Class Plus 2 Information Folder and Contract Provisions - Empire Life

1) within three business days of receipt of your notice to us ofthe option selected; and2) the deletion date of such Fund or Fund Class.9.4 Splitting of Fund Class UnitsWe may, at any time, elect to redetermine the number ofFund Class Units in a Fund. Any such redetermination will beaccompanied by a revaluation of Fund Class Units. The marketvalue of Fund Class Units at the credit of your contract in therespective Fund as at the date of redetermination will remainthe same before and after such redetermination.9.5 Merger of FundsWe may, at any time, elect to merge a Fund with another oneor more of our Funds. We will provide notice to you at least 60days prior to the merger and of the options available to you as aresult of the merger.9.6 Fees and Expenses Paid by the FundsEach Fund pays fees and expenses related to the operation ofthat Fund. These fees and expenses include but are not limitedto management fees and operational expenses. Each Fund Classpays its proportionate share of the fees and expenses ofthe Fund.9.6.1 Management FeeThe annual management fee for each Fund is outlined in theInformation Folder. A management fee can only be changedafter we have provided advance notice to you (See Section 9.8 -Fundamental Changes).The management fee covers the charges related to professionalinvestment management and the administration of a Fund.The management fee is subject to applicable taxes (e.g. theGoods and Services Tax (“GST”) or in some jurisdictions,the Harmonized Sales Tax (“HST”)). Management fees arecalculated and accrued on a daily basis and paid to Empire Lifeon the next business day. The management fee for each Fund ina Fund Class is calculated as a percentage of the Fund’s net assetvalue attributable to that Fund Class, which in turn reduces theFund Class Unit value.9.6.2 Operational ExpensesOperational expenses are the fees and charges necessary for aFund to operate. Operational expenses are accrued on a dailybasis and paid to Empire Life monthly.9.6.3 MERThe MER is the total cost of investing in a Fund in a Fund Class.The MER for each Fund in a Fund Class is outlined in the FundFact statement.The MER includes the management fee and operationalexpenses. The MER is paid by the Fund Class before the FundClass Unit value is calculated. The MER for each Fund in a FundClass is expressed as a percentage of the Fund’s average dailynet asset value attributable to that Fund Class. The MER for aFund is disclosed annually in the audited Financial Statements.9.7 Application of EarningsAll earnings of a Fund are retained in that Fund and used toincrease the market value of the Fund Class Units. Earnings mayinclude but are not limited to interest, capital gains, dividends,and distributions. Reinvestment of earnings is required by theterms of our individual variable insurance contracts.9.8 Fundamental ChangesA fundamental change includes:1) an increase in the management fee of a Fund;2) a change in the fundamental investment objectives of a Fund;3) a decrease in the frequency that Fund Class Units arevalued; and4) an increase in the Class Plus Fee if the increase is higherthan the maximum allowable.We will provide notice to you at least 60 days prior to makingany fundamental change. The notice will outline what changeswe intend and when they will be effective. Within the noticewe will provide you with the opportunity to switch to asimilar fund that is not subject to the fundamental change orto withdraw the market value of the Fund Class Units at thecredit of your contract in the affected Fund. In this event anyapplicable fees and charges will be waived provided your noticeto us advising of the option you have selected is received at leastfive days prior to the end of the notice period. You may alsochoose to remain in the affected Fund. Switches to or depositsinto the affected Fund may not be permitted during thenotice period.10. RSP ENDORSEMENTNOTE: These provisions only apply to your contract if you haverequested that the contract be registered as an RSP under theIncome Tax Act (Canada).The following provisions form part of your contract and,if applicable, override anything to the contrary within theContract Provisions if you have requested that your contractbe registered under the Income Tax Act (Canada) and anyapplicable provincial income tax legislation.1) “You” and “your” refer to the Contract Owner andAnnuitant. “Annuitant” is as defined in the Income TaxAct (Canada).57