EXHIBIT (h)(3)(b)
AMENDMENT NO. 2 TO SHAREHOLDER SERVICES AGREEMENT
THIS AMENDMENT NO. 2 TO SHAREHOLDER SERVICES AGREEMENT is made as of the
of , 2004, by and among AMERICAN GENERAL LIFE INSURANCE
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COMPANY (the "Company"), AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. ("ACIM")
and AMERICAN CENTURY INVESTMENT SERVICES, INC. (the "Distributor"). Capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in
the Agreement (defined below).
RECITALS
WHEREAS, the Company and ACIM are parties to a certain Shareholder Services
Agreement dated February 1, 2000, as amended November 1, 2000 (the "Agreement")
in connection with the participation by the Funds (as defined in the Agreement)
in individual and group variable annuity and variable life insurance contracts
to be issued through one or more separate accounts established by the Company
under state law;
WHEREAS, since the date of this Agreement, American Century Investment
Services, Inc. (the "Distributor") became the sole distributor of the Funds and
in connection therewith, ACIM wishes to assign all its rights and obligations
under the Agreement to the Distributor and the Company wishes to consent to such
assignment;
WHEREAS, the parties desire to expand the number of Funds to be made
available as investment options under the Contracts; and
WHEREAS, in connection with the expansion of Funds, the parties have agreed
to revise the compensation terms as set forth herein; and
WHEREAS, the parties desire to revise the method of calculating payments to
the Company.
WHEREAS, the parties now desire to modify the Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows:
1. Assignment by ACIM. Since the date of the Agreement, Distributor became
the sole distributor of the Funds offered under the Agreement. Therefore, ACIM
hereby assigns all its rights and obligations under the Agreement to Distributor
and Distributor accepts such assignment. The Company hereby consents to such
assignment. From the date of this Amendment, all references to "ACIM" in the
Agreement shall be deemed to refer to Distributor.
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2. The second WHEREAS clause is hereby deleted in its entirety and replaced
with the following:
"WHEREAS, the Company wishes to make available as investment options
under the Contracts Class I of the VP Balanced Fund, VP Income & Growth
Fund, VP International Fund, VP Value Fund and Class II of the VP Inflation
Protection Fund (collectively, the "Funds"), each of which is a series of
mutual fund shares registered under the Investment Company Act of 1940, as
amended and issued by American Century Variable Portfolios, Inc., except
for Class II of the VP Inflation Protection Fund, which is issued by
American Century Variable Portfolios II, Inc. (collectively referred to as
the "Issuer");"
3. Sections 6(b), 6(c) and 6(d) are hereby deleted in their entirety and
the following sections are substituted in lieu thereof:
"(b) Distributor acknowledges that it will derive a substantial
savings in administrative expenses, such as a reduction in expenses related
to postage, shareholder communications and recordkeeping, by virtue of
having a single shareholder account per Fund for the Accounts rather than
having each Contract owner as a shareholder. In consideration of the
Administrative Services and performance of all other obligations under this
Agreement by the Company, Distributor will pay the Company a fee (the
"Administrative Services Fee") equal to basis points ( %) per annum
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of the average aggregate amount invested by the Company in Class I shares
of the Funds and basis points ( %) per annum of the average
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aggregate amount invested by the Company in Class II shares of the VP
Inflation Protection Fund under this Agreement. The payments received by
the Company do not constitute payment in any manner for investment advisory
services.
"(c) In consideration of performance of the Distribution Services
specified on EXHIBIT B by the Company, Distributor will pay the Company a
fee (the "Distribution Fee") of basis points ( %) of the average
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aggregate amount invested by the Company in Class II of the VP Inflation
Protection Fund under this Agreement.
"(d) For the purposes of computing the payments to the Company
contemplated by this Section 6, the average aggregate amount invested by
the Company on behalf of the Accounts in the Funds over a one month period
shall be computed by totaling the Company's aggregate investment (share net
asset value multiplied by total number of shares of the Funds held by the
Company) on each calendar day during the month and dividing by the total
number of calendar days during such month."
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4. The first paragraph of Section 13 is hereby deleted in its entirety and
the following paragraph is substituted in lieu thereof:
"13. Termination; Withdrawal of Offering. This Agreement may be
terminated by any party upon 180 days' prior written notice to the other
party, or, on 60 days' written notice pursuant to a vote of a majority of
the outstanding securities of the Funds. Notwithstanding the above, the
Issuer reserves the right, without prior notice, to suspend sales of shares
of any Fund, in whole or in part, or to make a limited offering of shares
of any of the Funds in the event that (A) any regulatory body commences
formal proceedings against the Company, Distributor or the Issuer, which
proceedings Distributor reasonably believes may have a material adverse
impact on the ability of the Issuer or the Company to perform its
obligations under this Agreement or (B) in the judgment of Distributor,
declining to accept any additional instructions for the purchase or sale of
shares of any such Fund is warranted by market, economic or political
conditions. Notwithstanding the foregoing, this Agreement may be terminated
immediately (i) by any party as a result of any other breach of this
Agreement by another party, which breach is not cured within 30 days after
receipt of notice from the other party, or (ii) by any party upon a
determination that continuing to perform under this Agreement would, in the
reasonable opinion of the terminating party's counsel, violate any
applicable federal or state law, rule, regulation or judicial order, (iii)
by a vote of a majority of the independent directors, or (iv) upon
assignment by either party."
5. Section 18 is hereby deleted in its entirety and the following Section
18 is substituted in lieu thereof:
"18. Successors and Assigns. This Agreement may not be assigned and
will be terminated automatically upon any attempted assignment. This
Agreement shall be binding upon and inure to the benefit of both parties
hereto."
6. In the event of a conflict between the terms of this Amendment No. 2 and
the Agreement, it is the intention of the parties that the terms of this
Amendment No. 2 shall control and the Agreement shall be interpreted on that
basis. To the extent the provisions of the Agreement have not been amended by
this Amendment No. 2, the parties hereby confirm and ratify the Agreement.
7. This Amendment No. 2 may be executed in two or more counterparts, each
of which shall be an original and all of which together shall constitute one
instrument.
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8. Except as expressly supplemented, amended or consented to hereby, all of
the representations, warranties, terms, covenants and conditions of the
Agreement shall remain unamended and shall continue to be in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 2 as
of the date first above written.
AMERICAN GENERAL LIFE AMERICAN CENTURY INVESTMENT
INSURANCE COMPANY MANAGEMENT, INC.
By: By:
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Name: Name:
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Title: Title:
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By: AMERICAN CENTURY INVESTMENT
--------------------------------- SERVICES, INC.
Name:
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Title: By:
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Name:
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Title:
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[Corporate Seal]
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EXHIBIT B
DISTRIBUTION SERVICES
Pursuant to the Agreement to which this is attached, the Company shall perform
distribution services for Class II shares of the Funds, including, but not
limited to, the following:
1. Receive and answer correspondence from prospective shareholders, including
distributing prospectuses, statements of additional information, and
shareholder reports.
2. Provide facilities to answer questions from prospective investors about
Fund shares.
3. Assist investors in completing application forms and selecting dividend and
other account options.
4. Provide other reasonable assistance in connection with the distribution of
Fund shares.
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