Exhibit (3)(b)
SELLING GROUP AGREEMENT
AMERICAN GENERAL SECURITIES INCORPORATED AND
AMERICAN GENERAL LIFE INSURANCE COMPANY
This Selling Group Agreement ("Agreement") is made among American General
Securities Incorporated, a registered broker - dealer and the distributor for
the variable life insurance policies and/or variable annuity contracts set forth
in Schedule A ("Distributor" or "AGSI"),
McDonald Investments, Inc.
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("Selling Group Member")
KeyCorp Insurance Agency USA Inc., a Washington corporation
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("Associated Agency")
and, as the fourth party, American General Life Insurance Company ("AGL").
Distributor is a wholly-owned subsidiary of AGL. Selling Group Member is
registered with the Securities and Exchange Commission ("SEC") as a broker-
dealer under the Securities Exchange Act of 1934 ("1934 Act") and under any
appropriate regulatory requirements of state law, and is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD"),
unless Selling Group Member is exempt from the broker-dealer registration
requirements of the 1934 Act. Unless exempt, Selling Group Member maintains a
level of qualification with the NASD appropriate to enable it to offer and sell
the products set forth in Schedule A. Selling Group Member is affiliated with
Associated Agency, and Associated Agency's affiliated agencies as set forth in
Schedule C, which Schedule C may be amended from time to time (Associated Agency
and the Schedule C affiliated agencies are hereinafter collectively referred to
as "Associated Agency") which is properly licensed under the insurance laws of
the state(s) in which Selling Group Member will act under this Agreement.
This Agreement is for the purpose of providing for the distribution of certain
variable life insurance policies and/or annuity contracts set forth in Schedule
A and any successor or additional SEC registered insurance products (as
discussed in Part (1) "NEW PRODUCTS" of this Agreement) to be issued by AGL and
distributed through Distributor through representatives who are state insurance
licensed and appointed agents of AGL and associated with Associated Agency and
are also NASD registered representatives of Selling Group Member ("Sales
Persons"). The policies and/or annuity contracts set forth on Schedule A, along
with any
successor or additional SEC registered insurance products, are referred to
collectively herein as the "Contracts" or "Policies."
In consideration of the mutual promises and covenants contained in this
Agreement, AGL and Distributor appoint Selling Group Member and those persons
associated with Associated Agency who are NASD registered representatives of
Selling Group Member and state insurance licensed agents of AGL to solicit and
procure applications for the Contracts. This appointment is not deemed to be
exclusive in any manner and only extends to those jurisdictions where the
Contracts have been approved for sale. Selling Group Member is authorized to
collect the first purchase payment or premium (collectively "Premiums") on the
Contracts and, unless Selling Group Member and AGL have otherwise agreed, must
remit such premiums in full dollar amount to AGL. Unless Selling Group Member
and AGL have otherwise agreed, applications shall be taken only on preprinted
application forms supplied by AGL. All completed applications and supporting
documents are the sole property of AGL and must be promptly delivered to AGL.
All applications are subject to acceptance by AGL at its sole discretion.
(1) NEW PRODUCTS
AGL and Distributor may propose, and AGL may issue additional or successor
products, in which event Selling Group Member will be informed of the product
and its related concession schedule. If Selling Group Member does not agree to
distribute such product(s), it must notify Distributor in writing within 10 days
of receipt of the Concession Schedule for such product(s). If Selling Group
Member does not indicate disapproval of the new product(s) or the terms
contained in the related Concession Schedule, Selling Group Member will be
deemed to have thereby agreed to distribute such product(s) and agreed to the
related Concession Schedule which shall be attached to and made a part of this
Agreement.
(2) SALES PERSONS
Associated Agency is authorized to recommend Sales Persons for appointment by
AGL to solicit sales of the Contracts. Associated Agency warrants that all such
Sales Persons shall not commence solicitation nor aid, directly or indirectly,
in the solicitation of any application for any Contract until that Sales Person
is appropriately licensed for such product under applicable insurance laws and
is a currently NASD registered representative of Selling Group Member.
Associated Agency shall be responsible for all fees required to obtain and/or
maintain any licenses or registrations required by state or federal law, for
Associated Agency and its Sales Persons. From time to time, AGL will provide
Associated Agency and Selling Group Member with information regarding the
jurisdictions in which AGL is authorized to solicit applications for the
Contracts and any limitations on the availability of such Contracts in any
jurisdiction.
(3) SALES MATERIAL
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Associated Agency and Selling Group Member shall not utilize in their efforts to
market the Contracts, any written brochure, prospectus, descriptive literature,
printed and published material, audio-visual material or standard letters unless
such material has been provided preprinted by AGL or Distributor or unless AGL
and Distributor have provided written approval for the use of such literature.
Associated Agency and Selling Group Member jointly and severally hold AGL,
Distributor and their affiliates harmless from any liability arising from the
use of any material which either (a) has not been specifically approved in
writing by AGL, or (b) although previously approved, has been disapproved by AGL
or Distributor, in writing for further use.
(4) PROSPECTUSES
Selling Group Member and Associated Agency warrant that solicitation for the
sale of SEC registered insurance products will be made by use of a currently
effective prospectus, that a prospectus will be delivered concurrently with each
sales presentation and that no statements shall be made to a client superseding
or controverting any statement made in the prospectus. AGL and Distributor
shall furnish Selling Group Member and Associated Agency, at no cost to Selling
Group Member or Associated Agency, reasonable quantities of prospectuses to aid
in the solicitation of Contracts.
(5) SELLING GROUP MEMBER COMPLIANCE
Selling Group Member shall be solely responsible for the approval of suitability
determinations for the purchase of any Contract or the selection of any
investment option thereunder, in compliance with federal and state securities
laws and shall supervise Associated Agency and Sales Persons in determining
client suitability. Selling Group Member shall hold AGL and Distributor
harmless from any financial claim resulting from improper suitability decisions.
Selling Group Member will fully comply with the requirements of the NASD and of
the 1934 Act and such other applicable federal and state laws and will establish
rules, procedures, and supervisory and inspection techniques necessary to
diligently supervise the activities of its NASD registered representatives who
are state insurance licensed agents or solicitors of AGL, in connection with
offers and sales of the Contracts. Such supervision shall include providing, or
arranging for, initial and periodic training in knowledge of the Contracts.
Upon request by Distributor or AGL, Selling Group Member will furnish
appropriate records as are necessary to establish diligent supervision and
client suitability.
Selling Group Member shall fully cooperate in any insurance or securities
regulatory examination, investigation, or proceeding or any judicial proceeding
with respect to AGL, Distributor, Selling Group Member, and Associated Agency
and their respective affiliates, agents and representatives to the extent that
such examination, investigation, or proceeding arises in connection with the
Contracts. Selling Group Member shall immediately notify Distributor if its
broker-dealer registration or the registration of any of its Sales Persons is
revoked, suspended, or terminated.
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(6) ASSOCIATED AGENCY AND SALES PERSON COMPLIANCE
Associated Agency will fully comply with the requirements of state insurance
laws and applicable federal laws and will establish rules and procedures
necessary to diligently supervise the activities of the Sales Persons. Upon
request by Distributor or AGL, Selling Group Member will furnish appropriate
records as are necessary to establish such supervision. Associated Agency and
Sales Persons shall be responsible for making suitability determinations for
the purchase of any Contract or the selection of any investment option
thereunder, in compliance with federal and state securities laws.
Associated Agency shall fully cooperate in any insurance or securities
regulatory examination, investigation, or proceeding or any judicial proceeding
with respect to AGL, Distributor, Selling Group Member, and Associated Agency
and their respective affiliates, agents and representatives to the extent that
such examination, investigation, or proceeding arises in connection with the
Contracts. Associated Agency shall immediately notify Distributor if its
insurance license or the license of any of its Sales Persons is revoked,
suspended, or terminated.
Associated Agency agrees to maintain documentation regarding the background
investigation of individuals conducted prior to appointment during the period
the individual is appointed by the Company and shall provide such information to
the Company as may be required by valid request of any regulatory authority.
(7) AGL COMPLIANCE
AGL represents that the prospectus(es) and registration statement(s) relating to
the Contracts contain no untrue statements of material fact or omission to state
a material fact, the omission of which makes any statement contained in the
prospectus and registration statement misleading. AGL agrees to indemnify
Associated Agency and Selling Group Member from and against any claims,
liabilities and expenses which may be incurred by any of those parties under the
Securities Act of 1933 ("1933 Act"), the 1934 Act, the Investment Company Act of
1940, common law, or otherwise, and that arises out of a breach of this
paragraph.
AGL further represents that:
(i) All contract forms, applications and other documents relating to the
Contracts offered or to be offered by AGL which are required by
applicable law to be filed with and/or approved by public officials
or governmental agencies have been or will be so filed and will not
be offered until necessary approvals have been received by AGL, and
all such Contracts, forms, applications and other documents do
comply and will comply in all material respects with the applicable
laws, rules and regulations of the jurisdictions in which the
Contracts will be offered.
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(ii) All promotional materials, instructional guides and training
materials issued or approved by AGL and provided to Selling Group
Member: (a) are and will, to the best of AGL's knowledge, be true,
accurate and complete in all material respects; (b) do not and will
not contain any false or misleading statements of material fact
known to AGL, or omit any material fact, known to AGL, necessary to
make the statements contained therein not misleading in light of the
circumstances under which they are made; (c) do and will fully and
adequately disclose all material terms and conditions, limitations
and restrictions, known to AGL; and (d) comply and will comply with
all applicable laws and regulations of those jurisdictions in which
the Contracts will be offered.
(iii) The Contracts set froth in Schedule A will qualify, at the time that
the Contracts are first offered, for treatment as insurance
contracts under applicable sections of the Internal Revenue Code
such that state and federal taxes due on the interest and earnings
on the Contracts will be deferred until withdrawal by the contract
owner, or other person so designated to make such withdrawal.
(iv) The Contracts, or any interest in the separate account of AGL
related thereto, which constitutes a "security" for purposes of the
of 1933 Act, will be duly registered with the SEC and any state
where such registration is required, prior to offering the related
Contracts and any interest in the separate account of AGL related
thereto, and AGL, and the separate account of AGL related to such
Contracts, will comply in all material respects with applicable
federal and state securities laws with respect to such Contracts or
any interests in the separate account related thereto.
(8) COMPENSATION
AGL will remit to Associated Agency compensation as set forth in Schedule B
hereto.
(9) CUSTOMER SERVICE, COMPLAINTS, AND INDEMNIFICATION
The parties agree that AGL may contact by mail or otherwise, any client, agent,
account executive, or employee of Associated Agency or other individual acting
in a similar capacity if deemed appropriate by AGL, in the course of normal
customer service for existing Contracts, in the investigation of complaints, or
as required by law. The parties agree to cooperate fully in the investigation
of any complaint.
Selling Group Member, Associated Agency, and Sales Persons agree to hold
harmless and indemnify Distributor and AGL against any and all claims,
liabilities and expenses incurred by either Distributor or AGL, and arising out
of or based upon any alleged or untrue statement of Selling Group Member,
Associated Agency or Sales Person other than statements contained in
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the approved sales material for any Contract, or in the registration statement
or prospectus for any Contract.
AGL hereby agrees to indemnify and hold harmless Selling Group Member,
Associated Agency, and each of their respective employees, controlling persons,
officers or directors against any losses, expenses (including reasonable
attorneys' fees and court costs), damages or liabilities to which Selling Group
Member or such affiliates, controlling persons, officers or directors become
subject, under the 1933 Act or otherwise, insofar as such losses, expenses,
damages or liabilities (or actions or inactions in respect thereof) arise out of
or are based upon AGL's performance, non-performance or breach of this
Agreement, or are based upon any untrue statement contained in, or material
omission from, the prospectus for any of the Contracts.
The provisions of this Section (9) shall survive the expiration or other
termination of this Agreement.
(10) FIDELITY BOND
Associated Agency represents that all directors, officers, employees and Sales
Persons of Associated Agency licensed pursuant to this Agreement or who have
access to funds of AGL are and will continue to be covered by a blanket fidelity
bond including coverage for larceny, embezzlement and other defalcation, issued
by a reputable bonding company. This bond shall be maintained at Associated
Agency's expense. Such bond shall be at least equivalent to the minimal
coverage required under the NASD Rules of Fair Practice, and endorsed to extend
coverage to life insurance and annuity transactions. Associated Agency
acknowledges that AGL may require evidence that such coverage is in force and
Associated Agency shall promptly give notice to AGL of any notice of
cancellation or change of coverage.
Associated Agency assigns any proceeds received from the fidelity bond company
to AGL to the extent of AGL's loss due to activities covered by the bond. If
there is any deficiency, Associated Agency will promptly pay AGL that amount on
demand. Associated Agency indemnifies and holds harmless AGL from any
deficiency and from the cost of collection.
(11) LIMITATIONS OF AUTHORITY
The Contract forms are the sole property of AGL. No person other than AGL has
the authority to make, alter or discharge any policy, Contract, certificate,
supplemental contract or form issued by AGL. No party, other than AGL, has the
right to waive any provision with respect to any Contract or policy; give or
offer to give, on behalf of AGL, any tax or legal advice related to the purchase
of a Contract or policy; or make any settlement of any claim or bind AGL or any
of its affiliates in any way. No person, other than AGL, has the authority to
enter into any proceeding in a court of law or before a regulatory agency in the
name of or on behalf of AGL.
(12) ARBITRATION AND AUDIT
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The parties agree that any controversy between or among them arising out of
their business or pursuant to this Agreement that cannot be settled by agreement
shall be taken to arbitration as set forth herein. Such arbitration will be
conducted according to the securities arbitration rules then in effect, of the
American Arbitration Association, NASD, or any registered national securities
exchange. Arbitration may be initiated by serving or mailing a written notice.
The notice must specify which rules will apply to the arbitration. This
specification will be binding on all parties.
The arbitrators shall render a written opinion, specifying the factual and legal
bases for the award, with a view to effecting the intent of this Agreement. The
written opinion shall be signed by a majority of the arbitrators. In rendering
the written opinion, the arbitrators shall determine the rights and obligations
of the parties according the substantive and procedural laws of the State of
Texas. Accordingly, the written opinion of the arbitrators will be determined
by the rule of law and not by equity. The decision of the majority of the
arbitrators shall be final and binding on the parties and shall be enforced by
any court of competent jurisdiction.
Each party shall, upon reasonable prior written notice to the other party, have
the right to audit the books and records of the other party regarding
information directly related to this Agreement, during the other party's normal
business hours or by appointment, at such times as the auditing party reasonably
deems necessary. The party being audited shall permit reasonable access to any
of its facilities or any of its affiliates' facilities in which information
pertaining to this Agreement is being processed or stored. Upon the auditing
party's request, the other party shall provide reasonable assistance in
performing the audit, including any audit required or requested by any federal,
state, or local regulatory authority having jurisdiction over the auditing
party's business. The auditing party shall reimburse the party being audited for
its reasonable out-of-pocket costs and expenses incurred in connection with the
audit. The provisions of this Section (12) shall survive the expiration or other
termination of this Agreement for a period of two years from the date of such
expiration or other termination of this Agreement.
(13) TRADEMARKS
Without prior written consent from the other party, neither party shall use, or
authorize any other person to use the other party's names, logos, trademarks,
tradenames, service marks or other intellectual property or those of its
affiliates. If such consent is granted, then the party which has received such
consent shall use only those names, logos, trademarks, tradenames, service marks
and other intellectual property that are specifically enumerated in the consent
and only in conjunction with the offer and sale of the Contracts pursuant to
this Agreement.
(14) CONFIDENTIALITY
(A) Each party agrees that, during the term of this Agreement and at
all times thereafter, neither party will disclose to any
unaffiliated person, firm, corporation or other entity, nor use for
its own account, any of the other party's trade secrets
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or confidential information, as defined below, including, without
limitation, the terms of this Agreement, non-public program
materials; member or customer lists; proprietary information;
information as to the other party's business methods, operations or
affairs, or the processes and systems used in its operations and
affairs; or the processes and systems used in any aspect of the
operation of its business; all whether now known or subsequently
learned by it. Nothing in this Agreement shall require either party
to keep confidential any information that:
(i) The party can prove was known to it prior to any disclosure
by the other;
(ii) Is or becomes publicly available through no fault of the
party;
(iii) The party can prove was independently developed by it outside
the scope of this Agreement and with no access to any
confidential or proprietary information of the other party;
(iv) Is required to be produced pursuant to judicial or
administrative process or subpoena; and/or
(v) Is mutually agreed upon by both parties to this Agreement.
(B) Notwithstanding the information above, "Confidential Information"
shall mean: (1) information regarding a party's, or such other
party's affiliates, financial condition, information systems,
business operations, plans and strategies, customers and
prospective customers, marketing and distribution plans, and
methods and techniques; (2) information that is marked
"confidential", "proprietary" or in like words, or that is
summarized in writing as being confidential prior to or promptly
after disclosure to the other party; (3) any and all related
research; and (4) any and all designs, ideas, concepts, and
technology embodied therein. Notwithstanding the information above,
Confidential Information shall specifically include any information
regarding customers that is provided to AGL hereunder and any
information concerning premium, losses, profitability, expiration
dates, and insured demographics
(C) Each party hereto acknowledges and agrees that monetary damages
would not be a sufficient or adequate remedy for any breach or
anticipated breach of this Section (14) and that, in addition to
any other legal or equitable remedies which may be available, each
party shall be entitled to specific performance and injunctive
relief for any breach or anticipated breach of this Section (14).
(D) If this Agreement expires or is terminated, each party within sixty
(60) days after such termination will return to the other party any
and all copies, in whatever form or medium, of any material
disclosing any of the other party's trade secrets or confidential
information as described above, then in its possession or control.
No such materials shall be used for any purpose outside the
performance or
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enforcement of this Agreement except to the extent required by law or
order of a court, by order of a regulatory or administrative agency,
or by order of an arbitrator appointed under this Agreement.
(E) The provisions of this Section (14) shall survive the expiration or
other termination of this Agreement.
(15) GENERAL PROVISIONS
(A) Waiver
Failure of any of the parties to promptly insist upon strict
compliance with any of the obligations of any other party under this
Agreement will not be deemed to constitute a waiver of the right to
enforce strict compliance.
(B) Independent Contractors
Selling Group Member and Associated Agency are independent
contractors and not employees or subsidiaries of AGL. AGSI is a
wholly - owned subsidiary of AGL. Selling Group Member and Associated
Agency are not employees or subsidiaries of Distributor.
(C) Independent Assignment
No assignment, other than to an affiliate, of this Agreement or of
commissions or other payments under this Agreement shall be valid
without prior written consent of AGL and Distributor. Notwithstanding
this provision, any assignment of this Agreement or of commissions or
other payments under this Agreement, shall not be valid without
notice given to the other parties to this Agreement within a
reasonable amount of time prior to the assignment.
(D) Notice
Any notice pursuant to this Agreement may be given electronically
(other than vocally by telephone) or by mail, postage paid,
transmitted to the last address communicated by the receiving party
to the other parties to this Agreement.
(E) Severability
To the extent this Agreement may be in conflict with any applicable
law or regulation, this Agreement shall be construed in a manner
consistent with such law or regulation. The invalidity or illegality
of any provisions of this Agreement shall not be deemed to affect the
validity or legality of any other provision of this Agreement.
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(F) Amendment
This Agreement may be amended only in writing and signed by all
parties. No amendment will impair the right to receive commissions as
accrued with respect to Contracts issued and applications procured
prior to the amendment.
(G) Termination
This Agreement may be terminated by any party upon 30 days' prior
written notice. It may be terminated, for cause, by any party
immediately. Termination of this Agreement shall not impair the right
to receive commissions accrued with respect to applications procured
prior to the termination except as otherwise specifically provided in
Schedule B.
(H) TEXAS LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS.
(I) This Agreement replaces and supersedes any other agreement or
understanding related to the Contracts, between or among the parties
to this Agreement.
By signing below, the undersigned agree to have read and be bound by the terms
and conditions of this Agreement.
Date:
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Selling Group Member: McDonald Investments, Inc.
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(broker-dealer)
Address: 000 Xxxxxxxx Xxxxxx
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Xxxxxxxxx, Xxxx 00000
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Signature:
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Name & Title:
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Associated Agency: KeyCorp Insurance Agency USA Inc.
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(primary insurance agency affiliation)
Address: 127 Public Square, 8/th/ Floor
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Xxxxxxxxx, Xxxx 00000-0000
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Signature:
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Name & Title:
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American General Securities Incorporated
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Signature:
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Name & Title:
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American General Life Insurance Company
0000-X Xxxxx Xxxxxxx
Xxxxxxx Xxxxx 00000
Signed By:
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Name & Title
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Schedule A - PRODUCTS
Associated Agency's authority as a soliciting agent of AGL shall be for the
following product(s):
Key Legacy Plus
(Policy Form No. 99616)
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Schedule B - COMMISSIONS
The Commissions Schedule below is subject to the terms and conditions of the
Agreement to which it is attached. In no event shall AGL be liable for payment
of any commissions with respect to any solicitation made, in whole or in part,
by any person not appropriately licensed and appointed prior to the commencement
of the solicitation.
1. ANNUAL COMMISSIONS TO BE PAID TO INSURANCE AGENCY.
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(a) For a Policy Issued Based on Simplified Underwriting.
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For a Policy issued based on simplified underwriting, compensation
will be paid based on either (i) Percent of Premium, (ii) Policy
Accumulation Value (Trail) or (iii) a combination of Percent of
Premium and Policy Accumulation Value.
(i) Compensation based on Percent of Premium.
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6% of premiums paid.
(ii) Compensation based on Accumulation Value.
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. Non-Modified Endowment Contract Policies. Beginning with the
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first Policy year, a trail commission of 1.05% of each
Policy's accumulation value (reduced by any outstanding loans)
in the variable investment options. The trail commission will
be reduced by 0.20% beginning in Policy Year 11. Thus, the
schedule in effect is as follows: (i) 1.05% of each Policy's
accumulation value (reduced by any outstanding loans) in the
variable investment options for Policy years 1 through 10; and
(2) 0.85% of each Policy's accumulation value (reduced by any
outstanding loans) in the variable investment options for
Policy years 11 through 15.
. Modified Endowment Contract Policies. Beginning with the first
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Policy year, a trail commission of 1.05% of each Policy's
accumulation value (reduced by any outstanding loans) in the
variable investment options. The trail commission will be
reduced by 0.10% beginning in Policy Year 6. Thus, the
schedule in effect is as follows: (i) 1.05% of each Policy's
accumulation value (reduced by any outstanding loans) in the
variable investment options for Policy years 1 through 5; and
(2) 0.95% of each Policy's accumulation value (reduced by any
outstanding loans) in the variable investment options for
Policy years 6 through 10.
(iii) Compensation based on a combination of Percent of Premium and
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Accumulation Value.
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5% of premiums paid, plus a trail commission of 0.10% of each
Policy's accumulation value (reduced by any outstanding loans)
in the variable investment options;
(b) For a Policy Issued Based on Full Underwriting.
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For a Policy issued based on full underwriting, compensation will
be paid based on either (i) Percent of Premium or (ii) Policy
Accumulation Value (Trail).
(i) Compensation based on Percent of Premium.
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. 6% of premiums paid in the first Policy year through
Policy Year 3 up to the Target Premium; and
. 3% of premiums paid in Policy years 4+ up to the Target
Premium.
(ii) Compensation based on Accumulation Value. Beginning with the
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first Policy year, a trail commission of 2.50% of each
Policy's accumulation value (reduced by any outstanding
loans) in the variable investment options. The trail
commission will be reduced by 1.50% beginning in Policy year
2, with further reductions of 0.50% in Policy year 11 and
0.25% in Policy year 21. Thus, the schedule in effect is as
follows: (i) 2.50% of each Policy's accumulation value
(reduced by any outstanding loans) in the variable
investment options for Policy year 1; (ii) 1.00% of each
Policy's accumulation value (reduced by any outstanding
loans) in the variable investment options for Policy years 2
through 10; (iii) 0.50% of each Policy's accumulation value
(reduced by any outstanding loans) in the variable
investment options for Policy years 11 through 20; and (iv)
0.25% of each Policy's accumulation value (reduced by any
outstanding loans) in the variable investment options for
Policy years 21+.
2. TARGET PREMIUM.
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The Target Premium is the maximum amount of premium to which the first year
commission rate applies. Commissions paid on premiums received in excess
of the Target Premium are paid at the excess rate. The Target Premium is
an amount calculated in accordance with the method of calculation and rates
from the American General Life Target Premium schedules. AGL may change the
Target Premium schedules from time to time. The Target Premium applicable
to a particular coverage shall be determined from the schedule in force
when the first premium for such coverage is entered as paid in accounting
records of AGL.
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3. TRAIL COMMISSIONS: WHEN PAID.
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The annual trail commissions, as set forth in above, are calculated on a
quarterly basis and are applied to the entire unloaned accumulation value on
each quarterly Policy anniversary. Payment will be made at the end of the
calendar quarter immediately following the corresponding quarterly Policy
anniversary. For example, for Policies issued November 1, 1999, the first
trail payment is based on the unloaned accumulation value as of February 1,
2000, but is not payable until the calendar quarter ending March 31, 2000,
and mailed shortly thereafter.
4. CHARGEBACKS.
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The following commission chargebacks shall apply on Policy surrenders:
(a) 100% of commissions paid on a Policy surrendered during the first
Policy year; and
(b) 50% of commissions paid on a Policy surrendered during the second
Policy year;
This commission chargeback schedule shall only apply to compensation
paid based on Percent of Premium.
5. CHANGE OF BROKER-DEALER.
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A Policy owner may elect to change representation to another broker-dealer
subsequent to the sale of the Policy, solely in the Policy owner's
discretion. After such change, further compensation paid for the Policy will
be paid to the new broker-dealer.
6. GUIDELINES AND COMMISSIONS ON INTERNAL EXCHANGES.
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Generally, no commissions will be earned on the initial exchange of
any AGL contract or any contract issued by a company which is affiliated
with AGL's Key Legacy Plus. All subsequent premium payments will receive
commissions calculated in accordance with the administrative rules
established by AGL in its sole discretion and in effect at the time of
the exchange.
Schedule C - Affiliated Agencies
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. KeyCorp Insurance Agency USA Inc., an Ohio corporation
. KeyCorp Insurance Agency USA Inc., an Idaho corporation
. KeyCorp Insurance Agency, Inc., a New York corporation
. KIA (Ohio) Agency, Inc., an Ohio corporation
. McD Gradism Agency, Inc., an Ohio corporation
. McD Agency PA Inc., a Pennsylvania corporation
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