EXHIBIT (8)(h)
INVESTMENT SERVICES AGREEMENT
-----------------------------
THIS INVESTMENT SERVICES AGREEMENT ("Agreement"), dated and
effective as of November 28, 1995 between ANNUITY INVESTORS LIFE INSURANCE
COMPANY, an Ohio corporation ("Company"), and AMERICAN ANNUITY GROUP,
INC., a Delaware corporation ("American").
WHEREAS, Company seeks to obtain information and advice with
respect to the investment of its assets; and
WHEREAS, American, utilizing its own employees along with
services provided by its affiliate, American Money Management ("AMM"), is
willing and able to supply such investment services pursuant to the terms
and conditions set forth below;
NOW, THEREFORE, for the consideration herein stated, the parties
agree as follows:
1. INVESTMENT SERVICES.
1 American shall furnish investment services to Company,
which services shall include the following:
.1 to counsel and advise Company in connection with
the formulation of investment programs and strategies designed to
accomplish Company's investment objectives; and
.2 to manage the investment of Company's portfolios
of Invested Assets (as later defined) in accordance with investment
policies, objectives, directions and guidelines established by Company, as
set forth in Section 1.3 below, and, in connection therewith, to have full
discretion and authority, without prior consultation or prior approval, to
buy, sell and otherwise trade in stocks, bonds and other securities or
assets and take such other actions which American shall deem requisite,
appropriate or advisable.
2 Custody and control of the securities and all other
assets comprising Company's investment portfolio shall at all times be
subject to the direction and control of Company, acting through its Board
of Directors or an appropriate committee thereof. All purchases and sales
of securities shall be in the name of Company, and all certificates or
other instruments representing its investments shall be held by Company or
in accounts at depository institutions designated by Company or in book
form where appropriate. Such securities will be held in accounts
segregated from those of American or its affiliates.
3 American agrees that the investment services it furnishes
will be in accordance with the general, investment policies, objectives
and guidelines (collectively, "Guidelines") submitted by American to
Company and approved by the Board of Directors of Company or an
appropriate committee of the Board of Directors of Company.
4 The Company shall at all times keep American fully
informed as to the funds available, or to become available, for
investment, and generally as to its financial condition. The Company
shall furnish American with copies of financial statements and with other
information with regard to its affairs, as American may from time to time
request.
5 Notwithstanding Section .1 above, American shall not
(i) invest any of the Invested Assets in securities of American or any of
its affiliates or any entity controlled by any of them, (ii) cause Company
to purchase any securities from, or sell any securities to, American or
any of its affiliates or any entity controlled by any of them or (iii)
invest any of such Invested Assets in any investment opportunity which was
previously made available to and declined by American, in each case
without first obtaining the approval of the Board of Directors of the
Company or a appropriate Committee thereof.
6 For purposes of this Agreement, "Invested Assets" shall
mean bonds, stocks (common and preferred), short term investments and
similar invested assets carried on the Company's statutory convention
statements on Schedules BA, DA and D as admitted assets as permitted by
applicable law.
2. PURCHASE AND SALE OF SECURITIES.
American shall place all orders for the purchase and sale of
portfolio securities for Company accounts with brokers or dealers selected
by American and shall seek to execute portfolio transactions on terms
which are advantageous to Company in selecting brokers or dealers to
execute transactions. American shall not be obligated to solicit
competitive bids or seek the lowest available commission cost.
3. OTHER SERVICES; REPORTS AND RECORDS.
1 American shall maintain adequate records relating to the
furnishing of investment services under this Agreement, including those
with respect to the acquisition and disposition of securities, and shall
provide Company with all reports and documentation necessary for proper
accounting and regulatory reporting. American shall provide to Company
such oral or written reports as to its services provided under this
Agreement as Company shall reasonably require.
2 All records maintained pursuant to this Agreement shall
be deemed the property of Company and shall be subject to examination by
Company and by persons authorized by it, or by governmental authorities,
at all times upon reasonable notice. Except as expressly authorized in
this Agreement or directed by Company in writing, American shall keep
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confidential such records and other information obtained by reason of this
Agreement. Upon termination of this Agreement, American shall promptly
return all such records to Company.
4. INVESTMENT FEES; EXPENSES.
1 In full compensation and consideration for the
performance of its obligations hereunder, Company shall pay to American an
annual fee equal to .15% of the statutory carrying value of Invested
Assets. The fee paid by the Company shall not in any case exceed the
actual cost of the services provided by American. In addition, American
shall be entitled to reimbursement for the reasonable fees and expenses of
its outside legal counsel for necessary legal services rendered to
American in connection with the performance of its obligations hereunder.
All such fees and expenses shall be paid by Company. Payments due
hereunder shall be computed by American and paid by Company on a quarterly
basis measured as of the end of the preceding calendar quarter based on
the statutory carrying value of Invested Assets at such date. The
quarterly portion of the fee shall be billed within 30 days after the end
of each calendar quarter or portion thereof in which services are rendered
under this Agreement and paid within 10 days after receipt of the xxxx.
2 American shall furnish at its own expense necessary
executive and other personnel for providing investment services to Company
hereunder, including personnel to perform clerical, bookkeeping,
accounting and other office functions. Company shall be responsible for
the expenses of (a) brokerage commissions, issue and transfer taxes and
other costs in connection with securities transactions to which Company is
a party, including any portion of such commissions attributable to
research and brokerage services, (b) taxes payable by Company to federal,
state and other governmental agencies, and (c) custodial fees and
expenses.
5. NON-EXCLUSIVITY OF SERVICES.
The services of American to be provided hereunder are not to be
deemed exclusive and American shall be free to provide similar services
for its own account and the accounts of other affiliates, provided that
such services do not materially interfere with services to be rendered
hereunder.
6. SUBCONTRACTING.
Company acknowledges that American intends to subcontract with
American Money Management Corporation to provide a portion of the services
to be rendered hereunder. The arrangement with American Money Management
Corporation to provide those services shall not relieve American of any
liability or responsibility hereunder and any cost or expense of obtaining
such services shall be the sole responsibility of American.
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7. LIABILITY; INDEMNIFICATION.
1 Neither American nor any of its directors, officers or
employees or other persons affiliated with American shall have any
liability hereunder for any act, omission, misstatement or error in
judgment in the course of, or in connection with, providing investment
advisory services under this Agreement, or for any losses that may be
sustained from such investment advisory services. Company shall indemnify
and hold harmless American and its directors, officers, employees and
other affiliated persons from and against any and all liability, claims
and damages arising from or in connection with providing services
hereunder; provided, however, that the foregoing shall not relieve
American from liability for negligence, gross negligence or willful
misfeasance in providing services under this Agreement.
2 As to all other services provided by American hereunder,
neither American nor any of its directors, officers or employees or other
persons affiliated with American shall have any liability hereunder for
any act, omission, misstatement or error in judgment in the course of, or
in connection with, providing such other services, or for any losses that
may be sustained from such other services, and Company shall indemnify and
hold harmless American and its directors, officers, employees and other
affiliated persons from and against any and all liability, claims and
damages arising from or in connection with providing such other services
hereunder; provided, however, that the foregoing shall not relieve
American from liability for negligence, gross negligence or willful
misfeasance in providing such other services.
8. TERMINATION; RENEGOTIATION.
1 This Agreement shall remain in effect until terminated by
any party thereto at any time upon ninety (90) days written notice to the
other party's normal business address. Upon termination of this
Agreement, Company shall pay pro rata any investment fees due for any
portion of a calendar quarter within ten (10) days following the date of
termination.
2 This Agreement shall be subject to renegotiations upon
the request of either party at the end of each three (3) year period
during which this Agreement continues in effect. The party requesting
renegotiation shall provide written notice thereof to the other party's
normal business address during the thirty (30) day period preceding the
end of any three (3) year period. If such renegotiations result in an
Agreement which is unsatisfactory to Company, it shall be entitled to
terminate this Agreement in accordance with the terms hereof.
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9. NOTICES.
Notices or other writings given or sent under or pursuant to this
Agreement shall be in writing and be deemed to have been given or sent if
delivered to the party at its address listed below in person or by telex
or telecopy or within two (2) days of mailing if mailed postage prepaid to
such address. The addresses of the parties are:
Annuity Investors Life Insurance Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: General Counsel
with a copy to:
American Annuity Group, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: General Counsel
Each party may change its address by giving notice as herein
required.
10. SOLE INSTRUMENT.
This instrument constitutes the sole and only agreement of the
parties hereto relating to the subject matter hereof and correctly sets
forth the rights, duties, and obligations of each party to the other as of
its date.
11. WAIVER OR MODIFICATION.
No waiver or modification of this Agreement shall be effective
unless reduced to a written document signed by the party to be charged.
12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio.
13. ASSIGNMENT.
No party to this Agreement shall have the right to sell,
transfer, delegate, or assign this Agreement or any of its rights or
duties hereunder to any person, firm or corporation at any time during the
term hereof, and any proposed assignee shall acquire no rights nor be able
to assume any obligations unless the written consent of the other party to
this Agreement is given before such assignment or delegation takes place.
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However, subject to this paragraph, this Agreement binds and inures to the
benefit of the parties, their successors and assigns.
14. COMPLIANCE WITH APPLICABLE LAW. This Agreement shall be
performed in accordance with the requirements of the Securities Act of
1933, Securities Exchange Act of 1934, Investment Company Act of 1940,
Investment Advisors Act of 1940 and the applicable rules and regulations
of the Securities and Exchange Commission promulgated thereunder, to the
extent that any of the foregoing are applicable to the subject matter of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of November 28, 1995, effective for all purposes as of such date for
services rendered subsequent to November 28, 1995.
ANNUITY INVESTORS LIFE INSURANCE
COMPANY
BY: /s/ Xxxx X. Xxxxxxxx
____________________________
Title: Senior Vice President
AMERICAN ANNUITY GROUP, INC.
BY: /s/ Xxxx X. Xxxxxxxx
____________________________
Title: Senior Vice President
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