EXHIBIT 99(3)(a)
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
BETWEEN
AMERICAN GENERAL LIFE INSURANCE COMPANY
AND
AMERICAN GENERAL SECURITIES INCORPORATED
THIS AMENDED AND RESTATED DISTRIBUTION AGREEMENT (this "Agreement") is made by
and between AMERICAN GENERAL LIFE INSURANCE COMPANY, a Texas corporation (the
"Company") and AMERICAN GENERAL SECURITIES INCORPORATED, a Texas corporation
("AGSI" or "Distributor").
RECITALS:
WHEREAS, Company and AGSI have previously entered into a Distribution Agreement
(the Distribution Agreement, as amended by that certain First Amendment dated
effective as of March 2, 1998 is hereinafter called the "Prior Distribution
Agreement") designed for the promotion by AGSI of the sale of AGL's variable
annuity and variable life insurance contracts ; and
WHEREAS, the parties now desire to restate the terms of the Prior Distribution
Agreement and to amend the same to provide a revised schedule of compensation
for each of AGL's variable annuity and variable life insurance contracts offered
by AGL and promoted by AGSI, as set forth in the Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
FIRST: The Company hereby grants AGSI a non-exclusive right to promote the sale
of the Company's variable life insurance policies and certificates and variable
annuity contracts and certificates, as applicable, listed on Schedule A attached
hereto and made a part hereof (the "Contracts") to the public through investment
dealers which are members of the National Association of Securities Dealers,
Inc. (or exempt from such registration) in U. S. states where the Company is
licensed. The Company and AGSI agree that upon thirty (30) days written notice
to AGSI by the Company, the Company may revise Schedule A to include additional
registered products of the Company; provided, however, that AGSI shall have the
right to reject such revisions to Schedule A, by so advising the Company in
writing within such thirty (30) days notice period.
SECOND: AGSI hereby accepts the grant made herein for the sale of the Contracts
and agrees that it will use its best efforts to promote the sale of such
Contracts; provided, however, that:
A. AGSI may, and when requested by the Company, shall suspend its efforts
to promote the sale of the Contracts at any time AGSI or the Company
believes sales should be suspended because of market conditions, other
economic considerations, or other circumstances of any kind; and
B. The Company may withdraw the offering of the Contracts at any time.
Page 1 of 5 Pages
THIRD: The Company shall bear:
A. The expenses of printing and distributing registration statements and
prospectuses of the Separate Account and the Contracts;
B. The expenses of state and federal qualification of such contracts for
sale in connection with such offerings;
C. All legal expenses in connection with the foregoing; and
D. Any other expenses which may be deemed mutually appropriate.
FOURTH: The solicitation of the Contracts shall be made by investment dealers
or their sales representatives who are also life insurance and variable contract
licensed agents appointed to represent the Company.
AGSI shall bear such costs of obtaining insurance department licenses and
appointment fees for registered representatives as may be mutually agreed upon
between the parties hereto from time to time. For its costs in the promotion of
the sale of the Contracts, including its administrative and ministerial costs,
AGSI shall receive the percentage of gross purchase payments received by the
Company or of the accumulation value held by the Company, as indicated in
Schedule A.
FIFTH: The Company agrees to maintain all books and records in connection with
the sale of the Contracts on behalf of AGSI in conformity with the requirements
of Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934, to the
extent that such requirements are applicable to the Contracts.
SIXTH: A transaction statement for each purchase payment for a Contract will be
sent to the Contract owner by the Company as required. The transaction
statement will reflect the facts of the transaction.
SEVENTH: The Company and AGSI shall each comply with all applicable federal and
state laws, rules, and regulations governing the issuance and sale of the
Contracts.
EIGHTH: The Company agrees to indemnify AGSI against any and all claims,
liabilities, and expenses which AGSI may incur due to any alleged untrue
statements of a material fact, or any alleged omission to state a material fact
in the registration statement or prospectus of the Company's Separate Account(s)
used in connection with the offering and sale of the Contracts. AGSI agrees to
indemnify the Company against any and all claims, demands, liabilities, and
expenses which the Company may incur arising out of or based upon any act of an
employee of AGSI.
NINTH: Nothing contained herein shall require the Company or AGSI to take any
action contrary to any provision of its charter or any applicable statutes,
regulation, or rule of the National Association of Securities Dealers, Inc.
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TENTH: This Agreement shall supersede all prior agreements of the parties,
whether written or oral, with respect to sale of the Contracts issued on or
after the effective date of this Agreement.
ELEVENTH: This Agreement shall become effective as of October 15, 1998, and
shall continue in force and effect from year to year thereafter.
TWELFTH: This Agreement may be terminated at any time by either party, without
the payment of any penalty, upon thirty (30) days prior notice in writing to the
other party.
THIRTEENTH: This Agreement shall be binding upon the successors and assigns of
the parties hereto.
FOURTEENTH: Any notice under this Agreement shall be in writing addressed,
delivered, or mailed, postage paid, to the other party at such address as such
other party may designate for the receipt of such notices.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate.
AMERICAN GENERAL LIFE INSURANCE COMPANY
By: /s/ Xxx X. Xxxx Date: 01/04/99
---------------------------- ------------------------
Xxx X. Xxxx, Senior Vice President-
Variable Contracts
AMERICAN GENERAL SECURITIES INCORPORATED
By /s/ F. Xxxx Xxxxxx Date: 01/05/99
------------------ ------------------------
F. Xxxx Xxxxxx, President
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SCHEDULE A
This Schedule A governs the compensation to be paid by Company in connection
with the Contracts identified below, issued in accordance with this Agreement.
The compensation set forth below shall be paid semi-monthly unless otherwise
agreed to in writing signed by Company and AGSI. All capitalized terms not
otherwise defined below shall have the same meaning as in this Agreement or as
in the Contracts, as applicable.
1. SELECT RESERVE(SM) FLEXIBLE PAYMENT VARIABLE AND FIXED INDIVIDUAL DEFERRED
ANNUITY, FORM NO. 97505 (EFFECTIVE OCTOBER 15, 1998 THROUGH DECEMBER 27,
1998):
. SCHEDULE 1: Payable to Broker-Dealer:
1.9040% of all Purchase Payments received, plus
0.09504% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment.
Payable to Distributor:
0.0960% of all Purchase Payments received, plus
0.00496% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment.
. SCHEDULE 2: Payable to Broker-Dealer:
0.38100% of all Purchase Payments received, plus
0.38016% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment.
Payable to Distributor:
0.0190% of all Purchase Payments received, plus
0.01984% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment.
As used above, the term "Trail Commission" refers to an amount equal to an
annual percentage of the Contract Account Value. Trail Commissions will be
initially calculated as of the date specified above. Once commenced, Trail
Commission shall be computed on each quarterly Contract anniversary by
multiplying 0.025% in the case of Schedule 1, and 0.100% in the case of
Schedule 2, by the Contract Account Value computed on each quarterly Contract
anniversary. Trail Commissions shall be paid at the calendar quarter end
which follows the computation of the trail commission. The Trail Commissions
will continue until annuitization, surrender, or death which requires
distribution of the Contract Account Value.
2. SELECT RESERVE(SM) FLEXIBLE PAYMENT VARIABLE AND FIXED INDIVIDUAL DEFERRED
ANNUITY, FORM NO. 97505 (EFFECTIVE DECEMBER 27, 1998, SCHEDULES 1 AND 2 ABOVE
ARE REPLACED WITH THE FOLLOWING):
Payable to Broker-Dealer: 0%
Payable to Distributor: 0%
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3. PLATINUM INVESTOR I(SM) FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES,
FORM NO. 97600:
Payable to Broker-Dealer:
90% of premiums paid in the first Policy year, up to target; 4% of
premiums not in excess of target paid in Policy years 2-10; 2.5% of
all premiums in excess of target paid in years 1-10; 0.25% annually of
all Policies' accumulation value (reduced by any outstanding loans) in
Policy years 11+.
Payable to Distributor: 0%
4. PLATINUM INVESTOR II (SM) FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES,
FORM NO. 97610:
Payable to Broker-Dealer:
20% of all premiums paid in the first Policy year up to target; 12% of
all premiums not in excess of target paid in Policy years 2-7; 2.5% on
all premiums in excess of the target amount received in Policy years
1-7; 0.25% of all Policies' accumulation value (reduced by any
outstanding loans) in Policy years 8+
Payable to Distributor: 0%
5. LEGACY PLUS(SM) VARIABLE LIFE INSURANCE POLICIES, FORM NO. 98615:
Payable to Broker-Dealer:
2.5% of the Policy's accumulation value (reduced by any outstanding
loan) in Policy year 1 paid at the end of each of the first four
quarters at the rate of 0.625% per quarter, plus 1.0% Trail
Commission commencing at the end of the first quarter of Policy year 2
through the last quarter of year 10, plus 0.50% Trail Commission at
the end of the first quarter of Policy year 11 through the last
quarter of year 20, plus 0.25% Trail Commission commencing at the end
of the first quarter of Policy year 21 and each quarter thereafter.
As used above, the term "Trail Commission" refers to an amount equal
to an annual percentage of the Contract Account Value. Trail
Commissions will be initially calculated as of the date specified
above. Once commenced, Trail Commission shall be computed on each
quarterly Contract anniversary by multiplying the rate below by the
Contract Account Value computed on each quarterly Contract
anniversary.
Trail Commission Quarterly Rates
Year 2 through 10 - 0.25%
Years 11 through 20 - 0.125%
Years 21 and thereafter - 0.0625%
Trail Commissions shall be paid at the calendar quarter end which
follows the computation of the Trail Commission. The Trail Commission
will continue until annuitization, surrender, or death which requires
distribution of the Contract Account Value.
Payable to Distributor: 0%
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