
and regulatory risk. In addition, we regularly monitor changes
in laws and regulations in order maintain our products and
administrative procedures in compliance. We have developed
policies and procedures to mitigate these and other risks,
including establishing risk management teams to quantify risk
exposures and make recommendations to our risk committee, and we
have developed procedures to remediate compliance or other
issues. Even so, these policies and procedures may not be fully
effective to mitigate all of these risks. Many of our methods
for managing these risks and exposures are based upon historical
statistical models and observed market behavior. As such, our
methods may not be able to predict all future exposures. These
could be significantly greater than our historical measures have
indicated. Other risk management methods depend upon the
evaluation of information regarding markets and clients, or
other matters that are publicly available or otherwise
accessible to us. This information may not always be accurate,
complete, up-to-date or properly evaluated.
The
failure to maintain effective and efficient information systems
could adversely affect our business.
Our business is dependent upon our ability to keep pace with
technological advances. Our ability to keep our systems fully
integrated with those of our clients is critical to the
operation of our business. Our failure to update our systems to
reflect technological advancements or to protect our systems may
adversely affect our relationships and ability to do business
with our clients.
In addition, our business depends significantly on effective
information systems, and we have many different information
systems for our various businesses. We have committed and will
continue to commit significant resources to develop, maintain
and enhance our existing information systems and develop new
information systems in order to keep pace with continuing
changes in information processing technology, evolving industry
and regulatory standards and changing customer preferences. Our
failure to maintain effective and efficient information systems
could have a material adverse effect on our financial condition
and results of operations. If we do not maintain adequate
systems, we could experience adverse consequences, including:
| • | inadequate information on which to base pricing, underwriting and reserving decisions; | |
| • | the loss of existing customers; | |
| • | difficulty in attracting new customers; | |
| • | customer, provider and agent disputes; | |
| • | regulatory compliance problems, such as failure to meet prompt payment obligations; | |
| • | litigation exposure; or | |
| • | increases in administrative expenses. |
If we
are unable to maintain the availability of our systems and
safeguard the security of our data, our ability to conduct
business will likely be compromised, which may have a material
adverse effect on our financial condition, results of operations
and cash flows.
We use computer systems to store and retrieve, evaluate and use
customer and company data and information. Additionally, our
computer and information technology systems interface with and
rely upon third-party systems. Our business is highly dependent
on our ability, and the ability of our affiliates, to access
these systems to perform necessary business functions. This
includes providing insurance quotes, processing
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premium payments, providing customer support, filing and paying
claims and making changes to existing policies. Systems outages
or outright failures would compromise our ability to perform
these functions in a timely manner. This could hurt our
relationships with our business partners and customers and harm
our ability to conduct business. In the event of a disaster such
as a blackout, a computer virus, an industrial accident, a
natural catastrophe, a terrorist attack or war, our systems may
not be available to our employees, customers or business
partners for an extended period of time. If our employees are
able to report to work, yet our systems or our data are
destroyed or disabled, they may be unable to perform their
duties for an extended period of time. Our systems could also be
subject to similar disruptions due to physical and electronic
break-ins or other types of unauthorized tampering with our
systems. This may interrupt our business operations and may have
a material adverse effect on our financial condition, results of
operations and cash flows.
Failure
to protect our clients’ confidential information and
privacy could adversely affect our business.
A number of our businesses are subject to privacy regulations
and to confidentiality obligations. For example, the collection
and use of patient data in our Group segment is the subject of
national and state legislation, including the Health Insurance
Portability and Accountability Act of 1996, or HIPAA, and
certain of the activities conducted by our businesses are
subject to the privacy regulations of the Gramm-Leach-Bliley
Act. We also have contractual obligations to protect certain
confidential information we obtain from our existing vendors and
clients. These obligations generally include protecting such
confidential information in the same manner and to the same
extent as we protect our own confidential information.
In addition, we must develop, implement and maintain a
comprehensive written information security program with
appropriate administrative, technical and physical safeguards to
protect such confidential information. If we do not properly
comply with privacy regulations and protect confidential
information, we could experience adverse consequences, including
regulatory sanctions, such as penalties, fines and loss of
license, as well as loss of reputation and possible litigation.
Our
business could be interrupted or compromised if we experience
difficulties arising from outsourcing
relationships.
We outsource certain technology and business functions to third
parties, including a significant portion of our information
technology function, and expect to continue to do so in the
future. If we do not maintain an effective outsourcing strategy
or third-party providers do not perform as contracted, we may
experience operational difficulties, increased costs and a loss
of business that could have a material adverse effect on our
consolidated results of operations.
Our
new credit facility subjects us to restrictive covenants that
impose operating and financial restrictions on our operations
and could limit our ability to grow our business.
We entered into a $200.0 million revolving credit facility
on August 16, 2007. As of that date, we had no balance
outstanding under this facility. In connection with this
facility, we have made covenants that may impose significant
operating and financial restrictions on us. These restrictions
limit the incurrence of additional indebtedness by our
subsidiaries, limit the ability of us and our subsidiaries to
create liens, and impose certain other operating limitations.
These restrictions could limit our ability to obtain future
financing or take advantage of business opportunities.
Furthermore, our credit facility requires us and our insurance
subsidiaries to maintain specified financial ratios. Our ability
to comply with these ratios may be affected by events beyond our
control, including prevailing economic, financial and industry
conditions. If we are unable to comply with the covenants and
ratios in our new credit facility, we may be deemed in default
under the facility, or we may be required to pay substantial
fees or penalties to the lenders to obtain a waiver of any such
default. Either development could have a material adverse effect
on our business.
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We may
need additional capital in the future, which may not be
available to us on favorable terms. Raising additional capital
could dilute your ownership in the company and may cause the
market price of our common shares to fall.
We may need to raise additional funds through public or private
debt or equity financings in order to:
| • | fund liquidity needs; |
| • | refinance our senior notes; |
| • | satisfy letter of credit or guarantee bond requirements that may be imposed by our clients or by regulators; |
| • | acquire new businesses or invest in existing businesses; |
| • | expand our business into new regions; or |
| • | otherwise respond to competitive pressures. |
Any additional capital raised through the sale of equity will
dilute your ownership percentage in our company and may decrease
the market price of our common shares. Furthermore, the
securities may have rights, preferences and privileges that are
senior or otherwise superior to those of our common shares. Any
additional financing we may need may not be available on terms
favorable to us.
To be eligible for borrowing under our $200.0 million
revolving credit facility, we must not be in default of any
payment obligations, covenants or other requirements set forth
in the facility, and the representations and warranties that we
make under the facility must continue to be true in all material
respects. Accordingly, it is possible that we may not meet these
requirements in the future and may not be eligible to borrow
under our credit facility.
In addition, we entered into a covenant in connection with our
recent $150.0 million CENts offering that may limit our
ability to undertake certain additional types of financing to
repay or redeem the CENts.
Our
recent offering of CENts, the proceeds of which we are using to
pay a special cash dividend to stockholders, may affect our
ability to obtain future financing on favorable
terms.
On October 10, 2007, we issued $150.0 million
aggregate principal amount of CENts. We are using the proceeds
from the CENts to pay a special cash dividend to our
stockholders on October 19, 2007. That offering may prevent us
from obtaining future financing on favorable terms, such as
favorable interest rates. The increased cost of obtaining
additional financing may adversely affect our ability to fund
future working capital and other general corporate requirements,
make strategic acquisitions or carry out other aspects of our
business plan. Furthermore, our increased debt due to our
offering of CENts may adversely impact our cash flows or reduce
our liquidity. In addition, in connection with that offering, we
entered into a covenant that may limit our ability to undertake
certain additional types of financing to repay or redeem the
CENts.
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Risks
Related to Our Industry
Our
industry is highly regulated and changes in regulations
affecting our businesses may reduce our profitability and limit
our growth.
Our insurance businesses are heavily regulated and are subject
to a wide variety of laws and regulations in various
jurisdictions. State insurance laws regulate most aspects of our
insurance businesses and our insurance subsidiaries are
regulated by the insurance departments of the various states in
which they are domiciled and licensed.
State laws in the United States grant insurance regulatory
authorities broad administrative powers with respect to various
aspects of our insurance businesses, including:
| • | licensing companies and agents to transact business; | |
| • | calculating the value of assets to determine compliance with statutory requirements; | |
| • | mandating certain insurance benefits; | |
| • | regulating certain premium rates; | |
| • | reviewing and approving policy forms; | |
| • | regulating unfair trade and claims practices, including the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements; | |
| • | establishing statutory capital and reserve requirements and solvency standards; | |
| • | fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts; | |
| • | requiring regular market conduct examinations; | |
| • | approving changes in control of insurance companies; | |
| • | restricting the payment of dividends and other transactions between affiliates; and | |
| • | regulating the types, amounts and valuation of investments. |
State insurance regulators and the National Association of
Insurance Commissioners, or NAIC, regularly re-examine existing
laws and regulations applicable to insurance companies and their
products. Changes in these laws and regulations or in
interpretations thereof, are often made for the benefit of the
consumer at the expense of the insurer and thus could have an
adverse effect on our business.
Currently, the U.S. federal government does not regulate
directly the business of insurance. However, federal legislation
and administrative policies in several areas can significantly
and adversely affect insurance companies. These areas include
financial services regulation, securities regulation, pension
regulation, privacy, tort reform legislation and taxation. In
addition, various forms of direct federal regulation of
insurance have been proposed. These proposals include the
“National Insurance Act,” which would allow insurance
companies to choose to be regulated by a federal regulator
rather than by multiple state regulators and “The State
Modernization and Regulatory Transparency Act,” which would
maintain state-based regulation of insurance but would affect
state regulation of certain aspects of the business of insurance
including rates, agent and company licensing, and market conduct
examinations. We cannot predict whether these or other proposals
will be adopted, or what impact, if any, such proposals or, if
enacted, such laws may have on our financial condition, results
of operations and cash flows.
Many of our customers and independent sales intermediaries also
operate in regulated environments. Changes in the regulations
that affect their operations also may affect our business
relationships with them and their ability to purchase or to
distribute our products.
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Compliance with applicable laws and regulations is time
consuming and personnel-intensive, and changes in these laws and
regulations may materially increase our direct and indirect
compliance efforts and other expenses of doing business.
U.S. federal and state securities laws apply to investment
products that are also securities, including variable annuities
and variable life insurance policies. As a result, some of our
subsidiaries and the policies and contracts they offer are
subject to regulation under these federal and state securities
laws. Our insurance subsidiaries’ separate accounts are
registered as investment companies under the Investment Company
Act of 1940. Some subsidiaries are registered as broker-dealers
under the Securities Exchange Act of 1934, as amended, or
Exchange Act, and are members of, and subject to, regulation by
the National Association of Securities Dealers, Inc. In
addition, one of our subsidiaries also is registered as an
investment adviser under the Investment Advisers Act of 1940.
Securities laws and regulations are primarily intended to ensure
the integrity of the financial markets and to protect investors
in the securities markets or investment advisory or brokerage
clients. These laws and regulations generally grant supervisory
agencies broad administrative powers, including the power to
limit or restrict the conduct of business for failure to comply
with those laws and regulations.
Legal
and regulatory investigations and actions are increasingly
common in the insurance business and may result in financial
losses and harm our reputation.
We face a significant risk of litigation and regulatory
investigations and actions in the ordinary course of operating
our businesses, including the risk of class action lawsuits. Our
pending legal and regulatory actions include proceedings
specific to us and others generally applicable to business
practices in the industries in which we operate. In our
insurance operations, we are or may become subject to class
actions, individual suits and regulatory proceedings relating,
among other things, to sales or underwriting practices, payment
of contingent or other sales commissions, claims payments and
procedures, payment of interest on claims, product design,
disclosure, administration, additional premium charges for
premiums paid on a periodic basis, denial or delay of benefits
and breaches of fiduciary or other duties to customers.
Plaintiffs in class action and other lawsuits against us may
seek very large or indeterminate amounts, including punitive and
treble damages, which may remain unknown for substantial periods
of time.
For example, the mutual fund and insurance industry has been the
focus of increased scrutiny and class action lawsuits related to
“revenue sharing” practices by mutual funds with
service providers and others in offering mutual fund investments
in qualified retirement plans. The lawsuits allege that service
providers were involved in self-dealing and prohibited
transactions under the Employee Retirement Income Security Act,
or ERISA. The outcome of these lawsuits is unknown. We have not
been the subject of any inquiries or lawsuits regarding these
practices.
We are also subject to various regulatory inquiries, such as
information requests, subpoenas, market conduct exams and books
and record examinations, from state and federal regulators and
other authorities which may result in fines, recommendations for
corrective action or other regulatory actions.
Current or future investigations and proceedings could have an
adverse effect on our business. A substantial legal liability or
a significant regulatory action against us could have an adverse
effect on our business. Moreover, even if we ultimately prevail
in the litigation, regulatory action or investigation, we could
suffer significant reputational harm, which could have an
adverse effect on our business. Increased regulatory scrutiny
and any resulting investigations or proceedings could result in
new legal actions or precedents and industry-wide regulations or
practices that could adversely affect our business.
Proposals
for national health care reform could have a material adverse
effect on the profitability or marketability of the health
insurance products and services we sell.
In our Group segment, we sell group medical stop-loss insurance
and limited benefit employee health plans to employer groups.
Reform of the health care system is a topic of discussion at
both the state and federal levels in the United States and by
Presidential candidates from both major political parties.
Proposals for change vary widely and range from reform of the
existing employer-based system of insurance to a single-
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payer, public program. Several groups are urging consideration
by Congress of a national health care plan. If any of these
initiatives ultimately becomes effective, it could have a
material effect on the profitability or marketability of the
health insurance products and services we sell and on our
financial condition, results of operations and cash flows.
Medical advances, such as genetic research and diagnostic imaging, and related legislation could adversely affect the financial performance of our life insurance and annuities businesses.
Genetic research includes procedures focused on identifying key
genes that render an individual predisposed to specific diseases
such as particular types of cancer and other diseases. Other
medical advances, such as diagnostic imaging technologies, may
be used to detect the early onset of diseases such as cancer and
cardiovascular disease. We believe that if individuals learn
through medical advances that they are predisposed to particular
conditions that may reduce life longevity or require long-term
care, they will be more likely to purchase our life insurance
policies or not to permit existing polices to lapse. In
contrast, if individuals learn that they lack the genetic
predisposition to develop the conditions that reduce longevity,
they will be less likely to purchase our life insurance products
but more likely to purchase certain annuity products. In
addition, such individuals that are existing policyholders will
be more likely to permit their policies to lapse.
If we were to gain access to the same genetic or medical
information as our prospective policyholders and
contractholders, then we would be able to take this information
into account in pricing our life insurance policies and annuity
contracts. However, there are a number of regulatory proposals
that would make genetic and other medical information
confidential and unavailable to insurance companies. Legislation
that would prohibit group health plans, health insurers and
employers from making enrollment decisions or adjusting premiums
on the basis of genetic testing information has been introduced
in Congress as well as in certain state legislatures. If these
regulatory proposals were enacted, prospective policyholders and
contractholders would only disclose this information if they
chose to do so voluntarily. These factors could lead us to
reduce sales of products affected by these regulatory proposals
and could result in a deterioration of the risk profile of our
portfolio, which could lead to payments to our policyholders and
contractholders that are higher than currently anticipated.
Medical advances also could lead to new forms of preventive
care. Preventive care could extend the life and improve the
overall health of individuals. If this were to occur, the
duration of payments under certain of our annuity products
likely would increase, thereby reducing net earnings in that
business.
Changes
in tax laws could make some of our products less attractive to
consumers and as a result have an adverse effect on our
business.
Changes in tax laws could make some of our products less
attractive to consumers. For example, the Treasury Department
and the Internal Revenue Service, or IRS, recently issued new
final regulations relating to Section 403(b) plans that
will impact the 403(b) marketplace, including tax sheltered
annuities. While the impact of the new regulations is uncertain,
it is likely that employers offering Section 403(b) plans
will be required to change how their plans operate. Those
changes may include re-evaluation of their plan investment
offerings, including annuities currently offered by us in those
plans.
Furthermore, the federal estate tax, which has undergone a
gradual repeal since 2001 that will continue to be phased in
through 2010, is scheduled to revert to pre-2001 law as of
January 1, 2011. The repeal of and continuing uncertainty
regarding the federal estate tax may adversely affect sales and
surrenders of some of our estate planning products. In addition,
from time to time, legislation is proposed to eliminate the tax
deferred nature of certain non-qualified annuities.
Any such legislation or changes to existing legislation could
have a material adverse effect on our financial condition and
results of operations. We cannot predict whether any such
legislation or changes will be enacted, what the specific terms
will be or how, if at all, they would have an adverse effect on
our business.
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Failures
elsewhere in the insurance industry could obligate us to pay
assessments through guaranty associations.
When an insurance company becomes insolvent, guaranty
associations in each of the 50 states levy assessments upon
all companies licensed to write insurance in the relevant lines
of business in that state, and use the proceeds to pay claims of
policyholder residents of that state, up to the state-specific
limit of coverage. The total amount of the assessment is based
on the number of insured residents in each state, and each
company’s assessment is based on its proportionate share of
premium volume in the relevant lines of business and could have
an adverse effect on our results of operations. The failure of a
large life, health or annuity insurer could trigger guaranty
association assessments we would be obligated to pay.
Risks
Relating to this Offering and Ownership of Our Common
Stock
As a
holding company, Symetra Financial Corporation depends on the
ability of its subsidiaries to transfer funds to it to meet its
obligations and pay dividends.
Symetra Financial Corporation is a holding company for its
insurance and financial subsidiaries with no significant
operations of its own. Its principal sources of cash to meet its
obligations and to pay dividends consist of dividends from its
subsidiaries and permitted payments under tax sharing agreements
with its subsidiaries. State insurance regulatory authorities
limit the payment of dividends by insurance subsidiaries. Based
on our statutory results as of December 31, 2006, our
insurance subsidiaries may pay dividends of up to
$166.4 million to us through the end of fiscal 2007 without
obtaining regulatory approval, of which our insurance
subsidiaries have paid $66.4 million in dividends through
September 30, 2007, and are eligible to pay up to an
additional $100.0 million in dividends without obtaining
regulatory approval through the remainder of 2007. In addition,
competitive pressures generally require our insurance
subsidiaries to maintain financial strength ratings, which are
partly based on maintaining certain levels of capital. These
restrictions and other regulatory requirements, such as minimum
required risk-based capital ratios, affect the ability of our
insurance subsidiaries to make dividend payments. Limits on the
ability of the insurance subsidiaries to pay dividends could
adversely affect our liquidity, including our ability to pay
dividends to stockholders and service our debt.
There are a number of other factors that could affect our
ability to pay dividends, including the following:
| • | lack of availability of cash to pay dividends due to changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs; | |
| • | unexpected or increased operating or other expenses or changes in the timing thereof; | |
| • | restrictions under Delaware law or other applicable law on the amount of dividends that we may pay; | |
| • | a decision by our board of directors to modify or revoke its policy to pay dividends; and | |
| • | the other risks described under “Risk Factors.” |
The failure to maintain or pay dividends could adversely affect
the trading price of our shares.
There
may not be an active, liquid trading market for our common
stock.
Prior to this offering, there has been no public market for our
common stock. We cannot predict the extent to which an active
trading market with adequate liquidity will develop. If an
active trading market does not develop, you may have difficulty
selling any of our common stock that you purchase and the value
of your shares may be impaired.
If
securities or industry analysts do not publish research or
reports about our business, if they change their recommendations
regarding our stock adversely or if our operating results do not
meet their expectations, our stock price could
decline.
The trading market for our common stock will be influenced by
the research and reports that industry or securities analysts
publish about us, our business or our industry. If one or more
of these analysts cease
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coverage of our company or fail to publish reports on us
regularly, we could lose visibility in the financial markets,
which in turn could cause our stock price or trading volume to
decline. Moreover, if one or more of the analysts who cover our
company downgrade our stock or if our operating results do not
meet their expectations, our stock price could decline.
As a
public company, we will become subject to additional financial
and other reporting and corporate governance
requirements.
We have historically operated our business as a private company.
After this offering, we will become obligated to file with the
Securities and Exchange Commission, or SEC, annual and quarterly
information and other reports that are specified in
Section 13 of the Exchange Act. We will also be required to
ensure that we have the ability to prepare financial statements
that are fully compliant with all SEC reporting requirements on
a timely basis. We will also become subject to other reporting
and corporate governance requirements, including the
requirements of the NYSE and certain provisions of the
Sarbanes-Oxley Act of 2002 and the regulations promulgated
thereunder, which will impose significant compliance obligations
upon us. As a public company, we will be required to:
| • | prepare and distribute periodic public reports and other stockholder communications in compliance with our obligations under the federal securities laws and NYSE rules; | |
| • | create or expand the roles and duties of our board of directors and committees of the board; | |
| • | institute more comprehensive financial reporting and disclosure compliance functions; | |
| • | involve and retain to a greater degree outside counsel and accountants in the activities listed above; | |
| • | enhance our investor relations function; | |
| • | establish new internal policies, including those relating to disclosure controls and procedures; and | |
| • | comply with the Sarbanes-Oxley Act of 2002, in particular Section 404. |
These changes will require a significant commitment of
additional expense and other resources. We may not be successful
in implementing these requirements and implementing them could
adversely affect our business or operating results. In addition,
if we fail to implement the requirements with respect to our
internal accounting and audit functions, our ability to report
our operating results on a timely and accurate basis could be
impaired.
Significant
stockholders may be able to influence the direction of our
business.
Upon completion of this offering, our principal stockholders,
affiliates of White Mountains Insurance Group, Ltd. and
Berkshire Hathaway Inc., will continue to own
approximately % of our outstanding
shares of common stock. If they chose to act together on matters
that are brought to stockholders for their vote, they would
continue to have the collective ability to significantly
influence all matters requiring stockholder approval, including
the nomination and election of directors and the determination
of the outcome of any corporate transaction or other matter
submitted to our stockholders for approval, including amendments
to our certificate of incorporation, potential mergers or
acquisitions, asset sales and other significant corporate
transactions. The interests of our principal stockholders may
not coincide with the interests of the other holders of our
common stock.
Our
internal control over financial reporting does not currently
meet the standards required by Section 404 of the
Sarbanes-Oxley Act of 2002, and failure to achieve and maintain
effective internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act could
have a material adverse effect on our business and stock
price.
As a privately-held company, we have not been required to
maintain internal control over financial reporting in a manner
that meets the standards of publicly-traded companies required
by Section 404 of the Sarbanes-Oxley Act, standards that we
will be required to meet in the course of preparing our
financial
24
Table of Contents
statements as of and for the year ended December 31, 2008.
We do not currently have comprehensive documentation of our
internal controls, nor do we document or test our compliance
with these controls on a periodic basis in accordance with
Section 404 of the Sarbanes-Oxley Act. Furthermore, we have
not tested our internal controls in accordance with
Section 404 and, due to our lack of documentation, such a
test would not be possible to perform at this time.
If, as a public company, we are not able to implement the
requirements of Section 404 in a timely manner or with
adequate compliance, our independent registered public
accounting firm may not be able to attest to the adequacy of our
internal control over financial reporting. If we are unable to
maintain adequate internal control over financial reporting, we
may be unable to report our financial information on a timely
basis, may suffer adverse regulatory consequences or violations
of applicable stock exchange listing rules and may breach the
covenants under our revolving credit facilities and our senior
notes. There could also be a negative reaction in the financial
markets due to a loss of investor confidence in us and the
reliability of our financial statements. Confidence in our
financial statements is also likely to suffer if our independent
registered public accounting firm reports a material weakness in
our internal control over financial reporting.
In addition, we will incur incremental costs in order to improve
our internal control over financial reporting and comply with
Section 404, including increased auditing and legal fees
and costs associated with hiring additional accounting and
administrative staff.
Our
stock price may fluctuate significantly, and you may not be able
to resell your shares at or above the initial public offering
price.
The trading price of our common stock may be volatile and
subject to wide price fluctuations in response to various
factors, including:
| • | market conditions in the broader stock market in general; | |
| • | actual or anticipated fluctuations in our quarterly financial and operating results; | |
| • | changes in interest rates; | |
| • | introduction of new services or announcements of significant contracts, acquisitions or capital commitments by us or our competitors; | |
| • | regulatory or political developments; | |
| • | issuance of new or changed securities analysts’ reports or recommendations, or the announcement of any changes to our credit rating; | |
| • | additions or departures of key personnel; | |
| • | availability of capital; | |
| • | litigation and government investigations; | |
| • | legislative and regulatory developments; | |
| • | future sales of our common stock; | |
| • | investor perceptions of us and the life insurance industry; and | |
| • | economic conditions. |
These and other factors may cause the market price of our common
stock to fluctuate substantially, which may limit or prevent
investors from readily selling their shares of common stock and
may otherwise negatively affect the liquidity of our common
stock. Even factors that do not specifically relate to our
company may materially reduce the market price of our common
stock, regardless of our operating performance.
25
Table of Contents
Future
sales, or the perception of future sales, of a substantial
amount of our common stock may depress the price of our common
shares.
Future sales, or the perception of future sales, of a
substantial number of shares of our common stock in the public
market after this offering could have a material adverse effect
on the prevailing market price of our common stock.
Upon completion of this offering, we will have
10,649,000 shares of common stock outstanding, or
12,830,120 shares if we give effect to the exercise of all
outstanding warrants. All shares sold in this offering will be
freely tradable without restriction under the Securities Act,
except for any shares that may be held or acquired by affiliates
of the company, as that term is defined in the Securities Act.
In connection with this offering, we, each of our executive
officers and directors and the selling stockholders will have
entered into
lock-up
agreements that prevent the sale of shares of our common stock
for up to 180 days after the date of this prospectus,
subject to an extension in certain circumstances described under
“Underwriting.” Following the expiration of the
lock-up period, the
remaining
shares outstanding held by current stockholders of the company
will be available for sale pursuant to Rule 144, subject to
compliance with the volume, manner of sale and other limitations
under Rule 144 in the case of shares held by affiliates.
Furthermore, certain stockholders will have the right, subject
to certain conditions, to require us to register the sale
of
of their shares of our common stock under the Securities Act. By
exercising their registration rights, and selling a large number
of shares, our stockholders could cause the prevailing market
price of our common stock to decline.
Anti-takeover
provisions in our charter documents could delay or prevent a
change of control of our company and may result in an
entrenchment of management and diminish the value of our common
stock.
Upon completion of this offering, our certificate of
incorporation and bylaws will contain provisions that could
depress the trading price of our common stock by acting to
discourage, delay or prevent a change of control of our company
or changes in management that our stockholders might deem
advantageous. Specific provisions in our certificate of
incorporation will include:
| • | our ability to issue preferred stock with terms that the board of directors may determine, without stockholder approval; | |
| • | a classified board of directors; | |
| • | advance notice requirements for stockholder proposals and nominations; | |
| • | the absence of cumulative voting in the election of directors; and | |
| • | limitations on convening stockholder meetings. |
These provisions in our certificate of incorporation and bylaws
may frustrate attempts to effect a takeover transaction that is
in the best interests of our minority stockholders. Even in the
absence of a takeover attempt, the existence of these provisions
may adversely affect the prevailing market price of our common
stock if they are viewed as discouraging future takeover
attempts.
Applicable
insurance laws may make it difficult to effect a change of
control of our company.
Before a person can acquire control of a U.S. insurance
company, prior written approval must be obtained from the
insurance commissioner of the state where the insurer is
domiciled. Generally, state statutes provide that control over a
domestic insurer is presumed to exist if any person, directly or
indirectly, owns, controls, holds with the power to vote, or
holds proxies representing, 10% or more of the voting securities
of the domestic insurer. These statutes may frustrate or delay
attempts to effect a takeover transaction that would benefit our
stockholders.
26
Table of Contents
This prospectus contains “forward-looking” statements
that are intended to enhance the reader’s ability to assess
our future financial and business performance. Forward-looking
statements include, but are not limited to, statements that
represent our beliefs concerning future operations, strategies,
financial results or other developments, and contain words and
phrases such as “may,” “expects,”
“should,” “believes,”
“anticipates,” “estimates,”
“intends” or similar expressions. In addition,
statements that refer to our future financial performance,
anticipated growth and trends in our business and in our
industry and other characterizations of future events or
circumstances are forward-looking statements. Because these
forward-looking statements are based on estimates and
assumptions that are subject to significant business, economic
and competitive uncertainties, many of which are beyond our
control or are subject to change, actual results could be
materially different. The following uncertainties, among others,
may have such an impact:
| • | changes in economic conditions, including changes in interest rates and the performance of financial markets, which may: |
| • | increase defaults on and impairments of our bond portfolio; | |
| • | reduce sales of our variable and investment management products and the fees we receive on assets under management; and | |
| • | increase the level of our guaranteed minimum death benefit and reserves. |
| • | a change in our ratings by nationally recognized ratings organizations; | |
| • | changes in laws, regulations and taxes; | |
| • | competitive pressures on product pricing and services, including competition by other insurance companies and financial services companies; | |
| • | terrorist attacks and military and other actions; | |
| • | changes in lapse rates, morbidity, mortality or unemployment rates which differ significantly from our pricing expectations, including as a result of extremely rare, severe and widespread events, such as a possible global avian flu pandemic; and | |
| • | the relative success and timing of our business strategies. |
Consequently, such forward-looking statements should be regarded
solely as our current plans, estimates and beliefs with respect
to, among other things, future events and financial performance.
Except as required under the federal securities laws, we do not
intend, and do not undertake, any obligation to update any
forward-looking statements to reflect future events or
circumstances after the date of such statements.
You should review carefully the section captioned “Risk
Factors” in this prospectus for a more complete discussion
of the risks of an investment in our common stock.
This prospectus includes industry and government data and
forecasts that we have prepared based, in part, upon industry
and government data and forecasts obtained from industry and
government publications and surveys. These sources include
publications and data compiled by the Employee Benefit Research
Institute, Kaiser Family Foundation, U.S. Census Bureau,
U.S. Department of Health & Human Services
Centers for Disease Control, Spectrem Group and Variable Annuity
Research and Data Service. Third-party industry publications,
surveys and forecasts generally state that the information
contained therein has been obtained from sources believed to be
reliable, but there can be no assurance as to the accuracy or
completeness of included information. We have not independently
verified any of the data from third-party sources nor have we
ascertained the underlying economic assumptions relied upon
therein. Forecasts are particularly likely to be inaccurate,
especially over long periods of time. While we are not aware of
any misstatements regarding the industry data presented herein,
our estimates involve risks and uncertainties and are subject to
change based on various factors, including those discussed under
the heading “Risk Factors.”
27
Table of Contents
All of the shares of common stock offered by this prospectus are
being sold by the selling stockholders. For information about
the selling stockholders, see “Principal and Selling
Stockholders.” We will not receive any of the proceeds from
the shares of common stock sold by the selling stockholders.
We intend to pay quarterly cash dividends on our common stock at
an initial rate of approximately $
per share. The declaration, payment and amount of future
dividends to holders of our common stock will be at the
discretion of our board of directors and will depend on many
factors, including our financial condition and results of
operations, liquidity requirements, market opportunities,
capital requirements of our subsidiaries, legal requirements,
regulatory constraints and other factors as the board of
directors deems relevant. Dividends on our common shares will
also be paid to holders of our outstanding warrants.
On October 19, 2007, we will pay two dividends to our
stockholders totaling $200.0 million in the aggregate, of
which approximately $146.8 million will be funded with the
proceeds from our offering of CENts in October 2007.
We are a holding company with no significant business operations
of our own. All of our business operations are conducted through
our subsidiaries. Dividends and loans from, and cash generated
by, our subsidiaries will be our principal sources of cash to
repay indebtedness, fund operations and pay dividends.
Accordingly, our ability to pay dividends to our stockholders
will depend on the earnings and distributions of funds from our
subsidiaries. See “Risk Factors — As a holding
company, Symetra Financial Corporation depends on the ability of
its subsidiaries to transfer funds to it to meet its obligations
and pay dividends.”
28
Table of Contents
The following table sets forth our cash and cash equivalents and
capitalization as of June 30, 2007 on an actual basis and
on an as adjusted basis after giving effect to:
| • | the offering of $150.0 million aggregate principal amount of CENts in October 2007; and |
| • | the payment of two dividends to our stockholders totaling $200.0 million in the aggregate on October 19, 2007, of which approximately $146.8 million is being funded from the offering of the CENts. |
You should read this table in conjunction with our consolidated
financial statements and related notes and the information
provided under the captions “Selected Historical
Consolidated Financial Data” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” included elsewhere in this prospectus.
|
As of |
||||||||
|
June 30, |
As of |
|||||||
|
2007 |
June 30, 2007 |
|||||||
| (In Millions) | Actual | As Adjusted | ||||||
|
Cash and cash equivalents
|
$ | 362.4 | $ | 309.2 | ||||
|
Borrowings and other obligations:
|
||||||||
|
Revolving credit facilities(1)
|
$ | — | $ | — | ||||
|
Senior notes
|
298.8 | 298.8 | ||||||
|
CENts
|
— | 149.8 | (2) | |||||
|
Total borrowings and other obligations
|
298.8 | 448.6 | ||||||
|
Stockholders’ equity:
|
||||||||
|
Common stock, $0.01 par value; 15.0 million shares
authorized, 10.6 million shares issued and outstanding
|
0.1 | 0.1 | ||||||
|
Additional paid-in capital
|
1,166.3 | 1,166.3 | ||||||
|
Total paid-in capital
|
1,166.4 | 1,166.4 | ||||||
|
Retained earnings
|
260.1 | 60.1 | ||||||
|
Accumulated other comprehensive income (loss), net of taxes
|
(178.9 | ) | (178.9 | ) | ||||
|
Total stockholders’ equity
|
1,247.6 | 1,047.6 | ||||||
|
Total capitalization
|
$ | 1,546.4 | $ | 1,496.2 | ||||
| (1) | The revolving credit facilities collectively provide for borrowings of up to $120 million. As of September 30, 2007, we had no balance outstanding under our revolving credit facilities. On August 16, 2007, we entered into a new $200.0 million revolving credit facility. This facility replaced the $70 million revolving credit facility that was in place as of June 30, 2007, and, together with our two existing $25.0 million credit facilities, results in us having credit facilities for an aggregate of $250.0 million. |
| (2) | The CENts were issued at a price of $149.8 million with an initial aggregate principal amount of $150.0 million. |
29
Table of Contents
The selected historical consolidated financial data, except for
non-GAAP financial measures, as of June 30, 2007 and for
the six months ended June 30, 2007 and 2006 have been
derived from our unaudited interim historical consolidated
financial statements, which have been prepared on a basis
consistent with our annual consolidated financial statements,
included in this prospectus. In the opinion of management, such
unaudited financial data, except for non-GAAP financial
measures, reflects all historical and recurring adjustments
necessary for a fair presentation of the results for these
periods. The results of operations for the six months ended
June 30, 2007 are not necessarily indicative of the results
to be expected for the full year or any future period. The
selected historical consolidated financial data, except for
non-GAAP
financial measures, as of December 31, 2006 and 2005 and
for the years ended December 31, 2006 and 2005, and for the
period from August 2, 2004 through December 31, 2004,
and the period from January 1, 2004 through August 1,
2004 have been derived from our audited consolidated financial
statements that are included elsewhere in this prospectus. The
selected historical consolidated financial data, except for
non-GAAP financial measures, presented below as of
December 31, 2004 and as of and for the year ended
December 31, 2003 have been derived from our audited
consolidated financial statements that are not included in this
prospectus. The unaudited selected historical consolidated
financial data, except for non-GAAP financial measures, as of
and for the year ended December 31, 2002 were derived from
unaudited carve-outs of the acquired businesses from our
predecessor’s audited consolidated financial statements,
which are not included in this prospectus.
We do not believe the predecessor financial results for the
years ended December 31, 2003 and 2002 and for the period
from January 1, 2004 through August 1, 2004 are
comparable to the results of our new independent company. This
lack of comparability is primarily due to significant changes in
our operating costs and also because of purchase accounting
adjustments impacting net investment income, policyholder
benefits and claims, interest amortization of deferred
acquisition costs, intangible assets and net realized investment
gains (losses). Additionally, due to the short period from our
inception as an independent company to the end of 2004, as well
as the effect of transitional expense charges associated with
the Acquisition, we do not consider our financial results for
the period from August 2, 2004 through December 31,
2004 to be comparable to those for the years ended
December 31, 2006 and 2005. This summary data should be
read in conjunction with other information contained in this
prospectus, including “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
and our historical consolidated financial statements and related
notes included elsewhere in this prospectus.
| Predecessor | ||||||||||||||||||||||||||||||||
| Period from | ||||||||||||||||||||||||||||||||
|
August 2 |
January 1 |
|||||||||||||||||||||||||||||||
|
Year Ended |
through |
through |
Year Ended |
|||||||||||||||||||||||||||||
| Six Months Ended June 30, | December 31, |
December 31, |
August 1, |
December 31, | ||||||||||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||||||||||||||||||
|
Consolidated Income Statement Data:
|
||||||||||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||||||||||
|
Premiums
|
$ | 265.0 | $ | 269.2 | $ | 525.7 | $ | 575.5 | $ | 263.2 | $ | 357.9 | $ | 680.5 | $ | 599.6 | ||||||||||||||||
|
Net investment income
|
490.9 | 490.5 | 984.9 | 994.0 | 411.1 | 693.7 | 1,210.6 | 1,205.3 | ||||||||||||||||||||||||
|
Other revenues
|
32.7 | 29.7 | 56.1 | 58.6 | 27.1 | 43.9 | 63.9 | 62.1 | ||||||||||||||||||||||||
|
Net realized investment gains (losses)
|
24.5 | (0.5 | ) | 1.7 | 14.1 | 7.0 | 34.9 | (9.6 | ) | (152.3 | ) | |||||||||||||||||||||
|
Total revenues
|
813.1 | 788.9 | 1,568.4 | 1,642.2 | 708.4 | 1,130.4 | 1,945.4 | 1,714.7 | ||||||||||||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||||||||||||||
|
Policyholder benefits and claims
|
136.1 | 147.6 | 264.3 | 327.4 | 127.5 | 223.6 | 381.9 | 341.7 | ||||||||||||||||||||||||
|
Interest credited
|
374.1 | 382.2 | 765.9 | 810.9 | 360.2 | 556.4 | 990.8 | 968.7 | ||||||||||||||||||||||||
30
Table of Contents
| Predecessor | ||||||||||||||||||||||||||||||||
| Period from | ||||||||||||||||||||||||||||||||
|
August 2 |
January 1 |
|||||||||||||||||||||||||||||||
|
Year Ended |
through |
through |
Year Ended |
|||||||||||||||||||||||||||||
| Six Months Ended June 30, | December 31, |
December 31, |
August 1, |
December 31, | ||||||||||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||||||||||||||||||
|
Other underwriting and operating expenses
|
141.2 | 129.8 | 260.5 | 273.2 | 123.3 | 182.3 | 324.9 | 267.5 | ||||||||||||||||||||||||
|
Fair value of warrants issued to investors
|
— | — | — | — | 101.5 | — | — | — | ||||||||||||||||||||||||
|
Interest expense
|
9.3 | 9.8 | 19.1 | 12.4 | 3.5 | — | — | — | ||||||||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
9.4 | 7.6 | 14.6 | 11.9 | 1.6 | 34.2 | 51.3 | 40.8 | ||||||||||||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | — | 4.9 | 8.3 | 8.8 | ||||||||||||||||||||||||
|
Total benefits and expenses
|
670.1 | 677.0 | 1,324.4 | 1,435.8 | 717.6 | 1,001.4 | 1,757.2 | 1,627.5 | ||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes
|
143.0 | 111.9 | 244.0 | 206.4 | (9.2 | ) | 129.0 | 188.2 | 87.2 | |||||||||||||||||||||||
|
Provisions for income taxes:
|
||||||||||||||||||||||||||||||||
|
Current
|
49.0 | 59.4 | 92.4 | 22.2 | 21.3 | 0.9 | 42.1 | 58.8 | ||||||||||||||||||||||||
|
Deferred
|
(2.2 | ) | (20.2 | ) | (7.9 | ) | 39.7 | 10.7 | 30.5 | 9.1 | (30.3 | ) | ||||||||||||||||||||
|
Total provision for income taxes
|
46.8 | 39.2 | 84.5 | 61.9 | 32.0 | 31.4 | 51.2 | 28.5 | ||||||||||||||||||||||||
|
Income (loss) from continuing operations
|
96.2 | 72.7 | 159.5 | 144.5 | (41.2 | ) | 97.6 | 137.0 | 58.7 | |||||||||||||||||||||||
|
Income (loss) from discontinued operations (net of taxes)
|
— | — | — | 1.0 | (2.4 | ) | 2.3 | 1.7 | 1.5 | |||||||||||||||||||||||
|
Net income (loss)
|
$ | 96.2 | $ | 72.7 | $ | 159.5 | $ | 145.5 | $ | (43.6 | ) | $ | 99.9 | $ | 138.7 | $ | 60.2 | |||||||||||||||
|
Net income per common share:(1)
|
||||||||||||||||||||||||||||||||
|
Basic
|
$ | 7.50 | $ | 5.66 | $ | 12.43 | $ | 11.34 | ||||||||||||||||||||||||
|
Diluted
|
$ | 7.50 | $ | 5.66 | $ | 12.43 | $ | 11.34 | ||||||||||||||||||||||||
|
Weighted average common shares outstanding:
|
||||||||||||||||||||||||||||||||
|
Basic
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||||||||||||||
|
Diluted
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||||||||||||||
31
Table of Contents
| Predecessor | ||||||||||||||||||||||||||||||||
| Period from | ||||||||||||||||||||||||||||||||
|
August 2 |
January 1 |
|||||||||||||||||||||||||||||||
|
Year Ended |
through |
through |
Year Ended |
|||||||||||||||||||||||||||||
| Six Months Ended June 30, | December 31, |
December 31, |
August 1, |
December 31, | ||||||||||||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | 2004 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||||||||||||||||||
|
Non-GAAP Financial Measures(2):
|
||||||||||||||||||||||||||||||||
|
Net operating income (loss)
|
$ | 87.3 | $ | 78.5 | $ | 172.1 | $ | 141.9 | $ | (46.0 | ) | $ | 75.5 | |||||||||||||||||||
|
Reconciliation to Net Income (Loss):
|
||||||||||||||||||||||||||||||||
|
Net income (loss)
|
$ | 96.2 | $ | 72.7 | $ | 159.5 | $ | 145.5 | $ | (43.6 | ) | $ | 99.9 | |||||||||||||||||||
|
Less: Net realized investment gains (losses) (net of taxes)
|
15.9 | (0.3 | ) | 1.1 | 9.2 | 4.6 | 22.7 | |||||||||||||||||||||||||
|
Add:
|
||||||||||||||||||||||||||||||||
|
Net realized and unrealized investment gains (losses) on FIA
options (net of taxes)
|
0.7 | (0.7 | ) | 1.4 | (2.9 | ) | 1.3 | (1.7 | ) | |||||||||||||||||||||||
|
Net realized and unrealized investment gains on equity
securities (net of taxes)
|
6.3 | 6.2 | 12.3 | 8.5 | 0.9 | — | ||||||||||||||||||||||||||
|
Net operating income (loss)
|
$ | 87.3 | $ | 78.5 | $ | 172.1 | $ | 141.9 | $ | (46.0 | ) | $ | 75.5 | |||||||||||||||||||
|
As of June 30, |
As of December 31, | |||||||||||||||||||||||
| 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||
|
Consolidated Balance Sheet Data:
|
||||||||||||||||||||||||
|
Total investments
|
$ | 16,695.0 | $ | 17,305.3 | $ | 18,332.8 | $ | 19,244.8 | $ | 19,197.6 | $ | 17,913.1 | ||||||||||||
|
Total assets
|
19,845.8 | 20,114.6 | 20,980.1 | 22,182.0 | 22,512.0 | 21,393.6 | ||||||||||||||||||
|
Total debt
|
298.8 | 298.7 | 300.0 | 300.0 | — | — | ||||||||||||||||||
|
Separate account assets
|
1,268.5 | 1,233.9 | 1,188.8 | 1,228.4 | 1,137.4 | 899.2 | ||||||||||||||||||
|
Accumulated other comprehensive income (loss) (AOCI) (net of
taxes)
|
(178.9 | ) | (0.5 | ) | 136.6 | 312.9 | ||||||||||||||||||
|
Total stockholders’ equity
|
1,247.6 | 1,327.3 | 1,404.9 | 1,435.8 | 2,566.7 | 2,244.7 | ||||||||||||||||||
|
Book value per common share:
|
||||||||||||||||||||||||
|
Basic(3)
|
$ | 133.96 | $ | 124.69 | $ | 119.10 | $ | 105.45 | ||||||||||||||||
|
Diluted(4)
|
$ | 128.18 | $ | 120.49 | $ | 115.85 | $ | 104.52 | ||||||||||||||||
|
U.S. Statutory Financial Information:
|
||||||||||||||||||||||||
|
Statutory capital and surplus
|
$ | 1,304.6 | $ | 1,266.2 | $ | 1,260.1 | $ | 1,138.4 | $ | 1,059.6 | $ | 903.4 | ||||||||||||
|
Asset valuation reserve (AVR)
|
177.4 | 158.4 | 140.9 | 107.6 | 71.5 | 39.5 | ||||||||||||||||||
|
Statutory capital and surplus and AVR
|
$ | 1,482.0 | $ | 1,424.6 | $ | 1,401.0 | $ | 1,246.0 | $ | 1,131.1 | $ | 942.9 | ||||||||||||
| (1) | Net income per common share (basic and diluted) assumes that all participating securities, including warrants, have been outstanding since the beginning of the period, using the two-class method. |
32
Table of Contents
| (2) | Management considers certain non-GAAP financial measures, including net operating income (loss), to be a useful supplement to comparable GAAP measures in evaluating our financial performance and condition. These unaudited measures have been reconciled to their most comparable GAAP financial measures. We believe that the non-GAAP presentation of net operating income is valuable because excluding certain realized capital gains and losses, many of which are driven by investment decisions and external economic developments unrelated to the insurance and underwriting aspects of the business reveals trends that may be otherwise obscured. For a definition of these non-GAAP measures and other metrics used in our analysis, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of non-GAAP Financial Measures.” |
| (3) | Basic book value per common share is calculated based on total stockholders’ equity less AOCI divided by common shares outstanding of 10,649,000. |
| (4) | Diluted book value per common share is calculated based on total stockholders’ equity less AOCI plus the proceeds from the assumed exercise of outstanding warrants, divided by common shares and shares subject to outstanding warrants of 12,830,120 in the aggregate. |
33
Table of Contents
You should read the following discussion in conjunction with
the audited and unaudited historical financial statements and
the accompanying notes included in this prospectus, as well as
the discussion under “Selected Historical Consolidated
Financial Data.” This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual
results may differ materially from those discussed in or implied
by any of the forward-looking statements as a result of various
factors, including but not limited to those listed under
“Risk Factors” and “Forward-Looking
Statements.” Our fiscal year ends on December 31 of each
calendar year.
Management considers certain non-GAAP financial measures,
including net operating income (loss) and segment pre-tax
operating income, to be useful to investors in evaluating our
financial performance and condition. These measures have been
reconciled to their most comparable GAAP financial measures. For
a definition of these non-GAAP measures and other metrics used
in our analysis, see “— Use of non-GAAP Financial
Measures.”
Overview
We are a life insurance company focused on profitable growth in
select group health, retirement, life insurance and employee
benefits markets. Our first day of operations as an independent
company was August 2, 2004 when Symetra acquired a group of
life insurance and investment companies from Safeco Corporation
(the “Acquisition”). Our operations date back to 1957,
and many of our agency and distribution relationships have been
in place for decades. We are headquartered in Bellevue,
Washington and employ over 1,300 people in 25 offices
across the United States, serving over two million customers. As
of June 30, 2007, we had total stockholders’ equity of
$1.2 billion, regulatory capital of $1.5 billion and
total assets of $19.8 billion. Our operating return on
average equity, or operating ROAE, was 13.2%, 13.0%, and 11.9%,
for the twelve month periods ended June 30, 2007,
December 31, 2006 and December 31, 2005, respectively.
We define operating ROAE as net operating income, a non-GAAP
financial measure, divided by average stockholders’ equity
excluding accumulated other comprehensive income. For a
reconciliation of net operating income to net income, please see
page 43.
Our
Operations
We conduct our business through five segments, four of which are
operating:
| • | Group. We offer medical stop-loss insurance, limited medical benefit plans, group life insurance, accidental death and dismemberment insurance and disability insurance mainly to employer groups of 50 to 1,000 individuals. As a result of our recent acquisition of Medical Risk Managers, Inc., we also offer MGU services. | |
| • | Retirement Services. We offer fixed and variable deferred annuities, including tax sheltered annuities, IRAs, and group annuities to qualified retirement plans, including Section 401(k) and 457 plans. We also provide record keeping services for qualified retirement plans invested in mutual funds. | |
| • | Income Annuities. We offer SPIAs for customers seeking a reliable source of retirement income and structured settlement annuities to fund third-party personal injury settlements. | |
| • | Individual. We offer a wide array of term, universal and variable life insurance as well as BOLI. | |
| • | Other. This segment consists of unallocated corporate income, composed primarily of investment income on unallocated surplus, unallocated corporate expenses, interest expense on debt, the results of small, non-insurance businesses that are managed outside of our operating segments and inter-segment elimination entries. |
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Table of Contents
Revenues
and Expenses
We earn revenues and generate cash primarily from premiums
earned on group life and health and individual insurance
products, cost of insurance, or COI, charges primarily from our
universal life and BOLI products, net investment income, net
realized investment gains and other revenues. Other revenues
include mortality and expense, surrender, and other
administrative charges, revenues from our non-insurance
businesses and revenues from fee arrangements with our
reinsurance partners.
Each operating segment maintains its own portfolio of invested
assets. The realized gains (losses) incurred are reported in the
segment in which they occur. The unallocated portion of net
investment income is reported in the Other segment.
Our primary expenses include interest credited, benefits and
claims and general business and operating expenses, including
commissions. We allocate corporate expenses to each of our
operating segments using multiple factors which include
headcount, allocated capital, account values and time study
results.
Critical
Accounting Policies and Estimates and Recently Issued Accounting
Standards
The accounting policies discussed in this section are those that
we consider to be particularly critical to an understanding of
our financial statements because their application places the
most significant demands on our ability to judge the effect of
inherently uncertain matters on our financial results. For all
of these policies, we caution that future events rarely develop
exactly as forecast, and our management’s best estimates
may require adjustment. For a discussion of recently adopted and
not yet adopted accounting standards, see note 2,
“Summary of Significant Accounting Policies,” from the
notes to our consolidated financial statements included in this
prospectus.
Other-Than-Temporary
Impairments
We analyze investments that meet our impairment criteria to
determine whether the decline in value is other-than-temporary.
The impairment review involves the finance investment management
team, as well as the portfolio asset manager. To make this
determination for each security, we consider both quantitative
and qualitative criteria including:
| • | how long and by how much the fair value has been below cost or amortized cost; | |
| • | the financial condition and near-term prospects of the issuer of the security, including any specific events that may affect its operations or earnings potential, or compliance with terms and covenants of the security; | |
| • | our intent and ability to keep the security long enough for it to recover its value; | |
| • | any downgrades of the security by a rating agency; and | |
| • | any reduction or elimination of dividends or nonpayment of scheduled interest payments. |
Based on the analysis, we make a judgment as to whether the loss
is other-than-temporary. If the loss is other-than-temporary, we
record an impairment charge within net realized investment gains
(losses) in our consolidated statements of operations in the
period that we make the determination. Our impairment policy may
result in an other-than-temporary impairment charge recorded for
a security that has no credit default or credit issues if we do
not have the intent or ability to hold an impaired security long
enough to recover its value. This situation can exist as a
result of certain portfolio management or cash management
strategies. Accordingly, we categorize impairments as either
credit related or other. If we determine that we are not likely
to receive interest or principal amounts based upon the
expectations of the security or due in accordance with the
contractual terms of the security, the impairment is
characterized as credit related. We may also characterize an
impairment as credit related if substantially all of the
decrease in security value is related to issuer credit spreads
widening. The other-than-temporary impairments categorized as
other are primarily related to securities that have declined in
value and for which we are uncertain of our intent and ability
to retain the investment for a period of time to allow recovery
to book value.
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Deferred
Policy Acquisition Costs
We defer as assets certain costs, generally commissions,
distribution costs and other underwriting costs, that vary with,
and are primarily related to, the production of new and renewal
business. We limit our deferral to acquisition expenses
contained in our product pricing assumptions.
The following table summarizes our DAC balances by segment:
|
As of |
As of |
As of |
||||||||||
|
June 30, |
December 31, |
December 31, |
||||||||||
| 2007 | 2006 | 2005 | ||||||||||
| (Unaudited) | ||||||||||||
| (Dollars In Millions) | ||||||||||||
|
Group
|
3.3 | 4.0 | 5.3 | |||||||||
|
Retirement Services
|
66.6 | 54.5 | 25.5 | |||||||||
|
Income Annuities
|
8.7 | 6.8 | 4.3 | |||||||||
|
Individual
|
28.5 | 22.9 | 13.9 | |||||||||
|
Total
|
107.1 | 88.2 | 49.0 | |||||||||
In our Group segment, the DAC amortization period for group
medical stop-loss policies is one year as these policies are
re-priced on an annual basis.
In our Retirement Services, Income Annuities and Individual
segments, we amortize acquisition costs over the premium paying
period or over the lives of the policies in proportion to the
future estimated gross profits, or EGPs, of each of these
product lines, as follows:
| • | Retirement Services. The DAC amortization period is typically 20 years for the deferred annuities, although most of the DAC amortization occurs within the first 10 years because the EGPs are highest during that period. It is common for deferred annuity policies to lapse after the surrender charge period expires. | |
| • | Income Annuities. The DAC amortization period for SPIAs, including structured settlement annuities, is the benefit payment period, which ranges from 5 to 100 years. | |
| • | Individual. The DAC amortization period related to universal life and variable life policies is typically 25 years and 20 years, respectively. DAC amortization related to our term life insurance policies is the premium paying period, which ranges from 10 to 30 years. |
To determine the EGPs, we make assumptions as to lapse and
withdrawal rates, expenses, interest margins, mortality
experience, long term equity market return and investment
performance.
Changes to assumptions can have a significant impact on DAC
amortization. In the event actual experience differs from our
assumptions or our future assumptions are revised, we adjust our
EGPs, which could result in a significant increase in
amortization expense. The following would generally cause an
increase in DAC amortization expense: increases to lapse and
withdrawal rates in the current period, increases to expected
future lapse and withdrawal rates, increases to future expected
expense levels, increases to interest margins in the current
period, decreases to expected future interest margins and
decreases to current or expected equity market returns. EGPs are
adjusted quarterly to reflect actual experience to date or to
change underlying key assumptions based on experience studies.
We regularly conduct DAC recoverability analyses. We compare the
current DAC balance with the estimated present value of future
profitability of the underlying business. The DAC balances are
considered recoverable if the present value of future profits is
greater than the current DAC balance.
In connection with our recoverability analyses, we perform
sensitivity analyses on our two most significant DAC balances,
which currently consist of our Retirement Services deferred
annuity product and our Individual universal life product DAC
balances, to capture the effect that certain key assumptions
have on DAC balances. The sensitivity tests are performed
independently, without consideration for any correlation among
the key assumptions.
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The following depicts the sensitivities for our deferred annuity
and universal life DAC balances: If we changed our future lapse
and withdrawal rate assumptions by a factor of 10%, the effect
on the DAC balance is less than $0.5 million. If we changed
our future expense assumptions by a factor of 10%, the effect on
the DAC balance is less than $0.1 million.
The DAC balance on the date of our acquisition, August 2,
2004 was reset to zero in accordance with purchase accounting.
See “— Our Historical Financial Information and
Purchase Accounting.” Because of this, since the
Acquisition, quarterly updates to our DAC models to reflect
actual experience have led to immaterial changes in the DAC
asset and amortization, and the magnitude of the sensitivities
is currently relatively small. We expect the DAC balance to grow
as we continue to write new business, and as this occurs, we
would expect the sensitivities to grow accordingly. In addition,
depending on the amount and the type of new business written in
the future we may determine that other of our assumptions may
produce significant variations in our financial results.
Funds
Held Under Deposit Contracts
Liabilities for fixed deferred annuity contracts, guaranteed
investment contracts, and universal life policies, including
BOLI, are computed as deposits net of withdrawals made by the
policyholder, plus amounts credited based on contract
specifications, less contract fees and charges assessed, plus
any additional interest. The unamortized purchase accounting
reserve is also included in this balance. See “— Our
Historical Financial Information and Purchase Accounting.”
For SPIAs, including structured settlements, liabilities are
based on discounted amounts of estimated future benefits.
Contingent future benefits are discounted with best-estimate
mortality assumptions, which include provisions for longer life
spans over time. The interest rate pattern used to calculate the
reserves for SPIAs is set at issue for policies issued
subsequent to the Acquisition or based upon prevailing market
interest rates on August 2, 2004 for policies in existence
on the Acquisition date. The interest rates within the pattern
vary over time and start with interest rates that prevailed at
contract issue or on the Acquisition date. As of June 30,
2007, the weighted average implied interest rate on the existing
book of business is currently at 5.9% and will grade to an
ultimate assumed level of 6.7% in approximately 20 years.
Future
Policy Benefits
We compute liabilities for future policy benefits under
traditional individual life and group life insurance policies on
the level premium method, which uses a level premium assumption
to fund reserves. We select the level of premiums at issuance so
that the actuarial present value of future benefits equals the
actuarial present value of future premiums. We set the interest,
mortality and persistency assumptions in the year of issue and
include provisions for adverse deviations. These liabilities are
contingent upon the death of the insured while the policy is in
force. We derive mortality assumptions from both
company-specific and industry statistics. We discount future
benefits at interest rates that vary by year of policy issue,
are graded to the statutory valuation interest rate over time,
and range from 4.0% to 6.0%. Assumptions are made at the time
each policy is issued, and do not change over time unless the
liability amount is determined to be inadequate to cover future
policy benefits. The provisions for adverse deviations are
intended to provide coverage for the risk that actual experience
may be worse than locked-in best-estimate assumptions.
We periodically compare our actual experience with our estimates
of actuarial liabilities for future policy benefits. To the
extent that actual policy benefits differ from the reserves
established for future policy benefits, such differences are
recorded in the results of operations in the period in which the
variances occur, which could result in a decrease in profits, or
possibly losses. No revisions to assumptions within the Future
Policy Benefits liabilities have been necessary and therefore we
have not experienced any impact in our financial results due to
changes in assumptions.
Policy
and Contract Claims
Liabilities for policy and contract claims primarily represent
liabilities for claims under group medical coverages and are
established on the basis of reported losses. We also provide for
claims incurred but not
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Table of Contents
reported, or IBNR, based on expected loss ratios, claims paying
completion patterns and historical experience. We continually
review estimates for reported but unpaid claims and IBNR. Any
necessary adjustments are reflected in current operating
results. If expected loss ratios increase or expected claims
paying completion patterns extend, the IBNR amount increases.
Use of
non-GAAP Financial Measures
Certain tables in this prospectus include non-GAAP financial
measures. We believe these measures to provide useful
information to investors in evaluating our financial performance
and condition. In the following paragraphs, we provide a
definition of these non-GAAP measures.
Net
operating income
Net operating income (loss) consists of net income (loss), less
after-tax net realized investment gains (losses), plus after-tax
net realized and unrealized investment gains (losses) on
equity-related securities held in our Income Annuities segment
and on our FIA hedges.
We believe that net operating income provides greater
transparency than GAAP net income regarding the underlying
performance of our insurance operations. As an example, we could
produce a high level of net income in a given period, despite
poor operating performance, if in that period we generate
significant net realized gains from our investment portfolio.
Realized gains (losses) on our investment portfolio (except for
the realized gains (losses) on our Income Annuities’
equity-related securities and on our FIA hedges, as discussed
below) are primarily driven by investment decisions and external
economic developments, the nature and timing of which are
unrelated to the operating aspects of our business. By
disclosing net operating income in addition to net income, we
aim to provide investors with a view into the performance of our
operations that might otherwise be masked by unrelated factors.
We believe that it is useful for investors to evaluate both net
income and net operating income.
Net operating income includes equity-related realized and
unrealized investment gains (losses) in our Income Annuities
business and realized and unrealized investment gains (losses)
on our FIA hedges in our Retirement Services business. We
include these items because they specifically reflect our
management of certain of our insurance liabilities. For
instance, each year we use the realized gains from our FIA
hedges to fund the interest credited on our FIA product.
Additionally, over the long-term we expect to produce investment
returns in support of our long duration liabilities within
Income Annuities by investing in equities. Since the investment
performance from our FIA hedge program and equity investment
program is reported in realized and unrealized gains (losses),
we include these in our net operating income measure. See
“Segment pre-tax operating income” on this page for
further information regarding realized gains (losses) related to
our Income Annuities and Retirement Services segments.
Our management and board of directors use net operating income
to evaluate our operations, including assessing the
effectiveness of operating and strategic decisions, management
of insurance liabilities and financial planning. For instance,
we use net operating income to help determine the renewal
interest rates to credit to policyholders in Retirement
Services. Because net operating income excludes the net realized
investment gains (losses) described above, our management and
board of directors also separately review net realized
investment gains (losses) in connection with their review of our
investment portfolio. Additionally, our management and board of
directors examine our GAAP net income as part of their review of
the overall financial results of the company.
Net income (loss) is the most directly comparable GAAP measure.
Net operating income should not be considered a substitute for
net income. A reconciliation of net operating income to net
income is provided on page 43.
Segment
pre-tax operating income
We use the non-GAAP financial measure segment pre-tax operating
income as an important measure of our operating performance. We
believe that this measure provides investors with a valuable
measure of the
38
Table of Contents
performance of our ongoing businesses because it reveals trends
that may be obscured by the effect of certain realized capital
gains and losses. Some realized capital gains and losses are
primarily driven by investment decisions and external economic
developments for which the nature and timing are unrelated to
the insurance and underwriting aspects of our business.
Accordingly, segment pre-tax operating income excludes the
effect of most realized gains and losses. For segment pre-tax
operating income, segment pre-tax income is the most directly
comparable GAAP measure. Segment pre-tax operating income should
not be considered as a substitute for segment pre-tax income.
When evaluating our Retirement Services segment operating
results, we consider the impact of our hedging program related
to our FIA products. This program consists of buying S&P
500 Index call options. Although we use index options to hedge
the equity return component of our FIA products, the options do
not qualify as hedge instruments or for hedge accounting
treatment. These assets are recorded at fair value as
free-standing derivative assets with the mark-to-market gains or
losses to record the options at fair value recognized in net
realized investment gains (losses). The realized gain or loss on
the options is also recorded in net investment realized gains
(losses). Since the interest incurred on these FIA products is
included as a component of interest credited in our statement of
operations, we believe it is more meaningful to evaluate results
inclusive of the results of the hedge program. Accordingly,
segment pre-tax operating income in our Retirement Services
segment excludes all realized investments gains (losses), except
for realized and unrealized investment gains or (losses) from
our options related to our FIA hedging program.
For our Income Annuities segment, we evaluate the results of
operations including the impact of both realized and unrealized
investment gains (losses) on our equity portfolio because we
believe that equities are an effective investment to fund the
long duration benefit payments in our structured settlements and
SPIA policies. The majority of our investment returns on the
equities in our Income Annuities investment portfolio are
recorded in net realized investment gains (losses) on our
statement of operations and through changes in unrealized gains
(losses) as a component of other comprehensive income. Since the
interest incurred on the long duration benefit payments is
recorded as a component of interest credited, we believe it is
more meaningful to evaluate the results inclusive of our equity
investment program. Accordingly, segment pre-tax operating
income in our Income Annuities segment excludes all realized
investment gains (losses), except for realized and unrealized
investment gains (losses) arising from our equity investment
program held in this segment.
Our
Historical Financial Information and Purchase
Accounting
On August 2, 2004, we completed the Acquisition. The
Acquisition was accounted for using the purchase method under
the Financial Accounting Standards Board’s Statement of
Financial Accounting Standards, or SFAS, No. 141,
Business Combinations. We refer to this purchase method
as purchase GAAP accounting, or PGAAP. Under
SFAS No. 141, the purchase price is allocated to the
estimated fair value of the tangible and identifiable assets
acquired less liabilities assumed at the date of acquisition. In
conjunction with PGAAP for the Acquisition, we were required to
adjust our consolidated balance sheet to fair value. This
resulted in the following:
| • | the book values of our invested assets were increased by $1.0 billion to reset the book value to fair value, based on the prevailing market rates on August 2, 2004. The prevailing market interest rates were relatively low at the time of the Acquisition, which resulted in a significant increase in the book value of our invested assets. We recorded a PGAAP adjustment representing the difference between book value and the fair value of our invested assets. The difference between the updated book value and the par value of our fixed maturities invested assets of $27.0 million is amortized against investment income over the expected life of the invested assets, resulting in a lower earned yield; | |
| • | our funds held under deposit contracts, which our invested assets support, were increased to reflect the lower market interest rates compared to interest rates originally used to determine policy pricing and reserving. As a result, our reserves related to fixed deferred annuities, structured settlements, immediate annuities and BOLI products were increased by $1.2 billion; | |
| • | our deferred policy acquisition costs, goodwill and intangible asset balances at August 2, 2004 were reset to zero. The PGAAP resulted in a $30.0 million intangible asset related to our discontinued |
39
Table of Contents
| operations, which was received in cash in 2004. In our continuing operations, the purchase accounting resulted in minimal intangibles and no goodwill; and |
| • | all other assets and liabilities were recorded at fair value on August 2, 2004. |
The impact of PGAAP on operating performance for periods
subsequent to the Acquisition resulted in a decrease to
investment income and a decrease to policyholder benefits and
interest credited. In our Retirement Services and Individual
segments, a purchase accounting reserve, or PGAAP reserve, was
established related to the fair value adjustment for our
deferred annuities and BOLI policies. This PGAAP reserve is
amortized as a reduction to policyholder benefits according to
the pattern of profitability of the book of business of policies
in force at the date of the Acquisition. This profitability is
determined based on assumptions regarding the present value of
estimated future gross profits related to the policies in force
on August 2, 2004. In this estimation process, we made
assumptions as to lapse rates, mortality rates, maintenance
expenses, COI charges, credited interest rates, and investment
performance. This pattern resulted in higher PGAAP reserve
amortization in the years immediately following the Acquisition.
Actual profits can vary from the estimates and can thereby
result in increases or decreases to the PGAAP reserve
amortization rate.
The PGAAP adjustment associated with our immediate annuity book
of business was recorded in our income annuities reserve model
by updating the mortality assumptions and the interest rate
pattern used for discounting future benefit payments. This
adjustment resulted in a decrease in interest credited in the
years subsequent to the Acquisition.
As a result of the Acquisition and resulting PGAAP adjustments,
the results of operations for periods prior to August 2,
2004 are not comparable to periods subsequent to that date. Our
2004 results discussed below represent the mathematical addition
of the historical results for (i) the predecessor period
from January 1, 2004 through August 1, 2004 and
(ii) the successor period from August 2, 2004 through
December 31, 2004. This approach is not consistent with
U.S. GAAP and yields results that are not comparable on a
period-to-period basis. However, we believe it is a meaningful
way to compare our operating results for 2004 to our operating
results for 2005 because it would not be meaningful to discuss
the partial period from January 1, 2004 through
August 1, 2004 (Predecessor) separately from the period
from August 2, 2004 through December 31, 2004. The
following table provides a summary of the combination of the
audited consolidated statements of operations for the periods
January 1, 2004 through August 1, 2004 and
August 2, 2004 through December 31, 2004 to the
Combined 2004 (non-GAAP), results:
| Predecessor | ||||||||||||
|
Period From |
Period From |
|||||||||||
|
January 1, |
August 2, |
|||||||||||
|
2004 |
2004 |
|||||||||||
|
through |
through |
Combined |
||||||||||
|
August 1, |
December 31, |
2004 |
||||||||||
| 2004 | 2004 | (non-GAAP) | ||||||||||
| (Dollars in millions) | ||||||||||||
|
Revenues:
|
||||||||||||
|
Premiums
|
$ | 357.9 | $ | 263.2 | $ | 621.1 | ||||||
|
Net investment income
|
693.7 | 411.1 | 1,104.8 | |||||||||
|
Other revenues
|
43.9 | 27.1 | 71.0 | |||||||||
|
Net realized investment gains
|
34.9 | 7.0 | 41.9 | |||||||||
|
Total revenues
|
1,130.4 | 708.4 | 1,838.8 | |||||||||
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| Predecessor | ||||||||||||
|
Period From |
Period From |
|||||||||||
|
January 1, |
August 2, |
|||||||||||
|
2004 |
2004 |
|||||||||||
|
through |
through |
Combined |
||||||||||
|
August 1, |
December 31, |
2004 |
||||||||||
| 2004 | 2004 | (non-GAAP) | ||||||||||
| (Dollars in millions) | ||||||||||||
|
Benefits and Expenses:
|
||||||||||||
|
Policyholder benefits and claims
|
223.6 | 127.5 | 351.1 | |||||||||
|
Interest credited
|
556.4 | 360.2 | 916.6 | |||||||||
|
Other underwriting and operating expenses
|
182.3 | 123.3 | 305.6 | |||||||||
|
Fair value of warrants issued to investors
|
— | 101.5 | 101.5 | |||||||||
|
Interest expense
|
— | 3.5 | 3.5 | |||||||||
|
Amortization of deferred policy acquisition costs
|
34.2 | 1.6 | 35.8 | |||||||||
|
Intangible asset amortization
|
4.9 | — | 4.9 | |||||||||
|
Total benefits and expenses
|
1,001.4 | 717.6 | 1,719.0 | |||||||||
|
Income (loss) from continuing operations before income taxes
|
129.0 | (9.2 | ) | 119.8 | ||||||||
|
Provisions for income taxes:
|
||||||||||||
|
Current
|
0.9 | 21.3 | 22.2 | |||||||||
|
Deferred
|
30.5 | 10.7 | 41.2 | |||||||||
|
Total provision for income taxes
|
31.4 | 32.0 | 63.4 | |||||||||
|
Income (loss) from continuing operations
|
97.6 | (41.2 | ) | 56.4 | ||||||||
|
Income (loss) from discontinued operations (net of taxes)
|
2.3 | (2.4 | ) | (0.1 | ) | |||||||
|
Net income (loss)
|
$ | 99.9 | $ | (43.6 | ) | $ | 56.3 | |||||
|
Non-GAAP Financial Measures:
|
||||||||||||
|
Net operating income (loss)
|
$ | 75.5 | $ | (46.0 | ) | $ | 29.5 | |||||
|
Reconciliation to Net Income (Loss):
|
||||||||||||
|
Net income (loss)
|
$ | 99.9 | $ | (43.6 | ) | $ | 56.3 | |||||
|
Less: Net realized investment gains (net of taxes)
|
22.7 | 4.6 | 27.3 | |||||||||
|
Add:
|
||||||||||||
|
Net realized and unrealized investment gains (losses) on FIA
options (net of taxes)
|
(1.7 | ) | 1.3 | (0.4 | ) | |||||||
|
Net realized and unrealized investment gains on equity
securities (net of taxes)
|
— | 0.9 | 0.9 | |||||||||
|
Net operating income (loss)
|
$ | 75.5 | $ | (46.0 | ) | $ | 29.5 | |||||
The consolidated statements of operations for the Combined 2004
(non-GAAP) period include allocations of certain expenses from
Safeco Corporation. Safeco Corporation and its affiliates
provided us with personnel, property and facilities in carrying
out certain of our corporate functions. These expenses included
charges for corporate overhead, data processing systems, payroll
and other miscellaneous charges. The allocations were made using
relative percentages, as compared to Safeco Corporation’s
other businesses, of headcount or time studies or on a
specifically identifiable basis such as actual usage, or other
reasonable methods. Safeco Corporation charged us expenses of
$25.2 million for the seven months ended August 1,
2004. Our comparable expenses as a separate, stand alone company
have been lower than the amounts reflected in the Combined 2004
(non-GAAP) statement of operations.
In addition to our four operating segments and our Other
segment, during the year ended December 31, 2005 and prior,
our historical financial statements also include the results of
Symetra Asset Management Company and the majority of the
business of Symetra Services Corporation which are presented in
our
41
Table of Contents
historical financial statements as discontinued operations. For
more information, see note 15, “Discontinued
Operations,” in the notes to our consolidated financial
statements included in this prospectus. These discontinued
operations are not included in the discussions under
“— Results of Operations” section due to their
immateriality and lack of impact on future operating results.
The historical financial information included in this prospectus
has been derived from our financial statements, which have been
prepared as if Symetra had been in existence throughout all
periods shown. The discussions that appear under “—
Results of Operations” encompass our results of operations
and financial condition for the six months ended June 30,
2007 and 2006 and for the years ended December 31, 2006,
2005 and Combined 2004 (non-GAAP).
Results
of Operations
Total
Company
The following discussion should be read in conjunction with our
audited consolidated financial statements and the related notes
included elsewhere in this report. Set forth below is a summary
of our consolidated financial results for the six months ended
June 30, 2007 and 2006 and for the years ended
December 31, 2006, 2005 and Combined 2004 (non-GAAP):
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions, except per share data) | ||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||
|
Premiums
|
$ | 265.0 | $ | 269.2 | $ | 525.7 | $ | 575.5 | $ | 621.1 | ||||||||||
|
Net investment income
|
490.9 | 490.5 | 984.9 | 994.0 | 1,104.8 | |||||||||||||||
|
Other revenues
|
32.7 | 29.7 | 56.1 | 58.6 | 71.0 | |||||||||||||||
|
Net realized investment gains (losses)
|
24.5 | (0.5 | ) | 1.7 | 14.1 | 41.9 | ||||||||||||||
|
Total revenues
|
813.1 | 788.9 | 1,568.4 | 1,642.2 | 1,838.8 | |||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||
|
Policyholder benefits and claims
|
136.1 | 147.6 | 264.3 | 327.4 | 351.1 | |||||||||||||||
|
Interest credited
|
374.1 | 382.2 | 765.9 | 810.9 | 916.6 | |||||||||||||||
|
Other underwriting and operating expenses
|
141.2 | 129.8 | 260.5 | 273.2 | 305.6 | |||||||||||||||
|
Fair value of warrants issued to investors
|
— | — | — | — | 101.5 | |||||||||||||||
|
Interest expense
|
9.3 | 9.8 | 19.1 | 12.4 | 3.5 | |||||||||||||||
|
Amortization of deferred policy acquisition costs
|
9.4 | 7.6 | 14.6 | 11.9 | 35.8 | |||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | 4.9 | |||||||||||||||
|
Total benefits and expenses
|
670.1 | 677.0 | 1,324.4 | 1,435.8 | 1,719.0 | |||||||||||||||
|
Income from continuing operations before income taxes
|
143.0 | 111.9 | 244.0 | 206.4 | 119.8 | |||||||||||||||
|
Provisions for income taxes
|
||||||||||||||||||||
|
Current
|
49.0 | 59.4 | 92.4 | 22.2 | 22.2 | |||||||||||||||
|
Deferred
|
(2.2 | ) | (20.2 | ) | (7.9 | ) | 39.7 | 41.2 | ||||||||||||
|
Total provision for income taxes
|
46.8 | 39.2 | 84.5 | 61.9 | 63.4 | |||||||||||||||
|
Income from continuing operations
|
96.2 | 72.7 | 159.5 | 144.5 | 56.4 | |||||||||||||||
|
Income (loss) from discontinued operations (net of taxes)
|
— | — | — | 1.0 | (0.1 | ) | ||||||||||||||
|
Net income
|
$ | 96.2 | $ | 72.7 | $ | 159.5 | $ | 145.5 | $ | 56.3 | ||||||||||
|
Net income per common share(1):
|
||||||||||||||||||||
|
Basic
|
$ | 7.50 | $ | 5.66 | $ | 12.43 | $ | 11.34 | ||||||||||||
|
Diluted
|
$ | 7.50 | $ | 5.66 | $ | 12.43 | $ | 11.34 | ||||||||||||
42
Table of Contents
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions, except per share data) | ||||||||||||||||||||
|
Weighted average common shares outstanding:
|
||||||||||||||||||||
|
Basic
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||
|
Diluted
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||
|
Net operating income
|
$ | 87.3 | $ | 78.5 | $ | 172.1 | $ | 141.9 | $ | 29.5 | ||||||||||
|
Reconciliation to Net Income:
|
||||||||||||||||||||
|
Net income
|
$ | 96.2 | $ | 72.7 | $ | 159.5 | $ | 145.5 | $ | 56.3 | ||||||||||
|
Less: Net realized investment gains (losses) (net of taxes)
|
15.9 | (0.3 | ) | 1.1 | 9.2 | 27.3 | ||||||||||||||
|
Add:
|
||||||||||||||||||||
|
Net realized and unrealized investment gains (losses) on FIA
options (net of taxes)
|
0.7 | (0.7 | ) | 1.4 | (2.9 | ) | (0.4 | ) | ||||||||||||
|
Net realized and unrealized investment gains on equity
securities (net of taxes)
|
6.3 | 6.2 | 12.3 | 8.5 | 0.9 | |||||||||||||||
|
Net operating income
|
$ | 87.3 | $ | 78.5 | $ | 172.1 | $ | 141.9 | $ | 29.5 | ||||||||||
| (1) | Net income per common share (basic and diluted) assumes that all participating securities including warrants have been outstanding since the beginning of the period, using the two-class method. |
Six
Months Ended June 30, 2007 Compared to Six Months Ended
June 30, 2006
Summary of results. Net income increased
$23.5 million, or 32.3%, to $96.2 million from
$72.7 million. Net operating income increased
$8.8 million, or 11.2%, to $87.3 million from
$78.5 million. This increase was driven by a decrease in
the loss ratio in our Group segment, primarily the medical
stop-loss ratio which decreased to 55.8% from 69.8% as a result
of lower paid claims. We also experienced an increase in the
interest spread on reserves in our Income Annuities segment.
This increase was offset by lower profitability in our
Retirement Services segment due to a decrease in account value
as withdrawals exceeded new deposits and decreased interest
spread driven by a decrease in PGAAP reserve amortization, as
more fully described in “— Policyholder benefits
and claims.”
Premiums. Premiums consist primarily of
revenues from our group life and health and individual life
insurance products, and COI charges on our universal life
insurance and BOLI polices. Premiums decreased
$4.2 million, or 1.6%, to $265.0 million from
$269.2 million. Premiums decreased primarily due to lower
premiums in our Group segment of $4.5 million.
Net investment income. Net investment income
represents the income earned on our investments. Net investment
income increased $0.4 million, or 0.1%, to
$490.9 million from $490.5 million. Of this increase,
$18.7 million was a result of a positive rate variance due
to improved yields which increased to 5.62% from 5.41%. The
increase in yield was primarily due to the reinvestment of funds
in higher yielding securities, an increase in the yield on
short-term investments, the receipt of prepayment consent fees
and a reduction in investment advisory fee expense. This
increase was offset by an $18.3 million decrease which was
due to a decrease in average invested assets to
$17.5 billion from $18.1 billion, primarily in our
Retirement Services segment.
Net realized investment gains (losses). Net
investment gains (losses) consist of realized gains and losses
from the sale or impairment of our investments and unrealized
and realized gains from our derivatives instruments, which
provide an economic hedge on our FIA book of business. Net
realized investment gains increased $25.0 million, to
$24.5 million from $(0.5) million. For the six months
ended June 30, 2007, gross
43
Table of Contents
realized gains were $44.4 million and gross realized losses
were $19.9 million, including impairments of
$4.9 million. For the six months ended June 30, 2006,
gross realized gains were $28.5 million and gross realized
losses were $29.0 million, including impairments of
$13.7 million. The increase in gross realized gains was
driven by gains related to a significant tender offer of certain
fixed maturities in our investment portfolio.
Policyholder benefits and claims. Policyholder
benefits and claims consist of benefits paid and reserve
activity on group life and health and individual life products.
In addition, we record, as a reduction of this expense, PGAAP
reserve amortization related to our fixed deferred annuities and
BOLI policies. The PGAAP reserve is amortized as a reduction to
policyholder benefits according to our expected pattern of
profitability of the book of business of policies in force on
the Acquisition date. This pattern resulted in higher PGAAP
reserve amortization in the years immediately following the
Acquisition. Policyholder benefits and claims decreased
$11.5 million, or 7.8%, to $136.1 million from
$147.6 million. This decrease was primarily due to a
$28.1 million reduction in our group medical stop-loss paid
claims offset by a $7.0 million reduction in PGAAP reserve
amortization, a $4.4 million increase in our Individual
Segment’s paid claims and a $3.0 million increase in
reserves in our Individual segment.
Interest credited. Interest credited
represents interest credited to policyholder reserves and
contractholder general account balances. Interest credited
decreased $8.1 million, or 2.1%, to $374.1 million
from $382.2 million. Of this decrease, $7.1 million
was the result of a decrease in fixed account values in our
Retirement Services segment.
Other underwriting and operating
expenses. Other underwriting and operating
expenses represent non-deferrable costs related to the
acquisition and ongoing maintenance of insurance and investment
contracts, including commissions, policy issuance expenses and
other general operating costs. Other underwriting and operating
expenses increased $11.4 million, or 8.8%, to
$141.2 million from $129.8 million. This increase was
primarily due to a $6.0 million increase in employee
payroll and related benefit expenses and a $1.1 million increase
in incentive compensation. We also incurred $0.9 million of
expenses related to our initial public offering of common stock.
Provision for income taxes. The provision for
income taxes increased $7.6 million, to $46.8 million
from $39.2 million, primarily due to the increase in
pre-tax income from continuing operations. The effective tax
rate decreased 2.3% to 32.7% from 35.0% due primarily to an
increase in the tax sheltered affordable housing credits and a
decrease in the adjustment for unrecognized tax benefits, offset
by the effect of the increase in pre-tax income from continuing
operations.
Year
Ended December 31, 2006 Compared to Year Ended
December 31, 2005
Summary of results. Net income increased by
$14.0 million, or 9.6%, to $159.5 million from
$145.5 million. Net operating income increased by
$30.2 million, or 21.3%, to $172.1 million from
$141.9 million, which was primarily due to a decrease in
the loss ratio in our Group segment from 67.5% to 59.6%
resulting from better underwriting experience. Our results also
benefited from an increase in interest spreads on reserves in
our Income Annuities segment and, in our Individual segment,
improved mortality and an increase in our return on assets on
our BOLI policies. This was offset by a decrease in segment
pre-tax operating income in Retirement Services.
Premiums. Premiums decreased
$49.8 million, or 8.7%, to $525.7 million from
$575.5 million. Premiums in our Group segment decreased
$51.0 million, primarily due to higher lapses in our
medical stop-loss business and the termination of an assumed
reinsurance relationship in 2004.
Net investment income. Net investment income
decreased $9.1 million, or 0.9%, to $984.9 million
from $994.0 million. Of this decrease, $36.1 million
was the result of a decrease in the average invested assets to
$18.0 billion from $18.7 billion, primarily in our
Retirement Services segment. This decrease was partially offset
by a positive rate variance of $27.0 million due to
improved yields which increased to 5.48% from 5.33%. The
increase in yield was primarily the result of portfolio
rebalancing.
44
Table of Contents
Net realized investment gains. Net realized
investment gains decreased $12.4 million, or 87.9%, to
$1.7 million from $14.1 million. For 2006, gross
realized gains were $55.1 million and gross realized losses
were $53.4 million, including impairments of
$25.7 million. For 2005, gross realized gains were
$75.5 million and gross realized losses were
$61.3 million, including impairments of $7.7 million.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $63.1 million, or 19.3%, to
$264.3 million from $327.4 million. This decrease was
primarily driven by a $65.2 million decrease in our Group
segment’s medical stop-loss paid claims and a
$7.1 million decrease in our Individual segment’s
claims and benefits, offset by a $9.2 million increase in
our Retirement Services segment related to differences in the
amount of PGAAP reserve amortization.
Interest credited. Interest credited decreased
$45.0 million, or 5.5%, to $765.9 million from
$810.9 million. The decrease was primarily due to a
$25.3 million decrease in interest credited in our
Retirement Services segment related to a decrease in fixed
account values and a $20.7 million decrease in interest
credited in our Income Annuities segment due to a decrease in
reserves as benefit payments exceeded new deposits, mortality
gains and funding services activities.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $12.7 million, or 4.6%, to
$260.5 million from $273.2 million. This was primarily
due to a $6.7 million decrease in operating expenses and a
$7.0 million increase in DAC deferral. The decrease in
operating expenses included $2.4 million related to
information technology transition and $3.2 million related
to distribution expense incurred in 2005.
Interest expense. Interest expense increased
$6.7 million, or 54.0%, to $19.1 million from
$12.4 million, due to an increase in our average interest
rate of 6.0% in 2006 from the average interest rate of 4.1% in
2005. See “— Liquidity and Capital
Resources” for further information.
Amortization of deferred policy acquisition
costs. Amortization of DAC increased
$2.7 million, or 22.7%, to $14.6 million from
$11.9 million. This was related to an increase in the
underlying DAC asset, which increased $39.2 million, or
80%, to $88.2 million from $49.0 million. In
connection with the Acquisition, our DAC asset was reset to zero
on August 2, 2004 and has subsequently been growing as a
result of sales. Our amortization expense is expected to
increase as the underlying DAC asset increases.
Provision for income taxes. The provision for
income taxes increased $22.6 million, to $84.5 million
from $61.9 million, which reflects an increase of the
effective tax rate to 34.6% from 30.0%. In 2005, the effective
tax rate of 30.0% reflects a non-recurring tax benefit for the
release of a valuation allowance related to the utilization of
capital loss carryforwards. In addition, the effective tax rate
in 2006 of 34.6% reflects an increase due to a
true-up of
the permanent tax benefits related to the 2005 federal tax
return as filed.
Year
Ended December 31, 2005 compared to Year Ended
December 31, 2004 (Combined Non-GAAP)
Summary of results. Net income increased by
$89.2 million to $145.5 million from
$56.3 million. Net operating income increased by
$112.4 million to $141.9 million from
$29.5 million. This was primarily related to the
$101.5 million charge in 2004 to record the fair value of
warrants issued to investors. Net operating income in 2005,
benefiting from lower other underwriting and operating expenses
as a result of not incurring corporate overhead expenses from
Safeco and not incurring Acquisition related expenses. In
addition, amortization of deferred policy acquisition costs
decreased due to the Acquisition when DAC was reset to zero.
These positive factors were partially offset by an increase in
the loss ratio in our Group segment from 64.0% to 67.5%.
Premiums. Premiums decreased
$45.6 million, or 7.3%, to $575.5 million from
$621.1 million primarily due to decreased premiums in our
Group segment which decreased $62.3 million as a result of
higher lapses in our medical stop-loss business and the
termination of an assumed reinsurance relationship in 2004. This
was offset by an increase in our Individual segment premiums of
$16.8 million due to a $14.1 million adjustment
related to ceded term reinsurance.
45
Table of Contents
Net investment income. Net investment income
decreased $110.8 million, or 10.0%, to $994.0 million
from $1,104.8 million. This was related to the Acquisition
purchase accounting which resulted in an overall reduction in
investment yields for periods subsequent to the Acquisition.
Other revenues. Other revenues decreased
$12.4 million, or 17.5% to $58.6 million from
$71.0 million. This was primarily due to a
$4.0 million decrease in our Retirement Services segment
fees related to our variable annuities. In addition, in 2004 our
Individual segment recorded a $5.9 million favorable
adjustment related to ceded term reinsurance expense allowances,
which increased 2004 other revenue.
Net realized investment gains. Net realized
investment gains decreased $27.8 million, or 66.3%, to
$14.1 million from $41.9 million. For 2005, gross
realized gains were $75.5 million and gross realized losses
were $61.3 million, including impairments of
$7.7 million. For 2004, gross realized gains were
$110.7 million and gross realized losses were
$68.8 million, including impairments of $10.4 million.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $23.7 million, or 6.8%, to
$327.4 million from $351.1 million. This decrease was
primarily due to a $24.5 million decrease in our Group
segment’s reserves, which corresponds with a related
decrease in premium and a $10.0 million decrease, which
relates to having a full year in the Retirement Services
segment’s PGAAP reserve amortization. This was offset by a
$10.8 million increase in our Individual segment related to
an increase in claims and an adjustment in reserves for a bonus
interest feature on one of our UL products.
Interest credited. Interest credited decreased
$105.7 million, or 11.5%, to $810.9 million from
$916.6 million. This decrease was due to a
$53.1 million decrease in interest credited in our
Retirement Services segment related to a decrease in fixed
account values, a $46.4 million decrease in interest
credited in our Income Annuities segment related to PGAAP and a
$6.2 million decrease in interest credited in our
Individual segment related to BOLI claims experience, which
impacts the credited interest rate.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $32.4 million, or 10.6%, to
$273.2 million from $305.6 million. This was primarily
due to a $17.8 million decrease in our Group segment’s
commission and premium tax expense, corresponding to our lower
sales. The 2005 other underwriting and operating expenses
reflected are not comparable to 2004 during which Safeco
Corporation allocated us costs for the first seven months of
2004 and charged us for transition services for the remaining
five months of 2004.
Fair value of warrants issued to investors. In
connection with the Acquisition, on August 2, 2004, we
issued warrant certificates to the two lead investors. The
warrant holders have the option to purchase
2,181,120 shares of common stock at an exercise price of
$100 per share. We recorded the $101.5 million estimated
fair value of the warrants as a 2004 expense.
Interest expense. Interest expense increased
$8.9 million, to $12.4 million from $3.5 million.
This increase in interest expense was related to the
Acquisition. Prior to August 2, 2004, we had no debt
obligations. On August 2, 2004, we borrowed
$300.0 million against a revolving credit facility to
purchase the life and investment companies. The increase in
interest expense reflects twelve months of interest expense in
2005 compared to five months in 2004.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs decreased $23.9 million, or 66.8%, to
$11.9 million from $35.8 million. The deferred policy
acquisition costs asset was reset to zero on August 2, 2004
in connection with the Acquisition resulting in lower DAC
amortization in the subsequent periods. The 2004 expense
includes $1.6 million of expense for the five-month period
subsequent to the Acquisition.
Intangible asset amortization. Intangible
asset amortization decreased $4.9 million, or 100%, to zero
from $4.9 million as a result of intangible assets being
reset to zero on the acquisition date.
Provision for income taxes. The provision for
income taxes decreased $1.5 million, to $61.9 million
from $63.4 million which reflects an effective tax rate
decrease to 30.0% from 52.9%. The 2005 effective rate of 30.0%
reflects a non-recurring tax benefit of the release of a tax
valuation allowance related to the utilization of capital loss
carryforward. The 2004 effective tax rate of 52.9% was
significantly in excess of the
46
Table of Contents
statutory rate of 35.0% due to the GAAP expense associated with
the issuance of the warrant certificates, of which the majority
is not deductible for tax purposes. This increase in the 2004
effective rate was offset by the completion of an IRS audit
cycle for tax years 1998 through 2001 and the related favorable
adjustment of $8.7 million.
Group
The following table sets forth the results of operations
relating to our Group segment:
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months |
Combined |
|||||||||||||||||||
| Ended June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||
|
Premiums
|
$ | 195.0 | $ | 199.5 | $ | 387.3 | $ | 438.3 | $ | 500.6 | ||||||||||
|
Net investment income
|
8.8 | 9.0 | 18.0 | 19.3 | 22.4 | |||||||||||||||
|
Other revenues
|
6.3 | 5.5 | 10.2 | 11.8 | 14.0 | |||||||||||||||
|
Net realized investment gains (losses)
|
(0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | 0.1 | |||||||||||
|
Total revenues
|
210.0 | 213.9 | 415.4 | 469.3 | 537.1 | |||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||
|
Policyholder benefits and claims
|
107.7 | 132.2 | 230.8 | 296.0 | 320.5 | |||||||||||||||
|
Other underwriting and operating expenses
|
55.1 | 53.4 | 105.7 | 115.3 | 133.1 | |||||||||||||||
|
Amortization of deferred policy acquisition costs
|
4.5 | 5.7 | 10.9 | 10.5 | 11.9 | |||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | 0.8 | |||||||||||||||
|
Total benefits and expenses
|
167.3 | 191.3 | 347.4 | 421.8 | 466.3 | |||||||||||||||
|
Segment pre-tax income
|
$ | 42.7 | $ | 22.6 | $ | 68.0 | $ | 47.5 | $ | 70.8 | ||||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||
|
Segment pre-tax operating income
|
$ | 42.8 | $ | 22.7 | $ | 68.1 | $ | 47.6 | $ | 70.7 | ||||||||||
|
Reconciliation to segment pre-tax income:
|
||||||||||||||||||||
|
Segment pre-tax income
|
$ | 42.7 | $ | 22.6 | $ | 68.0 | $ | 47.5 | $ | 70.8 | ||||||||||
|
Less: Net realized investment gains (losses)
|
(0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | 0.1 | |||||||||||
|
Add:
|
||||||||||||||||||||
|
Net realized and unrealized investment gains on FIA options
|
— | — | — | — | — | |||||||||||||||
|
Net realized and unrealized investment gains on equity securities
|
— | — | — | — | — | |||||||||||||||
|
Segment pre-tax operating income
|
$ | 42.8 | $ | 22.7 | $ | 68.1 | $ | 47.6 | $ | 70.7 | ||||||||||
47
Table of Contents
The following table sets forth unaudited selected historical
operating metrics relating to our Group segment for the six
months ended June 30, 2007 and 2006 and for the years ended
December 31, 2006, 2005 and Combined 2004 (non-GAAP):
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Group loss ratio(1)
|
55.2 | % | 66.3 | % | 59.6 | % | 67.5 | % | 64.0 | % | ||||||||||
|
Expense ratio(2)
|
28.0 | % | 27.2 | % | 27.7 | % | 26.4 | % | 24.0 | % | ||||||||||
|
Combined ratio(3)
|
83.2 | % | 93.5 | % | 87.3 | % | 93.9 | % | 88.0 | % | ||||||||||
|
Medical stop-loss — loss ratio(4)
|
55.8 | % | 69.8 | % | 62.4 | % | 69.4 | % | 62.3 | % | ||||||||||
|
Total sales(5)
|
$ | 56.4 | $ | 48.6 | $ | 69.1 | $ | 81.9 | $ | 84.1 | ||||||||||
| (1) | Group loss ratio represents policyholder benefits and claims divided by premiums earned. | |
| (2) | Expense ratio is equal to other underwriting and operating expenses of our insurance operations and amortization of DAC divided by premiums earned. | |
| (3) | Combined ratio is equal to the sum of the loss ratio and the expense ratio. | |
| (4) | Medical stop-loss — loss ratio represents medical stop-loss policyholder benefits and claims divided by medical stop-loss premiums earned. | |
| (5) | Total sales represents annualized first-year premiums for group life and health policies and represents earned premiums for our limited medical benefit policies. |
Six
Months Ended June 30, 2007 Compared to Six Months Ended
June 30, 2006
Group summary of results. Our Group
segment’s pre-tax income increased $20.1 million, or
88.9%, to $42.7 million from $22.6 million. Segment
pre-tax operating income increased $20.1 million, or 88.5%,
to $42.8 million from $22.7 million. This increase was
primarily due to lower paid claims, which was reflected in the
reduction of our medical stop-loss loss ratio to 55.8% from
69.8%. In the first quarter of 2006, we experienced an increase
in the number of individual paid claims in excess of
$0.5 million that did not recur in 2007.
Premiums. Premiums decreased
$4.5 million, or 2.3%, to $195.0 million from
$199.5 million. Premiums decreased $1.9 million due to
policy lapses in our medical stop-loss business exceeding sales
and renewal premium rate increases and $1.8 million due to
decreased sales of our limited medical benefits product.
Other revenues. Other revenues increased
$0.8 million, or 14.5%, to $6.3 million from
$5.5 million. Our newly acquired subsidiary, MRM, generated
revenues of $1.5 million, partially offset by a decrease in
revenues from our third party administrator as a result of lower
production.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $24.5 million, or 18.5%, to
$107.7 million from $132.2 million. Paid claims
decreased $28.1 million, partially offset by a
$5.3 million benefit reduction in 2006 due to the decrease
in reserves related to a block of assumed medical stop loss
policies in run-off. The decrease in paid claims is primarily
related to strong underwriting results in 2007 and an unusual
number, as well as the overall value, of paid claims in excess
of $0.5 million in the first quarter of 2006 that did not
recur in the first quarter of 2007. In first quarter 2007, we
paid three claims over $0.5 million, totaling
$2.2 million, compared to ten claims over
$0.5 million, totaling $8.5 million, in the first
quarter of 2006.
Other underwriting and operating
expenses. Other underwriting and operating
expenses increased $1.7 million, or 3.2%, to
$55.1 million from $53.4 million. This is primarily
due to increases in direct expenses and allocated corporate
expenses of $1.1 million and $1.2 million,
respectively, and a $1.6 million reduction in DAC
deferrals. This is partially offset by $2.8 million of
decreased commissions, which is related to lower average
commission costs on business written and due to the type of
products sold.
48
Table of Contents
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs decreased $1.2 million, or 21.1%, to
$4.5 million from $5.7 million. This decrease was
related to a decrease in the underlying DAC asset, which
decreased to $3.3 million from $4.9 million at
June 30, 2006 due to a refinement in our methodology for
measuring deferable expense in 2007 which decreased DAC
deferrals.
Year
Ended December 31, 2006 Compared to Year Ended
December 31, 2005
Group summary of results. Our Group segment
pre-tax income increased $20.5 million, or 43.2%, to
$68.0 million from $47.5 million. Segment pre-tax
operating income increased $20.5 million, or 43.1%, to
$68.1 million from $47.6 million. This increase was
primarily due to lower paid claims, which was reflected in the
reduction of our loss ratio to 59.6% from 67.5%.
Premiums. Premiums decreased
$51.0 million, or 11.6%, to $387.3 million from
$438.3 million. Premiums decreased $32.6 million due
to higher lapses in our medical stop-loss business and lower new
sales due to disciplined pricing in an aggressive pricing
environment and $15.2 million due to the termination of an
assumed reinsurance relationship at the end of 2004. Group life
premiums decreased $8.2 million because we entered into a
reinsurance arrangement where we cede 50% of premium and risk.
Over the long run we expect this reinsurance arrangement will
enable us to become more competitive in group life insurance.
Partially offsetting these decreases was a $5.0 million
increase related to increased sales of our limited medical
benefits product.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $65.2 million, or 22.0%, to
$230.8 million from $296.0 million. The decrease in
total benefits and claims was primarily related to a decrease in
the book of business, as indicated by the $51.0 million
decrease in premiums described above. In addition, the 2006 loss
ratio decreased 7.9% from 2005 due to a decrease in paid claims
of $69.7 million. The lower total loss ratio was driven by
the 2006 favorable paid claims experience and the corresponding
impact on assumptions within the reserve models.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $9.6 million, or 8.3%, to
$105.7 million from $115.3 million in 2005. This
decrease was due to a $7.0 million decrease in operating
expenses, and a $5.0 million decrease in commission and
premium tax expense, offset by decreased DAC deferrals,
consistent with decreased premiums.
Year
Ended December 31, 2005 Compared to Year Ended
December 31, 2004 (Combined Non-GAAP)
Group summary of results. Our Group segment
pre-tax income decreased $23.3 million, or 32.9%, to
$47.5 million from $70.8 million. Segment pre-tax
operating income decreased $23.1 million, or 32.7%, to
$47.6 million from $70.7 million. This decrease was
primarily due to an increase in the loss ratio to 67.5% from
64.0%. During a period of aggressive industry pricing, we have
maintained a disciplined underwriting and pricing strategy for
targeted returns, which has resulted in a reduction in the size
of our medical stop-loss premiums written and, correspondingly,
policyholder benefits and claims.
Premiums. Premiums decreased
$62.3 million, or 12.4%, to $438.3 million from
$500.6 million. Premiums decreased $26.4 million due
to higher lapses in our medical stop-loss business and lower new
sales. We relinquished $26.7 million in premiums due to our
decision to terminate an assumed reinsurance relationship in the
fourth quarter of 2004 because we were not confident in the
direction of underwriting and pricing at the ceding company. We
also relinquished $14.8 million in premiums due to our
decision to not renew a significant group life policy on
December 31, 2004 because the employees were concentrated
in a small geographic location, potentially exposing us to a
significant claim in the event of a catastrophic event.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $24.5 million, or 7.6%, to
$296.0 million from $320.5 million. The decrease in
total claims was primarily related to a declining book of
business, as indicated by the $62.3 million decrease in
premiums described above. The total loss ratio increased from
64.0% to 67.5% due to higher paid claim experience of
$3.7 million and the corresponding impact of assumptions
within the reserve models. In addition, reserves were increased
during 2004 mainly as a result of the integration to a single
reserve methodology for acquired books of business and direct
written medical-stop loss business.
49
Table of Contents
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $17.8 million, or 13.4%, to
$115.3 million from $133.1 million. In 2005,
commission and premium tax expenses were lower consistent with
lower premiums. In addition, the 2004 results include higher
corporate expense allocations from Safeco Corporation and the
allocation of expenses related to the Acquisition. The 2005
other underwriting and operating expenses reflected are not
comparable to 2004 during which Safeco Corporation allocated us
costs for the first seven months of 2004 and charged us for
transition services for the remaining five months of 2004.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs decreased $1.4 million, or 11.8%, to
$10.5 million from $11.9 million. In connection with
the Acquisition, our DAC asset was reset to zero on
August 2, 2004. Our 2004 amortization included seven months
of DAC amortization prior to the Acquisition.
Retirement
Services
The following table sets forth the results of operations
relating to our Retirement Services segment:
|
Six Months |
Year Ended December 31, | |||||||||||||||||||
|
Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||
|
Premiums
|
$ | — | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.2 | ||||||||||
|
Net investment income
|
124.5 | 137.7 | 269.8 | 292.8 | 349.2 | |||||||||||||||
|
Other revenues
|
12.4 | 11.6 | 22.8 | 23.2 | 27.2 | |||||||||||||||
|
Net realized investment gains (losses)
|
(3.7 | ) | (16.4 | ) | (17.0 | ) | (17.1 | ) | 6.5 | |||||||||||
|
Total revenues
|
133.2 | 133.0 | 275.7 | 299.0 | 383.1 | |||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||
|
Policyholder benefits and claims
|
(4.0 | ) | (9.7 | ) | (16.5 | ) | (25.7 | ) | (15.7 | ) | ||||||||||
|
Interest credited
|
84.3 | 91.4 | 186.2 | 211.5 | 264.6 | |||||||||||||||
|
Other underwriting and operating expenses
|
35.8 | 30.4 | 61.7 | 62.6 | 63.5 | |||||||||||||||
|
Amortization of deferred policy acquisition costs
|
3.7 | 0.5 | 1.1 | 0.1 | 16.5 | |||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | 0.8 | |||||||||||||||
|
Total benefits and expenses
|
119.8 | 112.6 | 232.5 | 248.5 | 329.7 | |||||||||||||||
|
Segment pre-tax income
|
$ | 13.4 | $ | 20.4 | $ | 43.2 | $ | 50.5 | $ | 53.4 | ||||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||
|
Segment pre-tax operating income
|
$ | 18.1 | $ | 35.7 | $ | 62.4 | $ | 63.2 | $ | 46.3 | ||||||||||
|
Reconciliation to segment pre-tax income:
|
||||||||||||||||||||
|
Segment pre-tax income
|
$ | 13.4 | $ | 20.4 | $ | 43.2 | $ | 50.5 | $ | 53.4 | ||||||||||
|
Less: Net realized investment gains (losses)
|
(3.7 | ) | (16.4 | ) | (17.0 | ) | (17.1 | ) | 6.5 | |||||||||||
|
Add:
|
||||||||||||||||||||
|
Net realized and unrealized investment gains (losses) on FIA
options
|
1.0 | (1.1 | ) | 2.2 | (4.4 | ) | (0.6 | ) | ||||||||||||
|
Net realized and unrealized investment gains on equity securities
|
— | — | — | — | — | |||||||||||||||
|
Segment pre-tax operating income
|
$ | 18.1 | $ | 35.7 | $ | 62.4 | $ | 63.2 | $ | 46.3 | ||||||||||
50
Table of Contents
The following table sets forth unaudited selected historical
operating metrics relating to our Retirement Services segment as
of, or for the six months ended June 30, 2007 and 2006 and
for the years ended December 31, 2006, 2005 and Combined
2004 (non-GAAP):
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Account values — Fixed annuities
|
$ | 4,574.0 | $ | 5,226.8 | $ | 4,922.5 | $ | 5,580.8 | $ | 6,416.4 | ||||||||||
|
Account values — Variable annuities
|
1,142.8 | 1,057.9 | 1,115.5 | 1,074.5 | 1,114.8 | |||||||||||||||
|
PGAAP reserve balance
|
14.3 | 25.4 | 18.4 | 35.3 | 62.3 | |||||||||||||||
|
Interest spread on average account values(1)
|
1.70 | % | 1.83 | % | 1.76 | % | 1.58 | % | 1.59 | % | ||||||||||
|
Total sales(2)
|
$ | 248.7 | $ | 253.1 | $ | 573.2 | $ | 390.4 | $ | 326.6 | ||||||||||
| (1) | Interest spread is the difference between net investment yield earned and the credited interest rate to policyholders. The investment yield is the approximate yield on invested assets in the general account attributed to the segment. The credited interest rate is the approximate rate credited on policyholder fixed account values within the segment. Interest credited is subject to contractual terms, including minimum guarantees. Interest spread tends to move gradually over time to reflect market interest rate movements and may reflect actions by management to respond to competitive pressures and profit targets. | |
| (2) | Total sales represent deposits for new policies. |
Six
Months Ended June 30, 2007 Compared to Six Months Ended
June 30, 2006
Retirement Services summary of results. Our
Retirement Services segment pre-tax income decreased
$7.0 million, or 34.3%, to $13.4 million from
$20.4 million. Segment pre-tax operating income decreased
$17.6 million, or 49.3%, to $18.1 million from
$35.7 million. Segment pre-tax operating income decreased
due to a decline in account value as withdrawals exceeded new
deposits, a decrease in interest spread on average account value
driven by lower amortization of the PGAAP reserve, increased
operating expenses and increased DAC amortization.
Net investment income. Net investment income
decreased $13.2 million, or 9.6%, to $124.5 million
from $137.7 million. Of this decrease, $17.9 million
was a result of a decrease in the average invested assets to
$4.9 billion from $5.6 billion. This decrease was
partially offset by a positive rate variance of
$4.7 million due to improved yields related to our
investment portfolio rebalancing strategy, which increased to
5.12% from 4.92%.
Net realized investment gains (losses). Net
realized investment losses decreased $12.7 million, or
77.4%, to $(3.7) million from $(16.4) million. For the
six months ended June 30, 2007, gross realized gains were
$5.9 million and gross realized losses were
$9.6 million, including impairments of $2.5 million.
For the six months ended June 30, 2006, gross realized
gains were $2.0 million and gross realized losses were
$18.4 million, including impairments of $10.7 million.
Policyholder benefits and claims. Policyholder
benefits and claims increased $5.7 million, or 58.8%, to
$(4.0) million from $(9.7) million. This increase was
primarily driven by differences in the amount of PGAAP reserve
amortization. The PGAAP reserve is amortized as a reduction to
policyholder benefits according to our expected pattern of
profitability of the book of business of policies in force at
the time of the Acquisition. This pattern resulted in higher
PGAAP reserve amortization in the years immediately following
the Acquisition.
Interest credited. Interest credited decreased
$7.1 million, or 7.8%, to $84.3 million from
$91.4 million. This decrease is primarily due to a decrease
in fixed account values as withdrawals exceeded deposits, but
was partially offset by a $1.3 million increase in interest
credited on our FIA products, which is a result of 6.0%
year-to-date growth in the S&P 500 Index in 2007 compared
to 1.8% year-to-date growth in the S&P 500 Index in 2006.
51
Table of Contents
Other underwriting and operating
expenses. Other underwriting and operating
expenses increased $5.4 million, or 17.8%, to
$35.8 million from $30.4 million. This increase was
primarily due to a $2.3 million increase in allocated
corporate expenses, a $1.1 million increase in distribution
expenses and a $0.9 million increase in commission
expenses. The increase in allocated corporate expenses was due
primarily to a $1.3 million increase in employee payroll
and benefit expenses.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs increased $3.2 million to
$3.7 million from $0.5 million. This increase was
related to an increase in the underlying DAC asset, which
increased to $66.6 million from $38.0 million at
June 30, 2006. In connection with the Acquisition, our DAC
asset was reset to zero on August 2, 2004 and has
subsequently been growing as a result of sales of our insurance
products. Our amortization expense is expected to increase as
the underlying DAC asset increases.
Year
Ended December 31, 2006 Compared to Year Ended
December 31, 2005
Retirement Services summary of results. Our
Retirement Services segment pre-tax income decreased
$7.3 million, or 14.5%, to $43.2 million from
$50.5 million due to decreases in our fixed account values
of 11.8%, offset by an increase in our interest spread on
average account values. Segment pre-tax operating income
decreased $0.8 million, or 1.3%, to $62.4 million from
$63.2 million.
Net investment income. Net investment income
decreased $23.0 million, or 7.9%, to $269.8 million
from $292.8 million. Net investment income decreased
$37.0 million primarily due to a decline in the average
invested assets to $5.4 billion from $6.2 billion.
This was partially offset by a positive rate variance of
$14.0 million due to improved yields related to our
investment portfolio rebalancing strategy, which increased to
4.97% from 4.71%.
Net realized investment (losses). Net realized
investment losses decreased $0.1 million, or 0.6%, to
$(17.0) million from $(17.1) million. In 2006, gross
realized gains were $8.7 million, including
$2.2 million related to FIA options and gross realized
losses were $25.7 million, including impairments of
$11.8 million. In 2005, gross realized gains were
$25.5 million and gross realized losses were
$42.6 million, including impairments of $6.6 million
and $4.4 million related to the FIA options. In 2006,
realized gains on FIA options increased $6.6 million, which
offset the increase in interest credited on FIA contracts.
Policyholder benefits and claims. Policyholder
benefits and claims increased $9.2 million, or 35.8%, to
$(16.5) million from $(25.7) million. This was driven
by a reduction in the benefit received from the differences in
the amount of PGAAP reserve amortization.
Interest credited. Interest credited decreased
$25.3 million, or 12.0%, to $186.2 million from
$211.5 million. This decrease was primarily due to a
decrease in contractholder account values, but offset by a
$5.5 million increase in FIA interest credited.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs increased $1.0 million to
$1.1 million from $0.1 million. This was related to an
increase in the underlying DAC asset, which increased to
$54.5 million from $25.5 million at December 31,
2005. In connection with the Acquisition, our DAC asset was
reset to zero on August 2, 2004 and has subsequently been
growing as a result of sales of our insurance products. Our
amortization expense is expected to increase as the underlying
DAC asset increases.
Year
Ended December 31, 2005 Compared to Year Ended
December 31, 2004 (Combined Non-GAAP)
Retirement Services summary of results. Our
Retirement Services segment pre-tax income decreased
$2.9 million, or 5.4%, to $50.5 million from
$53.4 million. Segment pre-tax operating income increased
$16.9 million, or 36.5% to $63.2 million from
$46.3 million. This was primarily due to reduced DAC
amortization.
Net investment income. Net investment income
decreased $56.4 million, or 16.2%, to $292.8 million
from $349.2 million. This decrease was related to the
Acquisition purchase accounting, which resulted in an
52
Table of Contents
overall reduction in investment yields for periods subsequent to
the purchase date. We subsequently implemented an investment
portfolio rebalancing strategy, which improved investment yields.
Other revenues. Other revenues decreased
$4.0 million, or 14.7%, to $23.2 million from
$27.2 million. This decrease was primarily due to a
$3.3 million decrease of mutual fund fees related to
variable annuities resulting from the sale of mutual funds
operation in 2004. Such fees were not received in 2005.
Net realized investment gains (losses). Net
realized investment gains decreased $23.6 million to
$(17.1) million from $6.5 million. The 2005 gross
realized gains were $25.5 million and gross realized losses
were $42.6 million, including impairments of
$6.6 million. The 2004 realized gains were
$50.8 million and gross realized losses were
$44.2 million, including impairments of $5.0 million.
In 2004, we repositioned the asset portfolio to more effectively
match the duration of our liabilities. This activity generated
realized gains that were not repeated in 2005.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $10.0 million, or 63.7%, to
$(25.7) million from $(15.7) million. This was driven
by an increase in the benefit received from the change in the
PGAAP reserve. The 2004 PGAAP reserve reduction represented a
five month period compared to twelve months in 2005.
Interest credited. Interest credited decreased
$53.1 million, or 20.1%, to $211.5 million from
$264.6 million. This decrease was primarily due to a
decrease in contractholder account values.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $0.9 million, or 1.4%, to
$62.6 million from $63.5 million. The 2005 other
underwriting and operating expenses reflected are not comparable
to 2004 during which Safeco Corporation allocated us costs for
the first seven months of 2004 and charged us for transition
services for the remaining five months of 2004.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs decreased $16.4 million, or 99.4%, to
$0.1 million from $16.5 million. In connection with
the Acquisition, our DAC asset was reset to zero on
August 2, 2004. Our 2004 amortization included seven months
of DAC amortization prior to the Acquisition.
53
Table of Contents
Income
Annuities
The following table sets forth the results of operations
relating to our Income Annuities segment:
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months |
Combined |
|||||||||||||||||||
| Ended June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||
|
Net investment income
|
$ | 223.8 | $ | 217.7 | $ | 439.0 | $ | 441.4 | $ | 474.4 | ||||||||||
|
Other revenues
|
0.5 | 0.4 | 0.8 | 0.5 | 0.5 | |||||||||||||||
|
Net realized investment gains
|
24.2 | 15.4 | 16.8 | 17.4 | 9.5 | |||||||||||||||
|
Total revenues
|
248.5 | 233.5 | 456.6 | 459.3 | 484.4 | |||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||
|
Interest credited
|
183.8 | 187.0 | 371.8 | 392.5 | 438.9 | |||||||||||||||
|
Other underwriting and operating expenses
|
11.7 | 10.6 | 21.6 | 19.4 | 16.8 | |||||||||||||||
|
Amortization of deferred policy acquisition costs
|
0.5 | 0.3 | 0.6 | 0.3 | — | |||||||||||||||
|
Total benefits and expenses
|
196.0 | 197.9 | 394.0 | 412.2 | 455.7 | |||||||||||||||
|
Segment pre-tax income
|
$ | 52.5 | $ | 35.6 | $ | 62.6 | $ | 47.1 | $ | 28.7 | ||||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||
|
Segment pre-tax operating income
|
$ | 38.0 | $ | 29.8 | $ | 64.7 | $ | 42.8 | $ | 20.5 | ||||||||||
|
Reconciliation to segment pre-tax income:
|
||||||||||||||||||||
|
Segment pre-tax income
|
$ | 52.5 | $ | 35.6 | $ | 62.6 | $ | 47.1 | $ | 28.7 | ||||||||||
|
Less: Net realized investment gains
|
24.2 | 15.4 | 16.8 | 17.4 | 9.5 | |||||||||||||||
|
Add:
|
||||||||||||||||||||
|
Net realized and unrealized investment gains on FIA options
|
— | — | — | — | — | |||||||||||||||
|
Net realized and unrealized investment gains on equity securities
|
9.7 | 9.6 | 18.9 | 13.1 | 1.3 | |||||||||||||||
|
Segment pre-tax operating income
|
$ | 38.0 | $ | 29.8 | $ | 64.7 | $ | 42.8 | $ | 20.5 | ||||||||||
The following table sets forth unaudited selected historical
operating metrics relating to our Income Annuities segment as
of, or for the six months ended June 30, 2007 and 2006 and
for the years ended December 31, 2006, 2005, and Combined
2004 (non-GAAP):
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Reserves(1)
|
$ | 6,964.8 | $ | 7,097.9 | $ | 7,012.6 | $ | 7,176.0 | $ | 7,285.0 | ||||||||||
|
Interest spread on reserves(2)
|
0.90 | % | 0.74 | % | 0.76 | % | 0.67 | % | 0.16 | % | ||||||||||
|
Mortality gains(3)
|
$ | 1.8 | $ | 2.7 | $ | 6.3 | $ | 0.8 | $ | 3.8 | ||||||||||
|
Total sales(4)
|
63.0 | 45.8 | 96.6 | 93.1 | 76.0 | |||||||||||||||
| (1) | Reserves represent the present value of future income annuity benefits and assumed expenses, discounted by the assumed interest rate. This metric represents the amount of our in-force book of business. |
54
Table of Contents
| (2) | Interest spread is the difference between net investment yield earned and the credited interest rate on policyholder reserves. The investment yield is the approximate yield on invested assets in the general account attributed to the segment. This yield includes both realized and unrealized gains on our equity investments that back the policyholder reserves. The credited interest rate is the approximate rate credited on policyholder reserves within the segment and excludes the gains and losses from funding services and mortality. | |
| (3) | Mortality gains (losses) represents the difference between actual and expected reserves released on death of a life contingent annuity. | |
| (4) | Sales represent deposits for new policies. |
Six
Months Ended June 30, 2007 Compared to Six Months Ended
June 30, 2006
Income Annuities summary of results. Our
Income Annuities segment pre-tax income increased
$16.9 million, or 47.5%, to $52.5 million from
$35.6 million. Segment pre-tax operating income increased
$8.2 million, or 27.5%, to $38.0 million from
$29.8 million. Segment pre-tax operating income increased
due to increased funding services activity and an increased
interest spread on reserves driven by improved net investment
yields primarily from equity instrument returns and returns on
investments in limited partnerships. These increases were
partially offset by a decrease in mortality gain of
$0.9 million. The Income Annuities reserve covers payout
commitments that extend well beyond 40 years. We invest in
equities and equity-like investments to fund the longest part of
this liability. The Income Annuities’ equity portfolio
outperformed the S&P 500 by 1.6% for the six months ended
June 30, 2007.
Net investment income. Net investment income
increased $6.1 million, or 2.8%, to $223.8 million
from $217.7 million. Of this increase, $9.4 million
related to improved yields in our hedge fund portfolio. This
increase was partially offset by a $3.2 million decrease
related to a decrease in average invested assets, which
decreased to $7.2 billion from $7.3 billion.
Net realized investment gains (losses). Net
investment gains increased $8.8 million, or 57.1%, to
$24.2 million from $15.4 million. For the six months
ended June 30, 2007, gross realized gains were
$29.8 million and gross realized losses were
$5.6 million, including impairments of $1.6 million.
For the six months ended June 30, 2006, gross realized
gains were $19.5 million and gross realized losses were
$4.1 million, including impairments of $0.9 million.
We had higher realized gains in 2007 primarily due to gains
related to a significant tender offer related to certain fixed
maturities in our investment portfolio.
Interest credited. Interest credited decreased
$3.2 million, or 1.7%, to $183.8 million from
$187.0 million. This decrease was due to a decrease in
reserves as a result of benefit payments exceeding new deposits
and funding services activity.
Other underwriting and operating
expenses. Other underwriting and operating
expenses increased $1.1 million, or 10.4%, to
$11.7 million from $10.6 million. This increase was
mainly due to a $0.9 million increase in allocated
corporate expenses, primarily related to increased employee
payroll and benefit expenses.
Year
Ended December 31, 2006 Compared to Year Ended
December 31, 2005
Income Annuities summary of results. Our
Income Annuities segment pre-tax income increased
$15.5 million, or 32.9%, to $62.6 million from
$47.1 million. This was due to an increase in mortality
gains, increased interest spread on reserves from improved
yields and funding services activity. Segment pre-tax operating
income increased $21.9 million, or 51.2%, to
$64.7 million from $42.8 million. This was due to the
increase in segment pre-tax income and $5.8 million
increase in net realized and unrealized investment gains on
equity securities. Our total equity portfolio, mainly in Income
Annuities, outperformed the S&P 500 by 10.3% and 26.0%
for the years ended December 31, 2006 and 2005,
respectively.
Net investment income. Net investment income
decreased $2.4 million, or 0.5%, to $439.0 million
from $441.4 million. Of this decrease, $6.3 million
was related to a decrease in the average invested assets, which
decreased to $7.2 billion at December 31, 2006 from
$7.4 billion at December 31, 2005. This decrease was
offset by a $3.9 million increase related to improved
yields, which increased to 6.06% from 6.00%.
55
Table of Contents
Net realized investment gains. Net realized
investment gains decreased $0.6 million, or 3.4%, to
$16.8 million from $17.4 million. In 2006, gross
realized gains were $32.9 million and gross realized losses
were $16.0 million, including impairments of
$9.4 million. In 2005, gross realized gains were
$27.0 million and gross realized losses were
$9.6 million, including impairments of $0.3 million.
Interest credited. Interest credited decreased
$20.7 million, or 5.3%, to $371.8 million from
$392.5 million. This decrease was due to a decrease in
reserves as a result of benefit payments exceeding new deposits,
favorable mortality gains and funding services activity.
Other underwriting and operating
expenses. Other underwriting and operating
expenses increased $2.2 million, or 11.3%, to
$21.6 million from $19.4 million. The increase of
$2.2 million was primarily due to the launching of our
funding services operations in mid 2005.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs increased $0.3 million, or 100.0%, to
$0.6 million from $0.3 million. This increase in
amortization was related to an increase in the underlying DAC
asset, which increased to $6.8 million from
$4.3 million. Our DAC asset has been growing since the
Acquisition as a result of sales of our insurance products. Our
amortization expense was expected to increase as the underlying
DAC asset increases.
Year
Ended December 31, 2005 Compared to Year Ended
December 31, 2004 (Combined Non-GAAP)
Income Annuities summary of results. Our
Income Annuities segment pre-tax income increased
$18.4 million, or 64.1%, to $47.1 million from
$28.7 million and segment pre-tax operating income
increased $22.3 million, to $42.8 million from
$20.5 million. The segment pre-tax operating income
increased due to an increase in our interest spread on reserves
and an $11.8 million increase in net realized and
unrealized investment gains on equity securities. We gradually
built up our equity portfolio over the course of 2005.
Net investment income. Net investment income
decreased $33.0 million, or 7.0%, to $441.4 million
from $474.4 million. This decrease was primarily related to
the Acquisition purchase accounting, which resulted in an
overall reduction in investment yields for periods subsequent to
the Acquisition.
Net realized investment gains. Net realized
investment gains increased $7.9 million, or 83.2%, to
$17.4 million from $9.5 million. In 2005, gross
realized gains were $27.0 million and gross realized losses
were $9.6 million, including impairments of
$0.3 million. In 2004, gross realized gains were
$23.3 million and gross realized losses were
$13.8 million, including impairments of $2.6 million.
Interest credited. Interest credited decreased
$46.4 million, or 10.6%, to $392.5 million from
$438.9 million. The credited rate inherent in the reserves
was reduced as a result of purchase accounting.
Other underwriting and operating
expenses. Other underwriting and operating
expenses increased $2.6 million, or 15.5%, to
$19.4 million from $16.8 million. This increase was
primarily due to increased professional services fees and costs
of launching our funding services operations. The 2005 other
underwriting and operating expenses reflected are not comparable
to 2004 during which Safeco Corporation allocated us costs for
the first seven months of 2004 and charged us for transition
services for the remaining five months of 2004.
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Table of Contents
Individual
The following table sets forth the results of operations
relating to our Individual segment:
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months |
Combined |
|||||||||||||||||||
| Ended June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||
|
Premiums
|
$ | 70.0 | $ | 69.6 | $ | 138.3 | $ | 137.1 | $ | 120.3 | ||||||||||
|
Net investment income
|
120.3 | 114.7 | 232.8 | 222.6 | 228.3 | |||||||||||||||
|
Other revenues
|
7.1 | 6.8 | 12.9 | 14.0 | 21.0 | |||||||||||||||
|
Net realized investment gains (losses)
|
0.1 | (1.9 | ) | (3.8 | ) | 1.3 | 8.0 | |||||||||||||
|
Total revenues
|
197.5 | 189.2 | 380.2 | 375.0 | 377.6 | |||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||
|
Policyholder benefits and claims
|
32.4 | 25.1 | 50.0 | 57.1 | 46.3 | |||||||||||||||
|
Interest credited
|
106.4 | 103.9 | 208.2 | 206.9 | 213.1 | |||||||||||||||
|
Other underwriting and operating expenses
|
29.3 | 28.6 | 57.4 | 61.4 | 64.6 | |||||||||||||||
|
Amortization of deferred policy acquisition costs
|
0.8 | 1.0 | 2.0 | 1.0 | 7.4 | |||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | 1.7 | |||||||||||||||
|
Total benefits and expenses
|
168.9 | 158.6 | 317.6 | 326.4 | 333.1 | |||||||||||||||
|
Segment pre-tax income
|
$ | 28.6 | $ | 30.6 | $ | 62.6 | $ | 48.6 | $ | 44.5 | ||||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||
|
Segment pre-tax operating income
|
$ | 28.5 | $ | 32.5 | $ | 66.4 | $ | 47.3 | $ | 36.5 | ||||||||||
|
Reconciliation to segment pre-tax income:
|
||||||||||||||||||||
|
Segment pre-tax income
|
$ | 28.6 | $ | 30.6 | $ | 62.6 | $ | 48.6 | $ | 44.5 | ||||||||||
|
Less: Net realized investment gains (losses)
|
0.1 | (1.9 | ) | (3.8 | ) | 1.3 | 8.0 | |||||||||||||
|
Add:
|
||||||||||||||||||||
|
Net realized and unrealized investment gains on FIA options
|
— | — | — | — | — | |||||||||||||||
|
Net realized and unrealized investment gains on equity securities
|
— | — | — | — | — | |||||||||||||||
|
Segment pre-tax operating income
|
$ | 28.5 | $ | 32.5 | $ | 66.4 | $ | 47.3 | $ | 36.5 | ||||||||||
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The following table sets forth unaudited selected historical
operating metrics relating to our Individual segment as of, or
for the six months ended June 30, 2007 and 2006 and for the
years ended December 31, 2006, 2005 and Combined 2004 (non-GAAP):
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Insurance in force(1)
|
$ | 52,180.7 | $ | 52,301.9 | $ | 52,295.3 | $ | 51,796.9 | $ | 50,499.3 | ||||||||||
|
Mortality ratio(2)
|
92.6 | % | 81.6 | % | 74.7 | % | 79.4 | % | 79.6 | % | ||||||||||
|
BOLI account value(3)
|
$ | 3,443.7 | $ | 3,287.6 | $ | 3,346.8 | $ | 3,224.6 | $ | 3,115.2 | ||||||||||
|
UL account value(3)
|
569.8 | 562.2 | 565.1 | 561.1 | 561.2 | |||||||||||||||
|
PGAAP reserve balance
|
69.3 | 85.4 | 77.1 | 94.5 | 115.0 | |||||||||||||||
|
BOLI ROA(4)
|
1.23 | % | 1.14 | % | 1.18 | % | 0.97 | % | 1.04 | % | ||||||||||
|
UL interest spread(5)
|
1.20 | % | 1.31 | % | 1.31 | % | 0.66 | % | 1.51 | % | ||||||||||
|
Total sales(6)
|
$ | 4.7 | $ | 4.9 | $ | 9.3 | $ | 11.8 | $ | 14.8 | ||||||||||
| (1) | Insurance in force represents dollar face amounts of policies. | |
| (2) | Mortality ratio represents actual mortality experience as a percentage of benchmark. Benchmark is based on the 90-95 Society of Actuaries, or SOA, mortality table applied to current in force business. This ratio excludes BOLI mortality experience. | |
| (3) | Account Value — BOLI Accounts and universal life, or UL, represents Symetra’s liability to the policyholder. | |
| (4) | The BOLI ROA is a measure of the gross margin on our BOLI book of business. This metric is calculated as the difference between our BOLI revenue earnings rate and our BOLI policy benefits rate. The revenue earnings rate is calculated as total revenues net of allocated surplus investment income divided by average invested assets. The policy benefits rate is calculated as total policy benefits divided by average account value. The policy benefits used in this metric do not include expenses. | |
| (5) | Interest spread is the difference between net investment yield earned and the credited interest rate to policyholders. The investment yield is the approximate yield on invested assets in the general account attributed to the UL policies. The credited interest rate is the approximate rate credited on UL policyholder fixed account values. Interest credited to UL policyholders’ account values is subject to contractual terms, including minimum guarantees. Interest credited tends to move gradually over time to reflect market interest rate movements and may reflect actions by management to respond to competitive pressures and profit targets. | |
| (6) | Total sales represent annualized first year premiums and deposits for new policies. |
Six
Months Ended June 30, 2007 Compared to Six Months Ended
June 30, 2006
Individual Summary of Results. Our Individual
segment pre-tax income decreased $2.0 million, or 6.5%, to
$28.6 million from $30.6 million. Segment pre-tax
operating income decreased $4.0 million, or 12.3%, to
$28.5 million from $32.5 million. This decrease was
primarily due to reserve increases and an increase in mortality
in 2007 compared to 2006, partially offset by increased BOLI ROA
and UL interest spreads on growing BOLI and UL account values
and improved investment yields.
Net investment income. Net investment income
increased $5.6 million, or 4.9%, to $120.3 million
from $114.7 million. Of this increase, $3.4 million
related to improved yields, which increased to 5.39% from 5.24%,
and $2.3 million related to an increase in the average
invested assets, which increased to $4.5 billion from
$4.4 billion.
Net realized investment gains (losses). Net
realized investment gains (losses) increased $2.0 million
to $0.1 million from $(1.9) million. For the six
months ended June 30, 2007, gross realized gains were
58
Table of Contents
$1.2 million and gross realized losses were
$1.1 million, including impairments of $0.1 million.
For the six months ended June 30, 2006, gross realized
gains were $1.4 million and gross realized losses were
$3.3 million, including impairments of $1.3 million.
Policyholder benefits and claims. Policyholder
benefits and claims increased $7.3 million, or 29.1%, to
$32.4 million from $25.1 million. Claims increased
$4.4 million mainly related to universal life and BOLI
general account claims. Reserves increased $3.0 million due
to changes in reserve assumptions and a refinement of our
reserve methodology implemented in connection with an actuarial
reserving software conversion and a reduction in the benefit
received from PGAAP reserve amortization. These increases were
offset by a reduction of our term life reserves due to a
reduction in the block size.
Interest credited. Interest credited increased
$2.5 million, or 2.4%, to $106.4 million from
$103.9 million. This increase was primarily due to an
increase in our BOLI account values, offset by decreased
interest related to our BOLI separate account policies, for
which policyholder interest credited is adjusted based on claims
experience.
Year
Ended December 31, 2006 Compared to Year Ended
December 31, 2005
Individual summary of results. Our Individual
segment pre-tax income increased $14.0 million, or 28.8%,
to $62.6 million from $48.6 million. Segment pre-tax
operating income increased $19.1 million, or 40.4%, to
$66.4 million from $47.3 million. This increase was
primarily the result of a higher return on our average BOLI
account values, as evidenced by the increase in the BOLI ROA,
and favorable mortality. In addition, our UL/VUL account values
and interest spreads increased.
Net investment income. Net investment income
increased $10.2 million, or 4.6%, to $232.8 million
from $222.6 million in 2005. There was a $5.3 million
increase related to improved yields which increased to 5.30%
from 5.18%. In addition, there was a $4.8 million increase
related to a higher average invested assets, which increased to
$4.4 billion at December 31, 2006 from
$4.3 billion at December 31, 2005.
Net realized investment gains (losses). Net
realized investment gains (losses) decreased $5.1 million
to $(3.8) million from $1.3 million. In 2006, gross
realized gains were $2.1 million and gross realized losses
were $5.9 million, including impairments of
$2.9 million. In 2005, gross realized gains were
$8.7 million and gross realized losses were
$7.4 million, including impairments of $0.7 million.
Policyholder benefits and claims. Policyholder
benefits and claims decreased $7.1 million, or 12.4%, to
$50.0 million from $57.1 million. This decrease was
due to favorable mortality experience in 2006 and non-recurring
reserve adjustments in 2005 offset by lower PGAAP reserve
amortization in 2006. The PGAAP reserve is amortized as a
reduction to policyholder benefits according to our expected
pattern of profitability of the policies in force at the date of
the Acquisition. This pattern resulted in increased PGAAP
reserve amortization in the years immediately following the
Acquisition. In 2005, we experienced a reserve increase for a
persistency bonus interest feature in one of our universal life
contracts due to a refinement in our calculation methodology. In
addition, we increased reserves on an old book of term policies
to apply consistent reserve factors for all term policies.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $4.0 million, or 6.5%, to
$57.4 million from $61.4 million. This decrease was
due to a decrease in sales-related expenses including
commissions and premium taxes.
Year
Ended December 31, 2005 Compared to Year Ended
December 31, 2004 (Combined Non-GAAP)
Individual summary of results. Our Individual
segment pre-tax income increased $4.1 million, or 9.2%, to
$48.6 million from $44.5 million. Segment pre-tax
operating income increased $10.8 million, or 29.6%, to
$47.3 million from $36.5 million. This increase was
primarily due to a $6.4 million reduction in DAC
amortization and a $1.7 million reduction in intangible
asset amortization. The increase was offset by a decrease in UL
spreads.
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Table of Contents
Premiums. Premiums increased
$16.8 million, or 14.0%, to $137.1 million from
$120.3 million. Individual premiums increased primarily due
to a $14.1 million adjustment in 2004 related to ceded term
reinsurance, which resulted in a decrease in 2004 premiums and a
$2.3 million increase in BOLI COI charges.
Net investment income. Net investment income
decreased $5.7 million, or 2.5%, to $222.6 million
from $228.3 million. This decrease was related to the
Acquisition purchase accounting, which resulted in an overall
reduction in investment yields for periods subsequent to the
purchase date.
Other revenues. Other revenues decreased
$7.0 million, or 33.3%, to $14.0 million from
$21.0 million. This decrease was primarily due to a
$5.9 million adjustment in 2004 related to ceded term
reinsurance expense allowances, which resulted in an increase in
2004 other revenues.
Policyholder benefits and claims. Policyholder
benefits and claims increased $10.8 million, or 23.3%, to
$57.1 million from $46.3 million. This increase was
primarily driven by an increase of $8.5 million in BOLI
claims.
Interest credited. Interest credited decreased
$6.2 million, or 2.9%, to $206.9 million from
$213.1 million. This decrease was related to our BOLI
separate account policies, for which policyholder interest
credited is adjusted based on claims experience.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $3.2 million, or 5.0%, to
$61.4 million from $64.6 million. This decrease was
due to a decrease in sales-related expenses including
commissions and premium taxes. The 2005 other underwriting and
operating expenses reflected are not comparable to 2004 during
which Safeco Corporation allocated us costs for the first seven
months of 2004 and charged us for transition services for the
remaining five months of 2004.
Amortization of deferred policy acquisition
costs. Amortization of deferred policy
acquisition costs decreased $6.4 million, or 86.5%, to
$1.0 million from $7.4 million. In connection with the
Acquisition, our DAC asset was reset to zero on August 2,
2004. Our 2004 amortization included seven months of DAC
amortization prior to the Acquisition.
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Table of Contents
Other
The following table sets forth the results of operations
relating to our Other segment:
|
Six Months |
Year Ended December 31, | |||||||||||||||||||
|
Ended |
Combined |
|||||||||||||||||||
| June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||
|
Net investment income
|
$ | 13.5 | $ | 11.4 | $ | 25.3 | $ | 17.9 | $ | 30.5 | ||||||||||
|
Other revenues
|
6.4 | 5.4 | 9.4 | 9.1 | 8.3 | |||||||||||||||
|
Net realized investment gains
|
4.0 | 2.5 | 5.8 | 12.6 | 17.8 | |||||||||||||||
|
Total revenues
|
23.9 | 19.3 | 40.5 | 39.6 | 56.6 | |||||||||||||||
|
Benefits and Expenses:
|
||||||||||||||||||||
|
Interest credited
|
(0.4 | ) | (0.1 | ) | (0.3 | ) | — | — | ||||||||||||
|
Other underwriting and operating expenses
|
9.3 | 6.8 | 14.1 | 14.5 | 27.6 | |||||||||||||||
|
Fair value of warrants issued to investors
|
— | — | — | — | 101.5 | |||||||||||||||
|
Interest expense
|
9.3 | 9.8 | 19.1 | 12.4 | 3.5 | |||||||||||||||
|
Amortization of deferred policy acquisition costs
|
(0.1 | ) | 0.1 | — | — | — | ||||||||||||||
|
Intangible asset amortization
|
— | — | — | — | 1.6 | |||||||||||||||
|
Total benefits and expenses
|
18.1 | 16.6 | 32.9 | 26.9 | 134.2 | |||||||||||||||
|
Segment pre-tax income (loss)
|
$ | 5.8 | $ | 2.7 | $ | 7.6 | $ | 12.7 | $ | (77.6 | ) | |||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||
|
Segment pre-tax operating income (loss)
|
$ | 1.8 | $ | 0.2 | $ | 1.8 | $ | 0.1 | $ | (95.4 | ) | |||||||||
|
Reconciliation to segment pre-tax income (loss):
|
||||||||||||||||||||
|
Segment pre-tax income (loss)
|
$ | 5.8 | $ | 2.7 | $ | 7.6 | $ | 12.7 | $ | (77.6 | ) | |||||||||
|
Less: Net realized investment gains
|
4.0 | 2.5 | 5.8 | 12.6 | 17.8 | |||||||||||||||
|
Add:
|
||||||||||||||||||||
|
Net realized and unrealized investment gains on FIA options
|
— | — | — | — | — | |||||||||||||||
|
Net realized and unrealized investment gains on equity securities
|
— | — | — | — | — | |||||||||||||||
|
Segment pre-tax operating income (loss)
|
$ | 1.8 | $ | 0.2 | $ | 1.8 | $ | 0.1 | $ | (95.4 | ) | |||||||||
Six
Months Ended June 30, 2007 Compared to Six Months Ended
June 30, 2006
Other segment summary of results. Our Other
segment pre-tax income increased $3.1 million, to
$5.8 million from $2.7 million. Segment pre-tax
operating income increased $1.6 million, to
$1.8 million from $0.2 million. This increase was
primarily due to an increase in unallocated investment income
and an increase in revenues from our broker-dealer operations,
partially offset by increased operating expenses due to our
initial public offering process and increased amortization of
information technology assets.
Net investment income. Net investment income
is primarily non-allocated net investment income related to
insurance surplus and corporate assets. Net investment income
increased $2.1 million, or 18.4%, to $13.5 million
from $11.4 million. This increase was related to a
$0.1 billion increase in non-allocated average invested
assets, to $0.6 billion at June 30, 2007 from
$0.5 billion at June 30, 2006.
Other revenues. Other revenues increased
$1.0 million, or 18.5%, to $6.4 million from
$5.4 million, due to increased revenue from our
broker-dealer operations.
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Table of Contents
Net realized investment gains. Net realized
investment gains increased by $1.5 million, or 60.0%, to
$4.0 million from $2.5 million. For the six months
ending June 30, 2007, gross realized gains were
$7.5 million and gross realized losses were
$3.5 million, including impairments of $0.7 million.
For the six months ending June 30, 2006, gross
realized gains were $5.6 million and gross realized losses
were $3.1 million, including impairments of
$0.8 million.
Other underwriting and operating
expenses. Other underwriting and operating
expenses increased $2.5 million, or 36.8%, to
$9.3 million from $6.8 million in 2006. This increase
was primarily due to $0.9 million of additional operating
expenses related to our initial public offering process and
$0.9 million of increased amortization of information
technology assets.
Year Ended December 31, 2006 Compared to Year Ended December 31, 2005
Other summary of results. Our Other segment
pre-tax income decreased $5.1 million, or 40.2%, to
$7.6 million from $12.7 million. Segment pre-tax
operating income increased $1.7 million to
$1.8 million from $0.1 million. This increase was
primarily due to a $7.4 million increase in unallocated
investment income, offset by an increase in interest expense of
$6.7 million.
Net investment income. Net investment income
increased $7.4 million, or 41.3%, to $25.3 million
from $17.9 million. This increase was primarily due to a
$151.4 million increase in the non-allocated average
invested assets, which increased to $536.1 million from
$384.7 million.
Net realized investment gains. Net realized
gains decreased by $6.8 million, or 54.0% to
$5.8 million from $12.6 million. For 2006, gross
realized gains were $11.6 million and gross realized losses
were $5.8 million, including impairments of
$1.6 million. For 2005, gross realized gains were
$14.2 million and gross realized losses were
$1.6 million, including minimal impairments. In addition,
in 2005 we recorded a $6.3 million gain as a result of a
methodology refinement in the calculation of our mortgage loan
allowance.
Year
Ended December 31, 2005 compared to Year Ended
December 31, 2004 (Combined Non-GAAP)
Other summary of results. Our Other segment
pre-tax income increased $90.3 million to a gain of
$12.7 million from a loss of $77.6 million. Segment
pre-tax operating income increased $95.5 million to a gain
of $0.1 million from a loss of $95.4 million. This
increase was primarily due to our 2004 expense related to the
issuance of warrants to investors for services provided in
connection with the Acquisition.
Net investment income. Net investment income
decreased $12.6 million, or 41.3%, to $17.9 million
from $30.5 million. This decrease was related to the
Acquisition purchase accounting, which resulted in an overall
reduction in investment yields for periods subsequent to the
purchase date.
Net realized investment gains. Net realized
gains decreased $5.2 million, or 29.2%, to
$12.6 million from $17.8 million. For 2005, gross
realized gains were $14.2 million and gross realized losses
were $1.6 million, including minimal impairments. For 2004,
gross realized gains were $22.5 million and gross realized
losses were $4.7 million. There were no impairments in 2004.
Other underwriting and operating
expenses. Other underwriting and operating
expenses decreased $13.1 million, or 47.5%, to
$14.5 million from $27.6 million. The 2005 other
underwriting and operating expenses reflected are not comparable
to 2004 during which Safeco Corporation allocated us costs for
the first seven months of 2004 and charged us under a transition
services agreement for the remaining five months of 2004.
Fair value of warrants issued to
investors. See “— Results of
Operations — Total Company” for a discussion of
this line item.
Investments
Our investment portfolio mix as of June 30, 2007 consisted
in large part of high quality, fixed maturity securities,
commercial mortgage loans and short-term securities, as well as
a smaller allocation to marketable equity securities and other
investments, such as investments in limited partnerships, which
include hedge funds
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and private equity. Our management believes that prudent levels
of investments in marketable equity securities and other
investments within our investment portfolio are likely to
enhance long term after-tax total returns without significantly
increasing the risk profile of the portfolio.
The following table presents the composition of our investment
portfolio as of June 30, 2007 and December 31, 2006
and 2005:
|
As of June 30, |
As of December 31, | |||||||||||
| 2007 | 2006 | 2005 | ||||||||||
| (Unaudited) | ||||||||||||
| (Dollars in millions) | ||||||||||||
|
Types of Investments
|
||||||||||||
|
Fixed maturities
|
$ | 15,440.8 | $ | 16,049.9 | $ | 17,183.2 | ||||||
|
Marketable equity securities
|
209.9 | 201.7 | 162.3 | |||||||||
|
Mortgage loans
|
789.6 | 794.3 | 776.9 | |||||||||
|
Policy loans
|
77.8 | 79.2 | 80.5 | |||||||||
|
Short-term investments
|
5.3 | 48.9 | 7.4 | |||||||||
|
Investments in limited partnerships
|
159.8 | 112.6 | 93.4 | |||||||||
|
Other invested assets(1)
|
11.8 | 18.7 | 29.1 | |||||||||
|
Total
|
$ | 16,695.0 | $ | 17,305.3 | $ | 18,332.8 | ||||||
| (1) | Includes investments such as embedded derivatives, notes receivable and options. |
Investment
Returns
Return on invested assets is an important element of our
financial results. Significant fluctuations in the fixed income
or equity markets could weaken our financial condition or
results of operations. Additionally, changes in market interest
rates may impact the period of time over which certain
investments, such as mortgage-backed securities, are repaid and
whether certain investments are called by the issuers. Such
changes may in turn impact the yield on these investments and
may also result in the re-investment of funds received from
calls and prepayments at rates below the average portfolio yield.
Fluctuations in interest rates affect our return on, and the
fair value of, fixed maturity investments. Other events beyond
our control could also adversely impact the fair value of these
investments. Specifically, a default of payment by an issuer
could reduce our investment return.
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The following table summarizes our investment results:
| Year Ended December 31, | ||||||||||||||||||||
|
Six Months |
Combined |
|||||||||||||||||||
| Ended June 30, |
2004 |
|||||||||||||||||||
| 2007 | 2006 | 2006 | 2005 | (Non-GAAP) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Net investment income
|
$ | 490.9 | $ | 490.5 | $ | 984.9 | $ | 994.0 | $ | 1,104.8 | ||||||||||
|
Yield on average invested assets(1)
|
5.62 | % | 5.41 | % | 5.48 | % | 5.33 | % | 6.02 | % | ||||||||||
|
Net realized investment gains (losses):
|
||||||||||||||||||||
|
Gross gains on sales
|
$ | 37.5 | $ | 23.8 | $ | 47.6 | $ | 40.4 | $ | 80.4 | ||||||||||
|
Gross losses on sales
|
(9.9 | ) | (9.4 | ) | (19.9 | ) | (28.2 | ) | (46.6 | ) | ||||||||||
|
Impairments:
|
||||||||||||||||||||
|
Credit related
|
(0.7 | ) | (8.1 | ) | (8.9 | ) | (6.3 | ) | (3.5 | ) | ||||||||||
|
Other
|
(4.2 | ) | (5.6 | ) | (16.8 | ) | (1.4 | ) | (6.9 | ) | ||||||||||
|
Total impairments
|
(4.9 | ) | (13.7 | ) | (25.7 | ) | (7.7 | ) | (10.4 | ) | ||||||||||
|
Other net investment gains (losses)(2):
|
||||||||||||||||||||
|
Other gross gains
|
6.9 | 4.7 | 7.5 | 35.1 | 30.3 | |||||||||||||||
|
Other gross losses
|
(5.1 | ) | (5.9 | ) | (7.8 | ) | (25.5 | ) | (11.8 | ) | ||||||||||
|
Net realized gains (losses) before taxes
|
$ | 24.5 | $ | (0.5 | ) | $ | 1.7 | $ | 14.1 | $ | 41.9 | |||||||||
| (1) | Represents annualized net investment income (excluding income related to marketable equity securities available for sale) divided by the monthly weighted average invested assets at cost or amortized cost, as applicable, excluding marketable equity securities available for sale. Information presented is unaudited. | |
| (2) | Primarily consists of changes in fair value on derivatives instruments, the impact on DAC and gains (losses) on calls and redemptions. |
Impairments during the six months ended June 30, 2007 were
$4.9 million. The following table summarizes our five
largest aggregate losses on sales and impairments by each
issuer’s industry for the six months ended
June 30, 2007. No other issuer together with its affiliates
had an aggregate loss on dispositions and impairments that was
greater than 3.5% of total gross realized losses.
|
Fair Value |
June 30, 2007 | |||||||||||||||||||
|
at Sale |
Net |
|||||||||||||||||||
|
Issuer’s Industry
|
(Proceeds) | Loss on Sale | Impairment | Holdings | Unrealized Loss | |||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Consumer staples
|
$ | 9.5 | $ | (1.9 | ) | $ | — | $ | 19.1 | $ | (0.3 | ) | ||||||||
|
Consumer staples
|
— | — | (1.7 | ) | 52.9 | (0.2 | ) | |||||||||||||
|
Telecommunications
|
31.5 | (1.5 | ) | — | 26.8 | (0.1 | ) | |||||||||||||
|
Utilities
|
29.2 | (1.0 | ) | — | 12.1 | (0.1 | ) | |||||||||||||
|
U.S. Fed. Government
|
— | — | (0.7 | ) | 45.5 | (0.7 | ) | |||||||||||||
|
Totals
|
$ | 70.2 | $ | (4.4 | ) | $ | (2.4 | ) | $ | 156.4 | $ | (1.4 | ) | |||||||
Impairments for the year ended December 31, 2006 were
$25.7 million. The following table summarizes our five
largest aggregate losses on sales and impairments by each
issuer’s industry for the year ended
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December 31, 2006. No other issuer together with its
affiliates had an aggregate loss on dispositions and impairments
that was greater than 3.0% of total gross realized losses.
| December 31, 2006 | ||||||||||||||||||||
|
Fair Value |
Net |
|||||||||||||||||||
|
at Sale |
Unrealized |
|||||||||||||||||||
|
Industry
|
(Proceeds) | Loss on Sale | Impairment | Holdings | Gain (Loss) | |||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Business services
|
$ | 36.5 | $ | (2.2 | ) | $ | (8.1 | ) | $ | — | $ | — | ||||||||
|
Paper products
|
— | — | (7.5 | ) | 17.6 | 1.8 | ||||||||||||||
|
Food retail
|
21.0 | (1.4 | ) | (1.7 | ) | 22.0 | (0.8 | ) | ||||||||||||
|
Electronics store
|
27.8 | (1.0 | ) | (0.8 | ) | — | — | |||||||||||||
|
Wireless telecom
|
9.5 | (0.0 | ) | (1.8 | ) | 9.9 | 1.1 | |||||||||||||
|
Totals
|
$ | 94.8 | $ | (4.6 | ) | $ | (19.9 | ) | $ | 49.5 | $ | 2.1 | ||||||||
Our equity investment portfolio is managed by Prospector
Partners, LLC, or Prospector. Prospector, a registered
investment adviser with approximately $3.6 billion in
assets under management, oversees our portfolio of equity-like
investments including publicly-traded common stocks, convertible
securities and distressed debt. Prospector has a strong track
record of investment performance on both an absolute and
relative basis. Prospector has helped us to produce strong
annual investment results, evidenced in part by the returns of
our equity portfolio, which outperformed the total return of the
benchmark S&P 500 Index for the six months ended
June 30, 2007 by 2.0% and for years ended December 31,
2006 and 2005 by 10.3% and 26.0%, respectively. We believe that
these equity and equity-like investments are ideal for funding
certain long duration liabilities in our Income Annuities
segment. See “Business — Investments —
Overview” for further information regarding Prospector.
|
Six Months |
||||||||||||
|
Ended June 30, |
Year Ended December 31, | |||||||||||
| 2007 | 2006 | 2005 | ||||||||||
|
Public equity
|
8.9 | % | 26.1 | % | 30.9 | % | ||||||
|
S&P 500 Index (total return)
|
6.9 | % | 15.8 | % | 4.9 | % | ||||||
Liquidity
and Capital Resources
We conduct all our operations through our operating
subsidiaries. Dividends from our subsidiaries and permitted
payments under our tax sharing arrangements with our
subsidiaries are Symetra’s principal sources of cash to pay
stockholder dividends and meet Symetra’s obligations,
including payments of principal and interest on notes payable.
Our primary uses of funds at our holding company level include
payment of general operating expenses, payment of principal,
interest and other expenses related to holding company debt and
payment of dividends to our stockholders. We will pay two
dividends to our stockholders totaling $200.0 million in
the aggregate on October 19, 2007. After our initial public
offering, we intend to pay quarterly cash dividends on our
common stock, as described on page 28. The declaration and
payment of future dividends to holders of our common stock will
be at the discretion of our board of directors.
Dividends
and Regulatory Requirements
The payment of dividends and other distributions to us by our
insurance subsidiaries is regulated by insurance laws and
regulations. In general, dividends in excess of prescribed
limits are deemed “extraordinary” and require
insurance regulatory approval. Based on our statutory results as
of December 31, 2006, our insurance subsidiaries may pay
dividends of up to $166.4 million to us during fiscal 2007
without being required to obtain regulatory approval. During the
six months ended June 30, 2007, we received
$27.6 million in dividends from our subsidiaries, including
$23.0 million from our insurance subsidiaries. During 2006,
we received $122.5 million in dividends from our insurance
subsidiaries. During 2005, we did not receive dividends from our
insurance subsidiaries. For 2005 and the period from
August 2, 2004 through December 31,
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2004, we received $35.2 million and $20.0 million,
respectively, from our discontinued operations and our
non-insurance subsidiaries.
Liquidity
Requirements and Sources of Liquidity
The liquidity requirements of our insurance subsidiaries
principally relate to the liabilities associated with their
various insurance and investment products, operating costs and
expenses, the payment of dividends to us, and payment of income
taxes. Liabilities arising from insurance and investment
products include the payment of benefits, as well as cash
payments in connection with policy and contract surrenders and
withdrawals and policy loans. Historically, our insurance
subsidiaries have used cash flows from operations, cash flows
from invested assets and sales of investment securities to fund
their liquidity requirements.
Our insurance subsidiaries maintain investment strategies
intended to provide adequate funds to pay benefits without
forced sales of investments. Products having liabilities with
longer durations, such as certain life insurance policies and
structured settlement annuities, are matched with investments
having similar estimated lives such as long-term fixed
maturities, mortgage loans, and marketable equity securities.
Shorter-term liabilities are matched with fixed maturities that
have short-and medium-term fixed maturities. In addition, our
insurance subsidiaries hold highly liquid, high-quality,
short-term investment securities and other liquid
investment-grade fixed maturities to fund anticipated operating
expenses, surrenders and withdrawals. As of June 30, 2007,
our total cash and invested assets were $17.1 billion. As
of December 31, 2006, our total cash and invested assets
were $17.6 billion. Our fixed maturity portfolio included
below investment grade securities that comprised 4.1% and 4.4%
of the total fair value of our total fixed maturity securities
as of June 30, 2007 and December 31, 2006,
respectively. In addition, our fixed maturity portfolio included
non-rated securities that comprised 4.5% and 3.9% of the total
fair value of our fixed maturity securities as of these dates.
The short-term and long-term liquidity requirements are
monitored regularly to match cash inflows with cash
requirements. We review our short-term projected sources and
uses of funds and the asset/liability matching, investment and
cash flow assumptions underlying these projections. We
periodically make adjustments to our investment policies to
reflect changes in short-term and long-term cash needs and
changing business and economic conditions.
A primary liquidity concern with respect to fixed deferred
annuity and life insurance products is the risk of early
withdrawal. Our insurance subsidiaries attempt to mitigate this
risk by offering variable products whereby the investment risk
is transferred to the policyholder, charging surrender fees at
the time of withdrawal for certain products, applying a fair
value adjustment to withdrawals for certain products in our
general accounts, and monitoring and matching anticipated cash
inflows and outflows. Policyholder charges such as surrender
fees and fair value adjustments vary by product as follows:
| • | For group annuity products ($1.0 billion of reserves as of June 30, 2007), the surrender charge amounts and periods can vary significantly, depending on the terms of each contract and the compensation structure for the producer. Generally, surrender charge percentages for group products are less than individual products because we incur lower expenses at contract origination for group products. In addition, approximately 17% of the general account group annuity reserves are subject to a fair value adjustment at withdrawal. | |
| • | For individual annuity products ($3.5 billion of reserves as of June 30, 2007), the surrender charge is generally calculated as a percentage of the withdrawal amount and is assessed at declining rates generally during the first three to eight years after the initial deposit is made. | |
| • | Approximately 33% of the combined individual and group deferred annuities fund value is subject to surrender charges. | |
| • | Life insurance policies are less susceptible to withdrawal than annuity products because policyholders generally must undergo a new underwriting process and may incur a surrender fee in order to obtain a new insurance policy. |
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Capitalization
Our capital structure consists of notes payable and
stockholders’ equity. The following table summarizes our
capital structure as of the following dates:
|
June 30, |
December 31, | |||||||||||
| 2007 | 2006 | 2005 | ||||||||||
| (Unaudited) | ||||||||||||
| (Dollars in millions) | ||||||||||||
|
Senior notes payable
|
$ | 298.8 | $ | 298.7 | $ | 300.0 | ||||||
|
Stockholders’ equity, excluding accumulated other
comprehensive income (loss) or AOCI
|
1,426.5 | 1,327.8 | 1,268.3 | |||||||||
|
AOCI
|
(178.9 | ) | (0.5 | ) | 136.6 | |||||||
|
Total stockholders’ equity
|
1,247.6 | 1,327.3 | 1,404.9 | |||||||||
|
Total capital
|
$ | 1,546.4 | $ | 1,626.0 | $ | 1,704.9 | ||||||
|
Debt to capital ratio, excluding AOCI
|
17.3 | % | 18.4 | % | 19.1 | % | ||||||
Our capitalization decreased as of June 30, 2007 as
compared to December 31, 2006. This decrease was due to a
$79.7 million decrease in total stockholders’ equity.
Total stockholders’ equity decreased primarily due to a
$178.4 million decrease in accumulated other comprehensive
income, which was primarily caused by an increase in unrealized
losses in our fixed maturities portfolio. This decrease was
partially offset by net income generated of $96.2 million.
Our capitalization decreased $78.9 million as of
December 31, 2006 as compared with December 31, 2005.
This decrease was due to a $77.6 million decrease in total
stockholders’ equity. Total stockholders’ equity
decreased due to a $137.1 million reduction in AOCI, which
was primarily caused by unrealized losses in our fixed maturity
portfolio and the payment of a $100.0 million dividend to
stockholders. These decreases were partially offset by net
income of $159.5 million.
Debt
The following table summarizes our debt instruments as of
June 30, 2007:
| Maximum Amount Available as of | Amount Outstanding as of | |||||||||||||||||||||||||||
|
Description
|
Maturity Date | 6/30/2007 | 12/31/2006 | 12/31/2005 | 6/30/2007 | 12/31/2006 | 12/31/2005 | |||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||
|
Senior notes payable
|
4/1/2016 | $ | 300.0 | $ | 300.0 | $ | — | $ | 300.0 | $ | 300.0 | $ | — | |||||||||||||||
|
Revolving credit facilities:
|
||||||||||||||||||||||||||||
|
Bank of America, N.A.(1)
|
6/14/2009 | 70.0 | 70.0 | 370.0 | — | — | 300.0 | |||||||||||||||||||||
|
The Bank of New York:
|
||||||||||||||||||||||||||||
|
Holding company
|
n/a | 25.0 | 25.0 | 25.0 | — | — | — | |||||||||||||||||||||
|
Insurance subsidiary
|
n/a | 25.0 | 25.0 | 25.0 | — | — | — | |||||||||||||||||||||
|
Total notes payable and revolving credit facilities
|
$ | 420.0 | $ | 420.0 | $ | 420.0 | $ | 300.0 | $ | 300.0 | $ | 300.0 | ||||||||||||||||
| (1) | On August 16, 2007, we entered into a new $200.0 million revolving credit facility which replaced the $70 million credit facility in place as of June 30, 2007. See pages 68 and 131 for a description of this new facility. |
Senior
Notes Payable
On March 30, 2006, we issued $300.0 million of
6.125% senior notes due April 1, 2016, which were
issued at a discount yielding $298.7 million. Proceeds from
the notes were used to pay down the outstanding
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Table of Contents
principal on a variable rate revolving line of credit. Interest
on the notes is payable semiannually on April 1 and
October 1 of each year.
For a description of the additional terms of the notes, see
page 132.
Capital
Efficient Notes
On October 10, 2007, we issued $150.0 million
aggregate principal amount of CENts. We are using the proceeds
from the CENts to pay a special cash dividend on
October 19, 2007. The CENts bear interest at a fixed annual
rate of 8.30% to, but not including, October 15, 2017, and
thereafter at a floating annual rate equal to three-month LIBOR
plus 4.177%. The CENts have a scheduled maturity date of
October 15, 2037, subject to certain limitations, with a
final maturity date of October 15, 2067.
In connection with the offering of the CENts, we entered into a
covenant in favor of the holders of our $300.0 million
principal amount senior notes, pursuant to which we may not
repay or redeem the CENts prior to October 15, 2047 unless
the redemption or repayment is financed from the offering of
replacement capital securities, as specified in the CENts.
For a description of additional terms of the CENts, see
page 132.
Revolving
Credit Facilities
New Credit Facility. On August 16, 2007,
we entered into a $200.0 million senior unsecured revolving
credit agreement with a syndicate of lending institutions led by
Bank of America, N.A. The credit facility matures on
August 16, 2012, and loans under this facility bear
interest at varying rates depending on our credit rating. This
facility requires us to maintain specified financial ratios, and
includes other customary restrictive and affirmative covenants.
The revolving credit facility is available to provide support
for working capital, capital expenditures and other general
corporate purposes.
For a description of additional terms of this facility, see
page 133.
Other Facilities. In addition, in 2005, we
entered into two $25.0 million revolving credit facilities
with The Bank of New York to support our overnight repurchase
agreements program, which provides us with the liquidity to meet
general funding requirements. We have not borrowed under these
facilities since they were created.
Prior Facilities. In June 2004, we entered
into a $370.0 million revolving credit facility with
several lending institutions, led by Bank of America, N.A. In
August 2004, we borrowed $300.0 million against this
facility to help fund the purchase of our company from Safeco
Corporation. In March 2006, in conjunction with the issuance of
the notes described above, we repaid the $300.0 million
outstanding under this facility and reduced the amount that
could be borrowed from $370.0 million to
$70.0 million. Since then, we have not borrowed any funds
under this facility, and this facility has been replaced by the
new $200.0 million credit facility described above.
Cash
Flows
The following table sets forth a summary of our consolidated
cash flows for the six months ended June 30, 2007 and 2006
and the years ended December 31, 2006, 2005 and Combined
2004 (non-GAAP). Our consolidated cash flows for the years ended
December 31, 2005 and 2004 combine cash flows from
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Table of Contents
discontinued operations with cash flows from continuing
operations within each cash flow statement category of
operating, investing and financing activities:
|
Six Months Ended |
Year Ended December 31, | |||||||||||||||||||
| June 30, |
Combined |
|||||||||||||||||||
| (Unaudited) |
2004 |
|||||||||||||||||||
|
(Dollars in millions)
|
2007 | 2006 | 2006 | 2005 | (Non-GAAP) | |||||||||||||||
|
Net cash flows from operating activities
|
$ | 341.5 | $ | 423.0 | $ | 841.6 | $ | 866.2 | $ | 963.9 | ||||||||||
|
Net cash flows from investing activities
|
390.2 | 392.2 | 758.0 | 620.4 | (1,178.1 | ) | ||||||||||||||
|
Net cash flows from financing activities
|
(622.5 | ) | (707.9 | ) | (1,457.3 | ) | (1,527.9 | ) | 260.0 | |||||||||||
Operating
Activities
Cash flows from our operating activities are primarily driven by
the amounts and timing of cash received for premiums on our
group medical stop-loss, group life and term life insurance
products, income including dividends and interest on our general
account investments, as well as the amounts and timing of cash
disbursed for our payment of policyholder benefits and claims,
underwriting and operating expenses and income taxes. The
following discussion highlights key drivers in the level of cash
flows generated from our operating activities:
| • | Six months ended June 30, 2007 and 2006 — Net cash flows from operating activities for the six months ended June 30, 2007 were $341.5 million, an $81.5 million decrease over the same period in 2006. This decrease was primarily the result of the timing of certain cash settlements related to other assets and other liabilities. | |
| • | Years ended December 31, 2006 and 2005 — Net cash flows from operating activities during the year ended December 31, 2006 were $841.6 million, a $24.6 million decrease from 2005, which for 2005 included net cash flows used in discontinued operations of $3.7 million. The decrease was primarily the result of the amounts and timing of certain cash settlements related to other assets and other liabilities and a decline in premiums received from our group medical stop-loss products, partially offset by a reduced level of cash disbursed to fund policyholder benefits and claims, primarily group medical stop-loss products, as well as decreased underwriting and operating expenses. | |
| Years ended December 31, 2005 and 2004 — Net cash flows from operating activities for the year ended December 31, 2005 were $866.2 million, a $97.7 million decrease from 2004, which included net cash flows used in discontinued operations of $3.7 million in 2005 and $3.0 million in 2004. The decrease was primarily the result of a decline in premiums received from our group medical stop-loss products, increased amounts of cash paid to settle policyholder benefits and claims and a reduced amount of cash arising from other receivables and other assets and liabilities, partially offset by a reduction in cash disbursed to fund underwriting and operating expenses. |
Investing
Activities
Cash flows from our investing activities are primarily driven by
the amounts and timing of cash received from our sales of
investments and from maturities and calls of fixed maturity
securities, as well as the amounts and timing of cash disbursed
for our purchases of investments. The following discussion
highlights key drivers in the level of cash flows generated from
our investing activities:
| • | Net cash flows from investing activities for the six months ended June 30, 2007 were $390.2 million, a $2.0 million decrease from the same period in 2006. Net cash outflows from the routine management of our investment portfolio increased $54.8 million and we paid $21.9 million to acquire MRM. These outflows were offset by a $44.9 million increase in cash from short-term investments and $21.7 million increase related to mortgage loan activity. | |
| • | Years ended December 31, 2006 and 2005 — Net cash flows from investing activities during the year ended December 31, 2006 were $758.0 million, a $137.6 million increase from 2005, which for 2005 included net cash flows provided by discontinued operations of $29.6 million. The increase was |
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| primarily the result of a $543.5 million reduction of cash used in net purchases of investments and a $31.5 million reduction of cash used in purchases of property, equipment and leasehold improvements, partially offset by a $437.7 million decrease in proceeds from maturities and calls of fixed maturity investments. |
| • | Years ended December 31, 2005 and 2004 — Net cash flows from investing activities during the year ended December 31, 2005 were $620.4 million, a $1,798.5 million increase from 2004, which included net cash flows provided by discontinued operations of $29.6 million in 2005 and $22.4 million in 2004. The increase was primarily the result of consideration paid during 2004 of $1,349.9 million in conjunction with the acquisition of the life insurance and investment companies from Safeco Corporation, and a $1,000.3 million reduction of cash used in net purchases of investments, partially offset by a $487.5 million decrease in proceeds from maturities and calls of fixed maturity investments, a $34.6 million increase in cash used in purchases of property, equipment and leasehold improvements and our receipt in 2004 of $30.0 million related to our sale of our mutual funds business. |
Financing
Activities
Cash flows from our financing activities are primarily driven by
the amounts and timing of cash received from deposits into
certain life insurance and annuity policies and proceeds from
our issuances of capital stock and debt, as well as the amounts
and timing of cash disbursed to fund withdrawals from certain
life insurance and annuity policies, repayments of debt and
dividend distributions to our stockholders. The following
discussion highlights key drivers in the level of cash flows
generated from our financing activities:
| • | Six months ended June 30, 2007 and 2006 — Net cash flows from financing activities for the six months ended June 30, 2007 were $(622.5) million, an $85.4 million increase over the same period in 2006. We incurred a net cash outflow from financing activities in both periods as policyholder withdrawals exceeded deposits; however, the increase in the interim 2007 period relative to the same period in 2006 was primarily the result of an increase in policyholder deposits and a reduction in policyholder withdrawals. | |
| • | Years ended December 31, 2006 and 2005 — Net cash flows from financing activities during the year ended December 31, 2006 were $(1,457.3) million, a $70.6 million increase from 2005, which for 2005 included net cash flows used in discontinued operations of $29.2 million. The increase was primarily the result of a $170.1 million reduction in net policyholder withdrawals from certain life insurance and annuity policies, partially offset by our payment during 2006 of a $100.0 million dividend to our stockholders. | |
| • | Years ended December 31, 2005 and 2004 — Net cash flows from financing activities during the year ended December 31, 2005 were $(1,527.9) million, a $1,787.9 million decrease from 2004, which included net cash flows used in discontinued operations of $29.2 million in 2005 and $20.0 million in 2004. The decrease was primarily the result of a $486.1 million increase in net policyholder withdrawals from certain life insurance and annuity policies and our receipt during 2004 of financing proceeds of $1,364.9 million that were used to fund the purchase of the life insurance and investment companies from Safeco Corporation, partially offset by our payment during 2004 of $64.3 million of dividends to Safeco Corporation. |
Contractual
Obligations and Commitments
We enter into obligations with third parties in the ordinary
course of our operations. These obligations as of
December 31, 2006, are set forth in the table below.
However, we do not believe that our cash flow requirements can
be assessed based upon an analysis of these obligations as the
funding of these future cash obligations will be from future
cash flows from premiums, deposits, fees and investment income
that are not reflected in the table below. In addition, our
operations involve significant expenditures that are not based
upon commitments, including expenditures for income taxes and
payroll.
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| Payments Due by Year | ||||||||||||||||||||
|
2012 and |
||||||||||||||||||||
|
Contractual Obligations
|
Total | 2007 | 2008-2009 | 2010-2011 | thereafter | |||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
|
Senior notes payable
|
$ | 300.0 | $ | — | $ | — | $ | — | $ | 300.0 | ||||||||||
|
Interest on notes payable
|
183.8 | 18.4 | 36.8 | 36.8 | 91.8 | |||||||||||||||
|
Operating lease obligations(1)
|
56.1 | 6.9 | 13.4 | 12.7 | 23.1 | |||||||||||||||
|
Licensing fees(2)
|
48.8 | 13.2 | 27.2 | 8.4 | — | |||||||||||||||
|
Purchase and lending commitments:
|
||||||||||||||||||||
|
Investments in limited partnerships(3)
|
68.7 | 24.3 | 29.3 | 15.1 | — | |||||||||||||||
|
Commercial mortgage loans(4)
|
14.5 | 14.5 | — | — | — | |||||||||||||||
|
Securities collateral on securities lending(5)
|
439.3 | 439.3 | — | — | — | |||||||||||||||
|
Insurance obligations(6)
|
37,611.0 | 1,965.9 | 2,672.6 | 2,392.2 | 30,580.3 | |||||||||||||||
|
Total
|
$ | 38,722.2 | $ | 2,482.5 | $ | 2,779.3 | $ | 2,465.2 | $ | 30,995.2 | ||||||||||
| (1) | Includes minimum rental commitments on leases for office space, commercial real estate and certain equipment. For more information, see note 14, “Commitments and Contingencies,” of the notes to our 2006 consolidated financial statements included in this prospectus. | |
| (2) | Includes contractual commitments for a service agreement to outsource the majority of our information technology infrastructure. For more information, see note 14, “Commitments and Contingencies,” of the notes to our 2006 consolidated financial statements included in this prospectus. | |
| (3) | Related to investments in six limited partnership interests related to tax sheltered affordable housing projects and state tax credit funds and two private equity partnerships. We will provide capital contributions to the two private equity partnerships through 2015 up to a committed amount of $17.5 million at the discretion of the general partner, subject to certain contribution limits. Since the timing of payment is uncertain, the unfunded amount has been included in the payment due in less than one year. For more information, see note 14, “Commitments and Contingencies,” of the notes to our consolidated financial statements included in this prospectus. Amounts recorded on the balance sheet are included in “other liabilities”. | |
| (4) | Unfunded mortgage loan commitments as of December 31, 2006. | |
| (5) | We have accepted cash collateral of $439.3 million in connection with our securities lending program. Since the timing of the return of collateral is uncertain, the return of collateral has been included in the payments due in less than one year. For more information, see note 5, “Securities Lending Program,” of the notes to our 2006 consolidated financial statements included in this prospectus. | |
| (6) | Includes estimated claim and benefit, policy surrender and commission obligations on in-force insurance policies and deposit contracts. Estimated claim and benefit obligations are based on mortality, morbidity and lapse assumptions comparable with our historical experience. In contrast to this table, our obligations recorded in our consolidated balance sheets do not incorporate future credited interest for deposit contracts or tabular interest for insurance policies. Therefore, the estimated obligations for insurance liabilities presented in this table significantly exceed the liabilities recorded in reserves for future annuity and contract benefits and the liability for policy and contract claims. Due to the significance of the assumptions used, the amounts presented could materially differ from actual results. We have not included the variable separate account obligations as these obligations are legally insulated from general account obligations and will be fully funded by cash flows from separate account assets. We expect to fund the obligations for insurance liabilities from cash flows from general account investments and future deposits and premiums. |
Off-balance
Sheet Transactions
We do not have off-balance sheet transactions.
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Quantitative
and Qualitative Disclosures about Market Risk
We are subject to potential fluctuations in earnings, cash flows
and the fair value of certain assets and liabilities due to
changes in market interest rates and equity prices.
We enter into market-sensitive instruments primarily for
purposes other than trading.
Interest
Rate Risk
Our exposure to interest rate risk relates to the market price
and/or cash
flow variability associated with changes in market interest
rates.
An increase in market interest rates from current levels would
generally be a favorable development for us. If market interest
rates increase, we would expect to earn additional investment
income, to have increased annuity and universal life insurance
sales, and to limit the potential risk of margin erosion due to
minimum guaranteed crediting rates. However, an increase in
interest rates would also reduce the net unrealized gain and
could produce an unrealized net loss position of the investment
portfolio. In addition, if interest rates rise quickly enough
within a short time period, certain lines of business that are
interest sensitive are exposed to lapses as policyholders seek
higher yielding investments.
Our investment portfolios primarily consist of investment grade
fixed maturity securities, including public and privately-placed
corporate bonds, asset-backed securities, commercial
mortgage-backed securities, and collateralized mortgage
obligations. The carrying value of our investment portfolio as
of December 31, 2006 and 2005 was $17.3 billion and
$18.3 billion, respectively, of which 92.7% in 2006 and
93.7% in 2005 was invested in fixed maturity securities. The
primary market risk to our investment portfolio is interest rate
risk associated with investments in fixed maturity securities.
The fair value of our fixed maturities fluctuates depending on
the interest rate environment. During periods of declining
interest rates, paydowns on mortgage-backed securities and
collateralized mortgage obligations increase and we would
generally be unable to reinvest the proceeds of such prepayments
at comparable yields. The weighted-average duration of our fixed
maturity portfolio was approximately 6.2 and 6.8 years as
of December 31, 2006 and 2005, respectively.
We manage our exposure to interest rate risk through asset
allocation limits, limiting the purchase of negatively convex
assets, and asset/liability duration matching. Each line of
business has an investment policy based on its specific
liability characteristics.
Equity
Risk
We are exposed to equity price risk on our common stocks and
other equity holdings. In addition, asset fees calculated as a
percentage of the separate account assets are a source of
revenue to us. Gains and losses in the equity markets result in
corresponding increases and decreases in our separate account
assets and asset fee revenue.
In addition, a decrease in the value of separate account assets
may cause an increase in guaranteed minimum death benefit
claims, most of which are reinsured.
We manage equity price risk on investment holdings through
industry and issuer diversification and asset allocation
techniques.
Derivative
Financial Instruments
We make minimal use of derivative financial instruments as part
of our risk management strategy. We use indexed call options to
hedge our exposure to changes in the S&P 500 Index. Our
exposure is related to our FIA block of business, which credits
policyholders’ account values based on gains in the
S&P 500.
As a matter of policy, we have not and do not intend to engage
in derivative market-making, speculative derivative trading or
other speculative derivatives activities.
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Sensitivity
Analysis
Sensitivity analysis measures the impact of hypothetical changes
in interest rates and other market rates or prices on the
profitability of market-sensitive financial instruments.
The following discussion about the potential effects of changes
in interest rates and equity market prices is based on so-called
“shock-tests,” which model the effects of interest
rate and equity market price shifts on our financial condition
and results of operations. Although we believe shock tests
provide the most meaningful analysis, they are constrained by
several factors, including the necessity to conduct the analysis
based on a single point in time and by their inability to
include the extraordinarily complex market reactions that
normally would arise from the market shifts modeled. Although
the following results of shock tests for changes in interest
rates and equity market prices may have some limited use as
benchmarks, they should not be viewed as forecasts. These
forward-looking disclosures also are selective in nature and
address only the potential impacts on our financial instruments.
They do not include a variety of other potential factors that
could affect our business as a result of these changes in
interest rates and equity market prices.
One means of assessing exposure of our fixed maturity securities
portfolio to interest rate changes is a duration-based analysis
that measures the potential changes in fair value resulting from
a hypothetical change in interest rates of 100 basis points
across all maturities. This is sometimes referred to as a
parallel shift in the yield curve. Our investment manager uses
Derivative Solutions, a fixed-income analytics tool, to model
and calculate the duration and convexity of our asset portfolio.
Under this model, with all other factors constant and assuming
no offsetting change in the fair value of our liabilities, we
estimated that such an increase in interest rates would cause
the fair value of our fixed maturity securities portfolio to
decline by approximately $0.98 billion and
$1.14 billion, based on our securities positions as of
December 31, 2006 and 2005, respectively.
One means of assessing exposure to changes in equity market
prices is to estimate the potential changes in values on our
equity investments resulting from a hypothetical broad-based
decline in equity market prices of 10%. Using this assumption,
with all other factors constant, we estimate that such a decline
in equity market prices would cause the fair value of our
investment portfolio to decline by approximately
$27.4 million and $19.9 million as of
December 31, 2006 and 2005, respectively. In addition,
fluctuations in equity market prices affect our revenues and
returns related to our variable annuity and life products, which
depend upon fees that are related primarily to the fair value of
the underlying assets.
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Overview
Our
Business
We are a life insurance company focused on profitable growth in
select group health, retirement, life insurance and employee
benefits markets. Our first day of operations as an independent
company was August 2, 2004 when Symetra completed the
Acquisition. Our operations date back to 1957, and many of our
agency and distribution relationships have been in place for
decades. We are headquartered in Bellevue, Washington and employ
over 1,300 people in 25 offices across the United States,
serving over two million customers.
We manage our business through the following five segments, four
of which are operating:
| • | Group. We offer medical stop-loss insurance, limited medical benefit plans, group life insurance, accidental death and dismemberment insurance and disability insurance mainly to employer groups of 50 to 1,000 individuals. Our Group segment generated segment pre-tax income of $68.0 million during 2006 and $42.7 million during the six months ended June 30, 2007. As a result of our recent acquisition of Medical Risk Managers, Inc., we also offer MGU services. | |
| • | Retirement Services. We offer fixed and variable deferred annuities, including tax sheltered annuities, IRAs, and group annuities to qualified retirement plans, including Section 401(k) and 457 plans. We also provide record keeping services for qualified retirement plans invested in mutual funds. Our Retirement Services segment generated segment pre-tax income of $43.2 million during 2006 and $13.4 million during the six months ended June 30, 2007. | |
| • | Income Annuities. We offer SPIAs for customers seeking a reliable source of retirement income and structured settlement annuities to fund third-party personal injury settlements. Our Income Annuities segment generated segment pre-tax income of $62.6 million during 2006 and $52.5 million during the six months ended June 30, 2007. | |
| • | Individual. We offer a wide array of term, universal and variable life insurance as well as BOLI. Our Individual segment generated segment pre-tax income of $62.6 million during 2006 and $28.6 million during the six months ended June 30, 2007. | |
| • | Other. This segment consists of unallocated corporate income, composed primarily of investment income on unallocated surplus, unallocated corporate expenses, interest expense on debt, the results of small, non-insurance businesses that are managed outside of our operating segments and inter-segment elimination entries. Our Other segment generated segment pre-tax income of $7.6 million during 2006 and $5.8 million during the six months ended June 30, 2007. |
We distribute our products nationally through an extensive and
diversified independent distribution network. Our distributors
include financial institutions, employee benefits brokers, third
party administrators, worksite specialists, specialty brokers
and independent agents. We believe that our multi-channel
distribution network allows us to access a broad share of the
distributor and consumer markets for insurance and financial
services products. For example, we currently distribute our
annuity and life insurance products through approximately 17,000
independent agents, 22 major financial institutions and 1,200
independent employee benefits brokers. We have recently signed
selling agreements with an additional 14 major financial
institutions.
Market
Environment and Opportunities
We believe we are well positioned to benefit from a number of
demographic and market trends, including the following:
| • | Growing demand for affordable health insurance. According to the Kaiser Family Foundation, health insurance premiums in the U.S. increased 87% from 2000-2006, while the Consumer Price Index increased only 17% over the same period. As increases in health care costs continue to outpace |
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| inflation, the demand for affordable health insurance options has increased. We believe we can grow our business by providing employees with affordable access to health insurance through employer-sponsored limited benefit employee health plans and by offering group medical stop-loss insurance to medium and large businesses. We also believe that the trend toward reductions in employer-paid benefits and the uncertainty over the future of government benefit programs provide us with the opportunity to successfully offer other attractive employee benefits products. |
| • | Increasing retirement savings and income needs. According to the U.S. Department of Health and Human Services, from approximately 1950 to 2004, U.S. life expectancy at birth increased from 65.6 years to 75.2 years for men and from 71.1 years to 80.4 years for women and is expected to increase further. In addition, the U.S. Census Bureau estimates that approximately 77 million Americans born between 1946 and 1964 are approaching retirement age. However, according to the Employee Benefit Research Institute, in 2006, 52% of workers over the age of 55 and their spouses had accumulated less than $50,000 in retirement savings and only 14% of workers report that a traditional pension plan will be their primary source of retirement income. These projected demographic trends, along with a shift in the burden for funding retirement needs from governments and employers to individuals, increase the need for retirement savings and income. We expect greater demand for additional sources of retirement savings, such as our annuities and other investment products that will help consumers supplement their social security benefits with reliable retirement income. | |
| • | Expanding mass affluent market. As of June 2006, the mass affluent market included 13.7 million households with investible assets between $250,000 and $1.0 million, representing 28% of total financial assets. We believe that the mass affluent population is growing and that it underutilizes various financial products, such as insurance to protect assets, annuities to provide adequate income to support a desired future lifestyle and wealth transfer products to ensure its legacy. We believe we are well positioned to reach consumers in this target market given our relationships with financial institutions and independent agents, which are often their sources of guidance and advice. As such, we expect increased demand for our life insurance, variable and fixed annuity and wealth transfer products. |
Our
Competitive Strengths
We leverage the following competitive strengths to capitalize on
opportunities in our targeted markets:
| • | Innovative and collaborative product development capabilities. We design innovative products to meet the changing demands of the market. By working closely with our distributors, we are able to anticipate opportunities in the marketplace and rapidly address them. For example, we introduced Complete, an innovative variable life insurance policy designed for wealth transfer and centered on minimizing the inherent COI and thus maximizing the underlying account value. We also recently introduced our Focus variable annuity, which features low total cost to the contractholders, well-respected investment options and simplified product features. | |
| • | High-quality distribution relationships. We offer consumers access to our products through a national multi-channel network, including financial institutions, employee benefits brokers, third party administrators, worksite specialists, specialty brokers and independent agents. We have cultivated many of these relationships over decades by treating our distributors as clients and providing them with outstanding levels of service. We provide them with products specifically tailored to their needs, and supported by customized training and education services for their sales representatives. They value our reputation for our easy processes, simple forms and rapid turnaround time. By providing our distributors with excellent levels of service, we are able to develop strong relationships and avoid competing on price alone. | |
| • | Leading group medical stop-loss insurance provider. We believe we have been a leading provider of group medical stop-loss insurance since 1976. We have built a consistently profitable platform with high-levels of customer service and disciplined underwriting practices. In the last 25 years, our group medical stop-loss insurance business has experienced only two calendar years of net losses. We have driven profitable growth in our Group segment through disciplined underwriting practices, by |
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| developing related products, such as our Select Benefits limited medical benefit product, by using and by making strategic acquisitions, including, most recently, Medical Risk Managers in 2007. For the first six months of 2007, our group medical stop-loss insurance business drove a favorable loss ratio while experiencing improved persistency in our Group segment. |
| • | Diverse businesses provide flexibility, earnings stability and capital efficiency. We have an attractive and diverse mix of businesses that allows us to make profitability-driven decisions in each business across various market environments. In general, our four operating business segments are not affected in the same way by economic and operating trends. For example, the level of competitive pricing and performance varies across our segments over time. We believe that this mix offers us a greater level of financial stability than many of our similarly-sized competitors across business and economic cycles. Our diverse business mix also allows us to reallocate our resources to product lines that generate the most attractive returns on capital while reducing our overall capital requirements. | |
| • | Flexible information technology platform integrated with our distributors. We have a flexible information technology platform that allows us to seamlessly integrate our products onto the operating platforms of our distributors, which we believe provides us with a competitive advantage in attracting new distributors. We also continuously develop innovative tools designed to enhance the service levels and operational performance of our distributors, which strengthens these relationships. For example, our ExpressTM tool allows our distributors to capture all the necessary data to make products and services instantly available at the point of sale. We will continue to leverage our information technology platform to market our current and future product offerings. | |
| • | Experienced management team with investor-aligned compensation. We have a high-quality management team with an average of 25 years of insurance-industry experience, led by Randy Talbot who has been our chief executive officer since 1998. Mr. Talbot has spent a significant portion of his 30-year career in the insurance industry operating an insurance brokerage, providing him with the knowledge to intimately understand the needs of our distributors. We have enhanced our original team with several key additions since the Acquisition, each of whom brings substantial experience in their discipline. We also have an experienced board of directors, consisting of industry professionals who have worked closely with us since the Acquisition to develop our strategies and operating philosophies. Our compensation structure aligns management’s incentives with our stockholders through our long-term incentive plan that rewards long-term growth in tangible book value and in the intrinsic value of our business. |
Our
Growth Strategies
To maximize stockholder value, we pursue the following
strategies:
| • | Target large and growing markets. We will continue to capitalize on favorable demographic trends, including the growing demand for affordable health insurance, increasing retirement savings and income needs and an expanding mass affluent market. For example, our Select Benefits product allows employers who cannot afford to provide comprehensive health care coverage to offer some level of benefits to their employees. Additionally, as consumers live longer after retirement, their need for life-long financial security is expanding. We will continue to identify key opportunities within these markets and provide tailored solutions that address the evolving needs of these customers. | |
| • | Broaden and deepen distribution relationships. Our distribution strategy is to deliver multiple products through a single point of sale, thereby leveraging the cost of distribution. We utilize diverse distribution channels, including financial institutions, employee benefits brokers, third party administrators, worksite specialists, specialty brokers and independent agents. We intend to deepen our long-standing distribution relationships while adding new large-scale and high quality distribution partners. As an example, since June 30, 2006, we have increased our relationships with major financial institutions from 10 to 22 and we have recently signed selling agreements with an additional 14 major financial institutions. Through this growth, we have added approximately 10,000 financial institution representatives selling our products. We will continue to leverage our existing relationships by |
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| distributing additional products through our existing partnerships. Since the Acquisition, we have maintained distribution staff and new business processing staff to support higher levels of new sales, making incremental sales relatively more profitable. |
| • | Be innovative in anticipating customer needs. We work closely with our distributors to develop customer-responsive products that meet our stringent return requirements, address our target markets and can be delivered efficiently across our information technology platforms. Recent examples include the Focus Variable Annuity product for retirement savings and Complete, our new Variable Life product designed for the wealth transfer market. We will continue to pursue non-traditional avenues of product development. For example, we recently began offering funding services to holders of our structured settlements to offer them an attractive financial alternative. We continually seek to be the first to improve upon an existing leading product. For example, we believe we were the first to offer a hybrid BOLI separate account and an experience rating to customers, both of which provide greater transparency of the investment portfolio. We have also introduced a commutation benefit on a SPIA, which gives the owner greater flexibility to cash out some of his or her future benefits after a certain period of time. | |
| • | Effectively manage capital. We intend to manage our capital prudently to maximize our profitability and long-term growth in stockholder value. Our capital management strategy is to maintain financial strength through conservative and disciplined risk management practices while deploying or returning excess capital as situations warrant. We will also maintain our conservative investment management philosophy, which includes holding a high quality investment portfolio and carefully matching our investment assets against the duration of our insurance product liabilities. | |
| • | Pursue complementary acquisitions. We will continue to seek acquisition opportunities that fit strategically within our existing business lines, provide us with a larger distribution presence and meet our stringent return objectives. For example, our recent acquisition of Medical Risk Managers has provided us with key benefits in our group medical stop-loss business. As part of the acquisition, we acquired a database of underwriting experience, which provides us with superior underwriting knowledge. We also gained an MGU that provides us with fee income in addition to access to an existing book of business, a portion of which we may be able to integrate with our existing book of group medical stop-loss business. We believe we have ample financial capacity to remain a prudent acquirer while maintaining a conservative balance sheet. |
Group
Overview
We offer a full range of employment-based benefit products and
services targeted primarily at employers, unions and public
agencies with 50 to 1,000 employees, as well as select
larger groups that meet our targeted pricing and underwriting
parameters. Group’s products include group medical
stop-loss insurance sold to employer self-funded health plans;
limited benefits medical insurance for employees not able to
participate in a traditional health plan, such as part-time,
seasonal and temporary workers; group life, accidental death and
dismemberment insurance, and disability products. We purchase
reinsurance coverage to limit our exposure to losses from our
group medical stop-loss, life, short-term disability and
long-term disability products. We retain group medical stop-loss
risk up to $1.0 million and reinsure the remainder. We
reinsure 50% of our Group life risk and cap our liability at
$0.5 million. Our short-term and long-term disability risk
is 100% reinsured.
We sell through several types of distributors within the Group
segment, including third-party administrators or TPAs, employee
benefits brokers, consultants and Administrative Services Only,
or ASO, arrangements. ASO’s are fully insured networks that
also offer our group medical stop-loss insurance.
We work closely with employee benefits brokers, consultants and
the employer to design benefit plans to meet the employer’s
particular requirements. Our customers primarily are small and
mid-size employers that require knowledgeable employee benefits
brokers, consultants and insurance company representatives to
understand their individual financial needs and employee
profiles, and to customize benefit plans that are
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appropriate for them. We believe our extensive experience and
expertise in group medical stop-loss insurance, limited benefits
medical insurance, group life, accidental death and
dismemberment insurance and disability products provide us with
opportunities to support close broker relationships and to
provide employers innovative and customer-centric benefit plans.
Pricing in the medical stop-loss insurance market has proven to
be cyclical. Over the past two years, we have experienced a
cycle where the market had been offering this product at
competitively low prices. However, we continued our disciplined
medical stop-loss pricing strategy. More recently, we have seen
evidence of the medical stop-loss insurance market firming,
which may suggest a developing trend towards higher pricing for
this product line, based on our experience with previous pricing
cycles.
Products
Group
Medical Stop-Loss
Our group medical stop-loss insurance is provided to employer
self-funded health plans and covers the risk of higher than
expected claims experience. The group medical stop-loss coverage
reimburses for claims in excess of a predetermined amount.
Limited
Medical Benefits
Our limited medical benefits insurance is provided to employers
for health coverage to employees not otherwise eligible to
participate in traditional plans, such as part-time, seasonal
and temporary workers.
Life
Insurance, Accidental Death and Dismemberment
Our group term life insurance product provides benefits in the
event of an insured employee’s death. The death benefit can
be based upon an individual’s earnings or occupation, or
can be fixed at a set dollar amount. Our products also include
optional accidental death and dismemberment coverage as a
supplement to our term life insurance policies. This coverage
provides benefits for an insured employee’s loss of life,
limb or sight as a result of accidental death or injury.
Disability
Insurance
Our group long-term disability coverage is designed to cover the
risk of employee loss of income during prolonged periods of
disability. Our group short-term disability coverage provides
partial replacement of an insured employee’s weekly
earnings in the event of disability resulting from an injury or
illness. Benefits can be a set dollar amount or based upon a
percentage of earnings.
Underwriting
and Pricing
We face significant competition in the Group segment operations.
Our competitors include large and highly rated insurance
carriers. Some of these competitors have greater resources than
we do, and many of them offer similar products and use similar
distribution channels. We have consistently written or renewed
business that meets our return requirements, and this discipline
has recently had a slightly negative impact on our market share.
However, this was by design with our focus on profitability.
Competition is based primarily upon product pricing and
features, compensation and benefits structure and support
services offered.
Group insurance pricing reflects the employer group’s
claims experience, when appropriate. The risk characteristics of
each employer group are reviewed at the time the policy is
issued and each renewal year thereafter, resulting in ongoing
adjustments to pricing. The key pricing and underwriting
criteria are medical cost trends, the employer group’s
demographic composition, including the age, gender and family
composition of the employer group’s members, the industry,
geographic location, regional economic trends, plan design and
prior claims experience.
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Retirement
Services
Overview
Through our Retirement Services segment, we offer fixed and
variable deferred annuities in both the qualified and
non-qualified markets. Qualified contracts include tax-sheltered
annuities (marketed to teachers and not-for-profit
organizations), IRAs, Roth IRAs and Section 457 plans. We
also issue group annuities to qualified retirement plans and
provide record keeping services to qualified retirement plans
invested in mutual funds. We offer these products and services
to a broad range of individual consumers who want to accumulate
tax-deferred assets for retirement, desire a reliable source of
income during their retirement, or seek to protect against
outliving their assets during retirement. We also target the
small to mid-size employer market with cost effective products
and services that provide a broad range of diverse investment
options for employers that offer defined contribution plans.
Although the demand for fixed annuities has been negatively
impacted by the low interest rate environment, we believe that
higher interest rates will result in increased demand for fixed
annuities and other investment products that help consumers
supplement their social security benefits with reliable
retirement income.
We have a variety of fixed annuity products and a broad range of
distribution relationships that position us to increase sales to
consumers looking for stable returns. With our new Focus
variable product, we are positioned to increase sales to
consumers that are looking to maximize earnings and have a
tolerance for some volatility in their underlying investments.
Furthermore, we believe that the small to mid-sized employer
market place will be an area of growth as more employers
eliminate traditional pensions and offer defined contribution
plans with lower administrative costs. As employers drive down
employee costs, we believe they still want to offer competitive
benefit retirement plans so long as the administrative costs are
reasonable. We have partnered with a third party to offer
employers a turnkey 401(k) package of plan administration and
non-proprietary mutual fund investment options that is easy to
sell through financial advisors. In addition, our products are
designed to allow employers to provide their employees with
attractive retirement investments for a relatively low cost.
Furthermore, once those retirement plan customers decide to
retire or rollover their funds, we offer a suite of IRAs, Roth
IRAs, immediate annuities, and other retirement vehicles. It is
our goal to capture and hold those customers by offering
products that address their evolving needs and through excellent
service to our distribution partners and customers.
We develop our annuity products through a rigorous pricing and
underwriting process designed to achieve targeted returns based
upon each product’s risk profile and our expected rate of
investment returns. We compete for sales of annuities through
competitive pricing policies and innovative product design. For
example, we have introduced a single premium bonus annuity with
a choice of multi-year interest guarantee periods.
We offer our annuities and other investment products primarily
through financial institutions, broker dealers, independent
agents and financial advisors, and worksite employee benefits
specialists.
Products
Fixed
Annuities
We offer fixed single premium and flexible premium deferred
annuities that provide for a premium payment at time of issue,
an accumulation period and an annuity payout period at some
future date. For example, our fixed deferred annuities include
our Custom product, which has a seven-year surrender charge
penalty period and a choice of one year, three year or five year
interest rate lock periods. During the accumulation period, we
credit the account value of the annuity with interest earned at
an interest rate, called the crediting rate. The crediting rate
is guaranteed generally for one year, or the guarantee period
selected by the contract owner. After each guarantee period, the
crediting rate is subject to change at our discretion (subject
to the minimum guaranteed rate in the contract), based upon
competitive factors, portfolio earnings
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rate, prevailing market rates and product profitability. Our
fixed annuity contracts are funded by our general account, and
the accrual of interest during the accumulation period is
generally on a tax-deferred basis to the owner. The majority of
our fixed annuity contract owners retain their contracts through
the surrender penalty period. After one year in the annuity
contract, the contract owner may elect to take the accumulated
value of the annuity and convert it to a series of payments that
are received over a selected period of time of not less than
five years.
Our fixed annuity contracts permit the contract owners at any
time during the accumulation period to withdraw all or part of
the premium paid, plus the amount credited to their accounts,
subject to contract provisions such as surrender charges that
vary depending upon the terms of the product. The contracts
impose surrender charges that typically vary from 5.0% to 8.0%
of the amount withdrawn, starting in the year of contract issue
and decreasing to zero over a three to eight-year period. The
contract owner also may withdraw annually up to 10% of the
account value without any contractual penalty. Approximately
$1.6 billion, or 35.9% of the total account value of our
fixed annuities as of June 30, 2007, were subject to
surrender charges.
As market conditions change, we change the initial crediting
rate for newly issued fixed single premium deferred annuities,
or SPDAs. We maintain the initial crediting rate for a minimum
period of one year or the guarantee period, whichever is longer.
Thereafter, we may adjust the crediting rate no more frequently
than once every six months for any given deposit. Most of our
recently issued annuity contracts have minimum guaranteed
crediting rates between 1.0% and 3.0%.
Our earnings from fixed annuities are based upon the spread
between the crediting rate on our fixed annuity contracts and
the returns we earn in our general account on our investment of
premiums.
Variable
Annuities
We offer variable annuities that allow the contract owner to
make payments into a guaranteed-rate account and separate
accounts divided into subaccounts that invest in underlying
investment portfolios. Like a deferred fixed annuity, a deferred
variable annuity has an accumulation period and a payout period.
Although the fixed-rate account is credited with interest in a
manner similar to a fixed deferred annuity, there is no
guaranteed minimum rate of return for investments in the
subaccounts, and the contract owner bears the entire risk
associated with the performance of these subaccounts, subject to
the guaranteed minimum death benefit or any other benefit
offered under the contract.
Similar to our fixed annuities, our variable annuity contracts
permit the contract owner to withdraw all or part of the
premiums paid, plus the amount credited to the contract
owner’s account, subject to contract terms such as
surrender charges. The cash surrender value of a variable
annuity contract depends upon the value of the assets that have
been allocated to the contract, how long those assets have been
in the contract and the investment performance of the
subaccounts to which the contract owner has allocated assets.
Variable annuities provide us with fee revenue in the form of
flat-fee charges, mortality and expense risk charges, and asset
related administration charges. The mortality and expense risk
charge and asset related administration charge equal a
percentage of the contract owner’s assets in the separate
account and typically range from 0.95% to 1.55% per annum. In
addition, some contracts may offer the option for contract
owners to purchase additional features, such as guaranteed
minimum death benefits, for additional fees that are paid for
through charges equal to a percentage of the contract
owner’s assets. Substantially all of our guaranteed minimum
death benefit risk on our individual variable annuities is
reinsured. We continue to evaluate our pricing of such features
and intend to change prices if appropriate.
We recently introduced the Symetra Focus Variable Annuity, which
we believe is one of the most cost-effective such products on
the market. Focus is one of the few variable annuities available
featuring index investment options from Vanguard. The
product’s low-cost structure and well-respected investment
options are designed to benefit the clients. The average total
cost with Focus is 37% less than the industry average according
to Variable Annuity Research and Data Service, a leading source
of variable annuities data.
We continually review potential new fixed and variable annuity
products and pursue only those where we believe we can achieve
targeted returns in light of the risks involved. Unlike several
of our competitors, we
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have not offered variable annuity products with guaranteed
minimum withdrawal benefits, or GMWB, or with guaranteed minimum
income benefits, or GMIB.
Corporate
Retirement Plans
We offer a wide range of employer-sponsored retirement plans,
which include 401(k) plans, including traditional, Safe Harbor
and SIMPLE profit sharing plans, 403(b) plans and
Section 457 plans.
Additional retirement plans can be purchased by individual
business owners. These include one-person 401(k) plans designed
for business owners with no employees, other than a spouse and
defined benefit plans, commonly known as traditional retirement
plans, designed to distribute a specific monthly benefit at
retirement. The formula used to calculate this benefit can be
based on many factors, but most commonly on salary and years of
service. Contributions can only be made by the employer and are
a federally tax-deductible business expense.
Underwriting
and Pricing
We generally do not use an underwriting selection process for
our annuity products. We price our products based upon our
expected investment returns and our expectations for mortality,
longevity and the probability that a policy or contract will
remain in-force from one period to the next, or persistency, for
the group of our contract owners as a whole, taking into account
mortality improvements in the general population and our
historical experience. We price deferred annuities by analyzing
longevity and persistency risk, volatility of expected earnings
on our assets under management, risk profile of the product,
special reserving and capital requirements, and the expected
expenses we will incur.
Income
Annuities
Overview
We offer income annuities, which guarantee a series of payments
that continue either for a certain number of years or for the
remainder of an annuitant’s life.
Also, we offer structured settlement contracts that provide an
alternative to a lump sum settlement, generally in a personal
injury lawsuit or worker’s compensation claim, and
typically are purchased by property and casualty insurance
companies for the benefit of an injured claimant. The structured
settlements provide scheduled payments over a fixed period or,
in the case of a life-contingent structured settlement, for the
life of the claimant with a guaranteed minimum period of
payments.
Products
Income
Annuities
Our income annuities differ from deferred annuities in that they
provide for contractually guaranteed payments that generally
begin within one year of issue. Income annuities generally do
not provide for surrender or policy loans by the contractholder,
and therefore they provide us with the opportunity to match
closely the underlying investment of the deposit received to the
cash benefits to be paid under a policy and provide for an
anticipated margin for expenses and profit, subject to credit,
reinvestment and, in some cases, longevity risk. We have
recently added a liquidity feature that allows the
contractholder to withdraw portions of the future payments.
The most common types of income annuities are the
life-contingent annuity, which makes payments for the life of an
annuitant, the joint and survivor annuity, which continues to
make payments to a second annuitant, such as a spouse, after the
death of the contractholder, and period certain annuities, which
generally make payments for a minimum period from five to
30 years even if the contractholder dies within the certain
period. Income annuities typically are sold to people that are
near, at, or in retirement. We anticipate higher sales of income
annuities with the demographic shift toward more people reaching
retirement age and their need for dependable retirement income
that lasts their entire life.
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Structured
Settlements
Structured settlement contracts provide an alternative to a lump
sum settlement, generally in a personal injury lawsuit or
worker’s compensation claim, and typically are purchased by
property and casualty insurance companies for the benefit of an
injured claimant. The structured settlements provide scheduled
payments over a fixed period or, in the case of a
life-contingent structured settlement, for the life of the
claimant with a guaranteed minimum period of payments.
Structured settlement contracts also may provide for irregularly
scheduled payments to coincide with anticipated medical or other
claimant needs. These settlements offer tax-advantaged,
long-term financial security to the injured party and facilitate
claim settlement for the property and casualty insurance
carrier. Structured settlement contracts are long-term in
nature, guarantee a fixed benefit stream and generally do not
permit surrender or borrowing against the amounts outstanding
under the contract. In 2005, we introduced funding services to
clients with financial circumstances that may have changed from
the time they originally received a structured settlement. Our
funding service provides an immediate lump sum payment to
replace future benefit payments and includes coordinating the
court approval process.
Our current financial strength ratings limit our ability to
offer structured settlement contracts. If our principal life
insurance company subsidiary, Symetra Life Insurance Company,
increases its financial strength ratings from “A”
(Excellent) to “A+” (Excellent) from A.M. Best,
courts will be more willing to approve structured settlement
contract arrangements from us. Improving this key rating will
allow us to participate fully in this market.
Underwriting
and Pricing
In substandard cases, we maintain medical underwriting for these
annuities. We price income annuities and structured settlements
using industry produced annuity mortality information, our
mortality experience and assumptions regarding continued
improvement in annuitant longevity, as well as assumptions
regarding investment yields at the time of issue and thereafter.
Our structured settlement contracts and traditional income
annuities can be underwritten in our medical department by
medical doctors and other trained medical personnel.
Individual
Overview
Individual life insurance provides protection against financial
hardship after the death of an insured by providing cash
payments to the beneficiaries of the policyholder. Single
premium life and universal life insurance products also provide
an efficient way for assets to be transferred to heirs.
Our principal life insurance product is term life, which
provides life insurance coverage with guaranteed level premiums
for a specified period of time with little or no buildup of cash
value that is payable upon lapse of the coverage. We have been a
provider of term life insurance since 1957. In addition to term
life insurance, we offer universal life insurance products,
which are designed to provide protection for the entire life of
the insured and may include a buildup of cash value that can be
used to meet the policyholder’s particular financial needs
during the policyholder’s lifetime.
We price our traditional insurance policies based primarily upon
our own historical experience in the risk categories that we
target. Our pricing strategy is geared toward individuals in
preferred risk categories and offer them attractive products at
competitive prices. Persons in preferred risk categories include
healthier individuals who generally have family histories that
do not present increased mortality risk. We also have
significant expertise in evaluating people with health problems
and offer appropriately priced coverage for people who meet our
underwriting criteria.
We offer our life insurance products primarily through three
distribution channels: independent agents and financial
advisors, worksite benefit brokers and financial institutions,
and we offer BOLI through specialty agents. We believe there are
opportunities to expand our sales through each of these
distribution channels.
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Products
Term Life
Insurance
Our term life insurance policies provide a death benefit if the
insured dies while the coverage is in force. Term life policies
have little to no cash value buildup and therefore rarely have a
payment due if and when a policyholder decides to lapse the
policy.
Our primary term life insurance products have guaranteed level
premiums for initial terms of 10, 15, 20 or 30 years. After
the guaranteed period expires, premiums increase annually and
the policyholder has the option to continue under the current
policy by paying the increased premiums without demonstrating
insurability or qualifying for a new policy by submitting again
to the underwriting process. Coverage continues until the
insured reaches the policy expiration age or the policyholder
ceases to make premium payments or otherwise terminates the
policy, including potentially converting to a permanent plan of
insurance. The termination of coverage is called a lapse. For
newer policies, we seek to reduce lapses at the end of the
guaranteed period by gradually grading premiums to the attained
age scale of the insured over the five years following the
guaranteed period. After this phase-in period, premiums continue
to increase as the insured ages.
Because of how we design and price our term insurance, we have
limited the impact from statutory reserves mandated by the
valuation of life insurance policies model regulation, also
known in the insurance industry as XXX deficiency reserves.
BOLI
Our life insurance business also includes BOLI. During the past
few years, many of the nation’s largest financial
institutions have purchased several billion dollars of BOLI as a
means of generating the cash flow needed to fund benefit
liabilities. A BOLI program can create significant assets and
earnings gains that can closely match the emerging liabilities.
BOLI is a highly stable, low-risk source of financing that can
offer net annual after-tax returns that are generally higher
than traditional bank investments.
Universal
Life Insurance
Our universal life insurance policies provide policyholders with
lifetime death benefit coverage, the ability to accumulate
assets on a flexible, tax-deferred basis, and the option to
access the cash value of the policy through a policy loan,
partial withdrawal or full surrender. Our universal life
products also allow policyholders to adjust the timing and
amount of premium payments. We credit premiums paid, less
certain expenses, to the policyholder’s account and from
that account deduct regular expense charges and certain risk
charges, known as COI, which generally increase from year to
year as the insured ages. Our universal life insurance policies
accumulate cash value that we pay to the insured when the policy
lapses or is surrendered. Most of our universal life policies
also include provisions for surrender charges for early
termination and partial withdrawals.
We credit interest on policyholder account balances at a rate
determined by us, but not less than a contractually guaranteed
minimum. Our in-force universal life insurance policies
generally have minimum guaranteed crediting rates ranging from
3.0% to 4.5% for the life of the policy.
Because of how we design and price our universal life insurance,
we have limited the impact from AXXX deficiency reserves. We
sell only two products with secondary guarantees and these are
limited to the first 20 years of the policy.
Worksite
Life
Our worksite life product is voluntary universal life insurance
coverage that provides lifetime death benefit protection if
minimum premium payments are made. The premiums are paid by
payroll deduction while the employee remains with the employer
and the product is portable after the policyowner leaves the
employer. Policies are available for employees, their spouses,
children and grandchildren.
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The product has an Automatic Increase Option (AIO) that allows
the policyowner to elect at issue to have the option of paying
an incremental amount in future policy years to obtain
additional coverage. We credit interest on policyholder account
balances at a rate determined by us, subject to the guaranteed
minimum interest rate of 2.0%.
Because of how we design and price our worksite life insurance,
we have limited the impact from AXXX deficiency reserves.
Variable
Life Insurance
Our variable life insurance policies provide policyholders with
lifetime death benefit coverage, the ability to accumulate
assets on a flexible, tax-deferred basis, and the option to
access the cash value of the policy through a policy loan,
partial withdrawal or full surrender. We offer a variable
universal life insurance product with either a fixed or
increasing death benefit for traditional life insurance needs
and policyholders are allowed to adjust the timing and amount of
premium payments. We also offer a variable life insurance
product that is designed to maximize cash value accumulation by
minimizing the COI charges. This product provides the minimum
amount of insurance necessary to qualify as life insurance under
the IRS tax code and has a variable death benefit that adjusts
based on the investment performance of the underlying account
value. This product is designed for the financial planning
market, primarily for wealth transfer purposes for high net
worth individuals.
Because of how we design and price our variable universal life
insurance, we have limited the impact from AXXX deficiency
reserves. We sell only one product with secondary guarantees
that are limited to the first 20 years of the policy.
Underwriting
and Pricing
We believe effective underwriting and pricing are significant
drivers of the profitability of our life insurance business, and
we have established rigorous underwriting and pricing practices
designed to maximize our profitability. Our fully underwritten
term life insurance is reinsured 50% to 85%, which limits
retained mortality risk for the company. We set pricing
assumptions for expected claims, lapses, investment returns,
expenses and customer demographics based on our own relevant
experience and other factors. Our strategy is to price our
products competitively for our target risk categories and not
necessarily to be equally competitive in all categories.
Our fully underwritten policies place each insurable life
insurance applicant in one of eight primary risk categories,
depending upon current health, medical history and other
factors. Each of these eight categories has specific health
criteria, including the applicant’s history of using
nicotine products. We consider each life insurance application
individually and apply our guidelines to place each applicant in
the appropriate risk category, regardless of face value or net
amount at risk. We may decline an applicant’s request for
coverage if the applicant’s health or other risk factor
assessment is unacceptable to us. We do not delegate
underwriting decisions to independent sales intermediaries.
Instead, all underwriting decisions are made by our own
underwriting personnel or by our automated underwriting system.
We often share information with our reinsurers to gain their
insights on potential mortality and underwriting risks and to
benefit from their broad expertise. We use the information we
obtain from the reinsurers to help us develop effective
strategies to manage our underwriting risks. For specific
markets where fully underwritten products are not preferred by
the distributor, we have developed specially priced products to
support a “simplified issue” process. This process
enables us to reach applicants not called on by traditional
insurance agents. “Simplified issue” contracts are
typically generated via worksite sales to employees and sales to
retail bank customers. Insurance amounts are limited and
separate underwriting guidelines are applied for simplified
issue policies.
Other
Our Other segment consists primarily of unallocated surplus net
investment income and unallocated operating expenses including
interest expense on debt, the results of small, non-insurance
businesses that are managed outside of our operating segments
and inter segment elimination entries.
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Operating
Subsidiaries
Symetra Financial Corporation is a holding company, and we
conduct business through our subsidiaries. Our primary operating
subsidiaries are as follows:
|
Name
|
Operating Segment
|
Other Information
|
||
| Symetra Life Insurance Company | All segments | Primary operating subsidiary | ||
| First Symetra National Life Insurance Company of New York | Primarily Retirement Services | |||
| Clearscape Funding Corporation | Other | |||
| Employee Benefit Consultants, Inc. | Group | Third party administrator | ||
| Symetra Assigned Benefits Service Company | Income Annuities | Structured settlements | ||
| Symetra Securities, Inc. | Retirement Services | Broker-dealer; distributor | ||
| Symetra Investment Services, Inc. | Other | Broker-dealer; distributor | ||
| Medical Risk Managers, Inc. | Group | Managing general underwriter |
Distribution
We distribute our products through an extensive and diversified
distribution network. We believe access to a variety of
distribution channels enables us to respond effectively to
changing consumer needs and distribution trends. We compete with
other financial services companies to attract and retain
relationships in each of these channels. Some of the factors
that lead to our success in competing for sales through these
channels include amount of sales commissions and fees we pay,
breadth of our product offerings, our perceived stability and
our financial strength ratings, marketing and training we
provide and maintenance of key relationships with individuals at
those firms. We believe we have a well diversified multi-channel
distribution network to capture a broad share of the distributor
and consumer markets for insurance and financial services
products.
Our Group segment distributes their products through the
following channels:
| • | employee benefits brokers and TPAs; and | |
| • | worksite specialists. |
Our Individual, Retirement Services and Income Annuities
segments distribute their products through the following
channels:
| • | financial institutions; | |
| • | worksite specialists; and | |
| • | brokerage general agencies and independent agents. |
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The following table sets forth our annualized first-year
premiums and deposits on new policies in our Group, Retirement
Services, Income Annuities and Individual segments:
Sales for
the Year Ended December 31, 2006
by Distribution Channel
by Distribution Channel
| Segment | ||||||||||||||||
|
Retirement |
Income |
|||||||||||||||
|
Distribution Channel
|
Group(1) | Services(2) | Annuities(3) | Individual(4) | ||||||||||||
| (Unaudited) | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||
|
Financial institutions
|
$ | — | $ | 374.8 | $ | 14.8 | $ | 1.4 | ||||||||
|
Employee benefits brokers/TPAs
|
59.9 | — | — | — | ||||||||||||
|
Worksite specialists
|
9.2 | 160.3 | 5.4 | 1.6 | ||||||||||||
|
Independent agents/BGAs
|
— | 38.1 | 65.3 | 6.2 | ||||||||||||
|
Structured settlements/BOLI
|
— | — | 11.1 | — | ||||||||||||
| (1) | Includes medical stop-loss, health insurance and life and disability and limited medical benefits. | |
| (2) | Includes deferred and variable annuities and retirement programs. | |
| (3) | Includes immediate annuities and structured settlements. | |
| (4) | Includes term, universal, single premium, BOLI and variable life insurance. |
Financial Institutions. We have agency
agreements with 22 major financial institutions, accounting for
approximately 16,000 agents and registered representatives in
50 states. We use financial institutions to distribute a
significant portion of our fixed and variable annuities, as well
as a growing portion of our life insurance policies.
Two financial institutions, Washington Mutual Financial Services
and U.S. Bank, accounted for a significant portion of our
total sales in 2006, with each selling primarily fixed annuity
products. Each of these two distributors operates under an
agency agreement with us. Each agreement may be terminated at
any time, for any reason, upon thirty days notice. We pay each
distributor commissions and other compensation at various rates
depending on the product sold. We retain the right to change
compensation paid under these agreements with respect to future
sales. Generally, if premiums are returned to the policyholder
or withdrawals are made during the first contract year, the
distributor is obligated to pay back all or a portion of the
commissions and other compensation received for such product.
Employee Benefits Brokers, Third-Party
Administrators. We distribute most of our Group
segment products through approximately 2,500 agencies in the
employee benefits broker/third-party administrator channel. This
distribution channel is also supported by approximately 60 of
our employees located strategically in a nationwide network of
24 regional offices.
Worksite Specialists. We distribute limited
benefits medical insurance of our Group segment, retirement
programs of our Retirement Services segment, and voluntary life
insurance of our Individual segment through the worksite
channel. Employer sponsored retirement plans are sold through
more than 1,200 independent employee benefits brokers and
registered representatives from approximately 800 agencies.
Limited benefits medical insurance and voluntary life insurance
are sold through approximately 340 independent retail brokers,
agents and consultants in 49 states and the District of
Columbia.
Independent Agents, Brokerage General
Agencies. We distribute life insurance and fixed
and deferred annuities through approximately 17,000 independent
agents located throughout the U.S. from approximately
12,000 different agencies. These independent agents market our
products and those of other insurance companies.
Structured Settlements. We distribute
structured settlements through approximately 550 settlement
consultants representing 66 agencies in 49 states and the
District of Columbia. We believe our ability to participate and
compete effectively in the sales of structured settlements will
depend on our ability to achieve upgrades from the ratings
agencies.
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Marketing
We promote and differentiate our products and services through
the breadth of our product offerings, technology services,
specialized support for our distributors and innovative
marketing programs to help distributors grow their business with
our products.
Since the completion of the Acquisition, we have customized our
marketing approach to promote our new brand to distributors of
our products whom we believe have the most influence in our
customers’ purchasing decisions. We chose to build our
brand among this constituency in three phases: an outreach to
our employees to understand and deliver on the new brand, an
outreach to our independent producers in our sales channels and
a prudent consumer outreach. These programs include advertising
in trade and business periodicals, consumer advertising with a
small, prudent budget leveraged by its ties to our producers,
outreach from a media perspective to both trade and consumer
periodicals and community outreach to include partnering with
distributors.
At the product level, we simplify the sales process so that the
recommendation to purchase our product is as easy and seamless
as possible. This is accomplished through our product
collateral, technology in the sales process and ease of service
after the sale.
We seek to build recognition of our new brand and maintain
strong relationships with leading distributors by providing a
high level of specialized support, such as product training,
sales solutions, and financial product design for targeted
customers. In addition, we host several annual meetings with
independent sales intermediaries to gather their feedback on
industry trends, new product suggestions and ways to enhance our
relationships with distributors.
Reserves
Overview
We calculate and maintain reserves for estimated future benefit
payments to our policyholders and contractholders in accordance
with U.S. GAAP. We establish reserves at amounts which we
expect to be sufficient to satisfy our policy obligations. We
release these reserves as those future obligations are
extinguished. The reserves we establish necessarily reflect
estimates and actuarial assumptions with regard to our future
experience. These estimates and actuarial assumptions involve
the exercise of significant judgment. Our future financial
results depend significantly upon the extent to which our actual
future experience is consistent with the assumptions we have
used in pricing our products and determining our reserves. Many
factors can affect future experience, including economic and
social conditions, inflation, healthcare costs, changes in
doctrines of legal liability and damage awards in litigation.
Therefore, we cannot determine with complete precision the
ultimate amounts we will pay for actual future benefits or the
timing of those payments.
Individual
and Group Life Insurance and Group Health
Insurance
We establish reserves for life insurance policies based upon
generally recognized actuarial methods. We use mortality tables
in general use in the U.S., modified where appropriate to
reflect relevant historical experience and our underwriting
practices. Persistency, expense and interest rate assumptions
are based upon relevant experience and expectations for future
development.
The liability for policy benefits for universal life insurance
and BOLI policies is equal to the balance that accrues to the
benefit of policyholders, including credited interest, plus any
amount needed to provide for additional benefits. We also
establish reserves for amounts that we have deducted from the
policyholder’s balance to compensate us for services to be
performed in future periods. The BOLI life reserves were reset
to fair value on the date of acquisition, August 2, 2004.
Our reserves for unpaid group life and health insurance claims,
including our stop-loss medical and other lines, are estimates
of the ultimate net cost of both reported losses that have not
yet been settled and incurred
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but as yet unreported losses. Reserves for IBNR claims are based
upon historic incidence rates, severity rates, reporting delays
and any known events which we believe will materially affect
claim levels.
Reserves for long-term disability claims are based upon factors
including recovery, mortality, expenses, Social Security and
other benefit offsets, and investment income. They represent the
actuarial present value of benefits and associated expenses for
current claims, reported claims that have not yet completed the
applicable elimination period and for covered disabilities that
have been incurred but have not yet been reported. Claims on
long-term disability insurance policies consist of payments to
be made periodically, generally monthly, in accordance with the
contractual terms of the policy.
Retirement
Services and Income Annuities
For our investment contracts, including annuities and guaranteed
investment contracts, contractholder liabilities are equal to
the accumulated contract account values, which generally consist
of an accumulation of deposit payments, less withdrawals, plus
investment earnings and interest credited to the account, less
expense, mortality, and profit charges, if applicable. We also
maintain a separate reserve for any expected future payments in
excess of the account value due to the potential death of the
contractholder. The reserves were reset to fair value on
August 2, 2004.
Reserves for future policy benefits on our immediate fixed
annuity contracts are calculated based upon actuarial
assumptions regarding the interest to be earned on the assets
underlying the reserves and, if applicable, the annuitant’s
life expectancy. The reserves were reset to fair value on
August 2, 2004 with adjustments to future interest and
mortality assumptions.
Investments
Overview
Our investment portfolios are currently managed under an
agreement with White Mountains Advisors LLC, or WM Advisors, a
registered investment adviser that is owned by White Mountains
Insurance Group, Ltd. Prior to the completion of this
transaction we will enter into an amended agreement with WM
Advisors and a new agreement with Prospector Partners, LLC, or
Prospector. See “Certain Relationships and Related
Transactions.” WM Advisors and Prospector are
value-oriented investment managers whose overall investment
objective is to consistently achieve positive results and to
maximize long-term results with a focus on downside protection,
all within client constraints. Among the keys to their success
are an emphasis on capital preservation, a strong focus on
fundamental, value-oriented security selection and quick action
as a security’s outlook changes. Their moderate size allows
them to remain selective and opportunistic in implementing this
approach. WM Advisors has entered into two sub-advisory
agreements with Principal Global Investors, or Principal,
Pioneer Investment Management, or Pioneer to perform the
following:
| • | Principal’s objective is to invest in investment grade private placements with target average lives of three to 30 years. | |
| • | Pioneer’s investment objective is to provide a consistently high current yield, maintain preservation of principal and, provided the first two objectives are met, seek to achieve a competitive total rate of return relative to the Merrill Lynch U.S. High Yield BB/B combined index. |
Prospector’s investment strategy is to maximize absolute
total return through investments in a variety of equity and
equity-related instruments, including convertible preferred and
convertible debt securities. Using a value orientation,
Prospector invests in relatively concentrated positions in the
United States and other developed markets. Prospector’s
philosophy is to invest for total risk-adjusted return using a
bottom-up,
value discipline. Preservation of capital is of the utmost
importance.
In addition, we have a mortgage loan department that originates
new commercial mortgages and manages our existing commercial
mortgage loan portfolio. The commercial mortgage holdings are
secured by first-mortgage liens on income-producing commercial
real estate, primarily in the retail, industrial, and office
building sectors.
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We invest primarily in fixed maturities, including government,
municipal and corporate bonds, mortgage-backed and other
asset-backed securities and mortgage loans on commercial real
estate. We also invest in short-term securities and other
investments, including a position in equity securities. In all
cases, investments for our insurance subsidiaries are required
to comply with restrictions imposed by applicable laws and
insurance regulatory authorities.
Our investment department includes accounting, reporting and
analysis functions. We establish investment policies and
strategies, as well as reviewing portfolio performance and
asset-liability management allocations. We incurred expenses for
investment management and related administrative services of
$24.0 million for 2006 and $22.9 million for 2005.
Our primary investment objective is to meet our obligations to
policyholders and contractholders while increasing value to our
stockholders by investing in a diversified portfolio of
high-quality, income producing securities and other assets. Our
investment strategy for our non-equity portfolio seeks to
optimize investment income without relying on realized
investment gains. Our strategy for our equity portfolio is to
maximize total return. We deliberately forego investment income
to receive realized and unrealized investment gains from our
equity investments.
We are exposed to two primary sources of investment risk. One of
these investment risks is credit risk, and is associated with
the uncertainty of the continued ability of a given issuer to
make timely payments of principal and interest. Another
investment risk is interest rate risk, where market price and
cash flow variability are associated with changes in market
interest rates.
We manage credit risk by analyzing issuers, transaction
structures and real estate properties. We use analytic
techniques to monitor credit risk. For example, we regularly
measure the probability of credit default and estimated loss in
the event of such a default, which provides us with early
notification of worsening credit. If an issuer downgrade causes
our holdings of that issuer to exceed our risk thresholds, we
automatically undertake a detailed review of the issuer’s
credit. We also manage credit risk through industry and issuer
diversification and asset allocation practices. For commercial
real estate loans, we manage credit risk through geographic and
product type diversification and asset allocation. We routinely
review different issuers and sectors and conduct more formal
quarterly portfolio reviews.
We mitigate interest rate risk through rigorous management of
the relationship between the duration of our assets and the
duration of our liabilities, seeking to minimize risk of loss in
both rising and falling interest rate environments.
For a summary of the composition of our investment portfolio see
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations —
Investments.”
Fixed
Maturities
Fixed maturities consist principally of publicly traded and
privately placed debt securities, and represented 92.5% and
92.7% of invested assets as of June 30, 2007 and
December 31, 2006, respectively.
Based upon estimated fair value, public fixed maturities
represented 95.7% of total fixed maturities as of June 30,
2007. Private fixed maturities represented 4.3% of total fixed
maturities as of June 30, 2007. We invest in privately
placed fixed maturities in an attempt to enhance the overall
value of the portfolio, increase diversification and obtain
higher yields than can ordinarily be obtained with comparable
public market securities.
There are several credit ratings of the nationally recognized
statistical rating organizations such as S&P, Moody’s
and Fitch and the Securities Valuation Office of the NAIC for
marketable bonds. The following tables present our unaudited
public, private and aggregate fixed maturities by S&P
credit ratings and the
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equivalent NAIC designation, as well as the percentage, based
upon estimated fair value, that each designation comprises:
Fixed
Maturities Credit Quality
| As of June 30, 2007 | As of December 31, 2006 | |||||||||||||||||||||||||||
|
% of |
% of |
|||||||||||||||||||||||||||
|
Amortized |
Total |
Amortized |
Total |
|||||||||||||||||||||||||
|
S&P
|
NAIC | Cost | Fair Value | Fair Value | Cost | Fair Value | Fair Value | |||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||
|
AAA
|
1 | $ | 5,197.9 | $ | 5,093.9 | 33.0 | % | $ | 5,192.8 | $ | 5,160.5 | 32.1 | % | |||||||||||||||
|
AA
|
1 | 1,078.7 | 1,059.3 | 6.9 | 1,112.3 | 1,122.8 | 7.0 | |||||||||||||||||||||
|
A
|
1 | 3,507.1 | 3,444.9 | 22.3 | 3,639.2 | 3,653.4 | 22.8 | |||||||||||||||||||||
|
BBB
|
2 | 4,619.9 | 4,491.1 | 29.2 | 4,838.3 | 4,782.3 | 29.8 | |||||||||||||||||||||
|
BB
|
3 | 309.8 | 315.5 | 2.0 | 394.9 | 419.4 | 2.6 | |||||||||||||||||||||
|
B
|
4 | 297.4 | 299.3 | 1.9 | 253.9 | 256.5 | 1.6 | |||||||||||||||||||||
|
CCC
|
5 | 37.4 | 37.5 | 0.2 | 23.5 | 23.5 | 0.2 | |||||||||||||||||||||
|
D
|
6 | 0.4 | 1.7 | 0.0 | 1.1 | 2.2 | 0.0 | |||||||||||||||||||||
|
NR
|
711.1 | 697.6 | 4.5 | 630.6 | 629.3 | 3.9 | ||||||||||||||||||||||
|
Total
|
$ | 15,759.7 | $ | 15,440.8 | 100.0 | % | $ | 16,086.6 | $ | 16,049.9 | 100.0 | % | ||||||||||||||||
The following table sets forth the amortized cost and estimated
fair value of our fixed maturities by contractual maturity dates
as of the dates indicated, which have been derived from our
unaudited consolidated financial statements for the six months
ended June 30, 2007 and from our audited consolidated
financial statements for the year ended December 31, 2006:
Maturity
Table
| June 30, 2007 | December 31, 2006 | |||||||||||||||
|
Amortized |
Estimated |
Amortized |
Estimated |
|||||||||||||
|
Years to Maturity
|
Cost | Fair Value | Cost | Fair Value | ||||||||||||
| (Dollars in millions) | ||||||||||||||||
|
Due in one year or less
|
$ | 325.5 | $ | 323.9 | $ | 377.1 | $ | 374.6 | ||||||||
|
Due after one year through five years
|
2,716.7 | 2,667.7 | 2,655.7 | 2,613.7 | ||||||||||||
|
Due after five years through ten years
|
2,494.0 | 2,416.4 | 2,746.5 | 2,701.7 | ||||||||||||
|
Due after ten years
|
5,872.2 | 5,778.0 | 5,919.7 | 6,014.2 | ||||||||||||
|
Mortgage-backed securities
|
4,351.3 | 4,254.8 | 4,387.6 | 4,345.7 | ||||||||||||
|
Total
|
$ | 15,759.7 | $ | 15,440.8 | $ | 16,086.6 | $ | 16,049.9 | ||||||||
We diversify our fixed maturities by security sector. The
following table sets forth the estimated fair value of our fixed
maturities by sector, as well as the percentage of the total
fixed maturities each sector comprises of the total as of the
dates indicated, which have been derived from our unaudited
consolidated financial statements for the six months ended
June 30, 2007 and from our audited consolidated financial
statements for the year ended December 31, 2006:
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Sector
Table
| June 30, 2007 | December 31, 2006 | |||||||||||||||
|
Estimated |
% of |
Estimated |
% of |
|||||||||||||
|
Security Sector
|
Fair Value | Total | Fair Value | Total | ||||||||||||
| (Unaudited) | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||
|
U.S. Government and agencies
|
$ | 259.1 | 1.7 | % | $ | 157.9 | 1.0 | % | ||||||||
|
State and political subdivisions
|
494.7 | 3.2 | 670.9 | 4.2 | ||||||||||||
|
Foreign governments
|
156.0 | 1.0 | 208.9 | 1.3 | ||||||||||||
|
Corporate securities
|
10,276.1 | 66.5 | 10,666.5 | 66.4 | ||||||||||||
|
Mortgage-backed securities
|
4,254.9 | 27.6 | 4,345.7 | 27.1 | ||||||||||||
|
Total
|
$ | 15,440.8 | 100.0 | % | $ | 16,049.9 | 100.0 | % | ||||||||
The following table sets forth the unaudited estimated fair
value by major industry types that comprise our fixed maturities
holdings as of the dates indicated, based primarily on standard
industrial codes:
Industry
Table
| June 30, 2007 | December 31, 2006 | |||||||||||||||
|
Estimated |
% of |
Estimated |
% of |
|||||||||||||
|
Security Sector
|
Fair Value | Total | Fair Value | Total | ||||||||||||
| (Dollars in millions) | ||||||||||||||||
|
Consumer discretionary
|
$ | 963.5 | 6.2 | % | $ | 1,012.4 | 6.3 | % | ||||||||
|
Consumer staples
|
1,283.6 | 8.3 | 1,247.7 | 7.8 | ||||||||||||
|
Energy
|
476.5 | 3.1 | 650.4 | 4.0 | ||||||||||||
|
Financials
|
3,896.6 | 25.2 | 3,882.2 | 24.2 | ||||||||||||
|
Foreign governments
|
156.0 | 1.0 | 193.7 | 1.2 | ||||||||||||
|
Health care
|
441.8 | 2.9 | 457.3 | 2.8 | ||||||||||||
|
Industrials
|
1,359.7 | 8.8 | 1,325.1 | 8.3 | ||||||||||||
|
Information technology
|
165.5 | 1.1 | 186.7 | 1.1 | ||||||||||||
|
Internal/other
|
22.0 | 0.1 | 23.1 | 0.1 | ||||||||||||
|
Materials
|
714.4 | 4.6 | 694.7 | 4.3 | ||||||||||||
|
Supranationals
|
23.4 | 0.2 | 24.2 | 0.2 | ||||||||||||
|
Telecommunication services
|
577.7 | 3.8 | 688.1 | 4.3 | ||||||||||||
|
U.S. federal government
|
2,859.9 | 18.5 | 2,994.4 | 18.7 | ||||||||||||
|
U.S. municipals
|
494.7 | 3.2 | 571.1 | 3.6 | ||||||||||||
|
Utilities
|
2,005.5 | 13.0 | 2,098.8 | 13.1 | ||||||||||||
|
Total
|
$ | 15,440.8 | 100 | % | $ | 16,049.9 | 100.0 | % | ||||||||
Our fixed maturities holdings are diversified by industry and
issuer. The portfolio does not have significant exposure to any
single issuer. As of June 30, 2007 our combined corporate
bond holdings in the ten issuers in which we had the greatest
exposure was $908.0 million, or approximately 5.4% of our
total investments as of such date. Our exposure to the largest
single issuer of corporate bonds held as of June 30, 2007
was $167.3 million, which was 1.0% of our total investments
as of such date.
Mortgage-backed,
Asset-backed Securities
We purchase mortgage-backed and asset-backed securities to
diversify the portfolio risk from primarily corporate credit
risk to a mix of credit and cash flow risk. We believe the
inherent risks of prepayment and extension with the
mortgage-backed securities will impact when cash flow is
received, and the majority of our holdings have low variability
in monthly cash flow. Our total mortgage-backed securities
holdings estimated
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fair value was $4.3 billion and $4.3 billion as of
June 30, 2007 and December 31, 2006, respectively. We
held minimal investments in asset-backed securities which had an
estimated fair value of $84.5 million and
$92.7 million as of June 30, 2007 and
December 31, 2006, respectively. Based on market values as
of June 30, 2007, we classified approximately
$2.5 million of our mortgage-backed securities as
sub-prime, and approximately $273.9 million of our
mortgage-backed securities as Alt-A, representing approximately
0.1% and 6.4%, respectively, of our total mortgage-backed
securities. The $2.5 million in value of sub-prime
securities were issued from a dedicated second-lien shelf, which
we consider to be a sub-prime risk regardless of credit score or
other metrics. We do not own any securities from dedicated
sub-prime shelves. We classified $273.9 million of
securities as Alt-A because we viewed each to have overall
collateral credit quality between prime and sub-prime, based on
a review of the characteristics of their underlying mortgage
loan pools, such as credit scores and financial ratios. We do
not own any residential collateralized debt obligations.
Mortgage
Loans
Our mortgage loans holdings are collateralized by commercial
properties. These holdings are reported at carrying value
composed of original cost net of prepayments and amortization.
We diversify our mortgage loans by geographic region, loan size
and scheduled maturities. We held total mortgage loans net of
allowances of $789.6 million and $794.3 million as of
June 30, 2007 and December 31, 2006, respectively. As
of June 30, 2007, 83.7% of our total mortgage loans were
under $5 million, and 93.1% of our total mortgage loans had
scheduled maturities due after five years. Also, holdings in the
top four states, California, Washington, Texas and Oregon,
comprised 63.2% of our total mortgage loans as of June 30,
2007. We monitor our mortgage loans on a continual basis for any
that may be potentially delinquent. Our allowance for losses on
mortgage loans was $4.0 million and $4.0 million as of
June 30, 2007 and December 31, 2006, respectively.
Equity
Securities
We purchase preferred and common stocks of publicly traded
U.S. companies, and hold investments in other limited
partnerships. The majority of our equity securities are held in
our Income Annuities segment where we believe it is appropriate
to match equity exposure against long-tailed structured
settlement liabilities. Our equity holdings, which include
investments in limited partnerships when the ownership
percentage is less than 3%, are classified as available-for-sale
and are carried at fair value. We held total equity securities
of $209.9 million and $201.7 million as of
June 30, 2007 and December 31, 2006, respectively.
Investments
in Limited Partnerships
Our investments in limited partnerships are accounted for under
the equity method when our ownership interest is 3% or greater.
These investments are carried at fair value with the difference
between fair value and cost recorded in investment income. We
held total investments in limited partnerships of
$159.8 million and $112.6 million as of June 30,
2007 and December 31, 2006, respectively.
Reinsurance
Through both treaty and facultative reinsurance agreements, we
engage in the industry practice of reinsuring portions of our
insurance risk with reinsurance companies. We use reinsurance to
diversify our risks and manage loss exposures primarily in our
Group and Individual segments. The use of reinsurance permits us
to write policies in amounts larger than the risk we are willing
to retain.
We cede insurance primarily on a treaty basis, under which risks
are ceded to a reinsurer on specific books of business where the
underlying risks meet certain predetermined criteria. To a
lesser extent, we cede insurance risks on a facultative basis,
under which the reinsurer’s prior approval is required on
each risk reinsured. The use of reinsurance does not discharge
us, as the insurer, from liability on the insurance ceded. We,
as the insurer, are required to pay the full amount of our
insurance obligations even in circumstances where we are
entitled or able to receive payments from our reinsurer. The
principal reinsurers to which we
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cede risks have A.M. Best financial strength ratings
ranging from “A+” to “A−.”
Historically, we have not had significant concentrations of
reinsurance risk with any one reinsurer.
We had reinsurance recoverables of $249.1 million and
$238.8 million as of June 30, 2007 and
December 31, 2006, respectively. The following table sets
forth our exposure to our principal reinsurers, including
reinsurance recoverables as of December 31, 2006 and the
A.M. Best ratings of those reinsurers as of that date:
|
Reinsurance |
||||||||
| recoverable | A.M. Best rating | |||||||
| (Dollars in millions) | ||||||||
|
Reinsurance Group of America
|
$ | 70.7 | A+ | |||||
|
Transamerica Life Insurance Company
|
$ | 66.1 | A+ | |||||
|
UNUM Life Insurance Company of America
|
$ | 64.9 | A– | |||||
|
Lincoln National Life Insurance Company
|
$ | 25.1 | A+ | |||||
In the table above, the reinsurance recoverables under our
agreements with RGA, UNUM and Lincoln represent the reinsurance
exposure of these parties to us under the reinsurance policies.
The reinsurance recoverable under our agreement with
Transamerica represents our share of the proceeds generated
under this policy.
Under most of our reinsurance agreements, we obtain reinsurance
to mitigate some or all of the risk of the policies we issue,
particularly the risk of substantial loss from death of an
individual or catastrophic loss, and in other cases where the
reinsurer offers a particular expertise. Some of these
agreements are coinsurance arrangements, whereby we only obtain
reinsurance for a portion of the risk, and retain the remainder.
In some cases, we instead act as a reinsurer (or coinsurer) of
another life insurance company.
The following is a brief summary of our reinsurance agreements
with the parties listed in the table above:
| • | Reinsurance Group of America — Under our agreements with RGA, RGA reinsures the risk of a large loss on term life insurance and universal life insurance policies. These are typically coinsurance arrangements, whereby we cede fifty percent or more of the claims liability to RGA. These agreements do not have a fixed term. Either party can terminate these agreements with respect to future business with 90 days’ written notice to the other party. | |
| • | Lincoln National Life Insurance Company — Under our agreements with Lincoln, we primarily cede claims liability under 10, 15 and 20-year term life insurance policies to Lincoln. These are typically coinsurance arrangements, whereby we cede fifty percent or more of the claims liability to Lincoln. These agreements do not have a fixed term. Either party can terminate these agreements with respect to future business upon 90 days’ written notice to the other party. | |
| • | UNUM Life Insurance Company of America — We cede nearly all of our Group Long-Term-Disability and Short-Term-Disability claims liability through a reinsurance pool. The pool of reinsurers may change each year for new claims. UNUM covers the substantial majority of this business. This agreement does not have a fixed term. Either party can terminate the agreement with respect to future business by providing 90 days’ written notice to the other party on or before October 1 of any given year. | |
| • | Transamerica Life Insurance Company — Under an agreement with Transamerica, we act as their reinsurer with respect to 28.6% of a bank owned life insurance (BOLI) policy. BOLI is life insurance purchased by a bank to insure the lives of bank employees, usually officers and other highly compensated employees. BOLI policies are commonly used by banks to fund employee pension plans and benefit plans. Transamerica invests the policy premiums paid by the bank, and manages those investments subject to the terms of the policy. We have assumed 28.6% of the claims liability under this policy, and receive 28.6% of the proceeds generated under the policy. The term of this agreement is perpetual. We are only allowed to terminate this agreement in the event Transamerica fails to pay amounts due to us under this agreement, or in the event of fraud, misrepresentation or breach of this agreement by Transamerica. |
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Risk
Management
Overview
Risk management is a critical part of our business and we have
adopted risk management processes in virtually every aspect of
our operations, including product development, underwriting,
investment management, asset-liability management and technology
development projects. The primary objective of these risk
management processes is to reduce the variations we experience
from our expected results.
We use a risk model that draws on the risk-based capital
concepts. Risks are classified into four main categories:
| • | investment risks; | |
| • | pricing risks, including determination of adequate spreads or premiums, and estimation of claims, both expected and catastrophic; | |
| • | interest rate risk, including asset liability duration matching exposures; and | |
| • | other business risks, including business continuity, data security and other operational risks. |
Operations
and Technology
Service
and Support
We have a dedicated team of service and support personnel, as
well as Affiliated Computer Services, or ACS, based in Dallas,
Texas, our outsourced provider, that deliver automation
solutions to drive competitive advantage, to achieve earnings
growth objectives, and to control the cost of doing business. We
mainly follow a buy-versus-build approach in providing
application and business processing services that accelerate
delivery and responsiveness. We also develop proprietary
software for competitive or economic benefits.
Operating
Centers
In October 2004, we entered into an outsourcing agreement with
ACS. The initial term of the agreement expires in
July 2010, with two
one-year
extensions at our election. The scope of the contract with ACS
includes the management of the following:
| • | Data center: mainframe, Wintel systems, storage, web services, disaster recovery; | |
| • | Distributed computing: field office services, desktop support, asset management; | |
| • | Data network: network infrastructure, carrier services, secured remote access; | |
| • | Voice communications: voice systems, wireless, contact center technologies; | |
| • | Help desk supporting: infrastructure, packaged software, password resets; | |
| • | Output processing: print and mail fulfillment, archive and online viewing; and | |
| • | Content management: imaging and content management system. |
Under this agreement, we are obligated to pay an annual service
fee, which for the current year and the two remaining years
under the initial term are $12.5 million,
$13.1 million and $13.8 million, respectively. These
fees are subject to adjustments based on a variety of factors,
including product utilization and reductions for failure to meet
service level standards.
The agreement may be terminated by us for convenience prior to
the end of the five-year term upon ninety days’ notice and
payment by us of a termination fee, which is currently
$2.6 million, but which decreases monthly over the
remaining term. In the event of termination, we will own most
critical application
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software and desktop hardware, and may elect to purchase other
assets used by ACS in connection with the outsourced services.
Competition
We face significant competition for customers and distributors
from insurance and other financial services companies in each of
our businesses. Our competitors include other large and highly
rated insurance carriers. Some of these competitors have greater
resources than we do, and many of them offer similar products
and use similar distribution channels. Competition in our
operating business segments is based on a number of factors,
including:
| • | quality of service; | |
| • | product features; | |
| • | price; | |
| • | scope of distribution; | |
| • | financial strength ratings; and | |
| • | name recognition. |
The relative importance of these factors depends on the
particular product and market. We compete for customers and
distributors with insurance companies and other financial
services companies in our various businesses.
Financial
Strength Ratings
Rating organizations continually review the financial
performance and condition of most insurers and provide financial
strength ratings based on a company’s operating performance
and ability to meet obligations to policyholders. Ratings
provide both industry participants and insurance consumers
meaningful information on specific insurance companies and are
an important factor in establishing the competitive position of
insurance companies. In addition, ratings are important to
maintaining public confidence in us and our ability to market
our products.
Symetra Life Insurance Company, our principal life insurance
subsidiary, is rated by A.M. Best, S&P, Moody’s
and Fitch as follows as of September 30, 2007:
| Financial Strength Rating | ||||||||||||||||
| A.M. Best | S&P | Moody’s | Fitch | |||||||||||||
|
Symetra Life Insurance Company
|
A | A− | A2 | A+ | ||||||||||||
A.M. Best states that its “A” (Excellent) rating
is assigned to those companies that have, in its opinion, an
excellent ability to meet their ongoing obligations to
policyholders. The “A” (Excellent) is the third
highest of 15 ratings assigned by A.M. Best, which range
from “A++” to “F.”
Symetra Life Insurance Company’s Financial Size Category,
or FSC, ranking, as determined by A.M. Best is XII, the
fourth highest of 15. A.M. Best indicates that the FSC is
designed to provide an indicator of the size of a company in
terms of its statutory surplus and related accounts.
Standard & Poor’s states that an insurer rated
“A” (Strong) has strong financial security
characteristics, that outweigh any vulnerabilities, and is
highly likely to have the ability to meet financial commitments,
but is somewhat more likely to be affected by adverse business
conditions than are insurers with higher ratings. The
“A” range is the third highest of the four ratings
ranges that meet these criteria, and also is the third highest
of nine financial strength ratings ranges assigned by S&P,
which range from “AAA” to “R.” A plus (+) or
minus
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(−) shows relative standing in a rating category.
Accordingly, the “A−” rating is the seventh
highest of S&P’s 22 ratings categories.
Moody’s Investors Service states that insurance companies
rated “A2” (Good) offer good financial security.
However, elements may be present that suggest a susceptibility
to impairment sometime in the future. The “A” range is
the third highest of nine financial strength rating ranges
assigned by Moody’s which range from “Aaa” to
“C.” Numeric modifiers are used to refer to the
ranking within the group, with “1” being the highest
and “3” being the lowest. Accordingly, the
“A2” rating is the sixth highest of Moody’s 21
ratings categories.
Fitch states that insurance companies rated “A”
(Strong) are viewed as possessing strong capacity to meet
policyholder and contract obligations. Risk factors are
moderate, and the impact of any adverse business and economic
factors is expected to be small. The “A” rating
category is the third highest of eight financial strength
categories, which range from “AAA” to “D.”
The symbol (+) or (−) may be appended to a rating to
indicate the relative position of a credit within a rating
category. These suffixes are not added to ratings in the
“AAA” category or to ratings below the “CCC”
category. Accordingly, the “A+” rating is the fifth
highest of Fitch’s 24 ratings categories.
A.M. Best, S&P, Moody’s and Fitch review their
ratings periodically and we cannot assure you that we will
maintain our current ratings in the future. Other agencies may
rate Symetra or our insurance subsidiaries on a solicited or
unsolicited basis.
The A.M. Best, S&P, Moody’s and Fitch ratings
included are not designed to be, and do not serve as, measures
of protection or valuation offered to investors in this
offering. These financial strength ratings should not be relied
on with respect to making an investment in our securities.
Employees
As of September 30, 2007, we had over 1,300 full-time
and part-time employees. We believe our employee relations are
satisfactory. To the best of our knowledge, none of our
employees is subject to a collective bargaining agreement.
Facilities
We lease approximately 343,000 square feet of office space
in various locations throughout the U.S. which consists
primarily of 292,000 square feet of office space at our
headquarters in Bellevue, Washington.
Most of our leases have lease terms ranging from one to ten
years. Our aggregate annual rental expense under these leases
was $8.2 million during 2006.
We believe our properties are adequate for our business as
presently conducted.
Legal
Proceedings
We are regularly a party to litigation, arbitration proceedings
and governmental examinations in the ordinary course of our
business. While we cannot predict the outcome of any pending or
future litigation or examination, we do not believe that any
pending matter, individually or in the aggregate, will have a
material adverse effect on our business.
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Our insurance operations are subject to a wide variety of laws
and regulations. State insurance laws regulate most aspects of
our insurance businesses, and our insurance subsidiaries are
regulated by the insurance departments of the states in which
they are domiciled and licensed. Our insurance products and thus
our businesses also are affected by U.S. federal, state and
local tax laws. Insurance products that constitute
“securities,” such as variable annuities and variable
life insurance, also are subject to federal and state securities
laws and regulations. The SEC, the National Association of
Securities Dealers, or NASD, and state securities authorities
regulate these products.
Our broker-dealers are subject to federal and state securities
and related laws. The SEC, NASD and state securities authorities
are the principal regulators of these operations.
The purpose of the laws and regulations affecting our insurance
and securities businesses is primarily to protect our customers
and not our noteholders or stockholders. Many of the laws and
regulations to which we are subject are regularly re-examined,
and existing or future laws and regulations may become more
restrictive or otherwise adversely affect our operations.
In addition, insurance and securities regulatory authorities
increasingly make inquiries regarding compliance by us and our
subsidiaries with insurance, securities and other laws and
regulations regarding the conduct of our insurance and
securities businesses. We cooperate with such inquiries and take
corrective action when warranted.
Many of our customers and agents also operate in regulated
environments. Changes in the regulations that affect their
operations also may affect our business relationships with them
and their ability to purchase or to distribute our products.
Insurance
Regulation
Our insurance subsidiaries are licensed and regulated in all
states in which they conduct insurance business. The extent of
this regulation varies, but most states have laws and
regulations governing the financial condition of insurers,
including standards of solvency, types and concentration of
investments, establishment and maintenance of reserves, credit
for reinsurance and requirements of capital adequacy, and the
business conduct of insurers, including marketing and sales
practices and claims handling. In addition, statutes and
regulations usually require the licensing of insurers and their
agents, the approval of policy forms and related materials and
the approval of rates for certain lines of insurance. The types
of insurance laws and regulations applicable to us or our
insurance subsidiaries are described below.
Insurance
Holding Company Regulation
All states in which our insurance subsidiaries conduct insurance
business have enacted legislation that requires each insurance
company in a holding company system, except captive insurance
companies, to register with the insurance regulatory authority
of its state of domicile and to furnish that regulatory
authority financial and other information concerning the
operations of, and the interrelationships and transactions
among, companies within its holding company system that may
materially affect the operations, management or financial
condition of the insurers within the system. These laws and
regulations also regulate transactions between insurance
companies and their parents and affiliates. Generally, these
laws and regulations require that all transactions within a
holding company system between an insurer and its affiliates be
fair and reasonable and that the insurer’s statutory
surplus following any transaction with an affiliate be both
reasonable in relation to its outstanding liabilities and
adequate to its financial needs. Statutory surplus is the excess
of admitted assets over statutory liabilities. For certain types
of agreements and transactions between an insurer and its
affiliates, these laws and regulations require prior
notification to, and non-disapproval or approval by, the
insurance regulatory authority of the insurer’s state of
domicile.
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Policy
Forms
Our insurance subsidiaries’ policy forms are subject to
regulation in every state in which such subsidiaries are
licensed to transact insurance business. In most states, policy
forms must be filed prior to their use.
Dividend
Limitations
As a holding company with no significant business operations of
its own, Symetra depends on dividends or other distributions
from its subsidiaries as the principal source of cash to meet
its obligations, including the payment of interest on and
repayment of principal of any debt obligations and payment of
dividends to stockholders and stock repurchases. The payment of
dividends or other distributions to Symetra by its insurance
subsidiaries is regulated by the insurance laws and regulations
of their respective states of domicile. In the state of
Washington, the state of domicile of Symetra’s principal
insurance subsidiary, Symetra Life Insurance Company, an
insurance company subsidiary may not pay an
“extraordinary” dividend or distribution until
30 days after the insurance commissioner has received
sufficient notice of the intended payment and has not objected
or has approved the payment within the
30-day
period. An “extraordinary” dividend or distribution is
defined under Washington law as a dividend or distribution that,
together with other dividends and distributions made within the
preceding 12 months, exceeds the greater of:
| • | 10% of the insurer’s statutory surplus as of the immediately prior year end; or | |
| • | the statutory net gain from the insurer’s operations for the prior year. |
State laws and regulations also prohibit an insurer from
declaring or paying a dividend except out of its statutory
surplus or require the insurer to obtain regulatory approval
before it may do so. In addition, insurance regulators may
prohibit the payment of ordinary dividends or other payments by
our insurance subsidiaries to Symetra (such as a payment under a
tax sharing agreement or for employee or other services) if they
determine that such payment could be adverse to our
policyholders or contractholders.
Market
Conduct Regulation
The laws and regulations of U.S. jurisdictions include
numerous provisions governing the marketplace activities of
insurers, including provisions governing the form and content of
disclosure to consumers, product illustrations, advertising,
product replacement, sales and underwriting practices, complaint
handling and claims handling. State jurisdictions generally
enforce these provisions through periodic market conduct
examinations.
Statutory
Examinations
As part of their regulatory oversight process, state insurance
departments conduct periodic detailed examinations of the books,
records, accounts and business practices of insurers domiciled
in their jurisdictions. These examinations generally are
conducted in cooperation with the insurance departments of
several other states under guidelines promulgated by the NAIC.
In the three year period ended December 31, 2006, we have
not received any material adverse findings resulting from any
insurance department examinations of our insurance subsidiaries.
Guaranty
Associations and Similar Arrangements
Most states require life insurers doing business within the
state to participate in guaranty associations, which are
organized to pay contractual benefits owed pursuant to insurance
policies of insurers who become impaired or insolvent. These
associations levy assessments, up to prescribed limits, on all
member insurers in a particular state on the basis of the
proportionate share of the premiums written by member insurers
in the lines of business in which the impaired, insolvent or
failed insurer is engaged. Some states permit member insurers to
recover assessments paid through full or partial premium tax
offsets.
We had no assessments levied against our insurance subsidiaries
for the six months ended June 30, 2007. Aggregate
assessments levied against our insurance subsidiaries totaled
$0.2 million and $1.0 million for the
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years ended December 31, 2006 and 2005, respectively.
Although the amount and timing of future assessments are not
predictable, we have established reserves for guaranty fund
assessments that we consider adequate for assessments with
respect to insurers that currently are subject to insolvency
proceedings.
Change
of Control
The laws and regulations of the states in which our insurance
subsidiaries are domiciled require that a person obtain the
approval of the insurance commissioner of the insurance
company’s jurisdiction of domicile prior to acquiring
control of the insurer. Generally, such laws provide that
control over an insurer is presumed to exist if any person,
directly or indirectly, owns, controls, holds with the power to
vote, or holds proxies representing 10% or more of the voting
securities of the insurer. In considering an application to
acquire control of an insurer, the insurance commissioner
generally will consider such factors as the experience,
competence and financial strength of the applicant, the
integrity of the applicant’s board of directors and
executive officers, the acquiror’s plans for the management
and operation of the insurer, and any anti-competitive results
that may arise from the acquisition. In addition, a person
seeking to acquire control of an insurance company is required
in some states to make filings prior to completing an
acquisition if the acquiror and the target insurance company and
their affiliates have sufficiently large market shares in
particular lines of insurance in those states. Approval of an
acquisition may not be required in these states, but the state
insurance departments could take action to impose conditions on
an acquisition that could delay or prevent its consummation.
These laws may discourage potential acquisition proposals and
may delay, deter or prevent a change of control involving us,
including through transactions, and in particular unsolicited
transactions, that some or all of our stockholders might
consider to be desirable.
Policy
and Contract Reserve Sufficiency Analysis
Under the laws and regulations of their states of domicile, our
life insurance subsidiaries are required to conduct annual
analyses of the sufficiency of their life and health insurance
and annuity statutory reserves. In addition, other jurisdictions
in which these subsidiaries are licensed may have certain
reserve requirements that differ from those of their domiciliary
jurisdictions. In each case, a qualified actuary must submit an
opinion that states that the aggregate statutory reserves, when
considered in light of the assets held with respect to such
reserves, make good and sufficient provision for the associated
contractual obligations and related expenses of the insurer. If
such an opinion cannot be provided, the affected insurer must
set up additional reserves by moving funds from surplus. Our
life insurance subsidiaries submit these opinions annually to
applicable insurance regulatory authorities.
Surplus
and Capital Requirements
Insurance regulators have the discretionary authority, in
connection with the ongoing licensing of our insurance
subsidiaries, to limit or prohibit the ability of an insurer to
issue new policies if, in the regulators’ judgment, the
insurer is not maintaining a minimum amount of surplus or is in
hazardous financial condition. Insurance regulators may also
limit the ability of an insurer to issue new life insurance
policies and annuity contracts above an amount based upon the
face amount and premiums of policies of a similar type issued in
the prior year. We do not believe that the current or
anticipated levels of statutory surplus of our insurance
subsidiaries present a material risk that any such regulator
would limit the amount of new policies that our insurance
subsidiaries may issue.
Risk-based
Capital
The NAIC has established risk-based capital standards for life
insurance companies as well as a model act with the intention
that these standards be applied at the state level. The model
act provides that life insurance companies must submit an annual
risk-based capital report to state regulators reporting their
risk-based capital based upon four categories of risk: asset
risk, insurance risk, interest rate risk and business risk. For
each category, the capital requirement is determined by applying
factors to various asset, premium and reserve items, with the
factor being higher for those items with greater underlying risk
and lower for less risky
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items. The formula is intended to be used by insurance
regulators as an early warning tool to identify possible weakly
capitalized companies for purposes of initiating further
regulatory action.
If an insurer’s risk-based capital falls below specified
levels, the insurer would be subject to different degrees of
regulatory action depending upon the level. These actions range
from requiring the insurer to propose actions to correct the
capital deficiency to placing the insurer under regulatory
control. As of December 31, 2006, the risk-based capital of
each of our life insurance subsidiaries exceeded the level of
risk-based capital that would require any of them to take or
become subject to any corrective action.
Statutory
Accounting Principles
Statutory accounting principles, or SAP, is a basis of
accounting developed by state insurance regulators to monitor
and regulate the solvency of insurance companies. In developing
SAP, insurance regulators were primarily concerned with assuring
an insurer’s ability to pay all its current and future
obligations to policyholders. As a result, statutory accounting
focuses on conservatively valuing the assets and liabilities of
insurers, generally in accordance with standards specified by
the insurer’s domiciliary state. Uniform statutory
accounting practices are established by the NAIC and generally
adopted by regulators in the various states. These accounting
principles and related regulations determine, among other
things, the amounts our insurance subsidiaries may pay to us as
dividends. The values for assets, liabilities and equity
reflected in financial statements prepared in accordance with
U.S. GAAP may be different from those reflected in
financial statements prepared under SAP.
Regulation
of Investments
Each of our insurance subsidiaries is subject to laws and
regulations that require diversification of its investment
portfolio and limit the amount of investments in certain asset
categories, such as below investment grade fixed maturities,
real estate, equity investments and derivatives. Failure to
comply with these laws and regulations would cause investments
exceeding regulatory limitations to be treated as non-admitted
assets for purposes of measuring surplus, and, in some
instances, would require divestiture of such non-complying
investments. We believe the investments held by our insurance
subsidiaries comply with these laws and regulations.
Federal
Regulation
Our variable life insurance and variable annuity products
generally are “securities” within the meaning of
federal and state securities laws. As a result, they are
registered under the Securities Act of 1933 and are subject to
regulation by the SEC, the NASD and state securities
authorities. Federal and state securities regulation similar to
that discussed below under “— Other Laws and
Regulations — Securities Regulation” affect
investment advice, sales and related activities with respect to
these products. In addition, although the federal government
does not comprehensively regulate the business of insurance,
federal legislation and administrative policies in several other
areas, including taxation, privacy regulation, financial
services regulation and pension and welfare benefits regulation,
can also significantly affect the insurance industry. In
addition, various forms of direct federal regulation of
insurance have been proposed. These proposals include the
“National Insurance Act,” which would allow insurance
companies to choose to be regulated by a federal regulator
rather than by multiple state regulators, and “The State
Modernization and Regulatory Transparency Act,” which would
maintain state-based regulation of insurance but would affect
state regulation of certain aspects of the business of
insurance, including rates, agent and company licensing and
market conduct examinations.
Federal
Initiatives
Although the federal government generally does not directly
regulate the insurance business, federal initiatives often and
increasingly have an impact on the business in a variety of
ways. From time to time, federal measures are proposed that may
significantly affect the insurance business, including
limitations on antitrust immunity, tax incentives for lifetime
annuity payouts, simplification bills affecting tax-advantaged
or
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tax-exempt savings and retirement vehicles, and proposals to
modify or make permanent the estate tax repeal enacted in 2001.
In addition, various forms of direct federal regulation of
insurance have been proposed in recent years. We cannot predict
whether these or other proposals will be adopted, or what
impact, if any, such proposals may have on our business.
Changes
in Tax Laws
Changes in tax laws could make some of our products less
attractive to consumers. For example, in November 2004, the
Treasury Department and the Internal Revenue Service, or IRS,
issued proposed regulations relating to Section 403(b)
plans that will impact the 403(b) marketplace, including tax
sheltered annuities. While the terms of the proposed regulations
are not final and the impact of the new regulations is
uncertain, it is likely that employers offering
Section 403(b) plans will be required to change how their
plans operate. Those changes may include re-evaluation of their
plan investment offerings, including annuities currently offered
by us in those plans.
Furthermore, the federal estate tax, which has undergone a
gradual repeal since 2001 that will continue to be phased in
through 2010, is scheduled to revert to pre-2001 law as of
January 1, 2011. The repeal of and continuing uncertainty
regarding the federal estate tax may adversely affect sales and
surrenders of some of our estate planning products.
Other
Laws and Regulations
Securities
Regulation
Certain of our U.S. subsidiaries and certain policies and
contracts offered by them, are subject to various levels of
regulation under the federal securities laws administered by the
SEC. Certain of our U.S. subsidiaries are investment
advisers registered under the Investment Advisers Act of 1940.
Certain of their respective employees are licensed as investment
advisory representatives in the states where those employees
have clients. Some of our insurance company separate accounts
are registered under the Investment Company Act of 1940. Some
annuity contracts and insurance policies issued by some of our
U.S. subsidiaries are funded by separate accounts, the
interests in which are registered under the Securities Act of
1933. Certain of our subsidiaries are registered and regulated
as broker-dealers under the Exchange Act and are members of, and
subject to regulation by, the NASD, as well as by various state
and local regulators. The registered representatives of our
broker-dealers are also regulated by the SEC and NASD and are
further subject to applicable state and local laws.
These laws and regulations are primarily intended to protect
investors in the securities markets and generally grant
supervisory agencies broad administrative powers, including the
power to limit or restrict the conduct of business for failure
to comply with such laws and regulations. In such event, the
possible sanctions that may be imposed include suspension of
individual employees, limitations on the activities in which the
investment adviser or broker/dealer may engage, suspension or
revocation of the investment adviser or broker/dealer
registration, censure or fines. We may also be subject to
similar laws and regulations in the states and other countries
in which we provide investment advisory services, offer the
products described above or conduct other securities-related
activities.
Certain of our U.S. subsidiaries also sponsor and manage
investment vehicles that rely on certain exemptions from
registration under the Investment Company Act of 1940 and the
Securities Act of 1933. Nevertheless, certain provisions of the
Investment Company Act of 1940 and the Securities Act of 1933
apply to these investment vehicles and the securities issued by
such vehicles. The Investment Company Act of 1940, the
Investment Advisers Act of 1940 and the Securities Act of 1933,
including the rules promulgated thereunder, are subject to
change which may affect our U.S. subsidiaries that sponsor
and manage such investment vehicles.
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ERISA
Considerations
We provide certain products and services to certain employee
benefits plans that are subject to ERISA or the Internal Revenue
Code. As such, our activities are subject to the restrictions
imposed by ERISA and the Internal Revenue Code, including the
requirement under ERISA that fiduciaries must perform their
duties solely in the interests of ERISA plan participants and
beneficiaries and the requirement under ERISA and the Internal
Revenue Code that fiduciaries may not cause a covered plan to
engage in certain prohibited transactions with persons who have
certain relationships with respect to such plans. The applicable
provisions of ERISA and the Internal Revenue Code are subject to
enforcement by the U.S. Department of Labor, the IRS and
the Pension Benefit Guaranty Corporation.
USA
Patriot Act
The USA Patriot Act of 2001, or the Patriot Act, which was
renewed for an additional four years in 2006, contains
anti-money laundering and financial transparency laws and
mandates the implementation of various new regulations
applicable to broker/dealers and other financial services
companies including insurance companies. The Patriot Act seeks
to promote cooperation among financial institutions, regulators
and law enforcement entities in identifying parties that may be
involved in terrorism or money laundering. The increased
obligations of financial institutions to identify their
customers, watch for and report suspicious transactions, respond
to requests for information by regulatory authorities and law
enforcement agencies, and share information with other financial
institutions, require the implementation and maintenance of
internal practices, procedures and controls. We believe that we
have implemented, and that we maintain, appropriate internal
practices, procedures and controls to enable us to comply with
the provisions of the Patriot Act.
Privacy
of Consumer Information
U.S. federal and state laws and regulations require
financial institutions, including insurance companies, to
protect the security and confidentiality of consumer financial
information and to notify consumers about their policies and
practices relating to their collection and disclosure of
consumer information and their policies relating to protecting
the security and confidentiality of that information. Similarly,
federal and state laws and regulations also govern the
disclosure and security of consumer health information. In
particular, regulations promulgated by the U.S. Department
of Health and Human Services regulate the disclosure and use of
protected health information by health insurers and others, the
physical and procedural safeguards employed to protect the
security of that information and the electronic transmission of
such information. Congress and state legislatures are expected
to consider additional legislation relating to privacy and other
aspects of consumer information.
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Directors
and Executive Officers
Set forth below is a list of the directors and principal
executive officers of Symetra as of September 30, 2007. The
positions listed are of Symetra unless otherwise indicated.
|
Name
|
Age
|
Positions
|
||||
|
David T. Foy
|
41 | Director, Chairman of the Board | ||||
|
Randall H. Talbot
|
54 | Director, President and Chief Executive Officer | ||||
|
Roger F. Harbin
|
56 | Executive Vice President and Chief Operating Officer | ||||
|
Margaret A. Meister
|
42 | Executive Vice President and Chief Financial Officer | ||||
|
Allyn D. Close
|
45 | Senior Vice President — Marketing, Symetra Life Insurance Company | ||||
|
Jennifer V. Davies
|
49 | Senior Vice President — Enterprise Development | ||||
|
Richard J. Lindsay
|
51 | Senior Vice President — Life & Annuities Division, Symetra Life Insurance Company | ||||
|
Patrick B. McCormick
|
50 | Senior Vice President — Distribution, Symetra Life Insurance Company | ||||
|
M. Scott Taylor
|
64 | Senior Vice President — Group Department, Symetra Life Insurance Company | ||||
|
George C. Pagos
|
57 | Senior Vice President, General Counsel and Secretary | ||||
|
Tommie D. Brooks
|
37 | Vice President and Chief Actuary, Symetra Life Insurance Company | ||||
|
Christine A. Katzmar
|
48 | Vice President — Human Resources | ||||
|
Troy J. Olson-Blair
|
52 | Vice President — Information Technology | ||||
|
Lois W. Grady
|
62 | Director | ||||
|
Sander M. Levy
|
45 | Director | ||||
|
Robert R. Lusardi
|
50 | Director | ||||
|
David I. Schamis
|
33 | Director | ||||
|
Lowndes A. Smith
|
68 | Director | ||||
David T. Foy has been Chairman of the Board of Symetra
since 2004. He has been Executive Vice President and Chief
Financial Officer of White Mountains Insurance Group, Ltd. since
2003. Previously, he was Senior Vice President and Chief
Financial Officer of Hartford Life, Inc., which he joined in
1993. From 1989 to 1993, Mr. Foy was with Milliman and
Robertson, an actuarial consulting firm. He is also a director
of OneBeacon Insurance Group, Ltd. He received his B.S. degree
from the Rochester Institute of Technology.
Randall H. Talbot has been a director, Chief Executive
Officer and President of Symetra since 2004. Mr. Talbot
joined Symetra Life Insurance Company in 1998, and from 1998 to
2004, he served as its President. He is also President and a
director of various affiliates of Symetra. From 1988 to 1998, he
was Chief Executive Officer and President of Talbot Financial
Corporation. Mr. Talbot is a member of the board of
directors of the American Council of Life Insurers.
Mr. Talbot received his B.A. degree from Arizona State
University.
Roger F. Harbin has been Executive Vice President and
Chief Operating Officer of Symetra since 2004. Mr. Harbin
joined Symetra Life Insurance Company in 1977, and served in a
variety of positions, most recently Executive Vice President of
Symetra Life Insurance Company, before he was promoted to his
current positions. He is also an officer and director of various
affiliates of Symetra. Mr. Harbin is a fellow of the
Society of Actuaries and has served on the boards of several
industry organizations. He is currently a member of the boards
of state insurance guaranty associations in Washington,
Virginia, North Carolina and Montana. Mr. Harbin received
his B.A. and M.A. degrees from the University of Montana.
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Margaret A. Meister has been Executive Vice President and
Chief Financial Officer of Symetra since 2006. She is an officer
and director of various affiliates of Symetra. Ms. Meister
is a fellow of the Society of Actuaries. Ms. Meister joined
Symetra Life Insurance Company in 1988, and served in a variety
of positions, most recently Chief Actuary and Vice President
prior to her promotion to her current position. Ms. Meister
received her B.A. degree from Whitman College.
Allyn D. Close has been Senior Vice President of Symetra
Life Insurance Company since 2001 and is responsible for
Marketing. Mr. Close joined Symetra Life Insurance Company
in 1998, and from 1999 to 2001, he served as President of
Symetra Investment Services, Inc. He is also an officer and
director of various affiliates of Symetra. Prior to joining
Symetra, Mr. Close was President and Chief Executive
Officer of Interpacific Investors Services, Inc., a regional
brokerage company. Mr. Close received his B.A. degree from
the University of Washington.
Jennifer V. Davies has been Senior Vice President of
Symetra since June 2007 and is responsible for Enterprise
Development. Ms. Davies joined Symetra Life Insurance
Company in 1992, and served in a variety of positions, most
recently Vice President, prior to being promoted to her current
position. She is also an officer and director of various of our
affiliates. Ms. Davies was employed by Sons of Norway from
1986 to 1992, and ITT/Hartford Life Insurance Company from 1982
to 1986. Ms. Davies received her B.A. degree from the
University of Minnesota and her M.A. degree from the University
of Virginia.
Richard J. Lindsay has been Senior Vice President of
Symetra Life Insurance Company since 2006. He is responsible for
the operations of the Life & Annuities division of
Symetra Life Insurance Company. Prior to joining Symetra Life
Insurance Company, Mr. Lindsay had worked for AIG VALIC
since 1998, where his last position was as an executive vice
president of AIG VALIC and as president of VALIC Financial
Advisors, an affiliated broker-dealer. Prior to joining AIG
VALIC, Mr. Lindsay spent 11 years with CoreStates
Financial Corp. Mr. Lindsay received his B.A. degree from
Brown University, his M.B.A. degree from Wharton School of the
University of Pennsylvania, and his J.D. degree from Temple
University.
Patrick B. McCormick has been Senior Vice President of
Symetra Life Insurance Company since 1999 and is responsible for
Distribution. Mr. McCormick joined Symetra Life Insurance
Company in 1995, and served in a variety of positions, most
recently Vice President, before he was promoted to his current
position after the Acquisition. He is also an officer and
director of various affiliates of Symetra.
M. Scott Taylor has been Senior Vice President of
Symetra Life Insurance Company since 2000 and is responsible for
Symetra Life Insurance Company’s Group Department.
Mr. Taylor joined Safeco Life Insurance Company in 1971,
and served in a variety of positions, most recently Vice
President, before he was promoted to his current position. He is
also an officer and director of various affiliates of Symetra.
Mr. Taylor served in the U.S. Air Force and received
his B.A. degree from the University of Washington.
George C. Pagos has been Senior Vice President, General
Counsel and Secretary of Symetra since September 2007.
Mr. Pagos joined Symetra Life Insurance Company in 1976,
and served in a variety of positions, most recently Vice
President, prior to being promoted to his current position. He
is also an officer and director of various affiliates of
Symetra. Mr. Pagos received his B.A. degree from George
Washington University and his J.D. degree from the University of
Maryland.
Tommie D. Brooks has been Vice President and Chief
Actuary of Symetra since March 2007. Mr. Brooks joined
Symetra Life Insurance Company in 1992, and served in a variety
of managerial positions throughout the company. Mr. Brooks
attained the Fellow of the Society of Actuaries in 1998 and
earned his B.S. in math and actuarial sciences from Central
Washington University.
Christine A. Katzmar has been Vice President of Symetra
since 2004 and is responsible for Human Resources.
Ms. Katzmar joined Symetra Life Insurance Company in 2001
as Vice President. From 1991 to 2001, she was with Safeco
Insurance Company, where she held a variety of positions, most
recently Human Resources Director. She is also an officer of
various affiliates of Symetra. Ms. Katzmar received her
B.A. degree from Miami University, Ohio.
Troy J. Olson-Blair has been Vice President of Symetra
since June 2007 and is responsible for Information Technology.
She has been Vice President of Symetra Life Insurance Company
since 2000 and also
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served as Chief Information Officer since 2004. She has been
responsible for Information Technology since joining the
company. Prior to Symetra, Ms. Olson-Blair held a variety
of technical and managerial positions with Safeco Insurance
Company that span twenty years; her last position was AVP and
director for IT Operations. Ms. Olson-Blair’s
background includes application development, voice and data
communications, networking, web services and ITIL service level
management.
Lois W. Grady has been a director of Symetra since 2004.
Ms. Grady served as Executive Vice President and Director
of Investment Products Services of Hartford Life, Inc. from 2002
through 2004 and as Senior Vice President and Director of
Investment Products Services of Hartford Life, Inc. from 1998
through 2002. She began her career with Hartford Life in 1983.
She is also a director of OneBeacon Insurance Group, Ltd.
Ms. Grady received her B.S. degree from Southern
Connecticut State University.
Sander M. Levy has been a director of Symetra since 2004.
He has been Managing Director of Vestar Capital Partners, a
private equity firm, since 1988. He was previously a member of
the management buyout group of First Boston Corporation. He
received his B.S. degree from The Wharton School, University of
Pennsylvania, and his M.B.A. degree from Columbia Business
School.
Robert R. Lusardi has been a director of Symetra since
2005. He has been Executive Vice President and Managing Director
of White Mountains Capital, Inc. since 2005. From 1998 until
2005, Mr. Lusardi served at XL Capital Ltd., first as Chief
Financial Officer and later as Chief Executive
Officer — Financial Products and Services. Previously,
Mr. Lusardi was a Managing Director at Lehman Brothers,
which he joined in 1980. He is also a director of OneBeacon
Insurance Group, Ltd. and Primus Guaranty, Ltd. He received his
B.A. and M.A. degrees from Oxford University, and his M.B.A.
from Harvard Business School.
David I. Schamis has been a director of Symetra since
2004. He has been Managing Director of J.C. Flowers &
Co. LLC since 2000. He received his B.A. degree from Yale
University.
Lowndes A. Smith has been a director of the Company since
2007. Mr. Smith serves as Managing Partner of Whittington
Gray Associates. Mr. Smith formerly served as Vice Chairman
of The Hartford Financial Services Group, Inc. and President and
CEO of Hartford Life, Inc. He joined The Hartford in 1968.
Mr. Smith also serves as Chairman of OneBeacon Insurance
Group, Ltd. and is a director of 85 investment companies in the
mutual funds of The Hartford. He received his B.S. degree from
Babson College.
Composition
of the Board of Directors
Our business and affairs are managed under the direction of our
board of directors. Our board of directors currently consists of
seven members, four of whom we believe are independent directors
under currently applicable listing standards of the NYSE.
Effective upon completion of this offering, our board of
directors will be divided into three classes of directors who
will serve in staggered three-year terms, as follows:
| • | Class 1 directors will be Messrs. Lusardi and Schamis, and their terms will expire at the annual meeting of stockholders to be held in 2008; |
| • | Class 2 directors will be Messrs. Levy and Smith, and their terms will expire at the annual meeting of stockholders to be held in 2009; and |
| • | Class 3 directors will be Messrs. Foy and Talbot and Ms. Grady, and their terms will expire at the annual meeting of stockholders to be held in 2010. |
At each annual meeting of our stockholders beginning in 2008,
the successors to the directors whose terms expire at each such
meeting will be elected to serve until the third annual meeting
after their election or until their successor has been elected.
As a result, only one class of directors will be elected at each
annual meeting of our stockholders, with the other classes
serving for the remainder of their respective three-year terms.
Committees
of the Board of Directors
Upon completion of this offering, our board of directors will
conduct its business through three standing committees: the
audit committee, the compensation committee and the nominating
and corporate governance committee. In addition, from time to
time, special committees may be established under the direction
of the
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board of directors when necessary to address specific issues.
Our audit committee, our compensation committee and our
nominating and corporate governance committee will be required
to be composed of a majority of independent directors within
90 days following the completion of this offering and
entirely of independent directors within one year following the
completion of this offering.
Audit
Committee
Upon completion of this offering, we will have an audit
committee that will have responsibilities that meet all NYSE and
SEC requirements.
The audit committee will have the power to investigate any
matter brought to its attention within the scope of its duties
and to retain counsel for this purpose where appropriate.
Upon the completion of this offering, our audit committee will
consist of Mr. Foy, Mr. Levy and Mr. Schamis.
Within a year of the completion of this offering, all members of
the audit committee will be independent directors according to
the rules and regulations of the SEC and the NYSE and at least
one member will be an “audit committee financial
expert,” as such term is defined in Item 407 of
Regulation S-K.
Our board of directors has adopted a written charter for the
audit committee to be effective upon the completion of this
offering, which will be available on our website as of the date
of this offering.
Compensation
Committee
Upon completion of this offering, we will have a compensation
committee that will have responsibilities that meet all NYSE
requirements.
Upon the completion of this offering, our compensation committee
will consist of Mr. Foy, Ms. Grady and Mr. Smith.
Within a year of completion of this offering, all members of the
compensation committee will be independent directors according
to the rules and regulations of the NYSE.
Our board of directors has adopted a written charter for the
compensation committee to be effective upon the completion of
this offering, which will be available on our website as of the
date of this offering.
Nominating
and Corporate Governance Committee
Upon completion of this offering, we will have a nominating and
corporate governance committee that will have responsibilities
that meet all NYSE requirements.
Upon completion of the offering our nominating and corporate
governance committee will consist of Mr. Foy, Mr. Levy
and Mr. Smith. Within a year of completion of this
offering, all members of the nominating and corporate governance
committee will be independent directors according to the rules
and regulations of the NYSE.
Our board of directors has adopted a written charter for the
corporate governance and nominating committee to be effective
upon the completion of this offering, which will be available on
our website as of the date of this offering.
Compensation
Committee Interlocks and Insider Participation
Upon completion of this offering, our board of directors will
have a compensation committee as described above. None of our
executive officers will serve as a member of our compensation
committee, and none of them have served, or will be permitted to
serve, on the compensation committee (or any other committee
serving a similar function) of any entity of which an executive
officer is expected to serve as a member of our compensation
committee.
Code of
Business and Financial Conduct and Corporate Governance
Guidelines
Prior to the completion of this offering, our board of directors
will adopt a Code of Business and Financial Conduct applicable
to our directors, officers and employees and corporate
governance guidelines, each in accordance with applicable rules
and regulations of the SEC and the NYSE. Prior to completion of
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this offering, the Code of Business and Financial Conduct and
the corporate governance guidelines will be available on our
website.
Compensation
Discussion and Analysis
Named
Executive Officers
The following Compensation Discussion and Analysis describes the
compensation earned by, awarded to or paid to our Chief
Executive Officer, our Chief Financial Officer and our three
other most highly paid executive officers as determined under
the rules of the SEC, collectively referred to as the Named
Executive Officers and listed below:
| • | Randall H. Talbot, President and Chief Executive Officer | |
| • | Roger F. Harbin, Executive Vice President and Chief Operating Officer | |
| • | Margaret A. Meister, Executive Vice President and Chief Financial Officer | |
| • | M. Scott Taylor, Senior Vice President, Group Department, Symetra Life Insurance Company | |
| • | Patrick B. McCormick, Senior Vice President, Distribution, Symetra Life Insurance Company | |
| • | Oscar C. Tengtio, Former Executive Vice President and Chief Financial Officer. Mr. Tengtio resigned as an executive officer and employee on February 17, 2006. |
Compensation
Philosophy
Our overall executive compensation program was redesigned after
the Acquisition by the acquiring stockholder group to align the
financial interests of our executives with those of our
stockholders. We focus on pay-for-performance (both individual
and company performance) by providing incentives that emphasize
long-term value creation, therefore putting a large portion of
our executives’ pay at risk. Based on this philosophy, the
compensation committee has maintained base salaries that may be
lower than those paid by other financial services companies and
life insurers and has chosen not to provide pensions or other
perquisites, choosing instead to grant the largest portion of
compensation as long-term incentive compensation which is based
on the growth of intrinsic business value per share.
Pay-for-performance. A majority of our
executive officers’ compensation is directly linked to our
short- and long-term financial goals, thereby providing
incentives for both short- and long-term results. Our Annual
Incentive Bonus Plan rewards performance relative to short-term
results based on a combination of meeting company performance
goals and individual performance goals. The Symetra Financial
Corporation Performance Share Plan (the “Performance Share
Plan”) rewards long-term performance relative to financial
goals set on three-year cycles.
Pay at risk. The pay at risk approach of our
incentive compensation is intended to align with the executive
officer’s impact on company performance over the short-and
long-term. Our Chief Executive Officer receives the largest
portion (approximately 90%) of his target total annual
compensation as performance-based incentive compensation. All
executive officers have a significant amount of their total
annual compensation at risk through performance-based incentives.
Competitive. As we grow and strive to reach
competitive financial goals, our need for experienced executive
talent will continue. Our compensation opportunities must be
competitive to allow us to attract and retain talented
executives in our field.
Compensation
Process
The compensation committee, according to its charter, is
responsible for approving all compensation for our Named
Executive Officers as well as our other executive officers and
for administering the Performance Share Plan with respect to all
participants.
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The compensation committee relies on Randy Talbot, our Chief
Executive Officer, and Chris Katzmar, our Vice President of
Human Resources, for recommending compensation programs and
awards for executive officers subject to committee approval and
for administering approved programs for all employees.
Mr. Talbot and Ms. Katzmar attend committee meetings
and, at the committee’s request, present management’s
analysis and recommendations regarding compensation actions to
include base salary, Annual Incentive Bonus Plan and Performance
Share Plan grants.
Compensation actions are usually presented at the first meeting
of the compensation committee of each year after financial
results for the prior year are available. In the meeting,
Mr. Talbot also presents a self-evaluation outlining his
performance to assist the compensation committee in determining
his total compensation for the year. The compensation committee
then holds a private session to discuss and determine
Mr. Talbot’s total compensation.
The compensation committee is comprised of experienced investors
who have, based on their experience, set compensation levels and
performance targets at what they believe to be appropriate
levels.
Elements
of Compensation
We currently compensate our executives through a combination of
base salary, annual incentive compensation or, in the case of
our sales executive, sales incentive compensation and long-term
incentive compensation.
Base salary. Our philosophy is to make base
salary a relatively smaller portion of the overall compensation
package of our executive officers relative to what we believe to
be common in the industry. While executive performance is
annually reviewed, base salaries for executives are not
regularly adjusted. The base salaries for Messrs. Talbot,
Harbin, Taylor and McCormick have not been increased since
August 2004. Ms. Meister received an increase in her base
salary in connection with her promotion to Chief Actuary in
August 2004 and again in connection with her promotion to Chief
Financial Officer in February 2006. Our practice of not
adjusting base salaries based on performance is consistent with
our philosophy that the majority of compensation should be
variable based on our actual long-term and short-term
performance and that of the executive.
Annual incentive compensation. We pay annual
incentive cash awards to our Named Executive Officers, other
than Mr. McCormick, through the Annual Incentive Bonus Plan
in March of each year for performance in the prior calendar
year. The Annual Incentive Bonus Plan awards are based on our
fulfillment of performance goals set at the beginning of the
year and the executive’s individual role in that goal
fulfillment.
The compensation committee determines the performance goals and
approves the target aggregate bonus pool for the Annual
Incentive Bonus Plan each year. The actual aggregate bonus pool
for the Annual Incentive Bonus Plan is determined by the sum of
all participants’ target awards and can range from 0% to
200% of this target, based on our fulfillment of performance
goals. The metric currently used to determine the actual
aggregate bonus pool for the plan is the growth in our intrinsic
business value per share, which is the average of the growth of
both our GAAP book value per share and enterprise value per
share during the plan year. Currently, the growth target is 13%.
If the average growth is 10% or lower, the plan will not be
funded and no bonus awards will be paid. If the average growth
falls between 10% and 13%, the aggregate bonus pool will be less
than 100% of the target. If the average growth meets or exceeds
the 13% goal, the aggregate bonus pool will grow proportionately
to a maximum of 200% of the target at 16%. The aggregate bonus
pool for the Annual Incentive Bonus Plan for 2006 (for bonuses
paid in March 2007) was 92% of the target.
After the aggregate bonus pool for the Annual Incentive Bonus
Plan is established, each executive is allocated a portion of
the pool based on his or her individual target and such
executive’s individual performance. The individual target
bonus for each of the CEO, COO and CFO is equal to 50% of his or
her base salary while the individual annual target bonus for
Mr. Taylor is 35% of his base salary. After reviewing
performance of the executive, Mr. Talbot recommends to the
compensation committee a percentage of each executive’s
individual target to be paid out for the plan year based on such
executive’s individual performance compared to goals or
expectations set by such executive and Mr. Talbot.
Mr. Talbot’s recommended annual
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incentive bonus is subject to the total funding level for the
Annual Incentive Bonus Plan and the average percentage of target
bonuses paid to the executive team. The compensation committee
then makes the final determination of the amount to be received
by each executive. In 2006, Mr. Talbot, Mr. Harbin,
Ms. Meister and Mr. Taylor received 100%, 85%, 112%
and 112%, respectively, of their target bonuses under the Annual
Incentive Bonus Plan.
Combining our overall performance and individual performance
ensures the executive is aligned with our goals for financial
success as well as rewarded for individual performance.
In 2006, the Annual Incentive Bonus was designed to comprise 5%,
8%, 10% and 10% of total target compensation for
Mr. Talbot, Mr. Harbin, Ms. Meister and
Mr. Taylor, respectively.
Sales incentive compensation. All sales
employees, including Mr. McCormick, participate in a sales
incentive program. The targets for Mr. McCormick’s
Sales Incentive Plan are designed to motivate him to develop new
distribution relationships and expand existing relationships.
Mr. McCormick earns a percentage of sales for each product
line for new net sales volumes. The percentages decrease after a
prescribed sales-volume threshold is met. The percentages and
thresholds differ from product to product within each product
line. The range of percentages that applies before a sales
threshold is met is 0.00001%-0.003% and the range of sales
thresholds is $20,000,000-$1,000,000,000. The range of
percentages that applies after a sales threshold is met is
0.000005%-0.001%. Mr. McCormick’s sales incentive
target was 22% of his target total compensation for 2006.
Long-term incentive compensation. We provide
long-term incentives to our Named Executive Officers and other
executive officers through the Performance Share Plan. This
long-term incentive compensation is in the form of unit-based
performance awards. Awards are granted annually. Each award
period is typically three years, therefore overlapping other
award periods. At the time of grant, each target performance
unit has the financial value of $100.00. Thereafter, each target
performance unit has a notional value of $100.00 x
(1 + aggregate percentage growth in intrinsic business
value per share), conditioned upon attainment of a
pre-established performance goal over the award period. At the
end of the award period, the compensation committee determines
the level of attainment of the performance goal and assigns a
harvest percentage of
0-200% of
target based on that determination. The matured performance
units are paid in cash in an amount equal to the then notional
value of the target shares multiplied by the harvest percentage.
For all currently running performance cycles, the performance
goal is 13% compound annualized growth in our intrinsic business
value per share. Growth in our intrinsic business value per
share equals the average of the compound annualized growth rates
during the award period of the GAAP book value per share and the
enterprise value per share, excluding unrealized gains or losses
other than unrealized gains or losses on equities held as
investments.
The harvest percentage ranges from 0% to 200% for the currently
running performance cycles. If the compound annualized growth is
10% or less, no award is made. If the compound annualized growth
is 16% or higher, the maximum harvest percentage of 200%
applies. For annualized percentage growth between 10% and 16%,
the harvest percentage is determined on the basis of straight
line interpolation.
The “Grant of Plan-Based Awards” table on page 112
sets forth the grants made under this plan to each Named
Executive Officer for 2006. Our Chief Executive Officer’s
recommendations and compensation committee’s determination
with respect to the size of awards to participants are
subjective, and no proportional or other mathematical formula is
applied, nor are any specific factors considered. Moreover, the
allocation of performance shares among our Named Executive
Officers is not based on any performance criteria, although no
payouts are made with respect to any performance shares granted
unless the performance goal described above is satisfied. Our
Chief Executive Officer receives the largest grant because he is
responsible for the company’s overall business and
financial performance. Our Chief Operating Officer receives a
relatively larger grant than our Senior Vice President Group
Division, because Mr. Harbin is accountable for all product
line results, while Mr. Taylor leads our most significant
product line. Our Chief Financial Officer’s awards under
this plan have increased over each of the past three years due
to her increased responsibilities within the company during this
period, ultimately culminating in her promotion to Chief
Financial Officer in 2006. Our
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Senior Vice President, Sales and Distribution receives a
relatively smaller grant since his sales incentive plan, which
is also performance-based, already comprises a significant
component of his overall compensation.
The target grants for the
2006-2008
performance share award period comprised 85%, 75%, 70%, 61% and
52% of target total compensation for Mr. Talbot,
Mr. Harbin, Ms. Meister, Mr. Taylor and
Mr. McCormick, respectively. While awards of performance
shares were not specifically designed around these percentages,
this program is designed such that our Named Executive Officers
have a substantial proportion of their target total compensation
subject to the achievement of performance targets.
With respect to the
2004-2006
performance share award period, the company exceeded the target
compound annualized growth rate per share. Accordingly, the
payouts indicated in the Summary Compensation Table reflected
106% of the target performance share awards for our Named
Executive Officers.
IPO Grant Program. In October 2007, our board
of directors approved an IPO grant program to better align the
interests of our management team with the interests of our
stockholders and to serve as a long-term retention tool.
Participants in our Performance Share Plan as of the date of
this offering are eligible to participate in this grant program.
Under this program, a pool of one-time grants having an
aggregate value of $14.6 million will be awarded. Of this
amount:
| • | 20% (or $2.9 million) will be awarded in the form of fully-vested shares of common stock, the number of such shares to be determined based on the initial public offering price per share; |
| • | 40% (or $5.8 million) will be awarded in the form of restricted stock units, the number of such units to be determined based on the initial public offering price per share, with 50% of such units vesting on the second anniversary of this offering and the remainder vesting on the fourth anniversary of this offering; and |
| • | 40% (or $5.8 million) will be awarded in the form of stock options, the number of such options to be based on a Black- Scholes valuation performed as of the date of this offering, with such options having an exercise price of $ , equal to 110% of the midpoint of the stock price range set forth on the cover page of this prospectus, and with 50% of such options vesting on the third anniversary of this offering and the remainder vesting on the fifth anniversary of this offering. |
Awards under this program are made pursuant to our Equity Plan
(described under “Management — Employee Benefit
Plans”) and are subject to the terms of that plan. All of
these awards are contingent upon the closing of this offering.
The restricted stock units and stock options are subject to
time-based vesting, and are not subject to further
performance-based criteria.
Of the $14.6 million value pool, our Named Executive
Officers will receive 30%, 10%, 10%, 1% and 3% for
Mr. Talbot, Mr. Harbin, Ms. Meister,
Mr. Taylor and Mr. McCormick, respectively. Our
compensation committee arrived at this allocation by starting
with the percentage of the Performance Share Plan pool for 2007
awarded to each Named Executive Officer, and adjusting these
percentages to factor in contributions made by particular Named
Executive Officers to the initial public offering process. This
determination was subjective, and these percentages are not
based on any formula or performance targets.
Employment/severance/change of control
arrangements. We have no employment agreements
with our executive officers. All of our executive officers are
“at will” employees. We have an Executive Severance
Pay Plan that provides for payment of severance in the event of
either termination without cause, or, in the event of a change
of control of the company, constructive termination. This plan
terminates upon the closing of the initial public offering. The
terms of this plan are summarized on page 114.
In addition, in the event of a termination of an executive
officer’s employment by the company without cause or by the
executive due to a constructive termination, in either case
within 24 months of a change of control, executives receive
certain payments under our Performance Share Plan as described
in more detail on page 114. We provide for this change in
control-related benefit as an incentive and retention mechanism
by providing security to our executives in the event that we
experience a change in ownership.
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Retirement benefits. All of our employees,
including our Named Executive Officers, may participate in our
qualified 401(k) plan, which includes a safe harbor employer
match. The safe harbor employer match is equal to 100% of the
employee contributions up to the first 6% of eligible
compensation. We have no defined benefit pension plans,
non-qualified deferred compensation plans or retiree medical
plans.
Perquisites. Our executive officers receive
the same benefits that are available to all employees. Benefits
such as medical and dental insurance, life insurance, short- and
long-term disability, vacation and sick leave, tuition
reimbursement and professional education funding, charitable
gift matching, employee referral program, and relocation
assistance are available to all employees. All employees are
also eligible for several discount programs including fitness
club memberships, computers/software, wireless programs, office
supplies, rental cars and hotels for personal use.
Tax
and accounting implications of executive compensation
programs
After the consummation of this offering, Section 162(m) of
the Internal Revenue Code would limit the deductibility of the
compensation of our Named Executive Officers to $1,000,000 per
individual to the extent that such compensation is not
“performance-based” as defined in Section 162(m).
We intend to rely on an exemption from Internal Revenue Code
Section 162(m) for compensation plans adopted prior to a
company’s initial public offering. This transition
exemption for our compensation plans will no longer be available
to us after the date of our annual meeting that occurs after the
third calendar year following the year of our initial public
offering, or if we materially modify the plan earlier. We will
continue to consider the implications of Internal Revenue Code
Section 162(m) and the limits of deductibility of
compensation in excess of $1,000,000 as we design our
compensation programs going forward.
Summary
Compensation Table
The following table presents compensation earned during 2006 by
the company’s CEO, CFO and its three most highly
compensated executive officers other than the chief executive
officer and chief financial officer (the “Named Executive
Officers”):
|
Non-Equity |
||||||||||||||||||||
|
Incentive Plan |
All Other |
Total |
||||||||||||||||||
|
Name and |
Salary |
Compensation |
Compensation |
Compensation |
||||||||||||||||
|
Principal Position
|
Year | ($) | ($)(a) | ($)(b) | ($) | |||||||||||||||
|
Randall H. Talbot
|
2006 | 525,000 | 4,523,083 | 13,200 | 5,061,283 | |||||||||||||||
|
President and Chief Executive Officer
|
||||||||||||||||||||
|
Roger F. Harbin
|
2006 | 400,000 | 3,010,789 | 13,200 | 3,423,989 | |||||||||||||||
|
Executive Vice President and COO
|
||||||||||||||||||||
|
Margaret A. Meister(c)
|
2006 | 269,615 | 380,331 | 11,560 | 661,506 | |||||||||||||||
|
Executive Vice President and Chief Financial Officer
|
||||||||||||||||||||
|
Oscar C. Tengtio(d)
|
2006 | 48,750 | — | 13,180 | 61,930 | |||||||||||||||
|
Executive Vice President and Chief Financial Officer
|
||||||||||||||||||||
|
M. Scott Taylor
|
2006 | 276,050 | 492,033 | 13,200 | 781,283 | |||||||||||||||
|
Senior Vice President Group Division
|
||||||||||||||||||||
|
Patrick B. McCormick
|
2006 | 200,000 | 494,154 | 12,092 | 706,246 | |||||||||||||||
|
Senior Vice President Sales and Distribution
|
||||||||||||||||||||
| (a) | Represents (i) 2006 annual incentive bonuses paid in March 2007 (other than with respect to Mr. McCormick), (ii) in the case of Mr. McCormick, amounts earned under the 2006 Sales Incentive Plan, and (iii) amounts earned under the 2004-2006 Performance Share Plan and paid in March 2007. Mr. Talbot earned $241,500 for the 2006 annual incentive bonus and $4,281,583 for the 2004-2006 Performance Share Plan. Mr. Harbin earned $156,400 for the 2006 annual incentive bonus and $2,854,389 for the 2004-2006 Performance Share Plan. Ms. Meister earned $130,572 for the 2006 annual incentive |
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| bonus and $249,759 for the 2004-2006 Performance Share Plan. Mr. Taylor earned $99,555 for the 2006 annual incentive bonus and $392,478 for the 2004-2006 Performance Share Plan. Mr. McCormick earned $137,355 in his Sales Incentive Plan and $356,799 for the 2004-2006 Performance Share Plan. |
| (b) | Represents employer contributions to the Symetra Retirement Savings Plan. In addition, in the case of Ms. Meister, this amount also includes a grossed up employee referral bonus of $1,360. In the case of Mr. Tengtio, this amount also includes payment of $10,231 for accrued vacation upon the resignation of his employment. | |
| (c) | Ms. Meister was promoted to Executive Vice President and Chief Financial Officer on February 17, 2006. | |
| (d) | Mr. Tengtio resigned as an executive officer and employee on February 17, 2006. |
Grant of
Plan-Based Awards
The following table summarizes the estimated future payouts
under grants made by us to the Named Executive Officers in 2006
under our incentive plans:
|
Estimated Future Payouts Under |
||||||||||||||||||||
|
Number of |
Non-Equity Incentive Plan Awards | |||||||||||||||||||
|
Non-Equity |
Units |
Threshold |
Target |
Maximum |
||||||||||||||||
|
Name
|
Incentive Plan(a) | Cycle | Granted | ($) | ($) | ($) | ||||||||||||||
|
Randall H. Talbot
|
Annual Incentive Bonus Plan | 2006 | n/a | 0 | 262,500 | 525,000 | ||||||||||||||
| Performance Share Plan | 2006 - 2008 | 30,000 | 0 | 4,320,000 | 9,360,000 | |||||||||||||||
|
Roger F. Harbin
|
Annual Incentive Bonus Plan | 2006 | n/a | 0 | 200,000 | 400,000 | ||||||||||||||
| Performance Share Plan | 2006 - 2008 | 12,500 | 0 | 1,800,000 | 3,900,000 | |||||||||||||||
|
Margaret A. Meister
|
Annual Incentive Bonus Plan | 2006 | n/a | 0 | 126,719 | 253,438 | ||||||||||||||
| Performance Share Plan | 2006 - 2008 | 6,500 | 0 | 936,000 | 2,028,000 | |||||||||||||||
|
M. Scott Taylor
|
Annual Incentive Bonus Plan | 2006 | n/a | 0 | 96,618 | 193,235 | ||||||||||||||
| Performance Share Plan | 2006 - 2008 | 4,000 | 0 | 576,000 | 1,248,000 | |||||||||||||||
|
Patrick B. McCormick
|
Sales Incentive Plan | 2006 | n/a | 0 | 171,190 | 456,506 | ||||||||||||||
| Performance Share Plan | 2006 - 2008 | 2,750 | 0 | 396,000 | 858,000 | |||||||||||||||
| (a) | On May 17, 2006, the 2006 targets of the Annual Incentive Bonus Plan were approved for Messrs. Talbot, Harbin, Taylor and Ms. Meister. Mr. McCormick’s 2006 Sales Incentive Plan was approved by Mr. Talbot on January 25, 2006. On May 17, 2006, all Named Executive Officers were granted units in the 2006-2008 Performance Share Plan. Each unit was initially valued at $100.00. |
Please see Compensation Discussion and Analysis —
Elements of Compensation starting on page 108 for a
description of the material terms of the Annual Incentive Bonus
Plan, the Sales Incentive Plan and the Performance Share Plan.
Employee
Benefit Plans
The following is a summary of our primary employee benefit plans:
Equity
Plan
Background. The purpose of the Symetra
Financial Corporation Equity Plan (the “Equity Plan”)
is to advance our and our stockholders’ interests by
providing long-term incentives to our employees, directors and
consultants. Our board of directors adopted the Equity Plan in
October 2007. The Equity Plan became effective upon adoption,
and has a ten-year term.
Administration. Our compensation
committee will administer the Equity Plan, and will determine
which individuals are eligible to receive awards, the type of
awards and number of shares or units to be granted, the exercise
or purchase price for awards, the vesting schedule for each
award and the maximum term of each award (subject to the limits
set forth in the Equity Plan). The compensation committee will
have authority to interpret the Equity Plan, and any
determination by the compensation committee will be final.
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Share Reserve. We have reserved
900,000 shares of our common stock for issuance under the
Equity Plan. This reserve, and all limits referenced below, are
subject to adjustment in the event of stock splits or similar
capitalization events.
Eligibility. The individuals eligible
to participate in the Equity Plan include our officers and other
employees, our non-employee directors and any consultants.
Limit on Awards. During any calendar
year, the maximum aggregate number of shares subject to awards
granted to any individual shall be 50,000.
Equity Awards. The Equity Plan permits
us to grant the following types of awards:
| • | Stock Options. The Equity Plan provides for the grant of incentive stock options (commonly referred to as ISOs) to employees and nonqualified stock options (commonly referred to as NSOs) to employees, directors and consultants. The compensation committee determines the terms of options, provided that ISOs are subject to statutory limitations. The compensation committee determines the exercise price for a stock option, within the terms and conditions of the Equity Plan and applicable law, provided that the exercise price of an ISO may not be less than 100% (or 110% in the case of a recipient who is a ten percent stockholder) of the fair market value of our common stock on the date of grant. ISOs exercisable for no more than 50,000 shares may be issued to a participant in any one year. |
Options granted under the Equity Plan will vest at the rate
specified by the compensation committee, with the vesting
schedule for each stock option to be set forth in the stock
option agreement for such option grant. Generally, the committee
determines the term of stock options granted under the Equity
Plan, up to a maximum term of ten years.
After termination of an optionee’s employment, the optionee
may exercise the vested portion of each option for the period of
time stated in the option agreement to which such option
relates. The committee also has the discretion to permit
exercise of the unvested portion of an option in the event of
voluntary resignation or retirement. Generally, if termination
is due to disability, the vested portion of each option will
remain exercisable for three years following the date of
disability, and in the event of death of an optionee, the vested
portion of each option will remain exercisable by such
optionee’s estate for one year. In all other cases, the
vested portion of each option will generally remain exercisable
for three months following termination of employment. However,
an option may not be exercised later than its expiration date.
Notwithstanding the above, in the event of a change of control
of Symetra, followed by termination without cause or
constructive termination (as such terms are defined in the
Equity Plan) of an optionee within 12 months of the change
of control, such optionee’s stock options will become 100%
vested and exercisable for up to 30 days following such
termination.
| • | Stock Appreciation Rights. Stock appreciation rights provide for a payment, or payments, in cash or shares of common stock, to the participant based upon the difference between the fair market value of our common stock on the date of exercise and the stated exercise price. The exercise price of a stock appreciation right may not be less than 100% of the fair market value of our common stock on the date of grant of the stock appreciation right. Stock appreciation rights are otherwise generally subject to the same terms and limitations as described above for stock options, including vesting acceleration upon termination following a change of control. |
| • | Restricted Stock. A restricted stock award is an offer by us to sell shares of our common stock subject to a right of repurchase by us upon the termination of employment of the participant on such terms (including price and timing) as may be determined by the compensation committee. This right of repurchase may lapse according to vesting conditions, which may include performance conditions, a time-based schedule or a combination thereof, to be determined in each case by the compensation committee. In the event of death or disability of a holder of restricted stock subject to vesting other than monthly vesting, our right to repurchase such shares shall lapse with respect to a pro rata portion of the restricted shares equal to the percentage of the vesting period that has elapsed. The compensation |
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| committee also has the discretion to waive all or a portion of our right to repurchase shares of restricted stock in the event of a participant’s voluntary resignation or retirement. In the event of a change of control followed by termination without cause or constructive termination of the participant within 12 months, the restrictions on such participant’s restricted stock will lapse. |
| • | Restricted Stock Units. Restricted stock units represent the right to receive, without payment to the company, an amount of shares of our common stock equal to the number of shares underlying the restricted stock units multiplied by the fair market value of a share on the date of vesting of the restricted stock units. The compensation committee may, at its discretion, impose vesting conditions, which may include performance conditions, a time-based vesting schedule or a combination thereof, on the exercise of such units. A participant’s restricted stock units generally terminate in the event the participant’s employment terminates prior to payment with respect to the units. However, in the event of death or disability of a holder of restricted stock units that are subject to vesting other than monthly vesting, the holder will receive payment for a pro rata percentage of the unvested units equal to the percentage of the vesting period that has elapsed. The committee also has the discretion to make payment with respect to all or a portion of the unvested restricted stock units held by a participant in the event of such participant’s voluntary resignation or retirement. In the event of a change of control followed by termination without cause or constructive termination of the participant within 12 months, such participant’s restricted stock units that were outstanding on the date of termination will be cancelled and such participant will receive a cash payment equal to the product of the number of restricted stock units and the fair market value of a share of our common stock on the date of termination. |
| • | Performance Shares/Units. A performance share award entitles a participant to receive all or part of the value of a specified number of hypothetical shares if specified performance objectives, as determined by the committee, are satisfied during a specified award period. The payout under a performance share award is the product of (i) the target number of performance shares subject to award, (ii) the performance percentage and (iii) the fair market value of a share on the date the award is paid or becomes payable to the participant. |
Performance units are similar to performance shares, except that
the value is based on a fixed dollar value or formula specified
by the committee, rather than the fair market value of a share
on the date the award is paid or payable (as with performance
shares). The maximum value of performance units that may be
earned by a participant for any single award period of one year
or longer may not exceed $25 million.
At the end of the award period for performance shares or
performance units, the committee assigns a performance
percentage that is between 0% and 200% depending on the extent
to which the applicable performance objectives were met during
the award period. Performance shares and units may be settled in
cash, shares of our common stock, other securities, other
awards, other property or any combination thereof, as determined
by the committee.
A participant’s performance shares or units are cancelled
if the participant’s employment is terminated prior to end
of the award period. However, if a participant dies or becomes
disabled during the performance period, such award is paid to
such participant (or such participant’s estate) on a
pro-rata basis. In the event of a change of control followed by
termination without cause or constructive termination of the
participant within 12 months, the participant’s
performance share/unit award shall be paid out on a pro rata
basis according to the percentage of months during the award
period that have elapsed, with a performance percentage of 100%.
| • | Other Stock-Based Awards. The compensation committee also has the discretion to issue other equity-based awards under the Equity Plan, including fully-vested shares of common stock. |
Awards Not Transferable. Awards under
the Equity Plan are generally non-transferable, except to a
participant’s estate in the event of the participant’s
death.
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Adjustments. The compensation committee
is authorized to make adjustments to the terms and conditions of
awards in recognition of certain unusual or nonrecurring events,
including but not limited to extraordinary dividends, stock
splits, mergers or a change in control of Symetra. In such
events, the committee has the discretion to do what it
determines is appropriate or desirable, including providing for
the substitution or assumption or awards, accelerating the
vesting of or the lapse of restrictions on awards, terminating
the awards, or making a cash payment in consideration for the
cancellation of the awards.
Amendment and Termination. The Equity
Plan may be amended or terminated at any time upon approval of
our board of directors, provided that no amendment or
termination will adversely affect outstanding awards. The Equity
Plan will terminate on the earlier of the termination of the
Equity Plan by our board of directors or ten years from the
effective date of the Equity Plan.
Employee
Stock Purchase Plan
Background. Our employee stock purchase
plan is designed to enable eligible employees to periodically
purchase shares of our common stock at a discount. Purchases are
accomplished through participation during discrete offering
periods. Our employee stock purchase plan is intended to qualify
as an employee stock purchase plan under section 423 of the
Internal Revenue Code of 1986, as amended. Our board of
directors adopted our employee stock purchase plan in October
2007.
Share Reserve. We have initially
reserved 100,000 shares of our common stock for issuance
under our 2008 employee stock purchase plan.
Administration. Our compensation
committee will administer our employee stock purchase plan.
Our employees generally are eligible to participate in our
employee stock purchase plan if they are employed on a salaried
basis by us, or a subsidiary of ours that we designate, for 20
or more hours per week and more than five months in a calendar
year. Employees who are 5% stockholders, or would become 5%
stockholders as a result of their participation in our employee
stock purchase plan, are ineligible to participate in our
employee stock purchase plan. We may impose additional
restrictions on eligibility as well.
Under our employee stock purchase plan, eligible employees may
acquire shares of our common stock by accumulating funds through
payroll deductions. Our eligible employees may select a rate of
payroll deduction up to 15% of their cash compensation (or such
lower limit as determined by the compensation committee). We
also have the right to amend or terminate our employee stock
purchase plan, except that, subject to certain exceptions, no
such action may adversely affect any outstanding rights to
purchase stock under the plan. Our employee stock purchase plan
will remain in effect until terminated by our compensation
committee.
Purchase Rights. When an offering
period commences, our employees who meet the eligibility
requirements for participation in that offering period and who
elect to participate are granted a non-transferable option to
purchase shares in that offering period. An employee’s
participation automatically ends upon termination of employment
for any reason. An employee may withdraw from the plan at any
time at least five business days prior to a purchase date, and
in such event shall receive a refund of all of such
employee’s payroll deductions deposited to date into the
plan.
Each offering period will be for approximately six months
(commencing on the first trading day on or immediately after
February 15 and August 15 of each year and terminating on the
trading day on or immediately preceding the next August 14 or
February 14, respectively). The first offering period under
the plan shall commence on February 15, 2008. Each purchase
period will be for approximately three months (commencing on the
first day of the offering period). The first purchase period in
this first offering period will run until May 14, 2008, and
the second purchase period in this first offering period will
run from May 15, 2008 until August 14, 2008. The
duration and timing of offering periods may be changed by the
compensation committee without shareholder approval if such
change is announced prior to the scheduled beginning of the
offering period to be effected thereafter.
No participant will have the right to purchase our shares at a
rate which, when aggregated with purchase rights under all our
employee stock purchase plans that are also outstanding in the
same calendar year(s), have a fair market value of more than
$25,000, determined as of the first trading day of the
applicable offering
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period, for each calendar year in which such right is
outstanding. The purchase price for shares of our common stock
purchased under our employee stock purchase plan will be 85% of
the closing trading price per share of our common stock as
reported by the New York Stock Exchange on the last date of each
purchase period.
Change in Control. In the event of a
change in control of Symetra, the acquiring entity shall assume
the outstanding purchase rights. In the event the acquiring
entity refuses to do so, the purchase and offering periods then
in progress shall terminate prior to the date of closing of the
change of control transaction.
401(k)
Plan
We offer a 401(k) plan to all employees who meet specified
eligibility requirements. Eligible employees may contribute up
to 100% of their eligible compensation, subject to limitations
established by the Internal Revenue Code. We match participant
contributions dollar-for-dollar, up to 6% of their compensation.
Participants are immediately vested in their contributions.
Potential
Payments Upon Termination or Change in Control
We have no employment agreements with our Named Executive
Officers that would provide payments upon termination of
employment.
Annual
Incentive Bonus Plan
The Annual Incentive Bonus Plan requires that an executive be an
active employee on December 31 of the plan year, and remain
continuously employed by the company through the award payout
date, in order to be eligible to receive a bonus award.
Exceptions to this include death, disability, retirement at
age 65 or older or position elimination. In these cases,
the bonus will be based on eligible earnings paid through the
executive’s last day of work within the plan year.
Sales
Incentive Plan
Mr. McCormick’s Sales Incentive Plan provides that if
he leaves his position for any reason, he will be paid for
production earned through the end of the last full month of
employment.
Performance
Share Plan
The Performance Share Plan provides that, except for the change
of control provision described below, the executive would
immediately forfeit all outstanding awards upon termination of
employment prior to the end of the applicable award period. The
board of directors, at its discretion, may provide that if an
executive dies, retires, is disabled or is granted a leave of
absence, or if the executive is otherwise terminated in a manner
reasonably judged to be not seriously detrimental to the
company, then all or a portion of the executive’s award, as
determined by the board, may be paid to the executive (or
beneficiary).
The Performance Share Plan includes a “double trigger”
change in control provision which provides that if a
participant’s employment is terminated without cause or
constructively terminated within 24 months after a change
in control, each award held by the participant prior to the
change in control is cancelled and the participant is entitled
to receive an award payment equal to the product of (i) the
then financial value of 100% of the performance shares and
(ii) the harvest percentage, which is based on the level of
attainment of the performance goal as of the last day of the
calendar quarter ending prior to the date of the termination
event. Alternatively, following the change in control, if the
participant remains continuously employed through the end of the
award period, then the participant will receive those awards for
which the participant would have been paid had the change of
control not occurred. For purposes of this plan, a change of
control occurs when any person or group, other than White
Mountains or Berkshire Hathaway, an underwriter or an employee
benefit plan of the company, becomes the beneficial owner of 35%
or more of the company’s outstanding common stock.
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Under the Performance Share Plan, a “constructive
termination” is defined as a termination of the
participant’s employment at the initiative of the
participant following a material decrease in salary or a
material diminution in the participant’s authority, duties
or responsibilities.
Executive
Severance Pay Plan
Our Named Executive Officers each participate in our Executive
Severance Pay Plan. This plan was adopted in 2007, but
terminates upon the closing of our initial public offering. The
plan provides for payment of severance in the event of a
qualifying termination, in an amount equal to:
| • | a multiple, ranging from 1.5 to 2.0, of such officer’s annual base salary at the time of termination; and | |
| • | the officer’s target annual incentive bonus in the year of termination, or in the case of Mr. McCormick, the sales incentive bonus earned in the year prior to termination. |
A qualifying termination is defined as termination of an officer
without cause, or, in the event of a change of control of the
company, constructive termination. For purposes of this plan, a
change of control occurs when any person, entity or group
becomes, whether by merger or otherwise, the beneficial owner of
securities representing 100% of the combined voting power of the
company’s outstanding voting securities. Constructive
termination means termination following a material decrease in
base salary or target total annual compensation, a material
diminution in authority or duties, or relocation to a location
that is more than 100 miles away from the officer’s
current office, subject in each case to cure by the company
following notice.
Potential
Payments Upon Termination or Change in Control
The following table shows the potential payments that would have
been made by us to each of the Named Executive Officers,
assuming that each executive’s employment was terminated on
December 31, 2006.
|
2006 Annual |
2005-2007 |
2006-2008 |
||||||||||||||
|
Incentive |
Performance |
Performance |
||||||||||||||
|
Executive
|
Bonus Plan ($)(a) | Share Plan ($)(b) | Share Plan ($)(b) | Total ($) | ||||||||||||
|
Randall H. Talbot
|
262,500 | 3,413,110 | 3,087,610 | 6,763,220 | ||||||||||||
|
Roger F. Harbin
|
200,000 | 1,422,129 | 1,286,504 | 2,908,633 | ||||||||||||
|
Margaret A. Meister
|
126,719 | 255,983 | 668,982 | 1,051,684 | ||||||||||||
|
M. Scott Taylor
|
96,618 | 455,081 | 411,681 | 963,380 | ||||||||||||
|
Patrick B. McCormick
|
137,355 | 312,868 | 283,031 | 733,254 | ||||||||||||
| (a) | Reflects the amount payable under the 2006 Annual Incentive Bonus Plan, except with respect to Mr. McCormick, who would instead receive payment under his Sales Incentive Plan. This amount is payable in the event of death, disability, retirement at age 65 or older or elimination of position, whether or not a change of control of the company has occurred. | |
| (b) | Payable in the event a Named Executive Officer’s employment is terminated without cause or constructively terminated within 24 months following a change of control of the company. In addition, the board of directors, at its discretion, may elect to award all or a portion of such amounts to an officer in the event of such executive’s death, retirement, disability or leave of absence, or in the event of termination in a manner not determined to be seriously detrimental to the company. |
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Compensation
of Directors
The following table presents compensation paid to our board of
directors for the year ended December 31, 2006:
|
Fees Earned |
||||||||
|
or Paid in |
||||||||
|
Name
|
Cash ($) | Total ($) | ||||||
|
David T. Foy, Chairman(a)
|
67,000 | 67,000 | ||||||
|
John D. Gillespie(b)
|
28,000 | 28,000 | ||||||
|
Lois W. Grady(c)
|
32,800 | 32,800 | ||||||
|
Sander M. Levy(d)
|
54,500 | 54,500 | ||||||
|
Robert R. Lusardi(e)
|
30,000 | 30,000 | ||||||
|
Ronald P. McIntosh(f)
|
30,700 | 30,700 | ||||||
|
David I. Schamis(g)
|
38,800 | 38,800 | ||||||
|
Randall H. Talbot(h)
|
— | — | ||||||
| (a) | Includes Chairman of the Board retainer, annual retainer, and Board, Audit Committee and Compensation Committee meeting fees. | |
| (b) | Includes annual retainer and Board meeting fees. Mr. Gillespie retired as a member of the Board as of June 26, 2007. | |
| (c) | Includes annual retainer, and Board and Compensation Committee meeting fees. Ms. Grady also serves on the First Symetra National Life Insurance Company of New York Board of Directors and Audit Committee. | |
| (d) | Includes Chairman of the Audit Committee retainer, annual retainer and Board and Audit Committee meeting fees. Mr. Levy also serves on the First Symetra National Life Insurance Company of New York Board of Directors and Audit Committee. All compensation is paid to Vestar Capital Partners. | |
| (e) | Includes annual retainer and Board meeting fees. | |
| (f) | Includes annual retainer and Board meeting fees. Mr. McIntosh also served on the First Symetra National Life Insurance Company of New York Board of Directors. Mr. McIntosh retired as a member of the Board of Symetra Financial Corporation as of June 21, 2007 and from the board of directors of First Symetra National Life Insurance Company of New York as of June 25, 2007. | |
| (g) | Includes annual retainer, and Board and Audit Committee meeting fees. Mr. Schamis also serves on the First Symetra National Life Insurance Company of New York Board of Directors and Audit Committee. All compensation is paid to JC Flowers & Co. LLC. | |
| (h) | Mr. Talbot is our employee and receives no additional retainer or fee for Board participation. |
Our directors, who are not employees of the Company, are
entitled to the following compensation for service on our board
of directors and board committees:
| • | Chairman of the Board Annual Retainer: $150,000 |
| • | Board (excluding Chair) Annual Retainer: $75,000 |
| • | Attendance at Board Meeting: $2,000 |
| • | Audit Committee Chair retainer: $30,000 |
| • | Audit Committee member (excluding Chair) retainer: $10,000 |
| • | Compensation Committee Chair retainer: $10,000 |
| • | Nominating and Corporate Governance Committee Chair retainer: $10,000 |
| • | Attendance at each Committee Meeting: $2,000 |
In addition, members of the Board of Directors of First Symetra
National Life Insurance Co. of New York receive an annual
retainer of $500, and fees of $100 per board meeting and $50 per
committee meeting attended.
We reimburse our directors for reasonable costs and expenses
incurred in connection with attendance at board and committee
meetings.
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The following is a summary of each transaction or series of
similar transactions since August 2, 2004, the date of the
Acquisition, to which we were or are a party in which the amount
involved exceeded or exceeds $120,000 and in which any of our
directors or executive officers, any holder of 5% of our capital
stock or any member of the immediate family of any of the
foregoing persons had or will have a direct or indirect material
interest.
Investment
Management Agreement with White Mountains Advisors LLC
Certain of our investments are managed by WM Advisors, a wholly
owned subsidiary of White Mountains Insurance Group, Ltd. The
total fees paid to WM Advisors under our existing investment
management agreements, or IMAs, with them during 2006 were
$20.2 million. Immediately prior to the effectiveness of
this offering, we and certain of our subsidiaries will enter
into an amended investment management agreement, or the WMA
Agreement, with WM Advisors pursuant to which WM Advisors will
continue to supervise and direct the fixed income and
alternative investment portion of our investment portfolio in
accordance with our investment philosophy described under
“Business — Investments.”
Under this agreement and consistent with the existing IMA, WM
Advisors will have full discretion and authority to make all
investment decisions in respect of the fixed income and
alternative investment portion of our investment portfolio on
our behalf and at our sole risk, and to do anything which WM
Advisors deems is required, appropriate or advisable in
connection with the foregoing.
The assets of our portfolio will be held in one or more
separately identifiable accounts in the custody of a bank or
similar entity designated by us and acceptable to WM Advisors.
We will be responsible for custodial arrangements and the
payment of all custodial charges and fees.
We will agree to pay annual investment management fees generally
based on the month-end market / book values held under
custody as set forth in the table below:
| Value | Annual Fee | |||
|
Investment grade fixed income:
|
||||
|
Up to $1 billion
|
Book |
10.0 basis points (0.1% or 0.001) |
||
|
$1 billion — $2 billion
|
Book | 8.5 basis points | ||
|
$2 billion — $5 billion
|
Book | 7.5 basis points | ||
|
Greater than $5 billion
|
Book | 2.5 basis points | ||
|
High yield debt
|
Market | 25.0 basis points | ||
|
Fully funded hedge funds, limited partnerships &
limited liability companies
|
Market | 100.0 basis points | ||
|
Private equities & other deferred fundings:
|
||||
|
First two years of fund’s life
|
Committed | 100.0 basis points | ||
|
Thereafter
|
Market | 100.0 basis points |
We will pay WM Advisors a quarterly fee for Portfolio Management
Services computed at the annual rate of one basis point (0.01%)
of the aggregate value of the net assets of the Aggregate
Investment Account, which includes equities and commercial
mortgage loans in addition to the items managed by WM Advisors.
WM Advisors will provide reports containing a detailed listing
of invested assets and transactions in our investment portfolio,
as well as various other analytical reports as outlined by
Symetra, at least quarterly. We will review periodically the
performance of and the fees paid to WM Advisors under the WMA
Agreement.
The WMA Agreement will provide for an initial fixed term of
one year, which will be extendible by us for an additional
year (a second year), and if so extended, for a second
additional year (a third year). Following the end of the
initial term and any extensions, the WMA Agreement may be
terminated by either party upon 60 days written notice.
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WM Advisors also provides investment advisory services to White
Mountains Insurance Group, Ltd., its subsidiaries and a number
of its affiliates.
Investment
Management Agreement with Prospector Partners, LLC
Prospector is a registered investment adviser managing
approximately $3.6 billion in assets under management for
corporations, foundations, endowments, and high net worth
individuals. Mr. John D. Gillespie, the founder and
Managing Member of Prospector, is a former director of the
Company. Mr. Gillespie resigned his board seat on
June 26, 2007. Historically, Prospector managed most of the
publicly-traded common equity and convertible securities in our
portfolio through a sub-advisory agreement with WM Advisors. As
of June 30, 2007, Prospector served as a discretionary
advisor to WM Advisors under the sub-advisory agreement with
respect to approximately $0.2 billion of specified assets
in our combined insurance and non-insurance portfolios. During
2006, we paid $1.6 million in fees with respect to our
portfolio.
Immediately prior to the effectiveness of this offering, we will
enter into a separate investment management agreement with
Prospector, or the Prospector Agreement, pursuant to which
Prospector will agree to supervise and direct the
publicly-traded common equity and convertible securities portion
of our investment portfolio in accordance with our investment
guidelines described under “Business —
Investments.” Under the Prospector Agreement, Prospector
will have discretion and authority with respect to the portfolio
it manages for us that is substantially similar to WM
Advisors’ discretion and authority under the WMA Agreement.
The assets of our portfolio will be held in one or more
separately identifiable accounts in the custody of a bank or
similar entity designated by us and acceptable to Prospector. We
will be responsible for custodial arrangements and the payment
of all custodial charges and fees.
We will agree to pay annual investment management fees based on
aggregate net assets under management according to the following
schedule:
|
Assets Under Management
|
Annual Fee | |
|
Up to $200 million
|
100.0 basis points | |
|
$200 million to $400 million
|
50.0 basis points | |
|
Greater than $400 million
|
25.0 basis points |
The Prospector Agreement will have an initial fixed term of
three years, which will be extendible by us for an additional
year (a fourth year) at or prior to the end of the second year
of the term, and if so extended, for a second additional year (a
fifth year) at or prior to the end of the third year of the
term. The Prospector Agreement will be terminable by us only
(i) for cause (including material non-performance by
Prospector), (ii) if either John D. Gillespie or Richard P.
Howard are no longer affiliated with Prospector, or
(iii) if there is a change in control of Prospector.
Following the end of the initial term and any extensions, the
Prospector Agreement may be terminated by either party on
60 days written notice. We will review periodically the
performance of and the fees paid to Prospector under the
Prospector Agreement.
Relationships
and Transactions with White Mountains Insurance Group, Ltd. and
its Affiliates
We are party to certain shareholders agreements, dated as of
March 8, 2004, March 19, 2004 and April 16, 2004,
with our stockholders. The shareholders agreements will
terminate on the consummation of this offering other than
certain provisions relating to registration rights, transfer
restrictions, tag-along rights, competition and confidentiality.
In addition, following an initial public offering and so long as
White Mountains Insurance Group, Ltd. holds at least 20% of our
outstanding common stock, assuming exercise of any outstanding
warrants, each stockholder party to a shareholder’s
agreement is required to vote its shares for two board members
designated by White Mountains Insurance Group, Ltd. which will
be reduced to one nominee so long as White Mountains Insurance
Group, Ltd. holds at least 10%, but less than 20%, of our
outstanding common stock.
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Relationships
and Transactions with Others
We are parties to certain agency agreements with various
insurance agencies affiliated with Talbot Financial Corporation,
or TFC. Mr. Randall H. Talbot, our President, Chief
Executive Officer and a director of Symetra, is a member of
Talman, LLC which owned stock constituting a minority interest
in Satellite Acquisition Corporation (“Satellite”),
the parent company of TFC. Talman, LLC sold its interest in
Satellite on April 2, 2007 and has no continuing interest
in Satellite or TFC. We paid commissions of $0.1 million,
$0.6 million and $2.4 million for 2006, 2005 and 2004,
respectively, to agencies affiliated with TFC. Additionally, TFC
provided training, consulting and other marketing services for
which we paid fees of $0.6 million for 2005. The
contractual relationship with the TFC agencies, including
negotiations, establishment of contract terms, and setting of
commission levels, was managed by members of our senior
management other than Mr. Talbot. At the time the
transactions occurred, Mr. Talbot had recused himself from
all activities surrounding management of the relationship with
the TFC agencies or any related administrative decisions.
Mr. Talbot disclosed his indirect ownership interest in
Satellite Acquisition Corporation to the audit committee, which
ratified the relationship.
Another of our subsidiaries, Symetra Life Insurance Company, in
the ordinary course of business, has issued medical stop-loss
and group life insurance policies to related parties MidAmerican
Energy Holdings Company, an affiliate of Berkshire Hathaway
Inc., and Talbot Agency, Inc., an affiliated company of one of
our directors and officers. Premiums received from MidAmerican
Energy Holding Company were $2.7 million and
$2.2 million during 2006 and 2005, respectively. Premiums
received from Talbot Agency, Inc. were $0.5 million for
2005.
During 2005, Symetra Life Insurance Company, in the ordinary
course of business, entered into a coinsurance agreement with
Wilton Reassurance Company, or Wilton Re. We recorded ceded
reinsurance premiums of $1.4 million and $0.7 million
during 2006 and 2005, respectively. Vestar Capital Partners,
which holds 700,000 shares of our common stock, has an
investment interest in Wilton Re. Mr. Sander M. Levy, one
of our directors and our audit committee chair, serves on the
board of directors of Wilton Re. Mr. Levy is not directly
involved in the business dealings between the two companies but
disclosed the relationship to our audit committee, which
ratified the relationship.
Procedures
for Approval of Related Party Transactions
Prior to this offering, we did not have a written policy
relating to the approval of related party transactions. Any such
transactions were approved by our board of directors or audit
committee in accordance with applicable law.
In connection with this offering, we will adopt a written policy
relating to the approval of related party transactions. We will
review all relationships and transactions in which we and our
directors and executive officers or their immediate family
members are participants to determine whether such persons have
a direct or indirect material interest. Our legal staff will be
primarily responsible for the development and implementation of
processes and controls to obtain information from our directors
and executive officers with respect to related party
transactions and for determining, based on the facts and
circumstances, whether we or a related person have a direct or
indirect material interest in the transaction.
In addition, our audit committee will review and approve or
ratify any related party transaction reaching a certain
threshold of significance. As will be set forth in the audit
committee’s charter upon completion of this offering, in
the course of its review and approval or ratification of a
related party transaction, the committee will consider:
| • | the nature of the related person’s interest in the transaction; | |
| • | the material terms of the transaction, including, without limitation, the amount and type of transaction; | |
| • | the importance of the transaction to the related person; | |
| • | the importance of the transaction to us; |
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| • | whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the company; and | |
| • | any other matters the audit committee deems appropriate. |
Any member of the audit committee who is a related person with
respect to a transaction under review will not be permitted to
participate in the deliberations or vote respecting approval or
ratification of the transaction. However, such director may be
counted in determining the presence of a quorum at a meeting of
the committee that considers the transaction.
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The following table sets forth, as of September 30, 2007,
information regarding the beneficial ownership of our common
stock by:
| • | each person known by us to beneficially own more than 5% of the outstanding shares of our common stock; | |
| • | each selling stockholder; | |
| • | each of our current directors; | |
| • | each of our named executive officers; and | |
| • | our directors and named executive officers as a group. |
Beneficial ownership is determined in accordance with the SEC
rules and includes voting or investment power with respect to
the securities. Shares of common stock subject to options that
are currently exercisable or exercisable within 60 days are
deemed to be outstanding and beneficially owned by the person
holding such options. Such shares, however, are not deemed to be
outstanding for the purposes of computing the percentage
ownership of any other person.
Percentage of beneficial ownership is based on
12,830,120 shares of our common stock (assuming exercise of
all outstanding warrants) outstanding as of September 30,
2007, and to be outstanding after completion of the offering.
Unless otherwise indicated, the address for all beneficial
owners is
c/o Symetra
Financial Corporation, 777 108th Ave. NE, Suite 1200,
Bellevue, WA 98004.
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|
Shares Beneficially Owned |
||||||||||||||||||||||||||||||||
| Shares Offered Hereby | After Offering | |||||||||||||||||||||||||||||||
|
Shares of |
Assuming No |
Assuming Full |
Assuming No |
Assuming Full |
||||||||||||||||||||||||||||
|
Common Stock |
Exercise of |
Exercise of |
Exercise of |
Exercise of |
||||||||||||||||||||||||||||
|
Beneficially Owned |
Over-Allotment |
Over-Allotment |
Over-Allotment |
Over-Allotment |
||||||||||||||||||||||||||||
| Prior to the Offering | Option | Option | Option | Option | ||||||||||||||||||||||||||||
|
Beneficial Owner
|
Number | % | Number | Number | Number | % | Number | % | ||||||||||||||||||||||||
|
Selling Stockholders:
|
||||||||||||||||||||||||||||||||
|
Berkshire Hathaway Inc.
|
3,090,560 | (1)(2) | 24.1 | % | ||||||||||||||||||||||||||||
|
White Mountains Insurance Group, Ltd.
|
3,090,560 | (1)(3) | 24.1 | |||||||||||||||||||||||||||||
|
Franklin Mutual Advisers, LLC
|
1,250,000 | (4) | 9.7 | |||||||||||||||||||||||||||||
|
Highfields Capital Management LP
|
700,000 | (5) | 5.5 | |||||||||||||||||||||||||||||
|
Caxton Associates, L.L.C.
|
700,000 | (6) | 5.5 | |||||||||||||||||||||||||||||
|
OZ Master Fund, Ltd.
|
700,000 | (7) | 5.5 | |||||||||||||||||||||||||||||
|
Vestar Capital Partners
|
700,000 | (8) | 5.5 | |||||||||||||||||||||||||||||
|
Prospector Partners, LLC
|
400,000 | (9) | 3.1 | |||||||||||||||||||||||||||||
|
CSFB Private Equity- DLJ Growth Capital Partners
|
250,000 | (10) | 1.9 | |||||||||||||||||||||||||||||
|
J.C. Flowers & Co. LLC
|
250,000 | (11) | 1.9 | |||||||||||||||||||||||||||||
|
Fairholme Capital Management, LLC
|
200,000 | (12) | 1.6 | |||||||||||||||||||||||||||||
|
Marshfield Associates
|
200,000 | (13) | 1.6 | |||||||||||||||||||||||||||||
|
Scion Capital, LLC
|
200,000 | (14) | 1.6 | |||||||||||||||||||||||||||||
|
Montpelier Reinsurance Ltd.
|
200,000 | (15) | 1.6 | |||||||||||||||||||||||||||||
|
Sayro Fund Investors III, LLC
|
112,000 | (16) | * | |||||||||||||||||||||||||||||
|
Ulysses Partners, L.P.
|
85,000 | (17) | * | |||||||||||||||||||||||||||||
|
Bay Pond Partners, L.P.
|
75,000 | (18) | * | |||||||||||||||||||||||||||||
|
Rho Capital Partners, Inc.
|
74,750 | (19) | * | |||||||||||||||||||||||||||||
|
The Sulam Trust
|
27,500 | (20) | * | |||||||||||||||||||||||||||||
|
Bay Pond Investors (Bermuda) LP
|
25,000 | (18) | * | |||||||||||||||||||||||||||||
|
Chou Associates Management, Inc.
|
20,000 | (21) | * | |||||||||||||||||||||||||||||
|
James A. Stern
|
10,000 | * | ||||||||||||||||||||||||||||||
|
Roger Taylor
|
10,000 | * | ||||||||||||||||||||||||||||||
|
Terry Baxter
|
5,000 | * | ||||||||||||||||||||||||||||||
|
Snyder, Cahoon & Co., PLLC Profit Sharing Plan
|
2,000 | (22) | * | |||||||||||||||||||||||||||||
|
Michael J. Batal III
|
750 | * | ||||||||||||||||||||||||||||||
|
Gene Lee
|
500 | * | ||||||||||||||||||||||||||||||
|
Directors and Executive Officers:
|
||||||||||||||||||||||||||||||||
|
David T. Foy
|
3,090,560 | (1)(23) | 24.1 | % | ||||||||||||||||||||||||||||
|
Randall H. Talbot
|
7,500 | * | — | — | 7,500 | * | 7,500 | * | ||||||||||||||||||||||||
|
Roger F. Harbin
|
2,500 | * | — | — | 2,500 | * | 2,500 | * | ||||||||||||||||||||||||
|
Patrick B. McCormick
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Margaret A. Meister
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
M. Scott Taylor
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Lois W. Grady
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Sander M. Levy
|
700,000 | (24) | 5.5 | |||||||||||||||||||||||||||||
|
Robert R. Lusardi
|
3,090,560 | (1)(25) | 24.1 | |||||||||||||||||||||||||||||
|
David I. Schamis
|
250,000 | (26) | 1.9 | |||||||||||||||||||||||||||||
|
Lowndes A. Smith
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Directors and executive officers as a group (18 persons)
|
4,050,560 | 31.5 | % | — | — | |||||||||||||||||||||||||||
| * | Represents ownership of less than 1% |
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| (1) | Includes 1,090,560 of exercisable warrants. | |
| (2) | Represents shares held by General Reinsurance Corporation. | |
| (3) | Represents shares held by White Mountains Holdings (NL) B.V. | |
| (4) | Represents 136,000 shares held by Franklin Mutual Beacon Fund, 51,200 shares held by Franklin Mutual Recovery Fund, 29,400 shares held by Mutual Beacon Fund (Canada), 117,300 shares held by Mutual Financial Services Fund, 394,800 shares held by Mutual Qualified Fund, 9,700 shares held by Mutual Recovery Fund, Ltd. and 511,600 shares held by Mutual Beacon Fund, collectively “the Funds.” Franklin Mutual Advisers, LLC (“FMA”), an indirect wholly owned subsidiary of Franklin Resources, Inc. (“FRI”), is the investment manager for each of the Funds. Charles B. Johnson and Rupert H. Johnson, Jr. are the principal shareholders of FRI. However, because FMA exercises voting and investment control on behalf of its advisory clients independently of FRI, the principal shareholders, and their respective affiliates, beneficial ownership of the shares is being attributed only to FMA. FMA disclaims any economic interest or beneficial ownership in any of the shares. The address of FMA is 101 John F. Kennedy Parkway, Short Hills, NJ 07078. | |
| (5) | Represents 63,664 shares held by Highfields Capital I LP, 150,164 shares held by Highfields Capital II LP and 486,172 shares held by Highfields Capital III L.P., collectively “the Funds.” Highfields Capital Management LP serves as the investment manager to each of the Funds. Highfields GP LLC is the general partner of Highfields Capital Management LP. Highfields Associates LLC is the general partner of the Funds. Jonathon S. Jacobson and Richard L. Grubman are Senior Managing Directors of Highfields Capital Management LP, Managing Members of Highfields GP LLC, and Senior Managing Members of Highfields Associates LLC. Each of Highfields Capital Management LP, Highfields GP LLC, Highfields Associates LLC, Mr. Jacobson and Mr. Grubman has complete voting and investment control over the shares. The address of Highfields Capital Management LP, Highfields GP LLC, Highfields Associates LLC, Mr. Jacobson and Mr. Grubman is c/o Highfields Capital Management LP, John Hancock Tower, 200 Clarendon Street, 59th Floor, Boston, MA 02116. | |
| (6) | Represents shares held by CxLife, LLC. Caxton Associates, L.L.C. is the manager of CxLife, LLC. Bruce S. Kovner is the Chairman of Caxton Associates, L.L.C. and the sole shareholder of Caxton Corporation, the manager and majority owner of Caxton Associates, L.L.C. As a result of the foregoing, Mr. Kovner may be deemed to beneficially own the shares. The address of Caxton Associates, L.L.C. is 500 Park Avenue, New York, NY 10022. The address of Caxton Corporation is 731 Alexander Road, Building 2, Princeton, NJ 08540. | |
| (7) | OZ Management LP. Daniel S. Och, Senior Managing Member of Och-Ziff GP, LLC may be deemed to have investment and/or voting control of OZMD. The address of OZ Management LP is 9 West 57th Street, 39th Floor, New York, NY 10019. | |
| (8) | Represents 14,761 shares held by Vestar Symetra LLC and 685,239 shares held by Vestar Capital Partners IV, LP, entities which are affiliated with or managed by Vestar Capital Partners. Sander M. Levy is a managing director of Vestar Capital Partners. Mr. Levy disclaims beneficial ownership in the shares except to the extent of any pecuniary interest therein. The address of Vestar Capital Partners is 245 Park Avenue, 41st Floor, New York, NY 10167. | |
| (9) | Represents (i) 380,000 common shares owned by various funds (235,300 shares held by Prospector Partners Fund, LP, 112,200 shares held by Prospector Offshore Fund (Bermuda), Ltd., 28,000 shares held by Prospector Partners Small Cap Fund, LP, and 4,500 shares held by Prospector Turtle Fund, LP) of Prospector Partners, LLC in which John D. Gillespie is a managing member, (ii) 10,000 common shares held by Main Street America Assurance Corporation to which Mr. Gillespie serves as an investment manager and (iii) 10,000 common shares held by National Grange Mutual Insurance Company to which Mr. Gillespie serves as an investment manager. Mr. Gillespie disclaims beneficial ownership of such common shares owned by Prospector Partners, LLC, except to the extent of his pecuniary interest therein. The address of Prospector Partners, LLC is 370 Church Street, Guilford, CT 06437. | |
| (10) | Represents 202,020 shares held by DLJ Growth Capital Partners, L.P. and 47,980 shares held by GCP Plan Investors, L.P. Voting and investment control over the shares held by DLJ Growth Capital Partners, L.P. and GCP Plan Investors, L.P. are exercised by an investment committee of DLJ Growth Capital, L.P., |
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| which is the Associate General Partner of DLJ Growth Capital Partners, L.P. The investment committee consists of the following individuals: Nicole S. Arnaboldi, Edward A. Johnson and Thompson Dean. Such individuals disclaim beneficial ownership of the shares, except to the extent of their direct pecuniary interest therein. The business address of DLJ Growth Capital Partners, L.P. and GCP Plan Investors, L.P. is 11 Madison Avenue, New York, NY 10010. | ||
| (11) | Represents shares held by J.C. Flowers I L.P. JCF Associates I LLC is the general partner of J.C. Flowers I L.P., and J. Christopher Flowers is the managing member of JCF Associates I LLC and possesses voting and investment control over the shares held by J.C. Flowers I L.P. J. Christopher Flowers disclaims beneficial ownership of the shares, except to the extent of his direct pecuniary interest therein. The business address of J.C. Flowers I L.P. is 717 Fifth Avenue, 26th Floor, New York, NY 10022. | |
| (12) | Represents 100,000 shares held by Fairholme Ventures II, LLC and 100,000 shares held by Fairholme Holdings, Ltd. Fairholme Capital Management, LLC acts as the Managing Member of Fairholme Ventures II, LLC and is the Investment Manager to Fairholme Holdings, Ltd. Bruce R. Berkowitz is the Managing Member of Fairholme Capital Management, LLC, and the Chairman and Director of Fairholme Holdings, Ltd., a Bermuda exempted mutual fund, and has the sole voting and investment control over the shares. The address of Fairholme Capital Management, LLC is 1001 Brickell Bay Drive, Suite 3112, Miami, FL 33131. | |
| (13) | Represents shares held by Marshfield Insurance II, LLC. Marshfield Management II, LLC is the Managing Member of Marshfield Insurance II, LLC. Christopher M. Niemczewski, Melissa Vinick, Elise Hoffmann, Carolyn Miller, Sara J. Cavendish and William G. Stott are the Managers of Marshfield Management II, LLC and share voting and investment control over the shares held by Marshfield Insurance II, LLC. The Managers of Marshfield Management II, LLC disclaim beneficial ownership of the shares, except to the extent of their direct pecuniary interest in the shares. The address of Marshfield Management II, LLC is 21 Dupont Circle, Washington, DC 20036. | |
| (14) | Represents 165,415 shares held by Scion Qualified Value Fund and 34,585 shares held by Scion Value Fund. Scion Capital, LLC is the managing member of both Scion Value Fund and Scion Qualified Value Fund. Dr. Michael J. Burry is the managing member of Scion Capital, LLC and has sole voting and investment control over the shares held by Scion Value Fund and Scion Qualified Value Fund. The managing member of Scion Capital, LLC disclaims beneficial ownership of the shares, except to the extent of his direct pecuniary interest in the shares. The address of Scion Capital, LLC is 20400 Stevens Creek Blvd., Suite 840, Cupertino, CA 95014. | |
| (15) | The board of directors of Montpelier Reinsurance Ltd., consisting of Anthony Taylor, Thomas G.S. Busher and Christopher L. Harris, exercises shared voting and investment control over such shares. Each of Messrs. Taylor, Busher and Harris disclaim beneficial ownership of the shares owned by Montpelier Reinsurance Ltd., except to the extent of their direct pecuniary interest in the shares. The address of Montpelier Reinsurance Ltd. is 94 Pitts Bay Road, Pembroke HM08, Bermuda. | |
| (16) | Sayro Ventures, Ltd. is the managing member of Sayro Fund Investors III, LLC. George D. Kean, Kenneth J. Simpson, and Ashley Cox are the directors of Sayro Ventures, Ltd., and possess shared voting and investment control over the shares. The address of Sayro Ventures, Ltd. is Barclays Wealth, P.O. Box 487, First Caribbean House, 4th Floor, 25 Main Street, Grand Cayman KY1-1106, Cayman Islands. | |
| (17) | Joshua Nash LLC is a general partner of Ulysses Partners, L.P. and has voting and investment control over the shares held by Ulysses Partners, L.P. Joshua Nash is the managing member of Joshua Nash LLC and has the sole power to vote, direct the voting of, dispose of and direct the disposition of the shares of common stock beneficially owned by Ulysses Partners, L.P. Joshua Nash expressly disclaims any such beneficial ownership which exceeds the proportionate interest in the common stock which he may be deemed to own indirectly through Ulysses Partners, L.P. The address of Joshua Nash is c/o Ulysses Partners, L.P., 280 Park Avenue, New York, NY 10017. | |
| (18) | Wellington Management Company, LLP (“Wellington”) is an investment adviser registered under the Investment Advisers Act of 1940, as amended. Wellington, in such capacity, may be deemed to share |
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| beneficial ownership over the shares held by its client accounts. The address of Wellington is 75 State Street, Boston, MA 02109. | ||
| (19) | Represents shares held by Rho Management Trust I (“RMT I”). Pursuant to an Investment Advisory Agreement between RMT I and Rho Management Partners L.P. (“Rho”), Rho exercises sole voting and investment control over the shares held of record by RMT I. Altas Capital Corp., a Delaware corporation, is sole general partner of Rho. As sole stockholder of Atlas Capital Corp., Joshua Ruch may be deemed to have sole voting and investment control over the shares held by RMT I. Joshua Ruch disclaims beneficial ownership of the shares held of record by RMT I, except to the extent of his indirect pecuniary interest in such shares. The address of RMT I, Rho, and Joshua Ruch is c/o Rho Capital Partners, Inc., 152 W. 57th Street, 23rd Floor, New York, NY 10019. | |
| (20) | Represents shares held by JP Morgan Trust Co. of Delaware as Trustee for the Sulam Trust. Pursuant to the Trust instrument, Moris Tabacinic serves as investment adviser to the Trust and possesses sole voting and investment control over the shares. The address of JP Morgan Trust Co. of Delaware is 500 Stanton Christiana Road, Newark, DE 19713. | |
| (21) | Represents shares held by Chou RRSP Fund. The manager of Chou RRSP Fund is Chou Associates Management, Inc. Francis Chou is the Chief Executive Officer of the manager and portfolio manager for Chou RRSP Fund. The address of Chou Associates Management, Inc. is 95 Wellington St., West, Suite 701, Toronto, Ontario M5J 2N7. | |
| (22) | Robert E. Snyder and Michael Cahoon, trustees of the Snyder, Cahoon & Co., PLLC Profit Sharing Plan (“Plan”) possess voting and investment control over the shares. The address of the Plan and trustees is c/o Snyder, Cahoon & Co., PLLC, 80 South S. Main Street, Suite 202, Hanover, NH 03755. | |
| (23) | Represents shares owned by affiliates of White Mountains Insurance Group, Ltd. of which Mr. Foy is an executive officer. Mr. Foy disclaims beneficial ownership of all such shares. | |
| (24) | Represents shares owned by affiliates of Vestar Capital Partners of which Mr. Levy is a Managing Director. Mr. Levy disclaims beneficial ownership of all such shares. | |
| (25) | Represents shares owned by affiliates of White Mountains Insurance Group, Ltd. of which Mr. Lusardi is an executive officer. Mr. Lusardi disclaims beneficial ownership of all such shares. | |
| (26) | Represents shares owned by affiliates of J.C. Flowers & Co. LLC of which Mr. Schamis is a Managing Director. Mr. Schamis disclaims beneficial ownership of all such shares. |
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The following information reflects our certificate of
incorporation and restated bylaws as these documents will be in
effect upon completion of this offering. Our certificate of
incorporation and bylaws will be filed as exhibits to the
registration statement of which this prospectus forms a part.
The summaries of these documents are qualified in their entirety
by reference to the full text of the documents.
General
Immediately following the completion of this offering, our
authorized capital stock will consist of 750,000,000 shares
of common stock, $0.01 par value per share and
10,000,000 shares of preferred stock, $0.01 par value per
share. As of September 30, 2007, there were
10,649,000 shares of our common stock issued and
outstanding held by 55 shareholders of record, and no
shares of preferred stock outstanding.
Immediately prior to this offering, there was no public market
for our common stock. Although we will apply to list our common
stock on the NYSE, we cannot assure you that a market for our
common stock will develop or if it develops that it will be
sustained.
Common
Stock
Voting
Rights
Each share of common stock entitles the holder to one vote with
respect to each matter presented to our stockholders on which
the holders of common stock are entitled to vote. Our common
stock votes as a single class on all matters relating to the
election and removal of directors on our board of directors and
as provided by law, with each share of common stock entitling
its holder to one vote. Holders of our common stock will not
have cumulative voting rights.
Dividends
Holders of common stock and warrant holders will share equally
in any dividend declared by our board of directors, subject to
the rights of the holders of any outstanding preferred stock.
Liquidation
Rights
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of our affairs, holders of our common
stock would be entitled to share ratably in our assets that are
legally available for distribution to stockholders after payment
of liabilities. If we have any preferred stock outstanding at
such time, holders of the preferred stock may be entitled to
distributions
and/or
liquidation preferences. In either such case, we must pay the
applicable distribution to the holders of our preferred stock
before we may pay distributions to the holders of our common
stock.
Other
Rights
Our stockholders have no preemptive or other rights to subscribe
for additional shares. All holders of our common stock are
entitled to share equally on a share-for-share basis in any
assets available for distribution to common stockholders upon
our liquidation, dissolution or winding up. All outstanding
shares are, and all shares offered by this prospectus will be,
when sold, validly issued, fully paid and nonassessable.
Stock
Options, Restricted Stock Units and Share Grants
We have committed to grant stock options to purchase
approximately
shares of our common
stock,
restricted stock units
and shares
of our common stock to employees on or about the date of this
offering under our Equity Plan. The exact number of shares
subject to these awards will depend on the initial public
offering price per share, and the above estimates are based on
an assumed initial public offering price per share equal to the
midpoint of the range set forth on the cover page of this
prospectus.
The stock options will have an exercise price per share of
$ , equal to 110% of the midpoint
of the range set forth on the cover page of this prospectus, and
will vest as to 50% of the shares on the third
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anniversary of the date of this offering and as to the
remaining shares on the fifth anniversary of the date of this
offering. The restricted stock units will vest as to 50% of the
units on the second anniversary of the date of this offering,
and as to the remaining units on the fourth anniversary of the
date of this offering.
The shares
of common stock listed above will be fully vested as of the date
of grant. All awards will be subject to the terms of our Equity
Plan, as described in further detail under
“Management — Employee Benefit Plans.”
Warrants
We currently have outstanding warrants to purchase
2,181,120 shares of our common stock at an exercise price
of $100 per share. If our warrants were exercised on a
cashless basis, we would have had 883,800, 837,735, 869,878 and
746,503 additional shares of common stock outstanding for the
six months ended June 30, 2007 and 2006, and for the years
ended December 31, 2006 and 2005, respectively.
The exercise price and number of shares of common stock for each
warrant are subject to anti-dilution adjustments in respect of
certain events. If certain of these events occur, the warrant
holders will receive the right to receive the full intrinsic
value of the warrants instead of the stock acquirable and
receivable upon exercise. In the event we pay cash or stock
dividends or other distributions to our common stockholders, the
warrant holders will also receive such dividends or
distributions.
Preferred
Stock
Following the offering, our board of directors will be
authorized, subject to the limits imposed by the Delaware
General Corporation Law, or DGCL, to issue to up
10,000,000 shares of preferred stock in one or more series,
to establish from time to time the number of shares to be
included in each series, and to fix the rights, preferences,
privileges, qualifications, limitations and restrictions of the
shares of each wholly unissued series. Our board of directors
will also be authorized to increase or decrease the number of
shares of any series, but not below the number of shares of that
series then outstanding, without any further vote or action by
our stockholders.
Our board of directors may authorize the issuance of preferred
stock with voting or conversion rights that affect adversely the
voting power or other rights of our common stockholders. The
issuance of preferred stock, while providing flexibility in
connection with possible acquisitions and other corporate
purposes, could have the effect of delaying, deferring or
preventing a change in control, causing the market price of our
common stock to decline, or impairing the voting and other
rights of the holders of our common stock. We have no current
plans to issue any shares of preferred stock.
Certain
Anti-Takeover Provisions of our Charter and Bylaws and the
Delaware Law
Upon completion of this offering, we will have the following
provisions in our certificate of incorporation and bylaws that
could deter, delay or prevent a third-party from acquiring us,
even if doing so would benefit our stockholders.
Undesignated
Preferred Stock
The ability to authorize undesignated preferred stock makes it
possible for our board of directors to issue preferred stock
with super voting, special approval, dividend or other rights or
preferences on a discriminatory basis that could impede the
success of any attempt to acquire us. These and other provisions
may have the effect of deferring, delaying or discouraging
hostile takeovers, or changes in control or management of our
Company.
Classified
Board of Directors
Our certificate of incorporation will provide that our board of
directors is divided into three classes. Each class of directors
will serve three-year terms except that the term of the first
class of directors will expire at the first annual meeting after
the consummation of this offering and the second and third
classes of directors will expire at the second and third annual
meetings, respectively, after the consummation of this offering.
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Requirements
for Advance Notification of Stockholder Meetings, Nominations
and Proposals
Our bylaws will provide that special meetings of the
stockholders may be called only upon the request of the majority
of the board of directors or upon request of the president. Our
bylaws will prohibit the conduct of any business at a special
meeting other than as specified in the notice for such meeting.
Our bylaws will establish advance notice procedures with respect
to stockholder proposals for annual meetings and the nomination
of candidates for election as directors, other than nominations
made by or at the direction of the board of directors or a
committee of the board of directors. In order for any matter to
be “properly brought” before a meeting, a stockholder
will have to comply with advance notice requirements and provide
us with certain information. Additionally, vacancies and newly
created directorships may be filled only by a vote of a majority
of the directors then in office, even though less than a quorum,
and not by the stockholders. Our bylaws will allow the chairman
of a meeting of the stockholders to adopt rules and regulations
for the conduct of meetings that may have the effect of
precluding the conduct of certain business at a meeting if the
rules and regulations are not followed. These provisions may
also defer, delay or discourage a potential acquiror from
conducting a solicitation of proxies to elect the
acquiror’s own slate of directors or otherwise attempting
to obtain control of us.
No
Stockholder Action by Written Consent
Pursuant to Section 228 of the DGCL, any action required to
be taken at any annual or special meeting of the stockholders
may be taken without a meeting, without prior notice and without
a vote if a consent or consents in writing, setting forth the
action so taken, is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which
all shares of our stock entitled to vote thereon were present
and voted, unless our certificate of incorporation provides
otherwise. Our certificate of incorporation will provide that
any action required or permitted to be taken by our stockholders
may be effected at a duly called annual or special meeting of
our stockholders and may not be effected by consent in writing
by such stockholders.
Certain
Other Provisions of our Charter and Bylaws and the Delaware
Law
Board
of Directors
Our certificate of incorporation will provide that the number of
directors will be fixed in the manner provided in our bylaws.
Our bylaws will provide that the number of directors will be
fixed from time to time solely pursuant to a resolution adopted
by the board of directors. Upon completion of this offering, our
board of directors will have seven members who will serve
staggered terms as described above.
Limitations
of Liability and Indemnification of Officers and
Directors
The DGCL authorizes corporations to limit or eliminate the
personal liability of directors to corporations and their
stockholders for monetary damages for breaches of
directors’ fiduciary duties. Our certificate of
incorporation will include a provision that eliminates the
personal liability of directors for monetary damages for actions
taken as a director to the fullest extent authorized by the
DGCL. The DGCL does not permit exculpation for liability:
| • | for breach of duty of loyalty; | |
| • | for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law; | |
| • | under Section 174 of the DGCL (unlawful dividends); or | |
| • | for transactions from which the director derived improper personal benefit. |
Our certificate of incorporation and bylaws will provide that we
shall indemnify our directors and officers to the fullest extent
permitted by law. We are also expressly authorized to carry
directors’ and officers’ insurance providing
indemnification for our directors, officers and certain
employees and agents for some liabilities. We believe that these
indemnification provisions and insurance are useful to attract
and retain qualified directors and executive officers.
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The limitation of liability and indemnification provisions in
our certificate of incorporation and bylaws may discourage
stockholders from bringing a lawsuit against directors for
breach of their fiduciary duty. These provisions may also have
the effect of reducing the likelihood of derivative litigation
against directors and officers, even though such an action, if
successful, might otherwise benefit us and our stockholders. In
addition, your investment may be adversely affected to the
extent we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification
provisions.
There is currently no pending material litigation or proceeding
involving any of our directors, officers or employees for which
indemnification is sought.
Transfer
Agent and Registrar
The transfer agent and registrar of our common stock is BNY
Mellon.
New York
Stock Exchange Listing
We have applied to have our common stock quoted on the NYSE
under the symbol “SYA.”
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6.125% Senior
Notes due 2016
In March 2006, we issued $300.0 million aggregate principal
amount of 6.125% senior notes due 2016, at a price of
$298.7 million in proceeds prior to commissions and discounts
for the initial purchasers and offering expenses. Interest on
the notes is payable semi-annually on April 1 and
October 1 of each year.
The notes are unsecured senior obligations and are equal in
right of payment to all existing and future unsecured senior
indebtedness. The senior notes are redeemable at our option at
any time, in whole or in part, at a redemption price equal to
the greater of (i) 100% of the principal amount of the
senior notes or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest on the
notes (exclusive of interest accrues to the date of redemption),
discounted to the redemption date on a semiannual basis
(assuming a
360-day year
consisting of twelve
30-day
months) at the U.S. Treasury rate plus 25 basis
points, plus, in each case accrued and unpaid interest thereon
to the date of redemption.
The indenture for the senior notes contains covenants that,
among other things, limit the ability of our subsidiaries to:
| • | create liens; | |
| • | enter into certain sale and leaseback transactions; and | |
| • | enter into certain mergers and acquisitions. |
The notes do not contain any financial covenants or any
provisions restricting us from purchasing or redeeming capital
stock, paying dividends or entering into a highly leveraged
transaction, reorganization, restructuring, merger or similar
transaction. In addition, we are not required to repurchase,
redeem or modify the terms of any of the notes upon a change of
control or other event involving us.
The indenture provides for events of default that, if any of
them occurs, would permit or require the principal of, premium,
if any, interest and any other monetary obligations on the
senior notes to become or to be declared to be immediately due
and payable. These events of default include default in the
payment of interest or principal, default in the performance of
covenants under the indenture and default under the terms of any
instrument evidencing or securing indebtedness of us that
results in the acceleration of the payment of such indebtedness
or constitutes the failure to pay the principal of such
indebtedness when due, in each case where the total amount of
such indebtedness has an outstanding aggregate principal amount
greater than $25.0 million.
Capital
Efficient Notes due 2067
On October 4, 2007, we issued $150.0 million aggregate
principal amount of CENts. The CENts were purchased by a
syndicate of initial purchasers, led by J.P. Morgan
Securities Inc. and Lehman Brothers Inc., and may be resold to
qualified institutional buyers pursuant to Rule 144A under
the Securities Act or to
non-U.S. persons
pursuant to Regulation S under the Securities Act.
The CENts bear interest at a fixed annual rate of 8.30% to but
not including October 15, 2017, and at a floating annual
rate equal to three-month LIBOR plus 4.177% thereafter. We may
elect to defer the payment of interest for up to ten years. The
CENts have a scheduled maturity date of October 15, 2037,
provided that we raise sufficient funds from the sale of
qualifying capital securities. If we do not raise sufficient
funds, we are obligated to use commercially reasonable efforts
to sell enough qualifying capital securities to permit repayment
of the CENts in full on each interest payment date thereafter.
On October 15, 2067, we must pay any remaining amounts due
under the CENts, whether or not we have sold sufficient
qualifying capital securities.
We may redeem the CENts, in whole or in part, at any time before
October 15, 2017, at a redemption price equal to the
greater of 100% of the principal amount or a make-whole price as
set forth in the CENts, in either case plus accrued and unpaid
interest, including deferred interest. However, if a special
event occurs, we may redeem the CENts, in whole but not in part,
at a redemption price equal to the greater of 100% of the
principal amount or a special event make-whole price as set
forth in the CENts, in either case plus accrued
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and unpaid interest, including deferred interest. We may redeem
the CENts after October 15, 2017 on each interest payment
date thereafter, at a price equal to 100% of the principal
amount of the CENts plus accrued and unpaid interest, including
deferred interest.
In connection with this offering, we entered into a covenant in
favor of the holders of our $300.0 million principal amount
senior notes, pursuant to which we may not repay or redeem the
CENts prior to October 15, 2047 unless the repayment or
redemption is financed from the offering of replacement capital
securities, as specified in the CENTs.
Revolving
Credit Facilities
Long-Term
Facility
On August 16, 2007, we entered into a $200.0 million
senior unsecured revolving credit agreement with a syndicate of
lending institutions led by Bank of America, N.A. The credit
facility matures on August 16, 2012. The revolving credit
facility is available to provide support for working capital,
capital expenditures and other general corporate purposes,
including permitted acquisitions, issuance of letters of
credits, refinancing and payment of fees in connection with this
facility. This new credit facility replaced our prior
$70.0 million revolving credit facility.
The facility enables us to obtain letters of credit of up to
$50.0 million and short-term loans of up to
$10.0 million, which would count against the
$200.0 million limit. We can increase the
$200.0 million limit by up to an additional
$100.0 million, upon the agreement of any lender to lend
such additional amount, without the consent of the other
lenders. In addition, we may, with the consent of individual
lenders, elect to extend the term of the facility by up to two
additional one-year periods.
Loans under the credit facility bear interest, at our election,
at a spread above LIBOR, or at a base rate. The initial spread
above the LIBOR rate is 36 basis points, and may vary from 19 to
60 basis points depending on our credit rating. The base rate is
equal to the higher of 50 basis points above the federal funds
rate, and the Bank of America prime rate. Interest under
LIBOR-based loans is payable periodically, with the period at
the election of the company (but at most annually). Interest
under base rate loans is payable quarterly. In addition, we are
obligated to pay a facility fee of between 6 and 15 basis
points, depending on our credit rating, quarterly over the term
of the facility, as well as letter of credit and other fees as
applicable.
Under the terms of the credit agreement, we are required to
maintain certain financial ratios. In particular, each of our
material insurance subsidiaries must maintain a risk-based
capital ratio of at least 200%, measured at the end of each
year, and our debt-to-capitalization ratio may not exceed 37.5%,
measured at the end of each quarter. In addition, we have agreed
to other covenants restricting the ability of our subsidiaries
to incur additional indebtedness, our ability to create liens,
and our ability to change our fiscal year and to enter into new
lines of business, as well as other customary affirmative
covenants.
To be eligible for borrowing funds under this facility, the
representations and warranties that we make in the credit
agreement must continue to be true in all material respects, and
we must not be in default under the facility, including failure
to comply with the covenants described above.
As of September 30, 2007, we had no borrowings outstanding
under this facility.
Short-term
Facilities
In addition on October 17, 2005, we entered into two
$25.0 million revolving credit facilities with The Bank of
New York to support our overnight repurchase agreements program
which provides us with the liquidity to meet general funding
requirements. Borrowings under the revolving credit agreement
bear interest at the federal funds rate plus 0.2%.
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Before this offering, there has been no public market for our
common stock. We cannot predict the effect, if any, that market
sales of shares or the availability of shares will have on the
market price of our common stock. Sales of substantial amounts
of common stock in the public market, or the perception that
such sales could occur, could cause the prevailing market price
to decrease or to be lower than it might be in the absence of
those sales or perceptions.
Sales of
Restricted Securities
Upon the closing of this offering, we will have outstanding
approximately 10,649,000 shares of common stock. We have no
shares of common stock held in treasury. All of the shares of
our common stock sold in this offering will be freely tradeable
without restriction under the Securities Act of 1933, as amended
(the “Securities Act”), except for any shares that may
be acquired by an affiliate of us, as the term
“affiliate” is defined in Rule 144 under the
Securities Act. Persons who may be deemed to be affiliates
generally include individuals or entities that control, are
controlled by, or are under common control with, us and may
include our directors and officers as well as our significant
stockholders. Following the expiration of the lock-up agreements
described below, the
remaining shares
outstanding held by current stockholders of the company will be
available for sale pursuant to Rule 144, subject to compliance
with the volume, manner of sale and other limitations under Rule
144 in the case of shares held by affiliates, all as further
described below.
Rule 144
Generally, Rule 144 provides that a person who has
beneficially owned “restricted” shares for at least
one year will be entitled to sell on the open market in
brokers’ transactions, within any three-month period, a
number of shares that does not exceed the greater of:
| • | 1% of the then outstanding shares of common stock, which will equal approximately 106,490 shares of common stock immediately after this offering; and |
| • | the average weekly trading volume of the common stock on the open market during the four calendar weeks preceding the filing of notice with respect to such sale. |
Sales under Rule 144 are also subject to manner of sale
provisions and notice requirements and the availability of
current public information about our Company.
In the event that any person who is deemed to be our affiliate
purchases shares of our common stock in this offering or
acquires shares of our common stock pursuant to one of our
employee benefits plans, sales under Rule 144 of the shares
held by that person are subject to the volume limitations and
other restrictions (other than the one-year holding period
requirement) described in the preceding two paragraphs.
Under Rule 144(k), a person who is not deemed to have been
one of our affiliates for purposes of the Securities Act at any
time during the 90 days preceding a sale and who has
beneficially owned the shares proposed to be sold for at least
two years, including the holding period of any prior owner other
than our affiliates, is entitled to sell such shares without
complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144. Therefore,
unless otherwise restricted, “144(k) shares” may be
sold immediately upon the closing of this offering.
Lock-Up
Arrangements
In connection with this offering, each of our executive officers
and directors and all existing stockholders have agreed to enter
into lock-up
agreements described under “Underwriting” that
restrict the sale of shares of our common stock and securities
convertible into or exchangeable or exercisable for common stock
for up to 180 days after the date of this prospectus,
subject to an extension in certain circumstances. Following the
expiration of the
lock-up
period, our stockholders will have the right, subject to certain
conditions, to require us to register the sale of their
remaining shares of our common stock under federal securities
laws. By exercising their registration rights, and selling a
large number of shares, our stockholders could cause the
prevailing market price of our common stock to decline.
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Stock
Options, Restricted Stock Units and Share Grants
We have committed to grant stock options to purchase
approximately shares
of our common
stock, restricted
stock units
and shares
of our common stock to employees on or about the date of this
offering. The exact number of shares subject to these awards
will depend on the initial public offering price per share, and
the above estimates are based on an assumed initial public
offering price per share equal to the midpoint of the range set
forth on the cover page of this prospectus. We intend to file a
registration statement on
Form S-8
under the Securities Act to register all shares of our common
stock issuable pursuant to these awards and all shares of our
common stock issuable under our Equity Plan and our Employee
Stock Purchase Plan. Accordingly, shares of our common stock
issued under these plans will be eligible for sale in the public
markets, subject to vesting restrictions and the
lock-up
agreements described above.
Warrants
We currently have outstanding warrants to purchase
2,181,120 shares of our common stock at an exercise price
of $100 per share. The warrants permit the holders to exercise
either by paying the full exercise price in cash, or by means of
a cashless exercise, whereby the holders would surrender a right
to receive that number of shares having a value equal to the
exercise price of the warrants. In the event the holders pay the
exercise price in cash, the shares will be subject to the
one-year holding period described above, in addition to the
other requirements of Rule 144. In the event of a cashless
exercise, the shares will be deemed to have been acquired at the
time of issuance of the warrants, in which case the holding
period will be met and the shares will be eligible for resale
subject to compliance with the other requirements of
Rule 144 and the lockup agreements described above.
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This is a general summary of material U.S. federal income
and estate tax considerations with respect to your acquisition,
ownership and disposition of common stock if you purchase your
common stock in this offering, you will hold the common stock as
a capital asset and you are a beneficial owner of shares other
than:
| • | an individual citizen or resident of the United States; | |
| • | a corporation or other entity taxable as a corporation created or organized in, or under the laws of, the United States or any political subdivision of the United States; | |
| • | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; | |
| • | a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or | |
| • | a trust that has a valid election in place to be treated as a U.S. person. |
This summary does not address all of the U.S. federal
income and estate tax considerations that may be relevant to you
in light of your particular circumstances or if you are a
beneficial owner subject to special treatment under
U.S. income tax laws (such as a “controlled foreign
corporation,” “passive foreign investment
company”, a company that accumulates earnings to avoid
U.S. federal income tax, foreign tax-exempt organization,
financial institution, broker or dealer in securities, insurance
company, regulated investment company, real estate investment
trust, financial asset securitization investment trust, person
who holds common stock as part of a hedging or conversion
transaction or as part of a short-sale or straddle, or former
U.S. citizen or resident). This summary does not discuss
any aspect of U.S. federal alternative minimum tax, state,
local or
non-U.S. taxation.
This summary is based on current provisions of the Internal
Revenue Code (“Code”), Treasury regulations, judicial
opinions, published positions of the United States Internal
Revenue Service (“IRS”) and all other applicable
authorities, all of which are subject to change, possibly with
retroactive effect.
If a partnership holds our common stock, the tax treatment of a
partner will generally depend on the status of the partner and
the activities of the partnership. If you are a partner of a
partnership holding our common stock, you should consult your
tax advisor.
WE URGE PROSPECTIVE
NON-U.S. STOCKHOLDERS
TO CONSULT THEIR TAX ADVISORS REGARDING THE UNITED STATES
FEDERAL, STATE, LOCAL AND
NON-UNITED
STATES INCOME AND OTHER TAX CONSIDERATIONS OF ACQUIRING, HOLDING
AND DISPOSING OF SHARES OF COMMON STOCK.
Dividends
In general, any distributions we make to you with respect to
your shares of common stock that constitute dividends for
U.S. federal income tax purposes will be subject to
U.S. withholding tax at a rate of 30% of the gross amount,
unless you are eligible for a reduced rate of withholding tax
under an applicable income tax treaty and you provide proper
certification of your eligibility for such reduced rate. A
distribution will constitute a dividend for U.S. federal
income tax purposes to the extent of our current or accumulated
earnings and profits as determined under the Code. Any
distribution not constituting a dividend will be treated first
as reducing your basis in your shares of common stock and, to
the extent it exceeds your basis, as capital gain.
Dividends we pay to you that are effectively connected with your
conduct of a trade or business within the United States (and, if
certain income tax treaties apply, are attributable to a
U.S. permanent establishment maintained by you) generally
will not be subject to U.S. withholding tax if you comply
with applicable
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certification and disclosure requirements. Instead, such
dividends generally will be subject to U.S. federal income
tax, net of certain deductions, at the same graduated individual
or corporate rates applicable to U.S. persons. If you are a
corporation, effectively connected income may also be subject to
a “branch profits tax” at a rate of 30% (or such lower
rate as may be specified by an applicable income tax treaty).
Dividends that are effectively connected with your conduct of a
trade or business but that under an applicable income tax treaty
are not attributable to a U.S. permanent establishment
maintained by you may be eligible for a reduced rate of
U.S. withholding tax under such treaty, provided you comply
with certification and disclosure requirements necessary to
obtain treaty benefits.
Sale or
Other Disposition of Common Stock
You generally will not be subject to U.S. federal income
tax on any gain realized upon the sale or other disposition of
your shares of common stock unless:
| • | the gain is effectively connected with your conduct of a trade or business within the United States (and, under certain income tax treaties, is attributable to a U.S. permanent establishment you maintain); | |
| • | you are an individual, you are present in the United States for 183 days or more in the taxable year of disposition and you meet other conditions, and you are not eligible for relief under an applicable income tax treaty; or | |
| • | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes (which we believe we are not and have never been, and do not anticipate we will become) and you hold or have held, directly or indirectly, at any time within the shorter of the five-year period preceding disposition or your holding period for your shares of common stock, more than 5% of our common stock. |
Gain that is effectively connected with your conduct of a trade
or business within the United States generally will be subject
to U.S. federal income tax, net of certain deductions, at
the same rates applicable to U.S. persons. If you are a
corporation, the branch profits tax (described above) also may
apply to such effectively connected gain. If the gain from the
sale or disposition of your shares is effectively connected with
your conduct of a trade or business in the United States but
under an applicable income tax treaty is not attributable to a
permanent establishment you maintain in the United States, your
gain may be exempt from U.S. tax under the treaty. If you
are described in the second bullet point above, you generally
will be subject to U.S. tax at a rate of 30% on the gain
realized, although the gain may be offset by some
U.S. source capital losses realized during the same taxable
year.
Information
Reporting and Backup Withholding
We must report annually to the IRS the amount of dividends or
other distributions we pay to you on your shares of common stock
and the amount of tax we withhold on these distributions
regardless of whether withholding is required. The IRS may make
copies of the information returns reporting those distributions
and amounts withheld available to the tax authorities in the
country in which you reside pursuant to the provisions of an
applicable income tax treaty or exchange of information treaty.
The United States imposes a backup withholding tax on dividends
and certain other types of payments to U.S. persons. You
will not be subject to backup withholding tax on dividends you
receive on your shares of common stock if you provide proper
certification of your status as a
non-U.S. person
or you are a corporation or one of several types of entities and
organizations that qualify for exemption (an “exempt
recipient”).
Information reporting and backup withholding generally are not
required with respect to the amount of any proceeds from the
sale of your shares of common stock outside the United States
through a foreign office of a foreign broker that does not have
certain specified connections to the United States. However, if
you sell your shares of common stock through a U.S. broker
or the U.S. office of a foreign broker, the broker will be
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required to report the amount of proceeds paid to you to the IRS
and also perform backup withholding on that amount unless you
provide appropriate certification to the broker of your status
as a
non-U.S. person
or you are an exempt recipient. Information reporting will also
apply if you sell your shares of common stock through a foreign
broker deriving more than a specified percentage of its income
from U.S. sources or having certain other connections to
the United States, unless such broker has documenting evidence
in its records that you are a
non-U.S. person
and certain other conditions are met or you are an exempt
recipient.
Any amounts withheld with respect to your shares of common stock
under the backup withholding rules will be refunded to you or
credited against your U.S. federal income tax liability, if
any, by the IRS if the required information is furnished in a
timely manner.
Estate
Tax
Common stock owned or treated as owned by an individual who is
not a citizen or resident (as defined for U.S. federal
estate tax purposes) of the United States at the time of his or
her death will be included in the individual’s gross estate
for U.S. federal estate tax purposes and therefore may be
subject to U.S. federal estate tax unless an applicable
treaty provides otherwise.
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We intend to offer the shares in the U.S. and Canada
through the underwriters. Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman,
Sachs & Co., J.P. Morgan Securities Inc., and
Lehman Brothers Inc. are acting as representatives of the
underwriters named below. Subject to the terms and conditions
described in an underwriting agreement among us, the selling
stockholders and the underwriters, the selling stockholders have
agreed to sell to the underwriters, and the underwriters
severally have agreed to purchase from the selling stockholders,
the number of shares listed opposite their names below.
|
Underwriter
|
Number of Shares | |||
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
||||
|
Goldman, Sachs & Co.
|
||||
|
J.P. Morgan Securities Inc.
|
||||
|
Lehman Brothers Inc.
|
||||
|
Total
|
||||
The underwriters have agreed to purchase all of the shares sold
under the underwriting agreement if any of these shares are
purchased. If an underwriter defaults, the underwriting
agreement provides that the purchase commitments of the
nondefaulting underwriters may be increased or the underwriting
agreement may be terminated.
The underwriters are offering the shares, subject to prior sale,
when, as and if issued to and accepted by them, subject to
approval of legal matters by their counsel, including the
validity of the shares, and other conditions contained in the
underwriting agreement, such as the receipt by the underwriters
of officer’s certificates and legal opinions. The
underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
Commissions
and Discounts
The representatives have advised the selling stockholders that
the underwriters propose initially to offer the shares to the
public at the initial public offering price on the cover page of
this prospectus and to dealers at that price less a concession
not in excess of $ per share. The
underwriters may allow, and the dealers may reallow, a discount
not in excess of $ per share to
other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
The following table shows the public offering price,
underwriting discount and proceeds before expenses to the
selling stockholders. The information assumes either no exercise
or full exercise by the underwriters of their over-allotment
options.
| Per Share | Without Option | With Option | ||||||||||
|
Public offering price
|
$ | $ | $ | |||||||||
|
Underwriting discount
|
$ | $ | $ | |||||||||
|
Proceeds, before expenses, to the selling stockholders
|
$ | $ | $ | |||||||||
The expenses of the offering, not including the underwriting
discount, are estimated at $ and are
payable by us.
Overallotment
Option
The selling stockholders have granted options to the
underwriters to purchase up
to additional
shares at the public offering price less the underwriting
discount. The underwriters may exercise these options for
30 days from the date of this prospectus solely to cover
any overallotments. If the underwriters exercise these options,
each will be obligated, subject to conditions contained in the
underwriting agreement, to
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purchase a number of additional shares proportionate to that
underwriter’s initial amount reflected in the above table.
Indemnification
We and the selling stockholders have agreed to indemnify the
underwriters against certain liabilities, including liabilities
under the Securities Act and liabilities incurred in connection
with the directed share program referred to below, and to
contribute to payments that the underwriters may be required to
make for these liabilities.
No Sales
of Similar Securities
We, our executive officers and directors and all of our
stockholders have agreed, with exceptions, not to sell or
transfer any common stock for 180 days after the date of
this prospectus without first obtaining the written consent of
the representatives. Specifically, we and these other
individuals have agreed not to directly or indirectly
| • | offer, pledge, sell or contract to sell any common stock; | |
| • | sell any option or contract to purchase any common stock; | |
| • | purchase any option or contract to sell any common stock; | |
| • | grant any option, right or warrant for the sale of any common stock; | |
| • | lend or otherwise dispose of or transfer any common stock; | |
| • | request or demand that we file a registration statement related to the common stock; or | |
| • | enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise. |
This lock-up provision applies to common stock and to securities
convertible into or exchangeable or exercisable for or repayable
with common stock. It also applies to common stock owned now or
acquired later by the person executing the agreement or for
which the person executing the agreement later acquires the
power of disposition.
Notwithstanding the foregoing, if: (1) during the last
17 days of the
180-day
lock-up period, we issue an earnings release or material news or
a material event relating to the company occurs; or
(2) prior to the expiration of the
180-day
lock-up period, we announce that we will release earnings
results or become aware that material news or a material event
will occur during the
16-day
period beginning on the last day of the
180-day
lock-up period, then the restrictions imposed by this lock-up
provision shall continue to apply until the expiration of the
18-day
period beginning on the issuance of the earnings release or the
occurrence of the material news or material event, as
applicable, unless the representatives waive, in writing, such
extension.
New York
Stock Exchange Listing
We have applied to list the shares on the NYSE under the symbol
“SYA.” In order to meet the requirements for listing
on that exchange, the underwriters have undertaken to sell a
minimum number of shares to a minimum number of beneficial
owners as required by that exchange. Before this offering, there
has been no public market for our common stock. The initial
public offering price will be determined through negotiations
among the selling stockholders and the representatives. In
addition to prevailing market conditions, the factors to be
considered in determining the initial public offering price are
as follows:
| • | the valuation multiples of publicly traded companies that the representatives believe to be comparable to us; | |
| • | our financial information; | |
| • | the history of, and the prospects for, our company and the industry in which we compete; | |
| • | an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues; |
140
Table of Contents
| • | the present state of our development; and | |
| • | the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours. |
An active trading market for the shares may not develop. It is
also possible that after the offering the shares will not trade
in the public market at or above the initial public offering
price.
The underwriters do not expect to sell more than 5% of the
shares in the aggregate to accounts over which they exercise
discretionary authority.
Price
Stabilization, Short Positions and Penalty Bids
Until the distribution of the shares is completed, SEC rules may
limit underwriters and selling group members from bidding for
and purchasing our common stock. However, the representatives
may engage in transactions that stabilize the price of the
common stock, such as bids or purchases to peg, fix or maintain
that price.
If the underwriters create a short position in the common stock
in connection with the offering (i.e., if they sell more shares
than are listed on the cover of this prospectus), the
representatives may reduce that short position by purchasing
shares in the open market. The representatives may also elect to
reduce any short position by exercising all or part of the
over-allotment option described above. Purchases of the common
stock to stabilize its price or to reduce a short position may
cause the price of the common stock to be higher than it might
be in the absence of such purchases.
The representatives may also impose a penalty bid on
underwriters and selling group members. This means that if the
representatives purchase shares in the open market to reduce the
underwriter’s short position or to stabilize the price of
such shares, they may reclaim the amount of the selling
concession from the underwriters and selling group members who
sold those shares. The imposition of a penalty bid may also
affect the price of the shares in that it discourages resales of
those shares.
Neither we nor any of the underwriters makes any representation
or prediction as to the direction or magnitude of any effect
that the transactions described above may have on the price of
the common stock. In addition, neither we nor any of the
underwriters makes any representation that the representatives
will engage in these transactions or that these transactions,
once commenced, will not be discontinued without notice.
Other
Relationships
J.P. Morgan Securities Inc. and Lehman Brothers Inc. were
initial purchasers in connection with the offering of our 6.125%
senior notes due 2016 and in connection with the offering of our
Capital Efficient Notes due 2067. JPMorgan Chase Bank, N.A., an
affiliate of J.P. Morgan Securities Inc., and Lehman
Commercial Paper Inc., an affiliate of Lehman Brothers Inc.,
were involved in the financing of the Acquisition. JPMorgan
Chase Bank, N.A., Lehman Commercial Paper Inc., Merrill Lynch
Bank USA (an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated) and an affiliate of
Goldman, Sachs & Co. are lenders under our revolving credit
facility, and JPMorgan Chase Bank, N.A. is syndication agent
under our revolving credit facility. We recently entered into an
arm’s length distribution relationship with Chase Insurance
Agency, Inc. (an affiliate of J.P. Morgan Securities Inc.)
in connection with the sale of our income annuity products.
Howard L. Clark, Jr., Vice Chairman of Lehman Brothers
Inc., is a director of White Mountains Insurance Group, Ltd.
Some of the underwriters and their affiliates have engaged in,
and may in the future engage in, investment banking and other
commercial dealings in the ordinary course of business with us,
our affiliates, and White Mountains Insurance Group, Ltd. They
have received customary fees and commissions for these
transactions.
141
Table of Contents
Offering
Restrictions
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a Relevant
Member State), each underwriter has represented and agreed that
with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the
Relevant Implementation Date) it has not made and will not make
an offer of shares to the public in that Relevant Member State
prior to the publication of a prospectus in relation to the
shares which has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with
the Prospectus Directive, except that it may, with effect from
and including the Relevant Implementation Date, make an offer of
shares to the public in that Relevant Member State at any time:
| • | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; | |
| • | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; | |
| • | to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or | |
| • | in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. |
For the purposes of this provision, the expression an
“offer of shares to the public” in relation to any
shares in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms
of the offer and the shares to be offered so as to enable an
investor to decide to purchase or subscribe the shares, as the
same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member
State and the expression Prospectus Directive means Directive
2003/71/EC and includes any relevant implementing measure in
each Relevant Member State.
Each underwriter has represented and agreed that:
| • | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and | |
| • | it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom. |
The shares may not be offered or sold by means of any document
other than (i) in circumstances which do not constitute an
offer to the public within the meaning of the Companies
Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to
“professional investors” within the meaning of the
Securities and Futures Ordinance (Cap. 571, Laws of Hong
Kong) and any rules made thereunder, or (iii) in other
circumstances which do not result in the document being a
“prospectus” within the meaning of the Companies
Ordinance (Cap. 32, Laws of Hong Kong), and no
advertisement, invitation or document relating to the shares may
be issued or may be in the possession of any person for the
purpose of issue (in each case whether in Hong Kong or
elsewhere), which is directed at, or the contents of which are
likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the laws of Hong Kong) other
than with respect to shares which are or are intended to be
disposed of only to persons outside Hong Kong or only to
“professional investors” within the meaning of the
Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong)
and any rules made thereunder.
This prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this prospectus
and any other document or material in connection with the offer
or sale, or invitation for subscription or purchase, of the
shares may not be circulated or distributed, nor may the shares
142
Table of Contents
be offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional
investor under Section 274 of the Securities and Futures
Act, Chapter 289 of Singapore (the “SFA”),
(ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
Where the shares are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries’ rights and interest in
that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the shares under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
The securities have not been and will not be registered under
the Securities and Exchange Law of Japan (the Securities and
Exchange Law) and each underwriter has agreed that it will not
offer or sell any securities, directly or indirectly, in Japan
or to, or for the benefit of, any resident of Japan (which term
as used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan),
or to others for re-offering or resale, directly or indirectly,
in Japan or to a resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise
in compliance with, the Securities and Exchange Law and any
other applicable laws, regulations and ministerial guidelines of
Japan.
143
Table of Contents
The validity of our common stock offered hereby will be passed
upon for us by Cravath, Swaine & Moore LLP, New York,
New York. The underwriters are being represented in connection
with this offering by Simpson Thacher & Bartlett LLP,
New York, New York.
The consolidated financial statements of Symetra Financial
Corporation at December 31, 2006 and 2005 and for the years
ended December 31, 2006 and 2005, and for the period from
August 2, 2004 through December 31, 2004, and the
period from January 1, 2004 through August 1, 2004
(Predecessor), appearing in this prospectus and registration
statement have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in
their report thereon appearing elsewhere herein, and are
included in reliance upon such report given on the authority of
such firm as experts in accounting and auditing.
We have filed with the SEC a registration statement on
Form S-1
under the Securities Act of 1933, as amended, with respect to
the common stock we propose to sell in this offering. This
prospectus, which constitutes part of the registration
statement, does not contain all of the information set forth in
the registration statement. For further information about us and
the common stock we propose to sell in this offering, we refer
you to the registration statement and the exhibits and schedules
filed as a part of the registration statement. Statements
contained in this prospectus as to the contents of any contract
or other document filed as an exhibit to the registration
statement are not necessarily complete. If a contract or
document has been filed as an exhibit to the registration
statement, we refer you to the copy of the contract or document
that has been filed. The registration statement may be inspected
without charge at the principal office of the SEC in
Washington, D.C. and copies of all or any part of the
registration statement may be inspected and copied at the public
reference facilities maintained by the SEC at
100 F Street, N.E., Washington, D.C. 20549.
Copies of such material can also be obtained at prescribed rates
by mail from the Public Reference Section of the SEC at
100 F Street, N.E., Washington, D.C. 20549. The
SEC’s toll-free number is
1-800-SEC-0330.
In addition, the SEC maintains a website
(http://www.sec.gov)
that contains reports, proxy and information statements and
other information regarding registrants that file electronically
with the SEC. Prior to this offering, we were not required to
file reports with the SEC.
Upon completion of this offering, we will become subject to the
information and periodic reporting requirements of the Exchange
Act. The periodic reports and other information that we file
with the SEC will be available for inspection and copying at the
SEC’s public reference facilities and on the website of the
SEC referred to above.
144
| Page | ||||
|
Audited Consolidated Financial Statements of Symetra
Financial Corporation
|
||||
| F-2 | ||||
| F-3 | ||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| F-7 | ||||
| F-9 | ||||
|
Unaudited Consolidated Financial Statements
|
||||
| F-44 | ||||
| F-45 | ||||
| F-46 | ||||
| F-47 | ||||
| F-48 | ||||
| F-49 | ||||
F-1
Table of Contents
The Board of Directors
Symetra Financial Corporation
We have audited the accompanying consolidated balance sheets of
Symetra Financial Corporation (the Company) as of
December 31, 2006 and 2005, and the related consolidated
statements of operations, changes in stockholders’ equity,
comprehensive income (loss), and cash flows for the years ended
December 31, 2006 and 2005, and for the period from
August 2, 2004 through December 31, 2004, and the
period from January 1, 2004 through August 1, 2004
(Predecessor). These financial statements are the responsibility
of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. We were not engaged to perform an
audit of the Company’s internal control over financial
reporting. Our audits included consideration of internal control
over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of the Company at December 31, 2006 and
2005, and the consolidated results of its operations and its
cash flows for the years ended December 31, 2006 and 2005
and for the period from August 2, 2004 through
December 31, 2004, and the period from January 1, 2004
through August 1, 2004 (Predecessor), in conformity with
U.S. generally accepted accounting principles.
/s/ Ernst &
Young LLP
Seattle, Washington
February 20, 2007
F-2
Table of Contents
| December 31, | ||||||||
| 2006 | 2005 | |||||||
| (In thousands) | ||||||||
|
ASSETS
|
||||||||
|
Investments: (Note 3)
|
||||||||
|
Available-for-sale securities:
|
||||||||
|
Fixed maturities, at fair value (amortized cost:
|
||||||||
|
$16,086,596 and $16,987,097, respectively)
|
$ | 16,049,878 | $ | 17,183,197 | ||||
|
Marketable equity securities, at fair value (cost:
|
||||||||
|
$171,003 and $148,917, respectively)
|
201,706 | 162,301 | ||||||
|
Mortgage loans
|
794,283 | 776,923 | ||||||
|
Policy loans
|
79,244 | 80,463 | ||||||
|
Short-term investments
|
48,882 | 7,364 | ||||||
|
Investments in limited partnerships
|
112,648 | 93,400 | ||||||
|
Other invested assets
|
18,705 | 29,125 | ||||||
|
Total investments
|
17,305,346 | 18,332,773 | ||||||
|
Cash and cash equivalents
|
253,210 | 111,023 | ||||||
|
Accrued investment income
|
206,717 | 213,914 | ||||||
|
Accounts receivable and other receivables
|
81,993 | 50,909 | ||||||
|
Reinsurance recoverables (Note 7)
|
238,764 | 229,888 | ||||||
|
Deferred policy acquisition costs (Note 8)
|
88,237 | 49,017 | ||||||
|
Goodwill
|
3,687 | 3,687 | ||||||
|
Current income tax recoverable
|
— | 26,281 | ||||||
|
Deferred income tax assets, net (Note 12)
|
219,091 | 137,347 | ||||||
|
Property, equipment, and leasehold improvements, net
(Note 9)
|
28,076 | 30,522 | ||||||
|
Other assets
|
16,275 | 7,429 | ||||||
|
Securities lending collateral (Note 5)
|
439,292 | 598,451 | ||||||
|
Separate account assets
|
1,233,929 | 1,188,820 | ||||||
|
Total assets
|
$ | 20,114,617 | $ | 20,980,061 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Funds held under deposit contracts
|
$ | 15,986,198 | $ | 16,697,903 | ||||
|
Future policy benefits
|
376,363 | 371,457 | ||||||
|
Policy and contract claims (Note 10)
|
119,514 | 135,655 | ||||||
|
Unearned premiums
|
11,721 | 11,560 | ||||||
|
Other policyholders’ funds
|
46,369 | 47,532 | ||||||
|
Notes payable (Note 11)
|
298,737 | 300,000 | ||||||
|
Current income taxes payable (Note 12)
|
2,551 | — | ||||||
|
Other liabilities
|
272,630 | 223,815 | ||||||
|
Securities lending payable (Note 5)
|
439,292 | 598,451 | ||||||
|
Separate account liabilities
|
1,233,929 | 1,188,820 | ||||||
|
Total liabilities
|
18,787,304 | 19,575,193 | ||||||
|
Commitments and contingencies (Note 14)
|
||||||||
|
Capital stock (Note 1)
|
106 | 106 | ||||||
|
Additional paid-in capital
|
1,166,325 | 1,166,325 | ||||||
|
Retained earnings
|
161,432 | 101,902 | ||||||
|
Accumulated other comprehensive income (loss), net of taxes
(Note 13)
|
(550 | ) | 136,535 | |||||
|
Total stockholders’ equity
|
1,327,313 | 1,404,868 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 20,114,617 | $ | 20,980,061 | ||||
See accompanying notes.
F-3
Table of Contents
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, 2004 |
January 1, 2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
| (In thousands) | ||||||||||||||||
|
Revenues:
|
||||||||||||||||
|
Premiums (Note 7)
|
$ | 525,657 | $ | 575,459 | $ | 263,195 | $ | 357,925 | ||||||||
|
Net investment income (Note 3)
|
984,927 | 994,048 | 411,120 | 693,702 | ||||||||||||
|
Other revenues
|
56,172 | 58,559 | 27,050 | 43,943 | ||||||||||||
|
Net realized investment gains (Note 3)
|
1,680 | 14,140 | 7,003 | 34,892 | ||||||||||||
|
Total revenues
|
1,568,436 | 1,642,206 | 708,368 | 1,130,462 | ||||||||||||
|
Benefits and expenses:
|
||||||||||||||||
|
Policyholder benefits and claims
|
264,252 | 327,427 | 127,499 | 223,578 | ||||||||||||
|
Interest credited
|
765,871 | 810,928 | 360,196 | 556,433 | ||||||||||||
|
Other underwriting and operating expenses
|
260,541 | 273,247 | 123,242 | 182,334 | ||||||||||||
|
Fair value of warrants issued to investors
|
— | — | 101,531 | — | ||||||||||||
|
Interest expense (Note 11)
|
19,155 | 12,388 | 3,466 | — | ||||||||||||
|
Amortization of deferred policy acquisition costs
(Note 8)
|
14,589 | 11,861 | 1,626 | 34,164 | ||||||||||||
|
Intangible asset amortization
|
— | — | — | 4,929 | ||||||||||||
|
Total benefits and expenses
|
1,324,408 | 1,435,851 | 717,560 | 1,001,438 | ||||||||||||
|
Income (loss) from continuing operations before income taxes
|
244,028 | 206,355 | (9,192 | ) | 129,024 | |||||||||||
|
Provision (benefit) for income taxes (Note 12):
|
||||||||||||||||
|
Current
|
92,414 | 22,193 | 21,299 | 916 | ||||||||||||
|
Deferred
|
(7,916 | ) | 39,720 | 10,683 | 30,486 | |||||||||||
|
Total provision for income taxes
|
84,498 | 61,913 | 31,982 | 31,402 | ||||||||||||
|
Income (loss) from continuing operations
|
159,530 | 144,442 | (41,174 | ) | 97,622 | |||||||||||
|
Income (loss) from discontinued operations (net of taxes of
$(0), $536, $(1,335), and $1,235, respectively)
(Note 15)
|
— | 1,045 | (2,411 | ) | 2,296 | |||||||||||
|
Net income (loss)
|
$ | 159,530 | $ | 145,487 | $ | (43,585 | ) | $ | 99,918 | |||||||
|
Net income per common share
|
||||||||||||||||
|
Basic
|
$ | 12.43 | $ | 11.34 | ||||||||||||
|
Diluted
|
$ | 12.43 | $ | 11.34 | ||||||||||||
|
Weighted average number of common shares outstanding (in
millions)
|
||||||||||||||||
|
Basic
|
12.8 | 12.8 | ||||||||||||||
|
Diluted
|
12.8 | 12.8 | ||||||||||||||
See accompanying notes.
F-4
Table of Contents
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, 2004 |
January 1, 2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
| (In thousands) | ||||||||||||||||
|
Capital stock:
|
||||||||||||||||
|
Balance at beginning of period
|
$ | 106 | $ | 106 | $ | 7,459 | $ | 7,459 | ||||||||
|
Purchase method accounting adjustment
|
— | — | (7,459 | ) | — | |||||||||||
|
Capital contribution from stockholders
|
— | — | 106 | — | ||||||||||||
|
Balance at end of period
|
106 | 106 | 106 | 7,459 | ||||||||||||
|
Additional paid-in capital:
|
||||||||||||||||
|
Balance at beginning of period
|
1,166,325 | 1,166,325 | 407,683 | 397,354 | ||||||||||||
|
Purchase method accounting adjustment
|
— | — | (407,683 | ) | — | |||||||||||
|
Capital contribution from Safeco
|
— | — | — | 8,834 | ||||||||||||
|
Capital contributions from stockholders
|
— | — | 1,064,794 | — | ||||||||||||
|
Issuance of warrants to investors
|
— | — | 101,531 | — | ||||||||||||
|
Stock option expense allocation from Safeco
|
— | — | — | 1,495 | ||||||||||||
|
Balance at end of period
|
1,166,325 | 1,166,325 | 1,166,325 | 407,683 | ||||||||||||
|
Retained earnings (deficit):
|
||||||||||||||||
|
Balance at beginning of period
|
101,902 | (43,585 | ) | 1,367,690 | 1,332,072 | |||||||||||
|
Purchase method accounting adjustment
|
— | — | (1,367,690 | ) | — | |||||||||||
|
Net income (loss)
|
159,530 | 145,487 | (43,585 | ) | 99,918 | |||||||||||
|
Dividend distributions
|
(100,000 | ) | — | — | (64,300 | ) | ||||||||||
|
Balance at end of period
|
161,432 | 101,902 | (43,585 | ) | 1,367,690 | |||||||||||
|
Accumulated other comprehensive income (loss), net of taxes
(Note 13):
|
||||||||||||||||
|
Balance at beginning of period
|
136,535 | 312,931 | 636,149 | 829,772 | ||||||||||||
|
Purchase method accounting adjustment
|
— | — | (636,149 | ) | — | |||||||||||
|
Other comprehensive income (loss)
|
(137,085 | ) | (176,396 | ) | 312,931 | (193,623 | ) | |||||||||
|
Balance at end of period
|
(550 | ) | 136,535 | 312,931 | 636,149 | |||||||||||
|
Total stockholders’ equity
|
$ | 1,327,313 | $ | 1,404,868 | $ | 1,435,777 | $ | 2,418,981 | ||||||||
See accompanying notes.
F-5
Table of Contents
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, 2004 |
January 1, 2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
| (In thousands) | ||||||||||||||||
|
Net income (loss)..
|
$ | 159,530 | $ | 145,487 | $ | (43,585 | ) | $ | 99,918 | |||||||
|
Other comprehensive income (loss), net of taxes:
|
||||||||||||||||
|
Changes in unrealized gains and losses on available-for-sales
securities (net of tax:
|
||||||||||||||||
|
$(75,838), $(91,878), $170,296, and $(103,157), respectively)
|
(140,843 | ) | (170,629 | ) | 316,262 | (191,578 | ) | |||||||||
|
Reclassification adjustment for net realized investment (gains)
losses included in net income (net of tax: $383, $(3,525),
$(1,551), and $(12,395), respectively)
|
712 | (6,547 | ) | (2,879 | ) | (23,018 | ) | |||||||||
|
Derivatives qualifying as cash flow hedges — net
change in fair value (net of tax:
|
||||||||||||||||
|
$1,601, $(0), $(0), and $(2,390), respectively)
|
2,976 | — | — | (4,439 | ) | |||||||||||
|
Adjustment for deferred policy acquisition costs valuation
allowance (net of tax: $38, $421, $(243), and $13,683,
respectively)
|
70 | 780 | (452 | ) | 25,412 | |||||||||||
|
Other comprehensive income (loss)
|
(137,085 | ) | (176,396 | ) | 312,931 | (193,623 | ) | |||||||||
|
Comprehensive income (loss)
|
$ | 22,445 | $ | (30,909 | ) | $ | 269,346 | $ | (93,705 | ) | ||||||
See accompanying notes.
F-6
Table of Contents
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, 2004 |
January 1, 2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
| (In thousands) | ||||||||||||||||
|
Cash flows from operating activities
|
||||||||||||||||
|
Net income (loss)
|
$ | 159,530 | $ | 145,487 | $ | (43,585 | ) | $ | 99,918 | |||||||
|
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
||||||||||||||||
|
Net realized investment gains
|
(1,680 | ) | (16,394 | ) | (7,129 | ) | (35,017 | ) | ||||||||
|
Accretion of fixed maturity investments and mortgage loans
|
72,474 | 99,068 | 62,768 | 4,109 | ||||||||||||
|
Accrued interest on accrual bonds
|
(43,444 | ) | (45,383 | ) | (19,502 | ) | (27,504 | ) | ||||||||
|
Amortization and depreciation
|
12,077 | 9,069 | 1,090 | 6,104 | ||||||||||||
|
Deferred income tax provision (benefit)
|
(7,916 | ) | 39,994 | 10,764 | 30,486 | |||||||||||
|
Interest credited on deposit contracts
|
765,871 | 810,928 | 360,196 | 556,433 | ||||||||||||
|
Mortality and expense charges and administrative fees
|
(91,187 | ) | (89,185 | ) | (35,825 | ) | (50,718 | ) | ||||||||
|
Fair value of warrants issued to investors
|
— | — | 101,531 | — | ||||||||||||
|
Changes in:
|
||||||||||||||||
|
Accrued investment income
|
7,197 | 15,459 | 9,539 | (7,522 | ) | |||||||||||
|
Deferred policy acquisition costs
|
(39,112 | ) | (33,438 | ) | (13,816 | ) | 11,011 | |||||||||
|
Other receivables
|
(28,957 | ) | (7,790 | ) | (3,359 | ) | 20,143 | |||||||||
|
Policy and contract claims
|
(16,141 | ) | (17,518 | ) | (113 | ) | 14,061 | |||||||||
|
Future policy benefits
|
4,906 | 16,545 | (5,234 | ) | 5,710 | |||||||||||
|
Unearned premiums
|
161 | 2,157 | (710 | ) | 275 | |||||||||||
|
Accrued income taxes
|
28,832 | (27,436 | ) | 11,889 | (37,579 | ) | ||||||||||
|
Other assets and liabilities
|
17,793 | (34,910 | ) | 4,248 | (59,893 | ) | ||||||||||
|
Other, net
|
1,170 | (415 | ) | 247 | 863 | |||||||||||
|
Total adjustments
|
682,044 | 720,751 | 476,584 | 430,962 | ||||||||||||
|
Net cash provided by operating activities
|
841,574 | 866,238 | 432,999 | 530,880 | ||||||||||||
|
Cash flows from investing activities
|
||||||||||||||||
|
Purchases of:
|
||||||||||||||||
|
Fixed maturities
|
(1,613,303 | ) | (2,931,413 | ) | (1,229,884 | ) | (1,685,424 | ) | ||||||||
|
Equity securities
|
(114,008 | ) | (121,143 | ) | (42,992 | ) | (3,375 | ) | ||||||||
|
Other invested assets and investments in limited partnerships
|
(12,457 | ) | (68,659 | ) | (19,410 | ) | (173 | ) | ||||||||
|
Issuance of mortgage loans
|
(121,987 | ) | (101,992 | ) | (15,543 | ) | (40,854 | ) | ||||||||
|
Issuance of policy loans
|
(19,574 | ) | (17,895 | ) | (7,546 | ) | (12,550 | ) | ||||||||
|
Maturities and calls of fixed maturities available-for-sale
|
840,885 | 1,278,633 | 791,391 | 974,773 | ||||||||||||
|
Sales of:
|
||||||||||||||||
|
Fixed maturities
|
1,603,453 | 2,370,396 | 386,719 | 724,198 | ||||||||||||
|
Equity securities
|
106,657 | 81,776 | 42,578 | 4,478 | ||||||||||||
|
Other invested assets and investments in limited partnerships
|
13,235 | 1,525 | 17,320 | 1,621 | ||||||||||||
|
Repayment of mortgage loans
|
99,085 | 134,774 | 70,230 | 152,745 | ||||||||||||
|
Repayment of policy loans
|
20,663 | 19,244 | 8,555 | 12,956 | ||||||||||||
|
Net (increase) decrease in short-term investments
|
$ | (41,518 | ) | $ | 10,158 | $ | (6,067 | ) | $ | 18,857 | ||||||
|
Purchase of Safeco Life & Investments
|
— | — | (1,349,911 | ) | — | |||||||||||
F-7
Table of Contents
CONSOLIDATED
STATEMENTS OF CASH FLOWS — (Continued)
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, 2004 |
January 1, 2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
| (In thousands) | ||||||||||||||||
|
Purchase of property, equipment, and leasehold improvements
|
(3,164 | ) | (34,614 | ) | — | — | ||||||||||
|
Cash received from sale of discontinued operations
|
— | — | 30,000 | — | ||||||||||||
|
Other, net
|
(10 | ) | (356 | ) | (1,099 | ) | 281 | |||||||||
|
Net cash provided by (used in) investing activities
|
757,957 | 620,434 | (1,325,659 | ) | 147,533 | |||||||||||
|
Cash flows from financing activities
|
||||||||||||||||
|
Capital contributions received
|
— | — | — | 1,131 | ||||||||||||
|
Policyholder account balances:
|
||||||||||||||||
|
Deposit
|
656,526 | 444,638 | 179,250 | 211,851 | ||||||||||||
|
Withdrawals
|
(2,014,315 | ) | (1,972,483 | ) | (675,351 | ) | (757,495 | ) | ||||||||
|
Repayment of notes payable
|
(300,000 | ) | — | (15,000 | ) | — | ||||||||||
|
Proceeds from notes payable
|
298,671 | — | 315,000 | — | ||||||||||||
|
Proceeds from sale of capital stock
|
— | — | 1,064,900 | — | ||||||||||||
|
Dividend distributions
|
(100,000 | ) | — | — | (64,300 | ) | ||||||||||
|
Other, net
|
1,774 | (11 | ) | — | — | |||||||||||
|
Net cash provided by (used in) financing activities
|
(1,457,344 | ) | (1,527,856 | ) | 868,799 | (608,813 | ) | |||||||||
|
Net increase (decrease) in cash and cash equivalents
|
142,187 | (41,184 | ) | (23,861 | ) | 69,600 | ||||||||||
|
Cash and cash equivalents at beginning of period
|
111,023 | 148,832 | 165,617 | 102,480 | ||||||||||||
|
Plus: Cash and cash equivalents at beginning of period,
discontinued operations
|
— | 3,375 | 10,451 | 3,988 | ||||||||||||
|
Less: Cash and cash equivalents at end of period, discontinued
operations
|
— | — | (3,375 | ) | (10,451 | ) | ||||||||||
|
Cash and cash equivalents at end of period
|
$ | 253,210 | $ | 111,023 | $ | 148,832 | $ | 165,617 | ||||||||
|
Supplemental disclosures of cash flow information
|
||||||||||||||||
|
Net cash paid during the year for:
|
||||||||||||||||
|
Interest
|
$ | 17,840 | $ | 12,040 | $ | 3,312 | $ | — | ||||||||
|
Income taxes
|
62,795 | 59,756 | 7,898 | 39,817 | ||||||||||||
|
Non-cash transactions during the year:
|
||||||||||||||||
|
Issuance of warrants to investors
|
— | — | 101,531 | — | ||||||||||||
|
Investments in limited partnerships and capital obligation
incurred
|
19,864 | 31,599 | — | — | ||||||||||||
|
Other capital contribution
|
— | — | — | 7,703 | ||||||||||||
|
Acquisitions:
|
||||||||||||||||
|
Purchase price adjustment to intangible assets
|
— | 4,200 | — | — | ||||||||||||
|
Fair value of assets acquired:
|
— | — | 21,912,561 | — | ||||||||||||
|
Cash paid in acquisition
|
— | — | 1,349,910 | — | ||||||||||||
|
Liabilities assumed in acquisition
|
— | — | 20,562,651 | — | ||||||||||||
See accompanying notes.
F-8
Table of Contents
(All Dollar Amounts in Thousands, Unless Otherwise
Stated)
| 1. | Organization and Description of Business |
Symetra Financial Corporation is a Delaware corporation
privately owned by an investor group led by White Mountains
Insurance Group, Ltd. and Berkshire Hathaway Inc.
On March 15, 2004, Symetra Financial Corporation entered
into a definitive agreement to purchase a group of life and
investment companies from Safeco Corporation (Safeco).
The following companies which are wholly owned directly or
indirectly by Symetra Financial Corporation were included in the
transaction:
| • | Symetra Life Insurance Company (formerly Safeco Life Insurance Company) | |
| • | Symetra National Life Insurance Company (formerly Safeco National Life Insurance Company) | |
| • | American States Life Insurance Company | |
| • | First Symetra National Life Insurance Company of New York (formerly First Safeco National Life Insurance Company of New York) | |
| • | Symetra Administrative Services, Inc. (formerly Safeco Administrative Services, Inc.) | |
| • | Symetra Asset Management Company (formerly Safeco Asset Management Company) | |
| • | Symetra Securities, Inc. (formerly Safeco Securities, Inc.) | |
| • | Symetra Services Corporation (formerly Safeco Services Corporation) | |
| • | Symetra Investment Services, Inc. (formerly Safeco Investment Services, Inc.) | |
| • | Symetra Assigned Benefits Service Company (formerly Safeco Assigned Benefits Service Company) |
The acquisition was completed effective August 2, 2004, at
a purchase price of $1,349.9 million, representing the
amount paid to Safeco at closing of $1,350 million, plus
capitalized transaction costs of $11.0 million, and less a
purchase price adjustment of $11.1 million. The acquisition
was financed through investor capital contributions of
$1,065 million and the issuance of a note payable of
$300 million. On December 29, 2004, Symetra Financial
Corporation received $22.8 million from Safeco in final
settlement of its tax sharing agreement and purchase price
related to the August 2, 2004 transaction.
The acquisition was accounted for using the purchase method
under Statement of Financial Accounting Standards (SFAS)
No. 141, Business Combinations. Under
SFAS No. 141, the purchase price is allocated to the
estimated fair value of the tangible and identifiable assets
acquired less liabilities assumed at the date of acquisition.
Deferred policy acquisition costs (DAC), intangible assets, and
goodwill were reset to zero on August 2, 2004.
During 2005, the Company adjusted the deferred tax asset
valuation allowance that resulted from the realization of
certain income tax benefits related to the acquisition. The
adjustment increased the amount of deferred tax assets and
decreased the amount of intangible assets by $4,200. See
Note 12 for more information.
F-9
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following pro forma results for the seven months ended
August 1, 2004, are based on the historical financial
statements of the Predecessor, adjusted to include the effect of
the acquisition as if the acquisition had occurred at the
beginning of each period presented:
|
Seven Months Ended |
||||
| August 1, 2004 | ||||
|
Net income as reported in Consolidated Statements of Operations
|
$ | 99,918 | ||
|
Add back: Amortization of DAC and intangibles
|
25,410 | |||
|
Pro forma net income
|
$ | 125,328 | ||
Symetra Financial Corporation’s subsidiaries offer group
and individual insurance products and retirement products,
including annuities marketed through professional agents and
distributors in all states and the District of Columbia. The
Company’s principal products include stop-loss medical
insurance, fixed deferred annuities, variable annuities, single
premium immediate annuities, and individual life insurance.
The accompanying financial statements include on a consolidated
basis the accounts of Symetra Financial Corporation and its
subsidiaries which are referred to as “Symetra
Financial” or “the Company,” and the new names of
the entities have been used as if those names were in effect
prior to August 2, 2004. The discontinued mutual fund
business, including the transfer agent business, is referred to
as “discontinued operations.” In addition, all
references to affiliated companies in the periods prior to
August 2, 2004, refer to former Safeco affiliates.
Capital
Stock (in thousands, except par value and share
amounts)
Capital stock for Symetra Financial is comprised of
15,000,000 shares authorized and 10,649,000 shares
issued and outstanding at $.01 par value per share, for a
total value of $106. In 2004, the Company issued warrants to its
two lead investors and incurred expense in connection with their
issuance. The warrant holders have the option to purchase
2,181,120 shares of common stock in the aggregate. The fair
value of the warrants was calculated using the Black-Scholes
model with the following assumptions: dividend yield of 0.0%;
expected volatility of 25.0%; risk-free interest rate of 4.48%,
and expected term of ten years.
On December 4, 2006, the Company declared a cash dividend
of $7.794 per share to its stockholders. The dividend in the
amount of $100,000 was paid on December 26, 2006.
| 2. | Summary of Significant Accounting Policies |
Basis
of Presentation and Use of Estimates
The Consolidated Financial Statements have been prepared in
conformity with U.S. generally accepted accounting
principles (GAAP). The preparation of financial statements in
conformity with GAAP requires the Company to make estimates and
assumptions that may affect the amounts reported in the
Consolidated Financial Statements and accompanying notes. Actual
results could differ from those estimates.
The most significant estimates include those used in determining
reserves for future policy benefits, DAC, valuation of
investments and evaluation of other-than-temporary impairments,
income taxes, and contingencies. All significant intercompany
transactions and balances have been eliminated in the
Consolidated Financial Statements.
Certain reclassifications have been made to the prior year
financial information for it to conform to the current period
presentation.
F-10
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Recognition
of Insurance Revenue and Related Benefits
Premiums from group life and health insurance products are
recognized as revenue when earned over the life of the policy.
The Company reports the portion of premiums unearned as a
liability for unearned premiums on the Consolidated Balance
Sheets. These policies are short-duration contracts.
Traditional individual life insurance products, primarily term
and whole life insurance products, are long-duration contracts
consisting principally of products with fixed and guaranteed
premiums and benefits. Premiums from these products are
recognized as revenue when due. Benefits and expenses are
associated with earned premiums to result in the recognition of
profits over the life of the policy. This association is
accomplished by the provision for future policy benefits and the
deferral and amortization of policy acquisition costs.
Deposits related to universal life-type, limited payment-type,
and investment-type products are credited to policyholder
account balances and reflected as liabilities rather than as
premium income when received. Revenues from these contracts
consist of investment income on the policyholders’ fund
balances and amounts assessed during the period against
policyholders’ account balances for cost of insurance
charges, policy administration charges, and surrender charges.
The Company includes these cost of insurance charges in
premiums. Policy administration charges and surrender charges
are included in other revenue in the Consolidated Statements of
Operations. Amounts that are charged to operations include
interest credited and benefit claims incurred in excess of
related policyholder account balances.
Variable product fees are charged to variable annuity and
variable life policyholders’ accounts based upon the daily
net assets of the policyholders’ account values, and are
recognized as other revenue when charged. Cost of insurance
charges, policy administration charges, and surrender charges
are included in other revenue in the Consolidated Statements of
Operations.
Investments
In accordance with the provisions of SFAS No. 115,
Accounting for Certain Investments in Debt and Equity
Securities, the Company classifies its investments into one
of three categories: held-to-maturity, available-for-sale, or
trading. Fixed maturities include bonds, mortgage-backed
securities, and redeemable preferred stocks. The Company
classifies all fixed maturities as available-for-sale and
carries them at fair value. The Company reports net unrealized
investment gains and losses related to available-for-sale
securities in accumulated other comprehensive income (loss)
(OCI) in Shareholders’ Equity, net of related DAC and
deferred income taxes.
For mortgage-backed securities, the Company recognizes income
using a constant effective yield based on anticipated
prepayments and the estimated economic life of the securities.
Quarterly, the Company compares actual prepayments to
anticipated prepayments and recalculates the effective yield to
reflect actual payments to date plus anticipated future
payments. The Company includes any resulting adjustment in net
investment income.
Marketable equity securities include common stocks,
nonredeemable preferred stocks, and investments in other limited
partnerships when the ownership percentage of such investment is
less than 3%. The Company classifies marketable equity
securities as available-for-sale and carries them at fair value.
Changes in net unrealized investment gains and losses are
recorded directly to OCI in Shareholders’ Equity, net of
related DAC and deferred income taxes.
When the collectibility of interest income for fixed maturities
is considered doubtful, any accrued but uncollectible interest
income is reversed against investment income in the current
period. The Company then places the securities on nonaccrual
status, and they are not restored to accrual status until all
delinquent interest and principal are paid.
Investments are considered to be impaired when a decline in fair
value is judged to be other-than-temporary. The Company’s
review of investment securities includes both quantitative and
qualitative criteria.
F-11
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Quantitative criteria include the length of time and amount that
each security is in an unrealized position, and for fixed
maturities, whether the issuer is in compliance with the terms
and covenants of the security.
The Company’s review of its fixed maturities and marketable
equity securities for impairments includes an analysis of the
total gross unrealized losses by three categories of securities:
(i) securities where the estimated fair value has declined
and remained below cost or amortized cost by less than 20%,
(ii) securities where the estimated fair value has declined
and remained below cost or amortized cost by 20% or more for
less than six months, and (iii) securities where the
estimated fair value has declined and remained below cost or
amortized cost by 20% or more for six months or greater. While
all securities are monitored for impairment, the Company’s
experience indicates that the first two categories do not
represent a significant risk of impairment and, often, fair
values recover over time as the factors that caused the declines
improve.
If the value of any of the Company’s investments falls into
the third category, the Company analyzes the decrease to
determine whether it is an other-than-temporary decline in
value. To make this determination for each security, the Company
considers:
| • | How long and by how much the fair value has been below its cost or amortized cost. | |
| • | The financial condition and near-term prospects of the issuer of the security, including any specific events that may affect its operations or earnings potential. | |
| • | The Company’s intent and ability to hold the security long enough for it to recover its value, considering any long-range plans that may affect the Company’s ability to hold securities. | |
| • | Any downgrades of the security by a rating agency. | |
| • | Any reduction or elimination of dividends, or nonpayment of scheduled interest payments. |
Based on the analysis, the Company makes a judgment as to
whether the loss is other-than-temporary. If the loss is
other-than-temporary, the Company records an impairment charge
within net realized investment gains in its Consolidated
Statements of Operations in the period that the Company makes
the determination. In addition, any impaired investments where
the Company does not have the intent and ability to hold the
security long enough for it to recover its value is recorded as
an other-than-temporary impairment.
The Company uses public market pricing information to determine
the fair value of its investments when such information is
available. When such information is not available for
investments, as in the case of securities that are not publicly
traded, the Company uses other valuation techniques. Such
techniques include using independent pricing sources, evaluating
discounted cash flows, identifying comparable securities with
quoted market prices, and using internally prepared valuations
based on certain modeling and pricing methods. The
Company’s investment portfolio at December 31, 2006
and 2005, included $604,313 and $619,751, respectively, of fixed
maturities and $25,770 and $23,967, respectively, of marketable
equity securities that were not publicly traded, and values for
these securities were determined using these other valuation
techniques.
The cost of securities sold is determined by the
specific-identification method.
The Company carries mortgage loans at outstanding principal
balances, less a valuation allowance for mortgage loan losses.
The Company considers a mortgage loan impaired when it is
probable that the Company will be unable to collect principal
and interest amounts due according to the contractual terms of
the mortgage loan agreement. For mortgage loans that the Company
determines to be impaired, the Company charges the difference
between the amortized cost and fair value of the underlying
collateral to the valuation allowance. Changes in the valuation
allowance are recorded in net realized investment gains. The
Company accrues interest income on impaired loans to the extent
that it is deemed collectible and the loan continues to perform
under its original or restructured terms. Interest income on
nonperforming loans is generally recognized on a cash basis.
Policy loans are carried at unpaid principal balances, which
approximate fair value.
F-12
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Cash and cash equivalents consist of short-term highly liquid
investments with original maturities of three months or less at
the time of purchase. Short-term investments consist of highly
liquid debt instruments with maturities of greater than three
months and less than twelve months when purchased.
Investments in limited partnership interests are accounted for
under the equity method when the Company has more than a minor
interest of 3% or greater, has influence over the
partnership’s operating and financial policies, and does
not have a controlling interest. The Company has identified
certain investments in limited partnerships that meet the
definition of a variable interest entity (VIE) under Financial
Accounting Standards Board (FASB) Interpretation No. (FIN) 46R,
Consolidation of Variable Interest Entities. Based on the
analysis of these interests, the Company does not meet the
FIN No. 46R definition of “primary
beneficiary” of any of these partnerships and therefore has
not consolidated these entities.
Derivative
Financial Instruments
Derivative financial instruments are included in other invested
assets on the Company’s Consolidated Balance Sheets. The
Company’s financial statement recognition of the change in
fair value of a derivative depends on the intended use of the
derivative and the extent to which it is effective as part of a
hedging transaction. Derivatives that are highly effective and
designated as either fair value or cash flow hedges receive
hedge accounting treatment.
Derivatives that hedge the change in fair value of recognized
assets or liabilities are designated as fair value hedges. For
such derivatives, the Company recognizes the changes in the fair
value of both the derivative and the hedged items in net
realized investment gains in the Consolidated Statements of
Operations.
Derivatives that hedge variable rate assets or liabilities or
forecasted transactions are designated as cash flow hedges. For
such derivatives, the Company recognizes the changes in the fair
value of the derivative as a component of OCI, net of deferred
income taxes, until the hedged transaction affects current
earnings. At the time current earnings are affected by the
variability of cash flows, the related portion of deferred gains
or losses on cash flow hedge derivatives are reclassified from
OCI and recorded in the Consolidated Statements of Operations.
When the changes in the fair value of such derivatives do not
perfectly offset the changes in the fair value of the hedged
transaction, the Company recognizes the ineffective portion in
the Consolidated Statements of Operations. For derivatives that
do not qualify for hedge accounting treatment, the Company
records the changes in the fair value of these derivatives in
net realized investment gains in the Consolidated Statements of
Operations.
The Company formally documents all relationships between the
hedging instruments and hedged items, as well as risk-management
objectives and strategies for undertaking various hedge
transactions. The Company links all hedges that are designated
as fair value hedges to specific assets or liabilities on the
Consolidated Balance Sheets. The Company links all hedges that
are designated as cash flow hedges to specific variable rate
assets or liabilities or to forecasted transactions. The Company
also assesses, both at the inception of the hedge and on an
ongoing basis, whether the derivatives that are used in hedging
transactions are highly effective in offsetting the changes in
fair values or cash flows of hedged items. When it is determined
that a derivative is not highly effective as a hedge, the
Company discontinues hedge accounting on a prospective basis.
Reinsurance
The Company utilizes reinsurance agreements to manage its
exposure to potential losses. The Company reinsures all or a
portion of its risk to reinsurers for certain types of directly
written business. In addition, the Company reinsures through
pools to cover catastrophic losses. Reinsurance does not affect
the Company’s liability to the policyholders. Accordingly,
the policy and contract claims liabilities and future policy
benefit reserves are reported gross of any related reinsurance
recoverables. The Company reports premiums, benefits,
F-13
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
and settlement expenses net of reinsurance ceded on the
Consolidated Statements of Operations. The Company accounts for
reinsurance premiums, commissions, expense reimbursements,
benefits, and reserves related to reinsured business on bases
consistent with those used in accounting for the original
policies issued and the terms of the reinsurance contracts. The
Company remains liable to the policyholders to the extent that
counterparties to reinsurance ceded contracts do not meet their
contractual obligations.
Deferred
Policy Acquisition Costs
The Company defers as assets certain costs, principally
commissions, distribution costs, and other underwriting costs,
that vary with and are primarily related to the production of
business. The Company amortizes acquisition costs for deferred
and immediate annuity contracts and universal life insurance
policies over the lives of the contracts or policies in
proportion to the present value of the estimated future gross
profits of each of these product lines. In this estimation
process, the Company makes assumptions as to surrender rates,
mortality experience, maintenance expenses, and investment
performance. Actual profits can vary from the estimates and can
thereby result in increases or decreases to DAC amortization
rates. For interest-sensitive life products, the Company
regularly evaluates its assumptions and, when necessary, revises
the estimated gross profits of these contracts, resulting in
adjustments to DAC amortization which are recorded in earnings
when such estimates are revised. The Company adjusts the
unamortized balance of DAC for the impact on estimated future
gross profits as if net unrealized investment gains and losses
on securities had been realized as of the balance sheet date.
The Company includes the impact of this adjustment, net of tax,
in OCI in Stockholders’ Equity.
The Company amortizes acquisition costs for traditional
individual life insurance policies over the premium paying
period of the related policies, using assumptions consistent
with those used in computing policy benefit liabilities. The
Company amortizes acquisition costs for group life and medical
policies over the policy period of one year.
The Company conducts regular recoverability analyses for
deferred and immediate annuity contract, universal life
contract, and traditional life contract DAC balances. The
Company compares the current DAC balance with the estimated
present value of future profitability of the underlying
business. The DAC balances are considered recoverable if the
present value of future profits is greater than the current DAC
balance. As of December 31, 2006, all of the DAC balances
were considered recoverable.
Goodwill
Goodwill represents the excess of the cost of businesses
acquired over the fair value of the net assets. Goodwill is not
amortized but is tested for impairment at least annually using a
fair value approach, which requires the use of estimates and
judgment.
In December 1999, Symetra Life Insurance Company purchased
the assets of Sound Benefits Administration and Sound Benefits
Marketing (collectively, referred to as Sound Benefits), the
agency involved in selling and supporting the Company’s
Select Benefits group medical product. This transaction resulted
in adjustments to goodwill in the amounts of $287 and $3,400 for
the years ended December 31, 2005 and 2004, respectively.
Such adjustments were based on the 2004 earnings performance of
Sound Benefits. The Company paid the purchase price adjustment
of $3,687 in January 2005.
During 2005, $4,200 of other identifiable intangible assets were
written down to zero due to a purchase price allocation
adjustment resulting from the realization of certain income tax
benefits. See Note 12 for more information.
Property,
Equipment, and Leasehold Improvements
Property, equipment, and leasehold improvements are stated at
cost, less accumulated depreciation and amortization.
Depreciation is determined using the straight-line method over
the estimated useful lives of the
F-14
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
assets. Estimated useful lives generally range from one to ten
years for leasehold improvements and three to ten years for all
other property and equipment. Leasehold improvements are
amortized over the shorter of their economic useful lives or the
term of the lease.
Leases
Certain of the Company’s operating leases provide for
minimum annual payments that change over the life of the lease.
The aggregate minimum annual payments are expensed on the
straight-line basis over the minimum lease term. The Company
recognizes a deferred rent liability for minimum step rents when
the amount of rent expense exceeds the actual lease payments and
it reduces the deferred rent liability when the actual lease
payments exceed the amount of straight-line rent expense. Rent
holidays, rent incentives, and tenant improvement allowances are
amortized on the straight-line basis over the initial term of
the lease and any option period that is reasonably assured.
Sales
Inducements
The Company defers sales inducements to contract holders for
bonus interest features on deferred annuities. The bonus
interest entitles the contract holder to an incremental amount
of interest to be credited to the account value over the twelve
month period following the initial deposit. The incremental
interest causes the first year credited rate to be higher than
the contract’s expected ongoing crediting rates for periods
after the inducement. Deferred sales inducements to contract
holders are reported as other assets and amortized into interest
credited to policy holder account values using the same
methodology and assumptions used to amortize DAC.
Separate
Accounts
Separate account assets and liabilities reported on the
accompanying Consolidated Balance Sheets consist of the fair
value of variable annuity and variable universal life contracts
and represent funds that the Company administers and invests to
meet the specific fund allocations of the policyholder. The
assets of each separate account are legally segregated and are
not subject to claims that arise out of the Company’s other
business activities. Net investment income and net realized and
unrealized investment gains and losses accrue directly to such
policyholder who bears the investment risk, subject to
guaranteed minimum death benefits (GMDB). For variable annuity
contracts with GMDB, the Company contractually guarantees total
deposits made to the contract, less any partial withdrawals, in
the event of death. The Company offers three types of GMDB
contracts consisting of return of premium and two versions of
ratchet, which are evaluated every fifth and eighth year,
respectively.
The Company reinsures nearly all of the GMDB risk on its
individual variable annuity contracts. Therefore, the liability
balance is not material. The Company does not include investment
results accruing directly to the policyholder in its revenues.
Fees charged to policyholders include mortality, policy
administration, and surrender charges and are included in other
revenues.
Funds
Held Under Deposit Contracts
Liabilities for fixed deferred annuity contracts, guaranteed
investment contracts, and universal life policies are computed
as deposits net of withdrawals made by the policyholder, plus
amounts credited based on contract specifications, less contract
fees and charges assessed, plus any additional interest. For
single premium immediate annuities (SPIAs), including structured
settlements, future benefits are either fully guaranteed or are
contingent on the survivorship of the annuitant. Liabilities are
based on discounted amounts of estimated future benefits.
Contingent future benefits are discounted with current pricing
mortality assumptions, which include provisions for longer life
spans over time. The interest rate pattern used to calculate the
reserves for SPIAs is set at issue. The interest rates within
the pattern vary over time and start
F-15
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
with interest rates that prevailed at the contract issue. The
weighted-average implied interest rate on the existing block is
currently 5.9% and will grade to an ultimate assumed level of
6.7% in about 20 years.
Future
Policy Benefits
The Company computes liabilities for future policy benefits
under traditional individual life and group life insurance
policies on the level premium method, which uses a level premium
assumption to fund reserves. The Company selects the level
premiums so that the actuarial present value of future benefits
equals the actuarial present value of future premiums. The
Company sets the interest, mortality, and persistency
assumptions in the year of issue and includes provisions for
adverse deviations. These liabilities are contingent upon the
death of the insured while the policy is in force. The Company
derives mortality assumptions from both company-specific and
industry statistics. The Company discounts future benefits at
interest rates that vary by year of policy issue, are graded to
the statutory valuation interest rate over time, and range from
6.0% to 4.0%.
Policy
and Contract Claims
Liabilities for policy and contract claims primarily represent
liabilities for claims under group medical coverages and are
established on the basis of reported losses (case basis method).
The Company also provides for claims incurred but not reported
(IBNR), based on expected loss ratios, claims paying completion
patterns, and historical experience. The Company periodically
reviews estimates for reported but unpaid claims and IBNR. Any
necessary adjustments are reflected in current operating results.
Income
Taxes
Through the date of acquisition, the Company was included in a
consolidated federal income tax return filed by Safeco. Tax
payments (credits) were made to or received from Safeco in
accordance with the tax allocation agreement on a separate
company tax return filing basis. Subsequent to the acquisition,
the Symetra Life insurance companies file a separate life
consolidated tax return. The non-life insurance companies file a
separate non-life consolidated tax return. Pursuant to Internal
Revenue Code (IRC) § 1504(c), the life insurance
companies will file a separate life consolidated tax return for
five years subsequent to the acquisition.
Income taxes have been provided using the liability method in
accordance with SFAS No. 109, Accounting for Income
Taxes. The provision for income taxes has two components:
amounts currently payable or receivable and deferred income
taxes. The deferred income taxes are calculated as the
difference between the book and tax basis of the appropriate
assets and liabilities. Deferred tax assets are recognized only
to the extent that it is probable that future tax profits will
be available. A valuation allowance is established where
deferred tax assets cannot be recognized.
Recently
Issued Accounting Standards
SFAS No. 157,
Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements. SFAS No. 157 defines
fair value, establishes a framework for measuring fair value
under GAAP, and expands disclosures about fair value
measurements. SFAS No. 157 does not require any new
fair value measurements, but provides guidance on how to measure
fair value by providing a fair value hierarchy used to classify
the source of the information. SFAS No. 157 is
effective for financial statements issued for fiscal years
beginning after November 15, 2007. The Company is currently
evaluating the impact the adoption of this Statement could have
on its financial condition, results of operations, and cash
flows.
F-16
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
FASB
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes — An Interpretation of FASB Statement
No. 109
In June 2006, the FASB issued FASB Interpretation (FIN)
No. 48, Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109, Accounting for
Income Taxes. FIN No. 48 clarifies the accounting
for uncertainty in income taxes recognized in an
enterprise’s financial statements in accordance with
SFAS No. 109. FIN No. 48 prescribes a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return.
FIN No. 48 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim
periods, disclosure, and transition. FIN No. 48 is
effective for fiscal years beginning after December 15,
2006. The Company adopted FIN No. 48 as of
January 1, 2007, as required. The adoption did not have a
material impact on the Company’s consolidated financial
statements.
SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments
In February 2006, the FASB issued SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments.
SFAS No. 155 amends certain paragraphs of
SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities, and SFAS No. 140,
Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities. SFAS No. 155
also resolves issues addressed in SFAS No. 133
Implementation Issue No. D1, Application of Statement
133 to Beneficial Interests in Securitized Financial Assets.
In summary, SFAS No. 155: (1) permits an entity
to make an irrevocable election to measure any hybrid financial
instrument that contains an embedded derivative that otherwise
would require bifurcation at fair value in its entirety, with
changes in fair value recognized in earnings; (2) clarifies
which interest-only strips and principal-only strips are not
subject to the requirements of SFAS No. 133;
(3) establishes a requirement to evaluate interests in
securitized financial assets to identify interests that are
freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring
bifurcation; (4) clarifies that concentrations of credit
risk in the form of subordination are not embedded derivatives;
and (5) amends SFAS No. 140 to eliminate the
prohibition on a qualifying special purpose entity from holding
a derivative financial instrument that pertains to a beneficial
interest other than another derivative financial instrument.
SFAS No. 155 is effective for all financial
instruments acquired or issued after the beginning of an
entity’s first fiscal year that begins after
September 15, 2006. Provisions of
SFAS No. 155 may be applied to instruments that
an entity holds at the date of adoption on an
instrument-by-instrument
basis. The Company adopted SFAS No. 155 as of
January 1, 2007, as required. The adoption did not have a
material impact on the Company’s consolidated financial
statements.
American
Institute of Certified Public Accountants (AICPA) Statement of
Position (SOP)
05-1,
Accounting by Insurance Enterprises for Deferred Acquisition
Costs in Connection with Modifications or Exchanges of Insurance
Contracts
In September 2005, the AICPA issued
SOP 05-1,
Accounting by Insurance Enterprises for Deferred Acquisition
Costs in Connection with Modifications or Exchanges of Insurance
Contracts.
SOP 05-1
provides guidance on accounting by insurance enterprises for
deferred acquisition costs on internal replacements of insurance
and investment contracts other than those specifically described
in SFAS No. 97, Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and
For Realized Gains and Losses from the Sale of Investments.
SOP 05-1
defines an internal replacement as a modification in product
benefits, features, rights, or coverages that occurs by the
exchange of a contract for a new contract, or by amendment,
endorsement, or rider to a contract, or by the election of a
feature or coverage within a contract. Under
SOP 05-1,
modifications that result in a substantially unchanged contract
will be accounted for as a continuation of the replaced
contract. A replacement contract that is substantially changed
will be accounted for as an extinguishment of the replaced
contract, resulting in a release of unamortized DAC, unearned
revenue, and deferred sales inducements associated with the
replaced contract.
F-17
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The provisions of
SOP 05-1
are effective for fiscal years beginning after December 15,
2006. The Company adopted
SOP 05-1
effective on January 1, 2007 as required. The adoption of
SOP 05-1
did not have a material impact on the Company’s
consolidated financial statements.
| 3. | Investments |
The following tables summarize the Company’s fixed
maturities and marketable equity securities:
|
Cost or |
Gross |
Gross |
||||||||||||||
|
Amortized |
Unrealized |
Unrealized |
Fair |
|||||||||||||
| Cost | Gains | Losses | Value | |||||||||||||
|
December 31, 2006
|
||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||
|
U.S. government and agencies
|
$ | 157,000 | $ | 1,775 | $ | (879 | ) | $ | 157,896 | |||||||
|
State and political subdivisions
|
666,101 | 9,329 | (4,532 | ) | 670,898 | |||||||||||
|
Foreign governments
|
205,186 | 4,166 | (477 | ) | 208,875 | |||||||||||
|
Corporate securities
|
10,670,752 | 164,266 | (168,550 | ) | 10,666,468 | |||||||||||
|
Mortgage-backed securities
|
4,387,557 | 26,750 | (68,566 | ) | 4,345,741 | |||||||||||
|
Total fixed maturities
|
16,086,596 | 206,286 | (243,004 | ) | 16,049,878 | |||||||||||
|
Marketable equity securities
|
171,003 | 32,046 | (1,343 | ) | 201,706 | |||||||||||
|
Total
|
$ | 16,257,599 | $ | 238,332 | $ | (244,347 | ) | $ | 16,251,584 | |||||||
|
Cost or |
Gross |
Gross |
||||||||||||||
|
Amortized |
Unrealized |
Unrealized |
Fair |
|||||||||||||
| Cost | Gains | Losses | Value | |||||||||||||
|
December 31, 2005
|
||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||
|
U.S. government and agencies
|
$ | 652,304 | $ | 49,460 | $ | (799 | ) | $ | 700,965 | |||||||
|
State and political subdivisions
|
741,671 | 25,217 | (1,636 | ) | 765,252 | |||||||||||
|
Foreign governments
|
353,333 | 13,119 | (227 | ) | 366,225 | |||||||||||
|
Corporate securities
|
10,881,369 | 267,274 | (137,063 | ) | 11,011,580 | |||||||||||
|
Mortgage-backed securities
|
4,358,420 | 42,290 | (61,535 | ) | 4,339,175 | |||||||||||
|
Total fixed maturities
|
16,987,097 | 397,360 | (201,260 | ) | 17,183,197 | |||||||||||
|
Marketable equity securities
|
148,917 | 15,234 | (1,850 | ) | 162,301 | |||||||||||
|
Total
|
$ | 17,136,014 | $ | 412,594 | $ | (203,110 | ) | $ | 17,345,498 | |||||||
F-18
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 3. | Investments — (Continued) |
The following table shows the Company’s investments’
gross unrealized losses and fair values, aggregated by
investment category and length of time that individual
securities have been in a continuous unrealized loss position.
| Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
|
Gross |
Gross |
Gross |
||||||||||||||||||||||
|
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
| Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
|
December 31, 2006
|
||||||||||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||||||||||
|
U.S. government and agencies
|
$ | 52,723 | $ | (671 | ) | $ | 24,683 | $ | (208 | ) | $ | 77,406 | $ | (879 | ) | |||||||||
|
State and political subdivisions
|
219,608 | (2,922 | ) | 65,722 | (1,610 | ) | 285,330 | (4,532 | ) | |||||||||||||||
|
Foreign governments
|
14,404 | (214 | ) | 11,103 | (263 | ) | 25,507 | (477 | ) | |||||||||||||||
|
Corporate securities
|
2,732,600 | (55,864 | ) | 3,686,854 | (112,686 | ) | 6,419,454 | (168,550 | ) | |||||||||||||||
|
Mortgage-backed securities
|
1,501,485 | (22,776 | ) | 1,888,331 | (45,790 | ) | 3,389,816 | (68,566 | ) | |||||||||||||||
|
Total fixed maturities
|
4,520,820 | (82,447 | ) | 5,676,693 | (160,557 | ) | 10,197,513 | (243,004 | ) | |||||||||||||||
|
Marketable equity securities
|
9,829 | (206 | ) | 2,926 | (1,137 | ) | 12,755 | (1,343 | ) | |||||||||||||||
|
Total
|
$ | 4,530,649 | $ | (82,653 | ) | $ | 5,679,619 | $ | (161,694 | ) | $ | 10,210,268 | $ | (244,347 | ) | |||||||||
| Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
|
Gross |
Gross |
Gross |
||||||||||||||||||||||
|
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
| Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
|
December 31, 2005
|
||||||||||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||||||||||
|
U.S. government and agencies
|
$ | 43,881 | $ | (642 | ) | $ | 10,547 | $ | (157 | ) | $ | 54,428 | $ | (799 | ) | |||||||||
|
State and political subdivisions
|
87,574 | (675 | ) | 51,278 | (961 | ) | 138,852 | (1,636 | ) | |||||||||||||||
|
Foreign governments
|
20,927 | (225 | ) | 2,502 | (2 | ) | 23,429 | (227 | ) | |||||||||||||||
|
Corporate securities
|
4,956,275 | (123,274 | ) | 697,497 | (13,789 | ) | 5,653,772 | (137,063 | ) | |||||||||||||||
|
Mortgage-backed securities
|
2,077,490 | (36,639 | ) | 1,044,399 | (24,896 | ) | 3,121,889 | (61,535 | ) | |||||||||||||||
|
Total fixed maturities
|
7,186,147 | (161,455 | ) | 1,806,223 | (39,805 | ) | 8,992,370 | (201,260 | ) | |||||||||||||||
|
Marketable equity securities
|
10,729 | (1,759 | ) | 228 | (91 | ) | 10,957 | (1,850 | ) | |||||||||||||||
|
Total
|
$ | 7,196,876 | $ | (163,214 | ) | $ | 1,806,451 | $ | (39,896 | ) | $ | 9,003,327 | $ | (203,110 | ) | |||||||||
As of December 31, 2006 and 2005, $148,552 and $36,480,
respectively, of unrealized losses for a period of twelve months
or more relate to investment grade fixed income securities.
Unrealized losses on investment grade securities are principally
related to changes in interest rates or changes in the issuer
and the sector related credit spreads since the securities were
acquired. As of December 31, 2006 and 2005, the Company had
the intent and ability to hold these investments for a period of
time sufficient for them to recover in value.
F-19
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 3. | Investments — (Continued) |
The Company reviewed all its investments with unrealized losses
at the end of 2006 and 2005 in accordance with the impairment
policy described in Note 2. The Company’s evaluation
determined that these declines in fair value were temporary and
it had the intent and ability to hold them until recovery.
At December 31, 2006 and 2005, the Company held
below-investment-grade fixed maturities with a fair value of
$1,332,000 and $1,387,000, respectively, and an amortized cost
of $1,305,000 and $1,359,000, respectively. These holdings
amounted to 8.3% and 8.1%, respectively, of the Company’s
investments in fixed maturities at fair value at
December 31, 2006 and 2005.
The following table summarizes the cost or amortized cost and
fair value of fixed maturities at December 31, 2006, by
contractual years-to-maturity. Expected maturities will differ
from contractual maturities because borrowers may have the right
to call or prepay obligations with or without prepayment
penalties.
|
Cost or |
||||||||
|
Amortized |
Fair |
|||||||
| Cost | Value | |||||||
|
One year or less
|
$ | 377,113 | $ | 374,632 | ||||
|
Over one year through five years
|
2,655,755 | 2,613,674 | ||||||
|
Over five years through ten years
|
2,746,470 | 2,701,652 | ||||||
|
Over ten years
|
5,919,701 | 6,014,179 | ||||||
|
Mortgage-backed securities
|
4,387,557 | 4,345,741 | ||||||
|
Total fixed maturities
|
$ | 16,086,596 | $ | 16,049,878 | ||||
The carrying value of certain securities and cash on deposit
with state regulatory authorities was $8,302 and $14,103 at
December 31, 2006 and 2005, respectively.
No industry represented more than 9.1% of the amortized cost of
fixed maturities and equity securities at December 31, 2006
and 2005.
The following table summarizes the Company’s consolidated
pretax net investment income:
| Predecessor | ||||||||||||||||
|
Period from |
||||||||||||||||
|
Period from |
January 1, |
|||||||||||||||
|
August 2, 2004 |
2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
|
Interest:
|
||||||||||||||||
|
Fixed maturities
|
$ | 926,678 | $ | 945,737 | $ | 390,111 | $ | 633,756 | ||||||||
|
Mortgage loans
|
48,849 | 46,052 | 21,943 | 44,233 | ||||||||||||
|
Short-term investments and cash and cash equivalents
|
9,851 | 4,156 | 1,159 | 2,000 | ||||||||||||
|
Dividends:
|
||||||||||||||||
|
Marketable equity securities
|
6,759 | 3,967 | 2,671 | 3,302 | ||||||||||||
|
Redeemable preferred stock
|
3,640 | 3,387 | 492 | 2,965 | ||||||||||||
|
Policy loans
|
4,870 | 5,112 | 2,241 | 3,067 | ||||||||||||
|
Income from equity method investments
|
4,658 | 2,514 | — | — | ||||||||||||
|
Other
|
3,612 | 6,058 | 3,208 | 9,287 | ||||||||||||
|
Total investment income
|
1,008,917 | 1,016,983 | 421,825 | 698,610 | ||||||||||||
|
Investment expenses
|
(23,990 | ) | (22,935 | ) | (10,705 | ) | (4,908 | ) | ||||||||
|
Net investment income
|
$ | 984,927 | $ | 994,048 | $ | 411,120 | $ | 693,702 | ||||||||
F-20
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 3. | Investments — (Continued) |
The carrying value of investments in fixed maturities that have
not produced income for the last 12 months was $30,453 and
$10,354 at December 31, 2006 and 2005, respectively. All of
the Company’s mortgage loans produced income during 2006
and 2005.
The following table summarizes the Company’s consolidated
net realized investment gains before income taxes:
| Predecessor | ||||||||||||||||
|
Period from |
||||||||||||||||
|
Period from |
January 1, |
|||||||||||||||
|
August 2, 2004 |
2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August |
|||||||||||||
| 2006 | 2005 | 2004 | 1, 2004 | |||||||||||||
|
Fixed maturities
|
$ | (16,089 | ) | $ | 1,840 | $ | 4,117 | $ | 34,345 | |||||||
|
Marketable equity securities
|
14,842 | 8,221 | 291 | 972 | ||||||||||||
|
Other invested assets
|
1,737 | 3,992 | 2,584 | 92 | ||||||||||||
|
Deferred policy acquisition costs adjustment
|
1,190 | 87 | 11 | (517 | ) | |||||||||||
|
Net realized investment gains
|
$ | 1,680 | $ | 14,140 | $ | 7,003 | $ | 34,892 | ||||||||
During 2006, the Company recorded impairment charges of fixed
maturity investments and equity securities totaling $25,719.
These write-downs were primarily from investments in the
paper-related industry totaling $15,655, or 60.9%. The
additional write-downs represent securities that the Company
does not intend to hold until recovery. The following tables
summarize the proceeds from sales of investment securities and
related net realized investment gains before income taxes for
2006, 2005 and 2004.
| Year Ended December 31, 2006 | ||||||||||||||||
|
Marketable |
||||||||||||||||
|
Fixed |
Equity |
|||||||||||||||
| Maturities | Securities | Other | Total | |||||||||||||
|
Proceeds from sales
|
$ | 1,603,453 | $ | 106,657 | $ | 13,235 | $ | 1,723,345 | ||||||||
|
Gross realized investment gains
|
$ | 26,847 | $ | 18,274 | $ | 2,497 | $ | 47,618 | ||||||||
|
Gross realized investment losses
|
(18,373 | ) | (1,437 | ) | (112 | ) | (19,922 | ) | ||||||||
|
Net realized investment gains
|
8,474 | 16,837 | 2,385 | 27,696 | ||||||||||||
|
Impairments
|
(24,608 | ) | (1,111 | ) | — | (25,719 | ) | |||||||||
|
Other, including gains (losses) on calls and redemptions
|
45 | (884 | ) | 542 | (297 | ) | ||||||||||
|
Net realized investment gains (losses)
|
$ | (16,089 | ) | $ | 14,842 | $ | 2,927 | $ | 1,680 | |||||||
F-21
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 3. | Investments — (Continued) |
| Year Ended December 31, 2005 | ||||||||||||||||
|
Marketable |
||||||||||||||||
|
Fixed |
Equity |
|||||||||||||||
| Maturities | Securities | Other | Total | |||||||||||||
|
Proceeds from sales
|
$ | 2,364,806 | $ | 59,782 | $ | 1,525 | $ | 2,426,113 | ||||||||
|
Gross realized investment gains
|
$ | 30,782 | $ | 9,626 | $ | — | $ | 40,408 | ||||||||
|
Gross realized investment losses
|
(27,027 | ) | (1,184 | ) | — | (28,211 | ) | |||||||||
|
Net realized investment gains
|
3,755 | 8,442 | — | 12,197 | ||||||||||||
|
Impairments
|
(7,664 | ) | — | — | (7,664 | ) | ||||||||||
|
Other, including gains (losses) on calls and redemptions
|
5,749 | (221 | ) | 4,079 | 9,607 | |||||||||||
|
Net realized investment gains
|
$ | 1,840 | $ | 8,221 | $ | 4,079 | $ | 14,140 | ||||||||
|
Period from August 2, |
||||||||||||||||
| 2004 through December 31, 2004 | ||||||||||||||||
|
Marketable |
||||||||||||||||
|
Fixed |
Equity |
|||||||||||||||
| Maturities | Securities | Other | Total | |||||||||||||
|
Proceeds from sales
|
$ | 363,859 | $ | 41,573 | $ | 17,320 | $ | 422,752 | ||||||||
|
Gross realized investment gains
|
$ | 8,379 | $ | 978 | $ | 6,345 | $ | 15,702 | ||||||||
|
Gross realized investment losses
|
(7,862 | ) | (224 | ) | (5,747 | ) | (13,833 | ) | ||||||||
|
Net realized investment gains
|
517 | 754 | 598 | 1,869 | ||||||||||||
|
Impairments
|
(27 | ) | (87 | ) | — | (114 | ) | |||||||||
|
Other, including gains (losses) on calls and redemptions
|
3,627 | (376 | ) | 1,997 | 5,248 | |||||||||||
|
Net realized investment gains
|
$ | 4,117 | $ | 291 | $ | 2,595 | $ | 7,003 | ||||||||
|
Period from January 1, 2004 through |
||||||||||||||||
| August 1, 2004 — Predecessor | ||||||||||||||||
|
Marketable |
||||||||||||||||
|
Fixed |
Equity |
|||||||||||||||
| Maturities | Securities | Other | Total | |||||||||||||
|
Proceeds from sales
|
$ | 713,652 | $ | 4,491 | $ | 1,621 | $ | 719,764 | ||||||||
|
Gross realized investment gains
|
$ | 45,705 | $ | 1,137 | $ | 17,846 | $ | 64,688 | ||||||||
|
Gross realized investment losses
|
(17,163 | ) | (165 | ) | (15,467 | ) | (32,795 | ) | ||||||||
|
Net realized investment gains
|
28,542 | 972 | 2,379 | 31,893 | ||||||||||||
|
Impairments
|
(10,272 | ) | — | — | (10,272 | ) | ||||||||||
|
Other, including gains (losses) on calls and redemptions
|
16,075 | — | (2,804 | ) | 13,271 | |||||||||||
|
Net realized investment gains (losses)
|
$ | 34,345 | $ | 972 | $ | (425 | ) | $ | 34,892 | |||||||
F-22
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 3. | Investments — (Continued) |
The following table summarizes the Company’s allowance for
mortgage loan losses:
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, |
January 1, |
|||||||||||||||
|
2004 |
2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
|
Allowance at beginning of period
|
$ | 3,903 | $ | 10,172 | $ | 10,172 | $ | 10,172 | ||||||||
|
Provision
|
109 | — | — | — | ||||||||||||
|
Adjustment
|
— | (6,269 | ) | — | — | |||||||||||
|
Allowance at end of period
|
$ | 4,012 | $ | 3,903 | $ | 10,172 | $ | 10,172 | ||||||||
This allowance relates to mortgage loan investments of $798,295
and $780,826 at December 31, 2006 and 2005, respectively.
All of the Company’s mortgage loan investments were in good
standing at December 31, 2006.
At December 31, 2006, mortgage loans constituted
approximately 3.9% of total assets and are secured by
first-mortgage liens on income-producing commercial real estate,
primarily in the retail, industrial, and office building
sectors. The majority of the properties are located in the
western United States, with 27% of the total in California and
22% in Washington. Individual loans generally do not exceed
$15,000.
The carrying value of other invested assets approximates fair
value. The following table summarizes the Company’s other
invested assets:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Options
|
$ | 2,053 | $ | 3,331 | ||||
|
Note receivable — agency
|
7,823 | 7,930 | ||||||
|
Embedded derivatives
|
8,257 | 17,164 | ||||||
|
Other
|
572 | 700 | ||||||
|
Total other invested assets
|
$ | 18,705 | $ | 29,125 | ||||
| 4. | Derivative Financial Instruments |
Derivatives are instruments whose values are derived from
underlying instruments, indices, or rates, have a notional
amount, and can be net settled. This may include derivatives
that are “embedded” in financial instruments or in
certain existing assets or liabilities. The Company uses
derivative financial instruments, including interest rate swaps
and options, as a means of hedging exposure to equity price
changes
and/or
interest rate risk on anticipated transactions or on existing
assets and liabilities.
Interest rate risk is the risk of economic loss due to changes
in the level of interest rates. The Company manages interest
rate risk through active portfolio management and selective use
of interest rate swaps as hedges to change the characteristics
of certain assets and liabilities. With interest rate swap
agreements, the Company exchanges with a counterparty, at
specified intervals, interest rate payments of differing
character (e.g., fixed-rate payments exchanged for variable-rate
payments), based on an underlying principal balance (notional
amount). No cash is exchanged at the outset of the contract, and
no principal payments are made by either party. The net interest
accrued and the net interest payments made at each interest
payment due date are recorded to interest income or expense,
depending on the hedged item.
F-23
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Fair
Value Hedges
In August 2004, all fair value hedges, totaling $330,409 of
notional amount outstanding, were terminated resulting in a
realized investment loss of $3,491. Prior to August 2004, the
Company used interest rate swaps to hedge the change in fair
value of certain fixed-rate assets. As discussed in Note 2,
derivatives that were determined to be highly effective were
given hedge accounting treatment and changes in their fair
values and the fair values of the related assets that they
hedged were recognized in net realized investment gains (losses)
in the Consolidated Statements of Operations.
Cash
Flow Hedges
In January 2006, the Company’s Board of Directors
authorized a private offering to qualified institutional buyers
of $300,000 fixed rate senior subordinated notes due in ten
years (the Notes). The Company was exposed to interest rate risk
as it expected to issue the Notes on or about March 31,
2006 at or near par at the then current market interest rate. To
manage this risk, the Company bought a $300,000 forward-starting
interest rate swap at 5.0575%, maturing on March 31, 2006,
and designated the derivative as a hedge of a forecasted
transaction carried at fair value with changes recorded in OCI.
Since the critical terms of the derivative were the same as the
forecasted transaction, the Company did not record any
ineffectiveness.
On March 30, 2006, the Company issued $300,000 of
6.125% senior notes due on April 1, 2016
(Note 11). As a result, the Company recorded a $4,814 gain
in OCI related to the swap which will be reclassified into
income concurrent with the interest expense over the life of the
Notes. For the year ended December 31, 2006, $237 was
reclassified from OCI to interest expense.
In August 2004, all cash flow interest rate swaps were
terminated, resulting in a net realized investment gain of $393.
Prior to August 2004, the Company used interest rate swaps to
hedge the variability of future cash flows arising from changes
in interest rates associated with certain variable rate assets
and forecasted transactions. Amounts recorded in OCI related to
derivatives qualifying as cash flow hedges resulted in a
decrease in OCI of $4,439 after tax for the seven month period
ended August 1, 2004.
In August 2004, interest rate swaps related to the forecasted
transactions were terminated resulting in a realized investment
gain of $3,640.
Prior to August 2004, the interest rate swaps related to
forecasted transactions that were considered probable of
occurring were considered to be highly effective and qualified
for hedge treatment under SFAS No. 133.
SFAS No. 133 requires that amounts deferred in OCI be
reclassified into earnings either when the forecasted
transaction occurs or when it is considered not probable of
occurring, whichever happens sooner. In the seven month period
ended August 1, 2004, $7,442 after tax was reclassified
from OCI to net realized investment gains and losses relating to
forecasted transactions that were no longer probable of
occurring.
Other
Derivatives
The Company has a closed block of fixed indexed annuity (FIA)
product that credits the policyholders’ account based on a
percentage of the gain in the S&P 500 Index. In connection
with this product, the Company has a hedging program with the
objective to hedge the exposure to changes in the S&P 500
Index. This program consists of buying S&P 500 Index
options. Although the Company uses index options to hedge the
equity return component of the FIA, the options do not qualify
as hedging instruments or for hedge accounting treatment
pursuant to SFAS No. 133. Accordingly, the assets are
recorded as a free-standing derivative asset or options in other
invested assets, and mark-to-market gains or losses to record
the options at fair value are recognized in net realized
investment gains. The Company recognized pretax gains (losses)
on these options of $2,227, $(4,413), $2,007, and $(2,611) for
the years ended December 31, 2006 and 2005, the five month
period ended December 31, 2004, and the seven month period
ended August 1, 2004, respectively.
The Company has convertible bonds that contain embedded options.
The values of these options are bifurcated from the host value
of the respective bonds and are accounted for as derivatives.
During 2006 and
F-24
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
2005, the embedded derivatives are recorded in other invested
assets, and mark-to-market gains or losses to record the
embedded derivatives at fair value are recognized in net
realized investment gains. The value of these options is $8,257
and $17,164 at December 31, 2006 and 2005, respectively.
Counterparty credit risk is the risk that a counterparty to a
derivative contract will be unable to perform its obligations.
The Company manages counterparty credit risk on an individual
counterparty basis, and gains and losses are netted by
counterparty. The Company mitigates counterparty credit risk
through credit reviews, approval controls, and by only entering
into agreements with credit-worthy counterparties. The Company
performs ongoing monitoring of counterparty credit exposure risk
against credit limits. The contract or notional amounts of these
instruments reflect the extent of involvement the Company has in
a particular class of derivative financial instrument. However,
the maximum loss of cash flow associated with these instruments
can be less than these amounts. For interest rate swaps, credit
risk is limited to the amount that it would cost the Company to
replace the contract.
| 5. | Securities Lending Program |
The Company participates in a securities lending program whereby
blocks of securities included in investments are loaned to third
parties, primarily major brokerage firms. The Company requires a
minimum of 102% of the fair value of the loaned securities to be
separately maintained as collateral for the loans. Securities
with a cost or amortized cost of $395,942 and $577,877 and an
estimated fair value of $427,660 and $574,824 were on loan under
the program at December 31, 2006 and 2005, respectively.
The Company was liable for cash collateral under its control of
$439,292 and $598,451 at December 31, 2006 and 2005,
respectively.
| 6. | Fair Value of Financial Instruments |
The Company estimates the fair values for mortgage loans by
discounting the projected cash flows using the current rate at
which the loans would be made to borrowers with similar credit
ratings and for the same maturities.
For cash and cash equivalents, policy loans, short-term
investments, accounts receivable, and other liabilities the
carrying value is a reasonable estimate of fair value.
The fair value of investments in limited partnerships is
provided by the general partner or manager of each investment.
Included in investments in limited partnerships are investments
in tax-sheltered affordable housing projects for which the fair
values are calculated as the sum of cash contributions and the
present value of future commitments.
The carrying amount of the note receivable approximates fair
value.
All derivatives are carried at fair value on the Consolidated
Balance Sheets. The fair values of the derivative financial
instruments generally represent the estimated amounts that the
Company would expect to receive or pay upon termination of the
contracts as of the reporting date. Quoted fair values are
available for certain derivatives. For derivative instruments
not actively traded, the Company estimates fair value using
values obtained from independent pricing services, internal
modeling, or quoted market prices of comparable instruments.
The carrying value of securities lending collateral and
securities lending payable approximates fair value.
Separate account assets and the related liabilities are reported
at fair value using quoted market prices.
The Company estimates the fair values of investment contracts
(funds held under deposit contracts) with defined maturities by
discounting projected cash flows using rates that would be
offered for similar contracts with the same remaining
maturities. For investment contracts with no defined maturities,
the Company estimates fair values to be the present surrender
value.
F-25
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table summarizes the carrying or reported values
and corresponding fair values of financial instruments:
| December 31, 2006 | December 31, 2005 | |||||||||||||||
|
Carrying |
Carrying |
|||||||||||||||
| Amount | Fair Value | Amount | Fair Value | |||||||||||||
|
Financial assets:
|
||||||||||||||||
|
Fixed maturities
|
$ | 16,049,878 | $ | 16,049,878 | $ | 17,183,197 | $ | 17,183,197 | ||||||||
|
Marketable equity securities
|
201,706 | 201,706 | 162,301 | 162,301 | ||||||||||||
|
Mortgage loans
|
794,283 | 796,078 | 776,923 | 798,430 | ||||||||||||
|
Investment in limited partnerships
|
112,648 | 112,648 | 93,400 | 93,400 | ||||||||||||
|
Other invested assets:
|
||||||||||||||||
|
Options
|
2,053 | 2,053 | 3,331 | 3,331 | ||||||||||||
|
Embedded derivatives
|
8,257 | 8,257 | 17,164 | 17,164 | ||||||||||||
|
Note receivable — agency
|
7,823 | 7,823 | 7,930 | 7,930 | ||||||||||||
|
Other
|
572 | 572 | — | — | ||||||||||||
|
Securities lending collateral
|
439,292 | 439,292 | 598,451 | 598,451 | ||||||||||||
|
Separate account assets
|
1,233,929 | 1,233,929 | 1,188,820 | 1,188,820 | ||||||||||||
|
Financial liabilities:
|
||||||||||||||||
|
Funds held under deposit contracts
|
15,986,198 | 15,954,265 | 16,697,903 | 16,960,272 | ||||||||||||
|
Other liabilities:
|
||||||||||||||||
|
Limited partnership contributions payable
|
44,646 | 44,646 | 31,599 | 31,599 | ||||||||||||
|
Securities lending payable
|
439,292 | 439,292 | 598,451 | 598,451 | ||||||||||||
|
Separate account liabilities
|
1,233,929 | 1,233,929 | 1,188,820 | 1,188,820 | ||||||||||||
| 7. | Reinsurance |
The Company evaluates the financial condition of its reinsurers
to minimize the exposure to losses from reinsurer insolvencies.
Management of the Company is not aware of any of the
Company’s major reinsurers currently experiencing material
financial difficulties. The Company analyzes reinsurance
recoverables according to the credit ratings of its reinsurers.
Of the total amount due from reinsurers at December 31,
2006, 99.7% was with reinsurers rated A− or higher by
A.M. Best. The Company had no reserve for uncollectible
reinsurance in 2006 or 2005. None of the Company’s
reinsurance contracts exclude certified terrorist acts.
For the individual life business, the Company has coinsurance
agreements on policies exceeding $500,000 and other
miscellaneous policies where the reinsurer reimburses the
Company based on the percentage in the contract, which ranges
from 50% to 80% based upon the year that the policy was written.
The Company reinsures 100% of its group long-term disability and
group short-term disability business. The reinsurer is
responsible for paying all claims.
F-26
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Reinsurance recoverables are comprised of the following amounts:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Life insurance
|
||||||||
|
Reinsurance recoverables on:
|
||||||||
|
Policy and contract claims
|
$ | 5,861 | $ | 6,694 | ||||
|
Paid claims
|
10 | 77 | ||||||
|
Future policy benefits
|
166,621 | 149,853 | ||||||
|
Total life insurance
|
172,492 | 156,624 | ||||||
|
Accident and health insurance
|
||||||||
|
Reinsurance recoverables on:
|
||||||||
|
Policy and contract claims
|
725 | 338 | ||||||
|
Paid claims
|
79 | 295 | ||||||
|
Future policy benefits
|
65,468 | 72,631 | ||||||
|
Total accident and health insurance
|
66,272 | 73,264 | ||||||
|
Total reinsurance recoverables
|
$ | 238,764 | $ | 229,888 | ||||
The following table sets forth net life insurance in-force as of
December 31:
| 2006 | 2005 | 2004 | ||||||||||
|
Direct life insurance in-force
|
$ | 55,656,360 | $ | 56,928,623 | $ | 69,610,844 | ||||||
|
Amounts assumed from other companies
|
211,656 | 219,626 | 228,006 | |||||||||
|
Amounts ceded to other companies
|
(21,944,907 | ) | (20,266,656 | ) | (19,081,945 | ) | ||||||
|
Net life insurance in-force.
|
$ | 33,923,109 | $ | 36,881,593 | $ | 50,756,905 | ||||||
|
Percentage of amount assumed to net
|
0.62 | % | 0.59 | % | 0.44 | % | ||||||
F-27
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The effects of reinsurance on earned premiums are as follows:
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, |
January 1, |
|||||||||||||||
|
2004 |
2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
|
Direct:
|
||||||||||||||||
|
Accident and health premiums
|
$ | 390,873 | $ | 430,821 | $ | 185,464 | $ | 264,032 | ||||||||
|
Life insurance premiums
|
191,881 | 192,854 | 84,743 | 118,226 | ||||||||||||
|
Total
|
582,754 | 623,675 | 270,207 | 382,258 | ||||||||||||
|
Assumed:
|
||||||||||||||||
|
Accident and health premiums
|
(1 | ) | 15,277 | 18,753 | 23,220 | |||||||||||
|
Life insurance premiums
|
209 | 240 | 165 | 229 | ||||||||||||
|
Total
|
208 | 15,517 | 18,918 | 23,449 | ||||||||||||
|
Ceded:
|
||||||||||||||||
|
Accident and health premiums
|
(10,215 | ) | (22,529 | ) | (8,544 | ) | (11,804 | ) | ||||||||
|
Life insurance premiums
|
(47,090 | ) | (41,204 | ) | (17,386 | ) | (35,978 | ) | ||||||||
|
Total
|
(57,305 | ) | (63,733 | ) | (25,930 | ) | (47,782 | ) | ||||||||
|
Total premiums
|
$ | 525,657 | $ | 575,459 | $ | 263,195 | $ | 357,925 | ||||||||
|
Percentage of amount assumed to net
|
0.04 | % | 2.70 | % | 7.19 | % | 6.55 | % | ||||||||
Ceded reinsurance reduced policy benefits by $45,533, $39,253,
$11,529, and $23,722 for the years ended December 31, 2006
and 2005, the five months ended December 31, 2004, and the
seven months ended August 1, 2004, respectively.
| 8. | Deferred Policy Acquisition Costs and Deferred Sales Inducements |
Activities impacting deferred policy acquisition costs are as
follows:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Unamortized balance at beginning of period
|
$ | 48,511 | $ | 15,073 | ||||
|
Deferral of acquisition costs
|
52,511 | 45,213 | ||||||
|
Amortization related to investment gains
|
1,190 | 86 | ||||||
|
Amortization related to other expenses
|
(14,589 | ) | (11,861 | ) | ||||
|
Unamortized balance at end of period
|
87,623 | 48,511 | ||||||
|
Accumulated effect of net unrealized investment gains
|
614 | 506 | ||||||
|
Balance at end of period
|
$ | 88,237 | $ | 49,017 | ||||
F-28
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table provides a reconciliation of the beginning
and ending balance for sales inducements, which are included in
other assets:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Unamortized balance at beginning of period
|
$ | 2,905 | $ | 293 | ||||
|
Capitalizations
|
6,113 | 2,612 | ||||||
|
Amortization
|
(8 | ) | — | |||||
|
Unamortized balance at end of period
|
$ | 9,010 | $ | 2,905 | ||||
| 9. | Property, Equipment, and Leasehold Improvements |
Property, equipment, and leasehold improvements are comprised of
the following amounts:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Computer equipment and software
|
$ | 6,151 | $ | 4,060 | ||||
|
Office equipment, furniture, and fixtures
|
8,977 | 8,785 | ||||||
|
Equipment and software under capital leases
|
13,825 | 13,586 | ||||||
|
Leasehold improvements
|
13,728 | 13,598 | ||||||
| 42,681 | 40,029 | |||||||
|
Less accumulated depreciation and amortization
|
14,605 | 9,507 | ||||||
|
Total property, equipment, and leasehold improvements, net
|
$ | 28,076 | $ | 30,522 | ||||
Depreciation and amortization expenses associated with property,
equipment, and leasehold improvements, including equipment and
software under capital leases, amounted to $5,610, $4,554, $159,
and $367, for the years ended December 31, 2006 and 2005,
the five months ended December 31, 2004, and the seven
months ended August 1, 2004, respectively.
F-29
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 10. | Policy and Contract Claims |
The following table provides a reconciliation of the beginning
and ending reserve balances for policy and contract claims for
2006, 2005 and 2004:
| 2006 | 2005 | 2004 | ||||||||||
|
Balance as of January 1
|
$ | 135,655 | $ | 153,173 | $ | 139,113 | ||||||
|
Less: reinsurance recoverable
|
7,032 | 4,176 | 5,571 | |||||||||
|
Net balance as of January 1
|
128,623 | 148,997 | 133,542 | |||||||||
|
Incurred related to insured events of:
|
||||||||||||
|
The current year
|
298,269 | 364,832 | 369,948 | |||||||||
|
Prior years
|
(1,445 | ) | 1,807 | 12,158 | ||||||||
|
Total incurred
|
296,824 | 366,639 | 382,106 | |||||||||
|
Paid related to insured events of:
|
||||||||||||
|
The current year
|
231,890 | 292,482 | 290,857 | |||||||||
|
Prior years
|
80,629 | 94,531 | 75,794 | |||||||||
|
Total paid
|
312,519 | 387,013 | 366,651 | |||||||||
|
Net balance as of December 31
|
112,928 | 128,623 | 148,997 | |||||||||
|
Add: reinsurance recoverable
|
6,586 | 7,032 | 4,176 | |||||||||
|
Balance as of December 31
|
$ | 119,514 | $ | 135,655 | $ | 153,173 | ||||||
The Company uses estimates for determining its liability for
policy and contract claims, which are based on historical claim
payment patterns, and expected loss ratios to provide for the
inherent variability in claim patterns and severity. For the
year ended December 31, 2006, the change in prior year
incurred liabilities primarily relates to a favorable
development in contract claims. For the years ended
December 31, 2005 and 2004, the change in incurred
liabilities was primarily from higher-than-expected loss and
claims experience, and a change in estimates.
| 11. | Notes Payable |
Revolving
Credit Facilities
On June 14, 2004, the Company entered into a $370,000
revolving credit agreement with several lending institutions,
with Bank of America, N.A. acting as administrative agent for
the lenders. On August 2, 2004, the Company borrowed
$300,000 against the revolving credit facility, which was used
to purchase the life and investment companies, and $15,000,
which was used to purchase a loan from Safeco. On
August 31, 2004, $15,025 was repaid, which included $25 of
interest expense.
During the year ended December 31, 2006, the Company repaid
the $300,000 outstanding revolving credit line, and the line of
credit was subsequently reduced to $70,000. The credit agreement
contains restrictive covenants, which include maintaining
certain financial ratios. The interest rate is currently three
months at LIBOR, plus a margin of 0.60%. The margin is adjusted
based on the Company’s debt-to-capitalization ratio. There
was no borrowing activity on this facility in 2006. At
December 31, 2005, the balance outstanding was $300,000 and
the rate was 4.52%. Interest expense for 2006 and 2005 was
$3,851 and $12,388, respectively.
In 2005, the Company entered into two $25,000 revolving credit
facilities with The Bank of New York to support the
Company’s overnight repurchase agreement program, which
provides the Company liquidity to meet its general funding
requirements. There was no borrowing activity on these
facilities in 2006 and 2005.
F-30
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Senior
Notes Payable
On March 30, 2006, the Company issued $300,000 of
6.125% senior notes due on April 1, 2016, which were
issued at a discount yielding $298,671. As a result of this
transaction, the Company paid $3,040 in debt issuance costs
which have been capitalized and included in other assets and
realized $4,814 of deferred gains related to a hedging
transaction (Note 4). Both amounts are being amortized
using the effective-interest method over the term of the Notes,
yielding to an effective interest rate of 6.11%.
These senior notes are unsecured senior obligations and will be
equal in right of payment to all existing and future unsecured
senior indebtedness. These notes are redeemable, in whole or in
part, at the option of the Company at any time or from time to
time at a redemption price equal to the greater of:
(1) 100% of the aggregate principal amount of the notes to
be redeemed; or (2) the sum of the present value of the
remaining scheduled payments of principal and interest on the
Notes, discounted to the redemption date on a semi-annual basis
at a prevailing U.S. Treasury rate plus 25 basis
points, together in each case with accrued interest payments to
the redemption date.
Proceeds from the Notes were used to pay down the outstanding
principal on the revolving line of credit. Interest on the notes
is payable semi-annually in arrears, beginning on
October 2, 2006. The Company made interest payments on the
senior notes of $9,239 in 2006.
The terms of the senior notes contain various business and
financial covenants, including limitations on the disposition of
subsidiaries. As of December 31, 2006, the Company was in
compliance with all such covenants.
| 12. | Income Taxes |
The Company uses the liability method of accounting for income
taxes in accordance with SFAS No. 109, under which
deferred income tax assets and liabilities are determined based
on the differences between their financial reporting and tax
bases and are measured using the enacted tax rates.
Differences between income taxes computed by applying the
U.S. federal income tax rate of 35% to income from
continuing operations before income taxes and the provision for
income taxes were as follows:
| Predecessor | ||||||||||||||||||||||||||||||||
|
Period from |
Period from |
|||||||||||||||||||||||||||||||
|
August 2, 2004 |
January 1, 2004 |
|||||||||||||||||||||||||||||||
|
through |
through |
|||||||||||||||||||||||||||||||
| Year Ended December 31, 2006 | Year Ended December 31, 2005 | December 31, 2004 | August 1, 2004 | |||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes
|
$ | 244,028 | $ | 206,355 | $ | (9,192 | ) | $ | 129,024 | |||||||||||||||||||||||
|
Computed “expected” tax expense
|
85,410 | 35.00 | % | 72,224 | 35.00 | % | (3,217 | ) | 35.00 | % | 45,158 | 35.00 | % | |||||||||||||||||||
|
Separate account dividend received deduction
|
(1,981 | ) | (0.81 | ) | (3,960 | ) | (1.92 | ) | (1,103 | ) | 12.00 | (1,461 | ) | (1.13 | ) | |||||||||||||||||
|
Purchase transaction costs
|
(402 | ) | (0.17 | ) | (413 | ) | (0.20 | ) | (455 | ) | 4.95 | — | — | |||||||||||||||||||
|
Miscellaneous permanent differences
|
(308 | ) | (0.13 | ) | (158 | ) | (0.08 | ) | (237 | ) | 2.58 | 117 | 0.09 | |||||||||||||||||||
|
IRS audit adjustments
|
— | — | — | — | — | — | (8,749 | ) | (6.78 | ) | ||||||||||||||||||||||
|
Warrants
|
— | — | — | — | 35,536 | (386.60 | ) | — | — | |||||||||||||||||||||||
|
Valuation allowance
|
— | — | (5,440 | ) | (2.64 | ) | — | — | — | — | ||||||||||||||||||||||
|
Low income housing credits
|
(838 | ) | (0.34 | ) | — | — | — | — | — | — | ||||||||||||||||||||||
|
Other
true-up
adjustments
|
2,617 | 1.08 | (340 | ) | (0.16 | ) | 1,458 | (15.86 | ) | (3,663 | ) | (2.84 | ) | |||||||||||||||||||
|
Provision for income taxes
|
$ | 84,498 | 34.63 | % | $ | 61,913 | 30.00 | % | $ | 31,982 | (347.93 | )% | $ | 31,402 | 24.34 | % | ||||||||||||||||
F-31
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The warrant adjustment for the period from August 2, 2004
through December 31, 2004, reflects the reduction of
current income from continuing operations related to warrants
issued to investors for certain services provided. For tax
purposes, warrants for services are not deductible until the
time of exercise. As of December 31, 2006, $2,720 of the
warrant expense is accounted for as a temporary difference for
which a deferred tax asset has been established. For tax-basis,
the remaining portion of $32,816 has been allocated to
non-amortizable
capital expenditures.
The tax effects of temporary differences which give rise to the
deferred income tax assets and deferred income tax liabilities
were as follows:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Deferred income tax assets:
|
||||||||
|
Goodwill
|
$ | 3,453 | $ | 5,289 | ||||
|
Intangibles
|
18,408 | 19,036 | ||||||
|
Adjustment to life policy liabilities
|
343,120 | 369,329 | ||||||
|
Capitalization of policy acquisition costs
|
50,150 | 57,785 | ||||||
|
Long-term incentive plan
|
4,451 | 4,266 | ||||||
|
Warrants
|
2,720 | 35,536 | ||||||
|
Investment impairments
|
9,002 | 8,927 | ||||||
|
Uncollected premium adjustment
|
194 | — | ||||||
|
Guaranty fund assessments
|
502 | 522 | ||||||
|
Furniture and fixtures
|
510 | 2,262 | ||||||
|
Bond discount accrual
|
504 | — | ||||||
|
Unrealized depreciation of investment securities (net of
deferred policy acquisition costs adjustment: $(215) and $(0),
respectively)
|
296 | — | ||||||
|
Other
|
6,442 | 11,019 | ||||||
|
Total deferred income tax assets
|
439,752 | 513,971 | ||||||
|
Deferred income tax liabilities:
|
||||||||
|
Unrealized appreciation of investment securities (net of
deferred policy acquisition costs adjustment: $(0) and $(177),
respectively)
|
— | 73,520 | ||||||
|
Securities — basis adjustment
|
185,164 | 242,909 | ||||||
|
Mortgage loans
|
1,234 | 3,170 | ||||||
|
Warrants
|
2,720 | 35,536 | ||||||
|
Deferred policy acquisition costs
|
30,668 | 16,641 | ||||||
|
Bond discount accrual
|
— | 4,546 | ||||||
|
Other
|
875 | 302 | ||||||
|
Total deferred income tax liabilities
|
220,661 | 376,624 | ||||||
|
Net deferred income tax asset
|
$ | 219,091 | $ | 137,347 | ||||
On August 2, 2004, the Company established a valuation
allowance related to capital loss carryforwards of $27,392
($9,587 at the effective tax rate). The Company determined the
need for a valuation allowance due to the fact that the capital
losses generated in 2002 and 2003 continued to be available for
carryback purposes by the Company’s former parent, Safeco.
During 2005, the valuation allowance was reduced in its entirety
as a result of a change in the anticipated realizability of
deferred tax assets. The adjustment resulted in a write-down of
other intangible assets in the amount of $4,200.
F-32
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Prior to 1984, as provided for under the Life Insurance Company
Tax Act of 1959, a portion of statutory income was not subject
to current taxation, but was accumulated for income tax purposes
in a memorandum account referred to as the
“policyholders’ surplus account” (PSA). In any
taxable year beginning after 2004 and before 2007, direct and
indirect distributions from the PSA will be treated as zero (no
tax due). At December 31, 2005 the balance in the
Company’s PSA account was $7,448. During 2006, direct
dividends from the insurance companies of $123,030 were
distributed, which reduced the balance in the Company’s PSA
account to zero.
| 13. | Comprehensive Income |
Comprehensive income is defined as all changes in
Stockholders’ Equity, except those arising from
transactions with stockholders. Comprehensive income includes
net income and OCI, which consists of changes in unrealized
gains or losses of investments and derivatives carried at fair
value and the DAC valuation allowance.
The components of OCI are as follows:
| December 31, | ||||||||
| 2006 | 2005 | |||||||
|
Net unrealized gains (losses) on available-for-sale securities
|
$ | (6,037 | ) | $ | 209,549 | |||
|
Net unrealized gains on derivative financial instruments
|
4,577 | — | ||||||
|
Adjustment for deferred policy acquisition costs
|
614 | 506 | ||||||
|
Deferred income taxes
|
296 | (73,520 | ) | |||||
|
Accumulated other comprehensive income (loss)
|
$ | (550 | ) | $ | 136,535 | |||
The following summarizes the net changes in OCI:
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, |
January 1, |
|||||||||||||||
|
2004 |
2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
|
Increase (decrease) in unrealized appreciation/depreciation of:
|
||||||||||||||||
|
Available-for-sale securities
|
$ | (215,586 | ) | $ | (272,579 | ) | $ | 482,128 | $ | (330,148 | ) | |||||
|
Derivative financial instruments
|
4,577 | — | — | (6,829 | ) | |||||||||||
|
Adjustment for deferred policy acquisition costs
|
108 | 1,201 | (695 | ) | 39,095 | |||||||||||
|
Deferred income taxes
|
73,816 | 94,982 | (168,502 | ) | 104,259 | |||||||||||
|
Net change in accumulated OCI
|
$ | (137,085 | ) | $ | (176,396 | ) | $ | 312,931 | $ | (193,623 | ) | |||||
| 14. | Commitments and Contingencies |
Under state insolvency and guaranty laws, insurers licensed to
do business in a state can be assessed or required to contribute
to state guaranty funds to cover policyholder losses resulting
from insurer insolvencies. Liabilities for guaranty funds are
not discounted or recorded net of premium taxes and are included
in other liabilities in the Consolidated Balance Sheets. At
December 31, 2006, the Company had liabilities of $7,278
for estimated guaranty fund assessments. The Company has a
related asset for premium tax offsets of $5,843, which are
available for a period of five to twenty years.
F-33
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
At December 31, 2006 the Company was invested in six
limited partnership interests related to tax sheltered
affordable housing projects and state tax credit funds, four of
which were entered into during 2006. The Company unconditionally
committed to provide capital contributions of approximately
$64,298 over a period of four years. These investments were
accounted for under the equity method and are recorded at
present value in investments in limited partnerships with the
corresponding amount in other liabilities. Capital contributions
of $10,584 were paid as of December 31, 2006, with the
remaining expected cash capital contributions payable as follows:
|
2007
|
$ | 9,262 | ||
|
2008
|
7,867 | |||
|
2009
|
21,439 | |||
|
2010
|
15,146 | |||
|
Total capital contributions payable
|
$ | 53,714 | ||
The Company has committed to invest $17,500 in two private
equity limited partnerships. The Company will provide capital
contributions to the partnerships up to the committed amount at
the discretion of the general partners, subject to certain
incremental contribution limits. The term of the capital
commitment ranges from five to ten years ending in 2015.
Investments in both partnerships amounted to $2,495 for the year
ended December 31, 2006.
Because of the nature of the business, the Company is subject to
legal actions filed or threatened in the ordinary course of its
business operations. The Company does not believe that such
litigation will have a material adverse effect on its
consolidated financial condition, future operating results, or
liquidity.
The Company leases office space, commercial real estate, and
certain equipment under leases that expire at various dates
through 2015. The Company accounts for these leases as operating
leases. Certain leases include renewal options.
Future minimum lease commitments, including cost escalation
clauses, for the next five years and thereafter, are as follows:
|
Operating |
||||
| Leases | ||||
|
2007
|
$ | 6,853 | ||
|
2008
|
6,692 | |||
|
2009
|
6,747 | |||
|
2010
|
6,550 | |||
|
2011
|
6,192 | |||
|
Thereafter
|
23,072 | |||
|
Total
|
$ | 56,106 | ||
The amount of rent expense was $8,244, $9,592, $4,500, and
$5,867 for the years ended December 31, 2006 and 2005, the
five months ended December 31, 2004, and the seven months
ended August 1, 2004, respectively.
In October 2004, the Company entered into a service agreement
with a third-party service provider to outsource the majority of
its information technology infrastructure. The term of the
service agreement is for five years, subject to certain renewal
options and early termination provisions. Under the terms of the
service agreement, the Company agreed to pay an annual service
fee ranging from $13,194 to $14,664 for five years. The
remaining annual service fee is $13,224 for 2007, $13,269 for
2008, $13,928 for 2009, and $8,362 for 2010, subject to certain
annual service fee adjustments based on actual benchmarks and
production utilization.
F-34
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
During 2005, the Company entered into an agreement and paid the
service provider a fixed transition fee in the amount of $15,488
related to the acquisition of the initial equipment and software
used by the service provider to fulfill and perform its
services. The ownership of these assets will be conveyed to the
Company upon the termination of the service agreement. The
Company recorded the equipment and software as a capital lease
with no related future minimum lease payment. Additional
equipment and software may be purchased by the service provider
based on capacity and demand. Equipment and software costs under
the capital lease were $13,825 and $13,586, respectively, at
December 31, 2006 and 2005 with accumulated amortization of
$5,885 and $3,057, respectively. There were no capitalized
leases at December 31, 2004.
At December 31, 2006 and 2005, unfunded mortgage loan
commitments were $14,465 and $35,175, respectively. The Company
had no other material commitments or contingencies at
December 31, 2006 and 2005.
| 15. | Discontinued Operations |
On August 2, 2004, the Company announced it would exit the
mutual fund business through a sale agreement with Pioneer
Investment Management Inc. (Pioneer) for $30,000, subject to
adjustment based on the value of the assets under management at
closing and stockholder and trustee approval. Symetra Asset
Management (SAM), manager of the Safeco mutual funds, was
replaced with Pioneer. On December 10, 2004,
$3.1 billion in assets from Safeco’s 22 mutual funds
merged into the Pioneer family of funds and the Company received
$30,000. No realized investment gain or loss was recorded.
Accordingly, the Company has presented the asset management
segment, which is primarily composed of activity related to the
mutual fund business, as discontinued operations in the
Consolidated Financial Statements in accordance with
SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets.
Included in discontinued operations are the operations of SAM
and the majority of the business component of Symetra Services
Corporation. SAM provided fund accounting and other
administrative services to the funds through the sale date. The
other asset management entity, Symetra Services Corporation,
functioned as the transfer agent for the Safeco mutual funds.
Results of discontinued operations were as follows:
| Predecessor | ||||||||||||||||
|
Period from |
Period from |
|||||||||||||||
|
August 2, |
January 1, |
|||||||||||||||
|
2004 |
2004 |
|||||||||||||||
|
Year Ended |
Year Ended |
through |
through |
|||||||||||||
|
December 31, |
December 31, |
December 31, |
August 1, |
|||||||||||||
| 2006 | 2005 | 2004 | 2004 | |||||||||||||
|
Revenues
|
$ | — | $ | 2,426 | $ | 932 | $ | 14,608 | ||||||||
|
Benefits and expenses:
|
||||||||||||||||
|
Other underwriting and operating expenses
|
— | 845 | 4,678 | 11,077 | ||||||||||||
|
Income (loss) before income taxes:
|
— | 1,581 | (3,746 | ) | 3,531 | |||||||||||
|
Provision (benefit) for income taxes:
|
||||||||||||||||
|
Current
|
— | 262 | 8,764 | 1,166 | ||||||||||||
|
Deferred
|
— | 274 | (10,099 | ) | 69 | |||||||||||
|
Total
|
— | 536 | (1,335 | ) | 1,235 | |||||||||||
|
Net income (loss)
|
$ | — | $ | 1,045 | $ | (2,411 | ) | $ | 2,296 | |||||||
F-35
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 16. | Employee Benefit Plans |
The Company sponsors a defined contribution plan for all
eligible employees. Prior to 2006, the Symetra Financial
Retirement Plan was a 401(k)/profit-sharing retirement plan that
included a matching contribution of 66.6% of a
participant’s contributions up to 6% of eligible
compensation, a profit-sharing feature comprised of a minimum
contribution of 3% of each eligible participant’s
compensation, and a variable component based on the Board of
Directors’ discretion. No variable profit-sharing
contributions were made for the year ended December 31,
2005 and the five month period ended December 31, 2004.
Effective on January 1, 2006, the plan was amended to
include only an immediate safe harbor contribution of 100% of a
participant’s contributions up to 6% of eligible
compensation. The expense related to this plan was $2,155,
$5,141, and $2,526 for the years ended December 31, 2006
and 2005, and the five months ended December 31, 2004,
respectively.
The Company also sponsors a performance share plan (the
Performance Share Plan) that provides incentives to selected
executives based on the long-term success of the Company. The
Board of Directors of the Company may grant to an executive an
award of performance shares. Each performance share reflects the
financial value of the growth in both the book value and the
enterprise value, conditional upon attainment of a stated
performance goal over the award period specified in the grant.
The performance shares are exchanged for a cash payment at the
end of the award period. The amount expensed for the years ended
December 31, 2006 and 2005 and the five months ended
December 31, 2004, related to the Performance Share Plan,
was $11,801, $10,262, and $1,928, respectively. The Company does
not offer any healthcare, life insurance, or other
post-retirement benefits to retired employees.
Predecessor
Plans
Through the date of acquisition, Safeco sponsored defined
contribution and defined benefit plans covering substantially
all employees of the Company and its subsidiaries and provided a
postretirement benefit program for certain retired employees.
Eligibility for participation in the various plans was generally
based on completion of a specified period of continuous service
or date of hire. Employer contributions to these plans were made
in cash. Costs allocated to the Company for these plans were
$2,363 for the seven months ended August 1, 2004.
The Safeco 401(k)/Profit-Sharing Retirement Plan was a defined
contribution plan. It included a minimum contribution of 3% of
each eligible participant’s compensation, a matching
contribution of 66.6% of participant’s contributions up to
6% of eligible compensation, and a profit-sharing component
based on Safeco’s income. No profit-sharing contributions
were made for the seven month period ended August 1, 2004.
The Safeco Employee’s Cash Balance Plan (CBP) was a
noncontributory defined benefit plan that provided benefits for
each year of service after 1988, based on the participant’s
eligible compensation, plus a stipulated rate of return on the
benefit balance. Safeco made contributions to the CBP based on
the funding requirements set by the Employee Retirement Income
Security Act of 1974. Costs allocated to the Company for the CBP
were 1% or less of income before income taxes for the seven
months ended August 1, 2004.
The Company participated in Safeco’s Long-Term Incentive
Plan of 1997 (the Plan), as amended. Incentive stock options,
non-qualified stock options, restricted stock rights,
performance stock rights, and stock appreciation rights were
authorized under the Plan. Stock-based compensation expense
allocated to the Company was $1,873 for the seven months ended
August 1, 2004.
| 17. | Dividend Restrictions |
Insurance companies are restricted by state regulations as to
the aggregate amount of dividends they may pay in any
consecutive
12-month
period without regulatory approval. Generally, dividends may be
paid out of earned surplus without approval with
30 days’ prior written notice, within certain limits.
The limits are generally based on the greater of 10% of the
prior year statutory surplus or the prior year statutory net
gain
F-36
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
from operations. Dividends in excess of the prescribed limits or
earned surplus require formal state insurance commission
approval. Based on statutory limits as of December 31,
2006, the amount of surplus available for the payment of
dividends without prior regulatory approval is $166,415.
| 18. | Statutory-Basis Information |
State insurance regulatory authorities require insurance
companies to file annual statements prepared on an accounting
basis prescribed or permitted by their respective states of
domicile. Prescribed statutory accounting practices include
state laws, regulations, and general administrative rules, as
well as a variety of publications of the National Association of
Insurance Commissioners (NAIC), including the revised
Accounting Practices and Procedures Manual. Permitted
statutory accounting practices encompass all accounting
practices not so prescribed.
During 2005, American States Life Insurance Company (ASL) was
statutorily merged into Symetra Life Insurance Company.
Statutory net income and surplus of ASL for the years ended
December 31, 2006 and 2005, are included in Symetra Life
Insurance Company. Statutory net income (loss) and capital and
surplus, by company, are as follows:
| Year Ended December 31, | ||||||||||||
| 2006 | 2005 | 2004 | ||||||||||
|
Statutory net income (loss):
|
||||||||||||
|
Symetra Life Insurance Company
|
$ | 145,020 | $ | 162,210 | $ | 222,104 | ||||||
|
Symetra National Life Insurance Company
|
1,107 | (936 | ) | 119 | ||||||||
|
First Symetra National Life Insurance Company of New York
|
35 | (3,016 | ) | 857 | ||||||||
|
American States Life Insurance Company
|
— | — | 23,237 | |||||||||
|
Total
|
$ | 146,162 | $ | 158,258 | $ | 246,317 | ||||||
| December 31 | ||||||||
| 2006 | 2005 | |||||||
|
Statutory capital and surplus:
|
||||||||
|
Symetra Life Insurance Company
|
$ | 1,266,222 | $ | 1,260,136 | ||||
Statutory net income differs from income reported in accordance
with GAAP primarily because policy acquisition costs are
expensed when incurred, reserves are based on different
assumptions, and income tax expense reflects only taxes paid or
currently payable.
Statutory capital and surplus differs from amounts reported in
accordance with GAAP primarily because of the effect of GAAP
purchase price accounting adjustments, policy acquisition costs
are expensed when incurred, reserves are based on different
assumptions, and fixed maturities are carried at amortized cost.
Life and health insurance companies are subject to certain
Risk-Based Capital (RBC) requirements as specified by the NAIC.
Under those requirements, the amount of capital and surplus
maintained by a life and health insurance company is to be
determined based on various risk factors related to it. At
December 31, 2006, Symetra Life Insurance Company and its
subsidiaries met the RBC requirements.
| 19. | Related Parties |
The Company entered into an Investment Management Agreement on
March 14, 2004 with White Mountains Advisors, LLC. This
agreement provides for investment advisory services related to
the Company’s invested assets and portfolio management
services. Fees are paid quarterly and amounted to $20,187,
$18,533, and $7,768 for the years ended December 31, 2006
and 2005, and the five months ended December 31, 2004.
F-37
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
On August 2, 2004, the Company issued warrants to two lead
investors. At December 31, 2006, 2,181,120 shares of
warrants to purchase the Company’s common stock remain
outstanding at an exercise price of $100 per share.
Predecessor
During 2005, the Company relocated its main office location to
Bellevue, Washington. Prior to August 2, 2004, the Company
was obligated under a real estate lease with General America
Corporation, a subsidiary of Safeco, through July 31, 2005.
The current minimum aggregate rental commitment under this lease
obligation was $5,281 at December 31, 2004. Total
related-party rent expense for all facilities charged to
operations was $5,408 for the seven months ended August 1,
2004.
Prior to August 2, 2004, Safeco and its affiliates provided
the Company with personnel, property, and facilities in carrying
out certain of its corporate functions. Safeco annually
determined allocation factors based on headcount, time studies,
actual usage, or other relevant allocation bases in order to
allocate expenses for these services and facilities. These
expenses were included in net investment income and other
operating expenses within the Company’s Consolidated
Statements of Operations. Safeco charged the Company expenses of
$25,167 for the seven months ended August 1, 2004. These
expenses included charges for corporate overhead, data
processing systems, payroll, and other miscellaneous charges.
On July 30, 2004, as part of the purchase of Safeco’s
Life & Investment companies, $7,703 of fixed assets
and software were transferred to the Company and reflected as a
capital contribution. The remaining $1,131 of the total $8,834
was a cash contribution.
| 20. | Segment Information |
The Company provides a broad range of products and services that
include group and individual insurance products, pension
products, annuities, and investment advisory services. These
operations are managed separately as five reportable segments
based on product groupings: Group, Income Annuities, Retirement
Services, Individual, and Other:
| • | Group’s principal product is stop-loss medical insurance sold to employers with self-insured medical plans. Also included in this segment are group life, accidental death and dismemberment insurance, and disability products. | |
| • | Retirement Services’ products are primarily fixed and variable deferred annuities (both qualified and non-qualified), tax-sheltered annuities (marketed to teachers and not-for-profit organizations), and corporate retirement funds. | |
| • | Income Annuities’ principal products are the structured settlement annuities that are sold to fund third-party personal injury settlements, providing a reliable income stream to the injured party and immediate annuities purchased to fund income after retirement. | |
| • | Individual’s products include term, universal and variable universal life, and bank-owned life insurance. | |
| • | Other includes Symetra Financial Corporation (the holding company), inter-segment elimination entries, and various non-insurance companies. | |
| • | Discontinued operations are comprised of the discontinued mutual fund businesses (see Notes 1 and 15). |
The accounting policies of the reportable segments are the same
as those described in the summary of significant accounting
policies (Note 2).
The Company allocates capital and related investment income to
each segment using a risk-based capital formula. The Company
evaluates its results based upon segment operating income, GAAP
and non-GAAP financial measure that excludes net realized
investment gains (losses). Management believes the presentation
F-38
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
of segment pretax operating income enhances the understanding of
its results of operations by highlighting earnings attributable
to the normal recurring operations of the business.
The following tables present selected financial information by
segment and reconciles to segment income before income taxes
operating earnings to amounts reported in the Consolidated
Statements of Operations:
| Year Ended December 31, 2006 | ||||||||||||||||||||||||
|
Retirement |
Income |
|||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Total | |||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||
|
Premiums
|
$ | 387,231 | $ | 130 | $ | — | $ | 138,296 | $ | — | $ | 525,657 | ||||||||||||
|
Net investment income
|
18,030 | 269,821 | 439,001 | 232,759 | 25,316 | 984,927 | ||||||||||||||||||
|
Other revenue
|
10,195 | 22,831 | 797 | 12,939 | 9,410 | 56,172 | ||||||||||||||||||
|
Net realized investment gains (losses)
|
(66 | ) | (17,061 | ) | 16,798 | (3,807 | ) | 5,816 | 1,680 | |||||||||||||||
|
Total revenues
|
415,390 | 275,721 | 456,596 | 380,187 | 40,542 | 1,568,436 | ||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||
|
Policyholder benefits and claims
|
230,753 | (16,501 | ) | — | 50,000 | — | 264,252 | |||||||||||||||||
|
Interest credited
|
— | 186,232 | 371,786 | 208,180 | (327 | ) | 765,871 | |||||||||||||||||
|
Other underwriting and operating expenses
|
105,742 | 61,738 | 21,591 | 57,370 | 14,100 | 260,541 | ||||||||||||||||||
|
Interest expense
|
— | — | — | — | 19,155 | 19,155 | ||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
10,882 | 1,081 | 580 | 2,046 | — | 14,589 | ||||||||||||||||||
|
Total benefits and expenses
|
347,377 | 232,550 | 393,957 | 317,596 | 32,928 | 1,324,408 | ||||||||||||||||||
|
Segment pre-tax income
|
68,013 | 43,171 | 62,639 | 62,591 | 7,614 | 244,028 | ||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
(66 | ) | (17,061 | ) | 16,798 | (3,807 | ) | 5,816 | 1,680 | |||||||||||||||
|
Segment pre-tax operating income
|
$ | 68,079 | $ | 60,232 | $ | 45,841 | $ | 66,398 | $ | 1,798 | $ | 242,348 | ||||||||||||
|
Assets:
|
||||||||||||||||||||||||
|
Total investments
|
$ | 168,743 | $ | 4,443,302 | $ | 6,967,906 | $ | 4,074,927 | $ | 1,650,468 | $ | 17,305,346 | ||||||||||||
|
Separate account assets
|
— | 1,115,519 | — | 118,410 | — | 1,233,929 | ||||||||||||||||||
|
Total assets
|
300,084 | 5,904,981 | 7,273,385 | 4,601,697 | 2,034,470 | 20,114,617 | ||||||||||||||||||
F-39
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Year Ended December 31, 2005 | ||||||||||||||||||||||||||||||||
|
Retirement |
Continuing |
Discontinued |
||||||||||||||||||||||||||||||
| Group | Services | Income Annuities | Individual | Other | Operations | Operations | Total | |||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||||||||||
|
Premiums
|
$ | 438,276 | $ | 121 | $ | — | $ | 137,062 | $ | — | $ | 575,459 | $ | — | $ | 575,459 | ||||||||||||||||
|
Net investment income
|
19,270 | 292,801 | 441,438 | 222,613 | 17,926 | 994,048 | 172 | 994,220 | ||||||||||||||||||||||||
|
Other revenue
|
11,801 | 23,223 | 515 | 13,968 | 9,052 | 58,559 | — | 58,559 | ||||||||||||||||||||||||
|
Net realized investment gains (losses)
|
(74 | ) | (17,122 | ) | 17,382 | 1,344 | 12,610 | 14,140 | 2,254 | 16,394 | ||||||||||||||||||||||
|
Total revenues
|
469,273 | 299,023 | 459,335 | 374,987 | 39,588 | 1,642,206 | 2,426 | 1,644,632 | ||||||||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||||||||||
|
Policyholder benefits and claims
|
296,036 | (25,697 | ) | — | 57,088 | — | 327,427 | — | 327,427 | |||||||||||||||||||||||
|
Interest credited
|
— | 211,538 | 392,534 | 206,856 | — | 810,928 | — | 810,928 | ||||||||||||||||||||||||
|
Other underwriting and operating expenses
|
115,342 | 62,636 | 19,383 | 61,374 | 14,512 | 273,247 | 845 | 274,092 | ||||||||||||||||||||||||
|
Interest expense
|
— | — | — | — | 12,388 | 12,388 | — | 12,388 | ||||||||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
10,478 | 94 | 272 | 1,017 | — | 11,861 | — | 11,861 | ||||||||||||||||||||||||
|
Total benefits and expenses
|
421,856 | 248,571 | 412,189 | 326,335 | 26,900 | 1,435,851 | 845 | 1,436,696 | ||||||||||||||||||||||||
|
Segment pre-tax income
|
47,417 | 50,452 | 47,146 | 48,652 | 12,688 | 206,355 | 1,581 | 207,936 | ||||||||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
(74 | ) | (17,122 | ) | 17,382 | 1,344 | 12,610 | 14,140 | 2,254 | 16,394 | ||||||||||||||||||||||
|
Segment pre-tax operating income (loss)
|
$ | 47,491 | $ | 67,574 | $ | 29,764 | $ | 47,308 | $ | 78 | $ | 192,215 | $ | (673 | ) | $ | 191,542 | |||||||||||||||
|
Assets:
|
||||||||||||||||||||||||||||||||
|
Total investments
|
$ | 137,826 | $ | 5,096,016 | $ | 7,276,295 | $ | 4,130,472 | $ | 1,692,164 | $ | 18,332,773 | $ | — | $ | 18,332,773 | ||||||||||||||||
|
Separate account assets
|
— | 1,074,463 | — | 114,357 | — | 1,188,820 | — | 1,188,820 | ||||||||||||||||||||||||
|
Total assets
|
242,751 | 6,526,179 | $ | 7,451,961 | 4,638,575 | 2,120,595 | 20,980,061 | — | 20,980,061 | |||||||||||||||||||||||
F-40
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Period from August 2, 2004 through December 31, 2004 | ||||||||||||||||||||||||||||||||
|
Retirement |
Income |
Continuing |
Discontinued |
|||||||||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Operations | Operations | Total | |||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||||||||||
|
Premiums
|
$ | 207,396 | $ | 105 | $ | — | $ | 55,694 | $ | — | $ | 263,195 | $ | — | $ | 263,195 | ||||||||||||||||
|
Net investment income
|
8,764 | 124,188 | 184,074 | 89,229 | 4,865 | 411,120 | 393 | 411,513 | ||||||||||||||||||||||||
|
Other revenue
|
5,621 | 11,480 | 207 | 6,224 | 3,518 | 27,050 | 413 | 27,463 | ||||||||||||||||||||||||
|
Net realized investment gains (losses)
|
(1 | ) | 4,166 | (3,277 | ) | 2,809 | 3,306 | 7,003 | 126 | 7,129 | ||||||||||||||||||||||
|
Total revenues
|
221,780 | 139,939 | 181,004 | 153,956 | 11,689 | 708,368 | 932 | 709,300 | ||||||||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||||||||||
|
Policyholder benefits and claims
|
124,008 | (15,849 | ) | — | 19,340 | — | 127,499 | — | 127,499 | |||||||||||||||||||||||
|
Interest credited
|
— | 109,211 | 164,100 | 86,885 | — | 360,196 | — | 360,196 | ||||||||||||||||||||||||
|
Other underwriting and operating expenses
|
54,410 | 26,682 | 7,226 | 28,566 | 6,358 | 123,242 | 4,678 | 127,920 | ||||||||||||||||||||||||
|
Fair Value of warrants issued to investors
|
— | — | — | — | 101,531 | 101,531 | — | 101,531 | ||||||||||||||||||||||||
|
Interest expense
|
— | — | — | — | 3,466 | 3,466 | — | 3,466 | ||||||||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
1,352 | 236 | — | 38 | — | 1,626 | — | 1,626 | ||||||||||||||||||||||||
|
Total benefits and expenses
|
179,770 | 120,280 | 171,326 | 134,829 | 111,355 | 717,560 | 4,678 | 722,238 | ||||||||||||||||||||||||
|
Segment pre-tax income
|
42,010 | 19,659 | 9,678 | 19,127 | (99,666 | ) | (9,192 | ) | (3,746 | ) | (12,938 | ) | ||||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
(1 | ) | 4,166 | (3,277 | ) | 2,809 | 3,306 | 7,003 | 126 | 7,129 | ||||||||||||||||||||||
|
Segment pre-tax operating income (loss)
|
$ | 42,011 | $ | 15,493 | $ | 12,955 | $ | 16,318 | $ | (102,972 | ) | $ | (16,195 | ) | $ | (3,872 | ) | $ | (20,067 | ) | ||||||||||||
|
Assets:
|
||||||||||||||||||||||||||||||||
|
Total investments
|
$ | 534,402 | $ | 6,724,045 | $ | 7,752,785 | $ | 4,271,000 | $ | (37,471 | ) | $ | 19,244,761 | $ | 32,290 | $ | 19,277,051 | |||||||||||||||
|
Separate account assets
|
— | 1,114,843 | — | 113,517 | — | 1,228,360 | — | 1,228,360 | ||||||||||||||||||||||||
|
Total assets
|
639,582 | 8,247,675 | 7,885,813 | 4,737,864 | 606,492 | 22,117,426 | 64,556 | 22,181,982 | ||||||||||||||||||||||||
F-41
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Period from January 1, 2004 through August 1, 2004 — Predecessor | ||||||||||||||||||||||||||||||||
|
Retirement |
Income |
Continuing |
Discontinued |
|||||||||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Operations | Operations | Total | |||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||||||||||
|
Premiums
|
$ | 293,213 | $ | 92 | $ | — | $ | 64,620 | $ | — | $ | 357,925 | $ | — | $ | 357,925 | ||||||||||||||||
|
Net investment income
|
13,632 | 225,008 | 290,328 | 139,063 | 25,671 | 693,702 | 754 | 694,456 | ||||||||||||||||||||||||
|
Other revenue
|
8,323 | 15,755 | 276 | 14,774 | 4,815 | 43,943 | 13,729 | 57,672 | ||||||||||||||||||||||||
|
Net realized investment gains
|
143 | 2,372 | 12,751 | 5,225 | 14,401 | 34,892 | 125 | 35,017 | ||||||||||||||||||||||||
|
Total revenues
|
315,311 | 243,227 | 303,355 | 223,682 | 44,887 | 1,130,462 | 14,608 | 1,145,070 | ||||||||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||||||||||
|
Policyholder benefits and claims
|
196,468 | 172 | — | 26,938 | — | 223,578 | — | 223,578 | ||||||||||||||||||||||||
|
Interest credited
|
— | 155,403 | 274,800 | 126,230 | — | 556,433 | — | 556,433 | ||||||||||||||||||||||||
|
Other underwriting and operating expenses
|
78,727 | 36,789 | 9,522 | 36,059 | 21,237 | 182,334 | 11,077 | 193,411 | ||||||||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
10,537 | 16,313 | — | 7,314 | — | 34,164 | — | 34,164 | ||||||||||||||||||||||||
|
Intangibles and goodwill amortization
|
794 | 801 | — | 1,746 | 1,588 | 4,929 | — | 4,929 | ||||||||||||||||||||||||
|
Total benefits and expenses
|
286,526 | 209,478 | 284,322 | 198,287 | 22,825 | 1,001,438 | 11,077 | 1,012,515 | ||||||||||||||||||||||||
|
Segment pre-tax income
|
28,785 | 33,749 | 19,033 | 25,395 | 22,062 | 129,024 | 3,531 | 132,555 | ||||||||||||||||||||||||
|
Less: Net realized investment gains
|
143 | 2,372 | 12,751 | 5,225 | 14,401 | 34,892 | 125 | 35,017 | ||||||||||||||||||||||||
|
Segment pre-tax operating income
|
$ | 28,642 | $ | 31,377 | $ | 6,282 | $ | 20,170 | $ | 7,661 | $ | 94,132 | $ | 3,406 | $ | 97,538 | ||||||||||||||||
| 21. | Earnings Per Share |
Basic earnings per share represent the amount of earnings for
the period available to each share of common stock outstanding
during the reporting period. Diluted earnings per share
represent the amount of earnings for the period available to
each share of common stock outstanding during the reporting
period adjusted for the potential issuance of common stock, if
dilutive. All outstanding warrants are considered participating
securities or potential common stock securities that are
included in weighted average common shares outstanding for
purposes of computing basic earnings per share using the
two-class method. The warrants are considered participating
securities or potential common stock securities because the
terms of the warrants entitle the holders to receive any
dividends declared on the common stock concurrently with the
holders of outstanding shares of common stock, without regard to
whether the warrants are exercised prior to the record date for
any such dividend.
F-42
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table presents information relating to the
Company’s calculations of basic and diluted earnings per
share (EPS) for the years ended December 31:
| December 31, 2006 | December 31, 2005 | |||||||||||||||||||||||
|
Basic |
Diluted |
Basic |
Diluted |
|||||||||||||||||||||
| Amount | EPS | EPS | Amount | EPS | EPS | |||||||||||||||||||
| (In thousands, except for per share data) | ||||||||||||||||||||||||
|
Income from continuing operations
|
$ | 159,530 | $ | 12.43 | $ | 12.43 | $ | 144,442 | $ | 11.26 | $ | 11.26 | ||||||||||||
|
Discontinued operations, net of taxes
|
— | — | — | 1,045 | 0.08 | 0.08 | ||||||||||||||||||
|
Net income
|
$ | 159,530 | $ | 12.43 | $ | 12.43 | $ | 145,487 | $ | 11.34 | $ | 11.34 | ||||||||||||
|
Common stock:
|
||||||||||||||||||||||||
|
Distributed
|
$ | 83,000 | $ | 7.79 | $ | 7.79 | $ | — | $ | — | $ | — | ||||||||||||
|
Undistributed
|
49,410 | 4.64 | 4.64 | 120,754 | 11.34 | 11.34 | ||||||||||||||||||
|
Total
|
$ | 132,410 | $ | 12.43 | $ | 12.43 | $ | 120,754 | $ | 11.34 | $ | 11.34 | ||||||||||||
|
Warrants:
|
||||||||||||||||||||||||
|
Distributed
|
$ | 17,000 | $ | 7.79 | $ | 7.79 | $ | — | $ | — | $ | — | ||||||||||||
|
Undistributed
|
10,120 | 4.64 | 4.64 | 24,733 | 11.34 | 11.34 | ||||||||||||||||||
|
Total
|
$ | 27,120 | $ | 12.43 | $ | 12.43 | $ | 24,733 | $ | 11.34 | $ | 11.34 | ||||||||||||
| Basic | Diluted | Basic | Diluted | |||||||||||||||||
|
Weighted average common shares outstanding
|
||||||||||||||||||||
|
Common stock
|
10,649.0 | 10,649.0 | 10,649.0 | 10,649.0 | ||||||||||||||||
|
Warrants
|
2,181.0 | 2,181.0 | 2,181.0 | 2,181.0 | ||||||||||||||||
|
Total shares
|
12,830.0 | 12,830.0 | 12,830.0 | 12,830.0 | ||||||||||||||||
F-43
Table of Contents
|
June 30, |
December 31, |
|||||||
| 2007 | 2006 | |||||||
| (Unaudited) | ||||||||
| (In millions) | ||||||||
|
ASSETS
|
||||||||
|
Investments:
|
||||||||
|
Available-for-sale securities:
|
||||||||
|
Fixed maturities, at fair value
|
$ | 15,440.8 | $ | 16,049.9 | ||||
|
Marketable equity securities, at fair value
|
209.9 | 201.7 | ||||||
|
Mortgage loans
|
789.6 | 794.3 | ||||||
|
Policy loans
|
77.8 | 79.2 | ||||||
|
Short-term investments
|
5.3 | 48.9 | ||||||
|
Investments in limited partnerships
|
159.8 | 112.6 | ||||||
|
Other invested assets
|
11.8 | 18.7 | ||||||
|
Total investments
|
16,695.0 | 17,305.3 | ||||||
|
Cash and cash equivalents
|
362.4 | 253.2 | ||||||
|
Restricted funds
|
10.4 | — | ||||||
|
Accrued investment income
|
196.7 | 206.7 | ||||||
|
Accounts receivable and other receivables
|
147.9 | 82.0 | ||||||
|
Reinsurance recoverables
|
249.1 | 238.8 | ||||||
|
Deferred policy acquisition costs
|
107.1 | 88.2 | ||||||
|
Goodwill
|
20.9 | 3.7 | ||||||
|
Deferred income tax assets, net
|
313.7 | 219.1 | ||||||
|
Property, equipment, and leasehold improvements, net
|
26.2 | 28.1 | ||||||
|
Other assets
|
28.1 | 16.3 | ||||||
|
Securities lending collateral
|
419.8 | 439.3 | ||||||
|
Separate account assets
|
1,268.5 | 1,233.9 | ||||||
|
Total assets
|
$ | 19,845.8 | $ | 20,114.6 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Funds held under deposit contracts
|
$ | 15,655.3 | $ | 15,986.2 | ||||
|
Future policy benefits
|
381.8 | 376.4 | ||||||
|
Policy and contract claims
|
123.1 | 119.5 | ||||||
|
Unearned premiums
|
12.0 | 11.7 | ||||||
|
Other policyholders’ funds
|
79.6 | 46.4 | ||||||
|
Notes payable
|
298.8 | 298.7 | ||||||
|
Current income taxes payable
|
8.5 | 2.6 | ||||||
|
Other liabilities
|
350.8 | 272.6 | ||||||
|
Securities lending payable
|
419.8 | 439.3 | ||||||
|
Separate account liabilities
|
1,268.5 | 1,233.9 | ||||||
|
Total liabilities
|
18,598.2 | 18,787.3 | ||||||
|
Commitments and Contingencies
|
||||||||
|
Capital stock
|
0.1 | 0.1 | ||||||
|
Additional paid-in capital
|
1,166.3 | 1,166.3 | ||||||
|
Retained earnings
|
260.1 | 161.4 | ||||||
|
Accumulated other comprehensive income (loss), net of taxes
|
(178.9 | ) | (0.5 | ) | ||||
|
Total stockholders’ equity
|
1,247.6 | 1,327.3 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 19,845.8 | $ | 20,114.6 | ||||
F-44
Table of Contents
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| (In millions, except for per share data) | ||||||||||||||||
|
Revenues:
|
||||||||||||||||
|
Premiums
|
$ | 131.3 | $ | 132.6 | $ | 265.0 | $ | 269.2 | ||||||||
|
Net investment income
|
246.5 | 244.0 | 490.9 | 490.5 | ||||||||||||
|
Other revenues
|
17.4 | 14.0 | 32.7 | 29.7 | ||||||||||||
|
Net realized investment gains (losses)
|
10.6 | (5.2 | ) | 24.5 | (0.5 | ) | ||||||||||
|
Total revenues
|
405.8 | 385.4 | 813.1 | 788.9 | ||||||||||||
|
Benefits and expenses:
|
||||||||||||||||
|
Policyholder benefits and claims
|
69.4 | 63.4 | 136.1 | 147.6 | ||||||||||||
|
Interest credited
|
189.1 | 190.1 | 374.1 | 382.2 | ||||||||||||
|
Other underwriting and operating expenses
|
70.5 | 65.7 | 141.2 | 129.8 | ||||||||||||
|
Interest expense
|
4.6 | 4.6 | 9.3 | 9.8 | ||||||||||||
|
Amortization of deferred policy acquisition costs
|
5.0 | 4.0 | 9.4 | 7.6 | ||||||||||||
|
Total benefits and expenses
|
338.6 | 327.8 | 670.1 | 677.0 | ||||||||||||
|
Income before taxes
|
67.2 | 57.6 | 143.0 | 111.9 | ||||||||||||
|
Provision for income taxes:
|
||||||||||||||||
|
Current
|
29.8 | 68.0 | 49.0 | 59.4 | ||||||||||||
|
Deferred
|
(8.1 | ) | (46.7 | ) | (2.2 | ) | (20.2 | ) | ||||||||
|
Total provision for income taxes
|
21.7 | 21.3 | 46.8 | 39.2 | ||||||||||||
|
Net income
|
$ | 45.5 | $ | 36.3 | $ | 96.2 | $ | 72.7 | ||||||||
|
Net income per common share:
|
||||||||||||||||
|
Basic
|
$ | 3.54 | $ | 2.83 | $ | 7.50 | $ | 5.66 | ||||||||
|
Diluted
|
$ | 3.54 | $ | 2.83 | $ | 7.50 | $ | 5.66 | ||||||||
|
Weighted average number of common shares
|
||||||||||||||||
|
outstanding (in millions):
|
||||||||||||||||
|
Basic
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||
|
Diluted
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||
F-45
Table of Contents
|
Accumulated |
||||||||||||||||||||
|
Other |
||||||||||||||||||||
|
Additional |
Comprehensive |
Total |
||||||||||||||||||
|
Capital |
Paid-in |
Retained |
Income (loss), |
Stockholders’ |
||||||||||||||||
| Stock | Capital | Earnings | Net of Taxes | Equity | ||||||||||||||||
| (In millions) | ||||||||||||||||||||
|
Balances at January 1, 2006
|
$ | 0.1 | $ | 1,166.3 | $ | 101.9 | $ | 136.6 | $ | 1,404.9 | ||||||||||
|
Net income
|
— | — | 72.7 | — | 72.7 | |||||||||||||||
|
Other comprehensive income (loss), after tax
|
— | — | — | (485.8 | ) | (485.8 | ) | |||||||||||||
|
Balances at June 30, 2006
|
$ | 0.1 | $ | 1,166.3 | $ | 174.6 | $ | (349.2 | ) | $ | 991.8 | |||||||||
|
Balances at January 1, 2007
|
$ | 0.1 | $ | 1,166.3 | $ | 161.4 | $ | (0.5 | ) | $ | 1,327.3 | |||||||||
|
Net income
|
— | — | 96.2 | — | 96.2 | |||||||||||||||
|
Other comprehensive income (loss), after tax
|
— | — | — | (175.9 | ) | (175.9 | ) | |||||||||||||
|
Cumulative effect adjustment upon adoption of SFAS No. 155
|
— | — | 2.5 | (2.5 | ) | — | ||||||||||||||
|
Balances at June 30, 2007
|
$ | 0.1 | $ | 1,166.3 | $ | 260.1 | $ | (178.9 | ) | $ | 1,247.6 | |||||||||
F-46
Table of Contents
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| (In millions) | ||||||||||||||||
|
Net income
|
$ | 45.5 | $ | 36.3 | $ | 96.2 | $ | 72.7 | ||||||||
|
Other comprehensive income (loss), net of taxes:
|
||||||||||||||||
|
Changes in unrealized gains and losses on available-for-sales
securities
|
(208.0 | ) | (194.6 | ) | (164.3 | ) | (488.9 | ) | ||||||||
|
Reclassification adjustment for net realized investment gains
included in net income
|
(6.6 | ) | 1.5 | (16.2 | ) | (0.4 | ) | |||||||||
|
Derivatives qualifying as cash flow hedges
|
— | — | (0.1 | ) | 3.1 | |||||||||||
|
Adjustment for deferred policy acquisition costs valuation
allowance
|
1.0 | 0.1 | 2.2 | 0.4 | ||||||||||||
|
Other comprehensive income (loss)
|
(213.6 | ) | (193.0 | ) | (178.4 | ) | (485.8 | ) | ||||||||
|
Comprehensive income (loss)
|
$ | (168.1 | ) | $ | (156.7 | ) | $ | (82.2 | ) | $ | (413.1 | ) | ||||
F-47
Table of Contents
| Six Months Ended June 30, | ||||||||
| 2007 | 2006 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| (In millions) | ||||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$ | 96.2 | $ | 72.7 | ||||
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
|
Net realized investment (gains) losses
|
(24.5 | ) | 0.5 | |||||
|
Accretion of fixed maturity investments and mortgage loans
|
32.3 | 36.2 | ||||||
|
Accrued interest on accrual bonds
|
(20.2 | ) | (21.9 | ) | ||||
|
Amortization and depreciation
|
6.2 | 4.9 | ||||||
|
Deferred income tax provision
|
(2.2 | ) | (20.2 | ) | ||||
|
Interest credited on deposit contracts
|
374.1 | 382.2 | ||||||
|
Mortality and expense charges and administrative fees
|
(46.7 | ) | (45.4 | ) | ||||
|
Other
|
0.4 | (0.2 | ) | |||||
|
Changes in:
|
||||||||
|
Accrued investment income
|
10.0 | 4.2 | ||||||
|
Deferred policy acquisition costs
|
(15.4 | ) | (17.6 | ) | ||||
|
Other receivables
|
7.4 | 7.4 | ||||||
|
Policy and contract claims
|
3.6 | (7.6 | ) | |||||
|
Future policy benefits
|
5.4 | 2.9 | ||||||
|
Unearned premiums
|
0.3 | (0.6 | ) | |||||
|
Accrued income taxes
|
5.9 | 47.6 | ||||||
|
Other assets and liabilities
|
(95.1 | ) | (13.7 | ) | ||||
|
Other policyholder funds
|
3.8 | (8.4 | ) | |||||
|
Total adjustments
|
245.3 | 350.3 | ||||||
|
Net cash provided by operating activities
|
341.5 | 423.0 | ||||||
|
Cash flows from investing activities:
|
||||||||
|
Purchases of:
|
||||||||
|
Fixed maturities
|
(1,244.7 | ) | (959.6 | ) | ||||
|
Equity securities
|
(30.0 | ) | (39.1 | ) | ||||
|
Other invested assets and investments in limited partnerships
|
(30.6 | ) | (0.7 | ) | ||||
|
Issuance of mortgage loans
|
(40.6 | ) | (75.2 | ) | ||||
|
Issuance of policy loans
|
(8.4 | ) | (10.6 | ) | ||||
|
Maturities, calls, paydowns, other
|
541.5 | 400.9 | ||||||
|
Purchase of subsidiary, net of cash received
|
(21.9 | ) | — | |||||
|
Other assets
|
(0.2 | ) | (0.3 | ) | ||||
|
Sales of:
|
||||||||
|
Fixed maturities
|
1,094.2 | 995.1 | ||||||
|
Equity securities
|
36.1 | 23.8 | ||||||
|
Other invested assets and investments in limited partnerships
|
— | 0.9 | ||||||
|
Repayment of mortgage loans
|
43.6 | 50.5 | ||||||
|
Repayment of policy loans
|
9.2 | 10.0 | ||||||
|
Purchase of property, equipment and leasehold improvements
|
(1.6 | ) | (2.2 | ) | ||||
|
Net decrease in short-term investments
|
43.6 | (1.3 | ) | |||||
|
Net cash provided by investing activities
|
390.2 | 392.2 | ||||||
|
Cash flows from financing activities:
|
||||||||
|
Policyholder account balances:
|
||||||||
|
Deposits
|
318.7 | 294.2 | ||||||
|
Withdrawals
|
(941.2 | ) | (1,003.9 | ) | ||||
|
Repayments of notes payable
|
— | 298.7 | ||||||
|
Proceeds from notes payable
|
— | (300.0 | ) | |||||
|
Other, net
|
— | 3.1 | ||||||
|
Net cash used in financing activities
|
(622.5 | ) | (707.9 | ) | ||||
|
Net decrease in cash and cash equivalents
|
109.2 | 107.3 | ||||||
|
Cash and cash equivalents at the beginning of the period
|
253.2 | 111.0 | ||||||
|
Cash and cash equivalents at the end of the period
|
$ | 362.4 | $ | 218.3 | ||||
F-48
Table of Contents
| 1. | Nature of Operations and Summary of Significant Accounting Policies |
Organization
and Description of Business
The accompanying interim financial statements include on a
consolidated basis the accounts of Symetra Financial Corporation
and its subsidiaries which are referred to as “Symetra
Financial” or “the Company”. Symetra Financial
Corporation is a Delaware corporation privately owned by an
investor group led by White Mountains Insurance Group, Ltd. and
Berkshire Hathaway Inc.
Symetra Financial Corporation’s subsidiaries offer group
and individual insurance products and retirement products,
including annuities marketed through professional agents and
distributors in all states and the District of Columbia. The
Company’s principal products include medical stop-loss
insurance, fixed deferred annuities, variable annuities, single
premium immediate annuities, and individual life insurance.
Basis
of presentation
The Consolidated Financial Statements have been prepared in
conformity with U.S. generally accepted accounting
principles (GAAP). The preparation of financial statements in
conformity with GAAP requires the Company to make estimates and
assumptions that may affect the amounts reported in the
Consolidated Financial Statements and accompanying notes. Actual
results could differ from those estimates.
The most significant estimates include those used in determining
reserves for future policy benefits, deferred policy acquisition
costs (DAC), valuation of investments and evaluation of
other-than-temporary impairments, income taxes, and
contingencies. All significant intercompany transactions and
balances have been eliminated in the Consolidated Financial
Statements.
Certain reclassifications have been made to the prior year
financial information for it to conform to the current period
presentation.
Recently
Adopted Changes in Accounting Principles
FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes — An Interpretation of FASB Statement
No. 109
In June 2006, the FASB issued FASB Interpretation (FIN)
No. 48, Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109, Accounting
for Income Taxes. FIN No. 48 clarifies the
accounting for uncertainty in income taxes recognized in an
enterprise’s financial statements in accordance with
SFAS No. 109. FIN No. 48 prescribes a
recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return.
FIN No. 48 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim
periods, disclosure, and transition. FIN No. 48 is
effective for fiscal years beginning after December 15,
2006. The Company adopted FIN No. 48 as of
January 1, 2007, as required.
Upon adoption of FIN No. 48, the Company did not
recognize an increase in the liability for unrecognized tax
benefits or an adjustment to retained earnings.
The Company includes penalties and interest accrued related to
unrecognized tax benefits in the calculation of income tax
expense. During the three and six month periods ended
June 30, 2007 and 2006, amounts recognized for interest and
penalties and amounts accrued for the payment of interest and
penalties were not material.
The Company files income tax returns in the U.S. Federal
and various state jurisdictions. The Company’s Federal
income tax returns have been examined and closing agreements
have been executed with the Internal Revenue Service through the
tax period ended December 31, 2003. Final computations are
being reviewed by the Joint Committee on Taxation. The Internal
Revenue Service has commenced an audit of our returns for tax
F-49
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
years ended July 31, 2004, December 31, 2004 and
December 31, 2005. To date, no significant tax issues or
proposed adjustments have been raised by the examiners. The
Company is not currently subject to any state income tax
examinations.
SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments
In February 2006, the FASB issued SFAS No. 155,
Accounting for Certain Hybrid Financial Instruments.
SFAS No. 155 amends certain paragraphs of
SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities, and SFAS No. 140,
Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities. SFAS No. 155
also resolves issues addressed in SFAS No. 133
Implementation Issue No. D1, Application of Statement
133 to Beneficial Interests in Securitized Financial Assets.
In summary, SFAS No. 155 eliminates the requirement to
bifurcate financial instruments with embedded derivatives if the
holder of the instrument elects to account for the entire
instrument on a fair value basis. Changes in fair value are
recorded as realized gains. The fair value election may be
applied upon adoption of the statement for hybrid instruments
that had been bifurcated under SFAS 133 prior to adoption.
SFAS No. 155 is effective for all financial
instruments acquired or issued after the beginning of an
entity’s first fiscal year that begins after
September 15, 2006. Provisions of SFAS No. 155
may be applied to instruments that an entity holds at the date
of adoption on an
instrument-by-instrument
basis.
The Company adopted SFAS No. 155 as of January 1,
2007, as required. Prior to adoption, the Company bifurcated the
equity conversion option in its investment in convertible bonds.
Changes in fair value of the host instrument, the convertible
bonds, were recorded as unrealized gains (losses) on investments
while changes in the fair value of the equity conversion option
were recorded as realized investment gains (losses). At
December 31, 2006, the Company recorded $68.3 million
related to the fair value of host instrument in fixed maturity
investments and $8.3 million related to the fair value of
the equity conversion options in other investments. Upon
adoption of SFAS No. 155, the Company recorded an
adjustment of $2.5 million, net of tax, to reclassify net
unrealized gains on investments to beginning retained earnings
to reflect the cumulative effective of adoption. At
June 30, 2007 the Company recorded $89.3 million of
convertible bonds recorded in fixed maturities, and at
December 31, 2006, the Company had $76.6 million.
American
Institute of Certified Public Accountants (AICPA) Statement of
Position (SOP)
05-1,
Accounting by Insurance Enterprises for Deferred Acquisition
Costs in Connection with Modifications or Exchanges of Insurance
Contracts
In September 2005, the AICPA issued
SOP 05-1,
Accounting by Insurance Enterprises for Deferred Acquisition
Costs in Connection with Modifications or Exchanges of Insurance
Contracts.
SOP 05-1
provides guidance on accounting by insurance enterprises for
deferred acquisition costs on internal replacements of insurance
and investment contracts other than those specifically described
in SFAS No. 97, Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and
For Realized Gains and Losses from the Sale of Investments.
SOP 05-1
defines an internal replacement as a modification in product
benefits, features, rights, or coverages that occurs by the
exchange of a contract for a new contract, or by amendment,
endorsement, or rider to a contract, or by the election of a
feature or coverage within a contract. Under
SOP 05-1,
modifications that result in a substantially unchanged contract
will be accounted for as a continuation of the replaced
contract. A replacement contract that is substantially changed
will be accounted for as an extinguishment of the replaced
contract, resulting in a release of unamortized DAC, unearned
revenue, and deferred sales inducements associated with the
replaced contract.
The provisions of
SOP 05-1
are effective for fiscal years beginning after December 15,
2006. The Company adopted
SOP 05-1
effective on January 1, 2007 as required. The adoption of
SOP 05-1
did not have a material impact on the Company’s financial
position.
F-50
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Recent
Accounting Pronouncements
Fair
Value Measurements
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements. The Statement provides a revised
definition of fair value and guidance on the methods used to
measure fair value. The Statement also expands financial
statement disclosure requirements for fair value information.
The Statement establishes a fair value hierarchy that
distinguishes between assumptions based on market data from
independent sources (“observable inputs”) and a
reporting entity’s internal assumptions based upon the best
information available when external market data is limited or
unavailable (“unobservable inputs”). The fair value
hierarchy in SFAS No. 157 prioritizes inputs within
three levels: quoted prices in active markets have the highest
priority (Level 1) followed by observable inputs other
than quoted prices (Level 2) and unobservable inputs
having the lowest priority (Level 3). The Statement is
effective for financial statements issued for fiscal years
beginning after November 15, 2007, with earlier application
allowed for entities that have not issued financial statements
in the fiscal year of adoption. The Company has not yet
determined the effect of adoption on its financial statements.
Fair
Value Option
In February 2007, the FASB issued SFAS No. 159, The
Fair Value Option for Financial Assets and Financial
Liabilities. The Statement allows companies to make an
election, on an individual instrument basis, to report financial
assets and liabilities at fair value. The election must be made
at the inception of a transaction and may not be reversed. The
election may also be made for existing financial assets and
liabilities at the time of adoption. Unrealized gains and losses
on assets or liabilities for which the fair value option has
been elected are to be reported in earnings. The Statement
requires additional disclosures for instruments for which the
election has been made, including a description of
management’s reasons for making the election. SFAS 159
is effective as of fiscal years beginning after
November 15, 2007 and is to be adopted prospectively and
concurrent with the adoption of SFAS 157. The Company has
not yet determined the effect of adoption on its financial
condition of results of operations.
| 2. | Investments |
The following tables summarize the Company’s fixed
maturities and marketable equity securities:
| As of June 30, 2007 | ||||||||||||||||
|
Cost or |
Gross |
Gross |
||||||||||||||
|
Amortized |
Unrealized |
Unrealized |
||||||||||||||
| Cost | Gains | Losses | Fair Value | |||||||||||||
| (Amounts in millions) | ||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||
|
U.S. government and agencies
|
$ | 263.6 | $ | 0.2 | $ | (4.7 | ) | $ | 259.1 | |||||||
|
State and political subdivisions
|
501.4 | 1.3 | (8.1 | ) | 494.6 | |||||||||||
|
Foreign government
|
158.0 | 0.2 | (2.2 | ) | 156.0 | |||||||||||
|
Corporate securities
|
10,485.4 | 70.0 | (279.2 | ) | 10,276.2 | |||||||||||
|
Mortgage-backed securities
|
4,351.4 | 6.5 | (103.0 | ) | 4,254.9 | |||||||||||
|
Total fixed maturities
|
15,759.8 | 78.2 | (397.2 | ) | 15,440.8 | |||||||||||
|
Marketable equity securities
|
172.2 | 39.1 | (1.4 | ) | 209.9 | |||||||||||
|
Total
|
$ | 15,932.0 | $ | 117.3 | $ | (398.6 | ) | $ | 15,650.7 | |||||||
F-51
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| As of December 31, 2006 | ||||||||||||||||
|
Cost or |
Gross |
Gross |
||||||||||||||
|
Amortized |
Unrealized |
Unrealized |
Fair |
|||||||||||||
| Cost | Gains | Losses | Value | |||||||||||||
| (Amounts in millions) | ||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||
|
U.S. government and agencies
|
$ | 157.0 | $ | 1.8 | $ | (0.9 | ) | $ | 157.9 | |||||||
|
State and political subdivisions
|
666.1 | 9.3 | (4.5 | ) | 670.9 | |||||||||||
|
Foreign government
|
205.2 | 4.2 | (0.5 | ) | 208.9 | |||||||||||
|
Corporate securities
|
10,670.7 | 164.3 | (168.5 | ) | 10,666.5 | |||||||||||
|
Mortgage-backed securities
|
4,387.6 | 26.7 | (68.6 | ) | 4,345.7 | |||||||||||
|
Total fixed maturities
|
16,086.6 | 206.3 | (243.0 | ) | 16,049.9 | |||||||||||
|
Marketable equity securities
|
171.0 | 32.0 | (1.3 | ) | 201.7 | |||||||||||
|
Total
|
$ | 16,257.6 | $ | 238.3 | $ | (244.3 | ) | $ | 16,251.6 | |||||||
The following table shows the Company’s investments’
gross unrealized losses and fair values, aggregated by
investment category and length of time that individual
securities have been in a continuous unrealized loss position.
| Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
|
Gross |
Gross |
Gross |
||||||||||||||||||||||
|
Unrealized |
Unrealized |
Unrealized |
||||||||||||||||||||||
| Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||
|
June 30, 2007
|
||||||||||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||||||||||
|
U.S. government and agencies
|
$ | 79.3 | $ | (1.7 | ) | $ | 101.2 | $ | (3.0 | ) | $ | 180.5 | $ | (4.7 | ) | |||||||||
|
State and political subdivisions
|
223.7 | (3.9 | ) | 140.6 | (4.2 | ) | 364.3 | (8.1 | ) | |||||||||||||||
|
Foreign government
|
104.5 | (1.6 | ) | 21.5 | (0.6 | ) | 126.0 | (2.2 | ) | |||||||||||||||
|
Corporate securities
|
3,900.1 | (108.5 | ) | 4,150.6 | (170.7 | ) | 8,050.7 | (279.2 | ) | |||||||||||||||
|
Mortgage-backed securities
|
1,708.0 | (32.5 | ) | 2,083.2 | (70.5 | ) | 3,791.2 | (103.0 | ) | |||||||||||||||
|
Total fixed maturities
|
6,015.6 | (148.2 | ) | 6,497.1 | (249.0 | ) | 12,512.7 | (397.2 | ) | |||||||||||||||
|
Marketable equity securities
|
31.4 | (0.3 | ) | 6.6 | (1.1 | ) | 38.0 | (1.4 | ) | |||||||||||||||
|
Total
|
$ | 6,047.0 | $ | (148.5 | ) | $ | 6,503.7 | $ | (250.1 | ) | $ | 12,550.7 | $ | (398.6 | ) | |||||||||
F-52
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
|
Gross |
Gross |
Gross |
||||||||||||||||||||||
|
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|||||||||||||||||||
| Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||
|
December 31, 2006
|
||||||||||||||||||||||||
|
Fixed maturities:
|
||||||||||||||||||||||||
|
U.S. government and agencies
|
$ | 52.7 | (0.7 | ) | $ | 24.7 | $ | (0.2 | ) | $ | 77.4 | $ | (0.9 | ) | ||||||||||
|
State and political subdivisions
|
219.6 | (2.9 | ) | 65.7 | (1.6 | ) | 285.3 | (4.5 | ) | |||||||||||||||
|
Foreign government
|
14.4 | (0.2 | ) | 11.1 | (0.3 | ) | 25.5 | (0.5 | ) | |||||||||||||||
|
Corporate securities
|
2,732.6 | (55.8 | ) | 3,686.9 | (112.7 | ) | 6,419.5 | (168.5 | ) | |||||||||||||||
|
Mortgage-backed securities
|
1,501.5 | (22.8 | ) | 1,888.3 | (45.8 | ) | 3,389.8 | (68.6 | ) | |||||||||||||||
|
Total fixed maturities
|
4,520.8 | (82.4 | ) | 5,676.7 | (160.6 | ) | 10,197.5 | (243.0 | ) | |||||||||||||||
|
Marketable equity securities
|
9.8 | (0.2 | ) | 2.9 | (1.1 | ) | 12.7 | (1.3 | ) | |||||||||||||||
|
Total
|
$ | 4,530.6 | $ | (82.6 | ) | $ | 5,679.6 | $ | (161.7 | ) | $ | 10,210.2 | $ | (244.3 | ) | |||||||||
The Company recorded impairment charges of fixed maturity
investments and equity securities totaling $3.0 million and
$9.2 million for the three months ended June 30, 2007
and 2006, respectively, and impairment charges totaling
$4.9 million and $13.7 million for the six months
ended June 30, 2007 and 2006,
F-53
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
respectively. The following tables summarize the net realized
investment gains before income taxes for the three and six
months ended June 30, 2007 and 2006.
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Amounts in millions) | ||||||||||||||||
|
Gross realized gains on sales:
|
||||||||||||||||
|
Fixed maturities
|
$ | 12.0 | $ | 5.7 | $ | 27.1 | $ | 16.5 | ||||||||
|
Marketable equity securities
|
5.9 | 5.7 | 10.4 | 7.3 | ||||||||||||
|
Total gross realized gains on sales
|
17.9 | 11.4 | 37.5 | 23.8 | ||||||||||||
|
Gross realized losses on sales:
|
||||||||||||||||
|
Fixed maturities
|
(4.3 | ) | (5.2 | ) | (7.9 | ) | (9.4 | ) | ||||||||
|
Marketable equity securities
|
(1.9 | ) | — | (2.0 | ) | — | ||||||||||
|
Total gross realized losses on sales
|
(6.2 | ) | (5.2 | ) | (9.9 | ) | (9.4 | ) | ||||||||
|
Impairments:
|
||||||||||||||||
|
Fixed maturities
|
(3.0 | ) | (9.2 | ) | (4.5 | ) | (12.6 | ) | ||||||||
|
Marketable equity securities
|
— | — | (0.4 | ) | (1.1 | ) | ||||||||||
|
Total impairments
|
(3.0 | ) | (9.2 | ) | (4.9 | ) | (13.7 | ) | ||||||||
|
Other, including gains (losses) on calls and redemptions:
|
||||||||||||||||
|
Fixed maturities
|
1.4 | 0.6 | 2.2 | (0.2 | ) | |||||||||||
|
Marketable equity securities
|
0.1 | (1.0 | ) | 0.1 | (1.0 | ) | ||||||||||
|
Other
|
0.4 | (1.8 | ) | (0.5 | ) | — | ||||||||||
|
Total other
|
1.9 | (2.2 | ) | 1.8 | (1.2 | ) | ||||||||||
|
Net investment gains (losses)
|
$ | 10.6 | $ | (5.2 | ) | $ | 24.5 | $ | (0.5 | ) | ||||||
The following table summarizes the Company’s consolidated
pretax net investment income:
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (Amounts in millions) | ||||||||||||||||
|
Net investment income
|
||||||||||||||||
|
Fixed maturities
|
$ | 226.7 | $ | 231.4 | $ | 455.6 | $ | 464.9 | ||||||||
|
Marketable equity securities
|
2.2 | 3.0 | 3.8 | 5.2 | ||||||||||||
|
Mortgage loans
|
12.5 | 12.5 | 24.5 | 23.8 | ||||||||||||
|
Policy loans
|
1.1 | 1.3 | 2.3 | 2.5 | ||||||||||||
|
Investments in limited partnerships
|
3.2 | (1.2 | ) | 3.8 | 0.7 | |||||||||||
|
Other(1)
|
5.7 | 2.9 | 10.6 | 5.3 | ||||||||||||
|
Total investment income
|
251.4 | 249.9 | 500.6 | 502.4 | ||||||||||||
|
Less investment expense
|
(4.9 | ) | (5.9 | ) | (9.7 | ) | (11.9 | ) | ||||||||
|
Net investment income, pre-tax
|
$ | 246.5 | $ | 244.0 | $ | 490.9 | $ | 490.5 | ||||||||
| (1) | Includes income from investments such as short-term, embedded derivatives, a note receivable and options, and from cash and cash equivalents. |
F-54
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| 3. | Deferred Policy Acquisitions Costs |
Activities impacting deferred policy acquisition costs were as
follows:
|
June 30, |
December 31, |
|||||||
| 2007 | 2006 | |||||||
| (Amounts in millions) | ||||||||
|
Unamortized balance at beginning of period
|
$ | 87.6 | $ | 48.5 | ||||
|
Deferral of acquisition costs
|
24.3 | 52.5 | ||||||
|
Amortization related to investment gains
|
(9.4 | ) | 1.2 | |||||
|
Amortization related to other expenses
|
0.5 | (14.6 | ) | |||||
| 103.0 | 87.6 | |||||||
|
Accumulated effect of net unrealized gains
|
4.1 | 0.6 | ||||||
|
Balance at end of period
|
$ | 107.1 | $ | 88.2 | ||||
| 4. | Segment Information |
The Company provides a broad range of products and services that
include group and individual insurance products, pension
products, annuities, and investment advisory services. These
operations are managed separately as five reportable segments
based on product groupings: Group, Income Annuities, Retirement
Services, Individual, and Other:
| • | Group’s principal product is stop-loss medical insurance sold to employers with self-insured medical plans. Also included in this segment are group life, accidental death and dismemberment insurance, and disability products. | |
| • | Retirement Services’ products are primarily fixed and variable deferred annuities (both qualified and non-qualified), tax-sheltered annuities (marketed to teachers and not-for-profit organizations), and section 457 plans, and group variable annuities for qualified structured retirement plans. We also provide record keeping services for qualified retirement plans invested in mutual funds. | |
| • | Income Annuities’ principal products are the structured settlement annuities that are sold to fund third-party personal injury settlements and single premium immediate annuities purchased to fund income after retirement. | |
| • | Individual’s products include a wide array of term, universal and variable universal life, and bank-owned life insurance. | |
| • | Other includes Symetra Financial Corporation (the holding company), inter-segment elimination entries, various non-insurance businesses managed outside of our operating segments and unallocated income and expenses. |
The accounting policies of the reportable segments are the same
as those described in the summary of significant accounting
policies.
F-55
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following tables present selected financial information by
segment, and reconciles pretax operating earnings to amounts
reported in the Consolidated Statements of Operations.
| Three Months Ended June 30, 2007 | ||||||||||||||||||||||||
|
Retirement |
Income |
|||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Total | |||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||
|
Premiums
|
$ | 96.4 | $ | — | $ | — | $ | 34.9 | $ | — | $ | 131.3 | ||||||||||||
|
Net investment income
|
4.4 | 61.5 | 113.2 | 60.7 | 6.7 | 246.5 | ||||||||||||||||||
|
Other revenues
|
3.8 | 6.2 | 0.3 | 4.0 | 3.1 | 17.4 | ||||||||||||||||||
|
Net realized investment gains (losses)
|
— | (0.8 | ) | 9.4 | (0.3 | ) | 2.3 | 10.6 | ||||||||||||||||
|
Total revenues
|
104.6 | 66.9 | 122.9 | 99.3 | 12.1 | 405.8 | ||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||
|
Policyholder benefits and claims
|
52.8 | (1.9 | ) | — | 18.5 | — | 69.4 | |||||||||||||||||
|
Interest credited
|
— | 42.9 | 92.2 | 54.3 | (0.3 | ) | 189.1 | |||||||||||||||||
|
Other underwriting and operating expenses
|
27.0 | 18.0 | 5.7 | 14.4 | 5.4 | 70.5 | ||||||||||||||||||
|
Interest expense
|
— | — | — | — | 4.6 | 4.6 | ||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
2.0 | 1.7 | 0.3 | 1.0 | — | 5.0 | ||||||||||||||||||
|
Total benefits and expenses
|
81.8 | 60.7 | 98.2 | 88.2 | 9.7 | 338.6 | ||||||||||||||||||
|
Segment income before income taxes
|
22.8 | 6.2 | 24.7 | 11.1 | 2.4 | 67.2 | ||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
— | (0.8 | ) | 9.4 | (0.3 | ) | 2.3 | 10.6 | ||||||||||||||||
|
Segment operating income before income taxes
|
$ | 22.8 | $ | 7.0 | $ | 15.3 | $ | 11.4 | $ | 0.1 | $ | 56.6 | ||||||||||||
|
As of June 30, 2007
|
||||||||||||||||||||||||
|
Total investments
|
$ | 210.2 | $ | 4,048.4 | $ | 6,718.4 | $ | 4,110.0 | $ | 1,608.0 | $ | 16,695.0 | ||||||||||||
|
Separate account assets
|
— | 1,142.8 | — | 125.7 | — | 1,268.5 | ||||||||||||||||||
|
Total assets
|
342.3 | 5,528.9 | 7,269.1 | 4,725.6 | 1,979.9 | 19,845.8 | ||||||||||||||||||
F-56
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Three Months Ended June 30, 2006 | ||||||||||||||||||||||||
|
Retirement |
Income |
|||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Total | |||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||
|
Premiums
|
$ | 97.8 | $ | 0.1 | $ | — | $ | 34.7 | $ | — | $ | 132.6 | ||||||||||||
|
Net investment income
|
4.4 | 67.9 | 108.5 | 57.5 | 5.7 | 244.0 | ||||||||||||||||||
|
Other revenues
|
2.4 | 5.1 | 0.2 | 3.5 | 2.8 | 14.0 | ||||||||||||||||||
|
Net realized investment gains (losses)
|
(0.1 | ) | (11.7 | ) | 6.1 | (1.6 | ) | 2.1 | (5.2 | ) | ||||||||||||||
|
Total revenues
|
104.5 | 61.4 | 114.8 | 94.1 | 10.6 | 385.4 | ||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||
|
Policyholder benefits and claims
|
59.7 | (5.1 | ) | — | 8.8 | — | 63.4 | |||||||||||||||||
|
Interest credited
|
— | 44.2 | 91.7 | 54.3 | (0.1 | ) | 190.1 | |||||||||||||||||
|
Other underwriting and operating expenses
|
25.4 | 16.4 | 5.5 | 14.6 | 3.8 | 65.7 | ||||||||||||||||||
|
Interest expense
|
— | — | — | — | 4.6 | 4.6 | ||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
2.8 | 0.3 | 0.2 | 0.6 | 0.1 | 4.0 | ||||||||||||||||||
|
Total benefits and expenses
|
87.9 | 55.8 | 97.4 | 78.3 | 8.4 | 327.8 | ||||||||||||||||||
|
Segment income before income taxes
|
16.6 | 5.6 | 17.4 | 15.8 | 2.2 | 57.6 | ||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
(0.1 | ) | (11.7 | ) | 6.1 | (1.6 | ) | 2.1 | (5.2 | ) | ||||||||||||||
|
Segment operating income before income taxes
|
$ | 16.7 | $ | 17.3 | $ | 11.3 | $ | 17.4 | $ | 0.1 | $ | 62.8 | ||||||||||||
|
As of June 30, 2006
|
||||||||||||||||||||||||
|
Total investments
|
$ | 108.1 | $ | 4,656.2 | $ | 6,783.0 | $ | 4,010.8 | $ | 1,611.2 | $ | 17,169.3 | ||||||||||||
|
Separate account assets
|
— | 1,057.9 | — | 112.6 | — | 1,170.5 | ||||||||||||||||||
|
Total assets
|
238.4 | 6,034.5 | 7,170.0 | 4,575.0 | 2,064.2 | 20,082.1 | ||||||||||||||||||
F-57
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Six Months Ended June 30, 2007 | ||||||||||||||||||||||||
|
Retirement |
Income |
|||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Total | |||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||
|
Premiums
|
$ | 195.0 | $ | — | $ | — | $ | 70.0 | $ | — | $ | 265.0 | ||||||||||||
|
Net investment income
|
8.8 | 124.5 | 223.8 | 120.3 | 13.5 | 490.9 | ||||||||||||||||||
|
Other revenues
|
6.3 | 12.4 | 0.5 | 7.1 | 6.4 | 32.7 | ||||||||||||||||||
|
Net realized investment gains (losses)
|
(0.1 | ) | (3.7 | ) | 24.2 | 0.1 | 4.0 | 24.5 | ||||||||||||||||
|
Total revenues
|
210.0 | 133.2 | 248.5 | 197.5 | 23.9 | 813.1 | ||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||
|
Policyholder benefits and claims
|
107.7 | (4.0 | ) | — | 32.4 | — | 136.1 | |||||||||||||||||
|
Interest credited
|
— | 84.3 | 183.8 | 106.4 | (0.4 | ) | 374.1 | |||||||||||||||||
|
Other underwriting and operating expenses
|
55.1 | 35.8 | 11.7 | 29.3 | 9.3 | 141.2 | ||||||||||||||||||
|
Interest expense
|
— | — | — | — | 9.3 | 9.3 | ||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
4.5 | 3.7 | 0.5 | 0.8 | (0.1 | ) | 9.4 | |||||||||||||||||
|
Total benefits and expenses
|
167.3 | 119.8 | 196.0 | 168.9 | 18.1 | 670.1 | ||||||||||||||||||
|
Segment income before income taxes
|
42.7 | 13.4 | 52.5 | 28.6 | 5.8 | 143.0 | ||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
(0.1 | ) | (3.7 | ) | 24.2 | 0.1 | 4.0 | 24.5 | ||||||||||||||||
|
Segment operating income before income taxes
|
$ | 42.8 | $ | 17.1 | $ | 28.3 | $ | 28.5 | $ | 1.8 | $ | 118.5 | ||||||||||||
|
As of June 30, 2007
|
||||||||||||||||||||||||
|
Total investments
|
$ | 210.2 | $ | 4,048.4 | $ | 6,718.4 | $ | 4,110.0 | $ | 1,608.0 | $ | 16,695.0 | ||||||||||||
|
Separate account assets
|
— | 1,142.8 | — | 125.7 | — | 1,268.5 | ||||||||||||||||||
|
Total assets
|
342.3 | 5,528.9 | 7,269.1 | 4,725.6 | 1,979.9 | 19,845.8 | ||||||||||||||||||
F-58
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
| Six Months Ended June 30, 2006 | ||||||||||||||||||||||||
|
Retirement |
Income |
|||||||||||||||||||||||
| Group | Services | Annuities | Individual | Other | Total | |||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||
|
Premiums
|
$ | 199.5 | $ | 0.1 | $ | — | $ | 69.6 | $ | — | $ | 269.2 | ||||||||||||
|
Net investment income
|
9.0 | 137.7 | 217.7 | 114.7 | 11.4 | 490.5 | ||||||||||||||||||
|
Other revenues
|
5.5 | 11.6 | 0.4 | 6.8 | 5.4 | 29.7 | ||||||||||||||||||
|
Net realized investment gains (losses)
|
(0.1 | ) | (16.4 | ) | 15.4 | (1.9 | ) | 2.5 | (0.5 | ) | ||||||||||||||
|
Total revenues
|
213.9 | 133.0 | 233.5 | 189.2 | 19.3 | 788.9 | ||||||||||||||||||
|
Benefits and expenses:
|
||||||||||||||||||||||||
|
Policyholder benefits and claims
|
132.2 | (9.7 | ) | — | 25.1 | — | 147.6 | |||||||||||||||||
|
Interest credited
|
— | 91.4 | 187.0 | 103.9 | (0.1 | ) | 382.2 | |||||||||||||||||
|
Other underwriting and operating expenses
|
53.4 | 30.4 | 10.6 | 28.6 | 6.8 | 129.8 | ||||||||||||||||||
|
Interest expense
|
— | — | — | — | 9.8 | 9.8 | ||||||||||||||||||
|
Amortization of deferred policy acquisition costs
|
5.7 | 0.5 | 0.3 | 1.0 | 0.1 | 7.6 | ||||||||||||||||||
|
Total benefits and expenses
|
191.3 | 112.6 | 197.9 | 158.6 | 16.6 | 677.0 | ||||||||||||||||||
|
Segment income before income taxes
|
22.6 | 20.4 | 35.6 | 30.6 | 2.7 | 111.9 | ||||||||||||||||||
|
Less: Net realized investment gains (losses)
|
(0.1 | ) | (16.4 | ) | 15.4 | (1.9 | ) | 2.5 | (0.5 | ) | ||||||||||||||
|
Segment operating income before income taxes
|
$ | 22.7 | $ | 36.8 | $ | 20.2 | $ | 32.5 | $ | 0.2 | $ | 112.4 | ||||||||||||
|
As of June 30, 2006
|
||||||||||||||||||||||||
|
Total investments
|
$ | 108.1 | $ | 4,656.2 | $ | 6,783.0 | $ | 4,010.8 | $ | 1,611.2 | $ | 17,169.3 | ||||||||||||
|
Separate account assets
|
— | 1,057.9 | — | 112.6 | — | 1,170.5 | ||||||||||||||||||
|
Total assets
|
238.4 | 6,034.5 | 7,170.0 | 4,575.0 | 2,064.2 | 20,082.1 | ||||||||||||||||||
| 5. | Acquisitions |
On May 1, 2007, the Company acquired 100% ownership of
Medical Risk Managers Holding Inc, or MRM. MRM is a full-service
managing general underwriter and health care network consulting
firm specializing in the stop-loss market. This acquisition
provides the Company with pricing and underwriting competitive
advantages, and an additional source of revenue.
The aggregate purchase price was $32.2 million, of which
$22.0 million was paid in cash and the remaining
$10.2 million is subject to purchase price adjustment,
contingently payable over the next five years based upon the
achievement of certain annual profitability targets. In
connection with the acquisition, $5.3 million of the cash
paid was held in escrow and we have classified such amount as
restricted funds. We classified an additional $5.1 million
as restricted funds as such amount represents cash held in
fiduciary accounts.
The acquisition was accounted for using the purchase method of
accounting in accordance with SFAS No. 141,
Business Combinations. The results of operations are
presented in our Group segment and consolidated in the
accompanying financial statements from the date of acquisition.
The purchase price allocation resulted in $6.9 million of
identifiable intangible assets including customer relationships,
employment contracts, non-compete agreements, and the MRM trade
name with useful lives ranging from 5 to
F-59
Table of Contents
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
10 years. Preliminary goodwill of $17.3 million has
been recognized as of June 30, 2007 for the amount in
excess of the initial purchase price paid over the fair market
value of the net assets acquired.
6. Subsequent
event
New
Credit Facility
On August 16, 2007, the Company entered into a
$200.0 million senior unsecured revolving credit agreement
with a syndicate of lending institutions led by Bank of America,
N.A. The credit facility matures on August 16, 2012. The
revolving credit facility is available to provide support for
working capital, capital expenditures and other general
corporate purposes, including permitted acquisitions, issuance
of letters of credits, refinancing and payment of fees in
connection with this facility. This new credit facility replaced
the Company’s prior $70.0 million revolving credit
facility.
The facility enables the Company to obtain letters of credit of
up to $50.0 million and short-term loans of up to
$10.0 million, which would count against the
$200.0 million limit. The Company can increase the
$200.0 million limit by up to an additional
$100.0 million, upon the agreement of any lender to lend
such additional amount, without the consent of the other
lenders. In addition, the Company may, with the consent of
individual lenders, elect to extend the term of the facility by
up to two additional one-year periods.
Loans under the credit facility bear interest, at the
Company’s election, at a spread above LIBOR, or at a base
rate. The initial spread above the LIBOR rate is 36 basis
points, and may vary from 19 to 60 basis points depending
on the Company’s credit rating. The base rate is equal to
the higher of 50 basis points above the federal funds rate,
and the Bank of America prime rate. Interest under LIBOR-based
loans is payable periodically, with the period at the election
of the Company (but at most annually). Interest under base rate
loans is payable quarterly. In addition, we are obligated to pay
a facility fee of between 6 and 15 basis points, depending
on the Company’s credit rating, quarterly over the term of
the facility, as well as letter of credit and other fees as
applicable.
Under the terms of the credit agreement, the Company is required
to maintain certain financial ratios. In particular, each of the
Company’s material insurance subsidiaries must maintain a
risk-based capital ratio of at least 200%, measured at the end
of each year, and the Company’s debt-to-capitalization
ratio may not exceed 37.5%, measured at the end of each quarter.
In addition, the Company has agreed to other covenants
restricting the ability of its subsidiaries to incur additional
indebtedness, its ability to create liens, and its ability to
change its fiscal year and to enter into new lines of business,
as well as other customary affirmative covenants.
To be eligible for borrowing funds under this facility, the
representations and warranties that the Company makes in the
credit agreement must continue to be true in all material
respects, and the Company must not be in default under the
facility, including failure to comply with the covenants
described above.
As of September 30, 2007, the Company had no borrowings
outstanding under this facility. Compliance with the covenants
under the credit agreement will be determined starting the third
quarter of 2007.
Amendment
to Certificate of Incorporation
On September 28, 2007, the Company filed an Amended and
Restated Certificate of Incorporation with the Delaware
Secretary of State which, among other things, increased the
Company’s authorized shares of common stock to
750,000,000 shares and authorized the issuance of
10,000,000 shares of a new class of preferred stock with
rights, preferences and privileges to be designated by the Board
of Directors.
Capital
Efficient Notes due 2067
On October 10, 2007, the Company issued $150.0 million
aggregate principal amount of 8.30% fixed-to-floating rate
Capital Efficient Notes (or “CENts”) with a scheduled
maturity date of October 15, 2037 and
F-60
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NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
subject to certain limitations, with a final maturity date of
October 15, 2067. For the initial
10-year
period, to but not including October 15 2017, the CENts carry a
fixed interest rate of 8.30% payable semi-annually. From
October 15, 2017 until the final maturity date of
October 15, 2067, interest on the CENts will accrue at a
variable annual rate equal to the three-month LIBOR plus 4.177%,
payable quarterly. The Company plans to use the net proceeds
from the issuance to pay a special cash dividend to its
stockholders.
The Company is required to use commercially reasonable efforts
to sell enough qualifying capital securities to permit repayment
of the CENts at the scheduled maturity date or on each interest
payment date thereafter. Qualifying capital securities are
replacement capital securities other than common stock,
qualifying warrants, mandatorily convertible preferred stock,
debt exchangeable for common equity or debt exchangeable for
preferred equity and are generally treated by the ratings
agencies as having similar equity content to the CENts. Any
remaining outstanding principal amount will be due on
October 15, 2067.
Subject to certain conditions, the Company has the right, on one
or more occasions, to defer the payment of interest on the CENts
during any period up to ten years without giving rise to an
event of default. The Company will not be required to settle
deferred interest subject to certain conditions until it has
deferred interest for five consecutive years or, if earlier,
made a payment of current interest during a deferral period.
Deferred interest will accumulate additional interest at an
annual rate equal to the annual interest rate then applicable to
the CENts.
The CENts are unsecured junior subordinated obligations. The
Company can redeem the CENts at its option, in whole or in part,
on October 15, 2017 and on each interest payment date
thereafter at a redemption price of 100% of the principal amount
being redeemed plus accrued but unpaid interest. The Company can
redeem the CENts at its option, prior to October 15, 2017,
in whole or in part, at a redemption price of 100% of the
principal amount being redeemed or, if greater, a make-whole
price, plus accrued and unpaid interest.
In connection with the offering of the CENts, the Company
entered into a “replacement capital covenant” for the
benefit of the holders of the $300.0 million Senior Notes
due April 1, 2016. Under the terms of the replacement
capital covenant, the Company may not redeem or repay the CENts
prior to October 15, 2047 unless the redemption or
repayment is financed from the offering of replacement capital
securities, as specified in the CENts.
Cash
Flow Hedge
On July 11, 2007, the Company entered into an interest rate
swap agreement totaling $150.0 million, which qualified as
a cash flow hedge of the planned CENts offering. The Company
terminated the swap agreement on September 24, 2007 and
recorded the related loss of $5.3 million in accumulated
other comprehensive income. The Company entered into another
interest rate swap agreement totaling $150.0 million on
September 24, 2007, which also qualified as a cash flow
hedge of the planned CENts offering. The Company terminated the
swap agreement on October 4, 2007 when the Company entered
into the agreement to sell the CENts and recorded the related
loss of $1.9 million in accumulated other comprehensive
income. Since the critical terms of the derivative were the same
as the forecasted transaction, the Company did not record any
ineffectiveness and the combined losses on the interest rate
swaps of $7.2 million will be amortized into interest
expense concurrent with the interest expense over the life of
the CENts. Considering the impact of the hedge, as well as the
discount on the notes and the debt issuance costs, the effective
interest on the CENts is 9.39%.
Adoption
of Equity Plans and Related Grants
In October 2007, the board of directors of the Company adopted
the Equity Plan and Employee Stock Purchase Plan, and reserved
900,000 and 100,000 shares of common stock, respectively, for
issuance under these plans. The board of directors approved
grants of restricted stock units having an aggregate value of
$5.8 million and shares of fully-vested common stock having an
aggregate value of $2.9 million to employees under the Equity
Plan. These grants are contingent upon the initial public
offering occurring, and the actual
F-61
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NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
numbers of units and shares will be determined based on the
initial public offering price per share. The board of directors
also approved option grants to employees under the Equity Plan,
but the aggregate value and number of such option grants will
not be determinable until the initial public offering occurs.
| 7. | Earnings Per Share |
Basic earnings per share represent the amount of earnings for
the period available to each share of common stock outstanding
during the reporting period. Diluted earnings per share
represent the amount of earnings for the period available to
each share of common stock outstanding during the reporting
period adjusted for the potential issuance of common stock, if
dilutive. All outstanding warrants are considered participating
securities or potential common stock securities that are
included in weighted average common shares outstanding for
purposes of computing basic earnings per share using the
two-class method. The warrants are considered participating
securities or potential common stock securities because the
terms of the warrants entitle the holders to receive any
dividends declared on the common stock concurrently with the
holders of outstanding shares of common stock, without regard to
whether the warrants are exercised prior to the record date for
any such dividend.
The following table presents information relating to the
Company’s calculations of basic and diluted earnings per
share (EPS) for the three and six months ended June 30,
2007 and 2006:
|
Three Months Ended |
Three Months Ended |
|||||||||||||||||||||||
| June 30, 2007 | June 30, 2006 | |||||||||||||||||||||||
|
Basic |
Diluted |
Basic |
Diluted |
|||||||||||||||||||||
| Amount | EPS | EPS | Amount | EPS | EPS | |||||||||||||||||||
| (In millions, except for per share data) | ||||||||||||||||||||||||
|
Net income
|
$ | 45.5 | $ | 3.54 | $ | 3.54 | $ | 36.3 | $ | 2.83 | $ | 2.83 | ||||||||||||
|
Common stock:
|
||||||||||||||||||||||||
|
Distributed
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
|
Undistributed
|
37.8 | 3.54 | 3.54 | 30.1 | 2.83 | 2.83 | ||||||||||||||||||
|
Total
|
$ | 37.8 | $ | 3.54 | $ | 3.54 | $ | 30.1 | $ | 2.83 | $ | 2.83 | ||||||||||||
|
Warrants:
|
||||||||||||||||||||||||
|
Distributed
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
|
Undistributed
|
7.7 | 3.54 | 3.54 | 6.2 | 2.83 | 2.83 | ||||||||||||||||||
|
Total
|
$ | 7.7 | $ | 3.54 | $ | 3.54 | $ | 6.2 | $ | 2.83 | $ | 2.83 | ||||||||||||
| Basic | Diluted | Basic | Diluted | |||||||||||||||||
|
Weighted average common and warrant shares outstanding
|
||||||||||||||||||||
|
Common stock
|
10.6 | 10.6 | 10.6 | 10.6 | ||||||||||||||||
|
Warrants
|
2.2 | 2.2 | 2.2 | 2.2 | ||||||||||||||||
|
Total shares
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||
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NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
|
Six Months Ended |
Six Months Ended | |||||||||||||||||||||||
| June 30, 2007 | June 30, 2006 | |||||||||||||||||||||||
|
Basic |
Diluted |
Basic |
Diluted |
|||||||||||||||||||||
| Amount | EPS | EPS | Amount | EPS | EPS | |||||||||||||||||||
| (In millions, except for per share data) | ||||||||||||||||||||||||
|
Net income
|
$ | 96.2 | $ | 7.50 | $ | 7.50 | $ | 72.7 | $ | 5.66 | $ | 5.66 | ||||||||||||
|
Common stock:
|
||||||||||||||||||||||||
|
Distributed
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
|
Undistributed
|
79.8 | 7.50 | 7.50 | 60.3 | 5.66 | 5.66 | ||||||||||||||||||
|
Total
|
$ | 79.8 | $ | 7.50 | $ | 7.50 | $ | 60.3 | $ | 5.66 | $ | 5.66 | ||||||||||||
|
Warrants:
|
||||||||||||||||||||||||
|
Distributed
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
|
Undistributed
|
16.4 | 7.50 | 7.50 | 12.4 | 5.66 | 5.66 | ||||||||||||||||||
|
Total
|
$ | 16.4 | $ | 7.50 | $ | 7.50 | $ | 12.4 | $ | 5.66 | $ | 5.66 | ||||||||||||
| Basic | Diluted | Basic | Diluted | |||||||||||||||||
|
Weighted average common shares outstanding
|
||||||||||||||||||||
|
Common stock
|
10.6 | 10.6 | 10.6 | 10.6 | ||||||||||||||||
|
Warrants
|
2.2 | 2.2 | 2.2 | 2.2 | ||||||||||||||||
|
Total shares
|
12.8 | 12.8 | 12.8 | 12.8 | ||||||||||||||||
F-63
Table of Contents
| Contract values | The amounts held for the benefit of policyholders or contract holders within investment products. For variable products, account value is equal to fair value. | |
| Accumulation period | The period during which deferred annuity accumulate interest or investment gains (losses). The period ends when the income payments begin. | |
| Annualized first-year premiums (AFYP) | This term applies to our Group and Individual segments. For recurring premium products it represents the total expected premium payments over the first 12 months on new sales. The entire 12 months of expected premium is reported AFYP in the period during which the policy is issued. For single-premium products, the AFYP is 10% of the single premium. | |
| Annuity | A contract sold by insurance companies that offers tax-deferred savings and a choice of payout options to meet the owner’s income needs in retirement. | |
| Bank-owned life insurance (BOLI) | A life insurance policy purchased to insure the life of certain bank employees, usually officers and other highly compensated employees. The policies are commonly used to fund employee pension and benefit plans. | |
| Brokerage general agent | An independent contractor of the insurance company who has the authority to appoint brokers on behalf of the insurance company. | |
| Cash value | The amount of cash available to a policyholder on the surrender of or withdrawal from a life insurance policy or annuity contract. | |
| Cede | Reinsuring with another insurance company all or a portion of the risk we insure. | |
| Deferred annuities | Annuity contracts that delay income payments until the holder chooses to receive them. These contracts might also be surrendered for cash, exchanged for another contract, or rolled over to another contract. | |
| Defined benefit plan | A pension plan that promises to pay a specified amount to each eligible plan member who retires. | |
| Defined contribution plan | A plan established under Section 401(a), 401(k), 403(b) or 457(b) of the Internal Revenue Code, under which the benefits to a participant depend on contributions made to, and the investment return on, the participant’s account. | |
| Earned premiums | The portion of a premium, net of any amount ceded, that represents coverage already provided or that belongs to the insurer based on the part of the policy period that has passed. | |
| Expense risk | The measure of the sensitivity of the insurance company’s liability for the resultant higher expense rates than charged for in the premium, expense charge or margin. | |
| Experience rating | The statistical procedure used to calculate a premium rate based on the loss experience of an insured group. |
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Table of Contents
| Fixed annuity | An annuity that guarantees that a specific sum of money will be paid in the future, usually as monthly income, to an annuitant. The dollar amount will not fluctuate regardless of adverse changes in the insurance company’s mortality experience, investment return, and expenses. | |
| Fixed indexed annuity (FIA) | Modifications of the single premium deferred annuity, which usually guarantees at a minimum a return of the premium. Additional interest can be earned that is linked to a specified stock index. Thus, this insurance product usually guarantees the principal of the investment, while at the same time providing the opportunity for increasing values tied to the equities market. | |
| General account | All of the assets of our insurance companies recognized for statutory accounting purposes other than those specifically allocated to separate accounts. We bear the risk of our investments held in our general account. | |
| Group insurance | A single contract or policy under which individuals in a natural group (such as employees of a business firm) and potentially their dependants are covered. | |
| Group medical stop-loss insurance | Coverage purchased by employers in order to limit their exposure under self-insured medical plans. | |
| Guaranteed investment contract | A contract, usually purchased by ERISA qualified plans, that guarantees a minimum rate of return on the amount invested. | |
| Guaranteed minimum income benefit (GMIB) | A benefit that guarantees a specified minimum appreciation rate for a defined period of time, after which annuity payments commence. | |
| Guaranteed minimum withdrawal benefit (GMWB) | A benefit that guarantees a customer’s minimum stream of income, equal to the return of the contract’s principal provided it is withdrawn within specified limits over time. | |
| Immediate annuities | Annuity contracts under which the benefits payable to the annuitant begin to be paid within one year of contract issuance. | |
| In-force | Policies and contracts reflected on our applicable records that have not expired or been terminated as of a given date. | |
| Interest spread | Yield on investments less the interest rate credited on liabilities. | |
| Managing general underwriter (MGU) | An MGU is a business that acts as a sales intermediary between an insurance company and medical stop-loss policyholder. MGU’s can provide marketing, premium administration, claims administration, claims adjudication and pricing. The MGU is generally paid a percentage of premium and does not share in any of the risk. | |
| Market value adjustment (MVA) | A market value adjustment is a feature that adjusts the surrender value of a contract in the event of surrender prior to the end of the contract period to protect an insurer against losses due to higher interest rates at the time of the surrender. | |
| Morbidity | The incidence of disease or disability in a specific population over a specific period of time. |
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Table of Contents
| Mortality | The number of deaths in a specific population over a specific period of time. | |
| Mortality gains | Mortality gains may arise if mortality rates are higher or lower than expected. For structured settlements and SPIAs mortality gains occur if policyholders die sooner than expected. For life insurance, mortality gains occur if policyholders die later than expected. | |
| Non-admitted assets | Certain assets or portions thereof that are not permitted to be reported as admitted assets in an insurer’s annual statement prepared in accordance with statutory accounting principles. As a result, certain assets that normally would be accorded value in the financial statements of non-insurance corporations are accorded no value and thus reduce the reported statutory surplus of the insurer. | |
| Non-qualified plan | An employee benefits plan that does not have the federal tax advantages of a qualified pension plan, in which employers receive a federal tax deduction for contributions paid into the plan on behalf of their employees. For an employer, not having a tax deduction can be a serious disadvantage, but a nonqualified plan has these advantages. | |
|
1) otherwise
discriminatory coverage for some employees is allowed,
|
||
|
2) benefits
can be allocated to certain employees whom the employer wishes
to reward. The result could be that the total cost of the
benefits for a particular group of employees may be less under a
non-qualified plan than for all employees under a qualified plan.
|
||
| Persistency | Measurement by premiums of the percentage of insurance policies or annuity contracts remaining in force between specified measurement dates. | |
| Premiums | Payments and other consideration received on insurance policies issued or reinsurance assumed by an insurance company. Under generally accepted accounting principles, premiums on variable life and other investment-type contracts are not accounted for as revenues. | |
| Regulatory capital | Regulatory capital is the sum of statutory capital and surplus and asset valuation reserve (AVR). | |
| Reinsurance | A form of insurance that insurance companies buy for their own protection, “a sharing of insurance.” An insurer (the reinsured) reduces its possible maximum loss on either an individual risk or a large number of risks by giving a portion of its liability to another insurance company (the reinsurer). Reinsurance enables an insurance company to (1) expand its capacity; (2) stabilize its underwriting results; (3) finance its expanding volume; (4) secure catastrophe protection against shock losses; (5) withdraw from a class or line of business, or a geographical area, within a relatively short time period and (6) share large risks with other companies. | |
| Reserves | Liabilities established by insurers and reinsurers to reflect the estimated costs of claim payments and benefits and the related |
G-3
Table of Contents
| expenses that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance it has written. | ||
| Section 403(b) plan | A retirement plan which is available primarily to public school employees and non-profit organizations that allows individuals to defer compensation on a pre-tax basis through payroll deductions and to defer federal and sometimes state taxes until the assets are withdrawn. | |
| Section 457 plan | A retirement plan available to government employees that allows an individual to defer compensation on a pre-tax basis through payroll deductions and to defer federal and sometimes state taxes until the assets are withdrawn. | |
| Single Premium Immediate Annuities (SPIAs) | An annuity that is purchased for a single premium at the time of issue and guarantees a series of payments beginning within one year of the issue date and continuing over a fixed number of years or for the life of the annuitant. | |
| Statutory reserves | Liabilities established by state insurance law that an insurer must have available to provide for future obligations with respect to all policies. Statutory reserves are liabilities on the balance sheet of financial statements prepared in conformity with statutory accounting principles. | |
| Statutory surplus | The excess of admitted assets over statutory liabilities as shown on an insurer’s statutory financial statements. | |
| Structured settlement | A customized annuity used to provide a claimant ongoing periodic payments instead of a lump sum payment. A structured settlement provides an alternative to a lump sum settlement generally in a personal injury lawsuit and typically is purchased by a property and casualty insurance company for the benefit of an injured claimant with benefits scheduled to be paid throughout a fixed period or for the life of the claimant. | |
| Surrender charge | An amount specified in an insurance policy or annuity contract that is charged to a policyholder or contractholder for early cancellation of, or withdrawal under, that policy or contract. | |
| Surrenders and withdrawals | Amounts taken from life insurance policies and annuity contracts representing the full or partial values of these policies or contracts. | |
| Tax sheltered annuity | An annuity issued as part of a Section 403(b) plan. Tax-sheltered annuities are also referred to as “Section 403(b) annuities.” | |
| Term life insurance | Life insurance that stays in effect for only a specified, limited period. If an insured dies within that period, the beneficiary receives the death payments. If the insured survives, the policy ends and the beneficiary receives nothing. | |
| Third party administrator (TPA) | A person or entity that, pursuant to a service contract, processes claims or provides administrative services for an employee benefits plan. | |
| Underwriting | The insurer’s process of reviewing applications submitted for insurance coverage, deciding whether to accept all or part of the coverage requested and determining the applicable premiums. |
G-4
Table of Contents
| Universal life (UL) insurance | Adjustable life insurance under which (1) premiums are flexible, not fixed; (2) protection is adjustable, not fixed and (3) insurance company expenses and other charges are specifically disclosed to a purchaser. This policy is referred to as unbundled life insurance because its three basic elements (investment earnings, pure cost of protection, and company expenses) are separately identified both in the policy and in an annual report to the policyowner. After the first premium, additional premiums can be paid at any time. A specified percentage expense charge is deducted from each premium before the balance is credited to the cash value, along with interest. The pure cost of protection is subtracted from the cash value monthly. As selected by the insured, the death benefit can be a specified amount plus the cash value or the specified amount that includes the cash value. After payment of the minimal initial premium required, there are no contractually scheduled premium payments (provided the cash value account balance is sufficient to pay the pure cost of protection each month and any other expenses and charges.) Expenses and charges may take the form of a flat dollar amount for the first policy year, a sales charge for each premium received, and a monthly expense charge for each policy year. An annual report is provided the policy owner that shows the status of the policy. | |
| Variable annuity | An annuity in which premium payments are used to purchase accumulation units, their number depending on the value of each unit. The value of a unit is determined by the value of the portfolio of stocks in which the insurance company invests the premiums. | |
| Variable life (VL) insurance | An investment-oriented life insurance policy that provides a return linked to an underlying portfolio of securities. The investment offered through the policy is typically established as a separate account, which is divided into subaccounts that invest in underlying mutual funds. The policyholder has discretion in choosing among the available subaccounts, such as a common stock fund, bond fund, or money market fund. The life insurance policy benefits payable to the beneficiary upon the death of the insured or the surrender of the policy will vary to reflect the investment performance of the subaccounts chosen by the policy owner. | |
| Waiver of premium | A provision of a life insurance policy pursuant to which an insured with total disability that lasts for a specified period no longer has to pay premiums for the duration of the disability or for a stated period, during which time the life insurance policy provides continued coverage. | |
| Wealth transfer life insurance | A life insurance policy purchased with the primary intent to transfer wealth to chosen beneficiaries. | |
| Whole life insurance | Level premium life insurance that covers the lifetime of the individual instead of a fixed term. |
G-5
Table of Contents
Table of Contents
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
| Item 13. | Other Expenses of Issuance and Distribution. |
The following table sets forth the expenses (other than
underwriting compensation expected to be incurred) in connection
with this offering. All of such amounts (except the SEC
registration fee and NASD filing fee) are estimated.
|
SEC registration fee
|
$ | 23,025 | ||
|
Listing fee
|
200,000 | |||
|
NASD filing fee
|
$ | 75,500 | ||
|
Blue Sky fees and expenses
|
* | |||
|
Printing and engraving costs
|
* | |||
|
Legal fees and expenses
|
* | |||
|
Accounting fees and expenses
|
* | |||
|
Transfer Agent and Registrar fees and expenses
|
* | |||
|
Miscellaneous expenses
|
* | |||
|
Total
|
* |
| * | To be provided by amendment |
| Item 14. | Indemnification of Directors and Officers. |
Section 145(a) of the Delaware General Corporation Law (the
“DGCL”) provides in relevant part that a corporation
may indemnify any officer or director who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or
in the right of the corporation) by reason of the fact that such
person is or was a director or officer of the corporation, or is
or was serving at the request of the corporation as a director
or officer of another entity, against expenses (including
attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such
person’s conduct was unlawful.
Section 145(b) of the DGCL provides in relevant part that a
corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that
the person is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys’ fees)
actually and reasonably incurred by the person in connection
with the defense or settlement of such action or suit if the
person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court
in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
Our bylaws generally provide that we will indemnify our
directors and officers to the fullest extent permitted by law.
The registrant also obtained officers’ and directors’
liability insurance which insures against liabilities that
officers and directors of the registrant may, in such
capacities, incur. Section 145(g) of the DGCL provides that
a corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation
II-1
Table of Contents
as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person
and incurred by such person in any such capacity, or arising out
of such person’s status as such, whether or not the
corporation would have the power to indemnify such person
against such liability under that section.
Reference is made to the form of underwriting agreement to be
filed as Exhibit 1.1 hereto for provisions providing that
the underwriters are obligated under certain circumstances to
indemnify our directors, officers and controlling persons
against certain liabilities under the Securities Act of 1933, as
amended.
| Item 15. | Recent Sales of Unregistered Securities. |
In the three years preceding the filing of this registration
statement, the Registrant has issued the following securities
that were not registered under the Securities Act:
On multiple dates between July 29, 2004 and August 2,
2004, we issued 10,649,000 shares of common stock and
warrants to purchase an aggregate of 2,181,120 shares of common
stock in connection with Symetra Financial Corporation’s
initial formation, in reliance on Section 4(2) of the
Securities Act of 1933 and/or Regulation D promulgated
thereunder.
On March 30, 2006, we issued $300.0 million aggregate
principal amount of senior notes due 2016 to Lehman Brothers
Inc., Banc of America Securities LLC and J.P. Morgan
Securities Inc. as representatives of several initial purchasers
for $298.7 million. These transactions were conducted in
reliance upon the available exemptions from the registration
requirements of the Securities Act, including those contained in
Section 4(2) of the Securities Act of 1933. The net
proceeds of this offering were used to repay borrowing
outstanding under the Registrant’s revolving credit
facility.
On October 10, 2007, we issued $150.0 million
aggregate principal amount of Capital Efficient Notes due 2067
to a syndicate of initial purchasers, led by J.P. Morgan
Securities Inc. and Lehman Brothers Inc. in reliance on
Section 4(2) of the Securities Act of 1933, which may be
resold to qualified institutional buyers in compliance with
Rule 144A
and/or
Regulation S under the Securities Act of 1933. We intend to
use the net proceeds from that offering to pay a special cash
dividend to our stockholders.
In October 2007, we committed to grant stock options to purchase
approximately shares
of our common
stock, restricted
stock units
and shares
of our common stock to employees under our Equity Plan on or
about the date of our initial public offering. The exact number
of shares subject to these awards will depend on the initial
public offering price per share, and the above estimates are
based on an assumed initial public offering price per share
equal to the midpoint of the range set forth on the cover page
of the prospectus. These issuances will be made in reliance on
Rule 701 or Section 4(2) of the Securities Act of 1933.
Share and per share amounts contained in the numbered paragraphs
above do not reflect the -for-1 common stock
dividend, which was paid
on .
All sales indicated as having been made in reliance on
Section 4(2) of the Securities Act of 1933 and/or
Regulation D promulgated thereunder were made without
general solicitation or advertising. Each purchaser was a
sophisticated investor with access to all relevant information
necessary to evaluate the investment and represented to the
Registrant that the shares were being acquired for investment.
| Item 16. | Exhibits and Financial Statement Schedules. |
(a) Exhibits
|
Exhibit |
||||
|
Number
|
Description
|
|||
| 1 | .1 | Underwriting Agreement* | ||
| 2 | .1 | Stock Purchase Agreement by and among Safeco Corporation, General America Corporation, White Mountains Insurance Group, Ltd. and Occum Acquisition Corp. dated as of March 15, 2004** | ||
| 3 | .1 | Amended and Restated Certificate of Incorporation of Symetra Financial Corporation | ||
| 3 | .2 | Bylaws of Symetra Financial Corporation | ||
II-2
Table of Contents
|
Exhibit |
||||
|
Number
|
Description
|
|||
| 4 | .1 | Specimen Common Stock Certificate | ||
| 4 | .2 | Fiscal Agency Agreement between Symetra Financial Corporation and U.S. Bank dated March 30, 2006** | ||
| 4 | .3 | Master Promissory Note between The Bank of New York and Symetra Financial Corporation dated October 17, 2005** | ||
| 4 | .4 | Security Agreement between The Bank of New York and Symetra Financial Corporation dated October 17, 2005** | ||
| 4 | .5 | Master Promissory Note between The Bank of New York and Symetra Life Insurance Company dated October 17, 2005** | ||
| 4 | .6 | Security Agreement between The Bank of New York and Symetra Life Insurance Company dated October 17, 2005** | ||
| 4 | .7 | Warrant Certificate — Berkshire Hathaway, Inc. dated July 29, 2004** | ||
| 4 | .8 | Warrant Certificate — White Mountains Re Group, Ltd. dated July 29, 2004** | ||
| 4 | .9 | Credit Agreement among Occum Acquisition Corp. and the seven lenders and Bank of America, N.A. as Administrative Agent dated June 14, 2004** | ||
| 4 | .10 | Credit Agreement among Symetra Financial Corporation, the lenders and Bank of America, N.A., as administrative agent, dated August 16, 2007** | ||
| 4 | .11 | Purchase Agreement between Symetra Financial Corporation and the purchasers listed therein, dated October 4, 2007** | ||
| 4 | .12 | Indenture between Symetra Financial Corporation and U.S. Bank National Association, as trustee, dated October 10, 2007 | ||
| 5 | .1 | Opinion of Cravath, Swaine & Moore LLP** | ||
| 9 | .1 | Shareholders’ Agreement among Occum Acquisition Corp. and the persons listed on the signature page thereto dated as of March 8, 2004** | ||
| 9 | .2 | Shareholders’ Agreement among Occum Acquisition Corp. and the persons listed on the signature page thereto dated as of March 19, 2004** | ||
| 9 | .3 | Shareholders’ Agreement among Occum Acquisition Corp. and the persons listed on the signature page thereto dated as of April 16, 2004** | ||
| 10 | .1 | Service Agreement between ACS Commercial Solutions, Inc. and Symetra Financial Corporation dated October 28, 2004† | ||
| 10 | .2 | Reinsurance Agreement dated as of January 1, 1998 between Safeco Life Insurance Company and Reinsurance Group of America**† | ||
| 10 | .3 | Group Short Term Disability Reinsurance Agreement dated January 1, 1999 between Safeco Life Insurance Company and Duncanson & Holt Services, Inc.** | ||
| 10 | .4 | Group Long Term Disability Reinsurance Agreement dated January 1, 1999 between Safeco Life Insurance Company and Duncanson & Holt Services, Inc.** | ||
| 10 | .5 | Reinsurance Agreement dated as of August 24, 2001 between Safeco Life Insurance Company and Lincoln National Life Insurance Company**† | ||
| 10 | .6 | Reinsurance Agreement dated as of December 1, 2001 between Safeco Life Insurance Company and Transamerica Life Insurance Company**† | ||
| 10 | .7 | White Mountains Advisors LLC Investment Management Agreement* | ||
| 10 | .8 | Prospector Partners Investment LLC Investment Management Agreement* | ||
| 10 | .9 | Agency Agreement dated as of March 10, 2006 among Symetra Life Insurance Company, WM Financial Services, Inc. and WMFS Insurance Services, Inc.**† | ||
| 10 | .10 | Agency Agreement dated as of June 1, 2005 between Symetra Life Insurance Company and US Bancorp Investments Inc.**† | ||
| 10 | .11 | Symetra Financial Corporation Performance Share Plan 2007-2009** | ||
| 10 | .12 | Annual Incentive Bonus Plan** | ||
II-3
Table of Contents
|
Exhibit |
||||
|
Number
|
Description
|
|||
| 10 | .13 | Symetra Financial Corporation Material Terms and Conditions of the Executive Severance Pay Plan** | ||
| 10 | .14 | 2006 Sales Incentive Plan for Patrick B. McCormick**† | ||
| 10 | .15 | IPO Grant Program | ||
| 10 | .16 | Symetra Financial Corporation Equity Plan | ||
| 10 | .17 | Symetra Financial Corporation Employee Stock Purchase Plan | ||
| 21 | .1 | Subsidiaries of Symetra Financial Corporation** | ||
| 23 | .1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm | ||
| 23 | .2 | Consent of Cravath, Swaine & Moore LLP (included in the opinion filed as Exhibit 5.1)** | ||
| 24 | .1 | Power of Attorney (included in signature page to the Registration Statement filed June 29, 2007)** | ||
* To be filed by amendment.
** Previously filed.
† An application for confidential treatment of
selected portions of this agreement has been filed with the
Commission.
(b) Financial Statement Schedules.
|
Schedule I
|
Summary of Investments — Other than Investments in Related Parties | |
|
Schedule II
|
Condensed Statements of Financial Position, Operations and Cash Flows | |
|
Schedule III
|
Supplemental Insurance Information |
| Item 17. | Undertakings. |
The undersigned registrant hereby undertakes as follows:
(1) The undersigned will provide to the underwriters at the
closing specified in the underwriting agreement certificates in
such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser.
(2) For purposes of determining any liability under the
Securities Act of 1933, as amended, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it is declared effective.
(3) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 14 or
otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-4
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment No. 5 to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of New York,
state of New York, on October 16, 2007.
SYMETRA FINANCIAL CORPORATION
| By: |
/s/ George
C. Pagos
|
Name: George C. Pagos
| Title: |
Senior Vice President, General Counsel and Secretary |
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 5 to the Registration Statement has been
signed by the following persons in the capacities indicated on
the 16th day of October, 2007.
|
Signature
|
Title
|
|||
|
* |
Randall H. Talbot President, Chief Executive Officer and Director (Principal Executive Officer) |
|||
|
* |
Margaret A. Meister Chief Financial Officer (Principal Financial and Accounting Officer) |
|||
|
* |
David T. Foy (Director) |
|||
|
* |
Lois W. Grady (Director) |
|||
|
* |
Sander M. Levy (Director) |
|||
|
* |
Robert R. Lusardi (Director) |
|||
|
* |
David I. Schamis (Director) |
|||
|
* |
Lowndes A. Smith (Director) |
|||
| *By: |
/s/ George
C. Pagos |
George C. Pagos (Attorney-in-Fact) |
||
Table of Contents
EXHIBIT INDEX
|
Exhibit |
||||
|
Number
|
Description
|
|||
| 1 | .1 | Underwriting Agreement* | ||
| 2 | .1 | Stock Purchase Agreement by and among Safeco Corporation, General America Corporation, White Mountains Insurance Group, Ltd. and Occum Acquisition Corp. dated as of March 15, 2004** | ||
| 3 | .1 | Amended and Restated Certificate of Incorporation of Symetra Financial Corporation | ||
| 3 | .2 | Bylaws of Symetra Financial Corporation | ||
| 4 | .1 | Specimen Common Stock Certificate | ||
| 4 | .2 | Fiscal Agency Agreement between Symetra Financial Corporation and U.S. Bank dated March 30, 2006** | ||
| 4 | .3 | Master Promissory Note between The Bank of New York and Symetra Financial Corporation dated October 17, 2005** | ||
| 4 | .4 | Security Agreement between The Bank of New York and Symetra Financial Corporation dated October 17, 2005** | ||
| 4 | .5 | Master Promissory Note between The Bank of New York and Symetra Life Insurance Company dated October 17, 2005** | ||
| 4 | .6 | Security Agreement between The Bank of New York and Symetra Life Insurance Corporation dated October 17, 2005** | ||
| 4 | .7 | Warrant Certificate — Berkshire Hathaway, Inc. dated July 29, 2004** | ||
| 4 | .8 | Warrant Certificate — White Mountains Re Group, Ltd. dated July 29, 2004** | ||
| 4 | .9 | Credit Agreement among Occum Acquisition Corp. and the seven lenders and Bank of America, N.A. as Administrative Agent dated June 14, 2004** | ||
| 4 | .10 | Credit Agreement among Symetra Financial Corporation, the lenders and Bank of America, N.A., as administrative agent, dated August 16, 2007** | ||
| 4 | .11 | Purchase Agreement between Symetra Financial Corporation and the purchasers listed therein, dated October 4, 2007** | ||
| 4 | .12 | Indenture between Symetra Financial Corporation and U.S. Bank National Association, as trustee | ||
| 5 | .1 | Opinion of Cravath, Swaine & Moore LLP** | ||
| 9 | .1 | Shareholders’ Agreement among Occum Acquisition Corp. and the persons listed on the signature page thereto dated as of March 8, 2004** | ||
| 9 | .2 | Shareholders’ Agreement among Occum Acquisition Corp. and the persons listed on the signature page thereto dated as of March 19, 2004** | ||
| 9 | .3 | Shareholders’ Agreement among Occum Acquisition Corp. and the persons listed on the signature page thereto dated as of April 16, 2004** | ||
| 10 | .1 | Service Agreement between ACS Commercial Solutions, Inc. and Symetra Financial Corporation dated October 28, 2004† | ||
| 10 | .2 | Reinsurance Agreement dated as of January 1, 1998 between Safeco Life Insurance Company and Reinsurance Group of America**† | ||
| 10 | .3 | Group Short Term Disability Reinsurance Agreement dated January 1, 1999 between Safeco Life Insurance Company and Duncanson & Holt Services, Inc.** | ||
| 10 | .4 | Group Long Term Disability Reinsurance Agreement dated January 1, 1999 between Safeco Life Insurance Company and Duncanson & Holt Services, Inc.** | ||
| 10 | .5 | Reinsurance Agreement dated as of August 24, 2001 between Safeco Life Insurance Company and Lincoln National Life Insurance Company**† | ||
| 10 | .6 | Reinsurance Agreement dated as of December 1, 2001 between Safeco Life Insurance Company and Transamerica Life Insurance Company**† | ||
| 10 | .7 | White Mountains Advisors LLC Investment Management Agreement* | ||
| 10 | .8 | Prospector Partners Investment LLC Investment Management Agreement* | ||
| 10 | .9 | Agency Agreement dated as of March 10, 2006 among Symetra Life Insurance Company, WM Financial Services, Inc. and WMFS Insurance Services, Inc.**† | ||
Table of Contents
|
Exhibit |
||||
|
Number
|
Description
|
|||
| 10 | .10 | Agency Agreement dated as of June 1, 2005 between Symetra Life Insurance Company and US Bancorp Investment Inc.**† | ||
| 10 | .11 | Symetra Financial Corporation Performance Share Plan 2007-2009** | ||
| 10 | .12 | Annual Incentive Bonus Plan** | ||
| 10 | .13 | Symetra Financial Corporation Material Terms and Conditions of the Executive Severance Pay Plan** | ||
| 10 | .14 | 2006 Sales Incentive Plan for Patrick B. McCormick**† | ||
| 10 | .15 | IPO Grant Program | ||
| 10 | .16 | Symetra Financial Corporation Equity Plan | ||
| 10 | .17 | Symetra Financial Corporation Employee Stock Purchase Plan | ||
| 21 | .1 | Subsidiaries of Symetra Financial Corporation** | ||
| 23 | .1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm | ||
| 23 | .2 | Consent of Cravath, Swaine & Moore LLP (included in the opinion filed as Exhibit 5.1)** | ||
| 24 | .1 | Power of Attorney (included in signature page to the Registration Statement filed June 29, 2007)** | ||
| * | To be filed by amendment. |
** Previously filed.
| † | An application for confidential treatment of selected portions of this agreement has been filed with the Commission. |
Table of Contents
Report of
Independent Registered Public Accounting Firm
The Board of Directors
Symetra Financial Corporation
We have audited the consolidated financial statements of Symetra
Financial Corporation as of December 31, 2006 and 2005, and
for the years ended December 31, 2006 and 2005, and for the
period from August 2, 2004 through December 31, 2004,
and the period from January 1, 2004 through August 1,
2004, and have issued our report thereon dated February 20,
2007 (included elsewhere in this Registration Statement). Our
audits also included the financial statement schedules listed in
Item 16(b) of
Form S-1
of this Registration Statement. These schedules are the
responsibility of the Company’s management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.
/s/ Ernst & Young LLP
Seattle, Washington
February 20, 2007
S-1
Table of Contents
SUMMARY
OF INVESTMENTS — OTHER THAN INVESTMENTS IN RELATED
PARTIES
Year
Ended December 31, 2006
|
Amount as |
||||||||||||
|
Cost or |
Fair |
Shown on the |
||||||||||
|
Type of Investment
|
Amortized Cost | Value | Balance Sheet | |||||||||
| (In thousands) | ||||||||||||
|
Fixed maturities:
|
||||||||||||
|
Bonds:
|
||||||||||||
|
United States government and government agencies and authorities
|
$ | 157,000 | $ | 157,896 | $ | 157,896 | ||||||
|
States, municipalities, and political subdivisions
|
666,101 | 670,898 | 670,898 | |||||||||
|
Foreign governments
|
205,186 | 208,875 | 208,875 | |||||||||
|
Public utilities
|
2,032,006 | 2,037,298 | 2,037,298 | |||||||||
|
Convertibles and bonds with warrants attached
|
64,556 | 68,315 | 68,315 | |||||||||
|
All other corporate bonds
|
12,901,309 | 12,846,824 | 12,846,824 | |||||||||
|
Redeemable preferred stock
|
60,438 | 59,772 | 59,772 | |||||||||
|
Total fixed maturities
|
16,086,596 | 16,049,878 | 16,049,878 | |||||||||
|
Marketable Equity securities:
|
||||||||||||
|
Common stocks:
|
||||||||||||
|
Public utilities
|
8,617 | 11,665 | 11,665 | |||||||||
|
Banks, trusts, and insurance companies
|
16,312 | 19,372 | 19,372 | |||||||||
|
Industrial, miscellaneous, and all other
|
93,483 | 115,811 | 115,811 | |||||||||
|
Nonredeemable preferred stocks
|
52,591 | 54,858 | 54,858 | |||||||||
|
Total equity securities
|
171,003 | 201,706 | 201,706 | |||||||||
|
Mortgage loans on real estate(1)
|
798,295 | 796,078 | 794,283 | |||||||||
|
Policy loans
|
79,244 | 79,244 | 79,244 | |||||||||
|
Other long-term investments
|
124,229 | 131,353 | 131,353 | |||||||||
|
Short-term investments
|
48,893 | 48,882 | 48,882 | |||||||||
|
Total investments
|
$ | 17,308,260 | $ | 17,307,141 | $ | 17,305,346 | ||||||
| (1) | The amount shown in the consolidated balance sheets for mortgage loans on real estate differs from cost as these investments are presented net of a $4,012 allowance. |
S-2
Table of Contents
SCHEDULE II
CONDENSED
STATEMENTS OF FINANCIAL POSITION
(PARENT
COMPANY ONLY)
| December 31, | ||||||||
| 2006 | 2005 | |||||||
| (In thousands) | ||||||||
|
ASSETS
|
||||||||
|
Cash and investments:
|
||||||||
|
Investments
|
$ | 100,899 | $ | 83,938 | ||||
|
Investment in subsidiaries
|
1,516,626 | 1,617,147 | ||||||
|
Cash and cash equivalents
|
12,800 | 1,893 | ||||||
|
Total cash and investments
|
1,630,325 | 1,702,978 | ||||||
|
Current and deferred tax receivables
|
4,213 | 2,695 | ||||||
|
Receivables due from affiliates
|
22,665 | 8,560 | ||||||
|
Other assets
|
15,627 | 14,730 | ||||||
|
Total assets
|
$ | 1,672,830 | $ | 1,728,963 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Notes payable
|
$ | 298,737 | $ | 300,000 | ||||
|
Current and deferred taxes payable
|
— | 419 | ||||||
|
Other liabilities
|
47,258 | 23,795 | ||||||
|
Total liabilities
|
345,995 | 324,214 | ||||||
|
Capital stock, par value $0.1 per share, 15,000 shares
authorized and 10,649 shares issued and outstanding
|
106 | 106 | ||||||
|
Additional
paid-in-capital
|
1,166,325 | 1,166,325 | ||||||
|
Retained earnings
|
161,815 | 102,485 | ||||||
|
Accumulated other comprehensive income (loss)
|
(1,411 | ) | 135,833 | |||||
|
Total stockholders’ equity
|
1,326,835 | 1,404,749 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 1,672,830 | $ | 1,728,963 | ||||
S-3
Table of Contents
SCHEDULE II
(CONTINUED)
CONDENSED
STATEMENTS OF OPERATIONS
(PARENT
COMPANY ONLY)
|
Period from |
||||||||||||
|
August 2, |
||||||||||||
|
2004 |
||||||||||||
|
Year Ended |
Year Ended |
through |
||||||||||
|
December 31, |
December 31, |
December 31, |
||||||||||
| 2006 | 2005 | 2004 | ||||||||||
| (In thousands) | ||||||||||||
|
Revenues:
|
||||||||||||
|
Dividends from subsidiaries:
|
||||||||||||
|
Symetra Life Insurance Company
|
$ | 122,500 | $ | — | $ | — | ||||||
|
Other subsidiaries
|
— | 6,000 | — | |||||||||
|
Net investment income
|
2,160 | 2,374 | 523 | |||||||||
|
Net realized investment gains
|
7,365 | 1,976 | — | |||||||||
|
Total revenues
|
132,025 | 10,350 | 523 | |||||||||
|
Expenses:
|
||||||||||||
|
Fair value of warrants issued to investors
|
— | — | 101,531 | |||||||||
|
Interest expense on debt
|
19,155 | 12,388 | 3,466 | |||||||||
|
Operating expenses
|
610 | 276 | 1,888 | |||||||||
|
Total expenses
|
19,765 | 12,664 | 106,885 | |||||||||
|
Income (loss) from continuing operations before income taxes
|
112,260 | (2,314 | ) | (106,362 | ) | |||||||
|
Income tax benefits
|
(3,884 | ) | (2,856 | ) | (2,146 | ) | ||||||
|
Income before equity in undistributed net income (loss) of
subsidiaries
|
116,144 | 542 | (104,216 | ) | ||||||||
|
Equity in undistributed net income (loss) of subsidiaries:
|
||||||||||||
|
Symetra Life Insurance Company
|
38,556 | 150,486 | 62,416 | |||||||||
|
Other subsidiaries
|
4,629 | (5,870 | ) | 493 | ||||||||
| 43,185 | 144,616 | 62,909 | ||||||||||
|
Net income (loss) from continuing operations
|
159,329 | 145,158 | (41,307 | ) | ||||||||
|
Income (loss) from equity in discontinued operations (net of
taxes of $(0), $536, and $(1,335), respectively)
|
— | 1,045 | (2,411 | ) | ||||||||
|
Net income (loss)
|
$ | 159,329 | $ | 146,203 | $ | (43,718 | ) | |||||
S-4
Table of Contents
SCHEDULE II
(CONTINUED)
CONDENSED
STATEMENTS OF CASH FLOWS
(PARENT
COMPANY ONLY)
|
Period from |
||||||||||||
|
August 2, |
||||||||||||
|
2004 |
||||||||||||
|
Year Ended |
Year Ended |
through |
||||||||||
|
December 31, |
December 31, |
December 31, |
||||||||||
| 2006 | 2005 | 2004 | ||||||||||
| (In thousands) | ||||||||||||
|
Cash flows from operating activities
|
||||||||||||
|
Net income (loss)
|
$ | 159,329 | $ | 146,203 | $ | (43,718 | ) | |||||
|
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
||||||||||||
|
Income (loss) from equity in discontinued operations, net of
taxes
|
— | (1,045 | ) | 2,411 | ||||||||
|
Equity in undistributed net income of subsidiaries
|
(43,185 | ) | (144,616 | ) | (62,909 | ) | ||||||
|
Net realized investment gains
|
(7,365 | ) | (1,976 | ) | — | |||||||
|
Fair value of warrants issued to investors
|
— | — | 101,531 | |||||||||
|
Changes in accrued items and other adjustments, net
|
7,180 | 2,495 | 10,642 | |||||||||
|
Total adjustments
|
(43,370 | ) | (145,142 | ) | 51,675 | |||||||
|
Net cash provided by operating activities
|
115,959 | 1,061 | 7,957 | |||||||||
|
Cash flows from investing activities
|
||||||||||||
|
Purchases of investments
|
(46,686 | ) | (94,490 | ) | (40,773 | ) | ||||||
|
Sales of investments
|
52,965 | 51,920 | 5,539 | |||||||||
|
Purchases of Safeco Life & Investments
|
— | — | (1,349,911 | ) | ||||||||
|
Cash received from discontinued operations
|
— | — | 30,000 | |||||||||
|
Dividends from discontinued operations
|
— | 29,236 | 20,001 | |||||||||
|
Other, net
|
(11,062 | ) | (21,286 | ) | — | |||||||
|
Net cash provided by (used in) investing activities
|
(4,783 | ) | (34,620 | ) | (1,335,144 | ) | ||||||
|
Cash flows from financing activities
|
||||||||||||
|
Capital contributions/loans to subsidiaries
|
(715 | ) | (202 | ) | — | |||||||
|
Proceeds from sale of capital stock
|
— | — | 1,064,900 | |||||||||
|
Cash dividend to investors
|
(100,000 | ) | — | — | ||||||||
|
Proceeds from note payable
|
298,671 | — | 315,000 | |||||||||
|
Repayments of note payable
|
(300,000 | ) | — | (15,000 | ) | |||||||
|
Other, net
|
1,775 | — | (2,059 | ) | ||||||||
|
Net cash provided by (used in) financing activities
|
(100,269 | ) | (202 | ) | 1,362,841 | |||||||
|
Net increase (decrease) in cash and cash equivalents from
continuing operations
|
10,907 | (33,761 | ) | 35,654 | ||||||||
|
Cash and cash equivalents at beginning of period
|
1,893 | 35,654 | — | |||||||||
|
Cash and cash equivalents at end of period
|
$ | 12,800 | $ | 1,893 | $ | 35,654 | ||||||
S-5
Table of Contents
SCHEDULE II
(CONTINUED)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
(PARENT COMPANY ONLY)
(In Thousands)
(PARENT COMPANY ONLY)
(In Thousands)
Year
Ended December 31, 2006
| 1. | Organization and Presentation |
The accompanying financial statements comprise a condensed
presentation of financial position, results of operations, and
cash flows of Symetra Financial Corporation (the Company) on a
separate-company basis. These condensed financial statements do
not include the accounts of the Company’s wholly owned
subsidiaries, but instead include the Company’s investment
in those subsidiaries, stated at amounts which are substantially
equal to the Company’s equity in the subsidiaries’ net
assets. Therefore, the accompanying financial statements are not
those of the primary reporting entity.
Additional information about accounting policies pertaining to
investments and other significant accounting policies applied by
the Company and its subsidiaries, debt, and commitments and
contingencies are as set forth in Notes 2, 11, and 14,
respectively, to the audited consolidated financial statements
of the Company.
| 2. | Related Parties |
The Company received dividends of $122,500, $35,236, and $20,001
from its consolidated subsidiaries for the years ended
December 31, 2006 and 2005 and the five months ended
December 31, 2004.
See Note 19 to the audited consolidated financial
statements of the Company included earlier in this report for a
description of other related-party transactions.
S-6
Table of Contents
SCHEDULE III
SUPPLEMENTAL
INSURANCE INFORMATION
Year Ended December 31, 2006
Year Ended December 31, 2006
|
Future |
||||||||||||||||||||||||||||||||||||
|
Policy |
||||||||||||||||||||||||||||||||||||
|
Benefits, |
Benefits, |
Amortization |
||||||||||||||||||||||||||||||||||
|
Deferred |
Losses, |
Claims, |
of Deferred |
|||||||||||||||||||||||||||||||||
|
Policy |
Claims, |
Other |
Net |
Losses, and |
Policy |
Other |
||||||||||||||||||||||||||||||
|
Acquisition |
and Loss |
Unearned |
Policyholder |
Premium |
Investment |
Settlement |
Acquisition |
Operating |
||||||||||||||||||||||||||||
|
Segment
|
Costs | Expenses(1) | Premiums | Funds | Revenue | Income | Expenses | Costs | Expenses | |||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||
|
December 31, 2006
|
||||||||||||||||||||||||||||||||||||
|
Group
|
$ | 3,998 | $ | 185,215 | $ | 2,522 | $ | 8,376 | $ | 387,231 | $ | 18,030 | $ | 230,753 | $ | 10,882 | $ | 105,742 | ||||||||||||||||||
|
Retirement Services
|
54,472 | 4,916,869 | — | 5,677 | 130 | 269,821 | 169,731 | 1,081 | 61,738 | |||||||||||||||||||||||||||
|
Income Annuities
|
6,813 | 7,010,585 | — | 1,989 | — | 439,001 | 371,786 | 580 | 21,591 | |||||||||||||||||||||||||||
|
Individual
|
22,954 | 4,370,104 | 9,199 | 22,016 | 138,296 | 232,759 | 258,180 | 2,046 | 57,370 | |||||||||||||||||||||||||||
|
Other
|
— | (698 | ) | — | 8,311 | — | 25,316 | (327 | ) | — | 14,100 | |||||||||||||||||||||||||
|
Total
|
$ | 88,237 | $ | 16,482,075 | $ | 11,721 | $ | 46,369 | $ | 525,657 | $ | 984,927 | $ | 1,030,123 | $ | 14,589 | $ | 260,541 | ||||||||||||||||||
|
December 31, 2005
|
||||||||||||||||||||||||||||||||||||
|
Group
|
$ | 5,288 | $ | 208,122 | $ | 2,795 | $ | 8,423 | $ | 438,276 | $ | 19,270 | $ | 296,036 | $ | 10,478 | $ | 115,342 | ||||||||||||||||||
|
Retirement Services
|
25,537 | 5,576,531 | — | 5,313 | 121 | 292,801 | 185,841 | 94 | 62,636 | |||||||||||||||||||||||||||
|
Income Annuities
|
4,291 | 7,173,678 | — | 2,363 | — | 441,438 | 392,534 | 272 | 19,383 | |||||||||||||||||||||||||||
|
Individual
|
13,901 | 4,246,684 | 8,765 | 24,058 | 137,062 | 222,613 | 263,944 | 1,017 | 61,374 | |||||||||||||||||||||||||||
|
Other
|
— | — | — | 7,375 | — | 17,926 | — | — | 14,512 | |||||||||||||||||||||||||||
|
Discontinued Operations
|
— | — | — | — | — | 172 | — | — | 845 | |||||||||||||||||||||||||||
|
Total
|
$ | 49,017 | $ | 17,205,015 | $ | 11,560 | $ | 47,532 | $ | 575,459 | $ | 994,220 | $ | 1,138,355 | $ | 11,861 | $ | 274,092 | ||||||||||||||||||
|
August 2, 2004 Through December 31, 2004
|
||||||||||||||||||||||||||||||||||||
|
Group
|
$ | 3,946 | $ | 231,193 | $ | 1,315 | $ | 7,018 | $ | 207,396 | $ | 8,764 | $ | 124,008 | $ | 1,352 | $ | 54,410 | ||||||||||||||||||
|
Retirement Services
|
5,914 | 6,413,824 | — | 3,741 | 105 | 124,188 | 93,362 | 236 | 26,682 | |||||||||||||||||||||||||||
|
Income Annuities
|
1,257 | 7,282,235 | — | 3,996 | — | 184,074 | 164,100 | — | 7,226 | |||||||||||||||||||||||||||
|
Individual
|
3,260 | 4,123,410 | 8,088 | 24,189 | 55,694 | 89,229 | 106,225 | 38 | 28,566 | |||||||||||||||||||||||||||
|
Other
|
— | — | — | 4,344 | — | 4,865 | — | — | 6,358 | |||||||||||||||||||||||||||
|
Discontinued Operations
|
— | — | — | — | — | 393 | — | — | 4,678 | |||||||||||||||||||||||||||
|
Total
|
$ | 14,377 | $ | 18,050,662 | $ | 9,403 | $ | 43,288 | $ | 263,195 | $ | 411,513 | $ | 487,695 | $ | 1,626 | $ | 127,920 | ||||||||||||||||||
|
January 1, 2004 Through August 1, 2004
(Predecessor)
|
||||||||||||||||||||||||||||||||||||
|
Group
|
$ | 14,261 | $ | 244,684 | $ | 1,658 | $ | 8,333 | $ | 293,213 | $ | 13,632 | $ | 196,468 | $ | 10,537 | $ | 78,727 | ||||||||||||||||||
|
Retirement Services
|
146,432 | 6,540,337 | — | 2,999 | 92 | 225,008 | 155,575 | 16,313 | 36,789 | |||||||||||||||||||||||||||
|
Income Annuities
|
— | 6,339,003 | — | 4,725 | — | 290,328 | 274,800 | — | 9,522 | |||||||||||||||||||||||||||
|
Individual
|
192,156 | 3,910,168 | 8,456 | 24,231 | 64,620 | 139,063 | 153,168 | 7,314 | 36,059 | |||||||||||||||||||||||||||
|
Other
|
— | — | — | 3,184 | — | 25,671 | — | — | 21,237 | |||||||||||||||||||||||||||
|
Discontinued Operations
|
— | — | — | — | — | 754 | — | — | 11,077 | |||||||||||||||||||||||||||
|
Total
|
$ | 352,849 | $ | 17,034,192 | $ | 10,114 | $ | 43,472 | $ | 357,925 | $ | 694,456 | $ | 780,011 | $ | 34,164 | $ | 193,411 | ||||||||||||||||||
| (1) | Funds held under deposit contracts, future policy benefits, and policy and contract claims are included in this column. |
S-7
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SYMETRA FINANCIAL CORPORATION
ARTICLE I
The corporation was initially incorporated under Delaware law on February 25, 2004 under the
name Occum Acquisition Corp. by the filing of its original Certificate of Incorporation with the
Secretary of State of the State of Delaware. The Certificate of Incorporation was amended on July
27, 2004 to change the corporation’s name from Occum Acquisition Corp. to Symetra Financial
Corporation, effective August 2, 2004. This Amended and Restated Certificate of Incorporation of
the corporation, which both further amends and restates the provisions of the corporation’s
Certificate of Incorporation, was duly adopted in accordance with the provisions of Sections 242
and 245 of the General Corporation Law of the State of Delaware (the “DGCL”) and by the
written consent of its stockholders in accordance with Section 228 of the DGCL. The Certificate of
Incorporation of the corporation is hereby amended and restated to read in its entirety as follows:
ARTICLE II
The name of the corporation is Symetra Financial Corporation (hereinafter called the
“Corporation”).
ARTICLE III
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801. The name of the registered agent at such
address is The Corporation Trust Company.
ARTICLE IV
The purpose of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the DGCL.
ARTICLE V
Section 5.01. Capital Stock. The total number of shares of capital stock that the
Corporation shall have authority to issue is seven hundred and sixty million (760,000,000) shares,
consisting of seven hundred and fifty million (750,000,000) shares of common stock, par value of
$0.01 per share (“Common Stock”) and ten million (10,000,000) shares of preferred stock,
par value $0.01 per share (“Preferred Stock”). The number of authorized shares of Common
Stock and Preferred Stock may be increased or decreased (but not below the number of shares thereof
then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock
of the Corporation entitled to vote thereon irrespective of the provisions of
2
Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders
of any of the Common Stock or Preferred Stock voting separately as a class shall be required
therefor.
Section 5.02. Preferred Stock. The Board of Directors of the Corporation (the
“Board”) is hereby expressly authorized, by resolution or resolutions, to provide, out of
the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each
such series, to fix the number of shares constituting such series and the designation of such
series, and the voting powers (if any) of the shares of such series, preferences and relative,
participating, optional or other special rights, if any, and any qualifications, limitations or
restrictions thereof, of the shares of such series. The voting powers, preferences and relative,
participating, optional and other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from those of any and all
other series at any time outstanding.
Section 5.03. Voting; Other Rights. (a) Each holder of Common Stock, as such, shall
be entitled to one vote in person or by proxy for each share of Common Stock held of record by such
holder on all matters on which stockholders generally are entitled to vote; provided,
however, that, except as otherwise required by law, holders of Common Stock, as such, shall
not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation
(including any Certificate of Designation relating to any series of Preferred Stock) that relates
solely to the terms of one or more outstanding series of Preferred Stock if the holders of such
affected series are entitled, either separately or together with the holders of one or more other
such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation
(including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to
the DGCL.
(b) Except as otherwise required by law, holders of a series of Preferred Stock shall be
entitled only to such voting rights, if any, as shall expressly be granted thereto pursuant to the
provisions of this Article V (including any Certificate of Designation relating to such series).
(c) Upon the dissolution, liquidation or winding up of the Corporation, subject to the
rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the
Common Stock, as such, shall be entitled to receive the assets of the Corporation available for
distribution to its stockholders ratably in proportion to the number of shares held by them
(d) Subject to the preferential rights of the Preferred Stock, if any, the holders of Common
Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the
assets of the Corporation which are by law available therefor, dividends payable either in cash, in
property or in shares of capital stock.
3
ARTICLE VI
Subject to the rights of the holders of any series of Preferred Stock, any action required or
permitted to be taken by the stockholders of the Corporation may be effected at a duly called
annual or special meeting of the stockholders of the Corporation. No action required or permitted
to be taken at any annual or special meeting of the stockholders of the Corporation may be taken
without a meeting and the power of the stockholders to consent in writing, without a meeting, to
the taking of any action is specifically denied.
ARTICLE VII
In furtherance and not in limitation of the powers conferred upon it by law, the Board is
expressly authorized to adopt, amend or repeal the Bylaws of the Corporation by the vote of a
majority of the entire Board or such greater vote as shall be specified in the Bylaws.
ARTICLE VIII
The business and affairs of the Corporation shall be managed by or under the direction of the
Board. The exact number of directors shall be fixed in a manner provided in the Bylaws. The
directors, other than those who may be elected by the holders of any series of Preferred Stock
pursuant to the provisions of this Amended and Restated Certificate of Incorporation or any
resolution or resolutions providing for the issuance of such class or series of stock adopted by
the Board, shall be elected by the stockholders entitled to vote thereon at each annual or special
meeting of stockholders and shall hold office until the next annual meeting of stockholders and
until each of their successors shall have been elected and qualified. Unless otherwise provided in
the Bylaws, the election of directors need not be by written ballot. No decrease in the number of
directors constituting the Board shall shorten the term of any incumbent director. The directors
shall be classified, with respect to the time for which they severally hold office, into three
classes, as nearly equal in number as possible, one class to be originally elected for a term
expiring at the first annual meeting of stockholders following the effectiveness of this Amended
and Restated Certificate of Incorporation, another class to be originally elected for a term
expiring at the second annual meeting of stockholders following the effectiveness of this Amended
and Restated Certificate of Incorporation, and another class to be originally elected for a term
expiring at the third annual meeting of stockholders following the effectiveness of this Amended
and Restated Certificate of Incorporation, with each director to hold office until such person’s
successor is duly elected and qualified. At each annual meeting of stockholders, directors elected
to succeed those directors whose terms then expire shall be elected for a term of office to expire
at the third succeeding annual meeting of stockholders after their election, with each director to
hold office until such person’s successor shall have been duly elected and qualified.
Except as otherwise provided for or fixed by or pursuant to the provisions of Article V of
this Amended and Restated Certificate of Incorporation relating to the rights of the holders of any
series of Preferred Stock, newly created directorships resulting from any increase in the number of
directors may be filled by a majority of the directors then in office, although less than a quorum,
or by a sole remaining director.
4
Any director may be removed, with or without cause, by the affirmative vote of a majority of
the directors then in office.
There shall be no limitation on the qualifications of any person to be a director or on the
ability of any director to vote on any matter brought before the Board, except (a) as required by
applicable law or (b) as set forth in this Amended and Restated Certificate of Incorporation.
ARTICLE IX
To the fullest extent that the DGCL or any other law of the State of Delaware as it exists or
as it may hereafter be amended permits the limitation or elimination of the liability of directors,
no director of the Corporation shall be liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. If the DGCL hereinafter is amended to further
eliminate or limit the liability of directors, then the liability of a director of the Corporation,
in addition to the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended DGCL. No amendment to or repeal of this Article IX shall
apply to or have any effect on the liability or alleged liability of any director for or with
respect to any acts or omissions of such director occurring prior to such amendment or repeal.
ARTICLE X
Each person who is or was or had agreed to become a director or officer of the Corporation,
and each such person who is or was serving or who had agreed to serve at the request of the
Corporation as a director, officer, partner, member, employee or agent of another corporation,
partnership, limited liability company, joint venture, trust or other enterprise (including the
heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation
to the fullest extent permitted from time to time by applicable law.
IN WITNESS WHEREOF, I, Randall H. Talbot, President and Chief Executive Officer of Symetra
Financial Corporation, have executed this Amended and Restated Certificate of Incorporation this [
]th day of [ ] 2007.
| President and Chief Executive Officer |
Exhibit 3.2
AMENDED BYLAWS
OF
SYMETRA FINANCIAL CORPORATION
(HEREINAFTER CALLED THE “CORPORATION”)
ARTICLE I
Meetings Of Stockholders
Section 1. Place of Meetings. Meetings of the stockholders shall be held at such
place, either within or without the state of Delaware, as shall be designated from time to time by
the Board of Directors or the chairman of the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of the stockholders shall be held on
such date and at such time as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting, at which meetings the stockholders shall transact such
business as may be properly brought before the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by the Amended
and Restated Certificate of Incorporation, special meetings of the stockholders of the Corporation
may be called at any time and for any purpose or purposes by affirmative vote of a majority of the
entire Board of Directors or our President. Special meetings of the stockholders of the
Corporation may not be called by any other person or persons or in any other manner. No conduct
other than that specified in the notice for such meeting may take place at a special meeting.
Section 4. Notice of Meetings. Except as otherwise provided by applicable law or by
the Amended and Restated Certificate of Incorporation, notice of each meeting of the stockholders,
whether annual or special, shall be given not less than 10 days nor more than 60 days before the
date of the meeting to each stockholder of record entitled to vote at the meeting. If mailed, such
notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to
the stockholder at such stockholder’s address as it appears on the records of the Corporation. Each
such notice shall state the place, if any, date and hour of the meeting, the means of remote
communication, if any, by which stockholders and proxyholders may be deemed to be present in person
and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which
the meeting is called. Notice of any meeting of the stockholders shall not be required to be given
to any stockholder who shall waive notice thereof as provided in Section 2 of Article V of these
Bylaws. Notice of adjournment of a
2
meeting of the stockholders need not be given if the time, place, if any, thereof, and the
means of remote communications, if any, by which stockholders and proxyholders may be deemed to be
present in person and vote at such adjourned meeting are announced at such meeting, unless the
adjournment is for more than 30 days or, after adjournment, a new record date is fixed for the
adjourned meeting.
Section 5. Quorum. Unless otherwise provided by law or by the Amended and Restated
Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum
at all meetings of the stockholders for the transaction of business. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the stockholders entitled
to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at the meeting as
originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder entitled to vote at the meeting.
Section 6. Order of Business. (a) At every meeting of stockholders, the Chairman of
the Board of Directors, or in such person’s absence, the Chief Executive Officer and President, or
in the absence of both of them, any Vice President, shall act as Chairman of the meeting. In the
absence of the Chairman of the Board of Directors, the Chief Executive Officer and President and
each Vice President, the Board of Directors, or if the Board of Directors fails to act, the
stockholders may appoint any stockholder, director or officer of the Corporation to act as Chairman
of any meeting. The Chairman of any meeting shall have the right and authority to prescribe such
rules, regulations and procedures and to do all such acts and things as are necessary or desirable
for the proper conduct of the meeting. The Secretary of the Corporation shall act as Secretary of
the meeting, but in the absence of the Secretary, the Chairman of the meeting may appoint any
person to act as Secretary of the meeting.
(b) (1) Except as otherwise provided in the Amended and Restated Certificate of Incorporation,
nominations of persons for election to the Board of Directors and the proposal of business to be
considered by the stockholders may be made at any annual meeting of the stockholders, only (i)
pursuant to the Corporation’s notice of meeting (or any supplement thereto), (ii) by or at the
direction of the Board of Directors or (iii) by any stockholder who is a holder of record at the
time of the giving of the notice provided for in this Section 6, who is entitled to vote at the
meeting and who complies with the procedures set forth in this Section 6.
(2) Except as otherwise provided in the Amended and Restated Certificate of Incorporation, for
nominations or business properly to be brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in proper written form to the Secretary of the
Corporation and any such proposed business other than the nomination of persons for election to the
Board of Directors must constitute a
3
proper matter for stockholder action. To be timely, a stockholder’s notice must be delivered to or
mailed and received at the principal executive offices of the Corporation not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately preceding annual meeting;
provided, however, that in the event that the date of the annual meeting is more
than 30 days earlier or more than 60 days later than such anniversary date, notice by the
stockholder to be timely must be so delivered or received not earlier than the 120th day prior to
such annual meeting and not later than the close of business on the later of the 90th day prior to
such annual meeting or the 10th day following the day on which public announcement of the date of
such meeting is first made; provided further, however, that for the purpose
of calculating the timeliness of stockholder notices for the 2008 annual meeting of stockholders,
the date of the immediately preceding annual meeting shall be deemed to be May 15, 2007. In no
event shall the public announcement of an adjournment or postponement of an annual meeting commence
a new time period (or extend any time period) for the giving of a stockholder’s notice as described
above. To be in proper written form, a stockholder’s notice to the Secretary of the Corporation
shall set forth in writing as to each matter the stockholder proposes to bring before the annual
meeting: (i) as to each person whom the stockholder proposes to nominate for election or
re-election as a director, all information relating to such person that is required to be disclosed
in solicitations of proxies for election of directors in an election contest, or is otherwise
required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) (including such person’s written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (ii) as to any other business that
the stockholder proposes to bring before the meeting, a brief description of the business desired
to be brought before the annual meeting, the text of the proposal or business (including the text
of any resolutions proposed for consideration) and the reasons for conducting such business at the
annual meeting and in the event that such business includes a proposal to amend these bylaws, the
language of the proposed amendment; (iii) the name and address, as they appear on the Corporation’s
books, of the stockholder proposing such business or nomination and the name and address of the
beneficial owner, if any, on whose behalf the nomination or proposal is being made; (iv) the class
or series and number of shares of capital stock of the Corporation which are beneficially owned or
owned of record by the stockholder and the beneficial owner; (v) any material interest of the
stockholder in such business; (vi) a representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such annual meeting and intends to appear in person or
by proxy at such meeting to propose such business; and (vii) if the stockholder intends to solicit
proxies in support of such stockholder’s proposal, a representation to that effect. The foregoing
notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the
Corporation of his or her intention to make a nomination or present a proposal at an annual meeting
and such stockholder’s nominee or proposal has been included in a proxy statement that has been
prepared by management of the Corporation to solicit proxies for such annual meeting;
provided, however, that if such stockholder does not appear or send a qualified
representative to present such nominee or proposal at such annual meeting, the Corporation need not
present such nominee or proposal for a vote at such meeting notwithstanding that proxies in respect
of such vote may have been received by the Corporation. For purposes of this
4
Section 6, to be considered a qualified representative of the stockholder, a person must be
authorized by a writing executed by such stockholder or an electronic transmission delivered by
such stockholder to act for such stockholder as proxy at the meeting of stockholders and such
person must produce such writing or electronic transmission, or a reliable reproduction of such
writing or electronic transmission, at the meeting of stockholders. The Corporation may require
any proposed nominee to furnish such other information as it may reasonably require to determine
the eligibility of such proposed nominee to serve as a director of the Corporation.
(3) Notwithstanding anything in paragraph (b)(2) above to the contrary, in the event that the
number of directors to be elected to the Board of Directors at an annual meeting of the
stockholders is increased and there is no public announcement naming all of the nominees for
directors or specifying the size of the increased Board of Directors made by the Corporation at
least 90 days prior to the first anniversary of the date of the immediately preceding annual
meeting, a stockholder’s notice required by this Section 6 shall also be considered timely, but
only with respect to nominees for any new positions created by such increase, if it shall be
delivered to or mailed to and received by the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 10th day following the day on which such
public announcement is first made by the Corporation; provided, however, that for
the purpose of calculating the timeliness of public announcements by the Corporation for the 2008
annual meeting of stockholders, the date of the immediately preceding annual meeting shall be
deemed to be May 15, 2007.
(c) Only such business shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons
for election to the Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the
direction of the Board of Directors or (ii) by any stockholder who is a holder of record at the
time of the giving of notice provided for in this Section 6, who is entitled to vote at the meeting
and who complies with the procedures set forth in this Section 6 (except as otherwise provided in
the Amended and Restated Certificate of Incorporation). In the event the Corporation calls a
special meeting of stockholders for the purpose of electing one or more directors to the Board of
Directors, any such stockholder may nominate a person or persons (as the case may be), for election
to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder has
given timely notice thereof in proper written form to the Secretary of the Corporation (except as
otherwise provided in the Amended and Restated Certificate of Incorporation). To be timely, a
stockholder’s notice must be delivered to or mailed and received at the principal executive offices
of the Corporation not earlier than the 120th day prior to such special meeting and not later than
the close of business on the later of the 90th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such meeting is first made. In no
event shall the public announcement of an adjournment or postponement of a special meeting commence
a new time period (or extend any time period) for the giving of a stockholder’s notice as
5
described above. To be in proper written form, such notice must meet the requirements of paragraph
(b)(2) above.
(d) Except as otherwise provided in the Amended and Restated Certificate of Incorporation, only
such persons who are nominated in accordance with this Section 6 (including, for avoidance of
doubt, pursuant to the fifth sentence of paragraph (b)(2) above) shall be eligible to serve as
directors of the Corporation and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures set forth in this
Section 6 (including, for avoidance of doubt, pursuant to the fifth sentence of paragraph (b)(2)
above). The Chairman of a meeting shall refuse to permit any business to be brought before the
meeting which fails to comply with the foregoing or if a stockholder solicits proxies in support of
such stockholder’s nominee or proposal without such stockholder having made the representation
required by clause (vii) of paragraph (b)(2) above.
(e) Notwithstanding the foregoing provisions of this Section 6, a stockholder shall also comply
with all applicable requirements of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 6. Nothing in this Section 6 shall be deemed to
affect any rights of stockholders to request inclusion of proposals or nominations in the
Corporation’s proxy statement pursuant to applicable rules and regulations promulgated under the
Exchange Act.
Section 7. Voting. Unless otherwise required by law, the Amended and Restated
Certificate of Incorporation or these bylaws, any question brought before any meeting of the
stockholders shall be decided by the vote of the holders of a majority of the stock represented and
voting on such question. Each stockholder represented at a meeting of the stockholders shall be
entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such
stockholder. Such votes may be cast in person or by proxy.
Section 8. List of Stockholders Entitled to Vote. The officer of the Corporation who
has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before
every meeting of the stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to examination by
any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a
period of at least 10 days prior to the meeting, as required by law. The list shall also be
produced and kept at the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.
Section 9. Stock Ledger. The stock ledger of the Corporation shall constitute the
list required by Section 8 and shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger or to vote in person or by proxy at any meeting of stockholders.
6
ARTICLE II
Directors
Section 1. Qualification and Election of Directors. Directors need not be
stockholders or citizens or residents of the United States of America. Each of the directors shall
hold office until his resignation or removal in the manner hereinafter provided.
Section 2. Resignations. Any director may resign at any time. Such resignation
shall be made in writing, and shall take effect at the time specified therein, and if no time be
specified, at the time of its receipt by the Chairman of the Board, if any, the President or the
Secretary. The acceptance of a resignation shall not be necessary to make it effective.
Section 3. Removal. Directors may only be removed as provided in the Amended and
Restated Certificate of Incorporation.
Section 4. Vacancies. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of the directors then in
office, though less than a quorum, or by a sole remaining director, and the directors so chosen
shall hold office until their earlier resignation or removal.
Section 5. Number of Directors. The number of directors will be fixed from time to
time solely pursuant to a resolution adopted by the Board of Directors.
Section 6. Chairman of the Board of Directors. The Board of Directors, in its
discretion, may choose a Chairman of the Board of Directors and one or more Vice Chairmen (who must
be directors). The Chairman of the Board of Directors, if one shall be appointed, shall preside at
all meetings of the stockholders and of the Board of Directors. Except where by law the signature
of the President is required, the Chairman of the Board of Directors shall possess the same power
as the President to sign all contracts, certificates and other instruments of the Corporation which
may be authorized by the Board of Directors. During the absence or disability of the President,
the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties
of the President. The Chairman of the Board of Directors shall also perform such other duties and
may exercise such other powers as from time to time may be assigned to him by these bylaws or by
the Board of Directors.
Section 7. Vice Chairman. The Vice Chairman of the Board of Directors, if one shall
be appointed, or the Vice Chairmen, if there shall be more than one, shall perform such duties and
may exercise such other powers as from time to time may be assigned by these bylaws, the Board of
Directors or the Chairman of the Board of Directors. In the absence or disability of the chairman
of the Board of Directors, or if there be none, the Vice Chairman shall preside at meetings of the
stockholders and the Board of Directors.
7
Section 8. Duties and Powers. The business of the Corporation shall be managed by or
under the direction of the Board of Directors which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by the Amended and Restated
Certificate of Incorporation or by these bylaws, conferred upon or reserved to the stockholders.
Section 9. Meetings. The Board of Directors may hold meetings either within or
without the state of Delaware.
Section 10. Quorum. Unless otherwise provided by law, the Amended and Restated
Certificate of Incorporation or these bylaws, at all meetings of the Board of Directors, a majority
of the entire Board of Directors then in office shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting
of the Board of Directors, the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be present.
Section 11. Actions of Board. If the Board of Directors submits any action for the
transaction of business which results in an equal number of the directors at the meeting voting for
and against the action and such action would be effective when taken by a majority vote, then in
such case the Chairman of the Board of Directors shall be entitled to cast a tie breaking vote with
respect to such action. Unless otherwise restricted by the Amended and Restated Certificate of
Incorporation or these bylaws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting if all members of the
Board of Directors or committee, as the case may be, consent thereto in writing or by electronic
transmission, and the writing or writings or electronic transmission or transmissions are filed
with the minutes of proceedings of the Board of Directors, or committee. Such filing shall be in
paper form if the minutes are maintained in paper form and shall be in electronic form if the
minutes are maintained in electronic form.
Section 12. Meeting by Means of Conference Telephone. Unless otherwise provided by
law, the Amended and Restated Certificate of Incorporation or these bylaws, members of the Board of
Directors of the Corporation may participate in a meeting of the Board of Directors by means of a
conference telephone or similar communications equipment that enables all persons participating in
the meeting to hear each other, and participation in a meeting pursuant to this Section 12 shall
constitute presence in person at such meeting.
Section 13. Committees. The Board of Directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to consist of one or
more of the directors of the Corporation. Initially, the Corporation shall have the following
committees of the Board of Directors: the audit committee, the nominating and corporate governance
committee and the compensation committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent or disqualified member
at any
8
meeting of the committee. In the absence or disqualification of a member of a committee, the
member or members present at any meeting and not disqualified from voting, whether or not the
member or members present constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or disqualified member.
Section 14. Compensation. The directors who are officers or employees of the
Corporation or any of its subsidiaries shall serve on the Board of Directors without compensation
or reimbursement of expenses. The compensation of any other director shall be in the form of a
fixed fee and expenses of attendance set by resolution adopted by the Board of Directors. Nothing
herein contained, however, shall be construed to preclude any director from serving the Corporation
in any other capacity as an officer, agent or otherwise, and receiving compensation therefor.
ARTICLE III
Officers
Section 1. General. The officers of the Corporation shall be chosen by the Board of
Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors, in its
discretion, may also choose one or more Vice Presidents, Assistant Secretaries and Assistant
Treasurers as it may deem proper. Any number of offices may be held by the same person, unless
otherwise prohibited by law, the Amended and Restated Certificate of Incorporation or these bylaws.
The officers of the Corporation need not be stockholders of the Corporation nor, except in the
case of the Chairman of the Board of Directors and any Vice Chairman, need such officers be
directors of the Corporation.
Section 2. Election. The Board of Directors shall elect the officers of the
Corporation who shall hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board of Directors; and all officers of
the Corporation shall hold office until their successors are chosen and qualified, or until their
earlier resignation or removal. Any officer elected by the Board of Directors may be removed at
any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in
any office of the Corporation shall be filled by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of attorney, proxies,
waivers of notice of meeting, consents and other instruments relating to securities owned by the
Corporation may be executed in the name of and on behalf of the Corporation by any officer of the
Corporation and any such officer may, in the name of and on behalf of the Corporation, take all
such action as any such officer may deem advisable to vote in person or by proxy at any meeting of
security holders of any Corporation or entity in which the Corporation may own securities and at
any such meeting shall possess and may exercise any and all rights and powers incident to the
ownership of such securities and which, as the owner thereof, the Corporation might have
9
exercised and possessed if present. The Board of Directors may, by resolution, from time to
time confer like powers upon any other person or persons.
Section 4. President. The President shall be the Chief Executive Officer of the
Corporation and shall exercise general and active supervision over and management of the property,
affairs and business of the Corporation and shall authorize other officers of the Corporation to
exercise such powers as he, in his discretion, may deem to be in the best interests of the
Corporation. The President shall preside at meetings of the stockholders and the Board of
Directors in the absence or non-election of the Chairman of the Board of Directors. The President
shall, in general, perform all duties incident to the office of President and shall have such other
duties as the Board of Directors may from time to time prescribe.
Section 5. Vice President. The Vice President, or Vice Presidents, if any shall be
appointed, shall have such duties as the Board of Directors, the President or these bylaws may from
time to time prescribe.
Section 6. Treasurer. The Treasurer shall have the custody of the Corporation funds
and securities and shall keep full and accurate account of receipts and disbursements in books
belonging to the Corporation. He shall deposit all moneys and other valuables in the name and to
the credit of the Corporation in such depositaries as may be designated by the Board of Directors.
He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, or the
President, taking proper vouchers for such disbursements. He shall render to the President, the
Board of Directors and each stockholder at the meetings of the Board of Directors or the
stockholders, or whenever any of the foregoing may request it, an account of all his transactions
as Treasurer and of the financial condition of the Corporation.
Section 7. Secretary. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and directors and all other notices required by law or by these
bylaws, and in case of his absence or refusal or neglect so to do, any such notice may be given by
any person thereunto directed by the President, the directors or stockholders, upon whose request
the meeting is called as provided in these bylaws. He shall record all the proceedings of the
meetings of the Board of Directors, any committees thereof and the stockholders of the Corporation
in a book to be kept for that purpose, and shall perform such other duties as may be assigned to
him by the Board of Directors or the President. He shall have the custody of the seal of the
Corporation and shall affix the same to all instruments requiring it, when authorized by the Board
of Directors or the President, and attest the same.
Section 8. Assistant Treasurers and Assistant Secretaries. Assistant Treasurers and
Assistant Secretaries, if any shall be appointed, shall have such powers and shall perform such
duties as shall be assigned to them, respectively, by the Board of Directors or the President.
10
ARTICLE IV
Stock
Section 1. Form of Certificates. Every holder of stock in the Corporation shall be
entitled to have a certificate signed, in the name of the Corporation (i) by the Chairman or the
Vice Chairman of the Board of Directors, or the President or a Vice President and (ii) by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned by (i) a transfer agent
other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its
employee, any other signature on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new certificate to
be issued in place of any certificate theretofore issued by the Corporation alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal
representative, to advertise the same in such manner as the Board of Directors shall require and/or
to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may
be made against the Corporation with respect to the certificate alleged to have been lost, stolen
or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in the manner
prescribed by law and in these bylaws. Transfers of stock shall be made on the books of the
Corporation only by the person named in the certificate or by his attorney lawfully constituted in
writing and upon the surrender of the certificate therefor, which shall be canceled before a new
certificate shall be issued.
Section 5. Record Date. In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend, or to express consent to corporate action in writing
without a meeting, or in order to make a determination of stockholders for any other proper
purposes, the Board of Directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than 60 days nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if notice
11
is waived, at the close of business on the next day preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however, that
the Board of Directors may fix a new record date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to receive dividends,
and to vote as such owner, and to hold liable for calls and assessments a person registered on its
books as the owner of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by law.
ARTICLE V
Notices
Section 1. Notices. Whenever written notice is required by law, the Amended and
Restated Certificate of Incorporation or these bylaws, to be given to any director or stockholder,
such notice may be given by mail, addressed to such director or stockholder, at his address as it
appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the United States mail. Written
notice may also be given personally or by telegram, telex or cable or otherwise as permitted by
law.
Section 2. Waivers of Notice. Whenever notice is required to be given under any
provision of the Amended and Restated Certificate of Incorporation or these bylaws, a written
waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the
person entitled to notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express purpose of objecting at the
beginning of the meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice or any waiver by electronic transmission unless so
required by the Amended and Restated Certificate of Incorporation or these bylaws.
ARTICLE VI
General Provisions
Section 1. Dividends. Subject to the provisions of the Amended and Restated
Certificate of Incorporation, if any, dividends upon the capital stock of the Corporation may be
declared by the Board of Directors at any meeting, and may be paid in cash or in property. Before
payment of any dividend, there may be set aside out of any
12
funds of the Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any property of the
Corporation or for any proper purpose, and the Board of Directors may modify or abolish any such
reserve.
Section 2. Disbursements. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or persons as the
Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be the calendar
year, or such other period as may be adopted by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its organization and the words “corporate seal, Delaware”. The
seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE VII
Indemnification
Section 1. Power to Indemnify in Actions, Suits or Proceedings. The Corporation
shall indemnify to the fullest extent permitted by, and in the manner permissible under, the laws
of the State of Delaware any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding. Expenses incurred by a director or officer in defending or investigating the defense
of a threatened or pending action, suit or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the Corporation as authorized by the laws of the state of
Delaware.
Section 2. Indemnification by a Court. Any director or officer may apply to any
court of competent jurisdiction in the state of Delaware for indemnification to the extent
otherwise permissible under the laws of the state of Delaware. The basis of such indemnification
by a court shall be a determination by such court that indemnification of the director or officer
is proper in the circumstances because it is permitted by the laws of the state of Delaware. The
fact that the Corporation has not previously authorized indemnification for such director or
officer shall not be a defense to such application or
13
create a presumption that the director or officer seeking indemnification has not met any
applicable standard of conduct. Notice of any application for indemnification pursuant to this
Section 2 shall be given to the Corporation promptly upon the filing of such application. If
successful, in whole or in part, the director or officer seeking indemnification shall also be
entitled to be paid the expense of prosecuting such application.
Section 3. Nonexclusivity of Indemnification and Advancement of Expenses. The
foregoing rights of indemnification shall not be deemed exclusive of any other right to which any
director may be entitled apart from the provisions of this Article VII.
Section 4. Insurance. The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or agent of another
Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against
any liability asserted against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power or the obligation to indemnify
him against such liability under the provisions of this Article VII.
Section 5. Certain Definitions. For purposes of this Article VII, references to “the
Corporation” shall include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to indemnify its directors,
officers, employees or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, shall stand in the same position under
the provisions of this Article VII with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate existence had continued.
For purposes of this Article VII, references to “fines” shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to “serving at the request of the
Corporation” shall include any service as a director, officer, employee or agent of the Corporation
which imposes duties on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries.
Section 6. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII
shall, unless otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 7. Limitation on Indemnification. Notwithstanding anything contained in this
Article VII to the contrary, except for proceedings to enforce rights to
14
indemnification (which shall be governed by Section 2 of this Article VII), the Corporation
shall not be obligated to indemnify any director, officer, employee or agent in connection with a
proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was
authorized or consented to by the Board of Directors of the Corporation.
ARTICLE VIII
Amendments
The Board of Directors shall have the power to adopt, amend or repeal bylaws. Bylaws adopted
by the Board of Directors may be repealed or changed, and new bylaws made, by the stockholders.
Exhibit 4.1
| STOCK CERTIFICATE CUSIP XXXXXX |
EXHIBIT 4.12
INDENTURE
between
SYMETRA FINANCIAL CORPORATION,
as Company
as Company
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
as Trustee
Dated as of October 10, 2007
Capital Efficient Notes due 2067
TABLE OF CONTENTS
| Page | ||||
| ARTICLE 1 |
||||
| Definitions and Other Provisions of General Application |
||||
Section 1.01. Definitions and Construction |
1 | |||
Section 1.02. Compliance Certificates and Opinions |
18 | |||
Section 1.03. Form of Documents Delivered to Trustee |
19 | |||
Section 1.04. Acts of Holders |
19 | |||
Section 1.05. Notices |
20 | |||
Section 1.06. Notice to Holders; Waiver |
20 | |||
Section 1.07. Headings and Table of Contents |
21 | |||
Section 1.08. Severability |
21 | |||
Section 1.09. Trust Indenture Act Controls |
21 | |||
Section 1.10. Benefits of Indenture |
21 | |||
Section 1.11. No Implied Obligations |
22 | |||
Section 1.12. GOVERNING LAW |
22 | |||
Section 1.13. Counterparts |
22 | |||
| ARTICLE 2 |
||||
| The Notes |
||||
Section 2.01. Form and Dating |
22 | |||
Section 2.02. Terms of the Notes |
22 | |||
Section 2.03. Rule 144A Global Notes |
36 | |||
Section 2.04. Regulation S Temporary Global Notes |
37 | |||
Section 2.05. General — Form of Securities |
38 | |||
Section 2.06. Execution and Authentication; Issue Price; Aggregate Principal Amount |
39 | |||
Section 2.07. Trustee, Security Registrar and Paying Agent |
40 | |||
Section 2.08. Paying Agent to Hold Assets in Trust |
41 | |||
Section 2.09. Replacement Notes |
42 | |||
Section 2.10. Temporary Securities |
42 | |||
Section 2.11. Cancellation |
42 | |||
Section 2.12. Defaulted Interest |
43 | |||
Section 2.13. Persons Deemed Owners |
44 | |||
Section 2.14. CUSIP Numbers |
44 | |||
Section 2.15. Deposit of Moneys |
44 | |||
Section 2.16. Transfer and Exchange |
45 | |||
Section 2.17. Book-Entry Provisions for Global Notes |
46 | |||
Section 2.18. Restrictions on Transfer and Exchange of Notes |
47 | |||
Section 2.19. Special Transfer Provisions |
52 | |||
- i -
| Page | ||||
| ARTICLE 3 |
||||
| Repayment of the Notes |
||||
Section 3.01. Repayment |
53 | |||
Section 3.02. Selection of Securities to be Repaid |
53 | |||
Section 3.03. Notice of Repayment |
53 | |||
Section 3.04. Deposit of Repayment Amount |
54 | |||
Section 3.05. Payment of Notes Subject to Repayment |
54 | |||
| ARTICLE 4 |
||||
| Satisfaction and Discharge |
||||
Section 4.01. Satisfaction and Discharge of Indenture |
55 | |||
Section 4.02. Application of Trust Funds; Indemnification |
57 | |||
Section 4.03. Legal Defeasance and Discharge of Indenture |
57 | |||
Section 4.04. Defeasance of Certain Obligations |
59 | |||
| ARTICLE 5 |
||||
| Remedies |
||||
Section 5.01. Events of Default |
60 | |||
Section 5.02. Acceleration of Maturity; Rescission and Annulment |
61 | |||
Section 5.03. Enforcement Events |
62 | |||
Section 5.04. Trustee May File Proofs of Claim |
64 | |||
Section 5.05. Trustee May Enforce Claims Without Possession of Notes |
64 | |||
Section 5.06. Application of Money Collected |
65 | |||
Section 5.07. Limitation on Suits |
65 | |||
Section 5.08. Unconditional Right of Holders to Receive Principal, and Interest |
66 | |||
Section 5.09. Restoration of Rights and Remedies |
66 | |||
Section 5.10. Rights and Remedies Cumulative |
66 | |||
Section 5.11. Delay or Omission Not Waiver |
66 | |||
Section 5.12. Control by Holders |
67 | |||
Section 5.13. Waiver of Past Defaults |
67 | |||
Section 5.14. Undertaking for Costs |
67 | |||
Section 5.15. Waiver of Stay or Extension Laws |
68 | |||
Section 5.16. Notice of Defaults |
68 | |||
| ARTICLE 6 |
||||
| The Trustee |
||||
Section 6.01. Duties and Responsibilities of Trustee |
68 | |||
Section 6.02. Reliance on Documents, Opinions, etc. |
70 | |||
Section 6.03. No Responsibility for Recitals, etc. |
71 | |||
- ii -
| Page | ||||
Section 6.04. Ownership of Notes |
71 | |||
Section 6.05. Reports by Trustee to Holders |
71 | |||
Section 6.06. Compensation and Indemnity |
72 | |||
Section 6.07. Officers’ Certificate as Evidence |
72 | |||
Section 6.08. Eligibility of Trustee |
72 | |||
Section 6.09. Resignation or Removal of Trustee |
73 | |||
Section 6.10. Successors |
73 | |||
Section 6.11. Acknowledgement |
74 | |||
Section 6.12. Merger, Consolidation, etc. |
74 | |||
Section 6.13. Appointment of Authenticating Agent |
74 | |||
| ARTICLE 7 |
||||
| Delivery of Certain Information |
||||
Section 7.01. Delivery of Rule 144A Information and Annual Conference Call |
76 | |||
Section 7.02. Reports |
76 | |||
| ARTICLE 8 |
||||
| Successors |
||||
Section 8.01. Merger, Consolidation, or Sale of Assets |
77 | |||
Section 8.02. Successor Corporation Substituted |
78 | |||
| ARTICLE 9 |
||||
| Amendments and Supplemental Indentures |
||||
Section 9.01. Supplemental Indentures Without Consent of Holders |
78 | |||
Section 9.02. Supplemental Indentures With Consent of Holders |
79 | |||
Section 9.03. Effect of Supplemental Indentures |
81 | |||
Section 9.04. Notation on Notes |
81 | |||
Section 9.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee |
81 | |||
Section 9.06. Prohibition on Certain Amendments and Supplements |
81 | |||
| ARTICLE 10 |
||||
| Covenants |
||||
Section 10.01. Payment of Principal and Interest |
82 | |||
Section 10.02. Maintenance of Office or Agency |
82 | |||
Section 10.03. Money for Notes; Payments to Be Held in Trust |
82 | |||
Section 10.04. Maintain Existence |
84 | |||
Section 10.05. Statement by Officers as to Default |
84 | |||
- iii -
| Page | ||||
| ARTICLE 11 |
||||
| Redemption of Notes |
||||
Section 11.01. General |
84 | |||
Section 11.02. Election to Redeem; Notice to Trustee |
84 | |||
Section 11.03. Selection by Trustee of Notes to Be Redeemed |
85 | |||
Section 11.04. Notice of Redemption |
85 | |||
Section 11.05. Deposit of Redemption Price |
86 | |||
Section 11.06. Notes Payable on Redemption Date |
86 | |||
Section 11.07. Notes Redeemed in Part |
87 | |||
| ARTICLE 12 |
||||
| Subordination |
||||
Section 12.01. Agreement to Subordinate |
87 | |||
Section 12.02. Default on Senior Indebtedness |
88 | |||
Section 12.03. Liquidation; Dissolution; Bankruptcy |
88 | |||
Section 12.04. Subrogation |
90 | |||
Section 12.05. Trustee to Effectuate Subordination |
91 | |||
Section 12.06. Notice by the Company |
91 | |||
Section 12.07. Rights of the Trustee; Holders of Senior Indebtedness |
92 | |||
Section 12.08. Subordination May Not Be Impaired |
93 | |||
Section 12.09. Article Applicable to Paying Agents |
93 | |||
Section 12.10. Defeasance of this Article |
93 | |||
Section 12.11. Subordination Language to Be Included in Notes |
93 | |||
| ARTICLE 13 |
||||
| Calculation Agency |
||||
Section 13.01. Appointment of Calculation Agent |
94 | |||
Section 13.02. Status of the Calculation Agent |
94 | |||
Section 13.03. Fees and Expenses |
94 | |||
Section 13.04. Rights and Liabilities of the Calculation Agent |
95 | |||
Section 13.05. Duties of the Calculation Agent |
95 | |||
Section 13.06. Termination, Resignation or Removal of the Calculation Agent |
95 | |||
Section 13.07. Appointment of Successor Calculation Agent |
96 | |||
Section 13.08. Indemnification |
96 | |||
Section 13.09. Merger, Consolidation or Sale of Business by the Calculation Agent |
96 | |||
| EXHIBITS: | ||
Exhibit A-1 |
Form of Rule 144A Global Note or Regulation S Permanent Note | |
Exhibit A-2 |
Form of Regulation S Temporary Global Note | |
Exhibit B |
Form of Legends for Notes |
- iv -
| EXHIBITS: | Page | |
Exhibit C-1 |
Form of Transfer Certificate Transfer to Regulation S Temporary Global Security or Regulation S Permanent
Global Security |
|
Exhibit C-2 |
Form of Transfer Certificate Transfer to Rule 144A Global Security | |
Exhibit D |
Certificate of Beneficial Ownership | |
Exhibit E |
Replacement Capital Covenant |
- v -
INDENTURE, dated as of October 10, 2007, between SYMETRA FINANCIAL CORPORATION, a corporation
organized under the laws of the State of Delaware (herein called the “Company”), having its
principal office at 777 108th Avenue NE, Bellevue, Washington 98004 and U.S. BANK
NATIONAL ASSOCIATION, as Trustee (together with any successor as Trustee hereunder, the “Trustee”)
having an office located at 1420 5th Avenue, 7th Floor, Seattle, Washington
98101.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance of up to $225,000,000 aggregate principal amount of its Capital Efficient
Notes due 2067 (the “Notes”) issuable as provided in this Indenture;
WHEREAS, all things necessary to make this Indenture a valid agreement of the Company and the
Trustee, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders (as
defined below) thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions and Construction.
For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with United States GAAP, and, except as otherwise herein expressly
provided, the term “GAAP” with respect to any computation required or permitted hereunder
shall mean GAAP as are generally accepted at the date of such computation;
(3) unless the context otherwise requires, any reference to “Article”, “Section” or
“Exhibit” refers to an Article or Section of or Exhibit to this Indenture;
(4) the words “herein”, “hereof” and “hereunder” and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(5) all references used herein to the male gender shall include the female gender.
“Act,” when used with respect to any Holder, has the meaning specified in Section 1.04(a).
“Additional Interest” means the interest, if any, that shall accrue on any interest on the
Notes the payment of which has not been made on the applicable Interest Payment Date and which
shall accrue at the rate per annum specified or determined as specified in Section 2.02(b) from the
applicable Interest Payment Date.
“Additional
Notes” has the meaning set forth in Section 2.06(d).
“Alternative Payment Mechanism” has the meaning set forth in Section 2.02(f)(i).
“APM Commencement Date” means, with respect to any Deferral Period, the earlier of (i) the
first Interest Payment Date during such Deferral Period on which the Company elects to pay current
interest on the Notes or (ii) the fifth anniversary of the beginning of such Deferral Period.
“APM Securities” means:
| (a) | Common Stock; | ||
| (b) | Mandatorily Convertible Preferred Stock; | ||
| (c) | Qualifying Non-Cumulative Perpetual Preferred Stock; and | ||
| (d) | Warrants exercisable for Common Stock; |
provided that the Company may, without the consent of the Holders of the Notes, amend the
definition of APM Securities to eliminate Common Stock and/or Mandatorily Convertible Preferred
Stock from this definition if after the date of this Indenture, an accounting standard or
interpretive guidance of an existing standard issued by an organization or regulator that has
responsibility for establishing or interpreting accounting standards in the United States becomes
effective such that there is more than an insubstantial risk that the failure to do so would result
in a reduction in the Company’s earnings per share as calculated in accordance with generally
accepted accounting principles in the United States. The Company will promptly notify the Holders
of the Notes and the Trustee of any such change.
“Applicable Procedures” means, with respect to any transfer or transaction involving a Global
Security or beneficial interest therein, the rules and procedures of the DTC, Euroclear and
Clearstream, as the case may be, in each case to the extent applicable to such transaction and as
in effect from time to time.
“Applicable Rate” has the meaning set forth in Section 2.02(g)(ii).
- 2 -
“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.13 to
act on behalf of the Trustee to authenticate Notes, and shall initially be the Trustee.
“Bankruptcy Event” means any of the events set forth in Section 5.01(3) or Section 5.01(4).
“Board of Directors” means either the board of directors of the Company or any duly authorized
committee of that board duly authorized to act hereunder.
“Board Resolution” means a copy of a resolution, certified by the secretary or an assistant
secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, delivered to the Trustee.
“Business Day” means any day, other than (i) a Saturday, Sunday or other day on which banking
institutions in The City of New York are authorized or required by law or executive order to remain
closed or (ii) on or after October 15, 2017, a day that is not a day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
“Calculation Agent” means U.S. Bank National Association, or any other firm appointed by the
Company, acting as calculation agent for the Notes.
“Capital Stock” for any entity means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
shares issued by that entity.
“Certificated Notes” means Notes that are in registered definitive form and that are not
Global Notes.
“Clearstream” means Clearstream Banking, Société Anonyme.
“Commercially Reasonable Efforts” has, with respect to the Scheduled Maturity Obligations, the
meaning set forth in Section 2.02(a)(vii), and with respect to the Alternative Payment Mechanism,
the meaning set forth in Section 2.02(f)(ix).
“Commission” means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing, then its successor agency.
“Common Stock” means the Company’s equity securities, including treasury stock and shares of
common stock sold pursuant the Company’s dividend reinvestment
plan, if any, and employee benefit plans, if any, a
security that ranks pari passu upon the Company’s liquidation, dissolution or winding up with the
Company’s common stock that tracks the performance of, or relates to the results of, a business,
unit or division of the Company, and any securities issued in exchange therefor in connection with
a merger, consolidation, binding share exchange, business combination, recapitalization or similar
event.
“Common Stock Maximum Obligation” has the meaning set forth in Section 2.02(f)(ii).
- 3 -
“Communication” has the meaning set forth in Section 13.04.
“Company” means the Person named as the “Company” in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request” or “Company Order” means a written request or order signed in the name of
the Company by (i) its chief executive officer, its president or a vice president and (ii) by its
treasurer, an assistant treasurer, its comptroller, its secretary or an assistant secretary, and
delivered to the Trustee.
“Corporate Trust Office” means the office of the Trustee at which at any particular time this
Indenture shall be administered, which office, at the time of the execution of this Indenture, is
located, at 1420 5th Avenue, 7th Floor, Seattle, Washington 98101, Attention:
Symetra Financial Corporation, Capital Efficient Notes due 2067.
“Covenant Defeasance” has the meaning set forth in Section 4.04.
“Covered Debt” has the meaning assigned to such term in the Replacement Capital Covenant.
“Current Price” means, for the Common Stock on any date, the closing sale price per share (or
if no closing sale price is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on that date as reported in
composite transactions by the New York Stock Exchange or, if the Common Stock is not then listed on
the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the
Common Stock is traded or quoted. If the Common Stock is not listed on any U.S. securities exchange
on the relevant date, the “Current Price” shall be the last quoted bid price for the Common Stock
in the over-the-counter market on the relevant date as reported by Pink Sheets LLC or a similar
organization. If the Common Stock is not so quoted, the “Current Price” shall be the average of the
mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at
least three nationally recognized independent investment banking firms selected by the Company for
this purpose. If the Common Stock is not so quoted, and if bid and ask prices for the Common Stock
are not available, the “Current Price” shall be determined by a nationally recognized independent
investment banking firm selected by the Company for this purpose.
“Defaulted Interest” has the meaning specified in Section 2.12.
“Deferral Period” means the period beginning on an Interest Payment Date with respect to which
the Company elects to defer Interest and ending on the earlier of (i) the tenth anniversary of that
Interest Payment Date and (ii) the next Interest Payment Date on which the Company has paid all
Deferred Interest (including Additional Interest thereon) and all other accrued and unpaid
Interest.
“Deferred Interest” means the Interest that is deferred in accordance with the provisions of
Section 2.02(d).
- 4 -
“Depositary” means, unless otherwise specified by the Company pursuant to Section 2.17(a), The
Depository Trust Company, New York, New York, or any successor thereto registered under the
Exchange Act, as amended, or other applicable statute or regulation.
“Depositary Participant” means any member of, or participant in, the Depositary.
“Distribution Compliance Period” means the period from and including the date hereof to and
including the date 40 days after the date hereof.
“Distributions” means, as to a security or combination of securities, dividends, interest
payments or other income distributions to the holders thereof that are not Subsidiaries of the
Company.
“DTC” means The Depository Trust Company, a New York corporation.
“Eligible Proceeds” means, with respect to each relevant Interest Payment Date, the net
proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other
expenses relating to the issuance) the Company has received during the 180-day period prior to such
Interest Payment Date from the issuance of APM Securities to persons that are not the Company’s
Subsidiaries.
“Enforcement Event” has the meaning specified in Section 5.03.
“Euroclear” means Euroclear S.A./N.V., and its successors or assigns, as operator of the
Euroclear system.
“Event of Default” has the meaning specified in Section 5.01.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and rules and
regulations promulgated by the Commission thereunder.
“Final Maturity Date” means October 15, 2067.
“Global Note” means a Note issued to evidence the Notes which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with this Indenture and pursuant to a Company Order, which shall be
registered in the name of the Depositary or its nominee.
“Holder” means a Person in whose name a Note is registered in the Note Register.
“Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more amendments or indentures supplemental hereto entered into
pursuant to the applicable provisions hereof.
“Initial Purchasers” means the initial purchasers named in Schedule I to that certain purchase
agreement relating to the Notes, dated October 4, 2007, among the Company and J.P. Morgan
Securities Inc. and Lehman Brothers Inc., as representatives of the several Initial Purchasers.
- 5 -
“Intent-Based Replacement Disclosure” has the meaning assigned to such term in the Replacement
Capital Covenant.
“Interest” means both regularly scheduled interest payments and, to the extent applicable, any
Additional Interest.
“Interest Payment Date” has the meaning set forth in Section 2.02(b).
“Interest Period” means the period from and including any Interest Payment Date (or, in the
case of the first Interest Payment Date, October 10, 2007) to but excluding the next Interest
Payment Date.
“Issue
Date” means October 10, 2007.
“LIBOR Determination Date” means the second London Banking Day immediately preceding the first
day of the Relevant Period.
“London Banking Day” means any day on which commercial banks are open for general business
(including dealings in deposits in U.S. dollars) in London, England.
“Make-Whole Price” has the meaning set forth in Section 2.02(g)(ii).
“Mandatorily Convertible Preferred Stock” has the meaning assigned to such term in the
Replacement Capital Covenant.
“Market Disruption Event” means, for purposes of sales of APM Securities pursuant to the
Alternative Payment Mechanism or sales of Qualifying Capital Securities in connection with the
Scheduled Maturity Obligations, as applicable (collectively, the “Permitted Securities”), the
occurrence or existence of any of the following events or sets of circumstances:
(i) the Company is required to obtain the consent or approval of its stockholders or a
regulatory body (including, without limitation, any insurance regulator or the securities
exchange) or governmental authority to issue Permitted Securities and it fails to obtain
such consent or approval notwithstanding its commercially reasonable efforts to obtain such
consent or approval;
(ii) trading in securities generally, or shares of the Company’s securities
specifically, on the New York Stock Exchange or any other national securities exchange or
over-the-counter market on which Permitted Securities are then listed or traded shall have
been suspended or their settlement generally shall have been materially disrupted or minimum
prices shall have been established on any such exchange or market by the Commission, such
exchange or market or by any other regulatory body or governmental authority having
jurisdiction such that trading shall have been materially disrupted;
(iii) a banking moratorium shall have been declared by the federal or state authorities
of the United States such that market trading in any of the Permitted Securities has been
materially disrupted or ceased;
- 6 -
(iv) a material disruption shall have occurred in commercial banking or securities
settlement or clearance services in the United States such that market trading in any of the
Permitted Securities has been materially disrupted or ceased;
(v) the United States shall have become engaged in hostilities, there shall have been
an escalation in hostilities involving the United States, there shall have been a
declaration of a national emergency or war by the United States or there shall have occurred
any other national or international calamity or crisis such that market trading in any of
the Permitted Securities has been materially disrupted or ceased;
(vi) there shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without limitation as a
result of terrorist activities, or the effect of international conditions on the financial
markets in the United States shall be such as to make it, in the Company’s reasonable
judgment, impracticable or inadvisable to proceed with the offer and sale of the Permitted
Securities;
(vii) an event occurs and is continuing as a result of which the offering document for
the offer and sale of Permitted Securities would, in the Company’s reasonable judgment,
contain an untrue statement of a material fact or omit to state a material fact required to
be stated in that offering document or necessary to make the statements in that offering
document not misleading and either (a) the disclosure of that event, in the Company’s
reasonable judgment, would have a material adverse effect on its business or (b) the
disclosure relates to a previously undisclosed proposed or pending material business
transaction, the disclosure of which would impede its ability to consummate that
transaction; provided that no single suspension period described in this clause (vii) shall
exceed 90 consecutive days and multiple suspension periods described in this clause (vii)
shall not exceed an aggregate of 180 days in any 360-day period; or
(viii) the Company reasonably believes that the offering document for the contemplated
offer and sale of registered Permitted Securities would not be in compliance with a rule or
regulation of the Commission, for reasons other than those referred to in clause (vii), and
the Company determines that it is unable to comply with such rule or regulation or such
compliance is unduly burdensome; provided that no single suspension period described in this
clause (viii) shall exceed 90 consecutive days and multiple suspension periods described in
this clause (viii) shall not exceed an aggregate of 180 days in any 360-day period.
“Maturity” means the date on which the principal of the Notes or an installment of principal
becomes due and payable as herein provided, whether at the Scheduled Maturity Date, the Final
Maturity Date, or by declaration of acceleration, call for redemption or otherwise.
“Note Register” means the register in which the Company, its agent or the Trustee provides for
the registration of Notes and transfers of Notes as herein provided.
“Notes” has the meaning set forth in the recitals to this Indenture and more particularly
means any Notes authenticated and delivered under this Indenture.
- 7 -
“Notice of Enforcement Event” has the meaning set forth in Section 5.03(1).
“Notice of Redemption” has the meaning set forth in Section 11.04.
“Notice of Repayment” has the meaning set forth Section 3.03.
“Offering Memorandum” means the Offering Memorandum dated October 10, 2007, relating to the
sale of the Notes.
“Officers’ Certificate” means a certificate signed by (i) the chief executive officer, the
president or a vice president, and (ii) the treasurer, an assistant treasurer, the comptroller, the
secretary or an assistant secretary, of the Company, and delivered to the Trustee.
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company
and who shall be acceptable to the Trustee.
“Original
Notes” has the meaning set forth in Section 2.06(d).
“Outstanding,” when used with respect to Notes, means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
(ii) Notes for the payment or redemption of which money or evidences of indebtedness
(if permitted hereby) in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of
such Notes; provided, however, that, if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made; and
(iii) Notes which have been paid pursuant to Section 2.06 or in exchange for or in lieu
of which other Notes have been authenticated and delivered pursuant to this Indenture, other
than any such Notes in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser in whose hands such
Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Notes have given any request, demand, authorization, direction, notice, consent or
waiver hereunder and for the purpose of making the calculations required by the Trust Indenture Act
Section 313, as of any date, Notes owned by the Company or any other obligor upon the Notes or any
affiliate of the Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only Notes which the
Trustee knows to be so owned shall be so disregarded. Notes so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Notes and that
- 8 -
the pledgee is not the Company or any other obligor upon the Notes or any affiliate of the Company
or of such other obligor. In case of a dispute as to such right, any decision by the Trustee shall
be full protection to the Trustee absent negligence or willful misconduct. Upon request of the
Trustee, the Company shall furnish to the Trustee promptly an Officers’ Certificate listing and
identifying all Notes, if any, known by the Company to be owned or held by or for the account of
any of the above-described Persons; and, subject to Section 6.01, the Trustee shall be entitled to
accept such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Notes not listed therein are Outstanding for the purposes of any such determination.
“Parity Securities” has the meaning set forth in Section 2.02(e)(ii).
“Paying Agent” means any Person authorized by the Company (which may include the Company or
any of its affiliates) to pay the principal of (and premium, if any) or Interest on any Notes on
behalf of the Company, and shall initially be the Trustee.
“Permitted Remedies” has the meaning assigned to such term in the Replacement Capital
Covenant.
“Permitted Securities” has the meaning set forth in the definition of Market Disruption Event.
“Person” means any individual, corporation, exempted limited company, limited liability
company, partnership, limited liability partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or political subdivision
thereof.
“Physical Notes” has the meaning set forth in Section 2.05(b).
“Place of Payment” means the place or places where the principal of (and premium, if any) and
Interest on the Notes are payable, and shall initially be the Corporate Trust Office.
“Predecessor Note” of any particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.09 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.
“Preferred Stock” means shares of any class or series of preferred stock of the Company that
may be issued and outstanding from time to time.
“Preferred Stock Cap” has the meaning set forth in Section 2.02(f)(ii).
“Publicly Traded” means that the Common Stock has been listed for trading on a national
securities exchange or traded in a public over-the-counter market. For the avoidance of doubt, the
Common Stock is not, at the time of the execution of this Indenture, Publicly Traded.
“QIB” means any “qualified institutional buyer” (as defined in Rule 144A).
- 9 -
“Qualifying
Replacement Capital Covenant” has the meaning assigned to such term in the
Replacement Capital Covenant.
“Qualifying Capital Securities” has the meaning assigned to such term in the Replacement
Capital Covenant.
“Qualifying Non-Cumulative Perpetual Preferred Stock” means, the Company’s non-cumulative
perpetual preferred stock that
(a) ranks pari passu with or junior to all of the Company’s other outstanding preferred stock;
and
(b) contains no remedies other than Permitted Remedies; and
(c) either is (1) subject to Intent-Based Replacement Disclosure and has a provision that
prohibits the Company from making any distributions thereon upon the Company’s failure to satisfy
one or more financial tests set forth therein or (2) is subject to a replacement capital covenant
substantially similar to the Replacement Covenant or a Qualifying Replacement
Capital Covenant.
“Rating Agency” has the meaning set forth in the definition of “Rating Agency Event.”
“Rating Agency Event,” means that any nationally recognized statistical rating organization
within the meaning of Section 3(a)(62) under the Exchange Act that then publishes a rating for the
Company (a “Rating Agency”) amends, clarifies or changes the criteria it uses to assign equity
credit to securities such as the Notes, which amendment, clarification or change results in:
(a) the shortening of the length of time the Notes are assigned a particular level of
equity credit by that Rating Agency as compared to the length of time they would have been
assigned that level of equity credit by that Rating Agency or its predecessor on the issue
date of the Notes; or
(b) the lowering of the equity credit (including up to a lesser amount) assigned to the
Notes by that Rating Agency as compared to the equity credit assigned by that Rating Agency
or its predecessor on the issue date of the Notes.
“Redemption Date,” when used with respect to any Note to be redeemed, means the date fixed for
such redemption by or pursuant to this Indenture.
“Redemption Price” when used with respect to any Note to be redeemed, means the price at which
the Notes are to be redeemed, as specified in Section 2.02(g).
“Regular Record Date” for the Interest payable on any Interest Payment Date with respect to
the Notes means (i) in the case of Notes represented by one or more Global Notes, the Business Day
preceding such Interest Payment Date and (ii) in the case of Notes not represented by one or more
Global Notes, the date which is fifteen calendar days next preceding such Interest Payment Date
(whether or not a Business Day).
- 10 -
“Regulation S Global Security” means a Regulation S Temporary Global Security or a Regulation
S Permanent Global Security.
“Regulation S Permanent Global Security” means a permanent Global Security bearing the
applicable legends as are provided for in Exhibit B hereto and deposited with or on behalf of and
registered in the name of DTC or its nominee, issued in a denomination equal to the outstanding
principal amount of the Regulation S Temporary Global Security upon expiration of the Distribution
Compliance Period.
“Regulation S Temporary Global Security” means a temporary Global Security bearing the
applicable legends as are provided for in Exhibit B hereto and deposited with or on behalf of and
registered in the name of DTC or its nominee, issued in a denomination equal to the outstanding
principal amount of the Securities initially sold in reliance on Rule 903 of Regulation S.
“Relevant Period” has the meaning given to such term in the definition of Three-month LIBOR.
“Repayment Date” has the meaning set forth in Section 2.02(a)(ii).
“Replacement Capital Covenant” means the Replacement Capital Covenant, dated as of October 10,
2007, of the Company, as amended or supplemented from time to time. An execution copy of the
Replacement Capital Covenant in effect on the date hereof is attached hereto as Exhibit E.
“Responsible Officer,” when used with respect to the Trustee, means any officer of the Trustee
assigned by the Trustee to administer its corporate trust matters with respect to this Indenture
(which, for the avoidance of doubt, includes without limitation, any supplemental indenture
hereto).
“Reuters LIBOR01 Page” means the display designated as “LIBOR 01” on the Reuters 3000 Xtra (or
such other page as may replace that page on that service, or such other service as may be nominated
as the information vendor, for the purpose of displaying rates or prices comparable to the London
Interbank Offered rate for U.S. dollar deposits).
“Rule 144A” means Rule 144A under the Securities Act (or any successor provision), as it may
be amended from time to time.
“Rule 144A Global Note” has the meaning set forth in Section 2.03.
“Rule 144A Information” means the information as specified pursuant to paragraph (d)(4) of
Rule 144A (or any successor provision thereto), as such provision (or successor provision) may be
amended from time to time.
“Scheduled Maturity Date” has the meaning set forth in Section 2.02(a)(i).
“Scheduled Maturity Obligations” means the Company’s obligations in connection with the
repayment of principal under Section 2.02(a).
- 11 -
“Securities Act” means the Securities Act of 1933 (or any successor statute), as it may be
amended from time to time.
“Security Registrar” has the meaning set forth in Section 2.07(b).
“Senior Indebtedness” means:
(i) the principal of, premium, if any, interest and other payment obligations in
respect of the Company’s debt for money borrowed and debt evidenced by securities, notes,
bonds or other similar instruments issued by the Company;
(ii) all of the Company’s capital lease obligations;
(iii) all of the Company’s obligations issued or assumed as the deferred purchase price
of property, all of the Company’s conditional sale obligations, hedging agreements and
agreements of a similar nature and all agreements relating to any such agreements, and all
of the Company’s obligations under any title retention agreement;
(iv) all of the Company’s obligations for reimbursement on any letter of credit,
banker’s acceptance, security purchase facility or similar credit transaction (but excluding
trade accounts payable and accrued liabilities arising in the ordinary course of business);
and
(v) all obligations of the type referred to in clauses (i) through (iv) above of other
Persons for the payment of which the Company is responsible or liable as obligor, guarantor
or otherwise, in each case, whether created, assumed or incurred on, prior to or after the
date of this Indenture,
unless, in each case, the instrument creating that debt expressly provides that those obligations
rank pari passu in right of payment with the Notes.
Such Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions of this Indenture irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness and notwithstanding that no express
written subordination agreement may have been entered into between the holders of such Senior
Indebtedness and the Trustee or any of the Holders.
“Share Cap” has the meaning set forth in Section 2.02(f)(v).
“Special Event” means a Tax Event or a Rating Agency Event.
“Special Event Make-Whole Price” has the meaning set forth in Section 2.02(g)(ii).
“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 2.12(1).
“Subsidiary” means, at any time, any Person the shares of stock or other ownership interests
of which having ordinary voting power to elect a majority of the board of directors or
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other managers of such Person are at the time owned, or the management or policies of which
are otherwise at the time controlled, directly or indirectly, through one or more intermediaries
(including other Subsidiaries) by another Person.
“Supplemental Notice” has the meaning set forth in Section 3.03.
“Tax Event” means that the Company has requested and received an Opinion of Counsel
experienced in such matters to the effect that, as a result of any:
(a) amendment to or change (including any officially announced proposed change) in the laws or
regulations of the United States or any political subdivision or taxing authority of or in the
United States that is enacted or becomes effective after the initial issuance of the Notes;
(b) official administrative decision or judicial decision or administrative action or other
official pronouncement interpreting or applying those laws or regulations that is announced after
the initial issuance of the Notes; or
(c) threatened challenge asserted in writing in connection with an audit of the Company or its
Subsidiaries, or a threatened challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially similar to the Notes,
which challenge becomes publicly known after the initial issuance of the Notes,
there is more than an insubstantial risk that interest payable by the Company on the Notes is not,
or within 90 days of the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States federal income tax purposes.
“Temporary
Securities” has the meaning set forth in Section 2.10.
“Three-month LIBOR” means, with respect to any Interest Period, the rate (expressed as a
percentage per annum) for deposits in U.S. dollars for a three-month period commencing on the first
day of that Interest Period and ending on the next Interest Payment
Date (the “Relevant Period”) that appears on Reuters LIBOR01 Page as of 11:00 a.m. (London
time) on the LIBOR Determination Date for that Interest Period. If such rate does not appear on the
Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the LIBOR Determination Date for that
Interest Period, LIBOR shall be determined on the basis of the rates at which deposits in U.S.
dollars for the Relevant Period and in a principal amount of not less than $1,000,000 are offered
to prime banks in the London interbank market by four major banks in the London interbank market,
which may include affiliates of one or more of the Initial Purchasers, selected by the Calculation
Agent (after consultation with the Company), at approximately 11:00 a.m., London time on the LIBOR
Determination Date for that Interest Period. The Calculation Agent shall request the principal
London office of each such bank to provide a quotation of its rate. If at least two such quotations
are provided, Three-month LIBOR with respect to that Interest Period will be the arithmetic mean
(rounded upward if necessary to the nearest whole multiple of 0.00001%) of such quotations. If
fewer than two quotations are provided, Three-month LIBOR with respect to that Interest Period will
be the arithmetic mean (rounded upward if necessary to the nearest whole multiple of 0.00001%) of
the rates quoted by three major banks in New York City, which may include affiliates of one or more
of the Initial Purchasers, selected by the Calculation Agent (after consultation with the Company),
at approximately 11:00 a.m., New York City time, on the first day of that Interest Period for loans
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in U.S. dollars to leading European banks for the Relevant Period and in a principal amount of
not less than $1,000,000. However, if fewer than three banks selected by the Calculation Agent to
provide quotations are quoting as described above, Three-month LIBOR for that Interest Period shall
be the same as Three-month LIBOR as determined for the previous Interest Period or for the Interest
Period beginning on October 15, 2017, Three-month LIBOR will be 5.24%. The establishment of
Three-month LIBOR by the Calculation Agent shall (in the absence of manifest error) be final and
binding.
“Trading Day” means a day on which (i) there is no Market Disruption Event and (ii) trading in
securities generally occurs on the New York Stock Exchange.
“Treasury Dealer” means a nationally recognized firm that is a primary U.S. government
securities dealer specified by the Company.
“Treasury Price” means the bid-side price for the Treasury Security as of the third Trading
Day preceding the Redemption Date, as set forth in the daily statistical release (or any successor
release) published by the Federal Reserve Bank of New York on that Trading Day and designated
“Composite 3:30 p.m. Quotations for U.S. Government Securities,” except that: (i) if that release
(or any successor release) is not published or does not contain that price information on that
Trading Day or (ii) if the Treasury Dealer determines that the price information is not reasonably
reflective of the actual bid-side price of the Treasury Security prevailing at 3:30 p.m., New York
City time, on that Trading Day, then Treasury Price will instead mean the bid-side price for the
Treasury Security at or around 3:30 p.m., New York City time, on that Trading Day (expressed on a
next Trading Day settlement basis) as determined by the Treasury Dealer through such alternative
means as the Treasury Dealer considers to be appropriate under the circumstances.
“Treasury Rate” means the semi-annual equivalent yield to maturity of the Treasury Security
that corresponds to the Treasury Price (calculated in accordance with standard market practice and
computed as of the second Trading Day preceding the Redemption Date).
“Treasury Security” means the United States Treasury security that the Treasury Dealer
determines would be appropriate to use, at the time of determination and in accordance with
standard market practice, in pricing the Notes being redeemed in a tender offer based on a spread
to United States Treasury yields.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, and in force at the
date as of which this instrument was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is further amended after such date, “Trust Indenture Act” means, to the
extent required by such amendment, the Trust Indenture Act of 1939 as amended.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder.
“U.S. Government Obligations” means securities which are (i) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (ii)
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obligations of a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America the payment of which is unconditionally guaranteed as to the timely
payment of principal and interest as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company which is a member of
the Federal Reserve System and having a combined capital and surplus of at least $50,000,000 as
custodian with respect to any such obligation evidenced by such depository receipt or a specific
payment of interest on or principal of any such obligation held by such custodian for the account
of the holder of a depository receipt; provided, however, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the obligation set forth
in (i) or (ii) above or the specific payment of interest on or principal of such obligation
evidenced by such depository receipt.
“Vice President”, when used with respect to the Company or the Trustee, means any vice
president of such Person, whether or not designated by a number or a word or words added before or
after the title “vice president.”
“Warrants” means the Company’s net share settled warrants to purchase Common Stock that:
(a) have an exercise price greater than the Current Price of the Common Stock as of their date
of issuance; and
(b) the Company is not entitled to redeem for cash and the holders are not entitled to require
the Company to repurchase for cash in any circumstances.
Section 1.02. Compliance Certificates and Opinions. Upon any application or request by
the Company to the Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate required by Section 10.05) shall include:
(1) a statement that the Person signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;
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(3) a statement that, in the opinion of each such Person, such Person has made such
examination or investigation as is necessary to enable him to express an informed opinion as
to whether or not such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such Person, such condition or
covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case where several
matters are required to be certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters is erroneous. Any certificate of counsel or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.
Section 1.04. Acts of Holders: (a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section 1.04.
(b) The fact and date of the execution of any such instrument or writing, or the authority of
the Person executing the same, may be presumed by the Trustee to be true, correct and existing, and
the Trustee may reasonably rely upon such instrument or writing without further investigation.
(c) The ownership of Notes shall be proved by the Note Register.
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(d) If the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to
a Board Resolution, fix in advance a record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other Act or to revoke
any of the foregoing, but the Company shall have no obligation to do so. Notwithstanding Section
316(c) of the Trust Indenture Act, such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the date 30 days prior to
the first solicitation of Holders generally in connection therewith and not later than the date
such solicitation is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act or revocation may be given before or
after such record date, but only the Holders of record at the close of business on such record date
shall be deemed to be Holders for the purposes of any such Act or revocation for the purpose of
determining whether Holders of the requisite proportion of Outstanding Notes have acted.
(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
Section 1.05. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing, shall specify this Indenture by name and date
and shall identify the Securities, and if sent to the Trustee shall be delivered or transmitted by
facsimile to PO Box
34690, Seattle, Washington 98124-1690,
Attention: General Counsel, fax 425-256-8780, with a copy to Cravath,
Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York,
New York 10019 Attention William J. Whelan, fax
212-474-3700. The foregoing addresses for notices or communications may be changed by written notice given by the addressee to each party hereto, and the addressee’s address shall be deemed changed for all purposes from and after the giving of such notice.
212-474-3700. The foregoing addresses for notices or communications may be changed by written notice given by the addressee to each party hereto, and the addressee’s address shall be deemed changed for all purposes from and after the giving of such notice.
If the Trustee shall receive any notice or demand addressed to the Company by a Holder, the
Trustee shall promptly forward such notice or demand to the Company.
Section 1.06. Notice to Holders; Waiver. Where this Indenture provides for notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such
event, at his address as it appears in the Note Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any case where notice
to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
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If the Company mails a notice to Holders, it shall mail a copy of such notice to the Trustee
at the same time.
In case by reason of the suspension of regular mail service or by reason of any other case it
shall be impracticable to give such notice by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 1.07. Headings and Table of Contents. The article and section headings herein
and the table of contents are for convenience and reference only and shall not affect the
construction hereof.
Section 1.08. Severability. In case any provision in this Indenture or the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.09. Trust Indenture Act Controls.
If any provision hereof limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision hereof modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
Section 1.10. Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.11. No Implied Obligations. The obligations of the Company under this
Indenture and the Notes shall be without recourse to any Subsidiary, affiliate, policyholder,
director, officer or employee of the Company, and no such person shall have any liability with
respect thereto.
Section 1.12. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 1.13. Counterparts. This Indenture may be executed in one or more
counterparts, and by each party separately on a separate counterpart, and each such counterpart
when executed and delivered shall be deemed to be an original. Such counterparts shall together
constitute one and the same instrument.
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ARTICLE 2
The Notes
Section 2.01. Form and Dating. (a) The form of the Note, including the Trustee’s
certificate of authentication relating thereto, shall be substantially as set forth as Exhibit A
hereto. The Notes may have notations, legends or endorsements required by law or usage, as the
Company may determine. The Company shall approve the form of the Note and any notation, legend or
endorsement thereon. Each Note shall be dated the date of issuance and shall show the date of its
authentication. The Notes shall be in minimum denominations of $1,000 and integral multiples
thereof. The Notes will be issued at the closing of the offering only against payment in
immediately available funds.
(b) The terms and provisions contained in the Notes annexed hereto shall constitute, and are
hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
(c) Each Note shall bear the applicable legends set forth in Exhibit B.
Section 2.02. Terms of the Notes. The terms of the Notes shall be as follows:
(a) Scheduled Maturity Date.
(i) The Company is required to repay the Notes on October 15, 2037 (the “Scheduled
Maturity Date”) at their principal amount plus accrued and unpaid Interest only to the
extent that during a 180-day period ending on the date a Notice of Repayment is given
pursuant to Section 3.03, the Company has raised sufficient net proceeds from the issuance
of Qualifying Capital Securities to permit repayment of the Notes in full on the Scheduled
Maturity Date in accordance with the Replacement Capital Covenant. If the Company is unable
for any reason to raise sufficient net proceeds to repay the Notes in full on the Scheduled
Maturity Date, the Company shall (A) repay the Notes on the Scheduled Maturity Date in part
to the extent of any net proceeds so raised and (B) continue to comply with this Section
2.02(a). For the avoidance of doubt, a Repayment Date shall not constitute a Maturity for
the purposes of Section 5.01(2) hereof, unless the Company has given written notice to the
Trustee fixing such date for redemption and stating that the Company has determined to treat
that date as a Maturity, in which case such date shall constitute a Maturity for the Notes
specified in the applicable Notice of Repayment or Supplemental Notice, as the case may be.
(ii) The Company shall use its Commercially Reasonable Efforts, subject to clause
(viii) below, to raise sufficient net proceeds from the issuance of Qualifying Capital
Securities during such 180-day period to permit repayment of the Outstanding Notes in full
on the Scheduled Maturity Date. If the Company has not raised sufficient net proceeds
pursuant to the preceding sentence to permit repayment of all principal and accrued and
unpaid Interest on the Notes on the Scheduled Maturity Date, the unpaid amount shall remain
outstanding from quarter to quarter and bear interest at Three-month
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LIBOR plus 4.177%, payable quarterly in arrears on each quarterly Interest Payment Date
until repaid, and the Company shall use its Commercially Reasonable Efforts, subject to
clause (viii) below, to raise sufficient net proceeds from the issuance of Qualifying
Capital Securities during each 90-day period ending on each date Notice of Repayment is
given, on the next Interest Payment Date, and on each Interest Payment Date thereafter,
until all Notes Outstanding are repaid in full (the Scheduled Maturity Date and each such
subsequent Interest Payment Date, a “Repayment Date”). The Scheduled Maturity Obligations
shall terminate on the earlier of (A) the Interest Payment Date on which the Company has
redeemed the Notes in full in accordance with the Scheduled Maturity Obligations, (B) when
the Notes are otherwise paid in full on the Final Maturity Date or (C) upon an Event of
Default resulting in acceleration of the Notes pursuant to Section 5.02 hereof. Unless the
Scheduled Maturity Obligations shall have terminated as aforesaid and except under the
circumstances set forth in Section 2.02(a)(viii), the Company’s failure to use Commercially
Reasonable Efforts to raise sufficient proceeds from the issuance of Qualifying Capital
Securities to repay the Notes in full on a Repayment Date shall constitute a default under
clause (2) of the definition of Enforcement Event in Section 5.03, but shall in no event
constitute an Event of Default. Notwithstanding anything to the contrary herein, the Trustee
shall have no obligation to exercise any remedies with respect to any Enforcement Event
arising from such default unless directed to do so in accordance with and subject to the
conditions set forth in Section 5.12 and Section 6.02 hereof.
(iii) Under the Replacement Capital Covenant, the Company may also repay the Notes on
the Scheduled Maturity Date in an amount determined by reference to the net cash proceeds
received from certain issuances by the Company or its Subsidiaries of certain other
securities specified in the Replacement Capital Covenant to Persons other than the Company
or its Subsidiaries. To the extent the Company so repays Notes pursuant to this Section
2.02(a)(iii), its obligation to use Commercially Reasonable Efforts to sell Qualifying
Capital Securities will be reduced by the amount repaid in compliance with the Replacement
Capital Covenant. For the avoidance of doubt, the Company’s Subsidiaries are not required to
issue any securities to enable the repayment of the Notes at the Scheduled Maturity Date,
whether pursuant to the Replacement Capital Covenant or otherwise, and the Company is not
required to issue securities other than pursuant to Section 2.02(a)(ii) above.
(iv) Notwithstanding anything to the contrary in this Indenture, if the Company repays
the Notes pursuant to this Section 2.02(a) or redeems the Notes pursuant to Section 2.02(g)
when any Deferred Interest (including Additional Interest thereon) remains unpaid and at a
time when the Alternative Payment Mechanism is otherwise applicable, the unpaid Deferred
Interest (including Additional Interest thereon) may only be paid pursuant to the
Alternative Payment Mechanism.
(v) Any principal amount of Notes, together with accrued and unpaid Interest, shall be
due and payable on the Final Maturity Date, regardless of the amount of Qualifying Capital
Securities or, if applicable, APM Securities, the Company shall have issued and sold by that
time.
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(vi) If any date fixed for redemption or repayment pursuant to this Section 2.02(a) is
not a Business Day, then payment of the Redemption Price or repayment of the principal
amount of the Notes due on that date shall be made on the next day that is a Business Day,
without any interest or other payment as a result of such delay.
(vii) “Commercially Reasonable Efforts” to issue Qualifying Capital Securities means
commercially reasonable efforts by the Company to complete the offer and sale of Qualifying
Capital Securities to third parties that are not Subsidiaries of the Company in public
offerings or private placements. The Company shall not be considered to have made
Commercially Reasonable Efforts to effect a sale of Qualifying Capital Securities if it
determines not to pursue or complete the sale of Qualifying Capital Securities solely due to
pricing, coupon, dividend rate or dilution considerations.
(viii) The Company shall be excused from its obligation to use (and shall not be
required to use) Commercially Reasonable Efforts to sell Qualifying Capital Securities to
permit repayment of the Notes on any Repayment Date, and any failure to redeem the Notes
shall not constitute a default, an Event of Default (other than on the Final Maturity Date)
or an Enforcement Event, if and to the extent the Company was not able to raise proceeds
from the issuance of Qualifying Capital Securities as a result of the occurrence of a Market
Disruption Event. The Company shall deliver to the Trustee an Officer’s Certificate (which
the Trustee shall promptly forward upon receipt to each Holder of the Notes) on the date the
related Notice of Repayment pursuant to Section 3.03 is given, or prior to the date the
related Notice of Repayment required by Section 3.03 would have been given, certifying that:
(A) a Market Disruption Event was existing during the 180-day period preceding
the date of such certificate or, in the case of any required Repayment Date after
the Scheduled Maturity Date, the 90-day period preceding the date of such
certificate; and
(B) either (1) the Market Disruption Event continued for the entire 180-day
period or 90-day period, as the case may be, or (2) the Market Disruption Event
continued for only part of the period, but the Company was unable after Commercially
Reasonable Efforts to raise sufficient net proceeds during the rest of that period
to permit repayment of the Notes in full.
(ix) Net proceeds that the Company is permitted to apply to repayment of the Notes on
the Repayment Dates pursuant to this Section 2.02(a) shall be applied, first, to pay
Deferred Interest (including Additional Interest thereon) in chronological order, based on
the date each payment was first deferred, to the extent of Eligible Proceeds under the
Alternative Payment Mechanism (the amount thereof to be certified by the Company to the
Trustee in an Officers’ Certificate), second, to pay current interest that the Company is
not paying from other sources and, third, to repay the principal of Notes; provided that if
the Company is obligated to sell Qualifying Capital Securities and repay principal of or
interest on any outstanding Parity Securities in addition to the Notes, then on any date and
for any period the amount of net proceeds received by the Company from those sales and
available for such payments shall be applied first to Parity Securities
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having an earlier scheduled maturity date than the Notes, and then to the Notes and
those other Parity Securities having the same scheduled maturity date as the Notes pro rata
in accordance with their respective outstanding principal amounts and none of such net
proceeds shall be applied to any other Parity Securities having a later scheduled maturity
date until the principal of and all accrued and unpaid Interest on the Notes has been paid
in full; provided, further, that if the Company raises less than $5 million of net proceeds
from the sale of Qualifying Capital Securities during the applicable 180- or 90-day period
preceding the date the applicable Notice of Repayment is given pursuant to Section 3.03, the
Company shall deliver to the Trustee an Officers’ Certificate to such effect and the Company
shall not be required to repay the Notes on such Repayment Date, but the Company shall use
those net proceeds to repay the Notes on the next Repayment Date as of which the Company has
raised at least $5 million of net proceeds; provided, further, that if the net proceeds
allocable to repay the principal of the Notes shall not be divisible by the authorized
denominations of the Notes into a whole number, the net proceeds so allocable shall be
deemed to be equal to the next lower amount divisible by such authorized denominations into
a whole number.
(x) In the event the Company has delivered a notice to the Trustee pursuant to Section
3.01 in connection with any Repayment Date, the principal amount of Notes payable on such
Repayment Date, if any, shall be the principal amount set forth in the Notice of Repayment
accompanying such notice and such principal amount of Notes shall be repaid on such
Repayment Date pursuant to Article 3, subject to this Section 2.02(a).
(xi) The obligation of the Company to repay the Notes pursuant to this Section 2.02(a)
on any date prior to the Final Maturity Date shall be subject to its obligations under
Article 12 to the holders of Senior Indebtedness.
(b) Rate of Interest. The Notes will bear interest on their principal amount from and
including October 10, 2007 to but excluding October 15, 2017 at 8.300% per annum, payable
semi-annually in arrears on April 15 and October 15 of each year, beginning April 15, 2008. The
Notes will bear interest from and including October 15, 2017 at an annual rate equal to Three-month
LIBOR plus 4.177% payable quarterly in arrears on January 15, April 15, July 15 and October 15 of
each year, beginning January 15, 2018, subject to Section 2.02(d). Each semi-annual and quarterly
date on which interest is payable (including following the Scheduled Maturity Date, if applicable)
is referred to herein as an “Interest Payment Date.”
The amount of Interest payable for any Interest Period ending on or prior to October 15, 2017
will be computed on the basis of a 360-day year of twelve 30-day months. The amount of Interest
payable for any Interest Period ending after October 15, 2017 will be computed on the basis of a
360-day year and the actual number of days elapsed. Any installment of Interest (or portion
thereof) deferred in accordance with Section 2.02(d) or otherwise unpaid shall bear Interest, to
the extent permitted by law, at the rate of interest then in effect, from the relevant Interest
Payment Date, compounded on each subsequent Interest Payment Date, until paid in accordance with
Section 2.02(d).
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If any Interest Payment Date on or prior to October 15, 2017 is not a Business Day, the
Interest payment due on that date shall be postponed to the next day that is a Business Day and no
interest shall accrue as a result of that postponement. If any Interest Payment Date after October
15, 2017 is not a Business Day, the Interest Payment Date shall be postponed to the next day that
is a Business Day and Interest will accrue to but excluding the date Interest is actually paid.
However, if any Interest Payment Date falls on a date fixed for early redemption, or other
redemption or repayment, and such day is not a Business Day, the Interest payment due on that date
shall be postponed to the next day that is a Business Day and no Interest shall accrue as a result
of that postponement.
(c) To Whom Interest is Payable. Interest shall be payable on each Interest Payment Date to
each Person in whose name the Notes are registered at 5:00 p.m., New York City time, on the Regular
Record Date, except that Interest payable on any Notes on any Repayment Date, or Redemption Date or
the Final Maturity Date shall be paid to the Person to whom principal is paid.
(d) Option to Defer Interest Payments.
(i) The Company shall have the right, on one or more occasions, to elect to defer the
payment of Interest on the Notes for one or more consecutive Interest Periods that do not
exceed 10 years (which may include a combination of semi-annual and quarterly Interest
Periods), without giving rise to a default or an Event of Default or, unless otherwise
indicated below, an Enforcement Event. The Company’s right to defer Interest payments shall
end on the earlier of (A) the Final Maturity Date and (B) any repayment or redemption of the
Notes in full prior to the Final Maturity Date.
Interest shall continue to accrue during Deferral Periods at the then-applicable
interest rate for the Notes, compounding on each Interest Payment Date, subject to
applicable law.
(ii) The Company shall not pay Deferred Interest on the Notes (and Additional Interest
thereon) prior to the Final Maturity Date from any source other than Eligible Proceeds,
although the Company may pay current interest at all times from any available funds, and the
Company is required to pay Deferred Interest on the Notes (and Additional Interest thereon)
from all sources (including Eligible Proceeds) following an acceleration of the Notes. To
the extent that the Company applies Eligible Proceeds to pay Interest, the Company shall
allocate the proceeds first to pay Deferred Interest on the Notes (including Additional
Interest thereon) in chronological order based on the date each payment was first deferred.
(iii) At the end of a 10-year Deferral Period, the Company shall pay all Deferred
Interest on the Notes (including Additional Interest thereon). After the Company makes all
payments of Deferred Interest, including Additional Interest thereon, the Company may again
defer Interest payments during new Deferral Periods of up to 10 years each, subject to the
requirements therefor set forth herein.
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(iv) Each Holder, by such Holder’s acceptance of the Notes, agrees that if a Bankruptcy
Event shall occur prior to the redemption or repayment of such Holder’s Notes, such Holder
shall not have a claim for, and shall have no right to receive, unpaid Deferred Interest
(including Additional Interest thereon) to the extent that such Deferred Interest (including
Additional Interest thereon) exceeds the sum of (x) Interest that relates to the earliest
two years of the portion of the Deferral Period for the Notes for which Interest has not
been paid and (y) an amount equal to such Holder’s pro rata share of the excess, if any, of
the Preferred Stock Cap over the aggregate amount of net proceeds from the sale of the
Company’s Qualifying Non-Cumulative Perpetual Preferred Stock and unconverted and
outstanding Mandatorily Convertible Preferred Stock that the Company has applied to pay
Interest on the Notes pursuant to the Alternative Payment Mechanism. To the extent such
claim for unpaid Deferred Interest (including Additional Interest thereon) exceeds the
amount set forth in clause (x), the Holders of the Notes shall be deemed to agree that the
amount they receive in respect of such excess shall not exceed the amount they would have
received had such claim ranked pari passu with the claims of the holders, if any, of the
Company’s Qualifying Non-Cumulative Perpetual Preferred Stock.
(v) The Company shall give the Trustee written notice for each Interest Payment Date on
which payment of Interest is going to be deferred not less than 1 Business Day nor more than
60 Business Days prior to the Regular Record Date for such Interest Payment Date. However,
the Company’s failure to pay Interest on an Interest Payment Date shall constitute the
commencement of a Deferral Period with respect to the Notes unless the Company pays such
Interest within ten Business Days of the Interest Payment Date, whether or not the Company
provides a notice of deferral. For the avoidance of doubt, the non-payment of such Interest
for five Business Days does not give rise to a default hereunder.
(e) So long as any Notes remain outstanding, if the Company has given notice of its election
to defer Interest payments but the related Deferral Period has not yet commenced, or if a Deferral
Period is continuing, then the Company shall not, and the Company shall not permit any of its
Subsidiaries to:
(i) declare or pay any Distributions on, or redeem, purchase, acquire or make a
liquidation payment regarding, any of the Company’s Capital Stock; provided that the Company
may, at any time:
(A) declare or pay Distributions on the Company’s Capital Stock in the form of
additional shares of its Capital Stock or warrants, options or other rights
exercisable or exchangeable for shares of its Capital Stock; provided that these
securities paid as Distributions on the Company’s Capital Stock will rank pari passu
with or junior to the Company’s Capital Stock on which the Distributions are being
paid;
(B) declare or pay a dividend on its Capital Stock in connection with the
implementation of a stockholders’ rights plan, or issue its Capital Stock under
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such a plan, or redeem or repurchase any rights with respect to its Capital
Stock distributed pursuant to such a plan;
(C) purchase, redeem or otherwise acquire shares of its Capital Stock pursuant
to any dividend reinvestment or stockholder purchase plan or pursuant to any
employment agreement, benefit plan or similar arrangement with or for the benefit of
employees, officers, directors or consultants;
(D) purchase, redeem or otherwise acquire fractional interests in shares of its
Capital Stock pursuant to the conversion or exchange provisions of such Capital
Stock or the security being converted or exchanged;
(E) purchase, redeem or otherwise acquire its securities pursuant to
contractually binding agreements existing prior to the commencement of such Deferral
Period, including under a contractually binding stock repurchase plan; and
(F) exchange, redeem or convert any class or series of its Capital Stock, or
the Capital Stock of one of its Subsidiaries, for any other class or series of its
Capital Stock, or of any class or series of its indebtedness for any class or series
of its Capital Stock.
(ii) make any payment of principal of, or interest or premium, if any, on, or repay,
repurchase or redeem any securities that rank pari passu with the Notes (“Parity
Securities”) or junior to the Notes; provided that the Company may, at any time:
(A) make payments of current or deferred interest in respect of Parity
Securities that are made pro rata in respect of the amounts due on such Parity
Securities and the Notes (provided that such payments are made in accordance Section
2.02(f)(viii)); and
(B) make payments of principal in respect of Parity Securities having an
earlier scheduled maturity date than the Notes, as required under a provision of
such Parity Securities that is substantially the same as the provision described in
Section 2.02(a) and make payments in respect of Parity Securities having the same
Scheduled Maturity Date as the Notes, as required by such a provision, that are made
on a pro rata basis among one or more series of Parity Securities having such a
provision and the Notes; or
(iii) make any guarantee payments with respect to any guarantee by the Company of debt
securities if such guarantee ranks pari passu with or junior to the Notes.
(iv) If any Deferral Period lasts longer than one year, the Company may not redeem or
purchase nor permit any Subsidiary to purchase, any of the Capital Stock or securities that
upon the Company’s bankruptcy or liquidation rank pari passu with or junior to any of the
Company’s APM Securities issued, the proceeds of which were used to settle Deferred Interest
during such Deferral Period, until the first anniversary of the
- 25 -
date on which all Deferred Interest has been paid, subject to the exceptions listed
above in paragraphs (i), (ii) and (iii).
(v) If the Company is involved in a business combination with a third party where
immediately after the consummation of such combination more than 50% of the surviving
entity’s voting securities are owned by the securityholders of the other party to the
business combination, then paragraph (iv) above will not apply to any Deferral Period that
is terminated on the next Interest Payment Date immediately following the date of
consummation of the business combination.
(vi) For the avoidance of doubt, no terms of the Notes will be deemed to restrict in
any manner the ability of any Subsidiary of the Company to pay dividends or make any
distributions to the Company.
(f) Alternative Payment Mechanism.
(i) Subject to a Market Disruption Event and the conditions described in this Section
2.02(f) and the exception described in Sections 2.02(f)(vi) and (x) below, if the Company
defers Interest on the Notes, it shall be required, commencing on the relevant APM
Commencement Date, to use Commercially Reasonable Efforts to issue its APM Securities until
the Company has raised an amount of Eligible Proceeds at least equal to the aggregate amount
of accrued and unpaid Deferred Interest (including Additional Interest thereon) on the
Notes. This method of funding the payment of accrued and unpaid Deferred Interest is
referred to as the “Alternative Payment Mechanism.” The Company is required to apply
Eligible Proceeds raised during any Deferral Period pursuant to the Alternative Payment
Mechanism to pay Deferred Interest (and Additional Interest thereon) on the Notes.
(ii) Except as provided in the last sentence of this paragraph, during the first five
years of any Deferral Period, the Company shall not be required to issue a number of shares
of its Common Stock or Warrants exercisable for a number of shares of its Common Stock in
excess of 2% of the number of shares of the Company’s outstanding Common Stock as of the
applicable APM Commencement Date (the “Common Stock Maximum Obligation”). Once the Company
reaches the Common Stock Maximum Obligation for a Deferral Period, the Company will not be
required to issue more shares of Common Stock or Warrants under the Alternative Payment
Mechanism during the first five years of that Deferral Period (including Additional Interest
thereon) even if the amount referred to in the preceding sentence subsequently increases
because of a subsequent increase in the number of outstanding shares of such Common Stock.
The Common Stock Maximum Obligation for that Deferral Period will cease to apply after the
fifth anniversary of the commencement of any Deferral Period, at which point the Company
must pay any Deferred Interest (including Additional Interest thereon), regardless of the
time at which it was deferred, using the Alternative Payment Mechanism, subject to any
Market Disruption Event. If the Common Stock Maximum Obligation for that Deferral Period has
been reached during a Deferral Period and the Company subsequently pays all Deferred
Interest (including Additional Interest thereon), the Common Stock Maximum Obligation for
that Deferral Period will cease to apply at
- 26 -
the termination of that Deferral Period, and will not apply again unless and until the
Company starts a new Deferral Period. The Common Stock Maximum Obligation shall apply only
if the Company is or becomes Publicly Traded during such five-year period; for the avoidance
of doubt, if the Company is not Publicly Traded on the APM Commencement Date but becomes
Publicly Traded during such five-year Deferral Period, the calculation of the number of
shares of Common Stock or Warrants exercisable for a number of shares of Common Stock in
excess of 2% of the number of shares of the Company’s outstanding Common Stock shall be
based on (i) the number of shares outstanding on the date the Company becomes Publicly
Traded rather than the APM Commencement Date and (ii) the number of shares of Common Stock
and Warrants exercisable for Common Stock issued as APM Securities on or after the date the
Company becomes Publicly Traded.
The Company will not be permitted, pursuant to the Alternative Payment Mechanism for
purposes of paying Deferred Interest on the Notes, to issue shares of Qualifying
Non-Cumulative Perpetual Preferred Stock or Mandatorily Convertible Preferred Stock if the
net proceeds from such issuance, together with the net proceeds of all prior issuances of
Qualifying Non-Cumulative Perpetual Preferred Stock and unconverted and outstanding
Mandatorily Convertible Preferred Stock by the Company so applied during the current and all
prior Deferral Periods, would exceed 25% of the aggregate principal amount of the Notes
issued under this Indenture (the “Preferred Stock Cap”).
(iii) Notwithstanding clauses (i) and (ii) above, under the Alternative Payment
Mechanism, so long as the definition of “APM Securities” has not been amended to eliminate
Common Stock:
(1) the sale of Warrants to pay Deferred Interest is an option that may
be exercised at the Company’s sole discretion, subject to the Common Stock
Maximum Obligation (if applicable),
(2) the Company will not be obligated to sell Warrants or to apply the
proceeds of any such sale to pay Deferred Interest on the Notes, and
(3) no class of investors of the Company, or any other party, may
require the Company to sell Warrants.
(iv) If the Company sells Warrants to pay Deferred Interest pursuant to the Alternative
Payment Mechanism, the Company will be required to use commercially reasonable efforts,
subject to the Common Stock Maximum Obligation and the Share Cap (in each case, if
applicable), to set the terms of the Warrants so as to raise sufficient proceeds from their
issuance, together with the proceeds from any other APM Securities issued concurrently, to
pay all Deferred Interest on the Notes in accordance with the Alternative Payment Mechanism.
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(v) Except as provided in the last sentence of this paragraph, the Company may not
issue Common Stock, Warrants or Mandatorily Convertible Preferred Stock pursuant to the
Alternative Payment Mechanism to the extent that the total number of shares of Common Stock
issued or issuable upon exercise of Warrants or issuable upon conversion of Mandatorily
Convertible Preferred Stock that has been issued as APM Securities, together with all prior
issuances of Common Stock, Warrants or Mandatorily Convertible Preferred Stock as APM
Securities, would exceed 115 million shares of the Common Stock (the “Share Cap”). If the
issued and outstanding shares of the Common Stock are changed into a different number of
shares or a different class by reason of any stock split, reverse stock split, stock
dividend, reclassification, recapitalization, split-up, combination, exchange of shares or
other similar transaction, the Share Cap shall be correspondingly adjusted. The Share Cap
will apply so long as the Notes remain Outstanding. If the Share Cap has been reached and
it is not sufficient to allow the Company to pay all Deferred Interest then accrued in full,
the Company shall use commercially reasonable efforts to increase the Share Cap (i) only to
the extent that the Company can do so and simultaneously satisfy its future fixed or
contingent obligations under other securities and derivative instruments that provide for
settlement or payment in the Common Stock or (ii) if the Company cannot increase the Share
Cap as contemplated in clause (i), by requesting the Company’s Board of Directors to adopt a
resolution for stockholder vote at the Company’s next occurring annual stockholders’ meeting
to increase the number of the Company’s authorized Common Stock for purposes of satisfying
the Company’s obligations to pay Deferred Interest. The Share Cap shall apply only if the
Company becomes Publicly Traded; for the avoidance of doubt, if the Company becomes Publicly
Traded, the calculation of the number of shares of Common Stock issued or issuable upon
exercise of Warrants or issuable upon conversion of Mandatorily Convertible Preferred Stock
that has been issued as APM Securities, together with all prior issuances of Common Stock,
Warrants or Mandatorily Convertible Preferred Stock as APM Securities, shall commence as of
the date the Company becomes Publicly Traded and shall not include shares of Common Stock
issued or issuable upon exercise of Warrants or conversion of Mandatorily Convertible
Preferred Stock issued as APM Securities that were issued, if any, prior to the date the
Company became Publicly Traded.
(vi) The Company shall be excused from its obligations under the Alternative Payment
Mechanism in respect of any Interest Payment Date if the Company provides written
certification to the Trustee (copies of which the Company will promptly forward to each
Holder of Notes) no more than 15 and no less than 10 Business Days in advance of that
Interest Payment Date certifying that:
(A) a Market Disruption Event was existing after the immediately preceding
Interest Payment Date; and
(B) either (x) the Market Disruption Event continued for the entire period from
the Business Day immediately following the preceding Interest Payment Date to the
Business Day immediately preceding the date on which that certification is provided
or (y) the Market Disruption Event continued for only part of this period, but the
Company was unable after using its Commercially
- 28 -
Reasonable Efforts to raise sufficient Eligible Proceeds during the rest of
that period to pay all accrued and unpaid Interest.
(vii) The Company’s failure to pay Interest on the Notes in accordance with the
Alternative Payment Mechanism as required by this Indenture shall constitute a default under
clause (3) of the definition of Enforcement Event in Section 5.03, but shall constitute an
Event of Default only in the circumstances specified under Section 5.01(1). The Company’s
failure to raise Eligible Proceeds when required pursuant to Section 2.02(f) shall
constitute a default under clause (4) of the definition of Enforcement Event, but shall in
no event constitute an Event of Default. Notwithstanding anything to the contrary herein,
the Trustee shall have no obligation to exercise any remedies with respect to any
Enforcement Event arising from such default unless directed to do so in accordance with and
subject to the conditions set forth in Section 5.12 and Section 6.02(4).
(viii) If, due to a Market Disruption Event or otherwise, the Company was able to raise
some, but not all, Eligible Proceeds necessary to pay all Deferred Interest (including
Additional Interest thereon) on any Interest Payment Date, the Company shall apply any
available Eligible Proceeds to pay Deferred Interest (including Additional Interest thereon)
on the applicable Interest Payment Date in chronological order based on the date each
payment was first deferred. If the Company has outstanding securities in addition to, and
that rank pari passu with, the Notes under which the Company is obligated to sell APM
Securities and obligated to apply such proceeds to the payment of deferred interest and
distributions, then on any date and for any period the amount of net proceeds received by
the Company from those sales and available for payment of the deferred interest and
distributions shall be applied to the Notes and those Parity Securities on a pro rata basis,
subject to the Share Cap (if applicable), the Common Stock Maximum Obligation (if
applicable) and the Preferred Stock Cap, in proportion to the total amounts that are due on
the Notes and such Parity Securities.
(ix) “Commercially Reasonable Efforts” to sell APM Securities in accordance with the
Alternative Payment Mechanism means commercially reasonable efforts to complete the offer
and sale of APM Securities to third parties that are not Subsidiaries of the Company, which
in the event the Company is not Publicly Traded shall include the Company’s existing
stockholders, in public offerings or private placements. The Company shall not be considered
to have made Commercially Reasonable Efforts to effect a sale of the APM Securities if it
determines not to pursue or complete the sale of APM Securities solely due to pricing,
coupon, dividend rate or dilution considerations.
(x) If the Company is involved in a business combination with a third party where
immediately after its consummation more than 50% of the surviving entity’s voting securities
are owned by the securityholders of the other party to the business combination, then the
Alternative Payment Mechanism shall not apply to any outstanding Deferred Interest
(including Additional Interest thereon) as of the date of consummation of the business
combination if the Deferred Interest (including Additional Interest thereon) is settled
prior to or on the Interest Payment Date immediately following such
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consummation. The requirements and restrictions of clauses (d), (e) and (f) of this
Section 2.02 shall apply, however, to any Interest on the Notes that is deferred after such
Interest Payment Date.
(g) Redemption.
(i) The Company may, at its option, redeem the Notes:
(A) in whole or in part on October 15, 2017 and on each Interest Payment Date
thereafter at a Redemption Price equal to 100% of the principal amount of the Notes
so redeemed plus accrued and unpaid Interest, including Deferred Interest, to the
Redemption Date; and
(B) prior to October 15, 2017, (x) in whole or in part, at a Redemption Price
equal to 100% of the principal amount of the Notes so redeemed or, if greater, the
Make-Whole Price, in either case plus accrued and unpaid Interest to the Redemption
Date and (y) in whole but not in part, within 90 days after the occurrence of a
Special Event, at a Redemption Price equal to 100% of the principal amount of the
Notes so redeemed or, if greater, the Special Event Make-Whole Price, in either case
plus accrued and unpaid Interest, including Deferred Interest, to the Redemption
Date.
(ii) “Make-Whole Price” and “Special Event Make-Whole Price” each mean the present
value of scheduled payments of principal and Interest on the Notes being redeemed from the
Redemption Date to October 15, 2017, discounted to the Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal
to the Treasury Rate plus the Applicable Rate; provided that the “Applicable Rate” shall
mean, in the case of a redemption in connection with a Special Event, 0.50%, and in all
other cases of an early redemption prior to October 15, 2017, 0.50%; provided further that
for the avoidance of doubt, pursuant to this definition, the Make-Whole Price and the
Special Event Make-Whole Price are equal amounts in this Indenture.
(iii) If any date fixed for redemption pursuant to this clause (g) is not a Business
Day, then payment of the Redemption Price shall be made on the next day that is a Business
Day, without any Interest or other payment for the delay.
(iv) The Make-Whole Price and the Special Event Make-Whole Price shall be determined on
the third Business Day prior to the applicable Redemption Date. The Company shall notify the
Trustee of the Make-Whole Price or the Special Event Make-Whole Price, as applicable,
promptly after the calculation thereof and the Trustee shall have no responsibility for such
calculation.
(v) For the avoidance of doubt, if the Company redeems Notes when any Deferred Interest
(including Additional Interest thereon) remains unpaid and at a time when the Alternative
Payment Mechanism is applicable, the unpaid Deferred Interest (included Additional Interest
thereon) may only be paid pursuant to the Alternative Payment Mechanism.
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Section 2.03. Rule 144A Global Notes.
(a) The Notes offered and sold to QIBs in reliance on Rule 144A shall each be issued in the
form of one or more Global Notes (each, a “Rule 144A Global Note”) in registered, global form
without interest coupons, with such applicable legends as are provided for in Exhibit B hereto,
except as otherwise permitted herein.
(b) Each Rule 144A Global Note (A) shall represent such portion of the outstanding Notes as
shall be specified therein, (B) shall provide that it shall represent the aggregate amount, as
applicable, of outstanding Notes from time to time endorsed thereon and (C) shall be registered in
the name of DTC or its nominee and deposited upon issuance with the Trustee, at its Corporate Trust
Office, as custodian for DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided, for credit to the respective accounts at DTC of the depositaries. The
aggregate principal amount of a Rule 144A Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for DTC, as provided
herein.
Section 2.04. Regulation S Temporary Global Notes.
(a) The Notes offered and sold outside the United States in reliance on Regulation S shall
each be initially issued in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as
custodian for DTC, and registered in the name of DTC or the nominee of DTC for the accounts of
designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and
authenticated by the Authenticating Agent as hereinafter provided and shall bear such applicable
legends as are provided for in Exhibit B.
(b) An owner of a beneficial interest in a Regulation S Temporary Global Note (or a Person
acting on behalf of such an owner) may provide to Euroclear or Clearstream, as applicable, (and
Euroclear or Clearstream will accept) a duly completed Certificate of Beneficial Ownership at any
time after the termination of the Distribution Compliance Period (it being understood that
Euroclear or Clearstream, as applicable, will not accept any such certificate during the
Distribution Compliance Period). Promptly after receipt by the Trustee of a Certificate of
Beneficial Ownership from DTC on behalf of Euroclear or Clearstream, as applicable (or other
appropriate confirmation to such effect in accordance with the Applicable Procedures), with respect
to such a beneficial interest, the Trustee will cause such beneficial interest to be exchanged for
an equivalent beneficial interest in a Regulation S Permanent Global Note, and will (x) permanently
reduce the principal amount of such Regulation S Temporary Global Note
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by the amount of such beneficial interest and (y) increase the principal amount of such
Regulation S Permanent Global Note by the amount of such beneficial interest, in each case subject
to the Applicable Procedures. Notwithstanding the previous two sentences, if after the Distribution
Compliance Period any Initial Purchaser owns a beneficial interest in a Regulation S Temporary
Global Note, such Initial Purchaser may, upon written request to the Trustee accompanied by a
certification as to its status as an Initial Purchaser and as the owner of such beneficial interest
(but without any requirement to deliver a Certificate of Beneficial Ownership), exchange such
beneficial interest for an equivalent beneficial interest in a Regulation S Permanent Global Note,
and the Trustee will comply with such request and will (x) permanently reduce the principal amount
of such Regulation S Temporary Global Note by the amount of such beneficial interest and (y)
increase the principal amount of such Regulation S Permanent Global Note by the amount of such
beneficial interest, in each case subject to the Applicable Procedures.
(c) Upon the receipt by the Trustee of a written certificate from DTC, together with copies of
certificates from Euroclear and Clearstream certifying that they have received Certificates of
Beneficial Ownership representing 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an
interest therein during the Distribution Compliance Period pursuant to another exemption from
registration under the Securities Act and who shall take delivery of a beneficial ownership
interest in a Rule 144A Global Note) (or, in any such case, provide other appropriate confirmation
to such effect in accordance with the Applicable Procedures), the Trustee shall cancel the
Regulation S Temporary Global Note.
(d) Each Regulation S Temporary Global Note and Regulation S Permanent Global Note (A) shall
represent such portion of the outstanding Notes as shall be specified therein, (B) shall provide
that it shall represent the aggregate amount, as applicable, of outstanding Notes from time to time
endorsed thereon and (C) shall be registered in the name of DTC or its nominee and deposited upon
issuance with the Trustee, at its Corporate Trust Office, as custodian for DTC, duly executed by
the Company and authenticated by the Trustee as hereinafter provided, for credit to the respective
accounts at DTC of the depositaries. The aggregate principal amount of each Regulation S Temporary
Global Note (or Regulation S Permanent Global Note) may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for DTC, as provided herein.
(e) The provisions of the “Operating Procedures of the Euroclear System” and “Terms and
Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream” and
“Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by
participants through Euroclear or Clearstream.
Section 2.05. General — Form of Securities.
(a) Any endorsement of a Global Note to reflect the amount of any increase or decrease in the
amount of Outstanding Notes represented thereby shall be made by the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.18 hereof.
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(b) Notes issued in exchange for interests in a Global Note pursuant to Section 2.18 may be
issued in the form of permanent Certificated Notes in registered forms in substantially the forms
set forth in Exhibit A (the “Physical Notes”), subject to such changes, deletions or additions as
the Company may approve (the approval of which shall be deemed evidenced by the signature of the
officer or officers of the Company executing such Notes).
(c) Subject to the provisions of Section 2.18 hereof, Physical Notes may be produced in any
manner determined by the Officers of the Company executing such securities, as evidenced by their
execution of such securities. The Trustee shall register Physical Notes so issued in the name of,
and cause the same to be delivered to, such Person (or its nominee) as may be instructed by the
Company.
(d) The Notes may also have such additional provisions, omissions, variations or substitutions
as are not inconsistent with the provisions of this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with this Indenture, any applicable law or with any rules made pursuant thereto or with
the rules of any securities exchange or governmental agency, all as may be determined by the
Officer of the Company executing such securities, as conclusively evidenced by their execution of
such securities. All Notes shall be substantially identical except as provided herein.
(e) Subject to the provisions of this Article 2, a registered Holder in a Global Note may
grant proxies and otherwise authorize any Person to take any action that a Holder is entitled to
take under this Indenture or the Notes.
Section 2.06. Execution and Authentication; Issue Price; Aggregate Principal Amount.
(a) An Officer of the Company who shall have been duly authorized by all requisite corporate
actions shall execute the Notes for the Company by manual or facsimile signature.
(b) If an Officer whose signature is on a Note was an Officer at the time of such execution
but no longer holds that office or position at the time the Trustee authenticates the Note, the
Note shall nevertheless be valid.
(c) A Note shall not be valid or obligatory for any purpose or be entitled to the benefits of
this Indenture until an authorized signatory of the Trustee manually signs the certificate of
authentication on the Note. The signature of such representative of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture.
(d) On the Issue Date, upon Company Order the Trustee shall authenticate and deliver up to an
initial maximum of $150,000,000 principal amount of Notes (the “Original Notes”). In addition, at
any time, from time to time, without notice to, or the consent of, the Holders, the Trustee shall
authenticate and deliver additional Notes of up to a maximum of $75,000,000 principal amount
(“Additional Notes”) upon receipt of a Company Order specifying the amount of Notes to be
authenticated and the date on which such securities are to be authenticated and an Officers’
Certificate of the Company certifying that all conditions precedent to the issuance, of the
Additional Notes contained herein have been complied with and that no Default or Event of Default
would occur as a result of the issuance of such Additional
- 33 -
Notes and that such Additional Notes will be treated as fungible with the Original Notes and
any Additional Notes issued for U.S. federal income tax purposes. The Additional Notes and the
Trustee’s certificate of authentication relating thereto shall be substantially in the forms of
Exhibit A with all such necessary additions and deletions and shall have the same respective CUSIP
number as the Original Securities. The Notes issued as Original Notes and the Notes issued as
Additional Notes, if any, shall constitute one series for all purposes under this Indenture,
including, without limitation, amendments, waivers and redemptions.
(e) The Notes shall be known and designated as the “Capital Efficient Notes due 2067” of the
Company and shall have the terms described in Section 2.02 above.
(f) Interest and principal will be payable in Dollars at the agency of the Trustee’s New York
corporate trust office, which is located at 100 Wall Street, Suite 1600, New York, New York 10005
or, at the Company’s option, in the case of payments of Interest, by check mailed to the respective
addresses of the registered holders or by wire transfer.
(g) The Notes shall not have the benefit of any sinking fund obligations.
(h) The Trustee may appoint an Authenticating Agent reasonably acceptable to the Company to
authenticate the Notes. Unless otherwise provided in the appointment, an Authenticating Agent may
authenticate the Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An Authenticating Agent has
the same rights as an agent to deal with the Company.
Section 2.07. Trustee, Security Registrar and Paying Agent.
(a) The Company hereby appoints U.S. Bank National Association, as the Trustee hereunder and
U.S. Bank National Association hereby accepts such appointment. The Trustee shall have the powers
and authority granted to and conferred upon it in the Notes and hereby and such further powers and
authority to act on behalf of the Company as may be mutually agreed upon by the Company and the
Trustee, and the Trustee shall keep a copy of this Indenture available for inspection during normal
business hours at its Corporate Trust Office.
(b) The Company shall maintain an office or agency (which shall be located in New York) where
(a) Notes may be presented or surrendered for registration of transfer or for exchange (“Security
Registrar”), (b) Notes may be presented or surrendered for payment and (c) notices and demands to
or upon the Company in respect of the Notes and this Indenture may be served. The Registrar shall
keep a register of the Notes and of their transfers and exchanges. The Company, upon notice to the
Trustee, may have one or more co-Security Registrars and one or more additional Paying Agents
reasonably acceptable to the Trustee. The Company may change the Paying Agent or Security Registrar
upon notice to all Holders.
(c) The Company shall enter into an appropriate agency agreement with any agent not a party to
this Indenture. The Company shall notify the Trustee, in advance and in writing, of the name and
address of any such agent. If the Company fails to maintain a Security Registrar or Paying Agent,
or fails to give the foregoing notice, the Trustee shall act as such.
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(d) The Company initially appoints the Trustee as Security Registrar and Paying Agent until
such time as the Trustee has resigned or a successor has been appointed. Any of the Security
Registrar, the Paying Agent or any other agent may resign upon 60 days’ written notice to the
Company.
(e) The Company or any of its Subsidiaries may act as Security Registrar or Paying Agent;
provided, however, that none of the Company, its Subsidiaries or the affiliates of the foregoing
shall act as Security Registrar or Paying Agent if a Default or Event of Default has occurred and
is continuing. In addition, upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
(f) All of the terms and provisions with respect to such powers and authority contained in the
Notes are subject to and governed by the terms and provisions hereof.
Section 2.08. Paying Agent to Hold Assets in Trust.
(a) The Company shall require each Paying Agent other than the Trustee to agree in writing
that each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets
held by the Paying Agent for the payment of principal of, premium, if any, or Interest on, the
Notes (whether such assets have been distributed to it by the Company or any other obligor on such
securities), and shall notify the Trustee of any default by the Company (or any other obligor on
such securities) in making any such payment. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default, upon written request to a
Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to
account for any assets distributed. Upon distribution to the Trustee of all assets that shall have
been delivered by the Company to the Paying Agent and the completion of any accounting required to
be made hereunder, the Paying Agent shall have no further liability for such assets.
(b) If the Company or any of its Subsidiaries acts as Paying Agent, it shall segregate and
hold in separate trust funds for the benefit of the Holders of the Notes all the money held by it
as Paying Agent.
Section 2.09. Replacement Notes.
(a) If a mutilated Note is surrendered to the Trustee or if the Holder of a Note claims that
such Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement security if the Trustee’s requirements are met. If required by the
Trustee or the Company, such Holder must provide an indemnity bond or other indemnity, sufficient
in the reasonable judgment of the Company and the Trustee, to protect the Company, the Trustee or
any agent from any loss which any of them may suffer if a Note is replaced. The Company and the
Trustee may charge such Holder for its reasonable out-of- pocket expenses in replacing a Note.
Every replacement Note shall constitute an additional obligation of the Company.
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(b) The provisions of this Section 2.09 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement of mutilated, destroyed, lost
or stolen Notes.
Section 2.10. Temporary Securities.
In lieu of formal printed Physical Notes, or until such Physical Notes are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary securities upon a written
order of the Company signed by two Officers of the Company (“Temporary Securities”). Temporary
Securities shall be substantially in the form of Physical Notes but may have variations that the
Company considers appropriate for such Temporary Securities and as shall be reasonably acceptable
to the Trustee. At the Company’s election, the Company may prepare and the Trustee shall
authenticate Physical Notes in exchange for Temporary Securities. Unless and until any such
exchange, Holders of Temporary Securities shall be entitled to all of the benefits of this
Indenture.
Section 2.11. Cancellation. The Company at any time may deliver Notes to the Trustee
for cancellation. The Security Registrar and the Paying Agent shall forward to the Trustee any Note
surrendered to them for transfer, exchange or payment. The Trustee, or at the direction of the
Trustee, the Security Registrar or the Paying Agent, and no one else, shall cancel and, at the
written direction of the Company, shall dispose of all cancelled Securities in accordance with its
customary procedures. Certification of the destruction of all cancelled Notes shall be delivered to
the Company, upon written request, from time to time. The Company may not issue new Notes to
replace Notes that the Company has paid or delivered to the Trustee for cancellation. If the
Company shall acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Note unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. Defaulted Interest. Any Interest on any Note which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by
virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered at the close of
business on a special record date (a “Special Record Date”) for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note
and the date of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall not be less than 10 days prior to the date of the proposed
payment. The Trustee shall promptly
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notify the Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of
Notes at his address as it appears in the Note Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes (or their respective Predecessor Notes) are registered
at the close of business on such Special Record Date and shall no longer be payable pursuant
to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the Notes in any other
lawful manner not inconsistent with the requirements of any securities exchange on which
such Notes may be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.
For avoidance of doubt, Defaulted Interest shall not include Deferred Interest (including
Additional Interest thereon) during any Deferral Period, but shall include Deferred Interest
(including Additional Interest thereon) to the extent such Deferred Interest (including Additional
Interest thereon) is not paid when due under the terms of this Indenture.
Subject to the foregoing provisions of this section, each Note lawfully delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall
carry the rights to Interest accrued and unpaid, and to accrue, which were carried by such other
Note.
Section 2.13. Persons Deemed Owners.
Prior to due presentment for the registration of a transfer of any Note, the Trustee, the
Company and any agent of the foregoing shall deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for all purposes (including the purpose of receiving
payment of principal of and Interest on such Note; provided that Defaulted Interest shall be paid
as set forth in Section 2.12), and none of the Trustee, the Company or any agent of the foregoing
shall be affected by notice to the contrary.
Section 2.14. CUSIP Numbers.
The Company in issuing the Notes may use one or more “CUSIP” and/or “ISIN” numbers and, if so,
the Trustee shall use the CUSIP and/or ISIN numbers in notices of redemption or exchange as a
convenience to Holders; provided, however, that no representation is hereby deemed to be made by
the Trustee as to the correctness or accuracy of the CUSIP or ISIN numbers printed in the notice or
on the Notes, and that reliance may be placed only on the other identification numbers printed on
the Notes. The Company shall promptly notify the Trustee of any change in the CUSIP or ISIN number.
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Section 2.15. Deposit of Moneys.
(a) Prior to 10:00 a.m. New York time on each Interest Payment Date, Redemption Date,
Repayment Date or Final Maturity Date or any other day on which payment is due on the Notes, the
Company shall have deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Redemption Date, Repayment Date
or Final Maturity Date or such other day, as the case may be, in a timely manner which permits the
Paying Agent to remit payment to the Holders on such Interest Payment Date, Redemption Date,
Repayment Date or Final Maturity Date or such other day, as the case may be.
(b) The Trustee shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of all Holders. If the Trustee is not the
Security Registrar, the Company shall furnish to the Trustee at least seven Business Days before
each Interest Payment Date, and at such other times as the Trustee may request in writing, a list
in such form and as of such record date as the Trustee may reasonably require of the names and
addresses of the Holders.
Section 2.16. Transfer and Exchange.
(a) Subject to Section 2.17 and Section 2.18, when Notes are presented to the Security
Registrar or a co-Security Registrar with a request to register the transfer of such securities or
to exchange such securities for an equal principal amount of Notes of other authorized
denominations, the Security Registrar or co-Security Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met; provided, however, that
the Notes presented or surrendered for transfer or exchange shall be duly endorsed or accompanied
by a written instrument of transfer in form satisfactory to the Company and the Security Registrar
or co-Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in
writing. To permit registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Security Registrar’s or co-Security Registrar’s written
request. No service charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith.
(b) The Security Registrar or co-Security Registrar shall not be required to issue, or to
register the transfer or exchange of, any Note (i) during a period beginning at the opening of
business 15 days before the mailing of a Notice of Redemption pursuant to Section 11.04 and ending
at the close of business on the day of such mailing and (ii) selected for redemption in whole or in
part pursuant to Article 11, except the unredeemed portion of any Note being redeemed in part.
(c) All Notes issued upon any registration of transfer or exchange pursuant to the terms of
this Indenture shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration
of transfer or exchange.
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(d) The Trustee shall authenticate Notes in accordance with the provisions of Section 2.06
hereof.
(e) The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Note (including any transfers between or among
Depositary Participants or beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements hereof.
(f) Any Holder of a beneficial interest in a Global Note shall, by acceptance of such
beneficial interest, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Depository, and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book entry system.
Section 2.17. Book-Entry Provisions for Global Notes.
(a) Except as indicated below in this Section 2.17, the Notes shall be represented only by
Global Notes. The Global Notes shall be deposited with a Depositary or its custodian for such
securities (and shall be registered in the name of such Depositary or its nominee). The Depositary
for the Notes shall be DTC unless the Company appoints a successor Depositary by delivery of a
Company Order to the Trustee specifying such successor Depositary for the Notes.
(b) All payments on a Global Note will be made by the Trustee to DTC or its nominee, as the
case may be, as the registered owner and Holder of such Global Note. In each case, the Company will
be fully discharged by payment to or to the order of such Depositary from any responsibility or
liability in respect of each amount so paid. Upon receipt of any such payment in respect of a
Global Note, DTC will credit Depositary Participants’ accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount of such Global Note
as shown on the records of DTC.
(c) Unless and until it is exchanged in whole or in part for Physical Notes, a Global Note may
not be transferred except as a whole by the relevant Depositary or nominee thereof to another
nominee of the Depositary or to a successor of the Depositary or a nominee of such successor.
(d) Owners of beneficial interests in Global Notes shall be entitled or required, as the case
may be, but only under the circumstances described in Section 2.18(b), to receive physical delivery
of Physical Notes.
Section 2.18. Restrictions on Transfer and Exchange of Notes.
(a) Transfer and Exchange of Global Notes. Notwithstanding any provisions of this Indenture or
the Notes, transfers of a Global Note, in whole or in part, transfers and exchanges of interests
therein of the kinds described in clauses (iii), (iv) through (vi) below and exchange of interests
in Global Notes or of other Notes as described in clause (vii) below, shall be made only
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in accordance with this Section 2.18(a). Transfers and exchanges subject to this Section 2.18
shall also be subject to the other provisions of the Indenture that are not inconsistent with this
Section 2.18.
(i) General. A Global Note may not be transferred, in whole or in part, to any Person
other than DTC or a nominee thereof or a successor to DTC or its nominee, and no such
transfer to any such other Person may be registered; provided that this clause (i) shall not
prohibit any transfer of a Note that is issued in exchange for a Global Note but is not
itself a Global Note. No transfer of a Note to any Person shall be effective under this
Indenture or the Note unless and until such Note has been registered in the name of such
Person. Nothing in this Section 2.18(a)(i) shall prohibit or render ineffective any transfer
of a beneficial interest in a Global Note effected in accordance with the other provisions
of this Section 2.18(a).
(ii) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in
any Global Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Global Note in accordance with the transfer restrictions set
forth in the legend; provided, however, that prior to the expiration of the Distribution
Compliance Period, transfers of beneficial interests in the Regulation S Temporary Global
Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). No written orders or instructions shall be required to be
delivered to the Security Registrar to effect the transfers described in this Section
2.18(a)(ii).
(iii) Rule 144A Global Note to Regulation S Temporary Global Note or Regulation S
Permanent Global Note. If a Holder of a beneficial interest in a Rule 144A Global Note
deposited with DTC wishes at any time to exchange its interest in such Rule 144A Global Note
for an interest in the corresponding Regulation S Temporary Global Note or Regulation S
Permanent Global Note, as applicable, or to transfer its interest in such Rule 144A Global
Note to a Person who wishes to take delivery thereof in the form of an interest in the
corresponding Regulation S Temporary Global Note or Regulation S Permanent Global Note, as
applicable, such Holder, provided such Holder or, in the case of a transfer, the transferee
is not a U.S. person, may, subject to the immediately succeeding sentence and the Applicable
Procedures, exchange or transfer, or cause the exchange or transfer of, such interest for an
equivalent beneficial interest in the corresponding Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as applicable. Upon receipt by the Security Registrar of
(A) written instructions (or notice from DTC of its receipt of such instruction) given in
accordance with the Applicable Procedures from a Depositary Participant directing the
Security Registrar to credit or cause to be credited to a specified Depositary Participant’s
account a beneficial interest in the corresponding Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as applicable, but not less than the minimum
denomination applicable to such Holder’s Notes, in an amount equal to the beneficial
interest in the Rule 144A Global Note to be exchanged or transferred, (B) a written order
(or notice from DTC of its receipt of such order) given in accordance with the Applicable
Procedures containing information regarding the account of the Depositary Participant and
the Euroclear or Clearstream account to be credited with, and the account of the
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Depositary Participant and the Euroclear or Clearstream account, to be debited for,
such beneficial interest and (C) a certificate in substantially the form of Exhibit C-1
attached hereto given by the transferor of such beneficial interest stating that the
exchange or transfer of such interest has been made in compliance with the transfer
restrictions applicable to the Global Notes, including that the transferor or the
transferee, as applicable, is not a U.S. person, and pursuant to and in accordance with
Regulation S, then the principal amount of the Rule 144A Global Note shall be reduced, and
the principal amount of the Regulation S Temporary Global Note or the Regulation S Permanent
Global Note, as applicable, shall be increased, by the principal amount of the beneficial
interest in the Rule 144A Global Note to be so transferred, in each case by means of an
appropriate adjustment on the records of the Security Registrar, and the Security Registrar
shall instruct DTC or its authorized representative to make a corresponding adjustment to
its records and to credit or cause to be credited to the account of the Person specified in
such instructions a beneficial interest in the Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as applicable, having a principal amount equal to the
amount so transferred.
(iv) Rule 144A Global Note to Rule 144A Global Note. If the Holder of a beneficial
interest in a Rule 144A Global Note wishes at any time to transfer such interest to a Person
who wishes to take delivery thereof in the form of a beneficial interest in a Rule 144A
Global Note, such transfer may be effected, subject to the Applicable Procedures, only in
accordance with the provisions of this Section 2.18(a)(iv). Upon receipt by the Security
Registrar of (A) written instructions (or notice from DTC of its receipt of such
instruction) given in accordance with the Applicable Procedures from a Depositary
Participant directing the Security Registrar, to credit or cause to be credited to a
specified Depositary Participant’s account a beneficial interest in a Rule 144A Global Note
in a principal amount equal to that of the beneficial interest in a Rule 144A Global Note to
be so transferred; (B) a written order (or notice from DTC of its receipt of such order)
given in accordance with the Applicable Procedures containing information regarding the
account of the Depositary Participant to be credited with, and the account of the Depositary
Participant to be debited for, such beneficial interest and (C) a certificate in
substantially the form set forth in Exhibit C-2 given by the transferor of such beneficial
interest, the principal amount of a Rule 144A Global Note shall be reduced, and the
principal amount of a Rule 144A Global Note shall be increased, by the principal amount of
the beneficial interest in a Rule 144A Global Note to be so transferred, in each case by
means of an appropriate adjustment on the records of the Security Registrar, and the
Security Registrar shall instruct DTC or its authorized representative to make a
corresponding adjustment to its records and to credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in a Rule 144A Global
Note having a principal amount equal to the amount so transferred.
(v) Regulation S Temporary Global Note or Regulation S Permanent Global Note to Rule
144A Global Note. If the Holder of a beneficial interest in a Regulation S Temporary Global
Note or a Regulation S Permanent Global Note, as applicable, wishes at any time to transfer
such interest to a Person who wishes to take delivery thereof in the form of a beneficial
interest in a Rule 144A Global Note, such transfer may be effected
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after the Distribution Compliance Period, subject to the Applicable Procedures, only in
accordance with this Section 2.18(a)(v). Upon receipt by the Security Registrar of (A)
written instructions (or notice from DTC of its receipt of such instruction) given in
accordance with the Applicable Procedures from an Depositary Participant directing the
Security Registrar to credit or cause to be credited to a specified Depositary Participant’s
account a beneficial interest in a Rule 144A Global Note in a principal amount equal to that
of the beneficial interest in a Regulation S Temporary Global Note or a Regulation S
Permanent Global Note, as applicable, to be so transferred, (B) a written order (or notice
from DTC of its receipt of such order) given in accordance with the Applicable Procedures
containing information regarding the account of the Depositary Participant to be credited
with, and the account of the Depositary Participant to be debited for, such beneficial
interest and (C) with respect to a transfer of a beneficial interest in a Regulation S
Global Note to a Person whom the transferor reasonably believes is a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act, a certificate
in substantially the form set forth in Exhibit C-2 given by the transferor of such
beneficial interest, the principal amount of a Rule 144A Global Note shall be increased, and
the principal amount of a Regulation S Temporary Global Note or a Regulation S Permanent
Global Note, as applicable, shall be reduced, by the principal amount of the beneficial
interest in a Rule 144A Global Note to be so transferred, in each case by means of an
appropriate adjustment on the records of the Security Registrar and the Security Registrar
shall instruct DTC or its authorized representative to make a corresponding adjustment to
its records and to credit or cause to be credited to the account of the Person specified in
such instructions a beneficial interest in the Rule 144A Global Note having a principal
amount equal to the amount so transferred.
(vi) Regulation S Permanent Global Note to Regulation S Permanent Global Note. Any
exchange of a beneficial interest in a Regulation S Temporary Global Note for a Regulation S
Permanent Global Note shall be permitted only as set forth in Section 2.04. If the Holder of
a beneficial interest in Regulation S Permanent Global Note wishes at any time to transfer
such interest to a Person who wishes to take delivery thereof in the form of a beneficial
interest in a Regulation S Permanent Global Note, such transfer may be effected, subject to
the Applicable Procedures, only in accordance with the provisions of this Section
2.18(a)(vi). Upon receipt by the Security Registrar of (A) written instructions (or notice
from DTC of its receipt of instruction) given in accordance with the Applicable Procedures
from a Depositary Participant directing the Security Registrar, to credit or cause to be
credited to a specified Depositary Participant’s account a beneficial interest in a
Regulation S Permanent Global Note in a principal amount equal to that of the beneficial
interest in a Regulation S Permanent Global Note to be so transferred; (B) a written order
(or notice from DTC of its receipt of instruction) given in accordance with the Applicable
Procedures containing information regarding the account of the Depositary Participant to be
credited with, and the account of the Depositary Participant to be debited for, such
beneficial interest and (C) a certificate in substantially the form set forth in Exhibit D;
the principal amount of a Regulation S Permanent Global Note shall be reduced, and the
principal amount of a Regulation S Permanent Global Note shall be increased, by the
principal amount of the beneficial interest in a Regulation S Permanent Global Note to be so
transferred, in each case by means of an appropriate adjustment on the records of the
Security Registrar, and the Security Registrar shall
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instruct DTC or its authorized representative to make a corresponding adjustment to its
records and to credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in a Regulation S Permanent Global Note having a
principal amount equal to the amount so transferred.
(vii) Exchanges of Global Note for Non-Global Note. In the event that a Global Note or
any portion thereof is exchanged for Notes other than Global Notes, such other Notes may in
turn be exchanged (on transfer or otherwise) for Notes that are not Global Notes or for
beneficial interests in a Global Note (if any is then outstanding) only in accordance with
procedures which shall be substantially consistent with the provisions of clauses (i) and
(iii) through (vi) above (including the certification requirements intended to insure that
transfers and exchanges of beneficial interests in a Global Note comply with Rule 144A, Rule
144 or Regulation S, as the case may be) and any Applicable Procedures, as may be from time
to time adopted by the Company and the Trustee. Notwithstanding anything to the contrary in
this Indenture, definitive Notes shall not be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note except in accordance with
Section 2.04.
(b) Global Notes. The provisions of clauses (i), (ii), (iii), and (iv) below shall apply only
to Global Notes:
(i) General. Each Global Note authenticated under the Indenture shall be registered in
the name of the appropriate Depositary or a nominee thereof and delivered to such Depositary
or a nominee thereof or custodian therefor.
(ii) Transfer to Persons Other than Depositary. Notwithstanding any other provision in
the Indenture or the Notes, no Global Note may be exchanged in whole or in part for Notes
registered, and no transfer of a Global Note in whole or in part may be registered, in the
name of any person other than the appropriate Depositary or a nominee thereof, unless, (A)
in the case of a Global Note, DTC notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note, or DTC ceases to be a “clearing agency” (as
such term is defined in Section 17A of the Exchange Act) registered under the Exchange Act,
and a successor to DTC is not appointed by the Company within ninety (90) days, (B) the
Company executes and delivers to the Trustee and Security Registrar an Officers’ Certificate
stating that such Global Note shall be so exchangeable, or (C) an Event of Default has
occurred and is continuing with respect thereto and the owner of a beneficial interest
therein requests such exchange or transfer. Any Global Note exchanged pursuant to Section
2.18(a)(i) above shall be so exchanged in whole and not in part and any Global Note
exchanged pursuant to Section 2.18(a)(vii) above may be exchanged in whole or from time to
time in part as directed by DTC. Any Note issued in exchange for a Global Note or any
portion thereof shall be a Global Note, provided that any such Note so issued that is
registered in the name of a Person other than the appropriate Depositary or a nominee
thereof shall not be a Global Note.
(iii) Global Note to Physical Note. Subject to Section 2.18(a)(vii), Physical Notes in
exchange for a Global Note or any portion thereof pursuant to clause (ii) above shall be
issued in definitive, fully registered form without interest coupons, shall have an
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aggregate principal amount equal to that of such Global Note or portion thereof to be
so exchanged, shall be registered in such names and be in such authorized denominations as
the Depositary shall designate and shall bear any legends required hereunder. Any Global
Note to be exchanged in whole shall be surrendered by the Depositary to the appropriate
Security Registrar. With regard to any Global Note to be exchanged in part, either such
Global Note shall be so surrendered for exchange or, in the case of a Global Note, if the
Trustee is acting as custodian for DTC or its nominee with respect to such Global Note, the
principal amount thereof shall be reduced, by an amount equal to the portion thereof to be
so exchanged, by means of an appropriate adjustment made on the records of the Trustee, as
Authenticating Agent, or of the Depositary. Upon any such surrender or adjustment, the
Trustee shall authenticate and deliver the Note issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof.
(iv) Certificates. In the event of the occurrence of any of the events specified in
clause (ii) above, the Company will promptly make available to the Trustee a reasonable
supply of Physical Notes in definitive, fully registered form, without interest coupons.
(v) No Rights of Depositary Participants in Global Note. No Depositary Participant, nor
any other Persons on whose behalf Depositary Participants may act, shall have any rights
under the Indenture with respect to any Global Note or under any Global Note, and the
Depositary or its nominee, as the case may be, may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner and Holder of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by the
Depositary or such nominee, as the case may be, or impair, as between DTC, their respective
Depositary Participants and any other person on whose behalf a Depositary Participant may
act, the operation of customary practices of such Persons governing the exercise of the
rights of a Holder.
Section 2.19. Special Transfer Provisions.
(a) If a Holder proposes to transfer a Note pursuant to any exemption from the registration
requirements of the Securities Act other than as provided for above, the Security Registrar shall
only register such transfer or exchange if such transferor delivers to the Security Registrar and
the Trustee an Opinion of Counsel satisfactory to the Company and the Security Registrar that such
transfer is in compliance with the Securities Act and the terms of this Indenture; provided that
the Company may, based upon the opinion of its counsel, instruct the Security Registrar by a
Company Order not to register such transfer in any case where the proposed transferee is not a QIB
or a Non-U.S. Person.
(b) By its acceptance of any Note bearing legends, each Holder of such Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the legends and agrees
that it will transfer such Note only as provided in this Indenture.
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(c) The Security Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.17, 2.18 or this Section 2.19 for a period of two
years, after which time such letters, notices and other written communications shall at the written
request of the Company be delivered to the Company. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any reasonable time
upon the giving of reasonable prior written notice to the Security Registrar.
ARTICLE 3
Repayment of the Notes
Section 3.01. Repayment. The Company shall, not more than 30 and not less than 15 days
prior to each Repayment Date, notify the Trustee in writing of the principal amount of Notes to be
repaid on such date pursuant to Section 2.02(a), which notice shall have attached thereto the
Notice of Repayment, which shall be given by the Trustee to the Holders as soon as practicable
thereafter. If the Company anticipates that it will repay the Notes in part, and not in full, on
any Repayment Date, the Company shall use its commercially reasonable efforts to deliver notice
pursuant to this Section 3.01 to the Trustee 30 days prior to such Repayment Date.
Section 3.02. Selection of Securities to be Repaid. If less than all the Notes are to
be repaid on any Repayment Date (unless such repayment affects only a single Note), the particular
Notes to be repaid shall be selected not more than 30 days prior to such Repayment Date by the
Trustee in accordance with Section 11.03.
The Trustee shall promptly notify the Company in writing of the Notes selected for partial
repayment and the principal amount thereof to be repaid. For all purposes hereof, unless the
context otherwise requires, all provisions relating to the repayment of Notes shall relate, in the
case of any Note repaid or to be repaid only in part, to the portion of the principal amount of
such Note which has been or is to be repaid. If the Company shall so direct, Notes registered in
the name of the Company or any Subsidiary thereof shall not be included in the Notes selected for
repayment.
Section 3.03. Notice of Repayment. Notice of repayment (each a “Notice of Repayment”)
shall be given by first-class mail, postage prepaid, mailed not earlier than the 15th Business Day,
and not later than the 10th Business Day, prior to the Repayment Date, to each Holder of the Notes
to be repaid, at the address of such Holder as it appears in the Security Register; provided that
additional notices (each a “Supplemental Notice”) may be given to the Holders specifying additional
details relating to such repayment no later than the 5th Business Day prior to the Repayment Date.
Each Notice of Repayment, to the extent not specified thereafter by any applicable
Supplemental Notice, shall identify the Notes to be repaid (including CUSIP number) and shall
state:
(a) the Repayment Date, the price at which the Notes are to be repaid, and the amount of any
accrued Interest (including Additional Interest) thereon as of the Repayment Date;
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(b) if less than all Outstanding Notes are to be repaid, the identification (and, in the case
of partial repayment, the respective principal amounts) of the particular Notes to be repaid;
(c) that on the Repayment Date, the principal amount of the Notes to be repaid shall become
due and payable upon each such Note or portion thereof, and that Interest thereon shall cease to
accrue on and after said date; and
(d) the place or places where such Notes are to be surrendered for payment of the principal
amount thereof.
Notice of Repayment shall be given by the Trustee in the name and at the expense of the
Company and shall be irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder receives such notice. In
any case, a failure to give such notice by mail or any defect in the notice to the Holder of any
Notes designated for repayment as a whole or in part shall not affect the validity of the
proceedings for the repayment of any other Notes.
Section 3.04. Deposit of Repayment Amount. Prior to 10:00 a.m. New York City time on
the Repayment Date specified in the Notice of Repayment, the Company shall deposit with the Trustee
or with one or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company
shall segregate and hold in trust as provided in Section 10.03) an amount of money, in immediately
available funds, sufficient to pay the principal amount of, and any accrued Interest (including
Additional Interest thereon) on, all the Notes which are to be repaid on that date.
Section 3.05. Payment of Notes Subject to Repayment. If any Notice of Repayment has
been given, the Notes or portion of the Notes with respect to which such notice has been given, or
if any Supplemental Notice is given which identifies the particular Notes to be repaid, the Notes
or portion thereof so identified, shall become due and payable on the date and at the place or
places stated in such notice. On presentation and surrender of such Notes at a Place of Payment in
said notice specified, the Notes or the specified portion thereof shall be paid by the Company at
their principal amount, together with accrued Interest (including any Additional Interest thereon)
to the Repayment Date.
If any date fixed for repayment is not a Business Day, then repayment of the principal amount
of the Notes and accrued and unpaid interest shall be made on the next day that is a Business Day,
without any Interest or other payment for delay.
Upon presentation of any Note repaid in part only, the Company shall execute and the Trustee,
upon receipt of a Company Order to do so, shall authenticate and make available for delivery to the
Holder thereof, at the expense of the Company, a new Note or Notes, of authorized denominations, in
aggregate principal amount equal to the portion of the Note not repaid and so presented and having
the same date of original issuance, Scheduled Maturity Date, Final Maturity Date and terms.
If any Note called for repayment shall not be so paid upon surrender thereof, the principal of
such Note shall, until paid, bear Interest from the Repayment Date at the rate prescribed therefor
in the Note.
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ARTICLE 4
Satisfaction and Discharge
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture shall upon
Company Request cease to be of further effect with respect to the Notes (except as to (i) any
surviving rights of registration of transfer or exchange of Notes herein expressly provided for,
(ii) any rights under Sections 2.07, 2.09, 10.02 and 10.03, (iii) rights hereunder of Holders to
receive payments of principal of, and premium, if any, and Interest on, Notes, and other rights,
duties and obligations of the Holders as beneficiaries hereof with respect to the amounts, if any,
so deposited with the Trustee and (iv) the rights and immunities of the Trustee hereunder, and the
obligations of the Trustee under or as described in this Article 4), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture with respect to the Notes, when:
(1) either:
(A) all Notes theretofore authenticated and delivered (other than (i) Notes
which have been mutilated, destroyed, lost or stolen and which have been replaced as
provided in Section 2.09 and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section 10.03)
have been delivered to the Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Trustee for cancellation have
become due and payable, will become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the Trustee
and the Company has deposited or caused to be deposited with the Trustee as trust
funds in trust
(i) money in U.S. dollars in an amount sufficient, or
(ii) (a) U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide not later than one day before the due date of any payment
referred to in clause (B) of this subparagraph money in an amount, or (b) a
combination of such money and such U.S. Government Obligations, sufficient,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee,
to pay and discharge the entire indebtedness on the Notes not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and Interest to
the date of such deposit (in the case of Notes which have become due and payable) or
to the Scheduled Maturity Date, the Final Maturity Date or Redemption Date, as the
case may be;
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(2) the Company has paid or caused to be paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and no deposit made
under this Section 4.01 was made in violation of Section 12.02; provided, that, such Opinion
of Counsel need not include an opinion as to the sufficiency of the funds deposited in trust
and delivered to the Trustee pursuant to this Section 4.01.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 6.06, and, if money or U.S. Government Obligations shall have
been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section 4.01, the
obligations of the Trustee under Section 4.02 and the next to last paragraph of Section 10.03,
shall survive.
Section 4.02. Application of Trust Funds; Indemnification. Subject to the provisions
of the next to last paragraph of Section 10.03, all money or U.S. Government Obligations deposited
with the Trustee pursuant to Section 4.01 and all money received by the Trustee in respect of U.S.
Government Obligations deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and Interest for whose payment such money has been deposited with or received by
the Trustee, but such money need not be segregated from other funds except to the extent required
by law.
(a) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against U.S. Government Obligations deposited pursuant to Section 4.01, or
the Interest and principal received in respect of such obligations other than any amount payable by
or on behalf of Holders.
(b) The Trustee shall deliver or pay to the Company from time to time upon Company Request any
U.S. Government Obligations or money held by it as provided in Section 4.01 which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the same opinions given to the Trustee
pursuant to Section 4.01), is then in excess of the amount thereof which then would have been
required to be deposited for the purpose for which such obligations or money was deposited or
received. Such accounting opinion shall not be required once all amounts outstanding under the
Notes and due under this Indenture have been paid in full.
Section 4.03. Legal Defeasance and Discharge of Indenture. The Company shall be deemed
to have paid and discharged the entire indebtedness on all the Outstanding Notes on the first date
that all of the conditions set forth in the proviso below are satisfied, and the provisions of this
Indenture, as it relates to such Outstanding Notes, shall no longer be in effect (and the Trustee,
at the expense of the Company, shall at Company Request, execute proper instruments acknowledging
the same), except as to:
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(a) the rights of Holders of Notes to receive, from the trust funds described in Section
4.03(c) hereof, (x) payment of the principal of (and premium, if any) and each installment of
principal of (and premium, if any) or Interest on the Notes when such principal or installment of
principal or Interest is due and payable in accordance with the terms of this Indenture and the
Notes and (y) the benefit of any mandatory sinking fund payments applicable to the Notes on the day
on which such payments are due and payable in accordance with the terms of this Indenture and the
Notes;
(b) the Company’s obligations with respect to such Notes under Sections 2.07, 2.09, Section
3.05, 10.02 and 10.03; and
(c) the obligations of the Company to the Trustee under Section 6.06;
provided, however, that the following conditions shall have been satisfied:
(i) the Company has or caused to be irrevocably deposited (except as provided in
Section 4.02) with the Trustee as trust funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of the Notes,
(A) money in U.S. Dollars in an amount sufficient, or
(B) (1) U.S. Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to in this Section 4.03(c)
money in an amount or (2) a combination of such money and such U.S. Government
Obligations, sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof delivered to the Trustee,
to pay and discharge the principal of (and premium, if any) and each installment of principal of
(and premium, if any) and Interest on the Outstanding Notes on the dates on which such payments are
due and payable in accordance with the terms of this Indenture and the Notes of such principal or
installment of principal or Interest or on the applicable Redemption Date;
(ii) such deposit shall not cause the Trustee with respect to the Notes to have a
conflicting interest for purposes of the Trust Indenture Act with respect to the Notes;
(iii) such deposit will not result in a breach or violation of, or constitute a default
under this Indenture or any other material agreement or instrument to which the Company is a
party or by which it is bound;
(iv) no Event of Default or event which with notice or lapse of time would become an
Event of Default with respect to the Notes shall have occurred and be continuing on the date
of such deposit; and
(v) if the deposit referred to in subparagraph (i) of this Section 4.03 is to be made
on or prior to one year from the Scheduled Maturity Date for payment of principal of the
Outstanding Notes, the Company has delivered to the Trustee an Opinion of
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Counsel with no material qualifications or a favorable ruling of the United States
Internal Revenue Service, in either case to the effect that Holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a letter ruling of the United States Internal
Revenue Service received by the Company, a Revenue Ruling published by the United States
Internal Revenue Service or a change in applicable federal income tax law occurring after
the date of this Indenture.
Section 4.04. Defeasance of Certain Obligations. The Company shall be released from
its obligations under Section 8.01, and the occurrence of an event specified in Section 5.03(1)
shall not be deemed to be an Enforcement Event on and after the date the conditions set forth below
are satisfied, (“Covenant Defeasance”) if:
(i) the Company has deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Notes,
(A) money in U.S. dollars in an amount sufficient, or
(B) (1) U.S. Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide not later
than one day before the due date of any payment referred to in this Section 4.04
money in an amount, or (2) a combination of such money and such U.S. Government
Obligation, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee,
to pay and discharge the principal of (and premium, if any) and each installment of principal (and
premium, if any) and Interest on the Outstanding Notes on the dates on which such payments are due
and payable in accordance with the terms of this Indenture and the Notes;
(ii) such deposit shall not cause the Trustee with respect to the Notes to have a
conflicting interest for purposes of the Trust Indenture Act with respect to the Notes;
(iii) such deposit will not result in a breach or violation of, or constitute a default
under this Indenture or any other material agreement or instrument to which the Company is a
party or by which it is bound;
(iv) if the deposit referred to in subparagraph (i) of this Section, 4.04 is to be made
on or prior to one year from the Scheduled Maturity Date or Final Maturity Date for payment
of principal of the Outstanding Notes, the Company has delivered to the Trustee an Opinion
of Counsel with no material qualifications or a favorable ruling of the United States
Internal Revenue Service, in either case to the effect that Holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a result of such deposit
and defeasance of certain obligations and will be subject to federal
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income tax on the same amount and in the same manner and at the same times, as would
have been the case if such deposit and defeasance had not occurred; and
(v) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
Covenant Defeasance contemplated by this Section 4.04 have been complied with.
ARTICLE 5
Remedies
Section 5.01. Events of Default. “Event of Default” with respect to the Notes whenever
used herein means any one of the following events that has occurred and is continuing:
(1) default in the payment of Interest (including Additional Interest thereon) in full
on any Note for a period of 30 days after the conclusion of a ten-year period following the
commencement of any Deferral Period; or
(2) the failure to pay the principal of any Note when due and payable, whether on the
Final Maturity Date, upon redemption or upon a declaration of acceleration; or
(3) a court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Company in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company
or for any substantial part of its property or ordering the winding up or liquidation of its
affairs, and such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(4) the Company shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or for any substantial part of its property, or make any
general assignment for the benefit of creditors.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of
Default (other than an Event of Default under Section 5.01(3) or (4)) occurs and is continuing,
then in every such case the Trustee or the Holders of at least 25% in aggregate principal amount of
the Outstanding Notes may declare the principal amount of, and accrued Interest (including
Additional Interest thereon) on, all the Notes to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and payable.
In case of an Event of Default under Section 5.01(3) or (4) which occurs and is continuing
with respect to the Notes, then all unpaid principal of, and accrued Interest (including
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Additional Interest thereon) on, all such Outstanding Notes shall become immediately due and
payable without any notice or other action on the part of the Trustee or the Holders of any Notes.
For the avoidance of doubt, no other default or circumstances other than the ones specifically set
forth in Section 5.01(1), (2), (3) or (4) under the Indenture shall give the Holders or the Trustee
the right to declare the principal amount of, and accrued Interest (including Additional Interest
thereon) or any other amounts on the Notes immediately due and payable.
At any time after such a declaration of acceleration with respect to the Notes has been made
and before a judgment or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of
the Outstanding Notes, by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue Interest on the Notes,
(B) the principal of (and premium, if any, on) any Notes which have become due
otherwise than by such declaration of acceleration and Interest thereon at the rate
or rates prescribed therefor in the Notes,
(C) to the extent that payment of such Interest is lawful, Interest on overdue
Interest at the rate or rates prescribed therefor in the Notes, and
(D) all sums paid or advanced by the Trustee and any predecessor Trustee
hereunder and all sums due the Trustee and any predecessor Trustee under Section
6.06; and
(2) all Events of Default with respect to the Notes, other than the non-payment of the
principal of the Notes that have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
Section 5.03. Enforcement Events. The term “Enforcement Event” whenever used herein
means any one of the following events:
(1) default by the Company in the observance, satisfaction or performance of any of the
covenants or agreements contained in this Indenture (other than a covenant or agreement in
respect of the Notes a default in whose observance, satisfaction or performance is elsewhere
in this Section or in Section 5.01 specifically dealt with) on the part of the Company in
respect of the Notes that continues following a period of 60 days after the date on which
written notice of such failure, requiring the Company to remedy the same and stating that it
is a “Notice of Enforcement Event” hereunder, shall have been given to the Company by the
Trustee by registered mail, or to the Company and the
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Trustee by the Holders of at least a majority in the aggregate principal amount of the
Notes at the time Outstanding; or
(2) unless the Scheduled Maturity Obligations shall have terminated in accordance with
Section 2.02(a) and except under the circumstances set forth in Section 2.02(a)(viii), the
Company’s failure to use Commercially Reasonable Efforts to raise sufficient proceeds from
the issuance of Qualifying Capital Securities to repay the Notes in full on a Repayment
Date;
(3) the Company’s failure to pay Interest on the Notes in accordance with the
Alternative Payment Mechanism as required herein; or
(4) the Company’s failure to raise Eligible Proceeds.
Except as provided in the last sentence of this paragraph, if any Enforcement Event with
respect to the Notes occurs and is continuing, the Trustee may in its discretion, or at the written
request of the Holders of at least a majority in principal amount of the Outstanding Notes after
such Holders have provided the Trustee with reasonable indemnity or security as contemplated by
Article 6 shall, subject to Article 6, proceed to protect and enforce its rights and the rights of
the Holders of Notes by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific performance of any
covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or
to enforce any other proper remedy. The Company acknowledges that any failure by the Company to
comply with its obligations under Section 5.03(2) through (4) hereof may result in material
irreparable injury to Holders, for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event of any such failure,
any Holder may obtain such relief as may be required to specifically enforce the Company’s
obligations under Section 5.03(2) through (4) hereof.
For the avoidance of doubt, an Enforcement Event shall not constitute an Event of Default
under the Indenture (other than as specifically set forth under Section 5.01(1)) and shall not give
the Holders or the Trustee the right to declare the principal amount of, and accrued Interest
(including Additional Interest thereon) or any other amounts on the Notes immediately due and
payable under any circumstances.
Notwithstanding anything herein to the contrary, the Trustee shall have no responsibility,
including any right or obligation to exercise remedies, with respect to a default by the Company
with respect to any covenant contained herein, other than a covenant the violation of which
constitutes, or with the giving of notice or the passage of time or both, would constitute, an
Event of Default or an Enforcement Event; provided, that nothing in this paragraph shall impair the
right of the Trustee to enforce the Company’s obligations hereunder with respect to the Trustee’s
compensation, reimbursement of expenses and advances and indemnities.
Section 5.04. Trustee May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or the property of the Company or
its creditors, the Trustee (irrespective of whether the principal of the Notes shall
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then be due and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment of overdue
principal, premium or Interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise:
(i) to file and prove a claim for the whole amount of principal (and premium, if any)
and Interest owing and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding; and
(ii) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Notes. All rights of
action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee
without the possession of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
Section 5.06. Application of Money Collected. Any money collected by the Trustee
pursuant to this article shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal (or premium, if any)
or Interest, upon presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and each predecessor Trustee under
Section 6.06;
SECOND: Subject to Article 12, to the payment of the amounts then due and unpaid for principal
of (and premium, if any) and Interest on the Notes in respect of which or for the benefit of which
such money has been collected ratably, without preference or priority of any kind,
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according to the amounts due and payable on such Notes for principal (and premium, if any) and
Interest, respectively; and
THIRD: To the Company.
Section 5.07. Limitation on Suits. No Holder of any Note shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) an Event of Default or Enforcement Event shall have occurred and be continuing, and
such Holder has previously given written notice to the Trustee of such continuing Event of
Default or Enforcement Event, as the case may be;
(2) the Holders of not less than 25% in principal amount of the Outstanding Notes in
the case of an Event of Default, or a majority in principal amount of the Outstanding Notes
in the case of an Enforcement Event, shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default or Enforcement Event, as the case
may be, in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and
(5) in the case of an Event of Default, no direction inconsistent with such request
shall have been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such Holders.
Section 5.08. Unconditional Right of Holders to Receive Principal, and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Note shall have the right,
which is absolute and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 2.12 and to the limitation as to Interest specified in Section 2.02(d)(iv))
Interest on such Note at the times herein prescribed and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored
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severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section
2.09, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of
any Holder of any Notes to exercise any right or remedy accruing upon any Event of Default or
Enforcement Event shall impair any such right or remedy or constitute a waiver of any such Event of
Default or Enforcement Event or any acquiescence therein. Every right and remedy given by this
article or by law to the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 5.12. Control by Holders. The Holders of a majority in principal amount of the
Outstanding Notes shall have the right (subject to the Trustee’s right first to be indemnified for
associated costs and liabilities as provided in Article 6) to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Notes, provided, however, that
(1) such direction shall not be in conflict with any rule of law or with this
Indenture, expose the Trustee to personal liability or be unduly prejudicial to Holders not
joining therein; and
(2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Nothing in this Indenture shall impair the right of the Trustee to take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults. The Holders of not less than a majority in
principal amount of the Outstanding Notes may on behalf of the Holders of all the Notes waive any
past default hereunder and its consequences, except that the consent of each Holder of Notes
affected thereby is required to waive a default:
(1) in the payment of the principal of (or premium, if any) or Interest on any Note; or
(2) in respect of any provision hereof which under this Indenture cannot be modified or
amended without the consent of the Holder of each Outstanding Note affected thereby.
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Upon any such waiver, such default shall cease to exist, and any Event of Default or
Enforcement Event arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 5.14. Undertaking for Costs. All parties to this Indenture agree, and each
Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions of this Section
5.14 shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee,
to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10%
in principal amount of the Outstanding Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or Interest on any Notes on or
after the Final Maturity Date expressed in such Note (or, in the case of redemption, on or after
the Redemption Date).
Section 5.15. Waiver of Stay or Extension Laws. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.16. Notice of Defaults. Within 90 days after the occurrence of a default or
Event of Default or Enforcement Event hereunder is known to the Responsible Officer of the Trustee,
the Trustee shall transmit by mail to all Holders of Notes, as their names and addresses appear in
the Note Register, notice of such default hereunder, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment of the principal of
(or premium, if any), or Interest (including Additional Interest) on, any Note, the Trustee shall
be protected in withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the Holders of Notes. For the
purpose of this Section 5.16, the term “default” means any event which is, or after notice or lapse
of time or both would become, an Event of Default or Enforcement Event.
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ARTICLE 6
The Trustee
Section 6.01. Duties and Responsibilities of Trustee. With respect to the Holders of
the Notes issued hereunder, the Trustee, prior to the occurrence of an Event of Default or an
Enforcement Event with respect to the Notes known to the Trustee and after the curing or waiving of
all Events of Default or Enforcement Events which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In case an Event of
Default or an Enforcement Event with respect to the Notes known to the Trustee has occurred (which
has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own grossly negligent action, its own grossly negligent failure to act, or its own willful
misconduct, except that:
(1) prior to the occurrence of an Event of Default or an Enforcement Event with respect
to the Notes known to the Trustee and after the curing or waiving of all Events of Default
or Enforcement Events which may have occurred: (a) the duties and obligations of the Trustee
with respect to the Notes shall be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and (b) in the absence of
bad faith, gross negligence or willful misconduct on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken, omitted or
suffered to be taken by it in good faith in accordance with the direction of the holders of
Notes pursuant to Section 5.12 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to Notes; and
(4) none of the provisions of this Indenture shall be construed as requiring the
Trustee to expend or risk its own funds or otherwise to incur any personal financial
liability in the performance of any of its duties hereunder, or in the exercise of any of
its
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rights or powers, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not reasonably assured to
it.
Section 6.02. Reliance on Documents, Opinions, etc. Subject to the provisions of
Section 6.01:
(1) the Trustee may rely and shall be protected in acting or refraining from acting
upon any Board Resolution, Officers’ Certificate, statement, instrument, Opinion of Counsel,
opinion, report, notice, request, direction, consent, order, or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or
parties;
(2) any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an instrument signed in the name of the Company by the chief
executive officer, its president or one of its vice presidents or its secretary, assistant
secretary, treasurer or assistant treasurer (unless other evidence in respect thereof be
herein specifically prescribed); and any resolution of the Board of Directors may be
evidenced to the Trustee by a copy thereof certified by the Secretary, an Assistant
Secretary or an attesting secretary of the Company (unless other evidence in respect thereof
be herein specifically prescribed);
(3) the Trustee may consult with counsel and any advice of counsel or Opinion of
Counsel shall be full and complete authorization and protection in respect of any action
taken, omitted or suffered to be taken by it hereunder in good faith and in accordance with
such advice of counsel or Opinion of Counsel;
(4) the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the Holders,
pursuant to the provisions of this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and liabilities which
might be incurred therein or thereby;
(5) the Trustee shall not be liable for any action taken, omitted or suffered by it in
good faith and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(6) the Trustee shall not be bound to make any inquiry or investigation into the facts
or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, note or other paper or document unless
requested in writing so to do by the Holders of a majority in aggregate principal amount of
the Outstanding Notes; provided, however, that if the payment within a reasonable time to
the Trustee of the costs and expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security conferred upon it by the terms of this Indenture, the Trustee
may require reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding; and the reasonable expense of such investigation shall be paid
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by the Company, or, if paid by the Trustee, shall be repaid by the Company upon demand;
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(8) the Trustee shall not be charged with knowledge of any default, Event of Default or
Enforcement Event unless and except to the extent either (1) a Responsible Officer of the
Trustee shall have actual knowledge of such default, Event of Default or Enforcement Event,
or (2) written notice of such default, Event of Default or Enforcement Event shall have been
given to the Trustee at the Corporate Trust Office, which notice makes reference to the
Notes or this Indenture.
Section 6.03. No Responsibility for Recitals, etc. The recitals contained herein and
in the Notes shall be taken as the statements of the Company (except in the Trustee’s certificates
of authentication), and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this Indenture or the Notes,
provided that the Trustee shall not be relieved of its duty to authenticate Notes only as
authorized by this Indenture. The Trustee shall not be accountable for the use or application by
the Company of any of the Notes or of the proceeds thereof.
Section 6.04. Ownership of Notes. The Trustee and any agent of the Company or of the
Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes with the
same rights it would have if it were not Trustee or such agent.
Section 6.05. Reports by Trustee to Holders. As promptly as practicable after each
May 15 beginning with the May 15 following the date of this Indenture, the Trustee shall mail to
each Holder a brief report dated as of such May 15 that complies with 313(a) of the Trust Indenture
Act, if required by such 313(a) of the Trust Indenture Act. The Trustee also shall comply with
Section 313(b) of the Trust Indenture Act. The Trustee shall also transmit by mail all reports
required by Section 313(c) of the Trust Indenture Act.
Section 6.06. Compensation and Indemnity. The Trustee shall be entitled to such
compensation as shall be agreed with the Company for all services rendered by them hereunder, and
the Company agrees promptly to pay such compensation and to reimburse the Trustee for the
reasonable out-of-pocket expenses (including reasonable counsel fees and expenses) incurred by them
in connection with or arising out of their services hereunder or the issuance of the Notes. The
Company also agrees to indemnify the Trustee for, and to hold them harmless against, any loss,
damages, claim, liability or expense (including reasonable counsel fees and expenses), incurred
without negligence or bad faith, arising out of or in connection with their acting as Trustee
hereunder, as well as the reasonable costs and expenses of defending against any claim of liability
in the premises. The obligations of the Company under this Section 6.06 shall survive the
termination of this Agreement, payment of all the Notes or the resignation or removal of the
Trustee. The Trustee shall promptly notify the Company of any claim for which the Trustee may seek
indemnity, including costs and expenses of defending the relevant party against any claim
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for liability arising from the exercise or performance of any of its powers or duties
hereunder. The Company shall not be obligated to pay for any settlement of any such claim made
without its consent. To secure the Company’s payment obligations in this Section 6.06, the Trustee
shall have a lien prior to the Notes on all money or property held or collected by the Trustee, in
its capacity as Trustee, except money or property held in trust to pay principal of, premium, if
any, and interest on particular Notes.
Section 6.07. Officers’ Certificate as Evidence. Subject to the provisions of Sections
6.01 and 6.02, whenever in the administration of the provisions of this Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to taking, omitting or
suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of gross negligence or bad faith on the part
of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate
delivered to the Trustee, and such certificate, in the absence of gross negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action taken, omitted or
suffered by it under the provisions of this Indenture upon the faith thereof.
Section 6.08. Eligibility of Trustee. The Trustee hereunder shall at all times be a
corporation organized and doing business under the laws of the United States or any state thereof
or the District of Columbia, which (a) is authorized under such laws to exercise corporate trust
powers and (b) is subject to supervision or examination by Federal or State authority and (c) shall
have at all times a combined capital and surplus of not less than $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law, or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this Section 6.07, the
combined capital and surplus of such corporation at any time shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published. In case at
any time the Trustee shall cease to be eligible in accordance with the provisions of this Section
6.07, the Trustee shall resign immediately in the manner and with the effect specified in Section
6.08.
Section 6.09. Resignation or Removal of Trustee. The Trustee may at any time resign by
giving written notice to the Company of such intention on its part, specifying the date on which
its desired resignation shall become effective, provided that such date shall not be less than 60
days from the date on which such notice is given, unless the Company agrees to accept shorter
notice. The Trustee hereunder may be removed at any time by the filing with it of an instrument in
writing signed on behalf of the Company and specifying such removal and the date when it shall
become effective. The Holders of a majority in aggregate principal amount of the Outstanding Notes
may remove the Trustee as Trustee by notifying the removed Trustee and the Company. Notwithstanding
the dates of effectiveness of resignation or removal, as the case may be, to be specified in
accordance with the preceding sentences, such resignation or removal shall take effect only upon
the appointment by the Company, as hereinafter provided, of a successor Trustee (which, to qualify
as such, shall for all purposes hereunder be a corporation organized and doing business under the
laws of the United States of America or any state thereof or the District of Columbia, in good
standing and having and acting, either itself or through an affiliate, through an established place
of business in the Borough of Manhattan, The City of New York, authorized under such laws to
exercise corporate trust powers and having a combined capital and
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surplus in excess of $50,000,000) and the acceptance of such appointment by such successor
Trustee. Upon its resignation or removal, the Trustee shall be entitled to payment by the Company
pursuant to Section 6.06 hereof of compensation for services rendered and to reimbursement of
reasonable out-of-pocket expenses incurred hereunder.
Section 6.10. Successors. In case at any time the Trustee (or any Paying Agent if such
Paying Agent is the only Paying Agent located in a place where, by the terms of the Notes or this
Indenture, the Company is required to maintain a Paying Agent) shall resign, or shall be removed,
or shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or shall file a
voluntary petition in bankruptcy or make an assignment for the benefit of its creditors or consent
to the appointment of a receiver of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they severally mature, or if a receiver of it or
of all or any substantial part of its property shall be appointed, or if an order of any court
shall be entered approving any petition filed by or against it under the provisions of applicable
receivership, bankruptcy, insolvency or other similar legislation, or if any public officer shall
take charge or control of it or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Trustee or Paying Agent, as the case may be, qualified as
aforesaid, shall be appointed by the Company by an instrument in writing, filed with the successor
Trustee or Paying Agent, as the case may be, and the predecessor Trustee or Paying Agent, as the
case may be. Upon the appointment as aforesaid of a successor Trustee or Paying Agent, as the case
may be, and acceptance by such successor of such appointment, the Trustee or Paying Agent, as the
case may be, so succeeded shall cease to be Trustee or Paying Agent, as the case may be, hereunder.
Within one year after the successor Trustee or Paying Agent, as the case may be, takes office, the
Holders of a majority in aggregate principal amount of the Notes may appoint a successor Trustee to
replace the successor Trustee appointed by the Company. If no successor Trustee or other Paying
Agent, as the case may be, shall have been so appointed by the Company and shall have accepted
appointment as hereinafter provided within 60 days after such resignation, removal or
disqualification, and, in the case of such other Paying Agent, if such other Paying Agent is the
only Paying Agent located in a place where, by the terms of the Notes or this Indenture, the
Company is required to maintain a Paying Agent, then any Holder of a Note who has been a bona fide
Holder of a Note for at least six months (which Note, in the case of such other Paying Agent, is
referred to in this sentence), on behalf of himself and all others similarly situated, or the
Trustee, may petition any court of competent jurisdiction for the appointment of a successor
trustee or paying agent, as the case may be. The Company shall give prompt written notice to each
other Paying Agent of the appointment of a successor Trustee.
Section 6.11. Acknowledgement. Any successor Trustee appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such
appointment hereunder, and thereupon such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties
and obligations of such predecessor with like effect as if originally named as Trustee hereunder
and all provisions hereof shall be binding on such successor Trustee, and such predecessor, upon
payment of its compensation and reimbursement of its disbursements then unpaid, shall thereupon
become obligated to transfer, deliver and pay over, and such successor Trustee shall be entitled to
receive, all monies, securities, books, records or other property on deposit with or held by such
predecessor as Trustee hereunder.
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Section 6.12. Merger, Consolidation, etc. Any bank or trust company into which the
Trustee hereunder may be merged, or resulting from any merger or consolidation to which the Trustee
shall be a party, or to which the Trustee shall sell or otherwise transfer all or substantially all
of its corporate trust business, provided that it shall be qualified as aforesaid, shall be the
successor Trustee under this Indenture without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
Section 6.13. Appointment of Authenticating Agent. The Trustee may appoint an
Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to
authenticate Notes issued upon original issue and upon exchange, registration of transfer, partial
conversion or partial redemption or repayment or pursuant to Section 2.06, and Notes so
authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the Trustee’s certificate
of authentication, such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the effect specified in
this Section. Any corporation into which an Authenticating Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Note Register. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the provisions of this
Section.
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The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Notes may have endorsed thereon, in
addition to the Trustee’s certificate of authentication, an alternative certificate of
authentication in the following form:
“This is one of the Notes referred to in the within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
as Trustee
By: |
||||
By: |
||||
| Authorized Signatory” |
ARTICLE 7
Delivery of Certain Information
Section 7.01. Delivery of Rule 144A Information and Annual Conference Call.
At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and for
so long there be any Outstanding Notes, the Company shall, (i) upon the request of a Holder,
promptly furnish or cause to be furnished Rule 144A Information to such Holder or to a prospective
purchaser of such a Note who is designated by such Holder in order to permit compliance by such
Holder with Rule 144A under the Act in connection with the resale of such Note by such Holder and
(ii) no later than 90 days after the end of each fiscal year of the Company, conduct a conference
call for Holders with respect to the Company’s financial condition and results of operations for
such fiscal year. The Company shall send notice to Holders in accordance with Section 1.06
regarding the time, date and access information for such conference call no fewer than 15 Business
Days prior to such conference call.
Section 7.02. Reports.
(a) At any time when the Company is subject to Section 13 or 15(d) of the Exchange Act, the
Company covenants and agrees to provide to the Trustee such reports, information and documents, if
any, filed with the Commission.
(b) Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein,
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including the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).
ARTICLE 8
Successors
Section 8.01. Merger, Consolidation, or Sale of Assets. As long as any Notes are
outstanding, the Company shall not consolidate or merge with or into any other Person or convey,
transfer, lease, sell or assign all or substantially all of its properties and assets to another
Person, unless:
(i) either (A) the Company is the continuing Person or (B) both (x) the successor
Person expressly assumes by an indenture supplemental hereto executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal
of, and premium, if any, and Interest on the Notes, and the performance of every other
covenant of this Indenture on the part of the Company to be performed or observed; and (y)
the Person formed by the consolidation or into which the Company is merged or the Person
that acquires all or substantially all of the properties and assets of the Company is a
corporation or limited liability company organized and validly existing under the laws of
the United States, any State or the District of Columbia;
(ii) immediately after giving effect to such transaction, no Event of Default and no
event that, after notice or lapse of time or both, would become an Event of Default shall
have happened and be continuing; and
(iii) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such transaction and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply with this Article
and that all conditions precedent herein provided for relating to such transaction have been
complied with.
Section 8.02. Successor Corporation Substituted. Upon any consolidation of the Company
with, or merger of the Company into, any other Person or any conveyance, transfer, lease, sale or
assignment of all or substantially all of the properties and assets of the Company in accordance
with Section 8.01, the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease or sale or assignment is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Notes.
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ARTICLE 9
Amendments and Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Holders. Subject to Section
9.06, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for one or more of the
following purposes:
(a) to evidence the succession of another Person to the Company, or successive successions,
and the assumption by the successor Person of the covenants, agreements and obligations of the
Company under the Indenture and the Notes pursuant to Article 8 hereof; provided that the event
giving rise to such succession was otherwise in accordance with the provisions set forth in this
Indenture;
(b) to add to the covenants of the Company such further covenants, restrictions, conditions or
provisions for the benefit of the Holders of the Notes or to surrender any right or power herein
conferred upon the Company;
(c) to amend the definition of “APM Securities” to eliminate Common Stock and/or Mandatorily
Convertible Preferred Stock from such definition, subject to the conditions specified under the
proviso of the definition of “APM Securities”;
(d) to make any changes that would provide any additional rights or benefits to the Holders;
(e) to increase the Share Cap;
(f) to provide for the issuance of Additional Notes in accordance with the provisions of this
Indenture;
(g) to evidence and provide for the acceptance of appointment by a successor trustee with
respect to the Notes;
(h) to provide any guarantee of the Notes;
(i) to cure any ambiguity or omission, to correct or supplement any provision herein which may
be defective or inconsistent with any other provision herein; or
(j) to make any other provisions with respect to matters or questions arising under this
Indenture, in each case, which shall not be inconsistent with the provisions herein, provided such
action shall not adversely affect the interests of the Holders in any material respect.
No amendment to this Indenture or the Notes made solely to conform this Indenture to the
description of the Notes contained in the Offering Memorandum will be deemed to adversely affect
the interests of the Holders.
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The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer and assignment of any property thereunder,
but the Trustee shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 9.01 may be executed
by the Company and the Trustee without the consent of the Holders of any of the Notes at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.
After an amendment under this Section 9.01 becomes effective, the Company shall mail to
Holders of the Notes a notice briefly describing such amendment. The failure to give such notice
to all Holders of Notes, or any defect therein, shall not impair or affect the validity of an
amendment under this Section 9.01.
Section 9.02. Supplemental Indentures With Consent of Holders. Subject to Section
9.06, with the consent (evidenced as provided in Section 1.04)
of the Holders of not less than a majority in the
aggregate principal amount of the Notes at the time Outstanding, the Company and the Trustee may
from time to time and at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or any supplemental indenture or of modifying in any manner the rights of the
Holders of the Notes, and the Company shall not modify or supplement the Replacement Capital
Covenant in a manner to impose additional restrictions on the type or amount of Qualifying Capital
Securities that the Company may include for purposes of determining when repayment, redemption or
purchase of the Notes is permitted without obtaining the consent of at least a majority of the
Holders of the Notes. However, no such supplemental indenture shall, with respect to each Note held
by a non-consenting Holder:
(a) change the Scheduled Maturity Date or the Final Maturity Date of the principal of, or any
installment of Interest on, any Note, or reduce the principal amount thereof or the rate of
interest thereon, alter the manner of calculation of Interest payable or extend the time for
payment of Interest on any Note;
(b) reduce the percentage in principal amount of the Notes the consent of whose Holders of
Outstanding Notes is required for any supplement or amendment to this Indenture, or the consent of
whose Holders of Outstanding Notes is required for any waiver provided for in this Indenture;
(c) modify the interest rate reset provisions of any Note;
(d) reduce the Redemption Price of the Notes, or change the time at which the Notes may or
must be redeemed or purchased, or change any place of payment where any Note or Interest thereon is
payable;
(e) make any change to the abilities of Holders to enforce their rights under this Indenture
or the Notes; or
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(f) make any change in the provisions of the Indenture relating to waivers of past defaults or
the rights of holders of Notes to receive payments of principal of, premium, if any, or Interest,
or Additional Interest, if any, on the Notes,
without, in the case of each of the foregoing clauses (a) through (f), the consent of the Holder of
each Note so affected.
Upon the request of the Company, accompanied by a Board Resolution authorizing the execution
and delivery of any such supplemental indenture, and upon the filing with the Trustee of evidence
of the consent of Holders as aforesaid, the Trustee shall join with the Company in the execution of
such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights,
duties or immunities under this Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company shall mail to
Holders of the Notes a notice briefly describing such amendments. The failure to give such notice
to all Holders of Notes, or any affect therein, shall not impair or affect the validity of any
amendment under this Section 9.02.
Section 9.03. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article 9, this Indenture shall be deemed
to be modified and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the
Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in
all respects to such modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 9.04. Notation on Notes. Notes authenticated and delivered after the execution
of any supplemental indenture pursuant to the provisions of this Article 9 may bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of
the Trustee and the Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee
and delivered in exchange for the Notes then Outstanding.
Section 9.05. Evidence of Compliance of Supplemental Indenture to Be Furnished
Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may require delivery
to it, and shall be protected from liability in relying upon, an Officers’ Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 9.
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Section 9.06. Prohibition on Certain Amendments and Supplements. Notwithstanding any
provision contained in this Article 9, neither the Company nor the Trustee may amend or supplement
the Indenture or the Notes to add Events of Default or other acceleration events.
ARTICLE 10
Covenants
Section 10.01. Payment of Principal and Interest. Subject to Section 2.02(d), the
Company covenants and agrees for the benefit of the Notes that it will duly and punctually pay the
principal of (and premium, if any) and Interest on the Notes in accordance with the terms of the
Notes and this Indenture. At the option of the Company, payment of principal (and premium, if any)
and Interest on the Notes may be made either by wire transfer or (subject to collection) by check
mailed to the address of the Person entitled thereto at such address as shall appear in the Note
Register; provided that, in connection with payment by wire transfer, the Paying Agent shall have
received appropriate wire transfer instructions at least five Business Days prior to the applicable
payment date.
Section 10.02. Maintenance of Office or Agency. The Company will maintain in each
Place of Payment an office or agency where the Notes may be presented or surrendered for payment,
registration of transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company hereby initially appoints the
Trustee its office or agency for each of said purposes. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in each Place of
Payment for such purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.
Section 10.03. Money for Notes; Payments to Be Held in Trust. If the Company shall at
any time act as its own Paying Agent with respect to the Notes, it will, on or before each due date
of the principal of (and premium, if any) or Interest on the Notes, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or Interest so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its action or failure so to
act.
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Whenever the Company shall have one or more Paying Agents for the Notes, it will, on or prior
to each due date of the principal of (and premium, if any) or Interest on the Notes, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or Interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to such principal (and
premium, if any) or Interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee a written instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and premium, if any)
or Interest on the Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other obligor upon
the Notes) in the making of any payment of principal (and premium, if any) or Interest on
the Notes; and
(3) at any time during the continuance of any such default, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or Interest on any Note and
remaining unclaimed for two years after such principal (and premium, if any) or Interest has become
due and payable shall be paid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look, only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on each Business Day
and of general circulation in the City, County and State of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be less than 30 days
from the date of such mailing or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
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Section 10.04. Maintain Existence. Subject to Article 8, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company shall not be required
to preserve any such right or franchise if the Board of Directors or senior management of the
Company shall determine that the preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous in any material respect to
the Holders.
Section 10.05. Statement by Officers as to Default. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company ending after the date
hereof, a certificate of the principal executive officer, principal financial officer or principal
accounting officer of the Company stating whether or not to the best knowledge of the signer
thereof the Company is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture, and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
ARTICLE 11
Redemption of Notes
Section 11.01. General. The Notes shall be redeemable in accordance with Section
2.02(g) and this Article 11. Repayment of the Notes under Section 2.02(a) shall be in accordance
with Article 3 of this Indenture. In addition, the Company may purchase, acquire or otherwise hold
Notes.
Section 11.02. Election to Redeem; Notice to Trustee. The election of the Company to
redeem any Notes shall be evidenced by a Board Resolution. In case of any redemption of the Notes
in whole or in part under Section 2.02(g) of this Indenture, the Company shall, at least 2 Business
Days prior to the date that Notice of Redemption is required to be given to Holders under Section
11.04 (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing
of such Redemption Date and of the principal amount of Notes to be redeemed, such notice to be
accompanied by an Officers’ Certificate stating that no defaults in the payment of Interest or
Events of Default with respect to the Notes have occurred (which have not been waived or cured). In
the case of any redemption of Notes (x) prior to the expiration of any restriction on such
redemption provided in the terms of such Notes or elsewhere in this Indenture or (y) pursuant to an
election of the Company which is subject to a condition specified in the terms of such Notes or
elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate
evidencing compliance with such restriction or condition.
Section 11.03. Selection by Trustee of Notes to Be Redeemed. If less than all the
Notes are to be redeemed, the particular Notes to be redeemed shall be selected not more than 30
days prior to the Redemption Date by the Trustee, from the Outstanding Notes not previously called
for redemption, by such method as the Trustee in its sole discretion shall deem fair and
appropriate and which may provide for the selection or redemption of portions (equal to authorized
denominations for Notes) of the principal amount of Notes of a denomination larger than the minimum
authorized denomination for Notes.
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The Trustee shall promptly notify the Company in writing of the Notes selected for redemption
and, in the case of any Notes selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Notes shall relate, in the case of any Notes redeemed or to be
redeemed only in part, to the portion of the principal amount of such Notes which has been or is to
be redeemed.
Section 11.04. Notice of Redemption. Notice of Redemption shall be given by
first-class mail, postage prepaid, or by facsimile electronic transmission, mailed or transmitted
not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be
redeemed, at the Holder’s address appearing in the Note Register (“Notice of Redemption”). Any
notice which is mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not such Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to any such Holder in respect of any Note, shall not affect the validity of
the proceedings for the redemption of any other Note.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and any accrued Interest, or if the Redemption Price is not
then ascertainable, the manner of calculation thereof;
(3) if less than all the Outstanding Notes are to be redeemed, the identification (and,
in the case of partial redemption, the principal amounts) of the particular Notes to be
redeemed;
(4) that on the Redemption Date, the Redemption Price and any accrued Interest will
become due and payable upon each such Note to be redeemed;
(5) the place or places where such Notes are to be surrendered for payment of the
Redemption Price; and
(6) the CUSIP number and, if applicable, the ISIN number, of the Notes being redeemed.
Notice of Redemption of Notes to be redeemed at the election of the Company shall be given by
the Company or, upon Company Request, by the Trustee to each Holder of the Notes to be redeemed in
the name and at the expense of the Company, provided that the Company makes such request to the
Trustee in writing at least 2 Business Days prior (unless the Trustee agrees to a shorter period)
to the date by which such Notice of Redemption must be given to Holders in accordance with this
Section 11.04.
Section 11.05. Deposit of Redemption Price. Prior to 10:00 a.m. New York City time,
on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as provided in
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Section 10.03) an amount of money, in funds immediately available on the due date, sufficient
to pay the Redemption Price. Promptly after the calculation of the Redemption Price, the Company
will give the Trustee and any Paying Agent written notice thereof.
Section 11.06. Notes Payable on Redemption Date. Notice of redemption having been
given as aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date (unless the Company
shall default in the payment of the Redemption Price) such Notes shall cease to bear Interest. Upon
surrender of any such Note for redemption in accordance with said notice, such Note shall be paid
by the Company at the Redemption Price and in accordance with Section 2.02(c).
If any Note called for redemption shall not be so paid upon surrender thereof for redemption,
the principal (and premium, if any) shall, until paid, bear Interest from the Redemption Date at
the rate prescribed therefor in the Note.
The Trustee shall not redeem any Notes pursuant to this Article (unless all Outstanding Notes
are to be redeemed) or mail or give any notice of redemption of Notes during the continuance of an
Event of Default hereunder known to the Trustee, except that, where the mailing of notice of
redemption of any Notes shall theretofore have been made, the Trustee shall redeem or cause to be
redeemed such Notes, provided, however, that it shall have received from the Company a sum
sufficient for such redemption. Except as aforesaid, any moneys theretofore or thereafter received
by the Trustee shall, during the continuance of such Event of Default, be deemed to have been
collected under Article 5 and held for the payment of all Notes. In case such Event of Default
shall have been waived as provided in Section 5.13 or the default cured on or before the 60th day
preceding the Redemption Date, such moneys shall thereafter be applied in accordance with the
provisions of this Article.
Section 11.07. Notes Redeemed in Part. Any Note which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered.
ARTICLE 12
Subordination
Section 12.01. Agreement to Subordinate.
(a) The Company covenants and agrees, and each Holder of Notes issued hereunder by such
Holder’s acceptance thereof likewise covenants and agrees, that all Notes shall be issued
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subject to the provisions of this Article 12; and each Holder of a Note, whether upon original
issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.
(b) The payment by the Company of the principal of (and premium, if any), and Interest
(including Deferred Interest) on, and all other amounts owing in respect of the Notes issued
hereunder, which amounts shall not include certain amounts of Interest upon a Bankruptcy Event as
set forth in Section 2.02(d)(iv), shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full in cash of the principal
of, Interest on and all other amounts owing in respect of all Senior Indebtedness of the Company,
whether outstanding at the date of this Indenture or thereafter incurred, and shall rank pari passu
with the Company’s trade accounts payable, accrued liabilities arising in the ordinary course of
business and any debt that by its terms ranks pari passu with the Notes.
(c) No provision of this article shall prevent the occurrence of any default or Event of
Default or Enforcement Event hereunder.
Section 12.02. Default on Senior Indebtedness.
(a) No payment of any kind or character by or on behalf of the Company with respect to
principal of (and premium, if any), Interest on or other amounts owing in respect of the Notes or
to acquire any of the Notes for cash, property or otherwise, whether pursuant to the terms of the
Notes on the Final Maturity Date or upon acceleration, by way of repurchase, redemption, defeasance
or otherwise, will be made if, at the time of such payment, any default occurs and is continuing in
the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of
principal of, interest on, unpaid drawings for letters of credit issued in respect of, or regularly
accruing fees with respect to, any Senior Indebtedness, and such default shall not have been cured
or waived or the benefits of this Section 12.02(a) waived by or on behalf of the holders of such
Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing, any payment shall be received by the
Trustee when such payment is prohibited by Section 12.02(a), such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of such Senior Indebtedness
or their respective representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, to the extent necessary to pay such Senior
Indebtedness in full, in cash, after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness, before any payment or distribution is
made to the Holders or to the Trustee.
Section 12.03. Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any total or partial dissolution,
winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary,
assignment for the benefit of creditors or marshalling of the Company’s assets, or in bankruptcy,
insolvency, receivership or other similar proceedings relating to the Company or its assets,
whether voluntary or involuntary, all principal, premium, if any, and interest and all other
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amounts due or to become due regarding all Senior Indebtedness of the Company shall first be
paid in full in cash, or such payment duly provided for to the satisfaction of the holders of the
Senior Indebtedness, before any payment or distribution of any kind or character is made on account
of any principal of (premium, if any), Interest on or other amounts owing in respect of the Notes,
or for the acquisition of any of the Notes for cash, property or otherwise; and upon any such
dissolution, winding-up, liquidation or reorganization, any payment by the Company, or distribution
of assets of the Company of any kind or character whether in cash, property or securities, which
the Holders or the Trustee would be entitled to receive from the Company, except for the provisions
of this Article, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution, or by the Holders
or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Company or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have
been issued, as their respective interests may appear, as calculated by the Company, to the extent
necessary to pay such Senior Indebtedness in full in cash, or to cause such payment to be duly
provided for to the satisfaction of the holders of the Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the benefit of the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders or to the Trustee;
(b) In the event that, notwithstanding Section 12.03(a), any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or securities, prohibited by
Section 12.03(a), shall be received by the Trustee before all Senior Indebtedness of the Company is
paid in full, or provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of such Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may appear, as calculated
by the Company, to the extent necessary to pay such Senior Indebtedness in full, in cash, after
giving effect to any concurrent payment or distribution to or for the benefit of the holders of
such Senior Indebtedness, before any payment or distribution is made to the Holders or to the
Trustee.
(c) For purposes of this Article 12, the words “cash, property or securities” shall not be
deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article with respect to
the Notes to the payment of all Senior Indebtedness of the Company that may at the time be
outstanding; provided, however, that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of such Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or limited liability company or the liquidation or dissolution of
the Company following the conveyance, transfer, sale or assignment of all or substantially all of
the properties and assets of the Company, to another corporation or limited liability company upon
the terms and conditions provided for in Article 8 of this Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
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Section 12.03 if such other corporation or limited liability company shall, as part of such
consolidation, merger, conveyance, transfer, sale or assignment, comply with the conditions stated
in Article 8 of this Indenture. Nothing in Section 12.02 or in this Section 12.03 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this Indenture.
Section 12.04. Subrogation.
(a) Subject to the payment in full of all Senior Indebtedness of the Company then outstanding,
the rights of the Holders shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or securities of the Company
applicable to such Senior Indebtedness until the principal of and premium, if any, and Interest on
the Notes shall be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash, property or securities to
which the Holders or the Trustee would be entitled except for the provisions of this Article 12,
and no payment over pursuant to the provisions of this Article 12 to or for the benefit of the
holders of such Senior Indebtedness by Holders or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders, be deemed to be a payment by
the Company to or on account of such Senior Indebtedness. It is understood that the provisions of
this Article 12 are and are intended solely for the purposes of defining the relative rights of the
Holders, on the one hand, and the holders of such Senior Indebtedness, on the other hand.
(b) Nothing contained in this Article 12 or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders the principal of (premium, if any) and Interest on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders and the creditors of the Company other than the holders of
Senior Indebtedness nor shall anything herein or therein prevent the Trustee or any Holder of Notes
from exercising all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company received upon the exercise
of any such remedy.
(c) Upon any payment or distribution of assets of the Company referred to in this Article 12,
the Trustee, subject to the provisions of Section 6.01 of this Indenture, and the Holders shall be
entitled to rely conclusively upon any order or decree made by any court of competent jurisdiction
in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or the Holders, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this
article.
Section 12.05. Trustee to Effectuate Subordination. Each Holder of Notes by such
Holder’s acceptance thereof authorizes the Trustee on such Holder’s behalf, if so directed by the
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Company, to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 12 and appoints the Trustee such Holder’s attorney-in-fact
for any and all such purposes.
Section 12.06. Notice by the Company.
(a) The Company shall give prompt written notice to a Responsible Officer of the Trustee of
any fact known to the Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article 12. Notwithstanding the
provisions of this Article 12 or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the making of any payment
of monies to or by the Trustee in respect of the Notes pursuant to the provisions of this Article
12, unless and until a Responsible Officer of the Trustee shall have received written notice
thereof from the Company or a Holder or holders of Senior Indebtedness or from any representative
or trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.01 of this Indenture, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 12.06(a) at least two Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including, without limitation, the
payment of the principal of or Interest on any Note), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to receive such money and
to apply the same to the purposes for which such money was received, and shall not be affected by
any notice to the contrary that may be received by it within two Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 6.01 of this Indenture, shall be
entitled to conclusively rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder), to establish that such notice has been given by a holder of such Senior Indebtedness or a
trustee or representative on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment.
Section 12.07. Rights of the Trustee; Holders of Senior Indebtedness.
(a) The Trustee in its individual capacity shall be entitled to all the rights set forth in
this Article 12 in respect of any Senior Indebtedness at any time held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
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(b) With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or
to observe only such of its covenants and obligations as are specifically set forth in this Article
12 and no implied covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Section
6.01 of this Indenture, the Trustee shall not be liable to any holder of such Senior Indebtedness
if it shall pay over or deliver to Holders, the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of this Article 12 or
otherwise.
(c) Nothing in this Article 12 shall be applicable to any payments made or owing to the
Trustee pursuant to or as described in Section 6.06.
Section 12.08. Subordination May Not Be Impaired.
(a) No right of any present or future holder of any Senior Indebtedness of the Company to
enforce subordination provided in this Article 12 shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof that any such
holder may have or otherwise be charged with.
(b) Without in any way limiting the generality of the foregoing paragraph, the holders of
Senior Indebtedness of the Company may, at any time and from time to time, without the consent of
or notice to the Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article 12 or the obligations
hereunder of the Holders to the holders of such Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time of payment of, or
renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release any Person liable
in any manner for the collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising or waive any rights against the Company and any other Person.
(c) Each present and future holder of Senior Indebtedness shall be entitled to the benefit of
the provisions of this Article notwithstanding that such holder is not a party to this Indenture.
Section 12.09. Article Applicable to Paying Agents. In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder,
the term “Trustee” as used in this Article 12 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within its meaning as fully
for all intents and purposes as if such Paying Agent were named in this Article 12 in addition to
or in place of the Trustee; provided, however, that this Section 12.09 shall not apply to the
Company or any affiliate of the Company if it or such affiliate acts as Paying Agent.
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Section 12.10. Defeasance of this Article. Notwithstanding anything contained herein
to the contrary, payments from cash or the proceeds of U.S. Government Obligations held in trust
under Article 4 hereof by the Trustee and which were deposited in accordance with the terms of
Article 4 hereof and not in violation of Section 12.02 hereof for the payment of principal of and
premium, if any, and Interest on the Notes shall not be subordinated to the prior payment of any
Senior Indebtedness or subject to the restrictions set forth in this Article, and none of the
Holders or the Trustee shall be obligated to pay over any such amount to the Company or any holder
of Senior Indebtedness or any representative or trustee therefor or any other creditor of the
Company.
Section 12.11. Subordination Language to Be Included in Notes. Each Note shall contain
a subordination provision which will be substantially in the following form:
“The Notes are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in
full in cash of all Senior Indebtedness (as defined in the
Indenture). Each Holder of this Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes the
Trustee on his behalf, if so directed by the Company, to take such
actions as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. Each Holder hereof,
by his acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon
said provisions.”
ARTICLE 13
Calculation Agency
Section 13.01. Appointment of Calculation Agent. Upon the terms and subject to the
conditions set forth herein, the Company hereby appoints the Trustee as the Calculation Agent
hereunder and the Trustee hereby accepts such appointment. The Calculation Agent hereby agrees to
calculate the interest rates (the “Interest Rates”) on the Notes in the manner and at the times
provided in this Indenture. The Calculation Agent shall exercise due care to determine the Interest
Rates on the Notes and shall communicate the same to the Company, the Depositary or other
applicable depositary and any paying agent identified to it in writing promptly after each such
determination. The Calculation Agent will, upon the written request of a Holder of a Note, provide
(i) the Interest Rate then in effect with respect to such Note and (ii) if determined, the Interest
Rate with respect to such Note which will become effective for the next Interest Period.
Section 13.02. Status of the Calculation Agent. Any acts taken by the Calculation
Agent under this Article 13, including specifically, but without limitation, the calculation of any
Interest Rate for the Notes, shall be deemed to have been taken by the Calculation Agent solely in
its
- 79 -
capacity as an agent acting on behalf of the Company and shall not create or imply any
obligation to, or any agency or trust relationship with, any of the Holders of the Notes.
Section 13.03. Fees and Expenses. The Calculation Agent shall be entitled to such
compensation for all services as Calculation Agent rendered under this Agreement in accordance with
its schedule of fees and charges provided to the Company on or before the date hereof. The Company
agrees to pay such fees and charges and shall reimburse the Calculation Agent for all reasonable
out-of-pocket expenses, disbursements and advances (including reasonable legal fees and expenses)
incurred or made by the Calculation Agent in connection with the services rendered by it under this
Article 13.
Section 13.04. Rights and Liabilities of the Calculation Agent. In the absence of
gross negligence or willful misconduct, the Calculation Agent, its directors, officers, employees
and agents shall be protected and shall incur no liability for or in respect of, any action taken,
omitted to be taken or suffered by it in reliance upon the terms of the Notes or any order, written
instruction, notice, request, direction, statement, certificate, consent, report, affidavit or
other instrument, paper, document or communication (each a “Communication”) reasonably believed by
it in good faith to be genuine. Any Communication from the Company or given by it and sent,
delivered or directed to the Calculation Agent under, pursuant to or as permitted by any provision
of this Article 13 shall be sufficient for purposes of this Article 13 if such Communication is in
writing and signed by any officer of the Company. The Calculation Agent may consult with counsel
satisfactory to it and the written advice of such counsel shall constitute full and complete
authorization and protection of the Calculation Agent with respect to any action taken, omitted to
be taken or suffered by it hereunder in good faith and in accordance with and in reliance upon the
written advice of such counsel. The Calculation Agent shall not be liable for any error resulting
from use of or reliance on a source or publication required to be used by the Calculation Agent in
determining an Interest Rate as provided in this Indenture. Neither the Calculation Agent nor its
directors, officers, employees or agents shall be liable to the Company for any action taken,
omitted to be taken or suffered by it hereunder, except in the case of gross negligence or willful
misconduct.
Section 13.05. Duties of the Calculation Agent. The duties and obligations of the
Calculation Agent shall be determined solely by the express provisions of this Article 13 and no
implied covenants or obligations shall be read into this Article 13 against the Calculation Agent.
The Calculation Agent may perform any duties hereunder directly or by or through agents or
attorneys and the Calculation Agent shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it hereunder.
Section 13.06. Termination, Resignation or Removal of the Calculation Agent. The
Calculation Agent may at any time terminate its appointment as Calculation Agent by giving written
notice to the Company specifying the date on which its desired resignation shall become effective;
provided, however, that such notice shall be given no less than sixty (60) days prior to said
effective date unless the Calculation Agent and the Company otherwise agree in writing. The Company
may terminate the appointment of the Calculation Agent at any time by giving written notice to the
Calculation Agent and specifying the effective date of such termination which shall be at least
thirty (30) days after the date of notice and shall not be less than fifteen (15) days prior to the
next Interest Payment Date. No termination by either the Calculation Agent
- 80 -
or the Company shall become effective prior to the date of the appointment by the Company of a
successor Calculation Agent and the acceptance of such appointment by such successor Calculation
Agent as provided in Section 13.07 hereof. Upon termination by either party pursuant to the
provisions of this Section, the Calculation Agent shall be entitled to the payment of any
compensation owed to it by the Company hereunder and to the reimbursement of all reasonable
out-of-pocket expenses incurred in connection with the services rendered by it hereunder, as
provided by Section 13.03 hereof. The provisions of Section 13.04 and Section 13.08 hereof shall
remain in effect following termination by either party.
Section 13.07. Appointment of Successor Calculation Agent. In the event of the
termination of the appointment of the Calculation Agent pursuant to Section 13.06 hereof, the
Company shall promptly appoint a successor Calculation Agent. Any successor Calculation Agent
appointed by the Company shall execute and deliver to the original Calculation Agent and the
Company an instrument accepting such appointment. Thereupon, such successor Calculation Agent
shall, without any further act, deed or conveyance, become vested with all the authority, rights,
powers, immunities, duties and obligations of the Calculation Agent with like effect as if
originally named as Calculation Agent hereunder. Upon the acceptance of such appointment, the
original Calculation Agent shall be obligated to transfer and deliver to the successor Calculation
Agent such relevant records or copies thereof maintained by the Calculation Agent in connection
with the performance of its obligations hereunder. In the event of a change in the Calculation
Agent, holders of the Notes will be informed of such change in the manner provided for in this
Indenture.
Section 13.08. Indemnification. The Corporation shall indemnify and hold harmless the
Calculation Agent and its officers, directors, employees, representatives and agents to the same
extent provided in Section 6.05 hereof.
Section 13.09. Merger, Consolidation or Sale of Business by the Calculation Agent. Any
Person into which the Calculation Agent may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or consolidation to which
Calculation Agent shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Calculation Agent, shall be successor to the Calculation Agent
hereunder without the execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
[Signature pages follow]
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IN WITNESS WHEREOF, the undersigned have caused this Indenture to be duly executed as of the
day and year first before written.
| SYMETRA FINANCIAL CORPORATION |
||||
| By: | ||||
| Name: | Margaret A. Meister | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
| U.S. BANK NATIONAL ASSOCIATION, as Trustee |
||||
| By: | ||||
| Name: | Carolyn Whalen | |||
| Title: | Vice President | |||
EXHIBIT A-1
FORM OF RULE 144A GLOBAL NOTE OR REGULATION S PERMANENT NOTE
(FACE OF NOTE)
[Restricted Securities Legend]1
[Global Securities Legend]
[Global Securities Legend]
| [CUSIP No. 87151QAB2 | [CUSIP No. U79664AB1 | |||||
| ISIN No. US87151QAB23] 2 | ISIN No. USU79664AB19]3 |
SYMETRA FINANCIAL CORPORATION
CAPITAL EFFICIENT NOTES DUE 2067
No.
SYMETRA FINANCIAL CORPORATION, a corporation organized under the laws of the State of Delaware
(hereinafter called the “Company,” which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay [Cede & Co.] or its
registered assigns, the principal amount of
$ , which
amount may be increased or decreased from
time to time on Schedule I hereto on October 15, 2067 (the “Final Maturity Date”); provided that
the principal amount of, and all accrued and unpaid Interest on, this Security shall be payable in
full on October 15, 2037 (the “Scheduled Maturity Date”) or any subsequent Interest Payment Date to
the extent, and subject to the conditions, set forth in the Indenture; provided further that, if
any date fixed for redemption or repayment is not a Business Day, redemption or repayment of the
principal amount will be made on the next day that is a Business Day, without any Interest or other
payment as a result of such delay.
| 1 | To be inserted in any Regulation S Global Security or Rule 144A Global Note unless pursuant to its terms, the legend may be removed. | |
| 2 | To be inserted in any Rule 144A Global Note. | |
| 3 | To be inserted in any Regulation S Global Note. |
A-1-1
The Company further promises to pay Interest on said principal amount from October 10, 2007 or
from the most recent Interest Payment Date for which Interest has been paid or duly provided for.
This Security shall bear Interest (i) from and including October 10, 2007 to but excluding October
15, 2017 (or if earlier, until the principal hereof is paid in full), at the annual rate of 8.300%,
payable, and subject to deferral, in each case as set forth in the Indenture, and (ii) from and
including October 15, 2017 to but excluding the Final Maturity Date (or if earlier, until the
principal hereof is paid in full), at an annual rate equal to Three-month LIBOR plus 4.177%,
payable, and subject to deferral, in each case as set forth in the Indenture.
The Company shall have the right, at any time and from time to time prior to the Final
Maturity Date to defer the payment of Interest on this Security as set forth in, and subject to the
conditions specified in, the Indenture.
Each Holder, by such Holder’s acceptance hereof, agrees that if a Bankruptcy Event shall occur
prior to the redemption or repayment of this Security, such Holder shall not have a claim for, and
shall have no right to receive, unpaid Deferred Interest (including Additional Interest thereon) to
the extent that such Deferred Interest (including Additional Interest thereon) exceeds the sum of
(x) Interest that relates to the earliest two years of the portion of the Deferral Period for the
Notes for which Interest has not been paid (including Additional Interest thereon) and (y) an
amount equal to such Holder’s pro rata share of the excess, if any, of the Preferred Stock Cap over
the aggregate amount of net proceeds from the sale of the Company’s Qualifying Non-Cumulative
Perpetual Preferred Stock and unconverted and outstanding Mandatorily Convertible Preferred Stock
that the Company has applied to pay Interest on the Notes pursuant to the Alternative Payment
Mechanism. To the extent that such claim for unpaid Deferred Interest (including Additional
Interest thereon) exceeds the amount set forth in clause (x), the Holders shall be deemed to agree
that the amount they receive in respect of such excess shall not exceed the amount they would have
received had such claim ranked pari passu with the claims of the holders, if any, of the Company’s
Qualifying Non-Cumulative Perpetual Preferred Stock.
The Company may, at its option and subject to the terms and conditions of the Indenture and
Article 11 of the Indenture, redeem this Security (A) in whole or in part on October 15, 2017 and
on each Interest Payment Date thereafter at a Redemption Price equal to 100% of the principal
amount of this Security plus accrued and unpaid Interest to the Redemption Date, and (B) prior to
October 15, 2017, (i) in whole or in part, at a Redemption Price equal to 100% of the principal
amount of this Security or, if greater, a Make-Whole Price specified in the Indenture, in either
case plus accrued and unpaid Interest to the Redemption Date, and (ii) in whole but not in part,
within 90 days after the occurrence of a Special Event, at a Redemption Price equal to 100% of the
principal amount of this Security or, if greater, a Special Event Make-Whole Price specified in the
Indenture, in either case plus accrued and unpaid Interest to the Redemption Date.
The Securities are subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full of all Senior Indebtedness (as defined in the
Indenture). Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes the Trustee on his behalf, if so directed by the Company, to
take such actions as may be necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder
A-1-2
hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.
Unless the certificate of authentication hereon has been executed by the Trustee by manual
signature, this Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Security is a duly authorized security of the Company (herein called the “Security”),
issued under an Indenture, dated as of October 10, 2007 (herein called the “Indenture”), between
the Company and U.S. Bank National Association, as Trustee (herein called the “Trustee,” which term
includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered.
All terms used in this Security that are defined in the Indenture shall have the meanings
assigned to them in the Indenture, as the case may be.
Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.
A-1-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
| SYMETRA FINANCIAL CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Dated: October 10, 2007
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
| U.S. BANK NATIONAL ASSOCIATION, as Trustee |
||||
| By: | ||||
| Authorized Signatory | ||||
Dated: October 10, 2007
A-1-4
REVERSE OF SECURITY
As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer or exchange at the office or agency of the Company maintained under
Section 10.02 of the Indenture duly endorsed by, or accompanied by written instrument of transfer
in form satisfactory to the Company and the Security Registrar or co-Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No service charge
shall be made for any such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may deem and treat the
Person in whose name this Security is registered as the owner hereof for all purposes, whether or
not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
The Security is issuable only in registered form without coupons in denominations of $1,000
and any integral multiple thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for like aggregate principal amount
of Securities of a different authorized denomination, as requested by the Holder surrendering the
same.
The Company and, by its acceptance of this Security or a beneficial interest therein, the
Holder of, and any Person that acquires beneficial interest in, this Security agree that, for
United States federal, state and local tax purposes, it is intended that this Security constitute
indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
A-1-5
SCHEDULE I
SCHEDULE
OF INCREASES OR DECREASES
Principal
amount of Note outstanding represented by this Security as of October 10, 2007: $[ ]
Thereafter,
the following increases or decreases have been made:
| Increase in | Notation Made by or | |||||||
| Date of Redemption | Principal | Decrease in | Principal Amount | on Behalf of the | ||||
| or Repurchase | Amount | Principal Amount | Remaining | Trustee | ||||
A-1-6
EXHIBIT A-2
FORM OF REGULATION S TEMPORARY GLOBAL NOTE
(FACE OF NOTE)
[Temporary Global Security Legend]
[Global Securities Legend]
[Global Securities Legend]
CUSIP No.
ISIN No.
ISIN No.
SYMETRA FINANCIAL CORPORATION
CAPITAL EFFICIENT NOTES DUE 2067
No.
SYMETRA FINANCIAL CORPORATION, a corporation organized under the laws of the State of Delaware
(hereinafter called the “Company,” which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay [Cede & Co.] or its
registered assigns, the principal amount of
$ ,
which amount may be increased or decreased from
time to time on Schedule I hereto on October 15, 2067 (the “Final Maturity Date”); provided that
the principal amount of, and all accrued and unpaid Interest on, this Security shall be payable in
full on October 15, 2037 (the “Scheduled Maturity Date”) or any subsequent Interest Payment Date to
the extent, and subject to the conditions, set forth in the Indenture; provided further that, if
any date fixed for redemption or repayment is not a Business Day; redemption or repayment of the
principal amount will be made on the next day that is a Business Day, without any Interest or other
payment as a result of such delay.
The Company further promises to pay Interest on said principal amount from October 10, 2007 or
from the most recent Interest Payment Date for which Interest has been paid or duly provided for.
This Security shall bear Interest (i) from and including October 10, 2007 to but excluding October
15, 2017 (or if earlier, until the principal hereof is paid in full), at the annual rate of 8.300%,
payable, and subject to deferral, in each case as set forth in the Indenture, and (ii) from and
including October 15, 2017 to but excluding the Final Maturity Date (or if earlier, until the
principal hereof is paid in full), at an annual rate equal to Three-month LIBOR plus 4.177%,
payable, and subject to deferral, in each case as set forth in the Indenture.
A-2-1
The Company shall have the right, at any time and from time to time prior to the Final
Maturity Date to defer the payment of Interest on this Security as set forth in, and subject to the
conditions specified in, the Indenture.
Each Holder, by such Holder’s acceptance hereof, agrees that if a Bankruptcy Event shall occur
prior to the redemption or repayment of this Security, such Holder shall not have a claim for, and
shall have no right to receive, unpaid Deferred Interest (including Additional Interest thereon) to
the extent that such Deferred Interest (including Additional Interest thereon) exceeds the sum of
(x) Interest that relates to the earliest two years of the portion of the Deferral Period for the
Notes for which Interest has not been paid (including Additional Interest thereon) and (y) an
amount equal to such Holder’s pro rata share of the excess, if any, of the Preferred Stock Cap over
the aggregate amount of net proceeds from the sale of the Company’s Qualifying Non-Cumulative
Perpetual Preferred Stock and unconverted and outstanding Mandatorily Convertible Preferred Stock
that the Company has applied to pay Interest on the Notes pursuant to the Alternative Payment
Mechanism. To the extent that such claim for unpaid Deferred Interest (including Additional
Interest thereon) exceeds the amount set forth in clause (x), the Holders shall be deemed to agree
that the amount they receive in respect of such excess shall not exceed the amount they would have
received had such claim ranked pari passu with the claims of the holders, if any, of the Company’s
Qualifying Non-Cumulative Perpetual Preferred Stock.
The Company may, at its option and subject to the terms and conditions of the Indenture and
Article 11 of the Indenture, redeem this Security (A) in whole or in part on October 15, 2017 and
on each Interest Payment Date thereafter at a Redemption Price equal to 100% of the principal
amount of this Security plus accrued and unpaid Interest to the Redemption Date, and (B) prior to
October 15, 2017, (i) in whole or in part, at a Redemption Price equal to 100% of the principal
amount of this Security or, if greater, a Make-Whole Price specified in the Indenture, in either
case plus accrued and unpaid Interest to the Redemption Date, and (ii) in whole but not in part,
within 90 days after the occurrence of a Special Event, at a Redemption Price equal to 100% of the
principal amount of this Security or, if greater, a Special Event Make-Whole Price specified in the
Indenture, in either case plus accrued and unpaid Interest to the Redemption Date.
The Securities are subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full of all Senior Indebtedness (as defined in the
Indenture). Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes the Trustee on his behalf, if so directed by the Company, to
take such actions as may be necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder
hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.
On any exchange or purchase, as applicable, and cancellation of any of the Securities
represented by this Temporary Global Note, details of such purchase and cancellation shall be
entered by or on behalf of the Company in the records of the Trustee and the Depositary, and
cancellation shall be signed by or on behalf of the Company. Upon any such exchange or
A-2-2
purchase, as applicable, and cancellation, the principal amount of this Temporary Global Note
and the Securities represented by this Temporary Global Note shall be reduced by the principal
amount so exchanged or purchased and cancelled.
An owner of a beneficial interest in this Regulation S Temporary Global Note (or a Person
acting on behalf of such an owner) may provide to Euroclear or Clearstream, as applicable, (and
Euroclear or Clearstream will accept) a duly completed Certificate of Beneficial Ownership at any
time after the termination of the Distribution Compliance Period (it being understood that
Euroclear or Clearstream, as applicable, will not accept any such certificate during the
Distribution Compliance Period). Promptly after receipt by the Trustee of a Certificate of
Beneficial Ownership from DTC on behalf of Euroclear or Clearstream, as applicable (or other
appropriate confirmation to such effect in accordance with the Applicable Procedures), with respect
to such a beneficial interest, the Trustee will cause such beneficial interest to be exchanged for
an equivalent beneficial interest in a Regulation S Permanent Global Note, and will (x) permanently
reduce the principal amount of such Regulation S Temporary Global Note by the amount of this
beneficial interest and (y) increase the principal amount of such Regulation S Permanent Global
Note by the amount of such beneficial interest, in each case subject to the Applicable Procedures.
Notwithstanding the previous two sentences, if after the Distribution Compliance Period any Initial
Purchaser owns a beneficial interest in this Regulation S Temporary Global Note, such Initial
Purchaser may, upon written request to the Trustee accompanied by a certification as to its status
as an Initial Purchaser and as the owner of such beneficial interest (but without any requirement
to deliver a Certificate of Beneficial Ownership), exchange such beneficial interest for an
equivalent beneficial interest in a Regulation S Permanent Global Note, and the Trustee will comply
with such request and will (x) permanently reduce the principal amount of such Regulation S
Temporary Global Note by the amount of such beneficial interest and (y) increase the principal
amount of such Regulation S Permanent Global Note by the amount of such beneficial interest, in
each case subject to the Applicable Procedures.
Upon the receipt by the Trustee of a written certificate from DTC, together with copies of
certificates from Euroclear and Clearstream certifying that they have received Certificates of
Beneficial Ownership representing 100% of the aggregate principal amount of this Regulation S
Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an
interest therein during the Distribution Compliance Period pursuant to another exemption from
registration under the Securities Act and who shall take delivery of a beneficial ownership
interest in a Rule 144A Global Note) (or, in any such case, offer appropriate confirmation to such
effect in accordance with the Applicable Procedures), the Trustee shall cancel this Regulation S
Temporary Global Note.
Unless the certificate of authentication hereon has been executed by the Trustee by manual
signature, this Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Security is a duly authorized security of the Company (herein called the “Security”),
issued under an Indenture, dated as of October 10, 2007 (herein called the “Indenture”), between
the Company and U.S. Bank National Association, as Trustee (herein called the “Trustee,” which term
includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
A-2-3
respective rights, limitations of rights, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Securities, and of the terms upon which the Securities are, and are
to be, authenticated and delivered.
All terms used in this Security that are defined in the Indenture shall have the meanings
assigned to them in the Indenture, as the case may be.
Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
| SYMETRA FINANCIAL CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Dated: October 10, 2007
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
| U.S. BANK NATIONAL ASSOCIATION, as Trustee |
||||
| By: | ||||
| Authorized Signatory | ||||
Dated: October 10, 2007
A-2-5
REVERSE OF SECURITY
As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer or exchange at the office or agency of the Company maintained under
Section 10.02 of the Indenture duly endorsed by, or accompanied by written instrument of transfer
in form satisfactory to the Company and the Security Registrar or co-Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No service charge
shall be made for any such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee may deem and treat the
Person in whose name this Security is registered as the owner hereof for all purposes, whether or
not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
The Security is issuable only in registered form without coupons in denominations of $1,000
and any integral multiple thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for like aggregate principal amount
of Securities of a different authorized denomination, as requested by the Holder surrendering the
same.
The Company and, by its acceptance of this Security or a beneficial interest therein, the
Holder of, and any Person that acquires beneficial interest in, this Security agree that, for
United States federal, state and local tax purposes, it is intended that this Security constitute
indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
A-2-6
SCHEDULE I
SCHEDULE
OF INCREASES OR DECREASES
Principal
amount of Note outstanding represented by this Security as of October 10, 2007: $[ ]
Thereafter,
the following increases or decreases have been made:
| Increase in | Notation Made by or | |||||||
| Date of Redemption | Principal | Decrease in | Principal Amount | on Behalf of the | ||||
| or Repurchase | Amount | Principal Amount | Remaining | Trustee | ||||
A-2-7
EXHIBIT B
FORM OF LEGENDS FOR NOTES
[Global Securities Legend]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR
DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES.
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO ITS
NOMINEE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, A NOMINEE OF THE DEPOSITORY, HAS AN INTEREST HEREIN.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION OF THIS SECURITY, THE HOLDER: (1) REPRESENTS THAT (A)
IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO SYMETRA
FINANCIAL CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE
B-1
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER), OR (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT;
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS A PURCHASER WHO IS NOT A
QUALIFIED INSTITUTIONAL BUYER OR A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF
THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED IN THIS SECURITY,
THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
[Temporary Global Security Legend]
THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE DISTRIBUTION
COMPLIANCE PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON
OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON WHO PURCHASED SUCH INTEREST IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT PURSUANT TO RULE 144A THEREUNDER. BENEFICIAL
INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL SECURITIES OTHER THAN A PERMANENT GLOBAL
SECURITY IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN
REGULATION S UNDER THE SECURITIES ACT.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNTIL SUCH BENEFICIAL INTEREST IS EXCHANGED OR TRANSFERRED FOR AN
INTEREST IN ANOTHER NOTE.
B-2
EXHIBIT C-1
FORM OF TRANSFER CERTIFICATE
TRANSFER TO
REGULATION S TEMPORARY GLOBAL SECURITY
OR
REGULATION S PERMANENT GLOBAL SECURITY
(Transfers pursuant to Sections 2.18(a)(iii) and (iv)
of the Indenture)
TRANSFER TO
REGULATION S TEMPORARY GLOBAL SECURITY
OR
REGULATION S PERMANENT GLOBAL SECURITY
(Transfers pursuant to Sections 2.18(a)(iii) and (iv)
of the Indenture)
U.S. Bank National Association
Corporate Trust Services
1420 5th Avenue, 7th Floor
Seattle, WA 98101
Attention: Symetra Financial Corporation, Capital Efficient Notes due 2067
Corporate Trust Services
1420 5th Avenue, 7th Floor
Seattle, WA 98101
Attention: Symetra Financial Corporation, Capital Efficient Notes due 2067
Attn: Symetra Financial Corporation Administrator
Re: SYMETRA FINANCIAL CORPORATION
Capital Efficient Notes due 2067 (the “Securities”)
Reference is hereby made to the Indenture dated as of October 10, 2007 (the “Indenture”)
between Symetra Financial Corporation, as Company, and U.S. Bank National Association, as Trustee.
Terms used but not defined herein and defined in Regulation S under the U.S. Securities Act of 1933
(the “Securities Act”) or in the Indenture shall have the meanings given to them in Regulation S or
the Indenture, as the case may be.
This certificate relates to U.S.$ principal amount of Securities, which are
evidenced by the following certificate(s) (the “Specified Securities”):
CUSIP No(s). U79664AB1
ISIN No(s). USU79664AB19
CERTIFICATE No(s).
The person in whose name this certificate is executed below (the “Undersigned”) hereby
certifies that either (i) it is the sole beneficial owner of the Specified Securities or (ii) it is
acting on behalf of all the beneficial owners of the Specified Securities and is duly authorized by
them to do so. Such beneficial owner or owners are referred to herein collectively as the “Owner.”
If the Specified Securities are represented by a Global Security, they are held through the
appropriate Depositary or a Depositary Participant in the name of the Undersigned, as or on behalf
of the Owner.
C-1-1
The Owner has requested that the Specified Securities be transferred to a person (the
“Transferee”) who will take delivery in the form of an interest in a Regulation S Global Security.
In connection with such transfer, the Owner hereby certifies that such transfer is being effected
in accordance with Regulation S under the Securities Act and with all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner hereby further
certifies as follows:
1. the offer of the Specified Securities was not made to a person in the United States;
2. either: (a) at the time the buy order was originated, the Transferee was outside the
United States or the Owner and any person acting on its behalf reasonably believed that the
Transferee was outside the United States; or (b) the transaction is being executed in, on or
through the facilities of the Eurobond market, as regulated by the Association of International
Bond Dealers, or another designated offshore securities market and neither the Owner nor any person
acting on its behalf knows that the transactions have been prearranged with a buyer in the United
States;
3. no directed selling efforts have been made in the United States by or on behalf of the
Owner or any affiliate thereof;
4. the transaction is not part of a plan or scheme to evade the registration requirements of
the Securities Act; and
In addition, if the sale is made during a restricted period and the provisions of Rule
903(b)(3) or Rule 904(b)(l) of Regulation S are applicable thereto, the Owner confirms that such
sale has been made in accordance with the applicable provisions of Rule 903(b)(3) or Rule
904(b)(1), as the case may be.
This certificate and the statements contained herein are made for your benefit and the benefit
of the Company and the Initial Purchasers under the Purchase Agreement.
| Dated: | (Print the name of the Undersigned, as such term is defined in the second paragraph of this certificate.) | |||||
| By: | ||||||
| Title: | ||||||
| (If the Undersigned is a corporation, partnership or fiduciary, the title of the person signing on behalf of the Undersigned must be stated.) | ||||||
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EXHIBIT C-2
FORM OF TRANSFER CERTIFICATE
TRANSFER TO
RULE 144A GLOBAL SECURITY
(Transfers to QIBs Pursuant to Sections 2.18(a)(v) and (vi)
of the Indenture)
TRANSFER TO
RULE 144A GLOBAL SECURITY
(Transfers to QIBs Pursuant to Sections 2.18(a)(v) and (vi)
of the Indenture)
U.S. Bank National Association
Corporate Trust Services
1420 5th Avenue, 7th Floor
Seattle, WA 98101
Attention: Symetra Financial Corporation, Capital Efficient Notes due 2067
Corporate Trust Services
1420 5th Avenue, 7th Floor
Seattle, WA 98101
Attention: Symetra Financial Corporation, Capital Efficient Notes due 2067
Attn: Symetra Financial Corporation Administrator
Re: SYMETRA FINANCIAL CORPORATION
Capital Efficient Notes due 2067 (the “Securities”)
Reference is hereby made to the Indenture dated as of October 10, 2007 (the “Indenture”)
between Symetra Financial Corporation, as Company, and U.S. Bank National Association , as Trustee.
Terms used but not defined herein and defined in Regulation S under the U.S. Securities Act of 1933
(the “Securities Act”) or in the Indenture shall have the meanings given to them in Regulation S or
the Indenture, as the case may be.
This certificate relates to U.S.$ principal amount of Securities, which are
evidenced by the following certificate(s) (the “Specified Securities”):
CUSIP No(s). 87151QAB2
ISIN No(s). US87151QAB23
CERTIFICATE No(s).
The person in whose name this certificate is executed below (the “Undersigned”) hereby
certifies that either (i) it is the sole beneficial owner of the Specified Securities or (ii) it is
acting on behalf of all the beneficial owners of the Specified Securities and is duly authorized by
them to do so. Such beneficial owner or owners are referred to herein collectively as the “Owner.”
If the Specified Securities are represented by a Global Security, they are held through the
appropriate Depositary or a Depositary Participant in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred to a person (the
“Transferee”) who will take delivery in the form of an interest in a Rule 144A Global Security. In
connection with such transfer, the Owner hereby certifies that such transfer is being effected in
accordance with Rule 144A under the Securities Act and with all applicable securities laws of
C-2-1
the states of the United States and other jurisdictions. Accordingly, the Owner hereby further
certifies as follows:
(1) the Specified Securities are being transferred to a person that the Owner and any person
acting on its behalf reasonably believe is a “qualified institutional buyer” within the meaning of
Rule 144A, acquiring for its own account or for the account of a qualified institutional buyer; and
(2) the Owner and any person acting on its behalf have taken reasonable steps to ensure that
the Transferee is aware that the Owner may be relying on Rule 144A in connection with the transfer.
This certificate and the statements contained herein are made for your benefit and the benefit
of the Company and the Initial Purchasers under the Purchase Agreement.
| Dated: | (Print the name of the Undersigned, as such term is defined in the second paragraph of this certificate.) | |||||
| By: | ||||||
| Title: | ||||||
| (If the Undersigned is a corporation, partnership or fiduciary, the title of the person signing on behalf of the Undersigned must be stated.) | ||||||
C-2-2
EXHIBIT D
Certificate of Beneficial Ownership
| To: | [Euroclear | Bank S.A./N.V., as operator of the Euroclear System] OR | ||||
| [Clearstream | Banking, société anonyme] | |||||
| Re: | Symetra Financial Corporation Capital Efficient Notes due 2067 (the “Notes”) Issued under the Indenture dated as of October 10, 2007 relating to the Notes |
Ladies and Gentlemen:
We
are the beneficial owner of $ principal amount of Notes issued under the Indenture and represented by a Regulation S Temporary Global Note (as defined in the
Indenture).
We hereby certify as follows:
[CHECK A OR B AS APPLICABLE.]
| o | A. | We are a non-U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended). | ||||
| o | B. | We are a U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended) that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended. |
You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
| Very truly yours, | ||||||||||
| [NAME OF BENEFICIAL OWNER] | ||||||||||
| By: | ||||||||||
| Title: | ||||||||||
| Address: | ||||||||||
Date: |
||||||||||
D-1
EXHIBIT E
REPLACEMENT CAPITAL COVENANT
E-1
REPLACEMENT CAPITAL COVENANT, dated as of October 10, 2007 (this “Replacement Capital
Covenant”), by Symetra Financial Corporation, a Delaware corporation (together with its successors
and assigns, the “Corporation”), in favor of and for the benefit of each Covered Debtholder (as
defined below).
RECITALS
A. On the date hereof, the Corporation is issuing $150,000,000 aggregate principal amount of
its Capital Efficient Notes due 2067 (the “CENts”).
B. This Replacement Capital Covenant is the “Replacement Capital Covenant” referred to in the
Corporation’s Offering Memorandum dated October 10, 2007 relating to the CENts.
C. The Corporation is entering into and disclosing the content of this Replacement Capital
Covenant in the manner provided below with the intent that the covenants provided for in this
Replacement Capital Covenant be enforceable by each Covered Debtholder and that the Corporation be
estopped from disregarding the covenants in this Replacement Capital Covenant, in each case to the
fullest extent permitted by applicable law.
D. The Corporation acknowledges that reliance by each Covered Debtholder upon the covenants in
this Replacement Capital Covenant is reasonable and foreseeable by the Corporation and that, were
the Corporation to disregard its covenants in this Replacement Capital Covenant, each Covered
Debtholder would have sustained an injury as a result of its reliance on such covenants.
NOW, THEREFORE, the Corporation hereby covenants and agrees as follows in favor of and for the
benefit of each Covered Debtholder.
SECTION 1. Definitions
Capitalized terms used in this Replacement Capital Covenant (including the Recitals) have the
meanings set forth in Schedule I hereto.
SECTION 2. Limitations on Repayment, Redemption and Purchase of CENts
The Corporation hereby promises and covenants to and for the benefit of each Covered
Debtholder that the Corporation shall not repay, redeem or purchase, nor shall any Subsidiary of
the Corporation purchase, any of the CENts prior to the Termination Date except to the extent that
the principal amount repaid or the applicable redemption or purchase price does not exceed the sum
of the Applicable Percentages of the following amounts:
(i) the aggregate amount of net cash proceeds received by the Corporation and its
Subsidiaries since the most recent Measurement Date (without double counting proceeds
received in any prior Measurement Period) from the sale of Replacement Capital Securities to
Persons other than the Company and its Subsidiaries, plus
(ii) the product of the Current Stock Market Price of any Common Stock that the
Corporation and its Subsidiaries have issued (determined as of the date of issuance) to
Persons other than the Company and its Subsidiaries in connection with the conversion of any
convertible or exchangeable securities, other than securities for which the Corporation or
any of its Subsidiaries has received equity credit from any NRSRO, multiplied by the number
of shares of Common Stock so issued, since the most recent Measurement Date (without double
counting proceeds received in any prior Measurement Period).
1
For purposes of this Replacement Capital Covenant, the terms “repay” and “repayment” include the
defeasance by the Corporation of the CENts as well as the satisfaction and discharge of its
obligations under the Indenture with respect to the CENts.
SECTION 3. Covered Debt
(a) The Corporation represents and warrants that the Initial Covered Debt is Eligible Debt.
(b) On or during the 30-day period immediately preceding any Redesignation Date with respect
to the Covered Debt then in effect, the Corporation shall identify the series of Eligible Debt that
will become the Covered Debt on and after such Redesignation Date in accordance with the following
procedures:
(i) the Corporation shall identify each series of its then-outstanding long-term
indebtedness for money borrowed that is Eligible Debt;
(ii) if only one series of the Corporation’s then outstanding long-term indebtedness
for money borrowed is Eligible Debt, such series shall become the Covered Debt commencing on
the related Redesignation Date;
(iii) if the Corporation has more than one outstanding series of long-term indebtedness
for money borrowed that is Eligible Debt, then the Corporation shall identify the series
that has the latest occurring final maturity date as of the date the Corporation is applying
the procedures in this Section 3(b) and such series shall become the Covered Debt on the
related Redesignation Date;
(iv) the series of outstanding long-term indebtedness for money borrowed that is
determined to be Covered Debt pursuant to clause (ii) or (iii) above shall be the Covered
Debt for purposes of this Replacement Capital Covenant for the period commencing on the
related Redesignation Date and continuing to but excluding the Redesignation Date as of
which a new series of outstanding long-term indebtedness for money borrowed is next
determined to be the Covered Debt pursuant to the procedures set forth in this Section 3(b);
and
(v) in connection with such identification of a new series of Covered Debt, the
Corporation shall, as provided for in Section 3(c), (i) if the Corporation is a reporting
company under the Securities Exchange Act (a “Reporting Company”), give a notice and file
with the Commission a current report on Form 8-K (or any successor form) including or
incorporating by reference this Replacement Capital Covenant as an exhibit, and (ii) if the
Corporation is not a Reporting Company, follow the procedures provided in Section 3(c)(iv) ,
each within the time frame provided for in Section 3(c).
(c) Notice. In order to give effect to the intent of the Corporation described in Recital C,
the Corporation covenants that:
(i) simultaneously with the execution of this Replacement Capital Covenant or as soon
as practicable after the date hereof, it shall (x) give notice to the Holders of the Initial
Covered Debt, in the manner provided in the indenture relating to the Initial Covered Debt,
of this Replacement
2
Capital Covenant and the rights granted to such Holders hereunder and (y) cause a
notice of the execution of this Replacement Capital Covenant to be posted on the Bloomberg
screen for the Initial Covered Debt and each similar third-party vendor’s screen the
Corporation reasonably believes is appropriate (each an “Investor Screen”) and cause a
hyperlink to a definitive copy of this Replacement Capital Covenant to be included on the
Investor Screen for the Initial Covered Debt, in each case to the extent permitted by
Bloomberg or such similar third-party vendor, as the case may be;
(ii) if the Corporation is a Reporting Company, the Corporation shall include in each
annual report filed with the Commission on Form 10-K (or any successor form) under the
Securities Exchange Act a description of the covenant set forth in Section 2 and identify
the series of long-term indebtedness for borrowed money that is Covered Debt as of the date
such Form 10-K (or such successor form) is filed with the Commission;
(iii) if a series of the Corporation’s long-term indebtedness for money borrowed (1)
becomes Covered Debt or (2) ceases to be Covered Debt, the Corporation shall give notice of
such occurrence within 30 days to the holders of such long-term indebtedness for money
borrowed in the manner provided for in the indenture, fiscal agency agreement or other
instrument under which such long-term indebtedness for money borrowed was issued and, if the
Corporation is a Reporting Company, report such change in a current report on Form 8-K (or
any successor form) including or incorporating by reference this Replacement Capital
Covenant, and in the Corporation’s next annual report on Form 10-K (or any successor form) ,
as applicable;
(iv) if, and only if, the Corporation is not a Reporting Company, the Corporation shall
(x) post on its website the information otherwise required to be included in Securities
Exchange Act filings pursuant to clauses (ii) and (iii) of this Section 3(c) and (y) cause a
notice of the execution of this Replacement Capital Covenant to be posted on the applicable
Investor Screen and cause a hyperlink to a definitive copy of this Replacement Capital
Covenant to be included on the Investor Screen for each series of Covered Debt, in each case
to the extent permitted by Bloomberg or such similar third-party vendor, as the case may be;
and
(v) promptly upon request by any Holder of Covered Debt, the Corporation shall provide
such Holder with a copy of this Replacement Capital Covenant as executed.
(d) The Corporation agrees that, if at any time the Covered Debt is held by a trust (for
example, where the Covered Debt is part of an issuance of trust preferred securities), a holder of
the securities issued by such trust may enforce (including by instituting legal proceedings) this
Replacement Capital Covenant directly against the Corporation as though such holder owned Covered
Debt directly, and such holder shall be deemed to be a holder of “Covered Debt” for purposes of
this Replacement Capital Covenant for so long as the indebtedness held by such trust remains
Covered Debt hereunder.
SECTION 4. Termination, Amendment and Waiver
(a) The obligations of the Corporation pursuant to this Replacement Capital Covenant shall
remain in full force and effect until the earliest date (the “Termination Date”) to occur of:
3
(i) the date, if any, on which the Holders of a majority in principal amount of the
then-effective series of Covered Debt consent or agree in writing to the termination of this
Replacement Capital Covenant and the obligations of the Corporation hereunder;
(ii) the date on which the Corporation ceases to have any series of outstanding
Eligible Senior Debt or Eligible Subordinated Debt (in each case without giving effect to
the rating requirement in clause (b) of the definition of each such term);
(iii) October 15, 2047 or, if earlier, the date on which the CENts are otherwise
repaid, redeemed or purchased in full in accordance with this Replacement Capital Covenant;
and
(iv) the date on which the CENts become accelerated due to the occurrence of an event
of default.
From and after the Termination Date, the obligations of the Corporation pursuant to this
Replacement Capital Covenant shall be of no further force and effect.
(b) This Replacement Capital Covenant may be amended or supplemented from time to time by a
written instrument signed by the Corporation with the consent of the Holders of at least a majority
in principal amount of the then-effective series of Covered Debt, provided that this Replacement
Capital Covenant may be amended or supplemented from time to time by a written instrument signed
only by the Corporation (and without the consent of any Covered Debtholder) if:
(i) such amendment or supplement eliminates Common Stock, Warrants, Mandatorily
Convertible Preferred Stock and/or Debt Exchangeable for Common Equity as a Replacement
Capital Security and, in the case of this clause (i), after the date of this Replacement
Capital Covenant, an accounting standard or interpretive guidance of an existing accounting
standard issued by an organization or regulator that has responsibility for establishing or
interpreting accounting standards in the United States becomes effective such that there is
more than an insubstantial risk that failure to eliminate Common Stock, Warrants,
Mandatorily Convertible Preferred Stock and/or Debt Exchangeable for Common Equity as a
Replacement Capital Security would result in a reduction in the Corporation’s earnings per
share as calculated in accordance with generally accepted accounting principles in the
United States;
(ii) such amendment or supplement is not adverse to the Holders of the then-effective
series of Covered Debt and an officer of the Corporation has delivered to the Holders of the
then-effective series of Covered Debt in the manner provided for in the indenture, fiscal
agency agreement or other instrument with respect to such Covered Debt a written certificate
stating that, in his or her determination, such amendment or supplement is not adverse to
the Holders of the then-effective series of Covered Debt; or
(iii) the effect of such amendment or supplement is solely to impose additional
restrictions on, or eliminate (subject to clause (i) in the circumstances where it applies)
certain of, the types of securities qualifying as Replacement Capital Securities, and an
officer of the Corporation has delivered to the Holders of the then-effective series of
Covered Debt in the manner provided for in the
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indenture, fiscal agency agreement or other instrument with respect to such Covered
Debt a written certificate to that effect.
For the avoidance of doubt, an amendment or supplement that adds new types of Qualifying Capital
Securities or modifies the requirements of the Qualifying Capital Securities described herein would
not be adverse to the rights of the Covered Debtholders if, following such amendment or supplement,
this Replacement Capital Covenant would satisfy clause (ii) of the definition of Qualifying
Replacement Capital Covenant.
(c) For purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement is required
to terminate, amend or supplement the obligations of the Corporation under this Replacement Capital
Covenant shall be the Holders of the then-effective Covered Debt as of a record date established by
the Corporation that is not more than 30 days prior to the date on which the Corporation proposes
that such termination, amendment or supplement becomes effective.
SECTION 5. Miscellaneous
(a) This Replacement Capital Covenant shall be governed by and construed in accordance with
the laws of the State of New York.
(b) This Replacement Capital Covenant shall be binding upon the Corporation and its successors
and assigns and shall inure to the benefit of the Covered Debtholders as they exist from
time-to-time (it being understood and agreed by the Corporation that any Person who is a Covered
Debtholder shall retain its status as a Covered Debtholder for so long as the series of long-term
indebtedness for borrowed money owned by such Person is Covered Debt and if such Person initiates
an action, claim or proceeding to enforce its rights under this Replacement Capital Covenant after
the Corporation has violated its covenants in Section 2 and before the series of long-term
indebtedness for money borrowed held by such Person is no longer Covered Debt, such Person’s rights
under this Replacement Capital Covenant shall not terminate by reason of such series of long-term
indebtedness for money borrowed no longer being Covered Debt).
(c) All demands, notices, requests and other communications to the Corporation under this
Replacement Capital Covenant shall be deemed to have been duly given and made if in writing and (i)
if served by personal delivery upon the Corporation, on the day so delivered (or, if such day is
not a Business Day, the next succeeding Business Day), or (ii) if delivered by registered post or
certified mail, return receipt requested, or sent to the Corporation by a national or international
courier service, on the date of receipt by the Corporation (or, if such date of receipt is not a
Business Day, the next succeeding Business Day), and in each case to the Corporation at the address
set forth below, or at such other address as the Corporation may thereafter notify to Covered
Debtholders or post on its website as the address for notices under this Replacement Capital
Covenant:
Symetra Financial Corporation
PO Box 34690
Seattle, Washington 98124-1690
Attention: [ ]
[Remainder of Page Intentionally Left Blank]
PO Box 34690
Seattle, Washington 98124-1690
Attention: [ ]
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Corporation has caused this Replacement Capital Covenant to be
executed by its duly authorized officer, as of the day and year first above written.
| SYMETRA FINANCIAL CORPORATION | ||||||||
| By: | ||||||||
| Name: | Margaret A. Meister | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
SCHEDULE I
DEFINITIONS
“Alternative Payment Mechanism” means, with respect to any Qualifying Capital Securities,
provisions in the related transaction documents permitting the Corporation, in its sole discretion,
to defer or skip in whole or in part payment of Distributions on such Qualifying Capital Securities
for one or more consecutive Distribution Periods not to exceed ten years and requiring the
Corporation to issue (or use Commercially Reasonable Efforts to issue) one or more types of APM
Qualifying Securities raising eligible proceeds at least equal to the deferred Distributions on
such Qualifying Capital Securities and apply the proceeds to pay unpaid Distributions on such
Qualifying Capital Securities, commencing on the earlier of (x) the first Distribution Date after
commencement of a deferral period on which the Corporation pays current Distributions on such
Qualifying Capital Securities and (y) the fifth anniversary of the commencement of such deferral
period, and that:
(i) define “eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism,
the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other
expenses relating to the issuance or sale of the relevant securities, where applicable, and
including the fair market value of property received by the Corporation or any of its Subsidiaries
as consideration for such APM Qualifying Securities) that the Corporation has received during the
180 days prior to the related Distribution Date from the issuance of APM Qualifying Securities, up
to the Preferred Cap in the case of APM Qualifying Securities that are Qualifying Non-Cumulative
Preferred Stock or Mandatorily Convertible Preferred Stock;
(ii) permit the Corporation to pay current Distributions on any Distribution Date out of any
source of funds but (x) require the Corporation to pay deferred Distributions only out of eligible
proceeds and (y) prohibit the Corporation from paying deferred Distributions out of any source of
funds other than eligible proceeds;
(iii) if deferral of Distributions continues for more than one year (or such shorter period as
provided for in the terms of such securities), require the Corporation and its Subsidiaries not to
repay, redeem or purchase any of its securities that rank junior to or pari passu with any APM
Qualifying Securities on a bankruptcy or liquidation of the Corporation the proceeds of which were
used to settle deferred interest during the relevant deferral period until at least one year after
all deferred Distributions have been paid (a “Repurchase Restriction”), other than the following
(none of which shall be restricted or prohibited by a Repurchase Restriction):
(A) purchases of such securities by the Corporation’s Subsidiaries in connection with
the distribution thereof or market-making or other secondary-market activities;
(B) purchases, redemptions or other acquisitions of Common Stock in connection with
any employment contract, benefit plan or other similar arrangement with or for the benefit
of employees, officers, directors or consultants; or
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(C) purchases of Common Stock pursuant to a contractually binding requirement to buy
Common Stock entered into prior to the beginning of the related deferral period, including
under a contractually binding stock repurchase plan;
(iv) may include a provision that, notwithstanding the Common Cap and the Preferred Cap, for
purposes of paying deferred Distributions, limits the Corporation’s ability to sell Common Stock,
Warrants or Mandatorily Convertible Preferred Stock above the Share Cap;
(v) in the case of Qualifying Capital Securities other than Qualifying Non-Cumulative
Preferred Stock, include a Bankruptcy Claim Limitation Provision;
(vi) permit the Corporation, at its option, to provide that if it is involved in a merger,
consolidation, amalgamation, binding stock exchange or conveyance, transfer or lease of assets
substantially as an entirety to any other person or a similar transaction (a “Business
Combination”) where immediately after the consummation of the Business Combination more than 50% of
the voting stock of the surviving entity of the Business Combination or the Person to whom all or
substantially all of the Corporation’s assets have been transferred, conveyed or leased is owned,
directly or indirectly, by the stockholders of the other party to the Business Combination, then
clauses (i) through (iii) of this definition will not apply to any deferral period that is
terminated on the next Distribution Date following the date of the Business Combination;
(vii) limit the obligation of the Corporation to issue (or use Commercially Reasonable Efforts
to issue) APM Qualifying Securities that are Common Stock and Warrants to settle deferred
Distributions pursuant to the Alternative Payment Mechanism either (A) during the first five years
of any deferral period or (B) before an anniversary of the commencement of any deferral period that
is not earlier than the fifth such anniversary and not later than the ninth such anniversary (as
designated in the terms of such Qualifying Capital Securities) with respect to deferred
Distributions attributable to the first five years of such deferral period, either:
(X) to an aggregate amount of such securities, the net proceeds from the issuance of
which is equal to 2% of the product of the average of the Current Stock Market Price of the
Common Stock on the ten consecutive trading days ending on the fourth trading day
immediately preceding the date of issuance multiplied by the total number of issued and
outstanding shares of Common Stock as of the date of the Corporation’s most recent publicly
available consolidated financial statements; or
(Y) to a number of shares of Common Stock and Warrants, in the aggregate, not in excess
of 2% of the outstanding number of shares of Common Stock (such limitation set forth in (X)
or (Y), the “Common Cap”); and
(viii) limit the right of the Corporation to issue APM Qualifying Securities that are
Qualifying Non-Cumulative Preferred Stock and Mandatorily Convertible Preferred Stock to settle
deferred Distributions pursuant to the Alternative Payment Mechanism to an aggregate amount of
Qualifying Non-Cumulative Preferred Stock and still-outstanding Mandatorily Convertible Preferred
Stock, the net
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proceeds from the issuance of which with respect to all deferral periods is equal to 25% of
the liquidation or principal amount of such Qualifying Capital Securities (the “Preferred Cap”);
provided (and it being understood) that:
(A) the Corporation shall not be obligated to issue (or use Commercially Reasonable
Efforts to issue) APM Qualifying Securities for so long as a Market Disruption Event has
occurred and is continuing;
(B) if, due to a Market Disruption Event or otherwise, the Corporation is able to raise
and apply some, but not all, of the eligible proceeds necessary to pay all deferred
Distributions on any Distribution Date, the Corporation will apply any available eligible
proceeds to pay accrued and unpaid Distributions on the applicable Distribution Date in
chronological order subject to the Common Cap, Preferred Cap and Share Cap, as applicable;
and
(C) if the Corporation has outstanding more than one class or series of securities
under which it is obligated to sell a type of APM Qualifying Securities and apply some part
of the proceeds to the payment of deferred Distributions, then on any date and for any
period the amount of net proceeds received by the Corporation from those sales and available
for payment of deferred Distributions on such securities shall be applied to such securities
on a pro rata basis up to the Common Cap, the Preferred Cap and the Share Cap, as
applicable, in proportion to the total amounts that are due on such securities.
“APM Qualifying Securities” means, with respect to an Alternative Payment Mechanism, or
any Mandatory Trigger Provision, one or more of the following (as designated in the transaction
documents for any Qualifying Capital Securities that include an Alternative Payment Mechanism
or a Mandatory Trigger Provision, as applicable):
(i) Common Stock;
(ii) Warrants;
(iii) Qualifying Non-Cumulative Preferred Stock; or
(iii) Mandatorily Convertible Preferred Stock;
provided (and it being understood) that (i) if the APM Qualifying Securities for any Alternative
Payment Mechanism or Mandatory Trigger Provision include both Common Stock and Warrants, such
Alternative Payment Mechanism or Mandatory Trigger Provision may permit, but need not require, the
Corporation to issue Warrants and (ii) such Alternative Payment Mechanism or Mandatory Trigger
Provision may permit, but need not require, the Corporation to issue Mandatorily Convertible
Preferred Stock.
“Applicable Percentage” means:
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(i) in the case of any Common Stock or Warrants, (a) 133.33% with respect to any repayment,
redemption or purchase prior to October 15, 2017, (b) 200% with respect to any repayment,
redemption or purchase on or after October 15, 2017 and prior to October 15, 2037 and (c) 400% with
respect to any repayment, redemption or purchase on or after October 15, 2037;
(ii) in the case of any Mandatorily Convertible Preferred Stock, Debt Exchangeable for Common
Equity, Debt Exchangeable for Preferred Equity or any Qualifying Capital Securities described in
clause (i) of the definition of such term, (a) 100% with respect to any repayment, redemption or
purchase prior to October 15, 2037 and (b) 300% with respect to any repayment, redemption or
purchase on or after October 15, 2037;
(iii) in the case of any Qualifying Capital Securities described in clause (ii) of the
definition of such term, (a) 100% with respect to any repayment, redemption or purchase prior to
October 15, 2037 and (b) 200% with respect to any repayment, redemption or purchase on or after
October 15, 2037; and
(iv) in the case of any Qualifying Capital Securities described in clause (iii) of the
definition of such term, 100%.
“Bankruptcy Claim Limitation Provision” means, with respect to any Qualifying Capital
Securities that have an Alternative Payment Mechanism or a Mandatory Trigger Provision, provisions
that, upon any liquidation, dissolution, winding up or reorganization or in connection with any
insolvency, receivership or proceeding under any bankruptcy law with respect to the issuer, limit
the claim of the holders of such securities to Distributions that accumulate during (A) any
deferral period, in the case of securities that have an Alternative Payment Mechanism or (B) any
period in which the issuer fails to satisfy one or more financial tests set forth in the terms of
such securities or related transaction agreements, in the case of securities that have a Mandatory
Trigger Provision, to:
(i) in the case of Qualifying Capital Securities that have an Alternative Payment Mechanism or
Mandatory Trigger Provision with respect to which the APM Qualifying Securities do not include
Qualifying Non-Cumulative Preferred Stock or Mandatorily Convertible Preferred Stock, 25% of the
stated or principal amount of such Qualifying Capital Securities then outstanding; and
(ii) in the case of any other Qualifying Capital Securities, an amount not in excess of the
sum of (x) the first two years of accumulated and unpaid Distributions and (y) an amount equal to
the excess, if any, of the Preferred Cap over the aggregate amount of net proceeds from the sale of
Qualifying Non-Cumulative Preferred Stock and Mandatorily Convertible Preferred Stock that is still
outstanding that the issuer has applied to pay such Distributions pursuant to the Alternative
Payment Mechanism or the Mandatory Trigger Provision; provided that the holders of such Qualifying
Capital Securities are deemed to agree that, to the extent the remaining claim exceeds the amount
set forth in clause (x), the amount they receive in respect of such excess shall not exceed the
amount they would have received the claim for such excess ranked pari passu with the interests of
the holders, if any, of Qualifying Non-Cumulative Preferred Stock.
“Business Combination” has the meaning specified in clause (vi) of the definition of
Alternative Payment Mechanism.
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“Business Day” means each day other than (a) a Saturday or Sunday or (b) a day on which
banking institutions in The City of New York are authorized or required by law or executive order
to remain closed.
“CENts” has the meaning specified in Recital A.
“Commercially Reasonable Efforts” means, for purposes of selling APM Qualifying Securities,
commercially reasonable efforts to complete the offer and sale of APM Qualifying Securities to
third parties that are not Subsidiaries of the Corporation, which in the event the Corporation is
not publicly traded shall include the Corporation’s existing stockholders, in public offerings or
private placements. The Corporation shall not be considered to have made Commercially Reasonable
Efforts to effect a sale of APM Qualifying Securities if it determines not to pursue or complete
such sale solely due to pricing, coupon, dividend rate or dilution considerations.
“Commission” means the United States Securities and Exchange Commission.
“Common Cap” has the meaning specified in clause (vii) of the definition of Alternative
Payment Mechanism.
“Common Stock” means (i) common stock of the Corporation, including common stock issued
pursuant to any dividend reinvestment plan or employee benefit plan of the Corporation, (ii) a
security of the Corporation, ranking upon the Corporation’s liquidation, dissolution or winding up
junior to its Qualifying Non-Cumulative Preferred Stock and pari passu with its Common Stock, that
tracks the performance of, or relates to the results of, a business, unit or division of the
Corporation, and (iii) any securities issued in exchange for the securities described in clause (i)
or (ii) above in connection with a Business Combination.
“Corporation” has the meaning specified in the introduction to this instrument.
“Covered Debt” means (a) at the date of this Replacement Capital Covenant and continuing to
but excluding the first Redesignation Date, the Initial Covered Debt and (b) thereafter, commencing
with each Redesignation Date and continuing to but excluding the next succeeding Redesignation
Date, the Eligible Debt identified pursuant to Section 3(b) as the Covered Debt for such period.
“Covered Debtholder” means each Person to the extent that that Person holds (whether as a
Holder or a beneficial owner holding through a participant in a clearing agency) long-term
indebtedness for money borrowed of the Corporation during the period that such long-term
indebtedness for money borrowed is Covered Debt.
“Current Stock Market Price” means, with respect to the Common Stock on any date:
(i) the closing sale price per share (or if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of the average bid and the
average ask prices) on that date as reported in composite transactions by the New York Stock
Exchange;
(ii) if the Common Stock is not then listed on the New York Stock Exchange, as reported by the
principal U.S. securities exchange on which the Common Stock is traded or quoted on the relevant
date;
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(iii) if the Common Stock is not listed on any U.S. securities exchange on the relevant date,
the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date
as reported by Pink Sheets LLC or similar organization;
(iv) if the Common Stock is not so quoted, the average of the mid-point of the last bid and
ask prices for the Common Stock on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Corporation for this purpose; or
(v) if the Common Stock has no bid and ask price, the price per share determined by a
nationally recognized independent investment banking firm selected by the Corporation for this
purpose.
“Debt Exchangeable for Common Equity” means a security or combination of securities that:
(i) gives the holder a beneficial interest in (a) subordinated debt securities of the
Corporation that are not redeemable prior to the settlement date of a related stock purchase
contract and (b) a fractional interest in the related stock purchase contract for a share of Common
Stock that will be settled in three years or less, with the number of shares of Common Stock
purchasable pursuant to such stock purchase contract to be within a range established at the time
of issuance of such subordinated debt securities, subject to customary anti-dilution adjustments;
(ii) provides that the holders directly or indirectly grant the Corporation a security
interest in such subordinated debt securities and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the holders’ direct or indirect
obligation to purchase Common Stock pursuant to such stock purchase contracts;
(iii) includes a remarketing feature pursuant to which such subordinated debt securities are
remarketed to new investors commencing not later than the last Distribution Date that is at least
one month prior to the settlement date of the stock purchase contract; and
(iv) provides for the proceeds raised in the remarketing to be used to purchase Common Stock
under the stock purchase contracts and, if there has not been a successful remarketing by the
settlement date of the stock purchase contract, provides that the stock purchase contracts will be
settled by the Corporation exercising its remedies as a secured party with respect to the
subordinated debt securities or other collateral directly or indirectly pledged by holders in the
Debt Exchangeable for Common Equity.
“Debt Exchangeable for Preferred Equity” means a security or combination of securities
(together in this definition, “such securities”) that:
(i) gives the holder a beneficial interest in (a) subordinated debt securities of the
Corporation or one of its Subsidiaries (in this definition, the “issuer”) that include a provision
permitting the issuer to defer Distributions in whole or in part on such securities for one or more
Distribution Periods of up to at least seven years without any remedies other than Permitted
Remedies and that are the most junior subordinated debt of the issuer (or rank pari passu with the
most junior subordinated debt of the issuer) and (b) an interest in a stock purchase contract that
obligates the holder to acquire a beneficial interest in the Company’s Qualifying Non-Cumulative
Preferred Stock;
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(ii) provides that the holders directly or indirectly grant to the Corporation a security
interest in such subordinated debt securities and their proceeds (including any substitute
collateral permitted under the transaction documents) to secure the investors’ direct or indirect
obligation to purchase Qualifying Non-Cumulative Preferred Stock pursuant to such stock purchase
contracts;
(iii) includes a remarketing feature pursuant to which such subordinated debt securities are
remarketed to new investors commencing not later than the first Distribution Date that is at least
five years after the date of issuance of such securities or earlier in the event of an early
settlement event based on (a) the dissolution of the issuer of such Debt Exchangeable for Preferred
Equity or (b) one or more financial tests set forth in the terms of the instrument governing such
Debt Exchangeable for Preferred Equity;
(iv) provides for the proceeds raised in the remarketing to be used to purchase Qualifying
Non-Cumulative Preferred Stock under the stock purchase contracts and, if there has not been a
successful remarketing by the first Distribution Date that is six years after the date of issuance
of such securities, provides that the stock purchase contracts will be settled by the Corporation
exercising its rights as a secured creditor with respect to the subordinated debt securities or
other collateral directly or indirectly pledged by investors in the Debt Exchangeable for Preferred
Equity;
(v) includes a Qualifying Replacement Capital Covenant that will apply to such securities and
to any Qualifying Non-Cumulative Preferred Stock issued pursuant to the stock purchase contracts;
provided that such Qualifying Replacement Capital Covenant will not include Debt Exchangeable for
Common Equity or Debt Exchangeable for Preferred Equity as “Replacement Capital Securities”; and
(vi) if applicable, after the issuance of such Qualifying Non-Cumulative Preferred Stock,
provides the holders with a beneficial interest in such Qualifying Non-Cumulative Preferred Stock.
“Distribution Date” means, as to any Qualifying Capital Securities, Debt Exchangeable for
Common Equity or Debt Exchangeable for Preferred Equity, the dates on which Distributions on such
securities are scheduled to be made.
“Distribution Period” means, as to any Qualifying Capital Securities, Debt Exchangeable for
Common Equity or Debt Exchangeable for Preferred Equity, each period from and including a
Distribution Date for such securities to but excluding the next succeeding Distribution Date for
such securities.
“Distribution Rate Step-Up” means, as to any Qualifying Capital Securities, Debt Exchangeable
for Common Equity or Debt Exchangeable for Preferred Equity, that the rate at which Distributions
accrue or are paid on such securities increases over time (including by an increase in the fixed
rate of Distributions in the case of securities that accrue and pay Distributions at a fixed rate
or by an increase in the margin above the applicable index in the case of securities that accrue
and pay Distributions based upon a margin above an index, but not including an increase in the rate
of Distributions merely because the index used in calculating such rate increases).
“Distributions” means, as to any Qualifying Capital Securities, Debt Exchangeable for Common
Equity or Debt Exchangeable for Preferred Equity, dividends, interest or other income distributions
to the holders thereof that are not Subsidiaries of the Corporation.
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“Eligible Debt” means, at any time, Eligible Subordinated Debt or, if no Eligible Subordinated
Debt is then outstanding, Eligible Senior Debt.
“Eligible Senior Debt” means, at any time in respect of any issuer, each series of outstanding
unsecured long-term indebtedness for money borrowed of such issuer that:
(a) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks most senior
among the issuer’s then outstanding classes of unsecured indebtedness for money borrowed;
(b) is then assigned a rating by at least one NRSRO (provided that this clause (b) shall apply
on a Redesignation Date only if on such date the issuer has outstanding senior long-term
indebtedness for money borrowed that satisfies the requirements of clauses (a), (c) and (d) that is
then assigned a rating by at least one NRSRO);
(c) has an outstanding principal amount of not less than $100,000,000; and
(d) was issued through or with the assistance of a commercial or investment banking firm or
firms acting as underwriters, initial purchasers or placement or distribution agents.
For purposes of this definition as applied to securities with a CUSIP number, each issuance of
long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or
other intermediate entity established directly or indirectly by the issuer, the securities of such
intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the
issuer’s long-term indebtedness for money borrowed that is separate from each other series of such
indebtedness.
“Eligible Subordinated Debt” means, at any time in respect of any issuer, each series of the
issuer’s then-outstanding unsecured long-term indebtedness for money borrowed that:
(a) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks subordinate
to the issuer’s then outstanding series of unsecured indebtedness for money borrowed that ranks
most senior and ranks senior to the CENts;
(b) is then assigned a rating by at least one NRSRO (provided that this clause (b) shall apply
on a Redesignation Date only if on such date the issuer has outstanding subordinated long-term
indebtedness for money borrowed that satisfies the requirements in clauses (a), (c) and (d) that is
then assigned a rating by at least one NRSRO);
(c) has an outstanding principal amount of not less than $100,000,000; and
(d) was issued through or with the assistance of a commercial or investment banking firm or
firms acting as underwriters, initial purchasers or placement or distribution agents.
For purposes of this definition as applied to securities with a CUSIP number, each issuance of
long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or
other intermediate entity established directly or indirectly by the issuer, the securities of such
intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the
issuer’s long-term indebtedness for money borrowed that is separate from each other series of such
indebtedness.
“Holder” means, as to the Covered Debt then in effect, each holder of such Covered Debt as
reflected on the securities register maintained by or on behalf of the Corporation with respect to
such Covered Debt and each beneficial owner holding through a participant in a clearing agency.
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“Indenture” means the Indenture, dated October 10, 2007, between the Corporation and U.S. Bank
National Association, as Trustee.
“Initial Covered Debt” means the Corporation’s 6.125% Senior Notes due April 1, 2016, which
have CUSIP No. 87151QAA4.
“Intent-Based Replacement Disclosure” means, as to any Qualifying Non-Cumulative Preferred
Stock or Qualifying Capital Securities, that the issuer has publicly stated its intention, either
in the prospectus or other offering document under which such securities were initially offered for
sale or in filings with the Commission made by the issuer under the Securities Exchange Act prior
to or contemporaneously with the issuance of such securities, that the issuer and its subsidiaries,
to the extent such securities provide the issuer with equity credit for purposes of rating by an
NRSRO, will repay, redeem or purchase such securities only with the proceeds of replacement capital
securities that have terms and provisions at the time of repayment, redemption or purchase that are
as or more equity-like than the securities then being repaid, redeemed or purchased, raised within
180 days prior to the applicable repayment, redemption or purchase date.
“Investor Screen” has the meaning specified in Section 3(c)(i).
“Mandatorily Convertible Preferred Stock” means cumulative preferred stock with (a) no
prepayment obligation on the part of the issuer thereof, whether at the election of the holders or
otherwise, and (b) a requirement that such preferred stock convert into common stock of the issuer
within three years from the date of its issuance at a conversion ratio within a range established
at the time of issuance of such preferred stock, subject to customary anti-dilution adjustments.
“Mandatory Trigger Provision” means, as to any Qualifying Capital Securities, provisions in
the terms thereof or of the related transaction agreements that:
(i) require the issuer of such securities to make payment of Distributions on such securities
within two years of a failure of the issuer to satisfy one or more financial tests set forth in the
terms of such securities or related transaction agreements, provided that such payment shall be
made only with the net proceeds from the issue and sale of APM Qualifying Securities, such that the
net proceeds of such issue and sale are at least equal to the amount of unpaid Distributions on
such securities (including all deferred and accumulated amounts) and the terms of such securities
or related transaction agreements require the application of the net proceeds of such issue and
sale to pay such unpaid Distributions, provided further that (a) if the Mandatory Trigger Provision
does not require the issuance and sale within one year of such failure, the amount of Common Stock
and/or Warrants the net proceeds of which the issuer must apply to pay such Distributions pursuant
to such provision may not exceed the Common Cap and (b) the amount of Qualifying Non-Cumulative
Preferred Stock and still outstanding Mandatorily Convertible Preferred Stock the net proceeds of
which the issuer may apply to pay such Distributions pursuant to such provision may not exceed the
Preferred Cap;
(ii) if the provisions described in clause (i) above do not require such issuance and sale
within one year of such failure, include a Repurchase Restriction;
(iii) prohibit the issuer of such securities from redeeming or purchasing any of its
securities ranking upon the Corporation’s liquidation, dissolution or winding up junior to or pari
passu with any APM Qualifying Securities the proceeds of which were used to settle deferred
interest during the relevant
I-9
Deferral Period prior to the date six months after the issuer applies the net proceeds of the
sales described in (i) to pay such deferred Distributions in full; and
(iv) include a Bankruptcy Claim Limitation Provision;
provided (and it being understood) that:
(A) the issuer will not be obligated to issue (or use Commercially Reasonable Efforts
to issue) APM Qualifying Securities for so long as a Market Disruption Event has occurred
and is continuing;
(B) if, due to a Market Disruption Event or otherwise, the issuer is able to raise and
apply some, but not all, of the eligible proceeds necessary to pay all deferred
Distributions on any Distribution Date, the issuer will apply any available eligible
proceeds to pay accrued and unpaid Distributions on the applicable Distribution Date in
chronological order subject to the Common Cap, Preferred Cap and Share Cap, as applicable;
and
(C) if the issuer has outstanding more than one class or series of securities under
which it is obligated to sell a type of APM Qualifying Securities and applies some part of
the proceeds to the payment of deferred Distributions, then on any date and for any period
the amount of net proceeds received by the issuer from those sales and available for payment
of deferred Distributions on such securities shall be applied to such securities on a pro
rata basis up to the Common Cap and the Preferred Cap, as applicable, in proportion to the
total amounts that are due on such securities.
No remedy other than Permitted Remedies will arise by the terms of such securities or related
transaction agreements in favor of the holders of such Qualifying Capital Securities as a result of
the issuer’s failure to pay Distributions because of the Mandatory Trigger Provision until
Distributions have been deferred for one or more Distribution Periods that total together at least
ten years.
“Market Disruption Event” means the occurrence or existence of any of the following events or
sets of circumstances:
(i) trading in securities generally, or shares of the Corporation’s securities specifically,
on the New York Stock Exchange or any other national securities exchange, or in the
over-the-counter market on which APM Qualifying Securities are then listed or traded shall have
been suspended or the settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or market by the Commission, the
relevant exchange or by any other regulatory body or governmental agency having jurisdiction such
that trading shall have been materially disrupted;
(ii) the Corporation would be required to obtain the consent or approval of the Corporation’s
shareholders or a regulatory body (including, without limitation, any securities exchange) or
governmental authority to issue or sell APM Qualifying Securities pursuant to the Alternative
Payment
I-10
Mechanism and that consent or approval has not yet been obtained notwithstanding the
Corporation’s Commercially Reasonable Efforts to obtain that consent or approval;
(iii) a banking moratorium shall have been declared by the federal or state authorities of the
United States such that the issuance of, or market trading in, the APM Qualifying Securities has
been disrupted or ceased;
(iv) a material disruption shall have occurred in commercial banking or securities settlement
or clearance services in the United States such that the issuance of, or market trading in, the APM
Qualifying Securities has been disrupted or ceased;
(v) the United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have been a declaration of a
national emergency or war by the United States or there shall have occurred any other national or
international calamity or crisis such that the issuance of, or market trading in, the APM
Qualifying Securities has been disrupted or ceased;
(vi) there shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without limitation as a result
of terrorist activities, or the effect of international conditions on the financial markets in the
United States shall be such that the issuance of, or market trading in, the APM Qualifying
Securities has been materially disrupted;
(vii) an event occurs and is continuing as a result of which the offering document for the
offer and sale of APM Qualifying Securities would, in the reasonable judgment of the Corporation,
contain an untrue statement of a material fact or omit to state a material fact required to be
stated in that offering document or necessary to make the statements in that offering document not
misleading and either (a) the disclosure of that event at such time, in the reasonable judgment of
the Corporation, is not otherwise required by law and would have a material adverse effect on the
Corporation or (b) the disclosure relates to a previously undisclosed proposed or pending material
business transaction, provided that no single suspension period described in this clause (vii)
shall exceed 90 consecutive days and multiple suspension periods described in this clause (vii)
shall not exceed an aggregate of 180 days in any 360-day period; or
(viii) the Corporation reasonably believes that the offering document for the offer and the
sale of APM Qualifying Securities would not be in compliance with a rule or regulation of the
Commission (for reasons other than those described in clause (vii) above) and the Corporation
determines that it is unable to comply with such rule or regulation or such compliance is unduly
burdensome, provided that no single suspension period described in this clause (viii) shall exceed
90 consecutive days and multiple suspension periods described in this clause (viii) shall not
exceed an aggregate of 180 days in any 360-day period.
The definition of “Market Disruption Event” as used in any Replacement Capital Securities may
include less than all of the paragraphs outlined above, as determined by the Corporation at the
time of issuance of such securities, and in the case of clauses (i), (ii) and (iii) above, as
applicable to a circumstance where the Corporation would otherwise endeavor to issue preferred
stock, shall be limited
I-11
to circumstances affecting markets where the Corporation’s preferred stock traded or where a
listing for their trading is being sought.
“Measurement Date” means (a) with respect to any repayment, redemption or purchase of the
CENts on or prior to the Scheduled Maturity Date, the date that is 180 days prior to delivery of
notice of such repayment or redemption or the date of such purchase; and (b) with respect to any
repayment, redemption or purchase of the CENts after the Scheduled Maturity Date, the date that is
90 days prior to the date of such repayment, redemption or purchase, except that, if during the
90-day (or any shorter) period preceding the date that is 90 days prior to the date of such
repayment, redemption or purchase, the Corporation or its Subsidiaries issued Replacement Capital
Securities to Persons other than the Corporation and its Subsidiaries but no repayment, redemption
or purchase was made pursuant to Section 2 in connection therewith, the date upon which such 90-day
(or shorter) period began.
“Measurement Period” means, with respect to any date on which notice of repayment or
redemption is delivered with respect to the CENts or on which the Corporation purchases, or any
Subsidiary of the Corporation purchases, any CENts, the period beginning on the Measurement Date
with respect to such notice or purchase date and ending on such notice or purchase date, as the
case may be. Measurement Periods cannot run concurrently.
“No Payment Provision” means a provision or provisions in the transaction documents for
securities (referred to in this definition as “such securities”) that include the following:
(i) an Alternative Payment Mechanism; and
(ii) an Optional Deferral Provision modified and supplemented from the general definition of
that term to provide that the issuer of such securities may, in its sole discretion, defer in whole
or in part payment of Distributions on such securities for one or more consecutive Distribution
Periods of up to five years or, if a Market Disruption Event has occurred and is continuing, ten
years, without any remedy other than Permitted Remedies and the obligations (and limitations on
obligations) described in the definition of “Alternative Payment Mechanism” applying.
“Non-Cumulative” means, with respect to any Qualifying Capital Securities, that the issuer may
elect not to make any number of periodic Distributions without any remedy arising under the terms
of the securities or related agreements in favor of the holders, other than one or more Permitted
Remedies.
“NRSRO” means a nationally recognized statistical rating organization within the meaning of
Section 3(a)(62) under the Securities Exchange Act.
“Optional Deferral Provision” means, as to any Qualifying Capital Securities, a provision in
the terms thereof or of the related transaction agreements to the effect that:
(i) (a) the issuer of such Qualifying Capital Securities may, in its sole discretion, defer in
whole or in part payment of Distributions on such securities for one or more consecutive
Distribution Periods of up to five years or, if a Market Disruption Event is continuing, ten years,
without any remedy other than Permitted Remedies and (b) such Qualifying Capital Securities are
subject to an Alternative Payment Mechanism (provided that such Alternative Payment Mechanism need
not apply during the first five years of any deferral period and need not include a Common Cap,
Preferred Cap, Share Cap, Bankruptcy Claims Limitation Provision or Repurchase Restriction); or
I-12
(ii) the issuer of such Qualifying Capital Securities may, in its sole discretion, defer or
skip in whole or in part payment of Distributions on such securities for one or more consecutive
Distribution Periods of up to ten years without any remedy other than Permitted Remedies.
“Permitted Remedies” means, with respect to any securities, one or more of the following
remedies:
(i) rights in favor of the holders of such securities permitting such holders to elect one or
more directors of the issuer (including any such rights required by the listing requirements of any
stock or securities exchange on which such securities may be listed or traded); and
(ii) complete or partial prohibitions on the issuer paying Distributions on or repurchasing
common stock or other securities that rank pari passu with or junior as to Distributions to such
securities for so long as distributions on such securities, including unpaid distributions, remain
unpaid.
“Person” means any individual, corporation, partnership, joint venture, trust, limited
liability company or corporation, unincorporated organization or government or any agency or
political subdivision thereof.
“Preferred Cap” has the meaning specified in clause (viii) of the definition of Alternative
Payment Mechanism.
“Qualifying Capital Securities” means securities or combinations of securities (other than
Common Stock, Warrants, Mandatorily Convertible Preferred Stock, Debt Exchangeable for Common
Equity and Debt Exchangeable for Preferred Equity) that, in the determination of the Corporation’s
Board of Directors reasonably construing the definitions and other terms of this Replacement
Capital Covenant, meet one of the following criteria:
(i) in connection with any repayment, redemption or purchase of CENts prior to October 15,
2017:
(A) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon the liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 60 years and (3) either:
(x) (I) are subject to a Qualifying Replacement Capital Covenant and (II) have
a No Payment Provision or are Non-Cumulative, or
(y) (I) have a Mandatory Trigger Provision and are subject to Intent-Based
Replacement Disclosure and (II) have an Optional Deferral Provision or a No Payment
Provision;
(B) preferred stock issued by the Corporation or its Subsidiaries that (1) are
Non-Cumulative, (2) have no prepayment obligation on the part of the issuer thereof, whether
at the election of the holders or otherwise, (3) have no maturity or a maturity of at least
60 years and (4) either:
I-13
(x) are subject to a Qualifying Replacement Capital Covenant, or
(y) have a Mandatory Trigger Provision and are subject to Intent-Based
Replacement Disclosure; or
(C) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
or junior to the CENts upon the liquidation, dissolution or winding up of the Corporation,
(2) have no maturity or a maturity of at least 40 years, (3) are subject to a Qualifying
Replacement Capital Covenant and (4) have an Optional Deferral Provision and a Mandatory
Trigger Provision; or
(ii) in connection with any repayment, redemption or purchase of CENts at any time on or after
October 15, 2017 but prior to October 15, 2037:
(A) securities described under clause (i) of this definition that would be Qualifying
Capital Securities prior to October 15, 2017;
(B) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 60 years, (3) are subject to a
Qualifying Replacement Capital Covenant and (4) have an Optional Deferral Provision;
(C) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 60 years, (3) are Non-Cumulative
or have a No Payment Provision and (4) are subject to Intent-Based Replacement Disclosure;
(D) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 40 years, (3) are Non-Cumulative
or have a No Payment Provision and (4) are subject to a Qualifying Replacement Capital
Covenant;
(E) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 40 years, (3) have an Optional
Deferral Provision and a Mandatory Trigger Provision and (4) are subject to Intent-Based
Replacement Disclosure;
(F) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding-up of the
Corporation, (2) have no maturity or a maturity of at least 25 years, (3) are subject to a
Qualifying Replacement Capital Covenant and (4) have an Optional Deferral Provision and a
Mandatory Trigger Provision;
I-14
(G) cumulative preferred stock issued by the Corporation or its Subsidiaries that (1)
have no prepayment obligation on the part of the issuer thereof, whether at the election of
the holders or otherwise, (2) have no maturity or a maturity of at least 60 years and (3)
are subject to a Qualifying Replacement Capital Covenant; or
(H) securities issued by the Corporation or its Subsidiaries that (1) rank (i) senior
to the CENts and securities that are pari passu with the CENts but (ii) junior to all other
debt securities of the Corporation (other than (x) the CENts and securities that are pari
passu with the CENts and (y) securities that are pari passu with such Qualifying Capital
Securities) upon its liquidation, dissolution or winding-up, and (2) either:
(x) have no maturity or a maturity of at least 60 years and either (I) are (a)
Non-Cumulative or subject to a No Payment Provision and (b) subject to a Qualifying
Replacement Capital Covenant or (II) have a Mandatory Trigger Provision and an
Optional Deferral Provision and are subject to Intent-Based Replacement Disclosure,
or
(y) have no maturity or a maturity of at least 40 years, are subject to a
Qualifying Replacement Capital Covenant and have a Mandatory Trigger Provision and
an Optional Deferral Provision; or
(iii) in connection with any repayment, redemption or purchase of CENts at any time on or
after October 15, 2037:
(A) securities described under clause (ii) of this definition that would be Qualifying
Capital Securities on or after October 15, 2017 but prior to October 15, 2037;
(B) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) have an Optional Deferral Provision and (3) either:
(x) have no maturity or a maturity of at least 60 years and are subject to
Intent-Based Replacement Disclosure, or
(y) have no maturity or a maturity of at least 40 years and are subject to a
Qualifying Replacement Capital Covenant;
(C) securities issued by the Corporation or its Subsidiaries that (1) rank pari passu
with or junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) have no maturity or a maturity of at least 40 years and are subject to
Intent-Based Replacement Disclosure and (3) are Non-Cumulative or have a No Payment
Provision;
(D) securities issued by the Corporation or its Subsidiaries that (1) rank senior to
the CENts and securities that are pari passu with the CENts but junior to all other debt
securities of the Corporation (other than (x) the CENts and securities that are pari passu
with the CENts and (y) securities that are pari passu with such Qualifying Capital
Securities) upon its liquidation, dissolution or winding-up, and (2) either:
I-15
(x) have no maturity or a maturity of at least 60 years and either (i) have an
Optional Deferral Provision and are subject to a Qualifying Replacement Capital
Covenant or (ii) (a) are Non-Cumulative or have a No Payment Provision and (b) are
subject to Intent-Based Replacement Disclosure, or
(y) have no maturity or a maturity of at least 40 years and either (i) (a) are
Non-Cumulative or have a No Payment Provision and (b) are subject to a Qualifying
Replacement Capital Covenant or (ii) are subject to Intent-Based Replacement
Disclosure and have a Mandatory Trigger Provision and an Optional Deferral
Provision; or
(E) cumulative preferred stock issued by the Corporation or its Subsidiaries that
either (1) have no maturity or a maturity of at least 60 years and are subject to
Intent-Based Replacement Disclosure or (2) have a maturity of at least 40 years and are
subject to a Qualifying Replacement Capital Covenant.
Notwithstanding the foregoing, no securities or combination of securities will be included in
Qualifying Capital Securities if such securities (i) applying the tests set forth above, are
required to include Intent-Based Replacement Disclosure and (ii) include a Distribution Rate
Step-Up.
“Qualifying Non-Cumulative Preferred Stock” means non-cumulative preferred stock of the
Corporation that rank pari passu with or junior to all other preferred stock of the Corporation,
are perpetual and are subject to (a) a Qualifying Replacement Capital Covenant or (b) both (i)
mandatory suspension of dividends in the event the Corporation breaches certain financial metrics
specified in the offering documents relating to such preferred stock and (ii) Intent-Based
Replacement Disclosure, provided that with respect to both clauses (a) and (b) the transaction
documents shall provide for no remedies as a consequence of non-payment of Distributions other than
Permitted Remedies.
“Qualifying Replacement Capital Covenant” means a replacement capital covenant that is
substantially similar to this Replacement Capital Covenant or a replacement capital covenant, as
identified by the Corporation’s Board of Directors acting in good faith and in its reasonable
discretion and reasonably construing the definitions and other terms of this Replacement Capital
Covenant, (i) entered into by a company that at the time it enters into such replacement capital
covenant is a reporting company under the Securities Exchange Act and (ii) that restricts the
related issuer from repaying, redeeming or purchasing, and its Subsidiaries from purchasing,
identified securities, except to the extent of the applicable percentage of the net proceeds from
the issuance of specified replacement capital securities that have terms and provisions at the time
of repayment, redemption or purchase that are as or more equity-like than the securities then being
repaid, redeemed or purchased within the 180-day period prior to the applicable repayment,
redemption or purchase date; provided that the term of such replacement capital covenant shall be
determined at the time of issuance of the related Replacement Capital Securities taking into
account the other characteristics of such securities but in no event shall be earlier than October
15, 2037.
“Redesignation Date” means, as to the Covered Debt in effect at any time, the earliest of (a)
the date that is two years prior to the final maturity date of such Covered Debt, (b) if the
Corporation elects to redeem, repay or purchase, or the Corporation or a Subsidiary of the
Corporation elects to repurchase, such Covered Debt either in whole or in part with the consequence
that after giving effect to such redemption, repayment, purchase or repurchase the outstanding
principal amount of such Covered Debt is less than $100,000,000, the applicable redemption,
repayment, purchase or repurchase date and (c) if such Covered Debt is not Eligible Subordinated
Debt of the Corporation, the date on which the Corporation issues long-term indebtedness for money
borrowed that is Eligible Subordinated Debt.
I-16
“Replacement Capital Covenant” has the meaning specified in the introduction to this
instrument.
“Replacement Capital Securities” means Common Stock, Warrants, Mandatorily Convertible
Preferred Stock, Debt Exchangeable for Common Equity, Debt Exchangeable for Preferred Equity and
Qualifying Capital Securities.
“Reporting Company” has the meaning specified in Section 3(b).
“Repurchase Restriction” has the meaning specified in clause (iii) of the definition of
Alternative Payment Mechanism.
“Scheduled Maturity Date” has the meaning specified in the Indenture.
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Share Cap” means, with respect to any Qualifying Capital Securities, a limit on the total
number of Common Stock that may be issued by the Corporation pursuant to the Alternative Payment
Mechanism with respect to such Qualifying Capital Securities or on the total number of Common Stock
underlying all Warrants and Mandatorily Convertible Preferred Stock that may be issued by the
Corporation pursuant to such Alternative Payment Mechanism, provided that the product of such Share
Cap and the Market Value of the Common Stock as of the date of issuance of such Qualifying Capital
Securities shall not represent a lower proportion of the aggregate principal or liquidation amount,
as applicable, of such Qualifying Capital Securities than the product of the Share Cap applicable
to the CENts and the Current Stock Market Price of the Common Stock as of the date of issuance of
such CENts represents of the aggregate principal amount of such CENts at the time of issuance.
“Subsidiary” means, at any time, any Person the shares of stock or other ownership interests
of which having ordinary voting power to elect a majority of the board of directors or other
managers of such Person are at the time owned, or the management or policies of which are otherwise
at the time controlled, directly or indirectly through one or more intermediaries (including other
Subsidiaries) or both, by another Person.
“Termination Date” has the meaning specified in Section 4(a).
“Warrants” means any net share-settled warrants to purchase the Common Stock that (i) have an
exercise price greater than the Current Stock Market Price of the Common Stock as of their date of
issuance, and (ii) the Corporation is not entitled to redeem for cash and the holders of which are
not entitled to require the Corporation to purchase for cash in any circumstances. The Corporation
will publicly state its intention, either in the prospectus or other offering document under which
the Qualifying Capital Securities including an Alternative Payment Mechanism or Mandatory Trigger
Provision with respect to which Warrants are an APM Qualifying Security were initially offered for
sale or in filings with the Commission made by the issuer under the Securities Exchange Act prior
to or contemporaneously with the issuance of such Qualifying Capital Securities, that any Warrants
issued in accordance with such Alternative Payment Mechanism or Mandatory Trigger Provision will
have exercise prices at least 10% above the Current Stock Market Price of its Common Stock on the
date of issuance.
I-17
Table of Contents
Exhibit 10.1
INFORMATION TECHNOLOGY
SERVICES AGREEMENT
SERVICES AGREEMENT
by and between
SYMETRA LIFE
INSURANCE COMPANY
INSURANCE COMPANY
and
ACS COMMERCIAL
SOLUTIONS, INC.
SOLUTIONS, INC.
October 28, 2004
CONFIDENTIAL
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Table of Contents
TABLE OF CONTENTS
| PAGE | ||||
ARTICLE 1 GUIDING PRINCIPLES, RELATIONSHIP MANAGEMENT AND INTERPRETATION |
1 | |||
1.1 Guiding Principles |
1 | |||
1.1.1 Enhanced IT Capabilities and Effectiveness |
1 | |||
1.1.2 Reduce IT Costs |
2 | |||
1.1.3 Improve and Maintain Technology |
2 | |||
1.1.4 Focus on Core Competencies |
2 | |||
1.1.5 Improve Business Processes |
2 | |||
1.2 Relationship Management |
2 | |||
1.2.1 IT Outsourcing Committee |
2 | |||
1.2.2 Project Executives |
3 | |||
1.2.3 Service Delivery Managers |
3 | |||
1.2.4 Management Functions |
3 | |||
1.3 Agreement Structure |
4 | |||
1.3.1 Master Agreement |
4 | |||
1.3.2 Country Agreements |
4 | |||
1.3.3 Affiliates of Symetra |
4 | |||
1.3.4 Effect of Certain Provisions |
4 | |||
1.4 Interpretation |
4 | |||
ARTICLE 2 SERVICES |
5 | |||
2.1 General |
5 | |||
2.1.1 Commencement of Services |
5 | |||
2.1.2 Locations for Performance of Services |
5 | |||
2.2 Service Tower Services |
6 | |||
2.2.1 Initial Service Tower Services |
6 | |||
2.2.2 SLRs for Service Towers |
6 | |||
2.2.3 Symetra Sites |
8 | |||
2.2.4 Governance Regarding Relief Events |
8 | |||
2.3 Transition Services |
9 | |||
2.3.1 Transition Plan |
9 | |||
2.3.2 Progress Reports |
9 | |||
2.3.3 Financial Responsibility |
9 | |||
2.4 Purchasing Agent Services |
9 | |||
2.5 Technology Management and Security Services |
10 | |||
2.5.1 General |
10 | |||
2.5.2 Technology Upgrades and Enhancements |
10 | |||
2.5.3 ACS’ Technology Refresh Requirements |
10 | |||
2.5.4 Technology Planning and Innovation |
10 | |||
2.5.5 Asset Management |
11 | |||
2.5.6 Shared Resources |
11 | |||
2.5.7 Disaster Recovery |
11 | |||
-i-
Table of Contents
| PAGE | ||||
2.6 Standards and Procedures Manual |
12 | |||
2.6.1 Development of Manual |
12 | |||
2.6.2 Contents |
13 | |||
2.7 Service Compatibility |
13 | |||
2.8 In-Scope Service Requests |
14 | |||
2.9 Out-of-Scope Work Orders |
14 | |||
2.9.1 Requirements and Process |
14 | |||
2.9.2 Potential Limitation on Future Contracts |
15 | |||
2.10 Extraordinary Events or Circumstances |
15 | |||
2.11 Reports and Other Resource Materials |
16 | |||
2.11.1 General |
16 | |||
2.11.2 Media |
16 | |||
2.12 Critical Milestones |
16 | |||
2.12.1 Designation of Critical Milestones |
16 | |||
2.12.2 Failure to Timely Achieve a Critical Milestone |
16 | |||
2.13 End-User Satisfaction and Communication |
16 | |||
2.14 Cooperation with Symetra and Third Parties |
17 | |||
2.15 Movement of an ACS Facility |
17 | |||
ARTICLE 3 PERSONNEL |
17 | |||
3.1 ACS Personnel |
17 | |||
3.1.1 ACS Key Personnel |
17 | |||
3.1.2 Additional Personnel Requirements |
19 | |||
3.1.3 Minimum Proficiency Levels |
19 | |||
3.1.4 Specialized Personnel |
19 | |||
3.1.5 Training |
19 | |||
3.1.6 Supervision and Conduct of ACS Personnel |
19 | |||
3.2 Symetra Personnel |
20 | |||
3.3 Solicitation of Personnel |
20 | |||
3.4 Personnel Restriction |
20 | |||
ARTICLE 4 ASSETS AND THIRD-PARTY CONTRACTS |
21 | |||
4.1 Symetra Retained Equipment |
21 | |||
4.1.1 General |
21 | |||
4.1.2 Third-Party Approvals |
21 | |||
4.1.3 Return of Symetra Equipment |
21 | |||
4.2 ACS Equipment |
21 | |||
4.2.1 Use of ACS Equipment by ACS Employees |
22 | |||
4.2.2 Provision of ACS Equipment to Symetra |
22 | |||
4.2.3 Installation of ACS Equipment |
22 | |||
4.2.4 Maintenance of ACS Equipment |
22 | |||
4.3 Software |
22 | |||
4.3.1 ACS-Licensed Third Party Software |
22 | |||
4.3.2 Symetra-Licensed Third Party Software |
23 | |||
4.3.3 Category 5 Software |
24 | |||
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Table of Contents
| PAGE | ||||
4.3.4 Category 6 Software |
24 | |||
4.4 Assigned Contracts |
25 | |||
4.5 Managed Contracts |
25 | |||
4.6 Further Assurances |
25 | |||
4.7 Use of Symetra Facilities |
25 | |||
4.7.1 Specific Hardware and Carrier Charges |
25 | |||
4.7.2 Access to Personnel and Information |
26 | |||
4.7.3 Other Facility-Related Obligations |
26 | |||
ARTICLE 5 RETAINED AUTHORITIES |
26 | |||
5.1 General |
26 | |||
5.2 Specific Retained Authorities |
26 | |||
5.2.1 Strategic and Operational Planning |
26 | |||
5.2.2 Service Design and Delivery |
27 | |||
5.2.3 Moves, Adds and Changes |
27 | |||
5.2.4 Business Process Reengineering |
27 | |||
5.2.5 Contract Management |
28 | |||
5.2.6 Budget Management |
28 | |||
5.2.7 Validation and Verification |
28 | |||
5.2.8 Review and Acceptance |
28 | |||
ARTICLE 6 FEES AND PAYMENT TERMS |
29 | |||
6.1 Fees |
29 | |||
6.1.1 General |
29 | |||
6.1.2 Transition Services |
29 | |||
6.1.3 Annual Services Fees |
29 | |||
6.1.4 Service Rates |
29 | |||
6.1.5 Taxes |
30 | |||
6.1.6 Currency |
30 | |||
6.2 Adjustments to Fees |
31 | |||
6.2.1 Terminated Services |
31 | |||
6.2.2 Fee Reductions |
31 | |||
6.2.3 Baselines and ARCs and RRCs |
31 | |||
6.2.4 Addition or Divestiture of Affiliates and Business Ventures |
32 | |||
6.2.5 Set Off |
33 | |||
6.3 Invoices |
33 | |||
6.3.1 Services |
33 | |||
6.3.2 Other Services |
33 | |||
6.4 Disputed Amounts |
33 | |||
ARTICLE 7 RECORDKEEPING AND AUDIT RIGHTS |
34 | |||
7.1 Recordkeeping |
34 | |||
7.2 Operational Audits |
34 | |||
7.3 Financial Audits |
35 | |||
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| PAGE | ||||
7.4 Sarbanes-Oxley Compliance |
35 | |||
7.4.1 General |
35 | |||
7.4.2 SAS 70 Type II Audits |
36 | |||
7.4.3 Results of Inquiries and Corrective Plan |
36 | |||
7.4.4 Subcontractors |
37 | |||
7.4.5 Confidential Information |
37 | |||
ARTICLE 8 REPRESENTATIONS, WARRANTIES AND COVENANTS |
37 | |||
8.1 ACS Representations, Warranties and Covenants |
37 | |||
8.1.1 Performance of the Services |
37 | |||
8.1.2 Viruses and Disabling Devices |
37 | |||
8.1.3 Conflicts of Interest |
37 | |||
8.1.4 Financial Condition and Information |
39 | |||
8.1.5 Litigation and Service of Process |
39 | |||
8.1.6 Proprietary Rights Infringement |
39 | |||
8.1.7 Legal and Corporate Authority |
39 | |||
8.1.8 Violations |
40 | |||
8.1.9 Information Furnished to Symetra |
40 | |||
8.1.10 Previous Contracts |
40 | |||
8.1.11 Completeness of Due Diligence Activities |
40 | |||
8.2 Symetra’s Representations, Warranties and Covenants |
40 | |||
8.2.1 Legal Authority |
40 | |||
8.2.2 Warranty Disclaimer |
40 | |||
8.2.3 Proprietary Rights Infringement |
41 | |||
8.3 General Warranty Disclaimer |
41 | |||
8.4 Material Misstatements and Omissions |
41 | |||
ARTICLE 9 TERM AND TERMINATION |
41 | |||
9.1 Term |
41 | |||
9.1.1 Initial Term |
41 | |||
9.1.2 Renewal Terms |
41 | |||
9.1.3 Symetra-Initiated Annual Renegotiation |
41 | |||
9.2 Early Termination |
42 | |||
9.2.1 For Convenience |
42 | |||
9.2.2 Change in Control of ACS |
42 | |||
9.2.3 Termination for Force Majeure Event |
42 | |||
9.2.4 HIPAA |
44 | |||
9.3 Events of Default |
44 | |||
9.4 Rights and Remedies of ACS Upon Default of Symetra |
45 | |||
9.5 Rights and Remedies of Symetra upon Default of ACS |
46 | |||
9.6 Non-Exclusive Remedies |
46 | |||
9.7 Survival |
46 | |||
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| PAGE | ||||
ARTICLE 10 DISENTANGLEMENT |
46 | |||
10.1 General Obligations |
46 | |||
10.2 Disentanglement Period |
47 | |||
10.3 Specific Obligations |
47 | |||
10.3.1 Full Cooperation, Information and Knowledge Transfer |
47 | |||
10.3.2 Third-Party Authorizations |
48 | |||
10.3.3 Transfer of Assets |
48 | |||
10.3.4 Assignment of Contracts |
48 | |||
10.3.5 Delivery of Documentation and Data |
48 | |||
10.3.6 Hiring of Employees |
48 | |||
10.4 Preparation for Disentanglement |
49 | |||
10.4.1 Complete Documentation |
49 | |||
10.4.2 Maintenance of Assets |
49 | |||
10.4.3 Advance Written Consents |
49 | |||
10.4.4 All Necessary Cooperation and Actions |
50 | |||
10.4.5 Payment for Disentanglement Services |
50 | |||
ARTICLE 11 LIMITATIONS ON LIABILITY |
50 | |||
11.1 Cap On Liability |
50 | |||
11.2 Recoverable Damages |
51 | |||
11.3 Non-Direct Damages |
51 | |||
11.4 Symetra Exceptions from the Limitations on Liability |
52 | |||
11.5 ACS Exceptions from the Limitations on Liability |
52 | |||
11.6 Costs of Cure |
52 | |||
11.7 Attorneys’ Fees |
52 | |||
ARTICLE 12 PROPRIETARY RIGHTS |
53 | |||
12.1 Work Product |
53 | |||
12.1.1 Symetra Sole Owner |
53 | |||
12.1.2 ACS License to Use |
53 | |||
12.1.3 Intellectual Property |
53 | |||
12.1.4 ACS Underlying and Derivative Works |
54 | |||
12.1.5 Third-Party Underlying and Derivative Works |
54 | |||
12.2 Rights and Licenses |
54 | |||
12.3 Symetra Data |
54 | |||
12.4 Infringement |
54 | |||
12.5 Cooperation |
54 | |||
ARTICLE 13 SECURITY AND CONFIDENTIALITY |
55 | |||
13.1 Security |
55 | |||
13.1.1 General |
55 | |||
13.1.2 Information Access |
55 | |||
13.1.3 Background Checks |
55 | |||
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| PAGE | ||||
13.1.4 Other Policies |
56 | |||
13.2 Confidential Information |
56 | |||
13.2.1 Non-Disclosure |
56 | |||
13.2.2 Disclosure Requests |
56 | |||
13.2.3 Permitted Disclosures |
56 | |||
13.3 Legally Required Disclosures |
57 | |||
13.4 Notification and Mitigation |
57 | |||
13.5 Return of Confidential Information |
57 | |||
13.6 Injunctive Relief |
58 | |||
ARTICLE 14 LEGAL COMPLIANCE |
58 | |||
14.1 Compliance with All Laws and Regulations |
58 | |||
14.2 ACS Permits, Licenses and Assistance |
58 | |||
14.3 Hazardous Materials |
58 | |||
14.4 HIPAA |
59 | |||
14.4.1 General |
59 | |||
14.4.2 Security Requirements |
59 | |||
14.5 California Personal Information Statute |
59 | |||
14.6 Data Protection |
59 | |||
ARTICLE 15 INDEMNIFICATION |
61 | |||
15.1 By ACS |
61 | |||
15.1.1 Intellectual Property |
61 | |||
15.1.2 Personal Injury, Property Damage and Other Damage |
61 | |||
15.1.3 Third-Party Contracts |
62 | |||
15.1.4 ACS Employees |
62 | |||
15.1.5 Hazardous Material |
62 | |||
15.1.6 Information Disclosure |
62 | |||
15.1.7 Security Breaches |
62 | |||
15.1.8 Non-Performance |
62 | |||
15.1.9 Taxes |
63 | |||
15.2 By Symetra |
63 | |||
15.2.1 Intellectual Property |
63 | |||
15.2.2 Managed and Assigned Contracts |
63 | |||
15.2.3 Hazardous Materials |
63 | |||
15.3 Indemnification Procedures |
63 | |||
15.3.1 General |
63 | |||
15.3.2 Settlement of Claims |
64 | |||
15.3.3 Defense Declined |
64 | |||
15.3.4 Defense Accepted |
64 | |||
ARTICLE 16 INSURANCE |
64 | |||
16.1 Required Insurance Coverages |
64 | |||
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| PAGE | ||||
16.2 General Provisions |
65 | |||
16.2.1 Evidence of Insurance |
65 | |||
16.2.2 Claims-Made Coverage |
65 | |||
16.2.3 Notice of Cancellation or Change of Coverage |
65 | |||
16.2.4 Qualifying Insurers |
65 | |||
16.2.5 Waiver of Subrogation |
65 | |||
ARTICLE 17 PROBLEM RESOLUTION |
66 | |||
17.1 Problem Resolution Process |
66 | |||
17.1.1 Administrative-Level Performance Review |
66 | |||
17.1.2 IT Outsourcing Committee Performance Review |
66 | |||
17.1.3 Executive-Level Performance Review |
66 | |||
17.1.4 Voluntary, Non-Binding Mediation |
66 | |||
17.2 Continued Performance; No Tolling of Cure Periods |
66 | |||
17.3 De Minimis Problems |
66 | |||
17.4 Equitable Relief |
67 | |||
ARTICLE 18 USE OF SUBCONTRACTORS |
67 | |||
18.1 Approval; Key Subcontractors |
67 | |||
18.2 Subcontractor Agreements |
67 | |||
18.3 Liability and Replacement |
67 | |||
18.4 Direct Agreements |
68 | |||
ARTICLE 19 MISCELLANEOUS |
68 | |||
19.1 Defined Terms |
68 | |||
19.2 Third-Party Beneficiaries |
68 | |||
19.3 Use of Symetra Name |
68 | |||
19.4 Captions; References; Terminology |
68 | |||
19.5 Assignment |
68 | |||
19.6 Notices |
68 | |||
19.7 Amendments; Waivers |
69 | |||
19.8 Relationship Between the Parties |
69 | |||
19.9 Access to Personnel and Information |
70 | |||
19.10 Severability |
70 | |||
19.11 Counterparts; Faxed Signatures |
70 | |||
19.12 Governing Law and Venue |
70 | |||
19.13 Arbitration |
71 | |||
19.14 Expenses |
71 | |||
19.15 Import/Export |
71 | |||
19.16 Waiver of UCITA |
71 | |||
19.17 Benefits of Agreement |
71 | |||
19.18 Entire Agreement |
72 | |||
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SCHEDULES
Schedule 1
|
Relationship Management | |
Schedule 2
|
Service Tower Services SOW | |
Schedule 2A
|
Cross-Functional Services SOW | |
Schedule 2B
|
Data Center Services SOW | |
Schedule 2C
|
Distributed Computing Services SOW | |
Schedule 2D
|
Data Network Services SOW | |
Schedule 2E
|
Voice Communications Services SOW | |
Schedule 2F
|
Help Desk Services SOW | |
Schedule 2G
|
Output Processing SOW | |
Schedule 2H
|
Content Management SOW | |
Schedule 3
|
Fees | |
Schedule 4
|
Service Rates | |
Schedule 5
|
Fee Reductions | |
Schedule 6
|
Termination Fee | |
Schedule 7
|
Affiliates of Symetra |
ATTACHMENTS
Attachment A
|
Benchmarking Procedures | |
Attachment B
|
Symetra Sites | |
Attachment C
|
Transition Plan | |
Attachment D
|
Form of In-Scope Service Request | |
Attachment E
|
ACS Key Personnel | |
Attachment F
|
ACS’ Technology Refresh Requirements | |
Attachment G
|
Shared Resources | |
Attachment H
|
Assigned Contracts | |
Attachment I
|
Managed Contracts | |
Attachment J
|
Invoice Format | |
Attachment K
|
HIPAA Terms | |
Attachment L
|
Software Schedule | |
Attachment M
|
Offshore Services | |
Attachment N
|
Required Insurance Coverage | |
Attachment O
|
Approved Subcontractors | |
Attachment P
|
Definitions | |
Attachment Q
|
Approved Auditors |
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INFORMATION
TECHNOLOGY SERVICES AGREEMENT
This
Information Technology Services Agreement (the “Agreement”) is entered into as of
this 28th
day of October, 2004 (the “Effective Date”), by and between Symetra Life
Insurance Company, a Washington corporation with corporate offices at 5069 154th Place
NE, Redmond, Washington 98052 (“Symetra”), and ACS Commercial Solutions, Inc., a Nevada corporation
with corporate offices at 2828 N. Haskell, Dallas, Texas 75204 (“ACS”) (Symetra and ACS sometimes
are collectively referred to herein as the “Parties”).
RECITALS
WHEREAS,
on July 16, 2004, Symetra issued to ACS a Request for Proposal for Information
Technology Outsourcing (the “RFP”),
WHEREAS,
ACS submitted to Symetra a response dated September 17, 2004 (as the same may have
been supplemented and/or revised, the “ACS Bid”), and represented to Symetra that it had the
expertise, personnel, products, services and skills required to meet the requirements of Symetra
as reflected in the RFP;
WHEREAS,
in reliance on the representations made by ACS in the ACS Bid and subsequent
discussions, Symetra selected ACS over other prospective technology providers to provide Symetra
with outsourced IT services; and
WHEREAS,
Symetra and ACS want to specify the terms and conditions under which ACS will
provide such outsourced IT services to Symetra.
NOW,
THEREFORE, in consideration of the representations, warranties, promises and covenants
contained herein, and other good and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, the Parties, intending to be legally bound, agree to the
foregoing and as follows:
ARTICLE 1
GUIDING PRINCIPLES, RELATIONSHIP
MANAGEMENT AND INTERPRETATION
GUIDING PRINCIPLES, RELATIONSHIP
MANAGEMENT AND INTERPRETATION
1.1
Guiding Principles. The principles identified below
(“Guiding Principles”) include
principles that the Parties have determined to be important to ensure the success of their
relationship. The Guiding Principles function as “constitutional” statements regarding the
Parties’ overall intentions for this Agreement. If any term or condition of this Agreement is
ambiguous or unclear, or if the Parties did not anticipate a particular issue, the Parties shall
refer to and apply the Guiding Principles to resolve and/or address the ambiguous, unclear and/or
unanticipated issue.
1.1.1 Enhanced IT Capabilities and Effectiveness. Services will be provided in a manner that
enhances Symetra’s ability to deliver high-quality, cost-effective services both internally within
Symetra and externally to its customers with minimal interruptions in, and adverse impacts on,
Symetra’s delivery of services to its customers. Technology utilized by ACS will provide Symetra
with industry-leading levels of functionality and performance.
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1.1.2 Reduce IT Costs. Cost reduction is a key objective for Symetra in securing Services from
ACS. ACS will continuously implement new, cost-effective technologies in order to further reduce
the overall cost of Services to Symetra.
1.1.3 Improve and Maintain Technology. ACS will implement new technologies to deliver the
Services to Symetra in order to maintain competitiveness in the quality and scope of Services
available to Symetra and to take advantage of market cost efficiencies.
1.1.4 Focus on Core Competencies. By outsourcing the Services to ACS and leveraging ACS’ core
competencies, Symetra will be able to focus more of its internal resources on providing services
to its market constituents and improve the levels of service in the outsourced areas.
1.1.5 Improve Business Processes. Symetra will learn best practices from ACS which will
allow Symetra to improve its business processes, including improving the efficiencies of delivering
services to its own customers.
1.2 Relationship Management. The relationship between the Parties shall be managed as
described in this Section and in Schedule 1.
1.2.1 IT Outsourcing Committee. A joint IT outsourcing committee, comprised of senior
business and technology staff from Symetra and ACS (the
“IT
Outsourcing Committee”), shall be
responsible for providing input and advice concerning the overall business and technology
relationship between the Parties including, without limitation, the effectiveness and value of the
Services provided by ACS and guidance to improve such effectiveness and value. The IT Outsourcing
Committee shall be chaired by a Symetra representative, and the ACS members shall include the ACS
Project Executive and appropriate ACS executives and managers. The IT Outsourcing Committee shall
meet quarterly at a Symetra facility, or more often at Symetra’s request, to discuss:
(a) the status of each Service Tower and any Problems or difficulties experienced by a
Party in transitioning to and/or delivering the Services;
(b) ACS’ compliance with the SLRs;
(c) all financial arrangements, including invoices submitted by ACS;
(d) Symetra’s satisfaction with the ACS Key Personnel;
(e) in accordance with Section 2.5.4, innovative and emerging ideas and strategies for
more effective use of IT and related business transformation services and how such
innovative ideas and strategies can more effectively impact the
enterprise transformation
of Symetra’s businesses;
(f) ACS’ future financial and operational plans relating to the business unit that
fulfills ACS’ obligations to provide Services under this Agreement, to the extent
discloseable under applicable law; and
(g) such other matters as one Party may bring to the other.
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For each such meeting, ACS shall prepare a suggested agenda, with active input from the
Symetra Project Executive. ACS shall make available its senior management personnel to answer
questions from Symetra’s senior management personnel regarding the agenda items for such meeting.
Further, the IT Outsourcing Committee may invite industry thought leaders to participate in such
meetings to facilitate information exchange and increase the value of the strategies discussed.
1.2.2 Project Executives. Each Party shall designate an individual (for Symetra, the
“Symetra Project Executive”, and for ACS, the “ACS Project Executive”), who shall be each Party’s
primary point of contact for all matters relating to this Agreement throughout the Term. The ACS
Project Executive shall be: (a) knowledgeable about the Services and each of ACS’ and its
Subcontractors’ products and services; (b) experienced at running information technology systems
and networks of a size and scope minimally equal in size and scope to those of Symetra; (c) otherwise acceptable to Symetra; and (d) assigned (in the case of each ACS Project Executive) to Symetra
for a minimum period of twenty-four (24) months, except in cases involving: (i) a voluntary or For
Cause termination; (ii) removal at Symetra’s request; or (iii) inability to work due to death,
disability or illness. Without limiting any other rights and remedies that may then be available to
Symetra, if ACS fails to comply with the terms of the foregoing subsection (d), ACS represents to
Symetra that Symetra shall have the right to communicate dissatisfaction and impact to ACS senior
operations personnel through the customer satisfaction survey process. Symetra shall have the
right to pre-approve any candidate proposed by ACS to serve as the ACS Project Executive, and to
require ACS to remove and replace any previously appointed ACS Project Executive, and ACS promptly
shall comply with any such Symetra request. The ACS Project Executive shall have overall
responsibility for directing all of ACS’ activities hereunder and shall be vested by ACS with all
necessary authority to act for ACS in connection with all aspects of this Agreement. ACS and
Subcontractor staff shall be managed in the performance of their duties by the ACS Project
Executive. Upon ACS’ request, Symetra will provide a written evaluation of the ACS Project
Executive’s performance that ACS may elect to consider when determining the ACS Project Executive’s
salary and bonus compensation.
1.2.3 Service Delivery Managers. Each Party shall designate an individual to serve as that
Party’s service delivery manager for each Service Tower (for Symetra, each, a “Symetra Service
Delivery Manager”, and for ACS, each, an “ACS Service Delivery Manager”). The primary role of the
service delivery managers is to take ownership of the day-to-day operational relationships between
Symetra’s information technology service delivery and Symetra’s business. This involves managing
and coordinating the appropriate Symetra resources across all information technology services,
including resources and services provided by ACS, to ensure optimal service delivery and ensure
that all issues raised are resolved promptly and in accordance with the applicable SLR. The
Symetra Service Delivery Manager (or his or her designee) for a particular Service Tower shall be
the only Symetra representative authorized to request chargeable services from ACS with respect to
that Service Tower, and ACS acknowledges that it shall not have the right to bill or collect from
Symetra or any of its Affiliates any amounts ACS claims it is owed for otherwise chargeable
services provided without the written authorization of the applicable Symetra Service Delivery
Manager.
1.2.4 Management Functions. At Symetra’s request from time-to-time in order to more
efficiently administer certain functional aspects of the Parties’ relationship, each Party shall
designate individual(s) to address various subject matters including, without limitation,
performance and process management, architecture and technology management, finance/contract
management, enterprise standards management, sourcing relationship management, quality assurance
management, business unit management, and transition management, with such roles and
responsibilities of these individuals as may be determined by the Parties at such time.
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1.3 Agreement
Structure.
1.3.1 Master Agreement. This Agreement provides a
framework for, and the general terms that
are applicable to, the Services that ACS will provide to Symetra under this Agreement.
1.3.2 Country Agreements. If Symetra wants to receive from ACS, and ACS agrees to provide to
Symetra, Services in countries that are located outside the United
States (each, a “New Country”),
the terms of this Agreement shall apply to Services delivered in such New Country, except that the
local Affiliates of each Party in such New Country shall execute an agreement that identifies any
country-unique terms (and/or deviations from the terms of this Agreement) that are required by
local laws in such New Country and addresses appropriate pricing for the Services to be provided in
such New Country (each, a “Country Agreement”).
1.3.3 Affiliates of Symetra. As of the
Effective Date, ACS shall be responsible for providing
to Symetra and those Symetra Affiliates identified in Schedule 7 the Services contemplated to be
received by Symetra and those Symetra Affiliates identified in Schedule 7 under this Agreement as
of the Effective Date. After the Effective Date, Symetra may add Affiliates and/or business
ventures of Symetra and/or its Affiliates to the scope of this Agreement pursuant to Section
6.2.4. ACS is fully responsible for the performance of its obligations under this Agreement with
respect to the Services provided by ACS to Symetra and its Affiliates. Symetra (and not its Affiliates) shall be responsible for paying all Fees to be paid to ACS hereunder.
1.3.4 Effect of Certain Provisions. The following Sections hereof shall be applicable to
this Agreement only, and may not be applicable to certain Country Agreements where the Services may
be provided: 14.4 and 14.5.
1.4 Interpretation. If there is a conflict among the terms in the various contract documents
including this Agreement, the Schedules, the Attachments, the Addenda, the Appendices and/or any
other documents that comprise this Agreement:
(a) to the extent the conflicting terms can reasonably be interpreted so that such
terms are consistent with each other, such consistent interpretation shall prevail; and
(b) to the extent subsection (a) does not apply, the following order of precedence will
prevail:
(i) first, the terms set forth in Attachment K (including its addenda and
appendices), excluding, however, the terms of any separately executed agreement
containing the terms set forth in Attachment K pursuant to Sections 9.2.4 and/or
14.4.1;
(ii) second, the terms set forth in the body of this
Agreement;
(iii) third, the terms set forth in the Attachments A through Q to this
Agreement (including any attachments, addenda or appendices thereto), but excluding
Attachment K and its addenda and appendices, provided that no order of precedence
shall be given among them;
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(iv) fourth, the terms set forth in the Schedules 1 through 7 to this
Agreement (including any attachments or addenda thereto), provided that no order of
precedence shall be given among them; and
(v) fifth, the terms set forth in any other documents that comprise this
Agreement, provided that no order of precedence shall be given among them.
(c)
ACS and Symetra hereby acknowledge that they have drafted and negotiated the
Agreement jointly, and the Agreement will be construed neither against nor in favor of
either, but rather in accordance with its fair meaning.
Notwithstanding the foregoing terms of this Section 1.4, to the extent a defined term in
Attachment P conflicts with a defined term in any Schedule 2, the defined term in such Schedule 2
shall take precedence over the defined term in Attachment P for purposes of that Schedule 2.
Captions and titles to Schedules, Attachments, Addenda, Appendices and/or other documents
that comprise this Agreement are used herein for convenience of reference only and shall not be
used in the construction or interpretation of this Agreement. Any reference herein to a particular
Section number (e.g., “Section 2”), shall be deemed a reference to all Sections of this Agreement
that bear sub-numbers to the number of the referenced Section (e.g., Sections 2.1, 2.1.1, etc.).
As used herein, the word “including” shall mean “including, without limitation” or “including, but
not limited to”.
ARTICLE 2
SERVICES
SERVICES
2.1 General.
2.1.1 Commencement of Services. Subject to
Symetra’s exercise of its management and
oversight functions and prerogatives as identified in Article 5 or elsewhere in this
Agreement,
ACS shall provide the Services to Symetra at or with respect to all Symetra Sites. Except as
otherwise provided in this Agreement, ACS shall procure or otherwise provide all hardware, software, network facilities and other items required to provide the Services and otherwise perform its
obligations hereunder, all of which shall be deemed included in the Fees. In accordance with the
terms of this Agreement, ACS shall begin providing: (a) the transition and other Services described
herein (excluding the Service Tower Services) at 12:01 a.m., Pacific time, on the Effective Date;
and (b) each of the Service Tower Services at 12:01 a.m., Pacific time, on the Handover Date that
is applicable to each of such Service Tower Services. Symetra shall not be precluded from
obtaining services from any other provider that may be similar or identical to the Services.
2.1.2 Locations for Performance of Services. Without Symetra’s prior written consent, ACS
shall not perform any of the Services from locations, or using employees, agents and/or contractors
(including Subcontractors), situated outside the United States. Notwithstanding the foregoing,
Symetra acknowledges and agrees that the Services identified in Attachment M will be provided from
the respective countries identified therein; however, ACS represents and warrants to Symetra that:
(a) no Symetra Data will reside in any country other than the United States; and (b) except to the
extent minimally necessary for ACS’ employees, agents and/or contractors (including
Subcontractors) to perform the Services under this Agreement, no Symetra Data, and no data,
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information and/or mechanisms (including, without limitation, sniffer traces), that would
enable a Person to discover Symetra Data, will be accessible from any country other than the United
States. ACS will provide to Symetra from time to time upon Symetra’s request a written list of all
ACS employees, agents and/or contractors (including Subcontractors), if any, who have had access to
the Symetra Data, and the contents of such written list shall include, without limitation, the name
and business location of each such employee, agent and/or contractor (including Subcontractors),
the date of access of the Symetra Data and the type of Symetra Data accessed. If any law or
regulation enacted after the Effective Date has, or is likely to have, an adverse impact on the
desirability to either Party of having such Services provided from a location outside the United
States including, without limitation, as a result of new tax and/or privacy laws, at the affected
Party’s request, the Parties shall engage in good faith negotiations to arrive at a mutually
agreeable reasonable alternative.
2.2 Service Tower Services.
2.2.1
Initial Service Tower Services. Schedules 2A, 2B, 2C, 2D, 2E, 2F, 2G and
2H (each, together with any additional Schedules relating to additional Services that may be
added to this Agreement by mutual agreement of the Parties following the Effective Date, is
sometimes referred to herein as “the applicable Schedule 2”, or similar terminology) contain a
detailed description of each of the following Service Tower Services provided by ACS that will be
available to be purchased by Symetra from ACS:
(a) Cross-Functional Services (Schedule 2A);
(b) Data Center Services (Schedule 2B);
(c) Distributed Computing Services (Schedule 2C);
(d) Data Network Services (Schedule 2D);
(e) Voice Communications Services (Schedule 2E);
(f) Help Desk Services (Schedule 2F);
(g) Output
Processing (Schedule 2G); and
(h) Content Management (Schedule 2H).
The Parties may develop additional Schedules relating to additional Services that will be provided
by ACS to Symetra hereunder. Once approved in accordance with the terms herein, all such Schedules
shall be deemed to be numbered sequentially and made a part of Schedule 2.
2.2.2 SLRs for Service Towers.
(a) Commitment to SLRs. From and after each applicable Handover Date (or upon
the occurrence of such other date or event as may be expressly set forth in a particular
Schedule 2 for a particular SLR), ACS shall perform the applicable Service Tower Services in
accordance with, and in such a manner as to meet or exceed, the SLRs. ACS shall perform
any Other Services in accordance with, and in such a manner as to meet or exceed, any SLRs
that may be set forth in the applicable Out-of-Scope Work Order or otherwise agreed to by
the Parties in writing.
(b) Measurement and Reporting. ACS shall measure its performance against the SLRs in
accordance with the methodologies specified in the applicable Schedule 2 and shall provide a
detailed, comprehensive report of its performance against the SLRs during the applicable
reporting period (“SLR Reports”) by the fifth (5th) Business Day following
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the end of the applicable reporting period. Such reports shall be provided in
accordance with Section 2.11.1 and in accordance with the SLR metrics set forth in the
applicable Schedule 2. ACS shall meet with Symetra at least monthly, or more or less
frequently if requested by Symetra, to review ACS’ actual performance against the SLRs and
shall recommend remedial actions to resolve any performance deficiencies.
(c) Root-Cause Analysis and Resolution. Promptly, but in no event later than five (5)
calendar days after ACS’ discovery of, or if earlier, ACS’ receipt of a notice from Symetra
regarding, ACS’ failure to provide any of the Services in accordance with the SLRs, ACS
shall, as applicable under the circumstances: (i) perform a Root-Cause Analysis to identify
the cause of such failure; (ii) provide Symetra with a written report detailing the cause
of, and procedure for correcting, such failure; and (iii) provide Symetra with satisfactory
evidence that such failure will not recur. ACS’ correction of any such failures shall be
performed in accordance with the time frames set forth in the applicable Schedule 2 entirely
at ACS’ expense unless it has been determined, by mutual agreement of the Parties or through
the Problem-resolution process specified in this Agreement, that: (iv) Symetra (or one of
its subcontractors, agents or Third Parties provided by Symetra and not managed by ACS)
and/or its self-managed properties and/or systems was the predominant contributing cause of
the failure and ACS could not have worked around the failure without expending a material
amount of additional time or cost; or (v) Third Party software or firmware directly resulted
in such failure; provided that such Third Party software or firmware: (A) was expressly
approved by Symetra; (B) was implemented by ACS following its standard, rigorous, documented
interoperability testing, quality assurance, user acceptance and change management
processes; (C) was unknown, undocumented and unreported prior to ACS’ implementation of
such Third Party software or firmware; and (D) ACS could not have worked around the failure
without expending a material amount of additional time or cost. In such event: (vi) ACS
shall be entitled to temporary relief from its obligation to timely comply with the affected
SLR, but only to the extent and for the duration so affected; and (vii) in the case of an
event described in subsection (iv), Symetra shall reimburse ACS for ACS’ expenses to correct
such failure, but only to the extent Symetra caused such failure, unless the Parties
otherwise mutually agree. For purposes hereof, any preexisting condition of those of
Symetra’s properties and systems that are used and managed by ACS to deliver the Services
shall not be deemed a contributing cause of any failure if such condition was or reasonably
should have been identified in ACS’ reasonable, pre-implementation diligence processes, or
as a result of ACS’ post-implementation, industry-standard quality assurance processes; provided, however, that this exception specifically shall not apply to any hidden defect that
was not identified following such diligence and quality assurance processes.
(d) Annual Review of SLRs. Symetra expects that SLRs will improve over time and that
new SLRs may be added to reflect Symetra’s changing and/or new business requirements.
Accordingly, at least once annually, Symetra expects to review and reach agreement with ACS
on, among other things: (a) adjustments to the SLRs to reflect such anticipated continuous
improvements in the SLRs; and/or (b) the addition of new SLRs. Unless requested by Symetra,
in no event will the SLRs be made less favorable to Symetra as a result of such reviews.
(e) Classifying an SLR as an SLA. Subject to limitations set forth in Schedule 5,
upon sixty (60) calendar days’ prior written notice to ACS, Symetra shall have
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the right to classify any SLR as an SLA and to re-allocate the SLA Weighting Factors
so that a Weighting Factor is applicable to such newly classified SLA.
(f) Benchmarking. As part of the Services, ACS shall conduct benchmarking with
Symetra in accordance with the terms, conditions and procedures described in Attachment A.
2.2.3 Symetra Sites. Attached hereto as Attachment B is a list of Symetra facilities
(collectively, the “Symetra Sites”) with respect to which ACS shall provide the Services.
2.2.4 Governance Regarding Relief Events. The Parties acknowledge and agree that from time
to time during the Term, events and circumstances caused by the actions or inactions of Symetra may
arise that have (or are reasonably anticipated to have) a material adverse impact on ACS’ ability
to achieve the SLRs, or otherwise provide the Services in the manner required by this Agreement,
without expending a material amount of additional time or cost (such events and circum stances,
“Relief Events”). By way of example and without limiting the foregoing, the Parties acknowledge
that a Relief Event may arise as a result of ACS’ compliance with Symetra’s instructions in
connection with an Extraordinary Event under Section 2.10 and/or as a result of Symetra’s exercise
of its retained authorities under Article 5. With respect to such Relief Events, the following
terms and principles shall apply:
(a) If a Relief Event causing ACS to be unable to provide any of the Services in
accordance with the SLRs has occurred, the terms of Section 2.2.2(c) shall apply.
(b) Without limiting ACS’ obligations under Section 2.2.2(c), if a Relief Event has
occurred, ACS shall nevertheless use commercially reasonably efforts to perform the Services
and achieve the SLRs throughout the duration of such Relief Event using existing levels of
resources dedicated to Symetra’s account, and the Parties shall work together in good faith
to address the impact of such Relief Event on the Services and the SLRs in a timely manner.
(c) To the extent that either Party anticipates or determines that a Relief Event is
likely to occur, such Party shall notify the other Party of such determination, and the
Parties shall work together in good faith in advance of the anticipated Relief Event to
establish a plan for providing the Services during such Relief Event, taking into account
the relevant specifics and details of the Relief Event. Where Symetra’s actions or
inactions are the predominant cause of the anticipated Relief Event, such plan may include
the temporary suspension of SLRs associated with the affected Services, and/or additional
fees or charges associated with Other Services provided by ACS that are designated to
address the impact of the Relief Event or achieve the SLRs during the Relief Event.
(d) If an unanticipated Relief Event occurs, and Symetra’s actions or inactions are
the predominant cause of such Relief Event, or such Relief Event is the result of a Force
Majeure Event, without limiting ACS’ obligations under Section 2.2.2(c) and this Section,
ACS shall be relieved from its obligations to meet or exceed the SLRs affected by the Relief
Event (and its responsibility with respect to any related Fee Reductions) during the duration of such Relief Event.
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2.3 Transition Services.
2.3.1 Transition Plan. Attachment C sets forth a preliminary, high-level transition
plan (the “Transition Plan”) that generally outlines the tasks, timelines, responsibilities, dependencies, major milestones, deliverables and acceptance testing procedures for each Service area.
Within thirty (30) calendar days following the Effective Date, the Parties shall develop a
detailed, complete Transition Plan, which shall replace and supersede the initial high-level
Transition Plan. In accordance with the terms set forth in the Transition Plan, ACS shall
accomplish the transparent, seamless, orderly and uninterrupted transition from the manner in which
Symetra and its Affiliates received all services prior to the applicable Handover Date to the
manner in which the Services will be provided as described herein.
2.3.2 Progress Reports. ACS shall provide to the Symetra Project Executive (or his/her
designee) a weekly written report as to the progress of completion of the activities contained in
the Transition Plan until each of ACS’ responsibilities thereunder has been completed. Such reports shall be provided in accordance with Section 2.11.1.
2.3.3 Financial Responsibility. ACS shall assume financial responsibility for providing each
of the Service Tower Services as of the applicable Handover Date. Further, at Symetra’s option, ACS
shall assume financial responsibility for providing each of the Service Tower Services irrespective
of whether handover of the applicable Service Tower Service actually has been completed as of such
date.
(a) If ACS is unable to provide any of the Service Tower Services as of the applicable
Handover Date, “assume financial responsibility” means that:
(i) ACS shall reimburse Symetra for all costs and expenses incurred by Symetra
to provide such Service Tower Services (including by way of example and not of
limitation, salaries and other payments to in-scope Symetra employees, fees under
in-scope third party contracts, etc.) or, in Symetra’s sole discretion, Symetra may
set off any such costs and expenses against the Fees, if any, due under the
Agreement; and
(ii) ACS shall be entitled to invoice Symetra for such Service Tower Services
as if ACS itself were providing such Service Tower Services.
(b) ACS shall not be required to assume financial responsibility for a particular
Service Tower Service as described in the foregoing subsection (a) to the extent ACS’
performance is excused due to a Force Majeure Event or to the extent the delay was requested by Symetra. Further, if ACS is unable to provide a particular Service Tower Service
as of the applicable Handover Date, the SLRs shall not apply until ACS actually begins providing such Service Tower Service.
2.4 Purchasing Agent Services. Without limiting ACS’ obligations to procure or otherwise
provide all hardware, software, network facilities and other items required to provide the Services as described in this Article 2, and in addition to ACS’ other responsibilities herein, as and
when requested by Symetra, ACS shall procure hardware and software (such as, for example, personal
office printers) (“Procured Technology”) from a Symetra-approved product list on Symetra’s behalf.
ACS’ procurement responsibilities in this Section 2.4 shall include, without limitation,
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evaluating ACS qualifications and independence; negotiating Symetra-favorable pricing
(including obtaining the most favorable prices, rates and discounts available); ordering,
receiving, configuring, installing, testing, maintaining and distributing all Procured Technology.
As between Symetra and ACS, all right, title and interest in and to each item of Procured
Technology shall be vested in Symetra, and Symetra shall reimburse ACS for the purchase price for
such Procured Technology.
2.5 Technology Management and Security Services.
2.5.1 General. ACS shall provide the technology management and security Services described
in this Section 2.5. ACS shall obtain Symetra’s prior written consent before acquiring,
maintaining, upgrading or replacing any asset that is used by ACS to satisfy its obligations hereunder if such acquisition, maintenance, upgrade or replacement could result in any material change
in, or adverse impact on, the method, manner, types or levels of Services that are then being
provided to Symetra.
2.5.2 Technology Upgrades and Enhancements. ACS will keep all Services under this Agreement
current with industry advances and leading technology standards. Without limiting the generality of
the foregoing, all hardware and software used to provide the Services will be kept at levels
supportable by the respective manufacturers, and equipment will be upgraded or replaced as required
to meet the SLRs and manufacturer-recommended requirements. Additionally, ACS shall notify Symetra
as soon as hardware and software upgrades and enhancements become available from their respective
vendors, and the Parties thereafter will coordinate implementation of such upgrades and
enhancements. ACS shall schedule all such upgrades and enhancements in advance and in such a way as
to prevent any interruption or disruption of, or diminution in, the nature or level of any portion
of the Services.
2.5.3 ACS’ Technology Refresh Requirements. ACS shall replace and/or upgrade its own equipment
and software periodically as specified in Attachment F. In purchasing new equipment and software,
ACS shall conform to the Technology Plan as described in Section 2.5.4. ACS will review the
proposed purchase strategies each year (or more frequently, if required) with Symetra in order to
determine which technology strategies will provide optimal and/or improved Services to Symetra.
2.5.4 Technology Planning and Innovation. On or before June 1 and December 1 of each calendar
year, or more frequently as requested by Symetra, ACS shall prepare for Symetra’s review, comments
and approval a technology plan (the “Technology Plan”) that is comprised of both short-term and
long-range plans that tie into Symetra’s business goals. The short-term plan will include
information technology budget development for the next fiscal year including, consistent with the
requirements of Section 2.5.3, identification of software and hardware for which technology refresh may be needed in the next Contract Year, and a projected time schedule for procuring the
necessary software, hardware and services and implementing the proposed changes. The long-range plan
will include strategic and flexible use of information technology systems in light of Symetra’s
anticipated business goals, current mission, objectives, priorities and strategies. Once approved
by Symetra, each Technology Plan will be deemed to be incorporated in and made a part of this
Agreement. ACS will on a regular basis and prior to preparing each annual Technology Plan: (a) identify
ACS and non-ACS products and technology services that may benefit Symetra and support the mission,
goals and objectives of Symetra; (b) identify ACS or Symetra resources required to complete the
short-term and long-range plans; and (c) upon Symetra’s request, investigate the requirements,
costs and benefits of new technology. Notwithstanding the development of the Technology Plan on
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an annual basis as described herein, ACS also shall have an ongoing responsibility to
regularly provide Symetra with information regarding any newly improved or enhanced commercially
available information technologies that reasonably could be expected to have a positive impact on
Symetra including, without limitation, in the areas of increased efficiency, increased quality
and/or reduced costs (“Enhanced Technology”). At a minimum, at least once annually, or more
frequently as requested by Symetra, ACS shall meet with the IT Outsourcing Committee and provide a
written report to the IT Outsourcing Committee that identifies any Enhanced Technology that ACS and
its principal Subcontractors are developing and IT trends of which Symetra should be made aware.
Upon identifying any Enhanced Technology that the Parties believe would materially improve
performance, capacity, bandwidth, or reduce the cost, of the Services, the Parties will meet and
discuss in good faith the terms upon which such Enhanced Technology may be implemented into the
Services, including detailed SLRs specific to each such enhancement.
2.5.5 Asset Management. Within ninety (90) calendar days following the Effective Date, ACS
shall develop and thereafter maintain a comprehensive inventory of all: (a) equipment, software
and network connections and infrastructure used by ACS to provide the Services; (b) equipment,
software and network connections and infrastructure used by Symetra in connection with the
Services; and (c) Procured Technology. ACS shall provide an electronic copy of such inventory to
Symetra upon request. In addition, ACS shall provide Symetra with reports detailing software
usage by Symetra and other activities by Symetra relating to Symetra’s compliance with software
licenses that can be monitored by ACS in delivering the Services, provided that such responsibilities shall be detailed in each applicable Schedule 2. The Parties agree that ACS shall
have no legal or financial responsibility for Symetra’s non-compliance with such software licenses
except to the extent resulting from: (d) events subject to indemnification under Section 15.1.8;
and (e) potential breach of contract liability under this Agreement based on ACS’ failure to
comply with its obligations under this Agreement.
2.5.6 Shared Resources. Except as provided in Attachment G, ACS shall not use a shared
hardware or software environment, or any shared network or platform
(collectively, “Shared Resources”) to provide the Services. If, following the Effective Date, ACS wants to migrate or relocate any Services to Shared Resources, ACS shall provide to Symetra for its review, comments and
approval, which approval may be withheld in Symetra’s sole discretion, a proposal for such
migration or relocation, including a listing of all shared use assets that will be used to provide
the Services and a breakdown of the cost and price benefits and savings or risks to Symetra. As
part of the Disentanglement, ACS shall identify and assist Symetra with procuring suitable
functionally equivalent replacements for any Shared Resources used to provide the Services.
2.5.7 Disaster Recovery.
(a) Review of Symetra’s Disaster Recovery Plans. On or before the date specified in
the Transition Plan, ACS shall review Symetra’s existing disaster recovery plan(s) and
develop and deliver to Symetra for its review, comments and approval a detailed, complete,
written analysis of such disaster recovery plan(s) that identifies, among other things, any
deficiencies and gaps in such disaster recovery plan(s) and the changes, modifications
and/or updates recommended by ACS in order to address such deficiencies and gaps. Without
limiting the generality of the foregoing, ACS’ written analysis specifically shall address
ways to safeguard the Symetra Data and to ensure the continuing availability of all
Services, including the Service Tower Services, in accordance with the terms of this
Agreement during any event that would otherwise adversely affect ACS’ ability to safeguard
the Symetra
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Data and/or deliver the Services. Following its receipt of ACS’ analysis, Symetra
promptly shall review and comment on the same, and ACS thereafter shall update Symetra’s
disaster recovery plan(s) accordingly and, on or before the date specified in the
Transition Plan, deliver to Symetra fully updated paper and electronic copies of such
disaster recovery plan(s). Thereafter, ACS shall re-assess Symetra’s disaster recovery
plan(s) as described herein once annually (or more frequently if necessary) and, not later
than sixty (60) calendar days following commencement of the second and each subsequent
Contract Year, provide to Symetra for its review, comments and approval proposed changes,
modifications and/or updates to Symetra’s disaster recovery plan(s) in order to address any
identified deficiencies and gaps. Following its receipt of ACS’ annual assessment, Symetra
promptly shall review and comment on the same, and ACS thereafter shall update Symetra’s
disaster recovery plan(s) accordingly and, within thirty (30) days after receiving
Symetra’s comments, deliver to Symetra fully updated paper and electronic copies of such
disaster recovery plan(s).
(b) Provision of Disaster Recovery Services. Subject to, and without limiting, the
terms of this Section 2.5.7, ACS shall provide the disaster recovery Services set forth in
the applicable Schedules 2 in accordance with its own and Symetra’s disaster recovery
plan(s). ACS shall provide disaster recovery Services as described herein at all times irrespective of whether a Force Majeure Event has occurred, unless the Force Majeure Event
prevents the performance of the disaster recovery Services. Further, ACS shall provide dis
aster recovery Services if Symetra notifies ACS that a disaster has occurred. Upon the occurrence, and periodically for the duration, of any disaster, ACS shall provide regular reports
and notices to Symetra regarding the status of ACS’ response to, and recovery from, the disaster.
(c) Review and Testing of Disaster Recovery Plan. ACS’ disaster recovery Services
shall include regular (not less often than once annually) testing and updating of both its
own and Symetra’s disaster recovery plans (including plans for data backups, storage
management and contingency operations), reserving capacity at alternate site facilities and
annually testing network connectivity between such alternate site and the applicable Symetra
Sites. Symetra shall have the right to participate fully in any disaster recovery testing
conducted by ACS including being physically present at the facilities of ACS and/or any
Third Parties involved in such testing.
(d)
Fees. ACS’ costs and expenses associated with performing the obligations set forth
in this Section 2.5.7 shall be included in the Annual Services Fee as a separate annual
line item.
2.6 Standards and Procedures Manual.
2.6.1 Development of Manual. As ACS transitions and migrates Services in accordance with the
terms of the Transition Plan, ACS shall develop and continuously update a detailed,
Symetra-specific standards and procedures manual that minimally includes the contents specified in
Section 2.6.2 (the “Standards and Procedures Manual”). ACS shall deliver the first draft of the
Standards and Procedures Manual to Symetra for its review, comments and approval within ninety (90)
calendar days following the Effective Date of the Agreement and shall, with respect to each draft
of the Standards and Procedures Manual, incorporate all of Symetra’s comments and suggestions. Not
later than thirty (30) calendar days following completion of all activities under the Transition
Plan, ACS shall deliver an updated draft of the Standards and Procedures Manual to
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Symetra for its review, comments and approval and thereafter shall periodically (but not less
often than quarterly) update the Standards and Procedures Manual to reflect changes in the
operations or procedures described therein. All such updates to the Standards and Procedures Manual
shall be provided to Symetra for its prior review, comments and approval. Delivery of the initial
draft and the updated draft of the Standards and Procedures Manual as provided herein shall
constitute Critical Milestones. Prior to completion of the Standards and Procedures Manual, ACS
shall provide the Services in accordance with the standards and procedures generally used by
Symetra.
2.6.2
Contents. ACS shall provide the Standards and Procedures Manual to Symetra
electronically (and in a manner such that it can be accessed via either Symetra’s intranet or the
Internet) and communicate to all End-Users the availability of and methodology for accessing the
Standards and Procedures Manual. The Standards and Procedures Manual shall describe, among other
things, the manner in which ACS will provide the Services hereunder, including the equipment and
software being and to be used, the documentation (including, e.g., operations manuals, user
guides, specifications, and End-User support) that provide further details of such activities and
detailed problem and change management procedures. The Standards and Procedures Manual also shall
describe the activities ACS will undertake in order to provide the Services including, where
appropriate, direction, supervision, monitoring, staffing, quality assurance, reporting, planning
and oversight activities, as well as the specific measures taken to comply with all laws and
regulations that are applicable to ACS as an operator of its business or in performing its
obligations under the Agreement. The Standards and Procedures Manual also shall identify those
Services that ACS is to perform to assist Symetra in complying with its own regulatory obligations
including, without limitation, those relating to the privacy and security of the Symetra Data,
including HIPAA, the California Statute, GLB and any other laws and regulations applicable to the
Symetra Data and/or identified by Symetra. Without limiting ACS’ obligations to assist Symetra in
complying with its own regulatory obligations as described above, it is expressly agreed and
understood by the Parties that Symetra shall be responsible for compliance with all laws and
regulations that are applicable to Symetra as an operator of its business, its receipt of the
Services, its direct regulatory obligations relating to the Symetra Data and, if the terms of
Section 14.6 are applicable, its status as controller of the Symetra Data. The Standards and
Procedures Manual shall describe how the Services will be performed and act as a guide to
End-Users seeking assistance with respect to the Services offered hereunder. The Standards and
Procedures Manual shall in no event be interpreted as an amendment to this Agreement or so as to
relieve ACS of any of its performance obligations under this Agreement.
2.7 Service Compatibility. ACS shall ensure that all services, equipment, networks, software,
enhancements, upgrades, modifications and other resources, including those provided by Symetra
(collectively, the “Resources”), that are: (a) used by ACS to deliver the Services; or (b)
approved by ACS for utilization by Symetra in connection with the Services, shall be successfully
integrated and interfaced, and shall be compatible with the services, equipment, networks,
software, enhancements, upgrades, modifications and other resources that are being provided to
Symetra by Third Party service providers (collectively, the “Third-Party Resources”); provided,
however, that any such responsibilities of ACS for Resources shall be detailed in the applicable
Schedules 2. Further, ACS shall ensure that none of the Services or other items provided to
Symetra by ACS shall be adversely affected by, or shall adversely affect, those of any such Third
Party providers, whether as to functionality, speed, service levels, interconnectivity,
reliability, availability, performance, response times or similar measures. To the extent that any
interfaces need to be developed or modified in order for the Resources to integrate successfully,
and be compatible with, the Third-Party Resources, ACS shall develop or modify such interfaces as
part of the Services, pursuant to the process set forth in Section 2.8. If a question arises as to
whether a particular defect, malfunction or other
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difficulty with respect to the Services was caused by Resources or by Third-Party Resources,
ACS shall be responsible for correcting, at its cost, such defect, malfunction or difficulty,
except to the extent that ACS can demonstrate, to Symetra’s satisfaction, by means of a Root-Cause
Analysis, that the cause was not caused by Resources. In addition, ACS shall cooperate with all
Third Party service providers of Symetra to coordinate its provision of the Services with the
services and systems of such Third Party service providers. Subject to reasonable confidentiality
requirements, such cooperation shall include providing: (a) applicable written information
concerning any or all of the systems, data, computing environment, and technology direction used
in providing the Services; (b) reasonable assistance and support services to such Third Party
providers; (c) access to systems and architecture configurations of Provider to the extent
reasonably required for the activities of such Third Party providers; and (d) access to and use of
the Resources.
2.8 In-Scope Service Requests. If Symetra requires the performance of work that is not being
performed at a particular time but that is within the scope of the Services, Symetra shall deliver
to the ACS Project Executive an “In-Scope Service Request” in the form set forth in Attachment D
specifying the proposed work with sufficient detail to enable ACS to evaluate the request. If such
In-Scope Service Request is a request for access to ACS personnel versus a request for a
particular set of Services that are in the nature of a longer-term project, Symetra shall
prioritize (and re-prioritize as deemed necessary by Symetra), and ACS shall respond to, such
In-Scope Service Request as follows:
| Symetra- | Response | |||
| Designated | Symetra Corporate Headquarters & | |||
| Priority | ACS NWSC - Hillsboro | Symetra Remote Office Locations | ||
Urgent
|
Immediate | ASAP, not to exceed 8 hours | ||
Standard
|
2 Hours | 2 Business Days | ||
Low
|
8 Hours | 5 Business Days | ||
With respect to In-Scope Service Requests that are in the nature of a longer-term project,
unless the Parties mutually agree in writing to proceed otherwise, within five (5) Business Days
following the date of ACS’ receipt of such In-Scope Service Request, ACS shall provide Symetra
with a written proposal in response to the In-Scope Service Request that contains the following:
(a) a detailed description of the Services to be performed; (b) specifications (if applicable);
and/or (c) an implementation plan, with implementation to commence not later than thirty (30)
calendar days after approval thereof, unless otherwise mutually agreed. All services requested in
an In-Scope Service Request shall constitute Services for purposes of this Agreement. Following
receipt of ACS’ proposal, Symetra shall notify ACS in writing whether to proceed with the In-Scope
Service Request, and ACS shall take no further action with respect to the In-Scope Service Request
until it receives approval from Symetra. In-Scope Service Requests must be executed by the Symetra
Project Executive, or his or her designee, in order to be effective.
2.9 Out-of-Scope Work Orders.
2.9.1 Requirements and Process. From time-to-time, Symetra may solicit a response from
prospective providers to perform services that are outside the scope of the Services
(“Out-of-Scope Service(s)”). At its own cost
and expense, ACS shall submit a response (“Out-of-
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Scope Work Order”) to any such Out-of-Scope Services request that complies with the terms of
this Section within ten (10) Business Days after ACS’ receipt of Symetra’s request, or, if the
scope of the Out-of-Scope Services is such that ten (10) Business Days would be insufficient,
within a mutually agreed period of time. ACS’ proposed fees for performing each Out-of-Scope Work
Order shall be at a fixed price (to the extent the Out-of-Scope Service consists of design, build
or other development services) or at a fixed rate per unit of performance or other benefit to be
received by Symetra (to the extent the Out-of-Scope Service consists of operational or other
ongoing services), in either case based upon the lower of the Service Rates or the best rates,
terms and conditions ACS is offering or has offered to other customers for services of a similar
nature and scope. Each such response shall be in writing and shall contain the following items and
be in conformance with the process set forth herein: (a) ACS’ response to Symetra’s description
and specifications for the Out-of-Scope Services, including all services to be performed,
categories of personnel (and number of personnel within each category) required to complete the
Out-of-Scope Services, and an implementation plan; (b) the amount, schedule, and method of
payment; (c) the timeframe for performance; (d) completion and acceptance criteria; and (e) any
proposed SLRs for new services that would result from the Out-of-Scope Services. If Symetra
selects ACS as its provider with respect to the Out-of-Scope Work Order, the obligations of ACS
with respect to the Out-of- Scope Services shall be deemed Other Services under this Agreement,
and the Out-of-Scope Services and the Out-of-Scope Work Order shall be governed by all the terms
and conditions of this Agreement.
2.9.2 Potential Limitation on Future Contracts. If ACS, under the terms of this Agreement or
through the performance of tasks hereunder, develops specifications or statements of work, and such
specifications or statements of work are to be incorporated into a solicitation, at Symetra’s
option, ACS may be ineligible under Symetra’s standard procurement rules or, if such rules do not
exist, industry standard procurement rules, to bid on and perform the work described within that
solicitation as a prime contractor or subcontractor under a future Symetra contract. Except for the
foregoing, ACS shall have the ability to compete for future business with Symetra on an equal basis
with other Persons.
2.10 Extraordinary Events or Circumstances. Symetra may, at any time, in a written notice
signed by the Symetra Project Executive, or his or her designee, and as a result of an
Extraordinary Event: (a) direct ACS, in accordance with Section 2.8, to perform Services in an
extraordinary manner (e.g., perform Services at service levels above or below the SLRs for a
limited duration); or (b) direct ACS to prepare and submit a proposed Out-of-Scope Work Order more
quickly than required under Section 2.9.1; (c) direct ACS to temporarily cease the performance of
certain Services; or (d) obtain a Third Party to perform certain Services for the duration of the
Extraordinary Event. If such Extraordinary Event results in ACS’ performance of Other Services, to
the extent incremental pricing for such Other Services is not set forth in this Agreement
(including, in particular, in Schedule 4), the Parties shall engage in good faith negotiations in
order to arrive at appropriate fees and expenses to be paid to ACS in consideration of its
performance of such Other Services. If such Extraordinary Event results in ACS’ performance of
additional or fewer Services, as the case may be: (e) provided: (i) the upper Pricing Band limit
or the lower Pricing Band limit, as applicable, for such Services as specified in Schedule 3 has
not been surpassed for more than ninety (90) calendar days, the applicable pricing set forth in
Schedule 3 shall apply; or (f) once the upper Pricing Band limit or the lower Pricing Band limit,
as applicable, for such Services as specified in Schedule 3 has been surpassed for more than
ninety (90) calendar days, the Parties shall engage in good faith negotiations in order to arrive
at new pricing for the affected Service Tower Services. The rights and obligations of the Parties
under this Section 2.10 shall be in addition to those under Sections 2.5.7, 9.2.3 and similar
provisions of this Agreement addressing Force Majeure Events.
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2.11 Reports and Other Resource Materials.
2.11.1 General. In addition to any reports that may be required to be furnished pursuant to
any Schedule 2, ACS shall furnish reports to Symetra in the manner, format, and frequency, and
containing contents, reasonably requested by Symetra from time to
time. In addition to SLR Reports
and reports relating to amounts invoiced to Symetra, ACS’ reports shall include, among other
things, annual security audit reporting, including reporting on unauthorized system access
incidents, and reports regarding cost-management, Subcontractor relationships, End-User
satisfaction, human resources matters and any other pertinent data requested by Symetra. ACS
promptly shall (but not later than two (2) calendar days after gaining knowledge thereof) inform
Symetra of any deficiencies, omissions or irregularities in Symetra’s requirements or in ACS’
performance of the Services that come to ACS’ attention. ACS shall furnish Symetra with all
existing and future research and development resources, such as published materials, and industry
studies conducted for or by ACS, that pertain to the Services and that might assist Symetra in
setting its IT policies or requirements. The ACS Project Executive also shall advise Symetra of all
other matters of a material nature that he or she believes would be helpful to Symetra in setting
or revising its IT policies or requirements.
2.11.2 Media. ACS shall furnish to Symetra all reports in both hard copy and electronic form
per Symetra’s specifications in effect on the Effective Date, as the same may be reasonably
modified by Symetra from time-to-time thereafter.
2.12
Critical Milestones.
2.12.1
Designation of Critical Milestones. As of the Effective Date, the Parties have
designated certain milestones, activities, actions and/or projects under this Agreement as Critical Milestones, and have identified (in the Transition Plan or elsewhere in this Agreement) dates
for ACS to achieve such Critical Milestones. Following the Effective Date, the Parties may
designate additional milestones, activities, actions and/or projects under this Agreement as
Critical Milestones (such agreement not to be unreasonably withheld by either Party), and promptly
following such designation, the Parties shall work together cooperatively and in good faith to
agree upon appropriate dates for ACS to achieve such Critical Milestones.
2.12.2 Failure to Timely Achieve a Critical Milestone. If ACS fails to achieve any Critical
Milestone by the corresponding date for achieving such Critical Milestone, without limiting any
other rights and remedies that may be available to Symetra, Symetra shall have the right to: (a) if
applicable to the Critical Milestone, reduce the Fees by an amount equal to the Fee Reduction
calculated as provided in
Schedule 5; and/or (b) declare an Event of Default. Notwithstanding the foregoing, the remedies described in Sections 2.12.2(a) and (b) shall not be available to Symetra if and to the extent ACS’ failure to achieve any Critical Milestone by the corresponding date for achieving such Critical Milestone is due to: (c) the occurrence of a Force Majeure Event; (d) a delay by Symetra solely for its own convenience; or (e) Symetra’s material failure to perform any of its responsibilities under this Agreement that were a pre-condition to ACS’ ability to perform its obligations, provided that such failure previously was identified by ACS in writing.
Schedule 5; and/or (b) declare an Event of Default. Notwithstanding the foregoing, the remedies described in Sections 2.12.2(a) and (b) shall not be available to Symetra if and to the extent ACS’ failure to achieve any Critical Milestone by the corresponding date for achieving such Critical Milestone is due to: (c) the occurrence of a Force Majeure Event; (d) a delay by Symetra solely for its own convenience; or (e) Symetra’s material failure to perform any of its responsibilities under this Agreement that were a pre-condition to ACS’ ability to perform its obligations, provided that such failure previously was identified by ACS in writing.
2.13 End-User Satisfaction and Communication. In addition to any End-User satisfaction
survey requirements set forth in Schedule 2, not less than once quarterly, ACS shall conduct
End-User satisfaction surveys in accordance with this Section. The proposed surveys (including the
underlying instrument(s), methodology and survey plan) shall be
subject to Symetra’s review, comments
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and approval and shall cover a representative sample of the End-Users including, as a
separate sample category, senior management of Symetra. Symetra shall provide reasonable assistance
to ACS to: (a) identify the appropriate sample of End-Users; (b) distribute the surveys; and (c)
encourage participation by such End-Users in order to obtain meaningful results. ACS shall report
the results of the surveys separately from each of the End-Users or groups of End-Users as may be
specified by Symetra, and the ACS Project Executive shall review the results of each survey with
Symetra within thirty (30) calendar days following the mutually agreed deadline for completion and
return of the survey. During each such review session, ACS shall submit an End-User communication
plan to Symetra for its review, comments and approval that shall include, at a minimum, updates to
the End-Users regarding the results of the satisfaction surveys. Not later than thirty (30)
calendar days following each review session, ACS shall provide to Symetra an action plan for
addressing any problem areas identified in the survey results.
2.14 Cooperation with Symetra and Third Parties. ACS shall cooperate fully with Symetra and
all Third Parties designated by Symetra, and shall disclose such information to Symetra and such
Third Parties relating to ACS and its Subcontractors as may be reasonably required or necessary
for delivery of the Services as required herein. All such disclosures shall be subject to the
confidentiality provisions of Article 13.
2.15 Movement of an ACS Facility. Except as otherwise agreed to by the Parties in writing, if
ACS moves, relocates, alters or changes any facility (including, without limitation, any ACS data
center), such movement, relocation, alteration or change shall not: (a) result in any charges to
Symetra; or (b) alter or excuse ACS’ obligation to perform all Services in accordance with the
SLRs.
ARTICLE 3
PERSONNEL
PERSONNEL
3.1 ACS Personnel.
3.1.1 ACS Key Personnel.
(a) Designation of ACS Key Personnel. Each of the ACS Key Personnel is designated on,
and shall have the functions assigned to him or her as set forth in, Attachment E. This
Schedule may be modified from time-to-time in accordance with this Agreement and shall be
deemed modified upon any Symetra-approved replacement or substitution of a new person for
any ACS Key Personnel. Prior to the assignment, hiring or designation of any person to fill
the position or perform the duties provided by any ACS Key Personnel, Symetra shall have
the right to interview and participate in the selection of such person to fill the position
or perform the duties provided by the ACS Key Personnel to be replaced. ACS shall not hire,
assign or designate any new person to fill the position or perform the duties provided by
any ACS Key Personnel without Symetra’s prior written consent, which consent may be given
or withheld in Symetra’s sole discretion. In addition, Symetra shall not be obligated to
pay any Fees (or portion thereof) that are attributable to ACS Key Personnel until it
determines, in its reasonable discretion, that such ACS Key Personnel have sufficient
training, education and knowledge about Symetra’s then-current status and project needs.
ACS shall ensure that all ACS Key Personnel have at least one designated individual as his
or her core knowledge backup, ACS acknowledging that cross-sharing of knowledge is critical
to minimizing the potential impact to Symetra if any of the ACS Key Personnel become
unavailable for any reason. ACS Key Personnel shall treat Symetra as their most favored
customer
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and shall give Symetra priority over all of ACS’ other customers. All other ACS
employees who are assigned to Symetra shall treat Symetra as a priority customer.
(b) Removal/Replacement of ACS Key Personnel by ACS. All ACS Key
Personnel shall be assigned to perform the Services on such basis (e.g., full time
assignment or otherwise) as needed to ensure that the Services contemplated hereunder are
provided in an efficient and timely manner. Except as otherwise permitted in Section
1.2.2(d), without Symetra’s prior written consent, ACS shall not: (i) undertake any action
with respect to any ACS Key Personnel that would result in the alteration or reduction of
time expended by such ACS Key Personnel in performance of ACS’ duties hereunder; or (ii)
transfer, reassign or otherwise re-deploy any ACS Key Personnel from performance of ACS’
duties under this Agreement, except in cases involving: (i) a voluntary or For Cause
termination; (ii) removal at Symetra’s request; or (iii) inability to work due to death,
disability or illness. If any one of the ACS Key Personnel comes unavailable to perform
his/her duties for any reason, subject to the terms of subsection (c) below, within
forty-eight (48) hours thereafter, ACS shall replace such person with another person
approved by Symetra that is at least as well qualified as the person being replaced. For
purposes of this Section, the movement of ACS Key Personnel from the employ of ACS to an
Affiliate or a Subcontractor of ACS shall be considered a reassignment requiring Symetra’s
consent and not a cessation of employment. If ACS removes or temporarily reassigns the ACS
Key Personnel in accordance with the terms of this Section, Symetra may withhold any and all
payments due or that become due to ACS until the ACS Key Personnel vacancy is filled by a
qualified replacement, as approved by Symetra.
(c) Removal of ACS Personnel by Symetra. Notwithstanding anything contained herein to
the contrary, if Symetra believes that the performance or conduct of any Person employed or
retained by ACS to perform ACS’ obligations under this Agreement (including, without
limitation, ACS Key Personnel) is unsatisfactory for any reason or is not in compliance with
the requirements of this Agreement, Symetra shall so notify ACS in writing and ACS shall
promptly address the performance or conduct of such person, or, at Symetra’s request,
immediately replace such Person with another Person acceptable to Symetra and with
sufficient knowledge and expertise to perform the Services in accordance with this
Agreement. Symetra shall not be responsible for any relocation expenses associated with
ACS’ compliance with this Section or any other term or condition of this Agreement.
(d) Transition. If: (i) ACS is obligated to replace an individual as provided in
subsection (c) above; or (ii) ACS wants to replace or reassign any of the ACS Key Personnel,
and either Symetra consents to such replacement or reassignment, or Symetra’s consent to
such replacement or reassignment is not required as provided in subsection (b) above, then:
(1) the terms of subsection (a) above with respect to Symetra’s right to select replacement
personnel for any ACS Key Personnel shall apply; (2) the proposed replacement personnel
shall be “qualified,” meaning that the proposed replacement personnel shall possess
comparable experience and training as the ACS personnel to be replaced; and (3) the replacement personnel shall work with the replaced personnel during a mutually agreed transition
period, the duration of which shall be determined based on the duties and
responsibilities of the person to be replaced, and all costs and expenses associated with
educating and training the replacement personnel shall be borne by ACS. Without limiting
the generality of the foregoing, the transition period for the ACS Project Executive shall
be at least one (1) month in length. In addition, provided the replaced personnel remains
employed by ACS, such individual
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shall continue to be available by telephone to answer any Services or Other
Services-related questions.
3.1.2 Additional Personnel Requirements. In addition to ACS Key Personnel, ACS shall provide
and make available such additional staff and personnel as ACS deems necessary to properly perform
all of ACS’ obligations under this Agreement, all of whom shall, prior to their assignment to
perform Services, be subject to security clearances by ACS consistent with any applicable policies
and/or practices as may be requested and/or approved by Symetra. All costs and expenses
associated with providing, equipping and retaining ACS staff and other personnel is included within
the Fees, including, without limitation, all wages (including overtime payments), benefits of
employment, applicable payroll taxes, and all associated staffing costs such as training and education, office supplies, PC refreshment, travel and lodging costs and recruiting and relocation
expenses. On the Effective Date and at the end of every six (6)-month period after the Effective
Date, ACS shall provide Symetra with a written list of all ACS and Subcontractor personnel whose
time is dedicated fifty percent (50%) or more to providing Services hereunder, and the contents of
such written list shall include, without limitation, the employees’ names, dates of placement,
assignment addresses, assigned duties and responsibilities, and the names of the person to whom
they are required to report.
3.1.3 Minimum Proficiency Levels. ACS Key Personnel, and all other personnel assigned by ACS
or its Subcontractors to perform ACS’ obligations under this Agreement, shall have experience,
training and expertise sufficient to perform ACS’ obligations under this Agreement including,
without limitation, ACS’ obligations with respect to the SLRs. Whenever ACS and/or an ACS
Subcontractor indicates that a Person has a specific level of experience or expertise, such Person
shall in fact possess such experience and expertise. Symetra shall not be required to pay for Services provided by any Person who does not possess the promised levels of experience and expertise.
3.1.4 Specialized Personnel. As part of its provision of Services, ACS shall ensure that all
ACS personnel (and the personnel of any ACS Subcontractors) performing Services in work areas
requiring specific health, regulatory (including, without limitation, HIPAA, the California Statute, GLB and other regulations identified by Symetra), security or safety-related expertise are
trained, qualified, and available to perform the Services in such areas as such training is commercially appropriate for the Services performed by such personnel. As reasonably requested by ACS,
Symetra shall make available to ACS personnel (and to the personnel of any ACS Subcontractor(s))
any regulatory training that Symetra makes available to its own personnel in such work areas, with
all costs and expenses associated with such training (if any) to be borne by ACS.
3.1.5 Training. At its own cost and expense, ACS shall provide, and cause its Subcontractors
to provide, all such training to the employees of ACS and its Subcontractors as may be necessary
for them to perform all of ACS’ duties under this Agreement (including technical training as well
as training regarding applicable administrative matters such as training regarding Symetra-specific
policies and SOPs), and, in any event, levels of training equal to or greater than the average
levels of training given to other ACS and/or Subcontractor employees holding corresponding
positions.
3.1.6 Supervision and Conduct of ACS Personnel. Except as expressly set forth herein, neither
ACS, its Subcontractors, nor the employees of any of them, are or shall be deemed to be employees
of Symetra. ACS or, with respect to Persons who work for an ACS Subcontractor, the applicable ACS
Subcontractor(s), shall be responsible for their own staff assigned to provide Services
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under this Agreement, and, subject to this Article 3, ACS (directly or through ACS
Subcontractors) shall have the sole right to direct and control the management of such staff. ACS
and, in respect of Persons who work for ACS’ Subcontractors, ACS’ Subcontractors, shall: (a)
determine and pay all applicable wages and salaries, including applicable overtime and other
premium pay; (b) provide welfare and retirement benefits, as it deems necessary or desirable; (c)
comply with applicable tax laws, including income tax and employment tax withholding laws; (d)
comply with all applicable laws governing the relationship between ACS or ACS’ Subcontractors and
their respective employees, including laws relating to accommodation of disabilities, equal pay,
provision of leave (e.g., FMLA, jury duty, etc.), unlawful discrimination, as well as wage and
hour law requirements; (e) comply with all workers’ compensation insurance coverage laws; (f) file
all applicable reports with federal, state and local agencies and authorities as required by law;
(g) maintain all required employment records, including 1-9, personnel and medical files
consistent with applicable law and customary business practices; and (h) comply with all
applicable equal employment opportunity laws (including, without limitation, Executive Order 11246
as well as all other related laws and regulations). While at or on the premises of Symetra,
personnel of ACS and ACS’ Subcontractors shall: (i) conduct themselves in a businesslike manner;
and (j) comply with the requests and standard rules of Symetra regarding safety and health and
personal, professional and ethical conduct (including, without limitation, those contained in
Symetra’s employee manuals and other written policies and procedures) as may be required for such
locations.
3.2 Symetra Personnel. The Symetra Project Executive shall act as the primary liaison between
Symetra and the ACS Project Executive and have overall responsibility for the day-to-day oversight
of ACS’ performance under this Agreement and coordination of Symetra’s retained authorities, as
well as the additional personnel described in Section 3.1, in order to perform Symetra’s responsibilities hereunder. If any one of such Symetra personnel is unable to perform the functions
or responsibilities assigned to him or her in connection with this Agreement, or if he or she is no
longer employed by Symetra, Symetra shall replace such person or reassign the functions or
responsibilities to another Person.
3.3 Solicitation of Personnel. Except as provided in Section 10.3.6, during the Term and for
a period of twelve (12) months thereafter, neither Party shall, without the prior written consent
of the other Party, directly or indirectly solicit for employment any employee of the other who is
involved in the performance of this Agreement. Notwithstanding the
foregoing, a Party (the “Recruiting Party”) will not have violated the terms set forth in the preceding sentence if an
employee of the other Party: (a) responds to a general, non-targeted solicitation for employment
issued by the Recruiting Party, such as a newspaper advertisement; or (b) is contacted by a
recruiter for the Recruiting Party, where the recruiter has not been instructed by the Recruiting
Party to target the employees of the other Party.
3.4 Personnel Restriction. With respect to any ACS Project Executive, provided such ACS
Project Executive remains employed by ACS or one of its Affiliates, for a period of twelve (12)
months following the date on which such ACS Project Executive last provided Services to Symetra
hereunder, ACS shall restrict such ACS Project Executive from directly or indirectly, through the
education of other persons or otherwise, providing services to any of the Symetra Competitors.
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ARTICLE 4
ASSETS AND THIRD-PARTY CONTRACTS
ASSETS AND THIRD-PARTY CONTRACTS
4.1 Symetra Retained Equipment.
4.1.1 General. Symetra will furnish to ACS, for ACS’ use at no charge, the equipment owned
by Symetra (the “Symetra-Owned Equipment” ), and the equipment leased by Symetra (the
“Symetra-Leased Equipment” ) that are listed in the applicable Schedule 2, but for each such item of
Symetra-Owned Equipment and Symetra-Leased Equipment, only for that portion of the Term occurring
prior to the date on which, in the case of Symetra-Owned Equipment, Symetra fully depreciates such
item of equipment and, in the case of Symetra-Leased Equipment, the lease expires for such item of
Symetra-Leased Equipment, after which time ACS shall de-install and replace such item of equipment
at ACS’ own cost and comply with Symetra’s reasonable directions regarding the disposal or other
disposition of such item of equipment. The Symetra-Owned Equipment and Symetra-Leased Equipment
will remain the property of Symetra and a Symetra-retained expense; however, ACS shall be
responsible for managing all such equipment. The applicable Schedule 2 shall be deemed to be
updated to include any additional Symetra-Owned equipment and/or Symetra- Leased equipment made
available by Symetra for ACS’ use in providing the Services. Notwithstanding the location of any
Symetra-Owned Equipment or Symetra Leased Equipment at an ACS or other non-Symetra facility, or the
failure to list any item of Symetra-Owned Equipment or Symetra-Leased Equipment on the applicable
Schedule 2, all right, title and interest in and to any Symetra-Owned Equipment and Symetra-Leased
Equipment will be and remain in Symetra, and ACS will have no title or ownership interest in such
Symetra-Owned Equipment and Symetra-Leased Equipment. ACS will provide Symetra with reasonable
access to all Symetra-Owned Equipment or Symetra-Leased Equipment located at an ACS or other
non-Symetra facility, and, notwithstanding any contrary terms that may be contained herein, will be
responsible for all costs and expenses associated with repair or replacement of any Symetra-Owned
Equipment or Symetra-Leased Equipment or any part thereof damaged (reasonable wear and tear
excepted) by the employees, agents or invitees of ACS, its Affiliates and/or its Subcontractors
(excluding Symetra).
4.1.2 Third-Party Approvals. ACS and Symetra shall work together to identify, and Symetra
with ACS’ assistance thereafter will take all actions reasonably necessary to obtain, any consents,
approvals or authorizations from Third Parties as required for ACS to lawfully access, operate,
and use (at or from any location where Services are to be provided) the Symetra-Owned Equipment and
the Symetra-Leased Equipment. Symetra hereby appoints ACS to act as its single point of contact
for all matters pertaining to the Symetra-Owned Equipment and the Symetra-Leased Equipment, and
with Symetra’s approval, ACS promptly will notify all appropriate Third Parties of such
appointment. Symetra may at any time revoke such appointment and/or exercise control over ACS’
actions with respect to such Third Parties.
4.1.3 Return of Symetra Equipment. Unless a later return date is requested by Symetra,
thirty (30) calendar days following any expiration or termination of this Agreement, ACS will
return each item of Symetra-Owned Equipment and Symetra-Leased Equipment to Symetra (excluding
those items of equipment that previously were replaced by ACS as described in Section 4.1.1) in
substantially the same condition it was in when initially provided to ACS, reasonable wear and tear
excepted.
4.2 ACS Equipment. “ACS Equipment” means equipment owned, leased or otherwise held by ACS
that is dedicated solely to ACS providing the Services. Notwithstanding the location of
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ACS Equipment at a Symetra facility, all right, title and interest in and to any such ACS
Equipment will be and remain in ACS, and Symetra will not have any title or ownership interest in
the ACS Equipment.
4.2.1 Use of ACS Equipment by ACS Employees. ACS may provide ACS Equipment for use by ACS
employees on behalf of Symetra, at no additional charge to Symetra.
4.2.2 Provision of ACS Equipment to Symetra. ACS may, upon mutual agreement with Symetra as to
equipment and charges (if any), provide to Symetra certain ACS Equipment at mutually agreed
location(s), and on a mutually agreed delivery schedule. With the advice of ACS, Symetra will
prepare and maintain at Symetra’s cost and expense any Symetra facility in which ACS Equipment will
be installed in accordance with the manufacturers’ specifications and all applicable codes,
statutes, regulations and standards.
4.2.3 Installation of ACS Equipment. ACS will arrange for, and will determine the mode of
transportation and installation of each item of ACS Equipment to such location(s) as may be
mutually agreed to by the Parties. If Symetra relocates any Symetra facility in which ACS Equipment
may be installed, Symetra will be responsible for the relocation costs of such ACS Equipment. If
ACS requests the relocation of any ACS Equipment, ACS shall be responsible for the associated
relocation costs.
4.2.4 Maintenance of ACS Equipment. ACS will be responsible for maintaining all ACS Equipment
after installation at a Symetra location; provided, however, that Symetra will be responsible for
all costs and expenses of repair or replacement to correct any damage to ACS Equipment or any part
thereof (reasonable wear and tear excepted) caused by Symetra, or one of their employees, agents
or invitees (exclusive of the employees, agents and/or invitees of ACS, its Affiliates and/or its
Subcontractors).
4.3 Software.
4.3.1 ACS-Licensed Third Party Software.
(a) Category 1 Software. Schedule L to this Agreement sets forth the software that is
owned by a Third Party and licensed by ACS and/or any of its Affiliates on an enterprise-wide
basis (meaning pursuant to a license that is not specific to Symetra) that Symetra agrees ACS may
use to provide the Services (together with all supporting documentation, media and related
materials, including all modifications, enhancements, updates, replacements and other Derivative
Works thereof, the “Category 1 Software”). ACS shall grant to Symetra, its Affiliates and their
employees and independent contractors the right to use, or receive the benefit of the use by ACS
of, the Category 1 Software during the Term and during the Disentanglement Period. If and as
requested by Symetra during the Disentanglement Period and at no additional charge to Symetra,
ACS shall assist Symetra, its Affiliates and/or the Replacement Provider in procuring a license,
and in securing maintenance and support, with respect to the Category 1 Software commencing on the
Expiration Date and continuing thereafter for as long as Symetra requires at competitive rates
(which license and maintenance and support fees shall be paid by Symetra). Except as provided in
the preceding sentence, all costs and expenses associated with the Category 1 Software including,
without limitation, license, maintenance and support, implementation and/or upgrade fees, shall be
deemed to be included in the Fees. All right, title and interest in
and to the Category 1 Software
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(excluding Derivative Works that contain Work Product) shall remain with the
applicable Third Party.
(b) Category 2 Software. Schedule L to this Agreement sets forth the software that is
owned by a Third Party and licensed by ACS and/or its Affiliates solely for use in
performing its obligations under this Agreement (meaning pursuant to a license that is
specific to Symetra) that Symetra agrees ACS may use to provide the Services (together with
all supporting documentation, media and related materials, including all modifications,
enhancements, updates, replacements and other Derivative Works thereof, the “Category 2
Software” ). ACS shall obtain for Symetra a non-exclusive, non-transferable, fully paid
license for Symetra, its Affiliates and their employees and independent contractors to use,
or receive the benefit of the use by ACS, of the Category 2 Software during the Term and
during the Disentanglement Period. If ACS is unable to procure such a license, ACS shall so
notify Symetra in writing and Symetra may: (i) waive all or any portion of the foregoing
license scope requirements in writing; or (ii) become directly involved in negotiations with
the Third Party. ACS shall also procure the advance consent of each Third Party software
vendor of Category 2 Software to an assignment to Symetra, its Affiliates and/or the
Replacement Provider, of the license agreement between such Third Party software vendor and
ACS during the Disentanglement Period. If such consent cannot be obtained from any Third
Party software vendor, ACS shall so notify Symetra in writing, and Symetra may: (iii) waive
this requirement in writing; or (iv) elect to license the applicable Category 2 Software
directly from the applicable Third Party software vendor. If Symetra licenses such Category
2 Software directly from the Third Party software vendor, the software shall be deemed
Category 3 Software for purposes of this Agreement. If and as requested by Symetra during
the Disentanglement Period and at no additional charge to Symetra, ACS shall assist Symetra,
its Affiliates and/or the Replacement Provider in procuring a license (if necessary) and
securing maintenance and support with respect to the Category 2 Software commencing on the
Expiration Date and continuing thereafter for as long as Symetra requires at competitive
rates (which license (if any) and maintenance and support fees shall be paid by Symetra).
All costs and expenses associated with the Category 2 Software including, without
limitation, license, maintenance and support, implementation and/or upgrade fees (but
excluding any assignment-related consent fees as described above), shall be deemed to be
included in the Fees. All right, title and interest in and to the Category 2 Software
(excluding Derivative Works that contain Work Product) shall remain with the applicable
Third Party.
4.3.2 Symetra-Licensed Third Party Software.
(a) Category 3 Software. Schedule L sets forth certain Third Party software licensed
by Symetra that ACS may access and/or use in providing the Services during the Term and
during the Disentanglement Period (“Category 3
Software” ). Symetra will attempt to secure
the appropriate consents and approvals required to enable ACS to access and/or use the
Category 3 Software, and if it is unable to do so, the terms of Section 4.3.2(c) shall
apply. ACS will pay all required license, maintenance and support, implementation and
upgrade fees with respect to the Category 3 Software (up to those amounts that ACS would
have been required to pay if such Software constituted Category 2 Software), and Symetra
shall pay all required costs and expenses (including, without limitation, license and
consent charges imposed by software vendors) required to permit usage by ACS of the
Category 3 Software under this Agreement. All right, title and interest in and to the
Category 3 Software
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(excluding Derivative Works that contain Work Product) shall remain with the
applicable Third Party.
(b) Category 4 Software. Schedule L sets forth certain Third Party software licensed
by Symetra that ACS may access and/or use in providing the Services during the Term and
during the Disentanglement Period (“Category 4
Software” ). Symetra will attempt to secure
the appropriate consents and approvals required to enable ACS to access and/or use the
Category 4 Software, and if it is unable to do so, the terms of Section 4.3.2(c) shall
apply. Symetra will pay all required: (i) license and maintenance fees, including fees
associated with the purchase of any upgrades, with respect to the Category 4 Software; and
(ii) all costs and expenses (including, without limitation, license and consent charges
imposed by software vendors) required to permit usage by ACS of Category 4 Software under
this Agreement. All right, title and interest in and to the Category 4 Software (excluding
Derivative Works that contain Work Product) shall remain with the applicable Third Party.
(c) Consents and Approvals. If any consents or approvals under this Section 4.3.2 are
required to be obtained but are not reasonably available, Symetra will not be required to
obtain them, and Symetra and ACS agree to negotiate in good faith as to the impact of the
lack of consent and to produce a reasonable alternative.
4.3.3 Category 5 Software. Schedule L sets forth the software that is owned by ACS and/or
any of its Affiliates that Symetra agrees ACS may use to provide the Services (together with all
supporting documentation, media and related materials, including any and all modifications,
enhancements, updates, replacements and other Derivative Works
thereof, the “Category 5 Software” ). ACS shall grant to Symetra a non-exclusive, non-transferable (except in accordance with
Section 19.5), fully paid, license for Symetra, its Affiliates and their employees and
independent contractors to use, or receive the benefit of the use by ACS of, such Category 5
Software during the Term and during the Disentanglement Period. All costs and expenses associated
with the Category 5 Software including, without limitation, license, maintenance and support,
implementation and/or upgrade fees, shall be deemed to be included in the Fees. All right, title
and interest in and to the Category 5 Software (excluding Derivative Works that contain Work
Product) shall remain with ACS.
4.3.4 Category 6 Software. Schedule L sets forth the software that is owned by Symetra
and/or any of its Affiliates that Symetra may instruct ACS to use in connection with the Services
(together with all supporting documentation, media and related materials, including any and all
modifications, enhancements, updates, replacements and other Derivative Works thereof, the
“Category 6 Software” ). All right, title and interest in and to the Category 6 Software shall
remain with Symetra and/or its Affiliates, and ACS will have no ownership interests or other rights
in the Category 6 Software, provided that Symetra grants to ACS the right to access and use the
Category 6 Software as necessary to provide the Services. The Category 6 Software will be made
available to ACS in such form and on such media as ACS may reasonably request, together with
existing documentation and other available materials. If ACS is authorized to make any changes to
any Category 6 Software, such changes will be authorized by the change management procedure to be
developed as part of the Standards and Procedures Manual. ACS will document any such changes, and
all such changes shall constitute Category 6 Software and shall be treated as Work Product for
purposes of this Agreement. Without Symetra’s prior written permission, ACS will not access or use
the Category 6 Software for any purpose other than the provision of Services hereunder.
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4.4 Assigned Contracts. Attachment H sets forth the written support, maintenance and other
agreements that are expected to be assigned to ACS for use in providing the Services. If any
agreement inadvertently was omitted from such Schedule, at Symetra’s request, the Parties shall
work together in a cooperative manner to effectuate the assignment of such agreement to ACS. If
Symetra is unable to effectuate an assignment of any of such agreements, such agreements shall
become subject to the terms of Section 4.5.
4.5 Managed Contracts. Attachment I sets forth the support, maintenance and other agreements
that will be managed by ACS as part of the Services (collectively,
the “Managed Contracts” ). If
any agreement inadvertently was omitted from such Schedule, at Symetra’s request, the Parties shall
add such agreement to Attachment I. Symetra will attempt to secure the appropriate consents and
approvals required to enable ACS to perform its obligations relating to the Managed Contracts. If
any such consents or approvals are not reasonably available, Symetra will not be required to
obtain them, and Symetra and ACS agree to negotiate in good faith as to the impact of the lack of
consent and to produce a reasonable alternative. Symetra hereby appoints ACS to act during the Term
as its single point of contact for all matters pertaining to the Managed Contracts, and with
Symetra’s approval, ACS promptly will notify all appropriate Third Parties of such appointment.
Symetra may at any time revoke such appointment and/or exercise reasonable control over ACS’ actions with respect to such Third Parties as it relates to the provision of Services.
4.6 Further Assurances. Symetra and ACS agree to execute and deliver such other instruments
and documents as either Party reasonably requests to evidence or effect the transactions
contemplated by this Article 4.
4.7 Use of Symetra Facilities. Symetra shall make reasonably necessary office space,
furnishings, and storage space (the “Symetra Facilities”) available to ACS’ on-site personnel performing Services at any Symetra Site throughout the Term and shall maintain Symetra Facilities in
areas and at a level similar to that which it maintains for its own employees performing similar
work. Office space, furnishings, storage space, and assets installed or operated on Symetra
premises, and supplies allocated, are provided “AS IS, WHERE IS,” and “WITH ALL FAULTS”. Symetra
shall provide ACS reasonably unencumbered access to such facilities as is reasonably required for
ACS to provide the Services. Any furnishings (other than basic office furnishings) and office
supplies for the use of ACS’ (and its Subcontractors’) personnel are the exclusive responsibility
of ACS. ACS shall be entitled to make improvements and/or structural, mechanical and/or electrical
changes to any space where ACS’ personnel are performing Services on-site at any Symetra Site,
provided that: (i) such improvements shall have been previously approved in writing by Symetra
(which approval may be withheld in Symetra’s sole discretion); (ii) such improvements shall be made
at no cost or expense to Symetra; (iii) any contractors used by ACS to perform such improvements
shall have been identified or otherwise approved in writing by Symetra; and (iv) Symetra shall be
granted, without further consideration, all rights of ownership in such improvements.
4.7.1 Specific Hardware and Carrier Charges. ACS shall provide and be responsible for all
such telephone and modem lines, telephones, computers and peripheral devices, computer
connections, and network access, as may be necessary for ACS to provide the Services. ACS shall be
responsible for all usage-based carrier charges incurred by ACS personnel and all usage-based
carrier charges incurred to provide a telecommunications link between ACS and any Symetra Site.
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4.7.2 Access to Personnel and Information. The Parties shall cooperate with each other in all
matters relating to ACS’ performance of the Services. With respect to Symetra, such cooperation
shall be limited to providing, as reasonably required by ACS for the performance of the Services,
access to Symetra’s administrative and technical personnel, other similar personnel, and network
management records and information.
4.7.3 Other Facility-Related Obligations. Except as expressly provided in this Agreement,
ACS shall use Symetra Facilities for the sole and exclusive purpose of providing the Services to
Symetra. Use of such facilities by ACS does not constitute a leasehold interest in favor of ACS.
ACS shall use Symetra Facilities in a reasonably efficient manner. The employees and agents of
ACS, and its Subcontractors shall keep the Symetra Facilities in good order, shall not commit or
permit waste or damage to such facilities, and shall not use such facilities for any unlawful
purpose or act. ACS shall comply, and shall cause its employees and
the employees of its Subcontractors to comply, with all applicable laws and regulations, including all of Symetra’s standard
policies and procedures that are provided to ACS in writing regarding access to and use of Symetra
Facilities, including procedures for the physical security of the Symetra Facilities. When Symetra
Facilities are no longer required for performance of the Services, ACS shall return such
facilities to Symetra in substantially the same condition as when ACS began use of such facilities,
subject to reasonable wear and tear. ACS shall not cause the breach of any lease agreements
governing use of Symetra Facilities.
ARTICLE 5
RETAINED AUTHORITIES
RETAINED AUTHORITIES
5.1 General. Symetra shall retain the exclusive right and authority to set Symetra’s IT
strategy and to determine, alter, and define any or all of Symetra’s requirements and operational
and/or business processes and procedures. Symetra shall have the right to approve or reject any or
all proposed decisions regarding infrastructure design, technical platform, architecture and
standards and, subject to the change management procedures that will be developed as part of the
Standards and Procedures Manual, will have the right and authority to cause ACS at any time to
change any or all of the foregoing. If ACS can demonstrate that a particular exercise of Symetra’s
rights and authorities as stated in this Section may interfere with or degrade ACS’ provision of
the Services or have a materially detrimental impact on ACS’ cost of providing the Services or time
for delivery of the Services, the Parties shall mutually agree to any proposed exercise of such
right or authority pursuant to the terms of change management procedures that will be developed as
part of the Standards and Procedures Manual prior to the implementation thereof. Symetra shall
consult with ACS to inform ACS of significant changes in Symetra’s IT strategy and changes in its
requirements and business processes relating to the Services. ACS shall actively participate in
any of the foregoing as Symetra requests and shall provide Symetra with advice, information and
assistance in identifying and defining IT projects and future IT requirements to meet Symetra’s
objectives.
5.2 Specific Retained Authorities. Without limiting the generality of Section 5.1,
Symetra shall retain exclusive authority, discretion and rights of approval with respect to
the activities described in this Section 5.2, and ACS shall obtain Symetra’s prior written
approval before undertaking any such activities.
5.2.1 Strategic and Operational Planning. Symetra shall retain exclusive authority,
discretion and rights of approval with respect to strategic and operational planning, which
includes the following:
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(a) developing a series of comprehensive standards and planning guidelines pertaining
to the development, acquisition, implementation, and oversight and management of IT
systems;
(b) identifying and implementing opportunities for reducing costs for IT systems
considering alternatives suggested by ACS;
(c) approving or disapproving, in accordance with guidelines established by Symetra,
each proposed acquisition of hardware or software for an IT system;
(d) approving or disapproving, in accordance with guidelines established by Symetra,
all requests or proposed contracts for consultants for IT systems;
(e) defining and evaluating IT services, including service availability and minimum
acceptable service levels; service specifications and standards; selection of suppliers;
security requirements; scheduling, prioritization, and service conflict resolution among
End-Users; help desk rules; and general operational management guidelines; and
(f) service-provider strategy, including selection of providers; specialized provider
relationships (e.g., telecommunications); and quality assurance standards.
5.2.2 Service Design and Delivery. Symetra shall retain exclusive authority, discretion and
rights of approval with respect to service design and delivery, which includes the following:
(a) selecting designs of specific technologies and services from alternatives
suggested by ACS;
(b) selecting specific technologies, hardware and software from alternatives suggested
by ACS for implementation of such designs;
(c) selecting providers of specific technologies, hardware and software from
alternatives suggested by ACS; and
(d) selecting implementation schedules and activities from alternatives suggested by
ACS.
5.2.3 Moves, Adds and Changes. Symetra shall retain exclusive authority, discretion and
rights of approval with respect to ordering move, add and change activities.
5.2.4 Business Process Reengineering. Symetra shall retain exclusive authority, discretion
and rights of approval with respect to any business process reengineering opportunities identified
by ACS. The Parties shall ensure that performance metrics related to any business process
reengineering are accurately and appropriately developed. Notwithstanding anything contained in
this Section 5.2.4 or anywhere else in this Agreement to the contrary, Symetra shall retain sole
control over its business operations.
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5.2.5 Contract Management. Symetra shall retain exclusive authority, discretion and rights of
approval with respect to managing this Agreement and Symetra’s relationship with ACS.
5.2.6 Budget Management. Symetra shall retain exclusive authority, discretion and rights of
approval with respect to managing Symetra’s annual budget for all Symetra operations, utilizing
ACS’ estimates for Services included in the scope of this Agreement and for additional services
planned or anticipated throughout the Term.
5.2.7 Validation and Verification. Symetra shall retain exclusive authority, discretion and
rights of approval with respect to performing validation and verification activities in relation to
key projects and operational processes.
5.2.8 Review and Acceptance.
(a) General. Symetra shall have the right to review and accept or reject all
components, deliverables and systems to be provided by ACS to Symetra under this Agreement,
pursuant to the methodology set forth in this Section.
(b) Acceptance Testing. Following ACS’ notification to Symetra that ACS has completed
any component or deliverable identified in this Agreement, including In- Scope Service
Requests and Out-of-Scope Work Orders, at a mutually agreed scheduled time thereafter,
Symetra shall begin testing the component or deliverable to determine whether such component
or deliverable conforms to the applicable specifications and/or standards (collectively, the
“Acceptance Criteria”). After Symetra has completed such testing or upon expiration of the
agreed-upon testing period (the “Acceptance Testing Period”), Symetra shall notify ACS in
writing either that: (i) the component or deliverable meets the Acceptance Criteria and
that acceptance of such component or deliverable has occurred (“Acceptance”); or (ii) the
Acceptance Criteria have not been met and, in accordance with subsection (c) below, the
reasons therefor. If the component or deliverable is identified as being part of a larger,
integrated system being developed thereunder, then any Acceptance under the terms of this
subsection shall be understood as being conditional acceptance (“Conditional Acceptance”),
and such component or deliverable shall be subject to Final Acceptance in accordance with
subsection (d) below.
(c) Cure. If Symetra determines that a component or deliverable does not conform to
the applicable Acceptance Criteria, Symetra promptly shall deliver to ACS an exception
report describing the nonconformity (the “Exception Report”). Within thirty (30) calendar
days following receipt of the Exception Report, ACS shall: (i) perform a Root- Cause
Analysis to identify the cause of the nonconformity; (ii) provide Symetra with a written
report detailing the cause of, and procedure for correcting, such nonconformity; (iii) provide Symetra with satisfactory evidence that such nonconformity will not recur; and (iv)
cure the nonconformity; provided, however, that if the nonconformity is incapable of cure
within such thirty (30) calendar day period then, within such thirty (30) calendar day
period, ACS shall present to Symetra a mutually agreeable plan to cure such nonconformity
within a reasonable amount of time. Upon ACS’ notice to Symetra that ACS has cured any such
nonconformity, Symetra shall re-test the defective component or deliverable for an
additional testing period of up to thirty (30) calendar days or such other period as the
Parties may mutually
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agree
upon in writing, at the end of which period the process described in
subsection (b) above shall be repeated.
(d)
Final Acceptance. Upon achievement of Conditional Acceptance for all identified
components or deliverables, Symetra shall begin testing the system that is comprised of such
components or deliverables using the applicable test procedures and standards to determine
whether such system performs as an integrated whole in accordance with the Acceptance
Criteria. After Symetra has completed such testing or upon expiration of the testing period
(the “Final Acceptance Testing Period”), Symetra shall notify ACS in writing that: (i) the
system, and all components and deliverables that are a part thereof, meet the Acceptance
Criteria and that final acceptance of the system and such components and deliverables has
occurred (“Final Acceptance”); or (ii) that the Acceptance Criteria have not been met and,
in accordance with subsection (b) above, the reasons therefor. If Symetra determines that
the Acceptance Criteria have not been so met, the process described
in subsection (b) above
shall be initiated, with all references to “component or deliverable” being references to
the “system,” and all references to the “Acceptance Testing Period” being references to the
“Final Acceptance Testing Period.” Neither Conditional Acceptance, Acceptance, nor Final
Acceptance by Symetra shall constitute a waiver by Symetra of any right to assert claims
based upon defects not discernable through conduct of the applicable test procedures and
subsequently discovered in a component or deliverable or the system following Symetra’s
Final Acceptance thereof. Nothing else, including Symetra’s use of the system, or any
component thereof, shall constitute Final Acceptance, affect any rights and remedies that
may be available to Symetra and/or constitute or result in “acceptance” under general
contract law, any state uniform commercial code or any other law.
ARTICLE 6
FEES AND PAYMENT TERMS
FEES AND PAYMENT TERMS
6.1 Fees.
6.1.1 General. As the sole and entire financial consideration for all of the Services to be
performed by ACS hereunder and for all of the other tasks, services and obligations of ACS, Symetra
shall pay to ACS the amounts set forth in this Article 6. Except as otherwise expressly stated in
this Article 6, and as otherwise provided in this Agreement, Symetra shall not be obligated to pay
ACS any additional fees, assessments, reimbursements or labor and/or general business expenses
(including travel, meals and overhead expenses) for the Services and other obligations of ACS
hereunder.
6.1.2 Transition Services. For and in consideration of ACS’ provision of the transition
Services pursuant to the terms of the Transition Plan, Symetra shall pay to ACS the Fees for
transition Services specified in Schedule 3 in accordance with the payment terms set forth therein.
6.1.3
Annual Services Fees. The “Annual Services Fees” for the Services are set forth in
Schedule 3 and, subject to the terms of
Sections 2.3.3 and 6.3, shall be invoiced monthly in twelve
(12) equal payments commencing, for each of the Service Tower Services, on the applicable Handover
Date.
6.1.4 Service Rates. Services not included in the Services or otherwise designated in this
Agreement as “other services” (collectively,
“Other Services”) that are available from ACS on
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a time-and-materials basis, will be provided at rates that do not exceed the hourly service
rates set forth in Schedule 4 (“Service Rates”). The Service Rates may be increased by ACS once
annually commencing on the first anniversary of the Effective Date; provided, however, that such
annual increases shall not exceed the lesser of: (a) the most recent increase in the CPI; and (b)
three percent (3%), in each case of the then-current Service Rates. ACS shall not increase the
billing rate for a particular individual who is assigned to a Symetra project as a result of a
promotion, change in job classification or otherwise without Symetra’s prior written consent, it
being the understanding of the Parties that Symetra does not expect any rate changes during the
course of a particular project. Additionally, ACS shall bill Symetra in increments of not more than
one (l)-hour for all Other Services provided, and shall in no event bill Symetra for travel time.
6.1.5 Taxes.
(a) ACS’ Taxes. The Fees to be paid by Symetra are inclusive of taxes legally imposed
on ACS, including: (i) all applicable sales, use, gross-receipts or value- added, excise,
personal property or other similar taxes based upon or measured by ACS’ cost in acquiring or
providing equipment, materials, supplies or third party services furnished to or used by ACS
in providing and performing the Services; (ii) all taxes payable by ACS with respect to its
net worth, net income or profits; and (iii) other taxes legally imposed on ACS such as
franchise taxes, ad valorem taxes on its owned or leased property, employment taxes with
respect to its employees, intangibles taxes on property it owns or licenses, and the
Washington business and occupation tax.
(b) Symetra’s Taxes. Notwithstanding Section 6.1.5(a), if any sales, use, privilege,
value added, excise, gross receipts, services and/or similar tax that ACS is authorized by
law to collect from or otherwise pass through to Symetra is imposed on, based on, or
measured by any consideration for the provision of the Services by ACS to Symetra under this
Agreement, Symetra shall be responsible for and pay the amount of any such tax to ACS, or to
the appropriate tax authority as the law may otherwise require, in addition to the Fees.
(c) Cooperation to Minimize Tax Liability. The Parties agree to reasonably cooperate
with each other in good faith to more accurately determine and reflect each Party’s tax
liability and to minimize such liability to the extent legally permissible. Each Party
shall provide and make available to the other any resale certificates, multi-state benefit
certificates, exemption certificates or other evidence of exemption from tax reasonably requested by either Party. The Parties will also work together to segregate the Fees and other
amounts payable hereunder into separate payment accounts charged under separate invoices, as
appropriate, for Services and the components of the Services (i.e., components that are
taxable and nontaxable, including those for which a sales, use or similar tax has already
been paid by ACS and for which ACS functions merely as a paying agent for Symetra in
receiving goods, supplies or services including licensing arrangements that otherwise are
nontaxable or have previously been subjected to tax, components that are capitalized, and
components that are expensed).
6.1.6
Currency. Except as set forth herein, all pricing in
Schedule 3 and Schedule 4 shall be
expressed in United States Dollars. Any payments made in local currency other than United States
Dollars (a “Local Currency”) shall be converted into United States Dollars based on the official
exchange rate posted in the U.S. morning edition of the Wall Street Journal on the thirtieth
(30th) day of the month preceding the month in which the currency transaction occurs. By
way of
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example, if a transaction involving a conversion of Local Currency into United States
Dollars takes place on February 15, 2005, the Local Currency shall be converted into United States
Dollars at the exchange rate set forth in the US morning edition of the Wall Street Journal on
January 30,2005.
6.2 Adjustments to Fees.
6.2.1 Terminated Services. If, in accordance with the terms set forth in Sections 9.2
and/or 9.5, Symetra terminates or reduces all or any portion of the Services to be provided
here-under, then the Fees relating to such terminated Services shall be appropriately reduced, and
such reduction shall apply as of the applicable Termination Date(s).
(b) 6.2.2
(a) General. Schedule 5, as the same will be updated as provided in subsections
(b) and (c) below, specifies certain Fee Reductions that will be applicable with respect to
ACS’ actual performance as measured against the Critical Milestones and the SLAs. The
Parties agree that the Fee Reductions reflect the diminished value of the Services as a
result of any ACS failure to timely achieve a Critical Milestone and/or to provide the
Services in accordance with the SLAs, and accordingly do not constitute, shall not be
construed or interpreted as, and shall not be argued by ACS to be, penalties. Fee
Reductions shall in no event be the sole and exclusive remedy of Symetra with respect to any
failure of ACS as described in this Section.
(b) Weighting Factors. Symetra shall have the right to: [***] and (iii) for any new
Critical Milestones that will be applicable during the upcoming Contract Year, establish
Weighting Factors for each such Critical Milestone.
(c) Calculation of Fee Reductions. All Fee Reductions will be calculated on a monthly
basis in accordance with the terms set forth in Schedule 5 and reflected on the next monthly
invoice to Symetra following such calculation. Additionally, in the first month of each
Contract Year commencing with the second Contract Year, the Parties shall calculate the
total of all actual fees for the prior Contract Year and re-calculate all Fee Reductions
incurred during the prior Contract Year based on such amount. The resulting amount shall be
compared to the actual Fee Reductions that were applied to Symetra’s invoices during the
prior Contract Year, and if such resulting amount demonstrates that additional Fee
Reductions are owed to Symetra, then a credit for the difference in such amounts shall be
applied by ACS to the first month’s invoice in the then-current Contract Year, and if the
resulting amount demonstrates that ACS overpaid Fee Reductions, then ACS shall invoice
Symetra for the difference on the first month’s invoice in the then-current Contract Year.
6.2.3 Baselines and ARCs and RRCs. The initial Baselines for each of the Service Tower
Services are set forth in Schedule 3. Promptly following ACS’ completion of an initial asset
inventory as provided in Section 2.5.5, the Parties shall meet to review the accuracy of the
initial Baselines set forth in Schedule 3 and, if appropriate, agree upon any necessary adjustments
to such Baselines and associated pricing. Thereafter, on an annual basis commencing on the first
anniversary of the last Handover Date to occur under this Agreement, the Parties shall adjust all
such Baselines to be equal to Symetra’s actual average resource consumption for each such Baseline
over the prior twelve (12) month period, with an appropriate corresponding adjustment to the
then-current Annual Services Fees. Further, upon the addition or divestiture of a Symetra
Affiliate as described in Section 6.2.4, the Parties shall appropriately adjust all Baselines, and
the then-current Annual Services Fees, to reflect the new Symetra Services volumes associated with
such addition or divestiture. ARCs and RRCs that are applicable to each of the Service Tower
Services, and the methodology for applying such ARCs and RRCs, are set forth in Schedule 3.
6.2.4 Addition or Divestiture of Affiliates and Business Ventures. ACS acknowledges that,
following the Effective Date, Symetra may want to add additional Affiliates and/or business
ventures of Symetra and/or its Affiliates (including adding new lines of business, adding new
services and products, and acquiring additional blocks of business from Third Parties that complement Symetra’s current businesses and services) to the scope of this Agreement and/or reduce the
number of Affiliates or existing business ventures included within the scope of this Agreement, in
each case as a result of Symetra’s and/or its Affiliates’ acquisition and divestiture activities.
If Symetra wants to add an additional Affiliate or an additional business venture of Symetra and/or
its Affiliates to the scope of this Agreement, provided such additional Affiliate or business
venture is not an ACS Competitor, the Parties shall work together cooperatively and in good faith
to incorporate such Affiliate or business venture within the scope of this Agreement including,
without limitation, by developing an appropriate transition plan; however:
(a) if ACS will be providing Services to such new Affiliate and/or business venture
that are included within the scope of the Service Tower Services that are then being
provided to Symetra and/or its Affiliates hereunder and: (i) the addition of such Affiliate
and/or business venture will not result in ACS’ provision of a volume of any such Services
that surpasses the upper Pricing Band limit for such Services as specified in Schedule 3,
the pricing for Service Tower Services set forth in Schedule 3 shall apply; or (ii) the
addition of such Affiliate and/or business venture will result in the provision of a volume
of any such Services that surpasses the upper Pricing Band limit for such Services as
specified
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in
Schedule 3, the Parties shall engage in good faith negotiations in order to arrive at new
pricing for the affected Service Tower Services;
(b) if ACS will be providing Services to such new Affiliate and/or business venture that are
not included within the scope of the Service Tower Services that are then being provided to Symetra
and/or its Affiliates hereunder, the Parties shall engage in good faith negotiations in order to
arrive at pricing for such new Service Tower Services; and
(c) Symetra shall be responsible for mutually agreed, reasonable set-up costs and expenses
required to accommodate such addition including, without limitation, resource expenses, software
license and consent fees and other similar expenses incurred by ACS in effecting such request.
Symetra (and not its Affiliates) shall be responsible for paying all Fees to be paid to ACS
hereunder. Any SLRs that will be applicable to such new Affiliate and/or business venture shall
become effective not later than ninety (90) calendar days following conclusion of the applicable
transition period. If Symetra divests an Affiliate or exits an existing business venture and wants
to reduce the number of Affiliates or scope of Services included within the scope of this
Agreement, then: (d) Symetra shall so notify ACS and, at Symetra’s option, all or any portion of
the terms of Article 10 shall apply with respect to such divested Affiliate or business venture;
and (e) neither Symetra nor any of its Affiliates shall be obligated to pay a Termination Fee to
ACS as a result of any such scope reduction; however, if and to the extent the divestiture of such
Affiliate and/or business venture will result in ACS providing a volume of any Service Tower
Services that surpasses the lower Pricing Band limit for such
Services as specified in Schedule 3,
the Parties shall engage in good faith negotiations in order to arrive at new pricing for the
affected Service Tower Services.
6.2.5 Set Off. Symetra may set off against any and all amounts otherwise payable to ACS
pursuant to any of the provisions hereof any and all amounts owed by ACS to it including, without
limitation, any Fee Reductions. Within twenty (20) calendar days following any such set off,
Symetra shall provide to ACS a written accounting of such set off and a written statement of the
reasons therefor.
6.3 Invoices.
6.3.1 Services. As of the Effective Date, ACS shall be required to submit monthly invoices to
Symetra for the Services provided hereunder. Invoices shall be in the format as set forth in
Attachment J, and any changes in the monthly invoice formats shall be approved by Symetra in
advance of such changes. All invoices will be subject to Symetra’s review and approval prior to
payment. ACS shall not submit invoices: (a) for Fixed Charges, prior to the first day of the month
in which the invoiced Services will be provided; and (b) for Variable Charges, prior to the last
day of the month in which the invoiced Services were provided. Invoices must provide detailed and
customized information as requested by Symetra. Such detailed and customized information may
include, without limitation, general fee visibility and billing requirements that are consistent
with Symetra’s specific financial requirements and practices. Invoices shall be accompanied by the
SLR Reports and other information and data that support the invoiced Fees, including ARCs and RRCs,
as well as any Fee Reductions. Unless subject to a dispute as provided in Section 6.4, invoices for
Fixed Charges are payable within thirty (30) calendar days after receipt of an invoice that
complies with the requirements of this Agreement, and invoices for Variable Charges are payable
within [***]
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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after receipt of an invoice that complies with the requirements of this Agreement. Late
payments of undisputed and otherwise payable amounts will bear
interest at the Interest Rate.
6.3.2 Other Services. The invoicing milestones for Other Services Fees will be determined by
the Parties on a case-by-case basis. ACS’ invoices for Other Services shall include documentation
that references Symetra’s authorizing documentation, Symetra’s account number, charges and
description. No invoice with respect to Other Services shall be paid unless such Other Services
were pre-authorized in writing by Symetra.
6.4 Disputed Amounts. Symetra shall have the right to dispute any ACS invoice. Subject to and
in accordance with the provisions of this Section 6.4, Symetra may withhold payment of any ACS
invoice (or part thereof) for Variable Charges that it in good faith disputes as due or owing, but
absent any termination of this Agreement, shall not be entitled to withhold any payments due and
owing for Fixed Charges. In such case, Symetra shall pay any undisputed amounts and provide to ACS
a written explanation of the basis for the dispute. The failure of Symetra to pay a disputed
invoice for Variable Charges, or to pay the disputed part of an invoice for Variable Charges, shall
not constitute a breach or default by Symetra, so long as Symetra complies with the provisions of
this Section 6.4. Any dispute relating to amounts owed by a Party hereunder shall be considered a
Problem and resolved pursuant to Article 17. All of ACS’ obligations under this Agreement shall
continue unabated during the dispute resolution process.
ARTICLE 7
RECORDKEEPING AND AUDIT RIGHTS
RECORDKEEPING AND AUDIT RIGHTS
7.1 Recordkeeping. ACS shall maintain complete and accurate financial and accounting
records and books of account relating to its performance of Services under this Agreement,
including electronic copies of all such records and books, utilizing generally accepted accounting
principles (“GAAP”), consistently applied. Further, ACS shall maintain transaction-level
documentation, such as supporting invoices, purchase orders, bills of lading, tax returns,
exemption certificates and other relevant documents, in each case to the extent relating to its
performance of Services under this Agreement. Such records, books and documentation relating to
ACS’ performance of the Services under this Agreement, and the accounting controls related thereto,
shall constitute ACS Confidential Information and shall be sufficient to provide reasonable
assurances that:
(a) transactions are recorded so as to permit ACS to prepare its financial statements in
accordance with GAAP and to maintain accountability for its assets; and
(b) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Such records, books and documentation relating to ACS’ performance of Services under this Agreement
shall be maintained by ACS at a location(s) made known to Symetra upon Symetra’s request, and
Symetra (or its designees) shall have the right to examine and make extracts of information and
copy any part thereof at such times during normal business hours as ACS and Symetra shall mutually
agree, but in no event later than ten (10) business days after Symetra’s written request to ACS,
unless a shorter time frame is necessary to enable Symetra to comply with any regulatory
requirement. ACS shall retain and maintain accurate records, books and documentation relating to
its performance of Services under this Agreement until the latest of: (i) seven (7) years after the
final payment to ACS hereunder; (ii) one (1) year following the final resolution of all audits or
the conclusion of any
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litigation with respect to this Agreement; or (iii) such longer time period as may be required
by applicable federal, state, local and/or international laws or regulations, including tax laws.
7.2 Operational Audits. Upon Symetra’s request, but no more often than once annually except:
(a) as necessary for Symetra to respond to any regulatory requirement or inquiry; or (b) as deemed
reasonably necessary by Symetra as a result of Symetra’s good faith belief that ACS has breached
any of its obligations hereunder and such breach has exposed, or in Symetra’s reasonable judgment,
is likely to expose, Symetra to financial or other liabilities in
excess of [***], ACS shall allow
Symetra and/or any independent Third Party selected by Symetra from among the firms listed on
Attachment Q, or any other firm that may then be agreed to by the Parties, to perform operational
and/or security audits with respect to ACS’ performance of its obligations hereunder. If a firm
listed on Attachment Q might otherwise be ineligible to act as Symetra’s auditor under this Section
due to a conflict of interest arising from a former or current representation of ACS, ACS and
Symetra agree that such conflict may be eliminated by the audit firm’s creation of an ethical wall
or other screening procedure satisfactory to both parties. ACS shall grant, and shall cause its
Subcontractors to grant, Symetra and its Third Party representatives full and complete access to
ACS’ and its Subcontractors’ facilities (including, without limitation, the Symetra-specific
network and systems environments so that vulnerability and penetration assessments can be
performed) and all books, records and other documents of ACS and its Subcontractors as they relate
to this Agreement, or as they may be required in order for Symetra to ascertain any facts
relative to ACS’ performance hereunder. ACS shall provide Symetra, or its authorized Third Party
representatives, such information and assistance as requested in order to perform such audits;
provided, however, that the Parties shall endeavor to arrange such assistance in such a way that it
does not interfere with ACS’ performance of the Services. If any audit reveals a material
inadequacy or deficiency in ACS’ performance, the cost of such
audit, up to a cap of [***], shall
be borne by ACS. ACS shall incorporate this paragraph verbatim into any Agreement into which it
enters with any Subcontractor providing Services under this Agreement.
7.3 Financial Audits. Upon Symetra’s request, but no more often than once annually except:
(a) as necessary for Symetra to respond to any regulatory requirement or inquiry; or (b) as deemed
reasonably necessary by Symetra as a result of Symetra’s good faith belief that a billing error has
occurred involving an amount in excess of [***], ACS shall allow Symetra and/or any independent
Third Party selected by Symetra from among the firms listed on Attachment Q, or any other firm that
may then be agreed to by the Parties, to fully audit ACS’ and/or its Subcontractors’ books and
records to the extent necessary to verify any amounts paid or payable hereunder. If a firm listed
on Attachment Q might otherwise be ineligible to act as Symetra’s auditor under this Section due to
a conflict of interest arising from a former or current representation of ACS, ACS and Symetra
agree that such conflict may be eliminated by the audit firm’s creation of an ethical wall or other
screening procedure satisfactory to both parties. Such auditors shall be provided with full access
to such information, books and records as may be necessary to confirm the accuracy of ACS’
invoices, documents, and other information supporting such invoices, and any pricing adjustment
computations. All such audits shall be conducted during business hours, with reasonable advance
notice, and shall include access to all proprietary and confidential information of ACS and its
Subcontractors to the extent necessary to comply with the provisions of this Section 7.3. If any
such audit reveals that ACS has overcharged Symetra five percent (5%) or more during the period to
which the audit relates (as determined prior to the commencement of the audit), then ACS promptly
shall refund such overcharges to Symetra together with interest thereon retroactive to the date of
the overcharge(s) at the Interest Rate, and the cost of such audit
(up to a cap of [***]), shall be
borne by ACS. Similarly, if any such audit reveals that ACS has undercharged Symetra during the
period to which the audit
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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relates (as determined prior to the commencement of the audit), then Symetra shall pay such
undercharge(s) to ACS, together with interest thereon retroactive to the date of the undercharge(s)
at the Interest Rate, up to an aggregate cap for all such undercharges (plus applicable interest)
of [***]. ACS shall incorporate the auditing requirements set forth in this paragraph verbatim into
any agreement into which it enters with any Subcontractor providing Services under this Agreement.
7.4 Sarbanes-Oxley Compliance.
7.4.1 General. ACS acknowledges that: (a) Symetra’s management is now and/or in the future may
be required under the SOX Laws to, among other things, assess the effectiveness of its internal
controls over financial reporting and state in its annual report whether such internal controls
are effective; (b) Symetra’s independent auditor is now and/or in the future may be required to
evaluate the process used by management to reach the assessment conclusions described in subsection
(a) above to determine whether that process provides an appropriate basis for management’s
conclusions; and (c) because Symetra has outsourced certain functions to ACS as described in this
Agreement, the controls used by ACS (including, without limitation, controls that restrict
unauthorized access to systems, data and programs) are relevant to Symetra’s evaluation of its
internal controls. Having acknowledged the foregoing, ACS agrees to cooperate with Symetra and its
independent auditor as reasonably necessary to facilitate Symetra’s ability to comply with its
obligations under the SOX Laws including, without limiting the generality of the foregoing, by
complying with the further terms of this Section 7.4.
7.4.2 SAS 70 Type II Audits.
7.4.2.1 ACS Audits. At its sole cost and expense, ACS shall cause a reputable independent
auditor to conduct SAS 70 Type II Audits, and to prepare and deliver to Symetra full and complete
copies of written reports prepared following such audits, in July of each year during the Term
(covering January through June of that year), and in January of each year during the Term (covering
July through December of the prior year). All SAS 70 Type II Audits conducted by ACS pursuant to
this Section 7.4.2.1 shall include a review of all of ACS’ internal controls as they relate to ACS’
customers generally. If requested by Symetra, ACS shall cause its independent auditor to timely
prepare and submit to Symetra for its review and approval a detailed description of the scope of
the first SAS 70 Type II Audit to be conducted by ACS hereunder that specifically identifies
therein, among other things, any limitations on the scope of the audit. Once approved by Symetra,
and unless otherwise agreed to by the Parties in writing, such scope description shall be used for
all SAS 70 Type II Audits to be conducted by ACS hereunder.
7.4.2.2
Symetra Audits. At its sole cost and expense and upon reasonable
prior written notice to ACS, but no more frequently than twice annually (unless additional audits
are necessary for Symetra and/or its Affiliates to address a SOX Laws requirement), Symetra shall
have the right (either through its internal audit staff or through a reputable independent auditor)
to conduct audits including, without limitation, SAS 70 Type II Audits, of ACS’ internal controls
as they affect Symetra and/or its Affiliates. In order to facilitate such audits, ACS shall collect
and maintain appropriate books and records documenting ACS’ internal controls (both for ACS’
customers generally and as they affect Symetra and/or its Affiliates) (for purposes of this
Section, collectively, “Records”). Further, with respect to such audits, Symetra and/or its
independent auditors shall have the right to: (a) examine and audit the Records; and (b) question
and interview any ACS personnel, in each case as reasonably necessary or desirable to facilitate
Symetra’s and/or its Affiliates’ ability to comply with the SOX Laws. ACS shall obtain Symetra’s
prior written consent before modifying any of its internal
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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controls as they affect Symetra and/or the Records if such modification will, or is likely to,
affect Symetra’s and/or its Affiliates’ compliance under the SOX Laws.
7.4.3 Results of Inquiries and Corrective Plan. If any SAS 70 Type II Audit report and/or
Symetra’s (or its independent auditor’s) inquiries pursuant to Section 7.4.2.2 reveal any
deficiencies and/or exceptions (including, without limitation, if it is determined that ACS’
internal controls, in whole or in part, fail to constitute effective controls over financial
reporting), ACS shall prepare and deliver to Symetra a detailed plan that is reasonably acceptable
to Symetra for promptly correcting all such deficiencies and exceptions (“Corrective Plan”). ACS
shall deliver such Corrective Plan to Symetra and its independent auditor within ten (10)
calendar days following: (a) ACS’ delivery to Symetra of the SAS 70 Type II Audit report
containing the deficiencies and/or exceptions, if the deficiencies and/or exceptions were
identified in a SAS 70 Type II Audit report prepared pursuant to Section 7.4.2.1; and/or (b) ACS’
receipt of written notice from Symetra that contains a description of such deficiencies and/or
exceptions, if the deficiencies and/or exceptions were identified by Symetra (or its independent
auditor) through the exercise of the rights described in Section 7.4.2.2. ACS shall bear all costs
and expenses associated with correcting all deficiencies and exceptions identified in the
Corrective Plan if such deficiencies and/or exceptions affect ACS’ customers generally. If the
deficiencies and/or exceptions do not affect ACS’ customers generally, but rather are unique to
Symetra, ACS may activate the change management procedures developed by the Parties pursuant to
Section 2.6.2 with respect to the correction of such deficiencies and exceptions.
7.4.4 Subcontractors. To the extent any ACS Subcontractor will perform any function that
affects Symetra’s financial reporting (irrespective of whether Symetra’s consent to such
subcontract arrangement is required as provided in Section 18.1), the agreement entered into by ACS
and the Subcontractor shall include: (a) substantially the same terms as those appearing in this
Section 7.4 (with any substantive deviations being preapproved in writing by Symetra); and (b) a
provision identifying Symetra as a direct and intended third-party beneficiary of the agreement
between ACS and the Subcontractor.
7.4.5 Confidential Information. Notwithstanding anything that may be contained herein to the
contrary, Symetra shall have the right to: (a) disclose all ACS Confidential Information received
by Symetra and its independent auditor pursuant to the terms of this Section 7.4 to its employees, independent auditors, attorneys and other Persons with a reasonable need to know; and (b)
use such information as necessary or desirable to facilitate its ability to comply with the SOX
Laws.
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS
REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 ACS Representations, Warranties and Covenants.
8.1.1 Performance of the Services. ACS represents and warrants to Symetra that it has the
skills, resources and expertise to provide, and shall provide, all Services in accordance with the
terms of this Agreement. Without limiting the generality of the foregoing, ACS represents and
warrants to Symetra that all Services and Other Services provided under this Agreement shall be
provided in a timely, professional and workmanlike manner consistent with the highest industry
standards of quality and integrity provided, however, that where this Agreement specifies a
particular standard or criteria for performance, including, without limitation, applicable SLRs,
this warranty is not intended to and does not diminish that standard or criteria for performance.
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8.1.2 Viruses and Disabling Devices. ACS shall implement and use industry best practices to
identify, screen, and prevent, and shall not introduce, any Disabling Device in hardware, software
or other resources utilized by ACS, Symetra or any Third Party in connection with the Services. A
“Disabling Device” is any virus, timer, clock, counter, time lock, time bomb, Trojan horse, worms,
file infectors, boot sector infectors or other limiting design, instruction or routine and surveil
lance software or routines or data gathering or collecting software or devices that could, if
triggered, erase data or programming, have an adverse impact on the Services, cause the hardware,
software or other resources to become inoperable or otherwise incapable of being used in the full
manner for which such hardware, software or other resources were intended to be used, or that
collect data or information. Without limiting any other rights and remedies that may then be
available to Symetra, at no cost or expense to Symetra and without adversely impacting the Services
or any Other Services, ACS shall reduce and/or eliminate the effects of any Disabling Device
including, without limitation, by restoring and/or bearing the cost to re-create any lost data
and/or software programming.
8.1.3 Conflicts of Interest.
(a) No Financial Interest. ACS represents and warrants to Symetra that neither ACS nor any of
its Affiliates has, shall have, or shall acquire, any contractual, financial, business or other
interest or advantage, direct or indirect, that would: (a) materially conflict with, in a manner
that would materially, adversely impact, ACS’ performance of its duties and responsibilities to
Symetra under this Agreement; or (b) result in a breach of ACS’ performance of its duties and
responsibilities to Symetra under this Agreement. ACS promptly shall inform Symetra of any such
improper interest or advantage that may be incompatible with the interests of Symetra.
(b) No Abuse of Authority for Financial Gain. ACS represents and warrants to Symetra that
neither ACS nor any of its Affiliates has used or shall use the authority provided or to be
provided under this Agreement to improperly obtain financial gain, advantage or benefit for ACS
and/or any of its Affiliates.
(c) No Use of Information for Financial Gain. ACS represents and warrants to Symetra that
neither ACS nor any of its Affiliates has used or shall use any Symetra Confidential Information
acquired in connection with this Agreement to improperly obtain financial gain, advantage or
benefit for ACS and/or any of its Affiliates.
(d) Independent Judgment. ACS represents and warrants to Symetra that neither ACS nor any of
its Affiliates has accepted or shall accept another Symetra contract to perform auditing or other
services as described in Section 2.9.2 that would impair the independent judgment of ACS in the
performance of this Agreement.
(e) No Influence. ACS represents and warrants to Symetra that neither ACS nor any of its
Affiliates: (a) has accepted or shall accept, in a manner that is inconsistent with Symetra’s
standard procurement policies or, if such policies do not exist, industry standard procurement
policies, anything of value, or an inducement that would provide a financial gain, advantage or
benefit, based on an understanding that the actions of ACS or any such Affiliates on behalf of
Symetra would be influenced thereby; and (b) shall attempt to influence, in a manner that is
inconsistent with Symetra’s standard procurement policies or, if such policies do not exist,
industry standard procurement policies, any Symetra employee by the direct or indirect offer of
anything of value.
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(f) No Payment Tied to Award. ACS represents and warrants to Symetra that neither ACS nor any
of its Affiliates has paid or agreed to pay any Person, other than bona fide employees working
solely for ACS or such Affiliates or any of ACS’ Subcontractors, any fee, commission, percentage,
brokerage fee, gift or any other consideration in a manner that is inconsistent with Symetra’s
standard procurement policies or, if such policies do not exist, industry standard procurement
policies.
(g) No Collusion. ACS represents and warrants to Symetra that the prices presented in the
ACS Bid were arrived at independently, without consultation, communication or agreement with any
other proposer for the purpose of restricting competition; the prices quoted were not knowingly
disclosed by ACS to any other proposer; and no attempt was made by ACS to induce any other Person
to submit or not to submit a proposal for the purpose of restricting competition.
(h) Training. ACS represents and warrants to Symetra that it regularly provides ethics
training to its employees on matters such as those covered by this Section 8.1.3.
8.1.4 Financial Condition and Information.
(a) Financial Condition. ACS represents and warrants to Symetra that it now possesses, and
covenants that it shall maintain throughout the Term, sufficient financial resources to comply with
the requirements of this Agreement. If ACS experiences a change in its financial condition that may
adversely affect its ability to perform under this Agreement, then it immediately shall notify
Symetra of such change.
(b) Accuracy of Information. ACS represents and warrants to Symetra that all financial
statements, reports, and other information furnished by ACS to Symetra as part of the ACS Bid or
otherwise in connection with the award of this Agreement fairly and accurately represent the
business, properties, financial condition and results of operations of ACS as of the respective
dates, or for the respective periods, covered by such financial statements, reports or other
information. Since the respective dates or periods covered by such financial statements, reports
or other information, there has been no material adverse change in the business, properties,
financial condition or results of operations of ACS.
8.1.5 Litigation and Service of Process. ACS represents and warrants to Symetra that as of the
Effective Date there is no pending or anticipated claim, suit or proceeding that involves ACS or
any of its Affiliates or Subcontractors that might adversely affect ACS’ ability to perform its
obligations under this Agreement including, without limitation, actions pertaining to the
proprietary rights described in Section 8.1.6. ACS shall notify Symetra, within fifteen (15)
calendar days of ACS’ knowledge of any such actual or anticipated claim, suit or proceeding.
Without limiting the further terms of Section 13.4, ACS shall notify Symetra, within forty-eight
(48) hours, if process is served on ACS in connection with this Agreement, including any subpoena
for ACS’ records, and shall send a written notice of the service together with a copy of the same
to Symetra within seventy- two (72) hours of such service.
8.1.6 Proprietary Rights Infringement. ACS represents and warrants to Symetra that: (a) it
owns, or has the right to use, on its own behalf or on Symetra’s behalf, as applicable, any
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and all services, techniques or products provided or used by ACS to provide the Services; and
(b) such services, techniques and products provided or used by ACS to provide the Services do not
and shall not knowingly infringe upon any Third Parry’s patent, and do not and shall not infringe
upon any Third Party’s trademark, copyright or other intellectual-property rights, nor make use of
any misappropriated trade secrets.
8.1.7 Legal and Corporate Authority. ACS represents and warrants to Symetra that: (a) it
is a Nevada corporation and is qualified and registered to transact business in all locations where
the performance of its obligations hereunder would require such qualification; (b) it has all
necessary rights, powers and authority to enter into and perform this
Agreement and to bind its organization with respect to the same, and the execution, delivery, and performance of this Agreement
by ACS have been duly authorized by all necessary corporate action; (c) the execution and performance of this Agreement by ACS shall not violate any law, statute or regulation and shall not breach
any agreement, covenant, court order, judgment or decree to which ACS is a party or by which it is
bound; (d) it has, and promises that it shall maintain in effect, all governmental licenses and
permits necessary for it to provide the Services contemplated by this Agreement; (e) it owns or
leases and promises that it shall own or lease, free and clear of all liens and encumbrances, other
than lessors’ interests, or security interests of ACS’ lenders, all right, title, and interest in
and to the tangible property and technology and the like that ACS intends to use or uses to
provide the Services, and in and to the related patent, copyright, trademark, and other proprietary
rights, or has received appropriate licenses, leases or other rights from Third Parties to permit
such use; and (f) this Agreement constitutes a valid, binding, and enforceable obligation of ACS.
8.1.8 Violations. ACS represents and warrants to Symetra that it: (a) is not, and covenants
that it shall not be, in violation of any laws, ordinances, statutes, rules, regulations or orders
of governmental or regulatory authorities to which it is subject as an operator of its business or
in performing its obligations under the Agreement; and (b) has not failed, and shall not fail, to
obtain any licenses, permits, franchises or other governmental authorizations necessary for the
ownership of its properties or the conduct of its business, which violation(s) under the foregoing
subsection (a) or failure(s) under the foregoing subsection (b), either individually or in the
aggregate, might substantially adversely affect ACS’ ability to consummate the transactions
contemplated by this Agreement, or to perform its obligations hereunder.
8.1.9 Information Furnished to Symetra. ACS represents and warrants to Symetra that all
written information furnished to Symetra prior to the Effective Date by or on behalf of ACS in
connection with this Agreement, including in the ACS Bid, and all the information made a part of
this Agreement is true, accurate, and complete, and contains no untrue statement of a material fact
or omits any material fact necessary to make such information not misleading.
8.1.10 Previous Contracts. ACS represents and warrants to Symetra that neither it, nor any of
its Affiliates or Subcontractors, is in default or breach of any other contract or agreement
related to information systems facilities, equipment or services that it or they may have with
Symetra or any of its Affiliates. ACS further represents and warrants that neither it, nor any of
its Affiliates or Subcontractors, has been a party to any contract for information system
facilities, equipment or services with Symetra or any of its Affiliates that was finally
terminated within the previous five (5) years for the reason that ACS or such Person failed to
perform or otherwise breached an obligation of such contract.
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8.1.11 Completeness of Due Diligence Activities. ACS acknowledges that it has been
provided with sufficient access to Symetra facilities, information and personnel, and has had
sufficient time in which to conduct and perform a thorough due diligence of Symetra’s operations
and business requirements and those assets currently used to provide the services. In light of the
foregoing, ACS will not seek any adjustment in the Fees based on any incorrect assumptions made by
ACS in arriving at the Fees.
8.2 Symetra’s Representations, Warranties and Covenants.
8.2.1 Legal Authority. Symetra represents and warrants to ACS that it has all necessary rights, powers and authority to enter into and perform this Agreement and that the
execution, delivery and performance of this Agreement by Symetra has been duly authorized by all
necessary corporate action.
8.2.2 Warranty Disclaimer. Symetra does not make any representation or warranty, express
or implied, with respect to the Services or any component thereof. All hardware, software,
networks, and other assets made available or conveyed by Symetra to ACS under this Agreement are
made available or conveyed to ACS “AS IS, WHERE IS AND WITH ALL FAULTS,” and there are no
representations or warranties of any kind with respect to the condition, capabilities or other
attributes of such items.
8.2.3 Proprietary Rights Infringement. Symetra represents and warrants to ACS that: (a) it
owns the Category 6 Software; and (b) the Category 6 Software does not and shall not knowingly
infringe upon any Third Party’s patent, and does not and shall not infringe upon any Third Party’s
trademark, copyright or other intellectual-property rights, nor make
use of any misappropriated
trade secrets.
8.3 General Warranty Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY EXPRESS WARRANTIES TO THE OTHER, AND THERE ARE NO IMPLIED WARRANTIES OR
CONDITIONS, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
8.4
Material Misstatements or Omissions. No representation or warranty by ACS that is
contained in this Agreement or that may be contained in any Schedule, Attachment, or other document that may comprise this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements and facts contained herein or therein not
materially misleading.
ARTICLE 9
TERM AND TERMINATION
TERM AND TERMINATION
9.1 Term.
9.1.1 Initial Term. The period during which ACS shall be obligated to provide the
Services hereunder shall commence as provided in Section 2.1.1 and, unless extended as provided in
Section 9.1.2 or terminated earlier in accordance with the terms of this Agreement, shall end at
12:01 am, local time, on the date of the fifth (5th) anniversary of the last Handover
Date to occur under this Agreement (the “Initial Term”).
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9.1.2 Renewal Terms. Symetra shall have the right to extend the Initial Term for up to two
(2) successive renewal periods of twelve (12) months each (each, a “Renewal Term”) by providing
written notice to ACS in accordance with the terms of Section 19.6 at least three (3) months before
the end of the Initial Term or the then-current Renewal Term, as applicable. At Symetra’s
request, the Parties shall meet within sixty (60) calendar days of ACS’ receipt of Symetra’s notice
to proceed with a Renewal Term to negotiate modifications to the terms of this Agreement. If: (a)
such negotiations are not requested by Symetra; or (b) the negotiations do not result in an agreement on different terms and Symetra elects not to withdraw its
renewal notice, the then-existing terms and conditions of this Agreement shall remain unchanged and in full force and effect during
each such Renewal Term.
9.1.3 Symetra-Initiated Annual Renegotiation. At Symetra’s request, Symetra and ACS shall meet
at least thirty (30) days prior to each anniversary of the Effective Date of this Agreement to
review the status of the performance of the Agreement and, if requested by Symetra, to negotiate
modifications to the terms hereof. If such modifications are not requested by Symetra, or if the
negotiations with respect to such modifications do not result in an agreement on different terms,
the then-existing terms and conditions of this Agreement shall remain unchanged and in full force
and effect during the following Contract Year.
9.2 Early Termination.
9.2.1 For Convenience. Symetra shall have the right to terminate for its convenience
all of the Services in one (1) or more countries, terminate for its convenience one (1) or more
Service Towers in one (1) or more countries and/or to end the Term of this Agreement for its
convenience, in each case by delivering to ACS a Termination Notice at least ninety (90) calendar
days before the Termination Date. If Symetra terminates all or any portion of the Services and/or
terminates this Agreement in its entirety as provided in this Section 9.2.1, upon completion of
ACS’ Disentanglement obligations with respect to the terminated Services, Symetra shall pay to
ACS an amount determined in accordance with Schedule 6 (the “Termination Fee”). Notwithstanding the
foregoing, Symetra shall be obligated to pay to ACS only fifty percent (50%) of the otherwise
applicable Termination Fee if any one (1) or more of the following events (each, a “Triggering
Event”) occurred on or prior to the date of Symetra’s Termination Notice provided that, in the case
of a subsection (a) Triggering Event, Symetra gives ACS a Termination Notice within six (6) months
following the occurrence of such Triggering Event:
(a) ACS failed to achieve any Critical Milestone on or before the mutually agreed date for
achieving such Critical Milestone; or
(b) ACS failed to provide the Services in accordance with the SLRs such that any of the
circumstances described in Section 9.3(a) had occurred.
9.2.2 Change in Control of ACS. Without in any way limiting Symetra’s rights under Section
9.2.1, Symetra shall have the right to terminate all of the Services in one (1) or more countries,
terminate one (1) or more Service Towers in one (1) or more countries and/or to end the Term of
this Agreement, in each case by delivering to ACS a Termination Notice at least ninety (90)
calendar days prior to the Termination Date, in the event of a Change in Control of ACS involving
an entity (the “Acquiring Entity”): (a) that is a Symetra Competitor; or (b) with respect to
which one (1) or more of Symetra’s Third Party vendors fails or refuses to promptly consent to
having the
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Acquiring Entity act as Symetra’s outsourcing services provider (excluding, if paid by ACS
and/or the Acquiring Entity, those Third Party vendors that will provide such consent upon payment
of an approval or consent fee), provided that in either of the foregoing cases, Symetra gives ACS
written notice of such termination within one (1) year following receipt of written notice from ACS
of the occurrence of such Change in Control event. If Symetra terminates all or any portion of the
Services in one (1) or more countries, terminates one (1) or more Service Towers in one (1) or more
countries and/or ends the Term of this Agreement pursuant to this Section, ACS shall perform its
Disentanglement obligations hereunder until they are fulfilled. Any termination pursuant to this
Section shall not constitute a termination for convenience and: (c) Symetra shall in no event be
required to pay a Termination Fee to ACS with respect to any such termination; and (d) except for
those terms that survive any expiration or termination of this Agreement, Symetra shall have no
further liability or obligation to ACS under this Agreement.
9.2.3 Termination for Force Majeure Event.
(a) Symetra Force Majeure Events. If: (i) a Force Majeure Event occurs with respect to
Symetra; (ii) such Force Majeure Event substantially prevents, inhibits and/or frustrates Symetra’s
ability to receive the Services from ACS under circumstances when ACS is otherwise able to provide
the Services to Symetra; and (iii) such Force Majeure Event continues for seven (7) consecutive
calendar days or more, or for ten (10) consecutive or non-consecutive calendar days or more during
any thirty (30) calendar day period, then Symetra shall have the right to terminate the Services
affected by the Force Majeure Event by delivering to ACS a Termination Notice specifying the
Termination Date; provided, however, that ACS shall remain obligated to perform its
Disentanglement obligations hereunder until such obligations have been fulfilled. During such
period, Symetra shall remain obligated to pay the Annual Services Fees and other fees to ACS in
accordance with the terms of this Agreement until such Services are terminated in accordance with
this Section. Any termination pursuant to this Section shall not constitute a termination for
convenience or for cause, and Symetra shall in no event be required to pay a Termination Fee to ACS
with respect to any such termination.
(b) ACS Force Majeure Events. If a Force Majeure Event substantially prevents, hinders, or
delays ACS’ performance of all or any portion of the Services for seven (7) consecutive calendar
days or more, or for ten (10) consecutive or non-consecutive calendar days or more during any
thirty (30) calendar day period, thereby causing an adverse impact on Symetra’s business
operations, then:
(i) with Symetra’s reasonable cooperation, ACS at its sole cost and expense immediately
shall procure the affected Services from an alternate provider, and thereafter provide such
Services to Symetra through the use of the alternate provider until ACS is able to resume
performance of the affected Services in accordance with the terms of this Agreement, provided that
ACS’ obligations under this subsection (i) shall continue for a period that shall not exceed
one-hundred eighty (180) calendar days plus the length of any Disentanglement Period, and during
such period Symetra shall remain obligated to pay the Annual Services Fees and other fees to ACS in
accordance with the terms of this Agreement; and
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(ii) once the affected Services have been stabilized with the alternate provider, ACS
shall be obligated to provide such Services to Symetra in accordance with the SLRs and other terms
of this Agreement; and
(iii) notwithstanding the foregoing, if ACS is unable to provide the Services through an
alternate provider within seven (7) calendar days following commencement of the Force Majeure
Event, or the one-hundred eighty (180) calendar day time period described in subsection (i) above
expires without ACS having resumed performance of the affected Services in accordance with the
terms of this Agreement, then Symetra shall have the right to terminate all of the Services in one
(1) or more countries, terminate one (1) or more Service Towers in one (1) or more countries and/or
to end the Term, in each case by delivering to ACS a Termination Notice specifying the Termination
Date; provided, however, that ACS shall remain obligated to perform its Disentanglement obligations
hereunder until such obligations have been fulfilled.
Any termination pursuant to this Section shall not constitute a termination for convenience nor
cause, and Symetra shall in no event be required to pay a Termination Fee to ACS with respect to
any such termination.
9.2.4 HIPAA. ACS acknowledges that the HIPAA terms set forth in Attachment K (and the HIPAA
terms set forth in any separate HIPAA agreement as contemplated under Section 14.4.1), as
applicable, include the right under the circumstances described therein for Symetra (and/or the
applicable Symetra Affiliate) to terminate this Agreement. Having acknowledged the foregoing, ACS
agrees that Symetra shall have the right to terminate this Agreement for cause upon the occurrence
of such circumstances, all in accordance with the terms set forth in Attachment K and/or the
applicable separate HIPAA agreement, as applicable. Symetra shall in no event be required to pay a
Termination Fee to ACS with respect to any such termination.
9.3 Events of Default. The following events shall constitute “Events of Default,” and
the occurrence of any one (1) or more of such Events of Default by or with respect to a Party shall
constitute a material breach of this Agreement that shall afford the non-breaching Party, as
applicable, the rights and remedies set forth in this Article 9:
(a) In the case of ACS, ACS: (i) fails to achieve any SLR in a manner that constitutes an
Event of Default as specified in the applicable Schedule; (ii) fails to achieve any particular SLA
that adversely impacts Symetra’s business operations for: (A) four (4) or more hours on two (2)
consecutive calendar days or more; or (B) four (4) or more hours on five (5) non-consecutive
calendar days or more during any thirty (30) calendar day period; (iii) has incurred Fee Reductions
equal to thirty-five percent (35%) or more of the Annual At-Risk Amount within: (A) in the case
of the first Contract Year, the period between the Effective Date and the first six (6) months
following the last to occur of the Hand-over Dates; and (B) in the case of all other Contract
Years, the first six (6) months of any such Contract Year; (iv) has incurred Fee Reductions equal
to the Annual At-Risk Amount at any time during any Contract Year; or (v) fails to comply with any
SLA, and such failure causes a material adverse effect on Symetra’s business;
(b) In the case of ACS, ACS fails to achieve any Critical Milestone on or before the mutually
agreed date for achieving such Critical Milestone, provided that such
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failure is not due to: (i) the occurrence of a Force Majeure Event; (ii) a delay by Symetra
solely for its own convenience; or (iii) Symetra’s material failure to perform any of its
responsibilities under this Agreement that were a pre-condition to ACS’ ability to perform its
obligations, provided that such failure previously was identified by ACS in writing;
(c) In the case of ACS, ACS’ material breach of any warranty that, if curable, is not cured
within the time frames, if any, specified in this Agreement for curing any such breach, or if none
is specified elsewhere in this Agreement, then within thirty (30) calendar days, in each case
following ACS’ receipt of written notice of such breach from Symetra;
(d) In the case of ACS, ACS’ failure to maintain insurance coverage as specified in Article
16, provided that such failure is not cured within thirty (30) calendar days following ACS’ receipt
of written notice of such failure from Symetra;
(e) In the case of ACS, the institution of bankruptcy, receivership, insolvency,
reorganization or other similar proceedings by or against ACS under any section or chapter of the
United States Bankruptcy Code, as amended, or under any similar laws or statutes of the United
States (or any state thereof), if such proceedings have not been dismissed or discharged within
thirty (30) calendar days after they are instituted; the insolvency or making of an assignment
for the benefit of creditors or the admittance by ACS of any involuntary debts as they mature; the
institution of any reorganization arrangement or other readjustment of debt plan of ACS not
involving the United States Bankruptcy Code; or any corporate action taken by the Board of
Directors of ACS in furtherance of any of the above actions;
(f) In the case of ACS, ACS makes an assignment of all or substantially all of its assets for
the benefit of creditors, or ACS’ Board of Directors takes any corporate action in furtherance of
the above action;
(g) In the case of Symetra, Symetra fails to timely make any undisputed payment in accordance
with the terms of Section 6.3, provided Symetra fails to cure such failure within thirty (30)
calendar days after Symetra has received written notice of such failure from ACS;
(h) In the case of either Party, that Party’s failure to comply with the provisions of Article
13, provided that such failure is not cured, or substantial progress is not made towards a cure,
within seven (7) calendar days following that Party’s receipt of written notice of such failure
from the other Party; or
(i) In the case of either Party, that Party’s material breach of any of its other obligations
under this Agreement that is not cured within thirty (30) calendar days following its receipt of
written notice of such breach from the other Party.
9.4 Rights and Remedies of ACS Upon Default of Symetra. Upon the occurrence of an Event of
Default by or with respect to Symetra, subject to Section 9.6, ACS shall be entitled to the
following remedies:
(a) subject to Symetra’s rights as set forth below in this Section, terminate all of the
Services, terminate one (1) or more Service Towers and/or end the Term; and/or
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(b) subject to the terms of Section 11.1, seek to recover damages from Symetra; and/or
(c) if applicable, obtain the additional rights and remedies set forth in Section 17.4;
and/or
(d) any additional remedies that may be set forth in this Agreement or in any Schedule,
Attachment or Addendum.
Upon the occurrence of a Symetra Event of Default with respect to which ACS exercises a termination
remedy as described in Section 9.4(a), ACS shall effectuate such termination by delivering to
Symetra a Termination Notice specifying the Termination Date, whereupon the terms set forth in
Section 10.2 shall apply; provided, however, that ACS shall remain obligated to perform its
Disentanglement obligations hereunder until they are fulfilled, subject, upon ACS’ request, and
only if such termination is a result of a Section 9.3(g) Symetra Event of Default, to Symetra’s
payment of all: (e) invoices for Fixed Charges monthly in advance; (f) undisputed amounts then due
and owing; and (g) invoices for Variable Charges including, if applicable, Disentanglement
Services, as incurred. Any termination pursuant to this Section shall not constitute a termination
for convenience, and Symetra shall in no event be required to pay a Termination Fee to ACS with
respect to any such termination.
9.5 Rights and Remedies of Symetra Upon Default of ACS. Upon the occurrence of an Event of
Default by or with respect to ACS, subject to Section 9.6, Symetra shall be entitled to:
(a) subject to Symetra’s rights as set forth below in this Section, terminate all of the
Services, terminate one (1) or more Service Towers and/or end the Term; and/or
(b) subject to the terms of Section 11.2, seek to recover damages from ACS; and/or
(c) if applicable, obtain the additional rights and remedies set forth in Section 17.4;
and/or
(d) any additional remedies that may be set forth in this Agreement or in any Schedule,
Attachment or Addendum.
Upon the occurrence of an ACS Event of Default with respect to which Symetra exercises a
termination remedy as described in Section 9.5(a), Symetra shall effectuate such termination by
delivering to ACS a Termination Notice specifying the Termination Date; provided, however, that ACS
shall remain obligated to perform its Disentanglement obligations hereunder until they are
fulfilled. Any termination pursuant to this Section shall not constitute a termination for
convenience, and Symetra shall in no event be required to pay a Termination Fee to ACS with respect
to any such termination.
9.6 Non-Exclusive Remedies. The remedies provided in Sections 9.4 and 9.5 and else where in
this Agreement are neither exclusive nor mutually exclusive, and the Parties shall be entitled to
any and all such remedies, and any and all other remedies that may be available to the Parties at
law or in equity, by statute or otherwise, individually or in any combination thereof.
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9.7 Survival. The provisions of Articles 10, 11, 15, 16, 18 and 19 and Sections 1.1, 1.3,
1.4, 3.3, 3.4, 4.1.3, 6.1, 6.4, 7.1, 9.2-9.7, 12.1.3, 12.5, 13.2-13.6, 14.4 and any other Sections,
Schedules, Attachments, Addenda or Appendices to this Agreement that, by their nature, may
reasonably be presumed to survive any termination or expiration of this Agreement, shall so
survive.
ARTICLE 10
DISENTANGLEMENT
DISENTANGLEMENT
10.1 General Obligations. Upon any termination or expiration of this Agreement,
ACS shall provide the Disentanglement (as defined herein) services as set forth in this Article.
ACS shall accomplish a complete transition of any terminated Services from ACS and its
Subcontractors to Symetra, its Affiliates and/or to any replacement provider(s) designated by
Symetra (collectively, the “Replacement Provider”), without causing any unnecessary interruption
of, or causing any unnecessary adverse impact on, the Services, any Other Services and/or
services provided by Third Parties (the “Disentanglement”). Without limiting the generality of the
foregoing, ACS shall: (a) cooperate with Symetra, its Affiliates and/or the Replacement Provider,
including by promptly taking all steps required to assist Symetra in effecting a complete
Disentanglement; (b) provide to Symetra, its Affiliates and/or the Replacement Provider all
information regarding the Services as needed for Disentanglement including, without limitation,
data conversions, interface specifications and related professional services; (c) provide for
the prompt and orderly conclusion of all work, as Symetra may direct, including completion or
partial completion of Other Services and/or Out-of-Scope Services, documentation of work in
process, and other measures to provide an orderly transition to Symetra, its Affiliates and/or the
Replacement Provider; and (d) accomplish the other specific obligations de scribed in this Article
10. ACS and Symetra shall discuss in good faith a plan for determining the nature and extent of
ACS’ Disentanglement obligations and for the transfer of Services in process; provided, however,
that ACS’ obligation under this Agreement to provide all Services necessary for Disentanglement
shall not be lessened in any respect. ACS’ obligation to provide the Services shall not cease until
a Disentanglement that is satisfactory to Symetra has been completed, including the performance by
ACS of all asset transfers, if any, and other obligations of ACS set forth in this Article 10.
10.2 Disentanglement Period. The process to effectuate the Disentanglement shall begin on any
of the following dates: (a) the date designated by Symetra in connection with expiration of the
Term, which date shall not be earlier than one hundred eighty (180) calendar days prior to the end
of the Term; or (b) the Termination Date specified in any Termination Notice delivered by Symetra
to ACS, if Symetra elects to terminate any or all of the Services pursuant to Sections 9.2 or 9.5
(unless ACS in good faith disputes such termination); or (c) the Termination Date specified in any
Termination Notice delivered by ACS to Symetra pursuant to Section 9.4 (unless Symetra in good
faith disputes such termination), and shall continue: (d) in the case of subsection (a), until
expiration of the Term; or (e) in all other cases, for a period of up to twelve (12) months
thereafter, at Symetra’s option (with the applicable date under subsection (d) or subsection (e)
above on which ACS’ obligation to perform the Services expires being referred to as the
“Expiration Date”). If requested by Symetra, ACS shall perform its Disentanglement obligations on
an expedited basis if Symetra terminates this Agreement pursuant to Sections 9.2.4 or 9.5.
10.3 Specific Obligations. Disentanglement shall include, without limitation, the performance
of the specific obligations described in this Section and those described in Section 4.3. In connection with Sections 10.3.3 and 10.3.4 below, ACS shall as soon as reasonably possible following
its issuance or receipt of a Termination Notice, but in no event longer than ten (10) Business Days
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thereafter, provide to Symetra a complete and accurate list of all items that will be subject
to conveyance or re-conveyance to Symetra as provided in such Sections. ACS agrees that its
agreements with all Third Parties relating to this Agreement, including Subcontractors, shall not
include any terms that would prohibit or otherwise restrict such Third Parties, including
Subcontractors, from entering into agreements with Symetra, its Affiliates and/or the Replacement
Provider (whether directly or through an assignment) as provided herein.
10.3.1 Full Cooperation, Information and Knowledge Transfer. During Disentanglement, the
Parties shall cooperate fully with one another to facilitate a smooth transition of the terminated Services from ACS and its Subcontractors to Symetra, its Affiliates and/or the Replacement
Provider. ACS shall provide such cooperation both before and after the Expiration Date, and such
cooperation shall include, without limitation, provision of full, complete, detailed, and
sufficient information (including all information then being utilized by ACS with respect to
programs, tools, utilities and other resources used to provide the Services, as well as the
information and assistance required pursuant to
Section 2.5.6, if applicable) and knowledge
transfer with respect to all such information in order to enable Symetra’s, its Affiliates’ and/or
the Replacement Provider’s personnel (or that of Third Parties) to fully assume, become
self-reliant with respect to, and continue without interruption, the provision of the Services.
ACS shall cooperate with Symetra and all of Symetra’s other service providers to provide a smooth
transition at the time of Disentanglement, with no unnecessary interruption of Services, no
unnecessary adverse impact on the provision of Services or Symetra’s activities and no unnecessary
interruption of, or unnecessary adverse impact on, any services provided by Third Parties.
10.3.2 Third-Party Authorizations. Without limiting the obligations of ACS pursuant to
Section 12.2 and subject to the terms of any Third Party contracts, if requested by Symetra as part
of the Disentanglement, ACS shall procure at no charge to Symetra any Third Party authorizations
necessary to grant Symetra the use and benefit of any Third Party contracts between ACS and Third
Party contractors used to provide the Services, pending their assignment to Symetra pursuant to
Section 10.3.4.
10.3.3 Transfer of Assets. If and as requested by Symetra as part of the Disentanglement,
ACS shall convey to Symetra, its Affiliates and/or the Replacement Provider from among those assets
used by ACS to provide the Services (including ACS Equipment), such assets (other than software
assets otherwise covered by the terms of Section 4.3) as Symetra might select from the list
provided by ACS pursuant to Section 10.3 at a price for each such asset that is the lesser of: (a)
the net book value as reflected on ACS’ books and records; and (b) a fair market value price determined by a mutually agreed Third Party, or the then-remaining lease value; provided, however, that
to the extent Symetra has paid all or any portion of the purchase price for any such assets, ACS
shall convey such assets to Symetra at a price equal to the original purchase price less the
applicable amounts paid by Symetra. At mutually agreed times during Disentanglement, ACS shall
remove from Symetra’s premises any ACS assets (including ACS Equipment) that Symetra, its
Affiliates and/or the Replacement Provider elect not to purchase. In addition, although Symetra
acknowledges that ACS does not control Third-Party equipment vendors (if any), if requested by
Symetra, ACS shall assist Symetra, its Affiliates, and/or the Replacement Provider in securing
maintenance (including all enhancements and upgrades) and support with respect to any such
assets for so long as Symetra requires at competitive rates.
10.3.4 Assignment of Contracts. If and as requested by Symetra as part of the Disentanglement, ACS shall assign to Symetra, its Affiliates and/or the Replacement Provider from
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among those leases, maintenance, support and other contracts used by ACS, Symetra or any other
Person in connection with the Services, such contracts as Symetra might select from the list
provided by ACS pursuant to Section 10.3. ACS’ obligation under this Section 10.3.4 shall include
ACS’ performance of all obligations under such leases, maintenance, support and other contracts to
be performed by it with respect to periods prior to the date of assignment, and ACS shall reimburse
Symetra for any Losses resulting from any claim that ACS did not perform any such obligations.
10.3.5 Delivery of Documentation and Data. If and as requested by Symetra, ACS shall deliver
to Symetra, its Affiliates, and/or the Replacement Provider all documentation and data related to
ACS’ provision of the Services, including the Symetra Data, all results of ACS’ processing
activities and use of Symetra’s Data, as well as all procedures, standards and operating schedules
(including the Standards and Procedures Manual), held by ACS. Notwithstanding the foregoing, ACS
may retain one (1) copy of such documentation and data, excluding Symetra Data, for archival purposes or warranty support. ACS shall delete all data storage media used in its processing
activities following completion of its Disentanglement obligations. All test and data processing
material shall be destroyed or turned over to Symetra without undue delay.
10.3.6 Hiring of Employees. ACS shall as soon as reasonably possible following its issuance or
receipt of a Termination Notice, but in no event later than ten (10) Business Days thereafter,
provide to Symetra a complete and accurate list of all Substantially Dedicated Resources who were
involved in providing the Services during the six (6) month period preceding ACS’ issuance or
receipt of such Termination Notice. ACS shall cooperate with and assist (and shall cause its Subcontractors to cooperate with and assist) Symetra, its Affiliates and/or the Replacement Provider in
offering employment, at the sole discretion of Symetra, to any or all of such employees, whether
such offers are made at the time of, after or in anticipation of the Expiration Date. ACS shall be
solely responsible for and shall pay to any such employees of ACS who are hired by Symetra, its
Affiliates, and/or the Replacement Provider, all severance and related payments, if any are payable
pursuant to ACS’ standard policies, and shall cause relevant Subcontractors to pay severance and
related payments to any such employee of a Subcontractor who is hired by Symetra or its designee,
if any are payable pursuant to such Subcontractors’ standard policies. ACS shall release (and
shall cause its Subcontractors to release) from any restrictive covenants including, without
limitation, non-compete agreements, any of the employees hired by Symetra, its Affiliates and/ by
the Replacement Provider. Notwithstanding any agreements that ACS may have with its employees, ACS
shall not take or fail to take any actions that would interfere with or prevent Symetra, its
Affiliates and/or the Replacement Provider from hiring any or all of such Substantially Dedicated
Resources. ACS shall not (and shall ensure that its Subcontractors do not) in any manner
communicate disparaging information about Symetra, its Affiliates, and/or the Replacement Provider,
or any of their employees, to transitioning employees or existing employees of Symetra, its
Affiliates and/or the Replacement Provider.
10.4 Preparation for Disentanglement.
10.4.1 Complete Documentation. In addition to and/or as part of the Standards and Procedures
Manual, at all times during the Term, ACS shall provide to Symetra complete information, including
complete documentation, in accordance with the standards and methodologies to be implemented by
ACS, for all software (including applications developed as part of the Services) and hardware, that
is sufficient to enable Symetra, its Affiliates, and/or the Replacement Provider, to fully assume
the provision of the Services to Symetra.
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10.4.2 Maintenance of Assets. ACS shall maintain all of the hardware, software, systems,
networks, technologies, and other assets utilized in providing Services to Symetra (including
leased and licensed assets) in good condition and in such locations and configurations as to be
readily identifiable and transferable to Symetra or its designees in accordance with the provisions
of this Agreement; in addition, ACS shall insure such assets in accordance with the requirements of
Article 16.
10.4.3 Advance Written Consents. At all times during the Term, ACS shall seek to obtain
advance written consents from all licensors (in accordance with Section 4.3), lessors and other
contract parties to the conveyance or assignment of licenses, leases and other contracts to
Symetra, its Affiliates, and/or the Replacement Provider upon Disentanglement. If any such consent
cannot be obtained, ACS shall so notify Symetra in writing, and Symetra may: (a) as to the
affected contract(s), waive this requirement in writing; or (b) elect to enter into the applicable
license, lease or other contract directly with the applicable Third Party. ACS also shall obtain
for Symetra the right, upon Disentanglement, to obtain maintenance (including all enhancements and
upgrades) and support with respect to the assets that are the subject of such leases, licenses and
other contracts at the price at which, and for so long as, such maintenance and support is made
commercially available to other customers of such Third Parties.
10.4.4 All Necessary Cooperation and Actions. ACS shall provide all cooperation, take such
additional actions, and perform such additional tasks, as may be necessary to ensure a timely
Disentanglement in compliance with the provisions of this Article 10.
10.4.5 Payment for Disentanglement Services. Symetra shall be required to pay (at the Service
Rates, unless other rates are then agreed to by the Parties) for any Disentanglement Services that
are both outside the scope of the Services and cannot be accomplished by the Substantially
Dedicated Resources without adversely impacting ACS’ ability to comply with the SLRs. Notwithstanding the foregoing: (a) the ACS Key Personnel shall exercise all commercially reasonable efforts to minimize the costs and expenses associated with such Disentanglement services; and/or (b)
Symetra may require ACS to re-focus the work efforts of the Substantially Dedicated Resources toward Disentanglement activities and waive any resulting failure of ACS to comply with the SLRs. ACS
shall not: (y) in anticipation of sending or receiving a Termination Notice or the expiration of
the Term, reduce the number of Substantially Dedicated Resources, nor change the identities of the
Substantially Dedicated Resources; or (z) without Symetra’s prior written consent, reduce the number, or change the identities, of the Substantially Dedicated Resources during the Disentanglement
Period. For purposes of this Agreement, “Substantially Dedicated Resources” means those employees,
agents and/or contractors of ACS and/or its Subcontractors that dedicate fifty percent (50%) or
more of their work time to providing Services to Symetra and/or the Affiliates of Symetra, all of
whom shall be identified periodically by ACS pursuant to the requirements set forth in Section
3.1.2.
ARTICLE 11
LIMITATIONS ON LIABILITY
LIMITATIONS ON LIABILITY
Subject to the further terms of this Article 11, a breaching Party shall be liable to the
other Party for all damages incurred by such Party as a result of the
breaching Party’s failure to
perform its obligations under this Agreement.
11.1 Cap On Liability. EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 11.4 AND 11.5, THE
AGGREGATE CUMULATIVE MONETARY LIABILITY OF EITHER
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PARTY (INCLUDING THE AFFILIATES OF EACH PARTY) FOR ALL CLAIMS ARISING UNDER OR RELATING TO
THIS AGREEMENT AND/OR ANY COUNTRY AGREEMENTS, NOTWITHSTANDING THE FORM IN WHICH ANY ACTION IS
BROUGHT, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL BE LIMITED IN THE AGGREGATE TO THE TOTAL
FEES PAID AND/OR PAYABLE UNDER THIS AGREEMENT AND/OR ANY COUNTRY AGREEMENTS DURING THE TWELVE (12)
MONTH PERIOD PRECEDING THE DATE ON WHICH THE FIRST CLAIM AROSE (IT BEING THE UNDERSTANDING OF THE
PARTIES THAT IDENTIFYING THE “FIRST” CLAIM WILL ESTABLISH THE BEGINNING POINT FOR ANY TIME PERIOD
DESCRIBED IN THIS SECTION 11.1), EXCEPT THAT IF SUCH EVENT ARISES AT ANY TIME FOLLOWING EXPIRATION
OR TERMINATION OF THIS AGREEMENT, THEN SUCH AMOUNT SHALL BE EQUAL TO THE FEES PAID BY SYMETRA UNDER
THIS AGREEMENT DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING SUCH EXPIRATION OR
TERMINATION DATE (THE “CAP”).
NOTWITHSTANDING ANYTHING THAT MAY BE CONTAINED HEREIN TO THE CONTRARY, FEE REDUCTIONS PAID OR
PAYABLE TO SYMETRA SHALL NOT COUNT TOWARD SATISFACTION OF THE CAP.
11.2 Recoverable Damages. WITHOUT LIMITING THE GENERALITY OF SECTION 11.1, AND NOTWITHSTANDING
ANY CONTRARY TERMS IN SECTION 11.3, ACS AGREES THAT THE FOLLOWING TYPES OF DAMAGES (BY WAY OF
EXAMPLE AND NOT OF LIMITATION) SHALL BE INTERPRETED AND CONSTRUED TO CONSTITUTE DIRECT DAMAGES
RECOVERABLE BY SYMETRA PURSUANT TO SECTION 11.1, AND ACS SHALL NOT CLAIM OTHERWISE:
A. COSTS AND EXPENSES INCURRED TO SELECT, PROCURE, MIGRATE TO AND IMPLEMENT SUBSTANTIALLY
EQUIVALENT REPLACEMENT SERVICES (FROM AN IN-HOUSE OR REPLACEMENT PROVIDER) INCLUDING, WITHOUT
LIMITATION, COSTS AND EXPENSES INCURRED: (i) FOR EMPLOYEES (WAGES AND SALARIES, BOTH STRAIGHT TIME
AND OVERTIME, AND RELATED EXPENSES, INCLUDING OVERHEAD ALLOCATIONS), CONTRACTORS, TRAVEL
EXPENSES, TELECOMMUNICATIONS CHARGES AND OTHER SIMILAR CHARGES; AND (ii) TO RE-CREATE, RELOAD
AND/OR CONVERT ANY OF SYMETRA’S DATA, AND TO CREATE AND TEST INTERFACES;
B. REGULATORY FINES AND/OR PENALTIES INCLUDING, WITHOUT LIMITATION, THOSE ASSOCIATED WITH
DELAYS IN ELECTRONIC TRANSFERS OR FAILURES TO COMPLY WITH REGULATORY DEADLINES; AND
C. IN THE EVENT OF AN ACS CHANGE IN CONTROL PERMITTING SYMETRA TO TERMINATE THIS AGREEMENT
UNDER SECTION 9.2.2(b): (I) IF SYMETRA ELECTS NOT TO EXERCISE ITS RIGHT OF TERMINATION UNDER
SUCH SECTION, ALL COSTS AND EXPENSES INCURRED AS A RESULT OF ANY SUCH CHANGE OF CONTROL INCLUDING,
IF APPLICABLE UNDER THE CIRCUMSTANCES, THE COSTS AND EXPENSES ASSOCIATED WITH SELECTING,
PROCURING, MIGRATING TO AND IMPLEMENTING SUBSTAN-
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TIALLY EQUIVALENT REPLACEMENT THIRD PARTY APPLICATION SYSTEMS IF ONE OR MORE OF SYMETRA’S
APPLICATION VENDORS WILL NOT CONSENT TO HAVING AN ACQUIRING ENTITY ACT AS SYMETRA’S OUTSOURCING
PROVIDER PLUS ANY APPROVAL AND/OR CONSENT FEES NOT PAID UNDER THE TERMS OF SECTION 9.2.2 (THE
“CHANGE IN CONTROL EXPENSES”); AND (II) IF SYMETRA ELECTS TO EXERCISE ITS RIGHT OF TERMINATION
UNDER SUCH SECTION, ALL CHANGE IN CONTROL EXPENSES LESS ANY COSTS AND EXPENSES AVOIDED BY SYMETRA
AS A RESULT OF ITS TERMINATION OF ONE OR MORE CONTRACTS WITH THOSE APPLICATION VENDORS THAT FAIL TO
CONSENT TO HAVING AN ACQUIRING ENTITY ACT AS SYMETRA’S OUTSOURCING PROVIDER.
11.3 Non-Direct Damages. EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 11.4 AND 11.5,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY CLAIMING BY OR THROUGH THE
OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES WITH
RESPECT TO ANY CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM IN WHICH ANY ACTION IS BROUGHT.
11.4 Symetra Exceptions from the Limitations on Liability. THE LIMITATION ON SYMETRA’S
LIABILITY SET FORTH IN SECTIONS 11.1 AND 11.3 SHALL NOT APPLY TO LOSSES ARISING OUT OF OR RELATING
TO: (A) SYMETRA’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.2 (INDEMNIFICATION BY SYMETRA);
(B) SYMETRA’S FAILURE TO COMPLY WITH THE PROVISIONS OF ARTICLE 13 (SECURITY AND CONFIDENTIALITY);
(C) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF SYMETRA OR ANY ENTITY TO WHICH SYMETRA HAS
SUBCONTRACTED ITS OBLIGATIONS UNDER THIS AGREEMENT; OR (D) SYMETRA’S FAILURE TO COMPLY WITH
THE PROVISIONS OF ARTICLE 12 (PROPRIETARY RIGHTS). FURTHER, THE LIMITATION ON SYMETRA’S
LIABILITY SET FORTH IN SECTION 11.1 SHALL NOT APPLY TO LOSSES ARISING OUT OF OR RELATING TO
SYMETRA’S OBLIGATION TO MAKE ANY PAYMENTS THEN DUE AND OWING.
11.5 ACS Exceptions from the Limitations on Liability. THE LIMITATION ON ACS’ LIABILITY SET
FORTH IN SECTIONS 11.1 AND 11.3 SHALL NOT APPLY TO LOSSES ARISING OUT OF OR RELATING TO: (A) ACS’
INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.1 (INDEMNIFICATION BY ACS), EXCLUDING ACS’ INDEMNIFICATION OBLIGATIONS UNDER SECTION 15.1.8 (NON-PERFORMANCE); (B) ACS’ FAILURE TO COMPLY WITH THE
PROVISIONS OF ARTICLE 13 (SECURITY AND CONFIDENTIALITY); (C) ACS’ REPUDIATION OF, OR UNEXCUSED
REFUSAL TO PERFORM, THE SERVICES IN VIOLATION OF SECTION 17.2 (CONTINUED PERFORMANCE; NO TOLLING
OF CURE PERIODS); (D) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF ACS AND/OR ITS SUBCONTRACTORS;
(E) ACS’ FAILURE TO COMPLY WITH THE PROVISIONS OF ARTICLE 12 (PROPRIETARY
RIGHTS); OR (F) ACS’ INDEMNIFICATION OBLIGATIONS UNDER ATTACHMENT K FOR A VIOLATION OF THE
NON-DISCLOSURE AND/OR USE OBLIGATIONS RELATING TO SYMETRA PHI. FURTHER, THE LIMITATION ON ACS’
LIABILITY SET FORTH IN SECTION 11.3 SHALL NOT APPLY TO ACS’ INDEMNIFICATION OBLIGATIONS UNDER
ATTACHMENT K FOR A VIOLATION OF ANY OBLIGATIONS
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THEREUNDER EXCEPT FOR THOSE DESCRIBED IN THE FOREGOING SUBSECTION (F), BUT ONLY UNTIL SUCH
TIME AS THE DOLLAR VALUE OF THE CAP HAS BEEN ACHIEVED.
11.6 Costs of Cure. To the extent a Party elects to cure any failure by it to comply with
its obligations under the Agreement, all costs and expenses associated with such cure shall be
borne solely by the curing party and shall in no event count toward satisfaction of the CAP.
11.7 Attorneys’ Fees. If a Party brings an action, suit or proceeding (including, without
limitation, any arbitration proceeding under Section 19.13) against the other Party to this
Agreement arising out of or relating to this Agreement, or pertaining to a declaration of rights
under this Agreement, the trier of fact may, in the exercise of its discretion, award the Party
it finds to be the prevailing party in such action, suit or proceeding that portion or all of its
attorneys’ fees, costs and expenses that it deems to be appropriate under the facts and
circumstances.
ARTICLE 12
PROPRIETARY RIGHTS
PROPRIETARY RIGHTS
12.1 Work Product.
12.1.1 Symetra Sole Owner. Symetra shall be the sole and exclusive owner of all Work
Product, and of all copyright, patent, trademark, trade secret and other proprietary rights in and
to the Work Product. Ownership of the Work Product shall inure to the benefit of Symetra from the
date of conception, creation or fixation of the Work Product in a tangible medium of expression
(whichever occurs first). Each copyrightable aspect of the Work Product shall be considered a
“work-made-for-hire” within the meaning of the Copyright Act of 1976, as amended. If and to the
extent such Work Product, or any part thereof, is not considered a “work-made-for-hire” within the
meaning of the Copyright Act of 1976, as amended, ACS hereby expressly assigns to Symetra all
exclusive right, title and interest in and to the Work Product, and all copies thereof, and in and
to the copyright, patent, trademark, trade secret, and all other proprietary rights therein,
whether in the United States or any other country, territory or jurisdiction, that ACS may have or
obtain, without further consideration, free from any claim, lien for balance due, or rights of
retention thereto on the part of ACS. ACS shall obtain similar written undertakings from all
Subcontractors, employees and consultants who will perform any Services, so as to ensure Symetra’s
ownership of the Work Product as provided herein, and shall not commence the deployment of any such
Subcontractor, employee or consultant until such a written undertaking has been obtained from such
Subcontractor, employee or consultant and delivered to ACS. ACS acknowledges that the Parties do
not intend ACS to be a joint author of the Work Product within the meaning of the Copyright Act of
1976, as amended, and that ACS shall in no event be deemed the joint author of any Work Product.
Symetra shall have unrestricted access to all ACS materials, premises and computer files
containing the Work Product. The Parties will cooperate with each other and execute such other
documents as may be appropriate to achieve the objectives in this Section.
12.1.2
ACS License to Use. Symetra hereby grants to ACS a non-transferable, non-exclusive,
royalty-free, fully paid-up license to use any Work Product solely as necessary to provide the
Services to Symetra and/or its Affiliates. Except as provided in this Section, neither ACS nor any
Subcontractor shall have the right to use the Work Product in connection with the provision of services to its other customers without the prior written consent of Symetra, which consent may be
withheld or given in Symetra’s sole discretion.
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12.1.3 Intellectual Property. ACS promptly and fully shall disclose in writing and deliver to
Symetra all Work Product, which delivery, in the case of computer programs, shall include both
source code and object code and all available user manuals and other documentation, including any
documentation specifically requested by Symetra. ACS shall execute and deliver any and all
patent, copyright or other applications, assignments, and other documents that Symetra requests for
protecting the Work Product, whether in the United States or any other country, territory or
jurisdiction. Symetra shall have the full and sole power to prosecute such applications and to
take all other action concerning the Work Product, and ACS shall cooperate, at Symetra’s expense,
in the preparation and prosecution of all such applications and in any legal actions and
proceedings concerning the Work Product. ACS shall provide to Symetra’s Office of the General
Counsel, on a quarterly basis, a written report with appropriate information to enable Symetra to
pursue all intellectual property registrations or other protections for Symetra’s interests in the
Work Product.
12.1.4 ACS Underlying and Derivative Works. Notwithstanding anything to the contrary
contained in this Agreement, including in this Section 12.1, ACS shall be the sole and exclusive
owner of all ACS Underlying Works and all Derivative Works thereof that do not contain Work Product
(“ACS Derivative Works”).
12.1.5 Third-Party Underlying and Derivative Works. Notwithstanding anything to the contrary
contained in this Agreement, including this Section 12.1, the sole and exclusive owner of any Third
Party’s Underlying Works and of all Derivative Works thereof that are created, invented, conceived,
and fixed in a tangible medium of expression by such Third Party (such Derivative Works,
collectively with the Third Party’s Underlying Works, the “Third-Party Works”) shall be the
applicable Third Party; provided, however, that ACS shall not implement or utilize any Third-Party
Works in the provision of any Services unless the Third-Party Works are commercially available or
ACS shall have used commercially reasonable efforts to cause such Third Party to agree to grant to
Symetra (at Symetra’s cost and expense) a perpetual, irrevocable, non-exclusive, fully-paid license
to use, copy, modify, and sublicense the Third-Party Works in connection with the conduct of
Symetra’s business.
12.2 Rights and Licenses. ACS shall obtain from Third Parties all rights and licenses required to perform the Services.
12.3 Symetra Data. Symetra shall permit ACS to have access to Symetra Data solely to the
extent ACS requires access to such data to provide the Services in accordance with the terms of
this Agreement. ACS may only access and process Symetra Data in connection herewith or as directed by Symetra in writing and may not otherwise modify Symetra Data, merge it with other data,
commercially exploit it or engage in any other practice or activity that may in any manner
adversely affect the integrity, security or confidentiality of such data, other than as
specifically permitted herein or as directed by Symetra in writing. ACS understands and agrees that
Symetra owns all right, title, and interest in and to the Symetra Data and in and to any
modification, compilation or Derivative Works therefrom
(collectively, “Data and Modified Data”),
and also owns all copyright, trademark, trade secrets, and other proprietary rights in and to the
Data and Modified Data.
12.4 Infringement. Each of the Parties shall perform its responsibilities under this
Agreement in a manner that does not infringe, or constitute an infringement or misappropriation of,
any patent, trade secret, copyright or other proprietary right of any Third Party, or a violation
of the
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other Party’s software license agreements or intellectual property rights disclosed to or
known by such Party.
12.5 Cooperation. If at any time Symetra brings, or investigates the possibility of bringing,
any claim against any Person for infringement of any patent, trademark, copyright or similar
proprietary right of Symetra, including misappropriation of trade secrets and misuse of
confidential information, then ACS, upon the request and at the expense of Symetra, shall cooperate
with and assist Symetra in the investigation or pursuit of such claim, and provide Symetra with any
information in the possession of ACS that may be of use to Symetra in the investigation or pursuit
of such claim.
ARTICLE 13
SECURITY AND CONFIDENTIALITY
SECURITY AND CONFIDENTIALITY
13.1 Security.
13.1.1 General. ACS shall provide all Services utilizing security technologies and
techniques in accordance with industry best practices and Symetra’s security policies, procedures
and requirements, including those relating to the prevention and detection of fraud or other
inappropriate use or access of systems and networks. Without limiting the generality of the
foregoing, ACS shall implement and/or use network management and maintenance applications and tools
and appropriate fraud prevention and detection and encryption technologies. In no event shall ACS’
actions or inaction result in any situation that is less secure than: (a) the security provided
to Symetra as of the Effective Date; or (b) the security ACS then provides for its own systems and
data, whichever is greater.
13.1.2 Information Access. Prior to performing any Services, ACS and its employees, agents
and Subcontractors who may access Symetra Data and software shall execute the Parties’ agreements
and forms concerning access protection and data/software security consistent with the terms and
conditions of this Agreement. ACS and its employees, agents and Subcontractors shall comply with
all policies and procedures of Symetra and its Affiliates regarding data access, privacy and
security, including those prohibiting or restricting remote access to Symetra systems and data.
Symetra shall authorize, and ACS shall issue, any necessary information-access mechanisms, including access IDs and passwords, and ACS agrees that the same shall be used only by the personnel to
whom they are issued. ACS shall provide to such personnel only such level of access as is minimally
necessary to perform the tasks and functions for which such personnel are responsible. ACS shall
from time-to-time, upon request from Symetra but in the absence of any request from Symetra at
least quarterly, provide Symetra with an updated list of those ACS personnel having access to
Symetra’s and/or its Affiliate’s systems, software, and data, and the level of such access.
Computer data and software, including Symetra Data, provided by Symetra or accessed (or accessible)
by ACS personnel or ACS’ Subcontractor personnel, shall be used by such personnel only in
connection with the obligations provided hereunder, and shall not be commercially exploited by ACS
or its Subcontractors in any manner whatsoever. Without limiting the terms of Section 9.6,
failure of ACS or ACS’ Subcontractors to comply with the provisions of this Article 13 may result
in Symetra restricting offending personnel from access to Symetra computer systems or Symetra
Data. It shall be ACS’ obligation to maintain and ensure the confidentiality and security of
Symetra Data.
13.1.3 Background Checks. If ACS assigns Persons (whether employees, contractors (including
Subcontractors) and/or agents) to perform work at any Symetra Site, ACS shall conduct a background
check on all such Persons and review the results of the background check of each
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Person to verify that the Person meets ACS’ standards for employment before presenting the
results of the background check to Symetra and requesting that Symetra grant access to any such
Person to any Symetra Site. No Person shall have access to any Symetra Site prior to delivery of
the written background check to Symetra and Symetra’s approval of such Person. Symetra shall be
permitted, at its sole option, to refuse access of any Person to any Symetra Site. Such background
check shall be in the form generally used by ACS in its initial hiring of employees or contracting
for contractors (including Subcontractors and/or agents) or, as applicable, during the
employment-screening process but, at a minimum, must have been performed within the preceding
twelve (12) month period and detail the individual’s arrest record, credit history and employment
history. ACS shall obtain all releases, waivers or permissions required for the release of such
information to Symetra. Prior to presenting any Person to Symetra, with verification on an annual
basis, ACS’ human resources manager for this Agreement shall certify that the background check
required by this Section 13.1.3 has been conducted with respect to all Persons assigned by ACS to
perform work at any Symetra Site.
13.1.4 Other Policies. ACS shall, and shall cause its employees, contractors (including
Subcontractors) and agents to, abide by all policies and procedures of Symetra and its Affiliates
that may be established from time-to-time, and which are provided to ACS in writing including,
without limitation, rules and requirements for the protection of premises, materials, equipment and
personnel. Without limiting the terms of Section 9.6, any violations or disregard of these rules
shall be cause for denial of access by such personnel to properties of Symetra and/or its
Affiliates. The operation of ACS vehicles or private vehicles of ACS personnel on Symetra’s
property shall conform to posted regulations and safe driving practices. Vehicular accidents on
Symetra’s and/or its Affiliates property and involving ACS personnel shall be reported promptly to
the appropriate Symetra security personnel.
13.2 Confidential Information.
13.2.1 Non-Disclosure.
(a) All Confidential Information disclosed by the Disclosing Party to the Receiving Party
shall be deemed the sole property of the Disclosing Party and/or its Affiliates and shall be used
solely by the Receiving Party and its employees, contractors (including Subcontractors) and agents
for purposes of performing the Receiving Party’s obligations and/or exercising the Receiving
Party’s rights under this Agreement, and, except as permitted under Sections 13.2.3 and 13.3, shall
not be published, transmitted, released or disclosed by the Receiving Party or its employees,
contractors (including Subcontractors) or agents to any other Person without the prior written
consent of the Disclosing Party, which consent shall not be unreasonably withheld.
(b) The Receiving Party shall implement and maintain appropriate policies and procedures to
safeguard the confidentiality of the Disclosing Party’s Confidential Information in accordance
with subsection (a) above. The Receiving Party shall require as a condition of any subcontract
that the Subcontractor expressly acknowledges and agrees to be bound by confidentiality
requirements that are no less restrictive than the requirements to which the Receiving Party is
bound under this Agreement.
13.2.2 Disclosure Requests. Except to the extent Confidential Information is permitted to be
disclosed pursuant to Sections 13.2.3 or 13.3, any and all requests, from whatever
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source, for copies of, access to, or disclosure of the Disclosing Party’s Confidential
Information shall be promptly submitted to the Disclosing Party for disposition.
13.2.3 Permitted Disclosures. The Disclosing Party shall require each of its contractors
(including Subcontractors) and agents providing Services hereunder or otherwise having access, in
whatever form or function, to the Disclosing Party’s Confidential Information, to execute, prior to
any such activity or access, a confidentiality agreement, the terms of which shall be no less
stringent than the confidentiality requirements to which the Receiving Party is bound under this
Agreement and under which such contractors (including Subcontractors) and agents agree to protect
and maintain as confidential all of the Disclosing Party’s Confidential Information (including,
without limitation, following any termination of the Disclosing Party’s relationship with any such
contractor (including Subcontractors) and/or agents). The Receiving Party may disclose the
Disclosing Party’s Confidential Information only to those of such employees, contractors (including
Subcontractors) and agents who have a need to know the Disclosing Party’s Confidential Information
in order to perform their duties and/or exercise their rights under this Agreement, as determined
by an appropriate official of the Disclosing Party, and only to the extent minimally necessary.
Regardless of the form of any agreement executed with Receiving Party’s contractors (including
Subcontractors) and agents, ACS shall retain liability for all breaches of this Agreement and for
the acts or omissions of its officers, employees (including former employees), contractors
(including Subcontractors), agents and the like, including the unauthorized use or disclosure of
the Disclosing Party’s Confidential Information, by its officers, employees (including former
employees), contractors (including Subcontractors), agents and the like. Notwithstanding any
contrary terms that may be contained herein, the Receiving Party shall have the right to disclose
the Disclosing Party’s Confidential Information to the Receiving Party’s accountants, attorneys,
financial advisors, banks and other financing sources and other similar advisors who have a need to
know such Confidential Information, and Symetra shall have the right to disclose ACS’ Confidential
Information to a Replacement Provider to the extent strictly necessary.
13.3 Legally Required Disclosures. The Receiving Party may disclose the Confidential
Information of the Disclosing Party to the extent disclosure is based on the good faith written
opinion of the Receiving Party’s legal counsel that disclosure is required by law or by order of a
court or governmental agency or in order to comply with applicable Securities and Exchange
Commission (“SEC”) requirements; provided, however, that the Receiving Party shall give advance
notice of such requested disclosure and legal opinion to the Disclosing Party prior to any such
disclosure (except in the case of SEC-required disclosures or when a judicial or other binding
governmental order or decree or binding written instruction of a governmental regulator may
prevent such notice) and shall use all commercially reasonable efforts to obtain a protective order
or otherwise protect the confidentiality of the Disclosing Party’s Confidential Information.
Notwithstanding the foregoing, the Dis-closing Party reserves the right to obtain a protective
order or otherwise protect the confidentiality of such Confidential Information. For purposes of
this Section, the Office of General Counsel of each Party may act as that Parry’s legal counsel.
13.4 Notification and Mitigation. In the event of any impermissible disclosure, loss or
destruction of Confidential Information, the Receiving Party shall immediately notify the
Disclosing Party and take all reasonable steps to mitigate any potential harm or further
disclosure, loss or destruction of such Confidential Information.
13.5 Return of Confidential Information. Upon the expiration or termination of the Term, and
at any other time upon written request by the Disclosing Party, the Receiving Party
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promptly shall return to the Disclosing Party all Confidential Information (and all copies
thereof) of the Disclosing Party then in its possession or control, in whatever form, or, in the
case of a written request by the Disclosing Party, the Confidential Information specified in such
request as then in the Receiving Party’s possession or control, in whatever form. In addition,
unless the Disclosing Party otherwise consents in writing, the Receiving Party also shall deliver
to the Disclosing Party or, if requested by the Disclosing Party, shall delete or destroy, any
copies, duplicates, summaries, abstracts or other representations of any such Confidential
Information or any part thereof, in whatever form, then in the possession or control of the
Receiving Party. Notwithstanding the foregoing: (a) ACS may retain one (1) copy of documentation
and data, excluding Symetra Data, for archival purposes or warranty support; provided, however,
that any subsequent disclosure of such archived data shall comply with this Article 13; and (b)
Symetra may retain ACS’ Confidential Information (excluding any Category 5 Software) to the extent
required by law or regulation, to the extent otherwise permitted under this Agreement and for legal
archival purposes.
13.6 Injunctive Relief. If the Receiving Party or anyone acting on its behalf or operating
under its control, including employees, Subcontractors and other Third Parties, publishes,
transmits, releases, discloses or uses any Confidential Information of the Disclosing Party in
violation of this Article 13, or if the Disclosing Party anticipates that the Receiving Party may
violate or continue to violate any restriction set forth in this Article 13, then the Disclosing
Party shall have the right to have the provisions of this Article 13 specifically enforced by any
court having equity jurisdiction, without being required to post bond or other security and without
having to prove the inadequacy of available remedies at law, it being acknowledged and agreed that
any such violation shall cause irreparable injury to the Disclosing Party and that monetary damages
shall not provide an adequate remedy.
ARTICLE 14
LEGAL COMPLIANCE
LEGAL COMPLIANCE
14.1 Compliance with All Laws and Regulations. ACS shall perform its obligations
hereunder in compliance with all laws and regulations throughout the world that are applicable to
it as an operator of its business and/or in connection with performance of its obligations
hereunder, including, without limitation, all laws and regulations relating to the collection,
dissemination, transfer and use of data, specifically including, without limitation, the privacy
and security of confidential, personal, sensitive or other protected data. ACS acknowledges and
agrees that it may be required to modify the manner in which it provides the Services to Symetra in
order to be compliant with policies and procedures developed by Symetra that are designed to
assure compliance with HIPAA, the California Statute, GLB and all other applicable laws and
regulations. Without limiting the generality of the foregoing, such policies and procedures may
require ACS to cause its employees and those of its Subcontractors with access to the Symetra Data
to execute confidentiality and non-disclosure agreements. Any such change required under this
Section 14.1 shall be effected through the applicable change management process, and Symetra shall
be responsible for any additional costs or expense resulting from such change, provided that ACS
use all commercially reasonable efforts to mitigate any such additional costs and expenses. No
provision of this Agreement, including any InScope Service Request, shall have any force or
effect if it would cause a violation of any law or regulation, or would require any consent or
approval to prevent any such violation.
14.2 ACS Permits, Licenses and Assistance. ACS shall obtain and maintain, and shall cause
its Subcontractors to obtain and maintain, at no cost to Symetra, all approvals, permissions,
permits, licenses, and other forms of documentation required in order to comply with all foreign or
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domestic statutes, ordinances, and regulations or other laws that may be or become applicable
to performance of Services hereunder. Symetra reserves the right to reasonably request and review
all such applications, permits, and licenses prior to the commencement of any Services hereunder.
If requested, Symetra shall cooperate with ACS, at ACS’ cost and expense, to obtain any such
approvals, permits and licenses. Similarly, and without additional charge or fee, ACS shall provide
relevant assistance to Symetra in its attempt to fully comply with any domestic or foreign laws
concerning data protection, including any obligation to certify or respond to any data protection
authority regarding such matters.
14.3 Hazardous Materials. In providing the Services, ACS shall be responsible for compliance
with all Environmental Laws and all other laws, rules, regulations, and requirements regarding
Hazardous Materials, health and safety, notices and training. ACS shall not store any Hazardous
Materials at any Symetra Site. ACS agrees to take, at its expense, all actions necessary to
protect Third Parties including, without limitation, employees and agents of Symetra, from any
exposure to Hazardous Materials generated or utilized in its performance under this Agreement. ACS
agrees to report to the appropriate governmental agencies all discharges, releases, and spills of
Hazardous Materials that are required to be reported by any Environmental Law and to immediately
notify Symetra of same. ACS shall not be liable to Symetra for Symetra’s failure to comply with, or
violation of, any Environmental Law.
14.4 HIPAA.
14.4.1 General. In order to address certain requirements that are now or will become
applicable to Symetra and/or one (1) or more of its Affiliates pursuant to regulations issued
pursuant to the Health Insurance Portability and Accountability Act of 1996 (as the same may have
been and/or may be amended from time-to-time, “HIPAA”), ACS shall comply with the requirements set
forth in Attachment K and shall, if and as requested by Symetra, execute with any such Affiliate a
separate agreement that contains terms and conditions that are substantially the same as those set
forth in Attachment K. Notwithstanding anything contained herein to the contrary, ACS agrees that
Attachment K (and any separate agreements that may be entered into by ACS and any Symetra
Affiliate) shall be modified appropriately if Symetra determines that such modifications are
necessary for Symetra and/or its Affiliates to comply with any and all modifications to HIPAA
and/or its implementing regulations.
14.4.2 Security Requirements. ACS acknowledges that certain Security and Electronic
Signature Standards have been issued by the Secretary (as the same may have been and/or may be
modified from time-to-time, the “Security Standards”) and that such Security Standards will affect
the manner in which ACS provides the Services to Symetra hereunder. Having acknowledged the
foregoing, ACS agrees that it will cooperatively work with Symetra and, as part of the Services,
take all actions that may be necessary to ensure Symetra’s and/or it Affiliates’ ability to comply
with the Security Standards. ACS agrees that this provision shall equally apply with any other
security or privacy standards as may be promulgated under domestic or foreign law concerning such
matters.
14.5 California Personal Information Statute. ACS acknowledges that Symetra Confidential
Information may include personal information pertaining to California residents. ACS shall ensure
that the system and/or the network complies with the requirements of California Civil Code §1798.82
et. seq.; or any similar federal or state statute that may enacted (the “California Statute”),
including the encryption of all personally-identifiable Symetra Confidential Information. If ACS believes that personally-identifiable Symetra Confidential Information has been subject to
unauthorized
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access, ACS shall provide written notice to Symetra within twenty-four (24) hours. If Symetra
determines that actions must be taken to comply with the California Statute, ACS shall fully
cooperate with Symetra to achieve such compliance and all such compliance-related activities by
both Symetra and ACS shall be performed at ACS’ cost. Nothing contained herein shall be deemed to
release ACS from its indemnification obligations as set forth in Section 15.1.
14.6 Data Protection. The terms of this Section shall be applicable in European Union
countries where this Agreement may be performed, and shall be “localized”, as necessary, to address
local requirements and considerations.
(a) General Compliance. ACS shall during the Term comply with all applicable laws,
regulations, regulatory requirements and codes of practice in connection with all processing of
personal data by ACS pursuant to its obligations under this Agreement, including, without
limitation, by complying with all the provisions of the applicable country’s data protection act
and its amendments if any (the “Act”) and any regulations or instruments thereunder, and of
Directive 95/46/EC of the European Parliament and of the Council on the Protection of Individuals
with Regard to the Processing of Personal Data and on the Free Movement of Such Data and any
relevant recommendation issued by Article 29 working group and/or the data protection authority in
the applicable country (together with the Act, the “Data Protection Laws”), and shall not do, or
cause or permit to be done, anything which may cause or otherwise result in a breach by Symetra of
the same. ACS will oblige its employees and Subcontractors (if any) to comply with applicable
Data Protection Laws and to undertake in writing only to collect, process or use any personal data
received from Symetra for purposes of providing the Services and not to make personal data received
from Symetra available to any Third Parties.
(b) Security. ACS warrants and undertakes that, as part of the Services provided to Symetra,
it shall take, implement and maintain all such technical and organizational security procedures
and measures necessary or appropriate to preserve the security and confidentiality of personal data
processed by it and protect such personal data against unauthorized or unlawful disclosure, access
or processing, accidental loss, destruction or damage, including any technical and organizational
security procedures and measures as may be required or directed by Symetra from time to time.
Having regard to the state of the art and the cost of their implementation, ACS shall ensure that
such measures will provide a level of security appropriate to the risks represented by the Services
to the processing and in consideration of the nature of the data to be protected. In addition, and
without limiting the foregoing, ACS agrees, at Symetra’s request, to provide relevant assistance to
Symetra to devise appropriate technical and organization measures. By executing this Agreement,
Symetra appoints ACS as a data processor of Symetra Data. As a processor of such data, ACS will
process Symetra Data as specified in this Agreement. ACS may perform such processing as it
reasonably considers necessary or appropriate to perform the Services. Upon expiration or
termination of this Agreement and, if necessary, Symetra will give the data protection authority
prompt notice of the termination of the appointment of ACS as Symetra’s data processor.
(c) Trans-border Data Flows. ACS will not transfer any Symetra Data across a country border
unless ACS reasonably considers such transfer necessary for ACS’ performance of the Services and
obtains Symetra’s prior written consent.
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(d) ACS as a Data Processor. ACS understands and acknowledges that, to the extent that
performance of its obligations hereunder involves or necessitates the processing of personal data,
it shall act only on instructions and directions from Symetra. ACS shall comply promptly with all
such instructions and directions received by ACS from Symetra from time to time. ACS undertakes to
keep the Symetra Data confidential and not to disclose personal data to any Third Party in any
circumstances other than at Symetra’s specific written request or in compliance with legal
obligation. If ACS subcontracts any of its obligations under this Agreement, it shall ensure
contractually that the provisions agreed hereunder also apply towards the subcontractor before any
Symetra Data is transmitted to the subcontractor. ACS undertakes to monitor its subcontractors’
compliance with such provisions as often as it deems necessary.
(e) Transfer Outside of the European Union or Outside of a Country Considered as Providing an
Adequate Level of Protection Pursuant to Article 25 of the EU Directive 95/46 of 24 October 1995.
As part of the Services provided to Symetra under this Agreement, ACS undertakes to transfer
Symetra’s personal data to its Affiliates, which may be located in countries considered as not
providing an adequate level of protection only if necessary for the performance of the Services.
With respect to trans-border data flows mentioned under Section 14.6(c) above, ACS also undertakes
to execute, as part of the Services provided to Symetra, any documents, including any data transfer
agreement, that may be required for Symetra to comply with the Data Protection Laws.
(f) Data Subject Right of Access and Rectification. If Symetra is required to provide
information to a data subject regarding that individual’s personal data, ACS will reasonably
cooperate with Symetra in providing such information to the full extent necessary to comply with
Data Protection Laws, and where a request by a data subject is made directly to ACS, it shall as
soon as reasonably practicable notify Symetra upon receipt of a request (whether oral or in
writing) from such an individual providing sufficient details and information as are required by
Symetra to comply with its obligations under the Data Protection Laws. If further to this request
the personal data must be rectified, ACS undertakes to amend the personal data as instructed by
Symetra.
ARTICLE 15
INDEMNIFICATION
INDEMNIFICATION
15.1 By ACS.
15.1.1 Intellectual Property. ACS shall indemnify, defend and hold harmless the Symetra
Indemnitees from and against, and shall pay all settlements, judgments, awards, fines, penalties,
interest, liabilities, losses, costs, damages and expenses, including attorneys’ fees and
disbursements and court costs (collectively, “Losses”), sustained or incurred by any of the Symetra
Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third Party
against any of them for actual or alleged infringement of any patent, trademark, copyright or other
proprietary right, including misappropriation of trade secrets, arising out of or relating to
technology (excluding the Category 6 Software) and/or methods or processes used by ACS to provide
the Services (an “Infringement Claim”). If Symetra’s right to use any such technology or enjoy
continued use of any method or process is enjoined or appears likely to be enjoined, at its sole
cost and expense, ACS shall either procure a license to enable Symetra to continue such use or
replace or modify the technology,
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method or process so that it no longer is subject to any such claim, suit or proceeding while
maintaining equivalent or better functionality and performance capabilities in a form acceptable to
Symetra.
15.1.2 Personal Injury, Property and Other Damage. ACS shall indemnify, defend, and hold
harmless the Symetra Indemnitees from and against, and shall pay any and all Losses sustained or
incurred by any of the Symetra Indemnitees, based upon or relating to any claim, suit or proceeding
brought by any Third Party, ACS employee or Symetra employee against any of the Symetra Indemnitees
for actual or alleged bodily injury or death, damage to tangible personal or real property
including computer data, data loss or any other damage, notwithstanding the form in which any such
action is brought (e.g., contract, tort or otherwise), to the extent such injuries or damages arise
directly or indirectly from acts, errors or omissions that constitute negligence, willful misconduct or violations of law, by ACS and/or its employees, agents and/or Subcontractors.
15.1.3 Third-Party Contracts. ACS shall indemnify, defend and hold harmless the Symetra
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by any of the
Symetra Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third
Party against any of the Symetra Indemnitees for: (a) actual or alleged breach by ACS of any
agreement with any Third Party; and (b) actual or alleged breach by Symetra of any agreement with
any Third Party, to the extent the claim, suit or proceeding arises out of, relates to or is a
result of ACS’: (i) failure to fulfill its obligations under this Agreement; and/or (ii) breach
of any term or condition of this Agreement.
15.1.4 ACS Employees. ACS shall indemnify, defend and hold harmless the Symetra Indemnitees
from and against, and shall pay any and all Losses sustained or incurred by any of the Symetra
Indemnitees, based upon or relating to any claim, suit or proceeding brought by any ACS employee
against any of the Symetra Indemnitees based upon any act by ACS, its employees, agents and/or its
Subcontractors on or after the Effective Date (or in connection with services provided by ACS
prior to the Effective Date) including, without limitation, any claim relating to the non-hire of
employees by ACS, claims for wages, benefits, discrimination or harassment of any kind, wrongful
termination and/or denial of severance or termination payments upon leaving ACS’ employ. In
connection therewith, ACS shall retain for an appropriate length of time in light of applicable
statutes of limitation and make available to Symetra upon request any and all employment records
relating to any such claim, suit or proceeding.
15.1.5 Hazardous Material. ACS shall indemnify, defend and hold harmless the Symetra
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by any of the
Symetra Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third
Party against any of the Symetra Indemnitees as a result of: (a) ACS’ failure to comply with any
applicable Environmental Laws; or (b) the presence of any Hazardous Material upon, above or beneath
ACS’ facilities or locations.
15.1.6 Information Disclosure. ACS shall indemnify, defend and hold harmless the Symetra
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by any of the
Symetra Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third
Party against any of the Symetra Indemnitees as a result of any failure by ACS, its employees,
agents and/or Subcontractors to comply with the obligations set forth in this Agreement relating to
Symetra Confidential Information or the protection of the security or privacy of data.
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15.1.7 Security Breaches. ACS shall indemnify, defend and hold harmless the Symetra
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by any of the
Symetra Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third
Party against any of the Symetra Indemnitees as a result of any failure by ACS, its employees,
agents and/or Subcontractors to comply with the security obligations set forth in this Agreement relating to protection against fraudulent or other inappropriate or unauthorized use of or access to
the systems and/or networks described herein.
15.1.8 Non-Performance. ACS shall indemnify, defend and hold harmless the Symetra
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by any of the
Symetra Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third
Party against any of the Symetra Indemnitees as a result of ACS’ breach or default of any term of
this Agreement.
15.1.9 Taxes. ACS shall indemnify, defend and hold harmless the Symetra Indemnitees from and
against, and shall pay any and all Losses sustained or incurred by any of the Symetra Indemnitees,
based upon or relating to any claim, suit or proceeding brought by any Third Party against any of
the Symetra Indemnitees as a result of ACS’ failure to pay applicable taxes including, without
limitation, payroll and other employment-related taxes.
15.2 By Symetra.
15.2.1 Intellectual Property. Symetra shall indemnify, defend and hold harmless the ACS
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by any of the
ACS Indemnitees, arising out of any claim, suit or proceeding brought by any Third Party against
any of them for actual or alleged infringement of any patent, trademark, copyright or similar
proprietary right, including misappropriation of trade secrets, arising out of or relating to the
Category 6 Software. If ACS’ right to use such software is enjoined, Symetra may, in its
reasonable discretion and at Symetra’s sole expense, either procure a license to enable ACS to
continue use of such software or develop or obtain a non-infringing replacement. Symetra shall
have no obligation with respect to any claim or action to the extent it is based solely upon: (a)
modification of the software by ACS or any of its Affiliates or Subcontractors; or (b) ACS’
combination, operation or use of such software with other apparatus, data or programs; provided,
however, that this sentence and therefore this exception shall not be applicable to any such
combination, modification, operation or use required or specified in writing by Symetra.
15.2.2 Managed and Assigned Contracts. Symetra shall indemnify, defend, and hold harmless
the ACS Indemnitees from and against, and shall pay any and all Losses sustained or incurred by the
ACS Indemnitees, based upon or relating to any claim, suit or proceeding brought by any Third Party
against any of the ACS Indemnitees as a result of an actual or alleged breach by Symetra of: (a)
any Managed Contract (to the extent not caused by ACS); or (b) any Assigned Contract (to the
extent not caused by ACS) occurring prior to the date the Assigned Contract was assigned to ACS.
15.2.3 Hazardous Materials. Symetra shall indemnify, defend, and hold harmless the ACS
Indemnitees from and against, and shall pay any and all Losses sustained or incurred by the ACS
Indemnitees upon or relating to any claim, suit or proceeding brought by any Third Party against
any of the ACS Indemnitees as a result of: (a) Symetra’s failure to comply in all material respects with any applicable Environmental Laws; or (b) the presence of any Hazardous Material upon,
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above or beneath Symetra’s facilities or locations, provided such Hazardous Material was not
introduced to such facilities or locations by ACS or any of its Subcontractors or released into the
environment by ACS or any of its Subcontractors.
15.3 Indemnification Procedures.
15.3.1 General. If any legal action governed by this Article 15 is commenced against an
Indemnified Party, such Indemnified Party shall give written notice thereof to the Indemnifying
Party promptly after such legal action is commenced; provided, however, that failure to give prompt
notice shall not reduce the Indemnifying Party’s obligations under this Article 15, except to the
extent the Indemnifying Party is prejudiced thereby. After such notice, if the Indemnifying Party
acknowledges in writing to the Indemnified Party that the right of indemnification under this Agreement applies with respect to such claim, then the Indemnifying Party shall be entitled, if it so
elects in a written notice delivered to the Indemnified Party not fewer than ten (10) Business Days
prior to the date on which a response to such claim is due, to take control of the defense and
investigation of such claim and to employ and engage attorneys of its choice, that are reasonably
satisfactory to the Indemnified Party, to handle and defend same, at the Indemnifying Party’s
expense. The Indemnified Party shall cooperate in all reasonable respects with the Indemnifying
Party and its attorneys, at the Indemnifying Party’s expense, in the investigation, trial, and
defense of such claim and any appeal arising therefrom; provided, however, that the Indemnified
Party may participate, at its own expense, through its attorneys or otherwise, in such
investigation, trial, and defense of such claim and any appeal arising therefrom. If a court of
competent jurisdiction later determines, without right of further appeal, that a claim, suit or
proceeding for which the Indemnifying Party assumed defense was not eligible for indemnification
under this Article 15, within thirty (30) calendar days following such determination, the
Indemnified Party shall reimburse the Indemnifying Party in full for all judgments, settlements,
costs and expenses (including attorneys’ fees) incurred in connection with such claim, suit or
proceeding.
15.3.2 Settlement of Claims. No settlement of a claim that involves a remedy other than the
payment of money by the Indemnifying Party along with standard settlement terms, specifically
including a dismissal of all claims with prejudice as well as a non-admission of liability or other
wrongdoing, shall be entered into by the Indemnifying Party without the prior written consent of
the Indemnified Party, which consent may be withheld in the Indemnified Party’s sole discretion.
In no event shall an adverse judgment be entered against the Indemnified Party as part of a
settlement without its express written consent.
15.3.3 Defense Declined. If the Indemnifying Party declines to assume defense of a claim as
provided in this Section: (a) the Indemnified Party may assume such defense and, if such defense
is assumed, unless the Parties otherwise agree in writing, the Indemnifying Party thereafter shall
be barred from assuming such defense at a later time; and (b) if it is later determined by a court
of competent jurisdiction, without right of further appeal, that such claim was eligible for
indemnification by the Indemnifying Party under this Article 15, within thirty (30) calendar days
following such determination, the Indemnifying Party shall reimburse the Indemnified Party in full
for all settlements, judgments, costs and expenses (including attorneys’ fees) incurred by the
Indemnified Party in connection with such claim.
15.3.4 Defense Accepted. Notwithstanding anything contained herein to the contrary, if the
Indemnifying Party accepts defense of a claim as provided in this Section, the Indemnified Party
shall have the right to engage independent counsel to monitor and participate in the
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defense of the matter as such counsel or the Indemnified Party deems fit to protect its
interests. The Indemnifying Party and its counsel must reasonably cooperate with the Indemnified
Party’s counsel to enable such counsel to adequately represent the interests of the Indemnified
Party.
ARTICLE 16
INSURANCE
INSURANCE
16.1 Required Insurance Coverages. During the Term and for such other periods as may be
required herein, at its sole expense, ACS shall provide and maintain insurance consistent with acceptable and prudent business practices including, at a minimum, the types of insurance and the
amounts described in Attachment N. The fact that ACS has obtained the insurance required in this
Article 16 shall in no manner lessen nor otherwise affect ACS’ other obligations or liabilities set
forth in this Agreement including, without limitation, its obligations under Article 15. If ACS
retains any Subcontractors, ACS shall require all such Subcontractors to carry the same coverages
at the same limits set forth herein.
16.2 General Provisions.
16.2.1 Evidence of Insurance. On or before the Effective Date and thereafter at Symetra’s
request, ACS shall deliver to Symetra certificates of insurance evidencing the insurance required
hereunder, together with appropriate separate endorsements. In addition, upon reasonable notice,
ACS grants Symetra the right to examine its underlying policies solely for the purpose of confirming ACS’ compliance with the terms of this Article 16.
16.2.2 Claims-Made Coverage. If any coverage is written on a “claims-made” basis, the
certificate of insurance shall clearly so state. In addition to the coverage requirements
specified above, ACS will make all commercially reasonable efforts with respect to any such
policies to provide that:
(a) the policy’s retroactive date shall coincide with or precede ACS’ commencement of
performance of Services (including subsequent policies purchased as renewals or replacements);
(b) similar insurance is maintained during the required extended period of coverage following
expiration of the Agreement for a minimum of two (2) years;
(c) if insurance is terminated for any reason, ACS shall purchase a replacement claims-made
policy with the same or an earlier retroactive date or shall purchase an extended reporting
provision to report claims arising in connection with this Agreement for a minimum of two (2) years
following termination or completion of the Services; and
(d) all claims-made policies shall allow the reporting of circumstances or incidents that
might give rise to future claims.
16.2.3 Notice of Cancellation or Change of Coverage. All certificates of insurance provided by
ACS must evidence that the insurance ACS will give Symetra forty-five (45) calendar days’ written
notice in advance of any cancellation, lapse, reduction or other adverse change in respect of such
insurance.
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16.2.4 Qualifying Insurers. All policies of insurance required hereby shall be issued by
companies that have been approved to do business in the State of Washington, unless prior written
approval is obtained from Symetra’s risk manager. All providers of insurance shall have an AM Best
rating of A- and Financial Size Category VI or better.
16.2.5 Waiver of Subrogation. All policies of insurance required hereby shall include a
waiver of subrogation in favor of Symetra and its Affiliates, a copy of which shall be provided to
Symetra upon request. ACS does hereby exercise its waiver of subrogation in favor of Symetra and
its Affiliates for any insurance proceeds payable under any policies of insurance required hereby.
ARTICLE 17
PROBLEM RESOLUTION
PROBLEM RESOLUTION
17.1 Problem Resolution Process.
17.1.1 Administrative-Level Performance Review. If a Problem arises between the Parties, the
Symetra Project Executive and the ACS Project Executive shall meet and attempt to resolve the
Problem. Written minutes of such meetings shall be kept. If the Parties are unable to resolve
the Problem within ten (10) calendar days after the initial request for a meeting, then the Parties
shall seek to resolve the Problem through the IT Outsourcing Committee Performance Review as
provided in Section 17.1.2.
17.1.2 IT Outsourcing Committee Performance Review. Upon receipt of a written Problem referral
from the Parties’ representatives as provided in Section 17.1.1, the IT Outsourcing Committee shall
meet within five (5) Business Days thereafter in an effort to resolve the Problem. If the IT
Outsourcing Committee is unable to resolve the Problem within ten (10) calendar days after the
Problem was referred to it or fifteen (15) calendar days have passed since the Problem resolution
process was begun, then the IT Outsourcing Committee shall forward the written Problem referral to
the Parties’ executives as provided in Section 17.1.3 along with a statement of any actions taken
or recommendation made by the respective members of the IT Outsourcing Committee.
17.1.3 Executive-Level Performance Review. For Problems that are not resolved as described in
Section 17.1.2, negotiations shall be conducted by the Chief Information Officer or higher-level
officer of Symetra and the Western Region Vice President or higher-level officer of ACS. If such
representatives are unable to resolve the Problem within five (5) Business Days after the Parties
have commenced negotiations, or fifteen (15) calendar days have passed since the initial request
for negotiations at this level, then the Parties shall be entitled to discontinue negotiations, to
seek to resolve the Problem through mediation as hereinafter provided or, if the Parties do not
agree to submit the Problem to mediation, to seek any and all rights and remedies that may be
available to them as provided in this Agreement.
17.1.4 Voluntary, Non-Binding Mediation. If executive-level performance review is not
successful in resolving the Problem, the Parties may, but shall not be obligated to, mutually agree
in writing to submit the Problem to non-binding mediation. Mediation must occur within five (5)
Business Days after the Parties agree to submit the Problem to mediation. The Parties mutually
shall select an independent mediator experienced in IT systems, and each shall designate a representative(s) to meet with the mediator in good faith in an effort to resolve the Problem. The
specific format for the mediation shall be left to the discretion of the mediator and the
designated Party representatives
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and may include the preparation of agreed-upon statements of fact or written
statements of position furnished to the other Party.
17.2 Continued Performance; No Tolling of Cure Periods. The Parties agree to continue
performing their obligations under this Agreement while the Problem is being resolved as provided
in this Article 17, unless and until the Problem is resolved or until this Agreement is terminated.
The time frame for a Party to cure any breach of the terms of this Agreement shall not be tolled by
the pendency of any Problem resolution procedures.
17.3 De Minimis Problems. Notwithstanding anything to the contrary in this Article 17 or
elsewhere in this Agreement, if: (a) Symetra requests services, products and/or resources from
ACS and the Parties disagree as to whether any such request is within the scope of the Services;
and (b) the financial impact on ACS of satisfying such request
is less than [***], then the
disagreement shall not be deemed a Problem, but absent mutual agreement of the Parties through the
IT Outsourcing Committee, shall be deemed resolved in Symetra’s favor. The maximum financial
impact on ACS pursuant to this Section shall not exceed [***] in the aggregate during any Contract
Year.
17.4 Equitable Relief. Notwithstanding anything contained in this Agreement to the contrary,
the Parties shall be entitled to seek injunctive or other equitable relief whenever the facts or
circumstances would permit a Party to seek equitable relief in a court of competent jurisdiction.
ARTICLE 18
USE OF SUBCONTRACTORS
USE OF SUBCONTRACTORS
18.1 Approval; Key Subcontractors. Except as hereinafter provided in this Section, ACS
shall not perform or provide the Services through Subcontractors, including providers of hardware
and software, without the prior written consent of the Symetra Project Executive as to the
selection of the Subcontractor, which consent may be withheld by Symetra in its sole discretion.
Any such consent, or ACS’ subcontracting to the wholly owned subsidiaries of Affiliated Computer
Services, Inc. (which shall not require Symetra’s prior consent) shall be contingent on ACS’
compliance with the terms of Section 7.4.4 (when applicable) and Section 13.2.3 before the
Subcontractor (including any wholly owned subsidiary) begins providing any Services to ACS or
Symetra. Symetra consents to the Subcontractors identified in Attachment O, provided that ACS
complies with the terms of Section 7.4.4 (when applicable) and Section 13.2.3 before the
Subcontractor begins providing any Services to ACS or Symetra. ACS shall ensure that each
Subcontractor has obtained and maintains all licenses required in connection with the Services for
which such Subcontractor is responsible. ACS agrees that it shall continue throughout the Term to
retain the Subcontractors identified as “Key Sub contractors” in Attachment O and that such Persons
shall continue to provide the Services initially provided, unless ACS has obtained Symetra’s prior
written consent to any changes, which consent may be withheld in Symetra’s sole discretion.
18.2 Subcontractor Agreements. ACS will provide to Symetra copies of all agreements between
ACS and its Subcontractors related to the performance of this Agreement within thirty (30) calendar
days after such contracts are executed by ACS and its Subcontractors. Such subcontracts will
contain materially the same terms and conditions as this Agreement, to the extent such terms and
conditions are relevant to the Services to be provided by the Subcontractor (including, without
limitation, a restriction on the subcontractor’s right to further subcontract its obligations
without Symetra’s prior written consent), and shall identify Symetra as a direct and intended
third-party beneficiary
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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thereof. ACS represents and warrants that the copies of Subcontractor agreements required to
be provided to Symetra hereunder will be true and complete copies thereof.
18.3 Liability and Replacement. In no event shall ACS be relieved of its obligations under
this Agreement as a result of its use of any Subcontractors. ACS shall supervise the activities and
performance of each Subcontractor and shall be jointly and severally liable with each such Subcontractor for any act or failure to act by such Subcontractor. If Symetra determines that the
performance or conduct of any Subcontractor is unsatisfactory, Symetra may notify ACS of its
determination in writing, indicating the reasons therefor, in which event ACS promptly shall take
all necessary actions to remedy the performance or conduct of such Subcontractor or, subject to the
terms of Section 18.1, replace such Subcontractor by another Third Party or by ACS personnel.
18.4 Direct Agreements. Upon expiration or termination of the Term for any reason, Symetra
shall have the right to enter into direct agreements with any Subcontractors. ACS represents,
warrants, and covenants to Symetra that its arrangements with such Subcontractors shall not
prohibit or restrict such Subcontractors from entering into direct agreements with Symetra.
ARTICLE 19
MISCELLANEOUS
MISCELLANEOUS
19.1 Defined Terms. Capitalized terms used in this Agreement (including in any
Schedules, Attachments, Addenda and other documents attached to this Agreement), shall have the
meanings ascribed to them in Attachment P. Other capitalized terms used in this Agreement are
defined in the context in which they are used and shall have the meanings ascribed to them therein.
The terms defined in Attachment P include the plural as well as the singular.
19.2 Third-Party Beneficiaries. The applicable agreements are agreements between the
applicable Parties and, except for the Symetra Indemnitees and the ACS Indemnitees, confer no
rights upon any of such Parties’ employees, agents, or contractors, or upon any other Person.
19.3 Use of Symetra Name. Except as necessary to deliver the Services in accordance with
this Agreement, ACS shall have no right to use, and shall not use, the name of Symetra and/or any
of its officials or employees, or logos or trademarks in any manner without the prior written consent of Symetra, which consent may be withheld in Symetra’s sole discretion.
19.4 Captions; References; Terminology. Captions and titles to Schedules, Exhibits, Appendices, Attachments and/or Addenda are used herein for convenience of reference only and shall
not be used in the construction or interpretation of this Agreement. Any reference herein to a
particular Section number (e.g., “Section 2”), shall be deemed a reference to all Sections of this
Agreement that bear sub-numbers to the number of the referenced Section (e.g., Sections 2.1,
2.1.1, etc.). As used herein, the word “including” shall mean “including, without limitation.”
19.5 Assignment. Except for: (a) subcontracting permitted under the terms of Article 18; (b)
any initial public offering by Symetra; and (c) Symetra’s assignment, transfer or delegation to a
Symetra Affiliate, neither Party shall assign, transfer or delegate its duties under this
Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written
consent of the other Party, which shall not be unreasonably withheld. Any assignment in
contravention of this Section (e.g., without the consent of the other Party, where such consent is
required) shall be voidable by the non-assigning Party. Without limiting the generality of the
foregoing, the phrase “by operation of
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law” shall include a Change in Control. Subject to all other provisions herein contained, this
Agreement shall be binding on the Parties and their successors and permitted assigns.
Notwithstanding the foregoing, the assigning party shall remain liable for the performance of the
assigned or delegated obligations hereunder.
19.6 Notices. Any written notice, request, consent, approval or other communication required
or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have
been given: (a) upon delivery if delivered personally; (b) upon transmission if sent viafacsimile
(with the original sent by recognized overnight courier); or (c) one (1) business day after deposit
with a national overnight courier, in each case addressed to the following addresses/telecopier numbers, or to such other addresses/telecopier numbers as may be specified by a Party upon written notice to the other in accordance with the terms of this Section:
If to Symetra:
Symetra Life Insurance Company
5069 154th Place NE
Redmond, WA 98052-9669
Attention: Chief Information Officer
Telecopier No.: (425) 376-6080
5069 154th Place NE
Redmond, WA 98052-9669
Attention: Chief Information Officer
Telecopier No.: (425) 376-6080
with a copy to:
Symetra Life Insurance Company
5069 154th Place NE
Redmond, WA 98052-9669
Attention: Legal Counsel
Telecopier No.: (425) 376-6080
5069 154th Place NE
Redmond, WA 98052-9669
Attention: Legal Counsel
Telecopier No.: (425) 376-6080
If to ACS:
ACS Commercial Solutions, Inc.
3935 NW Aloclek Place
Suite A-100
Hillsboro, OR 97124
Attention: Symetra SBU Manager
Telecopier No.: (503) 466-6774
3935 NW Aloclek Place
Suite A-100
Hillsboro, OR 97124
Attention: Symetra SBU Manager
Telecopier No.: (503) 466-6774
with a copy to:
ACS Commercial Solutions, Inc.
2828 N. Haskell Avenue, Bldg 1, 9th Floor
Dallas, Texas 75204
Attention: Group Counsel for Commercial Solutions
Telecopier No.: (214) 584-5525
2828 N. Haskell Avenue, Bldg 1, 9th Floor
Dallas, Texas 75204
Attention: Group Counsel for Commercial Solutions
Telecopier No.: (214) 584-5525
19.7 Amendments; Waivers. This Agreement may be modified only pursuant to a writing executed
by Symetra and ACS. ACS expressly agrees that all amendments to this Agreement executed by the
Parties after the Effective Date must be signed by a Vice President or higher-level
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officer of Symetra in order to be effective. The Parties expressly disclaim the right to claim the
enforce-ability or effectiveness of: (a) any amendments to this Agreement that are not executed by
a Vice President or higher-level officer of Symetra; (b) any oral modifications to this Agreement;
and (c) any other amendments, based on course of dealing, waiver, reliance, estoppel or other
similar legal theory. The Parties expressly disclaim the right to enforce any rule of Washington
law that is contrary to the terms of this Section.
19.8 Relationship Between the Parties. Neither Party (nor any employee, subcontractor or
agent thereof) shall be deemed or otherwise considered a representative, agent, employee, partner
or joint venturer of the other. Further, neither Party (nor any employee, subcontractor or agent
thereof) shall have the authority to enter into any agreement, nor to assume any liability, on
behalf of the other Party, nor to bind or commit the other Party in any manner, except as expressly
provided in this Agreement.
19.9 Access to Personnel and Information. If reasonably required by ACS for the performance
of the Services, Symetra shall provide ACS with reasonable access to Symetra’s administrative,
technical and other similar personnel and network management records and information.
19.10 Severability. If any provision of this Agreement is determined to be invalid or
unenforceable, that provision shall be deemed stricken and the remainder of this Agreement shall
continue in full force and effect insofar as it remains a workable instrument to accomplish the
original intent and purposes of the Parties, and, if possible, the Parties shall replace the
severed provision with a provision that reflects the intention of the Parties with respect to the
severed provision but that will be valid and enforceable.
19.11 Counterparts; Faxed Signatures. This Agreement may be executed in duplicate counterparts, each of
which shall be deemed an original and both of which together shall constitute but one and the same
instrument. Counterparts may be executed in either original or faxed form, and the Parties hereby
adopt as original any signatures received via facsimile.
19.12 Governing Law and Venue. This Agreement shall in all respects be interpreted under, and
governed by, the internal laws of the State of Washington, U.S.A., including, without limitation,
as to validity, interpretation and effect, without giving effect to its conflicts of laws
principles. Except as provided in Section 17.1.4, Section 19.13 and hereafter in this Section, ANY
LEGAL ACTION, SUIT OR PROCEEDING BROUGHT BY A PARTY IN ANY WAY ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE BROUGHT SOLELY AND EXCLUSIVELY IN THE STATE OR FEDERAL COURTS LOCATED IN KING
COUNTY, STATE OF WASHINGTON, U.S.A., AND EACH PARTY IRREVOCABLY ACCEPTS AND SUBMITS TO THE SOLE AND
EXCLUSIVE PERSONAL JURISDICTION OF SUCH COURTS IN PERSONAM, GENERALLY AND UNCONDITIONALLY WITH
RESPECT TO ANY ACTION, SUIT OR PROCEEDING BROUGHT BY OR AGAINST IT BY THE OTHER PARTY. EXCEPT AS
PROVIDED IN SECTION 17.1.4, SECTION 19.13 AND HEREAFTER IN THIS SECTION, NEITHER PARTY SHALL BRING
ANY LEGAL ACTION, SUIT OR PROCEEDING IN ANY WAY ARISING OUT OF OR RELATING TO THIS AGREEMENT IN
ANY OTHER COURT OR IN ANY OTHER JURISDICTION AND SHALL NOT ASSERT ANY CLAIM, WHETHER AS AN ORIGINAL
ACTION OR AS A COUNTERCLAIM OR OTHERWISE, AGAINST THE OTHER IN ANY OTHER COURT OR JURISDICTION.
Each Party irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any objection that it may now or hereafter have to the venue of any of the
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aforesaid actions, suits or proceedings in the courts referred to above, and further waives
and agrees not to plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper, or that this Agreement or the subject matter hereof or thereof may not be
enforced in or by such court. As the only exceptions to any of the above, if a Party is entitled to
seek injunctive or other equitable relief which is not available in the venue specified in this
Section, this Section shall not be deemed to be a bar to the Party seeking such relief if such
relief is wholly non-monetary injunctive or other equitable relief.
19.13 Arbitration. At Symetra’s sole and absolute discretion and election, a dispute that
arises from or relates to this Agreement may be submitted for resolution to binding arbitration,
and if Symetra makes such an election, such dispute shall be decided exclusively by binding
arbitration in King County in the State of Washington, U.S.A., under the Commercial Arbitration
Rules of the American Arbitration Association (the “Rules”), before a sole arbitrator, who shall be
a retired or former judge or attorney with at least twenty (20) years of experience and mutually
acceptable to the parties. Each party will bear one half of the arbitrator’s fees and other
administrative fees of the arbitration; provided, however, that the arbitrator may award recovery
of such fees to the party whom the arbitrator reasonably believes is the prevailing party, if the
arbitrator reasonably believes that an award of such fees is appropriate. The parties agree that
the arbitrator’s award shall be final, and may be filed with and enforced as a final judgment by
any court of competent jurisdiction. The arbitrator shall have no power to: (a) award damages
(including any attorney’s fees) in excess of the amount or other than the types allowed by Article
11; or (b) alter any of the provisions of this Agreement. The parties consent and agree to the
jurisdiction of the tribunals mentioned in this paragraph, and waive any and all objections to such
forums, including but not limited to objections based on improper venue or inconvenient forum.
19.14 Expenses. Each Party shall bear all expenses paid or incurred by it in connection with
the planning, negotiation and consummation of this Agreement.
19.15 Import/Export. The computer hardware, software and technical data which are the subject
of this Agreement are acknowledged to be subject to any then-applicable United States laws,
regulations, orders or other restrictions regarding export of computer hardware, software,
technical data or Derivative Works thereof. Neither Party shall, in violation of any applicable
laws, regulations, orders or other restrictions, directly or indirectly export (or re-export) any
computer hardware, software, technical data or Derivative Works thereof, or permit the shipment of
same: (a) into (or to a national or resident of) Cuba, North Korea, Iran, Iraq, Libya, Syria or any
other country to which the United States has embargoed goods; or (b) to anyone on the United States
Treasury Department’s List of Specially Designated Nationals, List of Specially Designated
Terrorists and List of Specially Designated Narcotics Traffickers or the United States Commerce
Department’s Denied Parties List; or (c) to any country or destination for which the United States
government or a United States governmental agency requires export license or other approvals for
export without first having obtained such license or other approval. This obligation shall survive
the expiration or early termination of this Agreement.
19.16 Waiver of UCITA. THE PARTIES AGREE THAT THE UNIFORM COMPUTER INFORMATION
TRANSACTIONS ACT OR ANY VERSION THEREOF, ADOPTED BY ANY STATE IN ANY FORM (“UCITA”),
SHALL NOT APPLY TO THIS AGREEMENT AND, TO THE EXTENT THAT UCITA IS APPLICABLE, THE PARTIES
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AGREE TO OPT-OUT OF THE APPLICABILITY OF UCITA PURSUANT TO THE OPT-OUT PROVISION(S)
CONTAINED THEREIN.
19.17 Benefits of Agreement. All rights and benefits granted hereunder to Symetra may be
exercised and enjoyed by any Symetra Affiliate, provided that Symetra shall be and remain
responsible for the compliance of the terms and conditions of this Agreement with respect to such
Symetra Affiliate and will be such Symetra Affiliate’s agent for all purposes of this Agreement and
any claims or actions arising from such Symetra Affiliate shall be pursued solely by Symetra.
Further, for purposes of calculating discounts (if any) available under this Agreement that are
based on volume, quantity or other measurement factor, the total volume of all Symetra Affiliates
shall be counted to determine whether the applicable volume, quantity or other measurement factor
has been achieved.
19.18 Entire Agreement. This Agreement and all Schedules, Attachments, Exhibits and Addenda
hereto are incorporated herein by this reference and are an integral part of the Agreement and
shall be read and interpreted together with the Agreement as a single document. This Agreement,
consisting of all of the pages of this instrument, together with all Schedules, Attachments, Exhibits and Addenda hereto sets forth the entire, final and exclusive agreement between the Parties
and supersedes all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, between the Parties related to the subject matter herein.
IN WITNESS WHEREOF, the Parties have executed this Information Technology Services Agreement
as of the Effective Date.
| SYMETRA LIFE INSURANCE COMPANY | ACS COMMERCIAL SOLUTIONS, INC. | |||||||||
By:
|
By: | |||||||||
Title:
|
Title: | |||||||||
Date:
|
Date: | |||||||||
-71-
Table of Contents
AFFILIATED COMPUTER SERVICES, INC. GUARANTY
For value received, Affiliated Computer Services, Inc. (“Parent”), a Delaware corporation with
a place of business at 2828 N. Haskell, Dallas, Texas 75204, absolutely and unconditionally
guarantees the obligations and performance of its wholly-owned subsidiary, ACS Commercial
Solutions, Inc. (“ACS”), under that certain Information Technology Services Agreement by and
between ACS and Symetra Life Insurance Company (“Symetra”) dated October 28, 2004 (inclusive of all
Exhibits, Schedules, Attachments, Addenda, Appendices and any country agreements executed
thereunder (whether in effect on the effective date of such agreement or in effect in the future),
as the same may hereafter be amended, modified, renewed or extended from time to time (the
“Guaranteed Obligations”). If ACS fails to perform the Guaranteed Obligations, Parent shall perform
such obligations. This Guaranty shall continue in force until all Guaranteed Obligations have been
performed and/or satisfied. Parent shall not be discharged from liability under this Guaranty so
long as any claim by Symetra, or any of its Affiliates (as defined in the above-described
ACS/Symetra agreement), against ACS remains outstanding. This Guaranty shall be binding on Parent
and on its successors and assigns.
Notwithstanding anything in this Guaranty to the contrary, the obligations of Parent under
this Guaranty shall be subject to the rights, privileges and defenses otherwise available to ACS
under the above-described ACS/Symetra agreement with respect to the Guaranteed Obligations. Nothing
in this Guaranty shall be deemed to expand or otherwise extend the Guaranteed Obligations or limit
any defenses available to ACS (or to Parent by virtue of this Guaranty) under the Agreement. This
Guaranty shall be expressly subject to the conditions that: (a) Symetra may resort to Parent for
performance of the Guaranteed Obligations only if in Symetra’s reasonable judgment efforts to
obtain performance of the Guaranteed Obligations against ACS are not likely to result in the full
and timely performance of such Guaranteed Obligations; and (b) Parent may satisfy its performance
obligations under this Guaranty either directly or indirectly by causing one of its Affiliates to
perform such obligations.
IN WITNESS WHEREOF, Affiliated Computer Services, Inc. has, by a duly authorized officer,
executed this Guaranty as of the 28th day of October 2004.
| AFFILIATED COMPUTER SERVICES, INC. | ||||
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
Schedule 1
Relationship Management
for
Symetra Life Insurance Company
October 28, 2004
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
Table of Contents
1.0 Relationship Management Services and ACS Proposed Staffing |
1 | |||
1.1 Personnel and Organization Overview |
1 | |||
1.2 ACS Account Team Organization and Staffing |
2 | |||
1.2.1 Organization Chart |
2 | |||
1.2.2 Key Account Team Management Organization and Roles |
2 | |||
1.2.3 Key Executive Team Roles |
5 | |||
1.3 Additional ACS Team Roles |
6 | |||
1.3.1 ACS Business Operations Manager |
6 | |||
1.3.2 ACS Contracts Manager |
6 | |||
1.3.3 ACS Technical Service Tower Service Delivery Manager(s) |
6 | |||
1.3.4 ACS Sales Executive |
7 | |||
1.3.5 Other ACS Key Account Team Management Personnel |
7 | |||
1.3.6 Other relevant ACS personnel |
7 | |||
1.3.7 Account Team Position Descriptions |
7 |
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
1.0 Relationship Management Services and ACS Proposed Staffing
1.1 Personnel and Organization Overview
ACS’ strategic business unit (“SBU”) model, performance-based compensation and corporate
client satisfaction directive ensure that every ACS employee understands that ACS’ success
depends on its ability to serve and support each client’s needs. In summary, Symetra is
guaranteed more focused service from ACS than our peers through these benefits:
| ¨ | Account structure focuses on Symetra with resources that are aligned with Symetra’s objectives. | ||
| ¨ | Compensation is directly tied to Symetra’s satisfaction and ACS’ ability to exceed performance measurements. |
A communication strategy is in place to facilitate a structured approach to ongoing
communication and navigating through both organizations.
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
1.2 ACS Account Team Organization and Staffing
1.2.1 Organization Chart
Figure 1—Symetra Organizational Account
1.2.2 Key Account Team Management Organization and Roles
The SBU manager (a/k/a ACS Project Executive) has significant business knowledge and
management experience and a solid understanding of the role IT plays in achieving short-range
and long-range business objectives. SBU managers are responsible for ensuring that everyone at
ACS is working to support Symetra’s critical business systems. Ultimately, the SBU manager’s
role is to communicate and promote Symetra’s point of view within ACS—to be a Symetra advocate.
The ACS Service Delivery Manager is responsible for receiving, scheduling and delivering on
service requests and day-to-day issues. The ACS Service Delivery Manager works directly with
Symetra to clarify requests, discuss timing, develop specific project plans (if necessary) and
provide project status.
SBU Account Focus
ACS’ SBU management structure puts Symetra at the center of ACS business philosophy. New
initiatives are qualified by evaluating the benefits to our clients. The SBU manager,
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
working
directly with Symetra, becomes the conduit through which Symetra takes advantage of ACS’
technical resources.
Account Governance and Account Governance Board (“AGB”)
Key to establishing a successful governance board is ensuring that ACS’ proposed governance
board structure is appropriately mapped to the structural and functional requirements specified
by Symetra. ACS will collaborate with Symetra in establishing a jointly defined and mutually
beneficial account governance program. The AGB is also known as the IT Outsourcing Committee.
The descriptions and rights and responsibilities of the Parties related to the AGB and its
associated boards and teams as set forth in this Schedule shall not diminish the rights and
responsibilities of the Parties related to the IT Outsourcing Committee as set forth in Section
1.2 of the Agreement.
Account Governance Board Structure
Co-chairs, one each from Symetra and ACS, will lead the AGB, which will comprise four
standard teams and one special team. The four standard teams are the governance team, audit
team, finance team, and operations team. The four standard teams will meet regularly. The
special team is the executive team and will meet at least annually and as needed to provide
strategic direction or resolve problems that have been escalated to them by the AGB chair(s).
Governance Team Purpose
The governance team will oversee activities associated with the Agreement. This team is
responsible for ensuring the overall effectiveness of the Agreement governance processes and
communicating to Symetra and ACS stakeholders. The management and resolution of financial and
operational issues is the responsibility of the governance team. Contract interpretation is the
responsibility of the governance team. The governance team provides direction to the audit,
finance and operations teams.
Audit Team Purpose
The audit team assists the governance team in fulfilling contract oversight
responsibilities through participation in daily, weekly, monthly, quarterly, annual and ad hoc
review processes. This team is responsible for monitoring compliance with the financial and
operational deliverables associated with the Agreement. It ensures that financial statements are
accurate and consumption measurement methods, and that SLA/SLR measurement methods are
consistent with the Agreement.
Finance Team Purpose
The finance team assists the governance board with rationalizing the portfolio of Services
being provided or which may be added to the Agreement. This team works to ensure that the
pricing is competitive and oversees benchmarking activities. This team provides consumption
forecasts and acts as the project management office (PMO) for Services. This team oversees the
intake processes and new business proposal processes. This team coordinates internal chargeback
related activities.
Operations Team Purpose
The operations team assists the governance board with ensuring that day-to-day operational
processes such as problem management, change management, asset management and
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
SLA/SLR management
are executed effectively. This team provides the day-to-day oversight of operational processes
being delivered via the Agreement.
SBU Manager Selection
Without limiting any of its rights in Article 3 of the Agreement, Symetra will be involved
in the selection process of this SBU manager to ensure the best fit culturally, technically and
strategically. ACS recruits the SBU manager through several channels. Working with Symetra, ACS
will determine which approach and characteristics will deliver the best candidate. Some of the
methods used include the following:
| ¨ | Recruiting internally within the SBU management team | ||
| ¨ | Leveraging the salesperson’s knowledge gained throughout the sales process to continue delivery of the Services |
In addition to these selection methods, ACS will qualify candidates based on established
criteria. These criteria include areas such as industry knowledge, technology experience within
specific Service Towers and leadership ability applicable to the account size.
Because the SBU manager will become “embedded” in Symetra, this is an important factor in the
success of the relationship.
Communication Strategy
An ACS customer service cornerstone is a defined communication strategy between ACS and our
clients. At ACS, we would rather over-communicate than make an assumption.
We recommend weekly and monthly service review meetings with different parties as an opportunity
to discuss the relationship status at a technical and business level, as depicted in Figure 2.
Figure 2—SBU Communication Strategy
ACS maintains contractual performance statistics that the SBU manager will review monthly with
Symetra management. This information will be presented graphically with a rolling 12-month
history to help identify trends. We also provide a client portal where service
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
agreements
(including, without limitation, the Agreement) and invoices with supporting detail are
maintained.
Without limiting the rights and obligations set forth in the Agreement, including without
limitation Section 2.2 of the Agreement, ACS will work to identify areas for improvement and,
where a problem exists, establish the root cause and present procedures for prevention. A
scorecard is provided quarterly that grades ACS on Service delivery, communication and overall
account management.
In addition to these reviews, ACS will use the following methods to provide the responsiveness
and flexibility Symetra requires:
| ¨ | Daily interaction between Symetra functional leaders and the ACS SBU manager and the ACS Service Delivery Manager will keep the lines of communication and understanding open. | ||
| ¨ | Regular status meetings will be conducted to review and discuss activities or issues related to the provision of Services. | ||
| ¨ | Annual technology reviews will discuss Symetra’s business directions and ACS’ new products and services relative to Symetra’s environment. |
1.2.3 Key Executive Team Roles
SBU managers are responsible for making sure that everyone at ACS is working with Symetra
personnel to support Symetra’s critical business systems. Table 1 outlines the roles and
responsibilities, as well as the business profile, for an SBU manager.
Table 1 SBU Manager’s Roles and Responsibilities
SBU Manager (a/k/a ACS Project Executive)
| Roles and Responsibilities | Business Profile | |
• Direct activities of SBU
management team • Perform active role in migration process • Regularly review quality of delivered service • Coordinate recurring and ad hoc meetings • Prepare and present management reports • Oversee contract agreements • Escalate problems • Perform strategic planning |
• Strong IT infrastructure knowledge with
a clear understanding of IT as an enabler to
accomplishing business objectives |
|
• Experience in developing and
maintaining client relationships and developing
solutions to meet client needs |
||
• Expertise in project management, new
business support, proposal support and IT
consulting |
||
• Management experience |
||
• Team leadership skills |
||
• Creative thinker |
||
• Superior technology strategist |
||
• Negotiation skills |
||
• Experienced in motivating and managing
high performance staffs |
||
• Financial management experience |
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Schedule 1—Relationship Management
Schedule 1—Relationship Management
Table 2 shows the profile for the ACS Service Delivery Manager.
Table 2 ACS Service Delivery Manager’s Roles and Responsibilities
ACS Service Delivery Manager
| Roles and Responsibilities | Business Profile | |
• Oversee day-to-day operations of the Services
|
• Superior analytical skills |
|
• Collect and track SLA/SLR metrics
|
• Technical expertise in the very areas of
concern to ACS’ clients |
|
• Coordinate and manage service changes
|
• Experience from several operational areas |
|
• Prioritize special service requests
|
• Understanding of technology and the
outsourcing environment |
|
• Manage special and large projects
|
• Experience in assisting clients achieve their technology plans |
|
• Keep lines of communication open between Symetra
and ACS
|
• Operations management experience |
|
• Communicate changes that may affect both
organizations and ensure that interested parties
are informed
|
• Project management skills • Leadership qualities • Effective communicator • Team-building skills |
|
1.3 Additional ACS Team Roles
1.3.1 ACS Business Operations Manager
The ACS business operations manager serves as the primary financial contact between Symetra
and ACS. This individual is responsible for developing and maintaining client billing and
invoicing operations, establishing and maintaining procurement operations for ACS on behalf of
the Symetra program, and for ensuring that all financial accounting for Services provided to
Symetra is accurate and well documented. Prepares daily, weekly and monthly management and
status reporting based upon measured statistics, SLR/SLA data, and consumption usage.
1.3.2 ACS Contracts Manager
The ACS contracts manager serves as the primary contractual management point between Symetra and
ACS. This individual is responsible for developing and maintaining client contracts and any
required contractual modifications (as well as requisite legal reviews and approvals).
Furthermore, the ACS contracts manager ensures that contracts (including, without limitation,
the Agreement) remain compliant with applicable contractual or business laws and policies based
upon guidance from the compliance and audit teams.
1.3.3 ACS Technical Service Tower Service Delivery Manager(s)
Serve as the primary technical contact between Symetra and ACS for specific Services Towers.
Responsible for developing and maintaining client relationships and developing technical
solutions to meet Symetra’s needs for each Service Tower. Manage the account P&L and provide
general direction for the technical services team. Prepare daily, weekly and monthly management
and status reporting.
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Symetra Life Insurance Company (Symetra)
Schedule 1—Relationship Management
Schedule 1—Relationship Management
1.3.4 ACS Sales Executive
The ACS sales executive serves as the primary sales and new-business contact point between
Symetra and ACS. This individual is responsible for understanding the Symetra business
structure, and for identifying how ACS services map to and can enhance Symetra operations. The
ACS sales executive manages all sales-related activities for Symetra and ensures that sales
opportunities are well-communicated and understood, and driven through appropriate ACS channels
efficiently and effectively.
1.3.5 Other ACS Key Account Team Management Personnel
ACS Senior Project Manager—Transition Management Office
ACS senior project managers are responsible for oversight and coordination of transition
management related activities. They are responsible for developing, obtaining sign-off,
executing and maintain the detailed Transition Plan, project schedules and supplemental
management plans. They serve as the primary interface to Symetra and the ACS transition team
and develop and publish applicable transition status reports as well as conduct required daily
and weekly transition status meetings. Executing formal project closure processes, including
acceptance sign-offs, satisfaction surveys and lessons learned feedback sessions are also a key
requirement of this position. In addition, they will obtain and maintain appropriate ACS
transition team staffing throughout the transition.
ACS Project Manager—Project Management Office
ACS project manager(s) will manage the planning, execution, and close phases for assigned
transition projects. They will also work with ACS IT management to obtain the required ACS IT
transition team staffing for assigned transition projects. Managing and maintaining the
transition program portal for assigned projects is a key responsibility. The ACS project manager
will ensure assigned transition projects are executed on time, with a high degree of quality,
and according to the approved approach.
1.3.6 Other relevant ACS personnel
ACS Quality and Compliance Manager
This individual is responsible for establishing and maintaining ACS quality management
programs with respect to Symetra. The ACS quality and compliance manager oversees collection
and analysis of quality metrics and reports such statistics. Additionally, the ACS quality and
compliance manager oversees compliance auditing and operations, ensuring operational compliance
with industry and accounting standards and relevant legal requirements.
1.3.7 Account Team Position Descriptions
SBU Senior Staff
Location: Symetra HQ (<10%) and NWSC (>90%)
Members of the SBU senior staff, including the ACS human resources manager, the ACS business
operations manager, the ACS contracts manager, the ACS sales support manager,
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Schedule 1—Relationship Management
Schedule 1—Relationship Management
and the various
ACS Service Tower managers, will all work primarily out of the NWSC with visits to Symetra HQ as
necessary.
SBU Operations Onsite Staff
Location: Symetra HQ (100%)
Key, identified ACS operational staff will be located at the Symetra HQ facility full-time.
SBU Manager
Location: Symetra Financial HQ (50%) and NWSC (50%)
SBU Operations Data Center Staff
Location: NWSC (100%)
All remaining ACS operational staff will work out of the NWSC.
ACS’ SBU management structure puts Symetra at the center of ACS’ business philosophy. All new
initiatives are qualified by evaluating the benefits to our clients. The SBU manager, working
directly with Symetra, becomes the conduit through which Symetra takes advantage of ACS’
technical resources.
ACS recognizes the location percentages for the SBU Service Delivery Manager and ACS senior
staff are estimates and that there will be times when it will be necessary for them to be onsite
at Symetra 100%.
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Symetra Life Insurance Company (Symetra)
Schedule 2A—Cross Functional Services SOW
Schedule 2A—Cross Functional Services SOW
Schedule 2A
Cross-Functional Services SOW
for
Symetra Life Insurance Company (Symetra)
October 28, 2004
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Symetra Life Insurance Company (Symetra)
Schedule 2A—Cross Functional Services SOW
Schedule 2A—Cross Functional Services SOW
TABLE OF CONTENTS
1.0 Cross Functional Services Overview and Objectives |
||||
1.1 Services Overview |
||||
1.2 Service Objectives |
||||
2.0 Service Environment |
||||
2.1 Scope of the Infrastructure to be Supported |
||||
3.0 Cross Functional Services Requirements |
||||
3.1 Service Descriptions and Roles & Responsibilities |
||||
3.2 Exclusions |
||||
4.0 Service Management |
||||
4.1 Objectives |
||||
4.2 Definitions |
||||
4.3 Service Level Requirements (SLRs) |
||||
4.4 Reports |
||||
5.0 List of Referenced ITSA Schedules |
List of Tables
Table 1. General Roles and Responsibilities
Table 2. Planning and Analysis Roles and Responsibilities
Table 3. Requirements Definition Roles and Responsibilities
Table 4. Design Specifications Roles and Responsibilities
Table 5. Acquisition and Management Roles and Responsibilities
Table 6. Engineering/Development Roles and Responsibilities
Table 7. Integration and Testing Roles and Responsibilities
Table 8. Implementation and Migration Roles and Responsibilities
Table 9. Operations and Administration Roles and Responsibilities
Table 10. Incident & Problem Management
Table 11. Maintenance Roles and Responsibilities
Table 12. Configuration Management Roles and Responsibilities
Table 13. Change and Release Management Roles and Responsibilities
Table 14. Capacity Management Roles and Responsibilities
Table 2. Planning and Analysis Roles and Responsibilities
Table 3. Requirements Definition Roles and Responsibilities
Table 4. Design Specifications Roles and Responsibilities
Table 5. Acquisition and Management Roles and Responsibilities
Table 6. Engineering/Development Roles and Responsibilities
Table 7. Integration and Testing Roles and Responsibilities
Table 8. Implementation and Migration Roles and Responsibilities
Table 9. Operations and Administration Roles and Responsibilities
Table 10. Incident & Problem Management
Table 11. Maintenance Roles and Responsibilities
Table 12. Configuration Management Roles and Responsibilities
Table 13. Change and Release Management Roles and Responsibilities
Table 14. Capacity Management Roles and Responsibilities
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Schedule 2A—Cross Functional Services SOW
Schedule 2A—Cross Functional Services SOW
Table 15. Performance Management Roles and Responsibilities
Table 16. Service Level Monitoring and Reporting Responsibilities
Table 17. Account Management Roles and Responsibilities
Table 18. Root Cause Analysis Roles and Responsibilities
Table 19. Training and Knowledge Transfer Roles and Responsibilities
Table 20. Documentation Roles and Responsibilities
Table 16. Service Level Monitoring and Reporting Responsibilities
Table 17. Account Management Roles and Responsibilities
Table 18. Root Cause Analysis Roles and Responsibilities
Table 19. Training and Knowledge Transfer Roles and Responsibilities
Table 20. Documentation Roles and Responsibilities
Table 21. Technology Refreshment and Replenishment Roles and Responsibilities
Table 22. Security Roles and Responsibilities
Table 23. IT Service Continuity and Disaster Recovery Roles and Responsibilities
Table 24. Environmental and Facilities Support
Table 25. Financial/Chargeback Services
Table 26. Incident Resolution SLRs
Table 27. Priority Levels
Table 28. Backup Schedule
Table 29. Restoration SLR
Table 30. Disaster Recovery SLRs
Table 31. Asset Tracking SLR
Table 32. Customer Satisfaction SLR
Table 33. Cross Functional Services Reports
Table 22. Security Roles and Responsibilities
Table 23. IT Service Continuity and Disaster Recovery Roles and Responsibilities
Table 24. Environmental and Facilities Support
Table 25. Financial/Chargeback Services
Table 26. Incident Resolution SLRs
Table 27. Priority Levels
Table 28. Backup Schedule
Table 29. Restoration SLR
Table 30. Disaster Recovery SLRs
Table 31. Asset Tracking SLR
Table 32. Customer Satisfaction SLR
Table 33. Cross Functional Services Reports
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Symetra Insurance Company (Symetra)
Schedule 2A—Cross-Functional Services SOW
Schedule 2A—Cross-Functional Services SOW
1.0 Cross Functional Services Overview and Objectives
1.1 Services Overview
Cross functional Services include a number of common IT life cycle support and management
services that ACS will provide across all Symetra IT Service Towers. Services, activities and
roles and responsibilities described in this Cross-Functional Services SOW are considered within
the scope of each Service Tower (Schedules 2B through 2H). In addition, the Services described in
this Cross-Functional Services SOW shall be included within the IT Services Tower charges as
specified in Schedule 3 – Fees.
Cross Functional SOW
| Data | Distributed | Data | Voice | Output | Content | ||||||||||||
| Center | Computing | Network | Comm. | Help Desk | Processing | Management | |||||||||||
| Services | Services | Services | Services | Services | Services | Services | |||||||||||
| SOW | SOW | SOW | SOW | SOW | SOW | SOW |
Figure 1: Service Towers with Cross Functional View
1.2 Service Objectives
The following are the key high-level service objectives Symetra expects to achieve through
this Cross Functional Services SOW:
| n | Ensure that critical IT life cycle and service management functions are included in all IT Services Tower SOWs | ||
| n | Receive IT services that consider an end-to-end enterprise view across all IT Service Towers |
Service Environment
Scope of the Infrastructure to be Supported
The service environment section in each IT Services Tower SOW Schedule describes the computing
environment to be supported/complied with. The service environment includes such things as hardware
and software, facilities and locations, personnel, policies and procedures, licenses and
agreements, work-in-progress and future initiatives. As such, this Cross Functional Services SOW
shall apply to the service environments as specified in each IT Service Tower SOW. The service
environments for each IT Service Tower will be documented in SOW Appendices and are to be
maintained by ACS and made available to Symetra quarterly.
| 3.0 | Cross Functional Services Requirements |
ACS is responsible for providing the cross functional Services defined in Section 3.1 of this
Schedule for IT Service Towers defined in the following documents:
| n | Schedule 2B – Data Center Services SOW |
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Schedule 2A—Cross-Functional Services SOW
Schedule 2A—Cross-Functional Services SOW
| n | Schedule 2C – Distributed Computing Services SOW | ||
| n | Schedule 2D – Data Network Management Services SOW | ||
| n | Schedule 2E – Voice Communication Services SOW | ||
| n | Schedule 2F – Help Desk Services SOW | ||
| n | Schedule 2G – Output Processing Services SOW | ||
| n | Schedule 2H – Content Management Services SOW |
3.1 Service Descriptions and Roles & Responsibilities
3.1.1 General Responsibilities
The following table identifies general roles and responsibilities associated with this SOW. An
“X” is placed in the column under the Party that will be responsible for performing the task. ACS
responsibilities are indicated in the column labeled “ACS.”
General Roles and Responsibilities
| General Roles and Responsibilities | ACS | Symetra | ||
Provide Services that support Symetra business
needs and End-User requirements |
X | |||
Comply with Symetra policies and standards and
industry regulations applicable to Symetra for
information, information systems, personnel, physical
and technical security |
X | |||
Conform to changes in laws, regulations and policies.
Major changes shall be proposed on a
project-by-project effort basis to alter the
environment to conform to the new requirements |
X | |||
Report performance against SLRs |
X | |||
1. Coordinate all changes to the IT
infrastructure
that may affect the service levels of any other
service area |
X | |||
Provide timely creation, updating, maintenance
and provision of all appropriate project plans,
project time and cost estimates, technical
specifications, management documentation and
management reporting in a form/format that is
acceptable to Symetra for all Service Tower projects
and major Service activities |
X |
3.1.2 Planning & Analysis
Planning and analysis Services are the research of new technical trends, products and
services, such as hardware components, system software, and networks that offer opportunities to
improve the efficiency and effectiveness of the Service Towers. Planning Services can also help
support competitive business advantage and mitigate risks by reducing defects and improving the
quality of IT services.
The following table identifies the roles and responsibilities that ACS and Symetra will perform,
and that are associated with planning and analysis activities.
Planning and Analysis Roles and Responsibilities
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Schedule 2A—Cross-Functional Services SOW
Schedule 2A—Cross-Functional Services SOW
| Planning and Analysis Roles and Responsibilities | ACS | Symetra | ||
1. Define services, standards and timeframes for planning and
analysis activities |
X | |||
2. Participate in defining services and standards for planning
and
analysis activities |
X | |||
3. Review and approve services and standards for planning and
analysis activities |
X | |||
4. Define Symetra requirements at the enterprise level for all
Service Towers (e.g. business, technology strategy, functional,
availability, capacity, performance, backup and IT continuity
service) |
X | |||
5. Perform infrastructure, configuration, technical and service
planning and analysis based on Symetra requirements (e.g.
availability, capacity, performance, backup and IT continuity
service) |
X | |||
6. Provide infrastructure installation and upgrade
recommendations |
X | |||
7. Approve infrastructure planning, analysis and recommendations
for
new applications, infrastructure and services |
X | |||
8. Provide management reports required for planning and analysis
activities (e.g. utilization and capacity trend reports) |
X | |||
9. Recommend data backup and retention policies for all Service
Towers |
X | |||
10. Define and approve Symetra data backup and retention policies and
requirements for all Service Towers |
X | |||
11. Continuously monitor technical trends through independent
research; document and report on products and services with potential
use for Symetra as it aligns with Symetra’s business and technology
strategy |
X | |||
12. Perform feasibility studies for the implementation of new
technologies that best meet Symetra business needs and meet cost,
performance and quality objectives |
X | |||
13. Define enterprise-level project management policies, procedures
and requirements (e.g. project feasibility analysis, cost benefit
analysis, scheduling, costing, resource planning, communication
planning, procurement, risk management and quality management) |
X | |||
14. Perform project management function |
X | |||
15. Perform project management oversight and liaison function to the
business and customers |
X | |||
16. Conduct technical and business planning sessions to establish
standards, architecture and project initiatives per the planning and
analysis policies and procedures |
X | |||
17. Participate in technical and business planning sessions to
establish standards, architecture and project initiatives |
X | |||
18. Conduct regular planning for technology refresh and upgrades |
X | |||
19. Participate in regular planning for technology refresh and
upgrades |
X | |||
20. Conduct technical reviews and provide recommendations for
improvements to the infrastructure that increase efficiency and
effectiveness per the planning and analysis policies and procedures |
X |
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Symetra Insurance Company (Symetra)
Schedule 2A—Cross-Functional Services SOW
Schedule 2A—Cross-Functional Services SOW
3.1.3 Requirements Definition
Requirements definition Services are the activities associated with the assessment and
definition of functional, performance, IT continuity, and security requirements that also comply
with regulatory and Symetra policies. These requirements drive the technical design for the
environment. The following table identifies requirements definition roles and responsibilities that
ACS and Symetra will perform.
Requirements Definition Roles and Responsibilities
| Requirements Definition Roles and Responsibilities | ACS | Symetra | ||
1. Define requirements and standards |
X | |||
2. Participate in defining requirements and standards |
X | |||
3. Ensure requirements meet security policies |
X | |||
4. Conduct interviews, group workshops, and surveys to determine
user
functional, performance, availability, maintainability and IT
continuity requirements. |
X | |||
5. Participate in appropriate requirements gathering activities |
X | |||
6. Provide ACS with written information in sufficient detail
pertaining to the requirements definition to enable ACS to create the
appropriate requirements documentation (e.g. business requirements
documentation) |
X | |||
7. Document all requirements in mutually agreed formats (e.g.,
system
specifications, data models, network design schematics) |
X | |||
8. Approve all requirements documents |
X | |||
9. Define system and network acceptance test criteria |
X | |||
10. Participate in defining system and network acceptance test
criteria |
X | |||
11. Review and approve all system and network acceptance test criteria |
X |
3.1.4 Design Specifications
Design specification Services are the activities and deliverables that translate user and
information system requirements into detailed technical specifications. The following table
identifies design specifications roles and responsibilities that ACS and Symetra will perform.
Design Specifications Roles and Responsibilities
| Design Specification Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document technical design plans and
environment configuration based on Symetra standards,
architecture, functional, performance, availability,
maintainability, security and IT continuity requirements. |
X | |||
2. Determine required system and network upgrade,
replacement and/or conversion requirements (e.g.
hardware, software, networks) |
X | |||
3. Review and approve design plans through coordination
with the appropriate Symetra technology standards group
and design architects |
X | |||
4. Conduct site surveys for design efforts as required |
X |
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| Design Specification Roles and Responsibilities | ACS | Symetra | ||
5. Provide ACS with written information in sufficient
detail pertaining to the design specifications to enable
ACS to create the appropriate design documents |
X | |||
6. Document and deliver design specifications |
X | |||
7. Review and approve design specifications |
X |
3.1.5 Acquisition and Management
Acquisition and management Services are the activities associated with the pricing, evaluation
(technical and costing), selection, acquisition, and ongoing management of new and upgraded system
and network components (e.g. hardware, software, circuits). Symetra reserves the right to negotiate
certain contracts for Symetra purchased/leased components. Symetra will manage its acquisition life
cycle. The following table identifies acquisition and management roles and responsibilities that
ACS and Symetra will perform.
Acquisition and Management Roles and Responsibilities
| Acquisition and Management Roles and Responsibilities | ACS | Symetra | ||
1. Establish acquisition and tracking policies and procedures |
X | |||
2. Review and approve acquisition and tracking policies and
procedures |
X | |||
3. Develop and maintain list of ACS-preferred suppliers/vendors |
X | |||
4. Approve list of ACS-preferred suppliers/vendors |
X | |||
5. Develop and issue acquisition bid requests as required and
approved by Symetra |
X | |||
6. Establish audit procedures to ensure compliance with best
practices |
X | |||
7. Assist in periodic audits of procurement procedures |
X | |||
8. Evaluate proposals against clearly defined objective criteria |
X | |||
9. Negotiate contracts for ACS purchased/leased Service
Tower-related components |
X | |||
10. Manage the ordering, procurement and delivery processes in
compliance with Symetra procurement and acceptance processes |
X | |||
11. Manage and track ACS purchase orders and service orders |
X | |||
12. Coordinate delivery and installation of new products and
services, as required |
X | |||
13. Ensure that new equipment/hardware complies with established
Symetra IT standards and architectures |
X | |||
14. Review and approve selection of hardware to be installed in
Symetra facilities and software to be installed on Symetra hardware |
X | |||
15. Review and approve acquisition acceptance process |
X | |||
16. Adhere to Symetra acquisition acceptance process |
X | |||
17. Provide tracking data on Symetra Owned Equipment/hardware and
software licenses installed in the Symetra environment |
X | |||
18. Track ACS and Symetra Owned Equipment/hardware, circuits and
software licenses installed in the Symetra environment |
X | |||
19. Review tracking methodology |
X |
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| Acquisition and Management Roles and Responsibilities | ACS | Symetra | ||
20. Review and approve tracking methodology |
X | |||
21. Install and configure assets |
X | |||
22. Establish, update, and maintain an asset inventory database and
system and network configuration charts (e.g. location, asset ID,
serial number) and ensure service contracts are in force as needed
to meet SLRs |
X | |||
23. Track and advise Symetra in a timely manner of expiration and
renewal requirements of device/software licenses |
X | |||
24. Provide asset inventory and services reports as requested |
X | |||
25. Provide ability for Symetra inquiry into the asset database |
X | |||
26. Periodic review/audit asset inventory management procedures |
X | |||
27. Terminate, dispose of, and relocate assets as needed/specified
and provide disposition reports as needed |
X |
3.1.6 Engineering/Development
Engineering/development Services are the activities associated with the engineering and
development of the technical infrastructure, tools and utilities that enhance the IT Service
Towers. The following table identifies engineering/development roles and responsibilities that ACS
and Symetra will perform.
Engineering/Development Roles and Responsibilities
| Engineering/Development Roles and Responsibilities | ACS | Symetra | ||
1. Establish engineering/development policies and
procedures |
X | |||
2. Participate in developing and review
engineering/development policies and procedures, as
appropriate |
X | |||
3. Develop engineering/development plans where
there is an
impact on Symetra entities/facilities and/or other
Third-Party agreements. |
X | |||
4. Approve engineering/development plans where
there is an
impact on Symetra entities/facilities and/or other
Third-Party agreements |
X | |||
5. Perform engineering functions required
to implement
design plans for additional or new products and services |
X | |||
6. Perform engineering functions required to implement
and
manage Service Tower Services on Symetra owned/leased
facilities |
X | |||
7. Manage engineering/development efforts using
formal
project management tools and methodologies |
X | |||
8. Review and approve engineering/development plans
and
procedures where there is an impact on other Symetra
entities/facilities/Third-Party agreements |
X |
3.1.7 Integration and Testing
Integration and testing Services are the activities that ensure that all individual Symetra
infrastructure components configured with, or added to, the infrastructure work together cohesively
to achieve the intended results. The following table identifies integration and testing roles and
responsibilities that ACS and Symetra will perform.
Integration and Testing Roles and Responsibilities
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| Integration and Testing Roles and Responsibilities | ACS | Symetra | ||
1. Develop integration and testing policies and procedures |
X | |||
2. Review and approve integration and testing policies and
procedures and deliverables |
X | |||
3. Manage integration test environment |
X | |||
4. Maintain software release matrices across development,
quality
assurance, and production environments and networks |
X | |||
5. Validate and approve the software release matrix |
X | |||
6. Conduct integration and security testing for all new and
upgraded equipment, networks, software or services to include unit,
system, integration and regression testing |
X | |||
7. Evaluate all new and upgraded equipment, networks, software
or
services for compliance with Symetra security policies, regulations
and procedures |
X | |||
8. Assess and communicate the overall impact and potential
risk to
systems and networks prior to implementing changes |
X | |||
9. Define user acceptance test requirements |
X | |||
10. Stage new and upgraded equipment, software or services to
smoothly transition into existing environment |
X | |||
11. Perform modifications and performance-enhancement adjustments
to Symetra system software and utilities as a result of changes to
architectural standards |
X | |||
12. Test new releases of supported hardware and software to ensure
conformance with Symetra SLRs |
X | |||
13. Provide middleware |
X | |||
14. Provide integration of application software |
X | |||
15. Perform configuration management and change management
activities |
X |
3.1.8 Implementation and Migration
Implementation and migration Services are the activities associated with the installation of
new and upgraded hardware, software and network components. The following table identifies
implementation and migration roles and responsibilities that ACS and Symetra will perform.
Implementation and Migration Roles and Responsibilities
| Implementation and Migration Roles and Responsibilities | ACS | Symetra | ||
1. Define system and network implementation and migration
policies and procedures |
X | |||
2. Review and approve system and network implementation and
migration policies and procedures |
X | |||
3. Notify ACS of equipment migration and redeployment plans |
X | |||
4. Coordinate and review all implementation and migration plans
and
schedules with Symetra in advance in accordance with change
management policies |
X | |||
5. Approve implementation and migration plans and schedules |
X |
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| Implementation and Migration Roles and Responsibilities | ACS | Symetra | ||
6. Conduct pre-installation site surveys, as required |
X | |||
7. Install enhancements to technical architecture or services
provided |
X | |||
8. Install new or enhanced Service Tower components (e.g. hardware,
software, middleware, utilities, networks, peripherals,
configurations) |
X | |||
9. Perform Service Tower component upgrades as a result of new and
enhanced applications and architectures (e.g. hardware, software,
middleware, utilities, networks, peripherals, configurations) |
X | |||
10. Install physical infrastructure as required (e.g., wiring,
cable plant, cooling etc.) |
X | |||
11. Coordinate implementation and migration support activities with
Symetra IT staff and ACS help desk |
X | |||
12. Perform data migration, excluding conversion, by electronic or
manual methods as a result of implementation or migration (e.g.,
databases, network system management repositories, address tables,
management information bases (MIBs)) |
X | |||
13. Perform appropriate tests on all IMACs |
X | |||
14. Conduct and document user acceptance tests (UAT) plans and
results |
X | |||
15. Approve user acceptance test plans and results |
X | |||
16. Provide Symetra IT technical staff and End Users with training
related to the implementation of new products and services on
request |
X |
3.1.9 Operations and Administration
Operations and administration Services are the activities associated with providing a stable
IT infrastructure and to effectively and efficiently perform procedures to ensure IT services meet
the SLRs. The following table identifies operations and administration roles and responsibilities
that ACS and Symetra will perform.
Operations and Administration Roles and Responsibilities
| Operations and Administration Roles and Responsibilities | ACS | Symetra | ||
1. Provide operations requirements and policies, including
schedules for the operation of Symetra systems and networks |
X | |||
2. Participate in developing operations procedures that meet
requirements and adhere to defined policies |
X | |||
3. Define and develop operational documentation requirements (run
books, contact lists, operations scripts etc.) |
X | |||
4. Approve operations policies and procedures, documentation and
reporting |
X | |||
5. Identify enterprise system management tools to monitor the IT
infrastructure and Symetra applications |
X | |||
6. Coordinate with Symetra to deploy enterprise system and network
management tools to monitor the IT infrastructure and Symetra
applications |
X |
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| Operations and Administration Roles and Responsibilities | ACS | Symetra | ||
7. Install and configure enterprise system and network management
tools in such a fashion that problems, issues and events are
proactively identified, reported and resolved according to prescribed
service levels |
X | |||
8. Perform event management monitoring of IT services to detect
abnormal conditions or alarms, log abnormal conditions, analyze the
condition and take corrective action |
X | |||
9. Manage hardware, software, peripherals, services and spare parts
to meet service levels, minimize down time and minimize Symetra
resource requirements |
X | |||
10. Interface with help desk and Symetra for Incident & problem
management activities |
X | |||
11. Provide level 2 and level 3 support as required |
X | |||
12. Manage and coordinate Subcontractors and Third Parties in order
to meet Service and SLR requirements |
X | |||
13. Develop and provide operational reports (daily, weekly, monthly)
that provide status of operational activities, production issues, and
key operational metrics |
X | |||
14. Review and approve operational reports |
X | |||
15. Manage backup media inventory (tape, disk, optical and other
media type) including the ordering and distribution of media |
X | |||
16. Perform system and network backups and associated rotation of
media |
X | |||
17. Archive data media at a secure offsite location |
X | |||
18. Ensure ongoing capability to recover archived data from media as
specified (backwards compatibility of newer backup equipment) |
X | |||
19. Test backup media to ensure incremental and full recovery of data
is possible and ensure system and network integrity as required or
requested by Symetra |
X | |||
20. Recover files, file system or other data required from backup
media as required or requested by Symetra |
X | |||
21. Provide recovery and backup requirements and updates as they
change |
X | |||
22. Conduct disaster recovery testing per policies and procedures |
X | |||
23. Audit operations and administration polices for compliance with
Symetra security policies |
X | |||
24. Provide a copy of or access to any vendor-supplied documentation
(including updates thereto) |
X | X |
3.1.10 Incident & Problem Management
Incident and problem management Services include the activities associated with restoring
normal service operation as quickly as possible and minimizing the adverse impact on business
operations, thus ensuring that the best possible levels of service quality and availability are
maintained.
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Problem management also includes minimizing the adverse impact of Incidents and problems on the
business that are caused by errors in the IT infrastructure, and to prevent the recurrence of
Incidents related to those errors. In order to achieve this goal, problem management seeks to get
to the root cause of Incidents and then initiate actions to improve or correct the situation.
The following table identifies Incident and problem management roles and responsibilities that ACS
and Symetra will perform.
Incident & Problem Management
| Incident and Problem Management Roles and Responsibilities | ACS | Symetra | ||
1. Define Incident and problem management policies and
procedures |
X | |||
2. Approve Incident and problem management policies and procedures |
X | |||
3. Establish operations and service management quality assurance and
control programs |
X | |||
4. Approve operations and service management quality assurance and
control programs |
X | |||
5. Perform quality assurance and quality control programs |
X | |||
6. Coordinate user support activities with the help desk |
X | |||
7. Establish Incident/problem classification by priority |
X | |||
8. Establish Incident/problem workflow, escalation, communication
and reporting processes that help to achieve the SLRs |
X | |||
9. Review and approve Incident/problem classification,
prioritization and workflow, communication, escalation and reporting
processes |
X | |||
10. Provide, configure, and operate Incident and problem management
system that tracks Incidents across all IT towers |
X | |||
11. Provide Symetra access and input capabilities to Incident and
problem tracking system to allow for Incident/problem monitoring and
ad hoc reporting |
X | |||
12. Manage entire Incident/problem lifecycle including detection,
diagnosis, Symetra status reporting, repair and recovery |
X | |||
13. Ensure Incident resolution activities conform to defined change
control procedures |
X | |||
14. Manage efficient workflow of Incidents including the involvement
of Third Party providers (e.g., vendors, public carriers, ISP) |
X | |||
15. Coordinate and take ownership of problem resolution with Symetra
and Third Parties (e.g., public carriers, ISP) |
X | |||
16. Perform Root Cause Analysis of Incidents, document findings and
take corrective actions for in-scope Services. Resolve problem
and/or substantiate that all reasonable actions have been taken to
prevent future reoccurrence. |
X | |||
17. Periodically review the state of open problems and the progress
being made in addressing problems |
X | |||
18. Participate in problem review sessions and provide listing and
status of problems categorized by problem impact |
X | |||
19. Authorize close of Symetra initiated priority 1 and 2 Incidents |
X |
3.1.11 Maintenance
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Maintenance Services are the activities associated with the maintenance and repair of
hardware, software and networks to include “break-and-fix” services. Installed platform and product
version levels are not to be more than one version behind the current commercial release, unless
coordinated with the Symetra architectural standards committee. The following table identifies
maintenance roles and responsibilities that ACS and Symetra will perform.
Maintenance Roles and Responsibilities
| Maintenance Roles and Responsibilities | ACS | Symetra | ||
1. Define maintenance and repair policies and procedures. |
X | |||
2. Review and approve maintenance and repair policies and
procedures. |
X | |||
3. Define dispatch requirements and point-of-service locations |
X | |||
4. Ensure appropriate maintenance coverage for all system and
network components |
X | |||
5. Provide maintenance and break/fix support in Symetra’s defined
locations, including dispatching repair technicians to the
point-of-service location if necessary |
X | |||
6. Perform diagnostics and maintenance on Service Tower components
including hardware, software, peripherals, networks and special
purpose devices as appropriate |
X | |||
7. Install manufacturer field change orders, service packs,
firmware, and software maintenance releases, etc. |
X | |||
8. Perform product patch, “bug fix,” service pack installation or
upgrades to the current installed version |
X | |||
9. Perform software distribution and version control, both
electronic and manual |
X | |||
10. Replace defective parts including preventive maintenance,
according to the manufacturer’s published mean-time-between failure
rates |
X | |||
11. Conduct maintenance and parts management and monitoring during
warranty and off-warranty periods |
X |
3.1.12 Configuration Management
Configuration management activities provide a logical model of the infrastructure by
identifying, controlling, maintaining, and verifying installed hardware, software and network
versions. The goal being to account for all IT assets and configurations, provide accurate
information on configurations and provide a sound basis for Incident, problem, change and release
management and to verify configuration records against the infrastructure and correct any
exceptions. The following table identifies configuration management roles and responsibilities that
ACS and Symetra will perform.
Configuration Management Roles and Responsibilities
| Configuration Management Roles and Responsibilities | ACS | Symetra | ||
1. Define configuration management policies and
procedures. |
X | |||
2. Establish process for tracking configuration changes. |
X | |||
3. Approve configuration management policies, procedures and
processes. |
X |
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| Configuration Management Roles and Responsibilities | ACS | Symetra | ||
4. Establish configuration management database per Symetra
requirements. |
X | |||
5. Approve configuration management database |
X | |||
6. Select, install and maintain configuration management tools |
X | |||
7. Enter/upload configuration data into configuration database |
X | |||
8. Establish process interfaces to problem and incident
management, change management, technical support, maintenance
and asset management processes |
X | |||
9. Establish appropriate authorization controls for modifying
configuration items and verify compliance with software
licensing |
X | |||
10. Establish guidelines for physical and logical separation
between development, test and production and the process for
deploying and back out of configuration items |
X | |||
11. Establish configuration baselines as reference points for
rebuilds, and providing ability to revert to stable
configuration states |
X | |||
12. Establish process for verifying the accuracy of
configuration items, adherence to configuration management
process and identifying process deficiencies |
X | |||
13. Provide Symetra configuration management reports as
required and defined by Symetra |
X | |||
14. Audit configuration management process and accuracy of
configuration data |
X |
3.1.13
Change and Release Management
Change and release management processes and activities are inter-related and complementary. A
high level description of each is provided below.
Change management activities are to ensure that standardized methods and procedures are used for
efficient and prompt handling of all changes, in order to minimize the impact of change upon
Service quality and consequently to improve the day-to-day operations of the organization. Change
management covers all aspects of managing the
introduction and implementation of all changes affecting all IT Services Towers and in any of the
management processes, tools, and methodologies designed and utilized to support the IT systems and
networks. The change management process includes the following process steps:
| n | Request process | ||
| n | Recording/tracking process | ||
| n | Prioritization process | ||
| n | Responsibility assignment process | ||
| n | Impact/risk assessment process | ||
| n | Review / approval process | ||
| n | Implementation process | ||
| n | Verification (test) process | ||
| n | Release process |
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| n | Closure process |
Release management activities take a holistic view of a change to an IT Service and should ensure
that all aspects of a release, both technical and non-technical, are considered together. The goals
are to plan and oversee the successful rollout of software, hardware and network; design and
implement efficient procedures for distribution and installation of changes. The activities also
ensure that only correct, authorized and tested versions are installed and that changes are
traceable and secure. Execution and back-out plans shall be documented and approved by Symetra.
Master copies of new versions shall be secured in a software library and configuration databases
shall be updated.
The following table identifies change management and release management roles and responsibilities
that ACS and Symetra will perform.
Change and Release Management Roles and Responsibilities
| Change and Release Management Roles and Responsibilities | ACS | Symetra | ||
1. Recommend change and release management policies,
procedures, processes and training requirements for Symetra
infrastructure |
X | |||
2. Participate in change and release management policies,
procedures, processes and training requirements for Symetra
infrastructure |
X | |||
3. Establish change classifications (impact, priority, risk)
and
change authorization process |
X | |||
4. Participate in the development of the change management
and
release management procedures and policies |
X | |||
5. Approve change and release management procedures and policies |
X | |||
6. Administer the version control system as it relates to release
management of Symetra custom applications |
X | |||
7. Document and classify proposed changes to the Symetra Service
Towers. Documentation shall include cost and risk impact and back
out plans of those changes and establish release management plans
for major changes. |
X | |||
8. Develop and maintain a schedule of planned changes and provide
to Symetra for review as required |
X | |||
9. Determine change logistics |
X | |||
10. Schedule and conduct change management meeting to include
review of planned changes and results of changes made |
X | |||
11. Provide change documentation as requested |
X | |||
12. Authorize and approve scheduled changes or alter the schedule
of any or all change requests |
X | |||
13. Review release management details and alter as appropriate to
meet the needs of Symetra (back out plan, go/no go decision) |
X | |||
14. Notify Symetra affected clients of change timing and impact |
X | |||
15. Implement change and adhere to detailed release plans |
X | |||
16. Modify configuration, asset management Items, service catalog
(if applicable) to reflect change |
X | |||
17. Verify that change met objectives and resolve negative impacts |
X | |||
18. Monitor changes and report results of changes and impacts |
X |
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| Change and Release Management Roles and Responsibilities | ACS | Symetra | ||
19. Conduct user acceptance tests as required |
X | |||
20. Perform quality control audits and approve change control
results |
X | |||
21. Maintain master copies of new versions in a secured software
library and update configuration databases |
X |
3.1.14 Capacity Management
Capacity management involves ensuring that the capacity of the IT infrastructure matches the
evolving demands of Symetra’s business in the most cost-effective and timely manner. The process
encompasses the following:
| n | Monitoring performance and throughput of IT services and supporting IT components | ||
| n | Undertaking tuning activities | ||
| n | Understanding current demands and forecasting for future requirements | ||
| n | Developing capacity plans which will meet demand and SLRs | ||
| n | Conducting risk assessment of capacity recommendations | ||
| n | Identifying financial impacts of capacity plans |
The following table identifies capacity management roles and responsibilities that ACS and Symetra
will perform.
Capacity Management Roles and Responsibilities
| Capacity Management Roles and Responsibilities | ACS | Symetra | ||
1. Identify future business requirements that will alter
capacity requirements |
X | |||
2. Participate in all capacity planning activities |
X | |||
3. Assess capacity impacts when adding, removing or
modifying
applications |
X | X | ||
4. Assess impact/risk of capacity changes |
X | |||
5. Establish comprehensive capacity management planning
process |
X | |||
6. Review and approve capacity management planning process |
X | |||
7. Define, develop and implement tools that allow for the
effective capacity monitoring/trending of IT infrastructure,
system software, and IT components. This excludes business
applications unless mutually agreed otherwise. |
X | |||
8. Continually monitor IT resource usage to enable
proactive
identification of capacity and performance issues |
X | |||
9. Capture trending information and forecast future Symetra
capacity requirements based on Symetra defined thresholds |
X | |||
10. Assess incidents/problems related to throughput performance |
X | |||
11. Recommend changes to capacity to improve Service
performance |
X | |||
12. Approve capacity related recommendations |
X |
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| Capacity Management Roles and Responsibilities | ACS | Symetra | ||
13. Maintain capacity levels to optimize use of existing IT
resources and minimize Symetra costs to deliver Services at
agreed to service levels |
X | |||
14. Ensure adequate capacity exists within the IT environment
to meet SLR requirements taking into account daily, weekly and
seasonal variations in capacity demands |
X |
3.1.15 Performance Management
Performance management Services are the activities associated with tuning systems and networks
for optimal performance. The following table identifies performance management roles and
responsibilities that ACS and Symetra will perform.
Performance Management Roles and Responsibilities
| Performance Management Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document system and network performance
requirements |
X | |||
2. Approve system and network performance requirements |
X | |||
3. Develop and document performance management
procedures that meet requirements and adhere to
defined policies |
X | |||
4. Approve performance management procedures |
X | |||
5. Perform system and network tuning to maintain
optimum performance in accordance with change
management procedures |
X | |||
6. Manage system and network resources (e.g. devices
and traffic) to meet defined availability and
performance SLRs |
X | |||
7. Provide regular monitoring and reporting of system
and network performance, utilization and efficiency |
X | |||
8. Evaluate, identify and recommend configurations or
changes to configurations which will enhance
performance |
X | |||
9. Develop improvement plans as required to meet SLRs |
X | |||
10. Authorize improvement plans |
X | |||
11. Implement improvement plans and coordinate
with Third Parties as required |
X | |||
12. Provide technical advice and support to the
application maintenance and development staffs as
required |
X |
3.1.16 Service Level Monitoring and Reporting
Monitoring and reporting Services are the activities associated with monitoring and reporting
of service delivery with respect to SLRs. In addition, ACS shall report system management
information (e.g., performance metrics, and system accounting information) to the designated
Symetra representatives in a format agreed to by Symetra. The following table identifies
monitoring and reporting roles and responsibilities that ACS and Symetra will perform.
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Schedule 2A—Cross-Functional Services SOW
Service Level Monitoring and Reporting Responsibilities
| Service Level Monitoring Roles and Responsibilities | ACS | Symetra | ||
1. Approve and document SLRs and reporting cycles |
X | |||
2. Document SLRs and SLAs |
X | |||
3. Report on service performance improvement results |
X | |||
4. Coordinate SLA monitoring and reporting with
designated
Symetra representative and Third-Party vendors, as
required |
X | |||
5. Measure, analyze, and provide management reports on
performance relative to requirements |
X | |||
6. Develop service level improvement plans where
appropriate |
X | |||
7. Review and approve improvement plans |
X | |||
8. Implement improvement plans |
X | |||
9. Review and approve SLA metrics and performance
reports |
X | |||
10. Provide Symetra portal access to performance and SLA
reporting and monitoring system |
X |
3.1.17 Account Management
Account management Services are the activities associated with the ongoing management of the
service environment. The following table identifies account management roles and responsibilities
that ACS and Symetra will perform.
Account Management Roles and Responsibilities
| Account Management Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document account management structure,
planning and procedures |
X | |||
2. Approve account management structure, planning and
procedures |
X | |||
3. Develop a detailed “IT” service catalog which details
services offered including all service options, pricing,
installation timeframes, order process (new, change & remove
service) and prerequisites |
X | |||
4. Develop a service ordering process that clearly defines
how
to order, change or delete Services |
X | |||
5. Recommend criteria and formats for administrative, service
activity and service level reporting |
X | |||
6. Approve criteria and formats for administrative, service
activity and service level reporting |
X | |||
7. Develop and implement customer satisfaction program for
tracking the quality of Service delivery to End Users |
X | |||
8. Provide stewardship reporting (e.g. statistics, trends,
audits) |
X |
3.1.18 Root Cause Analysis
ACS will develop, implement, and maintain a Root Cause Analysis (RCA) process and perform the
activities required to diagnose, analyze, recommend, and take corrective measures to prevent
recurring problems and/or trends. The following table identifies Root Cause Analysis roles and
responsibilities that ACS and Symetra will perform.
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Root Cause Analysis Roles and Responsibilities
| Root Cause Analysis Roles and Responsibilities | ACS | Symetra | ||
1. Identify requirements and policies for Root Cause
Analysis (RCA) (e.g. events that trigger an RCA) |
X | |||
2. Develop procedures for performing an RCA that meet
requirements and adhere to defined policies |
X | |||
3. Approve RCA procedures |
X | |||
4. Conduct proactive trend analysis to identify recurring
problems |
X | |||
5. Track and report recurring problems or failures and
provide
associated consequences of problems if there is a business
impact to Symetra |
X | |||
6. Recommend solutions to address recurring problems or
failures |
X | |||
7. Approve solutions to address recurring problems or failures |
X | |||
8. Flag all Priority Level 1 and Priority Level 2 Incidents
that
require Root Cause Analysis |
X | |||
9. Identify root cause of Priority Level 1 and Priority
Level 2
Incidents and recommend appropriate resolution action |
X | |||
10. Approve solutions to address Priority Level 1 and Priority
Level 2 Incidents |
X | |||
11. Provide status report detailing the root cause of and
procedure for correcting recurring problems and Priority Level 1
and Priority Level 2 incidents until closure as determined by
Symetra |
X |
3.1.19 Training and Knowledge Transfer
Training and knowledge transfer Services consist of:
| a. | ACS will provide training for the improvement of skills through education and instruction for ACS’ staff. ACS will participate in any initial and on-going training delivered by Symetra as required that would provide a learning opportunity about Symetra’s business and technical environment | ||
| b. | ACS will provide for Symetra retained technical staff for the express purpose of exploitation of the functions and features of the Symetra computing environment. Delivery methods may include classroom style, computer-based, individual, or other appropriate means of instruction. | ||
| c. | ACS will provide Symetra selected Industry standards based training for those areas which it is certified to teach (Six Sigma for example) ACS will also coordinate with Symetra on other available industry training for which there may be associated costs. |
The following table identifies training and knowledge transfer roles and responsibilities that ACS
and Symetra will perform.
Training and Knowledge Transfer Roles and Responsibilities
| Training and Knowledge Transfer Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document training and knowledge database
requirements and policies |
X | |||
2. Participate in development, review and approve training
requirements |
X |
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| Training and Knowledge Transfer Roles and Responsibilities | ACS | Symetra | ||
3. Develop and document procedures that meet training requirements
and adhere to defined policies |
X | |||
4. Approve training procedures |
X | |||
5. Develop program to instruct Symetra personnel on the provision
of
ACS Services (e.g., “rules of engagement”, requesting services, etc.) |
X | |||
6. Approve ACS developed training program |
X | |||
7. Develop, implement and maintain an Symetra accessible knowledge
database/portal |
X | |||
8. Develop and implement knowledge transfer procedures to ensure
that
more than one individual understands key components of the business
and technical environment |
X | |||
9. Participate in Symetra delivered instruction on the business and
technical environment |
X | |||
10. Develop and document training requirements that support the
ongoing provision of Symetra services, including refresher courses as
needed and instruction on new functionality |
X | |||
11. Take training classes as needed to remain current with systems,
software, features and functions for which Help Desk support is
provided in order to improve Service performance (e.g. First Call
Resolution) |
X | |||
12. Provide training when substantive (as defined between the Symetra
and ACS) technological changes (e.g., new systems or functionality,
etc.) are introduced into the Symetra environment to facilitate full
exploitation of all relevant functional features |
X | |||
13. Provide training materials for Symetra technical staff for Level
1 supported applications |
X | |||
14. Provide on going training materials for Help Desk personnel on
the Symetra business and technical environments as defined by Symetra |
X | |||
15. Provide Symetra selected classroom-style and computer-based
training (case-by-cases basis) for standard commercial-off-the-shelf
(COTS) applications |
X |
3.1.20 Documentation
Documentation Services are the activities associated with developing, revising, maintaining,
reproducing, and distributing information in hard copy and electronic form. The following table
identifies documentation roles and responsibilities that ACS and Symetra will perform.
Documentation Roles and Responsibilities
| Documentation Roles and Responsibilities | ACS | Symetra | ||
1. Define documentation requirements and formats |
X | |||
2. Participate in defining documentation requirements
and
formats as appropriate |
X | |||
3. Approve documentation requirements and formats |
X | |||
4. Provide output in agreed format for support of
activities throughout the life cycle of Services as
specified in each Service Tower |
X |
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Schedule 2A—Cross-Functional Services SOW
| Documentation Roles and Responsibilities | ACS | Symetra | ||
5. Document system specifications and configurations
(e.g. interconnection topology, configurations, network
diagrams) |
X | |||
6. Document standard operating procedures (e.g. boot,
failover, spool management, batch processing, backup,
etc.) |
X | |||
7. Document policies, procedures, production &
maintenance schedules and job schedules |
X |
3.1.21 Technology Refreshment and Replenishment
Technology refreshment and replenishment Services (TR&R) are the activities associated with
modernizing the IT infrastructure on a continual basis to ensure that the system components stay
current with evolving industry standard technology platforms. The following table identifies
technology refreshment and replenishment roles and responsibilities that ACS and Symetra will
perform.
Technology Refreshment and Replenishment Roles and Responsibilities
| TR&R Roles and Responsibilities | ACS | Symetra | ||
1. Recommend and establish TR&R life-cycle management
policies, procedures and plans appropriate for support of
Symetra business requirements |
X | |||
2. Approve TR&R policies, procedures and plans in accordance
with the change and release management process |
X | |||
3. Manage, maintain, and update as necessary, the approved
TR&R
policies, procedures, and plans |
X | |||
4. Perform the necessary tasks required to fulfill the TR&R
plans |
X | |||
5. Provide management reports on the progress of the TR&R
plans |
X | |||
6. Periodically review the approved TR&R implementation plans
to ensure they properly support Symetra business requirements |
X |
3.1.22 Security (physical/logical access to systems)
Security management Services include physical and logical security of Symetra assets, virus
protection, and other security services in compliance with Symetra security requirements and all
applicable regulatory requirements. The following table identifies Security roles and
responsibilities that ACS and Symetra will perform.
Security Roles and Responsibilities
| Security Roles and Responsibilities | ACS | Symetra | ||
1. Define security requirements, standards, procedures and
policies including regulatory requirements |
X | |||
2. Assist in developing security standards, policies, and
procedures including industry best practices |
X | |||
3. Conduct risk assessment to identify control or security gaps |
X | |||
4. Provide security plan and IT infrastructure based on security
requirements, standards, procedures, policies and risks |
X | |||
5. Review and approve security plans |
X | |||
6. Implement security plans consistent with Symetra security
policies |
X |
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Schedule 2A—Cross-Functional Services SOW
| Security Roles and Responsibilities | ACS | Symetra | ||
7. Establish access profiles and policies for adding, changing,
enabling/disabling and deleting log-on access of Symetra employees,
agents and subcontractors |
X | |||
8. Perform log-on/security-level access changes as detailed in
profiles and policies |
X | |||
9. Report security violations to Symetra per Symetra policies |
X | |||
10. Resolve security violations internal to Symetra |
X | |||
11. Resolve security violations that originate outside of the
hosted network(s). Specifics examples include denial of service
attacks, spoofing, Web exploits |
X | |||
12. Actively participate in industry standard security forums and
users groups. Demonstrate the ability to remain up to date with
current security trends, threats, and common exploits. |
X | |||
13. Review all security patches relevant to the IT environment and
classify the need and speed in which the security patches should be
installed as defined by security policies. |
X | |||
14. Install security patches |
X | |||
15. Perform periodic security audits |
X | |||
16. Maintain all documentation required for security audits and
internal control and control testing |
X | |||
17. Allow Third Party security audits |
X |
3.1.23 IT Service Continuity and Disaster Recovery Services
ACS must demonstrate that it will consistently meet or exceed Symetra IT continuity and
disaster recovery requirements. The following table identifies IT Service continuity and disaster
recovery roles and responsibilities that ACS and Symetra will perform.
IT Service Continuity and Disaster Recovery Roles and Responsibilities
| IT Service Continuity and Disaster Recovery Roles and | ||||
| Responsibilities | ACS | Symetra | ||
1. Define Symetra IT Service continuity and disaster recovery
strategy, requirements and scenarios |
X | |||
2. Recommend best practice IT Service continuity and disaster
recovery strategies, policies and procedures |
X | |||
3. As needed, assist Symetra in other IT continuity and emergency
management activities |
X | |||
4. Develop detailed disaster recovery plan to achieve disaster
recovery requirements |
X | |||
5. Define data (file system, database, flat files etc. etc.)
replication, backup and retention requirements |
X | |||
6. Establish processes to ensure disaster recovery plans are
kept up
to date and reflect changes in Symetra environment |
X | |||
7. Review & approve disaster recovery plan |
X | |||
8. Establish disaster recovery test requirements |
X | |||
9. Perform scheduled ACS disaster recovery tests per Symetra
policies |
X |
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| IT Service Continuity and Disaster Recovery Roles and | ||||
| Responsibilities | ACS | Symetra | ||
10. Coordinate involvement of users for disaster recovery testing |
X | |||
11. Participate in disaster recovery tests |
X | |||
12. Track and report disaster recovery test results to Symetra |
X | |||
13. Review & approve disaster recovery testing results |
X | |||
14. Develop action plan to address disaster recovery testing results |
X | |||
15. Approve action plan |
X | |||
16. Implement action plan and provide on going status until
completion |
X | |||
17. Initiate the disaster recovery plan in the event of an Symetra
disaster recovery situation per the disaster recovery policies and
procedures |
X | |||
18. Initiate the disaster recovery plan in the event of an ACS
disaster recovery situation and notify Symetra per disaster recovery
polices and procedures |
X | |||
19. Coordinate with Symetra during an ACS disaster recovery
situation per disaster recovery policies and procedures |
X |
3.1.24 Environment and Facilities Support
ACS will perform services and activities associated with maintaining environmental
requirements at designated Symetra locations. The following table identifies environment and
facilities support roles and responsibilities that ACS and Symetra will perform.
Environmental and Facilities Support
| Environmental and Facilities Support Roles and Responsibilities | ACS | Symetra | ||
1. Identify requirements for Symetra environment and facilities
support |
X | |||
2. Identify requirements for Symetra environment for ACS supported
components |
X | |||
3. Develop and document procedures for environment and facilities Support |
X | |||
4. Approve environment and facilities support procedures |
X | |||
5. Remote monitor the designated Symetra environmental systems (e.g., UPS)
in rooms housing computing hardware and network devices where Symetra
ensures the appropriate monitoring equipment is installed in remote
locations |
X | |||
6. Develop and recommend improvement plans for Symetra monitored
facilities as needed to maintain an effective and secure computing
environment |
X | |||
7. Implement or coordinate the implementation of all approved upgrades
and
installations |
X | |||
8. Coordinate Symetra Site activities of all personnel (i.e., ACS
employees and others) working in equipment locations (e.g., equipment
rooms, network equipment closets) |
X | |||
9. Ensure that facilities support activities conform to the requirements
of defined change management processes |
X |
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3.1.25 Financial/Chargeback Management and Invoicing
ACS will provide financial/chargeback management that will allow Symetra to chargeback its
internal business units for actual usage of IT resources and to receive accurate invoices that meet
Symetra requirements. The following table identifies financial/chargeback management and invoicing
roles and responsibilities that ACS and Symetra will perform.
Financial/Chargeback Services
| Financial/Chargeback Roles and Responsibilities | ACS | Symetra | ||
1. Identify chargeback and reporting requirements |
X | |||
2. Document and maintain Symetra chargeback reporting
requirements |
X | |||
3. Approve chargeback reports |
X | |||
4. Provide chargeback reports |
X | |||
5. Identify invoicing requirements |
X | |||
6. Document and maintain invoicing requirements |
X | |||
7. Provide invoices per Symetra requirements |
X | |||
8. Approve invoices |
X |
3.2 Exclusions
The following items are specifically excluded
from this Cross Functional Services SOW:
a. None
4.0 Service Management
4.1 Objectives
A key objective of the Agreement is to attain the SLRs. SLRs specific to Service Towers are
identified in the Service Management section of each IT Service Tower SOW. SLRs applicable across
all Service Towers are identified in this Cross Functional Services SOW below. Specific Service
Tower and Cross Functional Service Level Agreements (SLAs) are specified with Fee Reductions where
business is impacted through failure to meet their respective SLRs. SLRs are detailed in the
Service Level Requirements section of each SOW and SLAs are detailed in Schedule 5 — Fee
Reductions.
ACS shall provide written reports to Symetra regarding ACS’s compliance with the SLRs specified in
each SOW Schedule.
4.2 Definitions
The following defined terms shall apply to this Cross Functional Services SOW and the
applicable SLRs/SLAs:
SL1 (Storage Level 1) – SAN storage based upon a utility pricing model which is subject to storage
SLAs requiring data set restoration to commence within 3 hours or less following a request. SL1
applies to both mainframe and midrange/server systems.
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SL2 (Storage Level 2) – SAN storage based upon a
utility pricing model which is subject to storage
SLAs/SLRs requiring data set restoration to commence
within 8 hours or less following a request. SL2 applies
to both mainframe and midrange/server systems.
4.3 Service Level Requirements (SLRs)
The following SLRs represent minimum service levels required across all IT Service Towers. ACS
must consistently meet or exceed the following SLRs commencing on the Handover Date (unless another
date is expressly set forth in a particular SLR) that is applicable to Cross Functional Services.
Cross Functional Services SLRs associated with Fee Reductions are detailed in Schedule 5 — Fee
Reductions.
Incident Resolution SLRs
Definition
|
Time to resolve following responses to different Incident priority classifications. Each IT Services Tower SOW categorizes incidents according to the Incident Resolution Priorities listed below. Service Tower Incident categorizations are referenced in the Service Environment section of each Service Tower SOW. |
Incident Resolution SLRs
| Performance | SLR Performance % | |||||
| Incident Resolution | Service Measure | Target | All QoS Levels | |||
Priority 1
|
Time to resolve | <2 hour | [***]% | |||
Priority 2
|
Time to resolve | <4 hours | [***]% | |||
Priority 3
|
Time to resolve | <8 hours | [***]% | |||
Priority 4
|
Time to resolve | Next Business Day or as prioritized by ACS |
[***]% | |||
Root Cause Analysis for Priority 1 & Priority 2 Incidents |
Time to report | Within 24 hours of Incident resolution | [***]% | |||
| Formula | Number of requests completed within Performance Target/Total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | To be agreed by the Parties | |||||
Portions
marked [***] have been omitted pursuant to a Confidential
Treatment Request by Symetra Financial Corp., this information has
been filed separately with the Securities and Exchange Commission.
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Priority Levels
| Priority Level | Description | |
| 1 - Emergency/Urgent | The problem has caused a complete and immediate work stoppage affecting a
primary business process or a broad group of users such as an entire
department, floor, branch, line of business, or external customer. No work
around available. |
|
Examples: |
||
Major application problem (e.g. payroll, call center, etc.) Severe problem during critical periods (e.g. month-end processing) Security violation (e.g. denial of service, widespread virus, etc.) |
||
| 2 - High | A business process is affected in such a way that business functions are
severely degraded, multiple End-Users are impacted or a key customer is
affected. A workaround may be available; however the workaround is not easily
sustainable. |
|
Examples: |
||
Major application (e.g. exchange) VIP Support |
||
| 3 - Medium | A business process is affected in such a way that certain functions are
unavailable to End-Users or a system and/or service is degraded. A workaround
may be available |
|
Examples: |
||
Telecommunication problem (e.g. Blackberry, PBX digital/analog card) Workstation problem (e.g. hardware, software) |
||
| 4 - Low | An incident that has little impact on normal business processes and can be
handled on a scheduled basis. A workaround is available. |
|
Examples: |
||
End-User requests (e.g. system enhancement) Peripheral problems (e.g. network printer) Preventative maintenance Benchmarks |
4.3.1 Backup and Restore Requirements
ACS shall implement and maintain backup and restoration capabilities for all Service Tower
data, applications and component configurations. ACS shall perform incremental backups, full
backups and full archive backups according to the backup schedule presented below. Recovery
procedures will be capable of restoring Service delivery for failed Service Tower data and
applications according to the Cross Functional Services restoration SLRs listed below. Service
Tower applications requiring scheduled backups are referenced in the Service Environment section of
each Service Tower SOW.
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Schedule 2A—Cross-Functional Services SOW
Backup Schedule
Data Center Computing Services—Backup Schedule and SLRs
| SLR | ||||||||||||
| Type of | Backup | Storage | Retention/Purge Period | Performance | ||||||||
| Backup | Frequency | Site | Standard | Regulatory | Target | % | ||||||
Incremental
(all backups
SLA/SLR will be in
effect 30 days
after the
applicable Handover
Date) |
Daily | Off-site | 35 days | Backup frequency | [***]% | |||||||
Full (Backup)
SLA/SLR will be in
effect 30 days
after the
applicable Handover
Date) |
Weekly | Off-site | 5 weeks | Backup frequency | [***]% | |||||||
Full (Archive)
SLA/SLR will be in
effect 30 days
after the
applicable Handover
Date) |
Monthly | Off-site | Indefinite | Backup frequency | [***]% | |||||||
All |
Quarterly test of each type | [***]% | ||||||||||
| of backup restore process | ||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Restoration SLR
Restoration Services Table
| Restoration | Service | Performance | ||||
| Type | Measure | Target | SLR Performance % | |||
SL1 data
restore requests
for production &
regulatory data
(data backup to
intermediate SAN
storage, restore
from intermediate
SAN storage) (SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) |
Response time to initiate the restoration of Data 1 week old or less | £ 3 hours from Symetra request | [***]% | |||
SL2 data restore
requests for
recovery of test
data or data volume
back-ups (data
backup to tape;
restore from tape)
(SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) |
Response time
to initiate the
restoration of
Data 1 week
old or less
Response time to initiate the restore Data 1 week old or less |
£ 8 hours
from Symetra
request £ 8 hours from Symetra request |
[***]% [***]% |
|||
| Formula | Number of requests completed within Performance Target /Total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report
monthly within approved operational windows |
|||||
| Measurement Tool | To be agreed by the Parties | |||||
4.3.2 INTENTIONALLY LEFT BLANK
4.3.3 Asset Tracking and Management
Within five (5) days after the first day of each calendar quarter, ACS shall select a
statistically valid sample, in accordance with the process specified in the Procedures Manual, to
measure
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Schedule 2A—Cross-Functional Services SOW
ACS’ compliance with the following SLAs pertaining to the accuracy of individual data
elements in the asset tracking database. Accuracy of data shall adhere to the following SLR:
Asset Tracking SLR
Asset Tracking Requirements Table
| Accuracy of data in
asset database for
desktops/laptops,
peripherals
(including network
attached printers),
hand held devices
and telephone
handsets
(SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) |
Accuracy | Accuracy percentage of each of the following
data elements as determined by audit: |
||||||
| Data Element | Accuracy Percentage | |||||||
| Serial number | [***] | |||||||
| Location | [***] | |||||||
| Hardware/Software configuration | [***] | |||||||
| Accuracy of data
for ACS owned
assets used to
perform Services
(SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) |
Accuracy | Accuracy percentage of each of the following
data elements as determined by audit: |
||||||
| Data Element | Accuracy Percentage | |||||||
| Serial number | [***] | |||||||
| Location | [***] | |||||||
| Hardware/Software configuration | [***] | |||||||
| Formula | Number of tracked assets where data element is determined to be correct | |||||||
| Total number of tracked assets audited. | ||||||||
| Measurement Interval | Audited as specified in Standards and Procedures Manual (quarterly as of Effective Date). | |||||||
| Measurement Tool | To be agreed by the Parties | |||||||
4.3.4 Annual Customer Satisfaction Survey
Symetra and ACS shall establish a service level linked to customer satisfaction using a
mutually agreed-upon survey, facilitated by a Third Party and designed with Symetra and ACS input.
The Third Party shall supply to Symetra semiannual reports of Symetra business End User
satisfaction, integrating the results of ongoing customer satisfaction surveys for each IT Service
Tower. Upon delivery of each such report, the Parties shall meet to jointly identify any areas of
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customer dissatisfaction. The Service ACS shall prepare a project plan with Symetra’s input and
approval to resolve customer dissatisfaction identified.
Customer Satisfaction SLR
Customer Satisfaction
| Customer | ||||||||
| Satisfaction | Service Measure | Performance Target | SLR | |||||
Scheduled survey
|
Customer satisfaction rate | Users surveyed should be very satisfied or satisfied | [***] | |||||
| Formula | Sum of survey result from each participant/total number of participants responding to scheduled survey | |||||||
| Measurement Interval | Measure annually, report annually | |||||||
| Measurement Method/Source data |
To be agreed by the Parties | |||||||
4.4 Reports
Without limiting the terms of Section 2.11.1 of the Agreement, ACS shall provide written
reports to Symetra regarding ACS’ compliance with the SLRs and other management reports specified
in this Cross Functional Services SOW.
5.0 List of Referenced ITSA Schedules
| ITSA Schedule | Description | |
Schedule 2B
|
Data Center Services SOW | |
Schedule 2C
|
Distributed Computing Services SOW | |
Schedule 2D
|
Data Network Management Services SOW | |
Schedule 2E
|
Voice Communications Services SOW | |
Schedule 2F
|
Help Desk Services SOW | |
Schedule 2G
|
Output Processing Services SOW | |
Schedule 2H
|
Content Management Services SOW | |
Schedule 3
|
Fees | |
Schedule 5
|
Fee Reductions |
Portions
marked [***] have been omitted pursuant to a Confidential
Treatment Request by Symetra Financial Corp., this information has
been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 28
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
Schedule 2B
Data Center Services SOW
for
Symetra Life Insurance Company (Symetra)
October 28, 2004
Confidential Information
Page i
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
TABLE OF CONTENTS
1.0 Data Center Overview and Service Objectives |
3 | |||
1.1 Data Center Services Overview |
3 | |||
1.2 Service Objectives |
4 | |||
2.0 Service Environment |
4 | |||
2.1 Scope of the Infrastructure to be Supported |
4 | |||
2.2 Work-In-Progress |
5 | |||
2.3 Future initiatives |
5 | |||
2.4 Baseline Information |
5 | |||
3.0 Data Center Service Requirements |
6 | |||
3.1 Service Descriptions and Roles & Responsibilities |
6 | |||
3.2 Exclusions |
13 | |||
4.0 Service Management |
13 | |||
4.1 Objectives |
13 | |||
4.2 Definitions |
13 | |||
4.3 Service Level Requirements (SLRs) |
14 | |||
4.4 Reports |
23 | |||
5.0 Referenced SOW Appendices and SOW Schedules |
23 | |||
5.1 Referenced Data Center SOW Appendices |
23 | |||
5.2 Referenced ITSA Schedules |
23 |
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
List of Tables
Table 1 – Data Center Baseline Projections
Table 2 – General Roles and Responsibilities
Table 3 – Operations and Administration Roles and Responsibilities
Table 4 – Collaborative Computing Services Roles and Responsibilities
Table 5 – Remote Access Facilities Roles and Responsibilities
Table 6 – Database Administration Roles and Responsibilities
Table 7 – General System Availability SLRs
Table 8 – Application Platform Response Time SLRs
Table 9 – Batch Processing SLRs
Table 10 – Output Delivery SLRs
Table 11 – General Administrative Functions SLRs
Table 12 – System Server Administration SLRs
Table 13 – Server Software Refresh SLRs
Table 14 – System Updates/Refresh Requirements SLRs
Table 15 – Database Administration SLRs
Table 16 – Data Center Reports
1.0 Data Center Overview and Service Objectives
1.1 Data Center Services Overview
Data center Services are the Services and activities, as detailed in the following Data Center
Services SOW, required to provide and support Symetra centralized production, quality assurance,
and development computing environments. The data center environment includes central CPU,
Windows-based systems, disk and tape storage hardware and systems software
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
that supports centralized databases, business applications, data warehouse and web applications.
Additional application and proprietary systems may be deployed to support the core business systems
and to provide Symetra infrastructure technical support.
As depicted in Figure 1 bellow, in addition to the Service described in this Data Center Services
SOW, ACS is responsible for providing the Services described in Schedule 2A to the Agreement –
Cross Functional Services SOW. Figure 1 depicts the relationship between the Cross Functional
Services SOW, and all SOWs within the scope of the Agreement.
Cross Functional Services SOW
Data
|
Distributed | Data | Voice | Output | Content | |||||||
| Center | Computing | Network | Comm. | Help Desk | Processing | Management | ||||||
| Services | Services | Services | Services | Services | Services | Services | ||||||
| SOW | SOW | SOW | SOW | SOW | SOW | SOW |
Figure 1: Service Tower SOWs with cross functional view
1.2 Service Objectives
The following are the key high-level Service objectives Symetra expects to achieve through
outsourced data center Services and this Data Center Services SOW:
| n | Meet Symetra business needs for highly available, reliable, scalable and secure Services | ||
| n | Maintain compliance with industry standards and government regulations | ||
| n | Acquire Services with Availability guarantees backed by SLAs/SLRs | ||
| n | Acquire Services that can leverage operational scale and best practices to achieve optimum commercial price performance | ||
| n | Adopt a more flexible and variable cost structure versus owning fixed assets | ||
| n | Acquire ongoing feedback mechanisms to ensure performance meets expectations |
2.0 Service Environment
2.1 Scope of the Infrastructure to be Supported
The following sub-sections specify the appendices and other relevant materials containing
details of the data center Services environment. These service environment appendices are to be
maintained by ACS and made available to Symetra on a quarterly basis. (Currently, Safeco Corporate
provides Symetra data center services as a shared service.)
2.1.1 Hardware and Software
A listing and description of the data sets and applications for which database administration
services are to be provided is provided in Appendix B.3 – Data Center Supported Databases.
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
2.1.2 Service Locations
All Data Center services shall be provided at Provider owned facilities. A listing of Provider
owned, operated or subcontracted centralized and backup facilities providing Data Center services
is provided in Appendix B.4 – Provider Data Center Facilities.
2.1.3 Personnel
| a. | ACS will be responsible for staffing the data center to meet the SLRs/SLAs set forth in this SOW and added in the future. |
2.1.4 Policies, Procedures and Standards
INTENTIONALLY LEFT BLANK
2.2 Work-In-Progress
INTENTIONALLY LEFT BLANK
2.3 Future initiatives
INTENTIONALLY LEFT BLANK
2.4 Baseline Information
Symetra’s current data center utilization and projected usage is presented below. These
business requirements represent Symetra’s most realistic projection of the Service requirements for
day 1 implementation based on a combination of past trends and current anticipated overall business
direction over the term of the contract.
These metrics, along with other data which may be pertinent for sizing the solution, are reflected
in Schedule 3 to the Agreement-Fees.
Table 1. Data Center Baseline Projections
| System | Type | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | ||||||||||||||||||||
Mainframe
Services (MIPS) –
7AM to 5PM AVG
|
IBM Z/OS | 250 | 288 | 331 | 380 | 437 | 503 | The average MIPS for a Typical Day in the middle of the month. 10 AM to 3PM is peak time. Days at the end and beginning of the month have heavier usage. | ||||||||||||||||||||
Mainframe
Services (MIPS) –
7PM to 3AM AVG
|
IBM Z/OS | 250 | 288 | 331 | 380 | 437 | 503 | A Typical batch cycle during the middle of the month | ||||||||||||||||||||
Mainframe
Services (MIPS) –
Peak Usage at
Quarter End 7PM to
6 AM
|
IBM Z/0S | 570 | 656 | 754 | 867 | 997 | 1146 | Month-end and the first few days of the month also have increased usage (250 – 500) | ||||||||||||||||||||
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| System | Type | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | ||||||||||||||||||||
Mainframe DASD
(GB)
|
IBM ESS-2105 Raid-5 | 703 | 879 | 1098 | 1373 | 1716 | 2145 | Does not include DB2 log or system files, sort work files, etc. | ||||||||||||||||||||
Mainframe DASD
(GB) — Compressed
DASD or tape with
auto recall to DASD
|
IBM ESS-2105 Raid-5 | 803 | 1004 | 1255 | 1568 | 1960 | 2451 | This could be migrated to normal DASD after transition | ||||||||||||||||||||
Mainframe Tapes
(GB)
|
3420 (9 Track) | 334 | 334 | N/A | N/A | N/A | N/A | Transition to 3490 | ||||||||||||||||||||
Mainframe Tapes
(GB)
|
3480 (18 Track) | 118 | 118 | N/A | N/A | N/A | N/A | Transition to 3490 | ||||||||||||||||||||
Mainframe Tapes
(GB)
|
3490 (36 Track) | 2896 | 3041 | 3193 | 3352 | 3520 | 3696 | |||||||||||||||||||||
Mainframe Tapes
– “Virtual Tapes”
(GB)
|
3490 (36 Track) | 9463 | 9936 | 10433 | 10995 | 11502 | 12077 | |||||||||||||||||||||
Mainframe Tapes (GB)
|
9840 | 84 | 84 | N/A | N/A | N/A | N/A | Transition to 3490 | ||||||||||||||||||||
Windows/NT
2000 Servers
|
All | 187 | 187 | 210 | 225 | 239 | 255 | |||||||||||||||||||||
3.0 Data Center Service Requirements
3.1 Service Descriptions and Roles & Responsibilities
In addition to the Services, activities, and roles and responsibilities described in Schedule
2A to the Agreement — Cross Functional Services SOW, ACS shall be responsible for the following
data center support Services.
3.1.1 General Responsibilities
The following table identifies general roles and responsibilities associated with this Data Center
Services SOW. An “X” is placed in the column under the party that will be responsible for
performing the task. ACS responsibilities are indicated in the column labeled “ACS.”
Table 2. General Roles and Responsibilities
| General Roles and Responsibilities | ACS | Symetra | ||
1. Manage event and workload processes across all
platforms |
X | |||
2. Provide technical support for all hardware/equipment
of the data center computing infrastructure |
X | |||
3. Support all infrastructure software
computer-processing Services (including operating
systems, middleware, messaging, collaborative computing
platforms, Internet, intranet and extranet) |
X | |||
4. Support data center network operations (including
systems monitoring; problem diagnostics, troubleshooting,
resolution and escalation; security management; and
capacity planning/analysis) |
X |
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| General Roles and Responsibilities | ACS | Symetra | ||
5. Provide database administration, data management and
storage Services |
X | |||
6. Provide data backup and restoration Services in
accordance with Symetra established policies |
X | |||
7. Provide disaster recovery Services across all
platforms per the Symetra business impact report |
X | |||
8. Provide send/receive electronic data transmissions
including EDI and FTP Services |
X | |||
9. Provide and support data center related environmental
elements (HVAC, UPS, power, cable plant, etc) |
X | |||
10. Coordinate all changes to the data center
infrastructure that may affect the SLAs/SLRs of any other
service area |
X | |||
11. Create and maintain all appropriate project plans,
project time and cost estimates, technical
specifications, management documentation and management
reporting in a form/format that is acceptable to Symetra |
X | |||
12. Report performance against SLA/SLR requirements |
x |
3.1.2 Data Center Computing Services
3.1.2.1 Operations and Administration
Operations and administration Services are the activities associated with the provisioning and
day-to-day management of the installed systems and software environment.
| a. | Operations activities include: | ||
| Computer processing for batch and on-line systems (e.g. mainframe, NT server) | |||
| Data storage (i.e. direct access storage devices (DASD), redundant array of independent disks (RAID), storage area network (SAN), network-attached storage (NAS), tape and optical) | |||
| Centralized output management for print, microfiche, film, etc. | |||
| Remote output management. | |||
| b. | Administration activities include: | ||
| Managing user accounts | |||
| Chargeback to users for usage of Services | |||
| Gathering usage statistics and reporting activity to ensure effective use of computing resources | |||
| Managing transaction definitions (CICS, IMS) |
The following table identifies the operations and administration roles and responsibilities that
are specific to this Data Center Services SOW. An “X” is placed in the column under the party that
will be responsible for performing the task. ACS responsibilities are indicated in the column
labeled “ACS.”
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
Table 3. Operations and Administration Roles and Responsibilities
| Monitoring Operations Roles and Responsibilities | ACS | Symetra | ||
1. Provide console operations for centralized and remote computer
processing unit (CPU) processing centers |
X | |||
2. Provide console monitoring, troubleshooting, repair and escalation of
problems in the data center computing environment |
X | |||
3. Start-up and shut-down Symetra online/interactive systems according to
defined schedules or upon approved request |
X | |||
4. Monitor systems as scheduled and respond accordingly to system messages |
X | |||
5. Identify and report application problems |
X | |||
6. Resolve or assist in resolving application problems in accordance with
SLRs/SLAs. Escalate as required. |
X | |||
7. Support applications test-to-production migration activities |
X |
| Job Scheduling and Execution Operations Roles and Responsibilities | ACS | Symetra | ||
1. Define job scheduling requirements, interdependencies, Symetra contacts,
and rerun requirements for all production jobs |
X | |||
2. Provide job scheduling, job execution, reporting and resolution |
X | |||
3. Implement and manage scheduling tools for managing/automating job
execution (e.g. job workflow processes, interdependencies, Symetra
contacts, and rerun requirements file exchange functions and print
management) |
X | |||
4. Define test and demand batch scheduling requirements |
X | |||
5. Prepare test and demand batch jobs for execution |
X | |||
6. Execute test and demand batch jobs on appropriate servers |
X | |||
7. Execute production batch jobs on appropriate servers as defined by
Symetra schedules |
X | |||
8. Monitor progress of scheduled jobs and identify and resolve issues in
scheduling process |
X | |||
9. Maintain database of job scheduling, contact, rerun and interdependencies |
X | |||
10. Provide quality control for reprocessing activities, such as batch
reruns |
X | |||
11. Prepare job run parameters |
X | X | ||
12. Validate job results per Symetra instructions |
X | |||
13. Notify Symetra and maintain a history of job completion results |
X |
| Media Operations Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document media processing procedures that meet requirements
and adhere to defined policies |
X | |||
2. Review media processing procedures |
X | |||
3. Maintain a media library and media management system |
X |
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| Media Operations Roles and Responsibilities | ACS | Symetra | ||
4. Manage the media inventory to ensure that adequate media resources are
available. Coordinate acquisition of additional media as needed. |
X | |||
5. Manage input media Availability to meet processing SLRs/SLAs |
X | |||
6. Load and manage third-party media |
X | |||
7. Provide secure offsite storage for designated media and transport media
to offsite location as required |
X | |||
8. Perform periodic audits to ensure proper cataloging of media |
X |
| Electronic Data Interchange Management Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document EDI management requirements and policies, including
transport, delivery locations and schedule requirements |
X | |||
2. Review EDI management procedures |
X | |||
3. Develop and maintain a repository of all Symetra EDI distribution
entities |
X | |||
4. Execute EDI distribution according to production and test schedules |
X | |||
5. Monitor all EDI transactions to ensure proper completion |
X | |||
6. Rerun transactions as required and escalate unresolved EDI transactions
to Symetra contact |
X | |||
7. Perform recovery operations for EDI transactions as required |
X | |||
8. Interface directly with Symetra EDI distribution entities according to
defined, entity unique Symetra procedures |
X |
| Output Management Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document output management requirements and policies,
including transport, delivery locations and schedule requirements |
X | |||
2. Review output management procedures |
X | |||
3. Provide print output management and distribution |
X | |||
4. Separate and organize printed output materials accordingly |
X | |||
5. Ensure that printed output is delivered to Symetra specified delivery
locations according to schedule |
X | |||
6. Package and coordinate designated output for pickup by USPS or private
delivery services (e.g., Fedex, UPS, etc.) |
X | |||
7. Ensure that output devices are functioning, including performing or
coordinating routine maintenance |
X | |||
8. Create and distribute Symetra data products for Symetra customers,
including volume creation (CDs, cartridges, FTP, etc.) |
X | |||
9. Manage consumables, such as paper, print ribbons, ink, tapes, etc.
Coordinate acquisition of additional materials as needed |
X |
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| Storage and Data Management Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document storage and data management requirements and
policies |
X | |||
2. Develop and document procedures for performing storage management that
meet requirements and conform to defined policies |
X | |||
3. Review storage management procedures |
X | |||
4. Provide data storage services (e.g., RAID array, SAN, NAS, tape,
optical, etc.) |
X | |||
5. Monitor and control storage performance according to data management
policies |
X | |||
6. Maintain and improve storage resource efficiency and space requirements |
X | |||
7. Maintain data set placement and manage catalogs |
X | |||
8. Perform data backups and restores per established procedures and
SLRs/SLAs |
X | |||
9. Manage file transfers and other data movement activities |
X | |||
10. Provide input processing, for activities such as loading third-party
tape and receipt and/or transmission of batch files |
X | |||
11. Support send and receive electronic data transmissions (e.g. EDI, FTP) |
X |
| Enterprise System Administration Roles and Responsibilities | ACS | Symetra | ||
1. Develop and document enterprise computing systems requirements and
policies |
X | |||
2. Develop procedures for performing enterprise systems administration that
meet requirements and adhere to defined policies |
X | |||
3. Review and approve enterprise systems administration procedures |
X | |||
4. Set up and manage user accounts, perform access control, manage files
and disk space and manage transaction definitions |
X | |||
5. Perform system or component configuration changes necessary to support
enterprise computing Services |
X |
3.1.2.2 Collaborative Computing Services
ACS will perform the collaborative computing Services and activities associated with the support of
existing and future tools (e.g. GroupWise, MS Exchange, web meetings). These activities include the
acquisition, installation, upgrades, maintenance, support and tuning of system software and
utilities for optimal performance. The following table identifies the collaborative computing roles
and responsibilities.
Table 4. Collaborative Computing Services Roles and Responsibilities
| Collaborative Computing Services Roles and Responsibilities | ACS | Symetra | ||
1. Define collaborative computing policies and procedures |
X | |||
2. Participate in defining and accept collaborative
computing policies and procedures for functions including
email, calendaring and mail messaging delivery components |
X | |||
3. Install, test, provide technical support, database
administration and security administration for
collaborative computing packages |
X | |||
4. Provide technical assistance and subject matter
expertise support as required by Symetra staff and
third-party solution providers |
X | |||
5. Provide Email archiving to meet regulatory and
compliance requirements |
X |
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
3.1.2.3 Remote Access Facilities
ACS will perform the remote access facility Services and activities associated with the
installation, management, operations, administration and support of those systems that support
remote access to computing facilities and services (e.g. Citrix Metaframe via dial up and Internet,
web-based mail, VPN etc., extranet access). The following table identifies the remote access
facilities roles and responsibilities.
Table 5. Remote Access Facilities Roles and Responsibilities
| Remote Access Facilities Roles and Responsibilities | ACS | Symetra | ||
1. Define remote access policies and procedures |
X | |||
2. Participate in defining and accept remote access
policies and procedures |
X | |||
3. Install, test, provide technical support,
administration and security administration for remote
access hardware and software |
X | |||
4. Provide testing support for defined Symetra
applications that will be made available via remote
access facilities |
X | |||
5. Provide technical assistance and subject matter
expertise as required by Symetra infrastructure staff and
third-party solution providers for remote access products
and solutions |
X | |||
6. Perform system or component configuration changes
necessary to support remote access Services |
X |
3.1.2.4 Database Administration
ACS will provide the database administration support Services and activities associated with the
maintenance and support of existing and future database (e.g. MS SQL server, FoxPro, IMS, DB2,
etc.). This includes responsibility for managing data, namely data set placement, database
performance, and data recovery and integrity at a physical level. The following table identifies
the database administration roles and responsibilities.
Table 6. Database Administration Roles and Responsibilities
| Database Administration Roles and Responsibilities | ACS | Symetra | ||
1. Define authorization requirements for users, roles, schemas, etc.
and approve change requests |
X | |||
2. Provide security administration including managing role and user
database permissions in accordance with Symetra policies |
X | |||
3. Perform database restores from export dumps or backups |
X | |||
4. Create/refresh development/test/QA databases from production data |
X | |||
5. Execute authorization change requests |
X |
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| Database Administration Roles and Responsibilities | ACS | Symetra | ||
6. Define database creation, configuration, upgrade, patches and
refresh requirements |
X | |||
7. Execute database creation, configuration, upgrades, patches and
refresh |
X | |||
8. Execute all database system level changes (initialization
parameters) |
X | |||
9. Execute all schema changes for all instances |
X | |||
10. Define database data definition requirements for applications (MAC
for tables, triggers, attributes, etc.) |
X | |||
11. Execute database data definition requirements for applications
(MAC for tables, triggers, attributes, etc.) |
X | |||
12. Maintain documentation for all database instance parameters and
system settings |
X | |||
13. Maintain consistency of non-sizing and non-platform specific
database parameters and system settings across all like instances;
consistency must be maintained according to established development to
QA to production life cycle |
X | |||
14. Define database definition and manipulation requirements for
applications and developer schemas. |
X | |||
15. Execute database data definitions for non-managed applications and
developer schemas |
X | |||
16. Define and execute database performance and tuning scripts and
keep database running at optimal performance for Symetra’s workload |
X | |||
17. Implement and administer appropriate database management tools
across all database instances. Performance metrics and historical data
must be available for trending and reporting over a minimum of 6
months |
X | |||
18. Identify locking conflicts, latch contention, rollback
requirements, etc. for all database instances. |
X | |||
19. Resolve locking conflicts, latch contention, rollback
requirements, etc. for all database instances |
X | |||
20. Provide technical assistance and subject matter expertise to
Symetra applications developers and third-party vendor support |
X | |||
21. Provide data dictionary expertise, end user data assistance, Data
Warehouse metadata definition, data mapping functions and creation of
data cubes |
X | |||
22. Monitor database and generate automatic trouble tickets for
problems |
X | |||
23. Open, track, and manage to resolution all database problems |
X | |||
24. Patch database software as needed according to established
development to QA to production life cycle |
X | |||
25. Manage database communication software configuration, installation
and maintenance |
X | |||
26. Provide database storage management |
X | |||
27. Define database backup schedules, retention periods, levels (i.e.
full, incremental, or differential) |
X | |||
28. Execute Symetra’s database backup and recovery policies |
X |
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
3.2 Exclusions
The following items are specifically excluded from this Data Center Services SOW:
| a. | Specialized output processing, and scanning |
4.0 Service Management
4.1 Objectives
A key objective of the Agreement is to attain service-level requirements (SLRs) and service
level agreements (SLAs). SLRs are detailed in the following sections of this Data Center Service
SOW and SLAs are detailed in Schedule 5 of the Agreement — Fee Reductions.
ACS shall provide written reports to Symetra regarding ACS’ compliance with the SLRs/SLAs specified
in this Data Center Services SOW.
4.2 Definitions
The following defined terms shall apply to this Date Center Services SOW and the applicable
SLRs/SLAs:
Administrative Functions – Routine functions such as setting up userIDs, changing authorization
tables, changing account codes, and similar functions handled by ACS.
Availability - The percentage of time the service is fully operational.
Availability(%) = 100% — unavailability (%)
Where unavailability is defined as:
S outage duration x 100
Scheduled Time – planned outage
Where unavailability is defined as:
S outage duration x 100
Scheduled Time – planned outage
Incident Resolution Time – The time elapsed from the initiation of a trouble ticket until service
is restored.
Measurement Interval – The period of time performance will be calculated. This takes into
consideration the impact of continuous outage. For example, a monthly measurement interval for a
99% minimum performance for a 7x24 system with 8 hours of weekly planned downtime would allow 6.4
hours of a continuous outage with no other outages during the month. A weekly interval would only
allow 1.6 hours of a continuous outage.
Online Response Time - Amount of time required to refresh end user screen from point that enter
command is given from end user device. Includes CICS, IMS, DB2, and TSO.
Priority Levels – Symetra-defined category that identifies the degree of Incident importance and
associated ACS response requirements attributed to an Incident.
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Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
Reporting Interval – The time span between regular performance reporting periods.
SL1 (Storage Level 1) – SAN storage based upon a utility pricing model which is subject to storage
SLAs requiring data set restoration to commence within 3 hours or less following a request. SL1
applies to both mainframe and midrange/server systems.
SL2 (Storage Level 2) – SAN storage based upon a utility pricing model which is subject to storage
SLAs/SLRs requiring data set restoration to commence within 8 hours or less following a request.
SL2 applies to both mainframe and midrange/server systems.
Scheduled Time – The time during which Service is to be operational as designated in the applicable
SLR table.
Service Level Requirement (SLR) – The percentage of time or instances that the Target SLR must be
met.
Target – The desired level of service Symetra is seeking for that particular SLA/SLR.
4.3 Service Level Requirements (SLRs)
ACS shall meet the following SLRs commencing on the Handover Date (unless a different date is
expressly set forth in a particular SLR) . ACS must consistently meet or exceed the following SLRs.
SLRs associated with fee reductions are detailed in Schedule 5 of the Agreement — Fee Reductions.
All times referenced are in Pacific Standard Time.
Table 7. General System Availability SLRs
Definition
|
General system Availability is defined as the server CPU, system memory, disks and peripherals up to the connection to the network. Availability is for the single unit and is not the Availability of the aggregated servers at Symetra. | |
| All pre-scheduled system downtime, unless otherwise agreed upon in advance by Symetra, will occur: | ||
Pre-Scheduled Downtime
Requirements
|
a. | For the systems with 24x7x365 requirements—all pre-scheduled maintenance shall be performed based on Symetra’s change management policy |
| b. | For systems having non-24x7x365 requirements—pre-scheduled maintenance shall be performed outside of the normal system Availability timeframe | |
GENERAL SYSTEM AVAILABILITY SLRs
| Service | Performance | SLR | ||||
| System | Measure | Target | Performance % | |||
Mainframe OS and
subsystems
|
Availability per system (SLA/SLR will be in effect 90 days after the applicable Handover Date) | Sun-Sat, 0000-2400 | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 14
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
GENERAL SYSTEM AVAILABILITY SLRs
| Service | Performance | SLR | ||||
| System | Measure | Target | Performance % | |||
Windows servers
|
Per Unit Availability | 7x24x365 | [***]% | |||
QA/Test systems and
servers
|
Availability per server | Mon- Sat 0400-1900 | [***]% | |||
Development servers
|
Availability per server | Mon-Sat, 0400-1900 | [***]% | |||
| Formula | Availability(%) = 100% - unavailability (%) | |||||
| Where unavailability is defined as: | ||||||
| (S outage duration x 100%) ¸ (Schedule Time – planned outage) |
||||||
| The Parties may mutually agree in accordance with the change management procedures to treat an emergency upgrade as a “planned outage” for the purposes of the foregoing calculation. | ||||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Table 8. Application Platform Response Time SLRs
| Definition | End-to-end response time for online application platforms including (e.g.) CICS, IMS/DC, TSO, IIS, etc. SLR is associated only to the detection and notification of abnormal transactional experiences. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
APPLICATION PLATFORM ONLINE RESPONSE TIME SLRs
| Service | Performance | SLR | ||||
| Application Platform | Measure | Target | Performance % | |||
Online transaction
performance,
(transaction types
and parameters are
to be agreed by the
Parties during the
120-day baseline
period)
|
Notification of failure event of metric below (SLR in effect 120 calendar days after the applicable Handover Date). Hourly measurement of aggregate transaction (end-to-end response time). | Initiate incident
management ticket
and commence
troubleshooting
procedure
£ 1
hour of
notification during
Business Day Hours,
or
£ 4
hours during
non-Business Day
hours. Up to (10) transaction types and operational parameters are to be defined and maintained by Symetra for measurement in a response time procedures guide. |
[***]% | |||
| Formula | Performance = transactions completed within performance Target /total transactions | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Table 9. Batch Processing SLRs
| Definition | Scheduled production batch: jobs include system setup, execution and completion of normally scheduled production batch jobs Demand and test batch: jobs include time for system setup and initiation of job execution for ad-hoc requests, non-standard, and non-prescheduled batch jobs |
BATCH PROCESSING SLRs
| Batch Processing | Service | Performance | SLR | |||
| Type | Measure | Target | Performance % | |||
Scheduled production batch
|
Per Scheduled Time (SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) | Complete jobs per Symetra’s approved schedule | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 16
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| Batch Processing | Service | Performance | SLR | |||
| Type | Measure | Target | Performance % | |||
Month end production batch
|
Per Scheduled Time (SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) | Complete jobs per Symetra’s approved schedule | [***]% | |||
Demand production batch
|
Response time (SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) | 30 minutes to initiation | [***]% | |||
Demand test batch
|
Response time (SLA/SLR will be in effect 90 calendar days after the applicable Handover Date) | 30 minutes to initiation | [***]% | |||
| Formula | Total number of jobs completed within performance Target /total number of jobs executed during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Table 10. Output Delivery SLRs
| Definition | Symetra –defined data output requirements for a variety of output delivery formats and destinations, as well as processing requirements (includes remote printing and print to file). Confirmation of delivery and reporting of output volumes is required. Various ACS systems/servers direct output to remote printers and other enterprise systems (fax, pager, e-mail) at various locations, with output delivered to the appropriate system according to ACS-approved schedules and without errors. For delivery to resources external to ACS control, queuing of work at ACS hosting site due to Availability of equipment or a confirmed delivery to the target destination will fulfill the delivery requirement. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 17
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
OUTPUT DELIVERY SLRs
| Output Delivery | Service | Performance | SLR Performance % |
|||
| Type | Measure | Target | ||||
Mainframe
high-speed printer
Availability at
Symetra
headquarters
|
Printer Availability | Daily print: £ 6 hr after job completes Evening print: By 0700 next morning |
[***]% | |||
| Formula | Number of jobs completed within performance Target /total number of scheduled jobs | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Table 11. General Administrative Functions SLRs
GENERAL ADMINISTRATIVE FUNCTIONS SLRs
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
Setup or modify job
scheduler
definition and
dependencies
|
Response time | Next Business Day (all daily requests) | [***]% | |||
One time schedule
change for existing
scheduled jobs
|
Response time | 2 hours (all daily requests) | [***]% | |||
Setup/modify user
ID or authorization
changes. (NOTE:
password resets NOT
included in this
SLA)
|
Response time 1-5 user IDs 6-10 users IDs >10 user Ids | £ 2 Business Days
£ 3 Business Days per agreed upon time per agreed upon time |
[***]% | |||
Notification of
priority Level 1
outage to help desk
|
Response time | £ 10 minutes of discovery | [***]% | |||
Notification of
priority Level 2
and 3 outage to
help desk
|
Response time | £ 20 minutes of discovery | [***]% | |||
| Formula | Number of requests completed within performance Target /total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Table 12. System Server Administration SLR
| Definition | Actions by ACS for proactive monitoring and intervention to minimize capacity bottlenecks and activities required to implement ACS-approved system capacity and operational usage change requests. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
SYSTEM SERVER ADMINISTRATION SLRs
| System | Performance | SLR | ||||
| Administration Task | Service Measure | Target | Performance % | |||
Notification of
sustained average
daily CPU
utilization
|
15 day sustained avg. daily CPU utilization approaches 70% of installed processor capacity | Within 1 day | [***]% | |||
Allocate additional
server storage
resources
pre-defined
parameters/observed
growth patterns via
the standard change
management process
|
Proactive monitoring and preemptive intervention to advise ACS of need to increase capacity. | Total monthly storage capacity utilization measured in GBs used approaches 80% of installed capacity within 1 day | [***]% | |||
On-demand disk
storage capacity
change requests
|
Elapsed time | Increases/decreases of ± 10% of installed storage capacity within 7 Business Days | [***]% | |||
Storage
administration
requests (work
packs, pools)
|
Response time | Within one Business Day subject to agreed upon change management procedures | [***]% | |||
System security
requests (ACF2)
|
Response time | Next Business Day | [***]% | |||
Deploy
service/security
patches/anti-virus
updates necessary
to fix/repair
environment
vulnerabilities
|
Response time | Same Business Day as signoff subject to agreed upon change management procedures | [***]% | |||
Capacity/performance
trend analysis and
reporting across
all platforms
|
Monthly measurement/analysis and periodic notification on resource utilization and trends for critical system resources | Monthly analysis reports Interim reports on rapidly developing events and trends identification | [***]% | |||
| Formula | Number of requests completed within performance Target /total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
Table 13. Server Software Refresh SLRs
| Definition | Software refresh for all upgrades and new releases |
Server Software Refresh SLRs
| Server Software | Service | Performance | SLR | |||
| Refresh | Measure | Target | Performance % | |||
Notification of
vendor software
upgrades and new
releases
|
Response time | Within 30 days after SW vendor general availability announcement | [***]% | |||
Implementation of
service packs and
updates to “dot”
releases
|
Response time | Within 60 days after approved by Symetra | [***]% | |||
Implementation of
version or major
release updates
|
Response time | Within 120 days after approved by Symetra | [***]% | |||
| Formula | Number of requests completed on time/total of all requests occurring during Measurement Interval | |||||
| Measure Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Table 14. Database Administration SLRs
| Definition | Performance of all database administration tasks including, but not limited to software installation, patching, performance monitoring and tuning, instances creation and refresh, and recovery operations. For SLA measurement, production requests MUST be executed within the highest service level. |
Database Administration SLRs
| Service | Performance | SLR | ||||
| Description | Measure | Target | Performance % | |||
Instance creation &
refresh
|
Response time | Create = 2 Business Days Refresh = 1 Business Day |
[***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 20
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| Service | Performance | SLR | ||||
| Description | Measure | Target | Performance % | |||
Create User ID,
grants, revokes,
create tablespace,
other data
definition requests
(SLA/SLR will be in
effect 30 days
after the
applicable Handover
Date)
|
Response time | 2 hours (1-5 requests daily) 4 hours (6-10 requests daily) 2 Business Day Hours > 10 daily | [***]% | |||
Schema changes and
stored procedures
(SLA/SLR will be in
effect 30 days
after the
applicable Handover
Date)
|
Response time | 1 Business Day | [***]% | |||
Response to
application
performance tuning
and maintenance per
change management
process
|
Response time | Proactive monitoring and preemptive intervention to maintain required performance levels. Two hours to respond to ad-hoc requests. | [***]% | |||
SL1 database data
restore requests
for production &
regulatory data
(data backup to
intermediate SAN
storage, restore
from intermediate
SAN storage)
(SLA/SLR will be in
effect 90 calendar
days after the
applicable Handover
Date)
|
Response time to initiate the restore Data 1 week old or less | < 3 hours from Symetra request | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 21
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
| Service | Performance | SLR | ||||
| Description | Measure | Target | Performance % | |||
SL2 database data
restore requests
for recovery of
test data or data
volume back-ups
(data backup to
tape; restore from
tape) (SLA/SLR will
be in effect 90
calendar days after
the applicable
Handover Date)
|
Response time to initiate the restore Data 1 week old or less | < 8 hours from Symetra request | [***]% | |||
| Formula | Number of requests completed on time/total of all requests occurring during Measurement Interval | |||||
| Measure Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Software Upgrade SLRs
| Performance | SLR | |||||
| Description | Service Measure | Target | Performance % | |||
Software patches
|
Response time | Individual patches & requisite patches (1–20 patches) Same business day per change management process, completed within availability window. | [***]% | |||
Software patches
|
Response time | Service packs and updates to “dot” releases Within 5 Business Days per change management process. Required downtime is outside of the normal availability window. | [***]% | |||
Software patches
|
Response time | Version or major release updates within 5 Business Days per change management process. Required downtime is outside of the normal availability window. | [***]% | |||
| Formula | Number of requests completed on time/total of all requests occurring during Measurement Interval | |||||
| Measure Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement tool | To be agreed by the Parties | |||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 22
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Symetra Life Insurance Company (Symetra)
Schedule 2B—Data Center Services SOW
Schedule 2B—Data Center Services SOW
4.4 Reports
Without limiting the terms of Section 2.11.1 of the Agreement, ACS shall provide written
reports to Symetra regarding ACS’ compliance with the SLRs in addition to the reports specified in
this Data Center Services SOW.
5.0 Referenced SOW Appendices and SOW Schedules
5.1 Referenced Data Center SOW Appendices
| SOW Appendix | Description | |
B.3
|
Data Center Supported Databases | |
B.4
|
ACS Data Center Facilities |
5.2 Referenced ITSA Schedules
| ITSA Schedule | Description | |
Schedule 3
|
Fees | |
Schedule 5
|
Fee Reductions |
Confidential Information
Page 23
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Appendix B.3 – Data Center Supported Databases
CICS Prod
CICS Prod
| Monthly | ||||||||||||||||||||||||||||||||||||||||||||||||
| App/Dept | Monthly Admin | Tran | ||||||||||||||||||||||||||||||||||||||||||||||
| Application/Department | Code(s) | Hours | Volume | Trans | Programs | Files | TDqueue | TSqueue | Mapsets | DB2Entry | DB2Tran | Terminals | ||||||||||||||||||||||||||||||||||||
CICS Systems |
||||||||||||||||||||||||||||||||||||||||||||||||
Acctg, Budget, & Cost (ABC) |
[***] | * | 40074 | 3 | 306 | 35 | 119 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
Check Distribution (CDS) |
[***] | * | 71341 | 7 | 328 | 53 | 144 | |||||||||||||||||||||||||||||||||||||||||
D3 |
[***] | * | 18695 | 74 | 72 | 7 | 141 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
Control-D |
[***] | * | 68886 | 3 | 9 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||
CAPS (Expense) |
[***] | * | 385 | 3 | 62 | 11 | 42 | |||||||||||||||||||||||||||||||||||||||||
CK4 [CyberLife] |
[***] | * | 1227396 | 19 | 16 | 30 | 2 | |||||||||||||||||||||||||||||||||||||||||
PARIS |
[***] | * | 2479783 | 706 | 917 | 0 | 781 | 1 | 3 | |||||||||||||||||||||||||||||||||||||||
Tax Reporting System |
[***] | * | 14219 | 38 | 41 | 9 | 29 | |||||||||||||||||||||||||||||||||||||||||
Vantage One, DSS, JETS,
Repetitive Payment |
[***] | * | 273482 | 18 | 947 | 30 | 0 | 3 | 10 | |||||||||||||||||||||||||||||||||||||||
Totals: |
0 | 4194261 | 871 | 2698 | 175 | 0 | 0 | 1258 | 6 | 15 | 0 | |||||||||||||||||||||||||||||||||||||
| * | Nominal |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
1
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Appendix B.3 – Data Center Supported Databases
IMS Prod
IMS Prod
| Monthly | Monthly | |||||||||||||||||||||||||||
| App/Dept | Admin | Tran | # of Online | DBs | ||||||||||||||||||||||||
| Application System | Code(s) | Hours | Volume | 3390 Tracks | Transactions | [DBDs] | PSBs | |||||||||||||||||||||
IMS Support |
||||||||||||||||||||||||||||
Annuity Benefit |
[***] | * | 157657 | 9452 | 8 | 10 | 58 | |||||||||||||||||||||
Life Agency |
[***] | * | 1209 | 2899 | 1 | 5 | 9 | |||||||||||||||||||||
Life Alpha |
[***] | * | 0 | 2717 | 0 | 3 | 2 | |||||||||||||||||||||
Group Policy Administration |
[***] | * | 44051 | 21558 | 9 | 12 | 110 | |||||||||||||||||||||
Safeco Credit Life |
[***] | * | 1219 | 5060 | 4 | 28 | 4 | |||||||||||||||||||||
Safeco Credit |
[***] | * | 9156 | 19323 | 5 | 70 | 13 | |||||||||||||||||||||
Table Management |
[***] | * | 0 | 1307 | 0 | 4 | 6 | |||||||||||||||||||||
Totals: |
213292 | 62316 | 27 | 132 | 202 | |||||||||||||||||||||||
| * | Nominal | |
| - | existing IMS production applications are static | |
| - | standard backup jobs | |
| - | standard application job backout using DBRC | |
| - | occasional restore and reorg batch jobs |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
2
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Appendix B.3 – Data Center Supported Databases
DB2 Prod
DB2 Prod
| Monthly | ||||||||||||||||||||||||||||
| App/Dept | Admin | Stored | ||||||||||||||||||||||||||
| Application/Department | Code(s) | Hours | GB | DBs | Tables | Indexes | Procs | |||||||||||||||||||||
Mainframe Systems |
||||||||||||||||||||||||||||
BMC |
[***] | * | ||||||||||||||||||||||||||
Life Annuity Department |
[***] | * | .40 | 1 | 121 | 8 | ||||||||||||||||||||||
Life Annuity Systems |
[***] | 0 | .60 | 1 | 25 | 48 | ||||||||||||||||||||||
Acctg, Budget, & Cost (ABC) |
[***] | 10 | 6.71 | 1 | 8 | 34 | ||||||||||||||||||||||
Check Distribution (CDS) |
[***] | 0 | 2.46 | 1 | 1 | 10 | ||||||||||||||||||||||
D3 |
[***] | 10 | 10.41 | 7 | 322 | 301 | 6 | |||||||||||||||||||||
ELRA ? |
[***] | 10 | .28 | 2 | 55 | 123 | 160 | |||||||||||||||||||||
Life Retirement Services Dept. |
[***] | * | 1.16 | 3 | 1491 | 0 | ||||||||||||||||||||||
CAPS (Expense) |
[***] | 0 | .01 | 1 | 1 | 1 | ||||||||||||||||||||||
Life Marketing Department |
[***] | * | .73 | 1 | 418 | 11 | ||||||||||||||||||||||
PARIS |
[***] | 25 | 72.13 | 30 | 592 | 607 | 6 | |||||||||||||||||||||
Repetitive Payment |
[***] | 5 | .05 | 2 | 78 | 90 | 0 | |||||||||||||||||||||
Life Trac 2000 |
[***] | 5 | .07 | 1 | 48 | 101 | 62 | |||||||||||||||||||||
Tax Reporting System |
[***] | 0 | .52 | 1 | 7 | 7 | ||||||||||||||||||||||
Data Exchange (Jets) |
[***] | 5 | .22 | 2 | 39 | 37 | 0 | |||||||||||||||||||||
Vantage One |
[***] | 15 | 6.76 | 9 | 249 | 242 | 0 | |||||||||||||||||||||
DSS |
[***] | 15 | 20.90 | 5 | 85 | 144 | 36 | |||||||||||||||||||||
Princeton Relational tools |
[***] | * | .01 | 1 | 12 | 12 | ||||||||||||||||||||||
QMF |
[***] | * | ||||||||||||||||||||||||||
Security Level for CICS |
[***] | * | .01 | 1 | 4 | 5 | ||||||||||||||||||||||
Totals: |
100 | 123.43 | 70 | 3556 | 1781 | 270 | ||||||||||||||||||||||
| * | Nominal |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
3
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Appendix B.3 – Data Center Supported Databases
VSAM Prod
VSAM Prod
| App/Dept | 3390 | |||||||||||||||
| Application System | Code(s) | Tracks | KSDS | ESDS | ||||||||||||
Mainframe Systems |
||||||||||||||||
Acctg, Budget, & Cost (ABC) |
[***] | 23503 | 27 | 0 | ||||||||||||
Check Distribution (CDS) |
[***] | 9973 | 64 | 9 | ||||||||||||
CAPS (Expense) |
[***] | 10388 | 8 | 2 | ||||||||||||
Group Benefits |
[***] | 4066 | 2 | 0 | ||||||||||||
CK4 [CyberLife] |
[***] | 303549 | 61 | 10 | ||||||||||||
Repetitive Payment |
[***] | 1880 | 51 | 0 | ||||||||||||
Tax Reporting |
[***] | 12328 | 11 | 0 | ||||||||||||
Vantage One |
[***] | 18692 | 55 | 0 | ||||||||||||
Vantage One — DSS |
[***] | 1740 | 9 | 0 | ||||||||||||
Automated Balancing |
[***] | 93 | 1 | 0 | ||||||||||||
Totals: |
386212 | 289 | 21 | |||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
4
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Appendix B.3 – Data Center Supported Databases
SQL Server Prod
SQL Server Prod
| Monthly | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Admin | Foreign | Default | Primary | Scalar | UQ | Tbl | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Application/Department | Hours | Server | Instance | Version | DBs | Size mb | Tables | Indexes | Stored Procs | Views | Keys | Triggers | Constraints | Keys | SysTables | Functions | Constraint | Ck Constraint | Function | |||||||||||||||||||||||||||||||||||||||||||||||||
SQL Server DEV/TAC |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITANNTZAdvantage4A01 | 20 | 6 | 54 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITANNTZAdvantage4U01 | 20 | 6 | 54 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITASLAdvantage4A01 | 20 | 6 | 91 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITASLAdvantage4U01 | 20 | 6 | 91 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITIllustrationA01 | 70 | 60 | 214 | 30 | 2 | 0 | 0 | 4 | 55 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITIllustrationU01 | 40 | 60 | 212 | 30 | 2 | 0 | 0 | 4 | 55 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITPASA01 | 70 | 6 | 62 | 40 | 2 | 0 | 0 | 1 | 66 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITPASU01 | 70 | 6 | 62 | 40 | 2 | 0 | 0 | 1 | 6 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITPDMA01 | 15 | 53 | 240 | 33 | 2 | 39 | 0 | 1 | 52 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITPDMU01 | 15 | 53 | 240 | 33 | 2 | 39 | 0 | 1 | 52 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSafeCoAIAdvantage4A01 | 35 | 6 | 88 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSafeCoAIAdvantage4U01 | 20 | 6 | 88 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSafecoAULA01 | 15 | 3 | 42 | 31 | 2 | 1 | 0 | 1 | 31 | 18 | 1 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSafecoAULU01 | 15 | 3 | 42 | 31 | 3 | 1 | 0 | 1 | 31 | 18 | 1 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSafeCoTermA01 | 15 | 3 | 42 | 30 | 2 | 1 | 0 | 1 | 3 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSafeCoTermU01 | 15 | 3 | 42 | 30 | 2 | 1 | 0 | 1 | 3 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSchwabAIAdvantage4A01 | 20 | 6 | 88 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDITSchwabAIAdvantage4U01 | 20 | 6 | 88 | 37 | 2 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDOpenEnrollA01 | 10 | 7 | 49 | 58 | 2 | 0 | 0 | 2 | 4 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDOpenEnrollU01 | 60 | 7 | 49 | 59 | 2 | 0 | 0 | 2 | 5 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDSNowA01 | 263 | 27 | 76 | 100 | 2 | 0 | 0 | 14 | 18 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | anon | 8.00.818 | LDDSNowU01 | 150 | 36 | 111 | 127 | 2 | 1 | 0 | 21 | 26 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | MSSQLSERVER | 8.00.818 | FMSInfoBase | 100 | 7 | 63 | 31 | 2 | 5 | 0 | 12 | 7 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | MSSQLSERVER | 8.00.818 | FundStation | 4100 | 81 | 610 | 42 | 33 | 0 | 228 | 5 | 80 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | MSSQLSERVER | 8.00.818 | LAXRBO | 100 | 10 | 79 | 30 | 2 | 4 | 0 | 6 | 9 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | MSSQLSERVER | 8.00.818 | MFISsADDS | 100 | 10 | 90 | 83 | 4 | 6 | 0 | 1 | 10 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | MSSQLSERVER | 8.00.818 | PNMBONUS | 11750 | 158 | 946 | 103 | 19 | 1 | 0 | 1 | 121 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | MSSQLSERVER | 8.00.818 | rcnRecon | 10500 | 105 | 498 | 41 | 3 | 0 | 66 | 421 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | CaseTrack | 30 | 120 | 390 | 139 | 21 | 146 | 85 | 160 | 114 | 19 | 0 | 67 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | CTTraining | 25 | 119 | 376 | 121 | 21 | 146 | 85 | 160 | 113 | 19 | 0 | 67 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | DPARTDB | 15 | 9 | 46 | 0 | 2 | 0 | 0 | 3 | 0 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | DQUEUEDB | 20 | 230 | 378 | 30 | 2 | 0 | 0 | 3 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | DVSUSE | 20 | 25 | 99 | 31 | 2 | 0 | 1 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | DWORKFLO | 20 | 15 | 72 | 32 | 3 | 0 | 0 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | FMSInfoBase | 100 | 7 | 63 | 31 | 2 | 5 | 0 | 12 | 7 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | FundStation | 4100 | 118 | 698 | 74 | 51 | 0 | 277 | 27 | 117 | 19 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LAGContractingA001 | 15 | 20 | 105 | 140 | 5 | 21 | 0 | 0 | 18 | 19 | 0 | 11 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LAGContractingU001 | 50 | 20 | 81 | 140 | 5 | 21 | 0 | 1 | 19 | 19 | 0 | 11 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LAXRBO | 80 | 10 | 87 | 30 | 2 | 4 | 0 | 6 | 9 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LBSSPAA001 | 280 | 80 | 278 | 462 | 17 | 73 | 146 | 146 | 78 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LBSSPAU001 | 412 | 81 | 294 | 460 | 17 | 73 | 146 | 4 | 78 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LBSSPAU009 | 655 | 81 | 285 | 458 | 16 | 73 | 146 | 81 | 78 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_CorpQaD01_db | 10 | 40 | 124 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_PCQaBisD01_db | 10 | 40 | 115 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_PCQaBPSD01_db | 10 | 40 | 116 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_PCQaDistD01_db | 10 | 40 | 119 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaAgyD01_db | 10 | 40 | 122 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaAnnD01_db | 40 | 41 | 144 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaDAD01_db | 15 | 40 | 115 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaFMSD01_db | 10 | 40 | 112 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaGrpD01_db | 10 | 40 | 119 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaIndD01_db | 10 | 40 | 114 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaIWSD01_db | 10 | 40 | 114 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LCO_QaMFundsD01_db | 10 | 40 | 119 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LDCTimeTrackA001 | 111 | 22 | 129 | 30 | 2 | 21 | 0 | 32 | 22 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LDCTimeTrackU001 | 100 | 22 | 142 | 30 | 2 | 21 | 0 | 30 | 22 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LDDISSPU001 | 10 | 0 | 31 | 0 | 0 | 0 | 0 | 0 | 0 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LDDRfpA001 | 75 | 0 | 59 | 71 | 2 | 6 | 0 | 8 | 7 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LDDRfpU001 | 75 | 1 | 67 | 71 | 2 | 6 | 0 | 8 | 7 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LFXCashManA01 | 50 | 0 | 31 | 30 | 2 | 0 | 0 | 1 | 0 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LFXCashManU01 | 75 | 1 | 33 | 30 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LFXSeagateInfo | 40 | 30 | 125 | 30 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LFXSeagateU002 | 148 | 30 | 127 | 30 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
5
Table of Contents
Appendix B.3 – Data Center Supported Databases
SQL Server Prod
SQL Server Prod
| Monthly | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Admin | Foreign | Default | Primary | Scalar | UQ | Tbl | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Application/Department | Hours | Server | Instance | Version | DBs | Size mb | Tables | Indexes | Stored Procs | Views | Keys | Triggers | Constraints | Keys | SysTables | Functions | Constraint | Ck Constraint | Function | |||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LFXSeagateU003 | 580 | 30 | 67 | 30 | 2 | 0 | 0 | 1 | 11 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LifeCashLinkA001 | 50 | 16 | 137 | 124 | 2 | 8 | 0 | 34 | 11 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LifeCashLinkU001 | 150 | 16 | 155 | 124 | 2 | 9 | 0 | 31 | 11 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LifeSFAA045 | 3000 | 316 | 1393 | 2628 | 121 | 60 | 159 | 9 | 218 | 19 | 15 | 15 | 2 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LifeSFAU045 | 4700 | 316 | 1473 | 2629 | 121 | 60 | 159 | 9 | 218 | 19 | 15 | 15 | 2 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LISPanConA001 | 130 | 4 | 71 | 40 | 2 | 0 | 0 | 1 | 4 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LISPanConU001 | 613 | 4 | 74 | 40 | 2 | 0 | 0 | 1 | 3 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LIXCMA001 | 125 | 66 | 320 | 184 | 20 | 61 | 1 | 19 | 62 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LIXCMU001 | 150 | 70 | 448 | 204 | 20 | 67 | 1 | 19 | 63 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LLPEventPlannerA001 | 10 | 3 | 39 | 28 | 2 | 2 | 0 | 1 | 2 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LLPEventPlannerU001 | 10 | 4 | 44 | 58 | 2 | 2 | 0 | 1 | 3 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LMXAICWkLogA001 | 60 | 10 | 45 | 33 | 2 | 0 | 0 | 0 | 2 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LMXAICWkLogU001 | 60 | 10 | 52 | 33 | 2 | 0 | 0 | 0 | 2 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LMXContractingA001 | 65 | 18 | 87 | 30 | 2 | 20 | 0 | 2 | 19 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LMXContractingU001 | 65 | 19 | 96 | 60 | 2 | 20 | 0 | 2 | 18 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | LMXLifePortalD99 | 40 | 1 | 33 | 30 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | MFISsADDS | 450 | 10 | 84 | 83 | 4 | 6 | 0 | 2 | 10 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | PNMBONUS | 3061 | 155 | 643 | 103 | 18 | 0 | 0 | 1 | 120 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | QPARTDB | 15 | 10 | 48 | 30 | 2 | 0 | 0 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | QQUEUEDB | 15 | 134 | 370 | 30 | 2 | 0 | 0 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | QVSUSE | 20 | 25 | 90 | 31 | 2 | 0 | 1 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | QWORKFLO | 285 | 14 | 73 | 0 | 3 | 0 | 0 | 3 | 0 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ01 | tun | 8.00.818 | WLOWirelessOfficeU01 | 17.5 | 21 | 185 | 30 | 2 | 4 | 29 | 9 | 14 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRAdmin | 114 | 48 | 205 | 30 | 20 | 0 | 0 | 739 | 48 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRCIXDB | 46 | 11 | 42 | 30 | 20 | 0 | 0 | 18 | 11 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRJobLine | 45 | 20 | 80 | 30 | 22 | 0 | 0 | 25 | 20 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRLifeIndividual | 80 | 14 | 75 | 31 | 24 | 3 | 0 | 43 | 14 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRLifeRetirement | 80 | 24 | 67 | 31 | 22 | 14 | 0 | 16 | 24 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRMutual | 90 | 4 | 33 | 2 | 20 | 0 | 0 | 1 | 2 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | IVRTracker | 110 | 2 | 36 | 30 | 20 | 1 | 0 | 4 | 14 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LDDDA001 | 310 | 22 | 118 | 144 | 24 | 1 | 0 | 4 | 12 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LDDDU001 | 298 | 24 | 124 | 161 | 24 | 1 | 0 | 1 | 12 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeARCA001 | 144 | 16 | 53 | 57 | 20 | 1 | 0 | 1 | 15 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeARCU001 | 75 | 16 | 51 | 58 | 20 | 1 | 0 | 1 | 15 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeCashLinkA001 | 50 | 16 | 135 | 133 | 20 | 9 | 0 | 34 | 11 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeCashLinkU001 | 190 | 16 | 152 | 123 | 20 | 9 | 0 | 34 | 11 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeLINCSBPA001 | 30 | 10 | 62 | 184 | 1 | 7 | 0 | 3 | 10 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeLINCSBPU001 | 30 | 10 | 66 | 187 | 20 | 7 | 0 | 3 | 9 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeLMCA001 | 15 | 4 | 37 | 45 | 20 | 0 | 0 | 1 | 4 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | LifeLMCU001 | 20 | 4 | 36 | 35 | 20 | 0 | 0 | 1 | 4 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ02 | MSSQLSERVER | 7.00.1094 | MFISPhoenix | 110 | 24 | 98 | 100 | 20 | 44 | 0 | 23 | 24 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ03 | MSSQLSERVER | 7.00.1094 | LifeLINCA001 | 240 | 53 | 167 | 340 | 24 | 0 | 0 | 3 | 17 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ03 | MSSQLSERVER | 7.00.1094 | LifeLINCU001 | 370 | 56 | 188 | 370 | 24 | 1 | 0 | 8 | 21 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ03 | MSSQLSERVER | 7.00.1094 | MFISeFIRE | 50 | 16 | 72 | 70 | 20 | 15 | 0 | 1 | 16 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ03 | MSSQLSERVER | 7.00.1094 | MFISInvestWebForms | 50 | 16 | 55 | 79 | 21 | 13 | 0 | 188 | 16 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVESQ03 | MSSQLSERVER | 7.00.1094 | MFISSiteServices | 30 | 3 | 34 | 32 | 20 | 0 | 0 | 27 | 3 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV015 | MSSQLSERVER | 8.00.818 | EventLog | 150 | 3 | 36 | 32 | 20 | 0 | 0 | 2 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | EURLifePortalD01 | 125 | 30 | 122 | 30 | 20 | 0 | 0 | 1 | 12 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | EURLifeReporterD01 | 50 | 15 | 73 | 31 | 20 | 0 | 0 | 1 | 14 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | EventLog | 125 | 3 | 36 | 32 | 20 | 0 | 0 | 2 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | LifeEAFA001 | 284 | 21 | 100 | 153 | 20 | 12 | 0 | 1 | 19 | 18 | 0 | 8 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | LifeEAFU001 | 60 | 21 | 102 | 153 | 20 | 12 | 0 | 2 | 19 | 18 | 0 | 9 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | LifeFundPerfA001 | 20 | 21 | 199 | 397 | 70 | 15 | 0 | 24 | 51 | 18 | 0 | 9 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | LifeFundPerfU001 | 20 | 21 | 160 | 341 | 60 | 10 | 0 | 23 | 41 | 18 | 0 | 9 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | MSSQLSERVER | 7.00.1094 | MFISPhoenix | 110 | 0 | 98 | 100 | 20 | 44 | 0 | 23 | 24 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DEVSV035 | TAC | 8.00.760 | MFISsADDS | 450 | 9 | 82 | 51 | 4 | 6 | 0 | 1 | 9 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DSMRDCCL02 | MSSQLSERVER | 8.00.818 | LCLClarifyA01 | 350 | 692 | 2111 | 2376 | 478 | 0 | 3 | 688 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DSMRDCCL02 | MSSQLSERVER | 8.00.818 | LCLClarifyT01 | 350 | 691 | 2083 | 2346 | 478 | 0 | 3 | 427 | 0 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
DSMRDCCL02 | MSSQLSERVER | 8.00.818 | LCLClarifyU01 | 400 | 692 | 2108 | 2382 | 478 | 0 | 3 | 681 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Totals: |
53051.5 | 6188 | 25163 | 21076 | 2827 | 1260 | 1539 | 4415 | 3115 | 2255 | 32 | 227 | 4 | 26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
6
Table of Contents
Appendix B.3 – Data Center Supported Databases
CICS Test
CICS Test
| Monthly | Monthly | |||||||||||||||||||||||||||||||||||||||||||||
| App/Dept | Admin | Tran | ||||||||||||||||||||||||||||||||||||||||||||
| Application/Department | Code(s) | Hours | Volume | Trans | Programs | Files | TDqueue | TSqueue | Mapsets | DB2Entry | DB2Tran | Terminals | ||||||||||||||||||||||||||||||||||
CICS Systems |
||||||||||||||||||||||||||||||||||||||||||||||
Acctg,
Budget, & Cost (ABC) |
[***] | * | 634 | 18 | 1836 | 210 | 714 | 6 | 6 | |||||||||||||||||||||||||||||||||||||
Check
Distribution (CDS) |
[***] | * | 481 | 42 | 1968 | 318 | 864 | |||||||||||||||||||||||||||||||||||||||
D3 |
[***] | * | 960 | 740 | 720 | 70 | 1410 | 10 | 10 | |||||||||||||||||||||||||||||||||||||
Control-D |
[***] | * | 1 | 3 | 9 | |||||||||||||||||||||||||||||||||||||||||
CAPS
(Expense) |
[***] | * | 120 | 9 | 186 | 33 | 126 | |||||||||||||||||||||||||||||||||||||||
CK4
(CyberLife) |
[***] | * | 59250 | 837 | 144 | 270 | 18 | |||||||||||||||||||||||||||||||||||||||
PARIS |
[***] | * | 40900 | 5648 | 7336 | 6248 | 8 | 24 | ||||||||||||||||||||||||||||||||||||||
Tax
Reporting System |
[***] | * | 1156 | 228 | 246 | 54 | 174 | |||||||||||||||||||||||||||||||||||||||
Vantage
One, DSS, JETS, Repetitive Payment |
[***] | * | 127456 | 180 | 9470 | 300 | 30 | 10 | ||||||||||||||||||||||||||||||||||||||
Totals: |
0 | 230958 | 7705 | 21915 | 1255 | 0 | 0 | 9554 | 54 | 50 | 0 | |||||||||||||||||||||||||||||||||||
| * | Nominal |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
7
Table of Contents
Appendix B.3 – Data Center Supported Databases
IMS Test
IMS Test
| Monthly | Monthly | |||||||||||||||||||||||||||
| App/Dept | Admin | Tran | # of Online | DBs | ||||||||||||||||||||||||
| Application System | Code(s) | Hours | Volume | 3390 Tracks | Transactions | [DBDs] | PSBs | |||||||||||||||||||||
IMS Support |
||||||||||||||||||||||||||||
Annuity Benefit |
[***] | * | * | * | 644 | 8 | 10 | 58 | ||||||||||||||||||||
Life Agency |
[***] | * | * | * | 151 | 1 | 5 | 9 | ||||||||||||||||||||
Life Alpha |
[***] | * | * | * | 2581 | 0 | 3 | 2 | ||||||||||||||||||||
Group Policy Administration |
[***] | * | * | * | 20579 | 9 | 12 | 110 | ||||||||||||||||||||
Safeco Credit Life |
[***] | * | * | * | 5465 | 4 | 28 | 4 | ||||||||||||||||||||
Safeco Credit |
[***] | * | * | * | 20488 | 5 | 70 | 13 | ||||||||||||||||||||
Table Management |
[***] | * | * | * | 991 | 0 | 4 | 6 | ||||||||||||||||||||
Totals: |
50899 | 27 | 132 | 202 | ||||||||||||||||||||||||
| * | Nominal | |
| - | existing IMS test applications are static |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
8
Table of Contents
Appendix B.3 – Data Center Supported Databases
DB2 Test
DB2 Test
| Monthly | ||||||||||||||||||||||||||
| App/Dept | Admin | Stored | ||||||||||||||||||||||||
| Application/Department | Code(s) | Hours | GB | DBs | Tables | Indexes | Procs | |||||||||||||||||||
Mainframe Systems |
||||||||||||||||||||||||||
BMC |
[***] | * | ||||||||||||||||||||||||
Life Annuity Department |
[***] | * | ||||||||||||||||||||||||
Acctg, Budget, & Cost (ABC) |
[***] | 0 | 1.11 | 12 | 53 | 206 | ||||||||||||||||||||
Check Distribution (CDS) |
[***] | 0 | 0.01 | 2 | 1 | 20 | ||||||||||||||||||||
D3 |
[***] | 40 | 31.81 | 68 | 1389 | 2780 | 12 | |||||||||||||||||||
ELRA ? |
[***] | 0 | 0.46 | 6 | 119 | 242 | 320 | |||||||||||||||||||
Life Retirement Services Dept. |
[***] | * | 0.63 | 9 | 409 | 10 | ||||||||||||||||||||
CAPS (Expense) |
[***] | 0 | 0.01 | 3 | 3 | 3 | ||||||||||||||||||||
Life Marketing Department |
[***] | * | 0.45 | 3 | 1013 | 33 | ||||||||||||||||||||
PARIS |
[***] | 20 | 40.01 | 104 | 1146 | 2165 | 47 | |||||||||||||||||||
Repetitive Payment |
[***] | 5 | 0.20 | 9 | 342 | 273 | ||||||||||||||||||||
Life Trac 2000 |
[***] | 5 | 0.12 | 2 | 98 | 202 | 124 | |||||||||||||||||||
Tax Reporting System |
[***] | 0 | 0.12 | 3 | 24 | 21 | ||||||||||||||||||||
Data Exchange (Jets) |
[***] | 5 | 1.74 | 10 | 349 | 368 | ||||||||||||||||||||
Vantage One |
[***] | 45 | 12.14 | 83 | 2004 | 4242 | ||||||||||||||||||||
Vantage One — DSS |
[***] | 55 | 109.61 | 29 | 730 | 1090 | 82 | |||||||||||||||||||
Princeton Relational tools |
[***] | * | ||||||||||||||||||||||||
QMF |
[***] | * | ||||||||||||||||||||||||
Security Level for CICS |
[***] | * | ||||||||||||||||||||||||
Totals: |
175 | 198.42 | 343 | 7680 | 11655 | 585 | ||||||||||||||||||||
| * | Normal |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
9
Table of Contents
Appendix B.3 – Data Center Supported Databases
VSAM Test
VSAM Test
| App/Dept | 3390 | |||||||||||||
| Application System | Code(s) | Tracks | KSDS | ESDS | ||||||||||
Mainframe Systems |
||||||||||||||
Acctg, Budget, & Cost (ABC) |
[***] | 52651 | 149 | 0 | ||||||||||
Check Distribution (CDS) |
[***] | 35280 | 307 | 24 | ||||||||||
CAPS (Expense) |
[***] | 1044 | 24 | 3 | ||||||||||
Group Benefits |
[***] | 0 | 0 | 0 | ||||||||||
CK4 [CyberLife] |
[***] | 397598 | 681 | 130 | ||||||||||
Repetitive Payment |
[***] | 1933 | 18 | 18 | ||||||||||
Tax Reporting |
[***] | 88221 | 47 | 6 | ||||||||||
Vantage One |
[***] | 147954 | 772 | 0 | ||||||||||
Vantage One — DSS |
[***] | 15744 | 32 | 0 | ||||||||||
Automated Balancing |
[***] | 78 | 1 | 0 | ||||||||||
Totals: |
740503 | 2031 | 181 | |||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
10
Table of Contents
Appendix B.3 – Data Center Supported Databases
SQL Server Test
SQL Server Test
| Monthly | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Admin | Foreign | Default | Primary | Scalar | UQ | Tbl | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Application/Department | Hours | Server | Instance | Version | DBs | Size mb | Tables | Indexes | Stored Procs | Views | Keys | Triggers | Constraints | Keys | SysTables | Functions | Constraint | Ck Constraint | Function | |||||||||||||||||||||||||||||||||||||||||||||||||
SQL Server Production |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ03 | MSSQLSERVER | 7.00.1094 | LifeCashLinkP001 | 420 | 16 | 141 | 134 | 20 | 8 | 0 | 33 | 11 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ03 | MSSQLSERVER | 7.00.1094 | MFISPhoenix | 110 | 24 | 98 | 100 | 20 | 44 | 0 | 213 | 24 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITANNTZAdvantage4P01 | 35 | 6 | 54 | 37 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITASLAdvantage4P01 | 35 | 6 | 91 | 37 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITIllustrationP01 | 300 | 60 | 214 | 30 | 2 | 0 | 0 | 4 | 55 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITPASP01 | 745 | 6 | 65 | 40 | 2 | 0 | 0 | 1 | 6 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITPDMP01 | 15 | 53 | 240 | 33 | 2 | 39 | 0 | 1 | 52 | 19 | 22 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITSafeCoAIAdvantage4P01 | 35 | 6 | 88 | 37 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITSafecoAULP01 | 15 | 3 | 42 | 31 | 2 | 1 | 1 | 1 | 3 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITSafeCoTermP01 | 15 | 3 | 42 | 30 | 2 | 1 | 0 | 1 | 3 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDITSchwabAIAdvantage4P01 | 20 | 6 | 88 | 37 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDOpenEnrollP01 | 10 | 6 | 49 | 58 | 2 | 0 | 0 | 2 | 4 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | ANON | 8.00.818 | LDDSNowP01 | 500 | 32 | 86 | 110 | 2 | 0 | 0 | 15 | 20 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | MSSQLSERVER | 7.00.1094 | LifeEAFP001 | 50 | 21 | 99 | 153 | 20 | 12 | 0 | 1 | 19 | 18 | 0 | 8 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | MSSQLSERVER | 7.00.1094 | LifeFundPerfP001 | 20 | 51 | 183 | 396 | 70 | 15 | 0 | 24 | 51 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | MSSQLSERVER | 7.00.1094 | LifeLINCP001 | 250 | 54 | 198 | 370 | 24 | 0 | 0 | 4 | 18 | 18 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | MSSQLSERVER | 7.00.1094 | MFISeFIRE | 50 | 16 | 68 | 71 | 20 | 15 | 0 | 1 | 16 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | MSSQLSERVER | 7.00.1094 | MFISInvestWebForms | 80 | 16 | 52 | 81 | 21 | 12 | 0 | 188 | 16 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ05 | MSSQLSERVER | 7.00.1094 | MFISSiteServices | 70 | 3 | 33 | 32 | 20 | 0 | 0 | 27 | 3 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | EventLog | 420 | 3 | 36 | 32 | 20 | 0 | 0 | 2 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | FMSInfoBase | 100 | 7 | 63 | 31 | 2 | 5 | 0 | 12 | 7 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | FundStation | 4100 | 81 | 610 | 42 | 33 | 0 | 228 | 5 | 80 | 19 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | LAXRBO | 100 | 10 | 83 | 30 | 2 | 4 | 0 | 6 | 9 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | LIXCMP001 | 1862 | 66 | 450 | 181 | 20 | 61 | 0 | 19 | 62 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | LLPEventPlannerP001 | 15 | 4 | 41 | 58 | 2 | 2 | 0 | 1 | 3 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | MFISsADDS | 450 | 9 | 82 | 51 | 4 | 6 | 0 | 1 | 9 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | PPARTDB | 82 | 9 | 46 | 0 | 2 | 0 | 0 | 3 | 0 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | PQUEUEDB | 150 | 76 | 454 | 30 | 2 | 0 | 0 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | PVSUSE | 20 | 24 | 90 | 1 | 2 | 0 | 1 | 3 | 0 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ10 | MSSQLSERVER | 8.00.818 | PWORKFLO | 4300 | 15 | 81 | 30 | 3 | 0 | 0 | 4 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ11 | MSSQLSERVER | 8.00.818 | MFISFundstnSAArchive | 3300 | 69 | 286 | 38 | 26 | 0 | 18 | 5 | 68 | 19 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | CaseTrack | 60 | 120 | 440 | 151 | 21 | 146 | 85 | 167 | 114 | 19 | 0 | 67 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LAGContractingP001 | 20 | 20 | 91 | 140 | 5 | 21 | 0 | 1 | 19 | 19 | 0 | 11 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LBSSPAP000 | 200 | 79 | 207 | 423 | 17 | 73 | 146 | 3 | 77 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LBSSPAP001 | 425 | 80 | 300 | 464 | 17 | 73 | 146 | 4 | 78 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LBSSPAP002 | 425 | 80 | 300 | 464 | 17 | 73 | 146 | 4 | 78 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_CorpQaP01_db | 20 | 40 | 156 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_PCQaBisP01_db | 15 | 40 | 135 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_PCQaBPSP01_db | 25 | 40 | 141 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_PCQaDistP01_db | 15 | 40 | 119 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QAadaP01_db | 45 | 40 | 138 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaAgyP01_db | 60 | 40 | 194 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaAnnP01_db | 70 | 40 | 169 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaFMSP01_db | 15 | 40 | 126 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaGrpP01_db | 60 | 40 | 152 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaIndP01_db | 50 | 40 | 146 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaIWSP01_db | 15 | 40 | 126 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LCO_QaMFundsP01_db | 30 | 40 | 147 | 0 | 2 | 0 | 0 | 0 | 38 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LDCTimeTracking | 200 | 22 | 151 | 30 | 2 | 21 | 0 | 30 | 22 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LDDRfpP001 | 30 | 7 | 59 | 71 | 2 | 6 | 0 | 8 | 7 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LFXSeagateInfo | 825 | 30 | 122 | 30 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LFXSeagateP001 | 600 | 30 | 127 | 30 | 2 | 0 | 0 | 1 | 1 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LifeSFAP045 | 4900 | 316 | 1407 | 2628 | 151 | 60 | 159 | 9 | 218 | 19 | 15 | 15 | 2 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LISPanConP001 | 205 | 4 | 73 | 40 | 2 | 0 | 0 | 1 | 4 | 19 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LMXAICWkLogP001 | 90 | 10 | 61 | 33 | 2 | 0 | 0 | 0 | 2 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | LMXContractingP001 | 140 | 18 | 98 | 30 | 2 | 20 | 0 | 1 | 18 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | rcnRecon | 10500 | 3 | 497 | 32 | 20 | 0 | 0 | 2 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | WirelessOffice30SQL | 20 | 15 | 175 | 30 | 2 | 4 | 0 | 9 | 12 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ14 | MSSQLSERVER | 8.00.818 | WLOWirelessOfficeP01 | 20 | 21 | 186 | 30 | 2 | 4 | 0 | 9 | 14 | 19 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | EURLifePortalP01 | 70 | 29 | 100 | 0 | 20 | 0 | 0 | 0 | 11 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | EURLifeReporterP01 | 70 | 14 | 66 | 1 | 20 | 0 | 0 | 0 | 13 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | EventLog | 400 | 2 | 34 | 2 | 20 | 0 | 0 | 1 | 0 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRAdmin | 2650 | 51 | 243 | 30 | 20 | 0 | 0 | 661 | 43 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRCIXDB | 150 | 9 | 50 | 30 | 20 | 0 | 0 | 15 | 9 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRJobLine | 350 | 22 | 104 | 30 | 21 | 0 | 0 | 23 | 22 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRLifeIndividual | 350 | 15 | 61 | 31 | 24 | 3 | 0 | 43 | 14 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRLifeRetirement | 350 | 24 | 73 | 31 | 22 | 14 | 0 | 16 | 24 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
11
Table of Contents
Appendix B.3 – Data Center Supported Databases
SQL Server Test
SQL Server Test
| Monthly | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Admin | Foreign | Default | Primary | Scalar | UQ | Tbl | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Application/Department | Hours | Server | Instance | Version | DBs | Size mb | Tables | Indexes | Stored Procs | Views | Keys | Triggers | Constraints | Keys | SysTables | Functions | Constraint | Ck Constraint | Function | |||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRMutual | 70 | 5 | 35 | 30 | 20 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | IVRTracker | 1150 | 5 | 43 | 30 | 20 | 0 | 0 | 1 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | LDDDP002 | 200 | 22 | 122 | 142 | 24 | 1 | 0 | 4 | 14 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | LifeARCP001 | 300 | 16 | 58 | 57 | 20 | 1 | 4 | 1 | 15 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | LifeLINCSBPP001 | 20 | 10 | 64 | 196 | 20 | 7 | 0 | 3 | 10 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
HOXESQ15 | MSSQLSERVER | 7.00.1094 | LifeLMCP001 | 20 | 4 | 39 | 45 | 20 | 0 | 0 | 1 | 4 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
PSMRDCCL02 | MSSQLSERVER | 8.00.818 | LCLClarifyP01 | 12381 | 692 | 2108 | 2382 | 478 | 0 | 3 | 681 | 1 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
PSMRDCSQ06 | PNM | 8.00.818 | PNMBONUS | 11750 | 158 | 946 | 103 | 19 | 1 | 0 | 1 | 121 | 18 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
[***] |
PSMRDCSQ07 | MSSQLSERVER | 8.00.818 | FundStation | 4100 | 81 | 610 | 42 | 33 | 0 | 228 | 5 | 80 | 19 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Totals: |
71135 | 3255 | 15052 | 10149 | 1466 | 753 | 1165 | 2292 | 2051 | 1418 | 37 | 107 | 2 | 13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the
Securities and Exchange Commission.
Confidential Information—For internal use only.
12
Table of Contents
| Symetra Enclosure D |
5 Appendix B.4 Provider Data Center Facilities |
ACS Proposed Data Center Facilities
Hillsboro, Oregon Hillsboro is a client data center supporting development server hosting and WAN and Internet access. The Hillsboro facility has 78,485 square feet of space, with 19,570 square feet of raised floor space. The data center contains 120 TB of DASD, 185 tape drives and eight robotic tape silo devices. This facility’s midrange capabilities include Hewlett-Packard (models N, L, K, RP and Superdomes) and Sun (models 200, 420, 3500, 6500 and V880). Midrange operating systems supported include HP-UX, Sun Solaris, OS/400, NT4, and Windows 2000 and 2003. Access into the facility is strictly controlled through several sophisticated physical security systems and procedures. Access into the facility is controlled by a security guard during normal business hours. After business hours, access is by card reader only. The Operations group is responsible for after-hours security functions. |
Average MIPS: 1,967 Platforms: CMOS DASD: 120 TB Midrange Servers: 577 IBM, Compaq, Sun and HP Environments: Sun Solaris, UNIX, HP-UX, HP and IBM Power: Three UPS systems, 2-1,600 kW diesel |
|
 |
||
Dallas, Texas The Dallas data center is a single-tenant, single-access facility comprising 611,000 square feet with 85,500 square feet of raised floor space. The Dallas data center is an ACS Enterprise Command Center (ECC) and resides at the ACS corporate headquarters campus. The Dallas ECC monitors distributed and mainframe environments, thus ensuring that online systems, applications and database subsystems are available and that the data center and systems hardware are problem-free for batch processing. Standard operational procedures are in place for logging, notifying and escalating all incidents that affect processing. The Dallas ECC also provides managed services, including 24x7 system and network monitoring, server and network |
Average MIPS: 13,634 Platforms: 27-CMOS DASD: 223 TB Midrange Servers: 587 Wintel Servers: 2516 DEC VAX Cluster, Alpha, IBM AS/400, HP3000, HP9000, HPV2200 and Sun E15K Environments: VMS, Open VMS/UNIX, AIX, OS/400, HP-UX, UNIX, DOS, Novell, Solaris and Linux Telecom: Two independent OC-48 SONET Power: TwoUPS, N+2 battery, |
1
Table of Contents
| Symetra Enclosure D |
5 Appendix B.4 Provider Data Center Facilities |
engineering
services, help desk support, network
operations and engineering,
scheduling, disaster recovery,
desktop management services,
performance reporting, audits, and
other services. The ECC also provides
Web hosting services on site of
existing infrastructures or for
remote sites.
|
31,250kW diesel, dual power grid | |
ACS operational teams support
platforms such as OS/390, UNIX,
Windows (NT and 2000), Linux, OS/400
and VMS. The Dallas data center’s mainframe processing is based on a CMOS architecture. The data center contains DASD storage, tape drives and robotic tape silo devices. This facility’s midrange platforms include DEC VAX Cluster, Alpha, RS/6000, IBM SP2, IBM AS/400, HP3000, HP9000, HP V2200 and Sun. Midrange operating systems include VMS, Open VMS/UNIX, AIX, OS/400, HP-UX, Windows NT, UNIX, DOS, Novell and Solaris. All computer, data communications and environmental equipment is served with sophisticated power conditioning equipment to minimize disruptions in service because of exterior power fluctuations. Additionally, all vital system components are attached to an uninterruptible power supply (UPS) system that provides power monitoring and line conditioning, as well as automatic switching to a battery system. ACS performs a weekly routine testing of all systems to ensure that equipment is in good working order. ACS facilities personnel maintain the emergency procedures in place. ACS has two utility feeds from separate substations, allowing a transfer to the second feed should if power is lost to the other feed. The Dallas facility comprises N+2 capabilities—two UPS modules, expandable to four. At current loads, the N-battery system can function approximately 30 minutes—at full capacity, 11 minutes—before adding additional support modules to avoid reaching full capacity. For network support, two independent OC-48 SONET rings currently service the Dallas facility—one from SBC, the other from MCI. Each ring is a four-strand, counter-rotating SONET facility. The two rings have separate entrance facilities. The outside plant components of each ring use separate utility easements as well. Each ring is connected to two geographically separate ISP points of presence (POPs) from AT&T and UUNET. The facilities are segmented into individual zones that are each fully equipped with fire, smoke and moisture detection systems, thus providing full protection against all environmental hazards. Halon or FM200 fire protection systems and pre-action sprinkler systems that are loaded with compressed air under |
2
Table of Contents
| Symetra Enclosure D |
5 Appendix B.4 Provider Data Center Facilities |
 |
||
normal
conditions protect the facilities.
The sprinkler systems are activated
with water only when an alarm
situation occurs. When activated, the
sprinklers discharge water in areas
indicating unacceptable heat levels.
The fire and police departments are
electronically notified of any alarm
condition. ACS’ Dallas campus is protected by an eight-foot perimeter fence with a single point of vehicle entry. Security personnel staff the point of entry 24x7. Campus access is permitted via an integrated badge access system with dual redundancy. All access badges include photo ID and are color-coded to distinguish between employees, business partners and temporary personnel. Entrance points are monitored via closed-circuit TV with displays located in permanent security guard posts. |
||
Pittsburgh, Pennsylvania The Pittsburgh facility is 135,00 square feet of space with 63.481 square feet of raised floor space. Pittsburgh is designated a dedicated ECC providing system and network monitoring, server and network engineering services and help desk support. The Pittsburgh data center’s mainframe processing is based on CMOS architecture. The data center contains DASD storage, tape drives and robotic tape silo devices. The midrange environment contains a variety of NT, HP, TPM, IBM AS/400, RS/6000, NCR, Sun-UX, Tandem and DEC platforms. Operating systems supported include Windows NT, HP-UX, HP-MPE, OS/400, AIX, NCR-RAS, Solaris, Nonstop Operating System and VMS. The primary telecommunications service into the facility consists of diversely routed T3 fiber-optic links that are connected to the local telephone switching office. The facility uses multimode OC-48 fiber feeds, one each from Qwest, MCI |
Average MIPS: 8,996 Platforms: 25-CMOS DASD: 18.2 TB Midrange Servers: 1,823 Wintel Servers: 970 RS/6000, IBM SP2, Sun E15K, NCR, Sun-UX, Tandem and DEC Environments: NT, VMS, AIX, OS/400, HP-UX, HP-MPE, Solaris, Linux and NCR-RAS Telecom: T3 fiber optic, 3-OC-48 (Qwest, MCI, AT&T) Power: Two UPS systems, N+2 battery, 6-1.281 KVA diesel, 1 UPS with 4 mod ,3-N+2 diesel |
3
Table of Contents
| Symetra Enclosure D |
5 Appendix B.4 Provider Data Center Facilities |
and
AT&T. If the primary link fails,
service is switched automatically to
a backup fiber-optic line. |
||
All computer, data communications and
environmental equipment is served
with sophisticated power conditioning
equipment to minimize disruptions in
service because of exterior power
fluctuations. All vital system
components are attached to a UPS
system that provides power monitoring
and line conditioning, as well as
automatic switching to a battery
system. Utility-supplied electrical
power to the facility (dual service)
is backed by batteries and generators
that are controlled by two UPS
systems. The facility’s battery
systems use a combination of Liebert
and Exide technologies that are
currently rated at N+2. The battery
time on all at preset capacity is
approximately is 40 minutes. The batteries can sustain the facility for up to 15 minutes; however, seven seconds after the facility begins to rely solely on battery backup, electrical power is supplied by six diesel-powered 1.281 KVA generators. These generators have 6,000-gallon underground storage tanks. Both main building systems are rated at N+1. The data center can be sustained indefinitely on its own power system if a prolonged disruption in utility-supplied power occurs. Routine testing and maintenance is performed to make sure that equipment is in working order. ACS tests at existing loads all emergency switchgear pertaining to the backup systems. All changes and problems relating to facilities are documented and available online for customer review. Access to the facility’s grounds and buildings is strictly controlled through sophisticated physical security systems and procedures. The facility is secured by a 10-foot chain-link fence topped with layers of razor wire that surrounds the facility. The fence is equipped with sonar detectors that alert a central security command center if anything touches the fence. The entire campus is constantly scanned by a closed-circuit television system and is monitored on a 24x7 basis from the central security command center. A multi-level security system controls access into and within the buildings, limiting the contact that employees, vendors and visitors have within sensitive areas. The system automatically monitors and records the movement of all building occupants. The data center is segmented into individual zones fully equipped with fire, smoke and moisture detection systems that provide full protection against all environmental hazards. |
||
 |
||
Bangalore, India The Bangalore facility has 40,000 square feet, with an additional 40,000 square feet in the procurement stage. |
Call Center Capacity: 1.000+ agents Switching Platform: Avaya S8700 Multivantage Switching capacity: 5,000 seats |
4
Table of Contents
| Symetra Enclosure D |
5 Appendix B.4 Provider Data Center Facilities |
This site provides call center
support and is being developed to
become an ACS ECC, which will provide
network monitoring and support. This
facility currently provides BPO
services, including Customer Care,
Finance and Accounting, Human
Resources and Transaction Processing.
IT services currently provided
include the following: ¨ IT development and support ¨ 24x7 help desk support The Bangalore site uses Avaya Definity 3GR switching to provide seamless integration with telecommunication infrastructures. The switching platform is an Avaya S8700 Multivantage with a switching capacity of 5,000 seats. There are 7 E1 connections to Dallas; Lexington, Kentucky; and Sandy and Draper, Utah. Bangalore has onsite security provided during normal business hours. After business hours, access is by card reader only |
Power: Supplied by an ITP-owned 9MW captive power plant with synchronized 220 kW state government power |
5
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
Attachment A
Schedule 2C
Distributed Computing Services SOW
for
Symetra Life Insurance Company (Symetra)
Draft Revisions WIP October 2006
Confidential Information
Page i
Page i
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
TABLE OF CONTENTS
1.0 Distributed Computing Services Overview and Business Objectives |
3 | |||
1.1 Services Overview |
3 | |||
1.2 Service Objectives |
3 | |||
2.0 Service Environment |
4 | |||
2.1 Scope of the Infrastructure to be Supported |
4 | |||
2.2 Work-In-Progress |
4 | |||
2.3 Future initiatives |
4 | |||
2.4 Baseline Information |
5 | |||
3.0 Distributed Computing Support Services Requirements |
6 | |||
3.1 Service Descriptions and Roles & Responsibilities |
6 | |||
4.0 Service Management |
13 | |||
4.1 Objectives |
13 | |||
4.2 Definitions |
13 | |||
4.3 Service Level Requirements (SLRs) |
14 | |||
4.4 Reports |
17 | |||
5.0 Referenced SOW Appendices and SOW Schedules |
17 | |||
5.1 Referenced Distributed Computing SOW Appendices |
17 | |||
5.2 Referenced ITSA Schedules |
17 |
List of Tables
Table 1. Distributed Computing Baseline Projections |
5 | |||
Table 2. General Roles and Responsibilities |
8 | |||
Table 3. Software Deployment/Management Roles and Responsibilities |
9 | |||
Table 4. Software Deployment/Management Roles and Responsibilities |
11 | |||
Table 5. Operations and Administration Roles and Responsibilities |
11 | |||
Table 6. Server Availability SLR |
14 | |||
Table 7. Install, Moves, Adds and Changes – Workstation and Peripherals |
15 |
Confidential Information
Page i
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
Table 8. Software Installation SLR |
16 | |||
Table 9. Deployment — New Server (from time hardware and software arrive at installation site) SLR |
17 |
Confidential Information
Page ii
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| 1.0 | Distributed Computing Services Overview and Business Objectives |
1.1 Services Overview
Distributed Computing Services are the services and activities detailed this Distributed
Computing Services Statement of Work (the “Distributed Computing Services SOW”), required to
provide and support the Symetra Life Insurance Company (Symetra) distributed computing
infrastructure (the “Distributed Computing Services”). ACS shall provide and support distributed
(i.e. non-data center) infrastructure that includes servers, storage devices, workstations,
printers and system software and applications that are attached to the local-area network (LAN) as
well as portable and standalone personal computing and other end user devices.
As depicted in Figure 1 below, in addition to the service described in this Distributed Computing
SOW, ACS is responsible for providing the services described in Schedule 2A – Cross Functional
Services SOW. Figure 1 depicts the relationship between the Cross Functional Services SOW, and all
SOWs within the scope of this IT services agreement.
Cross Functional SOW |
||||||||||||
| Data | Distributed | Data | Voice | Output | Content | |||||||
| Center | Computing | Network | Comm. | Help Desk | Processing | Management | ||||||
| Services | Services | Services | Services | Services | Services | Services | ||||||
| SOW | SOW | SOW | SOW | SOW | SOW | SOW | ||||||
Figure 1: Service Towers with Cross Functional View
| 1.2 | Service Objectives |
The following are the key high-level Service objectives Symetra expects to achieve through
outsourced Distributed Computing services and this Distributed Computing Services SOW:
| n | Meet Symetra business needs for highly available, reliable, and secure services |
| n | Acquire Distributed Computing Services that achieve the SLRs |
| n | Improve distributed computing and desktop service/support levels |
| n | Improve End-User productivity |
| n | Standardize the distributed computing and desktop environment (hardware and software) |
| n | Improve security, data management and backup in the distributed environment |
| n | Improve asset management and control |
| n | Improve total cost of ownership management |
| n | Support business initiatives |
Confidential Information
Page 3
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| 2.0 | Service Environment |
| 2.1 | Scope of the Infrastructure to be Supported |
The following sub-sections specify the appendices and other relevant materials containing
details of the Distributed Computing Services environment to be supported/complied with. Service
environment Appendices are to be maintained and reviewed with Symetra by ACS and made available to
Symetra on a quarterly basis.
ACS will provide Distributed Computing Services for all Symetra employees and locations 1 .
| 2.1.1 | Hardware and Software |
| a. | A listing and description of hardware to be supported is provided in Appendix C.1 — Distributed Computing Hardware. | ||
| b. | A listing and description of the software and utilities to be supported is provided in Appendix C.2 — Distributed Computing Software. | ||
| c. | A listing and description of core images to be supported is provided in Appendix C.3 – Distributed Computing Core Images. |
| 2.1.2 | Service Locations |
| a. | A description of the Symetra service locations for which ACS will provide Distributed Computing Services is provided in Attachment B of the Agreement. |
| 2.1.3 | Personnel |
| a. | ACS will be responsible for providing qualified, and appropriately certified, staffing for the Distributed Computing Services environment as required to perform the Services required hereunder in accordance with the SLRs set forth in this Distributed Computing Services SOW. |
| 2.1.4 | Policies, Procedures and Standards |
Intentionally Left Blank.
| 2.1.5 | Agreements and Licenses |
Intentionally Left Blank.
| 2.2 | Work-In-Progress |
Intentionally Left Blank.
| 2.3 | Future initiatives |
Intentionally Left Blank.
| 1 | Home workers will be supported via another supplier as a pass-through expense. |
Confidential Information
Page 4
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| 2.4 | Baseline Information |
Symetra current Distributed Computing utilization and projected usage is presented below.
These business requirements represent Symetra’s most realistic projection of the service
requirements as of the Effective Date based on a combination of past trends and current anticipated
overall business direction over the Term of the Agreement.
These metrics, along with other data which may be pertinent for sizing the solution, are reflected
in Schedule 3 — Fees.
Table 1. Distributed Computing Baseline Projections
| System | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | ||||||||||||||||
Headquarters Users
|
948 | 971 | 994 | 1018 | 1042 | 13% growth over 5 yrs/2.4% per yr | ||||||||||||||||
Headquarters VIP Users
|
59 | 59 | 59 | 59 | 59 | |||||||||||||||||
Remote Offices
|
8 | 8 | 8 | 8 | 8 | |||||||||||||||||
Remote Office Users
|
103 | 103 | 103 | 103 | 103 | |||||||||||||||||
Tele-workers
|
138 | 138 | 138 | 138 | 138 | |||||||||||||||||
Desktop Computers
|
1026 | 1051 | 1076 | 1102 | 1128 | 15% — 25% desktop pc’s not included in this count | ||||||||||||||||
Laptop Computers
|
309 | 316 | 324 | 332 | 340 | 15%- 25% laptops not included in this count | ||||||||||||||||
File and Print Servers
(Headquarters)
|
6 | 6 | 6 | 6 | 7 | |||||||||||||||||
File and Print Servers
(Remote)
|
10 | 10 | 11 | 11 | 11 | |||||||||||||||||
Networked Printers (Headquarters)
|
100 | 102 | 104 | 106 | 108 | |||||||||||||||||
Networked Printers
(Remote)
|
73 | 75 | 77 | 79 | 81 | |||||||||||||||||
Non-networked printers
|
46 | 47 | 48 | 49 | 50 | 25% – 50% desktop printers are not included this count | ||||||||||||||||
Copiers (Headquarters)
|
119 | 122 | 125 | 128 | 131 | |||||||||||||||||
Copiers (Remote)
|
45 | 46 | 47 | 48 | 49 | |||||||||||||||||
Scanners |
||||||||||||||||||||||
Faxes (Headquarters)
|
102 | 104 | 106 | 109 | 112 | |||||||||||||||||
Faxes (Remote)
|
39 | 40 | 41 | 42 | 43 | |||||||||||||||||
Blackberrys
|
40 | 41 | 42 | 43 | 44 | |||||||||||||||||
IMACs – Headquarters
& Remote
(June 2003 to May 2004) |
331 | 339 | 347 | 355 | 364 | |||||||||||||||||
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| 3.0 | Distributed Computing Support Services Requirements |
| 3.1 | Service Descriptions and Roles & Responsibilities |
In addition to the Services, activities, and roles and responsibilities described in Schedule
2A — Cross Functional Services SOW, Distributed Computing Services include the following Services,
activities and roles and responsibilities.
| 3.1.1 | Distributed Computing Services |
The Distributed Computing Services provided by ACS under this Distributed Computer Services SOW
include End User device provisioning and support required by Symetra End Users, including the
following:
| a. | Server Services: |
| – | Procurement services | ||
| – | Installs, moves, adds, changes (IMAC) | ||
| – | Operational monitoring, as needed | ||
| – | Problem determination and resolution | ||
| – | Technical support and break fix | ||
| – | Software deployment and management |
| b. | LAN File/Print/Storage Services: |
| – | Procurement services | ||
| – | Data storage, backup and recovery | ||
| – | Network-attached printer support | ||
| – | Local application servers | ||
| – | LAN user administration | ||
| – | Problem determination and resolution | ||
| – | Technical support as needed |
| c. | Symetra Headquarter Workstation/End-User Services (e.g., locally attached desktop computer, laptop computers, printers, accessory cables and workgroup hubs/switches, scanners, standardized personal digital assistant (PDA) devices, CD/DVD burners and integrated machines, LCD, etc.) |
| – | Operational monitoring, as needed | ||
| – | Commercially available system and productivity software deployment and management | ||
| – | Problem determination and resolution |
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| – | Technical Support and Break/Fix as needed | ||
| – | Management and distribution of Symetra approved standard image and related Symetra approved software | ||
| – | Hardware deployment | ||
| – | Excludes physical office relocations |
| d. | Remote Location Workstation/End User Services (e.g., locally attached desktop computer, laptop computers, printers, scanners, fax, copiers, standardized personal digital assistant (PDA) devices, facsimile servers, CD/DVD burners and integrated machines, LCD, etc.) |
| – | Installs, moves, adds, changes (IMAC), excluding physical office relocations | ||
| – | Operational monitoring, as needed | ||
| – | Problem determination and resolution | ||
| – | Technical support and Break/Fix as needed | ||
| – | Commercially available system and productivity software deployment and management | ||
| – | Management and distribution of Symetra approved standard image and related Symetra approved software | ||
| – | Hardware deployment |
| e. | Storage Services: Storage services include the hardware, software and staff resources necessary to meet Symetra requirements for storing non-shared and shared information on Symetra’s distributed servers. | ||
| f. | Desktop Applications Services: Desktop application services include the IT resources necessary to support business productivity software. Included are personal productivity and office applications services (in accordance with Symetra policies), and other basic IT resources necessary to meet the End User requirement for performing typical office and business functions using commercially developed applications and office suites. | ||
| g. | Electronic Mail (e-mail) Services: Support of distributed components of centralized email services (see Schedule 2B — Data Center SOW). This includes support for distributed e-mail applications, e-mail servers, wireless messaging (e.g. BlackBerry), End-User support and e-mail authorized End User account management. | ||
| h. | Remote Access Services - Employees: Remote access support services for Symetra employees in remote or home locations. | ||
| i. | LAN Services: LAN services include the activities associated with End User administration. | ||
| j. | Equipment Disposition will be coordinated by the ACS team, including packaging of disposed equipment for shipping (e.g. palleting, wrapping, boxing, etc). |
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| However responsibility for the actual packing supplies, postage, shipment, and contract management of the disposal service will be retained and executed by Symetra. ACS will recycle boxes and packing materials, as practicable, for re-use and shipping of equipment. Symetra will provide packing boxes and materials if the recycle stock has been depleted. | |||
| k. | Inventory Management/Asset Tracking: Management of the inventory and tracking for both new and surplus equipment per Symetra best practices. |
| 3.1.2 | General Responsibilities |
The following table identifies general roles and responsibilities associated with this Distributed
Computing Services SOW. Two columns are provided to identify roles and responsibilities for the
Symetra Headquarters location, and two columns are provided to identify roles and responsibilities
for Symetra remote office locations. An “X” is placed in the column under the party that will be
responsible for performing the task. ACS responsibilities are indicated in the column labeled
“ACS”.
Testing of image prior to deployment
Table 2. General Roles and Responsibilities
| Headquarters | Remote Offices | |||||||||||||||
| General Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
1. Define desktop/End User requirements |
X | X | ||||||||||||||
2. Recommend Services and standards for
supporting the desktop/End User |
X | X | ||||||||||||||
3. Approve services and standards for
supporting the desktop/End Users |
X | X | ||||||||||||||
4. Procure and own desktop and laptop hardware
and software and peripherals. |
X | X | ||||||||||||||
5. Deploy and manage desktop and laptop
hardware and software (e.g. operating system,
standard image, personal productivity and
office automation software and services) |
X | X | ||||||||||||||
6. Procure and own network-attached servers,
storage devices and peripherals |
X | X | ||||||||||||||
7. Deploy and manage network-attached servers,
storage devices and peripherals |
X | X | ||||||||||||||
8. Procure and own locally attached printers,
storage devices and miscellaneous peripherals |
X | X | ||||||||||||||
9. Deploy and manage locally attached
printers, storage devices and miscellaneous
peripherals |
X | X | ||||||||||||||
10. Provide storage services |
X | X | ||||||||||||||
11. Support distributed components of
centralized email services provided through
Data Center Services SOW |
X | X | ||||||||||||||
12. Provide and support remote access services
for Symetra employees in remote or home
locations |
X | X | ||||||||||||||
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| Headquarters | Remote Offices | |||||||||||||||
| General Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
13. Provide Level 1 and 2 Help Desk support
for personal productivity and office
automation software |
X | X | ||||||||||||||
14. Provide Level 2 support for Symetra
business applications (e.g. ViewStar, Cognos) |
X | X | ||||||||||||||
15. Provide Level 2 support of standard image
components required for Symetra business
applications. |
X | X | ||||||||||||||
16. Provide LAN administration |
X | X | ||||||||||||||
17. Provide problem determination and
resolution |
X | X | ||||||||||||||
18. Provide desktop break/fix and Level 2
hardware and system software support as
coordinated through the Help Desk |
X | X | ||||||||||||||
19. Provide server Break/Fix and Level 2
hardware and system software support as
coordinated through the Help Desk |
X | X | ||||||||||||||
20. Provide Level 1 technical support of
audio-visual technology in conference rooms
and training rooms identified by Symetra. |
X | X | ||||||||||||||
21. Provide Level 2 and Break/Fix technical
support of audio-visual technology in
conference rooms and training rooms identified
by Symetra. |
X | X | ||||||||||||||
22. Evaluate and recommend desktop-related
technology upgrades or refreshes. |
X | X | ||||||||||||||
23. Review and approve technology upgrades or
refresh plans prior to implementation. |
X | X | ||||||||||||||
| 3.1.3 | Core Software Build and Deployment Services |
ACS will perform the core software build deployment Services associated with the provision of
distributed computing infrastructure. The following table identifies the core software build and
deployment roles and responsibilities.
Table 3. Software Deployment/Management Roles and Responsibilities
| Remote | ||||||||||||||||
| Headquarters | Offices | |||||||||||||||
| Core Software Build and Deployment Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
1. Recommend core software
deployment/management policies and procedures |
X | X | ||||||||||||||
2. Review and approve core software deployment/
management policies and procedures |
X | X | ||||||||||||||
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| Remote | ||||||||||||||||
| Headquarters | Offices | |||||||||||||||
| Core Software Build and Deployment Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
3. Provide technical assistance for defining
core image specifications for desktop, laptop
and servers |
X | X | ||||||||||||||
4. Specify proprietary requirements for Symetra
core image for desktop and laptop systems. |
X | X | ||||||||||||||
5. Approve standard core image specifications |
X | X | ||||||||||||||
6. Build core software server image |
X | X | ||||||||||||||
7. Build core software desktop image |
X | X | ||||||||||||||
8. Package and test for distribution and
fallback |
X | X | ||||||||||||||
9. Test functionality of approved distribution |
X | X | ||||||||||||||
10. Approve package for distribution |
X | X | ||||||||||||||
11. Provide necessary utilities/tools to
maintain and ensure compliance with core
software deployment/management policies and
procedures |
X | X | ||||||||||||||
12. Manage deployment efforts using formal
project management tools, methodologies and
standards (e.g. ITIL change and configuration
management practices) |
X | X | ||||||||||||||
13. Deploy core images (desktop, laptop,
servers) |
X | X | ||||||||||||||
14. Provide and administer a software
distribution facility |
X | X | ||||||||||||||
15. After a failure to the end user’s desktop
environment, restoral to the end user’s core
image with their unique application set and
network connections. |
X | X | ||||||||||||||
16. Develop scripts and macro programs to
automate standard Symetra processes as
appropriate (e.g., upgrading desktop images) |
X | X | ||||||||||||||
17. Develop, implement, and maintain macro
programs for Symetra standard distributed
computing applications and processes |
X | X | ||||||||||||||
18. Conduct deployment reviews and provide
results to Symetra |
X | X | ||||||||||||||
19. Review and approve results of deployment
reviews |
X | X | ||||||||||||||
| 3.1.4 | Symetra Application Software Build and Deployment Services |
ACS will perform the software build and deployment Services associated with the provision of
Symetra application software. The following table identifies the software build and deployment
roles and responsibilities.
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Symetra Life Insurance Company (Symetra)
Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
Table 4. Software Deployment/Management Roles and Responsibilities
| Symetra Application Software Build and Deployment Roles and | Headquarters | Remote Offices | ||||||||||||||
| Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
1. Recommend application software deployment/management
policies and procedures |
X | X | ||||||||||||||
2. Review and approve application software deployment/
management policies and procedures |
X | X | ||||||||||||||
3. Provide technical assistance for defining Symetra
application software image specifications |
X | X | ||||||||||||||
4. Approve Symetra application image specifications |
X | X | ||||||||||||||
5. Build Symetra application image |
X | X | ||||||||||||||
6. Package and test for distribution and fallback |
X | X | ||||||||||||||
7. Test functionality of approved distribution |
X | X | ||||||||||||||
8. Approve package for distribution |
X | X | ||||||||||||||
9. Manage deployment efforts using formal project
management tools, methodologies and standards (e.g. ITIL
change and configuration management practices) |
X | X | ||||||||||||||
10. Deploy Symetra application images |
X | X | ||||||||||||||
11. Provide and administer a software distribution facility |
X | X | ||||||||||||||
12. Conduct deployment reviews and provide results to
Symetra |
X | X | ||||||||||||||
13. Review and approve results of deployment reviews |
X | X | ||||||||||||||
| 3.1.5 | Operations and Administration |
ACS is responsible for providing a number of operations and administration Services. Operations and
administration Services include the activities associated with the day-to-day management of the
installed systems and software environment. The following table identifies the operations and
administration Services roles and responsibilities that are specific to this SOW.
Table 5. Operations and Administration Roles and Responsibilities
| Remote | ||||||||||||||||
| Headquarters | Offices | |||||||||||||||
| Operations and Administration Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
1. Relocation of equipment for interoffice moves. |
X | X | ||||||||||||||
2. Provide Install, Add, Change services for desktop and
laptop systems and peripherals. |
X | X | ||||||||||||||
3. Perform and support hardware and software IMACs,
re-installations, updates and downloads for desktops and
laptops |
X | X | ||||||||||||||
4. Perform and support hardware and software IMACs,
re-installations, updates and downloads for servers |
X | X | ||||||||||||||
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| Remote | ||||||||||||||||
| Headquarters | Offices | |||||||||||||||
| Operations and Administration Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
5. Provide on-site technical support to End Users for
maintenance and Break/Fix activities |
X | X | ||||||||||||||
6. Conduct data and applications migration that is
necessary due to any hardware or software IMACs and
re-installations for desktops and laptops |
X | X | ||||||||||||||
7. Conduct data and applications migration that is
necessary due to any hardware or software IMACs and
re-installations for servers |
X | X | ||||||||||||||
8. Perform LAN/Domain/operating system administration
support activities (e.g. IP addressing, file and print
sharing, logon user-id and password maintenance) for all
managed servers (e.g. file/print, email) |
X | X | ||||||||||||||
9. Define backup/recovery requirements |
X | X | ||||||||||||||
10. Define file/database ownership and retention
requirements |
X | X | ||||||||||||||
11. Perform scheduled incremental and full tape backups of
servers |
X | X | ||||||||||||||
12. Exchange backup tapes with off-site storage facility |
X | X | ||||||||||||||
13. Purchase and manage paper/forms/consumables |
X | X | ||||||||||||||
14. Install consumables for printers |
X | X | ||||||||||||||
15. Install paper/forms for printers |
X | X | ||||||||||||||
16. Remove desktop/end user device print jobs and place in
output bins, courier and/or mail |
X | X | ||||||||||||||
17. Distribute desktop/end user device print jobs to user
locations |
X | X | ||||||||||||||
18. Define automated output distribution requirements |
X | X | ||||||||||||||
19. Maintain automated output distribution tables |
X | X | ||||||||||||||
20. Approve change management results |
X | X | ||||||||||||||
21. Manage user accounts, disk space quotas and access
control (OS, database, middleware, file systems, disk
space, etc.) |
X | X | ||||||||||||||
22. Provide support for external financial audits |
X | X | ||||||||||||||
23. Provide support for Symetra approved personal digital
assistants (PDAs) |
X | X | ||||||||||||||
24. Provide Tier 2 support for remote workers using Symetra
standard equipment (either home workers or remote office
workers) prior to dispatch of a third party support
organization |
X | X | ||||||||||||||
25. Asset tracking/management per Symetra standard policy
and procedures. |
X | X | ||||||||||||||
26. Provide ACS with Symetra standard equipment disposition
policy and procedures. |
X | X | ||||||||||||||
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| Remote | ||||||||||||||||
| Headquarters | Offices | |||||||||||||||
| Operations and Administration Roles and Responsibilities | ACS | Symetra | ACS | Symetra | ||||||||||||
27. Provide equipment disposition services following
Symetra standard policy and procedures. |
X | X | ||||||||||||||
28. Provide ACS with inventory management policies which
also contain information regarding appropriate levels. |
X | X | ||||||||||||||
29. Provide inventory management services including
tracking and maintaining appropriate inventory levels and
reporting. |
X | X | ||||||||||||||
30. Establish guidelines for priority on-call services. |
X | X | ||||||||||||||
31. Provide priority on-call services in accordance with
Symetra standard policy and procedures. |
X | X | ||||||||||||||
| 3.1.6 | Special Support Services |
ACS will provide the following special Services, including installation/deployment, maintenance,
support, break/fix, software and other technical training, upgrades, etc.
| a. | VIP Support—Includes all support for designated Symetra Executives/VIPs. This can include support in the home or other remote locations. Help Desk shall immediately dispatch desk side support. | ||
| b. | Sales Support – Provide support for designated key identified Sales staff who work from their home or remote offices. Help Desk shall escalate to the priority support person aligned with the key sales staff. | ||
| c. | Walk-in Support at Local ACS Support Centers—(e.g., remote End Users temporarily in Symetra offices) |
| 4.0 | Service Management |
| 4.1 | Objectives |
A key objective of the Agreement is to attain the SLRs. SLAs and Project-specific SLAs are
specified with Fee Reductions where business is impacted through failure to meet significant
mission critical systems or services, or project milestones or objectives warrants a reduction in
Fees paid when Service performance requirements are not met. SLRs are detailed in the following
sections of this Distributed Computing Services SOW and SLAs are detailed in Schedule 5 — Fee
Reductions.
ACS shall provide written reports to Symetra regarding ACS’ compliance with the SLRs specified in
this SOW Schedule.
| 4.2 | Definitions |
The following defined terms shall apply to this SOW and the following SLRs:
Administrative Functions – Routine functions such as setting up End User IDs, changing
authorization tables, changing account codes, and similar functions handled by ACS.
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
Availability - The percentage of time the service is fully operational. Availability represents a
measure of the fraction of time during a defined period when the Service provided is deemed to be
better than the defined Quality of Service (QoS) threshold (Standard, Enhanced, Premium).
Availability(%) = 100% — Unavailability (%)
Where Unavailability is defined as:
S outage duration x 100
Scheduled Time – planned outage
Where Unavailability is defined as:
S outage duration x 100
Scheduled Time – planned outage
Break/Fix – An End-User request placed due to a software or hardware problem encountered in
accessing or operating IT resources where support Services are required to resolve the problem.
Incident Resolution Time – The time elapsed from the initiation of a Trouble Ticket until Service
is restored.
Measurement Interval – The period of time performance will be calculated. This takes into
consideration the impact of continuous outage. For example, a monthly measurement interval for a
99% Minimum Performance for a 7x24 system with 8 hours of weekly planned downtime would allow 6.4
hours of a continuous outage with no other outages during the month. A weekly interval would only
allow 1.6 hours of a continuous outage.
Peripherals – Equipment such as local printers, workgroup hubs and switches, patch cords,
keyboards, mice, etc.
Reporting Interval – The time span between regular performance reporting periods.
Scheduled Time – The time during which Service is to be operational as designated in the applicable
SLR table.
Service Level Requirement (SLR) – The percentage of time or instances that the target service level
requirement must be met.
Target – The desired level of Service Symetra is seeking for that particular service level metric.
| 4.3 | Service Level Requirements (SLRs) |
ACS shall meet the following minimum SLRs commencing on the Handover Date (unless another date
is expressly set forth in a particular SLR) that is applicable to Distributed Computing Services.
ACS must consistently meet or exceed the following SLRs. SLRs associated with Fee Reductions are
detailed in Schedule 5 — Fee Reductions. All times referenced are Pacific Standard Time.
Table 6. Server Availability SLR
| Definition | Server Availability is defined as the accessibility and proper functioning of CPU, system memory, disks and peripherals up to the connection to the network. |
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
| Server Availability | ||||||
| Category | Service Measure | Performance Target | SLR | |||
Remote server
availability
(SLA/SLR will be in
effect 90 days
after production
deployment date)
|
Sun-Sat, 0000-2400 | [***]% | ||||
| Formula | Availability(%) = 100% — Unavailability (%) Where Unavailability is defined as: | |||||
(S Outage Duration x 100%) ¸ (Scheduled Time – Planned Outage) |
||||||
| Measure Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement method | To be agreed by the Parties | |||||
Table 7. Install, Moves, Adds and Changes – Workstation and Peripherals
| Definition | Defined as an installation, move, add, change of any hardware or software included within the scope of Distributed Computing. |
| Installs, Moves, Adds, Changes | ||||||
| Request | Service Measure | Performance Target | SLR | |||
1-10 in a single
request for new
equipment
|
Schedule installation appointment with the end user | Within 1 business day following receipt of the equipment. | [***]% | |||
1-10 in a single
request for new
equipment
|
Elapsed time to deploy | Deployment complete per customer requested schedule | [***]% | |||
More than 10 in a
single request
|
Date and Scheduled Time | As agreed case by case | [***]% | |||
Urgent request,
single move
|
Elapsed time to deploy | Per agreed schedule | [***]% | |||
| Formula | Number of instances within performance Target / total number of instances during Measurement Interval = “Percent (%) Attained” | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement method | To be agreed by the Parties | |||||
Note: Most IMACs performed after business hours.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities
and Exchange Commission.
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
Table 8. Software Installation SLR
| Software Installation | ||||||
| Request | Service Measure | Performance Target | SLR | |||
Install software
requiring external
procurement
|
Schedule appointment with end-user | Within 1 business day following receipt of software | [***]% | |||
Install software
requiring external
procurement
|
Elapsed time to deploy | Deployment complete per customer requested schedule | [***]% | |||
Install software
licensed under a
Master Services
Agreement
|
Schedule appointment with end-user | Within 1 business day following receipt of request for software | [***]% | |||
Install software
licensed under a
Master Services
Agreement
|
Elapsed time to deploy | Deployment complete per customer requested schedule | [***]% | |||
Desktop/Laptop
operating system
(including service
packs and
non-critical
security patches)
|
Elapsed time to deploy | As agreed per project plan | [***]% | |||
Local and Corporate
applications
software
|
Elapsed time to deploy to target population | As agreed per project plan | [***]% | |||
Core software
(messaging,
browser, etc.)
|
Elapsed time to refresh | As agreed per project plan | [***]% | |||
Service/Security
patches and
antivirus updates
(SLA/SLR will be in
effect 60 days
after production
deployment date)
|
Elapsed time to commencement of deployment | Within 24 hrs. Measured from approval or automatic updates from anti-virus vendor | [***]% | |||
| Formula | Number of instances within performance Target / total number of instances during Measurement Interval = “Percent (%) Attained” | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement method | To be agreed by the Parties | |||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
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Schedule 2C—Distributed Computing Services SOW
Schedule 2C—Distributed Computing Services SOW
Table 9. Deployment — New Server (from time hardware and software arrive at installation site) SLR
| Deployment – New Server | ||||||
| Category | Service Measure | Performance Target | SLR | |||
New File & Print
and local
applications
servers Services
|
Elapsed time to deploy | As agreed per project plan | [***]% | |||
| Formula | Number of instances within performance Target / total number of instances during Measurement Interval = “Percent (%) Attained” | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement method | To be agreed by the Parties | |||||
| 4.4 | Reports |
Without limiting the terms of Section 2.11.1 of the Agreement, ACS shall provide written
reports to Symetra regarding ACS’ compliance with the SLRs and other Distributed Computing activity
reports specified in this Schedule:
N/A
| 5.0 | Referenced SOW Appendices and SOW Schedules |
| 5.1 | Referenced Distributed Computing Services SOW Appendices |
| SOW Appendix | Description | |
C.1
|
Distributed Computing Hardware | |
C.2
|
Distributed Computing Software | |
C.3
|
Distributed Computing Core Images |
| 5.2 | Referenced ITSA Schedules |
| ITSA Schedule | Description | |
Schedule 3
|
Fees | |
Schedule 5
|
Fee Reductions | |
Schedule 2A
|
Cross Functional Services SOW |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 17
Page 17
Table of Contents
C-1 Distributed Computing Hardware
Laptop & Desktop Summary Info
Laptop & Desktop Summary Info
| Total CPUs | ||||||||
| Office Location / Category | Desktops | Laptops | ||||||
REDMOND-ADAMS BLDG |
6 | 2 | ||||||
REDMOND-LIFE |
590 | 165 | ||||||
REDMOND-RAINIER BLDG |
233 | 59 | ||||||
REDMOND-SHASTA BLDG |
1 | |||||||
SEATTLE-ROOSEVELT COMMONS |
1 | |||||||
SEATTLE-WESTLAKE CENTER |
1 | |||||||
Total Headquarters |
830 | 228 | ||||||
ALISO VIEJO |
2 | |||||||
ATLANTA — ING |
4 | 6 | ||||||
BETHEL PARK LRMS |
1 | |||||||
BOTHELL (L&I) |
1 | |||||||
CINCINNATI |
3 | 1 | ||||||
DULUTH |
14 | 1 | ||||||
FEDERAL WAY |
2 | |||||||
FENTON-SOUTH |
1 | |||||||
GOLDEN |
1 | |||||||
HARTFORD |
2 | |||||||
HOFFMAN ESTATES |
3 | 4 | ||||||
INDIANAPOLIS LRMS |
14 | 14 | ||||||
LAKE OSWEGO |
2 | 2 | ||||||
MAITLAND |
1 | |||||||
MIAMI LRMS |
24 | 9 | ||||||
NASHVILLE |
1 | |||||||
OVERLAND PARK |
2 | 1 | ||||||
RICHARDSON |
10 | 8 | ||||||
SAN DIEGO — ING |
6 | 3 | ||||||
SOUTH WINDSOR |
25 | 4 | ||||||
SPOKANE |
1 | |||||||
W CONSHOHOCKEN |
2 | |||||||
UNACCOUNTED |
61 | 10 | ||||||
Total Remote Office & Tele-worker |
172 | 74 | ||||||
Note: This is a low estimate (15-20%) based on system on line at time of count
Confidential
Information—For internal use only.
1
Table of Contents
C.1 - Distributed Computing Hardware
Laptops & Desktops Inventory
Laptops & Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
ALVLGRBETDYK
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6109DYSZQ785 | [***] | [***] | SAN DIEGO — ING | |||||||
ALVLGRKATVIL
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6845BW85B645 | [***] | [***] | SAN DIEGO — ING | |||||||
ALVLGRTMALLO
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6847BW85E437 | [***] | [***] | SAN DIEGO — ING | |||||||
ATLELCANGDUV
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZC05X | [***] | [***] | DULUTH | |||||||
ATLELCBARNEL
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF0V8 | [***] | [***] | DULUTH | |||||||
ATLELCCHEBEN
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF3TH | [***] | [***] | DULUTH | |||||||
ATLELCDORIEA
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF0LF | [***] | [***] | DULUTH | |||||||
ATLELCELLLON
|
Case Management-Rainier | Compaq | Deskpro | 6X19DYSZF0L8 | [***] | [***] | not in outlook | |||||||
ATLELCKAYRO1
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF0LA | [***] | [***] | DULUTH | |||||||
ATLELCSUEWHE
|
Case Management-Rainier | Compaq | Deskpro | 6X19DYSZF0XM | [***] | [***] | DULUTH | |||||||
ATLELCTEMPPC
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF101 | [***] | [***] | DULUTH | |||||||
ATLELCTERCHE
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF0P8 | [***] | [***] | DULUTH | |||||||
ATLELCTERETH
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF0RJ | [***] | [***] | DULUTH | |||||||
ATLELCTOMBOW
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF3V7 | [***] | [***] | DULUTH | |||||||
ATLELCWANCUT
|
Life Claims-SE | Compaq | Deskpro | 6X19DYSZF0Y6 | [***] | [***] | DULUTH | |||||||
ATLLGRADTRIA
|
Group Claims-Miami LRMS | Compaq | Deskpro EN Series | 6928CD640582 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRANGMEJ
|
Case Management-Rainier | Compaq | Deskpro | 6919CD64C535 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRANGMIL
|
Grp Dist-Sales Eastn Div-Atl | Compaq | DSDT | [***] | [***] | ATLANTA — ING | ||||||||
ATLLGRBETEXL
|
Grp Dist-Sales Eastn Div-Atl | Compaq | DSDT | [***] | [***] | ATLANTA — ING | ||||||||
ATLLGRBILDEF
|
Grp Dist-Sales Eastn Div-Atl | IBM | 26454EU | 78RXLR0 | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRBILLED
|
Grp Dist-Sales Eastn Div-Atl | IBM | 26474AU | 78FLZRD | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRCARLMA
|
Group Sales-NE-Miami | IBM | 26476U8 | 787BTRY | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRCARLPA
|
Group Sales-NE-Miami | Compaq | Deskpro EN Series | 6830BW24J510 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRCARVIC
|
Grp Dist-Sales Eastn Div-Atl | Compaq | Deskpro | 6050DYSZH124 | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRCHIPAR
|
Case Management-Rainier | Compaq | Deskpro | 6852BW85A724 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRCYNMCG
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6848BW85D613 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRDEHALE
|
Grp Dist-Sales Eastn Div-Atl | IBM | 26474AU | 78FLTCT | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRDELHOW
|
Case Management-Rainier | Compaq | Deskpro | 6906BW85B396 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRELOHOW
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6905BW85A341 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRELSALM
|
Policy Issue/Compliance | Compaq | Deskpro | 6848BW85B596 | [***] | [***] | not in outlook | |||||||
ATLLGRERIHIC
|
Group Sales-Eastern Div-Miami | IBM | 26476U8 | 787BTVT | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRFLOSAA
|
Group Systems | IBM | 26476U8 | 787BTVM | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRHEHALL
|
Case Management-Rainier | Compaq | Deskpro | 6850BW85B018 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRHERMKO
|
Group Sales-Eastern Div-Miami | Compaq | Deskpro | 6839BW85K745 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRHOT004
|
Group-Audit | Compaq | Deskpro | 6847BW85E422 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
ATLLGRJANBRA
|
Group Systems | Compaq | Deskpro EP/SB Series | 6936CJN40686 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRKATTID
|
Case Management-Rainier | Compaq | Deskpro | 6906BW85A599 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRKEVDUC
|
Group Systems | IBM | 26476U8 | 787BTPG | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRLORAUS
|
Group U/W-LRMS Fla | IBM | 26476U8 | 787BTRG | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRLORVAN
|
Group Distribution | Compaq | Deskpro | 6845BW85B757 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRLOUCAB
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6911BW85A898 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMADIAZ
|
Operations Management | IBM | 26476U8 | 787BTTM | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMARCRU
|
Group U/W-LRMS Fla | Compaq | Deskpro | 6846BW85A518 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMARFON
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6846BW85A482 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMARIAM
|
Group Distribution | IBM | 26476U8 | 787BTRM | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMARPOW
|
Group Systems | IBM | 26476U8 | 787BTPF | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMIRBEN
|
Group Sales-Eastern Div-Miami | Compaq | Deskpro | 6906BW85E797 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRMURHEA
|
Grp Dist-Sales Eastn Div-Atl | IBM | 26454EU | 78RXNP9 | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRNELBAS
|
Group U/W-LRMS Fla | IBM | 26476U8 | 99G6LBM | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRPATEDW
|
Case Management-Rainier | Compaq | Deskpro | 6906BW85B048 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRPAUCAN
|
Grp Dist-Sales Eastn Div-Atl | IBM | 26454EU | 78RXTK0 | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRRICGIV
|
Case Management-Rainier | Compaq | Deskpro | 6847BW85A837 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRRICLYO
|
Group Distribution | IBM | 264746U | 78KBND9 | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRSARDIA
|
LRMS-Production | Compaq | Deskpro | 6848BW85D650 | [***] | [***] | not in outlook | |||||||
ATLLGRSCOLOG
|
Group U/W-LRMS Fla | Compaq | Deskpro | 6847BW85E631 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRSTENOV
|
Policy Issue/Compliance | Compaq | Deskpro | 6903BW85A104 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRTONGRE
|
Grp Dist-Sales Eastn Div-Atl | Compaq | Deskpro | 6906BW85C403 | [***] | [***] | ATLANTA — ING | |||||||
ATLLGRTORWAL
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6846BW85A843 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRTRN001
|
Case Management-Rainier | Compaq | Deskpro | 6906BW85E897 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
ATLLGRVALSUA
|
Group Sales-NE-Miami | Compaq | Deskpro | 6843BW85A511 | [***] | [***] | MIAMI LRMS | |||||||
ATLLGRVISIT3
|
Case Management-Rainier | Compaq | Deskpro | 6911BW85A478 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
ATLLGRVIVGON
|
Policy Issue/Compliance | Compaq | Deskpro | 6848BW85D582 | [***] | [***] | not in outlook | |||||||
ATLLGRZAIGON
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6906BW85E565 | [***] | [***] | MIAMI LRMS |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
2
Table of Contents
C.1 - Distributed Computing Hardware
Laptops & Desktops Inventory
Laptops & Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
ATLLMLTHOKRU
|
Life Multiline-SE-Orlando | IBM | 26474EU | 78P7DX6 | [***] | [***] | MAITLAND | |||||||
BOSLGRJONHEN
|
Group Sales-NE-Boston | IBM | 26474AU | 78FNPWL | [***] | [***] | BOSTON LRMS | |||||||
BOSLGRTOMCOS
|
Group Sales-NE-Boston | IBM | 26476U8 | 787BTXA | [***] | [***] | BOSTON LRMS | |||||||
CHILCOAMYCAR
|
Grp Dist-Mkt/Sls-Sales-Chi | IBM | 26474AU | 78RKGT0 | [***] | [***] | HOFFMAN ESTATES | |||||||
CHILCOANNNOR
|
Group U/W-LRMS Ind | Compaq | Deskpro | 6X17DYSZR00C | [***] | [***] | HOFFMAN ESTATES | |||||||
CHILCOLAUCAL
|
Grp Dist-Mkt/Sls-Sales-Chi | Compaq | DSDT | 6X1ADYSZ805J | [***] | [***] | HOFFMAN ESTATES | |||||||
CHILCORALBR2
|
BD Sales-East-Chi | IBM | 26474EU | 78Z3T79 | [***] | [***] | HOFFMAN ESTATES | |||||||
CHILCOSCOHAM
|
Sales & Marketing Systems | IBM | 264746U | 78KGLZ0 | [***] | [***] | REDMOND-LIFE | |||||||
CHILCOSHAWEA
|
Grp Dist-Mkt/Sls-Sales-Chi | Compaq | DSDT | 6X1ADYSZ80YH | [***] | [***] | HOFFMAN ESTATES | |||||||
CHILMLCHRHIG
|
Multi-Line Dist-Sales-Chi | IBM | 264746U | 78KGDK5 | [***] | [***] | HOFFMAN ESTATES | |||||||
CHILMLDAVDEI
|
Multi-Line Dist-Sales-Chi | IBM | 26474EU | 78P7CT7 | [***] | [***] | HOFFMAN ESTATES | |||||||
CINLIFBARBAP
|
Group U/W-LRMS Ind | Compaq | Deskpro | 6043DYSZC282 | [***] | [***] | CINCINNATI | |||||||
CINLIFCHRHAY
|
Group-Audit | IBM | 26474AU | 78AGWM2 | [***] | [***] | BETHEL PARK LRMS | |||||||
CINLIFMARAUS
|
Grp Dist-Mkt/Sls-Sales-Cin | IBM | 26474AU | 78AGTY8 | [***] | [***] | CINCINNATI | |||||||
CINLIFSAUMOU
|
Grp Dist-Mkt/Sls-Sales-Cin | Compaq | Deskpro | 6X17DYSZR005 | [***] | [***] | CINCINNATI | |||||||
CINLIFTERMUR
|
Grp Dist-Mkt/Sls-Sales-Cin | Compaq | Deskpro | 6125DYSZK808 | [***] | [***] | CINCINNATI | |||||||
CONLGRCASTEV
|
Grp Dist-Sales Eastn Div-Phi | IBM | 26455EU | 78HNGX2 | [***] | [***] | W CONSHOHOCKEN | |||||||
CONLGRSHAMOR
|
Grp Dist-Sales Eastn Div-Phi | IBM | 26454EU | 78TATV0 | [***] | [***] | W CONSHOHOCKEN | |||||||
DALLIFBARDOY
|
Grp Dist-Sales Eastn Div-Dal | Compaq | Deskpro | 6853BW85B104 | [***] | [***] | RICHARDSON | |||||||
DALLIFBELMOR
|
Grp Dist-Sales Eastn Div-Dal | Compaq | Deskpro | 6846BW85A160 | [***] | [***] | RICHARDSON | |||||||
DALLIFBRYOUN
|
Group U/W-Dal | Compaq | Deskpro | 6847BW85C599 | [***] | [***] | RICHARDSON | |||||||
DALLIFCHRENG
|
Grp Dist-Sales Eastn Div-Dal | IBM | 264746U | 78KFPT5 | [***] | [***] | RICHARDSON | |||||||
DALLIFCHUJAG
|
Grp Dist-Sales Eastn Div-Dal | IBM | 264746U | 78KGNN6 | [***] | [***] | RICHARDSON | |||||||
DALLIFDEBEVA
|
Grp Dist-Sales Eastn Div-Dal | IBM | 26474AU | 78AGVM2 | [***] | [***] | RICHARDSON | |||||||
DALLIFECHUKOE
|
Life Multiline-SER | IBM | 26474AU | 78FLPVB | [***] | [***] | RICHARDSON | |||||||
DALLIFEDGCAR
|
Grp Dist-Sales Eastn Div-Dal | IBM | 264746U | 78KFNR0 | [***] | [***] | RICHARDSON | |||||||
DALLIFFRATIP
|
Grp Dist-Sales Eastn Div-Dal | Compaq | Deskpro | 6041DYSZD453 | [***] | [***] | RICHARDSON | |||||||
DALLIFJAMKOC
|
Group U/W-Dal | Compaq | Deskpro | 6907BW85B207 | [***] | [***] | RICHARDSON | |||||||
DALLIFJAMROB
|
Group U/W-Dal | IBM | 264746U | 78CWVH0 | [***] | [***] | RICHARDSON | |||||||
DALLIFJANDEA
|
Grp Dist-Sales Eastn Div-Dal | IBM | 26474AU | 78AGTT0 | [***] | [***] | RICHARDSON | |||||||
DALLIFLOUMOU
|
Grp Dist-Sales Eastn Div-Dal | Compaq | Deskpro | 6840BW85K020 | [***] | [***] | RICHARDSON | |||||||
DALLIFMISGRI
|
Group U/W-Dal | Compaq | Deskpro | 6847BW85E266 | [***] | [***] | RICHARDSON | |||||||
DALLIFMONFLO
|
Grp Dist-Sales Eastn Div-Dal | Compaq | Deskpro | 6044DYSZP860 | [***] | [***] | RICHARDSON | |||||||
DALLIFPARPER
|
Life Multiline-CEN | IBM | 264746U | 78KBWY8 | [***] | [***] | RICHARDSON | |||||||
DALLIFREBZEU
|
Grp Dist-Sales Eastn Div-Dal | Compaq | Deskpro | 6851BW85C318 | [***] | [***] | RICHARDSON | |||||||
DALLIFTOMMYM
|
Group U/W-Dal | Compaq | Deskpro | 6905BW85A317 | [***] | [***] | RICHARDSON | |||||||
DENLIFDANORR
|
Multi-Line Dist-Sales-Den | IBM | 26454EU | 78AAARY | [***] | [***] | GOLDEN | |||||||
DEVTS026
|
Group Systems | Compaq | ProLiant DL380 | D024DKN1N912 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
FEDITOSTEMED
|
Sales & Marketing Systems | Compaq | Evo D510 CMT | W240KN8XA032 | [***] | [***] | FEDERAL WAY | |||||||
FTVLGRCORWEM
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6037DYSZL746 | [***] | [***] | SAN DIEGO — ING | |||||||
FTVLGRDEBROT2
|
Grp Dist-Mkt/Sls-Sales-Sca | IBM | 264746U | 78KGCP4 | [***] | [***] | SAN DIEGO — ING | |||||||
FTVLGRHOTEL1
|
Grp Dist-Mkt/Sls-Sales-Sea | Compaq | Deskpro | 6918CD64D865 | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
FTVLGRJACWHI
|
Group Claims-Miami LRMS | Compaq | Deskpro | 6849BW85D255 | [***] | [***] | not in outlook | |||||||
FTVLGRJUNKEY
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6838BW85M675 | [***] | [***] | SAN DIEGO — ING | |||||||
FTVLGRROBREN
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6110DYSZU299 | [***] | [***] | SAN DIEGO — ING | |||||||
FTVLGRSCWILL
|
Grp Dist-Mkt/Sls-Sales-Sca | IBM | 264746U | 78KGCM1 | [***] | [***] | SAN DIEGO — ING | |||||||
FTVLGRSUELEE
|
Grp Dist-Mkt/Sls-Sales-Sca | Compaq | Deskpro | 6109DYSZQ628 | [***] | [***] | not in outlook | |||||||
FTVLGRTRAELB
|
Grp Dist-Mkt/Sls-Sales-Sca | IBM | 26476U8 | 787BTWA | [***] | [***] | SAN DIEGO — ING | |||||||
FTVLMLPETCAM
|
Multi-Line Dist-Sales-Sca | IBM | 26474EU | 78P7AY8 | [***] | [***] | ALISO VIEJO | |||||||
FTVLMLTUYPHA
|
Life Multiline Pension Sls-SW | IBM | 264746U | 78KBZD3 | [***] | [***] | ALISO VIEJO | |||||||
HARLCOJIMNIS
|
Life Ind Multiline Sls-NE-Hrt | IBM | 264746U | 78KBVW7 | [***] | [***] | HARTFORD | |||||||
HARLIFJIMNIS
|
Life Ind Multiline Sls-NE-Hrt | IBM | 264746U | 78KBVW7 | [***] | [***] | HARTFORD | |||||||
HOXEBSSUSASI
|
Retirement Services Systems | Compaq | Deskpro | 6043DYSZA224 | [***] | [***] | REDMOND-LIFE | |||||||
HOXEPOALBKIM
|
Sales & Marketing Systems | Compaq | Evo D510 CMT | W240KN8XA017 | [***] | [***] | REDMOND-LIFE | |||||||
HOXGMCRANTAL
|
General Management — Life | Compaq | Deskpro | 6849BW85D506 | [***] | [***] | REDMOND-LIFE | |||||||
HOXMKTGINMON
|
Sales & Marketing Systems | IBM | 26474EU | 78Z0T86 | [***] | [***] | REDMOND-LIFE | |||||||
HOXTRUANIKRE
|
SAFECO Trust Company-HO | Compaq | Evo D510 CMT | W239KN8XA061 | [***] | [***] | location not in outlook | |||||||
HOXTRUBERSEM
|
SAFECO Trust Company-HO | Compaq | DSDT | [***] | [***] | location not in outlook | ||||||||
HOXTRUCBUTLE
|
SAFECO Trust Company-HO | Compaq | Deskpro | 6X19DYSZF3MZ | [***] | [***] | not in outlook | |||||||
HOXTRUEVATOR
|
SAFECO Trust Company-HO | Compaq | Deskpro | 6X19DYSZF0PE | [***] | [***] | not in outlook | |||||||
HOXTRUGARGRI
|
SAFECO Trust Company-HO | Compaq | DSDT | [***] | [***] | location not in outlook | ||||||||
HOXTRUMANELS
|
SAFECO Trust Company-HO | Compaq | DSDT | [***] | [***] | not in outlook | ||||||||
HOXTRUMARKBA
|
SAFECO Trust Company-HO | Compaq | Evo D510 CMT | W239KN8XA059 | [***] | [***] | not in outlook |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
3
Table of Contents
C.1 - Distributed Computing Hardware
Laptops & Desktops Inventory
Laptops & Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
HOXTRUMARYWI
|
SAFECO Trust Company-HO | Compaq | Deskpro | 6X19DYSZF0PS | [***] | [***] | not in outlook | |||||||
HOXTRUMICCOR1
|
SAFECO Trust Company-HO | Compaq | DSDT | [***] | [***] | SEATTLE-WESTLAKE CENTER | ||||||||
HOXTRUROBNOK
|
SAFECO Trust Company-HO | Compaq | Evo D510 CMT | W239KN8XA060 | [***] | [***] | not in outlook | |||||||
HOXTRUSAMTHI
|
SAFECO Trust Company-HO | Compaq | DSDT | [***] | [***] | not in outlook | ||||||||
INDLGRBENJO1
|
Grp Dist-Mkt/Sls-Sales-Ind | Compaq | Evo D500 | U216JYFZA193 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRCHADUG
|
Group U/W-LRMS Ind | Compaq | Evo D500 | U216JYFZA196 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRCONGI1
|
Group U/W-LRMS Ind | Compaq | Evo D500 | W216JYFZA351 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRGUEST1
|
Group U/W-LRMS Ind | Compaq | Deskpro | 6907BW85A732 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRJANMOO
|
Grp Dist-Mkt/Sls-Sales-Ind | Compaq | Evo D500 | U216JYFZA329 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRJEENGL
|
Grp Dist-Mkt/Sls-Sales-Ind | IBM | 26476U8 | 787BTNV | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRJIMSEE
|
Grp Dist-Mkt/Sls-Sales-Ind | IBM | 26476U8 | 787BTTT | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRKIMVA1
|
Grp Dist-Mkt/Sls-Sales-Ind | IBM | 26476U8 | 787BTPK | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRLORMCK
|
Group U/W-LRMS Ind | Compaq | Evo D500 | U215JYFZC372 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRMARGRE
|
Group U/W-LRMS Ind | IBM | 26454EU | 78AAMZK | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRMARSTU
|
Group U/W-LRMS Ind | IBM | 26474AU | 78AGTX9 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRNICOEL
|
Grp Dist-Mkt/Sls-Sales-Midwest | Compaq | Evo D500 | U216JYFZA226 | [***] | [***] | not in outlook | |||||||
INDLGRPAGILE
|
Group-Audit | IBM | TP600X___ | [***] | [***] | INDIANAPOLIS LRMS | ||||||||
INDLGRPHYSAN
|
Group U/W-LRMS Ind | Compaq | Evo D500 | U215JYFZC279 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRSCKIN1
|
Grp Dist-Mkt/Sls-Sales-Ind | Compaq | Evo D500 | U215JYFZC531 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLGRSTEGAS
|
Group U/W-LRMS Fla | IBM | 26476U8 | 787BVDF | [***] | [***] | not in outlook | |||||||
INDLIFDEBDE1
|
Actu-Prod Dev-Indiv | IBM | 26474AU | 78FNVCL | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLIFDEBDEN
|
Actu-Prod Dev-Indiv | Compaq | Deskpro | 6920CD64E886 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLIFDEBKEN
|
Individual Systems | Compaq | DSDT | [***] | [***] | INDIANAPOLIS LRMS | ||||||||
INDLIFJAMSTA
|
Individual Systems | Compaq | DSDT | [***] | [***] | INDIANAPOLIS LRMS | ||||||||
INDLIFJOYMCA
|
Actu-Prod Dev-Indiv | IBM | 26474PU | 78KZ8YA | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLIFLAPTOP
|
Individual Systems | IBM | 26454AU | 78VNF66 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLIFLOIWHI
|
Actu-Prod Dev-Indiv | IBM | 26474AU | 78FNTBX | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLIFMARMER
|
Individual Systems | Compaq | DSDT | [***] | [***] | INDIANAPOLIS LRMS | ||||||||
INDLMLANTMEN
|
Multi-Line Dist Sales-Ind | Compaq | DSDT | X150DYSZA294 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLMLANTMEN
|
Multi-Line Dist Sales-Ind | Compaq | DSDT | X150DYSZA294 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLMLJOHMON
|
Multi-Line Dist Sales-Ind | IBM | 26474AU | 78FNTYH | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLMLMARSIM
|
Multi-Line Dist Sales-Ind | IBM | 26474EU | 78P7DC7 | [***] | [***] | INDIANAPOLIS LRMS | |||||||
INDLMLPAUGRA
|
Multi-Line Dist Sales-Ind | IBM | 26474AU | 78FNRCR | [***] | [***] | INDIANAPOLIS LRMS | |||||||
KANLIFKARWOL
|
Grp Dist-Mkt/Sls-Sales-Kansas | Compaq | Deskpro | 6107DYSZD718 | [***] | [***] | OVERLAND PARK | |||||||
KANLIFKATHBE
|
Grp Dist-Mkt/Sls-Sales-Kansas | Compaq | Evo D500 | 6X25JYFZF0BP | [***] | [***] | OVERLAND PARK | |||||||
KANLIFTIJOHN
|
Grp Dist-Mkt/Sls-Sales-Kansas | IBM | 264746U | 78CWXV7 | [***] | [***] | OVERLAND PARK | |||||||
MFBONUS2
|
Sales & Marketing Systems | Compaq | Deskpro EN Series | 6847BW85D382 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
PORLIFAZAGON
|
Grp Dist-Mkt/Sls-Sales-Por | IBM | 264746U | 78KGLC6 | [***] | [***] | LAKE OSWEGO | |||||||
PORLIFDONACA
|
Mortgage Loan | Compaq | Deskpro EN Series | 6928CD640658 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
PORLIFLISKEN
|
Grp Dist-Mkt/Sls-Sales-Por | Compaq | Deskpro | 6110DYSZP190 | [***] | [***] | LAKE OSWEGO | |||||||
PORLIFSUSHAW
|
Grp Dist-Mkt/Sls-Sales-Por | Compaq | Deskpro EN Series | 6838bw5bn075 | [***] | [***] | LAKE OSWEGO | |||||||
PORSSULAB006
|
Grp Dist-Mkt/Sls-Sales-Sea | Compaq | Deskpro | 6839BW85J198 | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
RAISISPAWEB1
|
SIS Operations | Compaq | Deskpro | 6926CD640942 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDACCAMGOO1
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA012 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCAMGOOD
|
Sales Center-Call Center | Compaq | Evo D510 CMT | 6924CD64A630 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCBARNO1
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA091 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCBOBLEW
|
Internal Wholesalers | Compaq | Evo D510 CMT | 78P6YW0 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCBRADUN
|
Internal Wholesalers | Compaq | Evo D510 CMT | 6949CJN4N704 | [***] | [***] | not in outlook | |||||||
REDACCCARFRE
|
Sales Center | Compaq | Evo D510 CMT | W240KN8XA100 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCDFSMI1
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA055 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCDFSMIT
|
Life Finance Group | Compaq | Evo D510 CMT | W240KN8XA041 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCDUAGER
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA119 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCGARGON
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA004 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCGARJOH
|
Internal Wholesalers | Compaq | Evo D510 CMT | 6924CD640183 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJASSHU
|
Internal Wholesalers | Compaq | Evo D510 CMT | 78MH8C1 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJEAWEL
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA035 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJEFCHA
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA114 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJESKAN
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA072 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJIMLEW
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA065 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJMARTH
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA028 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJOAHEN
|
Sales Center | IBM | 26474AU | 78FNTDR | [***] | [***] | REDMOND-LIFE | |||||||
REDACCJODPI1
|
Internal Wholesalers | Compaq | Evo D510 CMT | 6851BW85B725 | [***] | [***] | not in outlook | |||||||
REDACCJORINB
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA095 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
4
Table of Contents
C.1 - Distributed Computing Hardware
Laptops & Desktops Inventory
Laptops & Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDACCJOSMIT
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA108 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCKARIWA
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA097 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCKITSMI
|
Sales Center-Call Center | Compaq | Evo D510 CMT | 6930CD640171 | [***] | [***] | not in outlook | |||||||
REDACCLAULEP
|
Sales Center | Compaq | Evo D510 CMT | W240KN8XA105 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCLISHER
|
Sales Center-Call Center | Compaq | Evo D510 CMT | 78RABFL | [***] | [***] | REDMOND-LIFE | |||||||
REDACCLORLEO
|
Sales Center | Compaq | Evo D510 CMT | W240KN8XA104 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCLORPIZ
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA089 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCMEMCCA
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA014 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCNOMMCN
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA027 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCPHILAR
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA116 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCRICKUE
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA007 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSAMTIE
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA120 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSANHA1
|
Internal Wholesalers | Compaq | Evo D510 CMT | W251KN8XA108 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSANHAW
|
Internal Wholesalers | Compaq | Evo D510 CMT | W240KN8XA113 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSHABEM
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA129 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSPECHR
|
Sales Center-Call Center | Compaq | Evo D510 CMT | U234KN8XA038 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSTENGU
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA087 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCSUSDA1
|
Distribution Management | IBM | 26454EU | 78TCZV7 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCTESSTA
|
Sales Center | Compaq | Evo D510 CMT | W240KN8XA102 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCTRAIN1
|
Individual Systems | Compaq | Deskpro EN Series | 6928CD640587 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCTRAIN2
|
Individual-New Business-Issue | Compaq | Deskpro | 6848BW85D627 | [***] | [***] | REDMOND-LIFE | |||||||
REDACCWAYNEL
|
Sales Center-Call Center | Compaq | Evo D510 CMT | W240KN8XA081 | [***] | [***] | REDMOND-LIFE | |||||||
REDAGEBBURNS
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6938CJN41100 | [***] | [***] | REDMOND-LIFE | |||||||
REDAGEMICFAR
|
Life Agy-Appointments | IBM | 26474AU | 78VGTH5 | [***] | [***] | REDMOND-LIFE | |||||||
REDAGESHAKNA
|
Life Agy-Appointments | IBM | 23737CU | KPBPHKX | [***] | [***] | REDMOND-LIFE | |||||||
REDAGESTEFAL
|
Life Agy-Appointments | IBM | 26474AU | 78FNPPK | [***] | [***] | REDMOND-LIFE | |||||||
REDALMLMARMCM
|
Multi-Line Marketing | Compaq | DSDT | 6X1ADYSZ809J | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTAMHUNT
|
Life Fin Grp-Financial Report | Compaq | Evo D510 CMT | W240KN8XA112 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTBETVAN
|
Life Fin Grp-Financial Report | Compaq | Deskpro | 6847BW85C666 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTBEVMO1
|
Life Finance Group | Compaq | Evo D510 CMT | W240KN8XA064 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTBEVMOR
|
Life Finance Group | Compaq | Deskpro | 6037DYSZG755 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTBRETAY
|
Life Fin Grp-Expense Analysis | IBM | 26474AU | 78FNTWZ | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTCARCRO
|
Life Fin Grp-Financial Report | Compaq | Evo D510 CMT | W309KN8XA001 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTCATCOO
|
Life Fin Grp-Financial Report | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDCNTCHAKAL
|
Life Finance Group — Fin Ops | IBM | 26476U8 | 787BTWK | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTCOMURP
|
Life Finance Group | IBM | 26474PU | 78KZ4BN | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTDANAS1
|
Life Fin Grp-Financial Report | IBM | 26474PU | 78MH7C3 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTDANSCH
|
Life Fin Grp-Financial Report | IBM | 26474AU | 78FMAAR | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTDENTH1
|
Life Fin Grp-Actuarial Report | IBM | 26474AU | 78FNTVK | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTDIALAW
|
Life Finance Group | Compaq | Evo D510 CMT | W243KN8XA006 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTERIYOR
|
Life Finance Group — Fin Ops | Compaq | Evo D510 CMT | 6112DYSZ1502 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTFLOMCA
|
Life Finance Group — Fin Ops | Compaq | Deskpro | 6052DYSZJ435 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTHENHAR
|
Life Fin Grp-Actuarial Report | Compaq | Evo D510 CMT | W240KN8XA073 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTKATMEY
|
Life Finance Group — Fin Ops | Compaq | Evo D510 CMT | W240KN8XA098 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTKIRFLY
|
Life Fin Grp-Financial Report | Compaq | Evo D510 CMT | 6112DYSZ0496 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARBRA
|
Life Finance Group | Compaq | Evo D510 CMT | W240KN8XA063 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARGAU
|
Life Finance Group — Fin Ops | Compaq | Deskpro | 6106DYSZD960 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARGME
|
Life Fin Grp-Actuarial Report | IBM | 26474PU | 78KZ3ZD | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARGME1
|
Life Fin Grp-Actuarial Report | Compaq | Deskpro | 6046DYSZC737 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARGME2
|
Life Fin Grp-Actuarial Report | Compaq | Deskpro | 6X17DYSZR00A | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARHER
|
Life Fin Grp-Expense Analysis | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDCNTMARMCE
|
Life Fin Grp-Financial Report | Compaq | EVO | W232JYFXA003 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARWI2
|
Life Fin Grp-Actuarial Report | Compaq | Evo D510 CMT | W240KN8XA086 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMARWIT
|
Life Finance Group | Compaq | Evo D510 CMT | W240KN8XA022 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMGR001
|
Life Fin Grp-Financial Report | IBM | 26474EU | 78T5ZC2 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMIKHEA
|
Life Fin Grp-Actuarial Report | Compaq | DSDT | 6X1ADYSZ80CA | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTMIKKIN
|
General Management — Life | IBM | 26474PU | 78KZ4KB | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTRICSTO
|
Life Fin Grp-Expense Analysis | Compaq | Deskpro | 6040DYSZG671 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTSALYMA
|
Life Finance Group — Fin Ops | Compaq | Evo D510 CMT | W240KN8XA045 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTSHABIS
|
Life Fin Grp-Financial Report | Compaq | Evo D510 CMT | W240KN8XA006 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTSHARE1
|
Life Fin Grp-Financial Report | Compaq | Evo D510 CMT | W240KN8XA011 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTSHELWI
|
Life Fin Grp-Actuarial Report | Compaq | Evo D510 CMT | W240KN8XA101 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTSHIRZU
|
Life Fin Grp-Actuarial Report | IBM | 26474PU | 78KZ3DW | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
5
Table of Contents
C.1 - Distributed Computing Hardware
Laptops & Desktops Inventory
Laptops & Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDCNTTAKKAT
|
Life Fin Grp-Financial Report | Compaq | Evo D510 CMT | W240KN8XA005 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTTAKWAN
|
Life Fin Grp-Actuarial Report | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDCNTTEMP2
|
Life Finance Group — Fin Ops | Compaq | Deskpro | 6112DYSZ0496 | [***] | [***] | REDMOND-LIFE | |||||||
REDCNTTONCAM
|
Life Fin Grp-Financial Report | IBM | 26474PU | 78KZ8XW | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMANHOLT
|
Marketing-Administration | Compaq | Evo D510 CMT | W240KN8XA067 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMBECGRE
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 6X25JYFZE056 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMBOBPET
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 6X25JYFZH0BH | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMFANCRO
|
Agy Svcs-Ins Compliance | Compaq | Deskpro | 6903BW85A095 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMGERKIS
|
Agy Svcs-Ins Compliance | Compaq | Deskpro | 6847BW85C688 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMGORBOW
|
Agy Svcs-Ins Compliance | Compaq | Deskpro | 6903BW85A094 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMHEISTE
|
Agy Svcs-Securities Compliance | Compaq | Deskpro EP/SB Series | 6941CJN4N298 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMJAYQUA
|
Agy Svcs-Ins Compliance | Compaq | Deskpro | 6849BW85A121 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMJODIN1
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 78BLDB1 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMJODIN1
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 6010CJN4A125 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMJUDWAL
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 6945CJN4N766 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMKRIKEN
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 6946CJN4L275 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMLISHAM
|
Agy Svcs-Ins Compliance | Compaq | Deskpro EP/SB Series | 6941CJN4M545 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMMICSPE
|
Agy Svcs-Securities Compliance | Compaq | Deskpro | 6110DYSZP184 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMPATRRO
|
Agy Svcs-Securities Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K177 | [***] | [***] | REDMOND-LIFE | |||||||
REDCOMSHEUNJ
|
Agy Svcs-Ins Compliance | Compaq | Deskpro | 6036DYSZX862 | [***] | [***] | REDMOND-LIFE | |||||||
REDEASTAB007
|
Symetra Program Office | ACER | TravelMate 100 | 9148R01081223016FFM000 | [***] | [***] | REDMOND-LIFE | |||||||
REDECDCRATRO
|
Individual Systems | Compaq | Deskpro | 6111DYSZM986 | [***] | [***] | REDMOND-LIFE | |||||||
REDECDORIESP
|
Sales & Marketing Systems | Compaq | Deskpro | 6052DYSZJ426 | [***] | [***] | FEDERAL WAY | |||||||
REDGRPNORGER
|
Life Claims-NW | Compaq | Deskpro | 6915CD64A485 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDHRXANNDIO
|
Human Resources | Compaq | Deskpro | 6041DYSZD788 | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXBARTSM
|
Human Resources | Compaq | Deskpro | 6Y19DYSZ8189 | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXCARNEL
|
Human Resources | Compaq | Deskpro EP/SB Series | 6011DT63C286 | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXCHRKAT
|
Human Resources | IBM | 26474AU | 78FNRPY | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXEVOHAR
|
Human Resources | Compaq | Deskpro EP/SB Series | 6011DT63C283 | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXHENSHI
|
HR Adm-Business Continuity | IBM | 26474PU | 78KZ8LN | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXJESNIC
|
HR Adm-Business Continuity | IBM | 26474PU | 78KZ9TW | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXKATBAL
|
Human Resources | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDHRXMARLOZ
|
Human Resources | Compaq | Evo D510 CMT | W240KN8XA059 | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXMICNEA
|
Human Resources | IBM | 26474EU | 78P7RX4 | [***] | [***] | REDMOND-LIFE | |||||||
REDHRXTERKRE
|
Human Resources | Compaq | Deskpro EP/SB Series | 6011DT63F091 | [***] | [***] | REDMOND-LIFE | |||||||
REDIAXROSJAM
|
Income Annu-Cust Care | Compaq | EVO | W230JYFXA020 | [***] | [***] | REDMOND-LIFE | |||||||
REDITOBETMA1
|
Symetra Program Office | IBM | 26474PU | 78MH1D7 | [***] | [***] | REDMOND-LIFE | |||||||
REDITOTROOLS
|
Symetra Program Office | IBM | 26474PU | 78KZ9RR | [***] | [***] | REDMOND-LIFE | |||||||
REDIWSMICJON
|
Core Systems & Services | Compaq | Deskpro | 6051DYSZL504 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAALYNJAY
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | W240KN8XA023 | [***] | [***] | REDMOND-LIFE | |||||||
REDLASKRIMO1
|
Life Agency Information-NW | Compaq | Deskpro | 6040DYSZG687 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLASLINSLI
|
Life Agency Information-NW | Compaq | Deskpro | 6918CD64J046 | [***] | [***] | REDMOND-LIFE | |||||||
REDLASLORHOU
|
Human Resources | Compaq | Deskpro EP/SB Series | 6003CJN4K214 | [***] | [***] | REDMOND-LIFE | |||||||
REDLASSTDONA
|
Sales & Marketing Systems | Compaq | Deskpro | 6112DYSZG336 | [***] | [***] | REDMOND-LIFE | |||||||
REDLASSYLHUN
|
Life Agency Information-NW | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLASTINWON
|
Sales & Marketing Systems | Compaq | Deskpro | 6044DYSZQ681 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXALHALL
|
Retirement Services Systems | IBM | 26476U8 | 787BVAT | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXAMYAN1
|
Retirement Services Systems | IBM | 26474PU | 78KZ9LK | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXANDHAC1
|
Sales & Marketing Systems | IBM | 26474PU | 78KZ9LR | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXANDLOG
|
Retirement Services Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLAXAUDHON
|
Income Annuities Systems | Compaq | Deskpro | 6123DYSZN860 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXBARCUL
|
Symetra Quality Assurance | Compaq | Deskpro | p3368AF9VK9616 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXBUDDJU1
|
Retirement Services Systems | IBM | 26474MU | 78CYKHT | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXCALLPC
|
Core Systems & Services | IBM | 26474PU | 78KZ9VD | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXCATGRO
|
Retirement Services Systems | Compaq | Deskpro EP/SB Series | 6015CW4PA315 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXCATHAG
|
Core Systems & Services | Compaq | Deskpro | 6048DYSZW744 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXCHATIE
|
Retirement Services Systems | Compaq | Deskpro | 6048DYSZW557 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXCHRMUR
|
Income Annuities Systems | Compaq | Evo D510 CMT | W240KN8XA128 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXCRYBEP
|
Symetra Quality Assurance | Compaq | Deskpro EP/SB Series | 6015CW4PA254 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXDIAHES1
|
Retirement Services Systems | IBM | 26474MU | 78FRMWA | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXDIANEB
|
Symetra Quality Assurance | IBM | 26476U8 | 787BVAV | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXDONBEC
|
Symetra Quality Assurance | Compaq | DSDT | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
6
Table of Contents
C.1 - Distributed Computing Hardware
Laptops & Desktops Inventory
Laptops & Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLAXDOUMCI
|
Retirement Services Systems | Compaq | Deskpro | 6932CD641180 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXGEOLEN
|
Retirement Services Systems | Compaq | Deskpro | 6030DYSZN797 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXJANJON
|
Retirement Services Systems | IBM | 26474PU | 78KZ9ML | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXJEANTH
|
Retirement Services Systems | IBM | 26474MU | 78FRMWD | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXJEFFBE
|
Symetra Quality Assurance | Compaq | Deskpro | 6125DYSZL910 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXJERRVA
|
Retirement Services Systems | Compaq | Deskpro | 6051DYSZL475 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXJOHSAK
|
Symetra Quality Assurance | IBM | 26454AU | 78BTYM7 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLAXJOHSAK1
|
Retirement Services Systems | IBM | 26474MU | 78FRKKT | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXJOYCLA
|
Retirement Services Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLAXKARHAR
|
Retirement Services Systems | IBM | 26476U8 | 787BVAW | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXKATCAR
|
Income Annuities Systems | IBM | 26474AU | 78FNTKH | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXKATFIG
|
Retirement Services Systems | Compaq | Deskpro | 6043DYSZA889 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXKYLCON
|
Sales & Marketing Systems | IBM | 26474PU | 78KZ7FH | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXLINFON
|
Symetra Quality Assurance | Compaq | Evo D500 | 6X23JYFZS1W4 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXLINHUB
|
Income Annuities Systems | Compaq | Deskpro | 6110DYSZN167 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXLORREE
|
Symetra Program Office | IBM | 26474AU | 78FNTAH | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXMARPEL
|
Symetra Quality Assurance | IBM | 26474EU | 78P6ZR7 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXMARSAL
|
Income Annuities Systems | Compaq | Evo D510 CMT | W240KN8XA111 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXMARYSH
|
Income Annuities Systems | Compaq | Evo D510 CMT | 6940CJN4K382 | [***] | [***] | not in outlook | |||||||
REDLAXMIKCRO
|
Symetra Program Office | IBM | 26474AU | 78VFVH5 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXMOEAHM
|
Retirement Services Systems | Compaq | Deskpro | 6030DYSZN946 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXNANSID1
|
Retirement Services Systems | IBM | 26476U8 | 787BVDA | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXNATBU1
|
Retirement Services Systems | Compaq | Evo D510 CMT | W240KN8XA117 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXNORGIL
|
Retirement Services Systems | Compaq | DSDT | 6X1ADYSZ807R | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXONCALL
|
Retirement Services Systems | IBM | 26454AU | 550566X | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXONCALL1
|
Retirement Services Systems | IBM | 26474AU | 78FNRXZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXPAUHUA
|
Retirement Services Systems | IBM | 26474MU | 78FRKKK | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXPETCAR
|
Retirement Services Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLAXRAIGLA1
|
Retirement Services Systems | IBM | 26476U8 | 787BVAN | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXREBEHA
|
Symetra Quality Assurance | Compaq | Deskpro | 6109DYSZT239 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXRODFOR
|
Retirement Services Systems | Compaq | Deskpro EP/SB Series | 6015CW4PA259 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXROLBO1
|
Ret Svcs-Operations | Compaq | Evo D510 CMT | W240KN8XA001 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXSANBON
|
Retirement Services Systems | IBM | 23737CU | KPBPHFX | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXSARGOR
|
Symetra Quality Assurance | Compaq | Deskpro | 6043DYSZA161 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXSARRHO
|
Retirement Services Systems | Compaq | Deskpro EP/SB Series | 6015CW4PA025 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXSUMILL
|
Symetra Quality Assurance | Compaq | Deskpro EP/SB Series | 6015CW4PA047 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXTINKAJ
|
Retirement Services Systems | Compaq | Deskpro | 6X19DYSZF0T5 | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXTOMDYK
|
Retirement Services Systems | Compaq | DSDT | 6X1ADYSZ80GL | [***] | [***] | REDMOND-LIFE | |||||||
REDLAXWILWYV
|
Retirement Services Systems | IBM | TP-T21____ | [***] | [***] | REDMOND-LIFE | ||||||||
REDLAXZANWEA
|
Income Annuities Systems | Compaq | DSDT | 6X1ADYSZ80AG | [***] | [***] | REDMOND-LIFE | |||||||
REDLCAANDBOL
|
Actu-Prod Dev-Ret Svcs | Compaq | DSDT | 6X1ADYSZ80C6 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCADEMSCH
|
Actu-Prod Dev-Ret Svcs | Compaq | Deskpro | 6107DYSZD787 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCAJERCRO
|
Actu-Prod Dev-Ret Svcs | IBM | 26474AU | 78VGRA5 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCAKESPRA
|
Actu-Prod Dev-Ret Svcs | Compaq | DSDT | 6X1ADYSZ80HY | [***] | [***] | REDMOND-LIFE | |||||||
REDLCAKRIWAL
|
Actu-Prod Dev-Group | IBM | 26476U8 | 787BVCG | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLCALOUMEN
|
Actu-Prod Dev-Ret Svcs | Compaq | Evo D510 CMT | W240KN8XA057 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCANATCES
|
Actu-Prod Dev-Ret Svcs | Compaq | Evo D510 CMT | W240KN8XA054 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCAROBNEM
|
Actu-Prod Dev-Ret Svcs | Compaq | DSDT | 6X1ADYSZ80J9 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCARONBOL
|
Actu-Prod Dev-Ret Svcs | Compaq | DSDT | 6X1ADYSZ80GT | [***] | [***] | REDMOND-LIFE | |||||||
REDLCASTEVBL
|
Actu-Prod Dev-Ret Svcs | Compaq | DSDT | 6X1ADYSZ80CN | [***] | [***] | REDMOND-LIFE | |||||||
REDLCAWORKPC
|
Actu-Prod Dev-Ret Svcs | Compaq | Evo D510 CMT | W240KN8XA056 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCOMICKEM
|
Symetra Marketing | Compaq | Deskpro | 6052DYSZJ425 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCOPENHAR
|
Core Systems & Services | IBM | 26474AU | 78RHBC8 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCOTERRIC
|
Core Systems & Services | Compaq | Deskpro | 6847BW85A538 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCSALBDEA
|
Core Systems & Services | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLCSKASTANSHR
|
Core Systems & Services | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLCSSHARGR
|
Core Systems & Services | Compaq | DSDT | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
REDLCSSTENU1
|
Core Systems & Services | IBM | 26474MU | W240KN8XA124 | [***] | [***] | not in outlook | |||||||
REDLCXBRIHOP
|
Retirement Services Systems | Compaq | Deskpro | 6105DYSZJ349 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXCHABRO
|
Symetra Quality Assurance | Compaq | Deskpro | 6051DYSZJ899 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXDAVQUI
|
Retirement Services Systems | Compaq | Deskpro EP/SB Series | 6015CW4PA150 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXDAVSVI
|
Retirement Services Systems | IBM | 26474MU | 78FRMXK | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXDAVTHO
|
Retirement Services Systems | Compaq | Evo D500 | 6X23JYFZT1EZ | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
7
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLCXDOSTAP
|
Retirement Services Systems | Compaq | Deskpro | 6030DYSZN726 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXHOTEL0
|
Ret Svcs-Corporate | Compaq | Deskpro | 6922CD64A156 | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXJANLIN
|
Core Systems & Services | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLCXJENKNA
|
Retirement Services Systems | IBM | 23737CU | KPBPHKT | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXJOHLE1
|
Retirement Services Systems | Compaq | Evo D500 | 6X23JYFZS2CL | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXJUSKIM
|
Symetra Quality Assurance | Compaq | DSDT | 6X1ADYSZ805P | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXKARMON
|
Retirement Services Systems | IBM | 26474PU | 78KZ7RC | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXKELIN1
|
Retirement Services Systems | IBM | 26476U8 | 787BVDH | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXLORHE1
|
Retirement Services Systems | IBM | 26474MU | 78FRMWG | [***] | [***] | REDMOND-LIFE | |||||||
REDLCXMAURMC
|
Symetra Quality Assurance | IBM | 26474MU | 6044DYSZE814 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLCXMIKEMU
|
Symetra Quality Assurance | IBM | 26476U8 | 787BVCL | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLCXPENLIB
|
Retirement Services Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLCXREISHI
|
Retirement Services Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLCXVALATV1
|
Retirement Services Systems | IBM | 23737CU | KPBPHPP | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLCXYOUKI1
|
Retirement Services Systems | IBM | 26476U8 | 787BVDR | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDCHARLH
|
Sales & Marketing Systems | IBM | 26474AU | 78FNTWN | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDDAOXBI1
|
Sales & Marketing Systems | IBM | 26476U8 | 787BTXL | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDDIAZO1
|
Sales & Marketing Systems | Compaq | Evo D510 CMT | W240KN8XA093 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDDONBEC1
|
Symetra Quality Assurance | Compaq | Deskpro EP/SB Series | 6004CJN4K681 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDJAMSUL
|
Symetra Quality Assurance | Compaq | Deskpro | 6043DYSZC293 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDJERWAL
|
Sales & Marketing Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLDDJIMVAN
|
Sales & Marketing Systems | Compaq | Deskpro EP/SB Series | 6015CW4PA195 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDJOEPO1
|
Sales & Marketing Systems | IBM | 26476U8 | 787BTTH | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDJOHHI1
|
Sales & Marketing Systems | IBM | 26474PU | 78KZ4NB | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDJOHHIG
|
Sales & Marketing Systems | Compaq | Deskpro | 6926CD640140 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDJOHKOL
|
Sales & Marketing Systems | Compaq | Deskpro EP/SB Series | 6015CW4PA135 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDKARFIT1
|
Sales & Marketing Systems | IBM | 26454EU | 78TAAL6 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDKYLCON
|
Sales & Marketing Systems | Compaq | Deskpro EP/SB Series | 6005CJN4A104 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDNOAMIL
|
Sales & Marketing Systems | Compaq | Deskpro | 6048DYSZW551 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDNOAMIL1
|
Sales & Marketing Systems | IBM | 26454EU | 78BHWWH | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDREIREY
|
Sales & Marketing Systems | IBM | 26474AU | 78FKYZF | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDSAMCOO
|
Sales & Marketing Systems | IBM | 26474PU | 6847BW85C686 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLDDSAMCOO2
|
Sales & Marketing Systems | Compaq | Deskpro | 78TCHF6 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDSARWIL
|
Symetra Program Office | IBM | 26474PU | 78KZ7WN | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDSHARE1
|
Sales & Marketing Systems | Compaq | Deskpro | 6847BW85C753 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDSHARE5
|
Sales & Marketing Systems | IBM | 26474PU | 78KZ4NA | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDSHARE6
|
Sales & Marketing Systems | Compaq | Deskpro EP/SB Series | 6004CJN4K972 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDSTELOC
|
Market Development | Compaq | Deskpro EP/SB Series | 6948CJN4N505 | [***] | [***] | REDMOND-LIFE | |||||||
REDLDDWENTOB
|
Sales & Marketing Systems | IBM | 26474AU | 78FNTMM | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGANNERN
|
Legal | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLEGBILCRA
|
Legal | IBM | 264746U | 78CWVC1 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGCHRBA1
|
Legal | IBM | 26474AU | 78AGXR0 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGCRAGON
|
Legal | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLEGDIABAR
|
Legal | Compaq | Deskpro EP/SB Series | 6011DT63F839 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGGEOPAG
|
Legal | IBM | 264746U | 78CWTB1 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGJACVEN
|
Legal | IBM | 264746U | 78CWTK0 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGJEFLAU
|
Legal | IBM | TP-T20___ | [***] | [***] | REDMOND-LIFE | ||||||||
REDLEGJOEOTT
|
Legal | IBM | 26474PU | 78KZ9KZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGJULBOD
|
Legal | IBM | 264746U | 78CWTH9 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGKATHEN
|
Legal | IBM | 26474AU | 78FNPNL | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGMARHIG
|
Legal | Compaq | Deskpro | 6036DYSZ2326 | [***] | [***] | REDMOND-LIFE | |||||||
REDLEGSHEHOL
|
Legal | IBM | 2645AAU | 78MABY8 | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXABDHAI
|
Core Systems & Services | Compaq | Deskpro | 6X19DYSZC0LN | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXANNULL
|
Core Systems & Services | Compaq | Deskpro | 6X21JYFZT12S | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXGRECHA
|
Core Systems & Services | Compaq | Deskpro | W137DYSXA452 | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXKARSTR
|
Core Systems & Services | Compaq | Deskpro | 6X19DYSZC0MJ | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXKATMAN1
|
Core Systems & Services | IBM | 26474PU | 78MH3G1 | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXKENWI1
|
Core Systems & Services | Compaq | Deskpro | 6X19DYSZC0NT | [***] | [***] | REDMOND-LIFE | |||||||
REDLFXSHARE2
|
Mutual Funds — Intermed Svc | Compaq | Deskpro | 6849BW85A045 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRAMABAK
|
Group-Admin | Compaq | Deskpro EP/SB Series | 6949CJN4N411 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRBETAMU
|
Group-Management | Compaq | DSDT | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
REDLGRBILOHA
|
Operations Management | IBM | 26476U8 | 787BVFC | [***] | [***] | INDIANAPOLIS LRMS | |||||||
REDLGRBILRIE
|
Group-Management | Compaq | Deskpro | 6915CD64A912 | [***] | [***] | BOTHELL (Symetra) |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
8
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLGRBRITID
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K513 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRDERNEPLP
|
Group Systems | IBM | 26474AU | 78FNTVY | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRELLGAR
|
Life Claims-NW | Compaq | Deskpro | 6033DYSZK856 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRIMAGING
|
Life Claims-NW | Compaq | Deskpro EP/SB Series | 6010CJN4A203 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRIRESKI
|
Case Management-Rainier | Compaq | Deskpro | 6906bw85b209 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRJAMBRO
|
Grp Dist-Mkt/Sls-Sales-Sea | IBM | 26474PU | 78KY9XP | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
REDLGRJOHSEN
|
Group Systems | Compaq | Deskpro | 6X19DYSZL2ZB | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRJONSKI
|
Policy Issue/Compliance | Compaq | Deskpro | 6850BW85C387 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRLAUNIE
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6949CJN4N491 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRLIZDET
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6950CJN4L089 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRLOCBOX
|
Group-Accounting Services | Compaq | Deskpro | 6851BW85C955 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRLYNKEN
|
Policy Issue/Compliance | Compaq | Deskpro | 6915CD64A496 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRMAIBUR
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6929CJN42351 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRMARCPA
|
Group Systems | IBM | 264746U | 78KBVP1 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRMARMCK
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K560 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRMELKIN
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6X19DYSZC09A | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRMICFRY
|
Group-Management | IBM | 26454EU | 78TBMN6 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRPAMHEC
|
Group-Financial Reporting | Compaq | Deskpro EP/SB Series | 6945CJN4M546 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRPAMTIM
|
Group-Audit | IBM | 264746U | 78KBKD4 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRQINZHA
|
Actu-Prod Dev-Group | Compaq | Evo D510 CMT | W240KN8XA039 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRRIAKAN
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6015CW4PA275 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRRICTEA
|
Group-Management | IBM | 26474AU | 78FNTGA | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRSALKAN
|
Life Claims-NW | Compaq | Deskpro | 6043DYSZB249 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRSARKUN1
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6941CJN4M704 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRSCANER
|
Life Claims-NW | Compaq | Deskpro EP/SB Series | 3011CJN40001 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRSTEGOL
|
Grp Dist-Mkt/Sls-Sales-Sea | Compaq | Evo D500 | 6X24JYFZ80DM | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRTEMP02
|
Operations Management | Compaq | Deskpro | 6907BW85A776 | [***] | [***] | MIAMI LRMS | |||||||
REDLGRTEMP05
|
Symetra Quality Assurance | Compaq | Deskpro | 6847BW85A063 | [***] | [***] | REDMOND-LIFE | |||||||
REDLGRTISBRA
|
Actu-Prod Dev-Group | Compaq | Evo D500 | 6X24JYFZ805J | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGRVALCUL
|
Group-Accounting Services | Compaq | Deskpro | 6849BW85C608 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXDEBRAY
|
Group Systems | IBM | 26474PU | 78KZ8DY | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXDEVLP1
|
Group Systems | IBM | 26454EG | 557H07R | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXDEVLP3
|
Group Systems | IBM | 264545U | 78GKH06 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXDEVLP4
|
Group Systems | IBM | 264551U | 78GN094 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXEDWAIZ
|
Core Systems & Services | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLGXGINSWI
|
Life Claims-NW | Compaq | Deskpro | 6851BW85B762 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXJEREND
|
Group Systems | Compaq | Deskpro | 6X19DYSZF3PK | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXJULBOY
|
Symetra Program Office | Compaq | Deskpro | 6847BW85C734 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXKATPOR
|
Group Systems | IBM | 264746U | 78CWYR0 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXLEMGUL
|
Group Systems | IBM | 264746U | 78CWYY9 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXMONCLA
|
Group Systems | Compaq | Deskpro | 6041DYSZD804 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXRHOSCO
|
Group Systems | IBM | 264746U | 78KBKK6 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLGXTEST01
|
Group Systems | Compaq | Deskpro | 6846BW85A388 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLHXGREACK1
|
Sales & Marketing Systems | Compaq | DSDT | 6X1ADYSZ80DR | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFBILHUF1
|
Actu-Prod Dev-Life Sales | IBM | 26476U8 | 787BVBT | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFJIMMAN
|
Actu-Prod Dev-Indiv | Compaq | Deskpro | 6928CD640086 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFJOBAKE
|
Income Annuities | Compaq | Evo D510 CMT | 78BHPZK | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFLOANE1
|
Life Underwriting-NW | IBM | 264545U | 78KPW61 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFLOULED
|
General Management — Life | Compaq | Evo D510 CMT | W240KN8XA079 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFMARDUN
|
Actu-Prod Dev-Life Sales | Compaq | Deskpro EP/SB Series | 6011DT63D791 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFPATMCC
|
Distribution Management | IBM | 26474PU | 78KZ7WY | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFRANTAL
|
General Management — Life | IBM | 26474MU | 78CYKBK | [***] | [***] | REDMOND-LIFE | |||||||
REDLIFROGHAR
|
General Management — Life | Compaq | Deskpro | 6X19DYSZC03M | [***] | [***] | REDMOND-LIFE | |||||||
REDLIN733-01
|
Individual-New Business-Issue | Compaq | Deskpro | 6037DYSZG801 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINAARNIS
|
Individual-New Business-Issue | Compaq | Deskpro EN Series | 6920CD64C131 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINALAKEG1
|
Indiv-Admin-Accounting | Compaq | Evo D510 CMT | USW31506PQ | [***] | [***] | REDMOND-LIFE | |||||||
REDLINALEESC
|
Individual-New Business-Issue | Compaq | Deskpro | 6905BW85C559 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINALLCLE
|
Individual-New Business-Issue | Compaq | Deskpro | 6041DYSZD592 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINAMBAVE
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6015CW4PA044 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINANADIM
|
Individual-New Business-Issue | Compaq | Deskpro | 6906BW85F337 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINANGEGL
|
Individual-New Business-Issue | Compaq | Deskpro | 6041DYSZD555 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINANGMOO
|
Individual-Policy Service-HO | Compaq | Deskpro | 6044DYSZF011 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINANHTAN
|
Individual-New Business-Issue | Compaq | Deskpro | 6931CD640967 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
9
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLINANNAND
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6945CJN4K968 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINANNANG
|
Individual-New Business-Issue | Compaq | Deskpro | 6051DYSZH684 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINANTOGU
|
Individual Client Svc & Claims | Compaq | Deskpro | 6850BW85A920 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINARELEW1
|
Individual Admin | IBM | 26476U8 | 787BTWF | [***] | [***] | REDMOND-LIFE | |||||||
REDLINARTTHO1
|
Indiv-Admin-Accounting | Compaq | Evo D510 CMT | W309KN8XA003 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINAUDIT2
|
Individual-New Business-Issue | Compaq | Deskpro | 6X25JYFZN1KX | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBARBIL
|
Individual Client Svc & Claims | IBM | 26474PU | 78KZ8MK | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBEADOL
|
Individual Client Svc & Claims | Compaq | Deskpro | 6922CD64A252 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBELZEE
|
Individual-New Business-Issue | Compaq | Deskpro EN Series | 6918CD64F911 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBILLFL
|
Life Underwriting-NW | Compaq | Deskpro EN Series | 6920CD64B740 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBOBBWA
|
Individual Systems | Compaq | Deskpro EP/SB Series | 6014CW4PA420 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBOBGOO
|
Individual Client Svc & Claims | IBM | 26474PU | 78MH8R0 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBOORAT
|
Individual Systems | Compaq | Deskpro | 6048DYSZW804 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINBRIBUS
|
Individual-Policy Service-HO | Compaq | Deskpro | 6911BW85A573 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCARBRO
|
Individual-New Business-Issue | Compaq | Deskpro | 6920CD64E440 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCHAORP
|
Individual-New Business-Issue | Compaq | Deskpro | 6931CD640904 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCHIFEH
|
Individual-Policy Service-HO | Compaq | Deskpro | 6921CD64C873 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCHRCOH
|
Individual-Policy Service-HO | Compaq | Deskpro | 6911BW85A628 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCHRFLE
|
Individual-Policy Service-HO | Compaq | Deskpro | 6850BW85B294 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCHRISE
|
Individual-Policy Service-HO | Compaq | Deskpro | 6922CD64A358 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCHYHAE
|
Individual-New Business-Issue | Compaq | Deskpro EN Series | 6922CD64A329 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCOLDIL
|
Individual-Policy Service-HO | Compaq | Deskpro | 6922CD64A259 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINCRYYOU
|
Individual-Policy Service-HO | Compaq | Deskpro | 6919CD64D311 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDAWKAR
|
Individual-New Business-Issue | Compaq | Deskpro | 6918CD64J030 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDAWPET
|
Individual-New Business-Issue | Compaq | Deskpro | 6918CD64D402 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEBGIL
|
Indiv-Admin-Accounting | IBM | 26474PU | 6030DYSZN960 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEBGOO
|
Life Underwriting-NW | Compaq | Deskpro EP/SB Series | 6941CJN4M074 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEBJEN
|
Individual Client Svc & Claims | Compaq | Deskpro | 6848BW85D951 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEBSAB
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6112DYSZ1546 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEBUTE
|
Individual-Policy Service-HO | Compaq | Deskpro | 6044DYSZE626 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEMART
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6922CD64A361 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDERMCC
|
Individual Admin | Compaq | Evo D510 CMT | W240KN8XA069 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDEVBEL
|
Life Underwriting-NW | Compaq | Deskpro EP/SB Series | 6945CJN4K502 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDONMCG
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6926CD640950 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINDONNAO
|
Individual-New Business-Issue | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLINDONPOR
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6918CD64H932 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINEDNAHL
|
Individual-Policy Service-HO | Compaq | Deskpro | 6906BW85C909 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINELMVIL
|
Individual-New Business-Issue | Compaq | Deskpro | 6918CD64G081 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINFRADEN
|
Individual-Policy Service-HO | Compaq | Deskpro | 6044DYSZE396 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINFRIMAR
|
Individual-Policy Service-HO | Compaq | Deskpro | 6902BW85A594 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINGREJON
|
Individual-Policy Service-HO | Compaq | Deskpro | 6907BW85B014 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINGUNGRA1
|
Indiv-Admin-Accounting | Compaq | Evo D510 CMT | 6X19DYSZF0KZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLINGWECLA
|
Indiv-Admin-Accounting | IBM | 26474PU | 78KZ5DD | [***] | [***] | REDMOND-LIFE | |||||||
REDLINHEIHAY
|
Individual-New Business-Issue | Compaq | Deskpro | 6848BW85D931 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINHEILAW
|
Indiv-Admin-Accounting | IBM | 26474PU | 78KZ5DH | [***] | [***] | REDMOND-LIFE | |||||||
REDLINIRIGUR1
|
Indiv-Admin-Accounting | Compaq | Evo D510 CMT | W309KN8XA004 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJANKAH
|
Individual-Claims | Compaq | Deskpro EN Series | 6931CD640680 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJASMOR
|
Individual Client Svc & Claims | Compaq | Deskpro | 6044DYSZF009 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJEFHUN
|
Individual-New Business-Issue | Compaq | Deskpro | 6041DYSZD601 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJEFSHO
|
Individual-Claims | Compaq | Deskpro | 6910BW85G311 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJENDAV
|
Indiv Management | IBM | 266295U | FXT2043 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJENPEY
|
Individual Client Svc & Claims | Compaq | Deskpro | [***] | [***] | REDMOND-LIFE | ||||||||
REDLINJOECUR
|
Individual-New Business-Issue | Compaq | Deskpro | 6922CD64A397 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJOELIU
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6048DYSZB837 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINJULCON
|
Life Underwriting-NW | Compaq | Deskpro EN Series | 6918CD64J060 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKARDIE
|
Individual-Policy Service-HO | Compaq | Deskpro | 6926CD640658 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKAREBR
|
Individual-Policy Service-HO | Compaq | Deskpro | 6849BW85C464 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKATBRA
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6Y19DYSZ60G9 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKATFER
|
Individual-New Business-Issue | Compaq | Deskpro | 6931CD640965 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKATHPH
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6037DYSZG800 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKATMCG
|
Life Underwriting-NW | Compaq | Deskpro EN Series | 6918CD64F973 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKATWAL
|
Individual-New Business-Issue | Compaq | Deskpro | 6918CD64H929 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKEERHO
|
Individual-Policy Service-HO | Compaq | Deskpro | 6907BW85C890 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
10
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLINKELBAR
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6945CJN4K386 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKELPET
|
Individual-New Business-Issue | Compaq | Deskpro EN Series | 6920CD64E506 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKEVHIL
|
Indiv-Issue | Compaq | Deskpro EN Series | 6920CD64D264 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKHIQUA
|
Individual-New Business-Issue | Compaq | Deskpro | 6907BW85B059 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKRIEGG
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6015CW4PA280 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKRIHIL
|
Individual-Claims | Compaq | Deskpro | 6848BW85D923 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKRILAN
|
Individual-Policy Service-HO | Compaq | Deskpro | 6850BW85B562 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINKRIPAI
|
Indiv-Admin-Accounting | Compaq | Evo D510 CMT | W240KN8XA060 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLAUHAN
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6918CD64H931 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLAUJOH
|
Indiv Management | IBM | 26474AU | 78FMFYX | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLEAFRA
|
Individual-Policy Service-HO | Compaq | Deskpro | 6907BW85C673 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLEASAW
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6941CJN4M107 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLEOSIM
|
Individual-New Business-Issue | Compaq | Deskpro | 6905BW85C213 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLIDONA
|
Individual-Policy Service-HO | Compaq | Deskpro | 6910BW85D093 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLISANK
|
Sales Center-Call Center | Compaq | Deskpro | 6907BW85B578 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLISELV
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6926CD640606 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLISELV1
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6927CD642424 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLISSIE
|
Individual-New Business-Issue | Compaq | Deskpro | 6907BW85B606 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINLYNHIL
|
Individual-Policy Service-HO | Compaq | Deskpro | 6044DYSZE928 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMAHOLL1
|
Individual-New Business-Issue | Compaq | Evo D510 CMT | W240KN8XA090 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMARHA1
|
Life Underwriting-NW | IBM | 264746U | 78KBXM2 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMARHAR
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6926CD641280 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMARRAB
|
Individual-New Business-Issue | Compaq | Deskpro | 6918CD64G055 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMARTVE
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6052DYSZJ869 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMARVAR
|
Individual-New Business-Issue | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLINMICCHE
|
Individual Client Svc & Claims | IBM | 26474PU | 78KZ6AC | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMICHAM
|
Life Underwriting-NW | Compaq | Deskpro EP/SB Series | 6944CJN4K511 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMICHBA
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6949CJN4N815 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLINMICMEA
|
Individual-Policy Service-HO | Compaq | Deskpro | 6921CD64C881 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMIKMAD
|
Life Underwriting-NW | IBM | 266234U | FX39232 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMIRSEB
|
Individual-New Business-Issue | Compaq | Deskpro | 6907BW85B078 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINMONMOT
|
Individual-New Business-Issue | Compaq | Deskpro | 6922CD64A013 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINNATJON
|
Individual-Claims | Compaq | Deskpro | 6907BW85D051 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINNEEHOS
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6942CJN4M838 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINNICBR1
|
Individual-New Business-Issue | Compaq | Deskpro | 6918CD64F965 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINPATBRI
|
Individual Client Svc & Claims | Compaq | Deskpro | 6907BW85C970 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINPAUWHI
|
Individual-Policy Service-HO | Compaq | Deskpro EN Series | 6920CD64A257 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINPIEKOB
|
Individual-New Business-Issue | Compaq | Deskpro | 6037DYSZA954 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINQUANDO
|
Individual-Claims | Compaq | Deskpro | 6848BW85D958 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINREBMOO
|
Individual-Policy Service-HO | Compaq | Deskpro | 6906BW85F320 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINREEBAK
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6945CJN4K696 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINRHODUN
|
Life Underwriting-NW | Compaq | Deskpro EP/SB Series | 6941CJN4M034 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINRHOSOL
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6X1ADYSZ804F | [***] | [***] | REDMOND-LIFE | |||||||
REDLINROBBAU
|
Individual-Policy Service-HO | Compaq | Deskpro | 6849BW85B721 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINROBBUC
|
Individual-Policy Service-HO | Compaq | Deskpro | 6848BW85D917 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINROBGL1
|
Indiv-Issue | Compaq | Deskpro | 6847BW85A595 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINROBINC
|
Individual Admin | Compaq | Deskpro EP/SB Series | 6014CW4PA446 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINROSCAS
|
Individual Admin | Compaq | Deskpro EP/SB Series | 6929CJN42371 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINROSGRU
|
Individual-Claims | Compaq | Deskpro | 6850BW85B385 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINRUBGUT
|
Individual-Policy Service-HO | Compaq | Deskpro | 6048DYSZX470 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINRYALOV
|
Individual-Policy Service-HO | Compaq | Deskpro | 6848BW85E601 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSABYEU
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6015CW4PA115 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSALAND
|
Individual-New Business-Issue | Compaq | Deskpro | 6041DYSZD606 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSARTAR
|
Individual-New Business-Issue | Compaq | Deskpro EN Series | 6927CD640849 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSHARE3
|
Individual Systems | Compaq | Deskpro | 6849BW85A311 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSHETHO
|
Individual Admin | Compaq | DSDT | 6X1ADYSZ80AV | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSHISTU
|
Indiv-Admin-Accounting | IBM | 26474PU | 78KZ5BT | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSIRWIL
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6011DT63C419 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSTEWIL
|
Individual-Policy Service-HO | Compaq | Deskpro | 6850BW85A729 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSTLASS
|
Individual-Policy Service-HO | Compaq | Deskpro | 6907BW85D038 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSUANDE
|
Life Underwriting-NW | Compaq | Deskpro EP/SB Series | 6945CJN4K494 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSUEWIN
|
Individual-Policy Service-HO | Compaq | Deskpro EP/SB Series | 6946CJN4K823 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSUSAND
|
Individual-New Business-Issue | Compaq | Deskpro | 6911BW85A429 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
11
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLINSUSSM1
|
Indiv-Admin-Accounting | Compaq | EVO | W230JYFXA018 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINSUWPAT1
|
Indiv-Admin-Accounting | Compaq | Evo D510 CMT | W309KN8XA002 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTAMKUB
|
Individual Client Svc & Claims | Compaq | Deskpro | 6044DYSZE502 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTARRU1
|
Individual Client Svc & Claims | Compaq | Deskpro | 6035DYSZP606 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTEHARL
|
Individual-Policy Service-HO | Compaq | Deskpro | 6044DYSZE803 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTEMP01
|
Individual Systems | Compaq | Deskpro | 6907BW85C894 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTERDER
|
Individual Client Svc & Claims | Compaq | Deskpro | 6926CD641634 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTERMER
|
Individual-Policy Service-HO | Compaq | Deskpro | 6906BW85F318 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTHEWIC
|
Individual-New Business-Issue | Compaq | Deskpro EP/SB Series | 6945CJN4K267 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTHOGOW
|
Life Underwriting-NW | Compaq | Deskpro | 6105DYSZA492 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTINMET
|
Individual-New Business-Issue | IBM | 264746U | 78KGDF5 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTODYOU
|
Individual-New Business-Issue | Compaq | Deskpro EN Series | 6918CD64G582 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINTRNGPC
|
Individual-Policy Service-HO | Compaq | Deskpro | 6906BW85F839 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINVANDIN
|
Individual-Policy Service-HO | Compaq | Deskpro | 6848BW85D417 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINVICSTA
|
Individual-Policy Service-HO | Compaq | Deskpro | 6851BW85B977 | [***] | [***] | REDMOND-LIFE | |||||||
REDLINYELSKU
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6112DYSZH328 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXALIMOE
|
Individual Systems | Compaq | Deskpro | 6X19DYSZF0SF | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXBRAKNO
|
Individual Systems | Compaq | Deskpro | 6X19DYSZF0NP | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXDAVFR1
|
Actu-Prod Dev-Indiv | IBM | 26476U8 | 787BTYN | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXDEBBWI
|
Individual Systems | Compaq | Deskpro | 6112DYSZ1524 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXDOUCAR
|
Individual Systems | IBM | 26474PU | 78KZ9NA | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXGAYBEN
|
Individual Systems | Compaq | Deskpro | 6906BW85F331 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXGAYFIT
|
Individual Systems | Compaq | Deskpro | 6X19DYSZF0NW | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXGRASUM
|
Actu-Prod Dev-Indiv | COMPAQ | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLIXINDSYS
|
Individual Systems | Compaq | Deskpro | 6906BW85D523 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJOHMYE
|
Individual Systems | Compaq | Deskpro | 6906BW85B237 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJOPARK
|
Actu-Prod Dev-Indiv | IBM | 26474AU | 78FNPZW | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJORJUN
|
Individual Systems | Compaq | Deskpro | 6X19DYSZF0RK | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJORJUN3
|
Individual Systems | Compaq | Deskpro EP/SB Series | 6945CJN4K613 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJUDHAR
|
Individual Systems | Compaq | Deskpro | 6906BW85F248 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJUNPEC
|
Individual Systems | Compaq | Deskpro | 6X19DYSZF119 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXJUNWON
|
Individual Systems | Compaq | Deskpro | 6906BW85F218 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXKALDON
|
Individual Systems | IBM | 26474AU | 78FNPDL | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXKARESC
|
Individual Systems | IBM | 26474MU | 78FRKLC | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXKARHET
|
Individual Systems | Compaq | Deskpro EP/SB Series | 6011DT63E524 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXKARROG
|
Individual Systems | Compaq | Deskpro | 6906BW85B035 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXKEVMEE
|
Actu-Prod Dev-Indiv | Compaq | Deskpro EP/SB Series | 6945CJN4L878 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXLANLIL
|
Individual Systems | Compaq | Deskpro | 6847BW85D386 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXLAUAND
|
Individual Systems | IBM | 26474PU | 78KZ4VD | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXLAUKIN
|
Individual Systems | IBM | 26474PU | 78KZ9PD | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXLEEJON
|
Individual Systems | IBM | 26474AU | 78FNPWT | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXLISTRA
|
Actu-Prod Dev-Indiv | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLIXLORPOL
|
Individual Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLIXLYNCAR
|
Individual Systems | Compaq | Deskpro | 6926CD640916 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXMARRAU
|
Individual Systems | IBM | 26474AU | 78AGXT3 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXMATRIN
|
Actu-Prod Dev-Indiv | Compaq | Deskpro | 6922CD64A572 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXMEADER
|
Individual Systems | IBM | 26476U8 | 787BVCT | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXPAMEAS
|
Individual Systems | Compaq | Deskpro | 6906BW85F164 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXPAUSTE
|
Individual Systems | Compaq | Deskpro | 6110DYSZA665 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXSHARE3
|
Indiv Management | Compaq | Deskpro | 6925CD642916 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXSHARE6
|
Income Annuities Systems | Compaq | Deskpro | 6847BW85A596 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXSHARE8
|
Individual Systems | Compaq | Deskpro | 6847BW85B473 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXSOLVEL
|
Individual Systems | Compaq | Deskpro | 6906BW85C989 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXTEMPOO
|
Actu-Prod Dev-Indiv | Compaq | Deskpro | 6922CD64A164 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXTERRTH
|
Individual Systems | Compaq | Deskpro | 6905BW85C922 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXTEST3
|
Individual Systems | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLIXWENHUL
|
Individual Systems | Compaq | Deskpro | 6928CD640355 | [***] | [***] | REDMOND-LIFE | |||||||
REDLIXWESSIM
|
Individual Systems | Compaq | Deskpro | 6911BW85A569 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMHSOFT
|
Marketing-Administration | Compaq | Deskpro | 6847BW85B209 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKAARMAT
|
Agy Svcs-Compensation | IBM | 26474PU | 78KZ8GD | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKADRSTR
|
Agy Svcs-Compensation | Compaq | Deskpro EP/SB Series | 6002CJN4K516 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKAGYTEM
|
Agy Svcs-Compensation | IBM | 26474PU | 78KZ8DX | [***] | [***] | SEATTLE-ROOSEVELT COMMONS | |||||||
REDLMKANGHAW
|
Life Agy-Appointments | IBM | 26474EU | 78P7GN6 | [***] | [***] | REDMOND-RAINIER BLDG |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
12
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLMKBABESH
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6938CJN41131 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKBREFRE
|
Multi-Line Marketing | IBM | 26454EU | 78RWTH5 | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
REDLMKCOLRAM
|
Life Agy-Appointments | Compaq | Deskpro | 6850BW85A531 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDAITRA
|
Agy Svcs-Compensation | Compaq | Deskpro | 6033DYSZK201 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDANKIR
|
Agy Svcs-Compensation | Compaq | Deskpro | 6046DYSZC946 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDAROWL
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6949CJN4N808 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDAVBAT
|
Sales & Marketing Systems | IBM | 26474PU | 78KZ5VG | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKDEBVA1
|
Agy Svcs-Compensation | Compaq | Deskpro EN Series | 6917CD64A160 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDEBVAN
|
Agy Svcs-Compensation | IBM | 26474PU | 78KZ6BW | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDEBWA1
|
Agy Svcs-Compensation | IBM | 26474EU | 78P6TT2 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDEBWAN
|
Agy Svcs-Compensation | Compaq | Deskpro | 6037DYSZG755 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKDOHUBB
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6949CJN4N696 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKELIAGU
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | W240KN8XA052 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKEVEUGA
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6950CJN4M780 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKFALMAT
|
Life Agency Information-NW | Compaq | Deskpro EN Series | 6931CD640290 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKGAYFAW
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6950CJN4K563 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKGREGWH
|
Agy Svcs-Compensation | Compaq | Deskpro | 6044DYSZF004 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKGRETJO
|
Transfer Agent Admin | Compaq | Deskpro | 6035DYSZQ545 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKGREWHI
|
Life Agency Information-NW | Compaq | Deskpro | 6840BW85J108 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKHEALEL
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6X21JYFZT14A | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKHEALYO
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 78TCGM8 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKINDEXING
|
Agy Svcs-Compensation | Compaq | Deskpro EP/SB Series | 6048DYSZW575 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKJEASTR
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 78KZ5PY | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKJIMPIR
|
Symetra Marketing | IBM | 26474AU | 6X19DYSZF0RL | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKKATHWE
|
Agy Svcs-Compensation | IBM | 26474MU | 78KBYF6 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKKAYMON
|
Life Agy-Appointments | Compaq | DSDT | 78MH6W0 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKLAPTOP
|
Agy Svcs-Compensation | IBM | 26474AU | 6X25JYFZN1TM | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKLARMIK
|
Grp Dist-Mkt/Sls-Sales-Sea | IBM | 26474AU | 787BVDV | [***] | [***] | not in outlook | |||||||
REDLMKLAYSHI
|
Agy Svcs-Compensation | Compaq | Deskpro EP/SB Series | 78FNPTA | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKLIGARD
|
Sales & Marketing Systems | IBM | 264746U | W312KN8XA014 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKLORSWA
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6949CJN4N823 | [***] | [***] | not in outlook | |||||||
REDLMKLYNLIN
|
Life Agency Information-NW | IBM | 26474PU | 78KGDA3 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKMAGGRO
|
Agy Svcs-Compensation | Compaq | DSDT | W240KN8XA106 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKMARBUR
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6924CD64A889 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKMARZOR
|
Agy Svcs-Compensation | Compaq | Deskpro EP/SB Series | 6851BW85A356 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKMONPAR
|
Life Agy-Appointments | Compaq | DSDT | W238KN8XA213 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKNICJAM
|
Life Agy-Appointments | Compaq | Deskpro | W240KN8XA048 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKNORFOW
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6902BW85A688 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKOCTORD
|
Life Agency Information-NW | Compaq | Deskpro EP/SB Series | 78VFWT1 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKPATCRI
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | W240KN8XA094 | [***] | [***] | not in outlook | |||||||
REDLMKPATWIN
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 78KZ5DM | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKRANLAN
|
Multi-Line Marketing | IBM | 26454EU | 6X19DYSZF3RP | [***] | [***] | not in outlook | |||||||
REDLMKROBHEN
|
Agy Svcs-Compensation | IBM | 26474AU | 78T6CM3 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMKSCANER
|
Agy Svcs-Compensation | Compaq | Deskpro EP/SB Series | 6X1ADYSZ80E3 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKSHAHAG
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6112DYSZD602 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKSHEBLU
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 78MH6W1 | [***] | [***] | not in outlook | |||||||
REDLMKSIMBAN
|
Life Agy-Appointments | Compaq | Deskpro | 6927CD640182 | [***] | [***] | not in outlook | |||||||
REDLMKSTEZEI
|
Life Agy-Appointments | Compaq | Deskpro EP/SB Series | 6924CD64A836 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMKTEST02
|
Agy Svcs-Compensation | Compaq | Deskpro EP/SB Series | 6X21JYFZT16D | [***] | [***] | not in outlook | |||||||
REDLMKWENKEN
|
Agy Svcs-Compensation | IBM | 26474PU | 787BVBC | [***] | [***] | not in outlook | |||||||
REDLMLALEFUN
|
Multi-Line Dist-Sales-Atl | IBM | 264746U | W240KN8XA025 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLALLMUR
|
Multiline-Seattle Sls-NW-Spo | IBM | 26474EU | 6X1ADYSZ80GY | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLBRAMCA
|
Multiline-Seattle Sales-NW | IBM | 264746U | 6X19DYSZF0XE | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLJIMDAN
|
Life Multi Pension Sls-SE-Nsh | IBM | 26474EU | 78KBNR1 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLKARRMO
|
Multiline-Seattle Sales-NW | IBM | 26474EU | 6949CJN4M031 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMLMARLUD
|
Multi-Line Dist-Sales-Atl | IBM | 26474PU | W240KN8XA021 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLMELINT
|
Multi-Line Dist-Sales-Atl | IBM | 26474AU | W251KN8XA104 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLSHARSM
|
Multi-Line Distribution | Compaq | Deskpro | 6110DYSZP292 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMLSTEDAI
|
Multiline-Seattle Sls-NW-Por | IBM | 26474EU | 78P7CT6 | [***] | [***] | LAKE OSWEGO | |||||||
REDLMLTERRAY
|
Life Multiline-CEN-Stl | IBM | 26474EU | 78P7CF5 | [***] | [***] | NASHVILLE | |||||||
REDLMLTIMADK
|
Multiline-Seattle Sales-NW | IBM | 26474EU | 6915CD64C272 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXANGRIG
|
Sales & Marketing Systems | Compaq | Deskpro | 78FNTAR | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXBRANAY1
|
Symetra Program Office | IBM | 26474AU | 6035DYSZM670 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
13
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLMXCAMHEI1
|
Sales & Marketing Systems | IBM | 26476U8 | 6949CJN4N407 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMXCAROLS
|
Sales & Marketing Systems | IBM | 26474AU | 6043DYSZB432 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXDANTAK
|
Sales & Marketing Systems | Compaq | Deskpro | 6915CD64B149 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXDAVTUS
|
Sales & Marketing Systems | IBM | 26476U8 | W240KN8XA099 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXDERREA
|
Sales & Marketing Systems | IBM | 26474AU | 6X1ADYSZ8098 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXDONRO1
|
Sales & Marketing Systems | IBM | 26474AU | W240KN8XA040 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXGRECAM
|
Sales & Marketing Systems | IBM | 264746U | 6X1ADYSZ80HM | [***] | [***] | not in outlook | |||||||
REDLMXHEARIG
|
Sales & Marketing Systems | IBM | 26474AU | 6X25JYFZH0KE | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXICSTEST
|
Symetra Quality Assurance | Compaq | Deskpro | 6X25JYFZN1FH | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXKARMIL1
|
Sales & Marketing Systems | IBM | 26476U8 | 6X1ADYSZ80GZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXLISTUR
|
Life Agency Information-NW | Compaq | Deskpro | 6X19DYSZF3RS | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXLYFORS
|
Sales & Marketing Systems | IBM | 26474PU | 6109DYSZB878 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMXMARIJO
|
Sales & Marketing Systems | Compaq | Deskpro | 78KZ5RH | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXMARIME
|
Sales & Marketing Systems | Compaq | Deskpro | 6X1ADYSZ807H | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXMELNIC
|
Sales & Marketing Systems | IBM | 26474MU | [***] | [***] | REDMOND-LIFE | ||||||||
REDLMXMELRIC
|
Symetra Quality Assurance | Compaq | DSDT | W240KN8XA038 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXRICWOL
|
Sales & Marketing Systems | Compaq | Deskpro | 6X19DYSZF3SA | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXROBKER
|
Sales & Marketing Systems | Compaq | Deskpro | W240KN8XA082 | [***] | [***] | not in outlook | |||||||
REDLMXSAANDR2
|
Sales & Marketing Systems | IBM | 26474PU | 6902BW85A599 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXSANVAN2
|
Sales & Marketing Systems | IBM | 26476U8 | 6048DYSZX168 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXSHANAN
|
Sales & Marketing Systems | IBM | 2647APU | 6927CD642367 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXSHARE1
|
Sales & Marketing Systems | IBM | 26454AU | 6949CJN4N701 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLMXSTEPHA
|
Sales & Marketing Systems | Compaq | Deskpro | 6105DYSZH729 | [***] | [***] | not in outlook | |||||||
REDLMXSUELEE
|
Sales & Marketing Systems | IBM | 26474PU | 6030DYSZN938 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXSUENOR
|
Sales & Marketing Systems | IBM | 26474PU | 6048DYSZW566 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXTOMMUL
|
Sales & Marketing Systems | Compaq | Deskpro | 78KGLX6 | [***] | [***] | DULUTH | |||||||
REDLMXTONFAU
|
Sales & Marketing Systems | IBM | 26474PU | W240KN8XA078 | [***] | [***] | REDMOND-LIFE | |||||||
REDLMXWALBUC1
|
Sales & Marketing Systems | IBM | 26474PU | 6043DYSZA087 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNAILIBA
|
Ret Svcs-Operations | Compaq | Deskpro | 6043DYSZB399 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALAPHO
|
Ret Svcs-New Business | Compaq | Evo D500 | 6930CD640191 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALEBAC
|
Ret Svcs-New Business | Compaq | Evo D500 | 6X25JYFZN1HW | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALIEDG
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 78KFNT5 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALIMUL
|
Income Annu-New Business | Compaq | Evo D510 CMT | 6048DYSZW706 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALLCHU
|
Actu-Prod Dev-Ret Svcs | IBM | 26474PU | 6048DYSZW629 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALLVIL
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78KZ4HR | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNALMCCO
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | 6930CD640216 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNAMINAG
|
Income Annu-Cust Care | Compaq | Deskpro EP/SB Series | 6X19DYSZF0VG | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNAMPCAP
|
Ret Svcs-IRA/Non-Qual | Compaq | Evo D510 CMT | 6X25JYFZN1LB | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNAMYLUT
|
Income Annu-Ctl & Audit | IBM | 26474MU | W240KN8XA042 | [***] | [***] | not in outlook | |||||||
REDLPNANABET
|
Ret Svcs-Operations | Compaq | Deskpro | 6948CJN4N489 | [***] | [***] | not in outlook | |||||||
REDLPNANDCOO
|
Income Annuities | Compaq | DSDT | 6847BW85C692 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNANNCOO
|
Ret Svcs-TSA | Compaq | Deskpro | 6041DYSZD647 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNANSTSE
|
Income Annu-New Business | Compaq | DSDT | W306KN8XA206 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNAURHAL
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
REDLPNBENBAI
|
Ret Svcs-Operations | Compaq | Deskpro | 6048DYSZW706 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNBETKNO
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6952CJN4K429 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNBEVGAL
|
Ret Svcs-New Business | Compaq | Deskpro | 6X1ADYSZ8091 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNBREJAN
|
Sales Center-Call Center | Compaq | Deskpro | 6847BW85C694 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCARFOR
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro EN Series | 6043DYSZA203 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCARHAL
|
Ret Svcs-TSA | Compaq | DSDT | 6112DYSZQ034 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCARLYT
|
Ret Svcs-New Business | Compaq | Evo D500 | 6112DYSZL613 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCAROCA
|
Ret Svcs-Operations | Compaq | Deskpro | 787BVCZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCAROFL
|
Ret Svcs-TSA | Compaq | DSDT | 78FNRFW | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNCHADIC
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro EN Series | 78FNHYD | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCHRISC
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | 6X25JYFZE05A | [***] | [***] | not in outlook | |||||||
REDLPNCHRPAR
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 6037DYSZA919 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNCORKNO
|
Ret Svcs-New Business | Compaq | Evo D500 | W240KN8XA071 | [***] | [***] | not in outlook | |||||||
REDLPNCRACHU
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA088 | [***] | [***] | not in outlook | |||||||
REDLPNCRYQUI
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | 6938CJN40580 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNDABRIG
|
Ret Svcs-IRA/Non-Qual | Compaq | EVO | 6941CJN4M086 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNDAVBAD
|
Ret Svcs-New Business | Compaq | Evo D500 | 6048DYSZW575 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNDAVISA
|
Ret Svcs-New Business | Compaq | Deskpro | X037DYSZA500 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNDEAHUF
|
Ops Mgmt-HO | IBM | 264746U | 6043DYSZB838 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
14
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLPNDEBCOX
|
Income Annu-New Business | Compaq | DSDT | 6X1ADYSZ80FY | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNDEBLAN
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA109 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNEDWCHO
|
Ops Mgmt-HO | IBM | 26474AU | 6048DYSZW780 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNELEBAR
|
Ret Svcs-IRA/Non-Qual | Compaq | EVO | 6X25JYFZN1FN | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNELLCHE
|
Symetra Program Office | Compaq | Deskpro | 78KGMW3 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNELOOLI
|
Ret Svcs-Operations | Compaq | Deskpro | 6109DYSZT033 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNELOOLI
|
Ret Svcs-Operations | Compaq | Deskpro | 6X19DYSZC0F9 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNERLBER
|
Ret Svcs-Operations | Compaq | Deskpro | 78FNVAM | [***] | [***] | DULUTH | |||||||
REDLPNERLZAF
|
Ret Svcs-New Business | Compaq | Evo D500 | 6043DYSZB265 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNEVAHET
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6X25JYFZN187 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNFLOJES
|
Ret Svcs-New Business | Compaq | Deskpro | 6849BW85A325 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNHARHER
|
Ret Svcs-TSA | Compaq | Deskpro | 78KZ7KF | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNHISMON
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6X25JYFZH0BL | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNINDWHI
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro EN Series | 6918CD64C861 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNJABRA1
|
Income Annuities Systems | Compaq | DSDT | 6043DYSZB271 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJASFU2
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | W240KN8XA127 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJAWHEA
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro EN Series | 6925CD644331 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJEAJAC
|
Ret Svcs-TSA | Compaq | Deskpro | 6048DYSZW575 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJEALI2
|
Actu-Prod Dev-Ret Svcs | IBM | 26474PU | W240KN8XA015 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJEGROM
|
Actu-Prod Dev-Ret Svcs | Compaq | Evo D510 CMT | 6036DYSZB580 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJENABB
|
Ret Svcs-Operations | Compaq | Deskpro EN Series | W239KN8XA031 | [***] | [***] | not in outlook | |||||||
REDLPNJENCR1
|
Ret Svcs-Operations | Compaq | Deskpro | 6907BW85D045 | [***] | [***] | not in outlook | |||||||
REDLPNJERSAN
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78KZ9TB | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNJIHMOH
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6112DYSZL575 | [***] | [***] | not in outlook | |||||||
REDLPNJILBOR
|
Ret Svcs-TSA | Compaq | Deskpro | 78BFVR0 | [***] | [***] | not in outlook | |||||||
REDLPNJILPAT
|
Income Annuities | Compaq | Deskpro | 6910BW85G278 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJOALEI
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6849BW85A111 | [***] | [***] | not in outlook | |||||||
REDLPNJOEGOO
|
Ret Svcs-Operations | Compaq | Deskpro | 6048DYSZW629 | [***] | [***] | not in outlook | |||||||
REDLPNJOHWEA
|
Ret Svcs-IRA/Non-Qual | Compaq | EVO | 6048DYSZW780 | [***] | [***] | not in outlook | |||||||
REDLPNJOSFLO
|
Ret Svcs-Operations | Compaq | Deskpro | 6848BW85D893 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJUDJOH
|
Income Annu-Cust Care | Compaq | Deskpro EN Series | 6924CD64A619 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJUDYBR
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 6043DYSZB255 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNJULMAN
|
Ret Svcs-IRA/Non-Qual | Compaq | DSDT | 78TCPV9 | [***] | [***] | DULUTH | |||||||
REDLPNKAIJON1
|
Ret Svcs-IRA/Non-Qual | Compaq | Evo D510 CMT | 6125DYSZD374 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKAREHA1
|
Ret Svcs-TSA | Compaq | Deskpro | 6907BW85D056 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKARWIL
|
Income Annu-New Business | Compaq | DSDT | W240KN8XA018 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKATDIN
|
Ret Svcs-New Business | Compaq | Deskpro | 6043DYSZB310 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKATHYW
|
Ret Svcs-Operations | Compaq | Deskpro | 6927CD642437 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKATLEN
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro EP/SB Series | 6110DYSZQ526 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKATUND
|
Ret Svcs-IRA/Non-Qual | Compaq | Evo D510 CMT | 78KZ5RZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKEVWOO
|
Income Annu-Ctl & Audit | Compaq | Evo D510 CMT | 6927CD641942 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKIMLUO
|
Ret Svcs-Operations | Compaq | Deskpro | 6002CJN4K550 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNKIMMCS
|
Income Annuities | IBM | 26474PU | 6945CJN4K309 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNKYLWHI
|
Ret Svcs-New Business | Hewlett-Packard | HP d530 CMT(DC577AV) | 6030DYSZN771 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLIEDWA
|
Ret Svcs-IRA/Non-Qual | Compaq | Evo D500 | W240KN8XA085 | [***] | [***] | not in outlook | |||||||
REDLPNLILSOU
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78KFXF5 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLINDAH
|
Ret Svcs-Operations | Compaq | Deskpro | 78KZ7HR | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLINMAC
|
Income Annu-New Business | Compaq | DSDT | W231JYFXA008 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLINMCC
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 78MH7P8 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLISAHE
|
Ret Svcs-New Business | Compaq | Evo D500 | 6048DYSZB354 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLISBA1
|
Ret Svcs-Operations | IBM | 26454EU | 78MH1N1 | [***] | [***] | DULUTH | |||||||
REDLPNLISYAM
|
Ret Svcs-TSA | Compaq | Deskpro EP/SB Series | 6924CD64A892 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLOLESC
|
Ret Svcs-Operations | Compaq | Deskpro | 78CYHYB | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLORENG
|
Income Annu-New Business | Compaq | DSDT | 6924CD64A840 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLORSIM
|
Ret Svcs-Operations | Compaq | Deskpro | 6X19DYSZF11Z | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLUIGAM
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro EN Series | 6949CJN4N695 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNLUSGAB
|
Ret Svcs-New Business | Compaq | Deskpro | 6X1ADYSZ806N | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNLYDFLO
|
Income Annuities | Compaq | Evo D510 CMT | 6043DYSZC233 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNLYNMIL
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | U149DYSZB212 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMACOOP
|
Ret Svcs-Operations | Compaq | Deskpro | 6015CW4PA207 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNMACORO
|
Ret Svcs-IRA/Non-Qual | Compaq | EVO | 6929CJN42131 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNMARCRO
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 78MH7A3 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMATLAY
|
Ret Svcs-New Business | Compaq | Deskpro | 6922CD64A241 | [***] | [***] | not in outlook |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
15
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLPNMELBUR
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 78KBTG9 | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
REDLPNMELLEW
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78FRKKN | [***] | [***] | not in outlook | |||||||
REDLPNMELLYN
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA110 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMEOWOH
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6112DYSZ1530 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMERPAR
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78MH7D5 | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
REDLPNMICHSP
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | 6X1ADYSZ806Z | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMICTUT
|
Ret Svcs-IRA/Non-Qual | Compaq | EVO | 6X19DYSZF0XY | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMIKBRO
|
Ret Svcs-Operations | Compaq | Deskpro | 78KZ9VG | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMINORM
|
Ret Svcs-IRA/Non-Qual | Compaq | EVO | 78FNTHZ | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMOHTAL
|
Ret Svcs-New Business | Compaq | Deskpro | 6112DYSZL656 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNMONBEL
|
Ret Svcs-IRA/Non-Qual | Compaq | Evo D510 CMT | 6910BW85G293 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNNADSHI
|
Income Annuities | Compaq | Deskpro | 78FNTMB | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
REDLPNNANMUL
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 6847BW85D665 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNNANSCO
|
Ret Svcs-Operations | Compaq | Deskpro | 787BTYL | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNNATKUB
|
Ret Svcs-New Business | Compaq | Deskpro | 6927CD641896 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNNOELAS
|
Income Annu-Cust Care | Compaq | Deskpro | 6851BW85D197 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNNOMMCN
|
Income Annuities | Compaq | DSDT | 6050DYSZH123 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNODICAP
|
Ret Svcs-Operations | Compaq | Deskpro EN Series | 6050DYSZH123 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNPATMCN
|
Ret Svcs-Operations | Compaq | Deskpro | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
REDLPNPATWON
|
Ret Svcs-Operations | Compaq | Deskpro | 78P7DX7 | [***] | [***] | REDMOND-ADAMS BLDG | |||||||
REDLPNPAUFUL
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6043DYSZA253 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNRACEDM
|
Income Annu-New Business | Compaq | DSDT | 6930CD640065 | [***] | [***] | not in outlook | |||||||
REDLPNRAMIWA
|
Ret Svcs-New Business | Compaq | Evo D500 | W240KN8XA066 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNREBMIT
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78P7CV8 | [***] | [***] | not in outlook | |||||||
REDLPNRICBU1
|
Ops Mgmt-HO | IBM | 26476U8 | 6109DYSZU151 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLPNRICKUE
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | 6X25JYFZN1L9 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNRICLAV
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | [***] | [***] | REDMOND-LIFE | ||||||||
REDLPNROBAND
|
Ret Svcs-Operations | Compaq | Deskpro EN Series | 6050DYSZH094 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNROBDEM
|
Ret Svcs-TSA | Compaq | Deskpro | 6949CJN4M163 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNRONBUC
|
Ret Svcs-New Business | Compaq | Evo D500 | 6048DYSZW700 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNROSSIP
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 78XBFR4 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNRSACT1
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA053 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSALGLE
|
Life Insurance Marketing | Compaq | Deskpro | 78FRHTN | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSAMWAR
|
Ret Svcs-Operations | Compaq | Deskpro | W232JYFXA007 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSANHEN
|
Ops Mgmt-HO | IBM | 26474AU | 78KZ5TF | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSANLIN
|
Ret Svcs-New Business | Compaq | EVO | 78FRMWP | [***] | [***] | not in outlook | |||||||
REDLPNSARPED
|
Income Annuities | Compaq | DSDT | 6926CD641629 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSCOBAR
|
Ops Mgmt-HO | IBM | 26454EU | 6111DYSZM449 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSELTEL
|
Ret Svcs-Operations | Compaq | Deskpro | [***] | [***] | REDMOND-LIFE | ||||||||
REDLPNSHARE1
|
Ret Svcs-New Business | Compaq | Evo D500 | 78VFPC3 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSHEARI
|
Income Annuities | Compaq | Evo D510CMT | 6X19DYSZF10A | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSHEIHO
|
Income Annu-New Business | Compaq | DSDT | 6X19DYSZF10A | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSHIRBA
|
Ret Svcs-New Business | Compaq | Evo D500 | 6014CW4PA168 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSONDAV
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | W240KN8XA051 | [***] | [***] | not in outlook | |||||||
REDLPNSOPFON
|
Ret Svcs-Operations | Compaq | Deskpro | 6851BW85D181 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSTETRE
|
Internal Wholesalers | Compaq | Deskpro | [***] | [***] | not in outlook | ||||||||
REDLPNSTEVYA
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA122 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSUEYEA
|
Ret Svcs-Operations | Compaq | Deskpro | 6035DYSZQ539 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNSUSAVA
|
Ret Svcs-Operations | Compaq | Deskpro | 6048DYSZW765 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTARSTE
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6X1ADYSZ80JP | [***] | [***] | not in outlook | |||||||
REDLPNTHOLYO
|
Ret Svcs-Operations | Compaq | Deskpro | 6X19DYSZC0JX | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTIMCHA
|
Income Annu-Cust Care | Compaq | Deskpro EP/SB Series | 6005CJN4A011 | [***] | [***] | not in outlook | |||||||
REDLPNTMP733
|
Ret Svcs-New Business | Compaq | Deskpro | 6044DYSZE743 | [***] | [***] | not in outlook | |||||||
REDLPNTODSMA
|
Income Annu-Cust Care | Compaq | Evo D510 CMT | 6X25JYFZE043 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTOMBRO
|
Actu-Prod Dev-Ret Svcs | IBM | 26454EU | W240KN8XA013 | [***] | [***] | not in outlook | |||||||
REDLPNTRAHIR
|
Ret Svcs-New Business | Compaq | Deskpro | 78FNLZA | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTRIPOS
|
Ret Svcs-TSA | Compaq | Evo D510 CMT | 6928CD640263 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTROAXO
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA029 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTROAXO
|
Ret Svcs-Operations | Compaq | Deskpro | W240KN8XA008 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNTSA002
|
Ret Svcs-TSA | Compaq | DSDT | 6926CD640167 | [***] | [***] | not in outlook | |||||||
REDLPNVALGAR
|
Ret Svcs-New Business | Compaq | Evo D500 | 6840BW85J583 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNVALLEY
|
Ops Mgmt-HO | IBM | 264746U | W240KN8XA044 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNVASMON
|
Ret Svcs-Operations | Compaq | Deskpro | 6048DYSZW759 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
16
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDLPNVASMON
|
Ret Svcs-Operations | Compaq | Deskpro | 78P7CT3 | [***] | [***] | FENTON-SOUTH | |||||||
REDLPNWARWOO
|
Ops Mgmt-HO | Compaq | Evo D510 CMT | 78FNTKL | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNWILLAU
|
Ret Svcs-Operations | Compaq | Deskpro | 6051DYSZH653 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNYUKELL
|
Ret Svcs-TSA | Compaq | Deskpro | [***] | [***] | REDMOND-LIFE | ||||||||
REDLPNYUMKOJ
|
Ret Svcs-Operations | Compaq | Deskpro | 6112DYSZH289 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPNYVOPOR
|
Ret Svcs-Operations | Compaq | Deskpro EN Series | 78RKCF0 | [***] | [***] | REDMOND-LIFE | |||||||
REDLPXMIKMUR
|
Symetra Quality Assurance | Compaq | Evo D500 | 78FNTRP | [***] | [***] | REDMOND-LIFE | |||||||
REDLPXMIKMUR1
|
Symetra Quality Assurance | Compaq | DSDT | 6015CW4PA106 | [***] | [***] | not in outlook | |||||||
REDLRXBOBZO1
|
Core Systems & Services | Compaq | Evo D510 CMT | 6109DYSZQ987 | [***] | [***] | not in outlook | |||||||
REDLRXDAVHAX
|
Core Systems & Services | Compaq | Deskpro | 6112DYSZF321 | [***] | [***] | not in outlook | |||||||
REDLRXFRAPER
|
Core Systems & Services | Compaq | Deskpro | 6048DYSZA904 | [***] | [***] | REDMOND-LIFE | |||||||
REDLRXHELMZA
|
Core Systems & Services | Compaq | Deskpro | 6030DYSZN743 | [***] | [***] | REDMOND-LIFE | |||||||
REDLRXJONBIN
|
Core Systems & Services | Compaq | DSDT | W240KN8XA047 | [***] | [***] | REDMOND-LIFE | |||||||
REDLRXJUDFUN
|
Core Systems & Services | Compaq | Deskpro | W240KN8XA123 | [***] | [***] | REDMOND-LIFE | |||||||
REDLRXKASTAN
|
Core Systems & Services | IBM | 26474PU | 6X19DYSZF3SF | [***] | [***] | REDMOND-LIFE | |||||||
REDLRXKEVDEK
|
Sales & Marketing Systems | IBM | 26474AU | 78FRMWN | [***] | [***] | not in outlook | |||||||
REDLRXLAB-02
|
Core Systems & Services | Compaq | Deskpro | W240KN8XA003 | [***] | [***] | not in outlook | |||||||
REDLRXLILWOO1
|
Core Systems & Services | Compaq | Deskpro EP/SB Series | 6948CJN4K838 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLRXLINDHI
|
Core Systems & Services | Compaq | Deskpro | 6103DYSZB549 | [***] | [***] | REDMOND-LIFE | |||||||
REDLRXTENROB
|
Core Systems & Services | Compaq | Deskpro | W240KN8XA096 | [***] | [***] | not in outlook | |||||||
REDLSMMEGMCG
|
Symetra Marketing | Compaq | Deskpro | 6851BW85D169 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDBLMBRG
|
Actu-Prod Dev-Ret Svcs | Compaq | Deskpro EN Series | 6X22JYFZE0Z1 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLTDCLSB20
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6032DYSZA216 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB21
|
Individual-New Business-Issue | Compaq | Deskpro | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
REDLTDCLSB22
|
Individual-New Business-Issue | Compaq | Deskpro | 6048DYSZX255 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB23
|
Individual-New Business-Issue | Compaq | Deskpro | W240KN8XA061 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB24
|
Indiv-Admin-Accounting | Compaq | Deskpro | W240KN8XA125 | [***] | [***] | not in outlook | |||||||
REDLTDCLSB25
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6928CD640151 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB26
|
Income Annu-Cust Care | Compaq | Deskpro | 6945CJN4L006 | [***] | [***] | not in outlook | |||||||
REDLTDCLSB27
|
Income Annu-Cust Care | Compaq | Deskpro | 6048DYSZW764 | [***] | [***] | not in outlook | |||||||
REDLTDCLSB28
|
Income Annu-Cust Care | Compaq | Deskpro | W240KN8XA115 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB29
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6915CD64B151 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB30
|
Individual-New Business-Issue | Compaq | Deskpro | 78KZ2XA | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSB31
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6030DYSZN948 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDCLSBIN
|
Life Training-NW | Compaq | Deskpro | 6952CJN4K369 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLTDHELOJ1
|
Life Training-NW | SAFECO Insurance | W2K for Compaq Desktops v1.0 | 6011DT63E201 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLTDHELOJE
|
Life Training-NW | IBM | 26474AU | 6011DT63E197 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLTDLIBRY1
|
Individual-Policy Service-HO | Compaq | Deskpro | 6949CJN4N792 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDLTDLIBRY2
|
Sales Center-Call Center | Compaq | Deskpro | 6112DYSZZ741 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLIBRY3
|
Individual-Claims | Compaq | Deskpro | 6849BW85A119 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLIBRY4
|
Individual Client Svc & Claims | Compaq | Deskpro | 6902BW85A615 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINA01
|
Life Training-NW | Compaq | Deskpro | 6046DYSZC712 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB01
|
Individual-New Business-Issue | Compaq | Deskpro | 6846BZL2A076 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB20
|
Individual-New Business-Issue | Compaq | Deskpro | 6030DYSZN799 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB21
|
Indiv-Issue | Compaq | Deskpro | 6X1ADYSZ80DB | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB22
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6048DYSZW764 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB24
|
Individual-New Business-Issue | Compaq | Deskpro | 6043dysza163 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB26
|
Individual-New Business-Issue | Compaq | Deskpro | 99G6LBP | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB28
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6048DYSZW772 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDLINB31
|
Indiv-Admin-Accounting | Compaq | Deskpro | 6108DYSZJ958 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDMARBAU
|
Life Training-NW | Compaq | Deskpro | W240KN8XA118 | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDSARGRI
|
Life Training-NW | Compaq | Deskpro | 787BTNW | [***] | [***] | REDMOND-LIFE | |||||||
REDLTDTAMKEE
|
Life Training-NW | IBM | 26474MU | 6X19DYSZF0LE | [***] | [***] | REDMOND-LIFE | |||||||
REDMEDCARBIS
|
Medical | Compaq | Deskpro | 6110DYSZQ526 | [***] | [***] | REDMOND-LIFE | |||||||
REDMEDCRASCH
|
Medical | Compaq | Evo D510 CMT | 6033DYSZK000 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMEDMADUNN
|
Medical | Compaq | DSDT | 6X19DYSZF3S9 | [***] | [***] | REDMOND-LIFE | |||||||
REDMEDREBSCH
|
Medical | Compaq | Evo D510 CMT | 78FRKLM | [***] | [***] | REDMOND-LIFE | |||||||
REDMFBRIDBU1
|
SIS Sales | IBM | 26474AU | 6X21JYFZT169 | [***] | [***] | REDMOND-LIFE | |||||||
REDMFCGRECLA
|
Multi-Line Distribution | IBM | 26474EU | 78FRLNM | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMFCJIMJAC
|
BD Sales-West-HO | IBM | 26474PU | 6950CJN4N220 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMFCMICHAE
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6051DYSZH753 | [***] | [***] | REDMOND-LIFE | |||||||
REDMFCREBCRI
|
Multi-Line Marketing | IBM | 264746U | 6930CD640006 | [***] | [***] | REDMOND-LIFE | |||||||
REDMFCSTEMAN
|
BD — Admin | IBM | 26474PU | 6930CD640142 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
17
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDMFCWILLBR
|
BD Sales-East-Hrt | IBM | 264746U | 6930CD640090 | [***] | [***] | REDMOND-LIFE | |||||||
REDMKTANDCAS
|
Annuities Marketing | Compaq | Evo D510 CMT | 78VFTT2 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMKTJOEMCK
|
Grp Dist-Mkt/Sls-Sales-Sea | IBM | 26474PU | USW33300HF | [***] | [***] | REDMOND-LIFE | |||||||
REDMORALIEST
|
Mortgage Loan | Compaq | Deskpro | 6X1ADYSZ80J0 | [***] | [***] | REDMOND-LIFE | |||||||
REDMORBILHIG
|
Mortgage Loan | Compaq | Deskpro EP/SB Series | 6949CJN4N814 | [***] | [***] | not in outlook | |||||||
REDMORCINBAN
|
Mortgage Loan | Compaq | Deskpro | 6112DYSZG578 | [***] | [***] | REDMOND-LIFE | |||||||
REDMORDIADIC
|
Mortgage Loan | Compaq | Deskpro EP/SB Series | 6912CD64A180 | [***] | [***] | REDMOND-LIFE | |||||||
REDMORJOAMAI
|
Mortgage Loan | Compaq | Deskpro | 6015CW4PA173 | [***] | [***] | REDMOND-LIFE | |||||||
REDMORMJOHNS
|
Mortgage Loan | Compaq | Deskpro EP/SB Series | 6924CD64A732 | [***] | [***] | REDMOND-LIFE | |||||||
REDMORRICMAN
|
Mortgage Loan | Compaq | Deskpro EP/SB Series | W240KN8XA084 | [***] | [***] | REDMOND-LIFE | |||||||
REDMUTACCTEST
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6852BW85B540 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTALLLAB
|
Mut Funds-Controllers-HO | Compaq | Deskpro | X040DYSZA596 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTAMYARM
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6848BW85B776 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTANNMAN
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6105DYSZH764 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTAPRCRA
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6846BW85B011 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTBENLYX
|
Transfer Agent Admin | Compaq | Deskpro | 6847BW85D659 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTBENROP
|
Mut Funds-Controllers-HO | Compaq | Deskpro EP/SB Series | 6949CJN4N487 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTBONLUN
|
Mut Funds-Gen Mgmt | Compaq | Deskpro | 6906BW85B301 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTBOYACK
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6044DYSZE628 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTCARZAP
|
Mut Funds-Gen Mgmt | Compaq | Deskpro | 6849BW85A115 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTCHUNNG
|
Sales & Marketing Systems | Compaq | DSDT | 6X1ADYSZ80B1 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDABAL3
|
Core Systems & Services | Compaq | Deskpro | 6847BW85D635 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDABALL
|
Core Systems & Services | IBM | 26474AU | 78FNTBT | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDAVEVA
|
Mut Funds-Controllers-HO | IBM | 26454EG | 557H06Y | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDAVLON
|
Mut Funds-Controllers-HO | IBM | 26474PU | 78KZ8WR | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDEBDAW
|
Sales & Marketing Systems | IBM | 26474AU | 78FNVCC | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDELALB
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6126DYSZA012 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTDENEAR
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6105DYSZJ355 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTFREUEC
|
Market Dev-Mut Funds | Compaq | Deskpro | 6848BW85G314 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTGRETJ1
|
Transfer Agent Admin | Compaq | Evo D510 CMT | W239KN8XA043 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTGRETJ1
|
Transfer Agent Admin | Compaq | Evo D510 CMT | W239KN8XA043 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTJEFSKI
|
Life Agy-Appointments | Compaq | Deskpro | 6847BW85D422 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTJENSOM1
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6125DYSZG408 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTJOEBOW
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6X19DYSZC07B | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTJOHHAA
|
Mut Funds-Controllers-HO | IBM | 26474AU | 78FNPZZ | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTJUDJHA
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6043DYSZB832 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTKATSTA
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6847BW85A573 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTKELFI1
|
Transfer Agent Admin | Compaq | Evo D510 CMT | W239KN8XA042 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTKIOSK2
|
Life Claims-NW | Compaq | Deskpro | 6911BW85A455 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTKYLFUL
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6105DYSZJ371 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTLINGOS
|
Market Dev-Mut Funds | IBM | 264746U | 78KBNT0 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTLINKNI
|
Core Systems & Services | IBM | 264746U | 78CWRP3 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTLINMAH
|
Mutual Funds — Intermed Svc | IBM | 264746U | 78KFNP4 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTLISSUH
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6847BW85D692 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTLORME1
|
Market Dev-Mut Funds | IBM | 26474AU | 78RKGP0 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTMAMON1
|
Transfer Agent Admin | Compaq | Evo D510 CMT | W239KN8XA044 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTMERABE
|
Mutual Funds — Intermed Svc | IBM | 26474AU | 78FNRPB | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTMICZHA
|
Mut Funds-Controllers-HO | Compaq | DSDT | 6X1ADYSZ807G | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTMIWHIT
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6847BW85C831 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTPINGON
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6847BW85D701 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTPRICING
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6847BW85D624 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTPRICING1
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6847BW85A558 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTRUSKOS
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6044DYSZQ734 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSCOOSW
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6126 dysz a019 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSHARED
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6105DYSZH698 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSHELW1
|
Transfer Agent Admin | Compaq | Evo D510 CMT | W239KN8XA041 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSTHAND
|
Mut Funds-Controllers-HO | Compaq | Deskpro EP/SB Series | 6014CW4PA440 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSUCORT
|
Market Dev-Mut Funds | IBM | 26476U8 | W240KN8XA020 | [***] | [***] | REDMOND-LIFE | |||||||
REDMUTSUSSIM
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6040DYSZG683 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSUSWID
|
Core Systems & Services | IBM | 26474AU | 78FNTCD | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTSUZCRO
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6840BW85L516 | [***] | [***] | REDMOND-RAINIER BLDG |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
18
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDMUTTEST02
|
Core Systems & Services | Compaq | Deskpro | 6847BW85C838 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTTEST05
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6926CD641681 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTTHAHOA
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6920CD64E780 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTTHEKEL
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6850BW85B719 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDMUTWILLAU
|
Mut Funds-Controllers-HO | Compaq | Deskpro | 6950CJN4K605 | [***] | [***] | REDMOND-LIFE | |||||||
REDNSDCHRFOX
|
Group Systems | IBM | 26474AU | 78VGBB6 | [***] | [***] | REDMOND-SHASTA BLDG | |||||||
REDNSDNOC1
|
Sales & Marketing Systems | Compaq | Deskpro | 6107DYSZD526 | [***] | [***] | REDMOND-LIFE | |||||||
REDPSSEXEC04
|
Agy Svcs-Ins Compliance | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETANJPHI
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETCARBEL
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETCHRDOW
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETDIACHR
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETFELLEU
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETJEFBAI
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETJESWOO
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETJPEEDE
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETKATHAS
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETKONMCC
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETLOUSIC
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETLYDGUE
|
Ret Svcs-IRA/Non-Qual | Compaq | Deskpro | 6930CD640174 | [***] | [***] | REDMOND-LIFE | |||||||
REDRETMAGCAS
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETMARPOR
|
Ret Svcs-Corporate | Compaq | Deskpro | 6851BW85C971 | [***] | [***] | REDMOND-LIFE | |||||||
REDRETOLIKIL
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDRETROBFOL
|
Ops Mgmt-HO | IBM | 26474AU | 78VFWD6 | [***] | [***] | REDMOND-LIFE | |||||||
REDRETSANFLY
|
Ret Svcs-Corporate | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDSAMADREDW
|
Group Marketing | Compaq | Evo D510 CMT | W240KN8XA036 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMADRWEA
|
Market Development | Compaq | Evo D510 CMT | W240KN8XA049 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMALLYCL
|
Symetra Marketing | IBM | 26474PU | 78KZ9PA | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMBRERAN
|
Multiline-Seattle Sls-NW-Spo | IBM | 264746U | 78KBVP8 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMBROTIF1
|
Annuities Marketing | IBM | 264746U | 78KFZH0 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMCARDRE
|
Marketing-Administration | Compaq | Evo D510 CMT | W240KN8XA026 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMCHAWEB
|
Sales & Marketing Systems | IBM | 26474PU | 78KZ7PV | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMCRARAH
|
Marketing-Administration | Compaq | Deskpro | 6109DYSZR010 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMDANGAR
|
Market Development | Compaq | Deskpro EN Series | 6926CD641732 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMDEBEAT
|
General Management — Life | Compaq | Deskpro | 6918CD64C955 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMDENLYO
|
Emp Sponsored Prgms Mktg | Compaq | Deskpro EP/SB Series | 6004CJN4K067 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMDIAOTH
|
Income Annuities Marketing | Compaq | Deskpro | 6846BW85A789 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMEARGRO
|
Distribution Management | IBM | 26454EU | W240KN8XA111 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMEARGRO
|
Distribution Management | IBM | 26454EU | 78AAMGY | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMERIRYA
|
Marketing-Administration | Compaq | Deskpro | 6X19DYSZF0VW | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMJEMILL
|
Market Development | Compaq | Deskpro | 6112DYSZ1531 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMJIMSAN
|
BD — Admin | IBM | 26476U8 | 787BTPN | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMJOHNDE
|
Market Development | Compaq | DSDT | [***] | [***] | REDMOND-LIFE | ||||||||
REDSAMJOHRO1
|
BD — Admin | IBM | 26476U8 | 787BTPR | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMJULKNI
|
Market Development | IBM | TP-T21___ | [***] | [***] | REDMOND-LIFE | ||||||||
REDSAMKARMUN
|
Marketing Services | Compaq | Deskpro | 6910BW85G299 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKARSUS
|
Sales Center | Compaq | Evo D510 CMT | W240KN8XA131 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKATRIL
|
Marketing Services | Compaq | Deskpro | 6848BW85C389 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKATTYO
|
Marketing Services | Compaq | Evo D510 CMT | W240KN8XA002 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKEVWIL
|
Marketing Services | Compaq | Evo D510 CMT | W240KN8XA031 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKIMBNE
|
Group Marketing | Compaq | Evo D510 CMT | 6928CD640243 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKIMQUI
|
Marketing-Administration | Compaq | Evo D510 CMT | W238KN8XA212 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKIMWAL
|
Marketing-Administration | Compaq | Evo D510 CMT | W243KN8XA007 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMKRILEA
|
Marketing-Administration | IBM | 26474AU | 78FKWZK | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMLAUCHA
|
Marketing-Administration | Compaq | Deskpro | 6129DYSZA513 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMLERBRA
|
Marketing Services | IBM | 26474AU | 78FNTBK | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMLISLEE
|
Market Dev-Mut Funds | Compaq | DSDT | 6048DYSZW764 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMLIZWIL
|
Market Development | IBM | 26458PU | 78WHBT3 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMMAROLS
|
Market Development | IBM | 26454EU | 78TAFN3 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMMATHOU
|
Life Insurance Marketing | IBM | 26454EU | 78TDKK4 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMPHIWIN
|
Symetra Marketing | IBM | 264746U | 78CWTZ1 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMROBWAC
|
Life Insurance Marketing | Compaq | Evo D510 CMT | W240KN8XA034 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMSARBAL
|
Marketing-Administration | Compaq | EVO | W232JYFXA002 | [***] | [***] | REDMOND-LIFE |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
19
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
REDSAMSHRICK
|
Marketing Services | Compaq | Evo D510 CMT | W304KN8XA009 | [***] | [***] | REDMOND-LIFE | |||||||
REDSAMSTEPJO
|
Market Development | Compaq | Deskpro | 6923CD64B067 | [***] | [***] | REDMOND-LIFE | |||||||
REDSISALAWYN
|
SIS Operations | Compaq | DSDT | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
REDSISANDHOW
|
SIS Sales | IBM | 26474PU | 78KZ4RP | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISBONUS1
|
Core Systems & Services | Compaq | Deskpro | 6847BW85A557 | [***] | [***] | REDMOND-LIFE | |||||||
REDSISBRSTAS
|
SIS Sales | Compaq | Deskpro | 6910BW85A787 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISCHEWOO
|
SIS-Compliance | Compaq | Deskpro | 6911BW85A651 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISDAVACH
|
SIS Sales | IBM | 26474PU | 78KZ4MH | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISDAVICA
|
SIS Sales | Compaq | Deskpro | 6911BW85A459 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISDERICC
|
SIS Operations | Compaq | Deskpro | 6926cd640117 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISJENPRO
|
SIS-Compliance | Compaq | Deskpro | 6949CJN4M399 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISJESTO1
|
SIS-Compliance | Compaq | Deskpro | 6934CD640174 | [***] | [***] | REDMOND-LIFE | |||||||
REDSISJOASAL
|
SIS Operations | Compaq | Deskpro | 6105DYSZA435 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISKRINOR
|
SIS-Compliance | Compaq | Deskpro | 6924CD64A586 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISLEEGLE
|
SIS Operations | Compaq | Deskpro | 6911BW85A554 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISLUCMIL
|
SIS Operations | Compaq | Deskpro | 6948CJN4K851 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISMELLIS
|
SIS Operations | Compaq | Deskpro | 6847BW85C717 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISMELSEG
|
SIS Operations | Compaq | Deskpro | 6847BW85D451 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISMONAEL
|
SIS Sales | IBM | 26474PU | 78KZ4PR | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISNEDSHA
|
SIS Operations | IBM | 26474MU | W240KN8XA126 | [***] | [***] | REDMOND-LIFE | |||||||
REDSISNOEYIM
|
SIS-Compliance | Compaq | Deskpro | 6847BW85D757 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISPCTEST
|
Sales & Marketing Systems | Compaq | Deskpro | 6043DYSZA203 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISROYTIB
|
SIS Sales | Compaq | Deskpro | 6847BW85D704 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISSARYAT
|
SIS Operations | Compaq | Deskpro EP/SB Series | 6945CJN4K412 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISSCANPC
|
SIS Operations | Compaq | Deskpro | 6847BW85C722 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSISTEMP02
|
SIS Operations | Compaq | Deskpro | 6927CD640447 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDSRVCRCOHO
|
Life Training-NW | Compaq | Deskpro | 6105DYSZD402 | [***] | [***] | REDMOND-LIFE | |||||||
REDSUNSTUD09
|
Marketing-Administration | Compaq | Deskpro | 6931CD640307 | [***] | [***] | REDMOND-LIFE | |||||||
REDSUNSTUD12
|
Human Resources | Compaq | Compaq Deskpro | 6122DYSZH018 | [***] | [***] | REDMOND-LIFE | |||||||
REDSYSPAMWEB
|
Sales & Marketing Systems | Compaq | Deskpro | 6926CD640333 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
REDTNDCONLEE
|
Life Training-NW | Compaq | Deskpro | 6042DYSZB567 | [***] | [***] | REDMOND-LIFE | |||||||
REDTNDFABLOK
|
Life Training-NW | Compaq | Deskpro EP/SB Series | 6014CW4PA382 | [***] | [***] | REDMOND-LIFE | |||||||
REDVANJENKNA
|
Retirement Services Systems | Compaq | DSDT | 6X1ADYSZ808F | [***] | [***] | REDMOND-LIFE | |||||||
REDVANWILCHO
|
Retirement Services Systems | Compaq | DSDT | 6X1ADYSZ80A9 | [***] | [***] | REDMOND-LIFE | |||||||
REDWINRISK01
|
Individual Systems | Compaq | Deskpro | 6906BW85F149 | [***] | [***] | REDMOND-LIFE | |||||||
RMIA703388
|
Policy Issue/Compliance | IBM | 627550U | 5576M6B | [***] | [***] | not in outlook | |||||||
SPOLIFRBYERS
|
Sales & Marketing Systems | IBM | 26474AU | 78FNVBP | [***] | [***] | SPOKANE | |||||||
SWRLGRALIGOR
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6946CJN4L975 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRANNBOL
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro EP/SB Series | 6949CJN4M848 | [***] | [***] | not in outlook | |||||||
SWRLGRBOBCAM
|
Group Sales-NE-Boston | IBM | 26474AU | 78FNRVG | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRCHRGAL
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6946CJN4K834 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRDACONN
|
Group-Underwriting-Hrt | IBM | 26474AU | 78FNPMB | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRENIGIA
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63E179 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRFRACAR
|
Group-Underwriting-Hrt | IBM | 26474AU | 78FNPVZ | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRJANZIS
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6014DFXBA339 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRJESILV
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63E871 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRJESSYM
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro | 6849BW85B169 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRJOESHA
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63F096 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRKARPIN
|
Group-Underwriting-Hrt | Compaq | Deskpro | 6051DYSZJ506 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRKERROB
|
Group Sales-NE-Boston | Compaq | Deskpro EP/SB Series | 6946CJN4L296 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRKRIANT
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63E171 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRLORICH
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6946CJN4K813 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRMACHRI
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro EP/SB Series | 6946CJN4L602 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRMARNOW
|
Group-Underwriting-Hrt | Compaq | Deskpro | 6050DYSZG140 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRMICSAB
|
Group-Underwriting-Hrt | Compaq | Deskpro | 6050DYSZG127 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRMICTHE
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63E251 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRNANCSA
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6941CJN4L536 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRPAULEC
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63E261 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRREBKRA
|
Group Sales-NE-Boston | Compaq | Deskpro | 6109DYSZT159 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRRICBAL
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6946CJN4K828 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRSANHUN
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro EP/SB Series | 6946CJN4L892 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRSCHED1
|
Group Systems | Compaq | Deskpro | 6849BW85B163 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRSTEPHI
|
Group-Underwriting-Hrt | Compaq | Deskpro | 6846BW85A526 | [***] | [***] | SOUTH WINDSOR |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
20
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
SWRLGRSTJOHN
|
Group-Pol & UW Svcs-Hrt | Compaq | Deskpro | 6043DYSZA998 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRSUSPEE
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6011DT63E226 | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRVANSH2
|
Group Systems | IBM | 26476U8 | 787BVDW | [***] | [***] | SOUTH WINDSOR | |||||||
SWRLGRWILDAL
|
Group-Underwriting-Hrt | Compaq | Deskpro EP/SB Series | 6948CJN4N503 | [***] | [***] | SOUTH WINDSOR | |||||||
WILLGRACHMED
|
Group-Management | IBM | 26454EU | 78HLAV3 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRANNACK
|
Group Systems | Compaq | Deskpro | 6915CD64A492 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRANNVER
|
Group-Pol & UW Svcs | Compaq | Deskpro EP/SB Series | 6944CJN4K488 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRANUFER
|
Actu-Prod Dev-Group | Compaq | Deskpro | 6X19DYSZF0YA | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRAPROBR
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6944CJN4K585 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRBARHUG
|
Life Claims-NW | Compaq | Deskpro EP/SB Series | 6949CJN4M328 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRBARKEL
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6944CJN4K512 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRBETHUD
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6949CJN4N327 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRBETPAL
|
Group-Accounting Services | Compaq | Deskpro | 6851BW85C638 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRBILCLE
|
Group-Accounting Services | IBM | 26474AU | 78XBCZ3 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRBRUMEY
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K678 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRCANGIR
|
Policy Issue/Compliance | Compaq | Deskpro | 6853BW85B077 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRCARBUR
|
Actu-Prod Dev-Group | IBM | 26474PU | 78MH7F7 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRCARCIE
|
Group-Underwriting | Compaq | Deskpro EP/SB Series | 6011DT63G203 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRCLAHEA
|
Actu-Prod Dev-Group | Compaq | Deskpro | 6X19DYSZF0NN | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRCONKWO
|
Policy Issue/Compliance | Compaq | Deskpro | 6915CD64A406 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDALBIS
|
Group-Underwriting | Compaq | Deskpro | 6915CD64B448 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDANPRA
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K501 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDANSHI
|
Group-Underwriting | Compaq | Deskpro | 6848BW85B801 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDAVBAS
|
Group-Underwriting | Compaq | Deskpro | 6927CD640166 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDAWATK
|
Group Systems | Compaq | Deskpro | 6X19DYSZF14B | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDEASTI
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6949CJN4N489 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDEBABE
|
Group-Underwriting | Compaq | Deskpro | 6851BW85B929 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDEBBUC
|
Group Distribution | IBM | 264746U | 78KBKW3 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDEBOWA
|
Case Management-Rainier | Compaq | DSDT | 6X1ADYSZ80HF | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDEBTRO
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6941CJN4L394 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDENWAR
|
Group-Underwriting | Compaq | Deskpro EP/SB Series | 6945CJN4M615 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDIAHOR
|
Life Claims-NW | Compaq | Deskpro | 6915CD64C523 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDIAREE
|
Life Claims-NW | Compaq | Deskpro | 6915CD64C335 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDIARHU
|
Case Management-Rainier | Compaq | Deskpro | 6915CD64A569 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRDIMILL
|
Group-Accounting Services | Compaq | Deskpro | 6851BW85C634 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRFILMAR
|
Group-Admin | Compaq | Deskpro | 6847BW85C669 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRGAISAN
|
Group-Underwriting | IBM | 264746U | 78KBKR5 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRGAYSTI
|
Case Management-Rainier | COMPAQ | DSDT | [***] | [***] | REDMOND-RAINIER BLDG | ||||||||
WILLGRGINADA
|
Group-Management | Compaq | Deskpro EP/SB Series | 6938CJN40493 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRGRACFU
|
Group-Underwriting | Compaq | Deskpro | 6906BW85C066 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRGREPRE
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6949CJN4M237 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRHALCAR
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6915CD64C673 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRHEAMCC
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6915CD64C716 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRHELECO
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6915CD64C607 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJACOLD
|
Actu-Prod Dev-Group | Compaq | Deskpro | 6X19DYSZC03X | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJACPAI
|
Life Claims-NW | Compaq | Deskpro | 6915CD64C273 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJANNSC
|
Group-Audit | IBM | 26474AU | 78VGBH0 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJANPUR
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K679 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJAYYAN
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6X19DYSZF0ZZ | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJEFBAT
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6949CJN4N195 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJEFFIN
|
Group-Audit | IBM | 26474AU | 78FNPKN | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJEFSCA
|
Group-Underwriting | Compaq | Deskpro | 6848BW85D965 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJENEHA
|
Case Management-Rainier | IBM | 26474EU | 78Z2T58 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJESSBA
|
Life Claims-NW | Compaq | Deskpro | 6915CD64B454 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJILMCC
|
Actu-Prod Dev-Group | Compaq | Deskpro | 6X19DYSZF0VS | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJOAKLI
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6015CW4PA210 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJOANHA
|
Group-Accounting Services | Compaq | Deskpro | 6851BW85B930 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJOEWYR
|
Group-Management | IBM | 26474AU | 78FNTPL | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJOHRHU
|
Life Claims-NW | Compaq | Deskpro EP/SB Series | 6015CW4PA212 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJOYJUZ
|
Clms-Group Life WC-Rainier | Compaq | Deskpro EP/SB Series | 6941CJN4K835 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJUDYHA
|
Group-Financial Reporting | Compaq | Deskpro EP/SB Series | 6949CJN4N493 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRJULSIE
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6949CJN4M158 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRKARSAQ
|
Group-Underwriting | Compaq | Deskpro | 6914CD64A822 | [***] | [***] | REDMOND-RAINIER BLDG |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
21
Table of Contents
C.1 - Distributed Computing Hardware
Laptops &Desktops Inventory
Laptops &Desktops Inventory
| Office / Branch | ||||||||||||||
| Location (computer | Business | MFG Model (Name / | Comments | Comments | Comments | |||||||||
| name) | (department name) | MFG Make | Number) | (serial number) | (user name) | (user ID) | Office/City | |||||||
WILLGRKATCOU
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6005CJN4A091 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRKENLAC
|
Group-Underwriting | Compaq | Deskpro EP/SB Series | 6949CJN4N501 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRLILWIL
|
Case Management-Rainier | Compaq | Deskpro | 6915CD64A913 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRLISFOL
|
Life Claims-NW | Compaq | Deskpro EP/SB Series | 6941CJN4K711 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRLOBLAC
|
Group-Pol & UW Svcs | Compaq | Deskpro EP/SB Series | 6950CJN4K557 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRLORTHO
|
Group-Audit | IBM | 26474AU | 78FNTWV | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRLOUMEN
|
Actu-Prod Dev-Group | Compaq | Deskpro | 6X19DYSZF0RD | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMARBAC
|
Group-Pol & UW Svcs | Compaq | Deskpro EP/SB Series | 6944CJN4K487 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMARCWR
|
Operations Management | IBM | 26474AU | 78FNTLY | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMARFAY
|
Group-Financial Reporting | Compaq | Deskpro EP/SB Series | 6949CJN4N483 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMARLUC
|
Group-Admin | Compaq | Deskpro | 6853BW85A986 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMARSHI
|
Group-Pol & UW Svcs | Compaq | Deskpro EP/SB Series | 6950CJN4L094 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMEIWON
|
Group-Admin | Compaq | Deskpro | 6851BW85B747 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMELSMI
|
Group-Operations | Compaq | Deskpro | 6851BW85B755 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRMINDHA
|
Group-Accounting Services | Compaq | Deskpro | 6915CD64A474 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRNANTAY
|
Life Claims-NW | Compaq | Deskpro | 6915CD64A477 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRNICHWA
|
Group-Pol & UW Svcs | Compaq | Deskpro EP/SB Series | 6949CJN4M478 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRPAMALL
|
Group-Pol & UW Svcs | IBM | 264746U | 78KBVT4 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRPAUDOW
|
Clms-Group Life WC-Rainier | Compaq | Deskpro EP/SB Series | 6941CJN4L557 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRPHILBE
|
Group-Underwriting | Compaq | Deskpro | 6915CD64C331 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRRAEOKE
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6944CJN4K507 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRRAYBYR
|
Clms-Group Life WC-Rainier | Compaq | Deskpro EP/SB Series | 6949CJN4L148 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRROBKIL
|
Actu-Prod Dev-Group | Compaq | Evo D500 | 6X24JYFZ8061 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRROGEYU
|
Group-Accounting Services | Compaq | Deskpro EP/SB Series | 6949CJN4L864 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRRUTHOL
|
Clms-Group Life WC-Rainier | Compaq | Deskpro EN Series | 6915CD64A619 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRRUYBAR
|
Group-Financial Reporting | Compaq | Deskpro | 6125DYSZG433 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRSCOTAY
|
Group-Management | IBM | 26474AU | 78FNTWP | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRSHACAV
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6915CD64C677 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRSHARED
|
Life Claims-NW | Compaq | Deskpro | 6915cd64a484 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRSUSAMA
|
Group-Pol & UW Svcs | Compaq | Deskpro | 6915CD64A621 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRSUSGOE
|
Group Systems | Compaq | Deskpro EN Series | 6915CD64C639 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRSUSTHO
|
Case Management-Rainier | Compaq | Deskpro EP/SB Series | 6949CJN4N409 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRTESMAT
|
Group-Accounting Services | Compaq | Deskpro | 6848BW85B772 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRTHOSER
|
Policy Issue/Compliance | Compaq | Deskpro EP/SB Series | 6949CJN4N442 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRTRABAG
|
Clms-Group Life WC-Rainier | Compaq | Deskpro EN Series | 6915CD64C757 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRUSHCHO
|
Clms-Group Life WC-Rainier | Compaq | Deskpro EP/SB Series | 6011DT63G163 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGRVANELL
|
Group-Accounting Services | Compaq | Deskpro | 6915CD64A479 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGX24X7PC
|
Group Systems | Compaq | Deskpro EP/SB Series | 6945CJN4M645 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXBRIATK
|
Income Annuities Systems | Compaq | Deskpro | 6X19DYSZF3SR | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXDARAND
|
Group Systems | Compaq | Deskpro | 6X19DYSZC06A | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXDAVMCC
|
Group Systems | IBM | 26474AU | 78FNTLG | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXDERNEP
|
Symetra Quality Assurance | Compaq | Deskpro | 6847BW85E494 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXJIMKUD
|
Group Systems | Compaq | Deskpro | 6X19DYSZC0BM | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXJOEBRI
|
Group Systems | Compaq | Deskpro | 6X19DYSZL2ZD | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXMIKETH
|
Group Systems | Compaq | Deskpro | 6851BW85B748 | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILLGXWILLHA
|
Group Systems | Compaq | Deskpro | 6X18DYSZX02R | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILMUTFRASUY
|
Sales & Marketing Systems | IBM | 26474AU | 78FNPVB | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILMUTLINKNI
|
Core Systems & Services | Compaq | DSDT | 6X1ADYSZ80AB | [***] | [***] | REDMOND-RAINIER BLDG | |||||||
WILMUTSCAN01
|
Mut Funds-Acct Svcs-HO | Compaq | Deskpro EN Series | 6926CD641665 | [***] | [***] | REDMOND-RAINIER BLDG |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
| Confidential Information — For internal use only | Laptop & Desktop Inventory |
22
Table of Contents
C.1 - Distributed Computing Hardware
Excess PC Inventory
Excess PC Inventory
| assetSerialNumber | assetType | assetMake | assetModel | assetMonitorSize | assetLI | assetStatus | ||||||||||||
632CB02EA057 |
Monitor | Compaq | V70 | 17 | Yes | Available | ||||||||||||
6918CD64H842 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6851BW85B969 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6851BW85C199 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6851BW85C292 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6851BW85D179 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6907BW85A919 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6907BW85C966 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6907BW85D045 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6910BW85A929 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6910BW85G351 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6911BW85A673 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6918CD64A716 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6928CD640146 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6949CJN4N828 |
Desktop PC | Compaq | 500 | 0 | Yes | Available to Symetra | ||||||||||||
6918CD64D568 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6918CD64D841 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6927CD642385 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6926CD640910 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6923CD64B049 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6922CD64A127 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6918CD64J058 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6850BW85B387 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6012DT63D552 |
Desktop PC | Compaq | 500 | 0 | Yes | Available to Symetra | ||||||||||||
6851BW85B666 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6105DYSZH784 |
Desktop PC | Compaq | 733 | 0 | Yes | Available to Symetra | ||||||||||||
Confidential Information — Form internal use only.
23
Table of Contents
C.1 - Distributed Computing Hardware
Excess PC Inventory
Excess PC Inventory
| assetSerialNumber | assetType | assetMake | assetModel | assetMonitorSize | assetLI | assetStatus | ||||||||||||
6032DYSZA278 |
Desktop PC | Compaq | 733 | 0 | Yes | Available to Symetra | ||||||||||||
6840BW85K278 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6840BZL2K909 |
Desktop PC | Compaq | 400 | 0 | Yes | Available to Symetra | ||||||||||||
6010DT63A023 |
Desktop PC | Compaq | 500 | 0 | Yes | Available to Symetra | ||||||||||||
6847BW85D875 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6850BW85A977 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6848BW85F660 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6848BW85E752 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6848BW85E522 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6848BW85B874 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6847BW85D703 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6847BW85D691 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6847BW85C678 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6846BW85A435 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6840CD64L314 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6848BW85D631 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
l |
Desktop PC | Compaq | 1 | 0 | Yes | Available to Symetra | ||||||||||||
6929CD640444 |
Desktop PC | Compaq | 450 | 0 | Yes | Available to Symetra | ||||||||||||
6918BW85E315 |
Desktop PC | Compaq | 350 | 0 | Yes | Available to Symetra | ||||||||||||
6949CJN4N439 |
Desktop PC | Compaq | 500 | 0 | Yes | Available to Symetra | ||||||||||||
01-39974 |
LAN Printer | IBM | Network Printer 17 | 0 | Yes | Available to Symetra | ||||||||||||
78-FNPTA |
Laptop | IBM | T21 Thinkpad | 0 | Yes | Available to Symetra | ||||||||||||
929CF03TB528 |
Monitor | Compaq | V700 | 17 | Yes | Available to Symetra | ||||||||||||
930CF03TB113 |
Monitor | Compaq | V700 | 17 | Yes | Available to Symetra | ||||||||||||
652CB02EB088 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||||
650CB03EA486 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||||
Confidential Information — Form internal use only.
24
Table of Contents
C.1 - Distributed Computing Hardware
Excess PC Inventory
Excess PC Inventory
| assetSerialNumber | assetType | assetMake | assetModel | assetMonitorSize | assetLI | assetStatus | ||||||||||
634CB02EC199 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
821CF03DB444 |
Monitor | Compaq | V75 | 17 | Yes | Available to Symetra | ||||||||||
33482035 |
Monitor | Nanao | F2-17EX | 17 | Yes | Available to Symetra | ||||||||||
646CB03EC295 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
729CB03ED013 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
738CB03EE687 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
736CB03EG930 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
736CB03EG483 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
736CB03EG475 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
729CB03ED109 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
B4191113-USM |
Monitor | Nanao | F2-17EX | 17 | Yes | Available to Symetra | ||||||||||
726CB03EC645 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
721CB03EA458 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
713CB03EF664 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
6Z17042LA |
Monitor | NEC | FE750 | 17 | Yes | Available to Symetra | ||||||||||
729CB03ED958 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
850CF03DC441 |
Monitor | Compaq | V75 | 17 | Yes | Available to Symetra | ||||||||||
743GB02AC190 |
Monitor | Compaq | V75 | 17 | Yes | Available to Symetra | ||||||||||
8003156 |
Monitor | 17 | Yes | Available to Symetra | ||||||||||||
745CB03EN195 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
745CB03EF591 |
Monitor | Compaq | V70 | 17 | Yes | Available to Symetra | ||||||||||
8137383 |
Monitor | 0 | Yes | Available to Symetra | ||||||||||||
6902BZL2A122 |
Desktop PC | Compaq | 400 | 0 | Yes | Retroxboxed | ||||||||||
78RVTA5 |
Laptop PC | IBM | 600X Thinkpad | 0 | Yes | Retroxboxed | ||||||||||
6947BW85A063 |
Desktop PC | Compaq | 350 | 0 | Yes | Unknown | ||||||||||
6934CD640174 |
Desktop PC | Compaq | 450 | 0 | Yes | Unknown | ||||||||||
6004CJN4K070 |
Desktop PC | Compaq | 500 | 0 | Yes | Unknown | ||||||||||
6851BW85A752 |
Desktop PC | Compaq | 350 | 0 | Yes | Unknown | ||||||||||
6847BW85C681 |
Desktop PC | Compaq | 350 | 0 | Yes | Unknown | ||||||||||
Confidential Information — Form internal use only.
25
Table of Contents
C.1 — Distributed Computing Hardware
Excess PC Inventory
Excess PC Inventory
| assetSerialNumber | assetType | assetMake | assetModel | assetMonitorSize | assetLI | assetStatus | ||||||||||
Type 2647-46U S/N
78-KBZH1 09/00 |
Laptop PC | IBM | T20 Thinkpad | 0 | Yes | Unknown | ||||||||||
934CF03TA903 |
Monitor | Compaq | V700 | 17 | Yes | Unknown | ||||||||||
847cf03dc601 |
Monitor | Compaq | V70 | 17 | Yes | Unknown | ||||||||||
743BG02AC190 |
Monitor | Compaq | V75 | 17 | Yes | Unknown | ||||||||||
G8E010761 |
Monitor | Cornerstone | 17 | Yes | Unknown | |||||||||||
708CB03EE986 |
Monitor | Compaq | V70 | 17 | Yes | Unknown | ||||||||||
8920003XD |
Monitor | NEC | MultiSynch 900+ | 19 | Yes | Unknown | ||||||||||
851CF03D115 |
Monitor | Compaq | V70 | 17 | Yes | Unknown | ||||||||||
830CF03DO752 |
Monitor | Compaq | V75 | 17 | Yes | Unknown | ||||||||||
Confidential Information — Form internal use only.
26
Table of Contents
C.1 — Distributed Computing Hardware
Printer inventary
Printer inventary
| Firmware | ||||||||||||||||||
| Queue | Location | Office/City | Group | Print Server | Model | Date | New IP Address | Serial Number | ||||||||||
OLYHRX01
|
1Q5W |
Olympic/Redmond | Transition Team | psmrdcpr03 | HP LJ 1200 | [***] | CNC4062405 | |||||||||||
OLYINV11
|
3E8SW |
Olympic/Redmond | psmrdcpr04 | HP Color IJ 2000C | [***] | disconnected | ||||||||||||
OLYLAA01
|
3Q8S |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4000 | 9/2/97 | [***] | USEF051569 | |||||||||||
OLYLAA03
|
3P5N |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 2200 | 1/5/99 | [***] | USBGJ14590 | |||||||||||
OLYLAA04
|
3P5NE |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4 | 8/20/93 | [***] | JPH020733 | |||||||||||
OLYLAA05
|
3N5E |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 5 | 12/30/98 | [***] | USCC013591 | |||||||||||
OLYLAA07
|
3M11NW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4P | 3/94 | [***] | USCB154020 | |||||||||||
OLYLAA08
|
2Q13NE |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4 Plus | [***] | USFB236134 | ||||||||||||
OLYLAA09
|
2Q11E |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 8150 | 8/30/00 | [***] | USBD014722 | |||||||||||
OLYLAA12
|
3D8SW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4000T | 9/2/97 | [***] | USNC025655 | |||||||||||
OLYLAA13
|
3P5E |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050 | 12/30/98 | [***] | USCC013591 | |||||||||||
OLYLAA14
|
3N12SE |
Olympic/Redmond | psmrdcpr01 | HP LaserJet IIID | 7/90 | [***] | HJ07435 | |||||||||||
OLYLAA16
|
3N12SE |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 5 | 12/96 | [***] | USKB110253 | |||||||||||
OLYLAA17
|
3P7NW |
Olympic/Redmond | psmrdcpr04 | IBM Ntwrk Prntr 17 | [***] | 01-39957 | ||||||||||||
OLYLAX01
|
3Q8NE |
Olympic/Redmond | psmrdcpr04 | Braille Prtr 2500C | [***] | |||||||||||||
OLYLCN01
|
2N15NW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 8150 | [***] | JPBLL15574 | ||||||||||||
OLYLCN02
|
2N15NW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 8150 | 8/30/2000 | [***] | USBE010635 | |||||||||||
OLYLCN03
|
2Q15NE |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 5si | 12/20/96 | [***] | USDK152777 | |||||||||||
OLYLCN04
|
2Q15S |
Olympic/Redmond | psmrdcpr04 | IBM Ntwrk Prntr 24 | [***] | Moved or missing | ||||||||||||
OLYLCN05
|
1P15SE |
Olympic/Redmond | psmrdcpr04 | IBM Ntwrk Prntr17 | [***] | 01-48426 | ||||||||||||
OLYLCN06
|
2Q14SE |
Olympic/Redmond | psmrdcpr04 | HP Deskjet 2500C | [***] | SG9BU130VN | ||||||||||||
OLYLDC02
|
1Q15E |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050 | [***] | USBB206767 | ||||||||||||
OLYLDD01
|
3J5NW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4000 | 3/11/98 | [***] | USMB208839 | |||||||||||
OLYLEG01
|
3 | Olympic/Redmond | psmrdcpr03 | HP LaserJet 4200 | [***] | USBNL14685 | ||||||||||||
OLYLIN22
|
2M5N |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4+ | [***] | JPFL001915 | ||||||||||||
OLYLIN27
|
2E7N |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050T | 10/30/99 | [***] | USCC169494 | |||||||||||
OLYLIN30
|
3E8S |
Olympic/Redmond | psmrdcpr04 | HP DeskJet 840C | [***] | MX08O1W081KV | ||||||||||||
OLYLIN31
|
2C8E |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 2100 | 1/5/99 | [***] | USGZ046540 | |||||||||||
OLYLIN33
|
2G8SW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050T | 1/27/1999 | [***] | USCC017859 | |||||||||||
OLYLIN35
|
2E7S |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050 | 10/30/1999 | [***] | USBD003735 | |||||||||||
OLYLIN36
|
2E5NW |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4100 | 12/6/2000 | [***] | USBND06513 | |||||||||||
OLYLIX01
|
2P6S |
Olympic/Redmond | psmrdcpr01 | HP LaserJet 4Si | Aug-93 | [***] | USCB191204 | |||||||||||
OLYLMD01
|
2L5 |
Olympic/Redmond | psmrdcpr01 | HP Laserjet 4p | 12/25/95 | [***] | S4601LD76F7 | |||||||||||
OLYLMK01
|
2E5NW |
Olympic/Redmond | psmrdcpr04 | HP DeskJet 895C | [***] | MY97I1904NFB | ||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential
Information—For internal use only.
27
Table of Contents
C.1 — Distributed Computing Hardware
Printer inventary
Printer inventary
| Firmware | ||||||||||||||||
| Queue | Location | Office/City | Group | Print Server | Model | Date | New IP Address | Serial Number | ||||||||
OLYLMK09
|
3B8W | Olympic/Redmond | psmrdcpr01 | HP Color LJ 4500 | 7/20/98 | [***] | JPCD015547 | |||||||||
OLYLMK10
|
3E5SW | Olympic/Redmond | psmrdcpr04 | HP DJ 895C | [***] | |||||||||||
OLYLMK11
|
3M8N | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050 | 10/30/99 | [***] | USBH012786 | |||||||||
OLYLML06
|
3E7W | Olympic/Redmond | psmrdcpr01 | HP Color LJ 4500 | 7/20/98 | [***] | JPCD008021 | |||||||||
OLYLML07
|
3E6E | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050T | 3/9/99 | [***] | USQL026305 | |||||||||
OLYLMX02
|
3G5NW | Olympic/Redmond | psmrdcpr01 | HP Laserjet 8000 | 3/18/98 | [***] | USCB002625 | |||||||||
OLYLPN01
|
3Q8S | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050 | 9/2/97 | [***] | USCC024738 | |||||||||
OLYLPN02
|
2Q11NE | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4si | [***] | USGB536050 | ||||||||||
OLYLPN03
|
3P10SE | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4si | 8/20/93 | [***] | USFB357569 | |||||||||
OLYLPN04
|
3M15NE | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4si | 8/20/93 | [***] | USFB357372 | |||||||||
OLYLPN06
|
3Q6NE | Olympic/Redmond | psmrdcpr04 | Braille Printer | [***] | BP29811-111 | ||||||||||
OLYLPN09
|
2Q13NE | Olympic/Redmond | psmrdcpr01 | HP LaserJet 5si | 4/1/96 | [***] | AAXXYY9999 | |||||||||
OLYLPN10
|
3M15NE | Olympic/Redmond | psmrdcpr04 | HP DeskJet 1600C | 11/5/96 | [***] | USB8901815 | |||||||||
OLYLPN12
|
3K7 | Olympic/Redmond | psmrdcpr04 | HP Color IJ 1600C | [***] | USB7712439 | ||||||||||
OLYLPN13
|
2Q8N | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050T | 10/30/99 | [***] | USCF005105 | |||||||||
OLYLPN14
|
3M8N | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4050 | 10/30/99 | [***] | USBH012616 | |||||||||
OLYLPN15
|
3M14 | Olympic/Redmond | Mutual funds | psmrdcpr04 | IBM InfoPrint 32 | [***] | C390H3566 | |||||||||
OLYLPN16
|
3P10NW | Olympic/Redmond | psmrdcpr04 | IBM Ntwrk Prntr 17 | [***] | 01-09799 | ||||||||||
OLYLPN17
|
3K7 | Olympic/Redmond | psmrdcpr04 | HP Color DJ 840c | 3/7/00 | [***] | MX0371W0ZK | |||||||||
OLYLPN18
|
3Q11 | Olympic/Redmond | psmrdcpr04 | Canon IR 3300 | [***] | MPH36172 | ||||||||||
OLYLSR05
|
1M15W | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4000 | 9/2/97 | [***] | USNC032481 | |||||||||
OLYLSR07
|
2 ClsrmB | Olympic/Redmond | psmrdcpr01 | HP LaserJet 5 | [***] | USKC276524 | ||||||||||
OLYLSR09
|
1M15W | Olympic/Redmond | psmrdcpr04 | HP DeskJet 895C | [***] | MX88QSS1GJ | ||||||||||
OLYLSR10
|
1M15W | Olympic/Redmond | psmrdcpr04 | DJ 750C Plotter | [***] | ESA9242672 | ||||||||||
OLYLTD01
|
2M13SW | Olympic/Redmond | psmrdcpr01 | HP Laserjet 5 | 12/25/1995 | [***] | S4601LF4JGG | |||||||||
OLYLTD02
|
2 Lbry Mid | Olympic/Redmond | psmrdcpr01 | HP LJ 4000 PCL 6 | 9/2/1997 | [***] | USEF052384 | |||||||||
OLYLTP01
|
1P15N | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4si | [***] | USCB191732 | ||||||||||
OLYLTS02
|
2Q11E | Olympic/Redmond | psmrdcpr04 | IBM Ntwrk Prntr 17 | [***] | 01-17581 | ||||||||||
OLYSYS02
|
1Q14N | Olympic/Redmond | psmrdcpr01 | HP LaserJet 4000 | 11/4/97 | [***] | USEF097314 | |||||||||
OLYSYS03
|
1M15S | Olympic/Redmond | psmrdcpr01 | HP LJ 4200DTN | 10/11/02 | [***] | USBNM17762 | |||||||||
OLYTRTM01
|
1Q8W | Olympic/Redmond | Transition Team | psmrdcpr03 | HP LJ 2100 | 1/5/1999 | [***] | USGH195380 | ||||||||
RAIACT01
|
02-B15-34 | Rainier/Redmond | GrpAct | psmrdcpr01 | HP lj 4050 | 9/2/1997 | [***] | USMB018325 | ||||||||
RAIACT02
|
02-B15-34 | Rainier/Redmond | Actuary | psmrdcpr01 | HP lj 4050 | 10/30/1999 | [***] | USQX128743 | ||||||||
RAIADM01
|
Rainier/Redmond | Grp Admin | psmrdcpr03 | HP LJ 2100 | 5/1/1999 | [***] | USCD059684 |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential
Information—For internal use only.
28
Table of Contents
C.1— Distributed Computing Hardware
Printer inventary
Printer inventary
| Firmware | ||||||||||||||||||||
| Queue | Location | Office/City | Group | Print Server | Model | Date | New IP Address | Serial Number | ||||||||||||
RAIAGE01
|
01-C16-18 | Rainier/Redmond | Agency services | psmrdcpr01 | 5si | 12/20/1996 | [***] | USDK028895 | ||||||||||||
RAIAUD01
|
02-E15-34 | Rainier/Redmond | Audit | psmrdcpr01 | HP lj 4050 | 1/27/1999 | [***] | USBC028393 | ||||||||||||
RAIBEN01
|
02-G15-30 | Rainier/Redmond | Exs Lss/ Benefits | psmrdcpr01 | HP lj 4P | Mar-94 | [***] | JPFF023367 | ||||||||||||
RAIBEN02
|
Rainier/Redmond | Exs Lss/ Benefits | psmrdcpr01 | HP 4100 pcl 6 | 9/7/2001 | [***] | USLNH01108 | |||||||||||||
RAIBEN04
|
02-D13-35 | Rainier/Redmond | Exs Lss/ Benefits | psmrdcpr02 | hp lj 4050 pcl | 1/17/2002 | [***] | USLND16996 | ||||||||||||
RAIISS02
|
02-C12-10 | Rainier/Redmond | Iss&Comliance | psmrdcpr02 | HP LJ 4si | 3/9/1999 | [***] | USBB157355 | ||||||||||||
RAIISS03
|
02-F15-19 | Rainier/Redmond | Iss&Comliance | psmrdcpr02 | HP LJ 4100 pcl 6 | 5/24/2001 | [***] | USJNH02387 | ||||||||||||
RAIISS04
|
02-F16-03 | Rainier/Redmond | Iss&Comliance | psmrdcpr02 | HP LJ 5si pcl 5e | 12/20/1996 | [***] | USDK012870 | ||||||||||||
RAIISS05
|
02-F15-03 | Rainier/Redmond | Iss&Comliance | psmrdcpr02 | HP LJ 5si | 12/20/1996 | [***] | USDK012900 | ||||||||||||
RAIISS06
|
02-F16-03 | Rainier/Redmond | Iss&Comliance | psmrdcpr02 | HP LJ 8000 pcl 5e | 9/10/1999 | [***] | USHJ023108 | ||||||||||||
RAIISS07
|
02-F15-03 | Rainier/Redmond | Iss&Comliance | psmrdcpr02 | HP LJ 9000hns | 7/18/2003 | [***] | JPBLP03851 | ||||||||||||
RAIMAR01
|
02-E13-20 | Rainier/Redmond | Achiel’s 2nd prtr | psmrdcpr04 | HP 2500 c | [***] | SG1818304D | |||||||||||||
RAIMOR01
|
01-D16-15 | Rainier/Redmond | Mortgage Loan | psmrdcpr01 | HP 4si | 6/1/1994 | [***] | USHB724775 | ||||||||||||
RAIMUT01
|
Rainier/Redmond | Mutual funds | psmrdcpr02 | HP 4 plus | 10/11/2002 | [***] | CNBX415669 | |||||||||||||
RAIMUT02
|
Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 5si | 2/3/1998 | [***] | USCC020129 | |||||||||||||
RAIMUT03
|
01-E13-20 | Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 8000 pcl 6 | 9/10/1999 | [***] | USGJ022028 | ||||||||||||
RAIMUT04
|
Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 5SI | 12/20/1996 | [***] | USDK143049 | |||||||||||||
RAIMUT05
|
01-F14-27 | Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 8000 | 10/12/1998 | [***] | USDD024065 | ||||||||||||
RAIMUT06
|
Rainier/Redmond | Mutual funds | psmrdcpr02 | HP lj 4050 pcl | 3/9/1999 | [***] | USBB294789 | |||||||||||||
RAIMUT07
|
01-G14-23 | Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 2200 pcl 6 | 11/20/2000 | [***] | USBGJ28405 | ||||||||||||
RAIMUT08
|
01-F14-27 | Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 8150 pcl 6 | 5/26/2001 | [***] | JPBLL13077 | ||||||||||||
RAIMUT09
|
Rainier/Redmond | Mutual Funds | psmrdcpr02 | HP LJ 2100 | 1/5/1999 | [***] | USGZ316917 | |||||||||||||
RAIMUT10
|
Rainier/Redmond | Mutual funds | psmrdcpr02 | HP LJ 4050 | 10/30/1999 | [***] | USBD041303 | |||||||||||||
RAIOFF01
|
Rainier/Redmond | psmrdcpr01 | HP LJ 5si | 12/20/1996 | [***] | USBK142417 | ||||||||||||||
RAIOFF03
|
Rainier/Redmond | psmrdcpr01 | HP LJ 5si | 12/20/1996 | [***] | USBK136084 | ||||||||||||||
RAISIS01
|
Rainier/Redmond | SIS | psmrdcpr01 | HP LJ 4si | 3/5/1999 | [***] | USDG039243 | |||||||||||||
RAISIS02
|
Rainier/Redmond | SIS | psmrdcpr01 | HP LJ 8000 pcl 6 | 3/18/1998 | [***] | USBB031279 | |||||||||||||
RAISIS03
|
Rainier/Redmond | SIS | psmrdcpr01 | HP lj 4500 Color | 7/20/1998 | [***] | JPHAB11712 | |||||||||||||
RAISYS01
|
Rainier/Redmond | Group Sys #1 | psmrdcpr01 | HP lj 4050 pcl 6 | 3/9/1999 | [***] | USBC033547 | |||||||||||||
RAISYS02
|
Rainier/Redmond | Group Sys #2 | psmrdcpr01 | HP LJ 4 | Nov-93 | [***] | JPBH052219 | |||||||||||||
| Total HQ | 98 | [***] | ||||||||||||||||||
SDGroupLife
|
SCR/San Diego | Group Life | ftvlgrsdprt1 | HP LJ 4200 pcl 6 | [***] | CNBX500042 | ||||||||||||||
Lexmark Optra E312
|
SCR/San Diego | Group Life | ftvlgrtraelb | Lexmark Optra E312 | [***] | 3102400 | ||||||||||||||
HP DJ 882C
|
SCR/San Diego | Group Life | ftvlgrsuelee | HP DJ 882C | [***] | CN94S1M126 | ||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential
Information—For internal use only.
29
Table of Contents
C.1— Distributed Computing Hardware
Printer inventary
Printer inventary
| Firmware | ||||||||||||||||
| Queue | Location | Office/City | Group | Print Server | Model | Date | New IP Address | Serial Number | ||||||||
HP DJ 950C
|
SCR/San Diego | Group Life | ftvlgrrobren | HP DJ 950C | [***] | MY05I1FOYP | ||||||||||
HP LJ 1200 PCL 6
|
SCR/San Diego | Group Life | ftvlgrrobrot2 | HP LJ 1200 PCL 6 | [***] | CNBRF68690 | ||||||||||
Canon BJC-250
|
SCR/San Diego | Group Life | alvlgrkatvil | Canon BJC-250 | [***] | ENT26782 | ||||||||||
HP LJ 4000 PCL
|
SCR/San Diego | Group Life | ftvlgrcorwem | HP LJ 4000 PCL | [***] | USMB03548 | ||||||||||
HP LaserJet 4
|
SCR/San Diego | Group Life | HP LJ 4 | JPBG073150 | ||||||||||||
Lexmark Optra E312
|
SCR/San Diego | Group Life | Lexmark Optra E312 | 1059182 | ||||||||||||
HP DJ 880C
|
SCR/Aliso Viejo | Group Life | ftvlmllouber | HP DJ 880C | MY92D16268 | |||||||||||
HP DJ 880C
|
SCR/Aliso Viejo | Group Life | ftvlmlpetcam | HP DJ 880C | MY93I160HX | |||||||||||
HP DJ 710C
|
SCR/Aliso Viejo | Group Life | ftvlmltuypha | HP DJ 710C | MY93D151WB | |||||||||||
CHILCO01
|
10SE | Hoffman Estates/IL | Group | psmchifs01 | HP LJ 5si | 7/11/1995 | [***] | USBD039098 | ||||||||
CHIATS01
|
10SE | Hoffman Estates/IL | Group | psmchifs01 | HP LJ5 | 1/15/1996 | [***] | USKC156933 | ||||||||
SHAWEA
|
Hoffman Estates | Group Life | LaserJet 1100 | USFG009823 | ||||||||||||
CHRHIG
|
Hoffman Estates | Group Sales | LaserJet 2100 | USCD020502 | ||||||||||||
DAVDIE
|
Hoffman Estates | Group Sales | DeskJet 840 | MY06R1C0P7 | ||||||||||||
CINLIPRINT1
|
Bethel Park | None/Shared PC CINLIFPRINT1 |
HP LaserJet 4Si | None | ||||||||||||
BOSLRM01
|
Boston | None/Shared PC CINLIFPRINT1 |
HP LaserJet 4 Plus | None | ||||||||||||
CINPRN14
|
Cincinnati | PSMCINFS01 | HP LaserJet 4050 | [***] | USBB043263 | |||||||||||
CONLIF01
|
Conshohocken | None/Shared PC CINLIFPRINT1 |
HP LaserJet 4 Plus | None | ||||||||||||
SWRLIF01
|
South Windsor | PSMHARFS01 | HP LaserJet 5 | [***] | ||||||||||||
SWRLIF02
|
South Windsor | PSMHARFS01 | HP LaserJet 4000 | [***] | ||||||||||||
SWRLIF03
|
South Windsor | PSMHARFS01 | HP LaserJet 4 Plus | [***] | ||||||||||||
SWRLIF05
|
South Windsor | PSMHARFS01 | IBM Network Printer 17 | [***] | ||||||||||||
SWRLIF06
|
South Windsor | PSMHARFS01 | HP LaserJet 4 | [***] | ||||||||||||
CLALIF01
|
Clairmont/Atlanta | SRMS (Safeco Risk Mgmt Svcs) |
psmatlpr01 | HP LJ 4100 | 20010907 01.019.1 | [***] | USJNH28928 | |||||||||
ATLELC01
|
Duluth/Atlanta | EXCESS LOSS CLAIMS | psmatlpr01 | HP LJ 4 Plus | [***] | USFC122734 | ||||||||||
ATLELC02
|
Duluth/Atlanta | EXCESS LOSS CLAIMS | psmatlpr01 | HP LJ 4 Plus | [***] | USFC294990 | ||||||||||
MAIPRN01
|
Miami/Florida | Symetra IT Group Printer |
psmmiafs01 | HP LaserJet 4 | [***] | 11-CWKH8 | ||||||||||
MAIPRN02
|
Miami/Florida | Symetra Claims Grp Printer |
psmmiafs01 | Lexmark Optra T616 | [***] | 41-Y3897 | ||||||||||
MAIPRN03
|
Miami/Florida | Symetra Underwriting Grp Printer |
psmmiafs01 | HP LaserJet IIID | [***] | 124646 | ||||||||||
MAIPRN04
|
Miami/Florida | Symetra Mkt Sales Grp |
psmmiafs01 | Lexmark Optra T616 | [***] | 41-Y3893 | ||||||||||
MAIRPN05
|
Miami/Florida | Symetra U/W Mkt. Grp Printer | psmmiafs01 | Lexmark Optra T616 | [***] | 41-Y3896 | ||||||||||
MAIRPN06
|
BROKEN | Miami/Florida | Symetra BROKEN PRINTER |
psmmiafs01 | LaserJet 8150 PCL6 | [***] | JPBLM47667 | |||||||||
MAIPRN07
|
Miami/Florida | Symetra Case Mgmt Printer |
psmmiafs01 | Lexmark Optra T616 | [***] | 41-AB039 | ||||||||||
MAIPRN08
|
Miami/Florida | L & I Marketing/Promotion |
psmmiafs01 | Color Laserjet 4600PCL 6 | [***] | JPAKF11007 |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential
Information—For internal use only.
30
Table of Contents
C.1— Distributed Computing Hardware
Printer inventary
Printer inventary
| Firmware | ||||||||||||||||||
| Queue | Location | Office/City | Group | Print Server | Model | Date | New IP Address | Serial Number | ||||||||||
KCXLIF01
|
cube 269 | Overland Park | Life | PSMSTOFS01 | HP LaserJet 4600N | JPRGD40484 | ||||||||||||
| Terry Rayoum | St. Louis | Life | Deskjet 720c | Not in use. | ||||||||||||||
N/A
|
N/A | NCR / PH | MARKETING | N/A | Deskjet710C | 7/9/1998 | N/A | MY879191HT | ||||||||||
N/A
|
N/A | Portland | HP Laserjet 4 | N/A | JPBH052218 | |||||||||||||
N/A
|
N/A | Portland | HP Laserjet 4 | N/A | USBC224480 | |||||||||||||
N/A
|
N/A | Portland | HP Color DJ 840c | N/A | CN0871R074 | |||||||||||||
N/A
|
N/A | Portland | HP Color DJ 840c | N/A | MX08V1Y0CQ | |||||||||||||
N/A
|
N/A | Portland | NEC Superscript 870 | N/A | 613628879C | |||||||||||||
DALLIF01
|
N | Dallas | \\PSMDALFS01\DALLIF01 | HP8150 | R.22.09 | [***] | JPBLM65111 | |||||||||||
N/A
|
D | Dallas | LEXMARK | OPTRA E312L | 3032259 | |||||||||||||
N/A
|
D | Dallas | LEXMARK | OPTRA E312 | 1059087 | |||||||||||||
N/A
|
D | Dallas | HP | LJ4 | USBC254643 | |||||||||||||
N/A
|
D | Dallas | LEXMARK | OPTRA E310 | 136048 | |||||||||||||
2DEAST01
|
2nd Floor | Indianapolis | Life Sales | psmindpr01 | HP LaserJet 4 | [***] | JPBX008280 | |||||||||||
| 2nd Floor | Indianapolis | Life Sales (extra) | HP Deskjet 810C | MY94Q1B0W1 | ||||||||||||||
| 2nd Floor | Indianapolis | Life Sales (antmen) | HP Deskjet 840C | CN06F1P0V1 | ||||||||||||||
| 2nd Floor | Indianapolis | Life Sales (johmon) | HP Deskjet 840C | MX0321V06Z | ||||||||||||||
| 2nd Floor | Indianapolis | Life Sales (marsim) | HP Deskjet 810C | MY96V122JM | ||||||||||||||
4EEAST01
|
4th Floor | Indianapolis | Life Actuary/Systems | psmindpr01 | HP Laserjet 4si | [***] | USDB330638 | |||||||||||
| 4th Floor | Indianapolis | Life Act (loiwhi) | HP Deskjet 880C | MY93E110GT | ||||||||||||||
| 4th Floor | Indianapolis | Life Act (joymca) | HP Deskjet 880C | MY93E110H7 | ||||||||||||||
| 4th Floor | Indianapolis | Life Act (debden) | HP Deskjet 880C | MY93E110FC | ||||||||||||||
| 4th Floor | Indianapolis | Life Act (extra) | HP Deskjet 880C | MY93E110FN | ||||||||||||||
n/a
|
SRMS | Indianapolis | SRMS | INDLGRPRINT1 | Lexmark Optra T616 | 41-V0294 | ||||||||||||
n/a
|
SRMS | Indianapolis | SRMS | INDLGRPRINT1 | HP Laserjet 4050 | USBB229405 | ||||||||||||
HPColorL
|
SRMS | Indianapolis | SRMS | INDLGRPRINT1 | HP Laserjet 4600 | JPAKB08490 | ||||||||||||
| SRMS | Indianapolis | SRMS (jimsee) | HP Deskjet 940C | MY15F6B0TY | ||||||||||||||
| SRMS | Indianapolis | SRMS (physan) | HP Laserjet 2100 | USCC015700 | ||||||||||||||
| SRMS | Indianapolis | SRMS (pagile) | HP Laserjet 1100 | USJC085052 | ||||||||||||||
| SRMS | Indianapolis | SRMS (kimvan) | Lexmark Optra E310 | 0019021 | ||||||||||||||
| SRMS | Indianapolis | SRMS (margre) | Brother HL-1240 | U52581C0J289981 | ||||||||||||||
| SRMS | Indianapolis | SRMS (jeengl) | Lexmark E210 | 1053734 | ||||||||||||||
| SRMS | Indianapolis | SRMS (congib) | HP Laserjet 4 | USTC017101 | ||||||||||||||
| SRMS | Indianapolis | SRMS (chadug) | HP Deskjet 940C | MX1B36F0PP | ||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential
Information—For internal use only.
31
Table of Contents
C.1— Distributed Computing Hardware
Printer inventary
Printer inventary
| Firmware | ||||||||||||||||||
| Queue | Location | Office/City | Group | Print Server | Model | Date | New IP Address | Serial Number | ||||||||||
| Total Remote | 71 | |||||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential
Information—For internal use only.
32
Table of Contents
C.2 — Distributed Computing Software
| Symetra Distributed | Help Desk | Core Image | Not | Bus. | Limited | |||||||||||||||||||||||||||||||
| Applications | Supported | Applications | Standard | Supported | Needs Req. | License count | Site License | Quantity amount | Notes | |||||||||||||||||||||||||||
Office Suite Applications |
||||||||||||||||||||||||||||||||||||
Office 2003 (Access, Excel,
Outlook, Powerpoint, Word) |
x | x | x | |||||||||||||||||||||||||||||||||
Spreadsheet Applications |
||||||||||||||||||||||||||||||||||||
Lotus 123 |
x | |||||||||||||||||||||||||||||||||||
Word Processing |
||||||||||||||||||||||||||||||||||||
WordPerfect 6.1 |
x | x | ||||||||||||||||||||||||||||||||||
Presentation Applications |
||||||||||||||||||||||||||||||||||||
Harvard Instant Charts |
||||||||||||||||||||||||||||||||||||
Desktop Publication Apps. |
||||||||||||||||||||||||||||||||||||
Adobe Acrobat |
x | x | ||||||||||||||||||||||||||||||||||
Adobe Reader 5.05 |
x | x | x | |||||||||||||||||||||||||||||||||
Frontpage |
x | |||||||||||||||||||||||||||||||||||
Publisher |
x | x | x | |||||||||||||||||||||||||||||||||
Graphic Design applications |
||||||||||||||||||||||||||||||||||||
Grabbit 2.5 |
x | |||||||||||||||||||||||||||||||||||
Local Database Applications |
||||||||||||||||||||||||||||||||||||
None |
||||||||||||||||||||||||||||||||||||
Database Reporting Apps |
||||||||||||||||||||||||||||||||||||
Crystal Reports |
x | x | ||||||||||||||||||||||||||||||||||
Reports Facilitator |
x | |||||||||||||||||||||||||||||||||||
Database Client |
||||||||||||||||||||||||||||||||||||
None |
||||||||||||||||||||||||||||||||||||
Terminal Emulator Apps. |
||||||||||||||||||||||||||||||||||||
ProComm Plus |
x | x | ||||||||||||||||||||||||||||||||||
Terminal Server applications |
||||||||||||||||||||||||||||||||||||
Citrix Client |
x | x | x | |||||||||||||||||||||||||||||||||
Miscsoft RDP Terminal |
||||||||||||||||||||||||||||||||||||
Service Client |
x | |||||||||||||||||||||||||||||||||||
E-mail applications |
||||||||||||||||||||||||||||||||||||
Exchange |
x | |||||||||||||||||||||||||||||||||||
MailMarshal — scanning |
x | |||||||||||||||||||||||||||||||||||
PDA applications |
||||||||||||||||||||||||||||||||||||
Blackberry Desktop Software
v3.6 service pack 2 |
x | |||||||||||||||||||||||||||||||||||
Calendar applications |
||||||||||||||||||||||||||||||||||||
Outlook |
x | x | x | |||||||||||||||||||||||||||||||||
Accounting applications |
||||||||||||||||||||||||||||||||||||
MFACT |
x | |||||||||||||||||||||||||||||||||||
Microcash for Windows |
x | |||||||||||||||||||||||||||||||||||
Finance applications |
||||||||||||||||||||||||||||||||||||
Flexsoft |
x | |||||||||||||||||||||||||||||||||||
FundStation |
x | |||||||||||||||||||||||||||||||||||
Quicken |
x | x | ||||||||||||||||||||||||||||||||||
Programming applications |
||||||||||||||||||||||||||||||||||||
Remedy (Action Request) |
x | |||||||||||||||||||||||||||||||||||
Seaview |
x | |||||||||||||||||||||||||||||||||||
Management Tool Apps |
||||||||||||||||||||||||||||||||||||
None |
||||||||||||||||||||||||||||||||||||
VPN applications |
||||||||||||||||||||||||||||||||||||
Extranet Access Client |
x | x | x | |||||||||||||||||||||||||||||||||
Contivity Client |
||||||||||||||||||||||||||||||||||||
AT$T Dialer |
||||||||||||||||||||||||||||||||||||
Internet applications |
||||||||||||||||||||||||||||||||||||
Internet Explorer 5.5 sp2 |
x | |||||||||||||||||||||||||||||||||||
Confidential Information—For internal use only.
1
Table of Contents
C.2 — Distributed Computing Software
| Symetra Distributed | Help Desk | Core Image | Not | Bus. | Limited | |||||||||||||||||||||||||||||||
| Applications | Supported | Applications | Standard | Supported | Needs Req. | License count | Site License | Quantity amount | Notes | |||||||||||||||||||||||||||
Communication applications |
||||||||||||||||||||||||||||||||||||
CentreVue |
x | |||||||||||||||||||||||||||||||||||
Language Interpretation Services |
x | |||||||||||||||||||||||||||||||||||
Lanier (old NICE calls) |
x | |||||||||||||||||||||||||||||||||||
NICE Universe |
x | |||||||||||||||||||||||||||||||||||
Phone 2PC Recording |
x | |||||||||||||||||||||||||||||||||||
Faxing applications |
||||||||||||||||||||||||||||||||||||
Enterprise Fax Manager |
x | |||||||||||||||||||||||||||||||||||
Fax Util |
x | |||||||||||||||||||||||||||||||||||
RightFax |
x | |||||||||||||||||||||||||||||||||||
WinFax |
x | x | ||||||||||||||||||||||||||||||||||
Flowcharting applications |
||||||||||||||||||||||||||||||||||||
Visio |
x | |||||||||||||||||||||||||||||||||||
Visio Viewer |
x | x | x | |||||||||||||||||||||||||||||||||
Contact Management Apps |
||||||||||||||||||||||||||||||||||||
Bacon’s MediaSource |
x | |||||||||||||||||||||||||||||||||||
Project Tracking Apps |
||||||||||||||||||||||||||||||||||||
Project |
x | |||||||||||||||||||||||||||||||||||
Simply TIME (task manager) |
x | |||||||||||||||||||||||||||||||||||
Virus applications |
||||||||||||||||||||||||||||||||||||
Norton Anti-Virus |
x | x | x | |||||||||||||||||||||||||||||||||
Print Utility applications |
||||||||||||||||||||||||||||||||||||
PrintNow! |
x | |||||||||||||||||||||||||||||||||||
Scanning Software Apps |
||||||||||||||||||||||||||||||||||||
None |
||||||||||||||||||||||||||||||||||||
Handicap Utility |
||||||||||||||||||||||||||||||||||||
None |
||||||||||||||||||||||||||||||||||||
Video Conferencing Apps |
||||||||||||||||||||||||||||||||||||
None |
||||||||||||||||||||||||||||||||||||
Security applications |
||||||||||||||||||||||||||||||||||||
Cyber Gatekeeper Agent |
x | x | x | |||||||||||||||||||||||||||||||||
CyberArmor |
x | x | x | |||||||||||||||||||||||||||||||||
FAZAM 2000 |
x | |||||||||||||||||||||||||||||||||||
PowerQuest |
x | x | ||||||||||||||||||||||||||||||||||
Sysmantic Antivirus 8.01 |
||||||||||||||||||||||||||||||||||||
Reference applications |
||||||||||||||||||||||||||||||||||||
NILS |
x | |||||||||||||||||||||||||||||||||||
Operating Systems Apps |
||||||||||||||||||||||||||||||||||||
Windows 2000 sp3 |
x | x | x | |||||||||||||||||||||||||||||||||
Undefined applications |
||||||||||||||||||||||||||||||||||||
Ameritech White and Yellow Pages |
x | |||||||||||||||||||||||||||||||||||
Catapult Training |
x | |||||||||||||||||||||||||||||||||||
Chase Insight & Reporter |
x | x | ||||||||||||||||||||||||||||||||||
Desktop Submit |
x | |||||||||||||||||||||||||||||||||||
EFTPS for Windows 01.07.01 |
x | |||||||||||||||||||||||||||||||||||
EOSI/CLAS (Library copyright) |
x | |||||||||||||||||||||||||||||||||||
Extra! 6.71 |
x | x | x | |||||||||||||||||||||||||||||||||
EZ2000 |
x | x | ||||||||||||||||||||||||||||||||||
FlashPlayer 7.0.19.0 |
x | x | x | |||||||||||||||||||||||||||||||||
ICW Required |
x | |||||||||||||||||||||||||||||||||||
Iomega Tools |
x | |||||||||||||||||||||||||||||||||||
Message Manager |
x | |||||||||||||||||||||||||||||||||||
MMCD |
x | |||||||||||||||||||||||||||||||||||
MSDN |
x | |||||||||||||||||||||||||||||||||||
PBS |
x | |||||||||||||||||||||||||||||||||||
DirectX 8.1 |
x | x | ||||||||||||||||||||||||||||||||||
Confidential Information—For internal use only.
2
Table of Contents
C.2 — Distributed Computing Software
| Symetra Distributed | Help Desk | Core Image | Not | Bus. | Limited | |||||||||||||||||||||||||||||||
| Applications | Supported | Applications | Standard | Supported | Needs Req. | License count | Site License | Quantity amount | Notes | |||||||||||||||||||||||||||
Panagon Document Management |
x | |||||||||||||||||||||||||||||||||||
PCAnywhere |
x | |||||||||||||||||||||||||||||||||||
PGP Encryption |
x | |||||||||||||||||||||||||||||||||||
PowerSelect |
x | |||||||||||||||||||||||||||||||||||
Qview4 |
x | |||||||||||||||||||||||||||||||||||
RoboHelp Office 2000 |
x | |||||||||||||||||||||||||||||||||||
Skill Vantage |
x | |||||||||||||||||||||||||||||||||||
Snag-It! (screen shot capture) |
x | |||||||||||||||||||||||||||||||||||
Source OffSite 3.5.1 |
x | |||||||||||||||||||||||||||||||||||
Spencer CD |
x | x | ||||||||||||||||||||||||||||||||||
Trellis |
x | |||||||||||||||||||||||||||||||||||
Unicenter |
x | |||||||||||||||||||||||||||||||||||
UVT |
x | |||||||||||||||||||||||||||||||||||
Web IIS |
x | |||||||||||||||||||||||||||||||||||
WebTrends |
x | |||||||||||||||||||||||||||||||||||
WELL Concession Calculator |
x | |||||||||||||||||||||||||||||||||||
Window’s MDAC 2.61 sp2 |
x | |||||||||||||||||||||||||||||||||||
Window’s Media Player 7.1 |
x | |||||||||||||||||||||||||||||||||||
Winrapid Teledex |
x | |||||||||||||||||||||||||||||||||||
WinZip 8.1 |
x | |||||||||||||||||||||||||||||||||||
Confidential Information — For internal use only.
3
Table of Contents
C.3 — Distributed Computing Desktop/Laptop Core Image
| Application | Application | |
Windows 2000 Professional
|
Current Desktop OS | |
Symantec Anti-Virus 8.01
|
Anti-Virus Software | |
MS GPResult
|
Client Install allows for reporting for Group policies | |
MSConfig (WINNT)
|
An applet / tool provides local troubleshooting information to a TA. | |
MS DirectX 9.0b
|
DirectX is an advanced suite of multimedia application programming interfaces (APIs) built into Windows 2000. DirectX provides a standard development platform for Windows-based PCs by enabling software developers to access specialized hardware features wi | |
MS Windows Media Player 9.0
|
Many organizations use the electronic medium for distributing study and training material in audio and video format. Media Player provides a consistent interface for these multimedia presentations. | |
MS Internet Explorer 6.01 SP1
|
Browser | |
MS MDAC v2.7 SP1 Refresh
|
Microsoft Data Access Components (MDAC) contains core Data Access components such as the Microsoft SQL Server™ OLE DB provider and ODBC driver. | |
WinZip 9.0
|
WinZip provides a necessary tool for zipping and unzipping files that need to be compressed for faster file transfer. | |
Citrix Client v7.1
|
A Citrix client allows the user to establish a Citrix session with Citrix Metaframe or Terminal server. | |
Adobe Reader v6.0
|
Acrobat Reader allows anyone to open a portable document format file (.pdf) across a broad range of hardware and software, and it will look exactly as the author intended — with layout, fonts, links, and images intact. | |
MacroMedia FlashPlayer 7.0.19.0
|
Flash Player is a web browser plugin that allows the viewer to play multimedia content created with Macromedia Flash MX. | |
FAZAM Client v3.0
|
FAZAM is a trouble shooting tool that builds on Windows 2000 which can be used to track the history of Group Policy Object (GPO) changes, including who made the changes, from initial design to retirement. | |
Visio Viewer 2003
|
The Microsoft Visio Viewer allows anyone to view Visio drawings, diagrams, charts, and illustrations in a Web-based environment from within Microsoft Internet Explorer. | |
VPN Software
|
For remote users to connect via the Virtual Private Network | |
Extra! PC v6.71
|
Attachmate’s Extra! Personal Client (EPC) 6.71 is the standard terminal emulation software | |
Office XP SP2
|
Microsoft Office Suite | |
Misc Updates |
||
Desktop Customization |
||
System Management |
||
Power Management |
||
Start Menu Configuration |
||
MC Updater Tool Shortcut |
||
Windows Explorer Configuration |
||
.NET Framework |
||
Windows Scripting Host |
||
Security Patches |
||
Microsoft Q Fixes |
||
Verify Patch Installations
|
Various updates and configuration changes are made to the standard operating system. Some of them fall into these general categories. |
Confidential Information — For internal use only.
1
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
Schedule 2D
Data Network Services SOW
for
Symetra Life Insurance Company (Symetra)
October 28, 2004
Confidential Information
Page i
Page i
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
TABLE OF CONTENTS
1.0 |
Data Network Management Services Overview and Objectives | 3 | ||||
| 1.1 Services Overview | 3 | |||||
| 1.2 Service Objectives | 3 | |||||
2.0 |
Service Environment | 3 | ||||
| 2.1 Scope of Services and Infrastructure to be Supported | 3 | |||||
| 2.2 Work-In-Progress/Transition | 4 | |||||
| 2.3 Future initiatives | 4 | |||||
| 2.4 Baseline Information | 4 | |||||
3.0 |
Data Network Services Requirements | 5 | ||||
| 3.1 Service Descriptions and Roles & Responsibilities | 5 | |||||
| 3.2 Exclusions | 11 | |||||
4.0 |
Service Management | 11 | ||||
| 4.1 Objectives | 11 | |||||
| 4.2 Definitions | 12 | |||||
| 4.3 Service Level Requirements (SLRs) | 12 | |||||
| 4.4 Reports | 16 | |||||
5.0 |
Referenced SOW Appendices and SOW Schedules | 17 | ||||
| 5.1 Referenced Help Desk SOW Appendices | 17 | |||||
| 5.2 Referenced ITSA Schedules | 17 |
List of Tables
Table 1.
|
Data Network Baseline Projections | 5 | ||||
Table 2.
|
General Roles and Responsibilities | 6 | ||||
Table 3.
|
Engineering/Development Roles and Responsibilities | 7 | ||||
Table 4.
|
Asset Acquisition and Network Service Provisioning Roles and Responsibilities | 7 | ||||
Table 5.
|
Network Operations and Administration Roles and Responsibilities | 8 |
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
Table 6.
|
Network Monitoring and Reporting Roles and Responsibilities | 9 | ||||
Table 7.
|
Documentation Roles and Responsibilities | 9 | ||||
Table 8.
|
Firewall Services Roles and Responsibilities | 10 | ||||
Table 9.
|
Security Intrusion Detection Services Roles and Responsibilities | 10 | ||||
Table 10.
|
Security Penetration Services Roles and Responsibilities | 11 | ||||
Table 11.
|
Security Incident & Audit Management Roles and Responsibilities | 11 | ||||
Table 12.
|
Network Availability SLRs | 12 | ||||
Table 13.
|
Network Performance SLRs | 13 | ||||
Table 14.
|
Network Administration Services SLRs | 14 | ||||
Table 15.
|
Security Intrusion Detection SLRs | 15 | ||||
Table 16.
|
Security Penetration Services SLRs | 16 |
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
1.0 Data Network Management Services Overview and Objectives
1.1 Services Overview
Network support Services are the services and activities, as detailed in the following Data
Network Services SOW, required to provide and support Symetra data network environment as described
in Section 2.0 below. ACS responsibilities include, but are not limited to, the provisioning,
management, administration and troubleshooting of the following data network Services:
| n | Wide-area Network (WAN) | ||
| n | Local-area Network (LAN) | ||
| n | Virtual Private Network (VPN) | ||
| n | Network Security |
As depicted in Figure 1 below, in addition to the Service described in this Data Network Services
SOW, ACS is responsible for providing the Services described in Schedule 2A – Cross Functional
Services SOW. Figure 1 depicts the relationship between the Cross Functional Services SOW, and all
SOWs within the scope of the Agreement.
| Cross Functional SOW | ||||||||||||
| Data | Distributed | Data | Voice | Output | Content | |||||||
| Center | Computing | Network | Comm. | Help Desk | Processing | Management | ||||||
| Services | Services | Services | Services | Services | Services | Services | ||||||
| SOW | SOW | SOW | SOW | SOW | SOW | SOW | ||||||
Figure 1: Service Towers with Cross Functional View
1.2 Service Objectives
The following are the key high-level Service objectives Symetra expects to achieve through
outsourced data network management Services and this Data Network Services SOW:
| n | Provide a reliable, scalable and secure high-speed network infrastructure to Symetra headquarters, remote offices and remote individual End Users, as required | ||
| n | Operate efficiently and effectively by running on a consolidated network infrastructure and by simplifying network management, procurement and budgeting | ||
| n | Minimize administrative effort by engaging ACS to provide this management function | ||
| n | Achieve the SLRs specified in Section 4 of this Data Network Services SOW |
2.0 Service Environment
2.1 Scope of Services and Infrastructure to be Supported
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Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
The following sub-sections and related Data Network Services SOW appendices describe and scope
the network environment to be supported/complied with. Service Environment descriptions and
appendices include listings of hardware and software, policies and procedures, licenses and
agreements, work-in-progress and future initiatives. Service Environment Appendices are to be
maintained and reviewed with Symetra by ACS and made available to Symetra on a quarterly basis.
2.1.1 Hardware and Software
Intentionally Left Blank
2.1.1 Service Locations
| a. | A description and location of all Symetra facility and office locations requiring Network Services is provided in Attachment B of the Agreement. |
2.1.3 Personnel
| a. | ACS will be responsible for staffing skilled and appropriately certified data network management staff to meet the SLRs set forth in this SOW. Currently, Symetra Corporate provides Symetra data network Services as a shared service. |
2.1.4 Policies, Procedures and Standards
Intentionally Left Blank
2.1.5 Agreements and Licenses
Intentionally Left Blank
2.2 Work-In-Progress/Transition
Intentionally Left Blank
2.3 Future initiatives
Intentionally Left Blank
2.4 Baseline Information
Symetra’s projected network usage is presented below. These business requirements represent
Symetra’s most realistic projection of the Service requirements as of the Effective Date based on a
combination of past trends and current anticipated overall business direction over the Term of the
Agreement.
These metrics, along with other data which may be pertinent for sizing the solution, are reflected
in Schedule 3 -Fees.
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Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
Table 1. Data Network Baseline Projections
| System | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | ||||||||||||||||
Headquarters Users |
948 | 971 | 994 | 1018 | 1042 | |||||||||||||||||
Headquarters VIP Users |
59 | 59 | 59 | 59 | 59 | |||||||||||||||||
Remote Offices |
8 | 8 | 8 | 8 | 8 | |||||||||||||||||
Remote Office Users |
103 | 103 | 103 | 103 | 103 | |||||||||||||||||
Tele-workers |
138 | 138 | 138 | 138 | 138 | |||||||||||||||||
Routers |
These items will be proposed by ACS | |||||||||||||||||||||
DSCs/CSUs |
||||||||||||||||||||||
Firewalls |
||||||||||||||||||||||
Modems |
||||||||||||||||||||||
Frame Relay– Symetra
Locations |
||||||||||||||||||||||
Dedicated Internet Circuits |
||||||||||||||||||||||
Point-to-Point Circuits –
Symetra |
||||||||||||||||||||||
ISDN |
||||||||||||||||||||||
Dial-up WD Modem Pool |
||||||||||||||||||||||
VPN |
||||||||||||||||||||||
IMACs per device/per year |
||||||||||||||||||||||
3.0 Data Network Services Requirements
3.1 Service Descriptions and Roles & Responsibilities
In addition to the Services, activities, and roles and responsibilities described in Schedule
2A — Cross Functional SOW, ACS is responsible for the following data network management Services,
activities and roles and responsibilities.
3.1.1 Data Network Services Requirements
| a. | Wide Area Network (WAN) Services | ||
| WAN services include the provision and monitoring and management of networks that interconnect two or more separate facilities that span a geographic area larger than a campus or metropolitan area. Transmission facilities include, but are not limited to, point to point circuits, frame relay, dedicated Internet connections, broadband (DSL/Cable Modem) Internet connections, Internet-based VPNs, and dial-up connections. ACS shall work with public carriers and other Symetra circuit providers on behalf of Symetra to ensure delivery of WAN services. Support of any Data Network Services-related work required by designated carriers, to support the Symetra network, is considered within the scope of Services. |
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Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| b. | Local Area Network (LAN) Services | ||
| LAN services include the provision and monitoring and management of networks that are usually confined to a single facility or portion of a facility. LAN components include Dynamic Host Control Protocol (DHCP)/Domain Name Server (DNS) and Wireless LANs supporting all network traffic originating from desktop devices, local file and print servers, application servers, database servers, peripherals, firewalls/routers, other network devices and other user premise devices. This service ends at, but does not include, the LAN attached device network card at the desktop. | |||
| c. | Virtual Private Network (VPN) Services | ||
| VPN services include the provision and monitoring and management of methods for remote End Users and business partners to securely connect to the Network and Data Center Computing Services over the public Internet. This service includes dedicated site-to-site VPN connectivity on a shared public IP network. It requires industry-/Internet-based standards for security to create and preserve privacy, data integrity, and authenticity. The VPN service must be highly scaleable. ACS shall provide and support home user VPN software. | |||
| d. | IP Dial Services | ||
| IP Dial services include the provision and monitoring and management of a connection methodology for remote End Users to securely connect to the Network and Data Center Computing Services via dial-up connectivity. | |||
| e. | Network Security Services | ||
| Network security Services firewall include the provision and support of methods that provide security to physical and logical devise connected to the network. Security services include firewall, intrusion detection, penetration/vulnerability testing. | |||
| f. | Management Services | ||
| Management services include the provision and support of a suite of activities that spans all aspects of system security and networking levels in terms of system and component management and monitoring, information protection, component-addressing methods, access control, and change control. |
3.1.2 General Responsibilities
The following table identifies general roles and responsibilities associated with this SOW. An “X”
is placed in the column under the party that will be responsible for performing the task. ACS
responsibilities are indicated in the column labeled “ACS.”
Table 2. General Roles and Responsibilities
| General Roles and Responsibilities | ACS | Symetra | ||||||
1. Recommend WAN / LAN/ VPN / Firewall requirements based on industry
best practices |
X | |||||||
2. Review and approve requirements and for WAN/LAN/VPN/Firewall
Services |
X | |||||||
3. Review and approve services and standards for all Network Services |
X | |||||||
4. Perform business liaison function to Symetra operational units |
X | |||||||
5. Recommend Network capacity thresholds |
X | |||||||
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Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| General Roles and Responsibilities | ACS | Symetra | ||||||
6. Approve Network capacity planning thresholds |
X | |||||||
7. Provide capacity and performance reports on a quarterly basis |
X | |||||||
8. Procure/Provision and maintain all Network components and circuits |
X | |||||||
9. Reporting performance against SLRs |
X | |||||||
3.1.3 Design/Engineering
The following identifies the activities, roles and responsibilities associated with
engineering/development Services that are specific to this Schedule. Additional activities include:
Table 3. Engineering/Development Roles and Responsibilities
| Engineering/Development Roles and Responsibilities | ACS | Symetra | ||||||
1. Develop Network design, engineering and security testing and
integration procedures that meet requirements and adhere to
defined policies |
X | |||||||
2. Approve Network design engineering, security testing and
integration procedures |
X | |||||||
3. Prepare Network design, engineering and security, plans and
schedules to support new and enhanced applications, architectures
and standards |
X | |||||||
4. Review and approve Network design, engineering and security
plans and schedules |
X | |||||||
5. Approve the scheduling of all changes to the Network
environment |
X | |||||||
6. Coordinate with Symetra and affiliated entities, and public
carriers, as required |
X | |||||||
3.1.4 Asset Acquisition and Network Services Provisioning
ACS will perform asset acquisition and Network Services provisioning and associated with acquiring
network equipment and circuits. The following table identifies the underlying roles and
responsibilities associated with asset acquisition and Network Services provisioning activities.
Table 4. Asset Acquisition and Network Service Provisioning Roles and Responsibilities
| Network Provisioning Roles and Responsibilities | ACS | Symetra | ||||||
1. Order and expedite WAN circuits, equipment and services as
defined by Symetra |
X | |||||||
2. Configure WAN/LAN (hardware, software) prior to installation |
X | |||||||
3. Document router configuration files and IP addressing schemas |
X | |||||||
7. Develop and document Network provisioning requirements and
policies |
X | |||||||
8. Approve Network provisioning requirements and policies |
X | |||||||
9. Provide capacity planning assistance to develop Network resource
requirements projections |
X | |||||||
10. Coordinate ordering, procurement and inventory management of
Network circuits from public carriers |
X | |||||||
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Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| Network Provisioning Roles and Responsibilities | ACS | Symetra | ||||||
11. Manage the performance of public carriers (and other third
parties) to meet defined schedules, project plans, etc. |
X | |||||||
12. Ensure that all new circuits, devices and software provisioned
are included in configuration management documentation |
X | |||||||
3.1.5 Network Operations and Administration
The following table identifies the activities, roles and responsibilities associated with Network
operations and administration that are specific to this Schedule.
| a. | Operations activities include: |
| 1. | Network systems management and troubleshooting (e.g. performance, problem, change and capacity monitoring) | ||
| 2. | Bandwidth management | ||
| 3. | Protocol usage statistics (e.g. identify top talkers by protocol) | ||
| 4. | Working with public carriers and other circuit providers to perform any operations activities | ||
| 5. | Managing and maintaining all Network Service computing resources (e.g. hardware, operating system software and applications) that are required to provide designated Services |
| b. | Administration services include activities, such as: |
| 1. | Managing router configurations, firewalls, Internet Protocol (IP) addresses and related services (e.g. DNS/DHCP) | ||
| 2. | Asset management, including infrastructure software licenses | ||
| 3. | Physical (e.g. equipment) and logical (e.g. IP address change) IMACs |
Table 5. Network Operations and Administration Roles and Responsibilities
| Network Operations and Administration Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide LAN/WAN connectivity contained in the service environment |
X | |||||||
2. Develop and document Network administration requirements and
policies |
X | |||||||
3. Develop and document procedures for administration that meet
requirements and adhere to Symetra defined policies and procedures |
X | |||||||
4. Approve administration policies and procedures |
X | |||||||
5. Perform day-to-day Network operations and administration activities |
X | |||||||
6. Manage all Network devices in accordance with Symetra’s policies
(including security oversight and change management policies) |
X | |||||||
7. Maintain IP addressing schemes, router configurations, routing
tables, VPN configurations, etc. |
X | |||||||
8. Manage End User accounts as needed for access and maintaining
Network resources (e.g. logon user-id and password maintenance) |
X | |||||||
9. Maintain and provide audit information including access, general
logs, application logs in accordance with Symetra’s security policies |
X | |||||||
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Symetra Life Insurance Company (Symetra)
Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| Network Operations and Administration Roles and Responsibilities | ACS | Symetra | ||||||
10. Ensure that Network administration activities are coordinated
through defined change management processes |
X | |||||||
3.1.6 Network Monitoring and Reporting
The following table identifies the roles and responsibilities associated with Network monitoring
and reporting Services that are specific to this Schedule.
Table 6. Network Monitoring and Reporting Roles and Responsibilities
| Network Monitoring and Reporting Roles and Responsibilities | ACS | Symetra | ||||||
1. Develop and document requirements and policies for Network
monitoring and problem management |
X | |||||||
2. Approve requirements and policies for Network monitoring and problem
management |
X | |||||||
3. Develop and document Network monitoring and problem management
procedures, including escalation thresholds, that meet requirements and
adhere to defined policies |
X | |||||||
4. Approve Network monitoring and problem management procedures |
X | |||||||
5. Provide and implement tools for monitoring Network devices and
traffic |
X | |||||||
6. Implement measures for proactive monitoring and self-healing
capabilities to limit Network outages |
X | |||||||
7. Monitor Network per SLRs |
X | |||||||
8. Identify Network problems and resolve in accordance Incident and
Problem Management Services, polices, procedures and SLRs |
X | |||||||
9. Provide on-site staff at Symetra facilities as required to perform
maintenance and problem resolution activities |
X | |||||||
3.1.7 Documentation
The following are required document types that are specific to this Schedule.
| a. | Network system specifications and topologies (for example, router configurations, firewall policies, routing diagrams/IP addressing tables, hardware/software listings, etc.) | ||
| b. | Detailed circuit location information (e.g. circuit ID including LEC access ID, location, speed) | ||
| c. | Detailed documentation showing all firewall policy, group, object, etc. information | ||
| d. | “As-built” documentation for all Network devices (including firewalls) that are deployed in development, test, QA, production or other technical environments |
The following table identifies the roles and responsibilities associated with documentation
activities that are specific to this Schedule.
Table 7. Documentation Roles and Responsibilities
| Documentation Roles and Responsibilities | ACS | Symetra | ||||||
1. Recommend documentation requirements |
X | |||||||
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| Documentation Roles and Responsibilities | ACS | Symetra | ||||||
2. Approve recommend documentation
requirements |
X | |||||||
3. Provide documentation as required by
Symetra |
X | |||||||
3.1.8 Network Security Services
3.1.8.1 Firewall Management
ACS shall provide firewall management Services including firewall engineering and management and
access control list engineering and management in compliance with Symetra’s policies and standards.
The following table identifies roles and responsibilities associated with the firewall management
Services.
Table 8. Firewall Services Roles and Responsibilities
| Security Firewall Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Recommend best practice firewall policies |
X | |||||||
2. Develop Symetra specific firewall polices |
X | |||||||
3. Approve firewall polices |
X | |||||||
4. Provide Services in conformance to firewall policies |
X | |||||||
5. Perform firewall engineering and firewall security design |
X | |||||||
6. Assess firewall security and propose alternative security
designs |
X | |||||||
7. Review and approve firewall security designs |
X | |||||||
8. Maintain Access Control Lists (ACL) in accordance with Policies |
X | |||||||
9. Review and approve firewall ACL policies |
X | |||||||
10. Develop recommendations for improved security |
X | |||||||
11. Review and approve recommendations for improved security |
X | |||||||
3.1.8.2 Security Intrusion Detection Services
ACS shall provide both NIDS (Network-based Intrusion Detection Service) and HIDS (Host-based
Intrusion Detection Service). The following table identifies the roles and responsibilities
associated with the Intrusion Detection Services.
Table 9. Security Intrusion Detection Services Roles and Responsibilities
| Security Intrusion Detection Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Develop policies and standards for intrusion detection |
X | |||||||
2. Approve policies and standards for intrusion detection |
X | |||||||
3. Provide Intrusion Detection Services and reporting |
X | |||||||
4. Allow for independent Intrusion Detection Services |
X | |||||||
5. Develop recommendations for improved security |
X | |||||||
6. Review and approve recommendations for improved security |
X | |||||||
7. Implement approved recommendations |
X | |||||||
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
3.1.8.3 Security Vulnerability & Penetration Services
ACS shall test the susceptibility of Symetra’s Network hosts to a specific attack or suite of
attacks targeting all Symetra Internet address space as well as all Symetra Intranet address space
using automated and custom methods. The following table identifies the roles and responsibilities
associated with the security penetration Services.
Table 10. Security Penetration Services Roles and Responsibilities
| Security Penetration Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Develop policies for security vulnerability & penetration
testing |
X | |||||||
2. Approve policies for security vulnerability & penetration
testing |
X | |||||||
3. Conduct security vulnerability scans & penetration testing |
X | |||||||
4. Allow for independent vulnerability & penetration Services |
X | |||||||
5. Provide reporting on testing results |
X | |||||||
6. Develop recommendations for improved security |
X | |||||||
7. Review and approve recommendations for improved security |
X | |||||||
8. Implement approved recommendations |
X | |||||||
3.1.8.4 Security Incident & Audit Management Services
The following table identifies the roles and responsibilities associated with security incident
management Services.
Table 11. Security Incident & Audit Management Roles and Responsibilities
| Incident Management Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide initial review (level 1) of security incidents and the
determination if escalation to Symetra Information Security (level 2, 3
support) is warranted |
X | |||||||
2. Identify and removal from the network of any PC virus/worm infected
system |
X | |||||||
3. Identify and provide countermeasures for virus / worm attacks |
X | |||||||
4. Establish security audit policies |
X | |||||||
5. Provide technical expertise for security audits |
X | |||||||
6. Collect and review all incidents reported by all other security
Services (e.g. NIDS, HIDS, penetration testing, firewall). |
X | |||||||
7. Maintain log files in accordance with Symetra policies and Service
levels |
X | |||||||
8. Provide security reporting |
X | |||||||
3.2 Exclusions
The following items are specifically excluded from this statement of work:
a. None
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
4.0 Service Management
4.1 Objectives
A key objective of the Agreement is to attain the SLRs. SLAs and Project-specific SLAs are
specified with Fee Reductions where business is impacted through failure to meet significant
mission critical systems or services, or project milestones or objectives warrants a reduction in
Fees paid when Service performance requirements are not met. SLRs are detailed in the following
sections of this Schedule and SLAs are detailed in Schedule 5 — Fee Reductions.
ACS shall provide written reports to Symetra regarding ACS’s compliance with the SLRs specified in
this SOW Schedule.
4.2 Definitions
The following defined terms shall apply to this SOW and the following SLRs:
Availability –The percentage of scheduled time the Service is fully operational. Availability
represents a measure of the fraction of time during a defined period when the Service provided is
deemed to be as good or better than the defined requirement.
Availability = 100% - Unavailability (%)
Where Unavailability is defined as:
S outage duration x 100
(Schedule Time – planned outage)
IMAC – Installations, Moves, Adds, Changes — General term for the routine work performed on
equipment and services including installations, relocations and upgrades.
Network Transit Delay – Round trip transit delay from ingress and egress ports on premise devises.
Maximum Outage Per Link—The greatest allowable time that a network Service is unavailable.
Network—The network is comprised of the Local Area Network, Wide Area Network and VPN.
4.3 Service Level Requirements (SLRs)
ACS shall meet the following SLRs commencing on the Handover Date (unless another date is
expressly set forth in a particular SLR) that is applicable to Network Services. SLRs associated
with Fee Reductions are detailed in Schedule 5 — Fee Reductions. All times referenced are in
Pacific Standard Time.
Table 12. Network Availability SLRs
Definition
|
Network Availability is defined as the time during which the network is fully functioning as specified below and normal business operations can be carried out with no data loss, downtime, or performance degradation on primary path. | |
| Performance criteria for the wide area network and virtual private network are to be measured on an end-to-end basis. End-to-end shall mean site-to-site or from a premises access device (e.g. router) across the local, regional, and core networks to another access device. |
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
Pre-scheduled downtime requirements |
All pre-scheduled maintenance shall be performed between the period beginning Sunday 0830 to 2030 |
| Network Availability SLRs | ||||||
| Service Type | Service Measure | Performance Target | SLR | |||
End-to End Availability
- - Critical Locations
(Symetra headquarters
and ACS data center)
(Fee Reduction is
triggered after 180
minutes of aggregate
downtime achieved within
a Contract Year; SLA
measurement begins
immediately following
completion of the
network)
|
Availability | Sun-Sat, 0000-2400 | [***]% | |||
Remote office
Availability
|
Availability | Sun-Sat, 0000-2400 | [***]% | |||
Tele-workers Availability
|
Availability | Sun-Sat, 0000-2400 | [***]% | |||
Internet access
Availability
|
Availability | Sun-Sat, 0000-2400 | [***]% | |||
LAN locations
|
Availability | Sun-Sat, 0000-2400 | [***]% | |||
| Formula | Availability(%) = 100% - Unavailability (%)
Where Unavailability is defined as: (S Outage Duration x 100%) ¸ (Schedule Time – Planned Outage) |
|||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | To be agreed by the Parties | |||||
Table 13. Network Performance SLRs
Definition
|
Network performance includes the ability of the network components to deliver data timely and accurately. | |
| All performance criteria are to be measured on a per circuit and component basis– criteria is not to be aggregated and averaged for all circuits and network components. Maximum packet size is 128 bytes. |
Portions marked [***] have been omitted pursuant to a Confidential
Treatment Request by Symetra Financial Corp., this information has been filed
separately with the Securities and Exchange Commission.
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| Network Performance SLRs | ||||||||
| Performance Type | ||||||||
| Per Circuit | Service Measure | Performance Target | SLR | |||||
Frame Delivery Ratio
(SLA/SLR
measurement and
performance Target
adjustment period
of 60 calendar
days after the
applicable Handover
Date)
|
Successful frame transmission of frame relay frame between any remote site and NWSC; measured daily, reported monthly (subject to ability of carrier to report these statistics. | 99.9 | % | [***]% (data loss £ [***]%) |
||||
| Formula – Transit Delay | NTD = t2 – t1 |
|||||||
| Where: |
||||||||
| t1 is the time when a packet leaves the ingress premise, and | ||||||||
| t2 is the times when the packet arrives at the egress premise | ||||||||
| Formula – Frame Delivery |
Packet Delivery Ratio = 1 minus PDR Where: “PDR” = Packets delivered/ packets sent. |
|||||||
| Measurement Interval | Capture daily,
measure monthly, report monthly within approved operational windows |
|||||||
| Measurement Tool | To be agreed by the Parties | |||||||
Table 14. Network Administration Services SLRs
Definition
|
Routers and circuits to be managed proactively using either product-specific or proprietary Network monitoring and management tools. Measurement for these network components is 24x7x365 requirement. Pre-scheduled maintenance shall be preformed according to the published maintenance window schedule, with the ability to reschedule based on Network Availability requirements from the various Symetra groups or clients. |
| Network Administration Services SLRs | ||||||
| Administration Task | Service Measure | Performance Target | SLR | |||
Network Service
capacity
reallocation or
change per change
management process
|
Proactive monitoring and preemptive intervention to advise Symetra of need to increase capacity. | 15 day sustained avg. daily utilization reaches 60% of installed capacity | [***]% | |||
IMAC– Implement
service packs and
updates to “dot”
releases per change
management process
|
Overall schedule | Mon–Sat, 0700–1800 |
<[***] hours or per Symetra agreed schedule [***]% |
|||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities
and Exchange Commission.
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| Network Administration Services SLRs | ||||||
| Administration Task | Service Measure | Performance Target | SLR | |||
IMAC—Implement
version or major
release updates
|
Overall schedule | Mon–Sat, 0700–1800 |
<[***] hours or per Symetra agreed schedule [***]% |
|||
IMAC—service
addition or change
as scheduled per
change management
process
|
Elapsed time | Increases of
installed capacity
within 2 months Decreases of installed capacity within 6 months |
[***]% | |||
Adding/deleting VPN
user accounts
|
Response time | Mon–Fri, 0700–2000 within 30 minutes of notification | [***]% | |||
Firewall Management Implementation of firewall changes related to changing, adding/deleting firewall rules. |
Response time | Emergencies: £ 2 hours Standard Requests: within normal change control parameters after submission by Symetra |
[***]% | |||
| Formula | Transactions completed within performance Target / total transactions |
|||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | To be agreed by the Parties | |||||
Table 15. Security Intrusion Detection SLRs
Definition
|
Network traffic to/from designated systems is monitored for current attack signatures and is retained for 3 days. Measurement for this Service is 7x24x365 requirement. Pre-scheduled maintenance shall be preformed between the period beginning Sunday 0100 to 0700. |
| Security Intrusion Detection SLRs | ||||||||
| Management Task | Service Measure | Performance Target | SLR | |||||
NIDS – review all
positive priority 1
and priority 2
alerts and notify
Symetra by E-mail
(Per prioritized
alert schedule to
be agreed between
ACS and Symetra
|
Elapsed time from receipt of notification (SLA/SLR measurement and performance target adjustment period of 120 days after production deployment date) | <15 minutes | [***] | % | ||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
| Security Intrusion Detection SLRs | ||||||
| Management Task | Service Measure | Performance Target | SLR | |||
| Formula | Performance = Transactions completed per management task within performance Target / total transactions per management task occurring during the Measurement Interval |
|||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | Mutually agreed intrusion detection testing tools |
|||||
Table 16. Security Penetration Services SLRs
Definition
|
Entire Networks are tested to determine the susceptibility of their hosts to current attacks. Measurement for this Service is Mon-Fri, during business hours, for Intranet testing. Whereas Internet penetration testing occurs outside of business hours [1700 – 0700] and where appropriate, running continuously over the weekend. Pre-scheduled maintenance shall be preformed during periods of Service inactivity. |
| Security Vulnerability & Penetration Services SLRs | ||||||
| Management Task | Service Measure | Performance Target | SLR | |||
Penetration testing
– response to
positive
penetration test
results that match
defined penetration
profile
(SLA/SLR will take
effect ninety (90)
calendar days
following the final
Handover Date for
all Services)
|
Defined penetration profile. | Five (5) Business Days | [***]% | |||
| Formula | Response time required to address positive penetration testing results based on established penetration profiles | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | Mutually agreed penetration testing tools | |||||
4.4 Reports
Without limiting the terms of Section 2.11.1 of the Agreement, ACS will provide written
reports to Symetra regarding ACS’ compliance with the SLRs and other Network activity reports
specified in this Date Network Services SOW:
Portions marked [***] have been omitted pursuant to a Confidential Treatment
Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Schedule 2D — Data Network Services SOW
Schedule 2D — Data Network Services SOW
5.0 Referenced SOW Appendices and SOW Schedules
5.1 Referenced Data Network Services SOW Appendices
Not applicable.
5.2 Referenced ITSA Schedules
| ITSA Schedule | Description | |
Schedule 2A
|
Cross Functional Services SOW | |
Schedule 3
|
Fees | |
Schedule 5
|
Fee Reductions |
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
Schedule 2E
Voice Communications Services SOW
for
Symetra Life Insurance Company (Symetra)
October 28, 2004
October 28, 2004
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
TABLE OF CONTENTS
1.0 Voice Communications Overview and Service Objectives |
3 | |||
1.1 Voice Communications Services Overview |
3 | |||
1.2 Service Objectives |
3 | |||
2.0 Service Environment |
4 | |||
2.1 Scope of the Infrastructure to be Supported |
4 | |||
2.2 Work-In-Progress |
4 | |||
2.3 Future initiatives |
5 | |||
2.4 Voice Communications Baseline Information |
5 | |||
3.0 Voice Communications Services Requirements |
6 | |||
3.1 Service Descriptions and Roles & Responsibilities |
6 | |||
3.2 Exclusions |
10 | |||
4.0 Service Management |
10 | |||
4.1 Objectives |
10 | |||
4.2 Definitions |
10 | |||
4.3 Service Level Requirements (SLRs) |
11 | |||
4.4 Reports |
12 | |||
5.0 Referenced SOW Appendices and SOW Schedules |
12 | |||
5.1 Referenced Voice Communications SOW Appendices |
12 | |||
5.2 Referenced ITSA Schedules |
12 |
List of Tables
Table 1. Voice Communications Inbound and Outbound Baseline Projections |
5 | |||
Table 2. General Roles and Responsibilities |
6 | |||
Table 3. Desk Phone Service Roles and Responsibilities |
7 | |||
Table 4. Voice Network Services Roles and Responsibilities |
7 | |||
Table 5. Unified Messaging Roles and Responsibilities |
8 |
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
Table 6. Directory Services Roles and Responsibilities |
8 | |||
Table 7. Conferencing Services Roles and Responsibilities |
9 | |||
Table 8. Contact Center Service Roles and Responsibilities |
9 | |||
Table 9. Operations and Administration Roles and Responsibilities |
9 | |||
Table 10. Voice Communications Service Availability SLRs |
11 | |||
Table 11. Service Responsiveness SLRs |
11 |
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
1.0 Voice Communications Overview and Service Objectives
1.1 Voice Communications Services Overview
Voice communications Services are the services and activities, as detailed in this Voice
Communications Services SOW, required to provide and support Symetra with a number of voice
communication Services. ACS is responsible for full provision, operation and management of current
and emerging voice communications including, but not limited to, the following Services:
| n | Desk phone | ||
| n | Local service (dial tone) | ||
| n | Wireless services (e.g. cell phone, Blackberry service connectivity) | ||
| n | Long distance | ||
| n | Unified messaging | ||
| n | Calling cards | ||
| n | Inbound toll-free service | ||
| n | Caller recording and indexing | ||
| n | Audio and web conferencing | ||
| n | Contact center services, including: |
| – | Interactive voice response (IVR) | ||
| – | Automated call distribution (ACD) | ||
| – | Interpretive voice services |
As depicted in Figure 1 below, in addition to the Services described in this Voice Communications
Services SOW, ACS is responsible for providing the Services described in Schedule 2A – Cross
Functional Services SOW. Figure 1 depicts the relationship between the Cross Functional Services
SOW, and all SOWs within the scope of the Agreement as of the Effective Date.
Cross Functional SOW
Data
|
Distributed | Data | Help | Output | Content | |||||||
| Center | Computing | Network | Voice | Desk | Processing | Management | ||||||
| Services | Services | Services | Communications | Services | Services | Services | ||||||
| SOW | SOW | SOW | Services SOW | SOW | SOW | SOW |
Figure 1: Service Towers with Cross Functional View
1.2 Service Objectives
The following are the key high-level Service objectives Symetra expects to achieve through
outsourced voice communications Services and this Voice Communications Services SOW:
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
| n | Meet Symetra business needs for highly available, scalable, reliable, and secure voice communications Services | ||
| n | Acquire services with availability guarantees backed by SLAs | ||
| n | Acquire voice services with features and functions that meet user needs and meet Symetra business requirements | ||
| n | Acquire services that can leverage operational scale and best practices to achieve optimum commercial price performance |
2.0 Service Environment
2.1 Scope of the Infrastructure to be Supported
The following sub-sections specify the Appendices and other relevant materials containing details
of Symetra’s voice communications environment. These service environment Appendices are to be
maintained by ACS and made available to Symetra on a quarterly basis. (Currently, Symetra Corporate
provides Symetra voice communications services as a shared service.)
2.1.1 Hardware and Software
Intentionally Left Blank.
2.1.2 Service Locations
| a. | ACS will provide voice communications Services to Symetra’s corporate headquarters, remote offices and to Symetra home-based workers. A description of the Symetra service locations for which ACS will provide voice communications Services is provided in Attachment B of the Agreement. |
2.1.3 Personnel
| a. | ACS will be responsible for providing skilled and appropriately certified voice communications-related staffing as required to perform the Services required hereunder in accordance with the SLRs set forth in this Voice Communication Services SOW. (Currently, Symetra Corporate provides Symetra voice communications-services related staffing as a shared service.) |
2.1.4 Policies, Procedures and Standards
Intentionally Left Blank.
2.1.5 Voice Communications Systems Features and Functions
Intentionally Left Blank.
2.1.6 Agreements and Licenses
Intentionally Left Blank.
2.2 Work-In-Progress
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
Intentionally Left Blank.
2.3 Future initiatives
Intentionally Left Blank.
2.4 Voice Communications Baseline Information
Symetra’s current voice communications utilization and projected inbound and outbound usage is
presented below. These business requirements represent Symetra’s most realistic projection of its
voice communications Services requirements as of the Effective Date based on a combination of past
trends and current anticipated overall business direction over the Term of the Agreement.
These metrics, along with other data which may be pertinent for sizing the solution, are reflected
in Schedule 3 - Fees.
Table 1. Voice Communications Inbound and Outbound Baseline Projections
| System | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | ||||||||||||||||||
Headquarters Users |
948 | 971 | 994 | 1018 | 1042 | |||||||||||||||||||
Headquarters VIP Users |
59 | 59 | 59 | 59 | 59 | |||||||||||||||||||
Remote Offices |
8 | 8 | 8 | 8 | 8 | |||||||||||||||||||
Remote Office Users |
103 | 103 | 103 | 103 | 103 | |||||||||||||||||||
Tele-workers |
138 | 138 | 138 | 138 | 138 | |||||||||||||||||||
Outbound IntraState |
||||||||||||||||||||||||
Dedicated
(monthly
minutes) |
15,000 | 17,250 | 19,837 | 22,813 | 16,235 | |||||||||||||||||||
Switched
(monthly
minutes) |
10,000 | 11,500 | 13,225 | 15,208 | 17,490 | |||||||||||||||||||
Outbound Interstate |
||||||||||||||||||||||||
Dedicated
(monthly
minutes) |
168,000 | 193,200 | 222,180 | 255,507 | 293,833 | |||||||||||||||||||
Switched
(monthly
minutes) |
30,000 | 34,500 | 39,675 | 45,626 | 52,470 | |||||||||||||||||||
Calling
Cards
(units/monthly
minutes) |
214 | 246 | 283 | 325 | 374 | |||||||||||||||||||
Inbound Toll Free |
||||||||||||||||||||||||
Dedicated
Termination |
525,000 | 603,750 | 694,312 | 798,459 | 918,228 | |||||||||||||||||||
Switched
Termination |
Unknown | |||||||||||||||||||||||
Large PBX (300+ Users) |
1 | 1 | 1 | 1 | 1 | |||||||||||||||||||
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
| System | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | ||||||||||||||||||
Small PBX System |
8 | 8 | 8 | 8 | 8 | |||||||||||||||||||
Handsets |
1200 | 1200 | 1200 | 1200 | 1200 | |||||||||||||||||||
Cell Phones (units/total
monthly minutes) |
143/600,000 | 146/690,000 | 150/793,500 | 154/912,525 | 157/1,049,403 | |||||||||||||||||||
Pagers (units) |
60 | 61 | 62 | 64 | 65 | |||||||||||||||||||
Blackberry Users |
40 | 41 | 42 | 43 | 44 | |||||||||||||||||||
Teleconferencing
(users/total monthly
minutes) |
100/ 18000 | 115/ 20,700 | 132/23,805 | 152/27,375 | 174/31,482 | |||||||||||||||||||
3.0 Voice Communications Services Requirements
3.1 Service Descriptions and Roles & Responsibilities
In addition to the services, activities, and roles and responsibilities described in Schedule 2A -
Cross Functional Services SOW, ACS is responsible for the following voice communications services,
activities and roles and responsibilities.
3.1.1 General Responsibilities
The following table identifies the general roles and responsibilities associated with this Voice
Communications Services SOW. An “X” is placed in the column under the Party that will be
responsible for performing the task. ACS responsibilities are indicated in the column labeled
“ACS.”
Table 2. General Roles and Responsibilities
| General Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide voice communications strategies and
requirements |
X | |||||||
2. Provide voice communications design and engineering to
meet Symetra strategies and requirements |
X | |||||||
3. Approve voice communications design and engineering |
X | |||||||
4. Provide, operate and manage current and emerging voice
telecommunications services required to meet Symetra’s
business and operational requirements as they evolve |
X | |||||||
5. Procure, install, maintain, and provide problem
resolution for all voice communications services |
X | |||||||
6. Provide connectivity through methods such as
traditional wired, wireless and emerging methodologies |
X | |||||||
7. Fraud prevention, detection and reporting |
X | |||||||
8. Procure and own all voice services related hardware,
software, and peripherals |
X | |||||||
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
3.1.2 Desk Phone Service
ACS shall provide desk phones and Services necessary to provide telephone services to employees
throughout Symetra facilities. Services include providing planning and assessment, implementation,
training and ongoing monitoring and management of the telephone services.
The telephone and auxiliary equipment includes feature rich single-line telephones, multi-line
telephones, consoles, and auxiliary equipment, which also include headsets, speakerphones, and
add-on modules. Desk phone Service allows authorized callers to receive incoming calls and to make
intra-campus, inter-campus, outside local, outside long distance, and international calls (limited
stations). The following table identifies the roles and responsibilities associated with desk phone
Service.
Table 3. Desk Phone Service Roles and Responsibilities
| Desk Phone Service Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide desk phone requirements (e.g. number of sets, functions and
features) |
X | |||||||
2. Provide desk phone design and engineering to meet Symetra
requirements |
X | |||||||
3. Approve desk phone design and engineering |
X | |||||||
4. Provide end-to-end internal and external phone connectivity
including hardware and/or peripherals |
X | |||||||
5. Provide emergency 911 services to desk phone |
X | |||||||
6. Provide adaptive voice telecommunications services and equipment as
required by laws affecting the support of the disabled |
X | |||||||
7. Manage and maintain private dial plan |
X | |||||||
3.1.3 Voice Network Services
ACS shall provide voice network Services, including local service and long distance service, to
Symetra phone users with local, intrastate, interstate, and international calling from Symetra’s
facilities. Long distance calls are those that terminate at locations outside the caller’s local
calling area to locations in the United States (domestic) and to foreign countries (international).
long distance services include the planning and assessment, implementation, and ongoing management
necessary to deploy long distance Services enterprise wide. The following table identifies the
roles and responsibilities associated with long distance Service.
Table 4. Voice Network Services Roles and Responsibilities
| Long Distance Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide voice network Services strategies and requirements |
X | |||||||
2. Provide voice network Services design and engineering to
meet Symetra strategies and requirements |
X | |||||||
3. Approve voice network Services design and engineering |
X | |||||||
4. Provide local and long distance network Services |
X | |||||||
5. Provide long distance telephone calling cards and management |
X | |||||||
6. Provide local and long distance usage monitoring and
reporting |
X | |||||||
7. Provision local and long distance Services |
X | |||||||
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
3.1.4 Unified Messaging
ACS shall provide unified messaging (e.g., integrated voice mail, email, fax) services to allow the
efficient exchange of messages between two or more people enterprise wide. The following table
identifies the roles and responsibilities associated with unified messaging Service.
Table 5. Unified Messaging Roles and Responsibilities
| Unified Messaging Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide unified messaging Services strategies and
requirements |
X | |||||||
2. Provide unified messaging Services design and engineering to
meet Symetra strategies and requirements |
X | |||||||
3. Approve unified messaging Services design and engineering |
X | |||||||
4. Provide unified messaging Services |
X | |||||||
5. Provide unified messaging usage monitoring and reporting |
X | |||||||
6. Provide unified messaging storage capacity management |
X | |||||||
7. Provide unified messaging retention management per Symetra
requirements and external regulations |
X | |||||||
8. Provision unified messaging Services |
X | |||||||
9. Conduct mailbox moves, adds and changes |
X | |||||||
10. Maintain mailbox configurations by user |
X | |||||||
11. Provide new hire training material |
X | |||||||
3.1.5 Directory Service
ACS shall provide directory Services (e.g. Outlook) that provide Symetra telephone users with vital
communication information and tools including external directories such as white pages and yellow
pages. Outlook features shall include a repository of directory information for internal as well
as Symetra external contacts. Directory Services also include managing white page and yellow page
listing services to meet Symetra requirements. The following table identifies the roles and
responsibilities associated with directory Services activities.
Table 6. Directory Services Roles and Responsibilities
| Directory Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide directory Services strategies and requirements |
X | |||||||
2. Provide recommendations to meet Symetra strategies and
requirements |
X | |||||||
3. Approve directory Services recommendations |
X | |||||||
4. Provide a secure and searchable online directory service with
real time updates |
X | |||||||
5. Provide white pages and yellow page directories annually |
X | |||||||
6. Provide white page and yellow page listing requirements |
X | |||||||
7. Manage white page and yellow page listing services to meet
Symetra requirements |
X | |||||||
8. Approve white page and yellow page listing services |
X | |||||||
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
3.1.6 Conferencing Services
ACS shall provide conferencing Services (e.g. audio, web) that provide Symetra users with
conference capabilities. Services include the planning and assessment, implementation, training,
and ongoing management necessary to implement conferencing Services. An array of features will be
supported with the delivered services. The following table identifies the roles and
responsibilities associated conferencing Services.
Table 7. Conferencing Services Roles and Responsibilities
| Conferencing Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Develop conferencing Services strategies and requirements |
X | |||||||
2. Design conferencing Services to meet Symetra strategies and
requirements |
X | |||||||
3. Approve conferencing Services |
X | |||||||
4. Provide conferencing Services |
X | |||||||
5. Provide support for the setup of conferencing sessions |
X | |||||||
3.1.7 Contact Center Service
ACS shall provide contact center Services that provides toll-free call processing and call flow
with integrated ACD, IVR, CMS, and future CTI support and CRM integration. Services include
planning and assessment, implementation, and ongoing management necessary to deploy contact center
Services enterprise wide. The following table identifies roles and responsibilities associated with
contact center Services activities.
Table 8. Contact Center Service Roles and Responsibilities
| Contact Center Services Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide contact center Services strategies and
requirements |
X | |||||||
2. Recommend contact center Services to meet Symetra
strategies and requirements |
X | |||||||
3. Approve contact center Services |
X | |||||||
4. Provision and or configure contact center Services |
X | |||||||
3.1.8 Operations, Administration and Management
ACS shall operate, administer, maintain and manage all voice communications Services. The following
identifies roles and responsibilities associated with operations, administration and management
Services that are specific to this Voice Communications Services SOW.
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
Table 9. Operations and Administration Roles and Responsibilities
| Operations and Administration Roles and Responsibilities | ACS | Symetra | ||||||
1. Provide Symetra with a detailed explanation of outages
that identify the regional impact, source of outage, and
preventative measures being taken to prevent future
similar outages |
X | |||||||
2. Manage End User accounts (e.g. account set up,
password resets, account deletions and terminations) and
provide administrative support (online directory services
to maintain and update the directory in accordance with
the SLRs) for all Services contained in this Voice
Communications Services SOW according to Symetra
information security policies |
X | |||||||
3. Provide proactive and reactive voice Services fraud
and security management and reporting |
X | |||||||
4. Provide physical and logical IMACs |
X | |||||||
3.2 Exclusions
The following items are specifically excluded from this Voice Communications Services SOW:
| a. | Support for legacy voice recording system | ||
| b. | Replacement of Symetra owned PBXs and peripherals at eight (8) remote locations currently not shared with Symetra Corporate offices (see Appendix E.5 – Symetra Services Locations) | ||
| c. | Desktop hardware IMACS at Symetra headquarters |
4.0 Service Management
4.1 Objectives
A key objective of the Agreement is to attain SLRs. SLAs and project-specific SLAs have Fee
Reductions associated with them where business is impacted through failure to meet significant
mission critical systems or services, or project milestones or objectives warrants a reduction in
Fees paid when Service performance requirements are not met. SLRs are detailed in the following
sections of this Voice Communications Services SOW, and SLAs are detailed in Schedule 5 - Fee
Reductions.
ACS shall provide written reports to Symetra regarding ACS’ compliance with the SLRs specified in
this SOW.
4.2 Definitions
The following defined terms shall apply to this Voice Communications Services SOW and the following
SLRs:
Access Line—The connection between a customer premises network interface and the local exchange
carrier (LEC) that provides access to the PSTN.
LATA—Local access and transport area is a term that refers to a geographic region assigned to one
or more telephone companies for providing communication services. A connection between two
telephone companies within the same region is referred to as intraLATA. A connection between two
local exchange carriers in different regions is called interLATA, which is the same as
long-distance service.
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
Public Switched Telephone Network (PSTN)—The network of equipment, lines, and controls assembled to
establish communication paths between calling and called parties in North America.
4.3 Service Level Requirements (SLRs)
ACS shall meet the following SLRs commencing on the Handover Date (unless another date is
expressly set forth in a particular SLR) that is applicable to Voice Communications Services. ACS
must consistently meet or exceed the following SLRs. All times referenced are in Pacific Standard
Time.
Table 10. Voice Communications Service Availability SLRs
| Definition | Availability of the voice communications network, including all circuits and all associated hardware (includes blocked calls). |
Voice Communications Availability SLRs
| Service Type | Service Measure | Performance Target | SLR | |||
Overall Voice
Transport and
System Availability
|
Availability per location | Sun-Sat, 0000-2400 | [***]% | |||
Local Service
|
Availability per location | Sun-Sat, 0000-2400 | [***]% | |||
| Formula | Availability(%) = 100% — unavailability (%) Where unavailability is defined as: (S outage duration x 100%) ¸ (scheduled time – planned outage) |
|||||
| Measurement Interval | Unless otherwise noted above, capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | To be agreed by the Parties |
Table 11. Service Responsiveness SLRs
| Definition | The ability of ACS to respond to, process, and fulfill client-requested changes and reconfiguration of various types of voice services. |
Service Responsiveness SLRs
| Service Type | Service Measure | Performance Target | SLR | |||
Technology solution design |
Elapsed time | £ 2 weeks of request
|
[***]% | |||
Install voice access line
|
Elapsed time | £ 45 Business Days of request
|
[***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
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Schedule 2E—Voice Communications Services SOW
Schedule 2E—Voice Communications Services SOW
| Service Type | Service Measure | Performance Target | SLR | |||
System hardware capacity changes (Symetra headquarters only) |
Elapsed time | £ 4 hours of request received
within Business Day hours
|
[***]% | |||
User Account Changes
|
Elapsed time | £ 4 hours of request received
within Business Day
hours |
[***]% | |||
Remote Location IMACs
|
Elapsed time | £ 1 week of request
|
[***]% | |||
Headquarters PBX management |
Elapsed time | £ 2 Business Days of request
received within Business Day
hours
|
[***]% | |||
| Formula | Number of requests successfully completed per Service type within performance target/total number of requests per Service type occurring during the Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement Tool | To be agreed by the Parties |
4.4 Reports
Without limiting the terms of Section 2.11.1 of the Agreement, ACS shall provide written
reports to Symetra regarding ACS’ compliance with the SLRs and other voice communications
management reports specified in this Voice Communications Services SOW.
5.0 Referenced SOW Appendices and SOW Schedules
5.1 Referenced Voice Communications SOW Appendices
Not applicable.
5.2 Referenced ITSA Schedules
| ITSA Schedule | Description | |
Schedule 2A
|
Cross Functional Services SOW | |
Schedule 3
|
Fees | |
Schedule 5
|
Fee Reductions |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
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Symetra Life Insurance Company (Symetra)
Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Schedule 2F
Help Desk Services SOW
for
Symetra Life Insurance Company (Symetra)
October 28, 2004
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
TABLE OF CONTENTS
1.0 Help Desk Services Overview and Objectives |
3 | |||
1.1 Services Overview |
3 | |||
1.2 Service Objectives |
3 | |||
2.0 Service Environment |
4 | |||
2.1 Scope of the Infrastructure to be Supported |
4 | |||
2.2 Initiatives In Progress |
5 | |||
2.3 Future initiatives |
5 | |||
2.4 Help Desk Baseline Information |
5 | |||
3.0 Help Desk Support Services Requirements |
6 | |||
3.1 Service Descriptions and Roles & Responsibilities |
6 | |||
3.2 Exclusions |
13 | |||
4.0 Service Management |
13 | |||
4.1 Purpose |
13 | |||
4.2 Definitions |
13 | |||
4.3 Service Level Requirements (SLRs) |
17 | |||
4.4 Reports |
20 | |||
5.0 Referenced SOW Appendices and SOW Schedules |
20 | |||
5.1 Referenced Help Desk SOW Appendices |
20 | |||
5.2 Referenced ITSA Schedules |
20 |
List of Tables
Table 1. |
Help Desk Baseline Projections | 5 | ||
Table 2. |
General Roles and Responsibilities | 7 | ||
Table 3. |
SPOC Call Roles and Responsibilities | 7 | ||
Table 4. |
Help Desk Operations and Administration Roles and Responsibilities | 7 | ||
Table 5. |
Service Request and Trouble Ticket Management Roles and Responsibilities | 9 |
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Table 6. |
Remote Desktop Management Roles and Responsibilities | 10 | ||
Table 7. |
End-User Administration Services Roles and Responsibilities | 10 | ||
Table 8. |
Installs, Moves, Adds and Change Management Roles and Responsibilities | 11 | ||
Table 9. |
Self Help Roles and Responsibilities | 11 | ||
Table 10. |
Exceptions Requests | 12 | ||
Table 11. |
Planning and Analysis Roles and Responsibilities | 12 | ||
Table 12. |
Reporting Roles and Responsibilities | 12 | ||
Table 13. |
Priority Levels | 16 | ||
Table 14. |
Intentionally Left Blank | 17 | ||
Table 15. |
Response Time SLR | 17 | ||
Table 16. |
Incident Resolution SLR | 17 | ||
Table 17. |
Account Administration SLR | 18 | ||
Table 18. |
Customer Satisfaction SLR | 19 |
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1.0 Help Desk Services Overview and Objectives
1.1 Services Overview
Help Desk Services are the services and activities, as detailed in the following Help Desk
Services SOW, required to coordinate and respond to problems and Service Requests made by Symetra
Information Technology Service Tower End-Users and technical staff located in North America. The
ACS Help Desk is responsible for providing a toll-free number for access to Help Desk
Single-Point-of-Contact (“SPOC”) and for providing end-to-end ownership (e.g. logging, tracking,
resolution and reporting) of Trouble Tickets and Service Requests. Trouble Tickets and Services
Requests can be resolved by Help Desk staff or may need to be referred/escalated to more
specialized entities for resolution such as Symetra staff, a vendor or other designated Third
Parties. As part of the Help Desk Services, ACS will coordinate the Root Cause Analysis process.
As depicted in Figure 1 below, in addition to the Service described in this Help Desk SOW, ACS is
responsible for providing the Services described in Schedule 2A — Cross Functional Services SOW.
Figure 1 depicts the relationship between the Cross Functional Services SOW, and all SOWs within
the scope of the Agreement.
Cross Functional Services SOW
| Data Center Services SOW |
Distributed Computing Services SOW |
Data Network Services SOW |
Voice Comm. Services SOW |
Help Desk Services SOW |
Output Processing Services SOW |
Content Management Services SOW |
Figure 1: Service Towers with Cross Functional View
1.2 Service Objectives
The following are the key high-level service objectives Symetra expects to achieve through
outsourced Help Desk Services and this Help Desk Services SOW.
| n | Improve IT customer service and problem resolution speed through expanded service hours, self service abilities, and skilled Help Desk staff in the areas of industry standard IT products | ||
| n | Improve Symetra efficiency and effectiveness by adopting ACS leveraged knowledge databases and best practices in the areas of customer reporting, logging, tracking, resolving of IT problems and Service Requests | ||
| n | Improve efficiency and effectiveness by early identification and addressing of root causes of technical problems including working with specialized entities for resolution such as Symetra staff, a vendor or other designated Third Parties, before they become trends | ||
| n | Have the ability to acquire skilled Help Desk support for new technologies early in their life cycle while maintaining support for older technologies | ||
| n | Achieve the SLRs specified in Section 4 of this SOW. |
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
2.0 Service Environment
2.1 Scope of the Infrastructure to be Supported
The types of calls to be handled by ACS Help Desk include:
| n Infrastructure | |||
| n Systems software (i.e. operating systems, utilities) | |||
| n Packaged office productivity software | |||
| n Password resets | |||
| n Symetra applications (tracking and escalating to Symetra only) |
ACS will provide Help Desk Services specified in this Schedule for the following Symetra IT Service
Towers:
| n Enterprise Operation Center Services SOW as defined in Schedule 2B | |||
| n Distributed Computing Services SOW as defined in Schedule 2C | |||
| n Data Network Management Services SOW as defined in Schedule 2D | |||
| n Voice Communications Services SOW as defined in Schedule 2E |
The following sub-sections specify the appendices and other relevant materials containing details
of the Help Desk Services environment to be supported/complied with. Service environment appendices
are to be maintained and reviewed with Symetra by ACS and made available to Symetra on a quarterly
basis.
2.1.1 Hardware and Software
| a. | A list of Symetra Help Desk supported software and hardware is provided in Appendix F.1 — Help Desk Supported Software and in Appendix F.2 — Help Desk Supported Hardware. |
2.1.2 Help Desk Software, Tools and Knowledge Databases
Intentionally Left Blank.
2.1.3 Service Locations
| a. | A description of the Symetra service locations for which ACS will provide Help Desk Services is provided in Attachment B of the Agreement. |
2.1.4 Personnel
| a. | ACS will be responsible for staffing skilled and appropriately certified Help Desk staff required to perform the Services required hereunder in accordance with the SLRs set forth in this SOW. Currently, Safeco Corporate provides Symetra Help Desk Services as a shared service. |
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
2.1.5 Policies and Procedures
Intentionally Left Blank.
2.2 Initiatives In Progress
Intentionally Left Blank.
2.3 Future initiatives
Intentionally Left Blank.
2.4 Help Desk Baseline Information
Symetra’s current Help Desk utilization and projected usage is presented below. These business
requirements represent Symetra’s most realistic projection of the Service requirements for as of
the Effective Date based on a combination of past trends and current anticipated overall business
direction over the Term of the Agreement.
These metrics, along with other data which may be pertinent for sizing the solution, are reflected
in Schedule 3 -Fees.
Table 1. Help Desk Baseline Projections
| 5/2003 | ||||||||||||||||||||||||||
| to | ||||||||||||||||||||||||||
| System/Metric | 4/2004 | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | |||||||||||||||||||
Total Number of Calls
|
11404 | 11671 | 11958 | 12245 | 12539 | 12542 | ||||||||||||||||||||
Help Desk Calls per
user/per mo. (average)
|
0.76 | 0.77 | 0.78 | 0.79 | 0.79 | 0.78 | ||||||||||||||||||||
Headquarters Users
|
929 | 948 | 971 | 994 | 1018 | 1042 | 13% growth over 5 yrs/2.4% per yr | |||||||||||||||||||
Headquarters VIP Users
|
59 | 59 | 59 | 59 | 59 | 59 | ||||||||||||||||||||
Remote Offices
|
26 | 8 | 8 | 8 | 8 | 8 | ||||||||||||||||||||
Remote Office Users
|
208 | 103 | 103 | 103 | 103 | 103 | ||||||||||||||||||||
Tele-workers
|
52 | 138 | 138 | 138 | 138 | 138 | ||||||||||||||||||||
Level 1 Support: |
||||||||||||||||||||||||||
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
| 5/2003 | ||||||||||||||||||||||||||||
| to | ||||||||||||||||||||||||||||
| System/Metric | 4/2004 | 2005 | 2006 | 2007 | 2008 | 2009 | Comments | |||||||||||||||||||||
Break/Fix |
223 | 228 | 233 | 239 | 245 | 251 | ||||||||||||||||||||||
Applications (all) |
2451 | 2510 | 2570 | 2632 | 2695 | 2760 | ||||||||||||||||||||||
IP / Data Networking |
219 | 224 | 229 | 234 | 240 | 246 | ||||||||||||||||||||||
Voice / Telco Services |
17 | 17 | 18 | 18 | 19 | 19 | ||||||||||||||||||||||
End-User Access/Resets |
3275 | 3354 | 3434 | 3516 | 3600 | 3686 | ||||||||||||||||||||||
Network-attached Printing |
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Local-attached Printers
/ Peripherals |
136 | 139 | 142 | 145 | 148 | 152 | ||||||||||||||||||||||
Moves, Adds, Changes |
9 | 9 | 9 | 9 | 10 | 10 | ||||||||||||||||||||||
Security Related |
179 | 183 | 187 | 191 | 196 | 201 | ||||||||||||||||||||||
Other / No Subject/Misc. |
47 | 48 | 49 | 50 | 51 | 52 | ||||||||||||||||||||||
Level 2 Support |
||||||||||||||||||||||||||||
Break/Fix |
782 | 801 | 820 | 840 | 860 | 881 | ||||||||||||||||||||||
Applications (all) |
2319 | 2375 | 2432 | 2490 | 2550 | 2611 | ||||||||||||||||||||||
IP / Data Networking |
200 | 205 | 210 | 215 | 220 | 225 | ||||||||||||||||||||||
Voice / Telco Services |
81 | 83 | 85 | 87 | 89 | 91 | ||||||||||||||||||||||
End-User Access/Resets |
92 | 94 | 96 | 98 | 100 | 102 | ||||||||||||||||||||||
Network-attached Printing |
6 | 6 | 6 | 6 | 7 | 7 | ||||||||||||||||||||||
Local-attached Printers
/ Peripherals |
503 | 515 | 527 | 540 | 553 | 566 | ||||||||||||||||||||||
Moves, Adds, Changes |
314 | 322 | 330 | 338 | 346 | 354 | ||||||||||||||||||||||
Security Related |
353 | 361 | 368 | 377 | 386 | 395 | ||||||||||||||||||||||
Other / No Subject/Misc. |
103 | 105 | 108 | 111 | 114 | 117 | ||||||||||||||||||||||
Level 3 Support |
95 | 97 | 99 | 101 | 103 | 105 | ||||||||||||||||||||||
3.0 Help Desk Support Services Requirements
3.1 Service Descriptions and Roles & Responsibilities
In addition to the Services, activities, and roles and responsibilities described in Schedule
2A — Cross Functional Services SOW, ACS is responsible for the following Help Desk support
Services, activities and roles and responsibilities.
3.1.1 General Responsibilities
The following table identifies the general roles and responsibilities associated with Help Desk
support Services. An “X” is placed in the column under the party that will be responsible for
performing the task. ACS responsibilities are indicated in the column labeled “ACS.”
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Table 2. General Roles and Responsibilities
| General Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Set up the Help Desk, including implementation of systems necessary to document, track and manage End-User request for Services, inquiries and problem notifications | X | ||||
2.
|
Provide a SPOC for and coordinate all requests for Service in the service areas supported under the terms of the Agreement | X | ||||
3.
|
Provide expert assistance level 1, 2 and 3 to inquiries on the features, functions and usage of all Commercial-Off-The-Shelf (“COTS”) systems in use at Symetra | X | ||||
4.
|
Provide level 1 assistance to inquiries on the features, functions and usage of Symetra custom applications / software based on information obtained from Symetra knowledge transfer | X | ||||
5.
|
Identify, escalate, manage resolution and close problems | X | ||||
6.
|
Manage the Root Cause Analysis process on recurring problems |
X | ||||
7.
|
Perform administration services such as creating, changing and deleting user accounts | X | ||||
8.
|
Administer asset management | X | ||||
3.1.2 Help Desk End User Services
3.1.2.1 Single Point of Contact
The following table identifies SPOC roles and responsibilities.
Table 3. SPOC Call Roles and Responsibilities
| SPOC Call Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Provide SPOC call-in access via a toll-free number for all Help Desk Services described in this SOW for all Symetra IT Service Towers and Symetra locations | X | ||||
2.
|
Provide for multiple alternative communications channels, including voice messages, email and Intranet. In the case of voice communications, any IVR system must allow for immediate exit from the system and live communication with a Help Desk agent | X | ||||
3.
|
Record and redirect non IT Service Tower incidents and service requests | X | ||||
3.1.2.2 Help Desk Operations and Administration
The following table identifies Help Desk operations and administration roles and responsibilities.
Table 4. Help Desk Operations and Administration Roles and Responsibilities
| Help Desk Operations Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Develop and document operational procedures which meet Symetra requirements and adhere to defined Help Desk policies | X | ||||
2.
|
Review operational procedures | X | ||||
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
| Help Desk Operations Roles and Responsibilities | ACS | Symetra | ||||
3.
|
Receive, track, answer and resolve Symetra End User and technical staff calls | X | ||||
4.
|
Coordinate IMACs, including all IT Services Towers | X | ||||
5.
|
Provide “How-to” and Level 2 assistance for Symetra defined COTS applications included in its distributed computing environment | X | ||||
6.
|
Coordinate employee user account administration, activation, changes and terminations, including: password/account setup and reset, remote access connectivity, E-mail accounts, End-User IDs, Password Resets, remote paging devices, voicemail administration, telephone lines, secure ID cards, catalog quotations, etc. | X | ||||
7.
|
Provide end-to-end problem identification, escalation, resolution and closure process | X | ||||
8.
|
Provide additional resources as needed during planned and unplanned critical events | X | ||||
9.
|
Support Symetra policies and best practices | X | ||||
| Help Desk Administration Roles and Responsibilities | ACS | Symetra | ||||
10.
|
Develop and document Help Desk administration procedures which meet Symetra requirements and adhere to defined Help Desk policies | X | ||||
11.
|
Review Help Desk administration procedures | X | ||||
12.
|
Select and implement software and hardware (e.g. IVR) needed to collect, track and manage requests for service received by the Help Desk | X | ||||
13.
|
Track/manage/report Help Desk utilization | X | ||||
14.
|
Provide escalation contact list(s) for Symetra contacts | X | ||||
15.
|
Maintain and provide escalation contact list(s) for all Service Towers (including Third Parties such as vendors and service providers) | X | ||||
16.
|
Issue broadcasts or other notices to provide status updates as required for planned and unplanned events | X | ||||
17.
|
Provide End User or manager online/portal access to service requests and incident reports | X | ||||
18.
|
Develop and execute procedures for conducting End-User satisfaction surveys according to SLRs | X | ||||
19.
|
Review and approve procedures for conducting End-User satisfaction surveys | X | ||||
20.
|
Maintain a continuous improvement program that improves Help Desk Services using metrics to improve Service delivery | X | ||||
21.
|
Work with ACS operational and technical staff, and Symetra, to identify solutions that minimize the need to call the Help Desk (e.g. additional End User training, Self Help opportunities, Root Cause Analysis) | X | ||||
22.
|
Approve solutions that minimize the need to call the Help Desk | X | ||||
23.
|
Coordinate and make available envirdonment documentation (i.e. network configuration, and inventory of software to be supported) | X | ||||
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
3.1.2.3 Service Request and Trouble Ticket Management
ACS will own the end-to-end incident management process. Service Request and Trouble Ticket
management includes escalation to Level 2 and 3 specialists through a well-defined process,
including ACS’ primary resources, Third Parties, such as hardware and software suppliers, other
Third-Party service providers as well as Symetra’s internal technical support resources. The
following table identifies the Service Request and Trouble Ticket management roles and
responsibilities.
Table 5. Service Request and Trouble Ticket Management Roles and Responsibilities
| Service Request and Trouble Ticket Management Roles and | ||||||
| Responsibilities | ACS | Symetra | ||||
1. |
Identify and describe priorities, response and resolution targets for Service calls and Service Requests of differing impacts | X | ||||
2. |
Provide a system to document, manage and track all Service Requests, problem reports and inquiries regardless of the means by which the request is submitted (e.g., telephone, email, fax, direct online input by End-Users, etc.) | X | ||||
3. |
Develop procedures to receive and respond to Symetra calls for Service according to defined prioritization and resolution targets. Ensure that response to Service Requests is based on priority and impact rather than the method used to notify the Help Desk (e.g., telephone, email, fax, direct input to Service Request system by End-Users, etc.). | X | ||||
4. |
Review and approve procedures to receive and respond to Symetra calls | X | ||||
5. |
Review and approve procedures for the escalation of Incidents | X | ||||
6. |
Resolve Incidents within prescribed time limits, if possible, otherwise escalate to appropriate Level 2 resource | X | ||||
7. |
Identify problem characteristics and Root Cause Analysis | X | ||||
8. |
Categorize, prioritize and log all IT Incidents (e.g. inquiries/problems/service requests) in the Trouble Ticket system | X | ||||
9. |
Monitor Incidents (Trouble Tickets) and escalate per policies and procedures until resolution and End-User satisfaction | X | ||||
10. |
Verify acceptance of services by contacting the End-User to confirm results and level of satisfaction | X | ||||
11. |
Ensure that recurring problems which meet defined criteria are reviewed using Root Cause Analysis processes | X | ||||
12. |
Ensure that inventory and configuration management records are updated to reflect completed Service Request (IMACs, and others) | X | ||||
3.1.2.4 Remote Desktop Management
ACS shall have the ability to manage desktop devices and software remotely. Remote desktop
management Services are those Services required to manage and control desktop devices and software
over the network. This includes maintaining and troubleshooting the desktop operating system and
supported desktop applications electronically to minimize the need to dispatch
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
technical personnel. The following table identifies the remote desktop management roles and
responsibilities.
Table 6. Remote Desktop Management Roles and Responsibilities
| Remote Desktop Management Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Recommend and develop policies for the use of remote control tools for maintenance and troubleshooting | X | ||||
2.
|
Review and approve policies for the use of remote control tools for maintenance and troubleshooting | X | ||||
3.
|
Diagnose problems using remote control capability and when possible implement corrective actions to resolve problems. If resolution is not possible escalate per the escalation procedures | X | ||||
3.1.2.5 User Administration
The following table identifies the End User administration roles and responsibilities that ACS and
Symetra will perform.
Table 7. End-User Administration Services Roles and Responsibilities
| User Administration Services Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Develop and document requirements and policies regarding End User Administration | X | ||||
2.
|
Approve requirements and policies regarding End User Administration | X | ||||
3.
|
Receive and track requests for user account activation, changes and terminations | X | ||||
4.
|
Create, change and delete user accounts per requests in accordance with Symetra’s security policies. | X | ||||
5.
|
Coordinate as necessary with other specialized areas to manage End User accounts | X | ||||
6.
|
Reset passwords as required in accordance with Symetra’s security policies | X | ||||
3.1.2.6 Installs, Moves, Adds, Changes (IMACs)
ACS will manage all the requests for modification to the environment. Install, move, add, change
(IMAC) requests will be coordinated through the Help Desk where obligations include gathering the
business requirements, providing authorization, logging the request, and facilitating fulfillment.
All authorized IMAC requests are passed automatically to the local support team depending upon the
location and the product or service being requested. Local support team could be ACS, Symetra, or a
combination depending on location.
ACS’s obligations include (i) obtaining the requisite approvals from the relevant Symetra
stakeholders, (ii) contacting the End User and schedule an appropriate, agreed time for the work to
take place, (iii) verifying completion of IMACs and (iv) contacting the End User to confirm
satisfaction. Examples include adding PCs and moving local printers and a telephone. The following
table identifies the IMACs roles and responsibilities.
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Schedule 2F—Help Desk Services SOW
Table 8. Installs, Moves, Adds and Change Management Roles and Responsibilities
| Installs, Moves, Adds and Changes Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Receive and track requests for IMACs | X | ||||
2.
|
Confirm the requirements and scope and acquire Symetra approval of the IMAC request | X | ||||
3.
|
Contact the End User and schedule an appropriate, agreed time for the work to take place in remote offices | X | ||||
4.
|
Contact the End User and schedule an appropriate, agreed time for the work to take place in Symetra Headquarters | X | ||||
5.
|
Approve IMAC schedule | X | ||||
6.
|
Verify completion of IMACs by contacting the End User to confirm satisfaction | X | ||||
3.1.2.7 Self Help
ACS shall provide End User Self Help capabilities. Self Help refers to automated/electronic means
made available directly to End Users to assist in fulfilling various Service Requests, including
Password Resets, problem diagnosis and resolution, etc. This includes Interactive Voice Response
(IVR); out-of-prime time voice messaging with guaranteed callback response, intranet-based
automated self-help, etc. The following table identifies the Self Help roles and responsibilities.
Table 9. Self Help Roles and Responsibilities
| Self Help Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Identify Requirements for Self Help capabilities | X | ||||
2.
|
Implement Self-Help capabilities that enable End-Users to perform self service such as Password Resets and other administrative functions | X | ||||
3.
|
Monitor and review the effectiveness of Self Help capabilities and usage | X | ||||
4.
|
Develop recommendations for and implement improvements to Self Help capabilities (see Schedule 2A for general improvement recommendation process) | X | ||||
5.
|
Review and approve improvements to Self Help | X | ||||
3.1.2.8 Exception Requests
The exception request process is used by End-Users to fulfill requests for products or services
that are outside of standard Symetra policies, such as more memory for their PC or international
calling access on their phone line.
ACS will develop, implement, and maintain an exception process and perform the activities required
to collect the request, analyze, recommend, and process the request to fulfillment or denial and
advise the originator of the status. Upon approval, ACS will take the necessary action to
implement the request. The following table identifies the exception requests roles and
responsibilities.
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Schedule 2F—Help Desk Services SOW
Table 10. Exceptions Requests
| Exceptions Requests Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Develop and document exception request procedures | X | ||||
2.
|
Review and approve ACS exception process | X | ||||
3.
|
Document exception requests in trouble ticket system |
X | ||||
4.
|
Provide request status to requestor when approved | X | ||||
3.1.3 Other Responsibilities
3.1.3.1 Planning & Analysis
The following table identifies additional planning and analysis roles and responsibilities
associated with this Schedule.
Table 11. Planning and Analysis Roles and Responsibilities
| Planning and Analysis Roles and Responsibilities | ACS | Symetra | ||||
1.
|
Identify and recommend Help Desk solution that best meets Symetra business needs and expense/service—level expectations | X | ||||
2.
|
Approve Help Desk solutions and expense/service—levels | X | ||||
3.
|
Perform operational planning for Help Desk capacity and performance purposes | X | ||||
4.
|
Determine transitional plan & issues regarding facilities, layout & integration with other non-consolidated Help Desks (e.g. sales and agency technical services) | X | ||||
5.
|
Perform analysis of Symetra environment, including acquiring Symetra management team feedback, to identify the appropriate sets of skills, training, and experience needed by Help Desk staff | X | ||||
6.
|
Recommend Incident management, reporting standards and policies | X | ||||
3.1.3.2 Procurement
Subject to Symetra’s procurement policies, approval process and preferred supplier list, ACS shall
respond to procurement requests.
3.1.3.3 Reporting Services
The following table identifies additional reporting roles and responsibilities that are specific to
this Schedule.
Table 12. Reporting Roles and Responsibilities
| Reporting Roles and Responsibilities | ACS | Symetra | ||||
1. |
Report on Help Desk statistics and trends as requested (e.g., service request volumes and trends by types of End Users) | X | ||||
2. |
Report on trends in Service Requests indicating a need for training | X | ||||
3. |
Audit results & operations periodically | X | ||||
4. |
Provide online/portal access to Symetra Help Desk reports | X | ||||
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
3.2 Exclusions
The following items are specifically excluded from this SOW:
| a. | Tracking and resolution of requests outside of IT Service Towers | ||
| b. | Distribution partners and policy holders |
4.0 Service Management
4.1 Purpose
A key objective of this outsourcing agreement is to attain SLRs. SLAs and project-specific
SLAs are specified with fee reductions where business is impacted through failure to meet
significant mission critical systems or services, or project milestones or objectives warrants a
reduction in Fees paid when Service performance requirements are not met. SLRs are detailed in
Section 4.3 of this Schedule and SLAs are detailed in Schedule 5 — fee reductions.
ACS shall provide written reports to Symetra regarding ACS’s compliance with the SLRs specified in
this SOW Schedule.
4.2 Definitions
The following defined terms shall apply to this SOW and the SLRs set forth in Section 4.3 of
this Schedule:
Abandonment—Defined as calls received at Help Desk that enter the queue and that are terminated
(End User hang up) prior to pickup by human operator or after voice response unit options (VRU)
have been selected. The assumption is that the caller hung up because Call took too long to answer.
After-Hours Support—Refers to all hours outside of Normal Help Desk Business Hours.
Availability —The percentage of scheduled time the service is fully operational. Availability
represents a measure of the fraction of time during a defined period when the Service provided is
deemed to be as good or better than the defined requirement.
Availability = 100% — Unavailability (%)
Where Unavailability is defined as:
S outage duration x 100
(Schedule Time — planned outage)
Where Unavailability is defined as:
S outage duration x 100
(Schedule Time — planned outage)
Break/Fix — An End-User request placed due to a software or hardware problem encountered in
accessing or operating IT resources where support Services are required to resolve the problem.
Business Day Support—Refers to those hours during which ACS personnel will be available to provide
consolidated Help Desk support to End Users. Such support includes answering phone calls and
e-mails, opening Trouble Tickets, First Call Problem Resolution, and categorizing and routing
Trouble Tickets.
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Call— A call is counted for each unique Service Request made by a single End User with a single
problem that is received via telephone, voicemail, and/or e-mail, involving a separate individual
and event that results in opening a Help Desk Trouble Ticket. For Incidents where multiple calls
are related to a single point of failure (that is, calls related to a server outage), such calls
will be considered as a single Call; will not result in opening a separate Help Desk Trouble
Ticket; and will not be aggregated or counted as individual Calls for measuring call volume
statistics.
Call Abandonment — Percentage of total Calls that terminate after the Speed to Answer threshold
has been reached, but prior to an agent taking the Call.
Call Answer—A Call is considered answered when the caller is interacting with a Help Desk agent or
when a caller is interacting with a VRU.
Call Back—Defined as a follow-up call to an End User after a Trouble Ticket is closed to determine
level of End User satisfaction.
First Contact—Initial contact with a Help Desk human operator is defined as ACS response via
telephone, email, web chat resulting from an Incident or Service Request.
First Call Resolution—The percentage of in-scope problem Calls received during the month by the
Help Desk, resulting in the creation of a ticket that is resolved while the End-User is still on
the phone. This excludes calls received regarding out-of-scope requests and Trouble Tickets
initiated via email or voicemail.
Help Desk Trouble Ticket—Refers to a unique logical electronic record to create, update, maintain
and archive each Incident. A Help Desk Trouble Ticket is used to record all ACS, Symetra End User,
Symetra technical staff and Third Party interaction pertaining to an Incident and all related
actions, and corresponding date/time, taken to resolve an Incident, from the time it is first
reported to the Help Desk until Incident Resolution and closure by the Help Desk. Also, it is used
for application change-control traceability.
How to — An End-User request regarding how to use a feature or function of Help Desk supported
software or hardware.
IMAC — Installations, Moves, Adds, Changes — General term for the routine work performed on
computer equipment including installations, relocations and upgrades.
Incident Resolution Time — The time elapsed from the initiation of the Trouble Ticket until
Service is restored.
Level 1 — Routine event. The Level 1 Help Desk is the support hot line. It acts as the
human SPOC for all technology-related problems (internal applications to shrink-wrapped
software; LANs; hardware break/fix and more) and Service Requests. Incidents not resolved at
the Level 1 support are passed to Level 2 and/or Level 3 support personnel. Level 1 is
involved mostly in incident case management (e.g. including user management, incident
management, password/access security, coordinating IMACs).
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Level 2 — Specialized problem or Symetra executives. Level 2 support resolves escalated
incidents that require greater depth of knowledge (e.g. IT service tower subject matter
expert), standard desk side support and executive desk side and/or phone support.
Level 3 — Complex problem. Level 3 support resolves escalated Incidents that require third
parties such as hardware and software vendors, Symetra technical resources and or other
service providers to assist or resolve issues.
Staffed Support—Refers to those hours during which ACS must have skilled Help Desk staff available
to personally answer calls and provide Help Desk support to Symetra End Users. Such support
includes answering phone calls and e-mails, opening trouble tickets, First-Call Problem Resolution,
categorizing and routing Trouble Tickets, monitoring open Trouble Ticket status, and escalating
problems which are unresolved within the Incident Priority Level time requirements.
Measurement Interval —Refers to the period of time performance will be calculated taking into
consideration the impact of continuous outage. For example, a monthly measurement interval for a
99% Minimum Performance for a 7x24 system with 8 hours of weekly planned downtime would allow 6.4
hours of a continuous outage with no other outages during the month. A weekly interval would only
allow 1.6 hours of a continuous outage.
Normal Help Desk Business Hours—For the purposes of coverage and critical response times, Symetra
has defined the normal business hours “windows of operations” (excluding normally scheduled company
holidays) for the North American Region. Days and times falling out of these ranges are considered
outside of Normal Help Desk Business Hours. Normal Help Desk Business Hours are as follows:
| Category | Business Hours | |
Password Support |
24x7x365 | |
End User Support |
Mon-Fri. 0400-1900 | |
Symetra IT
Operations
and Technical
Support
|
24x7x365 |
Note: IT operations and Technical Support refers to tracking incidents reported by Symetra
technical staff not requiring Level 1 Help Desk support.
Outage — A specialized case of an End-User Break/Fix call affecting a substantial group of
End Users (“flood calls”); calls are placed to the service desk to inform, inquire or complain
about accomplishing tasks with, accessing or operating IT resources.
Password Reset — A specialized End-User request to regain access privileges to IT resources.
Reporting Interval — The time span between regular performance reporting periods.
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Schedule 2F—Help Desk Services SOW
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Self-Help—Refers to automated/electronic means made available directly to End Users to assist
in fulfilling various Service Requests not requiring personal assistance, including End User’s
ability to track Trouble Ticket status and enter Service Requests without calling the Support
Center.
Priority Levels — Symetra-defined category that identifies the degree of Incident importance and
associated ACS response requirements attributed to an Incident.
Table 13. Priority Levels
| Priority Level | Description | |||
| 1 - Emergency/Urgent | The problem has caused a complete and immediate work stoppage affecting a primary business process or a broad group of End Users such as an entire department, floor, branch, line of business, or external customer. No work around available. | |||
| Examples: | ||||
| Major application problem (e.g. payroll, call center, etc.) | ||||
| Severe problem during critical periods (e.g. month-end processing) | ||||
| Security Violation (e.g. denial of service, widespread virus, etc.) | ||||
| 2 - High | A business process is affected in such a way that business functions are severely degraded, multiple End Users are impacted or a key customer is affected. A workaround may be available; however the workaround is not easily sustainable. | |||
| Examples: | ||||
| Major application (e.g. exchange) | ||||
| VIP Support | ||||
| 3 - Medium | A business process is affected in such a way that certain functions are unavailable to End Users or a system and/or service is degraded. A workaround may be available | |||
| Examples: | ||||
| Telecommunication problem (e.g. Blackberry, PBX digital/analog card) | ||||
| Workstation problem (e.g. hardware, software) | ||||
| 4 - Low | An Incident that has little impact on normal business processes and can be handled on a scheduled basis. A workaround is available. | |||
| Examples: | ||||
| End User requests (e.g. system enhancement) | ||||
| Peripheral problems (e.g. network printer) | ||||
| Preventative Maintenance | ||||
| Benchmarks | ||||
Service Request — A service request call or an e-mail regarding a range of support-specific
service offerings.
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Speed-to-Answer—Total elapsed time from the point that the Help Desk automated call director (ACD)
call-circuitry places a call into queue until a human operator picks up the call.
4.3 Service Level Requirements (SLRs)
ACS shall meet the following SLRs commencing on the Handover Date (unless a different
date is expressly set forth in a particular SLR) that is applicable to Help Desk Services. SLRs
associated with fee reductions are detailed in Schedule 5 — Fee Reductions. All times referenced
are in Pacific Standard Time.
Table 14. Intentionally Deleted
This table intentionally left blank.
Table 15. Response Time SLR
| Definition | Response Time is the number of seconds or cycles
it takes any representative of Symetra to connect with
ACS’s contact center representative. ACS will provide
toll free telephone lines in adequate quantity to
handle call volume, ACD system to record call date,
time and duration information, and electronic interface
to all systems for monitoring and reporting. SLR Response Time coverage is Monday — Friday 0400-1900 |
Response Time
| Help Desk | ||||||
| Responsiveness | Service Measure | Performance Target | SLR | |||
Speed-to-Answer
|
Phone response time | £ 30 sec | [***]% | |||
Call Abandonment
rate
|
Phone response time | £5% | [***]% | |||
Email response rate
|
Online response time | £ 1 hour | [***]% | |||
Voicemail response
rate
|
Voicemail response time (from manual input into the ticketing system) | £30 minutes | [***]% | |||
| Formula | Number of events per event type within performance Target / total number of events per type during Measurement Interval = “Percent (%) Attained" | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement Tool/Source Data | To be agreed by the Parties | |||||
Table 16. Incident Resolution SLR
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
| Definition | The time elapsed from the initiation of the Trouble Ticket until service is restored. SLR is based on coverage for Monday — Friday 0400-1900 |
Incident Resolution
| Help Desk Incident | ||||||
| Resolution | Service Measure | Performance Target | SLR | |||
First Contact
Resolution of
Trouble Tickets
|
First Contact Resolution of Trouble Tickets | 70% with <5% recalls | [***]% | |||
(SLA/SLR will be in
effect 60 days
after production
deployment date) |
||||||
Time to Resolution
— Shrink Wrap App
Incidents
|
Elapsed time | 2 hours with <5% recalls | [***]% | |||
(SLA/SLR will be in
effect 60 days
after production
deployment date) |
||||||
Incident Closure
Notice (via e-mail
and/or phone)
|
Elapsed time | 20 minutes following incident resolution | [***]% | |||
Root Cause Analysis
|
Schedule | Provide monthly review of recurring problem areas and resolutions | [***]% | |||
| Formula | Number of instances within performance Target / total number of instances during Measurement Interval = “Percent (%) Attained” | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement Tool/Source Data | To be agreed by the Parties | |||||
Table 17. Account Administration SLR
| Definition | Routine functions, such as setting up user IDs, changing user authorization tables, changing account codes and similar functions, which are handled by ACS. SLR coverage is based on Mon-Fri. 0400-1900 |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Account Administration
| User Account | ||||||
| Administration | ||||||
| Tasks | Service Measure | Performance Target | SLR | |||
New User Account
(up to 5 per request)
|
Elapsed time | Completed within 1 business day of authorized request | [***]% | |||
New User Account
(6-20 per request)
|
Elapsed time | Completed within 3 business days of authorized request | [***]% | |||
New User Account
(20+ per request)
|
Elapsed time | Case by case | N/A | |||
Password Reset
|
Elapsed time | Completed within 5 minutes of receipt of request | [***]% | |||
Privilege Changes
|
Elapsed time | Within 4 business hours of Symetra authorized request | [***]% | |||
Disable User Account
|
Elapsed time | Within 60 minutes of Symetra authorized request | [***]% | |||
Terminate User Account
|
Elapsed time | After 14 days of authorized request | [***]% | |||
Procurement Request
|
Elapsed time | Request entered within 1 business day | [***]% | |||
| Formula | Number of instances within performance Target / Total number of instances during Measurement Interval = “Percent (%) Attained” | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement Method/Source Data | To be agreed by the Parties | |||||
Table 18. Customer Satisfaction SLR
Customer Satisfaction
| Customer | ||||||
| Satisfaction | Service Measure | Performance Target | SLR | |||
Periodic Sample
|
Response/Distribution rate | 10% of closed trouble tickets surveyed within 72 hours of closing ticket | [***]% | |||
Periodic Sample
Satisfaction
|
Symetra Satisfaction rate | End Users surveyed should be very satisfied or satisfied | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
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Schedule 2F—Help Desk Services SOW
Schedule 2F—Help Desk Services SOW
Customer Satisfaction
| Customer | ||||||
| Satisfaction | Service Measure | Performance Target | SLR | |||
Scheduled Survey
(conducted
annually)
|
Symetra Satisfaction rate | End Users surveyed should be very satisfied or satisfied | [***]% | |||
| Formula | 1. Number of responses with a very
satisfied or satisfied rating/total number
of responses |
|||||
2. Sum of survey results from each
participant/total number of participants
responding to Periodic Sample |
||||||
3. Sum of survey result from each
participant/total number of participants
responding to Scheduled Survey |
||||||
| Measurement Interval | See table above for survey period. | |||||
| Measurement Method/Source Data | To be agreed by the Parties | |||||
4.4 Reports
Without limiting the terms of Section 2.11.1 of the Agreement, ACS shall provide written
reports to Symetra regarding ACS’s compliance with the SLRs and other Help Desk activity reports
specified in this Help Desk Services SOW.
5.0 Referenced SOW Appendices and SOW Schedules
5.1 Referenced Help Desk Services SOW Appendices
| SOW Appendix | Description | |
F.1
|
Help Desk Supported Software | |
F.2
|
Help Desk Supported Hardware |
5.2 Referenced ITSA Schedules
| ITSA Schedule | Description | |
Schedule 2A
|
Cross Functional Services SOW | |
Schedule 2B
|
Enterprise Operations Center Services SOW | |
Schedule 2C
|
Distributed Computing Services SOW | |
Schedule 2D
|
Data Network Management Services SOW | |
Schedule 2E
|
Voice Communications Services SOW | |
Schedule 3
|
Fees | |
Schedule 5
|
Fee Reductions |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by
Symetra Financial Corp., this information has been filed separately with the Securities and
Exchange Commission.
Confidential Information
Page 20
Page 20
Table of Contents
Help Desk Supported Hardware and Software
F.1 — Help Desk Supported SW
F.1 — Help Desk Supported SW
| Symetra Distributed | ||||||||||||||||||||||||
| Applications | Help Desk Supported | Core Image Applications | Standard | Not Supported | Bus. Needs Req. | License count | Site License | Limited Quantity amount | Notes | |||||||||||||||
Office Suite Applications |
||||||||||||||||||||||||
Office 2003 (Access, Excel,
Outlook, Powerpoint, Word) |
x | x | x | |||||||||||||||||||||
Spreadsheet Applications |
||||||||||||||||||||||||
Lotus 123 |
x | |||||||||||||||||||||||
Word Processing |
||||||||||||||||||||||||
WordPerfect 6.1 |
x | x | ||||||||||||||||||||||
Presentation Applications |
||||||||||||||||||||||||
Harvard Instant Charts |
||||||||||||||||||||||||
Desktop Publication Apps. |
||||||||||||||||||||||||
Adobe Acrobat |
x | x | ||||||||||||||||||||||
Adobe Reader 5.05 |
x | x | x | |||||||||||||||||||||
Frontpage |
x | |||||||||||||||||||||||
Publisher |
x | x | x | |||||||||||||||||||||
Graphic Design applications |
||||||||||||||||||||||||
Grabbit 2.5 |
x | |||||||||||||||||||||||
Local Database Applications |
||||||||||||||||||||||||
None |
||||||||||||||||||||||||
Database Reporting Apps |
||||||||||||||||||||||||
Crystal Reports |
x | x | ||||||||||||||||||||||
Reports Facilitator |
x | |||||||||||||||||||||||
Database Client |
||||||||||||||||||||||||
None |
||||||||||||||||||||||||
Terminal Emulator Apps. |
||||||||||||||||||||||||
ProComm Plus |
x | x | ||||||||||||||||||||||
Terminal Server applications |
||||||||||||||||||||||||
Citrix Client |
x | x | x | |||||||||||||||||||||
Miscsoft RDP Terminal Service
Client |
x | |||||||||||||||||||||||
E-mail applications |
||||||||||||||||||||||||
Exchange |
x | |||||||||||||||||||||||
MailMarshal — scanning |
x | |||||||||||||||||||||||
PDA applications |
||||||||||||||||||||||||
Blackberry Desktop Software
v3.6 service pack 2 |
x | |||||||||||||||||||||||
Calendar applications |
||||||||||||||||||||||||
Outlook |
x | x | x | |||||||||||||||||||||
Accounting applications |
||||||||||||||||||||||||
MFACT |
x | |||||||||||||||||||||||
Microcash for Windows |
x | |||||||||||||||||||||||
Finance applications |
||||||||||||||||||||||||
Flexsoft |
x | |||||||||||||||||||||||
FundStation |
x | |||||||||||||||||||||||
Quicken |
x | x | ||||||||||||||||||||||
Programming applications |
||||||||||||||||||||||||
Remedy (Action Request) |
x | |||||||||||||||||||||||
Seaview |
x | |||||||||||||||||||||||
Management Tool Apps |
||||||||||||||||||||||||
None |
||||||||||||||||||||||||
VPN applications |
||||||||||||||||||||||||
Extranet Access Client |
x | x | x | |||||||||||||||||||||
Contivity Client |
||||||||||||||||||||||||
AT&T Dialer |
||||||||||||||||||||||||
Internet applications |
||||||||||||||||||||||||
Internet Explorer 5.5 sp2 |
x | |||||||||||||||||||||||
Communication
applications |
||||||||||||||||||||||||
CentreVue |
x | |||||||||||||||||||||||
| Confidential Information—For internal use only. | 1 |
Table of Contents
Help Desk Supported Hardware and Software
F.1 — Help Desk Supported SW
F.1 — Help Desk Supported SW
| Symetra Distributed | ||||||||||||||||||||||||
| Applications | Help Desk Supported | Core Image Applications | Standard | Not Supported | Bus. Needs Req. | License count | Site License | Limited Quantity amount | Notes | |||||||||||||||
Language Interpretation
Services |
x | |||||||||||||||||||||||
Lanier (old NICE calls) |
x | |||||||||||||||||||||||
NICE Universe |
x | |||||||||||||||||||||||
Phone 2PC Recording |
x | |||||||||||||||||||||||
Faxing applications |
||||||||||||||||||||||||
Enterprise Fax Manager |
x | |||||||||||||||||||||||
Fax Util |
x | |||||||||||||||||||||||
RightFax |
x | |||||||||||||||||||||||
WinFax |
x | x | ||||||||||||||||||||||
Flowcharting applications |
||||||||||||||||||||||||
Visio |
x | |||||||||||||||||||||||
Visio Viewer |
x | x | x | |||||||||||||||||||||
Contact Management Apps |
||||||||||||||||||||||||
Bacon’s MediaSource |
x | |||||||||||||||||||||||
Project Tracking Apps |
||||||||||||||||||||||||
Project |
x | |||||||||||||||||||||||
Simply TIME (task
manager) |
x | |||||||||||||||||||||||
Virus applications |
||||||||||||||||||||||||
Norton Anti-Virus |
x | x | x | |||||||||||||||||||||
Print Utility applications |
||||||||||||||||||||||||
PrintNow! |
x | |||||||||||||||||||||||
Scanning Software Apps |
||||||||||||||||||||||||
None |
||||||||||||||||||||||||
Handicap Utility |
||||||||||||||||||||||||
None |
||||||||||||||||||||||||
Video Conferencing Apps |
||||||||||||||||||||||||
None |
||||||||||||||||||||||||
Security applications |
||||||||||||||||||||||||
Cyber Gatekeeper Agent |
x | x | x | |||||||||||||||||||||
CyberArmor |
x | x | x | |||||||||||||||||||||
FAZAM 2000 |
x | |||||||||||||||||||||||
PowerQuest |
x | x | ||||||||||||||||||||||
Symantec Antivirus 8.01 |
||||||||||||||||||||||||
Reference applications |
||||||||||||||||||||||||
NILS |
x | |||||||||||||||||||||||
Operating Systems Apps |
||||||||||||||||||||||||
Windows 2000 sp3 |
x | x | x | |||||||||||||||||||||
Undefined applications |
||||||||||||||||||||||||
Ameritech White and Yellow
Pages |
x | |||||||||||||||||||||||
Catapult Training |
x | |||||||||||||||||||||||
Chase Insight & Reporter |
x | x | ||||||||||||||||||||||
Desktop Submit |
x | |||||||||||||||||||||||
EFTPS for Windows 01.07.01 |
x | |||||||||||||||||||||||
EOSI/CLAS (Library copyright) |
x | |||||||||||||||||||||||
Extra! 6.71 |
x | x | x | |||||||||||||||||||||
EZ2000 |
x | x | ||||||||||||||||||||||
FlashPlayer 7.0.19.0 |
x | x | x | |||||||||||||||||||||
ICW Required |
x | |||||||||||||||||||||||
Iomega Tools |
x | |||||||||||||||||||||||
Message Manager |
x | |||||||||||||||||||||||
MMCD |
x | |||||||||||||||||||||||
MSDN |
x | |||||||||||||||||||||||
PBS |
x | |||||||||||||||||||||||
DirectX 8.1 |
x | x | ||||||||||||||||||||||
Panagon Document Management |
x | |||||||||||||||||||||||
| Confidential Information—For internal use only. | 2 |
Table of Contents
Help Desk Supported Hardware and Software
F.1 — Help Desk Supported SW
F.1 — Help Desk Supported SW
| Symetra Distributed | ||||||||||||||||||||||||
| Applications | Help Desk Supported | Core Image Applications | Standard | Not Supported | Bus. Needs Req. | License count | Site License | Limited Quantity amount | Notes | |||||||||||||||
PCAnywhere |
x | |||||||||||||||||||||||
PGP Encryption |
x | |||||||||||||||||||||||
PowerSelect |
x | |||||||||||||||||||||||
Qview4 |
x | |||||||||||||||||||||||
RoboHelp Office 2000 |
x | |||||||||||||||||||||||
Skill Vantage |
x | |||||||||||||||||||||||
Snag-It! (screen shot capture) |
x | |||||||||||||||||||||||
Source OffSite 3.5.1 |
x | |||||||||||||||||||||||
Spencer CD |
x | x | ||||||||||||||||||||||
Trellis |
x | |||||||||||||||||||||||
Unicenter |
x | |||||||||||||||||||||||
UVT |
x | |||||||||||||||||||||||
Web IIS |
x | |||||||||||||||||||||||
WebTrends |
x | |||||||||||||||||||||||
WELL Concession Calculator |
x | |||||||||||||||||||||||
Window’s MDAC 2.61 sp2 |
x | |||||||||||||||||||||||
Window’s Media Player 7.1 |
x | |||||||||||||||||||||||
Winrapid Teledex |
x | |||||||||||||||||||||||
WinZip 8.1 |
x | |||||||||||||||||||||||
| Confidential Information—For internal use only. | 3 |
Table of Contents
Help Desk Supported Hardware & Software
F.2 — Help Desk Supported SW
F.2 — Help Desk Supported SW
Compaq dc5000
IBM ThinkPad T40
IBM ThinkPad T41
IBM ThinkPad T20
IBM ThinkPad T21
IBM ThinkPad T22
IBM ThinkPad T23
Monitor — Compaq V7550 17”
Monitor — NEC FE991sb 19”
Monitor — Compaq P1210 21”
HP LaserJet 2100
HP LaserJet 4P, 5P, 4Plus, 6PXI
HP LaserJet 4, 4Si, 5, 5Si
LaserJet 4000, 4000T, 4050, 4050N, 8000
Dymo (Co-star) Printer
56K Fax Modem V.90 Internal 3COM U.S. Robotic
USR EXT 56K Modem V.92 Black Casing
Belkin Modem Cable — 9 Pin.
Network Card — IBM Token Ring Adapter 2, with Wake On LAN
IBM Turbo T/R Adapter 16/4 (ISA)*
IBM Turbo T/R Adapter 16/4 (ISA)*
3COM 10/100 PCI DESKTOP MGT Ethernet Adapter
IBM 3278/9 Emulation Adapter
RIM Blackberry 7280
RIM Blackberry 6210
RIM Blackberry 7230
Keyboard
Mouse
IBM ThinkPad T40
IBM ThinkPad T41
IBM ThinkPad T20
IBM ThinkPad T21
IBM ThinkPad T22
IBM ThinkPad T23
Monitor — Compaq V7550 17”
Monitor — NEC FE991sb 19”
Monitor — Compaq P1210 21”
HP LaserJet 2100
HP LaserJet 4P, 5P, 4Plus, 6PXI
HP LaserJet 4, 4Si, 5, 5Si
LaserJet 4000, 4000T, 4050, 4050N, 8000
Dymo (Co-star) Printer
56K Fax Modem V.90 Internal 3COM U.S. Robotic
USR EXT 56K Modem V.92 Black Casing
Belkin Modem Cable — 9 Pin.
Network Card — IBM Token Ring Adapter 2, with Wake On LAN
IBM Turbo T/R Adapter 16/4 (ISA)*
IBM Turbo T/R Adapter 16/4 (ISA)*
3COM 10/100 PCI DESKTOP MGT Ethernet Adapter
IBM 3278/9 Emulation Adapter
RIM Blackberry 7280
RIM Blackberry 6210
RIM Blackberry 7230
Keyboard
Mouse
| Confidential Information—For internal use only. | 4 |
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Services SOW
Schedule 2G — Output Processing Services SOW
Schedule 2G – Output Processing Services SOW
OCTOBER 28, 2004
Confidential Information
Page 1 of 64
Table of Contents
Table of Contents
1.0 PROJECT AND SERVICES OVERVIEW |
3 | |||
1.1 Assumptions |
3 | |||
1.2 Scope of Output Processing |
3 | |||
1.3 Business Objectives |
5 | |||
1.4 Technical Objectives |
5 | |||
1.5 Service Locations |
6 | |||
1.6 Confidentiality |
6 | |||
1.7 Out of Scope |
6 | |||
1.8 Staffing |
6 | |||
2.0 OUTPUT PROCESSING SPECIFICATIONS |
8 | |||
2.1 Current Output Processes for Symetra |
8 | |||
2.1.1 Statements Processing |
9 | |||
2.1.2 Deferred Annuity Contracts and Individual Life Policies |
17 | |||
2.1.3 Billing Statements |
21 | |||
2.1.4 Check Printing |
24 | |||
2.1.5 Taxes |
26 | |||
2.1.6 Correspondence |
28 | |||
2.2 Test Environments |
39 | |||
2.3 Test Outputs |
39 | |||
2.4 Audit Reports |
39 | |||
2.5 Proof of Mailing |
39 | |||
2.6 Printed Output Archive |
39 | |||
2.7 Forms |
41 | |||
2.7.1 Documerge Forms |
41 | |||
2.7.2 Line Text Forms |
41 | |||
2.7.3 Page Segments |
41 | |||
2.7.4 Overlays |
42 | |||
2.7.5 Character Sets |
43 | |||
2.7.6 Pre-printed Forms |
44 | |||
2.7.7 Forms Conversion |
44 | |||
2.7.8 Forms Coding and Maintenance |
45 | |||
2.8 File Transfers |
46 | |||
2.8.1 Outgoing Files (from Symetra/Infrastructure Third Party vendor) |
46 | |||
2.8.2 Incoming Files (to Symetra) |
46 | |||
2.8.3 Specify the Following |
46 | |||
2.8.4 File Sizes |
46 | |||
2.9 Future Needs |
50 | |||
2.9.1 Income Annuities |
50 | |||
2.9.2 Agent Compensation Statements |
50 | |||
2.9.3 Paris Annuity Case Statements and Annuity Billing Statements |
50 | |||
2.9.4 Tax Forms From Finance |
50 | |||
2.9.5 Retirement Services Confirms, Audit Reports, RMD Letters, and Commission Reports |
51 | |||
2.9.6 Mortgage Loan 1098’s |
51 | |||
2.9.7 All Systems |
51 | |||
Appendix A – System Flows |
52 |
Confidential Information
Page 2 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
1.0 Project and Services Overview
Output processing systems and software that were owned by Safeco and used to process Symetra
daily mainframe1 printed outputs will become unavailable after transition to ACS. The
goal of this project is to transfer the printed output services currently provided by Safeco to
ACS. These Services include daily cut-sheet and forms-based printing, assembly, distribution,
mailing, forms coding, data security, and archiving of printed output images. These needs are
further defined within this Output Processing Services SOW.
This project is part of the Symetra transition program, which is responsible to ensure an
integrated and successful overall transition from Safeco to Symetra.
In parallel, this project is:
| • | Linked to an “in flight” document and Content Management SOW project that will address post-transition requirements for: document scanning, indexing, and document and image storage | ||
| • | Linked to an “in flight” print fulfillment project | ||
| • | Required to support our ability to provide information through our agent/customer portal. |
1.1 Assumptions
ACS will provide support services per Schedule 2A – Cross Functional Services. Related project
assumptions include:
| • | ACS will establish an Symetra approved project schedule including key milestones and will manage to that project schedule. | ||
| • | ACS will develop and Symetra will approve installation and cutover plans for those phases of the project allowing coordinated planning and the least possible disruption to current users. | ||
| • | Upon project completion, Symetra will have an operational report per the design with complete documentation. | ||
| • | After implementation, ACS will provide ongoing services support by keeping hardware, and software current. | ||
| • | ACS will provide recommendations to improve output processing |
1.2 Scope of Output Processing
Output processing includes, but is not limited to the following:
| • | Output service deliverables: |
| – | form coding and form management | ||
| – | page segments and overlays — creation and maintenance | ||
| – | data/forms/overlay conversion | ||
| – | forms library maintenance and management | ||
| – | generation of print streams from daily extract files | ||
| – | printing — local to Symetra and outsourced | ||
| – | post-processing and document assembly | ||
| – | conversion of current archived output documents to ACS systems | ||
| – | printed output image archiving | ||
| – | web intranet portal to access data from archive | ||
| – | access to archived data | ||
| – | development and testing processes | ||
| – | data security | ||
| – | customer privacy | ||
| – | disaster recovery | ||
| – | infrastructure / technology environment |
| 1 | To distinguish it from marketing, and other types of outputs. |
Confidential Information
Page 3 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| – | work flow training | ||
| – | interfaces | ||
| – | testing | ||
| – | data transfer | ||
| – | reports | ||
| – | documentation | ||
| – | technology support for Symetra departments and associated End Users in the initial implementation. |
| • | Implementation and acceptance of all output service deliverables to Symetra for the following departments: |
| – | Sales & Marketing | ||
| – | Compliance | ||
| – | Individual Life | ||
| – | Income Annuities | ||
| – | Group | ||
| – | Retirement Services | ||
| – | Life Finance | ||
| – | Mortgage Loans | ||
| – | SIS |
Confidential Information
Page 4 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
1.3 Business Objectives
General
| • | Move toward more automated printing, processing and mailing/distribution. | ||
| • | Outsource large volume and fully automated processes to ACS facilities | ||
| • | Update and improve processes during the transition |
Policies, contracts and statements
| • | Limited local printing capability – policies and contracts Checks | |||
| Checks | ||||
| • | Local on the spot check printing capability and automated printing and mailing at ACS facilities | |||
| • | Support three processes that currently produce checks: CDS, Payroll, Accounts Payable, Mutual Funds and SIS, and using a variety of different check stocks. | |||
Taxes
| • | Convert overlays to forms | |||
| • | Produces both printed output and tapes to meet federal and state requirements. | |||
| Archive | ||||
| • | ACS must provide access to archive documents via web browser | |||
1.4 Technical Objectives
The following mainframe systems have output processing feeds that need to be captured and
processed;
Cyberlife with IPS and work flow system (ViewStar), Paris, Vantage, LAB-Income Annuities, RPS, DSS,
FMS systems, and Group Systems.
Specifications are presented in 9 parts in Section 2 of this Output Processing Services SOW –
Output Processing Specifications:
| 1. | Current output processes for Symetra | ||
| 2. | Test outputs | ||
| 3. | Audit reports | ||
| 4. | Proof of mailing | ||
| 5. | Printed output archive | ||
| 6. | Forms | ||
| 7. | File transfers | ||
| 8. | Process flows | ||
| 9. | Future needs |
The majority of applications that generate printed output are vendor systems and reside on the
mainframe – IBM z/OS with primarily DB2 and limited IMS databases. The extract files are mainly
COBOL output formats. These applications are currently supported on Safeco’s systems but they will
be migrated to ACS concurrent with the efforts of this project.
Confidential Information
Page 5 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
The following environment and Services are required, but are not limited the following, to assist
in this transition:
| 1. | Network with adequate capacity for file transfer to and from Symetra primary and secondary locations | ||
| 2. | Temporary/intermediate storage capacity for all specified extract files | ||
| 3. | Printed output archive | ||
| 4. | Portal to access archived printed output data/images, forms, and test outputs | ||
| 5. | Forms creation and management software | ||
| 6. | Forms library | ||
| 7. | Print stream generation software/hardware | ||
| 8. | Cut sheet, special forms and check printers | ||
| 9. | Post processing/mailing preparation systems | ||
| 10. | Mail sorting address correction reporting software | ||
| 11. | Life insurance policies and annuity contracts are forms intensive. Content and appearance must match the approved state-filed form to meet with state and federal compliance requirements. |
1.5 Service Locations
Printed outputs fall into two categories: ACS location and Symetra local. Fully automated
mailings, such as annual and quarterly statements are those that can be printed processed and
mailed directly from ACS’ locations.
Outputs that are not fully automated are those that require manual processing by the originating
business operations department. These printed outputs must be made available according to Section
2 to this Output Processing Services SOW — Output Processing Specifications. Symetra data center
space can be made available for limited local printing.
1.6 Confidentiality
ACS will be responsible for adhering to Symetra confidentiality policies. Extract files, and
related printed output will include sensitive customer financial information. Secure data transfer
to and from Symetra, secure processing, secure data storage, secure disposal, where applicable, and
strict control of data access are required.
1.7 Out of Scope
| • | Network printer outputs – addressed in the Data Center Services SOW (Schedule 2B) | ||
| • | Reports, both hardcopy and online in Control D – addressed in the Data Center Services SOW (Schedule 2B) | ||
| • | Marketing material for agents, etc. – print/fulfillment/supply/distribution project | ||
| • | Document and image scanning, storing, retrieving — document management systems and content management systems project |
1.8 Staffing
ACS shall provide all personnel required to support the Services/specifications as defined in
Section 2 of this Output Processing Services SOW. The following chart depicts Symetra’s project
organization and the primary customers of Output Processing Services.
Confidential Information
Page 6 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Figure 1: Symetra Project Organization Chart
Confidential Information
Page 7 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.0 Output Processing Specifications
These specifications represent descriptions of current processes that must be replicated.
These processes do not necessarily need to be duplicated exactly as presented here.
Recommendations for improvements that are more cost efficient and are in line with the proposed
schedule and project scope are encouraged.
ACS may propose either, processing and printing from the data extract files provided by Symetra
systems, or replacement software systems and printing the output streams created by those software
systems.
2.1 Current Output Processes for Symetra
The outputs described here will continue to be required after transition from Safeco. The
minimum requirement is to reproduce the outputs the same as today. Recognizing that there have not
been any efforts made to optimize these outputs for outsourcing, recommendations for improvements
in the data extract structures, file sizes and processes will be considered when compatible with
the defined time frame and project scope.
The outputs are described as currently processed and produced, and have been separated into
categories with similar or common characteristics. The outputs are produced in various formats,
using cut sheet paper, roll-fed cut sheet paper, or pre-printed forms. All outputs are currently
printed black on white. Reports and program listings using continuous feed forms are not in scope.
Rather, they are part of the infrastructure replacement project.
The outputs vary in design, with some using application-formatted text and plain paper or
pre-printed forms, some using printer overlays, and some using Safeco’s current electronic print
system (EPS) with Documerge software.
Some outputs are automated so that they can be printed, processed and mailed directly to the
recipient from ACS’ chosen processing location. However, there are some outputs that will require
local printing due the need for manual processing and/or to business processing time constraints.
Confidential Information
Page 8 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.1 Statements Processing
Symetra statements are currently processed in-house using Documerge as the print stream
generator. This functionality must be replaced. The bulk of these statements can be generated,
printed, processed and mailed in an automated manner.
Statements are currently produced by four vendor applications listed below:
| • | CK4 (CSC) — Converting to CyberLife in September 2004 – individual life annual statements | ||
| • | Vantage-One (CSC) – deferred annuity statements | ||
| • | Paris – deferred annuity statements and deferred annuity case statements | ||
| • | DSS (CSC) — distribution support system — agent compensation |
2.1.1.1 Individual Life Insurance Statements
Annual universal life insurance statements are produced daily based on policy anniversary date.
Variable life insurance statements are produced quarterly. The extracts, including both types, are
produced by the CK4 policy administration system. This system will be upgraded to CyberLife during
2004, but the output processing will remain the same.
The statement extract is created during nightly batch processing and is sent to an enterprise
output system application (EOS) that sorts and formats the data, then generates the print stream
using Documerge, and splits it into appropriate print jobs (e.g., bi-fold, flat, agent copy, etc.).
Functional Requirements
| • | Normal handling statements are printed and processed with Gunther post-processing systems where they are automatically sorted, packaged and readied for mailing. A Third Party vendor processes this mail to provide efficiency and reduced postage costs (bulk mailing). | ||
| • | Agent copies are produced for both normal and special handling statements. | ||
| • | Bi-fold packaging is preferred to reduce mailing costs. There is an automatic changeover to flat when a page count threshold is exceeded (~10 pages) and the fold becomes difficult. | ||
| • | Overflow jobs are used to handle situations where more than 95 pages (reasonable flat limit) are to be packaged together. | ||
| • | There are no inserts. |
Business Requirements
| • | Normal handling statements can be printed, processed and mailed directly to the recipient. | ||
| • | All special handling statements are printed and returned to Symetra for manual processing and mailing. | ||
| • | Special request statements are manually processed by Symetra and must be completed by 8:00 AM the following Business Day. This may require local printing. | ||
| • | Proof of mailing is required. |
Archiving
Customer statements are archived in AFP format. The files are stored on tape, with the past 18
months also stored on DASD and available for on-line viewing. Direct access is provided to
customer service representatives (CSR) and indirect access is also provided through a web-based
application for customers, agents and CSR’s. The stored AFP document is converted to a PDF on
the fly for convenient handling and viewing.
Confidential Information
Page 9 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LISA0102 |
CK4 extract - feeds EOS application | COBOL extract | 10:00 PM | |||||||||||||||||||||||
EOS03LFB |
Process life extract files (UL & VUL) | Documerge printstream | 10:00 PM | |||||||||||||||||||||||
EOS04LFB |
Split output between flats and bifold | Documerge printstream | 10:00 PM | |||||||||||||||||||||||
EOS04400 |
Print special request statements | Documerge printstream | 11:00 PM | 2,651 | 1,825 | 1,014 | 1,304 | 1,442 | ||||||||||||||||||
EOS04410 |
Print customer statements - flats | Documerge printstream | 11:00 PM | 285 | 223 | 298 | 234 | 354 | ||||||||||||||||||
EOS04420 |
Print customer statements - bifold | Documerge printstream | 11:00 PM | 52,675 | 54,469 | 56,212 | 58,164 | 53,593 | ||||||||||||||||||
EOS04450 |
Print agent copies - flats | Documerge printstream | 11:00 PM | 13,485 | 12,549 | 14,860 | 14,834 | 13,543 | ||||||||||||||||||
EOS04460 |
Print agent copies - bifold | Documerge printstream | 11:00 PM | 33,045 | 37,171 | 34,197 | 38,663 | 34,322 | ||||||||||||||||||
EOS04470 |
Print agent copies - Bifold | Documerge printstream | 11:00 PM | 2,197 | 1,491 | 836 | 2,038 | 1,262 | ||||||||||||||||||
— |
Total impressions per month | — | 104,338 | 107,728 | 107,417 | 115,237 | 104,516 | |||||||||||||||||||
— |
Approximate packages per month | — | 25,000 | 26,000 | 26,000 | 29,000 | 25,000 | |||||||||||||||||||
Forms
Forms are hard coded in the application. |
||
Statement front page:
|
LO-1215/EP 6/02 | |
Second and continuing pages:
|
LO-1216/EP 6/02 |
Confidential Information
Page 10 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.1.2 Deferred Annuity Statements
Deferred annuity statements are produced daily from extracts produced by Vantage-One (job LVF02420)
and Paris annuity administration systems (job LPA1S230). The EOS feed is EOS03LFS. Normal handling
deferred annuity statements are produced quarterly. Quarterly statements run on the first Business
Day following quarter end for the Vantage-One system and on days 2 through 5 for the Paris system.
The runs are in the months of January, April, July and October.
The trigger event for normal quarterly statement production is the first Business Day of the new
quarter for Vantage-One, and the second, third and fourth Business Days for Paris. The statement
extract is created during nightly batch processing and is sent to an enterprise output system
application (EOS) which sorts and formats the data, then generates the print stream using Documerge
and splits it into appropriate print jobs (bi-fold, flat, agent copy, etc.). Due to the volume
produced at quarter-end, the print stream is separated into approximately 12,000 page print jobs.
During the rest of the quarter, smaller special request statements are produced daily. These
statements are automatically produced when transactions are backdated over the previous quarter
end, and for special requests. Both Paris and Vantage statements can be processed at the same
time.
Functional Requirements
| • | Normal handling statements are printed and then processed with Gunther post-processing systems where they are automatically sorted, packaged and readied for mailing. A Third Party vendor currently processes this mail for efficiency and reduced postage costs. | ||
| • | Agent copy statements are also produced and mailed for both normal and special handling (these are intermixed from Vantage-One and are a separate output from Paris. | ||
| • | First quarter statements carry a two-page, inline privacy notice. | ||
| • | Normal handling statements are produced and mailed during the two weeks following quarter-end as shown in the following table. This distribution helps to minimize excessive peaks in customer service call volume. |
| Business Days after | ||||||||||||
| Quarter End à | ||||||||||||
| System â | 1 | 2 | 3 | 4 | 5 | 6 | ||||||
Vantage-One |
85,000 pkgs. produced | ~40,000 pkgs. mailed | ~40,000 pkgs. mailed | |||||||||
Paris |
40,000 pkgs. produced | ~40,000 pkgs. mailed | ||||||||||
Paris |
40,000 pkgs. produced | ~40,000 pkgs. mailed | ||||||||||
Paris |
30,000 pkgs. produced | ~30,000 pkgs. mailed |
| • | There are newsletter inserts included in selected second and fourth quarter statement packages. The selection is based on product line and product type. These inserts are pre-printed and delivered bi-folded for insertion. They typically consist of 4 pages (11 by 17 glossy, folded into 81/2 by 11, then bi-folded to 51/2 by 81/2). They occasionally have an additional 81/2 by 11 center page. | ||
| • | Bi-fold packaging is preferred to reduce mailing costs. There is an automatic changeover to flat when a page count threshold is exceeded (typically 9 pages) and the fold becomes difficult. Overflow jobs are also provided to handle situations where more than 95 pages (reasonable flat limit) are to be packaged together. |
Confidential Information
Page 11 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Business Requirements
| • | Quarterly statements can be printed, processed and mailed from ACS’ chosen location. | ||
| • | Daily statements are manually processed by the business units, and are needed by 8:00 AM the next Business Day. | ||
| • | Special handling statements must be returned to Symetra for manual processing and mailing the next Business Day. There are two special handling jobs to sort the statements for different departments. | ||
| • | Foreign address statements can be mailed using appropriate postage (these are in with the special handling statements). | ||
| • | All mailed statements must be out by the 15th day after quarter-end. | ||
| • | Statements must be available for online viewing within 2 days of mailing. | ||
| • | Proof of mailing is required. |
Archiving
Customer statements are archived in AFP format. These are stored on tape, with the past 18
months also stored on DASD and readily available for on-line viewing. Direct access is provided
to CSR’s and indirect access is also provided through a web-based application for customers,
agents and CSR’s. The stored AFP document is converted to PDF on the fly for convenient
handling and viewing. These documents are stored 18 months online and a minimum of 7 years in
archive.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||
| Job | Description | Run Times * | 2004 | 2004 | 2004 | 2004 | 2004 | |||||||||||||||||
EOS04L11 |
Customer statements – flats | 11:00 PM | 869 | 357 | 138 | 936 | 168 | |||||||||||||||||
EOS04L12 |
Customer statements – flats > 95 pages | 11:00 PM | 279 | 323 | 78 | 320 | 94 | |||||||||||||||||
EOS04L21 |
Customer statements – bifold | 11:00 PM | 48,849 | 14,424 | — | 51,278 | — | |||||||||||||||||
EOS04L22 |
Customer statements – bifold | 11:00 PM | 50,217 | 12,513 | — | 49,161 | — | |||||||||||||||||
EOS04L23 |
Customer statements – bifold | 11:00 PM | 51,879 | 9 | — | 51,864 | — | |||||||||||||||||
EOS04L24 |
Customer statements – bifold | 11:00 PM | 36,911 | 9 | — | 51,188 | — | |||||||||||||||||
EOS04L25 |
Customer statements – bifold | 11:00 PM | 21,327 | 9 | — | 52,637 | — | |||||||||||||||||
EOS04L26 |
Customer statements – bifold | 11:00 PM | 12,130 | 9 | — | 27,129 | — | |||||||||||||||||
EOS04L27 |
Customer statements – bifold | 11:00 PM | 16,603 | 9 | — | 16,236 | — | |||||||||||||||||
EOS04L28 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,064 | — | |||||||||||||||||
EOS04L29 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,062 | — | |||||||||||||||||
EOS04L31 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,060 | — | |||||||||||||||||
EOS04L32 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,062 | — | |||||||||||||||||
EOS04L33 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,060 | — | |||||||||||||||||
EOS04L34 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,056 | — | |||||||||||||||||
EOS04L35 |
Customer statements – bifold | 11:00 PM | 56 | 9 | — | 12,654 | — | |||||||||||||||||
EOS04L36 |
Customer statements - bifold | 11:00 PM | 56 | 9 | — | 12,055 | — | |||||||||||||||||
EOS04L37 |
Customer statements - bifold | 11:00 PM | 56 | 9 | — | 12,052 | — | |||||||||||||||||
EOS04L38 |
Customer statements - bifold | 11:00 PM | 56 | 9 | — | 12,057 | — | |||||||||||||||||
EOS04L39 |
Customer statements - bifold | 11:00 PM | 56 | 9 | — | 14,555 | — | |||||||||||||||||
EOS04L40 |
Customer statements - bifold | 11:00 PM | 56 | 9 | — | 3,139 | — | |||||||||||||||||
EOS04L51 |
Agent copy - bifold | 11:00 PM | 1,101 | 197 | — | 656 | — | |||||||||||||||||
EOS04L52-69 |
Agent copy - bifold | 11:00 PM | 697 | 153 | — | 340 | — | |||||||||||||||||
EOS04L71 |
Agent copy - flat | 11:00 PM | 3,753 | 751 | — | 3,114 | — | |||||||||||||||||
EOS04L72-90 |
Agent copy - flat | 11:00 PM | 738 | 162 | — | 360 | — | |||||||||||||||||
EOS04L95 |
Agent copy > 95 pages | 11:00 PM | 14,379 | 6,030 | — | 12,666 | — | |||||||||||||||||
EOS04LS1 |
Special handling | 11:00 PM | 1,798 | 7,943 | 12,933 | 10,757 | 9,397 | |||||||||||||||||
EOS04LS5 |
Special handling | 11:00 PM | 3,646 | 1,635 | 1,790 | 3,135 | 873 | |||||||||||||||||
— |
Total impressions per month | 265,848 | 44,641 | 14,939 | 470,653 | 10,532 | ||||||||||||||||||
— |
Approximate packages per month | 200,000 | 38,000 | 10.000 | 200,000 | 6,000 | ||||||||||||||||||
| * | On quarter end, these jobs will not complete until 10:00 PM the following day. |
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Page 12 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Forms
Forms are hard coded in the application. |
||
Statement front page – pie chart:
|
LP-1376/EP 11/03 | |
Statement front page – no pie chart:
|
LP-1376/EP 12/03 | |
Second and continuing pages:
|
LP-1377/EP 11/03 |
Confidential Information
Page 13 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.1.3 Paris Annuity Case Statements
Paris annuity case statements are mailed to plan sponsors/employers. These statements currently
use an overlay with formatted text sent directly to the cut-sheet printers – Documerge software is
not involved in the process.
Case statements are triggered by the system and are scheduled annually, quarterly, and are also
available on request. The statement extract is created during nightly batch processing and is sent
directly to the printer as formatted text. The printed output is sent to the mail distribution
center where the packages are assembled and mailed.
Functional Requirements
| • | There are no inserts. | ||
| • | Mailed in size-appropriate envelopes. |
Business Requirements
| • | Special handling statements must be returned to Symetra for manual handling the next Business Day. | ||
| • | Proof of mailing is required. |
Archiving
These statements are not currently archived.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Time | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LPA1S200 |
Paris case statements | Formatted printstream | 11:00 PM | 8,085 | 2,433 | 1,114 | 4,745 | 1,380 | ||||||||||||||||||
Forms
Forms are hard coded in the application. |
||
Paris case statement forms:
|
LP906A/EP 1/92 (boxed overlay) | |
| LP906N (boxed overlay) | ||
| LP907A/EP 1/92 (boxed overlay) |
Confidential Information
Page 14 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.1.4 Agent Compensation Statements
Agent compensation statements are produced daily from extracts produced by the DSS system (job
LVO04730). Checks related to the statements are generated out of the FMS system and are
sorted in the same order as the statements.
The statement extract is created during nightly batch processing and is sent to an enterprise
output system application (EOS) which sorts and formats the data, generates the print stream and
splits it into appropriate print jobs (bi-fold or flat).
Functional Requirements
| • | Statements are sent to production mailing sorted into 6 groups: |
| 910 - | New York (with and without checks) | ||
| 920 - | Income annuities large check — value over $100,000 | ||
| 930 - | Hold code (special handling – sent back to Symetra) | ||
| 940 - | LMKSGC (grouped by agency – all are addressed the same, but the statements are for many different producers) | ||
| 950 - | No check (EFT used instead, or check value less than $100) | ||
| 960 - | All others (statements that are to be matched with checks) |
| • | Checks are manually matched and inserted with the corresponding compensation statement. | ||
| • | Statements are generally packaged in bi-fold envelopes unless they exceed a threshold page count (10 pages) in which case they sent to the flat (9 by 12) envelope print job. | ||
| • | Output schedule is: |
| o | Fridays – weekly and bi-weekly statements | ||
| o | Month end statements | ||
| o | Quarter-end statements and annual statements |
Business Requirements
| • | Statements for New York agencies (sort code 910) must be printed on New York letterhead and mailed in New York envelopes. | ||
| • | Special handling output (sort code 930) must be returned to Symetra for manual handling the next Business Day. | ||
| • | Statements for large checks (sort code 920) must be returned to Symetra for manual handling the next Business Day. | ||
| • | Statements with no check (sort code 950) can be mailed out directly to the recipient. | ||
| • | Statements for LMKSGC (sort code 940) must be matched up to the affiliated check and mailed. | ||
| • | Statements for all others (sort code 960) must be matched up to the affiliated check and mailed. | ||
| • | Mismatch statements (i.e., payment of $100 or greater with no check) must be returned to Symetra for manual handling the next Business Day. | ||
| • | Proof of mailing is required. |
Archiving
Agent compensation statements are partially stored on microfiche and partially stored on DSS
history. Microfiche was used prior to having DSS. Manual transactions are stored in Filenet.
Confidential Information
Page 15 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Print Volume
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times * | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
EOS04LSA
|
Agent compensation – bifold | Documerge printstream | 3:00 AM | 40,362 | 18,005 | 32,688 | 21,702 | 19,193 | ||||||||||||||||||
EOS04LSB
|
Agent compensation — flat | Documerge printstream | 3:00 AM | 273 | 297 | 325 | 356 | 344 | ||||||||||||||||||
—
|
Total impressions per month | — | 40,635 | 18,302 | 33,013 | 22,058 | 19,537 | |||||||||||||||||||
| * | 3:00 PM on quarter-end |
Forms
Forms are hard coded in the application. |
||
Mailing page – flat
|
OC-635/EP 09/00 | |
Mailing page – bi-fold
|
OC-686/EP 09/00 | |
Agent compensation statement front page:
|
LSA365/EP 03/02 | |
Agent compensation statement detail page:
|
LSA366/EP 10/01 | |
NY agent compensation statement front page:
|
LSA367/EP 12/01 | |
NY agent compensation statement detail page:
|
LSA368/EP 12/01 |
Confidential Information
Page 16 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.2 Deferred Annuity Contracts and Individual Life Policies
Contracts and policies are produced by three applications. Symetra is interested in
replacement methods for processing the contract forms and policy extract data, printing the
statements, and distributing them.
Contracts and policies are currently processed in-house using an electronic forms management (EFM)
database to manage the forms, Documerge V3.0.6 as the print stream generator, AFP format printers,
and Gunther post-processing systems. There are some manual processes associated with the
production and distribution of these documents.
ACS may propose to supply software systems to replace those systems, or they may propose to process
the data extract files to create print streams using their own image generation software.
2.1.2.1 Deferred Annuity Contracts
Deferred annuity contracts are produced daily from extracts produced by the Vantage-One annuity
administration system. They are automatically triggered when a policy is issued.
The annuity contract extract is created during nightly batch processing and is sent to an
enterprise output system application (EOS) that sorts and formats the data, generates the print
stream using Documerge, and splits it into appropriate print jobs. The forms are managed using the
EFM database, and the forms are stored in an electronic library (EDL). The extract is created to
supply all the necessary information to complete the selected forms. The extract is passed to the
EOS application which formats the data and generates the print stream. The scanned and imaged
customer application is pulled from an image archive database, converted from PDF to AFP and
incorporated in a new, indexed form placed in the EDL. The entire contract package is printed
in-stream then processed with the Gunther automated post-processing systems.
The contract package consists of; a) a loose, unbound group of forms including welcome letter,
privacy notice, guarantee association notices, contract summaries and various other correspondence;
b) the bound contract (currently using VeloBind), consisting of contract face page, contract data
page with variable data (amounts, interest rates, customer information, etc.), the contract body,
endorsements, an image of the application; and c) a stapled, multi-page buyers guide (for fixed
annuities contracts only). The entire package is inserted into a 9 x 12 envelope ready for
mailing.
A shortened agent copy is also created including the welcome letter, contract data page and a
disclosure form for IRA contracts.
Functional Requirements
| • | Printed contracts are processed using Gunther automated post-processing equipment. The package is not sealed, and is returned to the new business unit of retirement services for final checkout and mailing. | ||
| • | There are inserts included with the contract package, depending on product and line of business. | ||
| • | Flat packaging (9 by 12 envelopes) is used for all contract packages. | ||
| • | Many of these forms are filed with the states. |
Business Requirements
| • | These contracts must be returned to Symetra by 8:00 AM the next Business Day. | ||
| • | All contract packages are reviewed by the business unit and validated for mailing to the correct recipient (some go to the customer and some go to the agency). | ||
| • | Variable contract packages must be mailed within 2 days of creation. | ||
| • | Ability to re-issue or re-print old contracts is required (sometimes requests back to 1972 are received due to the fact that these are retirement accounts). |
Confidential Information
Page 17 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| • | Proof of mailing is required by five states. |
Archiving
All contract pages are archived in the printed output archive with the exception of the scanned
and imaged customer submitted application. Direct access is provided to CSR’s through an
intranet application. The stored AFP document is converted to PDF on the fly for convenient
handling and viewing. Contracts must be stored at least 7 years; however the ability to access
the contracts indefinitely is required.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LVF03710 |
Extract | 1:00 AM | — | — | — | — | — | |||||||||||||||||||
EOS04LEP |
Contracts | Documerge printstream | 2:00 AM | 112 | 100 | 90 | 120 | 100 | ||||||||||||||||||
EOS04LE1 |
Contracts | Documerge printstream | 2:00 AM | 1,594 | 592 | 856 | 894 | 1,072 | ||||||||||||||||||
EOS04LE2 |
Contracts | Documerge printstream | 2:00 AM | 5,440 | 2,113 | 1,839 | 2,496 | 4,510 | ||||||||||||||||||
EOS04LE3 |
Contracts | Documerge printstream | 2:00 AM | 100 | 100 | 90 | 110 | 100 | ||||||||||||||||||
EOS04LE4 |
Contracts | Documerge printstream | 2:00 AM | 100 | 100 | 90 | 110 | 100 | ||||||||||||||||||
EOS04LMS |
Contracts | Documerge printstream | 2:00 AM | 814 | 376 | 350 | 444 | 694 | ||||||||||||||||||
— |
Total impressions per month* | — | 8,160 | 3,381 | 3,315 | 4,174 | 6,576 | |||||||||||||||||||
| * | These quantities are currently low based on a drop since the announcement of Symetra’s sale. They are projected to potentially increase to more than 50,000 per month within a year based on the new Symetra corporate entity and increased sales. |
Forms
There are nearly 1,000 Documerge/AFP forms associated with this application. The forms are
managed through an application called EFM (electronic forms management) with an IMS database
back-end. The forms have a high frequency of change.
Confidential Information
Page 18 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.2.2 Individual Life Policies
Individual life insurance policies are produced daily from extracts produced by the CK4 policy
administration system (being converted to CyberLife in 2004). The extracts are automatically
triggered when a policy is issued.
The individual life policy extract is created during nightly batch processing. The appropriate
forms are selected from an electronic forms management database (EFM). The printstream is then
generated with all the information needed to complete the set of selected forms. The policy
package is printed and then processed with the Gunther automated post processing system. Other
print jobs create matched output which is inserted by the Gunther system. A package consists of an
unbound group of forms including a welcome letter, privacy notice, guarantee association notice,
policy summary, automatic amendments and endorsements and the policy itself, inserted into a flat
envelope. These packages are returned to the individual life new business area where a printed
copy of the application and the part II documents are inserted. The contract is then bound,
packaged and mailed.
Functional Requirements
| • | Policies are processed using Gunther automated post-processing equipment. The packages created are returned to Symetra early the next Business Day. | ||
| • | Inserts into the contract include the application, part II, Amendments and endorsements. | ||
| • | The application and part II are printed locally within the business unit. The automatic amendments and endorsements print with the contract pages and are manually inserted into the contract. | ||
| • | Flat packaging is used for all policy packages. |
Business Requirements
| • | All policy output must be available for print at Symetra H.Q. by 5:00am the next Business Day. | ||
| • | Proof of mailing is not applicable. |
Archiving
All policy pages are archived in the printed output archive with the exception of the scanned
and imaged application. Direct access is provided to CSR’s through an intranet application.
The stored AFP document is converted to PDF on the fly for convenient handling and viewing.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LISL0100
|
Individual policy pages | Documerge printstream | 11:00 PM | 9,491 | 8,049 | 8,188 | 9,280 | 9,770 | ||||||||||||||||||
LISL0110
|
Individual policy pages, agent cards/labels | Documerge printstream | 11:00 PM | 5,934 | 4,350 | 4,256 | 5,506 | 5,589 | ||||||||||||||||||
LISL0120
|
Individual policy pages | Documerge printstream | 11:00 PM | 118,021 | 81,602 | 80,512 | 100,289 | 104,642 | ||||||||||||||||||
LISL0125
|
Individual policy pages | Documerge printstream | 11:00 PM | 140 | 133 | 126 | 157 | 141 | ||||||||||||||||||
LISP0100
|
* ASL policy pages | Documerge printstream | 11:00 PM | 1,494 | 1,267 | 1,078 | 1,146 | 1,104 | ||||||||||||||||||
LISP0120
|
* Individual policy pages | Documerge printstream | 11:00 PM | 2,285 | 1,897 | 1,625 | 1,725 | 1,990 | ||||||||||||||||||
LISA0117
|
Policy cover letters | Formatted output | 10:00 PM | 3,045 | 2,117 | 2,141 | 2,717 | 2,413 | ||||||||||||||||||
LISA0130
|
DPFS schedule pages, new business worksheets, agent cards, mailing labels | Formatted output | 2:00 PM | 47 | 17 | 46 | 45 | 37 | ||||||||||||||||||
LISA0140
|
DPFS schedule pages, New business worksheets, agent cards, mailing labels DPFS schedule pages | Formatted output | 9:00 PM | 72 | 63 | 70 | 74 | 80 | ||||||||||||||||||
LISA0056
|
Amendment letters for new business | Formatted output | 10:00 PM | — | — | 36 | 1,075 | 1,042 | ||||||||||||||||||
—
|
Total impressions per month | — | 137,484 | 97,378 | 95,901 | 118,222 | 123,353 | |||||||||||||||||||
| * | LISP0100 and LISP0120 may be phased out prior to completion of this project. |
Confidential Information
Page 19 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Forms
There are approximately 1,600 forms associated with this application. They are currently
managed with an application called EFM (electronic forms management) which uses an IMS database.
The majority of these forms are state-filed.
Confidential Information
Page 20 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.3 Billing Statements
Billing statements are produced by four applications applicable to three departments.
2.1.3.1 Group Billing Statements
Group list billing statements are produced monthly.
Statements are separated in 1-page, 2-page, 3-page, and 4-or-more-page bundles. The 1-page bundles
are sent to mail distribution services for folding, stuffing and mailing. Multi-page bundles are
handled manually. This process can be improved so that all are automated.
Job LCG40021 uses life envelope # V3727 and job LCG40024 uses life envelope # V3673 because the
mail-to addresses are in different locations. Job LCG40021 requires trimming and bursting.
Functional Requirements
Return envelopes are inserted in the mailing.
Business Requirements
| • | Any errors or damaged pages must be returned to Symetra for review and manual handling. | ||
| • | Proof of mailing is not applicable. |
Archiving
Files are stored on microfiche. The microfiche is used to print old bills.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LCG40021 |
Billing statements - self-administered | Formatted output | 9:00 PM | 45 | 45 | 45 | 45 | 45 | ||||||||||||||||||
LCG40024 |
Billing statements - list bill | Formatted output | 9:00 PM | 1,212 | 1,212 | 1,212 | 1,212 | 1,212 | ||||||||||||||||||
— |
Total impressions per month | — | 1,257 | 1,257 | 1,257 | 1,257 | 1,257 | |||||||||||||||||||
Forms
Forms are hard coded in the application. |
||
List bill form:
|
LG1110/EP 7/90 | |
| DP-740/EP 7/90 | ||
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Page 21 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.3.2 Retirement Services — Deferred Annuity Billing Statements
List bill statements are produced daily from both the Paris and Vantage-One deferred annuity
administration systems. Paris loan billings are also included here.
The Paris and Vantage-One list bills are created daily and are printed on plain cut sheet paper.
The Paris Loan billing statements are run weekly or on request, and are also produced on plain cut
sheet paper.
Functional Requirements
| • | There are no inserts. |
Business Requirements
| • | Vantage-One list bills and Paris loan bills can be mailed directly from ACS’ location. | ||
| • | Retirement services requires the ability to request pulls from the Paris list bills. |
Archiving
Printed output is not archived.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LPA1D140 |
Paris list bill statements | Formatted output | 11:00 PM | 5,668 | 6,768 | 5,499 | 5,546 | 5,320 | ||||||||||||||||||
LPA1L140 |
Paris loan billings | Formatted output | 10:00 PM | 1,045 | 876 | 806 | 826 | 847 | ||||||||||||||||||
LVF03600 |
Vantage-One list bill statements | Documerge printstream | 12:00 PM | 72 | 67 | 64 | 76 | 71 | ||||||||||||||||||
— |
Total impressions per month | — | 6,785 | 7,711 | 6,369 | 6,448 | 6,238 | |||||||||||||||||||
Forms
Paris list bill forms:
|
LP-869/EP 7/99 | |
Paris loan bill forms: |
||
Vantage-One list bill forms:
|
LN827/EP 5/01 Page 1 | |
| LN828 Page 2-6 — Portrait | ||
| LN829 Page 2-5 — Landscape |
Confidential Information
Page 22 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.3.3 Individual Life Billing Statements
Billing statements are produced daily from the CK4 administration system. Triggers are: LISA0091 is
30 days prior to payment due date, LISA0092 is 28 days prior to payment due date, and LISA0124 is
customer change request.
Functional Requirements
There are no inserts.
Business Requirements
| • | All output is currently returned to Symetra for manual handling early the next Business Day. | ||
| • | Premium notices could be mailed out directly if pull requests could be accommodated. |
Archiving
Letters are scanned into the policy file.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LISA0124 |
Billing letters | Formatted output | 10:00 PM | — | — | — | — | 45 | ||||||||||||||||||
LISA0091 |
List bill | Formatted output | 10:00 PM | 3,676 | 3,676 | 3,676 | 3,676 | 3,676 | ||||||||||||||||||
LISA0092 |
Premium payment notice | Formatted output | 10:00 PM | 82,500 | 82,500 | 82,500 | 82,500 | 82,500 | ||||||||||||||||||
— |
Total impressions per month | — | 86,176 | 86,176 | 86,176 | 86,176 | 86,221 | |||||||||||||||||||
Forms
Billing letters:
List bills: standard letterhead
Premium payment: LO-1120/DP 4/03 (small partial page, perforated)
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Page 23 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.4 Check Printing
2.1.4.1 Checks
Check printing is done with on-line and batch processes. The checks produced from the CDS batch
process are from administrative system feeds. The online CDS entry allows for same-day check
processing. The on-line process is used to generate checks locally for large value amounts or when
special processing is required.
Checks for the business lines are printed daily using a Third Party vendor supplied application to
create the formatted outputs.
The batch jobs create check forms (stub and check) that can either be automatically processed and
mailed, or packaged and returned to the business lines. The on-line jobs create a print stream
which is sent to a local MICR printer for printing. On-line is used for check values greater than
$250,000, special customer processing requests, and checks that need to be sent by FedEx that day.
They are normally processed at 2:00 each afternoon.
Functional Requirements
| • | Printed output from LAD60303 is folded and inserted into envelopes ready for mailing. | ||
| • | Printed output from LAD60304 is returned to Symetra for manual handling. | ||
| • | The on-line manually input checks are processed by LAD60310 for special processing as defined in the description above. | ||
| • | There are generally no inserts for the directly mailed checks; however, there may be ad-hoc insert requests at a company or product line level. | ||
| • | Checks are packaged in standard tri-fold business envelopes. |
Business Requirements
| • | The checks must be held until 1:00 PM in case any checks need to be pulled prior to mailing. | ||
| • | Printed output from LAD60304 must be returned to Symetra for manual handling the next Business Day. The output is manually matched to other correspondence prior to mailing. | ||
| • | Proof of mailing is required. |
Archiving
Printed output is not archived. The files are copied to tape which is sent to storage and
retained for 10 years.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LAD60303 |
Check printing – direct mailing | Documerge printstream | 2:00 AM* | 20,226 | 19,292 | 15,682 | 26,684 | 19,356 | ||||||||||||||||||
LAD60304 |
Check printing – return to Symetra | Documerge printstream | 2:00 AM | 11,528 | 4,333 | 6,678 | 5,074 | 4,906 | ||||||||||||||||||
LAD60310 |
Check printing – local printing | Documerge printstream | 3:00 PM | 300 | 300 | 300 | 300 | 300 | ||||||||||||||||||
— |
Total impressions per month | — | 32,054 | 23,925 | 22,660 | 32,058 | 24,562 | |||||||||||||||||||
| * | 9:00 AM on month-end |
Confidential Information
Page 24 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Forms
CDS check form:
|
W776/EP 069700 | |
CDS overflow form:
|
W775/EP 109100 | |
Check stock:
|
W765 8/99 |
Confidential Information
Page 25 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.5 Taxes
2.1.5.1 Tax Forms from Finance
These outputs include standard forms 1099, 5498 and W2.
A large percentage of the tax output is annual – January for the 1099 and May for the 5498. There
is a small amount of daily processing throughout the year.
The administrative systems interface with LTR. The LTR system runs on software provided by check
free. The business units can also manually update LTR.
The trigger is a taxable event (e.g., withdrawal, payment, etc.).
Functional Requirements
| • | Printed output is processed and mailed directly to the recipient. | ||
| • | Inserts are not allowed. | ||
| • | These notices are packaged in various envelopes based on the form. | ||
| • | All forms can be run daily as required for corrections. |
Business Requirements
| • | The envelopes must indicate “Tax Document Enclosed”. | ||
| • | The SSN cannot show in the envelope window. | ||
| • | The 1099 forms must be mailed no later than January 31th. They are typically printed for mailing January 15thand mailed a week before the deadline. | ||
| • | The 5498 forms must be mailed no later than May 31st. The data should be available at the print and mail center 5 days prior to mail date. | ||
| • | Foreign mail can be mailed directly to the recipient after the correct postage is applied. | ||
| • | The following output must be returned to Symetra the next Business Day for manual handling: |
| o | State output — Some states require a copy of the 1099 or W-2 to be provided. Tapes are sometimes used based on volume of data and state requirements. | ||
| o | Reprints – The reprint ability is used to process mailings that are ripped or torn during handling or mail processing. | ||
| o | Corrections | ||
| o | Bad address mail |
| • | Proof of mailing is not applicable. | ||
| • | Reporting of output counts is required. The LTR system creates reports that are used in conjunction with data center processes, including counts. |
Archiving
Archiving is currently supported on microfiche. By October 2004, the archiving should be
transitioned to Control D. Symetra would prefer to have a web interface to the image archive
storage.
Confidential Information
Page 26 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times * | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LTRC0200 |
1099 and W2 corrections | Documerge printstream | 1:00 AM | 675 | 1,463 | 851 | 690 | 735 | ||||||||||||||||||
LTRY0150 |
1099R customer | Documerge printstream | 1:00 AM | 47,000 | — | — | — | — | ||||||||||||||||||
LTRY0200 |
1099I customer | Documerge printstream | 1:00 AM | 718 | — | — | — | — | ||||||||||||||||||
LTRY0210 |
1099M customer | Documerge printstream | 1:00 AM | 3,536 | — | — | — | — | ||||||||||||||||||
LTRY0220 |
1099LTC – typed manually | Documerge printstream | 1:00 AM | 9 | — | — | — | — | ||||||||||||||||||
LTRYS420 |
1099I state | Documerge printstream | 1:00 AM | 10 | — | — | — | — | ||||||||||||||||||
LTRYS430 |
1099M state | Documerge printstream | 1:00 AM | 26 | — | — | — | — | ||||||||||||||||||
LTRYS440 |
1099R state | Documerge printstream | 1:00 AM | 593 | — | — | — | — | ||||||||||||||||||
LTRY0800 |
5498 customer | Documerge printstream | 1:00 AM | — | — | — | — | 46,000 | ||||||||||||||||||
LTRY0300 |
W2 customer | Documerge printstream | 1:00 AM | 937 | — | — | — | — | ||||||||||||||||||
LTRY0230 |
W2G typed manually | Documerge printstream | 1:00 AM | 5 | — | — | — | — | ||||||||||||||||||
LTRSY620 |
W2 state | Documerge printstream | 1:00 AM | 104 | — | — | — | — | ||||||||||||||||||
LTRY0751 |
B-notice customer as-required | Documerge printstream | 1:00 AM | — | — | — | — | — | ||||||||||||||||||
LTR70752 |
B-Notice customer as-required – second notice | Documerge printstream | 1:00 AM | — | — | — | — | — | ||||||||||||||||||
— |
Total impressions per month | — | 105,613 | 1,463 | 851 | 690 | 46,735 | |||||||||||||||||||
| * | 7:00 AM on month-end |
Forms
| PAGEDEF | FORMDEF | OVERLAY | FORM | |||||
Federal |
||||||||
1099R
|
LTR5 | LTRCR3 | L9RCB3 L9RCF3 |
LO-1173 3-section, perforated | ||||
1099I
|
LTRA | LTRCI3 | L9ICF3 | Standard paper | ||||
1099M
|
LTRA | LTRCM3 | L9MCF3 | Standard paper | ||||
W2
|
LTR6T | LTRCW3 | LW2CB3 LW2CF3 |
LO-1174 4-quadrants, perforated | ||||
5498
|
LTRA | LTRC53 | L54CF3 | Standard paper | ||||
State |
||||||||
1099I
|
LTR9I | LTRSI3 | L9ISF3 | LO-1173 3-section, perforated | ||||
1099M
|
LTR9M | LTRSM3 | L9MSF3 | LO-1173 3-section, perforated | ||||
1099R
|
LTR7 | LTRSR3 | L9RSF3 | LO-1172 2-section, perforated | ||||
W2
|
LTR8 | LTRSW3 | LW2SF3 | LO-1172 2-section, perforated |
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Page 27 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.6 Correspondence
2.1.6.1 Bank Reconciliation System
When a check has not been cashed within 6 months of the issue date, the check is stale dated and a
letter is generated. These letters get reviewed to confirm the correct mailing address and then are
mailed to the customer. The intention is to disburse the monies owed to the customer.
Functional Requirements
| • | This job runs monthly |
Business Requirements
| • | All output mailed directly |
Archiving
Documents are stored in paper files.
Print Volumes
| Run | January | February | March | April | May | |||||||||||||||||||||
| Job | Description | Output File Format | Time | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
BRS0STCS
|
Customer service letters for standard accounts | Formatted output | 7:00 PM | 865 | 981 | 1,099 | 1,270 | 1,212 | ||||||||||||||||||
Forms
Standard paper
Confidential Information
Page 28 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| 2.1.6.2 | Agency Compensation Letters |
E-comp letters (job LVO04550) and agent statements (job LVO04730) run from the same EOS extract.
The extract file produced is picked up along with the agent compensation statement extract and the
two are processed within the same EOS application (EOS03LFC).
The output for this job is processed daily using the Gunther post-processing equipment, and is
mailed directly to agents.
Functional Requirements
| • | E-comp letters are packaged in standard tri-fold business envelopes. | ||
| • | There are no inserts. |
Business Requirements
See “Print Volumes” below.
Archiving
Agent E-comp letters are archived in AFP format and have been produced for approximately 2
years. These are stored on tape, with the past 18 months also stored on DASD and readily
available for on-line viewing. The stored AFP document is converted to PDF on the fly for
convenient handling and viewing.
Print Volumes
| Job | Description | Output File Format | Run Times | January | February | March | April | May | ||||||||||||||||||||||||
| ** | 2004 | 2004 | 2004 | 2004 | 2004 | |||||||||||||||||||||||||||
| EOS04LSA | EComp update validation letters |
Documerge printstream | 3:00 AM | * | * | * | * | * | ||||||||||||||||||||||||
| EOS04LSB | EComp update validation letters |
Documerge printstream | 3:00 AM | * | * | * | * | * | ||||||||||||||||||||||||
| — | Total impressions per month (not available) |
— | ||||||||||||||||||||||||||||||
| * | These counts are included in the numbers for agent compensation statements. The interface files are processed in the same set of EOS jobs. | |
| ** | Run can take up to 3:00 PM at quarter-end |
Forms
EComp update validation letters:
|
OC-673/EP 03/02 | |
EComp update validation letters, NY:
|
OC-673/NYEP 05/02 |
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Page 29 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.6.3 Retirement Services
Functional Requirements
| • | There are no inserts. | ||
| • | Paris RMD Letters are printed locally. | ||
| • | Vantage RMD Letters are triggered by the MDA transaction under one of three conditions: |
| o | January 1 of the year that the annuitant turns 701/2, | ||
| o | the annuitant is already 701/2 when the contract is added to the admin system, or | ||
| o | when policies are added earlier in the year and the annuitant does not turn 701/2 until later in the year, RMD will be triggered on the RMD notice date, which is 90 days before the day they turn 701/2 |
| • | schedule a/commission reports are created monthly, with the largest volume in January. The volume is about 2,000 per year, multiplied by about 4 pages each times 4 copies, results in about 32,000 pages. |
Business Requirements
| • | Special handling (such as multiple pages and foreign addresses) can be mailed out directly to the recipient. | ||
| • | Need to have ability to contact vendor to pull letters from the output if unable to suppress. | ||
| • | Corporate audit reports can be mailed out directly. | ||
| • | Schedule a letters and commission reports must be returned to Symetra for manual handling the next Business Day. | ||
| • | Need a count validation of output and next day notice of any print failures or errored output. |
Archiving
| • | Online view of printed output must be available within 2 days following mailing. | ||
| • | Documents must be stored in archive for a minimum of 7 years. | ||
| • | For Paris, only variables go to archive for storage now. There is rarely a need to access confirms. It would be helpful though to have online view and archive of all confirms. | ||
| • | For Vantage-one, all confirms go to archive. |
Print Volumes
| Job | Description | Output File Format | Run Times | January | February | March | April | May | ||||||||||||||||||||||
| 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||||||||||
| LPA1F170 | Confirmation statements |
Documerge printstream | 11:00 PM | 2,095 | 2,105 | 2,018 | 2,354 | 2,256 | ||||||||||||||||||||||
| LPA1F172 | Confirmation statements |
Documerge printstream | 11:00 PM | 1,496 | 1,162 | 1,055 | 1,810 | 1,446 | ||||||||||||||||||||||
| LPA1F174 | Confirmation statements |
Documerge printstream | 11:00 PM | 4,340 | 4,311 | 3,814 | 4,211 | 5,640 | ||||||||||||||||||||||
| LPA1F176 | Confirmation statements |
Documerge printstream | 11:00 PM | — | — | — | — | 5 | ||||||||||||||||||||||
| LPA1E210 | IVR participant interface — PIN change |
Formatted output | 10:00 PM | 68 | 56 | 45 | 64 | 48 | ||||||||||||||||||||||
| LPA1K400 | Annuity payment confirms |
Formatted output | 10:00 PM | 7 | 5 | — | 7 | 6 | ||||||||||||||||||||||
| LPA1W180 | RMD letters |
Local print | 11:00 PM | — | — | — | — | — | ||||||||||||||||||||||
| LPA1S800 | Schedule a letters and commission reports |
Formatted output | 11:00 PM | 4,482 | 208 | 146 | 834 | 894 | ||||||||||||||||||||||
| LPA1Y200 | Corporate audit reports |
Formatted output | 11:00 PM | — | — | — | 1,237 | 9,765 | ||||||||||||||||||||||
| LPA10158 | Mutual fund letters |
Documerge printstream | 11:00 PM | — | — | — | — | — | ||||||||||||||||||||||
| LVF03000 | Confirmation statements |
Documerge printstream | 12:00 PM | 3,364 | 3,247 | 2,996 | 3,509 | 3,211 | ||||||||||||||||||||||
| LVF03050 | Confirmation statements |
Documerge printstream | 12:00 PM | 52 | 42 | 33 | 50 | 58 | ||||||||||||||||||||||
| LVF03400 | RMD letters |
Documerge printstream | 12:00 PM | 104 | 90 | 102 | 114 | 105 | ||||||||||||||||||||||
| LVF03500 | Mutual fund letters |
Documerge printstream | 12:00 PM | — | — | — | — | — | ||||||||||||||||||||||
| — | Total Impressions per Month |
— | 16,008 | 11,226 | 10,209 | 14,190 | 23,434 | |||||||||||||||||||||||
Forms
Confidential Information
Page 30 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Paris confirms:
|
LP-869/EP 7/99 | |
Vantage-One confirms:
|
LN-811/EP 01/99 | |
Vantage-One RMD letters:
|
LP-1240 11/01 | |
Vantage-One:
|
LN-830 10/01 | |
Vantage-One NY:
|
LN831 NYEP 01060200(1) | |
Vantage-One MULIC:
|
LN832 EP 100200(1) | |
Schedule a letters:
|
Letterhead | |
IVR participant interface:
|
Letterhead | |
Corporate audit reports:
|
Plain, legal |
Confidential Information
Page 31 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.6.4 Group
The output from these three jobs is handled entirely by group systems. The output from job
LCG20070 is sent to our customers by group accounting services. Group policy services verifies
rates on jobs LCG50020 and job LCG50050 and activity reports and enrollment cards are placed into
the envelopes with the census letters.
Therefore, LCG20070, LCG50020, and LCG50050 do not require any mail center or operations
activities, just the processing and printing.
Functional Requirements
There are no inserts.
Business Requirements
All output must be returned to Symetra for manual handling the next Business Day.
Archiving
Printed output is not archived.
Print Volumes
| Job | Description | Output File Format | Run | January | February | March | April | May | ||||||||||||||||||||||
| Times | 2004 | 2004 | 2004 | 2004 | 2004 | |||||||||||||||||||||||||
| LCG20070 | ERISA policy holder letter |
Formatted output | 10:00 PM | 1,241 | 166 | — | — | 100 | ||||||||||||||||||||||
| LCG50020 | Renewal activity reporting — census letters |
Formatted output | 11:00 PM | 167 | 42 | — | — | 60 | ||||||||||||||||||||||
| LCG50050 | 60 worksheets, rate sheets, renewals |
Formatted output | 9:00 PM | 55 | 207 | — | — | 40 | ||||||||||||||||||||||
| — | Total impressions per month |
— | 1,463 | 415 | 200 | |||||||||||||||||||||||||
Forms
ERISA policy holder letter:
Renewal activity reporting — census letters:
60 worksheets, rate sheets, renewals:
Renewal activity reporting — census letters:
60 worksheets, rate sheets, renewals:
Confidential Information
Page 32 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| 2.1.6.5 | Income Annuities |
Customer correspondence is automatically generated by the LAB administrative system. The output is
in the form of a letter and is printed on one of two letterhead forms: NY and Non-NY. The letters
are folded, stuffed and mailed without the involvement of IA department personnel.
Functional Requirements
There are no inserts.
Business Requirements
| • | Output can be mailed directly to the recipients. | ||
| • | Output for New York must be printed on New York letterhead and mailed in New York envelopes. | ||
| • | Correspondence with a foreign address can be mailed directly with the appropriate postage applied. | ||
| • | Proof of mailing is not applicable. |
Archiving
Printed output is not archived.
Print Volumes
| Job | Description | Output File | Frequency | Run | January | February | March | April | May | |||||||||||||||||||||||||
| Format | Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||||||||||||
| LABB0750 | Termination of benefit letters |
Formatted output | Daily | 8:00 PM | 206 | 194 | — | 226 | 238 | |||||||||||||||||||||||||
| LABM0350 | Secured benefit account letters |
Formatted output | Daily | 8:00 PM | 302 | 292 | — | 382 | 524 | |||||||||||||||||||||||||
| LABB0700 | EFT audit letters |
Formatted output | Monthly | 8:00 PM | 82 | 69 | — | 70 | 81 | |||||||||||||||||||||||||
| LABB0250 | Explanation of benefit pages |
Formatted output | Daily | 8:00 PM | 413 | 406 | — | 445 | 409 | |||||||||||||||||||||||||
| LABM0100 | Verification of living status (VSL) letter |
Formatted output | Annually | 8:00 PM | — | — | — | — | — | |||||||||||||||||||||||||
| — | Total impressions per month |
— | 1003 | 961 | 1123 | 1252 | ||||||||||||||||||||||||||||
Forms
TOB:
|
LA-4029/EP 11/01 – letterhead | |
TOB New York:
|
LA-4029/NYEP 3/02 – letterhead | |
SBA:
|
LA-4029/EP 11/01 – letterhead | |
EFT audit:
|
LA-4029/EP 11/01 – letterhead | |
EOB:
|
LA-4029/EP 11/01 – letterhead | |
EOB NewYork:
|
LA-4029/NYEP 03/02 – letterhead | |
VLS:
|
LA-4029/EP 11/01 – letterhead | |
VLS New York:
|
LA-4029/NYEP 3/02 — letterhead |
Termination of benefit (TOB) letters are produced daily by job LABB0750. Letters are sent based
on selection criteria advising payees of last payment. The trigger is when a contract is at or
near the end of benefit payout period.
Confidential Information
Page 33 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Secure benefit account (SBA) letters are produced daily by job LABM0350. Letters are sent to
selected payees offering an SBA program.
EFT audit letters are produced monthly by job LABB0700. The output is a report listing EFT
recipients with payments starting in the month. The trigger is the entry of customer request
for benefit payment via EFT.
Explanation of benefits (EOB) letters are produced daily by job LABB0250. The output is sent to
EOB recipients. The trigger is the entry of customer EOB request into the administrative
system.
Verification of living status (VLS) letters are produced annually by job LABM0100. Letters are
sent to annuitants and payees without an SSN on their record in the administrative system. The
trigger is when the SSN is not entered on customer record (this can be a valid condition when
tax reporting is not required for the individual).
Confidential Information
Page 34 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.6.6 Individual Life
Functional Requirements
There are no inserts.
Business Requirements
| • | All policy output must be available for print at Symetra H.Q. by 5:00am the next Business Day . |
Archiving
Paper copies are scanned and stored.
Print Volumes
| Output File | Run | January | February | March | April | May | ||||||||||||||||||||
| Job | Description | Format | Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
LISA0095
|
Owner term renewal letter, agent term renewal letter, owner secondary addr. letter, agent secondary addr. letter |
Formatted output | 10:00 PM | 1,257 | 1,188 | 1,041 | 1,339 | 1,105 | ||||||||||||||||||
LISA0105
|
Cyberscribe agent setters, surrender letter cyberscribe records letters, premium pymt letter cyberscribe owner letters, initial pymt letter |
Formatted output | 10:00 PM | 16,185 | 15,317 | 13,152 | 15,523 | 15,326 | ||||||||||||||||||
LISA0106
|
Vul confirm owner letters, Vul confirm agent letters, Vul confirm records letters |
Formatted output | 10:00 PM | 480 | 331 | 443 | 301 | 586 | ||||||||||||||||||
LISA0116
|
Disbursement payee letters, Disbursement agent letters, Disbursement Symetra letters |
Formatted output | 10:00 PM | 1,017 | 1,205 | 1,082 | 1,451 | 1,346 | ||||||||||||||||||
LISA0118
|
Life fund allocation letters | Formatted output | 9:00 PM | 576 | 279 | 543 | 210 | 849 | ||||||||||||||||||
LISA0119
|
Life reinstatement letters | Formatted output | 10:00 PM | 453 | 541 | 358 | 414 | 380 | ||||||||||||||||||
LISA0121
|
Credit card expiry letter — payer, credit card sxpiry letter — agent, credit card expiry letter — payer, masterplan gio notify report, masterplan gio letters — owner, masterplan gio letter — agent |
Formatted output | 10:00 PM | 1,593 | 1,434 | 1,490 | 1,605 | 1,796 | ||||||||||||||||||
LISA0122
|
Policyholder letters / ind accounting, Symetra copy of letters / ind. acct’ing, agent copy of letters / mail room |
Formatted output | 10:00 PM | 763 | 672 | 664 | 856 | 773 | ||||||||||||||||||
LISA0123
|
Maintenance letters, address change letters |
Formatted output | 10:00 PM | 1,165 | 1,282 | 1,246 | 1,595 | 1,390 | ||||||||||||||||||
LISA0125
|
GDB/GCB notify letters, term/expiry notify letters, term rider/expiry letters, ETI expiry notify letters, Maturing policy letters, Symetra gio notify letters |
Formatted output | 10:00 PM | 880 | 823 | 730 | 978 | 854 | ||||||||||||||||||
LISA0126
|
Lapse/Nfo letters — insured copy, Lapse/Nfo letters — agent copy, Lapse/Nfo letters — record copy |
Documerge printstream | 10:00 PM | 7,634 | 6,793 | 5,622 | 7,090 | 7,034 | ||||||||||||||||||
LISA0335
|
Lis.Pa0335.detail.crown, Lis.Pa0335.detail.lincoln, Lis.Pa0335.reports.lincoln, reinsurance report |
Tape, formatted output | 11:00 PM | — | — | — | — | — | ||||||||||||||||||
—
|
Total impressions per month | — | 30,903 | 29,865 | 26,371 | 31,362 | 31,439 | |||||||||||||||||||
Confidential Information
Page 35 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Forms
Letterhead
Lapse: LO-1147 10/01
Lapse: LO-1147 10/01
Confidential Information
Page 36 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.6.7 Mortgage Loan
Symetra offers mortgage loans to businesses for purchasing property, buildings, etc. The output
produced to service these loans include tax statements for interest earned and invoices for loan
payments.
Functional Requirements
| • | These outputs are mailed in standard packaging. | ||
| • | The 1098’s must be mailed in envelopes indicating “Tax Document Enclosed”. | ||
| • | Trigger for 1098’s is year-end. | ||
| • | Trigger for invoices is 20 days prior to payment due date. | ||
| • | A return envelope is inserted with non-EFT invoices. |
Business Requirements
| • | 1098’s can be mailed directly to the recipient/borrower. | ||
| • | If the mailing address on the invoice indicates Symetra, return the print to Symetra. | ||
| • | Proof of mailing is created for the invoices. |
Archiving
1098’s are not currently archived.
Invoices are archived.
Invoices are archived.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||
SCL02600
|
SCL 1098 misc. income (annual) |
Formatted output | 10:00 PM | 1,237 | — | — | — | — | ||||||||||||||||||
EOS03000
|
SCL invoices | Formatted output | 2:00 AM | 500 | 500 | 500 | 500 | 500 | ||||||||||||||||||
—
|
Total impressions per month |
— | 1,737 | 500 | 500 | 500 | 500 | |||||||||||||||||||
Forms
1098’s: CR-289/EP 2/90
Invoices: CR-0322/EP 3/00 and CR-0317/EP 3/00 (perforated)
Invoices: CR-0322/EP 3/00 and CR-0317/EP 3/00 (perforated)
Confidential Information
Page 37 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.1.6.8 EFT Letters
These are letters of confirmation for benefit payments paid via electronic funds transfers (EFT)
from the LRP administrative system for income annuities.
Functional Requirements
There are no inserts.
Business Requirements
There are no special handling requirements.
Archiving
Printed output is archived.
Print Volumes
| January | February | March | April | May | ||||||||||||||||||||||||||||
| Job | Description | Output File Format | Run Times | 2004 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||||||||
LAD60306 |
EFT letters | Documerge printstream | 10:00 PM | 166 | 164 | 166 | 166 | 166 | ||||||||||||||||||||||||
Forms
EFT letter: letterhead (LA-4029/EP 11/01)
Confidential Information
Page 38 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.2 Test Environments
ACS must provide the ability to perform end-to-end testing in a fully functioning test
environment for all stages of testing (unit, integration, acceptance, regression, parallel, system
and quality assurance).
All test data must be secured according to Symetra standards. (There is potential that customer
information is present in the test files and environments)
2.3 Test Outputs
Test outputs are produced for many of the same jobs used to create production outputs. Timing
on these is random, and used only when maintenance or improvements are required.
Online viewing and/or test outputs must be available to Symetra within 24hrs.
Symetra needs the ability to run test jobs and print all, some, or none of the output. As an
example: If Symetra is doing statement testing Symetra does not want to print contracts. Symetra
may be able to accommodate this by sending only the files Symetra wants printed.
Symetra needs the ability to print and search specific data that is available for on-line
viewing.
A method for generating outputs and readily reviewing the results is necessary. This includes
both on-line viewing and reliable 1 to 1 test printing.
ACS must provide a process for ensuring that test runs are kept distinctly separate from production runs.
2.4 Audit Reports
Audit reports are required and must be designed and developed as part of this project. This
report would contain, at a minimum, the number of prints produced, sorted by department and output
type.
2.5 Proof of Mailing
The Proof of mailing consists of an affidavit page that lists some key identifying
information, the documents in the packet and a signature space. The key identifiers would include
the policy number. These are currently processed with the print job. These forms are completed,
signed and stored for 10 years.
2.6 Printed Output Archive
Printed output is currently archived in a Symetra developed repository. The data is currently
kept in the electronic print system (EPS) permanent archive forever (no limit on retention). There
are approximately 6 million AFP images currently available on DASD or tape.
Data passes through either an EOS job or a department job that provides an indexed copy of the
print file to the EPS system for archival. EPS archives the same file that originally goes to the
printer to create the output sent to agents or customers. These archived documents are stored in
APF format for use with IBM printers. The archive index key consists of up to 14 alphanumeric
characters.
Reprints are currently requested through an IMS REPRINT transaction that batches up all the day’s
reprint requests and prints/distributes them all at the same time during the nightly batch cycle.
When a reprint is requested, the output generated is an exact duplicate of the original. The
output is not “reconstructed” from form images plus data; rather, the output is a complete, intact
copy of the original printed document.
Confidential Information
Page 39 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
In addition to the IMS REPRINT transaction, access is possible through browser-based viewing of
both forms and stored transaction images. These images are converted from AFP to PDF format on the
fly.
It is necessary for this archived information to continue to be available for reprint and on-line
viewing after switching to the new output processing systems. Online viewing should be available
for a minimum of 18 months. Symetra prefers that all images be located in one repository, rather
than being scattered between many. This means that these images will need to be converted from
Symetra’s archive to another archive. To accomplish this, the following options have been
identified:
Option 1. Convert Symetra’s archived images to ACS’ archive system. Images could be stored either
by ACS or be Symetra after the appropriate software has been installed. This is Symetra’s
preferred option.
Option 2. Clone Symetra’s existing archive and transfer all new archive images to it on a daily
basis. This archive would be managed by a Third Party vendor for Symetra
ACS shall assist Symetra with conversion to their repository, whether residing with ACS or
purchased from ACS and installed by Symetra.
Regardless of which option is chosen, the data shall remain the property of Symetra.
Confidential Information
Page 40 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.7 Forms
Forms currently exist in many formats, including electronic Documerge AFP forms, AFP page
segments, and printer overlays, and also pre-printed forms including letterhead, covers, agent card
stock. While IBM/AFP processes and printers are currently used, their continued use is not a
requirement.
2.7.1 Documerge Forms
Documerge forms include the annuity contract forms, life insurance policy forms, annual and
quarterly statements forms, and some of the correspondence forms. They are coded from mockups
using WordPerfect with Print Commander and Tag Commander plug-ins.
2.7.2 Line Text Forms
Many outputs are printed directly using the IBM Print Services Facility. These processes tend
to use pre-printed forms and overlays.
2.7.3 Page Segments
Page segments are graphic elements such as logos, symbols or small blocks of text that are
inserted into forms. They are either coded directly onto the form or placed on the form
dynamically by the application allowing substitution of different logos on the same form. There
are currently 43 of these page segments being used as listed below.
Page segments are created either from mockups (usually in Word format) or from PDFs. They are
created by processing through a bit converter and uploaded to the mainframe libraries using legacy
developed code. They are saved in AFP format.
The PDF versions are created using the IBM PDFTOAFP conversion utility, and are used when graphic
detail is more challenging and critical. Better resolution is achievable with this method.
Page Segments Currently in Use
| FCD Number | Description | Comments | ||
FCD303
|
“Correction” | |||
FCD365
|
Randy Talbot | |||
FCD385 |
||||
FCD416 |
||||
FCD546
|
Midwestern United Life Ins Co | Logo | ||
FCD365
|
Randy Talbot | Signature | ||
FCD374
|
Randy Talbot | Signature with title | ||
FCD436
|
Scott L. Bartholomaus | Signature with full title | ||
FCD563
|
!VIVA! | Logo | ||
FCD569
|
“CURRENT ACCOUNT HOLDINGS. | |||
FCD572
|
Graphic element, 2 boxes | |||
FCD573
|
Graphic element, 3 boxes | |||
FCD574
|
Graphic element, 4 boxes | |||
FCD575
|
Graphic element, 5 boxes | |||
FCD576
|
Graphic element, 6 boxes | |||
FCD577
|
Graphic element, 7 boxes | |||
FCD578
|
Graphic element, 8 boxes | |||
FCD598
|
George Pagos | Signature | ||
FCD599
|
TM line | |||
FCD600
|
Logo | |||
FCD601
|
TM line | |||
FCD602
|
How to Contact us | |||
FCD603
|
How to Contact us |
Confidential Information
Page 41 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| FCD Number | Description | Comments | ||
FCD604
|
How to Contact us | |||
FCD605
|
How to Contact us | |||
FCD606
|
If you have questions concerning this notice. | |||
FCD607
|
If you have questions concerning this statement,. | |||
FCD608
|
If you have questions concerning this notice,. | |||
FCD609
|
If you have questions concerning this notice,. | |||
FCD610
|
Amount received with. | Bold line with text | ||
FCD611
|
If you have questions. | Bold line with text | ||
FCD612
|
If you have questions. | Bold line with text | ||
FCD613
|
American States Life Insurance | Address/Landscape | ||
FCD614
|
Life Insurance Company | Address/Landscape | ||
FCD615
|
American States Life Insurance | Address/Landscape | ||
FCD616
|
Life Insurance Company | Address/Landscape | ||
FCD617
|
Bold line with text | Landscape | ||
FCD618
|
Bold line with text | Landscape | ||
FCD619
|
Scott L. Bartholomaus | Signature with full title | ||
FCD620
|
Scott L. Bartholomaus | Signature with full title for NY | ||
FCD621
|
Logo with address | |||
FCD622
|
Logo with address | For NY | ||
FCD623
|
American States Insurance | Logo | ||
FCD624
|
Amount received with. | Bold line with text |
2.7.4 Overlays
Printer overlays are currently used by many of the daily print jobs, especially those written
using line text output. Their basic purpose was to allow creation of graphical elements that were
previously difficult to code and maintain on forms, especially lines or boxes. Using more modern
forms creation processes and tools, it should be possible to eliminate the need for these overlays.
For example, one overlay is merely a box creating a border around a text page. Tax forms, billing
statements and some correspondence currently use overlays. There are currently 31 overlays in use,
as listed below.
| Overlays | ||
010110
|
LTRC53 | |
010120
|
LTRCI3 | |
DMGALL
|
LTRCM3 | |
DMGDFD
|
LTRCR3 | |
DMGDFS
|
LTRCW3 | |
DP701
|
LTRSI3 | |
DP740
|
LTRSM3 | |
DP1088
|
LTRSR3 | |
DP1222
|
LTRSW3 | |
FUL1SP
|
NY4029 | |
LA4029
|
P701 | |
LNB1
|
P740B | |
LPA2
|
P813 | |
LPA4
|
SHORT | |
LPAA
|
STD1SP | |
LPAL |
||
Confidential Information
Page 42 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.7.5 Character Sets
Character Sets Currently in Use
| Character | ||
| Set | Description | |
AM12
|
Gothic 12 pitch with Fat-Dash character in the Tilde (-) position. Used for processing on AIMS machine. | |
AOD
|
Gothic and OCR-A 10 pitch | |
CR10
|
Courier 10 pitch | |
FM12
|
Format 12 pitch | |
GB12
|
Gothic Bold 12 pitch | |
GF10
|
Gothic Folded 10 pitch | |
GF12
|
Gothic Folded 12 pitch | |
GF15
|
Gothic Folded 15 pitch | |
GS10
|
Gothic 10 pitch | |
GS12
|
Gothic 12 pitch | |
GS15
|
Gothic 15 pitch | |
GT10
|
Gothic Text 10 pitch | |
GT12
|
Gothic Text 12 pitch | |
GT15
|
Gothic Text 15 pitch | |
GT18
|
Gothic Text 18 pitch | |
GT20
|
Gothic Text 20 pitch | |
GU12
|
Gothic Underscored 12 pitch | |
GU15
|
Gothic Underscored 15 pitch | |
H10B
|
Helvetica Latin 1 Bold 10 pitch | |
H12B
|
Helvetica Latin 1 Bold 08 pitch | |
H12I
|
Helvetica Latin 1 Italic 12 pitch | |
H08M
|
Helvetica Latin 1 08 pitch | |
H10M
|
Helvetica Latin 1 10 pitch | |
H12M
|
Helvetica Latin 1 12 pitch | |
LC12
|
Gothic 12 Pitch with Lower Case | |
QN
|
Gothic |
Confidential Information
Page 43 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.7.6 Pre-printed Forms
Refer to the following list of forms. pre-printed forms are used when the 8-1/2 by 11 format is
not suitable, when special perforations are required, or when color is desired — on letterhead for
instance. All of the daily printing is now done black on white.
Pre-printed Forms
| Forms | Description | |
1280
|
3900 (tractor feed) continuous forms paper | |
4000
|
Cuts sheet roll paper | |
DP154
|
15” wide, 8.5” high, white, tractor feed, not perforated | |
DP300 |
||
DP365
|
Labels, 13” wide, 12” high, tractor feed, 27 x 1-1/4 x 3-3/4 | |
DP488/LU1184
|
New business worksheet, 9.5” wide, 11” high, pre-printed, tractor feed | |
G1190
|
W9 important tax notice — action is required | |
G1191
|
Second backup withholding warning | |
L-9610 08/01
|
Individual life policy cover, 8.5” wide, 11” high, cut sheet, pre-printed | |
L-9813
|
Individual life agent card, 11” wide, 8.5” high, cut sheet, pre-printed | |
LA-2090
|
Letterhead, 8.5” wide, 11” high, pre-printed, cut sheet | |
LA-2100
|
Letterhead, 9.5” wide, 11” high, pre-printed, tractor feed (not perforated) | |
LG-1105/DP 6/90
|
Group cards, 11” wide, 8.5” high, pre-printed, tractor feed, perforated edges | |
LO-1120/DP 4/03
|
Billing form, 9.5” wide, 7” high, pre-printed, tractor feed, not perforated | |
LO-1172
|
Card stock, 8.5” wide, 11” high, cut sheet, perforated 2 halves — top/bottom | |
LO-1173
|
Card stock, 8.5” wide, 11” high, cut sheet, perforated 3 thirds — top/middle/bottom | |
LO-1174
|
Card stock, 8.5” wide, 11” high, cut sheet, perforated 4 quadrants | |
LPC-339/DP 3/97
|
Certificate label, 7” wide, 10” high, tractor feed, two 6” by 4-3/4 labels | |
LU750
|
Letterhead, 8.5” wide, 11” high, pre-printed, cut sheet | |
W2-C
|
W2-C | |
W765
|
Check stock, MICR printer |
2.7.7 Forms Conversion
Forms will need to be converted from the Safeco electronic forms libraries, along with page
segments, overlays, and character sets. Suitable substitutions or replacements for some of these
elements will be considered, especially for overlays. Forms usage is not currently directed by the
existing Documerge capabilities.
| • | All forms are contained in either of two libraries. One contains only the american states forms (approximately 3,000), while the second contains all the other forms (approximately 2,450). | ||
| • | The approximately 3000 american states forms are currently part of a project effort to eliminate the forms, slated to be complete by year-end 2004. | ||
| • | We may have up to an additional 1200 forms due to the name change not being accepted in all 50 states. The details will need to be further defined. |
Forms can be categorized as follows
| • | Deferred annuity contract related forms (~950) | ||
| • | Individual life insurance policies — Symetra (~1,500) | ||
| • | Individual life insurance policies — american states life (~3,000) | ||
| • | Statements (~10) | ||
| • | Confirmations (~5) | ||
| • | Other correspondence (~25) |
Confidential Information
Page 44 of 64
Table of Contents
Symetra
Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Annuity contracts include welcome letters, guarantee association, privacy and other notices,
endorsements, contract summaries, state-filed contract pages, customer application, and covers.
Forms tracking is currently accomplished using an IMS database rather than the Documerge forms management functions. It is referred to as the electronic forms management (EFM), and it keeps track of which forms are to be used to complete a given contract or policy. The key to this database includes:
Forms tracking is currently accomplished using an IMS database rather than the Documerge forms management functions. It is referred to as the electronic forms management (EFM), and it keeps track of which forms are to be used to complete a given contract or policy. The key to this database includes:
| • | Company | ||
| • | Product | ||
| • | Line of business | ||
| • | State | ||
| • | Working date (not process date) | ||
| • | Department key (s) |
This database will remain available to Symetra, but other methods for specifying and selecting the
appropriate forms sets are also of interest and will be considered.
2.7.8 Forms Coding and Maintenance
Forms coding and maintenance functions are currently “outsourced” to Safeco. Symetra does not
perform this function. Forms are coded using either WordPerfect with Print Commander and Tag
Commander plug-ins, or using DCF (limited mainly to landscape formats). Forms are compatible with
Documerge version V3.0.6 with DocuGraph installed for pie charts.
Since the workload is highly variable, ranging from little to very high when new products or
re-filings are required making management of internal coding resources difficult, Symetra is
interested in having these services provided.
Issues that need to be addressed include:
| • | Assignment of permanent contact representative and backup | ||
| • | Defined escalation process for urgent or unresolved issues | ||
| • | Qualification of coding staff | ||
| • | Turn-around time, standard and expedited | ||
| • | Cost for standard request | ||
| • | Cost for expedited request | ||
| • | Methods for proofing and approving forms in process | ||
| • | Method for introducing and maintaining forms in test and production |
Page 45 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
2.8 File Transfers
File transfer protocols for daily extract files will need to be defined and developed for
reliable, efficient, secure, cost-effective transfers. Symetra is contracting with a Third Party
vendor to provide hosting of its mainframe and server-based applications. Output extract files
will originate from the Third Party vendor location(s), and coordination of these transfers will be
managed by them on Symetra’s behalf.
The need for local printing can be accomplished in a number of ways. The methods chosen to
accomplish this will determine the destination of files returned to Symetra.
| • | ACS could print at their local facilities and deliver printed documents on a regular daily schedule. A consideration however is that batch outputs are not produced until later in the evening or early the next morning. | ||
| • | Symetra could provide space for certain local, time sensitive print jobs (e.g., check printing and cut-sheet documents, etc.). The printers themselves could be owned and run by either Symetra or ACS as negotiated. |
| 2.8.1 | Outgoing Files (from Symetra/Infrastructure Third Party vendor) |
| • | Daily batch outputs | ||
| • | On-line or special request | ||
| • | Test outputs |
| 2.8.2 | Incoming Files (to Symetra) |
| • | Reports and audits | ||
| • | Local printstream files | ||
| • | Printed output archive files |
| 2.8.3 | Specify the Following |
| • | Facility recommendations | ||
| • | Recommended production transfer methods | ||
| • | Recommended test transfer methods | ||
| • | Data encryption requirements | ||
| • | Data security specifications |
| 2.8.4 | File Sizes |
Refer to the following list of current file extract sizes. Please note that these extract
files were created for internal use and have not been compressed or designed for network transfer
efficiency.
Confidential Information
Page 46 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Current Extract Files Sizes
| Category/System | Description | Job | File Size | Frequency | ||||||
| (Mbytes) | ||||||||||
Statements |
||||||||||
CK4/Cyberlife |
CK4 extract - feeds EOS03LFB | [***] | 0.7 to 2.3 | Daily | ||||||
DSS |
Agent compensation statements - feeds EOS03LFC | [***] | 2 | Daily | ||||||
Paris |
Case statements | [***] | 700 | Daily | ||||||
Paris |
Deferred annuity statements- feeds EOS03LFS | [***] | 4 to 10,800 | Quarterly/Daily | ||||||
Vantage — One |
Deferred annuity statements - feeds EOS03LFS | [***] | 4 to 7,200 | Quarterly/Daily | ||||||
Policies and Contracts |
||||||||||
CK4/Cyberlife |
Individual policy pages | [***] | 31 | Daily | ||||||
CK4/Cyberlife |
Individual policy pages, agent cards/labels | [***] | 2 | Daily | ||||||
CK4/Cyberlife |
Individual policy pages | [***] | 32 | Daily | ||||||
CK4/Cyberlife |
Individual policy pages | [***] | 1 | Daily | ||||||
CK4/Cyberlife |
ASL policy pages | [***] | 2 | Daily | ||||||
CK4/Cyberlife |
Individual policy pages | [***] | 2 | Daily | ||||||
CK4/Cyberlife |
DPFS schedule pages, | [***] | 3 | Daily | ||||||
| new business worksheets, | ||||||||||
| agent cards, mailing labels | ||||||||||
CK4/Cyberlife |
DPFS schedule pages, new business worksheets, | [***] | 5 | Daily | ||||||
| agent cards, mailing labels DPFS | ||||||||||
| schedule pages | ||||||||||
CK4/Cyberlife |
Policy cover letters | [***] | 4 | Daily | ||||||
CK4/Cyberlife |
Amendment letters for new business | [***] | 1 | Daily | ||||||
Vantage — One |
Deferred annuity contracts | [***] | 20 | Daily | ||||||
Billing Statements |
||||||||||
CK4/Cyberlife |
Billing letters | [***] | 15 | Daily | ||||||
CK4/Cyberlife |
List bill | [***] | Monthly | |||||||
CK4/Cyberlife |
Premium payment | [***] | Monthly | |||||||
Group |
Billing statements - self administered | [***] | 2 | Monthly | ||||||
Group |
Billing statements - List bill | [***] | 2 | Monthly | ||||||
Paris |
List bill statements | [***] | 25 | Daily | ||||||
Paris |
Paris loan billings | [***] | 5 | Weekly | ||||||
Vantage — One |
List bill statements | [***] | 2 | Daily | ||||||
Tax Forms |
||||||||||
FMS — LTR |
1099s and W2 corrections | [***] | 2 | Daily | ||||||
FMS — LTR |
1099R customer | [***] | 50 | Yearly | ||||||
FMS — LTR |
1099I customer | [***] | 3 | Yearly | ||||||
FMS — LTR |
1099M customer | [***] | 9 | Yearly | ||||||
FMS — LTR |
1099LTC - typed manually | [***] | 1 | Yearly | ||||||
FMS — LTR |
1099I state | [***] | 1 | Yearly | ||||||
FMS — LTR |
1099M state | [***] | 1 | Yearly | ||||||
FMS — LTR |
1099R state | [***] | 1 | Yearly | ||||||
FMS — LTR |
5498 customer | [***] | 20 | Daily | ||||||
FMS — LTR |
W2 (non-payroll) customer | [***] | 1 | Annual | ||||||
FMS — LTR |
W2 G typed manually | [***] | 1 | Yearly | ||||||
FMS — LTR |
W2 state | [***] | 1 | Yearly | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| Category/System | Description | Job | File Size | Frequency | ||||||
| (Mbytes) | ||||||||||
FMS — B-Notice |
B-notice customer as-required | [***] | On request | |||||||
FMS — B-Notice |
B-notice customer as-required | [***] | On request | |||||||
Checks |
||||||||||
FMS — CDS |
Check printing - direct mailing | [***] | 62 | Daily | ||||||
FMS — CDS |
Check printing - return to Symetra | [***] | 34 | Daily | ||||||
FMS — CDS |
Check printing - local printing | [***] | 1 | Daily | ||||||
Notices/Correspondence |
||||||||||
Bank Reconciliation System |
Customer service letters for standard accounts | [***] | 8 | Monthly | ||||||
CK4/Cyberlife |
Owner term renewal letter | |||||||||
| Agent term renewal letter Owner secondary addr. letter |
||||||||||
| Agent secondary addr. letter | [***] | 3 | Daily | |||||||
CK4/Cyberlife |
Cyberscribe agent letters, surrender letters | |||||||||
| Cyberscribe records letters, premium pymt letters | ||||||||||
| Cyberscribe owner letters, initial pymt letters | [***] | 8 | Daily | |||||||
CK4/Cyberlife |
Vul confirm owner letters | |||||||||
| Vul confirm agent letters | ||||||||||
| Vul xonfirm records letters | [***] | 2 | Daily | |||||||
CK4/Cyberlife |
Disbursement payee letters | |||||||||
| Disbursement agent letters | ||||||||||
| Disbursement Symetra letters | [***] | 4 | Daily | |||||||
CK4/Cyberlife |
Fund allocation letters | [***] | 2 | Daily | ||||||
CK4/Cyberlife |
Reinstatement letters | [***] | 2 | Daily | ||||||
CK4/Cyberlife |
Credit card expiry letters - payer | [***] | 3 | Daily | ||||||
| Credit card expiry letters - agent | ||||||||||
| Masterplan gio notify report | ||||||||||
| Masterplan gio letters - owner | ||||||||||
| Masterplan gio letters - agent | ||||||||||
CK4/Cyberlife |
Policyholder/Symetra/agent letters | [***] | 2 | Daily | ||||||
CK4/Cyberlife |
Maintenance letters Address change letters | [***] | 4 | Daily | ||||||
CK4/Cyberlife |
GDB/GCB notify letters, | [***] | 2 | Daily | ||||||
| Term/expiry notify letters, | ||||||||||
| Term rider/expiry letters, | ||||||||||
| ETI expiry notify letters, Maturing policy letters, |
||||||||||
| Symetra gio notify letters | ||||||||||
CK4/Cyberlife |
Lapse/Nfo letters - insured copy, | [***] | 9 | Daily | ||||||
| Lapse/Nfo letters - agent copy, | ||||||||||
| Lapse/Nfo letters - record copy | ||||||||||
CK4/Cyberlife |
Lis.Pa0335.detail.crown, Lis.Pa0335.detail.lincoln, | [***] | 2 | monthly | ||||||
| Lis.Pa0335.reports.lincoln, | ||||||||||
| Reinsurance report | ||||||||||
DSS |
EComp update validation letters feed | [***] | 2 to 590 | Daily | ||||||
FMS — CAPS/PAC |
EFT letters | [***] | 1 | Daily | ||||||
Group |
ERISA policy holder letter | [***] | 4 | Monthly | ||||||
Group |
Renewal activity reporting - census letters | [***] | 1 | Monthly | ||||||
Group |
60 worksheets, rate sheets, renewals | [***] | 1 | Monthly | ||||||
LAB — Income Annuities |
Termination of benefit letters | [***] | 1 | Daily | ||||||
LAB — Income Annuities |
Secured benefit account letters | [***] | 2 | Daily | ||||||
LAB — Income Annuities |
EFT audit letters | [***] | 1 | Monthly | ||||||
LAB — Income Annuities |
Explanation of benefit pages | [***] | 6 | Daily | ||||||
LAB — Income Annuities |
Verification of living status letters (VSL) | [***] | Annually | |||||||
Paris |
Confirmation statements | [***] | 2 | Daily | ||||||
Paris |
Confirmation statements | [***] | 2 | Daily | ||||||
Paris |
Confirmation statements | [***] | 4 | Daily | ||||||
Paris |
Confirmation statements | [***] | 1 | Daily | ||||||
Paris |
IVR participant interface - PIN change | [***] | 1 | Daily | ||||||
Paris |
Annuity payment confirms | [***] | 2 | Monthly | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| Category/System | Description | Job | File Size | Frequency | ||||||
| (Mbytes) | ||||||||||
Paris |
RMD letters | [***] | 2 | Daily | ||||||
Paris |
Schedule a letters and commission reports | [***] | 4 | Monthly | ||||||
Paris |
Corporate audit reports | [***] | 1 | Daily | ||||||
Paris |
Mutual fund letters | [***] | 1 | Daily | ||||||
SCL |
Mortgage loan 1098 misc. income | [***] | 4 | Annual | ||||||
Vantage — One |
Confirmation statements | [***] | 1 to 21 | Daily | ||||||
Vantage — One |
Confirmation statements | [***] | 0.25 | Daily | ||||||
Vantage — One |
RMD letters | [***] | 0.5 | Daily | ||||||
Vantage — One |
Mutual fund letters | [***] | 1 | Daily | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Page 49 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| 2.9 | Future Needs |
Future needs are identified here so that ACS can verify their ability to support the requests.
These may either be added to the scope of this project effort or delayed for future enhancements,
depending on the complexity and timelines.
| 2.9.1 | All Systems |
| • | Automate handling of checks that come back to Symetra for various reasons. | ||
| • | Automate handling of schedule a letters and commission reports for retirement services. | ||
| • | Integrate systems for increased efficiency, improved automation, and movement toward electronic communication processes. | ||
| • | Set up electronic information transfer with agents rather than continuing to print, process and mail large quantities of agent copies. | ||
| • | Establish electronic billing presentment and payment capability. | ||
| • | Automate foreign address mailings. | ||
| • | Convert overlays to forms. |
| 2.9.2 | Income Annuities |
| • | Online view capability for all correspondence generated and mailed/faxed. | ||
| • | Automated contract issuance. |
| 2.9.3 | Agent Compensation Statements |
| • | Ability to stuff mailers in with statements (preferably automated). | ||
| • | Outsource Summit campaign production statements. | ||
| • | Ability to add campaign letters and statements to related outputs (preferably automated). | ||
| • | Ability to request stop pay on checks. |
| 2.9.4 | Retirement Services — Paris Annuity Case Statements and Annuity Billing Statements |
| • | Cover letter auto generated. | ||
| • | Non-formatted output converted to formatted using forms. | ||
| • | Ability to insert free-form comments on statements. |
| 2.9.5 | Retirement Services — Confirms, Audit Reports, RMD Letters, and Commission Reports |
| • | Ability to automate inserts with mailings. | ||
| • | Online view and archive of all confirms from Paris output. | ||
| • | Confirmation that the vendor pulled and disposed of the output. | ||
| • | Incorporate trip credit reports into mailings to agents. | ||
| • | Automate the matching and mailing of the schedule a letters and commission reports. Would require a database of TPA codes and Agent ID’s for corresponding addresses. | ||
| • | Consider merging the content of the schedule a letters and the commission report into one output. | ||
| • | Incorporate PSA mailings into other mailings as an insert. |
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Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| 2.9.6 | Finance — Tax Forms |
| • | The forms are currently created as overlays, and text is manually placed by the application (Checkfree IRS/SRS/W2). These are difficult to maintain. It is preferred that these overlays be converted to electronic forms with variable tags. Multiple versions (previous years) can then be readily retrieved and used as needed. Updating the form would require no programming changes, unless a new tag was added. | ||
| • | Automate form 1042S for non-resident aliens. |
| 2.9.7 | Individual Life |
| • | Electronic transmission of agent mailings. | ||
| • | Automate policies |
| 2.9.8 | Mortgage Loan 1098’s |
Ability to reproduce documents from the archive.
| 2.9.9 | Group |
| • | Archive and view online | ||
| • | Automate mailings |
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Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Appendix A — System Flows
Output Processes
This generic process applies to most of our printed outputs
This generic process applies to most of our printed outputs
| 1 | Some processes create line text output directly and do not require print stream generation software | |
| 2 | Electronic Forms Management is mainly needed for Contracts and Policies | |
| 3 | Overlays are used for forms with complex lines and boxes (like federal or state tax forms) | |
| 4 | Only Statements, Confirms, Contracts, Policies and some correspondence are archived |
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Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
CK4 and Cyberlife Printed Output Process
Confidential Information
Page 53 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
DSS Printed Output Process
Confidential Information
Page 54 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
FMS — CDS — LTR — CAPS Printed Output Process
Confidential Information
Page 55 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Group Printed Output Process
Confidential Information
Page 56 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Income Annuities Printed Output Process
Confidential Information
Page 57 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Paris Printed Output Process
Confidential Information
Page 58 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Vantage-One Printed Output Process
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Page 59 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Table 1. Forms Creation and Maintenance SLRs.
ACS shall meet the following SLRs commencing on the Handover Date (unless a different date is
expressly set forth in a particular SLR).
FORMS CREATION AND MAINTENANCE SLRs
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
Code new forms from mockup (create draft) |
Response time (SLA/SLR measurement and performance Target adjustment period of 90 calendar days after the Handover Date) | Within 3 Business Days |
[***]% | |||
Modify existing forms
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 calendar days after the Handover Date) | Within 2 Business Days |
[***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Page 60 of 64
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Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
FORMS CREATION AND MAINTENANCE SLRs
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
Create new page
segments/graphic elements
(i.e. logos)
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 calendar days after the Handover Date) | Within 2 Business Days |
[***]% | |||
Complete corrections
based on review of new or
modified drafts
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 calendar days after the Handover Date) | Within 1 Business Day | [***]% | |||
Move to production
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 calendar days after the Handover Date) | Move to production - -completed upon approval for requests received per agreed to schedule | [***]% | |||
Make form available
to view online
|
Response time | Next Business Day after move to production | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Page 61 of 64
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Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
FORMS CREATION AND MAINTENANCE SLRs
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
| Formula | Number of requests completed within Performance Target /total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement tool | To be agreed by the Parties | |||||
Table 2. Daily Production Processing SLRs
DAILY PRODUCTION PROCESSING SLRs
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
Daily and Weekly
Batch Outputs — ACS
Location
|
Response time | Print, Package, Postage, mailing completed during next Business Day after receipt by print and mail center | [***]% | |||
Daily and
Weekly Batch
Outputs — Local
Processing
Delivered to
Symetra
|
Response time | Printed outputs returned to Symetra per agreed to schedule | [***]% | |||
Monthly Batch
Outputs — ACS
Location
|
Response Time | Print, Package, Postage, mailing completed within two Business Days after receipt by print and mail center | [***]% | |||
Monthly Batch
Outputs — Local
Processing
Delivered to
Symetra
|
Response time | Printed outputs returned to Symetra per agreed to schedule | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Page 62 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
Quarterly and
Annual Outputs
|
Response time | Print, Package, Postage, mailing completed per agreed to schedule | [***]% | |||
Returns for bad address |
Response time | Return information to Symetra by next Business Day after determination | [***]% | |||
Returns for
mail ruined during
processing and
handling
|
Response time | Recreate and mail by next Business Day. Mail ruined during pre-sort process will be delayed an additional Business Day. | [***]% | |||
| Formula | Number of requests completed within performance Target /total of all requests occurring during Measurement Interval | |||||
| Measurement Interval |
Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement tool | To be agreed by the Parties | |||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
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Page 63 of 64
Table of Contents
Symetra Life Insurance Company
Schedule 2G — Output Processing Service SOW
Schedule 2G — Output Processing Service SOW
Table 3. Testing SLRs
TESTING SLRs
| General | Performance | |||||
| Administration Task | Service Measure | Target | SLR Performance % | |||
Printed, end-to-end test output availability |
Response time | Complete test job within 1 Business Day of receipt of test extract file(s) and submission of job request | [***]% | |||
Test support
|
Response time | Resolve testing output failures within 1 Business Day |
[***]% | |||
| Formula | Number of requests completed within performance Target /total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement tool | To be agreed by the Parties | |||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial
Corp., this information has been filed separately with the Securities and Exchange Commission.
Confidential Information
Page 64 of 64
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
Schedule 2H
Content Management Services SOW
Content Management Services SOW
for
Symetra Life Insurance Company (Symetra)
Final Draft
December 30, 2004
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Page i
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
TABLE OF CONTENTS
1.0
|
Content Management Solution Overview | 1 | ||||
2.0
|
Content Management Strategy Goals: | 1 | ||||
3.0
|
Current Environment | 2 | ||||
4.0
|
Content Management Requirements | 3 |
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Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
1.0
Content Management Solution Overview
The Content Management Services are the Services and activities, detailed in this Content
Management Services SOW, required to provide and support Symetra with a number of Content
Management Services. ACS is responsible for full provision, operation and management of Content
Management Services including, but not limited to, the following Services:
| • | Conversion off of the current content management solution (the “Content Management Solution”) | ||
| • | Ongoing document capture Services | ||
| • | Records management processes to address the regulatory and compliance retention policies | ||
| • | The Cross Functional Services as defined in Schedule 2A — Cross Functional Services SOW | ||
| • | Possible addition conversion of some existing paper files and microfiche records |
As depicted in Figure 1 below, in addition to the Services described in this Content Management
Services SOW, ACS is responsible for providing the Services described in Schedule 2A - Cross
Functional Services SOW. Figure 1 depicts the relationship between the Cross Functional Services
SOW, and all SOWs within the scope of the Agreement as of the Effective Date.
| Cross Functional SOW |
||||||||||||
| Data Center Services SOW |
Distributed Computing Services SOW |
Data Network Services SOW |
Voice Comm. Services SOW |
Help Desk Services SOW |
Output Processing Services SOW |
Content Management Services SOW |
||||||
Figure 1: Service Towers with Cross Functional Services View
2.0 Content Management Strategy Goals
The following are the key high-level Service objectives Symetra expects to achieve through
outsourced content management Services and this Content Management Services SOW:
| • | Create a shared and common enterprise solution, which multiple lines of business can leverage to maximize value and minimize costs. | ||
| • | Create a highly scalable multi-site platform that will allow Symetra to reuse content, business logic, and design elements to reduce implementation costs in new areas. |
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Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
| • | Ensure compliance with industry regulations through improved records management. | ||
| • | Provide the ability to integrate with other Third-Party systems. | ||
| • | Increase Operational Efficiencies | ||
| • | Improve customer service to internal and external customers | ||
| • | Increase customer retention | ||
| • | Reduction of lost documents | ||
| • | Reduction of paper storage requirements and the physical space that it requires | ||
| • | Dramatic decrease in the time and labor required to search for and retrieve documents | ||
| • | Increased work capacity and productivity (without adding employees) | ||
| • | Allow authorized End Users to put new and changed content into the Content Management Solution without IT involvement |
3.0 Current Environment
Symetra currently has 24 million images and their associated index values in FileNet’s
Content Services 5.1, running on one Compaq DL380 server with 1 GIG RAM, 1.6 Terabytes of virtual
memory (currently half full), and 2 RAID 5 arrays (each array has 14 drives). The property
manager, storage manager and SQL v7.0 database (index metadata) are all located on the same
server. The majority of the images are multi-page group IV tiffs (no annotations, no versioning).
There are a small number of files in their native file format (Microsoft Word, Microsoft Excel,
and PDF). The conversion process needs to be completed in as short a period of time as possible
to minimize the impact on Symetra’s ability to provide its current level of customer service.
Currently, there are five areas at Symetra that use document capture services provided by the
Safeco Corporation: Retirement Services, Income Annuities, Group Benefits, Agency Appointments,
and Individual. There are also a number of additional departments that are interested in
participating in the content management solution once it has been implemented. Currently, with
the exception of one process, the document capture occurs at the backend of the workflow after all
processing has been completed. The exception is in Individual, where a portion of the documents
are captured upfront and exported into Individual’s Business Process Management (“BPM”) tool
(Viewstar). Symetra would like to modify its internal processes to allow for upfront scanning for
all workflows, thus allowing Symetra to take advantage of some of the efficiencies provided by a
BPM tool. Utilizing an upfront capture model will require that the vast majority of Symetra
documents be captured within 24 hours of receipt at the capture facility. At this time, there are
three known exceptions to this 24 hour turnaround; the Individual New Business workflow, and the
variable products in both Individual and Retirement Services, all of which require four hour
turnaround times. ACS will work with Symetra to develop more detailed Service specifications.
The 2003 document capture volumes for each of the Symetra entities using the Safeco Corporate
Content Management Solution are as follows:
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Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
| Documents | Pages | |||||||
Agency Appointments |
18,644 | 41,319 | ||||||
Group Benefits |
10,511 | 185,456 | ||||||
Income Annuities |
24,145 | 156,858 | ||||||
Individual (upfront) |
136,843 | 253,025 | ||||||
Individual |
267,146 | 2,006,578 | ||||||
Retirement Services |
286,760 | 755,380 | ||||||
In performing the content management Services required hereunder, ACS will work closely with
Symetra to ensure a smooth transition and ACS shall meet all of the requirements set forth in this
Content Management Services SOW.
The following provides additional detail on the current Content Management Solution provided by
Symetra:
| • | FileNet Content Services 5.1 | ||
| • | 1 Compaq DL380 Server |
| • | 1 GIG RAM | ||
| • | 1.6 Terabytes of virtual memory (currently half full) | ||
| • | 2 RAID 5 arrays (each array has 14 drives). |
| • | Property manager, storage manager and SQL v7.0 database (index metadata) are all located on the same server. | ||
| • | Two content services libraries with 6 document classes (Individual and the rest of Symetra) | ||
| • | Majority of images are multi-page group IV tiffs (no annotations, no versioning) | ||
| • | A small number of files in their native file format (Microsoft Word, Microsoft Excel, and PDF) | ||
| • | Captiva’s Input Accel 4.0 for capture. | ||
| • | 24 million images and their associated index values. | ||
| • | 300,000 images added a month. | ||
| • | 700 users accessing documents. | ||
| • | Characters to Index 10-30 depending on business. |
4.0 Content Management Requirements
ACS shall provide content management Services to support the following Services requirements
and specifications:
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Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
| • | Document Capture: |
| • | Single or batch document scanning | ||
| • | Image enhancement (Deskew, despeckle, etc.) | ||
| • | OCR/ICR | ||
| • | Customizable interface |
| • | Library functions: |
| • | Storage of scanned Images, digital assets (images, sound, movies), Microsoft Office documents, and publishing output. | ||
| • | Managed content with the ability for End Users to check in and check out documents, create versions, and track changes made to the content. | ||
| • | Ability to add annotations to scanned images | ||
| • | Ability to use Microsoft Active Directory for security | ||
| • | Records management for regulatory and compliance issues (Retention, SOX, etc) | ||
| • | A security model that controls access to view, publish, annotate, and delete content. Security by user groups, document class, and document. |
| • | Search Function: |
| • | A robust search engine with index based search criteria to find content. | ||
| • | A security model that controls access to view, publish, annotate, and delete content. | ||
| • | An application programming interface (API) to provide a single browser-based interface to multiple repositories/systems. | ||
| • | Viewer with the following functions: |
| — | Reverse, rotate, scale, scroll, and zoom. | ||
| — | Annotations and markups, such as highlight, stamp, initials. | ||
| — | Thin client — Internet Explorer |
| • | Application Integration: |
| • | 401K On-Line enrollment — Upload to Content Management Solution | ||
| • | Facsimile Transmissions — Upload to Content Management Solution | ||
| • | Upload of files in their native file format (Microsoft Word, Microsoft Excel, Microsoft PowerPoint, Microsoft Outlook, PDF) to Content Management Solution | ||
| • | Clarify CRM | ||
| • | EiStream ViewStar Workflow | ||
| • | RightFax |
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Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
Content Management — Daily Production Processing SLRs
| General Administration | Performance | |||||
| Task | Service Measure | Target | SLR Performance % | |||
Incoming mail returns
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Returns completed
within 1 Business Day after determination that documents cannot be processed (illegible, damaged mail, out sorts, etc.) |
[***]% | |||
| Formula | To be agreed by the Parties | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows | |||||
| Measurement Tool | Web report | |||||
Content Management — Printed Output Image Archive SLRs
| General Administration | Performance | |||||
| Task | Service Measure | Target | SLR Performance % | |||
Accessibility of
archived output data
from FileNet
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Within 1 Business Day of corresponding print output | [***]% | |||
Availability of
archived images from
FileNet
|
Number of responses
(SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Archive system available during scheduled hours | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
Confidential Information
Page 5
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
Content
Management — Printed Output Image Archive SLRs
| General Administration | Performance | |||||
| Task | Service Measure | Target | SLR Performance % | |||
Online Viewing
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Document viewable within 5 seconds of valid request for data | [***]% | |||
| Formula | Number of requests completed within performance Target/total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | To be agreed by the Parties | |||||
Content Management — Capture Management SLRs
| General Administration | Performance | |||||
| Task | Service Measure | Target | SLR Performance % | |||
Scanning
|
Scanning accuracy (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Straight on the
screen and readable
from left to right,
In focus and
clearly readable on
the computer
screen. No data is
cutoff Less than 5 degrees of skew from the original image. Blank backside pages are properly deleted. Failure of any one or more of these targets contributes a reduction in scanning performance. |
[***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
Confidential Information
Page 6
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
Content Management — Capture Management SLRs
| General Administration | Performance | |||||
| Task | Service Measure | Target | SLR Performance % | |||
Indexing
|
Scanning accuracy (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Index Accuracy is defined as the overall accuracy of all index fields except for memo fields. All index fields will be in error if one character is wrong. Memo field accuracy is based on the contents of the entire field. If the memo field is unreadable, it will count as an error in the accuracy calculation. | [***]% | |||
Timeliness of turnaround
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Completed within 24 hours of cut-off schedule (cut-off schedule to be agreed by the parties) | [***]% | |||
Backfiles
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Backfiles, (paper and/or fiche), are imaged within 1 Business Day as requested | [***]% | |||
Records Retention
|
Document retention
life cycle (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Documents retained according to schedule | [***]% |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
Confidential Information
Page 7
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
Content Management — Capture Management SLRs
| General Administration | Performance | |||||
| Task | Service Measure | Target | SLR Performance % | |||
Receipt and Sorting
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Within 24 hours of
cut-off schedule
(cut-off schedule
to be agreed by the
Parties) Overnight and Special Delivery mail are scanned within 4 Business Day Hours of receipt. Not to exceed 5% of the daily volume. |
[***]% | |||
Rescans
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Within 90 day retention period, rescans will occur within 24 hours of receipt of the request | [***]% | |||
Requests for Originals
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Within the 90 day retention period, an original request will be returned to Symetra within 24 hours of receipt of the request provided that storage file is easily identifiable | [***]% | |||
Destruction / Recycling
|
Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Documents destroyed per document retention/destruction schedule (schedule to be agreed by the Parties) | [***]% | |||
| Formula | Total number of measured items minus the number of items in error, divided by the total number of measured items. | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | Varies depending on the task | |||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
Confidential Information
Page 8
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
FileNet Content Management — Daily Hosting Production Processing SLRs
| General Administration | ||||||
| Task | Service Measure | Performance Target | SLR Performance % | |||
Acceptance of Inbound
PDF Images from
Output
|
FileNet system’s
importation of
inbound PDFs from
the ACS supported
output system per
agreed to schedule Response time (SLA/SLR measurement and performance Target adjustment period of 90 days after production deployment date) |
Images should be imported into the FileNet system within 4 Business Hours. | [***]% | |||
| Formula | Number of requests completed within performance Target/total of all requests occurring during Measurement Interval | |||||
| Measurement Interval | Capture daily, measure monthly, report monthly within approved operational windows |
|||||
| Measurement Tool | Varies depending on the task | |||||
4.1 Reports
Without limiting the terms of Section 2.11.1 of the Agreement, ACS shall provide written reports to
Symetra regarding ACS’ compliance with the SLRs and other content management reports specified in
this Content Management Services SOW.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
Confidential Information
Page 9
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 2H — Content Management Services SOW
Schedule 2H — Content Management Services SOW
5.0 Referenced SOW Appendices and SOW Schedules
5.1 Referenced Data Center SOW Appendices
Not applicable.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
Confidential Information
Page 10
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
Schedule 3
Fees
for
Symetra Life Insurance Company
October 28, 2004
| Mod 04 | Confidential Information | |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
Table of Contents
1.0 Annual Services Fees |
2 | |||
2.0 Management Fees |
2 | |||
3.0 Transition Fees |
3 | |||
4.0 Baselines |
3 | |||
5.0 Fees For Recurring Services |
5 | |||
5.1 Fixed Unit Pricing |
5 | |||
5.2 ARC/RRC Units; Adjustments Outside of Deadband Allowance |
5 | |||
6.0 Basis of Pricing and Assumptions |
6 | |||
6.1 Basis of Pricing |
6 | |||
6.2 Key Assumptions |
7 | |||
List of Tables |
||||
Table 1. Annual Services Fees |
2 | |||
Table 2. Management Fees |
2 | |||
Table 3. Transition Fees |
3 | |||
Table 4. Baselines |
3 | |||
Table of Appendices |
||||
Appendix A Detailed Transition Fees |
||||
Appendix B ARC/RRC Unit Prices |
| Mod 04 | Confidential Information | |
| Page 1 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
1.0 Annual Services Fees
The following are the Annual Services Fees for the Services, subject to adjustments as
provided for in this Schedule 3 and in the Agreement. The Annual Services Fees will be divided by
twelve (12) to determine the amount of fees to be invoiced monthly. If there is an adjustment to
the Annual Services Fees, then the monthly amount will be recalculated on a going-forward basis,
and the adjusted amount of Annual Services Fees will replace and supersede the prior Annual
Services Fees for purposes of Table 1 below.
Table 1. Annual Services Fees
| YEAR | Amount | |||
Year 1 Annual Services Fees |
$ | 13,640,154 | ||
Year 2 Annual Services Fees |
$ | 12,899,830 | ||
Year 3 Annual Services Fees |
$ | 12,516,300 | ||
Year 4 Annual Services Fees |
$ | 13,146,859 | ||
Year 5 Annual Services Fees |
$ | 13,844,623 | ||
Total Annual Services Fees |
$ | 66,047,766 | ||
| Note: | Annual Services Fees include all recurring carrier and network costs. Mod 04 removed output supplies and DR funding for output |
ACS hereby grants to Symetra a sales inducement credit equal to $[***] Dollars
($ $[***] ), which Symetra shall have the right to apply against invoices issued by ACS
during the first twelve (12) months following the Effective Date, provided that the dollar amount
of any single application shall not exceed $[***] ($ $[***] ).
2.0 Management Fees
ACS will establish, staff and operate a program management office in accordance with Schedule
1 (Relationship Management) and Schedule 2 (Service Tower Services). The Fees for those Services
are included in the Annual Services Fees and are identified in Table 2 below:
Table 2. Management Fees
| Monthly | Monthly | Monthly | Monthly | Monthly | ||||||||||||||||
| Item Description | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||||||||||||||
Management Fees – Data Center |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Management Fees – Distributed Computing |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Management Fees – Help Desk |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Management Fees – Network |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Management Fees – Voice |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Management Fees – Output |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Management Fees – Content |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Total Management Fees |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information | |
| Page 2 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
3.0 Transition Fees
The following are the transition / one-time Fees for the Services.
Table 3. Transition Fees
| Item Description | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||||||||||||||
Transition Fees – Data Center |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Transition Fees – Distributed Computing |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Transition Fees – Help Desk |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Transition Fees – Network |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Transition Fees – Voice |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Transition Fees – Output Processing |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Transition Fees – Content Management |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
Total Transition Fees |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||||
The transition Fees will be invoiced as Services are received, due in accordance with Section
6.3.1 (b) of the Agreement. Invoicing will itemize: hardware, software, telecommunication
pass-through charges and professional Services fees. The transition Fees referenced above are
described in greater detail in Appendix A.
4.0 Baselines
Table 4 sets forth the Baselines for each of the first five (5) Contract Years (estimates only
in the case of Contract Years two (2) through five (5)). The Baselines shall be re-set as provided
in Section 6.2.3 of the Agreement.
Table 4. Baselines
| BASELINES | ||||||||||||||||||||
| Item Description | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||||||||||||||
Data Center |
||||||||||||||||||||
Mainframe Server (MIPS) |
410 | 410 | 410 | 437 | 503 | |||||||||||||||
Mainframe DASD (GB) |
1,883 | 2,353 | 2,941 | 3,677 | 4,596 | |||||||||||||||
Mainframe Tape |
13,540 | 14,217 | 14,928 | 15674 | 16,458 | |||||||||||||||
Microfiche |
9,000 | 6,750 | 5,063 | 3,797 | 2,848 | |||||||||||||||
Laser (3900) Printer |
415,972 | 332,742 | 266,193 | 212,955 | 170,364 | |||||||||||||||
NT Application Server |
36 | 38 | 40 | 42 | 44 | |||||||||||||||
NT Database Server |
6 | 7 | 8 | 9 | 10 | |||||||||||||||
NT File/Print Server |
16 | 17 | 18 | 19 | 20 | |||||||||||||||
NT Messaging Server |
9 | 10 | 10 | 11 | 12 | |||||||||||||||
NT Web/http |
19 | 20 | 11 | 22 | 23 | |||||||||||||||
Other NT Servers |
21 | 24 | 27 | 29 | 31 | |||||||||||||||
Additional Infrastructure Support |
21 | 7.05 | 28.5 | 21 | 22.05 | |||||||||||||||
Development/Test/QA |
80 | 84 | 88 | 92 | 97 | |||||||||||||||
NT Tape Backup |
7.5 | 10 | 12.5 | 15.0 | 17.5 | |||||||||||||||
NT SAN Storage |
16,384 | 16,384 | 18,432 | 20,480 | 22,528 | |||||||||||||||
Project Pool Hours |
100 | 100 | 100 | 100 | 100 | |||||||||||||||
Distributed Computing |
||||||||||||||||||||
Management Services |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Desktop
Support - Remote Offices |
103 | 103 | 103 | 103 | 103 | |||||||||||||||
Laptop
Support - Remote Offices |
36 | 36 | 36 | 36 | 36 | |||||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information | |
| Page 3 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
| BASELINES | ||||||||||||||||||||
| Item Description | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||||||||||||||
PDA Support - Remote Offices |
26 | 26 | 26 | 26 | 26 | |||||||||||||||
**Distributed High-volume
Production/Printing |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Network-Attached Printer Support - HQ
& Remote |
73 | 75 | 77 | 79 | 81 | |||||||||||||||
IMProvider for PCs / Net Printers -
Remote Offices |
26 | 26 | 26 | 27 | 27 | |||||||||||||||
**IMProvider
for Servers - HQ & Remote |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Desktop Support and Engineering |
1112 | 1108 | 1106 | 1103 | 1101 | |||||||||||||||
Help Desk |
||||||||||||||||||||
Help Desk Calls |
973 | 997 | 1,020 | 1,045 | 1,045 | |||||||||||||||
Help Desk Tool Use (Symetra IT Use of
Provider Tools) |
17 | 18 | 19 | 19 | 19 | |||||||||||||||
Data Network |
||||||||||||||||||||
Managed Routers |
15 | 15 | 15 | 15 | 15 | |||||||||||||||
Managed Switches |
17 | 17 | 17 | 17 | 17 | |||||||||||||||
Managed DSUs/CSUs |
5 | 5 | 5 | 5 | 5 | |||||||||||||||
Managed Firewalls |
4 | 4 | 4 | 4 | 4 | |||||||||||||||
Voice |
||||||||||||||||||||
Large PBX’s (Over 300 handsets /
Extensions) |
1,007 | 1,030 | 1,053 | 1,077 | 1,101 | |||||||||||||||
PBX Handsets |
1,110 | 1,133 | 1,156 | 1,180 | 1,204 | |||||||||||||||
PBX -Like Services |
1,110 | 1,133 | 1,156 | 1,180 | 1,204 | |||||||||||||||
ACD-Like Services |
150,000 | 153,600 | 157,286 | 161,061 | 164,927 | |||||||||||||||
IVR-Like Services |
150,000 | 153,600 | 157,286 | 161,061 | 164,927 | |||||||||||||||
Voice Mail Systems |
1,248 | 1,271 | 1,294 | 1,318 | 1,342 | |||||||||||||||
Voice Circuit Monitoring |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Call Recording |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
Output |
||||||||||||||||||||
Page Output (Simplex Printed Page) |
612,214 | 673,435 | 740,779 | 814,857 | 896,343 | |||||||||||||||
Post-Processing |
306,650 | 337,315 | 371,047 | 408,152 | 448,967 | |||||||||||||||
6x9 envelopes |
287,105 | 315,816 | 347,398 | 382,138 | 420,352 | |||||||||||||||
Automated flat envelopes |
9,014 | 9,915 | 10,907 | 11,998 | 13,198 | |||||||||||||||
Boxes |
10,362 | 11,398 | 12,538 | 13,792 | 15,171 | |||||||||||||||
Binding |
169 | 186 | 205 | 226 | 249 | |||||||||||||||
Storage |
500 | 575 | 661 | 760 | 874 | |||||||||||||||
Forms Coding and Maintenance |
208 | 208 | 208 | 208 | 208 | |||||||||||||||
Postal Presorting |
287,105 | 315,816 | 347,398 | 382,138 | 420,352 | |||||||||||||||
Supplies to be supplied by Symetra |
||||||||||||||||||||
6x9 envelopes |
287,105 | 315,816 | 347,398 | 382,138 | 420,352 | |||||||||||||||
Flat envelopes |
9,014 | 9,915 | 10,907 | 11,998 | 13,198 | |||||||||||||||
Boxes |
10,362 | 11,398 | 12,538 | 13,792 | 15,171 | |||||||||||||||
Content Management |
||||||||||||||||||||
744,049 annual document volumes |
744,049 | 744,049 | 744,049 | 744,049 | 744,049 | |||||||||||||||
Annual number of pages |
3,398,616 | 3,398,616 | 3,398,616 | 3,398,616 | 3,398,616 | |||||||||||||||
Mailroom |
283,218 | 283,218 | 283,218 | 283,218 | 283,218 | |||||||||||||||
Scanning |
283,218 | 283,218 | 283,218 | 283,218 | 283,218 | |||||||||||||||
Indexing |
62,004 | 62,004 | 62,004 | 62,004 | 62,004 | |||||||||||||||
MicroFiche/Film BF Conversion (Scan on-demand only) |
8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | |||||||||||||||
| Mod 04 | Confidential Information | |
| Page 4 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
5.0 Fees For Recurring Services
5.1 Fixed Unit Pricing
Fees for recurring Services are aggregated and based upon fixed unit prices for the resource
consumption or volumes identified in the applicable Baselines. The fees represent all variable and
fixed cost components comprising ACS’ charges to deliver the Services. In accordance with the terms
set forth in Section 6.2.3, the fees will be adjusted (subject to the Deadband Allowance described
below) to the actual resource consumption/volumes in the user environment, and will take effect on
the invoice for the following month. For any resource consumption/volumes that may vary from
day-to-day or other periodic basis, a monthly average will be used to determine whether an
adjustment based on an increase or decrease in resource consumption or volumes should be made.
The Parties have established a “Deadband Allowance” that provides for Services growth and
contraction within a five percent (5%) variance above and below the Baselines. Accordingly, if
there is a variation in a resource consumption or volume within the Deadband Allowance, there will
be no fee adjustment.
| – | Example (Fixed Unit Price): If the Baseline for a Service is one hundred (100) users, then the charge will be calculated as one hundred (100) times the unit price. | |
| – | Example (Within Deadband Allowance): If the Baseline for a Service is one hundred (100) users, the Deadband Allowance starts at ninety-five (95) and ends at one hundred five (105). There is no adjustment of Fees for adding or subtracting users within this range. |
5.2 ARC/RRC Units; Adjustments Outside of Deadband Allowance
A. ARC/RRC Units. ARC and RRC unit charges/reductions have been defined for each component of
Service in the Table included in Appendix B.
For additions or deletions to resource consumption/volumes outside the Deadband Allowance, the
monthly fee will increase or decrease based on the incremental resource consumption/volume from the
Deadband Allowance low point (for delete) or high point (for add) times the unit price.
| – | Example (ARC Within Deadband Allowance): If the Baseline is one hundred (100) users, and actual volume is one hundred thirty (130) users, on the next monthly invoice, the fee is calculated as 105 * x + (130-105) * y (where “x” = fixed unit price and “y” = unit price for add units) | |
| – | Example (RRC Within Deadband Allowance): If the Baseline is one hundred (100) users, and actual volume is seventy-five (75) users, on the next monthly invoice, the fee is calculated as 95 * x + (75-95) * (z — x) (where “x” = fixed unit price and “z” = unit price for delete units) |
B. Adjustments Outside of Deadband Allowance. If Symetra’s actual consumption/volume for a
particular component of Service is twenty percent (20%) higher or lower than the applicable
Baseline during any ninety (90) consecutive calendar days, the Parties agree to re-set the affected
Baseline(s) and to negotiate in good faith pricing for the higher or lower Baseline(s).
| Mod 04 | Confidential Information | |
| Page 5 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3Fees
Schedule 3Fees
6.0 Basis of Pricing and Assumptions
| 6.1 | Basis of Pricing | |
| The basis for the Fees in this Schedule 3 include the following: | ||
| Data Center |
| • | Pricing for hot site includes 300 MIPS, 1.2GB DASD, one hundred twenty (120) shared servers, one (1) email retention server, disaster recovery analyst travel and seventy-two (72) hours annual test time. | ||
| • | “Project Pool” shall mean one hundred (100) hours per month for infrastructure-related IT work requested by Symetra so long as: (a) the request is for a discrete unit of non-recurring work, it requires start-up, planning and execution; (b) the work is not required for ACS to meet other obligations under the Agreement; (c) the work is not required to meet SLAs. Symetra and ACS will assess and adjust number of hours in the Project Pool during 1Q and 3Q of each calendar year. If Symetra authorizes an increase in the Project Pool hours per month, the rate for such additional Services shall be provided at the blended rate of [***] ($[***]) per hour. If Symetra exceeds the number of Project Pool hours available in a given month, the excess hours will be charged using the above blended rate. If Symetra does not fully utilize the Project Pool hours available in a given month, the balance of unused hours available for that month shall remain chargeable, and the hours shall accumulate and aggregate and be usable for a twelve (12) month period from the date they were not used, after which time such hours shall expire. | ||
| • | The NT SAN storage Baseline is an approximate total. Actual NT SAN storage requirements will be refined during transition. Pricing is assumed as a linear scale basis for volume increases or decreases from the Baseline. |
| Distributed computing |
| • | N/A |
| Help Desk |
| • | N/A |
| Data Network |
| • | Circuit rates represent monthly recurring charges. Installation charges are waived by carrier if circuit is kept in place for one (1) year. If a circuit is disconnected before one (1) year the carrier will impose the original install fee of up to [***] Dollars ($[***]). This fee, if applicable, will be charged to Symetra as a pass through expense. |
| Voice |
| • | Symetra retains maintenance costs for owned or leased PBX systems. | ||
| • | Voice transport and long distance rates are billed directly to Symetra with an additional [***] percent ([***]%) management fee. |
| Output Services |
| • | Monthly fee will be based on actual volume processed. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information | |
| Page 6 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3—Fees
Schedule 3—Fees
| • | Volume does not drop below twenty percent (20%) of volume stated in RFP. | ||
| • | Symetra will prepay postage into USPS metered accounts. | ||
| • | Symetra to provide all consumable print supplies with the exception of white 81/2 by 11 (cut-sheet and continuous feed) and 8/12 x 11 perforated cut sheets (SYM-100-continous feed, 200 cut sheet, 1400 perforated cut sheets). | ||
| • | Output DR is not available at this time. |
| Content Management Services |
| • | Five (5) indexed fields with no more than nine (9) keystrokes per field (defined by product line). | ||
| • | Shipping, paper storage, and certified destruction, and telecom costs are pass-through items billed to Symetra, i.e., paper backfile, microfiche, outsorts, checks, patch sheets, etc. | ||
| • | Paper and fiche storage costs not to exceed thirty (30), sixty (60), ninety (90), and one hundred eighty (180) days from receipt from Symetra depending upon product type. | ||
| • | The FileNet software includes a test suite to perform testing against current applications. | ||
| • | Assumes content management Services with two hundred fifty (250) dedicated SLUs and 110 SLUs at a ration of 4:1. A total of seven hundred (700) total system users is assumed. | ||
| • | ACS assumes that Symetra’s preferred approach for development of new, P8 compatible versions of the following applications will be completed via in-house development or the use of FileNet’s professional services: |
| o | 401(k) On-Line enrollment — Upload to content management solution | ||
| o | Clarify CRM | ||
| o | EiStream ViewStart Workflow |
| 6.2 | Key Assumptions | |
| The following are key assumptions on which the Fees in this Schedule are based: | ||
| Data Center |
| • | Pricing assumes software listed in Attachment L to the Agreement. Additional software requirements will incur additional charges if discovered after the Effective Date. | ||
| • | ACS will be allowed to install and execute SOFT AUDIT to validate software inventory. | ||
| • | Symetra will retain responsibility for copying Symetra Data at the Redmond data center from both physical tape and the VSM to ACS VTS and physical drives temporarily installed at the RDC for migration purposes. | ||
| • | Safeco ACF2 security database with Symetra Data will be provided to ACS for migration purposes. | ||
| • | ACS will be allowed to use full system lift methodology to perform the transition from the Safeco data center to the ACS data center. | ||
| • | Channel and DASD requirements for migration purposes at Safeco data center are retained expenses. | ||
| • | Assumes Symetra data will be segregated by DASD volumes to support full volume dumps. | ||
| • | Safeco and Symetra will provide necessary IT configuration and architectural information in ACS-requested format required to establish the new Symetra IT |
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Schedule 3—Fees
Schedule 3—Fees
| infrastructure, thus simplifying configuration of new enterprise equipment and environment. | |||
| • | Pricing for hot site includes 300 MIPS, 1.2GB DASD, one hundred twenty (120) shared servers, one (1) email retention server, disaster recovery analyst travel and seventy-two (72) hours annual test time. | ||
| • | Processor utilization is defined as physical machine utilization taken from the SMF type-70 records as reported by IBM’s “RMF CPU Summary Report”. SMF records are recorded on a fifteen (15)-minute interval (ninety-six (96) intervals each day) and report the average processor utilization during the interval. | ||
| • | Baseline configuration is defined as an IBM Z890 system configured for 410 MIPS offered capacity. [***] Dollars ($[***]) monthly fee for twelve (12) months post transition that will serve as ‘term insurance’ for capability to increase to 489 MIPS with option to renew term insurance annually. Upon direction by Symetra to discontinue the 489 MIP option, ACS will reduce recurring billings by [***] Dollars ($[***]) per month. | ||
| • | To increase mainframe capacity to a 489 MIP Mainframe processor, a High-Utilization-Week is defined as five (5) consecutive non-holiday weekdays (Monday through Friday) with average CPU utilization of seventy percent (70%) or higher of the Baseline configuration. | ||
| • | To reduce mainframe capacity to a 312 MIP Mainframe processor, a High-Utilization-Week (as defined above) should measure below fifty percent (50%) processor utilization of the Baseline configuration for each of four (4) consecutive months. ACS will perform a capacity study and determine the feasibility of a mainframe downgrade. After presentation of the study, Symetra management, at its sole discretion, may elect to initiate a mainframe processor downgrade with associated RRC credits (as described in this Schedule 3). Mainframe processor downgrade will occur in the first quarter following fiscal year end. |
| Distributed computing |
| • | None |
| Help Desk |
| • | None |
| Data Network |
| • | Pricing for VAN connections is not included. | ||
| • | Circuit rates represent monthly recurring charges. Installation charges are waived by carrier if circuit is kept in place for one (1) year. If a circuit is disconnected before one (1) year the carrier may impose the original install fee of up to [***] Dollars ($[***]). This fee, if applicable, will be charged to Symetra as a pass through expense, without markup. | ||
| • | Internet access- sold as a bundled service from the carriers and is not broken down by port and access charges. |
| Voice |
| • | Symetra retains maintenance costs for owned or leased PBX systems. |
| Output Services |
| • | Monthly fee will be based on actual volume processed. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
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Schedule 3—Fees
Schedule 3—Fees
| • | Third Party presort house will be used for 6x9 envelopes to achieve postal discounts. | ||
| • | Symetra to provide all consumable print supplies with the exception of white 81/2 by 11 (cut-sheet and continuous feed) and 8/12 x 11 perforated cut sheets (SYM-100-continous feed, 200 cut sheet, 1400 perforated cut sheets). |
| Content Management Services |
| • | New business P.O. box mail will be immediately re-routed to Kentucky to begin pilot. | ||
| • | Content management and mailroom image Services will be performed by ACS domestically in London, Kentucky. |
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Schedule 3—Fees
Schedule 3—Fees
Appendix A
– Detailed Transition Fees
[***]
The actual billing date may vary based on the final Transition Plan.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
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Schedule 3—Fees
Schedule 3—Fees
Appendix B
– ARC/RRC Unit Prices
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | Increase Above the | Decrease Below the | ||||||||||
| (extended Unit | Deadband | Deadband | ||||||||||
| Pricing remains | (Increase from 5.1% to | (Decrease from 5.1% to | ||||||||||
| constant within the | 20% above the Initial | 20% below the Initial | ||||||||||
| Item Description | 10% Deadband) | Order Counts) | Order Counts) | |||||||||
Year 1 |
||||||||||||
Data Center |
||||||||||||
Mainframe Server (per MIP) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe DASD (per GB) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe Tape |
$ | [***] | $ | [***] | $ | [***] | ||||||
Application Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Database Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
File/Print Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Messaging Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Web/HTTP Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Development/Test/QA |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT Tape Backup |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-1 |
$ | — | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-2 |
$ | [***] | $ | [***] | $ | [***] | ||||||
IT Continuity |
$ | [***] | $ | — | $ | — | ||||||
Print |
$ | [***] | $ | — | $ | — | ||||||
Other - Project Pool Hours (rate per hour) |
$ | [***] | $ | [***] | $ | [***] | ||||||
EAM Project - Ongoing labor |
$ | [***] | $ | — | $ | — | ||||||
Distributed Computing |
||||||||||||
Desktop Support - Remote Offices per desktop |
$ | [***] | $ | [***] | $ | [***] | ||||||
Laptop Support - Remote Offices per laptop |
$ | [***] | $ | [***] | $ | [***] | ||||||
PDA Support - Remote Offices per PDA |
$ | [***] | $ | [***] | $ | [***] | ||||||
E-Mail Server Support - HQ & Remote per server |
$ | — | $ | — | $ | — | ||||||
File / Print Server Support - HQ & Remote per server |
$ | — | $ | — | $ | — | ||||||
Network-Attached Printer Support - HQ & Remote per
printer |
$ | [***] | $ | [***] | $ | [***] | ||||||
Remote High-volume Production/Printing |
$ | — | $ | — | $ | — | ||||||
IMAC for PCs / Net Printers - Remote Offices per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMAC for Servers - HQ & Remote per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
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Schedule 3—Fees
Schedule 3—Fees
| Baseline Unit Price | ||||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | Price for Add Units | Price for Delete Units | ||||||||||
| Pricing remains | (ARC) | (RRC) | ||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Help Desk |
||||||||||||
Per Call |
$ | [***] | $ | [***] | $ | [***] | ||||||
5 pack floating user Remedy licenses |
$ | — | $ | [***] | $ | [***] | ||||||
5 pack fixed user Remedy licenses |
$ | — | $ | [***] | $ | [***] | ||||||
100 P-Synch and ID-Synch licenses |
$ | — | $ | [***] | $ | [***] | ||||||
Data Network |
||||||||||||
Routers per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Switches per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
DSUs/CSUs per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Firewalls per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
FRADS per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMProvider per device |
$ | [***] | $ | [***] | $ | [***] | ||||||
Circuits-See Data Transport recurring tab
|
||||||||||||
Hardware for new remote site (Not including circuit costs) |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost at each remote site |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost for NWSC network module |
$ | — | $ | [***] | $ | [***] | ||||||
BRI Circuit at remote site |
$ | — | $ | [***] | $ | [***] | ||||||
PRI circuit to NWSC |
$ | — | $ | [***] | $ | [***] | ||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Internet access -Dual DS-3 burstable to 7.5M |
$ | — | $ | [***] | $ | [***] | ||||||
-Access port fees for Internet access |
$ | — | ||||||||||
Circuits-Point to Point |
$ | — | ||||||||||
-DS3 Point to Point AT&T |
$ | — | $ | [***] | $ | [***] | ||||||
-DS3 - Point to Point-Verizon |
$ | — | $ | [***] | $ | [***] | ||||||
Circuits-Frame relay |
$ | — | ||||||||||
-56k |
$ | — | $ | [***] | $ | [***] | ||||||
-128K |
$ | — | $ | [***] | $ | [***] | ||||||
-256K |
$ | — | $ | [***] | $ | [***] | ||||||
-384K |
$ | — | $ | [***] | $ | [***] | ||||||
-512K |
$ | — | $ | [***] | $ | [***] | ||||||
-768K |
$ | — | $ | [***] | $ | [***] | ||||||
-1.024M |
$ | — | $ | [***] | $ | [***] | ||||||
-1.544M |
$ | — | $ | [***] | $ | [***] | ||||||
DS3- ATM/FR Internetworking |
$ | — | $ | [***] | $ | [***] | ||||||
Voice Communications |
||||||||||||
Circuit monitoring per trunk |
$ | — | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
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Schedule 3—Fees
Schedule 3—Fees
| Baseline Unit Price | ||||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | Price for Add Units | Price for Delete Units | ||||||||||
| Pricing remains | (ARC) | (RRC) | ||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
IMProvider Per PBX |
$ | — | $ | — | $ | — | ||||||
Large PBX’s (over 300 Extensions) per unit |
$ | — | $ | — | $ | — | ||||||
Small PBXs (LT 75 extensions) per unit |
$ | — | $ | — | $ | — | ||||||
PBX Handsets per unit |
$ | — | $ | [***] | $ | [***] | ||||||
ACD, IVR IMProvider |
$ | — | $ | — | $ | — | ||||||
Voice Circuit IMProvider |
$ | — | $ | — | $ | — | ||||||
Teleconferencing |
||||||||||||
Teleconference Services |
$ | — | $ | — | $ | — | ||||||
Calling Cards |
$ | — | $ | — | $ | — | ||||||
Cell Phones |
$ | — | $ | — | $ | — | ||||||
Voice Mailbox Users |
$ | — | $ | — | $ | — | ||||||
Add Locations/Remote
Offices/Remote Workers |
||||||||||||
Location |
$ | — | $ | — | $ | — | ||||||
Remote Office |
$ | — | $ | — | $ | — | ||||||
Remote Worker |
$ | — | $ | [***] | ||||||||
Voice Services-Local and Long
Distance |
||||||||||||
Dedicated |
$ | — | $ | — | $ | — | ||||||
Switched |
$ | — | $ | — | $ | — | ||||||
Circuits |
||||||||||||
Fractional T-1: |
||||||||||||
56/64k |
$ | — | $ | [***] | $ | [***] | ||||||
128k |
$ | — | $ | [***] | $ | [***] | ||||||
256k |
$ | — | $ | [***] | $ | [***] | ||||||
384k |
$ | — | $ | [***] | $ | [***] | ||||||
512k |
$ | — | $ | [***] | $ | [***] | ||||||
DS3-FR |
$ | — | $ | [***] | $ | [***] | ||||||
Fractional DS3- Internet BW |
$ | — | $ | [***] | $ | [***] | ||||||
OCX |
$ | — | $ | — | $ | — | ||||||
Other |
$ | — | ||||||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Output Processing |
||||||||||||
Simplex Printed Page |
$ | [***] | $ | [***] | $ | [***] | ||||||
Post-Processing |
||||||||||||
6x9 envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Automated flat envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Boxes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Binding |
$ | [***] | $ | [***] | $ | [***] | ||||||
Storage |
||||||||||||
Forms Coding and Maintenance |
$ | [***] | $ | [***] | $ | [***] | ||||||
Postal Presorting |
$ | [***] | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
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Schedule 3—Fees
Schedule 3—Fees
| Baseline Unit Price | ||||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | Price for Add Units | Price for Delete Units | ||||||||||
| Pricing remains | (ARC) | (RRC) | ||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Supplies |
||||||||||||
deleted |
||||||||||||
deleted |
||||||||||||
deleted |
||||||||||||
Duplex Printed Page |
$ | — | $ | [***] | $ | [***] | ||||||
Content Management |
||||||||||||
Mailroom services |
||||||||||||
-Mailroom |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
MicroFiche/Film BF Conversion
(Scan on-demand only) |
$ | — | ||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | [***] | $ | [***] | ||||||
Paper Active BF Conversion |
||||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | — | $ | — | ||||||
Lockbox (per check processed) |
$ | [***] | $ | — | $ | — | ||||||
T1 with 512 PVC |
$ | [***] | $ | — | $ | — | ||||||
FileNet Software Maintenance |
$ | [***] | $ | — | $ | — | ||||||
Disaster Recovery |
$ | [***] | $ | — | $ | — | ||||||
Year 2 |
||||||||||||
Data Center |
||||||||||||
Mainframe Server (per MIP) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe DASD (per GB) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe Tape |
$ | [***] | $ | [***] | $ | [***] | ||||||
Application Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Database Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
File/Print Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Messaging Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Web/HTTP Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Development/Test/QA |
$ | [***] | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information | |
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Schedule 3—Fees
Schedule 3—Fees
| Baseline Unit Price | ||||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | Price for Add Units | Price for Delete Units | ||||||||||
| Pricing remains | (ARC) | (RRC) | ||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
NT Tape Backup |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-1 |
$ | — | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-2 |
$ | [***] | $ | [***] | $ | [***] | ||||||
IT Continuity |
$ | [***] | $ | — | $ | — | ||||||
Print |
$ | [***] | $ | — | $ | — | ||||||
Other - Project Pool Hours |
$ | [***] | $ | [***] | $ | [***] | ||||||
EAM Project - Ongoing labor |
$ | [***] | $ | — | $ | — | ||||||
Distributed Computing |
||||||||||||
Desktop
Support - Remote
Offices per desktop |
$ | [***] | $ | [***] | $ | [***] | ||||||
Laptop
Support - Remote Offices per laptop |
$ | [***] | $ | [***] | $ | [***] | ||||||
PDA Support - Remote Offices
per PDA |
$ | [***] | $ | [***] | $ | [***] | ||||||
E-Mail
Server Support - HQ &
Remote per server |
||||||||||||
File / Print
Server Support - HQ &
Remote per server |
||||||||||||
Network-Attached Printer Support -
HQ & Remote per printer |
$ | [***] | $ | [***] | $ | [***] | ||||||
Remote High-volume
Production/Printing |
||||||||||||
IMAC for PCs / Net Printers -
Remote Offices per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMAC for
Servers - HQ & Remote
per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
Help Desk |
||||||||||||
Per Call |
$ | [***] | $ | [***] | $ | [***] | ||||||
5 pack floating user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
5 pack fixed user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
100 P-Synch and ID-Synch
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
Data Network |
||||||||||||
Routers per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Switches per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
DSUs/CSUs per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Firewalls per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
FRADS per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMProvider per device |
$ | [***] | $ | [***] | $ | [***] | ||||||
Circuits-See Data Transport
recurring tab |
||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information | |
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Table of Contents
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Schedule 3—Fees
Schedule 3—Fees
| Baseline Unit Price | ||||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | Price for Add Units | Price for Delete Units | ||||||||||
| Pricing remains | (ARC) | (RRC) | ||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Hardware for new remote site (Not
including circuit costs) |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost at each remote
site |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost for NWSC network
module |
$ | — | $ | [***] | $ | [***] | ||||||
BRI Circuit at remote site |
$ | — | $ | [***] | $ | [***] | ||||||
PRI circuit to NWSC |
$ | — | $ | [***] | $ | [***] | ||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Internet access -Dual DS-3
burstable to 7.5M |
$ | — | $ | [***] | $ | [***] | ||||||
-Access port fees for Internet
access |
||||||||||||
Circuits-Point to Point |
||||||||||||
-DS3 Point to Point AT&T |
$ | — | $ | [***] | $ | [***] | ||||||
-DS3 - Point to Point-Verizon |
$ | — | $ | [***] | $ | [***] | ||||||
Circuits-Frame relay |
||||||||||||
-56k |
$ | — | $ | [***] | $ | [***] | ||||||
-128K |
$ | — | $ | [***] | $ | [***] | ||||||
-256K |
$ | — | $ | [***] | $ | [***] | ||||||
-384K |
$ | — | $ | [***] | $ | [***] | ||||||
-512K |
$ | — | $ | [***] | $ | [***] | ||||||
-768K |
$ | — | $ | [***] | $ | [***] | ||||||
-1.024M |
$ | — | $ | [***] | $ | [***] | ||||||
-1.544M |
$ | — | $ | [***] | $ | [***] | ||||||
DS3- ATM/FR Internetworking |
$ | — | $ | [***] | $ | [***] | ||||||
Voice Communications |
||||||||||||
Circuit monitoring per trunk |
$ | — | $ | — | $ | — | ||||||
IMProvider Per PBX |
$ | — | $ | — | $ | — | ||||||
Large PBX’s (over 300
Extensions) per unit |
$ | [***] | $ | — | $ | — | ||||||
Small PBXs (LT 75 extensions)
per unit |
$ | — | $ | — | $ | — | ||||||
PBX Handsets per unit |
$ | — | $ | [***] | $ | [***] | ||||||
ACD, IVR IMProvider |
$ | — | ||||||||||
Voice Circuit IMProvider |
$ | — | $ | — | $ | — | ||||||
Teleconferencing |
$ | — | $ | — | ||||||||
Teleconference Services |
$ | — | ||||||||||
Calling Cards |
$ | — | $ | — | $ | — | ||||||
Cell Phones |
$ | — | $ | — | $ | — | ||||||
Voice Mailbox Users |
$ | — | $ | — | $ | — | ||||||
Add Locations/Remote
Offices/Remote Workers |
$ | — | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp.,
this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information | |
| Page 16 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Location |
$ | — | ||||||||||
Remote Office |
$ | — | $ | — | $ | — | ||||||
Remote Worker |
$ | — | $ | — | $ | — | ||||||
Voice Services-Local and Long
Distance |
$ | — | $ | — | ||||||||
Dedicated |
$ | — | ||||||||||
Switched |
$ | — | $ | — | $ | — | ||||||
Circuits |
$ | — | $ | — | ||||||||
Fractional T-1: |
$ | — | ||||||||||
56/64k |
$ | — | $ | [***] | $ | [***] | ||||||
128k |
$ | — | $ | [***] | $ | [***] | ||||||
256k |
$ | — | $ | [***] | $ | [***] | ||||||
384k |
$ | — | $ | [***] | $ | [***] | ||||||
512k |
$ | — | $ | [***] | $ | [***] | ||||||
DS3-FR |
$ | — | $ | [***] | $ | [***] | ||||||
Fractional DS3- Internet BW |
$ | — | $ | [***] | $ | [***] | ||||||
OCX |
$ | — | $ | — | $ | — | ||||||
Other |
||||||||||||
Local Loop Charges for Circuits |
$ | [***] | $ | [***] | ||||||||
Output Processing |
||||||||||||
Simplex Printed Page |
$ | [***] | $ | [***] | $ | [***] | ||||||
Post-Processing |
||||||||||||
6x9 envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Automated flat envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Boxes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Binding |
$ | [***] | $ | [***] | $ | [***] | ||||||
Storage |
$ | — | ||||||||||
Forms Coding and Maintenance |
$ | [***] | $ | [***] | $ | [***] | ||||||
Postal Presorting |
$ | [***] | $ | [***] | $ | [***] | ||||||
Supplies |
||||||||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 17 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Duplex Printed Page |
$ | [***] | $ | [***] | ||||||||
Content Management |
||||||||||||
Mailroom services |
||||||||||||
-Mailroom |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
MicroFiche/Film BF Conversion
(Scan on-demand only) |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | [***] | $ | [***] | ||||||
Paper Active BF Conversion |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | — | $ | — | ||||||
Lockbox (per check processed) |
$ | [***] | $ | — | $ | — | ||||||
T1 with 512 PVC |
$ | [***] | $ | — | $ | — | ||||||
FileNet Software Maintenance |
$ | [***] | $ | — | $ | — | ||||||
Disaster Recovery |
$ | [***] | $ | — | $ | — | ||||||
Year 3 |
||||||||||||
Data Center |
||||||||||||
Mainframe Server (per MIP) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe DASD (per GB) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe Tape |
$ | [***] | $ | [***] | $ | [***] | ||||||
Application Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Database Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
File/Print Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Messaging Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Web/HTTP Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Development/Test/QA |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT Tape Backup |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-1 |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-2 |
$ | [***] | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 18 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
IT Continuity |
$ | [***] | $ | — | $ | — | ||||||
Print |
$ | [***] | $ | — | $ | — | ||||||
Other — Project Pool Hours |
$ | [***] | $ | [***] | $ | [***] | ||||||
EAM Project — Ongoing labor |
$ | [***] | $ | — | $ | — | ||||||
Distributed Computing |
||||||||||||
Desktop Support — Remote
Offices per desktop |
$ | [***] | $ | [***] | $ | [***] | ||||||
Laptop Support — Remote
Offices per laptop |
$ | [***] | $ | [***] | $ | [***] | ||||||
PDA Support — Remote Offices
per PDA |
$ | [***] | $ | [***] | $ | [***] | ||||||
E-Mail Server Support — HQ &
Remote per server |
||||||||||||
File / Print Server Support — HQ &
Remote per server |
||||||||||||
Network-Attached
Printer Support — HQ & Remote per printer |
$ | [***] | $ | [***] | $ | [***] | ||||||
Remote High-volume
Production/Printing |
||||||||||||
IMAC for PCs
/ Net Printers — Remote Offices per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMAC for Servers — HQ & Remote
per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
Help Desk |
||||||||||||
Per Call |
$ | [***] | $ | [***] | $ | [***] | ||||||
5 pack floating user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
5 pack fixed user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
100 P-Synch and ID-Synch
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
Data Network |
||||||||||||
Routers per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Switches per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
DSUs/CSUs per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Firewalls per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
FRADS per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMProvider per device |
$ | [***] | $ | [***] | $ | [***] | ||||||
Circuits-See Data Transport
recurring tab |
||||||||||||
Hardware for new remote site (Not
including circuit costs) |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost at each remote
site |
$ | — | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 19 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Hardware cost for NWSC network
module |
$ | — | $ | [***] | $ | [***] | ||||||
BRI Circuit at remote site |
$ | — | $ | [***] | $ | [***] | ||||||
PRI circuit to NWSC |
$ | — | $ | [***] | $ | [***] | ||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Internet access -Dual DS-3
burstable to 7.5M |
$ | — | $ | [***] | $ | [***] | ||||||
-Access port fees for Internet
access |
$ | — | $ | — | $ | — | ||||||
Circuits-Point to Point |
$ | — | $ | — | $ | — | ||||||
-DS3 Point to Point AT&T |
$ | — | $ | [***] | $ | [***] | ||||||
-DS3 - Point to Point-Verizon |
$ | — | $ | [***] | $ | [***] | ||||||
Circuits-Frame relay |
$ | — | ||||||||||
-56k |
$ | — | $ | [***] | $ | [***] | ||||||
-128K |
$ | — | $ | [***] | $ | [***] | ||||||
-256K |
$ | — | $ | [***] | $ | [***] | ||||||
-384K |
$ | — | $ | [***] | $ | [***] | ||||||
-512K |
$ | — | $ | [***] | $ | [***] | ||||||
-768K |
$ | — | $ | [***] | $ | [***] | ||||||
-1.024M |
$ | — | $ | [***] | $ | [***] | ||||||
-1.544M |
$ | — | $ | [***] | $ | [***] | ||||||
DS3- ATM/FR Internetworking |
$ | — | $ | [***] | $ | [***] | ||||||
Voice Communications |
||||||||||||
Circuit monitoring per trunk |
$ | — | $ | — | $ | — | ||||||
IMProvider Per PBX |
$ | — | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 20 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Large PBX’s (over 300
Extensions) per unit |
$ | [***] | $ | — | $ | — | ||||||
Small PBXs (LT 75 extensions)
per unit |
$ | — | $ | — | $ | — | ||||||
PBX Handsets per unit |
$ | [***] | $ | [***] | ||||||||
ACD, IVR IMProvider |
$ | — | $ | — | $ | — | ||||||
Voice Circuit IMProvider |
$ | — | $ | — | $ | — | ||||||
Teleconferencing |
||||||||||||
Teleconference Services |
$ | — | $ | — | $ | — | ||||||
Calling Cards |
$ | — | $ | — | $ | — | ||||||
Cell Phones |
$ | — | $ | — | $ | — | ||||||
Voice Mailbox Users |
$ | — | $ | — | $ | — | ||||||
Add Locations/Remote
Offices/Remote Workers |
||||||||||||
Location |
$ | — | $ | — | $ | — | ||||||
Remote Office |
$ | — | $ | — | $ | — | ||||||
Remote Worker |
$ | — | $ | — | $ | — | ||||||
Voice Services-Local and Long
Distance |
||||||||||||
Dedicated |
$ | — | $ | — | $ | — | ||||||
Switched |
$ | — | $ | — | $ | — | ||||||
Circuits |
||||||||||||
Fractional T-1: |
||||||||||||
56/64k |
$ | — | $ | [***] | $ | [***] | ||||||
128k |
$ | — | $ | [***] | $ | [***] | ||||||
256k |
$ | — | $ | [***] | $ | [***] | ||||||
384k |
$ | — | $ | [***] | $ | [***] | ||||||
512k |
$ | — | $ | [***] | $ | [***] | ||||||
DS3-FR |
$ | — | $ | [***] | $ | [***] | ||||||
Fractional DS3- Internet BW |
$ | — | $ | [***] | $ | [***] | ||||||
OCX |
$ | — | $ | — | $ | — | ||||||
Other |
||||||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 21 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Output Processing |
||||||||||||
Simplex Printed Page |
$ | [***] | $ | [***] | $ | [***] | ||||||
Post-Processing |
||||||||||||
6x9 envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Automated flat envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Boxes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Binding |
$ | [***] | $ | [***] | $ | [***] | ||||||
Storage |
$ | — | ||||||||||
Forms Coding and Maintenance |
$ | [***] | $ | [***] | $ | [***] | ||||||
Postal Presorting |
$ | [***] | $ | [***] | $ | [***] | ||||||
Supplies |
||||||||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Duplex Printed Page |
$ | [***] | $ | [***] | ||||||||
Content Management |
||||||||||||
Mailroom services |
||||||||||||
-Mailroom |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
MicroFiche/Film BF Conversion
(Scan on-demand only) |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | [***] | $ | [***] | ||||||
Paper Active BF Conversion |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | — | $ | — | ||||||
Lockbox (per check processed) |
$ | [***] | $ | — | $ | — | ||||||
T1 with 512 PVC |
$ | [***] | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 22 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
FileNet Software Maintenance |
$ | [***] | $ | — | $ | — | ||||||
Disaster Recovery |
$ | [***] | $ | — | $ | — | ||||||
Year 4 |
||||||||||||
Data Center |
||||||||||||
Mainframe Server (per MIP) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe DASD (per GB) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe Tape |
$ | [***] | $ | [***] | $ | [***] | ||||||
Application Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Database Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
File/Print Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Messaging Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Web/HTTP Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Development/Test/QA |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT Tape Backup |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-1 |
$ | — | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-2 |
$ | [***] | $ | [***] | $ | [***] | ||||||
IT Continuity |
$ | [***] | $ | — | $ | — | ||||||
Print |
$ | [***] | $ | — | $ | — | ||||||
Other — Project Pool Hours |
$ | [***] | $ | — | $ | — | ||||||
EAM Project — Ongoing labor |
$ | [***] | $ | — | $ | — | ||||||
Distributed Computing |
||||||||||||
Desktop Support — Remote
Offices per desktop |
$ | [***] | $ | [***] | $ | [***] | ||||||
Laptop Support — Remote
Offices per laptop |
$ | [***] | $ | [***] | $ | [***] | ||||||
PDA Support — Remote Offices
per PDA |
$ | [***] | $ | [***] | $ | [***] | ||||||
E-Mail Server Support — HQ &
Remote per server |
||||||||||||
File / Print Server Support — HQ &
Remote per server |
||||||||||||
Network-Attached Printer Support -
HQ & Remote per printer |
$ | [***] | $ | [***] | $ | [***] | ||||||
Remote High-volume
Production/Printing |
||||||||||||
IMAC for PCs
/ Net Printers —
Remote Offices per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMAC for Servers — HQ & Remote
per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
Help Desk |
||||||||||||
Per Call |
$ | [***] | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 23 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
5 pack floating user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
5 pack fixed user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
100 P-Synch and ID-Synch
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
Data Network |
||||||||||||
Routers per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Switches per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
DSUs/CSUs per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Firewalls per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
FRADS per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMProvider per device |
$ | [***] | $ | [***] | $ | [***] | ||||||
Circuits-See Data Transport
recurring tab |
||||||||||||
Hardware for new remote site (Not
including circuit costs) |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost at each remote
site |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost for NWSC network
module |
$ | — | $ | [***] | $ | [***] | ||||||
BRI Circuit at remote site |
$ | — | $ | [***] | $ | [***] | ||||||
PRI circuit to NWSC |
$ | — | $ | [***] | $ | [***] | ||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Internet access -Dual DS-3
burstable to 7.5M |
$ | — | $ | [***] | $ | [***] | ||||||
-Access port fees for Internet
access |
$ | — | $ | — | $ | — | ||||||
Circuits-Point to Point |
$ | — | $ | — | $ | — | ||||||
-DS3 Point to Point AT&T |
$ | — | $ | [***] | $ | [***] | ||||||
-DS3 - Point to Point-Verizon |
$ | — | $ | [***] | $ | [***] | ||||||
Circuits-Frame relay |
$ | — | ||||||||||
-56k |
$ | — | $ | [***] | $ | [***] | ||||||
-128K |
$ | — | $ | [***] | $ | [***] | ||||||
-256K |
$ | — | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 24 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
-384K |
$ | — | $ | [***] | $ | [***] | ||||||
-512K |
$ | — | $ | [***] | $ | [***] | ||||||
-768K |
$ | — | $ | [***] | $ | [***] | ||||||
-1.024M |
$ | — | $ | [***] | $ | [***] | ||||||
-1.544M |
$ | — | $ | [***] | $ | [***] | ||||||
DS3- ATM/FR Internetworking |
$ | — | $ | [***] | $ | [***] | ||||||
Voice Communications |
||||||||||||
Circuit monitoring per trunk |
$ | — | $ | — | $ | — | ||||||
IMProvider Per PBX |
$ | — | $ | — | $ | — | ||||||
Large PBX’s (over 300
Extensions) per unit |
$ | [***] | $ | — | $ | — | ||||||
Small PBXs (LT 75 extensions)
per unit |
$ | — | $ | — | $ | — | ||||||
PBX Handsets per unit |
$ | — | $ | [***] | $ | [***] | ||||||
ACD, IVR IMProvider |
$ | — | $ | — | $ | — | ||||||
Voice Circuit IMProvider |
$ | — | $ | — | $ | — | ||||||
Teleconferencing |
||||||||||||
Teleconference Services |
$ | — | $ | — | $ | — | ||||||
Calling Cards |
$ | — | $ | — | $ | — | ||||||
Cell Phones |
$ | — | $ | — | $ | — | ||||||
Voice Mailbox Users |
$ | — | $ | — | $ | — | ||||||
Add Locations/Remote
Offices/Remote Workers |
||||||||||||
Location |
$ | — | $ | — | $ | — | ||||||
Remote Office |
$ | — | $ | — | $ | — | ||||||
Remote Worker |
$ | — | $ | — | $ | — | ||||||
Voice Services-Local and Long
Distance |
||||||||||||
Dedicated |
$ | — | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 25 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Switched |
$ | — | $ | — | $ | — | ||||||
Circuits |
||||||||||||
Fractional T-1: |
||||||||||||
56/64k |
$ | — | $ | [***] | $ | [***] | ||||||
128k |
$ | — | $ | [***] | $ | [***] | ||||||
256k |
$ | — | $ | [***] | $ | [***] | ||||||
384k |
$ | — | $ | [***] | $ | [***] | ||||||
512k |
$ | — | $ | [***] | $ | [***] | ||||||
DS3-FR |
$ | — | $ | [***] | $ | [***] | ||||||
Fractional DS3- Internet BW |
$ | — | $ | [***] | $ | [***] | ||||||
OCX |
$ | — | $ | — | $ | — | ||||||
Other |
||||||||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Output Processing |
||||||||||||
Simplex Printed Page |
$ | [***] | $ | [***] | $ | [***] | ||||||
Post-Processing |
$ | — | $ | — | $ | — | ||||||
6x9 envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Automated flat envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Boxes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Binding |
$ | [***] | $ | [***] | $ | [***] | ||||||
Storage |
$ | — | $ | — | $ | — | ||||||
Forms Coding and Maintenance |
$ | [***] | $ | [***] | $ | [***] | ||||||
Postal Presorting |
$ | [***] | $ | [***] | $ | [***] | ||||||
Supplies |
$ | — | $ | — | $ | — | ||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Duplex Printed Page |
$ | — | $ | [***] | $ | [***] | ||||||
Content Management |
||||||||||||
Mailroom services |
||||||||||||
-Mailroom |
$ | [***] | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 26 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
MicroFiche/Film BF Conversion
(Scan on-demand only) |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | [***] | $ | [***] | ||||||
Paper Active BF Conversion |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | — | $ | — | ||||||
Lockbox (per check processed) |
$ | [***] | $ | — | $ | — | ||||||
T1 with 512 PVC |
$ | [***] | $ | — | $ | — | ||||||
FileNet Software Maintenance |
$ | [***] | $ | — | $ | — | ||||||
Disaster Recovery |
$ | [***] | $ | — | $ | — | ||||||
Year 5 |
||||||||||||
Data Center |
||||||||||||
Mainframe Server (per MIP) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe DASD (per GB) |
$ | [***] | $ | [***] | $ | [***] | ||||||
Mainframe Tape |
$ | [***] | $ | [***] | $ | [***] | ||||||
Application Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Database Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
File/Print Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Messaging Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Web/HTTP Server |
$ | [***] | $ | [***] | $ | [***] | ||||||
Development/Test/QA |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT Tape Backup |
$ | [***] | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-1 |
$ | — | $ | [***] | $ | [***] | ||||||
NT SAN Storage SLA-2 |
$ | [***] | $ | [***] | $ | [***] | ||||||
IT Continuity |
$ | [***] | $ | — | $ | — | ||||||
Print |
$ | [***] | $ | — | $ | — | ||||||
Other — Project Pool Hours |
$ | [***] | $ | — | $ | — | ||||||
EAM Project — Ongoing labor |
$ | [***] | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 27 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Distributed Computing |
||||||||||||
Desktop Support — Remote
Offices per desktop |
$ | [***] | $ | [***] | $ | [***] | ||||||
Laptop Support — Remote
Offices per laptop |
$ | [***] | $ | [***] | $ | [***] | ||||||
PDA Support — Remote Offices
per PDA |
$ | [***] | $ | [***] | $ | [***] | ||||||
E-Mail Server Support — HQ &
Remote per server |
||||||||||||
File / Print Server Support — HQ &
Remote per server |
||||||||||||
Network-Attached Printer Support -
HQ & Remote per printer |
$ | [***] | $ | [***] | $ | [***] | ||||||
Remote High-volume
Production/Printing |
||||||||||||
IMAC for PCs / Net Printers -
Remote Offices per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMAC for Servers — HQ & Remote
per IMAC |
$ | [***] | $ | [***] | $ | [***] | ||||||
Help Desk |
||||||||||||
Per Call |
$ | [***] | $ | [***] | $ | [***] | ||||||
5 pack floating user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
5 pack fixed user Remedy
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
100 P-Synch and ID-Synch
licenses |
$ | — | $ | [***] | $ | [***] | ||||||
Data Network |
||||||||||||
Routers per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Switches per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
DSUs/CSUs per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
Firewalls per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
FRADS per unit |
$ | [***] | $ | [***] | $ | [***] | ||||||
IMProvider per device |
$ | [***] | $ | [***] | $ | [***] | ||||||
Circuits-See Data Transport
recurring tab |
||||||||||||
Hardware for new remote site (Not
including circuit costs) |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost at each remote
site |
$ | — | $ | [***] | $ | [***] | ||||||
Hardware cost for NWSC network
module |
$ | — | $ | [***] | $ | [***] | ||||||
BRI Circuit at remote site |
$ | — | $ | [***] | $ | [***] | ||||||
PRI circuit to NWSC |
$ | — | $ | [***] | $ | [***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 28 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Internet
access -Dual DS-3 burstable to 7.5M |
$ | — | $ | [***] | $ | [***] | ||||||
-Access port fees for Internet
access |
$ | — | $ | — | $ | — | ||||||
Circuits-Point to Point |
$ | — | $ | — | $ | — | ||||||
-DS3 Point to Point AT&T |
$ | — | $ | [***] | $ | [***] | ||||||
-DS3 - Point to Point-Verizon |
$ | — | $ | [***] | $ | [***] | ||||||
Circuits-Frame relay |
$ | — | ||||||||||
-56k |
$ | — | $ | [***] | $ | [***] | ||||||
-128K |
$ | — | $ | [***] | $ | [***] | ||||||
-256K |
$ | — | $ | [***] | $ | [***] | ||||||
-384K |
$ | — | $ | [***] | $ | [***] | ||||||
-512K |
$ | — | $ | [***] | $ | [***] | ||||||
-768K |
$ | — | $ | [***] | $ | [***] | ||||||
-1.024M |
$ | — | $ | [***] | $ | [***] | ||||||
-1.544M |
$ | — | $ | [***] | $ | [***] | ||||||
DS3- ATM/FR Internetworking |
$ | — | $ | [***] | $ | [***] | ||||||
Voice Communications |
||||||||||||
Circuit monitoring per trunk |
$ | — | $ | — | $ | — | ||||||
IMProvider Per PBX |
$ | — | $ | — | $ | — | ||||||
Large PBX’s (over 300
Extensions) per unit |
$ | [***] | $ | — | $ | — | ||||||
Small PBXs (LT 75 extensions)
per unit |
$ | — | $ | — | $ | — | ||||||
PBX Handsets per unit |
$ | [***] | $ | [***] | ||||||||
ACD, IVR IMProvider |
$ | — | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 29 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
Voice Circuit IMProvider |
$ | — | $ | — | $ | — | ||||||
Teleconferencing |
||||||||||||
Teleconference Services |
$ | — | $ | — | $ | — | ||||||
Calling Cards |
$ | — | $ | — | $ | — | ||||||
Cell Phones |
$ | — | $ | — | $ | — | ||||||
Voice Mailbox Users |
$ | — | $ | — | $ | — | ||||||
Add Locations/Remote
Offices/Remote Workers |
||||||||||||
Location |
$ | — | $ | — | $ | — | ||||||
Remote Office |
$ | — | $ | — | $ | — | ||||||
Remote Worker |
$ | — | $ | — | $ | — | ||||||
Voice Services-Local and Long
Distance |
||||||||||||
Dedicated |
$ | — | $ | — | $ | — | ||||||
Switched |
$ | — | $ | — | $ | — | ||||||
Circuits |
||||||||||||
Fractional T-1: |
||||||||||||
56/64k |
$ | — | $ | [***] | $ | [***] | ||||||
128k |
$ | — | $ | [***] | $ | [***] | ||||||
256k |
$ | — | $ | [***] | $ | [***] | ||||||
384k |
$ | — | $ | [***] | $ | [***] | ||||||
512k |
$ | — | $ | [***] | $ | [***] | ||||||
DS3-FR |
$ | — | $ | [***] | $ | [***] | ||||||
Fractional DS3- Internet BW |
$ | — | $ | [***] | $ | [***] | ||||||
OCX |
$ | — | $ | — | $ | — | ||||||
Other |
||||||||||||
Local Loop Charges for Circuits |
$ | — | $ | [***] | $ | [***] | ||||||
Output Processing |
||||||||||||
Simplex Printed Page |
$ | [***] | $ | [***] | $ | [***] | ||||||
Post-Processing |
$ | — | $ | — | ||||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 30 |
Table of Contents
Symetra Life Insurance Company (Symetra)
Schedule 3-Fees
Schedule 3-Fees
| Price for Add Units | Price for Delete Units | |||||||||||
| Baseline Unit Price | (ARC) | (RRC) | ||||||||||
| Baseline Unit Price | ||||||||||||
| (extended Unit | ||||||||||||
| Pricing remains | ||||||||||||
| constant within the | Increase Above the | Decrease Below the | ||||||||||
| Item Description | 10% Deadband) | Deadband | Deadband | |||||||||
6x9 envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Automated flat envelopes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Boxes |
$ | [***] | $ | [***] | $ | [***] | ||||||
Binding |
$ | [***] | $ | [***] | $ | [***] | ||||||
Storage |
$ | — | $ | — | $ | — | ||||||
Forms Coding and Maintenance |
$ | [***] | $ | [***] | $ | [***] | ||||||
Postal Presorting |
$ | [***] | $ | [***] | $ | [***] | ||||||
Supplies |
$ | — | $ | — | $ | — | ||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Deleted |
||||||||||||
Duplex Printed Page |
$ | [***] | $ | [***] | ||||||||
Content Management |
||||||||||||
Mailroom services |
||||||||||||
-Mailroom |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
MicroFiche/Film BF Conversion
(Scan on-demand only) |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | [***] | $ | [***] | ||||||
Paper Active BF Conversion |
— | |||||||||||
-Prep documents |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Scanning |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Imaging |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Copying |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Indexing |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Checks |
$ | [***] | $ | [***] | $ | [***] | ||||||
-Research |
$ | [***] | $ | — | $ | — | ||||||
Lockbox (per check processed) |
$ | [***] | $ | — | $ | — | ||||||
T1 with 512 PVC |
$ | [***] | $ | — | $ | — | ||||||
FileNet Software Maintenance |
$ | [***] | $ | — | $ | — | ||||||
Disaster Recovery |
$ | [***] | $ | — | $ | — | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
| Mod 04 | Confidential Information Page 31 |
Table of Contents
SCHEDULE 4
SERVICE RATES
| Hourly Rate | ||||||||||||||||
| (Symetra-site | Hourly Rate | Hourly Rate | Hourly Rate | |||||||||||||
| ACS Job Title / Labor Category | Rates) | (ACS-site Rates) | (Near-shore Rates) | (Off-shore Rates) | ||||||||||||
Applications Programmer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Business Analyst |
$ | [***] | $ | [***] | $ | [***] | NA | |||||||||
Communications Hardware Specialist |
$ | [***] | $ | [***] | $ | [***] | NA | |||||||||
Communications Network Specialist |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Communications Software Specialist |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Computer Systems Analyst |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Database Administrator (DBA) |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Database Analyst |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Documentation Specialist |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Information Systems Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Network Design Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Project Manager |
$ | [***] | $ | [***] | $ | [***] | NA | |||||||||
Quality Assurance Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Security Systems Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Software Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Software Systems Specialist |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Storage Operations Specialist |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Storage Management Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
System Administrator/Operator |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
System Programmer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Systems Engineer |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Tape Librarian |
$ | [***] | $ | [***] | $ | [***] | NA | |||||||||
Technical Architect |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
Training Specialist |
$ | [***] | $ | [***] | $ | [***] | $ | [***] | ||||||||
IBM Consulting for Advanced DR |
NA | $ | [***] | NA | NA | |||||||||||
Sun Professional Services for DR |
NA | $ | [***] | NA | NA | |||||||||||
| • | The on-site Service Rates set forth above were determined based on Services being provided within the United States. | |
| • | Travel time will not be billed to Symetra. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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| • | The Service Rates set forth above do not include travel (e.g., mileage, cab/bus/train fare, etc.), meals or other incidental expenses that may be incurred by ACS in performing the Other Services, and Symetra shall reimburse ACS for any such reasonable expenses so incurred. Notwithstanding the foregoing, Symetra will not pay for travel (e.g., mileage, cab/bus/train fare, etc.), meals or other incidental expenses for local resources based within a fifty (50) mile radius of Symetra’s headquarters or the NWSC, as applicable. |
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Table of Contents
SCHEDULE 5
FEE REDUCTIONS
1. General. The Fee Reductions are designed to encourage the consistent and timely delivery
of Services and value to Symetra. The Fee Reductions are not intended to compensate Symetra for
damages, but rather to estimate the value of the diminished Services actually provided. The goal of
Fee Reductions is not to penalize ACS, but to provide a greater incentive to achieve the
Agreement’s stated objectives and focus ACS on Symetra’s critical needs.
This Schedule outlines the circumstances under which ACS will be subject to Fee Reductions for
failures to achieve the SLAs and/or Critical Milestones, and the circumstances under which ACS will
be entitled to incentives. The tables attached to this Schedule shall be updated to reflect
Symetra’s current initiatives and Service requirements as provided in the Agreement. Fee
Reductions are not capped on a monthly basis, but shall not exceed the total Annual At-Risk Amount
at any point during any Contract Year, except as outlined below in Section 3(b).
The tables attached to this Schedule identify, among other things:
(a) in Table 1, the SLAs and the Weighting Factors for each such SLA; and
(b) in Table 2, the Critical Milestones for the first Contract Year and the Weighting
Factors and Corrective Assessments for each such Critical Milestone.
2. SLAs.
a. Fee Reductions. Each SLA identifies key performance measures that will be used to evaluate
ACS’ delivery of the Services. The overriding goal in developing SLAs is to support Symetra’s
desire to manage ACS by monitoring and measuring performance with respect to Symetra’s
most-important business requirements. The Fee Reductions for ACS’ failure to achieve any SLA shall
be equal to the product of: (i) the Annual At-Risk Amount, multiplied by (ii) the Weighting
Factor (set forth in the attached Table 1) for the SLA that was missed. For example, given the
following assumptions: (a) the Annual Services Fees are [***] Dollars ($[***]); (b) the total
Annual At-Risk Amount therefore equals [***] Dollars ($[***]) ([***] percent ([***]%) of the Annual
Services Fees); and (c) an SLA failure occurs with respect to an SLA having a [***] percent
([***]%) Weighting Factor, Fee Reductions would be calculated as follows:
Annual At-Risk Amount
|
$[***] | |
times
|
times | |
SLA Weighting Factor
|
[***]% | |
Fee Reduction
|
$[***], which does not exceed the monthly Fee Reduction cap of [***] percent ([***]%) of the Annual At-Risk Amount (in this case, $[***]). If the Fee Reduction had been greater than $[***] (either individually or in the aggregate when considering all Fee Reductions for that month), such Fee Reductions would be capped at $[***]. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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The earn-back rights described in Section 4 below would apply to the missed SLA.
b. Priority SLAs. Symetra may classify two (2) SLAs as priority SLAs (“Priority SLAs”) and
allocate up to a [***] percent ([***]%) Weighting Factor to each such Priority SLA. With ACS’
prior written consent, which shall not be unreasonably withheld, Symetra shall have the right to
re-classify any other SLA as a Priority SLA, provided that: (a) unless otherwise agreed to by the
Parties in writing, there shall never be more than two (2) Priority SLAs at any given point in
time; (b) such re-classification shall become effective sixty (60) calendar days following ACS’
consent to such re-classification (if given); and (c) unless otherwise agreed to by the Parties in
writing, a Priority SLA must remain as such for the entirety of the Contract Year in which it first
becomes a Priority SLA. Following any such re-classification, subject to the limitations set forth
in Section 5 of this Schedule, Symetra shall have the right to re-allocate the SLA Weighting
Factors among the SLAs.
c. Performance Measurements. As further described in Section 2.2.2(b) of the Agreement,
measurement of performance against the SLRs shall be in accordance with the SLR metrics set forth
in the applicable Schedules 2 to the Agreement.
3. Critical Milestones.
a. Fee Reductions. Each Critical Milestone identifies a key project milestone that will be
used to evaluate ACS’ delivery of the requested Services. The goal of identifying Critical
Milestones is to support Symetra’s desire to manage ACS by monitoring and measuring actual
performance against Symetra’s most-important business deadlines. The Fee Reductions for ACS’
failure to timely achieve any Critical Milestone shall be equal to the product of: (i) the Annual
At-Risk Amount, multiplied by (ii) the Weighting Factor (set forth in the attached Table 2) for the
Critical Milestone that was missed. For example, given the following assumptions: (a) the Annual
Services Fees are [***] Dollars ($[***]); (b) the total Annual At-Risk Amount therefore equals
[***] Dollars ($[***]) ([***] percent ([***]%) of the Annual Services Fees); and (c) a Critical
Milestone failure occurs with respect to a Critical Milestone having a [***] percent ([***]%)
Weighting Factor, Fee Reductions would be calculated as follows:
Annual At-Risk Amount
|
$[***] | |
times
|
times | |
Critical Milestone Weighting Factor
|
[***]% | |
Fee Reduction
|
$[***], which does not exceed the monthly Fee Reduction cap of [***] percent ([***]%) of the Annual At-Risk Amount (in this case, $[***]). If the Fee Reduction had been greater than $[***] (either individually or in the aggregate when considering all Fee Reductions for that month), such Fee Reductions would be capped at $[***]. |
There is no earn back option associated with Critical Milestones. Additional Corrective Assessments may apply.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
-4-
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b. Corrective Assessments. Upon any failure with respect to a Critical Milestone, if
specified in Table 2 to this Schedule, an initial Corrective Assessment and incremental Corrective
Assessments may be imposed on ACS, in addition to any other Fee Reductions available under this
Schedule. Such Corrective Assessments shall not apply toward satisfaction of the Annual At-Risk
Amount.
4. Earn-Back Rights. ACS may earn back [***] percent ([***]%) of any Fee Reductions
corresponding to a particular SLA if, with respect to SLAs with a monthly Measurement Interval, no
failure occurs as to that SLA for a period of ninety (90) calendar days following the Measurement
Interval in which the last failure to comply with that SLA occurred. If an SLA is measured in any
manner other than monthly, ACS may earn back [***] percent ([***]%) of any Fee Reductions
corresponding to that particular SLA if no additional failures occur as to that SLA in three (3)
consecutive Measurement Intervals.
5. Weighting Factors. The Weighting Factors shall not exceed: (a) [***] percent ([***]%) in
the aggregate for SLA (including Priority SLA) Weighting Factors; (b) [***] percent ([***]%) in the
aggregate for Critical Milestone Weighting Factors; (c) [***] percent ([***]%) for any individual
Priority SLA; (d) [***] percent ([***]%) for any individual SLA other than a Priority SLA; or (e)
[***] percent ([***]%) for any individual Critical Milestone.
6. Limit on Monthly Fee Reductions. The Fee Reductions in any single month shall not exceed
[***] percent ([***]%) of the Annual At-Risk Amount.
7. Interrelated SLAs. If ACS fails to achieve an SLA and, following such failure, a
Root-Cause Analysis reveals that: (a) such failure would not have occurred but for ACS’ failure to
achieve a separate SLA; and (b) such SLA otherwise would have been achieved, ACS shall not be
obligated to pay any Fee Reductions associated with its failure to achieve such SLA. For example,
if ACS has failed to achieve the batch processing SLA and a Root-Cause Analysis reveals that: (c)
the batch processing SLA would not have been missed but for ACS’ failure to achieve the end-to-end
network availability SLA; and (d) the batch processing SLA otherwise would have been achieved, ACS
would not be obligated to pay any Fee Reductions associated with its failure to achieve the batch
processing SLA (but would be responsible for Fee Reductions associated with its failure to achieve
the end-to-end network availability SLA).
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Table 1 — Contract Year 1: SLAs
| Category | Performance Requirement | SLA | Weighting Factor % |
|||
| Help Desk |
||||||
Incident Resolution |
||||||
First Contact Resolution
|
Seventy percent (70%) with < five percent (5%) recalls | [***]% | [***]% | |||
| Distributed Computing | ||||||
Distributed Computing Server Availability |
||||||
Remote server Availability
|
Sun-Sat, 0000-2400 | [***]% | [***]% | |||
Software Installation |
||||||
Service/security patches and
antivirus updates
|
Within twenty-four (24) hours. Measured from approval or automatic updates from anti-virus vendor. | [***]% | [***]% | |||
| Data Center |
||||||
General System Availability |
||||||
Mainframe OS and subsystems
|
Sun-Sat, 0000-2400 | [***]% | [***]%1 | |||
Windows servers
|
7x24x365 | [***]% | [***]% | |||
Batch Processing |
||||||
Scheduled production batch
|
Complete jobs per Symetra approved schedule |
[***]% | [***]% | |||
| Network Services |
||||||
Network Availability |
||||||
End-to-end Availability — critical
locations (Symetra headquarters and ACS
data center)
|
Sun-Sat, 0000-2400 | [***]% | [***]%2 | |||
Remote office availability
|
Sun-Sat, 0000-2400 | [***]% | [***]% | |||
Internet access Availability
|
Sun-Sat, 0000-2400 | [***]% | [***]% | |||
| Voice Services |
||||||
Voice Communication Availability |
||||||
Overall voice transport and system
Availability
|
Sun-Sat, 0000-2400 | [***]% | [***]% | |||
| Cross Functional |
||||||
Restoration |
||||||
SL1 data restore requests for production
& regulatory data (data backup to
intermediate SAN storage, restore from
intermediate SAN storage)
|
< Three (3) hours from Symetra request | [***]% | [***]% | |||
| 1 | This is a Priority SLA. | |
| 2 | This is a Priority SLA. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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Table 2 — Critical Milestones
| Completion Period | ||||||||||||
| Grace | ||||||||||||
| Period | ||||||||||||
| following | ||||||||||||
| due date | ||||||||||||
| before | ||||||||||||
| Critical | Corrective | Corrective | Incremental | |||||||||
| Weighting | Milestone | Assessment | Assessment | Corrective | ||||||||
| Critical Milestones | Factor % | Due Date | takes effect | ($)1 | Assessment1 | |||||||
1) Final Transition Plan per Section
2.3.1 of the Agreement
|
0 | % | 11/30/04 | One (1) week | $[***] | None | ||||||
2) Data Center Development Environment
|
0 | % | 12/30/04 | One (1) week | $[***] | None | ||||||
3) Phase 1 Network (connection to
Hillsboro-Redmond
|
0 | % | 02/01/05 | One (1) week | $[***] | $[***] | ||||||
4) Data Center Production Infrastructure Ready for test |
0 | % | 02/01/05 | Ten (10) calendar days | $[***] | $[***] | ||||||
5) Phase II network connection Remotes/Bellevue |
0 | % | 02/28/05 | One (1) week | $[***] | $[***] | ||||||
6) Voice Production
|
0 | % | 02/04/05 | Ten (10) calendar days | $[***] | $[***] | ||||||
7) Help Desk Cutover and Distributed
Computing Migration
|
0 | % | 03/05/05 | None | $[***] | $[***] | ||||||
8) All applications operating on ACS Infrastructure |
0 | % | 06/19/05 | None | $[***] | $[***] | ||||||
9) Content Management
|
0 | % | 05/09/05 | None | $[***] | $[***] | ||||||
10) Output Services
|
0 | % | 04/04/05 | One (1) Week | $[***] | $[***] | ||||||
11) Final Cutover from Safeco of
Infrastructure services
|
0 | % | 07/31/05 | None | $[***] | Actual incremental costs and expenses incurred by Symetra under the Safeco/Symetra Transition Services Agreement, up to a monthly cap of $[***], and an aggregate cap of $[***] | ||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
-7-
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| Completion Period | ||||||||||||
| Grace | ||||||||||||
| Period | ||||||||||||
| following | ||||||||||||
| due date | ||||||||||||
| before | ||||||||||||
| Critical | Corrective | Corrective | Incremental | |||||||||
| Weighting | Milestone | Assessment | Assessment | Corrective | ||||||||
| Critical Milestones | Factor % | Due Date | takes effect | ($)1 | Assessment1 | |||||||
12) Disaster Recovery Plan
|
0 | % | 04/19/05 | Two (2) weeks | $[***] | $[***] | ||||||
13) Disaster Recovery Event
|
0 | % | Seventy-two (72) hours following the establishment of a DR event | None | $[***] | $[***] | ||||||
The above-referenced Critical Milestone due dates are subject to change upon the mutual,
written agreement of the Parties as a result of the transition planning activities that are
expected to occur following the Effective Date.
| 1 | Provided: (a) ACS has failed to timely achieve a Critical Milestone; and (b) such failure is not excused as provided in Section 2.12.2 of the Agreement, the corresponding Corrective Assessment set forth in the Table above shall be incurred by ACS on the first day following the expiration of the applicable grace period (if any). Further: (c) if ACS continues to fail to timely achieve a Critical Milestone; and (d) such failure is not excused as provided in Section 2.12.2 of the Agreement, incremental Corrective Assessments may be incurred by ACS for each applicable time interval, or portion thereof (such as a week) by which the Critical Milestone is not timely achieved. |
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
-8-
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SCHEDULE 6
TERMINATION FEE
| Termination Charges | ||||||||||||
| During | Contract | Contract | Contract | Contract | Contract | |||||||
| Month | Transition | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||||||
1
|
5,000,000 | 5,000,000 | 4,000,000 | 3,000,000 | 375,500 | 289,286 | ||||||
2
|
5,000,000 | 5,000,000 | 3,916,667 | 2,781,250 | 367,857 | 282,143 | ||||||
3
|
5,000,000 | 5,000,000 | 3,833,333 | 2,562,500 | 360,714 | 275,000 | ||||||
4
|
5,000,000 | 5,000,000 | 3,750,000 | 2,343,750 | 353,571 | 244,444 | ||||||
5
|
5,000,000 | 5,000,000 | 3,666,667 | 2,125,000 | 346,429 | 213,889 | ||||||
6
|
5,000,000 | 5,000,000 | 3,583,333 | 1,906,250 | 339,286 | 183,333 | ||||||
7
|
5,000,000 | 5,000,000 | 3,500,000 | 1,687,500 | 332,143 | 152,778 | ||||||
8
|
5,000,000 | 5,000,000 | 3,416,667 | 1,468,750 | 325,000 | 122,222 | ||||||
9
|
5,000,000 | 5,000,000 | 3,333,333 | 1,250,000 | 317,857 | 91,667 |
||||||
10
|
NA |
5,000,000 | 3,250,000 | 1,031,250 | 310,714 | 61,111 |
||||||
11
|
NA |
5,000,000 | 3,166,667 | 812,500 |
303,571 | 30,556 |
||||||
12
|
NA |
5,000,000 | 3,083,333 | 593,750 |
296,429 | (0) |
||||||
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
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SCHEDULE 7
AFFILIATES OF SYMETRA
| 1. | Symetra Financial Corporation | |
| 2. | Symetra National Life Insurance Company | |
| 3. | American States Life Insurance Company | |
| 4. | First Symetra National Life Insurance Company of New York | |
| 5. | Symetra Assigned Benefits Service Company | |
| 6. | Symetra Administrative Services, Inc. | |
| 7. | Symetra Asset Management Company | |
| 8. | Symetra Securities, Inc. | |
| 9. | Symetra Services Corporation | |
| 10. | Symetra Investment Services, Inc. |
-10-
Table of Contents
ATTACHMENT A
BENCHMARKING PROCEDURES
1. Initiation of Benchmarking Procedures. Subject to the timing restrictions set forth in
Section 3 below, if Symetra believes that the Fees are not reflective of the industry’s best rates,
or believes that the SLRs are not reflective of the industry’s best practices, then Symetra shall
have the right to initiate the benchmarking procedures set forth in this Attachment. If Symetra
wants to challenge the competitiveness of the Fees, Symetra shall deliver to ACS a written notice
requesting that the Parties meet to discuss Symetra’s concerns. ACS shall meet with Symetra within
fifteen (15) calendar days following ACS’ receipt of such notice from Symetra, and the Parties
shall exchange any and all relevant information pertaining to the Fees that relate to the items
being challenged. The Parties shall have thirty (30) calendar days from the date of such meeting
to conclude such discussions. If the Parties agree as a result of such discussions to modify the
terms of this Agreement, the Parties will develop and execute an amendment that reflects such
agreed modifications in accordance with Section 19.7 of the Agreement. If the Parties’ discussions
do not result in agreement within such thirty (30) calendar day period, then Symetra shall have the
right to invoke the formal benchmarking procedures set forth below.
2. Benchmarker; Benchmarking Costs. Any benchmarking process initiated hereunder will be
conducted by an independent, industry-recognized benchmarking service provider (“Benchmarker”)
designated by Symetra from among the list of acceptable Benchmarkers set forth below in this
Section or otherwise agreed to by the Parties in writing. ACS and Symetra agree that the following
companies are acceptable to act as the Benchmarker: Gartner, Hackett, Compass and Meta Group.
[***].
3. Benchmarking Procedures. [***]. Promptly following Symetra’s initiation of the
benchmarking process, the Parties shall meet with the Benchmarker for purposes of agreeing upon a
detailed plan for implementing the benchmark (including timelines for ACS’ submission of data to
the Benchmarker and a reasonable time period for concluding the benchmark); provided, however, that
any changes to the Fees that occur as a result of the Benchmarking process shall in all instances
be retroactive to the date on which Symetra first provided ACS with written notice of its desire to
conduct a benchmark as provided in Section 1 above. Pursuant to the mutually agreed plan, the
benchmarking process shall be designed not to disrupt delivery of the Services or the ability for
the Services to be provided in accordance with the SLRs.
The Benchmarker, with input from the Parties, will determine what factors are relevant for
purposes of conducting the benchmark and shall “normalize” all data to obtain relevant comparisons
for purposes of the benchmark. Normalization factors to be taken into consideration by the
Benchmarker may include, without limitation: (a) geographic location of the peer companies; (b)
industry differences affecting information technology costs; (c) economies of scale; and (d)
workload and complexity factors (including operating environment). Other normalization factors may
include, without limitation: (e) the SLRs offered; (f) duration and nature of the contractual
commitment; (g) volume of services being provided; (h) contractual
terms, conditions and allocation of risk; (i) the investment made by the provider in the
customer’s equipment and personnel;
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
-11-
Table of Contents
(j) appropriate overhead; and (k) provisions to ensure the
unique factors of each deal are taken into account by the Benchmarker, including out-of-scope
deliverables.
If ACS fails to provide data or otherwise comply in a timely manner with the requirements set
forth in the mutually agreed benchmark plan, ACS shall have a period of seven (7) calendar days
following its receipt of written notice from Symetra regarding such failure during which to provide
such data or comply with the agreed plan. [***].
4. Review of Benchmark Results.
(a) General. The Benchmarker shall provide a report on the results of the benchmark to both
Symetra and ACS. Within fifteen (15) calendar days following receipt of the Benchmarker’s report,
Symetra and ACS will meet to jointly review the benchmark results.
(b) Fee Disparities. If the Benchmarker’s report concludes that the then-current aggregate
Fees for any benchmarked Service is greater than the Benchmarker’s market-based average aggregate
fees for such Service then: (i) if the difference between the rates payable hereunder and the
rates identified by the Benchmarker (the “Rate Differential”) is [***] percent ([***]%) or less,
the Fees payable hereunder shall remain unchanged; (ii) if the Rate Differential is greater than
[***] percent ([***]%), then the Fees payable hereunder shall be reduced by an amount necessary to
cause the Rate Differential to be [***] percent ([***]%).
5. General Agreement of Cooperation. The Parties acknowledge that the benchmarking procedures
described in this Attachment will require further definition and clarification as the Parties begin
actual implementation of the benchmark. The Parties shall cooperate in good faith with one another
and with the Benchmarker to reach reasonable and timely agreements on such further definition and
clarification. To the extent the Benchmarker reasonably establishes that certain definitions,
procedures and methodologies are widely used in information technology benchmarking, the Parties
agree to generally rely on the Benchmarker’s definitions, procedures and methodologies for guidance
in reaching agreement. Further, the Parties acknowledge that in reaching the final results of the
benchmark, the Benchmarker will be required to exercise its professional judgment and discretion in
certain matters and, assuming such judgments are within established industry practices for
information technology benchmarking, the Parties will defer to the conclusions of the Benchmarker.
ACS acknowledges that Symetra views the benchmark procedure described in this Schedule as a
critical inducement to Symetra’s agreement to many of the terms of this Agreement, including the
Term and termination rights provided for in the Agreement, and therefore ACS agrees that it will
cooperate in good faith to accomplish the objectives of the benchmark procedure for the benefit of
Symetra.
6. Benchmark Metrics. At their highest level of classification, the Service Tower Services to
be provided by ACS are the Service Towers identified in Section 2.2.1 of the
Agreement. ACS will be apprised of the specific Services or sub-Services (metrics) that will
be included in the scope of the benchmark sufficiently in advance of the benchmarking study so that
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra Financial Corp., this information has been filed separately with the Securities and Exchange Commission.
-12-
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ACS can establish administrative processes to capture the necessary metric data. The exact metrics
to be included in the benchmark study will be contingent upon: (a) the detail in which the
Benchmarker maintains cost, pricing and other relevant data within its database; and (b) ACS’
ability to capture pricing and other relevant information at the desired level of detail. The
following table is shown solely as an example of the types of metrics that may be included in the
benchmarking study:
| Service Tower Services | Possible Benchmark Service/Sub-Service | |
Help Desk or Call Center
|
Cost per contact | |
| Cost per call | ||
Desktop Management
|
Cost per seat (hardware, standard software) | |
| Cost per seat (maintenance and support) | ||
Distributed Computing
Services and Web Hosting
Services
|
Cost per Server Unix Operation & Maintenance Cost per server NT Operation & Maintenance Cost per AS400 system operations and maintenance Cost per kGEMS |
-13-
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ATTACHMENT B
SYMETRA SITES
| Approximate | ||||||
| Number of Users | ||||||
| Office City Location | Address | (in 2005) | ||||
New Symetra Headquarters
|
777 108th Avenue NE, Bellevue, WA 98004 | 1008 | ||||
Indianapolis, IN. (SRMS)
|
3600 Woodview Trace Suite 301, Indianapolis, IN 46268 | 12 | ||||
Boston, MA
|
50 Congress Street, Suite 420, Boston, MA 02109 | 5 | ||||
South Windsor (Hartford), CT
|
1170 Ellignton Road, South Windsor, CT 06074 | 25 | ||||
Conshohocken, PA
|
One First Ave, Conshohocken, PA 19428 | 6 | ||||
Pittsburgh (Bethel Park), PA
|
2000 Oxford Drive Suite 490, Bethel Park, PA 15102 | 5 | ||||
Clairmont (Atlanta), GA
|
2957 Clairmont Road Suite 400, Atlanta, GA 30329 | 11 | ||||
Miami, FL
|
7300 NW 19TH ST., Street. 205, Miami, FL 33126 | 31 | ||||
Woodstock, IL
|
224 W. Judd Street, Woodstock IL 60098-3127 | 1 | ||||
| Approximate | ||||||
| Number of Tele- | ||||||
| Remote Tele-workers | Workers | |||||
| City | Address | (in 2005) | ||||
Lake Oswego (Portland), OR |
5 | |||||
Portland, OR |
1 | |||||
Aliso Viejo-SoCal, CA |
3 | |||||
San Diego, CA |
10 | |||||
Golden, CO |
1 | |||||
Richardson (Dallas), TX |
13 | |||||
Overland Park, KS |
3 | |||||
Cincinnati, OH |
4 | |||||
Hoffman Estates
(Chicago), IL |
7 | |||||
Duluth (Atlanta), GA |
13 | |||||
Fenton-South, MO |
1 | |||||
Maitland, FL |
1 | |||||
Doylestown, PA |
2 | |||||
Wexford, PA |
2 | |||||
Chicago, IL (Hoffman Estate) |
4 | |||||
-14-
Table of Contents
Attachment C
Transition Plan
Initial Draft of Transition Plan
Symetra Transition Program
Transition Plan
Initial Draft of Transition Plan
Symetra Transition Program
Confidential Information
Table of Contents
Symetra Transition Program
Table of Contents
Initial Transition Plan
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| 1 | Introduction |
| This preliminary Transition Plan is provided as Attachment C to the Agreement. The Parties acknowledge and agree that this plan is only intended to be an initial draft of the Transition Plan and will be replaced by a detailed Transition Plan in accordance with Section 2.3.1 of the Agreement. |
| 1.1 | Detailed Transition Plan Background |
| The detailed transition plan will be developed to leverage the latest technology and the best in class practices ACS uses to support all of our Business Process and Information Technology Outsourcing clients. This approach provides a cost-effective solution insuring high performance levels, mitigation of risks, and flawless execution. | |||
| In the plan, we address the approach for services transition support (section 4.1 Transition Approach for Services Transition), the approach for data center’s mainframe and midrange systems (section 4.2 Transition Approach for Data Center Migrations), the approach for knowledge transfer (section 4.3 Transition Approach for Knowledge Transfer), and the approach for testing (section 4.4 Transition Approach For Testing). Additionally, we discuss the program key milestones, program schedule, and Symetra acceptance of the program’s criteria for success. | |||
| As a service organization that provides timely, accurate and dependable services, ACS brings numerous benefits. ACS offers Symetra unparalleled success in delivering outsourcing services and the knowledge gained through more than 15 years of experience. From this experience, we know that Symetra satisfaction depends on the availability, efficiency, flexibility and reliability of ACS services. And satisfaction will drive every responsibility Symetra entrusts to ACS. |
| 1.2 | Detailed Transition Plan Overview |
| The transition plan, supplemental management plans, and detailed program plan schedule are critical components of a successful outsourcing agreement. The purpose of these plans — managed by the ACS Transition Management Office (TMO) — is to provide a comprehensive reference source of project plans, activities, deliverables and resources for the successful completion of the Symetra Transition Program. | |||
| The transition plan acts as a road map for program and project team members. The ACS transition manager will provide leadership in the completion of tasks and resolution of issues that arise throughout the transition. A key to the plan’s success is continuous communication between all team members and active client participation. The program scope and approach are detailed within the transition plan. | |||
| The roles, responsibilities, and project management processes that will be used to manage the program are defined in a supplemental set of management plans. The supplemental plans define the strategies and process sets for communications, risk, quality, schedule, and change management. |
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| 2 | Program Scope |
| The following subparagraphs describe the scope of the Symetra Transition Program that will be managed by the ACS Transition Management Office. |
| 2.1 | In Scope |
| • | Help Desk Transition | ||
| • | Remedy Implementation | ||
| • | Security Transition | ||
| • | End User Computing Transition | ||
| • | Asset Management Transition | ||
| • | Messaging Transition | ||
| • | Disaster Recovery Transition | ||
| • | NWSC Data Center Migration | ||
| • | Content Management | ||
| • | Output Processing | ||
| • | Voice Services | ||
| • | Data Network Services |
| 2.2 | Out of Scope |
| 2.2.1 | Activities Out of Scope of ACS Contract |
| • | TBD |
| 2.2.2 | Activities In Scope of ACS Contract, Out of Scope for Transition |
| • | In-flight projects | ||
| • | TBD |
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| 2.3 | Measures of Success |
| 2.3.1 | Client Business Objectives |
| The following bullet, from the ACS RFP response, is a high level recap of the selected Symetra sourcing objectives that directly applies to the transition program. |
| § | Smoothly and successfully transition Symetra to a new IT infrastructure in the required time frame. |
| 2.3.2 | Program Objectives |
| Meet all critical deliverables dates. This objective will be measured by the supplemental quality management plan. | |||
| Complete the transition with minimum disruption to Symetra IT and Symetra business units. The TMO Client Satisfaction Survey will measure the success of this objective. | |||
| Build a solid relationship between ACS and Symetra. The TMO Client Satisfaction Survey will measure the success of this objective. Stay within budgetary parameters. The SBU Management team will measure the success of this objective through the P&L. The ACS TMO will also implement and measure the success of the TMO portion of the budget through execution of the TMO financial management plan. |
| 2.4 | Stakeholders |
| 2.4.1 | Symetra |
| • | TBD |
| 2.4.2 | ACS |
| • | Solutions Management | ||
| • | West Region | ||
| • | Operations and Engineering | ||
| • | HR |
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| • | Finance | ||
| • | SalesProgram Dependencies |
| 2.5.1 | Transition Program Dependencies on Non Program Areas |
| • | Symetra Bellevue Facility Complete by TBD | ||
| • | ACS has signed contract with CompuCom | ||
| • | TBD |
| 2.5.2 | Non Program Areas Dependencies on Transition Program |
| • | TBD |
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| 3 | Project Boundaries |
| This section describes other factors that can affect the scope of the program and a summary of the management plans that will be used to manage the delivery of program deliverables. |
| 3.1 | Situation Analysis |
| This section of the plan identifies the constraints and assumptions that exist for the program. Program assumptions are statements taken for granted or truth that define the scope of the program. Constraints are restrictions that affect the scope of the program. Both are circumstances and events that need to be managed for the program to be successful but are outside the total control of the program team. The assumptions and constraints provide a historical perspective when evaluating the program’s performance and determining justification for program-related decisions and direction. |
| 3.1.1 | Assumptions |
| • | Network and hardware vendors will be able to deliver equipment and professional services within industry standard times. | ||
| • | Safeco will allow a lift of the OS and all program products. | ||
| • | Symetra user/application data will be segregated on existing or ACS supplied DASD prior to the first “lift”. | ||
| • | Safeco will segregate all archived data prior to the final “lift” | ||
| • | Safeco will allow the installation of an IBM VTS at the RDC and will support the conversion of tape from the STK VSM | ||
| • | TBD |
| 3.1.2 | Constraints |
| • | All Symetra related equipments (servers, network, etc) removed from Safeco RDC no later than date TBD. | ||
| • | TBD |
| 3.2 | Supplemental Management Plans |
| Following is a summary description of the supplemental management plans that will be utilized to manage program deliverables. |
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| 3.2.1 | Communications Management Plan |
| The Communications Management Plan defines the following areas: |
| • | Program structure including program governance, organization, and roles and responsibilities | ||
| • | Program communications schedule | ||
| • | Program contacts | ||
| • | Issue and action management process | ||
| • | Escalation management process |
| 3.2.2 | Risk Management Plan |
| The Risk Management Plan defines the following areas: |
| • | Risk definition | ||
| • | Risk tracking tool | ||
| • | Risk management process | ||
| • | Risk escalation process |
| 3.2.3 | Quality Management Plan |
| The Quality Management Plan defines the following areas: |
| • | Quality management events | ||
| • | Quality management roles and responsibilities | ||
| • | Quality management schedule |
| 3.2.4 | Schedule Management Plan |
| The Schedule Management Plan defines the following areas: |
| • | Schedule development | ||
| • | Schedule management | ||
| • | Schedule change control |
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| 3.2.5 | Change Management Plan |
| The Change Management Plan defines the following areas: |
| • | Program change management process | ||
| • | Roles and responsibilities | ||
| • | Change Control Board (CCB) | ||
| • | Change request tracking and reporting |
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| 4 | Program Approach |
| The following paragraphs describe the approach that will be utilized to transition the Symetra infrastructure to ACS. |
| 4.1 | Transition Approach for Knowledge Transfer |
| Without limiting any of ACS’ knowledge transfer obligations set forth in the Agreement including, without limitation, those set forth in Section 10.3.1, the objective of the following knowledge transfer process is to provide a seamless transition of knowledge, required to operate and support the Symetra’s processing environments, from the current support organizations to the ACS support organizations. | |||
| There are four major elements related to knowledge transfer: |
| • | Initial Knowledge Transfer | ||
| • | Follow-up Knowledge Transfer | ||
| • | Interface Process Development | ||
| • | Operations Extended Site Visit |
| 4.1.1 | Initial Knowledge Transfer |
| At the kickoff of the transition project, the ACS transition team is established. Information from due diligence and the contract is “transitioned” to the new team members, and a kickoff meeting is held in which all team members are informed of the latest details of the transition project. | |||
| ACS team members, representing the involved functional areas, meet with their counterparts at Symetra and/or Safeco via site visits or conference calls in order to: |
| • | Validate the transition, implementation, and migration approaches | ||
| • | Complete detailed design to the level required for initial procurement | ||
| • | Prepare to assume operational responsibility |
| The ACS transition manager works with Symetra’s transition manager to set up the initial knowledge transfer meetings. This includes establishing the scope, timing, location, and participants for the required breakout sessions. During this sub-phase, ACS requires input from Symetra and/or Safeco Subject Matter Experts (SMEs) in the following areas: |
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Subject Matter Expertise Required
¨ Hardware
|
¨ Software | ¨ Network | ||
¨ Systems administration
|
¨ Storage management | ¨ Communications | ||
¨ Program products
|
¨ Capacity planning | ¨ Automation | ||
¨ Console operations
|
¨ Media services | ¨ Tape management | ||
¨ Capacity and
Performance Mgmt
|
¨ Incident, problem and change management | ¨ Scheduling and production control | ||
¨ Data security
|
¨ Print and Mail Services | ¨ Disaster recovery | ||
¨ Desktop Management
|
¨ Assets Management | ¨ Service desk |
| The following are examples of initial knowledge transfer requirements for a representative set of functional areas: |
| 4.1.1.1 | Technical Services Areas | ||
| ACS Transition Team members representing technical services areas (e.g. OS/390, CICS, DB2, etc.) will meet with Symetra and/or Safeco personnel currently performing the same functions. The purpose of the meetings is as follows: |
| • | Validate the transition, implementation, and migration approaches | ||
| • | Complete detailed design to the level required for initial procurement | ||
| • | Prepare to assume operational responsibility |
| Ø | Complete a technical questionnaire and obtain related technical documentation | ||
| Ø | Review operating system and/or program product implementation | ||
| Ø | Review support processes and procedures | ||
| Ø | Review standards and conventions | ||
| Ø | Review application support requirements |
| 4.1.1.2 | Operations Areas | ||
| ACS Transition Team members representing Operations Areas (e.g. Console Operations, Help Desk, Scheduling, etc.) will meet with Symetra |
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| and/or Safeco personnel currently performing the same functions. The purpose of the meetings is as follows: |
| • | Validate the transition, implementation, and migration approaches | ||
| • | Complete detailed design to the level required for initial procurement | ||
| • | Prepare to assume operational responsibility |
| Ø | Complete a technical questionnaire and obtain related operational documentation | ||
| Ø | Review operations processes & procedures, hours of operation | ||
| Ø | Review help desk environment and problem management procedures | ||
| Ø | Review scheduling package implementation, schedules, and administrative processes & procedures | ||
| Ø | Review tape management package implementation, tape library, and tape drive configuration, processes & procedures, off site requirements, backup & recovery requirements, foreign tape requirements, mail tape requirements | ||
| Ø | Review standards and conventions | ||
| Ø | Observe daily processes for operations, production control & scheduling, & tape operations & administration | ||
| Ø | Review interfaces to other platforms | ||
| Ø | Review application support requirements |
| 4.1.1.3 | Application Areas |
| ACS Transition Team members representing both technical and operational areas meet with client personnel knowledgeable about the application portfolio. The purposes of the meetings are to assist ACS with packaging applications into groupings for the various phases of the data center migration. The main application suite discussion points for these meetings are as follows: |
| • | Servers platforms | ||
| • | Database systems utilized |
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| • | Application and network interfaces (internal and external) | ||
| • | Maintenance windows | ||
| • | Outage tolerances |
| 4.1.2 | Follow-Up Knowledge Transfer | ||
| ACS works with Symetra and/or Safeco to establish access rights and preliminary connectivity to Symetra system. This access is used to allow ACS to further its data collection activities without directly impacting Symetra or Safeco personnel. The ACS Project Manager works with the Symetra Transition Coordinator to determine the “ground rules” for access and to determine if there are interim means (e.g. web, dial-up) to access the systems. Once an agreement is reached, the ACS Data Security Team identifies access requirements for ACS team members and submits formal requests. Symetra and/or Safeco then works with ACS to establish connectivity and process the access requests. | |||
| After the initial knowledge transfer activities, further interaction between ACS team members and their Symetra and/or Safeco counterparts is conducted to finalize and validate the detailed design for each transition, implementation, and migration area. | |||
| The knowledge transfer process is strengthened as the ACS project team begins to put the information to use. For the technical groups, this involves building and testing the new system and networking environments at ACS. For operations groups, this involves setting up and rehearsing operations procedures such as system start-up, shutdown, and monitoring. |
| 4.1.3 | Interface Process Development | ||
| During the knowledge transfer process, ACS team members collect process requirements from their meetings with Symetra personnel. These requirements are then merged with ACS core processes to create new interface processes and procedures. In a typical transition, interface processes are developed, at a minimum, for problem management, change management, and service requests. The ACS Service Delivery Manager spearheads the development of interface processes. Technical and operational teams also provide significant input into this activity. Major tasks include the following: |
ACS team members collect requirements.
| • | An interface process model is developed and reviewed with involved Symetra personnel. | ||
| • | ACS updates the process model based on Symetra’s input. |
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| • | The interface model is again reviewed with and presented for approval by involved Symetra personnel. | ||
| • | ACS rolls out the final approved model to ACS personnel. | ||
| • | Symetra rolls out the final approved model to Symetra personnel. |
| 4.1.4 | Operations Extended Site Visits | ||
| Four to six weeks prior to the start of cutovers, ACS personnel participate in extended site visits in order to obtain hands-on experience while working side-by-side with their Symetra and/or Safeco counterparts. |
| 4.2 | Transition Approach for Services Transition | |
| The following paragraphs describe the service transition project life cycle and the approach for the seven projects that comprise the service transition portion of the Symetra transition program: |
| • | Help Desk Transition | ||
| • | Remedy Implementation | ||
| • | Security Transition | ||
| • | End User Computing Transition | ||
| • | Messaging Transition | ||
| • | Assets Management Transition | ||
| • | Content Management Transition |
| 4.2.1 | Project Life Cycle for Service Transition Projects | ||
| ACS employs a standard system development & implementation approach to each defined discipline within the transition. The following provides a general description of the approach applied to each area of this transition: | |||
| Analysis & Knowledge Transfer |
| • | See Section 4.1 for a detailed description of Knowledge Transfer. |
| Design & Procurement |
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| • | Discovery — ACS will identify current environment information and obtain knowledge of existing processes for Symetra services support. This will be accomplished through assignments of transition team members and knowledge transfer sessions. | ||
| • | Obtain System/Workflow Inputs — ACS will obtain input from Symetra business workflow, policy & procedures, incident management, change management and reporting. | ||
| • | Procurement – Initiate procurement of hardware, software, or services required to complete the deliverable. |
Construct
| • | Development — ACS will build and implement the necessary hardware, software and business workflow processes necessary to support the defined requirements. This may also include set up of physical space and network connectivity to ACS. | ||
| • | Training – Determine training requirements based on the existing knowledge base and the solution to be implemented. Define and execute a training program based on these requirements. | ||
| • | Testing and Quality Assurance — This includes development of test plans, configuration test, dry run test, and Go/No Go decision. |
Implement
| • | Following a “go” decision based on successful testing and approval, the implemented solution is put into production. | ||
| • | During post implementation there is a defined “critical care” period where all activities associated with the implemented solution are closely monitored and issues or incidents are addressed by the transition team. Once this “critical care” period is over, incident management will be addressed by the defined operational support organization. |
Close
| • | Complete turnover from the TMO to the SBU Management team. | ||
| • | Obtain customer concurrence that deliverables associated with this effort have been met | ||
| • | Obtain customer approval to close project | ||
| • | Complete administrative project close activities |
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| 4.2.2 | Help Desk Transition | ||
| ACS will provide in-scope help desk services for Symetra from our NWSC. A large portion of the transition timeline is dedicated to knowledge transfer and building appropriate processes that the new agents can use to support Symetra. The transition will take approximately TBD days to complete. The transition activities associated with the Help Desk transition will consist of: | |||
| Knowledge Transfer sessions with and shadowing of the current Help Desk staff. | |||
| Implementation of Help Desk tools such as Remedy and Aspect | |||
| Implementation of Automatic Call Distribution (ACD) and Knowledge Management Systems | |||
| Additional activities required for this transition beyond the approach activities described above include: | |||
| Design |
| • | Discovery to define the steps for each activity such as Remedy setup, process improvements, and relocation of the help desk to the NWSC. | ||
| • | TBD |
Construct
| • | Infrastructure Development — ACS will complete the infrastructure set up for the help desk. ACS will install the required network connectivity between Symetra sites and the NWSC, configure the agent workstations, and establish access to required systems. | ||
| • | Process improvements and efficiencies will be implemented incrementally, utilizing best practices employed by ACS. | ||
| • | ACS will hire and train 2 additional Help Desk agents. | ||
| • | TBD |
Implement
| • | At cutover, the Symetra PBX will be updated to forward Help Desk calls to NWSC. | ||
| • | TBD |
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| 4.2.3 | Remedy Transition | ||
| Problem and change management will be performed from the Remedy system in the NWSC. Symetra employees that require access to this system in order to enter problem tickets or review them will be given the appropriate access. The transition to the Remedy system will take place in conjunction with the migration of the help desk, approximately TBD days after contract sign. | |||
| The Remedy transition will consist of moving Symetra users onto the ACS Remedy application. Symetra will be able to take advantage of a tool that has been built around industry best practices. | |||
| Design |
| • | TBD |
Construct
| • | TBD |
Implement
| • | TBD |
| 4.2.4 | Security Transition |
The security transition will address Symetra’s application and data security
requirements and will provide a structured migration, knowledge transfer and management
process for physical and logical security of in-scope systems, data, infrastructure and
environments. The transition will run concurrent with the data center migration
activities.
| 4.2.4.1 | Logical Security Operations Transition | ||
| This methodology provides for 24 x 7 threat assessments, incident response and threat mitigation, regulatory assessments, risk or vulnerability assessments and remediation. The goal of the Information Security Team is to provide Symetra a secure network that meets or exceeds the stated security requirements with confidentiality, integrity and availability. | |||
| ACS will deliver a secure computing environment for Symetra and its user community through the following activities: | |||
| Design |
| • | Policy and procedure gap analysis | ||
| • | Firewall configuration rule review |
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| • | IDS monitoring review | ||
| • | Classification of data review | ||
| • | Roles and responsibility rules | ||
| • | Management tools/reporting | ||
| • | Escalation procedures | ||
| • | Software support and SLA metrics | ||
| • | TBD |
Construct
| • | Security platform selection, testing and implementation | ||
| • | Intrusion detection systems placement | ||
| • | Vulnerability assessment and threat analysis | ||
| • | Monitoring and bandwidth analysis | ||
| • | Review application configurations | ||
| • | Test and validate escalation procedures | ||
| • | Identify problems/corrective actions | ||
| § | TBD |
Implement
| • | Transition to active monitoring | ||
| • | TBD |
| 4.2.5 | End User Computing Transition | ||
| The transition approach documents the major deliverables necessary to complete a successful transition of End User Computing services from Symetra to ACS. Desktop management services will be provided for the Symetra environment. These servers consist of overall desktop engineering, configuration management, and software distribution. An SMS server will be set up in the Symetra headquarter building to enable ACS to perform electronic software distribution and asset tracking to all of the Symetra desktops. ACS will contract with a third-party vendor to conduct break/fix and IMACs in the remote Symetra locations. These |
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| services include installation, maintenance and user support. The transition activities associated with Desktop Support will consist of Knowledge Transfer sessions with and shadowing of the current Desktop Support staff. |
| 4.2.5.1 | Third Party contracts | ||
| TBD |
| 4.2.5.2 | Transition Approach | ||
| The following are the major activities and milestones that are part of the ACS Desktop Services approach: | |||
| Design |
| • | Obtain organizational charts and map to ACS support organization. | ||
| • | Review Symetra and ACS roles and responsibilities. | ||
| • | Review Symetra, ACS and vendor interface procedures. Review the times, days and procedures for the regularly scheduled status and support services meetings. | ||
| • | Review the formats of the existing reports and escalation models (to include VIP support). | ||
| • | Conduct knowledge exchange activities. | ||
| • | Review the service level tracking and reporting procedures. | ||
| • | TBD |
Construct
| • | Obtain working space for the ACS onsite staff and plan for implications of remote support staff. | ||
| • | Update Symetra, ACS and vendor interface procedures. | ||
| • | Establish the times, days and procedures for the regularly scheduled status and support services meetings. | ||
| • | Update the formats of the existing reports and escalation models (to include VIP support). | ||
| • | Update the service level tracking and reporting procedures. |
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| • | Develop the staff augmentation plan, as necessary | ||
| • | Finalize Hardware Support Services | ||
| • | Develop the support services turnover plan. | ||
| • | TBD |
Implement
| • | Conduct contract administration turnover as required. | ||
| • | Establish the accounting and billing processes for third party contracts | ||
| • | Incorporate ACS tools, processes, and procedures into the current Desktop Services environment. | ||
| • | Implement next day remote depot | ||
| • | Execute the support services turnover plan. | ||
| • | TBD |
| 4.2.6 | Disaster Recovery Transition | ||
| Disaster recovery services will be provided through the ACS Continuous Availability Services (CAS) team. ACS will review Safeco’s current plan as requested in the RFP. At the conclusion of each phase of the data center migration (mainframe and servers), ACS will develop disaster recovery procedures specific to the needs of Symetra for the new servers located in the NWSC. The procedures will be in place TBD days after the completion of each data center phase. | |||
| The following major activities drive the ACS Disaster Recovery (DR) transition approach: | |||
| Design |
| • | Assign a DR coordinator and establish a DR support team for the participation in DR planning sessions, testing exercises and post-testing review meetings. | ||
| • | Review existing Symetra DR Plan | ||
| • | Conduct technical and business walk-through of Symetra existing DR plan. | ||
| • | Analyze and define Symetra existing DR roles and responsibilities. |
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| • | Identify any business functions that require special equipment, network connectivity, supplies or unique workspace environments. | ||
| • | TBD |
Construct
| • | Develop and maintain complete listing of application files needed for recovery processing. | ||
| • | Define application availability recovery times and prioritize each application’s importance in the business environment. | ||
| • | Develop and maintain application file backup and recovery procedures. | ||
| • | Administer and coordinate activities with non-ACS contracted DR service providers. | ||
| • | Develop alternate processing methods for maintaining continuity of business transactions that have been identified as critical for client survival; these methods are planned for interim use following a disaster until usual information processing activities can occur at an alternate site. |
Implement
| • | Review new DR plan with Symetra | ||
| • | Gain approval/acceptance of new DR plan from Symetra. | ||
| • | Perform turnover of DR plan to Account SDM |
| 4.2.7 | Asset Management Transition | ||
| The Asset Management transition will be executed following ACS’s standard implementation processes. Transition will be accomplished in two phases. The first phase involves performing an initial inventory collection. The second phase will address rollout of the Asset Management component of Remedy. Additional activities required for this transition include: | |||
| Design |
| • | Initial Inventory Plan — ACS will develop a plan for the initial inventory assessment. | ||
| • | TBD | ||
| • | The initial inventory baseline will be provided to Symetra for review and approval. |
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| • | Desktop Software Inventory – The baseline inventory will be provided electronically for those desktops and laptops that are network attached. | ||
| • | Hardware Maintenance and leasing contracts will be captured and associated with the inventory in the Asset Management Application. | ||
| • | Obtain Service Inputs — Interim inventory change controls will be established based on input from Symetra. |
Construct
| • | Initial Inventory — ACS will conduct an asset inventory assessment capturing the required attributes for each asset type. | ||
| • | Application Setup – ACS will establish a client’s instance in the Asset Management component of Service Center. Identify appropriate users of the application and perform the necessary user setup. | ||
| • | Data Import – ACS will work with Symetra to verify the accuracy of the initial inventory. Corrections to the data will be made prior to importing into the Asset Management application. | ||
| • | Process/Procedures – ACS will develop the inventory change control procedures for use, management, and administration of the Asset Management application. | ||
| • | Training – Symetra employees utilizing the Asset Management application will be trained on its use and the appropriate change control procedures. | ||
| • | Testing and Quality Assurance — This section will include import data verification, Dry Run Testing, and Go/No Go Decision for implementation into production. |
Implement
| • | Upon successful “go” decision, the inventory will be baselined and changes to this inventory will be managed through established change control processes | ||
| • | Perform turnover to Account SDM |
| 4.2.8 | Content Management Transition |
Please see attached Appendix 1 to this Attachment C.
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| 4.3 | Transition Approach for Data Center Migrations | |
| For all platforms, the transition approach incorporates a series of network and application tests to ensure a seamless migration. See section 4.4 (Transition Approach for Testing) for a detailed description of the testing approach. | ||
| The following paragraphs describe the data center migration project life cycle and the approach for data center migration portion of the Symetra transition program: |
| 4.3.1 | Project Life Cycle for Data Center Migration Projects | ||
| ACS employs a standard system development & migration approach to each defined discipline within the transition. The following provides a general description of the approach. | |||
| Knowledge Transfer |
| See Section 4.1 for a detailed description of Knowledge Transfer. |
| Design and Procurement |
| During knowledge transfer, ACS will collect information that is required to finalize the system configuration and network design. Final detailed specifications are developed for hardware, software, and network circuits/equipment. ACS then initiates the procurement process for the required resources. |
| Construct |
| For Symetra, ACS will install similarly configured hardware in the NWSC. This approach eliminates the need to physically move any hardware during the actual cutover and provides for easy fallback in the event of a cutover problem. | |||
| Data Copies | |||
| Per standard process, ACS will make four full copies of the system for systems operated at the RDC. The first copy establishes a base for initial customization, network unit testing, and application unit testing. The second copy is a data refresh to facilitate integrated application/network testing. The third copy occurs at the dry run, and the fourth copy occurs at the hot cut. | |||
| For systems being moved by tape copy, all processing must be stopped while the copies occur in order to ensure data integrity. | |||
| Customization and Start-Up of Systems |
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| Once the new hardware is installed at ACS and the first data copy is completed, the customization process begins. Minimal changes will be made to the systems software environment. The following paragraphs describe typical activities for the mainframe and open systems environments. | |||
| Mainframe | |||
| The migration team will establish the ACS internal systems integration processes, apply the necessary software maintenance upgrades and authorization pass-codes, set up the internal automation and systems support processes, and install additional systems utilities. | |||
| The Migration Team will make no changes to the applications environment. All logical definitions remain the same, and all systems software products should function the same. ACS will not add new versions, releases or maintenance to the environment without Symetra’s prior approval. | |||
| Wintel Systems | |||
| Operating Systems — ACS will perform a fresh OS installation of the current OS on all servers unless a change is specifically requested by Symetra, designated by the hardware vendor, or specific application vendor for supportability reasons. | |||
| In most cases, the approach for the Wintel environment will be fresh application installs using vendor supplied media or downloadable files from their web sites. The configuration and customization of these and other products will be performed cooperatively between ACS and Symetra. | |||
| Exceptions to the product installation rule are when Symetra engages vendor supplied professional services or when the entire system image of the source server can be moved to the target server. Symetra will be responsible for overseeing efforts related to vendor assistance and engage ACS on an as needed basis to address environmental or operating system requirements. | |||
| Testing | |||
| A comprehensive testing methodology is executed to verify the transition process is sound and the systems and network function properly. This includes unit testing for network and application components, integrated application/network testing, and a dry run that is a dress rehearsal of the final cutover. For more information, refer to the Section 4.4 (Transition Approach for Testing). | |||
| Prior to the Dry Run, a “freeze” for discretionary changes is required to ensure that the systems are stabilized for the cutover. This “freeze” is in |
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| effect beginning one week before the “dry run” and extends one week after the “hot cut”. |
| Implement |
| The Hot Cut is the final move (cutover) of the Symetra processing environment to ACS. The general scenario for the Hot Cut is as follows: |
| • | Quiesce systems at RDC | ||
| • | For tape copy: |
| Ø | Perform disk-to-tape copies at RDC | ||
| Ø | Transport copy tapes to ACS | ||
| Ø | Perform tape-to-disk restores at ACS |
| • | Cut network over to ACS | ||
| • | Transport tape library to ACS | ||
| • | Perform system customization at ACS | ||
| • | Perform Customer Application Acceptance Test | ||
| • | Make “go” decision | ||
| • | Start production processing at ACS | ||
| • | Transport off-site tapes to ACS vault |
| ACS will develop the master cutover plan and manage the move. Symetra is responsible for developing and executing application test scripts. This event will require participation from ACS technical, operations, and network groups; Safeco technical, operations, network, and Symetra application groups; and a select group of business users. | |||
| Fallback | |||
| In the event that a catastrophic problem is encountered at the Hot Cut, the transition approach employed by ACS allows for a controlled fallback to Symetra original systems at RDC. As part of developing the cutover plan and script, ACS also develops a fallback plan based on potential “showstoppers” that are pre-identified by ACS and Symetra. The following paragraphs highlight key aspects of ACS’ fallback approach. | |||
| ACS works with Symetra to develop an Acceptance Test that is executed at the final Hot Cut. The Acceptance Test checks the validity of the “just-moved” systems to ensure that all business-critical functions are working |
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| properly prior to making a “go” decision and starting production processing at ACS. |
| If a major problem surfaces, ACS, along with its supporting vendors, works to resolve the problem within the pre-designated outage window. If the issue cannot be resolved to the satisfaction of Symetra, the fallback plan is implemented. Since the original systems have not been dismantled, the fallback plan is to point the network back to the original systems and restart the production applications. This is done with little or no loss of data. | |||
| Regarding the tape library, ACS works with Symetra prior to the Hot Cut to identify if there are any critical master tapes that need to be copied by Safeco prior to the cutover. In the event that fallback is required, the copies will remain at the original data center and will be used until the tape library can be returned. | |||
| If problems are encountered after production processing is started in the new processing environment, ACS, with its supporting vendors and Symetra, works to resolve the issues and move forward on the systems at ACS. | |||
| Following a “go” decision based on successful testing and approval, the implemented solution is put into production. | |||
| During post implementation there is a defined “critical care” period where all activities associated with the implemented solution are closely monitored and issues or incidents are addressed by the transition team. Once this “critical care” period is over, incident management will be addressed by the defined operational support organization. |
Close
| • | Complete turnover from the TMO to the SBU Management team. | ||
| • | Obtain customer concurrence that deliverables associated with this effort have been met | ||
| • | Obtain customer approval to close project | ||
| • | Complete administrative project close activities |
| 4.3.2 | Detailed Symetra Migration Approach | ||
| PHASES/APPLICATION GROUPINGS |
Phase 1
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| • | TBD |
Phase 2
| • | TBD |
Phase 3
| • | TBD |
| 4.3.3 | Network |
| 4.3.3.1 | Managed Network Services | ||
| ACS will design a network infrastructure to support the mainframe and server migration from the Safeco Redmond data center (RDC), and applicable remote sites, to the ACS NWSC in Hillsboro. The appropriate network infrastructure will be built for the systems that will be housed in the NWSC and at Symetra headquarters in Bellevue, Washington. There will be enough bandwidth installed to support remote access to the servers and mainframe. Network connectivity will take approximately 90 days to install from contract sign date. At that time, the remote sites can be configured and tested on the network which will take approximately 30 days. The voice strategy will consist of implementing a new Avaya PBX solution at the Bellevue, Washington facility, and of managing the existing Avaya switches in six sites and Centrex switches in two sites. | |||
| Upon contract signing, ACS will plan and engineer the installation and establishment of circuit connectivity between the RDC and the NWSC that will be used to facilitate the migration activities. This also will allow the RDC and the NWSC to access the existing Safeco-provided Symetra network as required to support the business. | |||
| As each additional circuit and site is turned up, associated network management services will be installed, configured and made available at the ACS ECC in the Dallas data center-with visibility from the NWSC-to ensure visibility and manageability. After new service has been established at all sites, existing connections will no longer be required and ACS will submit a request to Symetra to disconnect the circuit. This work will be performed in a coordinated and seamless fashion, ensuring an invisible transition from the existing network to the new network with no impact on Symetra users, customers or affiliates. | |||
| As this is a Greenfield network implementation, ACS will manage the acquisition, configuration and staging of new network equipment for deployment to all applicable Symetra sites. ACS will perform the necessary |
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| discovery on the current network state as part of the network engineering transition planning. Network engineering will take into account IP addressing, summarization, application loading, security requirements and traffic patterns. ACS network engineering will ensure that application access is not impacted during the transition of network by performing a traffic analysis of all applications to ensure that application interdependencies are fully understood before services are migrated from the RDC to the NWSC. | |||
| Our transition planning for voice services focuses on implementing standard management practices for change, problem and request management. ACS will establish functional personnel responsibility matrices to identify primary support for locations and equipment. Support queues will be created in ACS Remedy for all Symetra-related problem tickets, changes and requests. We will establish regular meetings between ACS support personnel, vendors and Symetra personnel as appropriate. A daily, weekly and monthly task list will be identified per location with responsibilities clearly defined and assigned. The first 60 days will focus on evaluating the state of the system and process documentation. ACS will identify all required information and document all systems, processes and lacking information. On-call responsibilities will be established and their respective escalation procedures will be documented. |
| 4.3.3.2 | VPN Transition |
TBD
| 4.3.3.3 | Enterprise Command Center | ||
| A follow the sun approach will be used to provide Enterprise Command Center (ECC) services. The ECC’s will be located in Dallas and <ECC loc #2>. Data network connectivity from the NWSC to the ECC locations will be provided by production circuits between the three locations. | |||
| Beginning with Network Test 2, ACS will begin monitoring any ACS-provisioned circuit. ACS will use HP OpenView at the NWSC to manage and monitor the Symetra network including the Symetra LAN and WAN. NetCool will be used as a “manager of managers” to collect data from all infrastructure monitoring systems, including Openview. The NetCool system will communicate with Dallas and <ECC loc #2> NetCool systems so that management and monitoring may be provided by the ACS Enterprise Command Centers in each location. |
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As servers are placed into production in the NWSC data center, the
ECC will begin active monitoring for those servers.
4.3.4 Mainframe
Overview
The mainframe environment will be migrated to the NWSC using a “system
lift and drop” methodology. This methodology entails copying (“lift”)
the operating system, applications, and user data currently in production
at the RDC and restoring (“drop”) them at the NWSC. This approach
ensures that the new mainframe environment is a mirror image of the
production environment, with little or no change introduced during the
transition. The data migration strategy will be a tape migration. ACS
will set up a VTS/ATL device in the Safeco L&I data center and perform a
data migration to this device in order to create the tapes that will be
restored at the NWSC. The mainframe migration to NWSC will take
approximately 120 days from contract sign date.
Methodology
Disk Storage System
ACS will install an IBM 2105 Shark DASD to handle Symetra storage
requirements at our NWSC. ACS will migrate the Symetra mainframe
workload to our NWSC in April 2005 using a tape dump/restore
migration, or system lift. This is a proven methodology and will
minimize cost while retaining data integrity. This methodology also
allows for dry runs (tests) to finely tune the process and to
facilitate user acceptance testing
Tape Storage System
To facilitate the migration to our NWSC, ACS also will install a
temporary tape solution at the existing Safeco RDC.
The hardware will be installed within 60 days of contract signing.
This equipment will consist of an IBM 3494 ATL and a VTS that will
allow transition of Symetra’s tape processing from the existing STK
VSM and 9840 solution.
Modifications to the existing ACS routines on the Safeco systems will
be made, in cooperation with the Safeco systems staff, that will route
all Symetra tape activity to the transition ATL/VTS equipment.
Critical tape data stored on existing STK tapes will be copied to the
3590 media using the IBM 3590 drives.
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All existing 3480 and 3490 tape volumes will be copied to the VTS,
consolidating all Symetra tape processing onto the new IBM technology.
4.3.5 Wintel
Overview
The majority of the Wintel server environment will be migrated to the
NWSC. The servers located in the remote offices will be replaced with ACS
owned hardware that is comparable or better than the technology currently
in place today. ACS will create a Wintel server environment that will
allow for migration of the applications with little or no application
changes. Hardware configurations for the new servers will closely match
the existing servers; enabling us to simply back-up the current server
operating system, applications, and user data and restoring them on the
new servers. Servers that are currently SAN attached will continue to be
SAN attached when replicated at the NWSC. Servers that currently have
internal storage will be converted to SAN-attached during the migration.
The migration will be a multi-phased approach that takes approximately
240 days from contract sign to implement. The number of phases and exact
timing for each server migration will be determined during the Initial
Knowledge Transfer phase as additional information is provided detailing
server/application dependencies and data transfer requirements. The
preliminary plan is to:
| • | Migrate key infrastructure related applications such as Exchange and DNS first | ||
| • | Establish lab-based application testing area for application and data segregation | ||
| • | Migrate lab-tested applications and servers next | ||
| • | Migrate non-critical path servers and applications next | ||
| • | Migrational method is discretional based upon unique nature of application |
Methodology
4.3.6 Output Processing
To quickly and seamlessly migrate Symetra to an efficient and easy to
use outsource print and mail service capable of handling the complexities of
your
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business requirements, the following 10 step project development and workflow
process will be followed:
1. Define Channels of Communication
By ensuring we know the protocol for development and approval process we can
better streamline the project process and set a solid foundation for a smooth
engagement.
2. Define and Approve Project Plan
Build realistic timelines for deliverables and approvals to ensure timely
completion of implementation, testing and go-live functions.
3. Forms Design and Coding
Given the requirements, design the document(s) to accomplish the stated
goals. Special considerations may include bar codes, optical marks and so on.
4. Print Output and Fulfillment Development
Identify the specific criteria for each document output. Establish and
prioritize criteria for each document flow and fulfillment. Test in
production environment, provide samples for approval and document all process
and procedure.
5. Develop and Document Delivery Timelines and Delivery Protocol.
Establish delivery and turnaround time requirements.
6. Establish Protocol and Requirements for Reporting:
Establish requirements for client notification of project completion.
7. Inventory management.
Coordinate the monitoring and replenishing of consumables to ensure
continuous and timely production.
8. Production Auditing and Performance Reviews.
Improvement comes from continually monitoring and reviewing process and
procedure.
9. Evaluation and coordination of process enhancements
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Once possible improvements are identified they have to be weighed and
understood how they will affect the rest of the process.
10. Change Management Process: Establish and maintain procedure.
4.4 Transition Approach for Testing
ACS employs a comprehensive proven testing methodology aimed at ensuring that the
transition process is accurate and that the new systems and network environments will
function properly. The methodology is based on the key elements covered in the following
subsections.
4.4.1 Testing Integration and Refinement
ACS utilizes a building-block approach to testing. System components, network
components, application components, and interfaces are all tested both individually
and then in an integrated fashion. Once the cloned systems are installed at ACS,
the technical support staffs will perform basic systems testing to ensure that the
systems are up and functional. As network circuits and equipment are installed,
the network staff performs standalone testing with providers. At the point these
two areas are ready, three network tests are conducted in order to test
connectivity to the systems. In addition, application unit testing commences using
a small subset of the network. These tests are followed by two integrated
application/network tests. The Dry Run test that follows is a simulation of the
final Hot Cut and involves thorough integrated testing.
The integrated test plan is also known as an “acceptance test”. The acceptance
test is executed at both integrated tests, at the Dry Run, and again at the Hot
Cut. It is rehearsed and refined so that by the Hot Cut, its execution becomes
second nature.
Throughout the transition period, migration processes are repeated, integrated, and
refined. The purpose of this approach is to build a level of proficiency and
confidence in the transition team so that by the time the Hot Cut occurs, execution
of the process is timely and accurate.
4.4.2 Mirrored Systems and Functional Testing
As indicated previously, ACS will install a “mirrored” hardware configuration
on the floor at the NWSC. Disk storage will then be copied and restored “as is” on
a volume-per-volume basis. Although the volumes will be restored to a new hardware
configuration, the new systems and their applications environments will logically
be identical to the original systems. Changes will be limited to
configuration-related items such as hardware configuration, network connectivity,
software authorization codes.
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In light of this methodology, ACS recommends that the Symetra acceptance test plan
be based on a “functional interface testing” approach. This means that Symetra
test scripts focus on testing the interfaces of components of the systems and
network, particularly those that have changed. Selecting small functional subsets
of key applications that exercise targeted systems and network components is an
excellent way to do this.
It is necessary to test the following areas:
| • | Network connectivity – Test inter-platform and intra-platform connectivity; inter-site and intra-site connectivity; connectivity with workstations, network printers, gateways, and other unique devices; transmissions (FTP, EDI, file transfer), dial-up, Internet access, connectivity with business partners, access to value-added networks. It is essential that all connectivity and interfaces be tested. | ||
| • | Application development and support environment – Test access to and function of operating software, utilities, development tools, test-to-production promotion procedures, and QA environments | ||
| • | Applications – Test access to and function of representative sequences of transactions, batch jobs, and cross-platform application interfaces. |
ACS will work with Symetra to identify key interfaces, system components, and
application components that are highly critical candidates for testing.
4.4.3 Test Plans
Symetra will be responsible for developing and executing its acceptance test
plans in accordance with the transition methodology defined by ACS and approved by
Symetra. The following defines the two types of test plans that are applicable.
The Application Unit Test is conducted over a window of approximately two to three
weeks. This type of testing can be done mid-week via TCP/IP access to the cloned
system(s) at ACS. The test plan should contain scripts that Symetra personnel can
execute in order to ensure proper function of system and application components as
well as interfaces to other test systems.
The Acceptance Test Plan is executed four times: at the two Integrated Applications
/ Network Tests, at the Dry Run, and at the Hot Cut. This plan is comprised of a
subset of the functional test scripts. These scripts define “quick hit” tests that
can be performed in a short period to verify that the systems have been
successfully built and the network has been successfully pointed to ACS. At the
Hot Cut, the Acceptance Test Plan execution is the final check to ensure that the
environment is healthy prior to a “Go / No-Go” decision. It is essential that this
test plan be executed more than once to insure that test scripts are functioning as
expected prior to beginning production processing at the ACS data center.
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4.4.4 Testing Limitations
When testing on the new systems at ACS, there are some limitations that must
be considered. Some of these limitations are as follows:
| • | Minimal scratch tapes are available at ACS | ||
| • | No production input tapes are available at ACS | ||
| • | No archived datasets can be recalled from tape | ||
| • | Disk data is aged to the prior copy date | ||
| • | Passwords are aged to the prior copy date |
In some cases, special arrangements can be made to overcome certain limitations,
such as shipping a copy of a specific production tape dataset to ACS. ACS will
work with Symetra to support testing needs as required.
4.4.5 Acceptance Criteria
Based on Symetra knowledge of its systems and applications, it is anticipated
that the Symetra Team will develop test scripts for business-critical functions
along with acceptance criteria (expected results) for these tests. ACS will
provide input to Symetra on critical technical functions that are candidates for
acceptance testing.
Final acceptance is based on successful test of each critical function. If a test
fails, due to issues with performance, integrity, or functionality, ACS will work
with Symetra to resolve the problem. It is essential that each critical function
be successfully tested prior to the “Go / No-Go” decision. During the development
of the Symetra Acceptance Test Plan, it is expected that Symetra will identify
which potential functional failures are “showstoppers” and communicate these to
ACS.
4.4.6 Testing Events
This subsection identifies the various testing events that occur during the
transition period.
4.4.6.1 ACS Systems Testing
Once the mirrored systems at ACS have been started and customized,
the technical support and operations staffs will test them. This testing
ensures that all system components are starting properly and functioning
to proper technical specifications. ACS Technical Support and Operations
personnel will be responsible for developing and executing the test
plans.
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4.4.6.2 1st Network Test
The purpose of this test is to initially verify connectivity to the
new systems at ACS and to begin testing network cutover process. This
type of test usually includes base connectivity checks such as bringing
lines and devices active, establishing sessions between peers, “pinging”
devices, logging onto a system, and executing simple data transmissions.
At the 1st Network Test, a key subset of interfaces is tested
in order to ensure that all primary and redundant paths through the
network are working properly. Most activities involve testing access
from Symetra-only sites.
ACS will develop the master test script and manage the test. The
estimated test window is approximately eight hours. Some network devices
will be impacted for the time that they are pointed to the ACS systems
for testing.
4.4.6.3 2nd Network Test
Additional interfaces are tested for connectivity to the new systems
at ACS. Any items that failed during the 1st Network Test are
re-tested. Depth and complexity may be added to tests. Testing of the
network cutover process is continued. Some initial testing with business
partners and non-Symetra sites is introduced.
ACS will develop the master test script and manage the test.
Participation from Symetra application/business groups may be required
for testing with third parties. It is estimated that the test window
will be approximately eight hours. Some network devices will be impacted
for the time that they are pointed to the systems at ACS for testing.
4.4.6.4 3rd Network Test
Remaining interfaces are tested for connectivity. Any items that
failed during the 2nd Network Test are re-tested. More
in-depth functional testing may be introduced (application
transaction/transmission sequences). The process to cut over the network
is further refined. Testing with business partners continues.
ACS will develop the master test script and manage the test.
Participation from Symetra application/business groups may be required
for testing with third parties. Again, it is estimated that the test
window will be approximately eight hours. Some network devices will be
impacted for the time that they are pointed to the systems at ACS for
testing.
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4.4.6.5 Application Unit Testing
ACS recommends that the Symetra acceptance test plan be based on a
“functional interface testing” approach for systems/ application testing.
This type of testing focuses on system components that have changed and
focuses on small subsets of key applications. Unit testing is done to
ensure proper function of system and application components such as
hardware devices, systems software, key application transactions and
jobs, printing, interfaces to other systems, and key parts of the
application development environment. This testing will occur during the
workweek.
A maximum of a three week window will be established during which
Customer systems/applications personnel can log on to the new systems in
ACS in order to execute their test scripts. ACS will establish
coordination procedures for handling test set-ups and problem tracking.
Symetra personnel are responsible for developing and executing test
scripts. There will be no disruption of production processing.
4.4.6.6 1st Integrated Application / Network Test
This activity integrates application testing along with network
testing. Its primary purposes are to test network connectivity, to test
the network cutover process, and to rehearse the acceptance test that
will be used again at the Dry Run and Hot Cut. As mentioned previously,
the acceptance test is one that can be performed in a short period to
verify that the systems have been successfully built and that the network
has been successfully pointed ACS prior to a “Go” decision.
ACS will develop the overall execution plan. Symetra is responsible for
developing and executing the Symetra acceptance test plan. This event
will require participation from ACS technical, operations, and network
groups; Symetra technical, operations, network, and applications groups;
and possibly a select group of business users.
It is estimated that the test window will be approximately eight hours.
During this time, network components will be pointed to ACS and be
unavailable for production.
4.4.6.7 2nd Integrated Application / Network Test
This activity is similar to the 1st Integrated Test. Its
primary purposes are to rehearse the acceptance test that will be used
again at the Dry Run and Hot Cut, re-test any items that failed during
the 1st Integrated Test, and add new test items that were
excluded at the 1st Integrated Test.
ACS will develop the overall execution plan. Symetra is responsible for
developing and executing the Symetra acceptance test plan. This event
will require participation from ACS technical, operations, and network
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groups; Symetra technical, operations, network, and applications groups;
and possibly a select group of business users.
It is estimated that the test window will be approximately eight hours.
During this time, network components will be pointed to ACS and be
unavailable for production.
4.4.6.8 Dry Run
The Dry Run is a rehearsal of the Hot Cut. The objective is to
simulate, as closely as possible, the final cutover with the given
exception that physical moves do not occur (tape library, etc.). The
general plan is as follows:
| • | Quiesce systems at Symetra | ||
| • | For tape copy: | ||
| Perform disk-to-tape copies at Symetra | |||
| Transport copy tapes to ACS | |||
| Perform tape-to-disk restores at ACS | |||
| • | Cut network over to ACS | ||
| • | Transport tape library to ACS | ||
| • | Perform system customization at ACS | ||
| • | Perform Customer Application Acceptance Test | ||
| • | Make “go” decision | ||
| • | Start production processing at ACS | ||
| • | Transport off-site tapes to ACS vault |
ACS will develop the overall execution plan. Symetra is responsible
for developing and executing the Symetra acceptance test plan. This
event will require participation from ACS technical, operations, and
network groups; Symetra technical, operations, network, and applications
groups; and possibly a select group of business users.
When using a tape copy approach, production system outages at will be
limited to TBD hours plus tape transport time plus the amount of test
time defined by Symetra.
During this time, network components will be pointed to ACS and be
unavailable for production.
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5 Transition Program Key Milestones and Project Plan (Schedule)
5.1 Key Transition Milestones
| The key Transition Milestones, dates to be determined at a later date, are: | |||
| 1. | Transition Plan Completed and Delivered | ||
| 2. | Data Center Development Environment (Sandbox) Completed and Available | ||
| 3. | Phase I Network Completed and Available (NWSC-Redmond) | ||
| 4. | Data Center Production Infrastructure Completed and Available (Mainframe and Critical Server Support Ready) | ||
| 5. | Phase II Network Completed and Available (Remotes-NWSC) | ||
| 6. | Voice Production Infrastructure Completed and Available (Bellevue) | ||
| 7. | Help Desk Cutover (Includes Double-dipping with Safeco Help Desk) | ||
| 8. | All Applications Operating on ACS Infrastructure | ||
| 9. | Content Management Service Ready for Production | ||
| 10. | Output Services Ready for Production | ||
| 11. | Distributed Computing Services Ready for Support (CompuCom Ready for Dispatch) | ||
| 12. | Final Cutover from Safeco RDC to NWSC | ||
| 13. | Disaster Recovery Plan Completed and Delivered |
5.2 Program Project Plan (Schedule)
Version XX of the Symetra transition program project plan supports this plan and the
achievement of the key transition milestones. As required by the agreement, the Symetra
transition program project plan (schedule) will be revised by ACS and submitted to Symetra
for review, comment, and approval during detailed transition planning activities early in
the transition.
Following are the milestone dates review, comment, and approval.
| • | Review: Detailed Transition Plan approval plus 30 calendar days |
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| • | Comments:— Within 7 calendar days of review | ||
| • | Approval: Within 14 calendar days of comments |
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6 Detailed Transition Plan Approvals
6.1 Approvals Required
| Name | Signature | Approval | Date | |||
Jim Ryan
|
o Approved | |||||
Symetra
|
o Disapproved | |||||
Transition Executive |
||||||
Debbie Dawes
|
o Approved | |||||
Symetra
|
o Disapproved | |||||
Transition Manager |
||||||
Erik Johnson
|
o Approved | |||||
ACS
|
o Disapproved | |||||
SBU Manager |
||||||
Joe Gentry
|
o Approved | |||||
ACS
|
o Disapproved | |||||
Transition Manager |
6.2 Comments
| Name | Approval/Disapproval Comments | |
Jim Ryan |
||
Symetra |
||
Transition Executive |
||
Debbie Dawes |
||
Symetra |
||
Transition Manager |
||
Erik Johnson |
||
ACS |
||
SBU Manager |
||
Joe Gentry |
||
ACS |
||
Transition Manager |
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ATTACHMENT
D
FORM OF IN-SCOPE SERVICE REQUEST
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ATTACHMENT E
ACS KEY PERSONNEL
Each of the following individuals constitutes Key Personnel under the terms of the Agreement:
| Position | Name | |
ACS Project Executive
|
Erik S. Johnson | |
ACS Service Delivery Manager (All Service Towers)
|
Fran Nesbitt |
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ATTACHMENT F
PROVIDER’S TECHNOLOGY REFRESH REQUIREMENTS
The Parties shall meet upon Symetra’s reasonable request to discuss Symetra’s refresh requirements.
Symetra will be responsible for hardware necessary to provide the Services purchased throughout the
Term of the Agreement.
ACS’ refresh recommendations are as follows:
| • | Server refresh — Cycle of one hundred percent (100%) of candidate servers between thirty-six (36) and forty-eight (48) months post-Handover Date, with subsequent server refreshes every thirty-six (36) to forty-eight (48) months thereafter. This strategy would ensure that no server extends beyond a forty-eight (48)-month refresh window. | ||
| • | Mainframe and peripherals thirty-six (36) month refresh cycle, only for systems or equipment requiring refresh at that time, or for equipment approaching manufacturer EOL at that time. | ||
| • | Router and data communications equipment — Refresh no less than every forty-eight (48) months, or as required to provide Services and meet the SLRs. | ||
| • | Telecommunications equipment (e.g., telephone switch and handsets) — Refresh only as required to support new feature sets or discontinued equipment, estimated between sixty (60) and seventy-two (72) months. |
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ATTACHMENT G
SHARED RESOURCES
Software:
| • | iStar proprietary web portal, and associated proprietary tools and systems owned and operated by ACS, including but not limited to SRP, iDrive, and CrystalReports. | ||
| • | Category 5 Software which is content management software, including but not limited to MCP and ACS Capture. | ||
| • | Monitoring systems software, including but not limited to HP Openview, Micromuse NetCool, IBM Tivoli, and Concord eHealth. |
Hardware:
| • | Facilities support, including but not limited to HVAC, electrical power distribution and backup, fire suppression, and equipment racks. | ||
| • | Network infrastructure, including but not limited to core network switches and routers, cable plant, and monitoring tools. | ||
| • | Storage area network (“SAN”), including but not limited to SAN switches, drive arrays, cable plant, and monitoring tools. Symetra data will be segregated on dedicated physical volumes. | ||
| • | Print and mail hardware including but not limited to inserters, sorters, high speed printers and velo binders. | ||
| • | Image capture hardware including but not limited to scanners, sorters and bar code readers. |
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ATTACHMENT H
ASSIGNED CONTRACTS
None as of the Effective Date.
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ATTACHMENT I
MANAGED CONTRACTS
None as of the Effective Date; provided, however, that ACS acknowledges and agrees that all
maintenance contracts for telephony services for the remote offices identified in Attachment B
shall, at Symetra’s option, become Managed Contracts.
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ATTACHMENT J
INVOICE FORMAT
| General Invoice - |
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Invoice Number 00000000
|
Customer No: SYM001 | |
DATE: Month Day, Year
|
Invoice Account Number SYM001 | |
| Customer A/R Number | ||
INVOICE TO:
|
PLEASE REMIT TO: | |
Symetra Life Insurance Company
|
ACS Commercial Solutions, Inc. | |
Attn: [Name]
|
Attn: Accounts Receivable | |
5069 154th Place, N.E.
|
P.O. Box 200790 | |
Redmond, WA 98052-9669
|
Dallas, TX 75320-0790 | |
U.S.
|
U.S. |
| DESCRIPTION | AMOUNT | |||
Resource Utilization Charges |
0.00 | |||
Third Party Charges |
0.00 | |||
Recurring Charges |
0.00 | |||
SUB-TOTAL |
$ | 0.00 | ||
TAX |
$ | 0.00 | ||
TOTAL AMOUNT DUE |
$ | 0.00 | ||
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Final Billing Summary Report —
Final Billing Summary Report
| Billing Period : Month 2004 | Page : 1 | |
| Posting Date : 00/00/2004 | ||
Customer Number : SYM001
|
Customer Name : Symetra | CPU Type: | ||||||||||||
| CPU Factor: 1.00 relative to | ||||||||||||||
| Resource Name | Number Of Units Unit Type | Bill Rate | Tier Amount | Bill Amount | ||||||||||
Utilization Charges : |
||||||||||||||
Recurring Charges : |
||||||||||||||
Invoice Account Tax |
||||||||||||||
Invoice Account Total
|
Account SYM001 Amt of Invoice | 0.00 | ||||||||||||
ARC Invoice —
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Invoice Number 00000000
|
Customer No: SYM001 | |
DATE: Month, Day, Year
|
Invoice Account Number SYM002 | |
| Customer A/R Number | ||
INVOICE TO:
|
PLEASE REMIT TO: | |
Symetra Life Insurance Company
|
Affiliated Computer Services, Inc. | |
Attn: [Name]
|
Attn: Accounts Receivable | |
5069 154th Place, N.E.
|
P.O. Box 200790 | |
Redmond, WA 98052-9669
|
Dallas, TX 75320-0790 | |
U.S.
|
U.S. |
| DESCRIPTION | AMOUNT | |||
Resource Utilization Charges |
0.00 | |||
Third Party Charges |
0.00 | |||
Recurring Charges |
0.00 | |||
Customer Credits |
0.00 | |||
SUB-TOTAL |
$ | 0.00 | ||
TAX |
$ | 0.00 | ||
TOTAL AMOUNT DUE |
$ | 0.00 | ||
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ARC/RRC Final Billing Summary Report —
Final Billing Summary Report
| Billing Period : Month 2004 | Page : 1 | |
| Posting Date : 00/00/2004 |
Customer Number : SYM001
|
Customer Name : Symetra | CPU Type: | ||||||||||||||||
| CPU Factor: 1.00 relative to | ||||||||||||||||||
| Resource Name | Number Of Units Unit Type | Bill Rate | Tier Amount | Bill Amount | ||||||||||||||
Credits: |
||||||||||||||||||
| RRC/ | 0.000000 | 0.000000 | 0.00 | |||||||||||||||
| Baseline 0/Difference 0.00 @ $0.00 | ||||||||||||||||||
Third Party Charges : |
||||||||||||||||||
Invoice Account Tax
|
0.00 | |||||||||||||||||
Invoice Account Total
|
Account SYM002 Amt of Invoice | 0.00 | ||||||||||||||||
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ARC/RRC Billing Description Report-
Billing Description Report
| Billing Period : Month 2004 | Page : 1 | |
| Posting Date : 00/00/2004 |
Customer Number : SYM001
|
Customer Name : Symetra | CPU Type: | ||||||||||
| Invoice Account: SYM002 | CPU Factor: 1.00 relative to | |||||||||||
| Resource Name | Number Of Units Unit Type | Bill Rate | Tier Amount | Bill Amount | ||||||||
Credits: |
||||||||||||
RRC/
|
Baseline /Difference | |||||||||||
Third Party Charges : |
||||||||||||
| Baseline /Actual | ||||||||||||
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ATTACHMENT K
HIPAA TERMS
The Agreement contemplates that: (1) ACS will perform certain services for the benefit of Symetra
and/or certain of its Affiliates; and (2) in connection therewith, ACS may have access to certain
Protected Health Information “PHI”) collected, maintained, transmitted or otherwise used by Symetra
and/or one (1) or more Symetra Affiliates (whether in their capacity as a Covered Entity or as a
Business Associate of another Covered Entity) (collectively referred to herein as “Symetra PHI”).
1. HIPAA Privacy Regulations.
(a) General. ACS acknowledges that it is a Business Associate or sub-Business Associate of Symetra
for purposes of HIPAA’s Standards for Privacy of Individually Identifiable Health Information (as
the same may have been and/or may be amended from time-to-time, the “Privacy Regulations”). ACS
shall comply with the provisions set forth in Addendum 1 to this Attachment K with respect to
Symetra PHI.
(b) Uses and Disclosures of Protected Health Information. ACS shall Use and Disclose Symetra PHI
only as minimally necessary to perform its obligations under the Agreement and/or as otherwise
authorized by Symetra in writing.
(c) Failure to Comply with HIPAA Obligations.
(i) Mitigation Obligation. If ACS has violated any of its obligations under this Section 1,
at its sole cost and expense, ACS immediately shall take commercially reasonably steps to mitigate
the harmful effects of such violation, if any.
(ii) Opportunity to Cure; Termination. If ACS notifies Symetra, or Symetra otherwise has
reason to believe, that ACS has violated a material term of any of the requirements set forth in
this Section 1, and a cure of such violation is possible, not later than five (5) calendar days
following Symetra’s request, the Parties shall meet (in person or by telephone, as requested by
Symetra) to discuss Symetra’s concerns. Following such meeting, ACS shall advise Symetra whether
it agrees or disagrees with Symetra’s concerns. If ACS agrees with Symetra’s concerns, not later
than five (5) calendar days after such meeting, ACS shall propose to Symetra a plan for addressing
Symetra’s concerns (the “Corrective Plan”) and, if necessary, the Parties thereafter shall engage
in good faith discussions in an effort to reach agreement on the terms of the Corrective Plan. If
ACS materially fails to implement the terms of the mutually agreed Corrective Plan, then, in
addition to any other rights and remedies that may be available to Symetra, upon written notice to
ACS, Symetra shall have the right to terminate the Agreement and any or all country-specific
agreements either in their entirety or as they relate to Symetra only. If ACS disagrees with
Symetra’s concerns, then the Parties will engage in good faith discussions at successively higher
levels of management until the Problem has been resolved. Notwithstanding the foregoing, if the
Parties are unable to reach agreement on the terms of the Corrective Plan or otherwise
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are unable to reach agreement with respect to Symetra’s concerns
within sixty (60) calendar days following Symetra’s initial request for a meeting as described
above, and Symetra has determined that ACS has violated a material term of any of its HIPAA-related
obligations hereunder, then, upon written notice to ACS, Symetra shall have the right to terminate,
the Agreement and any or all country-specific agreements either in their entirety or as they relate
to Symetra only.
(iii) No Opportunity to Cure; Termination. If ACS notifies Symetra, or Symetra otherwise has
reason to believe, that ACS has violated a material term of any of the requirements set forth in
this Section 1 and a cure of such violation is not possible, Symetra shall have the right upon
written notice to ACS to terminate the Agreement and any or all country-specific agreements either
in their entirety or as they relate to Symetra only.
(iv) Effect of Termination. Any termination the Agreement and/or any country-specific
agreements as provided herein shall be without liability or further obligation on the part of
Symetra to ACS, except for those provisions that would, by their nature, survive any termination of
the Agreement and/or any country-specific agreement.
(d) State Law Requirements. Any Use or Disclosure of Symetra PHI by ACS shall be made in
accordance with More Stringent state laws and regulations and as ACS may be specifically instructed
by Symetra; provided, however, that ACS shall continue to be bound by and comply with the terms and
conditions of this Attachment K to the extent such terms and conditions do not conflict with the
applicable laws and regulations of such states.
(e) Audit Rights. Upon Symetra’s request, but no more often than once annually except: (a) as
necessary for Symetra to respond to any regulatory requirement or inquiry; or (b) as deemed
reasonably necessary by Symetra as a result of Symetra’s good faith belief that ACS has breached
any of its obligations under this Attachment K, and not later than ten (10) calendar days following
Symetra’s request (unless the terms of subsection (a) apply, in which case such time period shall
be five (5) calendar days following Symetra’s request), ACS shall make available to Symetra its
internal practices, books and records relating to the Use and Disclosure of Protected Health
Information received from, or created or received by ACS on behalf of, Symetra in order to permit
Symetra to confirm and/or investigate ACS’ compliance with its HIPAA-related obligations (including
any obligations under applicable state laws and regulations) hereunder. ACS shall cooperate with
Symetra in all reasonable respects in connection with such audits.
(f) ACS’ Employees, Agents, Representatives and Subcontractors. ACS represents and warrants that
ACS’ employees, agents and subcontractors who will or may potentially have access to Symetra PHI
will have been provided with general HIPAA-related training and education as well as specific
knowledge of ACS’ HIPAA-related responsibilities and contractual requirements to Symetra (including
applicable state laws and regulations to the extent that ACS has received written instructions from
Symetra concerning More Stringent state laws and regulations), in each case prior to being allowed
to have access to Symetra PHI. At Symetra’s request, ACS will provide Symetra with all information
reasonably requested by Symetra regarding the training provided to those ACS employees, agents and
subcontractors who will or potentially may have access to Symetra PHI. ACS further represents and
warrants to Symetra
that it will impose appropriate sanctions on any employee and will take appropriate action under
its contract with
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any agent and/or Subcontractor of ACS if such Person violates any of ACS’
HIPAA-related obligations under this Attachment K, and agrees, at Symetra’s request if the
violation is egregious or recurring in nature, to prevent any such employee, agent and/or
Subcontractor from having any further access to Symetra PHI.
(g) Aggregate Data. Without the express prior written consent of Symetra, ACS shall not have the
right to engage in Data Aggregation activities with respect to Symetra’s data, whether or not such
data constitutes Symetra PHI.
(h) Defined Terms. Capitalized terms used in the opening paragraph, in this Section 1, in Addendum
1 and/or Addendum 2 but not defined herein shall have the meanings ascribed to them in the
Agreement and/or in the Privacy Regulations, as applicable. If a capitalized term is defined in
both the Agreement and in the Privacy Regulations, the definition in the Privacy Regulations shall
apply.
(i) Interpretation. Any ambiguity in any term or condition of the Agreement, including this
Attachment (including Addenda 1 and 2), or any inconsistency between any term or condition of the
Agreement and this Attachment (including Addenda 1 and 2), shall be resolved in favor of a meaning
that permits Symetra to comply with the Privacy Regulations.
2. HIPAA Electronic Transactions Standards.
(a) General. If ACS agrees to conduct on behalf of Symetra all or part of any Transaction covered
under HIPAA’s Standards for Electronic Transactions (as the same may have been and/or may be
amended from time-to-time, the “Electronic Transactions Regulations”), then ACS shall conduct, and
cause its employees, agents and subcontractors to conduct, such Transactions as standard
transactions under the Electronic Transactions Standards.
(b) Defined Terms. Capitalized terms used in this Section 2 but not defined herein shall have the
meanings ascribed to them in the Agreement and/or the Electronic Transactions Regulations, as
applicable. If a capitalized term is defined in both the Agreement and in the Electronic
Transactions Regulations, the definition in the Electronic Transactions Regulations shall apply.
3. HIPAA Security Regulations. Beginning on April 20, 2005, Symetra and ACS will be required to
comply with HIPAA’s security standards, which were issued in their final form on February 20, 2003
(as the same may have been and/or may be amended from time to time, the “Security Regulations”).
In connection therewith, as of that compliance date ACS shall: (a) have implemented safeguards
that reasonably and appropriately protect the confidentiality, integrity and availability of the
electronic PHI that it creates, receives, maintains or transmits on behalf of Symetra; (b) ensure
that any agent, including a subcontractor, to whom ACS provides this information agrees to
implement reasonable and appropriate safeguards; (c) report to Symetra any security incident of
which it becomes aware; and (d) make ACS’ policies and procedures, and documentation required by
the Security Regulations relating to such safeguards, available to the Secretary for purposes of
determining Symetra’s compliance with the Security
Regulations. Without limiting any other rights and remedies that may then be available to Symetra,
Symetra shall have the right to terminate the Agreement and any or all country-specific
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agreements, either in their entirety or as they relate to Symetra only, immediately and without penalty upon
written notice by Symetra to ACS if Symetra determines that ACS has violated a material term of
this Section.
4. Changes or Modifications to HIPAA and/or HIPAA Regulations. If, following the Effective Date,
HIPAA and/or any of the HIPAA regulations are modified and/or additional regulations are issued
pursuant to HIPAA (each, a “Modification”) and, as a result, Symetra determines that modifications
to the terms of the Agreement are required in order for Symetra to comply with such Modification(s)
(including by way of example and not of limitation, if additional provisions are required to be
included in agreements between Covered Entities and Business Associates), promptly following
Symetra’s request, the Parties shall engage in good faith negotiations regarding any modifications
to the terms of this Agreement that may be necessary or appropriate. If the Parties are unable to
agree on any such modifications to the terms of the Agreement following such good faith
negotiations, which negotiations shall not exceed sixty (60) calendar days from the date of
Symetra’s request for negotiations unless otherwise agreed to by the Parties, then following
expiration of such sixty (60) calendar day period, Symetra shall have the right, at its option, to
terminate the Agreement and any country-specific agreements as of a date specified in a notice of
termination to ACS, which date shall be any date on or before the applicable compliance date
relating to such Modification. Such termination shall be without liability or further obligation
on the part of Symetra to ACS, except for those provisions that would, by their nature, survive any
termination of the Agreement.
5. Indemnity for Third Party Claims. ACS shall indemnify, defend and hold Symetra and its
Affiliates, as well as their respective members, directors, officers, shareholders, employees,
agents, attorneys, successors and assigns, harmless from and against any and all Third-Party
claims, damages, liabilities, judgments, fines, assessments and/or other losses or expenses
(including reasonable attorneys’ fees) arising out of or relating to any failure by ACS to comply
with its HIPAA-related obligations (including any similar obligations under applicable state laws
and regulations to the extent that ACS has received written instructions from Symetra concerning
More Stringent state laws and regulations) under this Attachment.
6. Notices. Any notices required or permitted to be delivered to Symetra under this Attachment
shall be delivered to the Persons identified in Section 19.6 of the Agreement and to Symetra’s
Privacy Officer at the following addresses via facsimile or via overnight mail delivery:
Symetra Life Insurance Company
5069 154th Place NE
Redmond, WA 98052-9669
Attn: Privacy Officer
Fax: (425) 376-6080
5069 154th Place NE
Redmond, WA 98052-9669
Attn: Privacy Officer
Fax: (425) 376-6080
7. Injunctive Relief. ACS agrees that the remedies at law for any breach by it of the terms of
this Attachment shall be inadequate and that monetary damages resulting from such breach are not
readily measured. Accordingly, in the event of a breach or threatened breach by ACS of the
terms of this Attachment, Symetra shall be entitled to immediate injunctive relief. Nothing herein
shall prohibit Symetra from pursuing any other remedies that may be available to it for
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such breach, and the rights provided under this Attachment and the section(s) of the Agreement related
to injunctive relief, if any, shall be cumulative.
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ADDENDUM 1
BUSINESS ASSOCIATE REQUIREMENTS UNDER PRIVACY REGULATIONS
1. ACS shall not Use or further Disclose Symetra PHI except as permitted or required by the
Agreement, including this Attachment, or as Required by Law.
2. ACS shall use appropriate safeguards to prevent Use or Disclosure of Symetra PHI other than as
provided for in the Agreement, including this Attachment.
3. ACS shall report to Symetra any Use or Disclosure of Symetra PHI not permitted under the terms
of the Agreement, including this Attachment, of which it becomes aware.
4. ACS shall ensure that any agents, including subcontractors, to whom ACS provides Symetra PHI
received from, or created or received by ACS on behalf of Symetra, agree to the same restrictions
and conditions that apply to ACS with respect to such Symetra PHI by causing such agents, including
subcontractors, to execute a subcontract agreement with ACS that includes as an attachment
substantially the same terms as the terms set forth in the attached Addendum 2.
5. If ACS maintains Symetra PHI in a Designated Record Set, at the request of Symetra, and in the
time and manner designated by Symetra, ACS shall make available or provide access to such data in a
Designated Record Set to Symetra (or to Individuals, if so directed by Symetra) in order to permit
Symetra to satisfy the requirements of Section 164.524 of the Privacy Regulations.
6. If ACS maintains Symetra PHI in a Designated Record Set, at the request of Symetra, and in the
time and manner designated by Symetra, ACS shall make any amendments to such data in a Designated
Record Set that Symetra directs or agrees to pursuant to Section 164.526 of the Privacy
Regulations.
7. ACS shall document any Disclosure of Symetra PHI as to which Symetra has an accounting
obligation under Section 164.528 of the Privacy Regulations and information related to such
Disclosure as required for Symetra to respond to a request by an Individual for an accounting of
Disclosures of Protected Health Information in accordance with Section 164.528 of the Privacy
Regulations.
8. At the request of Symetra, and in the time and manner designated by Symetra, ACS shall make
available and provide to Symetra (or to an Individual, if so directed by Symetra) the information
collected in accordance with Section 7 above to permit Symetra to respond to a request by an
Individual for an accounting of Disclosures of Protected Health Information in accordance with
Section 164.528 of the Privacy Regulations.
9. ACS shall make available its internal practices, books and records relating to the Use and
Disclosure of Symetra PHI received from, or created or received by ACS on behalf of Symetra,
available to Symetra, or at the request of Symetra, to the Secretary, in a time and manner
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designated by Symetra or the Secretary, for purposes of the Secretary determining Symetra’s
compliance with the Privacy Regulations.
10. Upon termination or expiration of the Agreement, if feasible, ACS shall return or destroy all
Symetra PHI received from, or created or received by ACS on behalf of Symetra, that ACS still
maintains in any form and retain no copies of such Symetra PHI. If such return or destruction of
Symetra PHI is not feasible, the terms and conditions of the Agreement and this Addendum that are
applicable to Symetra PHI shall survive termination or expiration of the Agreement for as long as
ACS retains Symetra PHI, and ACS shall comply with such terms and conditions and shall limit its
further Uses and Disclosures of such Symetra PHI to those purposes that make the return or
destruction of Symetra PHI infeasible. ACS shall include a similar provision regarding return or
destruction of Symetra PHI upon termination of its contracts with any subcontractor or agent.
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ADDENDUM 2
HIPAA REQUIREMENTS FOR ACS SUBCONTRACT AGREEMENTS
1. HIPAA Privacy Regulations.
(a) General. Subcontractor acknowledges that it is an indirect Business Associate of Symetra
and/or one of its affiliates (collectively for purposes of this Attachment, “Symetra”) for purposes
of the HIPAA Standards for Privacy of Individually Identifiable Health Information (as the same may
have been and/or may be amended from time-to-time, the “Privacy Regulations”). Subcontractor shall
comply with the provisions set forth in Appendix 1 to this Addendum with respect to the Protected
Health Information collected, maintained, transmitted or otherwise used by Symetra (collectively
referred to herein as “Symetra PHI”).
(b) Uses and Disclosures of Protected Health Information. Subcontractor shall Use and
Disclose Symetra PHI only as minimally necessary to perform its obligations under its agreement
with ACS (the “Subcontract Agreement”) and/or as otherwise authorized in writing by ACS or Symetra.
(c) Failure to Comply With HIPAA Obligations.
(i) Mitigation Obligation. If Subcontractor has violated any of its obligations under
this Section 1, at its sole cost and expense, Subcontractor immediately shall take
commercially reasonable steps to mitigate the harmful effects of such violation, if any.
(ii) Opportunity to Cure; Termination. If Subcontractor notifies ACS and/or Symetra,
or ACS and/or Symetra otherwise have reason to believe, that Subcontractor has violated a
material term of any of the requirements set forth in this Section 1, and a cure of such
violation is possible, not later than five (5) calendar days following ACS’ and/or Symetra’s
request, Subcontractor, ACS and Symetra shall meet (in person or by telephone, as requested
by Symetra) to discuss ACS’ and/or Symetra’s concerns. Following such meeting,
Subcontractor shall advise ACS and Symetra whether it agrees or disagrees with ACS’ and/or
Symetra’s concerns. If Subcontractor agrees with such concerns, not later than five (5)
calendar days after such meeting, Subcontractor shall propose to ACS and Symetra a plan for
addressing those concerns (the “Corrective Plan”) and, if necessary, Subcontractor, ACS and
Symetra thereafter shall engage in good faith discussions in an effort to reach agreement on
the terms of the Corrective Plan. If Subcontractor materially fails to implement the terms
of the mutually agreed Corrective Plan, then, in addition to any other rights and remedies
that may be available to ACS and Symetra, ACS and/or Symetra shall have the right to
terminate the Subcontract Agreement. If Subcontractor disagrees with ACS’ and/or Symetra’s
concerns, then Subcontractor, ACS and Symetra shall follow the dispute resolution procedures
set forth in the Subcontract Agreement, if any, or if dispute resolution procedures are not
specified therein, then Subcontractor, ACS and Symetra shall engage in negotiations at
successively higher levels of management until the dispute has been resolved.
Notwithstanding the foregoing or any contrary provisions or terms in the Subcontract
Agreement, if Subcontractor, ACS and
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Symetra are unable to reach agreement on the terms
of the Corrective Plan or otherwise are unable to reach agreement with respect to ACS’
and/or Symetra’s concerns within ninety (90) calendar days following the initial request for
a meeting as described above, then, upon written notice to Subcontractor, ACS and/or Symetra
shall have the right to terminate the Subcontract Agreement if ACS and/or Symetra have
determined that Subcontractor has violated a material term of any of its HIPAA-related
obligations hereunder.
(iii) No Opportunity to Cure; Termination. If Subcontractor notifies ACS and/or
Symetra, or ACS and/or Symetra otherwise have reason to believe, that Subcontractor has
violated a material term of any of the requirements set forth in this Section 1, and a cure
of such violation is not possible, ACS and/or Symetra shall have the right to terminate the
Subcontract Agreement upon written notice to Subcontractor.
(iv) Effect of Termination. Any termination of the Subcontract Agreement shall be
without liability or further obligation on the part of ACS or Symetra to Subcontractor,
except for those provisions that survive any termination of the Subcontract Agreement.
(d) State Law Requirements. Any Use or Disclosure of Symetra PHI by Subcontractor shall be
made in accordance with More Stringent state laws and regulations and as ACS may be specifically
instructed by Symetra; provided, however, that Subcontractor shall continue to be bound by and
comply with the terms and conditions of this Addendum 2 to the extent such terms and conditions do
not conflict with the applicable laws and regulations of such states.
(e) Audit Rights. Not later than five (5) calendar days following ACS’ or Symetra’s request,
Subcontractor shall make available to ACS and Symetra its internal practices, books and records
relating to the Use and Disclosure of Symetra PHI received from, or created or received by
Subcontractor on behalf of Symetra (directly or indirectly), in order to permit ACS and Symetra to
confirm and/or investigate Subcontractor’s compliance with its HIPAA-related obligations (including
any obligations under applicable state laws and regulations) hereunder. Subcontractor shall
cooperate with ACS and Symetra in all reasonable respects in connection with such audits.
(f) Subcontractor’s Employees, Agents, Representatives and Subcontractors. Subcontractor
represents and warrants to ACS and Symetra that Subcontractor’s employees, agents and
subcontractors who will or potentially may have access to Symetra PHI shall have been provided with
general HIPAA-related training and education as well as specific knowledge of Subcontractor’s
HIPAA-related responsibilities and contractual requirements to ACS and Symetra (including
applicable state laws and regulations to the extent that ACS has received written instructions from
Symetra concerning More Stringent state laws and regulations), in each case prior to being allowed
to have access to Symetra PHI. At ACS’ or Symetra’s request, Subcontractor shall provide ACS and
Symetra with all information reasonably requested by ACS or Symetra regarding the training provided
to those Subcontractor employees, agents and
subcontractors who will or may potentially have access to Symetra PHI. Subcontractor further
represents and warrants to ACS and Symetra that it will impose appropriate sanctions on any
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employee, and will take appropriate action under its contract with any agent and/or subcontractor
of Subcontractor if such Person violates any of Subcontractor’s HIPAA-related obligations
hereunder, and agrees, at ACS’ or Symetra’s request if the violation is egregious or recurring in
nature, to prevent any such employee, agent and/or subcontractor from having any further access to
Symetra PHI.
(g) Aggregate Data. Without the express prior written consent of ACS and Symetra,
Subcontractor shall not have the right to engage in any type of data aggregation activities with
respect to Symetra’s data, whether or not such data constitutes Symetra PHI.
(h) Defined Terms. Capitalized terms used in this Section 1 and in Appendix 1 but not defined
herein shall have the meanings ascribed to them in the Privacy Regulations.
(i) Interpretation. Any ambiguity or inconsistency in any term or condition of the
Subcontract Agreement (including this Addendum and Appendix 1) shall be resolved in favor of a
meaning that permits Symetra to comply with the Privacy Regulations.
2. HIPAA Electronic Transactions Standards.
(a) General. If Subcontractor agrees to conduct on behalf of ACS and/or Symetra all or part
of any Transaction covered under HIPAA’s Standards for Electronic Transactions (as the same may
have been and/or may be amended from time-to-time, the “Electronic Transactions Regulations”), then
Subcontractor shall conduct, and cause its employees, agents and subcontractors to conduct, such
Transactions as standard transactions under the Electronic Transactions Standards.
(b) Defined Terms. Capitalized terms used in this Section 2 but not defined herein shall have
the meanings ascribed to them in the Electronic Transactions Regulations.
3. HIPAA Security Regulations. Beginning on April 20, 2005, Symetra and ACS will be required
to comply with HIPAA’s security standards, which were issued in their final form on February 20,
2003 (as the same may have been and/or may be amended from time to time, the “Security
Regulations”). In connection therewith, as of that compliance date Subcontractor shall: (a) have
implemented safeguards that reasonably and appropriately protect the confidentiality, integrity and
availability of the electronic Symetra PHI that it creates, receives, maintains or transmits on
behalf of Symetra; (b) ensure that any agent, including a subcontractor, to whom Subcontractor
provides this information agrees to implement reasonable and appropriate safeguards; (c) report to
Symetra any security incident of which it becomes aware; and (d) make Subcontractor’s policies and
procedures, and documentation required by the Security Regulations relating to such safeguards,
available to the Secretary for purposes of determining Symetra’s compliance with the Security
Regulations. Without limiting any other rights and remedies that may then be available to Symetra
or ACS, Symetra or ACS shall have the right to terminate the Subcontract Agreement immediately and
without penalty upon written notice by Symetra or ACS to Subcontractor if either Symetra or ACS determines that
Subcontractor has violated a material term of this Section.
- 40 -
Table of Contents
4. Changes or Modifications to HIPAA and/or HIPAA Regulations. If, following the date of the
Subcontract Agreement, HIPAA and/or any of the HIPAA regulations are modified and/or additional
regulations are issued pursuant to HIPAA (each, a “Modification”) and, as a result, Symetra or ACS
determines that modifications to the terms of the Subcontract Agreement are required in order for
Symetra or ACS to comply with such Modification(s) (including by way of example and not of
limitation, if additional provisions are required to be included in agreements between Covered
Entities and Business Associates), promptly following ACS’ or Symetra’s request, Subcontractor, ACS
and Symetra shall engage in good faith negotiations regarding any modifications to the terms of the
Subcontract Agreement that may be necessary or appropriate. If Subcontractor, ACS and Symetra are
unable to agree on any such modifications to the terms of the Subcontract Agreement following such
good faith negotiations, which negotiations shall not exceed sixty (60) calendar days from the date
of ACS’ or Symetra’s request for negotiations unless otherwise agreed to by the Parties, then
following expiration of such sixty (60) calendar day period, ACS and/or Symetra shall have the
right to terminate the Subcontract Agreement as of a date specified in a notice of termination to
Subcontractor, which date shall be any date on or before the applicable compliance date relating to
such Modification. Such termination shall be without liability or further obligation on the part
of ACS or Symetra to Subcontractor, except for those provisions that survive any termination of the
Subcontract Agreement.
5. Third-Party Beneficiary. Symetra is acknowledged to be a direct and intended third-party
beneficiary of the terms of the Subcontract Agreement.
6. Indemnity for Third Party Claims. Subcontractor shall indemnify, defend and hold harmless
ACS, Symetra and their respective Affiliates, and all of their members, directors, officers,
shareholders, employees, agents, attorneys, successors and assigns, from and against any and all
Third-Party claims, damages, liabilities, judgments, fines, assessments and/or other losses or
expenses (including reasonable attorneys’ fees) arising out of or relating to any failure by
Subcontractor to comply with its HIPAA-related obligations (including any similar obligations under
applicable state laws and regulations to the extent that Subcontractor has received written
instructions from Symetra and/or ACS concerning More Stringent state laws and regulations)
hereunder.
7. Notices. Any notices required or permitted to be delivered to ACS and/or Symetra hereunder
shall be delivered to ACS and Symetra at the following addresses via facsimile or via overnight
mail delivery:
If to ACS:
Affiliated Commercial Solutions, Inc.
2828 N. Haskell Avenue, Bldg. 1
Dallas, Texas 75204
Attn: Chief Privacy Officer
Telecopier No.: (214) 584-5525
If to Symetra:
2828 N. Haskell Avenue, Bldg. 1
Dallas, Texas 75204
Attn: Chief Privacy Officer
Telecopier No.: (214) 584-5525
If to Symetra:
- 41 -
Table of Contents
Symetra Life Insurance Company
5069 154th Place NE
Redmond, WA 98052-9669Attn: Privacy Officer
Fax: (425) 376-6080
5069 154th Place NE
Redmond, WA 98052-9669Attn: Privacy Officer
Fax: (425) 376-6080
8. Injunctive Relief. Subcontractor agrees that the remedies at law for any breach by it of
the terms hereof shall be inadequate and that monetary damages resulting from such breach are not
readily measured. Accordingly, in the event of a breach or threatened breach by Subcontractor of
the terms hereof, ACS and/or Symetra shall be entitled to immediate injunctive relief. Nothing
herein shall prohibit ACS and/or Symetra from pursuing any other remedies that may be available to
them individually or jointly for such breach, and the rights provided hereunder and in any
section(s) of the Subcontract Agreement related to injunctive relief, if any, shall be cumulative.
9. No Assignment or Subcontracting. Notwithstanding anything contained herein to the
contrary, Subcontractor shall not assign, subcontract or delegate any of its obligations under the
Subcontract Agreement without the prior written consent of ACS and Symetra.
- 42 -
Table of Contents
APPENDIX 1 TO ADDENDUM 2
BUSINESS ASSOCIATE REQUIREMENTS UNDER PRIVACY REGULATIONS
1. Subcontractor shall not Use or further Disclose Symetra PHI except as permitted or required
by the Subcontract Agreement or as Required by Law.
2. Subcontractor shall use appropriate safeguards to prevent Use or Disclosure of Symetra PHI
other than as provided for in the Subcontract Agreement.
3. Subcontractor shall report to ACS and Symetra any Use or Disclosure of Symetra PHI not
permitted under the terms of the Subcontract Agreement of which it becomes aware.
4. Subcontractor shall ensure that any agents, including subcontractors, to whom Subcontractor
provides Symetra PHI received from, or created or received by Subcontractor on behalf of Symetra,
agree to the same restrictions and conditions that apply to Subcontractor with respect to such
Symetra PHI.
5. If Subcontractor maintains Symetra PHI in a Designated Record Set, at the request of ACS or
Symetra, and in the time and manner designated by ACS or Symetra, Subcontractor shall make
available or provide access to Symetra PHI in a Designated Record Set to ACS or Symetra (or to
Individuals, if so directed by ACS or Symetra) in order to permit Symetra to satisfy the
requirement of and in accordance with Section 164.524 of the Privacy Regulations.
6. If Subcontractor maintains Symetra PHI in a Designated Record Set, at the request of ACS or
Symetra, and in the time and manner designated by ACS or Symetra, Subcontractor shall make
available Symetra PHI for amendment and incorporate any amendments to Symetra PHI in a Designated
Record Set that Symetra directs or agrees to, pursuant to and in accordance with Section 164.526 of
the Privacy Regulations.
7. Subcontractor shall document any Disclosure of Symetra PHI as to which Symetra has an
accounting obligation under Section 164.528 if the Privacy Regulations and information related to
such Disclosure as required for Symetra to respond to a request by an Individual for an accounting
of Disclosures of Symetra PHI in accordance with Section 164.528 of the Privacy Regulations.
8. At the request of ACS or Symetra, and in the time and manner designated by ACS or Symetra,
Subcontractor shall make available and provide to ACS or Symetra (or to an Individual, if so
directed by ACS or Symetra) the information collected in accordance with Section 7 above, and as
required to provide an accounting of Disclosures in accordance with Section 164.528 of the Privacy
Regulations.
9. Subcontractor shall make available its internal practices, books and records relating to
the Use and Disclosure of Symetra PHI received from, or created or received by
- 43 -
Table of Contents
Subcontractor on behalf of, Symetra (directly or indirectly) available to ACS or Symetra, or at the request of
Symetra, to the Secretary, in the time and manner designated by ACS, Symetra or the Secretary, for
purposes of the Secretary determining Symetra’s compliance with the Privacy Regulations.
10. Upon termination or expiration of the Subcontract Agreement, if feasible, Subcontractor
shall return or destroy all Symetra PHI received from, or created or received by Subcontractor on
behalf of, Symetra (directly or indirectly) that Subcontractor still maintains in any form and
retain no copies of such Symetra PHI. If such return or destruction of Symetra PHI is not
feasible, the terms of the Subcontract Agreement that are applicable to Symetra PHI shall survive
the termination or expiration of the Subcontract Agreement for as long as Subcontractor retains
Symetra PHI, and Subcontractor shall comply with such terms and conditions and shall limit its
further Uses and Disclosures of such Symetra PHI to those purposes that make the return or
destruction of Symetra PHI infeasible. Subcontractor shall include a similar provision regarding
return or destruction of Symetra PHI upon termination of its contract with any subcontractor or
agent.
- 44 -
Table of Contents
ATTACHMENT L
SOFTWARE SCHEDULE
| Supplier Name | Product Name | Category | ||||
BMC
|
Catalog Manager for DB2 * ( CA R/C Compare ) | 1 | ||||
BMC
|
Change Manager for DB2 * ( CA R/C Migrator ) | 1 | ||||
BMC
|
Control-D | 1 | ||||
BMC
|
Control-D\WebAccess ( Per Site ) | 1 | ||||
BMC
|
DASD Manager for DB2 *( CA Data Analyser ) | 1 | ||||
BMC
|
DASD MANAGER PLUS for DB2 * ( CA Data Analyser ) | 1 | ||||
BMC
|
DATABASE INTEGRITY PLUS * | 1 | ||||
BMC
|
FAST REORG FACIILITY for IMS * ( MAX Reorg / online for IMS ) | 1 | ||||
BMC
|
IMAGE COPY PLUS for IMS * | 1 | ||||
BMC
|
LOADPLUS for DB2 * ( CA Fast Load ) | 1 | ||||
BMC
|
LOADPLUS for IMS * ( MAX Reorg / online for IMS ) | 1 | ||||
BMC
|
POINT CHECKER PLUS for IMS * | 1 | ||||
BMC
|
SECONDARY INDEX UTIL for IMS * ( MAX Reorg / online for IMS ) | 1 | ||||
BMC
|
SNAPSHOT UPGRADE FEATURE * ( MAX Reorg / online for IMS ) | 1 | ||||
BMC
|
ULTRAOPT/IMS * | 1 | ||||
BMC
|
UNLOAD PLUS for DB2 * ( CA Fast unload ) | 1 | ||||
BMC
|
UNLOAD PLUS for IMS * ( MAX Reorg /online for IMS ) |
1 | ||||
CA
|
ACF2 | 1 | ||||
CA
|
ACF2/DB2 Option | 1 | ||||
CA
|
CA-1 [Tape Management] * | 1 | ||||
CA
|
Detector(DB2) * | 1 | ||||
CA
|
Endevor/MVS ** | 1 | ||||
CA
|
Netspy | 1 | ||||
CA
|
Plan Analyzer for DB2 * | 1 | ||||
CA
|
UNICENTER CA-7 JOB MANAGEMENT | 1 | ||||
CA
|
Unicenter CA-OPS/MVS Event Management and Automation for JES2 | 1 | ||||
CA
|
UNICENTER DATABASE ANALYZER FOR DB2 FOR Z/OS | 1 | ||||
CA
|
UNICENTER FAST LOAD FOR DB2 FOR Z/OS | 1 | ||||
CA
|
UNICENTER FAST UNLOAD FOR DB2 FOR Z/OS | 1 | ||||
-45-
Table of Contents
| Supplier Name | Product Name | Category | ||||
CA
|
UNICENTER RC/COMPARE FOR DB2 FOR Z/OS | 1 | ||||
CA
|
UNICENTER RC/MIGRATOR FOR DB2 FOR Z/OS | 1 | ||||
CA
|
UNICENTER RC/QUERY FOR DB2 FOR Z/OS | 1 | ||||
CA
|
UNICENTER RC/UPDATE FOR DB2 FOR Z/OS | 1 | ||||
CA
|
View [Sysout Archive Retrieval] * | 1 | ||||
CA
|
Vision: Interface for DB2 | 1 | ||||
CA
|
Vision: Results [DYL280, DYL260] | 1 | ||||
Candle CL
|
Supersession (VTAMPLUS) | 1 | ||||
Compuware
|
File-Aid for MVS* | 1 | ||||
Compuware
|
File-Aid for IMS IMS * | 1 | ||||
Compuware
|
XPEDITER CICS, XPEDITER/IMS *XPEDITER/TSO | 1 | ||||
IBM
|
BMS Mapset [DFSMS/MVS] | 1 | ||||
IBM
|
CICS/TS | 1 | ||||
IBM
|
DB2 | 1 | ||||
IBM
|
Enterprise COBOL for z/OS | 1 | ||||
IBM
|
High Level Assembler/MVS | 1 | ||||
IBM
|
IMS & DB2 Utility Tools S&S | 1 | ||||
IBM
|
IMS/ESA * | 1 | ||||
IBM
|
IMS/ESA BTS * | 1 | ||||
IBM
|
ISPF/PDF [included in z/OS] | 1 | ||||
IBM
|
JES2 [included in z/OS] | 1 | ||||
IBM
|
QMF | 1 | ||||
IBM
|
SDF II/MVS | 1 | ||||
IBM
|
TCP/IP (HIP6140) | 1 | ||||
IBM
|
TSO/E [included in z/OS] | 1 | ||||
IBM
|
VS FORTRAN | 1 | ||||
IBM
|
VTAM (HVT6140) | 1 | ||||
IBM
|
Websphere Business Intergration Message Broker with Rules and forematting Extentions | 1 | ||||
IBM
|
WebSphere MQ | 1 | ||||
IBM
|
z/OS | 1 | ||||
ISOGON
|
Softaudit | 1 | ||||
Opentech
|
DASD Backup Stacker (DBS) | 1 | ||||
Opentech
|
TapeCopy/VDR (Licensed together) | 1 | ||||
-46-
Table of Contents
| Supplier Name | Product Name | Category | ||||
Sterling
|
Connect:Direct OS/390 with 2 concurrent sessions (SNA and TCP/IP Protocols) | 1 | ||||
Allen Systems Group
|
ASG-TMON for CICS/ESA * | 2 | ||||
Allen Systems Group
|
ASG-TMON for DB2 * ( CA insite for DB2 ) | 2 | ||||
Allen Systems Group
|
JCLPREP * | 2 | ||||
BI Moyle
|
BIM-RECOV (CICS VSAM) * | 2 | ||||
Chicago-Soft
|
MVS/QuickRef | 2 | ||||
Cybermation
|
ESP Agent for Windows * | 2 | ||||
Cybermation
|
ESP Workload Manager * | 2 | ||||
DTS
|
The Space Recovery System ( SRS ) | 2 | ||||
Freeware
|
PDS ( supercedes Serena’s Star Tool ) | 2 | ||||
Innovation
|
ABR/FDR * [Application Backup function of FDR (or equivalent product) needed to support Archive/Restore of Control-D reports] | 2 | ||||
LRS Software
|
VPS * | 2 | ||||
LRS Software
|
VPS / TCPIP | 2 | ||||
Macro 4
|
Dumpmaster MVS | 2 | ||||
Macro 4
|
Insync MVS | 2 | ||||
Oblix
|
Oblix | 2 | ||||
Merrill
|
MXG | 2 | ||||
Pitney-Bowes
|
Finalist [Zip Code] | 2 | ||||
Princeton Softech
|
DB2 Relational Tools | 2 | ||||
Princeton Softech
|
Version Merger | 2 | ||||
SPC Systems
|
Level 2 Report Writer for OS/390 | 2 | ||||
2
|
SYNCSORT for z/OS | 2 | ||||
Tone Software
|
DYNA-STEP | 2 | ||||
Tone Software
|
Flasher (OS/390 Spool Display) * | 2 | ||||
Unitech
|
ACR/Detail | 2 | ||||
Unitech
|
ACR/Summary | 2 | ||||
Utility Software
|
USCCopy [aka COPYMACS] | 2 | ||||
SAS
|
BASE | 2 | ||||
DST Systems
|
TA2000 | 4 | ||||
DST Systems
|
TRAC2000 | 4 | ||||
SunGard Systems International
|
ABC | 4 | ||||
Bloomberg, L.P.
|
Bloomberg Professional | 4 | ||||
| Bond Edge | 4 | |||||
| CAPS — Corporate Automated Payment System | 4 | |||||
-47-
Table of Contents
| Supplier Name | Product Name | Category | ||||
SunGard Systems International
|
CDS | 4 | ||||
Computer Sciences Corp (CSC)
|
CK4/CyberLife | 4 | ||||
CheckFree
|
Disc-IRS | 4 | ||||
Computer Sciences Corp (CSC)
|
DSS | 4 | ||||
Computer Sciences Corp (CSC)
|
JETS | 4 | ||||
Computer Sciences Corp (CSC)
|
Plan Advisor | 4 | ||||
Computer Sciences Corp (CSC)
|
RPS | 4 | ||||
Computer Sciences Corp (CSC)
|
V1 | 4 | ||||
Stonebranch
|
Application systems Scheduling | 1 | ||||
Altris
|
Wise Package Suite | 2 | ||||
Best Software
|
Blackberry Enterprise Server | 2 | ||||
Best Software
|
BlackBerry Enterprise Server (to support 500 users) | 2 | ||||
CA
|
Argis (Database software) | 2 | ||||
Captaris
|
Windows 2000 RightFax | 2 | ||||
Citrix
|
50 user pack Citrix Metaframe xPE Presentation (350 users) | 2 | ||||
Citrix
|
Citrix MF Xpe 1.0-10 User Conn. Pack w/Sub Adv | 2 | ||||
Citrix
|
Citrix MF XPe 1.0-20 User Conn. Pack w/Sub Adv | 2 | ||||
Citrix
|
Citrix MF XPe 1.0-Starter Sys. w/20 User w/Sub Adv | 2 | ||||
COMM-PRESS Inc.
|
COMM-PRESS (File compression tool) | 2 | ||||
DBArtisan
|
DBArtisan | 2 | ||||
Famatech
|
Famatech Remote Administrator | 2 | ||||
IBM
|
DB2 Connect | 2 | ||||
IBM
|
MQ Integrator | 2 | ||||
IBM
|
MQSeries | 2 | ||||
InfoExpress
|
CyberArmor | 2 | ||||
InfoExpress
|
CyberGatekeeper Server | 2 | ||||
Legato
|
Legato DiskBackup Option Tier 2 | 2 | ||||
Legato
|
Legato DiskXtender Data Manager | 2 | ||||
Legato
|
Legato DiskXtender RAID/NAS 1TB Capacity | 2 | ||||
Legato
|
Legato Gold Care Premier support agreement | 2 | ||||
Legato
|
Legato Networker Client Connection | 2 | ||||
Legato
|
Legato NetWorker Module for MS Exchange Server Tier 2 | 2 | ||||
Legato
|
Legato NetWorker Module for SQL Tier 2 | 2 | ||||
Legato
|
Legato NetWorker Power Ed Dedicated Storage Node | 2 | ||||
-48-
Table of Contents
| Supplier Name | Product Name | Category | ||||
Legato
|
Legato NetWorker Power Edition Storage Node for Windows | 2 | ||||
Legato
|
Legato NetWorker Server Power Edition for Windows | 2 | ||||
Legato
|
Legato NetWorker Sharepoint Portal Server Win2000 Client Tier 2 | 2 | ||||
Legato
|
Legato Silo Software Module unlimited | 2 | ||||
Melillo
|
eMail Retention Server software | 2 | ||||
Mercator
|
Ascential (FTP) | 2 | ||||
Microsoft
|
Exchange 2003 Enterprise | 2 | ||||
Microsoft
|
Exchange 2003 Standard | 2 | ||||
Microsoft
|
Sharepoint Server | 2 | ||||
Microsoft
|
SMS 2003 Client Access Licenses | 2 | ||||
Microsoft
|
SMS 2003 Enterprise Server | 2 | ||||
Microsoft
|
SMS Enterprise Server Disk Kit | 2 | ||||
Microsoft
|
SQL Server Database Enterprise Edition | 2 | ||||
Microsoft
|
SQL Server Database Standard | 2 | ||||
Microsoft
|
Terminal server (Included with Citrix) | 2 | ||||
Microsoft
|
Windows 2003 Enterprise Edition | 2 | ||||
Microsoft
|
Windows 2003 Standard Edition | 2 | ||||
Microsoft
|
Sharepoint Portal server | 2 | ||||
Microsoft
|
Systems Management server ENT | 2 | ||||
Net IQ
|
NetIQ AppManager Agent — BES Module | 2 | ||||
Net IQ
|
NetIQ AppManager Agent — Exchange Module | 2 | ||||
Net IQ
|
NetIQ AppManager Agent — Mail Mashal | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 CITRIX METAFRAME XP NT/2K (LIC)(EU,NR) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 MS ACTIVE DIRECTORY NT/2K (LIC)(EU,NR) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 MS INTERNET INFO SVR (LIC)(EU,NR) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 MS SQL SVR NT/2K (LIC)(EU,MR,EU) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 MS WIN 2000 BASE AGT ADV SVR W2K (LIC)(EU,NR) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 MS WINDOWS NT/2000 SVR NT/2K (LIC)(MR,EU,NR) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 OPERATOR CONSOLE (LIC)(EU,NR) | 2 | ||||
Net IQ
|
NETIQ APPMANAGER V5.0.1 WEB ACCESS CONSOLE NT/2K (LIC)(EU,MR,EU) | 2 | ||||
Net IQ
|
NetIQ Mail Mashal | 2 | ||||
Net IQ
|
Webtrends | 2 | ||||
-49-
Table of Contents
| Supplier Name | Product Name | Category | ||||
Network Associates
|
McAfee Active Virus Defense Perpetual | 2 | ||||
Nortel
|
Contivity (VPN) — (Replaced with Cisco VPN solution) | 2 | ||||
Northern
|
Northern Storage Suite 2003 | 2 | ||||
PGP
|
Encryption Software | 2 | ||||
Proginet
|
SecurPass | 2 | ||||
Quest
|
Fastlane Active Roles (Policy manager) | 2 | ||||
RIM
|
RIM T-Support for Blackberry | 2 | ||||
RSA
|
SecureID | 2 | ||||
Secure Computing
|
SmartFilter (Replacement for WebSense) | 2 | ||||
St Bernard
|
St. Bernard Update Expert 100 node pack | 2 | ||||
Symantec
|
Antivirus | 2 | ||||
Symantec
|
Symantec Deploy Center | 2 | ||||
Winzip
|
Winzip | 2 | ||||
ActivePDF
|
Toolkit (Application Tool — Retained) | 4 | ||||
Actuate
|
Actuate (Application — Retained) | 4 | ||||
AmDocs
|
Clarify (Application — Retained) | 4 | ||||
Avaya, Inc
|
CentreVu. ( To be supplied by Symetra ) | 4 | ||||
Best Software
|
FAS Asset Accounting (Application — Retained) | 4 | ||||
Borland
|
Turbo Pascal ( To be supplied by Symetra ) | 4 | ||||
Brainshark
|
Brainshark (online presentations) ( To be supplied by Symetra ) | 4 | ||||
BusinessObjects
|
Crystal Reports (Application — Retained) | 4 | ||||
CA
|
CleverPath Eureka Reporter (Application - Retained) | 4 | ||||
CA
|
CleverPath Portal (Application — Retained) | 4 | ||||
Captiva
|
Input Accel (Application — Retained) | 4 | ||||
CheckFree
|
APECS (Application — Retained) | 4 | ||||
CheckFree
|
RECON-Plus (Application — Retained) | 4 | ||||
DST Systems
|
Vision ( To be supplied by Symetra ) | 4 | ||||
DST Systems
|
FAN Mail (Financial Advisor Network) ( To be supplied by Symetra ) | 4 | ||||
Edify
|
Data Integration (Application — Retained)) | 4 | ||||
Edify
|
Telephony (Application — Retained) | 4 | ||||
Edify
|
Web (Application — Retained) | 4 | ||||
eiStream
|
Viewstar (Application-Retained solution) | 4 | ||||
FileNet
|
P8 | 4 | ||||
FiServ Insurance Solutions
|
Freedom 2000 Annual Statements (Application-Retained) | 4 | ||||
Fugent
|
Virtual Meeting ( To be supplied by Symetra ) | 4 | ||||
Hyperion
|
Analyzer (Application — Retained) | 4 | ||||
-50-
Table of Contents
| Supplier Name | Product Name | Category | ||||
Hyperion
|
Essbase (Application - Retained) | 4 | ||||
Imagenet
( Application supplied by In-house |
Imagenet Document Services ( To be supplied by Symetra ) | 4 | ||||
| CMA - Cash Management (Application - Retained) | 4 | |||||
Medical Information Bureau
|
MIB-Link/Plus ( To be supplied by Symetra ) | 4 | ||||
Mercury Interactive
|
Test Director (Application Tool - Retained) | 4 | ||||
Mercury Interactive
|
Test Director 7.2 ( To be supplied by Symetra ) | 4 | ||||
Mercury Interactive
|
Winrunner ( To be supplied by Symetra ) | 4 | ||||
Microsoft
|
Access (Application - Retained) | 4 | ||||
Microsoft
|
MSDN Subscription (Application Tool - Retained) | 4 | ||||
Microsoft
|
Visual SourceSafe (Application Tool - Retained) | 4 | ||||
Microsoft
|
Visual Studio 6 (Application Tool - Retained) | 4 | ||||
Microsoft
|
Visual Studio.NET 2003 (Application Tool - Retained) | 4 | ||||
NFS SIS
|
Streetscape ( To be supplied by Symetra ) | 4 | ||||
Onyx
|
Onyx Employee Portal - (Application - Retained) | 4 | ||||
Output Technology Solutions SRI
Group, Inc.
|
Output Technologies ( To be supplied by Symetra ) |
4 | ||||
Paymentech
|
eCommerce Solutions - (Application - Retained) | 4 | ||||
Paymentech, L.P.
|
Select Merchant Payment Card Processing (To be supplied by Symetra ) |
4 | ||||
Remedy
|
Remedy (Modeled in Help Desk) | 4 | ||||
SourceForge
|
Source Offsite (Application Tool - Retained) | 4 | ||||
SunGard
|
EAS (Application - Retained) | 4 | ||||
Thomson
|
NetG ( To be supplied by Symetra ) | 4 | ||||
Transunion, LLC
|
TU Desktop ( To be supplied by Symetra ) | 4 | ||||
Univeral Conversion Tools, Inc. |
(CSC) Conversion Case Tool ( To be supplied by Symetra ) | 4 | ||||
ACS
|
i-Star Portal | 5 | ||||
CA
|
Unicenter (Replaced with NetIQ and NetCool) | N/A | ||||
Checkpoint
|
Firewall (Replaced with PIX Firewall) | N/A | ||||
CYBERMATION
|
ESP Agent for Windows (Replaced by Stonebranch) | N/A | ||||
F5
|
BigIP (Replaced by Cisco CSS) | N/A | ||||
Microsoft
|
IIS (Included with MS OS) | N/A | ||||
Symmetricom
|
NTP (Not Required, ACS will use Microsoft NTP) | N/A | ||||
WebSense
|
WebSense (Replaced with Secure Computing SmartFilter) | N/A | ||||
Barton & Bolton Associates
|
UVT (Unit Value Trade System) | 4 | ||||
-51-
Table of Contents
| Supplier Name | Product Name | Category | ||||
Broker Dealer Solutions
|
BONUS | 4 | ||||
Chalke Inc.
|
PTS | 4 | ||||
Cognos, Inc.
|
Impromptu | 4 | ||||
Cognos, Inc.
|
ReportNet | 4 | ||||
Concur Technologies, Inc.
|
Concur Expense Reimbursement | 4 | ||||
Economic Analysis Group, Ltd.
|
CaseTrack | 4 | ||||
GEAC Computer Corp
|
AllTax | 4 | ||||
Institutional Shareholder Services |
ISS Proxy Master | 4 | ||||
Insurance Technolgies
|
ForeSight | 4 | ||||
Interactive Data Corp
|
FT Interactive | 4 | ||||
Lab1, Inc.
|
Lab1 Net | 4 | ||||
Medical Information Bureau
|
Knowledge Now | 4 | ||||
Milliman USA
|
ALFA | 4 | ||||
New River
|
New River | 4 | ||||
NFS
|
NFS | 4 | ||||
NiiS/APEX
|
APEX | 4 | ||||
nomoreforms, inc.
|
nomoreforms | 4 | ||||
NSCC
|
Fund/Serve | 4 | ||||
NSCC
|
IPS | 4 | ||||
Polysystems, Inc.
|
Master (Annuity, UL, Life) | 4 | ||||
QuoteMedia, Inc.
|
QuoteMedia Market Info | 4 | ||||
Sharebuilder Corp
|
Sharebuilder (formerly Netstock) | 4 | ||||
Thomson TFP
|
ACH Participant Directory File | 4 | ||||
Thomson TFP
|
US Electronic Payments File | 4 | ||||
Tritech Software
|
Premium Pro | 4 | ||||
| Annuity Master | 4 | |||||
| APECS — CheckFree | 4 | |||||
| APL | 4 | |||||
| BPWin | 4 | |||||
| Camtasia | 4 | |||||
| Centerpiece | 4 | |||||
| Cumulus (Canto) | 4 | |||||
| FAS Asset Accounting | 4 | |||||
| FLOW4 | 4 | |||||
| Freedom 2000 | 4 | |||||
| HotDocs | 4 | |||||
| InputAccel | 4 | |||||
| InsMark | 4 | |||||
| Marketing Auto Balancing | 4 | |||||
| Mercator (EDI project) | 4 | |||||
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| Supplier Name | Product Name | Category | ||||
| Monarch | 4 | |||||
| Protobase | 4 | |||||
| QuarkXPress | 4 | |||||
| ROSTER — DST GUI | 4 | |||||
| Trilogy | 4 | |||||
| UL Master | 4 | |||||
| Responsibility | ||||||
| Supplier Name | Product Name | Category | ||||
| Content Management Software and Tools: |
||||||
Deleted |
||||||
Deleted |
||||||
Deleted |
||||||
MCP
|
Workflow tracking | 5 | ||||
OCR
|
Quality/Quantity improvements | 1 | ||||
Deleted |
||||||
ACS Capture
|
Image enhancement | 5 | ||||
| Output processing software and tools |
||||||
Xerox
|
DocuPrint™ Series 180 | 1 | ||||
Pitney Bowes
|
APS DM-Series™ | 1 | ||||
Pitney Bowes
|
StreamWeaver® | 1 | ||||
Group 1
|
DOC1® | 1 | ||||
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ATTACHMENT M
OFFSHORE SERVICES
| Off-Shore | Off-Shore | |||||||
| Year 1 | Year 2-5 | Location | Description of Services Provided by | |||||
| Function | (Est.) | (Est.) | Off-shore | Job Function | ||||
Mainframe Systems
Engineering |
||||||||
DB2 |
1.00 | 1.00 | Bangalore | DB2 DBMS and table maintenance and tuning. | ||||
CICS |
0.00 | 0.50 | Bangalore | CICS system maintenance and tuning. | ||||
z/OS |
0.25 | 0.75 | Bangalore | Systems programming and maintenance activities, | ||||
| performance analysis, problem resolution, system configurations, and service in off-hours situations. | ||||||||
Middleware / MQSeries |
0.00 | 0.75 | Bangalore | Operational maintenance of MQSeries services and software. | ||||
Sub-Total |
1.25 | 3.00 | ||||||
Wintel Systems
Engineering |
||||||||
NT Engineering |
0.00 | 2.50 | Bangalore | Operating system engineering and maintenance activities, including image, upgrade, and patching maintenance activities, tuning, new solution engineering for servers and enterprise services (Exchange). | ||||
Enterprise Services
(Citrix) |
0.00 | 1.00 | Bangalore | Citrix Engineer responsible for application publishing, environmental management and support of the Citrix environment. | ||||
Sub-Total |
0.00 | 3.50 | ||||||
Pooled Systems
Engineering |
||||||||
Storage Management |
0.00 | 1.00 | Bangalore | SAN storage management and allocation/deallocation requests and maintenance. | ||||
Asset Management |
0.00 | 1.00 | Bangalore | Management and application administration of the Asset Insight environment. | ||||
| Sub-Total Operations |
0.00 | 2.00 | ||||||
| MF Operations | 0.75 | 1.50 | Bangalore | Software maintenance, performance analysis, problem resolution, product installations, system configurations, working problem management tickets and providing customer service in off hour situations. | ||||
MF Prod Control |
1.00 | 2.00 | Bangalore | Production control work during off-hours conditions. |
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| Off-Shore | Off-Shore | |||||||
| Year 1 | Year 2-5 | Location | Description of Services Provided by | |||||
| Function | (Est.) | (Est.) | Off-shore | Job Function | ||||
MF Monitoring |
1.50 | 1.50 | Bangalore | Production control work during off-hours conditions. | ||||
NT Monitoring |
0.00 | 1.00 | Bangalore | Production control work during off-hours conditions. | ||||
Sub-Total |
3.25 | 6.00 | ||||||
SMC& Business Ops |
||||||||
EAC |
0.00 | 0.50 | Bangalore | ID management and password management services. | ||||
Sub-Total |
0.00 | 0.50 | ||||||
Applications |
||||||||
SQL DBA |
0.00 | 1.00 | Bangalore | SQL DBA services including DBMS and table maintenance and tuning. | ||||
Web Hosting |
1.00 | 1.00 | Bangalore | Supplements on-shore Web Hosting team with monitoring for availability and response time, monitor problem management queue; assist in 24X7 problem resolution; assists in project work | ||||
Sub-Total |
1.00 | 2.00 | ||||||
Network (Data and
Voice) |
||||||||
Mail Gateway |
1.00 | 1.00 | Bangalore | Mail gateway operations including dead letter queue monitoring, spam filter maintenance, and quarantine maintenance. | ||||
NOC |
0.50 | 0.50 | Bangalore | Network operations and support. | ||||
Sub-Total |
1.50 | 1.50 | ||||||
Total Off-shore FTEs |
||||||||
(Est.) |
7.00 | 18.50 |
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ATTACHMENT N
MINIMUM REQUIRED INSURANCE COVERAGES
1. Commercial General Liability Insurance.
1.1 General. During the Term and the Disentanglement Period, ACS shall maintain a policy of
commercial general liability insurance (including coverage for contractual liability assumed by ACS
under this Agreement to the extent such liability can be insured by a standard commercial general
liability policy without endorsement, premises-operations, completed operations—products, and
independent contractors) providing coverage for bodily injury, personal injury and property damage
with combined single limits of not less than [***] Dollars ($[***]) per occurrence and [***]
Dollars ($[***]) in the aggregate per ACS policy year.
1.2 Required General Liability Policy Coverage. Any general liability policy provided by ACS
hereunder shall include, but not be limited to, the following coverage: (i) premises and
operations; (ii) products/completed operations; (iii) contractual liability to the extent such
liability can be insured by a standard commercial general liability policy without endorsement;
(iv) personal injury and advertising injury liability; (v) independent contractor’s liability; (vi)
severability of interest clause; (vii) broad form property damage, and shall be an occurrence-based
policy.
1.3 Primary Insurance Endorsement. Any general liability policy provided by ACS shall apply
as primary insurance, and any other insurance maintained by Symetra or its Affiliates, or any of
their directors, officers, agents or employees, shall be excess only and not contributing with such
coverage.
1.4 Form of General Liability Insurance Policies. All general liability policies shall be
written to apply to bodily injury, including death, property damage and personal injury, during the
policy term.
2. Business Automobile Liability Insurance. ACS shall procure business automobile liability
insurance written for bodily injury and property damage occurring during the policy term, in the
amount of not less than [***] Dollars ($[***]), combined single limit per occurrence, applicable to
all owned, non-owned, and hired vehicles.
3. Statutory Workers’ Compensation and Employers’ Liability Insurance. ACS shall maintain a
policy of workers’ compensation coverage (or any alternative plan of coverage as permitted or
required by applicable law) for no less than the minimum statutory amount required for the state or
states in which ACS’ employees are performing Services on Symetra’s and/or an Affiliate’s behalf,
and employers’ liability coverage for not less than [***] Dollars ($[***]) per occurrence for all
employees of ACS engaged in the performance of Services or operations under this Agreement.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
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4. Umbrella (Excess) Coverage. ACS shall maintain umbrella (excess) insurance coverage in the
amount of [***] Dollars ($[***]) written on a per occurrence, non-contributory basis for commercial
general liability, automobile liability, and employers’ liability coverage.
5. Professional Errors and Omissions Liability Insurance/Electronic Errors and Omissions. ACS
shall obtain professional errors and omissions liability insurance in an amount of not less than
[***]n Dollars ($[***]) per claim, with an aggregate limit of not less than [***] Dollars ($[***])
per ACS policy year, providing coverage for wrongful acts in the rendering of, or failure to
render, professional services under this Agreement, and shall include, but not be limited to,
electronic data losses or damage or breaches of electronic data security. As of the Effective
Date, the coverage will not contain specific, express exclusions for design errors, destruction of
data (other than casualty exclusions) or failure to design an adequate system arising out of ACS’
wrongful acts in the rendering of, or failure to render, professional services under this
Agreement. ACS will exercise commercially reasonable efforts to provide that such specific,
express exclusions will not be contained in such insurance during the Term of this Agreement and
Disentanglement Period. This coverage shall be maintained for a minimum of two (2) years following
termination or completion of ACS’ performance of its obligations under this Agreement. In the
event of a claim and upon Symetra’s request, ACS shall provide Symetra with a certified copy of its
professional errors and omissions liability policy.
6. Employee Dishonesty and Computer Fraud. ACS shall maintain employee dishonesty and
computer fraud coverage in an amount not less than [***] Dollars ($[***]) per occurrence and [***]
Dollars ($[***]) in the aggregate per ACS policy year.
7. Property Insurance. ACS shall provide insurance on all property owned by ACS and provided
under this Agreement. Such policy shall provide “all risk” perils and shall be written on a basis
of [***] percent ([***]%) replacement value of the property. Coverage shall include business
personal property, electronic data processing equipment, tenant improvements, business interruption
(including mechanical breakdown), business income and extra expense, transit and property of others
in the care, custody, and control of the insured. In the event Symetra or any of its Affiliates
places any real or personal property (whether owned or leased) in the care, custody, and control of
the ACS, Symetra or its Affiliates, as appropriate, must provide ACS with the replacement cost
value of such real or personal property within thirty (30) calendar days of ACS’ written request
for such information. Should Symetra or its Affiliates, as applicable, fail to provide the
replacement cost of the real or personal property within thirty (30) calendar days of ACS’ written
request, ACS shall be relieved of all liability for loss or damage to such property regardless of
how such loss or damage occurs. ACS shall maintain flood and earthquake insurance with respect to
its property used to provide Services in such amounts as ACS deems appropriate.
8. Deductible/Self Insured Retention. Any deductible, self-insured retention or use of an
insurance company subsidiary in excess of [***] Dollars ($[***]) must be declared to Symetra along
with any changes thereto and shall be subject to Symetra’s reasonable prior approval. ACS shall be
responsible for any deductible, self-insured retention or use of an insurance company subsidiary.
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
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9. Additional Insureds. The coverages maintained by ACS under Sections 1 and 2 above shall
name Symetra and its Affiliates, and the directors, officers, agents and employees of Symetra and
its Affiliates, individually and collectively, as additional insureds. The ACS insurance policies
required under Section 6 above shall name Symetra and its Affiliates, and the directors, officers,
agents and employees of Symetra and its Affiliates, individually and collectively, as loss payees.
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ATTACHMENT O
APPROVED SUBCONTRACTORS
1.
|
Avaya | |
2.
|
Compucom | |
3.
|
FileNet | |
4.
|
HP | |
5.
|
IBM (approved only to provide equipment) | |
6.
|
M-Tech | |
7.
|
Pitney-Bowes | |
8.
|
Sun | |
9.
|
Xenos | |
10.
|
Critical Watch |
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ATTACHMENT P
DEFINITIONS
“Acceptance” is defined in Section 5.2.8(b).
“Acceptance Criteria” is defined in Section 5.2.8(b).
“Acceptance Testing Period” is defined in Section 5.2.8(b).
“Acquiring Entity” is defined in Section 9.2.2.
“ACS” means ACS Commercial Solutions, Inc., and its successors and permitted assigns.
“ACS Bid” is defined in the Recitals.
“ACS Confidential Information” means records, data, and other information marked as “confidential”
that is obtained by Symetra in confidence from ACS or its Subcontractors in connection with this
Agreement, except for any information that was: (a) at the time of disclosure to Symetra and/or
its Affiliates, in the public domain; (b) after disclosure to Symetra and/or its Affiliates,
published or otherwise made a part of the public domain through no fault of Symetra and/or its
Affiliates; (c) in the possession of Symetra and/or its Affiliates at the time of disclosure to it
or them; (d) received after disclosure by ACS to Symetra and/or its Affiliates from a Third Party
who had a lawful right to disclose such information to Symetra and/or its Affiliates; or (e)
independently developed by Symetra and/or its Affiliates without reference to ACS Confidential
Information. For purposes of this provision, information is in the public domain if it is
generally known (through no fault of Symetra and/or its Affiliates) to Third Parties that are not
subject to nondisclosure restrictions with respect to such information.
“ACS Competitor” means the entities set forth in Addendum 2 to this Attachment P and any other
provider of services substantially similar to the Services.
“ACS Derivative Works” is defined in Section 12.1.4.
“ACS Equipment” is defined in Section 4.2.
“ACS Indemnitees” means ACS, and each of its officers, directors, employees, agents, successors and
assigns.
“ACS Key Personnel” means, initially, those personnel of ACS and its Subcontractors who are
identified in Attachment E.
“ACS Project Executive” is defined in Section 1.2.2.
“ACS Service Delivery Manager” is defined in Section 1.2.3.
“ACS Underlying Works” means those Underlying Works conceived, invented, created or acquired by
ACS, rather than by a Third Party.
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“Act” is defined in Section 14.6(a).
“Administrative Functions” are routine functions such as setting up user IDs, changing
authorization tables, changing account codes, and similar functions handled by ACS.
“Affiliate” means, as to any Person, any other Person that, now or in the future, directly or
indirectly, controls, is controlled by, or is under common control with, such Person, whether
through ownership of voting securities or otherwise. For this purpose, and without limiting the
foregoing, any Person that owns more than twenty percent (20%) of the outstanding voting securities
of any other Person shall be deemed to control such other Person.
“Affiliates of Symetra” means those entities that are Affiliates of Symetra and identified in
Schedule 7, all of which shall be authorized to receive Services from ACS hereunder.
“Agreement” means this Information Technology Services Agreement, including all Schedules,
Attachment, Exhibits, Appendices, Addenda and other documents attached hereto or incorporated
herein by reference, as amended from time-to-time.
“Annual At-Risk Amount” means: (a) for the first Contract Year, the sum of: (i) [***] percent
([***]%) of the total transition Services fees; plus (ii) [***] percent ([***]%) of the sum of that
Contract Year’s monthly Annual Services Fees, which will be estimated at the beginning of the first
Contract Year based on that year’s Annual Services Fees; and (b) for the second and each subsequent
Contract Year, [***] percent ([***]%) of the sum of that Contract Year’s monthly Annual Services
Fees, which will be estimated at the beginning of each such Contract Year based on that year’s
Annual Services Fees.
“Annual Service Baselines” are set forth in Table 4 of Schedule 3.
“Annual Services Fees” is defined in Section 6.1.3.
“ARC” means additional resource charge.
“Availability” is the percentage of time that a given Service or system is fully operational and
available when its resources are called upon at a random point in time. Availability represents a
measure of the fraction of time (expressed as a percentage) during a defined period when the
Service or system is deemed to be equal to or better than an SLR.
Availability (%)
|
= | 100% – Unavailability (%) | ||||
| Where Unavailability is defined as: | ||||||
| S Unplanned Outage Duration x 100%
|
Availability measurement calculations shall be limited to those Service and system components that
are directly under the control of ACS, as well as Services and systems components for which ACS is
responsible for subcontracting to Third Parties. Availability measurement calculations
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
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shall exclude any Service or system elements downtime that is caused by a Force Majeure Event, as
well as any Service or system that is controlled exclusively by Symetra.
“Baseline” means, for each of the Service Tower Services, the quantity of Resource Units included
in the Annual Services Fees.
“Benchmarking Company” is defined in Attachment A.
“Bridge Group” or “Bridge” means the production control team responsible for providing support for
client interactive sessions and applets in the production cluster environment.
“Business Days” means Monday through Friday, excluding New Year’s Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
“Business Day Hours” means a local Business Day “window of coverage” hours within which Symetra
requires the Services to be provided for a specific SLR. While ‘normal’ business hours are
generally 0400-1700, Pacific time, most schedules operate or provide support on a 7x24x365
(0000-2400) basis.
“California Statute ” is defined in Section 14.5.
“CAP” is defined in Section 11.1.
“Category 1 Software” is defined in Section 4.3.1(a).
“Category 2 Software” is defined in Section 4.3.1(b).
“Category 3 Software” is defined in Section 4.3.2(a).
“Category 4 Software” is defined in Section 4.3.2(b).
“Category 5 Software” is define4d in Section 4.3.3.
“Category 6 Software” is defined in Section 4.3.4.
“Change in Control” means: (a) any transaction or combination of transactions as a result of which
either a Person or a group of Persons that customarily has acted in concert and that presently is
in control of a Party ceases to be in control of such Party; (b) the sale, transfer, exchange or
other disposition (including disposition in full or partial dissolution) of fifty percent (50%) or
more of the beneficial ownership (as defined in Rule 13(d) of the Securities Exchange Act of 1934)
of the voting power of a Party, or of the assets of such Party that constitute a substantial or
material business segment of such Party; (c) individuals who as of the Effective Date constituted
the Board of Directors of a Party cease for any reason to constitute a majority of such Party’s
Board of Directors then in office; or (d) with respect to ACS, the unit, division or operating
group of ACS that is responsible in providing the Services to Symetra is sold, transferred or
otherwise experiences a change in ownership or control.
“Change in Control Expenses” is defined in Section 11.2(c).
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“Client Satisfaction” means a subjective rating obtained through a combination of periodic End-User
surveys and feedback from random End-User follow-up calls.
“Collaborative Computing” means the use of computers to support and promote shared experience, peer
exchange, the development of shared models, purpose, common practices of interaction and
communication – allowing for more efficient deployment across heterogeneous environments and
enabling joint collaborative projects.
“Commercial Applications” means those applications that are part of Symetra’s revenue-generating
processes.
“Conditional Acceptance” is defined in Section 5.2.8(b).
“Confidential Information” means ACS Confidential Information or Symetra Confidential Information,
as the case may be.
“Contract Year” or “CY” means: (a) the period from the Effective Date through and including a
period that is twelve (12) months following the last to occur of the Handover Dates (which shall
constitute the first Contract Year); and (b) thereafter, each twelve (12) month period beginning on
each subsequent anniversary of the end of the first Contract Year.
“Corporate Applications” means those applications that support Symetra’s internal management
systems.
“Correct IMAC Dispatch” means that an IMAC is correctly dispatched, based on the information
provided to ACS or that should be reasonably verifiable by ACS, in terms of:
| • | the action that is to be performed; | ||
| • | the replacement technology that is to be used, if appropriate; | ||
| • | the person or location involved; | ||
| • | the cost center to be charged; and | ||
| • | the time period in which the IMAC is to occur. |
“Corrective Assessment” means a type of Fee Reduction that may be assessed upon ACS’ failure to
achieve an SLA or a Critical Milestone; all Corrective Assessments will be specified in the tables
attached to Schedule 5.
“Corrective Plan” is defined in Section 7.4.3.
“Country Agreement” is defined in Section 1.3.2.
“CPI” means the annual increase in percentage points (or fraction thereof) of the official Consumer
Price Index, All Urban Consumers, U.S. City Average, All Items, published by the Bureau of Labor
Statistics, United States Department of Labor.
“Critical Milestones” means those milestones, activities, actions and projects identified as such
in this Agreement including, without limitation, in any applicable Schedule 2, in Schedule 5, in
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any In-Scope Service Request, in any Out-of-Scope Work Order and/or elsewhere in this Agreement.
“Data and Modified Data” is defined in Section 12.3.
“Data Protection Laws” is defined in Section 14.6(a).
“Deadband Allowance” is defined in Section 5.1 of Schedule 3.
“Derivative Works” means a revision, modification, translation, abridgment, compilation,
condensation or expansion of the applicable underlying work or any other form in which that work
may be recast, transformed or adapted, and which, if prepared without the consent of the copyright
owner, would be a copyright infringement.
“Disabling Device” is defined in Section 8.1.2.
“Disclosing Party” means the Party that has disclosed Confidential Information to the other Party
or to such other Party’s employees, agents or contractors (including Subcontractors).
“Disentanglement ” is defined in Section 10.1.
“Disentanglement Period” means the period of time during which ACS is providing Disentanglement
services to Symetra.
“Effective Date” is defined in the opening paragraph of the Agreement.
“End-to-End Response Time” is defined as the total elapsed time for a discrete data packet (e.g.,
ping) to complete a round-trip traversal of the computing infrastructure from the initiation point
device to a specific computing device resource and return of a response acknowledgement to the
point of initiation (i.e., “ping”). This shall exclude any local processing overhead time that may
result from any Symetra or Third Party computing resources over which the ACS has minimal control.
“End-User” means: (a) any employee of Symetra or any of the Affiliates of Symetra; and (b) any
other Person who is determined by Symetra, in its sole discretion, to require access to any of the
Services.
“Enhanced Technology” is defined in Section 2.5.4.
“Environmental Laws” means all applicable federal, state and local statutes, laws, regulations,
rules, ordinances, codes, licenses, orders or permits of any governmental entity relating to
environmental matters including, without limitation: (a) the Clean Air Act (42 U.S.C. 7401 et
seq.); the Federal Water Pollution Control Act (33 U.S.C. §1251); the Safe Drinking Water Act (42
U.S.C. §5 300f et seq.); the Toxic Substances Control Act (15 U.S.C. 55 2601 et seq.); the
Endangered Species Act (16 U.S.C. §1531 et seq.); the Emergency Planning and Community
Right-to-Know Act of 1986 (42 U.S.C. 55 110011 et seq.); and (b) similar state and local
provisions.
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“EU Directive” means Directive 95/46/EC of the European Parliament and of the Council of 24 October
1995 on the Protection of Individuals with Regard to the Processing of Personal Data and on the
Free Movement of Such Data.
“Events of Default” means any of the events described in Section 9.3.
“Exception Report” is defined in Section 5.2.8(c).
“Expiration Date” is defined in Section 10.2.
“Extraordinary Event” means a Force Majeure Event and any other event not exceeding ninety (90)
calendar days in duration that: (a) could not have been adequately planned for; and (b)(i)
substantially interferes with or impacts Symetra’s ordinary business operations; or (ii) causes
substantial increase or decrease in demand for Symetra’s products or services or the Services that
are provided or that could be provided by ACS under this Agreement.
“Fee Reductions” means the dollar amount by which the Fees will be reduced based on ACS’ failure
to: (a) timely achieve any Critical Milestone; or (b) achieve any SLA. The methodology for
calculating all Fee Reductions is set forth in Schedule 5.
“Fees” means the fees payable by Symetra to ACS hereunder in consideration of ACS’ provision of the
Services and Other Services.
“Final Acceptance” is defined in Section 5.2.8(d).
“Final Acceptance Testing Period” is defined in Section 5.2.8(d).
“Fixed Charges ” means the Annual Service Fees, expressed as a monthly amount.
“For Cause” means the applicable employee committed or participated in actions that are or were
dishonest, fraudulent, illegal, unethical, involving insubordination or moral turpitude, or
involving disclosure or trade secrets, proprietary information or other forms of confidential
information.
“Force Majeure Event” means an act of God, act of governmental body or military authority, fire,
explosion, flood, epidemic, riot or civil disturbance, war, sabotage, insurrections, blockades,
embargoes, storms or other similar events that are beyond the reasonable control of the affected
Party. Notwithstanding the foregoing, “Force Majeure Event” expressly excludes: (a) any event
that ACS reasonably could have prevented by any system testing either required to be performed
pursuant to the Services or necessary to provide the Services; (b) (i) any single point of failure
where ACS was obligated to provide fault tolerant Services; (ii) where fault tolerant architecture
was deployed for Symetra notwithstanding the absence of specifying same; or (iii) where a fault
tolerant infrastructure or architecture should have reasonably been implemented by ACS; (c) any ACS
strike, walkout or other labor shortage; and/or (d) any non-performance of an ACS Subcontractor,
regardless of cause (unless due to a Force Majeure Event).
“GAAP” is defined in Section 7.1.
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“GLB” means the Gramm-Leach-Bliley Act, 15 U.S.C. Sections 6801-6809.
“Guiding Principles” is defined in Section 1.1.
“Handover Date” means, with respect to each of the Service Tower Services, the date on which ACS is
scheduled to begin providing such Service Tower Services ; each such date constitutes a Critical
Milestone and is specified in the Transition Plan.
“Hazardous Materials” means any substances the presence of which requires investigation or
remediation under any Environmental Law, or that is or becomes defined as a “hazardous waste,”
“hazardous substance,” pollutant or contaminant under any Environmental Law.
“HIPAA” is defined in Section 14.4.1.
“IMAC” (Install, Move, Add or Change) means activities performed as pre-scheduled events to
install, remove, relocate, upgrade, modify, or otherwise reconfigure the Symetra computing system
and/or telecommunications infrastructure components that are covered by this Agreement. IMACs are
included in Services and will be performed at no additional charge to Symetra, provided the work
can be performed with normally assigned staffing levels. One (1) IMAC is counted for each unique
action that occurs during normal business hours. If IMAC-related work must be performed outside of
normal Business Day work hours due to operating/scheduling constraints, the parties will mutually
agree how these IMACs will be addressed. Any repeat visits to correct problems that arise or
result from implementing an IMAC will be considered an Incident and will not be included under the
IMAC count. If multiple upgrades or reconfigurations are scheduled for a single piece of
equipment, only one (1) IMAC will be counted.
“In-Scope Service Request” means a request, in the form set forth in Attachment D, for the
performance of work that is not being performed at a particular time but that is within the scope
of the Services.
“Incident” means a single event requiring an ACS response typically denoted by an In-Scope Service
Request or identification of a problem. Symetra will determine the Severity Level of each reported
Incident. Repeat visits to correct problems that arise from previously implemented IMACs are
considered Incidents, not IMACs, and will not be added to the IMAC count. ACS will provide Symetra
with an escalation procedure (to be approved by Symetra) for resolution of reported Incidents.
“Incident Resolution” means the point at which ACS has responded to an Incident and ACS has either:
(a) conducted and successfully completed a Root Cause Analysis on a reported problem and
appropriately corrected both the results and the cause of the problem; or (b) has provided an
appropriate answer to an inquiry or an informational question that is understood by and acceptable
to Symetra. In both cases, the Incident is not resolved until Symetra is convinced and satisfied
that it has been resolved.
“Incident Resolution Time” (aka Time to Repair) means the time elapsed from the initiation of a
trouble ticket until service is restored and/or call is resolved to the caller’s satisfaction.
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“Indemnified Party” means either the Symetra Indemnities, in the case of claims, suits or
proceedings subject to indemnification by ACS under Section 15.1 of the Agreement, or the ACS
Indemnitees, in the case of claims, suits or proceedings subject to indemnification by Symetra
under Section 15.2 of the Agreement.
“Indemnifying Party” means ACS, in the case of claims, suits or proceedings subject to
indemnification by ACS under Section 15.1 of the Agreement, or Symetra, in the case of claims,
suits or proceedings subject to indemnification by Symetra under Section 15.2 of the Agreement.
“Infringement Claim” is defined in Section 15.1.1.
“Initial Term ” is defined in Section 9.1.1.
“Interest Rate” means the prime rate as published in the Wall Street Journal on the Business Day
immediately preceding the date in which interest began to accrue under this Agreement plus one
percent (1%).
“IT” means information technology.
“IT Outsourcing Committee” is defined in Section 1.2.1.
“Key Subcontractors” is defined in Section 18.1.
“Local Currency” is defined in Section 6.1.6.
“Losses” is defined in Section 15.1.1.
“Measurement Interval” means the period during which a given SLR is measured (e.g., one (1) month,
one (1) year, etc.). This takes into consideration the impact of a continuous outage. For
example, a monthly measurement interval for a ninety-nine percent (99%) Minimum Performance for a
24x7 system with eight (8) hours of weekly planned downtime would allow 6.4 hours of a continuous
outage, with no other outages during the calendar month. A weekly interval would only allow 1.6
hours of a continuous outage.
“Measurement Period” means the calendar period with respect to which a measurement for a given SLR
is aggregated, measured and reported (e.g., one (1) month, one (1) year, etc.) as stated in each
Schedule 2.
“Middleware” means software that serves as a data-passing intermediary between operating system
software and an application. Middleware is also used to describe separate products that serve as
the glue between two applications, distinct from import and export features that may be built into
one of the applications.
“Minimum Performance” means the lowest level of acceptable service performance before Fee
Reductions apply for non-performance during a monthly period.
“New Country” is defined in Section 1.3.2.
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“NWSC” means the ACS Northwest Service Center located in Hillsboro, Oregon.
“OES” or “OESs” means operating environment specification(s).
“OLAP” or “On-line Analytical Processing” means a category of database software which provides
users the ability to examine, select or change raw data quickly and interactively using pre-defined
functions.
“Other Services” is defined in Section 6.1.4.
“Outage Duration/Incident Resolution Time (a.k.a. Time to Repair)” is the time elapsed from the
initiation of an Incident trouble ticket until Incident Resolution is achieved.
Calculation: Performance = Actual time to resolve/target time to resolve
“Outage Reporting” means that, upon detecting a Service outage, ACS will notify the designated
Symetra contact within the specified time-to-notify interval.
“Out-of-Scope Service(s)” is defined in Section 2.9.1.
“Out-of-Scope Work Order” is defined in Section 2.9.1.
“Party” or “Parties” means, individually or collectively, Symetra and/or ACS.
“Peak Demand Period” means the period between 0100-2000 hours, Pacific time, Monday through Friday.
“Person” means any natural person, corporation, limited liability company, limited liability
partnership, general partnership, limited partnership, trust, association, governmental
organization or agency, political subdivision, body politic or other legal person or entity of any
kind, legally constituted.
“Premises Devices” means devices used by Symetra End-Users to interface with the computing
infrastructure, including workstations, network-attached printers and other network-attached
peripherals.
“Pricing Band” means [***] percent ([***]%) above or below the applicable Baseline.
“Priority SLA” is defined in Section 2(b) of Schedule 5.
“Problem” means any dispute or problem arising out of or relating to this Agreement, including
those that relate to any of the following:
(a) an alleged failure by either Party to perform its obligations under this Agreement;
(b) an alleged inadequacy or delay of either Party’s performance under this Agreement;
Portions marked [***] have been omitted pursuant to a Confidential Treatment Request by Symetra
Financial Corp., this information has been filed separately with the Securities and Exchange
Commission.
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(c) a request for products, services or resources, where the Parties disagree whether
such products, services or resources are within the scope of the Services (and therefore
included in the Fees) or otherwise within the scope of this Agreement; and/or
(d) a disagreement as to the responsibilities either Party has under this Agreement.
“Procured Technology” is defined in Section 2.4.
“Rate Differential” is defined in Section 4(b) of Attachment A.
“Records” is defined in Section 7.4.2.2.
“Receiving Party” means the Party that has received Confidential Information from the other Party
or such other Party’s employees, agents or contractors (including Subcontractors).”Relief Event” is
defined in Section 2.2.4.
“Renewal Term” is defined in Section 9.1.2.
“Replacement Provider” is defined in Section 10.1
“Reporting Period” means all reports are provided on a monthly basis, within three (3) Business
Days of the close of the calendar month, unless stated otherwise.
“Resolve” means to repair, replace, reconfigure, reinstall, re-route, or otherwise provide a
complete solution to an Incident that returns the system and/or End-User(s) to non-degraded full
functionality. A workstation Incident at a VORA site is considered “resolved” by the overnight
shipment of a repaired or a replacement workstation that is fully operational. Implementing a
Workaround is a partial or temporary resolution.
“Resource Unit” or “RU” means, for each Service described in the applicable Schedule 2, a unit of
resource for which Symetra and ACS have established a minimum purchase requirement.
“Resources” is defined in Section 2.7.
“RFP” is defined in the Recitals.
“Root Cause Analysis” is a problem analysis process undertaken to identify and quantify the
underlying cause(s) of an Incident, and document the necessary corrective actions to be taken to
prevent recurring problems and/or trends which could result in problems.
“RRC” means reduced resource credit.
“SAS 70” means the American Institute of Certified Public Accountants’ Statement on Auditing
Standards (SAS) No. 70, Reports on the Processing of Transactions of Service Organizations, and any
replacement or successor standard.
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“SAS 70 Type II Audit” means an audit conducted pursuant to SAS 70 that results in a report that
both describes an organization’s description of controls at a specific point in time and includes
detailed testing of those controls over a minimum six (6) month period, or any replacement or
successor audit standard or process.
“Schedule Time” is the time during which Service is to be operational as designated in the
applicable Schedule 2. All references to schedule time (e.g., 0730 hours) in the SLR tables are
local time for the point of service.
“Secretary” means the Secretary of Health and Human Services.
“Security Standards” is defined in Section 14.4.2.
“Service Rates” is defined in Section 6.1.4.
“Service Tower” means each of the categories of Services as set forth in each applicable Schedule
2.
“Services” means all of the services, functions and activities in any one or more of the following
categories:
(a) the services described in Schedule 1, Schedules 2A, 2B, 2C, 2D,
2E, 2F, 2G and 2H
and in any additional Service Tower Schedules that may be agreed to by the Parties following
the Effective Date;
(b) any other services specified elsewhere in this Agreement and not designated as
Other Services;
(c) any other IT-related services that are requested by Symetra from time-to-time that
do not require additional start-up expenses or the use of additional resources not otherwise
required for the performance of the services described in subsections (a), (b), (d) and (e)
of this definition; and
(d) any services, functions, responsibilities or tasks not specifically described in
this Agreement that are required for the proper performance of any of the foregoing and that
are an inherent part of, or a necessary sub-part included within, any of the foregoing;
(e) any management, planning and other services that are ancillary to, and appropriate
for the performance of, any of the foregoing.
“Severity Levels” (aka Incident Priority Level) are defined categories that identify the degree of
business criticality and importance to Symetra (the “Business Impact”) of specific Incidents, and
the associated ACS response requirements attributed to any such Incident. The following Severity
Level table categories and descriptions apply to all Services:
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| Priority Level | Description | |
1
– Emergency/Urgent
|
The problem has caused a complete and immediate work stoppage affecting a primary business process or a broad group of users such as an entire department, floor, branch, line of business, or external customer. No work around available. Examples: Major application problem (e.g. payroll, call center, etc.) Severe problem during critical periods (e.g. month-end processing) Security Violation (e.g. denial of service, widespread virus, etc.) | |
2
– High
|
A business process is affected in such a way that business functions are severely degraded, multiple users are impacted or a key customer is affected. A workaround may be available; however the workaround is not easily sustainable. Examples: Major application (e.g. exchange) VIP Support | |
3 – Medium
|
A business process is affected in such a way that certain functions are unavailable to end users or a system and/or service is degraded. A workaround may be available Examples: Telecommunication problem (e.g. Blackberry, PBX digital/analog card) Workstation problem (e.g. hardware, software) | |
4 – Low
|
An incident that has little impact on normal business processes and can be handled on a scheduled basis. A workaround is available. Examples: User requests (e.g. system enhancement) Peripheral problems (e.g. network printer) Preventative Maintenance Benchmarks |
“Shared Resources” is defined in Section 2.5.6.
“SLA” or “Service Level Agreement” means SLRs that have a Fee Reduction associated with them.
“SLR” means service level requirement and is a standard for performance of the Services.
“SLR Reports” are defined in Section 2.2.2(b).
“SOP” or “SOPs” means standard operating procedure(s).
“SOX Laws” means the Sarbanes-Oxley Act of 2002, applicable rules and regulations issued by the
U.S. Securities and Exchange Commission and applicable rules and regulations of the Public Company
Accounting Oversight Board including, without limitation, provisions relating to internal controls
over financial reporting, as any of the foregoing may have been and/or may be amended from time to
time.
“Standards and Procedures Manual” is defined in Section 2.6.1.
“Subcontractor” means, subject to the terms of Section 18.1, any Person other than ACS including,
without limitation, any ACS Affiliate, that provides Services to Symetra pursuant to an agreement
(whether oral or written) with ACS.
“Substantially Dedicated Resources” is defined in Section 10.4.5.
“Symetra” means Symetra Life Insurance Company, and its successors and permitted assigns.
“Symetra Competitors” means the entities set forth in Addendum 1 to this Attachment P and any other
insurance and/or financial services company that markets annuities, life insurance,
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disability insurance, medical excess loss insurance, and/or limited benefit health insurance
through independent agents.
“Symetra Confidential Information” means all records, data and other information of Symetra and/or
its Affiliates that is disclosed to ACS or any of its employees, contractors (including
Subcontractors) and/or agents, whether in tangible, intangible and/or oral form, and whether in
written form or readable by machine, including, without limitation:
(a) all Symetra Data;
(b) all financial information, personnel information, customer information, reports,
documents, correspondence, plans and specifications relating to Symetra and/or its
Affiliates;
(c) all technical information, materials, data, reports, programs, documentation,
diagrams, ideas, concepts, techniques, processes, inventions, knowledge, know-how, and trade
secrets, developed or acquired by Symetra and/or its Affiliates, including Work Product;
(d) any information that Symetra and/or its Affiliates identifies to ACS as
confidential by a stamp or other similar notice; and
(e) all other records, data or information collected, received, stored or transmitted
in any manner connected with the provision of Services hereunder.
Symetra Confidential Information shall not include information that ACS can demonstrate was: (f)
at the time of disclosure to ACS, in the public domain; (g) after disclosure to ACS, published or
otherwise made a part of the public domain through no fault of ACS; (h) in the possession of ACS at
the time of disclosure to it, if ACS was not then under an obligation of confidentiality with
respect thereto; (i) received after disclosure by Symetra to ACS from a Third Party who had a
lawful right to disclose such information to ACS; or (j) independently developed by ACS without
reference to Symetra Confidential Information. For purposes of this provision, information is in
the public domain if it is generally known (through no fault of ACS) to Third Parties who are not
subject to nondisclosure restrictions with respect to such information.
“Symetra Data” means, in or on any media or other form of any kind: (a) all data that is in the
possession of Symetra and/or its Affiliates, and all data concerning or indexing such data
(regardless of whether or not owned by Symetra and/or its Affiliates or generated or compiled by
Symetra and/or its Affiliates); (b) all personal data, meaning any information relating to an
identified or identifiable natural person who can be identified, directly or indirectly, including
sensitive data (as defined in the Act) which is under, or subject to or intended to be subject to
processing (as defined in the Act) by ACS pursuant to this Agreement; and (c) all other records,
data, files, input materials, reports, forms and other such items that may be received, computed,
developed, used or stored by ACS or any of its employees, contractors (including Subcontractors) or
agents from, for or on behalf of Symetra and/or any of its Affiliates, or in connection with the
Services.
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“Symetra Facilities” is defined in Section 4.7.
“Symetra Holidays” are: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
“Symetra Indemnitees” means Symetra and its Affiliates, and each of their respective directors,
officers, employees, attorneys, agents, representatives, consultants, successors and assigns.
“Symetra-Leased Equipment” is defined in Section 4.1.1.
“Symetra-Owned Equipment” is defined in Section 4.1.1.
“Symetra Project Executive” is defined in Section 1.2.2.
“Symetra Service Delivery Manager” is defined in Section 1.2.3.
“Symetra Sites” is defined in Section 2.2.3.
“Target” is the desired service performance level Symetra is seeking for a particular SLR.
“Technology Plan” is defined in Section 2.5.4.
“Term” means the Initial Term and any Renewal Terms.
“Termination Date” means 11:59 p.m. on the specified date of termination, as set forth in a
Termination Notice.
“Termination Fee” is defined in Section 9.2.1.
“Termination Notice” means a written notice of termination delivered by one Party to the other.
“Third Party” means a person or entity other than the Parties.
“Third-Party Resources” is defined in Section 2.7.
“Third-Party Works” is defined in Section 12.1.5.
“Time to Respond” is the duration between when an Incident is reported to ACS and an ACS support
technician or engineer provides initial feedback to Symetra.
Calculation: Performance = Actual time to respond/target time to respond
“Transition Plan” is defined in Section 2.3.1.
“Triggering Event” is defined in Section 9.2.1.
“UCITA” is defined in Section 19.16
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“Underlying Works” means all works of authorship fixed in any tangible medium of expression that:
(a) had already been conceived, invented, created or acquired by ACS or a Third Party prior to the
Effective Date and that were not conceived, invented or created for Symetra’s use or benefit in
connection with this Agreement; or (b) are conceived, invented, created or acquired by ACS or a
Third Party after the Effective Date, but only to the extent such works of authorship do not
constitute Work Product. An Underlying Work includes all intermediate and partial versions
thereof, as well as all source code, object code, documentation, formulae, processes, algorithms,
designs, specifications, inventions, discoveries, concepts, improvements, materials, program
materials, software, flow charts, notes, outlines, lists, compilations, manuscripts, writings,
pictorial materials, schematics, apparatus, methods, techniques, other creations, and the like,
whether or not patented or patentable or otherwise protectable by law.
“User Account IMAC” means routine functions, such as setting up user IDs, changing user
authorization tables, changing account codes and similar functions handled by the ACS. Examples
include completion of one or more steps necessary to establish or modify an account for a user,
such as: (re)set up user login environment; (re)set up home directory and shared directory access;
(re)set up e-mail access; (re)set up access permissions.
“Variable Charges ” means charges that vary in amount from month to month including, without
limitation, ARCs and RRCs, telephone usage charges and the like.
“VORA” is an acronym for Virtual Office/Remote Access pertaining to Symetra remote users whose
office is either permanently or temporarily located outside of an Symetra Site and who connect to
the Symetra network via remote access facilities (i.e., VPN, Dial-up) using a laptop or desktop PC
and having different service requirements from that of an Symetra IT-managed/staffed business
facility.
“Week” is seven (7) days, Sunday through Saturday, including Symetra Holidays.
“Weighting Factor” means, for any SLA or Critical Milestone, the percentage factor that is applied
to the Annual At-Risk Amount for purposes of calculating Fee Reductions in the event of any failure
with respect to an SLA or Critical Milestone during a given Measurement Interval. The Tables
attached to Schedule 5 specify the Weighting Factor for each SLA and each Critical Milestone as of
the Effective Date.
“Workaround” is a temporary solution that ACS or Symetra can implement in the event of an Incident
as an alternate method of providing full Service or process functionality that allows the affected
system(s) and/or process(es) to deliver to Symetra an acceptable level of business operations
functionality until a permanent Incident Resolution can be implemented. Any such Workaround must
be acceptable to and approved by Symetra.
“Work Product” means all works of authorship fixed in any tangible medium of expression (including,
without limitation, computer programs), and all intermediate and partial versions thereof, as well
as all source code, object code, documentation, formulae, processes, algorithms, designs,
specifications, inventions, discoveries, concepts, improvements, ideas, know-how, techniques,
materials, program materials, software, flow charts, notes, outlines, lists,
compilations, manuscripts, writings, pictorial materials, schematics, apparatus, methods,
techniques, other
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creations, and the like, whether or not patented or patentable or subject to copyright, or
otherwise protectable by law, that are created, invented or conceived for the use or benefit of
Symetra in connection with this Agreement: (a) by any ACS personnel, any Symetra personnel, where
“personnel” includes employees, contractors (including, in the case of ACS, Subcontractors), agents
and the like; (b) any Person who was an employee of Symetra and then became an employee of ACS or
any of its contractors (including Subcontractors) or agents, where, although creation or
reduction-to-practice is completed while the Person is an employee of ACS or such contractors
(including Subcontractors) or agents, any portion of the same was created, invented or conceived by
such Person while an employee of Symetra.
“Workstation” means an End-User computing device, ranging in power and function from a desktop or
laptop PC to a high-end engineering or graphic workstation.
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ADDENDUM 1
SYMETRA COMPETITORS
1.
|
AIG Life Group | |
2.
|
Hartford Life Group | |
3.
|
Metropolitan Life & Affiliated | |
4.
|
Equitable Group | |
5.
|
AEGON USA Inc. | |
6.
|
Allianz Insurance Group | |
7.
|
Manulife Financial | |
8.
|
Genworth Financial Group | |
9.
|
Allstate Financial | |
10.
|
ING Group | |
11.
|
New York Life Group | |
12.
|
Pacific Life Group | |
13.
|
American Express Financial | |
14.
|
Citigroup | |
15.
|
Jackson National Group | |
16.
|
Lincoln National Group | |
17.
|
John Hancock Financial Svs Group | |
18.
|
Prudential of America Group | |
19.
|
MassMutual Financial Group | |
20.
|
Northwestern Mutual Group | |
21.
|
Sun Life Financial Group | |
22.
|
Sammons Financial Group | |
23.
|
American National Group | |
24.
|
Thrivent Financial Lutherns | |
25.
|
Old Mutual US Life Holdings | |
26.
|
Western & Southern Life Group | |
27.
|
Phoenix Life Group | |
28.
|
AmerUs Group | |
29.
|
Ohio National Life Group | |
30.
|
AFLAC Incorporated Group | |
31.
|
Guardian Life | |
32.
|
American Equity Investment Grp. | |
33.
|
Jefferson-Pilot Corp | |
34.
|
Principal Life Insurance Co. | |
35.
|
Assurant | |
36.
|
Security Benefit Group | |
37.
|
TIAA Group | |
38.
|
Conseco Insurance Group |
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ADDENDUM 2
ACS COMPETITORS
1.
|
Accenture | |
2.
|
APAC Customer Services | |
3.
|
BearingPoint | |
4.
|
Brigade Corporation | |
5.
|
Cap Gemini Ernst & Young | |
6.
|
CGI Group | |
7.
|
Computer Sciences Corporation | |
8.
|
Coefficient Backoffice Solutions Corporation | |
9.
|
Convergys | |
10.
|
Creditek | |
11.
|
Datamark | |
12.
|
Deloitte | |
13.
|
Deloitte Consulting | |
14.
|
Diversified IT Solutions | |
15.
|
Electronic Data Systems Corporation | |
16.
|
Ephinay Corporation | |
17.
|
Equitant | |
18.
|
Hewitt/Exult | |
19.
|
First Consulting Group | |
20.
|
First Health Group Corporation | |
21.
|
Geller & Company | |
22.
|
GTESS Corporation | |
23.
|
Hewlett-Packard | |
24.
|
IBM Corporation | |
25.
|
ICT Group | |
26.
|
Infosys | |
27.
|
LASON | |
28.
|
MAXIMUS | |
29.
|
NCIC | |
30.
|
OPI | |
31.
|
Outsource Partners | |
32.
|
PeopleSupport | |
33.
|
Perot Systems Corporation | |
34.
|
Precision Response Corporation | |
35.
|
Progeon (an Infosys company) | |
36.
|
QCSI | |
37.
|
SCS | |
38.
|
Siemens | |
39.
|
SITEL Corporation | |
40.
|
SourceNet Solutions |
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41.
|
Stream International | |
42.
|
Sykes | |
43.
|
SOURCECORP | |
44.
|
Teletek Corporation | |
45.
|
The TriZetto Group | |
46.
|
Unisys | |
47.
|
Verizon | |
48.
|
Wipro | |
49.
|
Xerox Corporation |
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ATTACHMENT Q
APPROVED AUDITORS
1.
|
KPMG | |
2.
|
Ernst & Young | |
3.
|
PricewaterhouseCoopers | |
4.
|
Deloitte & Touche |
If any of the above-listed firms becomes an ACS Competitor, then such firm shall be excluded from
the foregoing list of approved auditors as long as such firm remains an ACS Competitor.
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Exhibit
10.15
Symetra Financial Corporation (the “Company”)
IPO Grant Program
IPO Grant Program
Set forth below are the material terms and conditions of the Company’s IPO Grant Program (the
“Program”):
| • | IPO Grant Pool: A one-time IPO transaction grant pool will be established with an aggregate value equal to $14.6 million in value, as determined below. The pool will be paid out to participants through awards (“Awards”) as set forth below. | ||
| • | Eligibility: Eligibility for the Program is limited to those current employees of the Company and its subsidiaries who, as of the IPO Pricing Date (defined below), hold outstanding awards under the Company Performance Share Plan for 2007-2009. | ||
| • | Awards: Twenty percent (20%) of the pool will be paid out to participants in the form of fully-vested shares of Common Stock (“Shares”), forty percent (40%) will be paid out in the form of restricted stock units (“RSUs”), and forty percent (40%) will be paid out in the form of stock options (“Options”), as follows: |
Shares. The aggregate number of shares to be granted under the Program shall equal $14.6
million, multiplied by 20%, divided by the “Public Offering Price” set forth in the
prospectus for the IPO. Shares will be granted on the closing date of the IPO,
subject to such closing occurring. Shares will be fully vested on the date of grant,
subject only to a lock-up agreement entered into in connection with the IPO.
RSUs. The aggregate number of RSUs to be granted shall equal $14.6 million, multiplied by
40%, divided by the “Public Offering Price” set forth in the prospectus for the IPO. RSUs
will be granted on the date on which the Company enters into an underwriting agreement for
the IPO (the “IPO Pricing Date”), but shall terminate if the IPO is terminated. RSUs will
vest as to 50% of the units on the second anniversary of the IPO Pricing Date, and as to 50%
of the units on the fourth anniversary of the IPO Pricing Date.
Options. The aggregate number of Options to be granted shall equal $14.6 million,
multiplied by 40%, divided by the value of an Option on the IPO Pricing Date in accordance
with the Black-Scholes-Merton model. Options will have an exercise price equal to 110% of
the midpoint of the price range for the Common Stock set forth in the Company’s S-1
Registration Statement on file as of the commencement of the road show for the IPO;
provided, however, that if such amount is less than 100% of the fair market value of the
Common Stock on the IPO Pricing Date, then the exercise price shall instead be 100% of the
fair market value of the Common Stock on the IPO Pricing Date. Options will be granted on
the IPO Pricing Date, but shall terminate if the IPO is terminated. Options will vest as to
50% of the units on the third anniversary of the IPO Pricing Date,
-1-
and as to 50% of the units on the fifth anniversary of the IPO Pricing Date, and will have a
7-year term.
| • | Allocation of Awards: Individual Awards will be made by the Chief Executive Officer of the Company (the “CEO”) with the approval of the Compensation Committee of the Board (the “Committee”). Any Awards made to the CEO will be made by the Committee. | ||
| • | Terms of Awards: All Awards will be made pursuant to the Symetra Financial Corporation Equity Plan (the “Plan”) and subject to the terms of the Plan and the applicable Award agreements. | ||
| • | Amendments: The Board reserves the right to amend the Program at any time prior to the IPO. |
-2-
Exhibit
10.16
Symetra Financial Corporation Equity Plan
| 1. | PURPOSE |
The purpose of the Symetra Financial Corporation Equity Plan (the “Plan”) is to advance the
interests of Symetra Financial Corporation (the “Company”) and its stockholders by providing
long-term incentives to certain employees, directors and consultants of the Company and its
subsidiaries.
| 2. | ADMINISTRATION |
The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board
of Directors (the “Board”) of the Company; provided that, following the initial public
offering of the Company’ common shares (the “IPO”), each member of the Committee shall
qualify as (a) a “non-employee director” under Rule 16b-3 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), (b) an “outside director” under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), and (c) otherwise meets the
independence requirements of the New York Stock Exchange (the “NYSE”). In the event that,
following the IPO, any member of the Committee does not so qualify, the Plan shall, to the
extent practicable, be administered by a sub-committee of Committee members who do so
qualify. If it is later determined that one or more members of the Committee do not so
qualify, actions taken by the Committee prior to such determination shall be valid despite
such failure to qualify.
The Committee shall have exclusive authority to select the employees, directors and
consultants to be granted awards under the Plan (“Awards”), to determine the type, size and
terms of the Awards and to prescribe the form of the instruments embodying Awards. With
respect to Awards made to directors and consultants, the Committee shall, and with respect
to employees may, specify the terms and conditions applicable to such Awards in an Award
agreement (each, an “Award Agreement”). The Committee is hereby authorized to interpret the
Plan, Award Agreements and the Awards granted under the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan and to make any other determinations
which it believes necessary or advisable for the administration of the Plan. In connection
with any Award, the Committee in its sole discretion may provide for vesting provisions that
are different from the default vesting provisions that are contained in the Plan and such
alternative provisions shall not be deemed to conflict with the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award or Award Agreement in the manner and to the extent the Committee deems desirable
to carry it into effect. Any decision of the Committee in the administration of the Plan,
as described herein, shall be final and conclusive. The Committee may act only by a
majority of its members, except that the members thereof may authorize any one or more of
their number or any officer of the Company to execute and deliver documents on behalf of the
Committee. No member of the Committee shall be liable for anything done or omitted to be
done by him or her or by any other member of the Committee in connection with the Plan,
except for his or her own willful misconduct or as expressly provided by statute.
The Committee may delegate, on such terms and conditions as it determines in its sole and
plenary discretion, to one or more executive officers of the Company the authority to
make grants of Awards to officers (other than executive officers), employees and consultants
of the Company and its affiliates (including any prospective officer, employee or
consultant) and all necessary and appropriate decisions and determinations with respect
thereto.
| 3. | PARTICIPATING SUBSIDIARIES |
If a subsidiary of the Company wishes to participate in the Plan and its participation shall
have been approved by the Board, the Board of Directors of the subsidiary (the “Subsidiary
Board”) shall adopt a resolution in form and substance satisfactory to the Committee
authorizing participation by the subsidiary in the Plan. As used herein, “subsidiary” shall
mean a “subsidiary corporation” as defined in Section 424(f) of the Code.
A subsidiary may cease to participate in the Plan at any time by action of the Board or by
action of the Subsidiary Board, which latter action shall be effective not earlier than the
date of delivery to the Secretary of the Company of a certified copy of a resolution of the
Subsidiary Board taking such action. Termination of participation in the Plan shall not
relieve a subsidiary of any obligations theretofore incurred by it under the Plan.
| 4. | AWARDS |
| (a) | Eligible Participants. Any employee, director or consultant of the Company or any of its subsidiaries is eligible to receive an Award hereunder. The Committee shall select which eligible employees, directors or consultants shall be granted Awards hereunder. No employee, director or consultant shall have a right to receive an Award hereunder and the grant of an Award to an employee, director or consultant shall not obligate the Committee to continue to grant Awards to such employee, director or consultant in subsequent periods or to grant Awards to any other person at any time. | ||
| (b) | Type of Awards. Awards shall be limited to the following seven types: (i) “Stock Options,” (ii) “Stock Appreciation Rights,” (iii) “Restricted Stock,” (iv) “Restricted Stock Units,” (v) “Performance Shares,” (vi) “Performance Units” and (vii) other stock-based awards. | ||
| (c) | Maximum Number of Shares That May Be Issued. A maximum of nine hundred thousand (900,000)* shares of common stock of the Company, $0.01 par value (“Shares”), may be issued by the Company in satisfaction of its obligations with respect to Award grants. The maximum aggregate number of Shares with respect to which Awards may be issued to any participant in any fiscal year of the Company is fifty thousand (50,000*), subject to adjustment as provided in Section 17. For purposes of the foregoing, the exercise of a Stock Appreciation Right shall constitute the issuance of Shares equal to the Shares delivered under such Stock Appreciation Right. If any Shares issued as Restricted Stock shall be |
| * | To be adjusted to give effect to the stock split or stock dividend to be implemented in connection with the Company’s initial public offering. | |
| * | To be adjusted to give effect to the stock split or stock dividend to be implemented in connection with the Company’s initial public offering. |
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| repurchased pursuant to the Company’s option described in Section 6 below, or if any Shares issued under the Plan shall be reacquired pursuant to restrictions imposed at the time of issuance or pursuant to the satisfaction of tax withholding or related obligations, such Shares may again be issued under the Plan. |
| (d) | Rights With Respect to Shares. |
| (i) | A participant to whom Restricted Stock has been issued shall have, prior to the expiration of the Restricted Period or the earlier repurchase of such Shares as herein provided, ownership of such Shares, including the right to vote the same and to receive dividends thereon, subject, however, to the options, restrictions and limitations imposed thereon pursuant hereto. | ||
| (ii) | A participant to whom Stock Options, Stock Appreciation Rights, Restricted Stock Units, Performance Shares or Performance Units are granted (and any person succeeding to such participant’s rights pursuant to the Plan) shall have no rights as a shareholder with respect to any Shares issuable pursuant thereto until the date of the issuance of a stock certificate (whether or not delivered) therefor. Except as provided in Section 17, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) the record date for which is prior to the date such stock certificate is issued. | ||
| (iii) | The Company, in its discretion, may hold custody during the Restricted Period of any Shares of Restricted Stock. |
| 5. | STOCK OPTIONS AND STOCK APPRECIATION RIGHTS |
| (a) | Stock Options, which include “Incentive Stock Options” and other stock options or combinations thereof, are rights to purchase shares of Common Stock of the Company. A Stock Appreciation Right is an unfunded and unsecured promise to deliver Shares, cash, other securities, other Awards or other property equal in value to the excess, if any, of the Fair Market Value per Share over the exercise price per Share of the Stock Appreciation Right, subject to the terms of the applicable Award Agreement. The maximum number of Shares with respect to which Incentive Stock Options may be issued to a participant in one year is, fifty thousand (50,000) *subject to adjustment pursuant to Section 17. Each Stock Option shall comply with the following terms and conditions: |
| (i) | The Committee shall determine the participants to whom Stock Options shall be granted, the number of shares to be covered by each Stock Option, whether the Stock Option will be an Incentive Stock Option and the conditions and limitations applicable to the vesting and exercise of the Option. Unless otherwise set forth in the applicable Award Agreement, the per share exercise price shall not be less than the greater of (i) the Fair Market Value per Share at the time of grant and (ii) the par value per |
| * | To be adjusted to give effect to the stock split or stock dividend to be implemented in connection with the Company’s initial public offering. |
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| Share. However, the exercise price of an Incentive Stock Option granted to a participant who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or of a subsidiary (a “Ten Percent Participant”) shall not be less than 110% of the greatest of (i) the Fair Market Value per share at the time of grant, and (ii) the par value per Share. | |||
| (ii) | The Stock Option shall not be transferable by the optionee otherwise than by will or the laws of descent and distribution, and shall be exercisable during such optionee’s lifetime only by such optionee, unless otherwise set forth in the applicable Award Agreement. | ||
| (iii) | The Stock Option shall not be exercisable unless payment in full is made for the Shares being acquired thereunder at the time of exercise (including any Federal, state or local income or other taxes which the Committee determines are required to be withheld in respect of such Shares), and such payment shall be made in United States dollars by cash or check or, if permitted by the Committee, (A) by tendering to the Company Shares owned by the person exercising the Stock Option and having an aggregate Fair Market Value equal to the aggregate cash exercise price thereof, (B) if there shall be a public market for the Shares at such time, subject to such rules as may be established by the Committee, through delivery of irrevocable instructions to a broker to sell a number of Shares otherwise deliverable upon the exercise of the Stock Option and to deliver promptly to the Company an amount equal to the aggregate exercise price, or (C) by a combination of United States dollars and Shares pursuant to (A) and/or (B) above. | ||
| (iv) | The aggregate Fair Market Value of Shares (determined at the time of grant of the Stock Option pursuant to Section 5(a)(i) of the Plan) with respect to which Incentive Stock Options granted to any participant under the Plan are exercisable for the first time by such participant during any calendar year may not exceed the maximum amount permitted under Section 422(d) of the Code at the time of the Award grant. In the event this limitation would be exceeded in any year, the optionee may elect either (i) to defer to a succeeding year the date on which some or all of such Incentive Stock Options would first become exercisable (but no longer than the term specified in Section 5(c)(i) herein) or (ii) to convert some or all of such Incentive Stock Options into non-qualified Stock Options. |
| (b) | Each Stock Appreciation Right shall comply with the following terms and conditions: |
| (i) | The Committee shall determine the participants to whom Stock Appreciation Rights shall be granted, the number of shares to be covered by each Stock Appreciation Right and the conditions and limitations applicable to the vesting and exercise of the Stock Appreciation Right. Unless otherwise set forth in the applicable Award Agreement, the per |
4
| share exercise price shall not be less than the greater of (i) the Fair Market Value per Share at the time of grant and (ii) the par value per Share. | |||
| (ii) | The Stock Appreciation Right shall not be transferable by the awardee otherwise than by will or the laws of descent and distribution, and shall be exercisable during such awardee’s lifetime only by such awardee, unless otherwise set forth in the applicable Award Agreement. | ||
| (iii) | A Stock Appreciation Right shall entitle the Participant to receive an amount equal to the excess, if any, of the Fair Market Value of a Share on the date of exercise of the Stock Appreciation Right over the exercise price thereof. The Committee shall determine, in its sole and plenary discretion, whether a Stock Appreciation Right shall be settled in cash, Shares, other securities, other Awards, other property or a combination of any of the foregoing. | ||
| (iv) | No fractional Shares shall be delivered under this Section 5(b), but in lieu thereof a cash adjustment may be made as determined by the Committee. |
| (c) | Each Stock Option or Stock Appreciation Right shall not be exercisable: |
| (i) | after the expiration of ten years from the date it is granted (or such earlier date specified in the grant of the Stock Option or Stock Appreciation Right or applicable Award Agreement) and may be exercised during such period only at such time or times as the Committee may establish; or | ||
| (ii) | unless otherwise set forth in the applicable Award Agreement, by participants who were employees of the Company or one of its subsidiaries at the time of the grant of the Stock Option or Stock Appreciation Right unless such participant has been, at all times during the period beginning with the date of grant of the Stock Option or Stock Appreciation Right and ending on the date three months prior to such exercise, an officer or employee of the Company or any of its subsidiaries, or of a corporation, or a parent or subsidiary of a corporation, issuing or assuming the Stock Option or Stock Appreciation Right in a transaction to which Section 424(a) of the Code is applicable, except that: |
| (A) | unless otherwise set forth in the applicable Award Agreement, if such person shall cease to be an officer or employee of the Company or one of its subsidiaries solely by reason of a period of Related Employment (as defined in Section 12), he or she may, during such period of Related Employment (but in no event after the Stock Option or Stock Appreciation Right has expired under the provisions of Section 5(c)(i) hereof), exercise such Stock Option or Stock Appreciation Right as if he or she continued to be such an officer or employee; or | ||
| (B) | unless otherwise set forth in the applicable Award Agreement, if an optionee shall become Disabled (as defined in Section 10) he or |
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| she may, at any time within three years of the date he or she becomes disabled (but in no event after the Stock Option or Stock Appreciation Right has expired under the provisions of Section 5(c)(i) hereof), exercise the Stock Option or Stock Appreciation Right with respect to (i) any Shares as to which he or she could have exercised the Stock Option or Stock Appreciation Right on the date he or she became disabled and (ii) if the Stock Option or Stock Appreciation Right is not fully exercisable on the date he or she becomes disabled, the number of additional Shares as to which the Stock Option or Stock Appreciation Right would have become exercisable had he or she remained an employee through the next date on which additional Shares were scheduled to become exercisable under the Stock Option or Stock Appreciation Right; or | |||
| (C) | unless otherwise set forth in the applicable Award Agreement, if an optionee shall die while holding a Stock Option or Stock Appreciation Right, his executors, administrators, heirs or distributees, as the case may be, at any time within one year after the date of such death (but in no event after the Stock Option or Stock Appreciation Right has expired under the provisions of Section 5(c)(i) hereof), may exercise the Stock Option or Stock Appreciation Right with respect to any Shares as to which the decedent could have exercised the Stock Option or Stock Appreciation Right at the time of his or her death, and if the Stock Option or Stock Appreciation Right is not fully exercisable on the date of his or her death, the number of additional Shares as to which the Stock Option or Stock Appreciation Right would have become exercisable had he or she remained an employee through the next date on which additional Shares were scheduled to become exercisable under the Stock Option or Stock Appreciation Right; provided, however, that if death occurs during the three-year period following a Disability as described in Section 5(c)(ii)(B) hereof or any period following a voluntary termination (including retirement) in respect of which the Committee has exercised its discretion to grant continuing exercise rights as provided in Section 5(c)(ii)(D) hereof, the Stock Option or Stock Appreciation Right shall not become exercisable as to any Shares in addition to those as to which the decedent could have exercised the Stock Option or Stock Appreciation Right at the time of his or her death; or | ||
| (D) | unless otherwise set forth in the applicable Award Agreement, if such person shall voluntarily terminate his or her employment with the Company (including retirement), the Committee, in its sole discretion, may determine that such optionee may exercise the Stock Option or Stock Appreciation Right with respect to some or all of the Shares subject to the Stock Option or Stock Appreciation Right as to which it would not otherwise be exercisable on the date |
6
| of his or her voluntary termination provided, however, that in no event may such exercise take place after the Stock Option or Stock Appreciation Right has expired under the provisions of Section 5(c)(i) hereof. | |||
| (E) | notwithstanding anything herein to the contrary and subject to Section 13, unless otherwise set forth in the applicable Award Agreement, in the event a Change in Control (as defined in Section 13(a)) occurs and within 12 months thereafter: (A) there is a Termination Without Cause (as defined in Section 14) of an optionee’s or awardee’s employment or (B) there is a Constructive Termination (as defined in Section 15) of an optionee’s or awardee’s employment (any such Termination Without Cause or Constructive Termination, a “Trigger Event”), the optionee or awardee may exercise the entire Stock Option or Stock Appreciation Right at any time within 30 days following such Trigger Event (but in no event after the Stock Option or Stock Appreciation Right has expired under the provisions of Sections 5(c)(i)). |
| 6. | RESTRICTED STOCK |
| Each Award of Restricted Stock shall comply with the following terms and conditions, unless otherwise set forth in the applicable Award Agreement: |
| (a) | The Committee shall determine the number of Shares to be issued to a participant pursuant to the Award. | ||
| (b) | Shares issued may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, for such period from the date on which the Award is granted as the Committee shall determine (the “Restricted Period”). The Company shall have the option to repurchase the Shares subject to the Award at such price as the Committee shall have fixed (including zero consideration), in its sole discretion, when the Award was made, which option will be exercisable on such terms, in such manner and during such period as shall be determined by the Committee when the Award is made (which may include, for illustration, the participant’s cessation of continuous employment or the failure to satisfy performance conditions). Certificates for Shares issued pursuant to Restricted Stock Awards shall bear an appropriate legend referring to the foregoing option and other restrictions. Any attempt to dispose of any such Shares in contravention of the foregoing option and other restrictions shall be null and void and without effect. If Shares issued pursuant to a Restricted Stock Award shall be repurchased pursuant to the option described above, the participant to whom the Award was granted, or in the event of his or her death after such option became exercisable, his or her executor or administrator, shall forthwith deliver to the Secretary of the Company any certificates for the Shares awarded to the participant, accompanied by such instruments of transfer, if any, as may reasonably be required by the Secretary of the Company. If the option described above is not exercised by the Company, |
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| such option and the restriction imposed pursuant to the first sentence of this Section 6(b) shall terminate and be of no further force and effect. | |||
| (c) | Unless otherwise set forth in the applicable Award Agreement, if a participant who has been in the continuous employment of the Company or of a subsidiary shall: |
| (i) | die or become Disabled during the Restricted Period, the option of the Company to repurchase (and any and all other restrictions on) a pro rata portion of the Shares awarded to such participant under such Award shall lapse and cease to be effective as of the date on which his or her death or disability occurs which shall be determined as follows: (A) the number of Shares awarded under the Award multiplied by (B) a percentage, the numerator of which is equal to the number of months elapsed in the Restricted Period as of the date of death or disability (counting the month in which the death or disability occurred as a full month) and the denominator of which is equal to the number of months in the Restricted Period; or | ||
| (ii) | voluntarily terminate his or her employment with the Company (including retirement) during the Restricted Period, the Committee may determine that all or any portion of the option to repurchase and any and all other restrictions on some or all of the Shares awarded to him or her under such Award, if such option and other restrictions are still in effect, shall lapse and cease to be effective as the date on which such voluntary termination or retirement occurs. |
| (d) | Unless otherwise set forth in the applicable Award Agreement, in the event within 12 months after a Change in Control and during the Restricted Period there is a Trigger Event, then the option to repurchase (and any and all other restrictions on) all Shares awarded to the participant under his or her Restricted Stock Award shall lapse and cease to be effective as of the date on which such Trigger Event occurs. |
| 7. | RESTRICTED STOCK UNITS | |
| The grant of a Restricted Stock Unit Award to a participant will entitle him or her to receive, without payment to the Company, an amount equal to the number of Shares underlying such Restricted Stock Unit Award multiplied by the Fair Market Value of a Share on the date of vesting of the Restricted Stock Unit Award, if the terms and conditions specified herein and in the Award are satisfied. Payment in respect of a Restricted Stock Unit Award shall be made as provided in Section 7(e). Each Restricted Stock Unit Award shall be subject to the following terms and conditions: |
| (a) | The Committee shall determine the number of Shares underlying the Restricted Stock Units to be granted to a participant. | ||
| (b) | Restricted Stock Unit Awards shall be subject to the vesting schedule determined by the Committee and set forth in the applicable Award Agreement. Payment in |
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| respect of a vested Restricted Stock Unit may be made in cash, stock or any combination thereof, as specified in the applicable Award Agreement. | |||
| (c) | Except as otherwise determined by the Committee or in an Award Agreement, Restricted Stock Units shall be cancelled if the participant’s continuous employment with the Company or any of its subsidiaries shall terminate for any reason prior to the vesting of the Restricted Stock Units, except solely by reason of a period of Related Employment, and except as otherwise specified in this Section 7(c) or in Section 7(d). Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, if an employee participant shall: |
| (i) | while in such employment, die or become Disabled prior to the vesting of the Restricted Stock Units, such Restricted Stock Units shall be immediately canceled and the participant, or the participant’s legal representative, as the case may be, shall receive a payment in respect of such canceled Restricted Stock Units equal to the product of (A)(i) the number of Shares underlying such Restricted Stock Units multiplied by (ii) a fraction, the numerator of which is equal to the number of full or partial months within the period commencing on the grant date of such Restricted Stock Units and such death or Disability (including, for this purpose, the month in which the death or Disability occurs), and the denominator of which is equal to the total number of months from the grant date to the date when such Restricted Stock Units were intended to vest; or | ||
| (ii) | retire with the approval of the Committee in its sole discretion prior to the vesting of the Restricted Stock Units, the Restricted Stock Units shall be immediately canceled; provided that the Committee in its sole discretion may determine to make a payment to the participant in respect of some or all of such canceled Restricted Stock Units. |
| (d) | Unless otherwise set forth in the applicable Award Agreement, if within 12 months after a Change in Control there is a Trigger Event, then with respect to Restricted Stock Unit Awards that were outstanding on the date of the Trigger Event (each, an “Applicable Award”), each such Applicable Award shall be immediately canceled and, in respect thereof, such participant shall be entitled to receive a cash payment equal to the product of (A) the number of Shares underlying such Applicable Awards and (B) the Fair Market Value of a Share on the date the applicable Trigger Event occurs. | ||
| (e) | Unless payment is deferred in accordance with an election made by the participant in accordance with procedures adopted by the Company in its sole discretion (if any), payment of any amount in respect of any Restricted Stock Units shall be made by the Company no later than 60 days after the end of the calendar year in which such Restricted Stock Units vest or become payable. |
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| 8. | PERFORMANCE SHARES | |
| The grant of a Performance Share Award to a participant will entitle such participant to receive, without payment to the Company, all or part of the value (the “Actual Value”) of a specified number of hypothetical Shares (“Performance Shares”) determined by the Committee, if the terms and conditions specified herein and in the Award are satisfied. Payment in respect of a Performance Share Award shall be made as provided in Section 8(h). Each Performance Share Award shall be subject to the following terms and conditions: |
| (a) | The Committee shall determine the target number of Performance Shares to be granted to a participant. Performance Share Awards may be granted in different classes or series having different terms and conditions. | ||
| (b) | The Actual Value of a Performance Share Award shall be the product of (i) the target number of Performance Shares subject to the Performance Share Award, (ii) the Performance Percentage (as determined below) applicable to the Performance Share Award and (iii) the Fair Market Value of a Share on the date the Award is paid or becomes payable to the participant. The “Performance Percentage” applicable to a Performance Share Award shall be a percentage of no less than 0% and no more than 200%, which percentage shall be determined by the Committee based upon the extent to which the Performance Objectives (as determined below) established for such Award are achieved during the Award Period (as defined below). The method for determining the applicable Performance Percentage shall also be established by the Committee. | ||
| (c) | At the time each Performance Share Award is granted, the Committee shall establish performance objectives (“Performance Objectives”) to be attained within the Award Period as the means of determining the Performance Percentage applicable to such Award. The Performance Objectives shall be approved by the Committee (i) while the outcome for that Award Period is substantially uncertain and (ii) no more than 90 days after the commencement of the Award Period to which the Performance Objective relates or, if less than 90 days, the number of days which is equal to 25 percent of the relevant Award Period. The Performance Objectives established with respect to a Performance Share Award shall be specific performance targets established by the Committee with respect to one or more of the following criteria selected by the Committee: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per Share; (v) book value per Share; (vi) return on stockholders’ equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) share price; (xi) combined ratio; (xii) operating ratio; (xiii) profitability of an identifiable business unit or product; (xiv) maintenance or improvement of profit margins; (xv) market share; (xvi) revenues or sales; (xvii) costs; (xviii) cash flow; (xix) working capital; (xx) return on assets; (xxi) customer satisfaction; (xxii) employee satisfaction; (xxiii) economic value per Share, (xxiv) underwriting return on capital and (xxv) underwriting return on equity. The foregoing criteria may relate to the Company, one or more of its subsidiaries or one or more of its divisions, units, partnerships, joint ventures or |
10
| minority investments, product lines or products or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine. In addition, to the degree consistent with Section 162(m) of the Code (or any successor section thereto), the Performance Objectives may be calculated without regard to extraordinary items. | |||
| (d) | The award period (the “Award Period”) in respect of any grant of a Performance Share Award shall be such period as the Committee shall determine commencing as of the beginning of the fiscal year of the Company in which such grant is made. An Award Period may contain a number of performance periods; each performance period shall commence on or after the first day of the Award Period and shall end no later than the last day of the Award Period. If the Committee does not specify in a Performance Share Award agreement or elsewhere the performance periods contained in an Award Period, each 12-month period beginning with the first day of such Award Period shall be deemed to be a performance period. | ||
| (e) | Except as otherwise determined by the Committee or in an Award Agreement, Performance Shares shall be canceled if the participant’s continuous employment with the Company or any of its subsidiaries shall terminate for any reason prior to the end of the Award Period, except by reason of a period of Related Employment as defined in Section 11, and except as otherwise specified in this Section 8(e) or in Section 8(f). Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, if an employee participant shall: |
| (i) | while in such employment, die or become Disabled prior to the end of an Award Period, the Performance Share Award for such Award Period shall be immediately canceled and he or she, or his or her legal representative, as the case may be, shall receive a payment in respect of such canceled Performance Share Award equal to the product of (A)(i) the target number of Performance Shares for such Award multiplied by (ii) a fraction, the numerator of which is equal to the number of full or partial months within the Award Period during which employee was continuously employed by the Company or its subsidiaries (including, for this purpose, the month in which the death or Disability occurs), and the denominator of which is equal to the total number of months within such Award Period, multiplied by (B) the Fair Market Value of a Share on the last day of the performance period in which the death or Disability occurred, multiplied by (C) the Performance Percentage determined by the Board to have been achieved through the end of the performance period in which the death or Disability occurred (but which in no event shall be less than 50%); or | ||
| (ii) | retire with the approval of the Committee in its sole discretion prior to the end of the Award Period, the Performance Share Award for such Award Period shall be immediately canceled; provided that the Committee in its sole discretion may determine to make a payment to the participant in respect of some or all of such canceled Performance Share Award. |
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| (f) | Unless otherwise set forth in the applicable Award Agreement, if within 12 months after a Change in Control there is a Trigger Event, then with respect to Performance Share Awards that were outstanding on the date of the Trigger Event (each, an “Applicable Award”), each such Applicable Award shall be immediately canceled and, in respect thereof, such participant shall be entitled to receive a payment equal to the product of (A) (i) the target number of Performance Shares for such Applicable Award multiplied by (ii) a fraction, the numerator of which is equal to the number of full months within the Award Period during which the participant was continuously employed by the Company or its subsidiaries, and the denominator of which is equal to the total number of months within such Award Period, multiplied by (B) the Fair Market Value of a Share on the date the applicable Trigger Event occurs, multiplied by (C) a Performance Percentage equal to 100%. Unless otherwise set forth in the applicable Award Agreement, if following a Change in Control, a Participant’s employment remains continuous through the end of an Award Period, then the Participant shall be paid with respect to such Awards for which he would have been paid had there not been a Change in Control and the Actual Value shall be determined in accordance with Section 8(g) below. | ||
| (g) | Except as otherwise provided in Section 8(f), as soon as practicable after the end of the Award Period or such earlier date as the Committee in its sole discretion may designate, the Committee shall (i) determine, based on the extent to which the applicable Performance Objectives have been achieved, the Performance Percentage applicable to an Award of Performance Shares, (ii) calculate the Actual Value of the Performance Share Award and (iii) shall certify the foregoing to the Board. The Committee shall cause an amount equal to the Actual Value of the Performance Shares earned by the participant to be paid to him or his beneficiary. The Committee shall determine, in its sole and plenary discretion, whether Performance Shares shall be settled in cash, Shares, other securities, other Awards, other property or a combination of any of the foregoing. | ||
| (h) | Unless payment is deferred in accordance with an election made by the participant in accordance with procedures adopted by the Company in its sole discretion (if any), payment of any amount in respect of any Performance Shares shall be made by the Company no later than 60 days after the end of the calendar year in which such Performance Shares are earned. |
| 9. | PERFORMANCE UNITS | |
| The grant of a Performance Unit Award to a participant will entitle such participant to receive, without payment to the Company, all or part of a specified amount (the “Earned Value”) determined by the Committee, if the terms and conditions specified herein and in the Award are satisfied. Payment in respect of a Performance Unit Award shall be made as provided in Section 9(h). Each Performance Unit Award shall be subject to the following terms and conditions: |
| (a) | The Committee shall determine the target number of Performance Units to be granted to a participant. The maximum Earned Value that may be earned by a participant for Performance Units for any single Award Period of one year or |
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| longer shall not exceed $25,000,000. Performance Unit Awards may be granted in different classes or series having different terms and conditions. | |||
| (b) | The Earned Value of an Award of Performance Units shall be the product of (i) the target number of Performance Units subject to the Performance Unit Award, (ii) the Performance Percentage (as determined below) applicable to the Performance Unit Award and (iii) the Value (as defined below) of a Performance Unit on the date the Award is paid or becomes payable to the employee. The “Performance Percentage” applicable to a Performance Unit Award shall be a percentage of no less than 0% and no more than 200%, which percentage shall be determined by the Committee based upon the extent to which the Performance Objectives (as determined below) established for such Award are achieved during the Award Period (as defined below). The method for determining the applicable Performance Percentage shall also be established by the Committee. The “Value” of a Performance Unit shall be a fixed dollar value (or a dollar value determined pursuant to a formula or similar process) specified by the Committee and set forth in the applicable Award Agreement. | ||
| (c) | At the time each Performance Unit Award is granted the Committee shall establish performance objectives (“Performance Objectives”) to be attained within the Award Period as the means of determining the Performance Percentage applicable to such Award. The Performance Objectives shall be approved by the Committee (i) while the outcome for that Award Period is substantially uncertain and (ii) no more than 90 days after the commencement of the performance period to which the performance objective relates or, if less than 90 days, the number of days which is equal to 25 percent of the relevant performance period. The Performance Objectives established with respect to a Performance Unit Awards shall be specific performance targets established by the Committee with respect to one or more of the following criteria selected by the Committee: (i) consolidated earnings before or after taxes (including earnings before interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per Share; (v) book value per Share; (vi) return on stockholders’ equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) share price; (xi) combined ratio; (xii) operating ratio; (xiii) profitability of an identifiable business unit or product; (xiv) maintenance or improvement of profit margins; (xv) market share; (xvi) revenues or sales; (xvii) costs; (xviii) cash flow; (xix) working capital; (xx) return on assets; (xxi) customer satisfaction; (xxii) employee satisfaction; (xxiii) economic value per Share, (xxiv) underwriting return on capital and (xxv) underwriting return on equity. The foregoing criteria may relate to the Company, one or more of its subsidiaries or one or more of its divisions, units, partnerships, joint ventures or minority investments, product lines or products or any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine. In addition, to the degree consistent with Section 162(m) of the Code (or any successor section thereto), the Performance Objectives may be calculated without regard to extraordinary items. |
13
| (d) | The award period (the “Award Period”) in respect of any grant of a Performance Unit Award shall be such period as the Committee shall determine commencing as of the beginning of the fiscal year of the Company in which such grant is made. An Award Period may contain a number of performance periods; each performance period shall commence on or after the first day of the Award Period and shall end no later than the last day of the Award Period. If the Committee does not specify in a Performance Unit Award Agreement or elsewhere the performance periods contained in an Award Period, each 12-month period beginning with the first day of such Award Period shall be deemed to be a performance period. | ||
| (e) | Except as otherwise determined by the Committee or in an Award Agreement, Performance Units shall be cancelled if the participant’s continuous employment with the Company or any of its subsidiaries shall terminate for any reason prior to the end of the Award Period, except solely by reason of a period of Related Employment, and except as otherwise specified in this Section 9(e) or in Section 9(f). Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, if an employee participant shall: |
| (i) | while in such employment, die or become Disabled prior to the end of an Award Period, the Performance Unit Award for such Award Period shall be immediately canceled and the participant, or his or her legal representative, as the case may be, shall receive a payment in respect of such canceled Performance Unit Award equal to the product of (A)(i) the target number of Performance Units for such Award multiplied by (ii) a fraction, the numerator of which is equal to the number of full or partial months within the Award Period during which employee was continuously employed by the Company or its subsidiaries (including, for this purpose, the month in which the death or disability occurs), and the denominator of which is equal to the total number of months within such Award Period, multiplied by (B) the value of a Performance Unit on the last day of the performance period in which the death or disability occurred, multiplied by (C) the Performance Percentage determined by the Board to have been achieved through the end of the performance period in which the death or disability occurred; or | ||
| (ii) | retire with the approval of the Committee in its sole discretion prior to the end of the Award Period, the Performance Unit Award for such Award Period shall be immediately canceled; provided that the Committee in its sole discretion may determine to make a payment to the participant in respect of some or all of such canceled Performance Unit Award. |
| (f) | Unless otherwise set forth in the applicable Award Agreement, if within 12 months after a Change in Control there is a Trigger Event, then with respect to Performance Unit Awards that were outstanding on the date of the Trigger Event (each, an “Applicable Award”), each such Applicable Award shall be immediately canceled and, in respect thereof, such participant shall be entitled to receive a payment equal to the product of (A) (i) the target number of Performance Units for such Applicable Award multiplied by (ii) a fraction, the |
14
| numerator of which is equal to the number of full months within the Award Period during which the participant was continuously employed by the Company or its subsidiaries, and the denominator of which is equal to the total number of months within such Award Period, multiplied by (B) the Value of a Performance Unit on the date the applicable Trigger Event occurs, multiplied by (C) a Performance Percentage equal to 100%. If following a Change in Control, unless otherwise set forth in the applicable Award Agreement, a Participant’s employment remains continuous through the end of an Award Period, then the Participant shall be paid with respect to such Awards for which he or she would have been paid had there not been a Change in Control and the Earned Value shall be determined in accordance with Section 9(g) below. | |||
| (g) | Except as otherwise provided in Section 9(f), as soon as practicable after the end of the Award Period or such earlier date as the Committee in its sole discretion may designate, the Committee shall (i) determine, based on the extent to which the applicable Performance Objectives have been achieved, the Performance Percentage applicable to an Award of Performance Units, (ii) calculate the Earned Value of the Performance Unit Award and (iii) shall certify all of the foregoing to the Board of Directors. The Committee shall cause an amount equal to the Earned Value of the Performance Units earned by the participant to be paid to him or her or his or her beneficiary. The Committee shall determine, in its sole and plenary discretion, whether a Performance Unit shall be settled in cash, Shares, other securities, other Awards, other property or a combination of any of the foregoing. | ||
| (h) | Unless payment is deferred in accordance with an election made by the participant in accordance with procedures adopted by the Company in its sole discretion (if any), payment of any amount in respect of any Performance Units shall be made by the Company no later than 60 days after the end of the calendar year in which such Performance Units are earned. |
| 10. | OTHER STOCK-BASED AWARDS | |
| Subject to the provisions of the Plan, the Committee shall have the sole and plenary authority to grant to participants other equity-based or equity-related Awards (including, but not limited to, fully-vested Shares) in such amounts and subject to such terms and conditions as the Committee shall determine. | ||
| 11. | DISABILITY | |
| For the purposes of this Plan, unless otherwise specified in the applicable Award Agreement, a participant shall be deemed to be “Disabled” if the Committee shall determine that the physical or mental condition of the participant is such as would entitle him or her to payment of long-term disability benefits under any disability plan of the Company or a subsidiary in which he or she is a participant. |
15
| 12. | RELATED EMPLOYMENT | |
| For the purposes of this Plan, Related Employment shall mean the employment of a participant by an employer which is neither the Company nor a subsidiary provided: (i) such employment is undertaken by the participant and continued at the request of the Company or a subsidiary; (ii) immediately prior to undertaking such employment, the participant was an officer or employee of the Company or a subsidiary, or was engaged in Related Employment as herein defined; and (iii) such employment is recognized by the Committee, in its sole discretion, as Related Employment for the purposes of this Section 12. The death or Disability of a participant during a period of Related Employment as herein defined shall be treated, for purposes of this Plan, as if the death or onset of disability had occurred while the participant was an officer or employee of the Company. | ||
| 13. | CHANGE IN CONTROL |
| (a) | For purposes of this Plan, unless otherwise specified in the applicable Award Agreement, a “Change in Control” within the meaning of this Section 13(a) shall occur if: |
| (i) | Any person or group (within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act), other than (x) White Mountains Insurance Group, Ltd., Berkshire Hathaway, Inc. or the respective wholly owned subsidiaries thereof, as applicable (the “Significant Investors”), (y) an underwriter temporarily holding Shares in connection with a public issuance thereof or (z) an employee benefit plan of the Company or its affiliates, becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of thirty-five percent (35%) or more of the Company’s then outstanding Shares and such ownership percentage exceeds the beneficial ownership percentage of the Significant Investors in the Company’s then outstanding Shares; | ||
| (ii) | the Continuing Directors, as defined in Section 13(b), cease for any reason to constitute a majority of the Board of the Company; or | ||
| (iii) | the business of the Company and its subsidiaries is disposed of by the Company pursuant to a sale or other disposition of all or substantially all of the business or business-related assets of the Company and its subsidiaries. |
| (b) | For the purposes of this Plan, “Continuing Director” shall mean a member of the Board who either was a member of the Board on the Effective Date (as defined below) or subsequently became a director of the Company and whose election, or nomination for election, by the Company’s shareholders was approved by a vote of a majority of the Continuing Directors then on the Board (which term, for purposes of this definition, shall mean the whole Board and not any committee thereof), but excluding any such individual whose initial assumption of office occurred pursuant to an actual or threatened proxy contest or consent solicitation with respect to the election or removal of directors. |
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| (c) | In the event of a Change in Control, the Committee as constituted immediately prior to the Change in Control shall determine the manner in which “Fair Market Value” of Shares will be determined following the Change in Control. |
| 14. | TERMINATION WITHOUT CAUSE | |
| For purposes of this Plan, unless otherwise specified in the applicable Award Agreement, “Termination Without Cause” shall mean a termination of the participant’s employment with the Company or subsidiary or business unit of the Company by the Company (or subsidiary or business unit, as applicable) or, by a purchaser of the participant’s subsidiary or business unit after a Change in Control as described in Subsection 13(a)(iii), other than (i) for death or Disability or (ii) for Cause. “Cause” shall mean, unless otherwise set forth in the applicable Award Agreement, (a) an act or omission by the participant that constitutes a felony or any crime involving moral turpitude; or (b) willful gross negligence or willful gross misconduct by the participant in connection with his employment which causes, or is likely to cause, material loss or damage to the Company, subsidiary or business unit. Notwithstanding anything herein to the contrary, if the participant’s employment with the Company, subsidiary or business unit shall terminate due to a Change in Control as described in Subsection 13(a)(iii), where the purchaser (the “Purchaser”), as described in such subsection, formally assumes the Company’s obligations under this Plan or places the participant in a similar or like plan with no diminution of the value of the awards, such termination shall not be deemed to be a “Termination Without Cause.” | ||
| 15. | CONSTRUCTIVE TERMINATION | |
| “Constructive Termination” shall mean, unless otherwise set forth in the applicable Award Agreement, a termination of employment with the Company or a subsidiary at the initiative of the participant that the participant declares by prior written notice delivered to the Secretary of the Company to be a Constructive Termination by the Company or a subsidiary and which follows (a) a material decrease in his total compensation opportunity or (b) a material diminution in the authority, duties or responsibilities of his position with the result that the participant makes a determination in good faith that he or she cannot continue to carry out his or her job in substantially the same manner as it was intended to be carried out immediately before such diminution. Notwithstanding anything herein to the contrary, Constructive Termination shall not occur within the meaning of this Section 15 until and unless (a) the participant provides 30 days written notice of termination to the company of the occurrence of the circumstances described in this Section 15 within 30 days following such occurrence and (b) 30 days have elapsed from the date the Company receives such written notice from the participant without the Company curing or causing to be cured the circumstance or circumstances described in this Section 15 on the basis of which the declaration of Constructive Termination is given. |
17
| 16. | [RESERVED] | |
| 17. | DILUTION AND OTHER ADJUSTMENTS |
| (a) | In the event of any change in the outstanding Shares of the Company by reason of any stock split, stock or extraordinary cash dividend, recapitalization, merger, consolidation, reorganization, combination or exchange of Shares or other similar event, and if the Committee shall determine, in its sole discretion, that such change equitably requires an adjustment in the number or kind of Shares that may be issued under the Plan pursuant to Section 4, in the number or kind of Shares subject to, or the Stock Option or Stock Appreciation Right price per Share under, any outstanding Award, in the number or kind of Shares which have been awarded as Restricted Stock or in the repurchase option price per share relating thereto, in the target number of Performance Shares or Performance Units which have been awarded to any participant, or in any measure of performance, then such adjustment shall be made by the Committee and shall be conclusive and binding for all purposes of the Plan. | ||
| (b) | The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, any extraordinary dividend or other extraordinary distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, split-up or spin-off, merger, consolidation, stock sale, asset sale or the occurrence of a Change of Control) affecting the Company, any affiliate, or the financial statements of the Company or any affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law (i) whenever the Committee, in its sole and plenary discretion, determines that such adjustments are appropriate or desirable, including, without limitation, providing for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event, (ii) if deemed appropriate or desirable by the Committee, in its sole and plenary discretion, by providing for a cash payment to the holder of an Award in consideration for the cancelation of such Award, including, in the case of an outstanding Option or Stock Appreciation Right, a cash payment to the holder of such Option or Stock Appreciation Right in consideration for the cancelation of such Option or Stock Appreciation Right in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or Stock Appreciation Right over the aggregate Exercise Price of such Option or Stock Appreciation Right and (iii) if deemed appropriate or desirable by the Committee, in its sole and plenary discretion, by canceling and terminating any Option or Stock Appreciation Right having a per Share exercise price equal to, or in excess |
18
| of, the Fair Market Value of a Share subject to such Option or Stock Appreciation Right without any payment or consideration therefor. |
| 18. | DESIGNATION OF BENEFICIARY BY PARTICIPANT | |
| A participant may name a beneficiary to receive any payment to which he may be entitled in respect of Restricted Stock Units, Performance Shares, Performance Units or Stock Appreciation Rights under the Plan in the event of his death, on a form to be provided by the Committee. A participant may change his beneficiary from time to time in the same manner. If no designated beneficiary is living on the date on which any amount becomes payable to a participant’s executors or administrators, the term “beneficiary” as used in the Plan shall include such person or persons. | ||
| 19. | CERTAIN ADDITIONAL DEFINITIONS | |
| As used in the Plan, the term “Fair Market Value” shall mean (a) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee and (b) with respect to Shares, as of any date, (i) the closing per share sales price of the Shares (A) as reported by the NYSE for such date or (B) if the Shares are listed on any other national stock exchange, as reported on the stock exchange composite tape for securities traded on such stock exchange for such date or, with respect to each of clauses (A) and (B), if there were no sales on such date, on the closest preceding date on which there were sales of Shares or (ii) in the event there shall be no public market for the Shares on such date, the fair market value of the Shares as determined in good faith by the Committee. |
| 20. | MISCELLANEOUS PROVISIONS |
| (a) | No employee or other person shall have any claim or right to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving an employee any right to be retained in the employ of the Company or any subsidiary. | ||
| (b) | A participant’s rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of a participant’s death), including but not limited to, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner and no such right or interest of any participant in the Plan shall be subject to any obligation or liability or such participant. | ||
| (c) | No Shares shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable Federal and state securities laws. | ||
| (d) | The Company and its subsidiaries shall have the right to deduct from any payment made under the Plan any Federal, state or local income or other taxes required by law to be withheld with respect to such payment. It shall be a condition to the obligation of the Company to issue Shares upon exercise of a Stock Option, upon settlement of a Stock Appreciation Right, or upon payment of a Restricted Stock |
19
| Unit, Performance Share or a Performance Unit that the participant (or any beneficiary or person entitled to payment under Section 5(c)(ii)(C) hereof) pay to the Company, upon its demand, such amount as may be required by the Company for the purpose of satisfying any liability to withhold Federal, state or local income or other taxes. If the amount requested is not paid, the Company may refuse to issue Shares. | |||
| (e) | The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under the Plan. | ||
| (f) | By accepting any Award or other benefit under the Plan, each participant and each person claiming under or through him or her shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee. |
| 21. | AMENDMENT | |
| The Plan may be amended at any time and from time to time by the Board, but no amendment which increases the aggregate number of Shares which may be issued pursuant to the Plan or the class of employees eligible to participate shall be effective unless and until the same is approved by the shareholders of the Company. No amendment of the Plan shall adversely affect any right of any participant with respect to any Award previously granted without such participant’s written consent. | ||
| 22. | TERMINATION | |
| This Plan shall terminate upon the earlier of the following dates or events to occur: |
| (a) | the adoption of a resolution of the Board terminating the Plan; or | ||
| (b) | ten years from the Effective Date. |
| No termination of the Plan shall alter or impair any of the rights or obligations of any person, without his consent, under any Award previously granted under the Plan. |
| 23. | EFFECTIVE DATE | |
| The Plan shall be effective as of the date of its adoption by the Board and approval by the Company’s shareholders (such date, the “Effective Date”); provided, however, that no Incentive Share Options may be granted under the Plan unless it is approved by the Company’s shareholders within twelve (12) months before or after the date the Plan is adopted by the Board. |
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[FORM OF]
SYMETRA FINANCIAL CORPORATION
SYMETRA FINANCIAL CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT (this “Agreement”) made as of this th day of 2007, by and between Symetra
Financial Corporation (the “Company”), and (the “Optionee”).
W I T N E S S E T H :
WHEREAS, the Optionee is now employed by the Company or a subsidiary of the Company and the
Company desires to promote the interests of the Company and its subsidiaries by providing the
Optionee with incentives to continue and increase his or her efforts with respect to, and remain in
the employ of, the Company and its subsidiaries and, as an inducement thereto, the Company has
determined to grant to the Optionee an option pursuant to the Symetra Financial Corporation Equity
Plan (the “Plan”). Capitalized terms not otherwise defined in this Agreement shall have the
meanings assigned to such terms in the Plan.
NOW, THEREFORE, it is agreed between the parties as follows:
i) Grant of Option. Subject to the terms and conditions hereof, the Company hereby
grants to the Optionee the right and option to purchase from the Company up to, but not exceeding
in the aggregate, Shares, at an exercise price of $ per Share (the “Option”). The Option
is not intended to be an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).
ii) Vesting of Right to Exercise Option. The Optionee may purchase from the Company
the following aggregate number of Shares covered by the Option (“Option Shares”) on and after each
of the following dates during the term of the Option:
| Number of Option Shares Vested | ||
| Date | On a Cumulative Basis | |
Third anniversary of the date the
Company consummates the initial
public offering of its Common Shares
(the “IPO Date”)
|
One-half of all Option Shares, rounded down to the nearest whole number of Shares | |
Fifth anniversary of the IPO Date
|
100% of all Option Shares |
21
The Option, to the extent vested, shall be exercisable in whole or in part at any time during
the term of the Option. The term of the Option shall be seven (7) years from the IPO Date or such
shorter period as is prescribed in paragraph 3.
iii) Termination of Employment. If at any time the Optionee’s employment with the
Company or any subsidiary shall be terminated for any reason other than death or Disability (as
described below), the Optionee shall have the right to exercise this Option to the extent of the
Shares with respect to which the Option could have been exercised by the Optionee as of the date of
his or her termination of employment in accordance with its terms but in no event beyond the
earlier of (i) three months after the date of termination of employment or (ii) the scheduled
expiration of the term of such Option. If the Optionee shall voluntarily terminate his or her
employment with the Company (including retirement), the Board may determine that the Optionee may
exercise his or her Option with respect to some or all of the shares subject to the Option as to
which it would not otherwise be exercisable on the date of his or her voluntary termination;
provided, however, that in no event may the Option be exercised after the scheduled
expiration of the term of the Option.
If the Optionee shall become Disabled, he or she may, at any time within three years of the
date he or she becomes Disabled (but in no event after the scheduled expiration of the term of the
Option), exercise the Option with respect to (i) any Shares as to which he or she could have
exercised the Option on the date he became Disabled and (ii) if the Option is not fully exercisable
on the date he or she becomes Disabled, the number of additional Shares as to which the Option
would have become exercisable had he or she remained an employee through the next date on which
additional Shares were scheduled to become exercisable under the Option.
If the Optionee shall die while holding an Option, his or her executors, administrators, heirs
or distributees, as the case may be, at any time within one year after the date of such death (but
in no event after the scheduled expiration of the term of the Option), may exercise the Option with
respect to (i) any Shares as to which the decedent could have exercised the Option at the time of
his or her death, and (ii) if the Option is not fully exercisable on the date of his or her death,
the number of additional Shares as to which the Option would have become exercisable had he or she
remained an employee through the next date on which additional Shares were scheduled to become
exercisable under the Option; provided, however, that if death occurs during the
three-year period following a Disability or any period following a retirement or voluntary
termination in respect of which the Board has exercised its discretion to grant continuing exercise
rights, the Option shall not become exercisable as to any Shares in addition to those as to which
the decedent could have exercised the Option at the time of his or her death.
[If the Optionee ceases to be employed by the Company or one of its subsidiaries by reason of
Related Employment, he or she shall not be considered to have incurred a termination of employment
for purposes of this Agreement.]
iv) Exercise of Option. The Optionee, from time to time during the period when the
Option hereby granted may by its terms be exercised, may exercise the Option by delivering to the
Company a written notice signed by the Optionee stating the number of Shares that the Optionee has
elected to purchase and the manner of payment for such Shares. The notice shall be accompanied by
payment in full by [(a)] cash or
22
check [or (b) delivery of Shares, duly endorsed for transfer (or with duly executed stock
powers attached), (c) if there shall be a public market for the Common Shares at such time, subject
to such rules as may be established by the Committee, through delivery of irrevocable instructions
to a broker to sell a number of Shares otherwise deliverable upon the exercise of the Option and to
deliver promptly to the Company an amount equal to the exercise price or (d) any combination of the
foregoing], for an amount equal to the purchase price of the Shares then to be purchased (including
any withholding taxes as determined by the Committee). [Shares surrendered as payment for Shares
purchased pursuant to the exercise of this Option will be valued, for such purposes, at Fair Market
Value on the date of such Option exercise.] As soon as practicable after receipt of the foregoing,
the Company shall issue the shares in the name of the Optionee and deliver the certificates
therefor to the Optionee.
Anything to the contrary herein notwithstanding, the Company’s obligation to sell and deliver
Shares under this Option is subject to such compliance with Federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities as the Company deems
necessary or advisable. The Company shall not be required to sell and deliver stock pursuant
hereto unless and until it receives satisfactory proof that the provisions of the Securities Act of
1933 or the Securities Exchange Act of 1934 or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder or the provisions of any state law governing the sale of
securities, or that there has been compliance with the provisions of such acts, rules, regulations
and state laws.
v) Non-Assignability. The Option shall not be transferable by the Optionee other
than by will or the laws of descent and distribution and may be exercised during the Optionee’s
lifetime only by the Optionee or by his or her guardian or legal representative. Any transferee of
the Option shall be subject to the terms and conditions of this Agreement. No such transfer of the
Option shall be effective to bind the Company unless the Company shall have been furnished with
written notice thereof and a copy of the will and/or such other evidence as the Company may deem
necessary to establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of this Agreement. No assignment or transfer of this
Option, or of the rights represented thereby, whether voluntary or involuntary, by operation of law
or otherwise except a transfer by the Optionee by will or by the laws of descent and distribution,
shall vest in the purported assignee or transferee any interest or right herein whatsoever.
vi) Disputes. As a condition of the granting of the Option, the Optionee and the
Optionee’s successors and assigns agree that any dispute or disagreement which shall arise under or
as a result of this Agreement shall be determined by the Committee in its sole discretion and
judgment and that any such determination and any interpretation by such Committee of the terms of
this Agreement shall be final and shall be binding and conclusive for all purposes.
vii) Dilution and Other Adjustments. In the event of any change in the Outstanding
Shares of the Company by reason of any stock split, stock dividend, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares or other similar event, [and if
the Committee shall determine, in its sole discretion, that such change equitably requires an
adjustment] in the number of Shares subject to, or
23
the Option price per Share under, any outstanding Option, which has been awarded to any
participant Optionee, then such adjustment shall be made by the Committee and shall be conclusive
and binding for all purposes of the Plan.
viii) Rights as Shareholder. The Optionee shall have no rights as a shareholder of
the Company with respect to any of the unexercised Shares until the issuance of a stock certificate
or certificates upon the exercise of the Option in full or in part and the payment or withholding
of any applicable withholding taxes is made, and then only with respect to the shares represented
by such certificate or certificates.
ix) Notices. Every notice relating to this Agreement shall be in writing and if
given by mail shall be given by registered or certified mail with return receipt requested. All
notices to the Company shall be delivered to the Vice President of Human Resources at 777
108th Avenue NE, Suite 1200, Bellevue, Washington, 98004. All notices by the Company to
the Optionee shall be delivered to the Optionee personally or addressed to the Optionee at the
Optionee’s last address as then contained in the records of the Company or such other address as
the Optionee may designate. Either party by notice to the other may designate a different address
to which notices shall be addressed. Any notice given by the Company to the Optionee at the
Optionee’s last designated address shall be effective to bind any other person who shall acquire
rights hereunder.
x) Provisions of Plan Controlling. The provisions hereof are subject to the terms
and conditions of the Plan. In the event of any conflict between the provisions of this Option and
the provisions of the Plan, the provisions of the Plan shall control. All capitalized concerning
this Agreement shall have the same meaning, as in the Plan unless otherwise defined in this
Agreement.
* * * * *
24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| SYMETRA FINANCIAL CORPORATION: | ||
| By: | ||
| Name: | ||
| Its: | ||
| OPTIONEE: | ||
| By: | ||
| Name: |
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[FORM OF]
SYMETRA FINANCIAL CORPORATION
SYMETRA FINANCIAL CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
AGREEMENT (this “Agreement”) made as of this ___th day of 2007, by and between Symetra
Financial Corporation (the “Company”), and (the “Awardee”).
W I T N E S S E T H :
WHEREAS, the Awardee is now employed by the Company or a subsidiary of the Company and the
Company desires to promote the interests of the Company and its subsidiaries by providing the
Awardee with incentives to continue and increase his or her efforts with respect to, and remain in
the employ of, the Company and its subsidiaries and, as an inducement thereto, the Company has
determined to grant to the Awardee an award of restricted stock units pursuant to the Symetra
Financial Corporation Equity Plan (the “Plan”).
Capitalized terms not otherwise defined in this Agreement shall have the meanings assigned to such
terms in the Plan.
NOW, THEREFORE, it is agreed between the parties as follows:
xi) Grant of RSUs. Subject to the terms and conditions hereof, the Company hereby
grants to the Awardee restricted stock units with respect to [NUMBER] Shares (the “RSUs”).
xii) Vesting of RSUs. The RSUs shall vest on each of the following dates and shall
be settled in Shares as set forth in Section xiv), immediately upon vesting:
| Number of Shares Underlying the RSUs | ||
| Date | Vesting on such Date | |
Second anniversary of the date the
Company consummates the initial
public offering of its Shares (such
date, the “IPO Date”)
|
One-half of all Shares underlying the RSUs, rounded down to the nearest whole number of Shares | |
Fourth anniversary of the IPO Date
|
All remaining Shares underlying the RSUs |
xiii) Termination of Employment. If at any time the Awardee’s employment with the
Company or any subsidiary shall be terminated for any reason other than death or Disability, any
unvested RSUs shall be forfeited and terminated.
If the Awardee ceases to be employed by the Company and its subsidiaries by reason of death or
Disability, a portion of the RSUs (to the extent not already vested
26
pursuant to paragraph 2) shall immediately vest thereupon. Such portion shall be the number
of Shares underlying the RSUs equal to the product of (i) the total number of Shares underlying the
RSUs and (ii) a fraction, the numerator of which is the number of full or partial months within the
period commencing on the IPO Date and ending on the month in which such termination occurs, and
the denominator of which is equal to the number of full or partial months within the period
commencing on the IPO Date and ending on the fourth anniversary of the IPO Date. For the avoidance
of doubt, the vesting provided in this paragraph will only apply to the extent such portion of the
RSUs did not previously vest in accordance with paragraph 2.
If the Awardee ceases to be employed by the Company or one of its subsidiaries by reason of
Related Employment, he or she shall not be considered to have incurred a termination of employment
for purposes of this Agreement.
xiv) Settlement of RSU. Upon the vesting of any portion of the RSUs, the Company
shall issue a number of Shares equal to the number of Shares underlying such vested portion of the
RSUs in the name of the Awardee and deliver the certificates therefor to the Awardee.
Anything to the contrary herein notwithstanding, the Company’s obligation to sell and deliver
Shares under this Agreement is subject to such compliance with Federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities as the Company deems
necessary or advisable. The Company shall not be required to sell and deliver stock pursuant
hereto unless and until it receives satisfactory proof that the provisions of the Securities Act of
1933 or the Securities Exchange Act of 1934 or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder or the provisions of any state law governing the sale of
securities, or that there has been compliance with the provisions of such acts, rules, regulations
and state laws.
xv) Non-Assignability. The RSUs shall not be transferable by the Awardee other than
by will or the laws of descent and distribution and may be exercised during the Awardee’s lifetime
only by the Awardee or by his or her guardian or legal representative. Any transferee of the RSUs
shall be subject to the terms and conditions of this Agreement. No such transfer of the RSUs shall
be effective to bind the Company unless the Company shall have been furnished with written notice
thereof and a copy of the will and/or such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or transferees of the
terms and conditions of this Agreement. No assignment or transfer of the RSUs, or of the rights
represented thereby, whether voluntary or involuntary, by operation of law or otherwise except a
transfer by the Awardee by will or by the laws of descent and distribution, shall vest in the
purported assignee or transferee any interest or right herein whatsoever.
xvi) Disputes. As a condition of the granting of the RSUs, the Awardee and the
Awardee’s successors and assigns agree that any dispute or disagreement which shall arise under or
as a result of this Agreement shall be determined by the Committee in its sole discretion and
judgment and that any such determination and any interpretation by such Committee of the terms of
this Agreement shall be final and shall be binding and conclusive for all purposes.
27
xvii) Dilution and Other Adjustments. In the event of any change in the Outstanding
Shares of the Company by reason of any stock split, stock dividend, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares or other similar event, [and if
the Committee shall determine, in its sole discretion, that such change equitably requires an
adjustment] in the number of shares subject to any outstanding RSU, which has been awarded to any
participant Awardee, then such adjustment shall be made by the Committee and shall be conclusive
and binding for all purposes of the Plan.
xviii) Rights as Shareholder. The Awardee shall have no rights as a shareholder of
the Company with respect to any Shares underlying the RSUs [until the issuance of a stock
certificate or certificates upon the settlement of the RSUs in full or in part and the payment or
withholding of any applicable withholdings taxes is made, and then only with respect to the shares
represented by such certificate or certificates].
xix) Notices. Every notice relating to this Agreement shall be in writing and if
given by mail shall be given by registered or certified mail with return receipt requested. All
notices to the Company shall be delivered to the Vice President of Human Resources at 777
108th Avenue NE, Suite 1200, Bellevue, Washington, 98004. All notices by the Company to
the Awardee shall be delivered to the Awardee personally or addressed to the Awardee at the
Awardee’s last address as then contained in the records of the Company or such other address as the
Awardee may designate. Either party by notice to the other may designate a different address to
which notices shall be addressed. Any notice given by the Company to the Awardee at the Awardee’s
last designated address shall be effective to bind any other person who shall acquire rights
hereunder.
xx) Provisions of Plan Controlling. The provisions hereof are subject to the terms
and conditions of the Plan. In the event of any conflict between the provisions of this Agreement
and the provisions of the Plan, the provisions of the Plan shall control. All capitalized
concerning this Agreement shall have the same meaning, as in the Plan unless otherwise defined in
this Agreement.
* * * * *
28
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| SYMETRA FINANCIAL CORPORATION: | ||
| By: | ||
| Name: | ||
| Its: | ||
| AWARDEE: | ||
| By: | ||
| Name: |
29
Exhibit 10.17
Symetra Financial Corporation
EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the Employee Stock Purchase Plan of Symetra
Financial Corporation.
1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an
“Employee Stock Purchase Plan” under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a uniform and
nondiscriminatory basis consistent with the requirements of Section 423.
2. Definitions.
(a) “Administrator” shall mean the Board or any Committee designated by the Board to
administer the plan pursuant to Section 14.
(b) “Board” shall mean the Board of Directors of the Company.
(c) “Change of Control” shall, for the purpose of this plan, occur if:
(i) Any person or group (within the meaning of Section 13(d) and 14(d)(2) of
the Exchange Act), other than (x) White Mountains Insurance Group, Ltd.,
Berkshire Hathaway, Inc. or the respective wholly owned subsidiaries
thereof, as applicable (the “Significant Investors”), (y) an underwriter
temporarily holding Shares in connection with a public issuance thereof or
(z) an employee benefit plan of the Company or its affiliates, becomes the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of thirty-five percent (35%) or more of the Company’s then outstanding
Shares and such ownership percentage exceeds the beneficial ownership
percentage of the Significant Investors in the Company’s then outstanding
Shares;
(ii) the Continuing Directors (defined as a member of the Board who
either was a member of the Board on the Effective Date, or subsequently
became a director of the Company and whose election, or nomination for
election by the Company’s shareholders was approved by a vote of a majority
of the Continuing Directors then on the Board (which term, for purposes of
this definition, shall mean the whole Board and not any committee thereof),
but excluding any such individual whose initial assumption of office
occurred pursuant to an actual or threatened proxy contest or consent
solicitation with respect to the election or removal of directors) cease for
any reason to constitute a majority of the Board of the Company;
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(iii) the business of the Company and its subsidiaries is disposed of by the
Company pursuant to a sale or other disposition of all or substantially all
of the business or business-related assets of the Company and its
subsidiaries.
(d) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(e) “Committee” means the Compensation Committee of the Board appointed by the Board
in accordance with Section 14 hereof.
(f) “Common Stock” shall mean the common stock of the Company.
(g) “Company” shall mean Symetra Financial Corporation, a Delaware corporation.
(h) “Compensation” shall mean all taxable compensation reportable by Employer on IRS
Form W-2, before any salary reduction contributions made to an Employee-sponsored cafeteria,
qualified transportation fringe, simplified employee pension, 401(k), 457(b) or 403(b) plan, and
including sales incentive compensation and overtime pay; but excluding reimbursements or other
expense allowances, fringe benefits, moving expenses, deferred compensation, welfare benefits,
Annual Incentive Bonus (AIB), any other bonus, the taxable value of qualified or non-qualified
stock option, severance pay, Employer-paid cash and non-cash fringe benefits, long-term disability
benefits, and any long term incentive plan payments to include the Performance Share Plan.
(i) “Designated Subsidiary” shall mean any Subsidiary selected by the Administrator as
eligible to participate in the Plan and noted on Schedule A. Schedule A may be modified by the
Administrator.
(j) “Eligible Employee” shall mean any individual who is a salaried employee of the
Company or any Designated Subsidiary and whose customary employment with the Company or Designated
Subsidiary is at least twenty (20) hours per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of absence approved by the Company. Where the
period of leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either
by statute or by contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.
(k) “Fair Market Value” of a Share shall mean, as of any date, (i) the closing per
share sales price of the Shares (A) as reported by the NYSE for such date or (B) if the Shares are
listed on any other national stock exchange, as reported on the stock exchange composite tape for
securities traded on such stock exchange for such date or, with respect to each of clauses (A) and
(B), if there were no sales on such date, on the closest preceding date on which there were sales
of Shares or (ii) in the event there shall be no public market for the Shares on such date, the
fair market value of the Shares as determined in good faith by the Committee. Not withstanding the
above, in the event of a Change in Control, the Committee as constituted
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immediately prior to the Change in Control shall determine the manner in which “Fair Market
Value” of Shares will be determined following the Change in Control.
(l) “Offering Date” shall mean the first Trading Day of each Offering Period.
(m) “Offering Periods” shall mean the periods of approximately six (6) months during
which payroll deductions of the participants are accumulated under this Plan, commencing on the
first Trading Day on or immediately after February 15 and August 15 of each year and terminating on
the next August 14 or February 14, respectively; provided, however, that in the event the first day
of an Offering Period would not fall on a Trading Day, the Offering Period shall instead begin on
the next Trading Day, and in the event the last day of an Offering Period would not fall on a
Trading Day, the Offering Period shall instead end on the Trading Day immediately prior to such
date. The first Offering Period under the Plan shall commence on February 15, 2008. The duration
and timing of Offering Periods may be changed pursuant to Section 4 of this Plan.
(n) “Plan” shall mean this Employee Stock Purchase Plan.
(o) “Purchase Date” shall mean the last day of each Purchase Period.
(p) “Purchase Periods” shall mean periods of approximately three (3) months within an
Offering Period, with the first Purchase Period of each Offering Period commencing on the first day
of the Offering Period (for example, February 15 or August 15) and ending on the next May 14 or
November 14, respectively, and with the second Purchase Period of each Offering Period commencing
the next Trading Day following the end of the first Purchase Period (for example, May 15 or
November 15) and ending on the next August 14 or February 14, respectively; provided that in the
event the beginning of a Purchase Period would not fall on a Trading Day, the Purchase Period shall
instead begin on the next Trading Day, and in the event the last date of a Purchase Period would
not fall on a Trading Day, the Purchase Period shall instead end on the Trading Day immediately
prior to such date.
(q) “Purchase Price” shall mean eighty-five percent (85%) of the Fair Market Value of
a share of Common Stock on the applicable Purchase Date; provided however, that the Purchase Price
may be adjusted by the Administrator pursuant to Section 20.
(r) “Subsidiary” shall mean a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.
(s) “Trading Day” shall mean a day on which national stock exchanges and the NYSE
System are open for trading.
3. Eligibility.
(a) Offering Periods. Any individual who is an Eligible Employee one month prior to an
Offering Date shall be eligible to participate in the Plan for that Offering Period.
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(b) Limitations. Any provisions of the Plan to the contrary notwithstanding, no
Eligible Employee shall be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Eligible Employee (or any other person whose stock would be attributed to
such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the
Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of the capital stock of the Company or
of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries under Section 423 of the Code
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined
at the fair market value of the shares at the time such option is granted) for each calendar year
in which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive Offering Periods,
which will continue until terminated in accordance with Section 20 hereof. The Committee shall have
the power to change the duration of Offering Periods (including the commencement dates thereof)
with respect to future offerings without shareholder approval if such change is announced prior to
the scheduled beginning of the first Offering Period to be affected thereafter.
5. Participation.
(a) First Offering Period. An Eligible Employee shall be entitled to participate in
the first Offering Period only if such individual submits a subscription agreement authorizing
payroll deductions in a form determined by the Administrator (i) no earlier than the effective date
of the Form S-8 registration statement with respect to the issuance of Common Stock under the Plan
and (ii) no later than five (5) business days (or such other number of days as determined by the
Administrator) from the effective date of such S-8 registration statement (the “Enrollment
Window”). An Eligible Employee’s failure to submit the subscription agreement during the
Enrollment Window shall result in the automatic termination of such individual’s participation in
the Offering Period.
(b) Subsequent Offering Periods. An Eligible Employee may become a participant in the
Plan with respect to Offering Periods after the first Offering Period by completing a subscription
agreement authorizing payroll deductions in a form determined by the Administrator and filing it
with the Company’s payroll office prior to the applicable Offering Date.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement, he or she shall elect
to have payroll deductions made on each pay day during the Offering Period in an amount not
exceeding fifteen percent (15%) of the Compensation which he or she receives on each pay day during
the Offering Period (or such lower limit as determined by the Committee), but in any event not to
exceed the limit specified in Section 3(b); provided, however, that should a payday occur on an
Purchase Date, a participant shall have the payroll deductions made on such day applied to his or
her account under the new Offering Period or Purchase Period, as the
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case may be. A participant’s subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10 hereof.
(b) Payroll deductions for a participant shall commence on the first payday following the
Offering Date and shall end on the last payday in the Offering Period to which such authorization
is applicable, unless sooner terminated by the participant as provided in Section 10 hereof;
provided, however, that for the first Offering Period, payroll deductions shall commence on the
first payday on or following the end of the Enrollment Window.
(c) All payroll deductions made for a participant shall be credited to his or her account
under the Plan and shall be withheld in whole percentages only. A participant may not make any
additional payments into such account.
(d) A participant may discontinue his or her participation in the Plan as provided in Section
10 hereof, or may increase or decrease the rate of his or her payroll deductions during the
Offering Period by completing or filing with the Company a new subscription agreement authorizing a
change in payroll deduction rate. The Administrator may, in its discretion, limit the nature
and/or number of participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following ten (10) business days after the
Company’s receipt of the new subscription agreement unless the Company elects to process a given
change in participation more quickly.
(e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) hereof, a participant’s payroll deductions may be decreased to zero
percent (0%) at any time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant’s subscription agreement at the beginning of the first Purchase Period
which is scheduled to end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.
(f) At the time the option is exercised, in whole or in part, or at the time some or all of
the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate
provision for the Company’s federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At any time, the
Company may, but shall not be obligated to, withhold from the participant’s compensation the amount
necessary for the Company to meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Eligible Employee.
7. Grant of Option. On the Offering Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall be granted an option to purchase on each
Purchase Date during such Offering Period (at the applicable Purchase Price) up to a number of
shares of the Company’s Common Stock determined by dividing such Eligible Employee’s payroll
deductions accumulated prior to such Purchase Date and retained in the Participant’s account as of
the Purchase Date by the applicable Purchase Price; and provided that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 12 hereof. The Eligible
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Employee may accept the grant of such option by turning in a completed Subscription Agreement
to the Company on or prior to an Offering Date, or with respect to the first Offering Period, prior
to the last day of the Enrollment Window. The Administrator may, for future Offering Periods,
increase or decrease, in its absolute discretion, the maximum number of shares of the Company’s
Common Stock an Eligible Employee may purchase during each Purchase Period of such Offering Period.
Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering
Period.
8. Exercise of Option.
(a) Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her
option for the purchase of shares shall be exercised automatically on the Purchase Date, and the
maximum number of full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her account. No
fractional shares shall be purchased; any payroll deductions accumulated in a participant’s account
which are not sufficient to purchase a full share shall be retained in the participant’s account
for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other funds left over in a participant’s account
after the Purchase Date shall be returned to the participant. During a participant’s lifetime, a
participant’s option to purchase shares hereunder is exercisable only by him or her.
(b) If the Administrator determines that, on a given Purchase Date, the number of shares with
respect to which options are to be exercised may exceed (i) the number of shares of Common Stock
that were available for sale under the Plan on the Offering Date of the applicable Offering Period,
or (ii) the number of shares available for sale under the Plan on such Purchase Date, the
Administrator may in its sole discretion (x) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such Offering Date or Purchase
Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in
its sole discretion to be equitable among all participants exercising options to purchase Common
Stock on such Purchase Date, and continue all Offering Periods then in effect, or (y) provide that
the Company shall make a pro rata allocation of the shares available for purchase on such Offering
Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it
shall determine in its sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Purchase Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20 hereof. The Company may make pro rata allocation of the shares
available on the Offering Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the
Company’s shareholders subsequent to such Offering Date.
9. Delivery. As soon as reasonably practicable after each Purchase Date on which a
purchase of shares occurs, the Company shall arrange the delivery to each participant the shares
purchased upon exercise of his or her option in a form determined by the Administrator.
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10. Withdrawal.
(a) A participant may withdraw all but not less than all the payroll deductions credited to
his or her account and not yet used to exercise his or her option under the Plan at any time by
giving written notice to the Company in a form determined by the Administrator to this Plan five
(5) or more business days prior to the Purchase Date as designated by the Administrator. All of
the participant’s payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such participant’s option for the
Offering Period shall be automatically terminated, and no further payroll deductions for the
purchase of shares shall be made for such Offering Period. If a participant withdraws from an
Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new subscription agreement.
(b) A participant’s withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods which commence after the termination of the Offering Period from
which the participant withdraws.
11. Termination of Employment. Termination of a participant’s employment for any
reason, including retirement, death or the failure of a participant to remain an Eligible Employee
of the Company or of a Designated Subsidiary, immediately terminates his or her participation in
this Plan. In such event, the payroll deductions credited to the participant’s account during the
Offering Period but not yet used to purchase shares under the Plan will be returned without
interest to him or her or, in the case of his or her death, to the person or persons entitled
thereto under Section 15 hereof. For purposes of this Section 11, an employee will not be deemed
to have terminated employment or failed to remain in the continuous employ of the Company or of a
Designated Subsidiary in the case of sick leave, military leave, or any other leave of absence
approved by the Board; provided that such leave is for a period of not more than ninety (90) days
or reemployment upon the expiration of such leave is guaranteed by contract or statute.
12. Interest. No interest shall accrue on the payroll deductions of a participant in
the Plan.
13. Stock.
(a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of shares of the Company’s Common Stock which shall be made available
for sale under the Plan shall be one hundred thousand
(100,000)* shares.
(b) Until the shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), a participant shall
| * | To be adjusted to give effect to the stock split or stock dividend to be implemented in connection with the Company’s initial public offering. |
- 7 -
only have the rights of an unsecured creditor with respect to such shares, and no right to
vote or receive dividends or any other rights as a stockholder shall exist with respect to such
shares.
(c) Shares to be delivered to a participant under the Plan shall be registered in the name of
the participant or in the name of the participant and his or her spouse.
14. Administration. The Administrator shall administer the Plan and shall have full
and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to
determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Administrator shall, to the full extent permitted by law, be
final and binding upon all parties.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to a Purchase Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a written designation of
a beneficiary who is to receive any cash from the participant’s account under the Plan in the event
of such participant’s death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for such designation to
be effective.
(b) Such designation of beneficiary may be changed by the participant at any time by written
notice. In the event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant’s death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.
(c) All beneficiary designations shall be in such form and manner as the Administrator may
designate from time to time.
16. Transferability. Neither payroll deductions credited to a participant’s account
nor any rights with regard to the exercise of an option or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds from an Offering Period in accordance
with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be
- 8 -
obligated to segregate such payroll deductions. Until shares are issued, participants shall
only have the rights of an unsecured creditor.
18. Reports. Individual accounts shall be maintained for each participant in the
Plan. Statements of account shall be given to participating Eligible Employees at least annually,
which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number
of shares purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Change
of Control.
(a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the maximum number of shares of the Company’s Common Stock which shall be made
available for sale under the Plan, the maximum number of shares each participant may purchase each
Purchase Period (pursuant to Section 7), the number of shares that may be added annually to the
shares reserved under the Plan (pursuant to Section 13(a)(i), as well as the price per share and
the number of shares of Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other change in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Administrator, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Purchase Date (the “New Purchase Date”), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided otherwise by the
Administrator. The New Purchase Date shall be before the date of the Company’s proposed
dissolution or liquidation. The Administrator shall notify each participant in writing, at least
ten (10) business days prior to the New Purchase Date, that the Purchase Date for the participant’s
option has been changed to the New Purchase Date and that the participant’s option shall be
exercised automatically on the New Purchase Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.
(c) Merger or Change of Control. In the event of a merger or Change of Control, each
outstanding option shall be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any Purchase Periods then in
progress shall be shortened by setting a New Purchase Date and any Offering Periods then in
progress shall end on the New Purchase Date. The New Purchase Date shall be before
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the date of the Company’s proposed merger or Change of Control. The Administrator shall
notify each participant in writing, at least ten (10) business days prior to the New Purchase Date,
that the Purchase Date for the participant’s option has been changed to the New Purchase Date and
that the participant’s option shall be exercised automatically on the New Purchase Date, unless
prior to such date the participant has withdrawn from the Offering Period as provided in Section 10
hereof.
20. Amendment or Termination.
(a) The Administrator may at any time and for any reason terminate or amend the Plan. Except
as otherwise provided in the Plan, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Administrator on any Purchase Date if the
Administrator determines that the termination of the Offering Period or the Plan is in the best
interests of the Company and its shareholders. Except as provided in Section 19 and this Section
20 hereof, no amendment may make any change in any option theretofore granted which adversely
affects the rights of any participant. To the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision or any other applicable law, regulation or stock exchange
rule), the Company shall obtain shareholder approval in such a manner and to such a degree as
required.
(b) Without shareholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Administrator shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Administrator determines in its sole
discretion advisable which are consistent with the Plan.
(c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Board may, in its discretion and, to
the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:
(i) increasing the Purchase Price for any Offering Period including an Offering Period
underway at the time of the change in Purchase Price;
(ii) shortening any Offering Period so that Offering Period ends on a new Purchase Date,
including an Offering Period underway at the time of the Board action; and
(iii) allocating shares.
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Such modifications or amendments shall not require stockholder approval or the consent of any Plan
participants.
21. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form and manner specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
23. Term of Plan. The Plan shall become effective upon the earlier to occur of its
adoption by the Board of Directors or its approval by the shareholders of the Company. It shall
continue in effect until terminated under Section 20 hereof.
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SCHEDULE A
Symetra Financial Corporation
Designated Subsidiaries
Symetra Life Insurance Company
Employee Benefit Consultants, Inc.
Medical Risk Managers, Inc.
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” and to the use of our reports
dated February 20, 2007, in Amendment No. 5 to the
Registration Statement (Form S-1 No. 333-144162) and related
Prospectus of Symetra Financial Corporation dated October 16, 2007.
/s/ Ernst & Young LLP
Seattle, Washington
October 15, 2007