EXHIBIT (8)(N)
December 1, 1999
Mr. Xxx Xxxx
Senior Vice President
American General Life Insurance Company
0000 Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Dear Don:
The following constitutes a letter of understanding (the "Agreement")
whereby OppenheimerFunds, Inc. ("OFI") intends to compensate American General
Life Insurance Company ("American General") for providing the administrative
support services described in Schedule A hereto, which is made a part hereof, to
contract owners of any American General variable annuity and/or variable life
insurance product described in Schedule C hereto, which is made a part hereof
("American General Products") that are indirect shareholders of Xxxxxxxxxxx
Variable Account Funds ("OVAF"), a series investment company dedicated to
insurance company separate accounts for which OFI acts as investment manager.
This Agreement will be effective as of December 1, 1999. All other terms
and conditions of this Agreement are described in Schedule C hereto, which is
made a part hereof.
We look forward to a long and prosperous relationship. If this Agreement
meets with your approval, please have the enclosed duplicate copy of this letter
signed on behalf of American General, and return it to my attention.
Sincerely,
Xxxxxxx F.X. Xxxxx
Title: Vice President,
OppenheimerFunds, Inc.
Agreed to and accepted on behalf of
American General Life Insurance Company
By:
------------------------------
Title:
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SCHEDULE A TO
DECEMBER 1, 1999 LETTER AGREEMENT
BY AND BETWEEN
AMERICAN GENERAL LIFE INSURANCE COMPANY
AND
OPPENHEIMERFUNDS, INC. (THE "AGREEMENT")
Maintenance of Books and Records
Assist as necessary to maintain book entry records on behalf of the Funds
regarding issuance to, transfer within (via net purchase orders) and
redemption by the Accounts of Fund shares.
Maintain general ledgers regarding the Accounts' holdings of Fund shares,
coordinate and reconcile information, and coordinate maintenance of ledgers
by financial institutions and other contract owner service providers.
Communication with the Funds
Serve as the designee of the Funds for receipt of purchase and redemption
orders from the Account and to transmit such orders, and payment therefor,
to the Funds. Coordinate with the Funds' agents respecting daily valuation
of the Funds' shares and the Accounts' units.
Purchase Orders
-- Determine net amount available for investment in the Funds.
-- Deposit receipts at the Funds or the Funds' custodian (generally by
wire transfer).
-- Notify the Funds of the estimated amount required to pay dividend or
distribution.
Redemption Orders
-- Determine net amount required for redemption by the Funds.
Notify the custodian and Funds of cash required to meet payments.
Purchase and redeem shares of the Funds on behalf of the Accounts at the
then current price in accordance with the terms of each Fund's then current
prospectus.
Assistance in enforcing procedures adopted on behalf of the Trust to
reduce, discourage, or eliminate market timing transactions in a
Fund's shares in order to reduce or eliminate adverse effects on the
Fund or its shareholders.
Processing Distributions from the Funds
Process ordinary dividends and capital gains.
Reinvest the Funds' distributions.
Reports
Periodic information reporting to the Funds, including, but not limited to,
furnishing registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, and any other
SEC filings with respect to the Accounts invested in the Funds, as not
otherwise provided for.
Periodic information reporting about the Funds, including any necessary
delivery of the Funds' prospectus and annual and semi-annual reports to
contract owners, as not otherwise provided for.
Fund-related Contract Owner Services
Maintain adequate fidelity bond or similar coverage for all Company
officers, employees, investment advisors and other individuals or entities
controlled by the Company who deal with the money and/or securities of the
Funds.
Provide general information with respect to Fund inquiries (not including
information about performance or related to sales).
Provide information regarding performance of the Funds and the subaccounts
of the Accounts to existing contract owners.
Oversee and assist the solicitation, counting and voting or contract owner
voting interests in the Funds pursuant to Fund proxy statements.
Other Administrative Support
Provide other administrative and legal compliance support for the Funds as
mutually agreed upon by the Company and the Funds or the Fund
Administrator.
Relieve the Funds of other usual or incidental administrative services
provided to individual contract owners.
SCHEDULE B TO
DECEMBER 1, 1999 LETTER AGREEMENT
BY AND BETWEEN
AMERICAN GENERAL LIFE INSURANCE COMPANY
AND
OPPENHEIMERFUNDS, INC. (THE "AGREEMENT")
Separate Accounts Products
----------------- --------
American General Life Insurance Company Legacy Plus Variable Life
Insurance Policy Form No. 98615
Separate Account VL-R
American General Life Insurance Company
Separate Account D
SCHEDULE C TO
DECEMBER 1, 1999 LETTER AGREEMENT
BY AND BETWEEN
AMERICAN GENERAL LIFE INSURANCE COMPANY
AND
OPPENHEIMERFUNDS, INC. (THE "AGREEMENT")
1. The Agreement may be cancelled by any party upon ten days of written
notice: (1) if the participation agreement for American General Products between
OFI, American General and OVAF is terminated; (2) if neither American General
nor any underwriter under its control actively promotes American General
Products with OVAF as underlying options to new investors; (3) if either party
is subject to a change of control; or (4) if it is not permissible to continue
this Agreement under laws, rules or regulations applicable to OVAF, OFI or
American General. Either party may also cancel this Agreement upon six months
written notice.
2. Payment will be made to American General quarterly during the term
this Agreement is in effect, no later than thirty days after the end of the
quarter starting with the quarter ending December 31, 1999. Payments shall be
separately computed on the average net assets of OVAF held by American General
Products variable account during the prior quarter, subject to a limit of one-
third of the average management fee paid by that OVAF series to OFI during the
prior quarter, subject to a limit of one-third of the average management fee
paid by that series to OFI during the prior quarter, at the annual rate of:
0.20% of the first $100 million of average net assets, plus 0.25% of average net
assets held by American General Products variable account(s) in excess of $100
million during that prior quarter. For purposes of determining whether the
breakpoint described in the preceding sentence has been achieved, the net asset
value of OVAF shares held by separate accounts of American General Life
Insurance Company will be aggregated with shares held by American General.
3. Except to the extent that American General's, OFI's or OVAF's counsel
may deem it necessary or advisable to disclose in their respective prospectuses
or elsewhere, the terms of this Agreement will be held confidential by each
party. The party making such disclosure shall provide advance written
notification, including particulars, to the other party that it is making such
disclosure.
4. No other fees or expenses will be required of OFI or OVAF for the
sponsorship within American General product line, except as mutually agreed to
by the parties.
5. On advance written notice, OFI or a subsidiary may pay all or a
portion of the fees provided for in this Agreement under any service fee or Rule
12b-1 plan hereafter adopted by OVAF, which shall satisfy that portion of OFI's
payment obligation hereunder.
6. OFI will be responsible for calculating the fees payable hereunder.
7. Each party shall provide each other party or its designated agent
reasonable access
to its records to permit it to audit or review the accuracy of the charges
submitted for payment under this Agreement.
8. This Agreement does not modify or replace the November 23, 1998
Agreement by and between American General Annuity Insurance Company and OFI (the
"1998 Agreement"), or any other agreement with American General Life Insurance
Company pertaining to any Xxxxxxxxxxx fund other than OVAF. The parties hereto
agree that OVAF assets that qualify for payment under the 1998 Agreement shall
not qualify for payment under this Agreement.
