Exhibit 4(b) Advisory and Investment Services Agreements
INVESTMENT ADVISORY AGREEMENT
BETWEEN
TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B
AND
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made this 21st day of July, 1999, between
Transamerica Occidental Life Insurance Company, a California corporation
(hereinafter called the "Company"), and Transamerica Occidental's Separate
Account Fund B, a separate account of the Company established by a resolution of
the Company's Board of Directors on June 26, 1968, pursuant to Section 10506 of
the California Insurance Code (hereinafter called the "Fund").
WHEREAS, the Fund has been organized for the purpose of providing a separate
account for the benefit of equity investment fund contracts and desires to avail
itself of the investment experience, assistance and facilities available to the
Company and to have the Company perform for it various management and clerical
services, and the Company is willing to furnish such advice, facilities and
services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. The Fund hereby employs the Company to manage the investment and
reinvestment of the assets of the Fund and to perform the other services
herein set forth, subject to the supervision of the Board of Managers of the
Fund (hereinafter called the "Board") for the period and on the terms herein
set forth. The Company hereby accepts such employment and agrees during such
period, at its own expense, to render the services and to assume the
obligations herein set forth for the compensation herein provided.
2. In carrying out its obligations to manage the investment and
reinvestment of the assets of the Fund, the Company shall:
(a) obtain and evaluate pertinent economic, statistical and financial
data and other information relevant to the investment policy of the Fund,
affecting the economy generally, and individual companies or industries the
securities of which are included in the Fund's portfolio or are under
consideration for inclusion therein and make such data and information
reasonably available to the Board of Managers of the Fund at its request;
(b) develop and implement an investment program for the Fund, which
shall be subject to the overall review from time to time of the Board of
Managers;
(c) provide necessary personnel to assist the Board in managing the
affairs of the Fund, including clerical, bookkeeping, accounting and other
office personnel;
(d) provide for expenses (including all fees) incurred in connection
with the registration and qualification of the Fund and contracts issued by
the Fund under the Investment Company Act of 1940, the Securities Act of
1933 and state laws;
(e) provide for the charges and expenses of any custodian or
depository appointed for the safekeeping of the Fund's cash, securities or
other property;
(f) authorize and permit any of its directors, officers and employees,
who may be elected as directors or officers of the Fund, to serve in the
capacities in which they are elected;
(g) bear the expenses of calling and holding of meetings of Contract
Owners, the fees and expenses of members of the Board of Managers, and all
ordinary expenses incurred in the ordinary course of business.
3. Any investment program undertaken by the Company pursuant to this
Agreement and any other activities undertaken by the Company on behalf of
the Fund shall at all times be subject to any directives of the Board or any
duly constituted committee thereof acting pursuant to like authority.
4. For the services rendered hereunder, the Company shall receive an
amount for each valuation period of the Fund, equal to .30% per annum of the
value of the Fund as of the end of the period, such amount to be paid to the
Company weekly.
5. With respect to the Fund's portfolio securities, the Company shall
purchase such securities from or through and sell such securities to or
through such persons, brokers or dealers, as it may deem appropriate. Such
persons, brokers or dealers may include those affiliated with the Company.
6. The services of the Company to the Fund hereunder are not to be
deemed exclusive and the Company shall be free to render similar services to
others so long as its services hereunder are not impaired or interfered with
thereby.
7. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Company who may also be a director,
officer or employee of the Fund to engage in any other business or to devote
his time and attention in part to the management or other aspects of any
other business or to render services of any kind to any other corporation,
firm, individual or association.
8. This Agreement shall be submitted for approval of the Contract
Owners and if then approved this Agreement:
(a) shall continue in effect only so long as its continuance is
specifically approved annually by the Board of Managers of the Fund as
required by the Investment Company Act of 1940 or by Contract Owners casting
a majority of the votes entitled to be cast by all of Contract Owners;
(b) may not be terminated by the Company without the prior approval of a
new investment advisory agreement by Contract Owners casting a majority of
the votes entitled to be cast by all Contract Owners and shall be subject to
termination without the payment of any penalty, on sixty days' written
notice, by the Board or by vote of Contract Owners casting a majority of the
votes entitled to be cast;
(c) shall not be amended without prior approval by Contract Owners
casting a majority of the votes entitled to be cast; and
(d) shall automatically terminate in the event of its assignment by
either party.
9. The Fund shall pay:
(a) brokers' commissions in connection with portfolio asset
transactions to which the Fund is a party;
(b) all taxes, including issuance and transfer taxes, which may become
payable to federal, state or other governmental entities, with respect to
the operation of the Fund; and
(c) all extraordinary expenses which may be incurred by or on behalf of
the Fund in connection with matters not in the ordinary course of business.
10. This Agreement is subject to the provisions of the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized as of the day and
year first above written.
TRANSAMERICA OCCIDENTAL'S TRANSAMERICA OCCIDENTAL
SEPARATE ACCOUNT LIFE INSURANCE COMPANY
FUND B
By By
President President
By
Secretary
INVESTMENT SERVICES AGREEMENT
REGARDING TRANSAMERICA OCCIDENTAL'S SEPARATE ACCOUNT FUND B
THIS AGREEMENT is made between TRANSAMERICA OCCIDENTAL LIFE INSURANCE
COMPANY, a California corporation, "Occidental", and TRANSAMERICA INVESTMENT
SERVICES, INC., a Delaware corporation, "the Services Company".
WHEREAS, Occidental pursuant to a separate written Investment Advisory
Agreement provides investment management and various other services to
Transamerica Occidental's Separate Account Fund B, the "Fund", which Fund is
registered as a management investment company under the Investment Company Act
of 1940; and
WHEREAS, the Services Company is registered as an investment adviser under
the Investment Advisers Act of 1940, and engages in the business of providing
investment services to a number of clients, including other investment
companies; and
WHEREAS, the Services Company provides Occidental with investment advisement
and other services in connection with the management of Occidental's financial
resources under an Investment Advisement and Service Agreement between the two
parties; and
WHEREAS, Occidental desires to retain the Services Company to render certain
investment services pertaining to the Fund in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, the Manager desires to perform such services in the manner and on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
1. INVESTMENT ADVICE AND OTHER SERVICES
(a) The Services Company shall, to the extent required in the conduct of the
investment activities of Occidental with respect to the Fund, place at the
disposal of Occidental its judgment and experience and provide Occidental advice
and recommendations with respect to the management of the assets of the Fund,
including but not limited to the purchase and sale of common stock, convertible
preferred stock, notes, bonds, debentures, short term investments and other
securities in which the Fund may invest. The Services Company shall also, from
time to time, furnish to or place at the disposal of Occidental such reports and
information relating to industries, businesses, corporations, or securities as
may be reasonably required by Occidental or as the Services Company may deem to
be helpful to Occidental in the administration of these investments.
(b) The Services Company agrees to use its best efforts in providing such
advice and recommendations and in the preparation of such reports and
information, and for this purpose the Services Company shall at all times
maintain a staff of officers and other trained personnel for the performance of
its obligations under this Agreement. The Services Company may employ other
persons to furnish to it statistical and other factual information, advice
regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as it
may desire.
(c) The Fund and Occidental will from time to time furnish to the Services
Company detailed statements of the objectives and investments of the Fund and
will provide to the Services Company such information relating to the
investments of the Fund as may be available to the Fund or Occidental.
(d) The Services Company shall take, on behalf of Occidental and the Fund,
all actions which it deems necessary to implement the investment policies with
respect to stocks, bonds and money market instruments as determined by the Board
of Managers of the Fund, the Board of Directors of Occidental, or any committee
thereof, and in particular within the limits of those guidelines will determine
those securities to be bought or sold and will place all orders for the purchase
or sale of such securities for the Fund's account. To that end the Services
Company is authorized as the agent of Occidental and of the Fund to give
instructions as to deliveries of securities and other documents and as to
payments of cash for the account of the Fund in connection with the placing of
such orders. Selection of the brokers or dealers with which transactions are
executed and negotiation of commission rates will be made by the Services
Company.
Securities orders will be placed with brokers or dealers selected for their
ability to give prompt execution at prices and commissions rates (if any)
favorable to the Fund, and, in some instances, for their ability to provide
statistical, investment research and other services. As part of the process of
brokerage allocation, the Services Company is authorized to pay commissions
which may exceed what another broker might have charged. To the extent that
preference is given in the allocation of portfolio business to those brokers and
dealers which provide statistical, investment research, pricing quotations, or
other services, the Fund will bear any cost of obtaining such services, and the
Services Company and other clients advised by the Services Company, including
Occidental, may benefit from those services. Under the provisions of Section
28(e) of the Securities Exchange Act of 1934, the Services Company may determine
in good faith that the amount of a commission paid was reasonable in relation to
the value of the "brokerage and research services" provided by the executing
broker or dealer viewed in terms of the particular transaction or the Services
Company's overall responsibilities with respect to accounts as to which it is
exercising investment discretion.
2. ALLOCATION OF CHARGES AND EXPENSES
(a) The Services Company shall furnish at its own expense executive,
supervisory and other personnel and services, office space, equipment, utilities
and telephone services in connection with supplying the investment advice,
statistical and research services contemplated by this Agreement.
(b) It is understood that either the Fund or Occidental will pay, pursuant
to the separate Agreement between them, for all other expenses in connection
with operation of the Fund, including, without limitation, maintenance of
accounting and securities records, governmental fees, interest charges, taxes,
fees and expenses of independent auditors, legal fees, brokerage and other
expenses connected with the execution of security transactions, and custodian
and transfer agent fees. Should the Services Company advance or pay any of these
or similar expenses, it will be reimbursed by the appropriate party.
3. COMPENSATION
Occidental agrees to pay to the Services Company, as full compensation for
all services rendered hereunder, a fee at an annual rate of 0.15% (15/100ths of
one percent), or such other amount as the parties mutually agree in writing from
time to time, of the value of the Fund, as calculated by Occidental on each
Valuation Date of the Fund, which fee is to be paid by Occidental to the
Services Company quarterly, or more frequently should Occidental elect to do so.
Occidental and the Services Company may mutually choose to calculate an
estimated quarterly fee, with any applicable fee adjustment being made after the
end of the applicable quarter. Fee calculation and payment is solely a matter
between Occidental and the Services Company; the Fund has no obligation to pay
or take other acts in connection therewith.
Compensation under this Agreement will only be paid as specified in Section
5 of this Agreement.
4. NON-EXCLUSIVE AGREEMENT
This Agreement is non-exclusive as to Occidental, the Fund and the Services
Company. Occidental or the Fund may, in its discretion, purchase or obtain
information, reports and other services from other sources, including other
affiliates of Transamerica Corporation and outside consultants. The Services
Company may engage in any other business and may provide similar services to
other clients, so long as its services under this Agreement are not impaired;
and the Services Company may purchase or obtain information, reports and other
services from outside sources, including other affiliates of Transamerica
Corporation and outside consultants. The Services Company assumes no
responsibility under this Agreement other than to render the services called for
hereunder in good faith, and shall not be responsible for any action of the
Board of Managers of the Fund, the Board of Directors of Occidental, or any
committee thereof, in following or declining to follow any advice or
recommendation of the Services Company. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of the Services Company,
whether or not he is also a director, officer or employee of Occidental or the
Fund, to engage in any other business or to devote his time and attention in
part to the management or other aspects of any other business, whether of a
similar or dissimilar nature.
5. EFFECTIVE DATE
This Agreement shall become effective on , 1999 as to the services and other
obligations in this Agreement, provided, however, that the fee specified in
Section 3 will accrue but will not be paid unless and until initial approval of
and continuance of this Agreement shall have been approved by a vote of a
majority of the outstanding voting securities of the Fund (which matter is
expected to be considered at the Special Meeting of Contract Owners scheduled to
be held in June, 1999) or by a vote of the Board of Managers of the Fund, and by
a majority of the Managers who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940) of any party to this
Agreement, and provided further that said fee will in no event be paid prior to
, 1999. In the event the Fund does not approve this Agreement and its
continuance as specified above, the Services Company will if so requested
continue to provide on a temporary basis the services contemplated by this
Agreement for a reasonable period until the Fund and Occidental make other
arrangements.
6. CONTINUANCE AND TERMINATION
This Agreement shall continue in effect from year to year after the initial
approval and continuance as specified in Section 5, provided it is approved
annually 1) by vote of a majority of the outstanding voting securities of the
Fund or by vote of the Board of Managers of the Fund, and 2) by a majority of
the Managers of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act of 1940) of any party to this
Agreement; provided, however, that (a) Occidental, either on its own motion or
at the direction of the Fund upon a majority vote of the Board of Managers of
the Fund or by the vote of a majority of the outstanding voting securities of
the Fund, may, at any time and without the payment of any penalty, terminate
this Agreement upon sixty days' written notice to the Services Company; (b) this
Agreement shall immediately terminate in the event of its assignment (within the
meaning of the Investment Company Act of 1940) unless such automatic termination
shall be prevented by an exemptive order of the Securities and Exchange
Commission; and (c) the Services Company may terminate this Agreement without
payment of penalty on sixty days' written notice to Occidental and the Fund. Any
notice under this Agreement shall be given in writing, addressed and delivered,
or mailed postpaid, to the other party at the principal office of such party.
Any amendment to this Agreement may be made at any time by mutual written
consent of the parties.
7. APPLICABLE LAW
This Agreement shall be construed in accordance with the laws of the State
of California and the applicable provisions of the Investment Company Act of
1940.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
in Los Angeles, California on this 21st day of July, 1999.
TRANSAMERICA OCCIDENTAL
ATTEST: LIFE INSURANCE COMPANY
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Title: Title:
ATTEST: TRANSAMERICA INVESTMENT
SERVICES, INC.
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Title: Title:
