Exhibit 1(c)(iii)
SPECIMEN
DISTRICT MANAGER'S AGREEMENT
OF
CHUBB SECURITIES CORPORATION
[LOGO OF CHUBB SECURITIES CORPORATION APPEARS HERE]
Chubb Securities Corporation
Xxx Xxxxxxx Xxxxx, X0 Xxx 0000
Xxxxxxx, Xxx Xxxxxxxxx 00000
(000) 000-0000
DISTRICT MANAGER'S
AGREEMENT
This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a
corporation organized and existing under the laws of the State of New Hampshire
with its principal place of business in Concord, New Hampshire (hereinafter
called the Company) and
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of (hereinafter called the District
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Manager).
In consideration of the premises and the mutual agreements herein made, it is
agreed as follows:
Effective Date
The agreement shall be effective as of -----------------------------,19 .
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Territory
It is agreed that the District Manager will represent the Company in the
State(s) of
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and any other state in which the District Manager becomes registered hereafter.
Terms
1. The Company, subject to the terms and conditions contained herein, hereby
authorizes the District Manager, as an independent contractor, to represent it
in the sale of securities for which the Company may now or hereafter act as
principal, dealer, wholesaler or underwriter. The District Manager agrees to
direct the sales activities of each Sales Representative assigned to the
District Manager's agency and further to enforce the Supervisory Procedures (and
any amendments thereto) issued by the Company from time to time in regard to
such Sales Representatives. The District Manager shall at all times act in
strict compliance with all state and federal securities laws, including but not
limited to the Federal Securities Act of 1933, as amended, and with the rules
and regulations of the National Association of Securities Dealers, Inc.
2. The Company reserves the right to accept or reject any or all business
submitted to it by the District Manager. In all cases in which the question of
credit for business, confirmation of orders, or compensation is not definitely
stipulated herein, the decision of the Company shall be final.
3. The District Manager agrees to use his/her best efforts on behalf of the
Company while so representing it, and will not engage in any employment by, or
representation of, any issuer of or dealer in securities other than those
offered by the Company without the written consent of the Company. The District
Manager agrees to promptly report and remit to the Company all checks, drafts or
funds of any kind received from customers without commingling same with the
District Manager's own funds, and in the event of failure to do so, all rights
hereunder, including all accrued and accruing commissions, shall immediately
terminate. If and when requested by the Company, the District Manager shall
furnish a surety bond satisfactory to the Company. This Agreement shall be
immediately and automatically cancelled upon cancellation of coverage by the
surety under said bond.
4. The District Manager shall be free to exercise his/her own judgment as to
whom to solicit and the time, place and manner of solicitation. The District
Manager shall pay all expenses in connection with conducting business as a Sales
Representative and shall comply with all federal and state laws,
ordinances and regulations relating thereto.
1
Form 3-0826 Ed. 12/89
The District Manager shall make no solicitation for any securities until he/she
has been duly registered under the applicable state and federal laws, and until
any license or permit required by law has been obtained, and unless such
registration is then in effect.
5. The District Manager agrees that, in connection with all solicitations,
he/she will not take or recommend any action which they may have reason to
believe is not in the best interests of each client or customer. The District
Manager agrees not to make any untrue statement or misrepresentations, or omit
any material facts concerning the securities involved. The District Manager also
agrees to comply in all respects with the Rules of Fair Practice, and other
applicable rules of the National Association of Securities Dealers, Inc. and all
applicable federal and state laws.
6. The District Manager hereby assigns to the Company any and all commissions or
other monies owed to the District Manager under any contracts he/she may have
with the Chubb Life Insurance Company of America or any subsidiary or affiliate
thereof, as security for the repayment of any loan or extensions of credit made
to the customers of the District Manager at the District Manager's request or
for any losses incurred by the Company in any transaction. The District Manager
hereby authorizes Chubb Life Insurance Company of America, or any of its
subsidiaries or affiliates to pay such monies to the Company to the extent of
the Company's interest therein upon receipt of written demand by the Company.
7. If the District Manager's contract with Chubb Securities Corporation has not
been terminated, the District Manager shall be entitled to commissions with
respect to all sales the District Manager shall make in accordance with the
Commission Schedules issued from time to time by the Company and incorporated by
reference herein. All commissions are payable subject to receipt of full payment
for the securities sold. The District Manager hereby expressly waives all rights
to such earned commissions or other payments until such time as the Company is
in actual receipt of the concession due in respect to such sale. The amount of
any such excess shall be refunded to the Company in the event of termination of
this Agreement, to the extent that such commissions have not been earned prior
to such termination. Any indebtedness from the District Manager to the Company
shall be a first lien upon any amount due the District Manager hereunder.
8. The Company agrees that, if any Sales Representative assigned to the
District Manager's agency is terminated under any conditions or circumstances
which preclude the payment of commissions thereafter, then pursuant to Paragraph
8 of such Sales Representative's Agreement with the Company, the Company shall
pay to the District Manager the Sales Representative's commissions which become
due thereafter as personal production. The Company shall, then treat such
commissions as business personally produced by the District Manager.
9. If the District Manager either dies or retires after attaining the age of 55
or is permanently and totally disabled and terminates his license with the
National Association of Securities Dealers, Inc., the Company will continue to
pay commissions subject to the following conditions and limitations. If this
Agreement is terminated for any reason other than death, retirement or permanent
and total disability, then no commissions or other compensation shall be paid;
provided however, that if this Agreement is terminated for any reason other than
the National Association of Securities Dealers, Inc. disqualification, then
commissions will continue to be paid in accordance with the Supplemental
Commission Schedule (or any replacement thereof) on all premium payments
received by the Company on variable life insurance products.
Other than in the event of death, the District Manager must agree to the
continuance of this Agreement and must agree in writing not to solicit any new
securities business or to attempt to obtain a securities license through any
other entity.
If the District Manager so agrees, or in the event of death, the Company will
continue to pay to the District Manager or his/her estate, all commissions due
the District Manager totalling in excess of $100 per annum on business
personally produced by the District Manager. Commissions payable will be
determined based on New Customer Account forms executed prior to the termination
of his license. Commissions will be payable for a period not to exceed 10 years
from the date of termination or death. Commissions will be paid for the balance
of the calendar year at the rate currently in effect at the time of
termination. Thereafter, commissions will be paid at the appropriate
commission level as determined pursuant to the terms of the District Manager's
Commission Schedule.
The Company will not pay commissions to any District Manager who is
disqualified from association with any member of the National Association of
Securities Dealers, Inc. because of revocation, expulsion, suspension, or any
other reason, nor will the Company pay commissions in violation of any
applicable laws or regulations.
10. The Company will, each month, furnish to the District Manager a statement
of the District Manager's account showing all earnings and payments made to
his/her account and the balance due from the Company and the amount of any
indebtedness due from the District Manager to the Company. The District Manager
agrees to notify the Company, in writing,
2
within 30 days, of any discrepancy or disagreement with such statement in any
respect. In the absence of such notice, such statement shall be conclusively
presumed to be correct unless the parties mutually agree to an adjustment in
writing.
11. The Company may offset against any commissions or other monies accruing to
the account of the District Manager under the terms of this Agreement any debts,
liabilities, or other obligations of the District Manager due to the Company or
any affiliate of the Company. This right of offset shall apply both during the
existence of this Agreement and upon its termination.
12. Any commissions or other compensation due to a Sales Representative
assigned to the District Manager's agency will be included in the commission
paid to the District Manager for payment to the Sales Representative, unless the
District Manager informs the Company in writing to pay commissions or other
compensation directly to the Sales Representative. The District Manager agrees
to pay commissions or other compensation to the Sales Representative in
accordance with the Commission Schedules issued by the Company.
13. The District Manager shall obtain and maintain for the term of this
Agreement errors and omissions insurance, satisfactory to the Company, and shall
provide proof of such coverage to the Company.
14. This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by the
Company for cause or breach of this Agreement by the District Manager. Notice of
such termination shall be deemed to be given on the day mailed or delivered. If
mailed to the Company, such notice shall be addressed to the principal office
of the Company at Xxx Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000. If mailed to
the District Manager, notice shall be addressed to the last known address as
shown on the records of the Company.
15. With respect to any concession which the Company may receive as a
residual concession at the termination of a direct participation program, it
being understood that any such residual concession to the Company is contingent
in nature and there is no guarantee that the Company will ever actually receive
such payment, the Company will, upon receipt of such residual concession, pay
out a commission to the District Manager in accordance with the vesting schedule
as follows:
(i) If the District Manager has been under agreement with the Company for no
less than one nor more than five years, then he/she shall be vested to receive
any residual concession three years or more after the program sale is made;
(ii) If the District Manager has been under agreement with the Company for no
less than five nor more than ten years, he/she shall be vested to receive any
residual concession two years or more after the program sale is made; and
(iii) If the District Manager has been under agreement with the Company for more
than ten years, then he/she shall be vested to receive any residual concession
one year or more after the program sale is made; provided, however, that the
District Manager must continue to be under agreement with the Company for the
number of years set forth in the applicable portion of the above vesting
schedule after a program sale is made. If the District Manager does not remain
under agreement for the applicable number of years after a program sale is made,
then no residual concession shall be paid. The amount of the residual concession
commission paid shall be as set forth in the Commission Schedule in effect at
the time of the payment, but in no event will the commission be less than 75% of
the concession which the Company actually receives.
Payment of a commission to the District Manager out of any residual concessions
received by the Company will be considered as any other commission and all
provisions of this Agreement which relate to commissions will also apply to
these commissions, specifically including but not limited to the terms of
paragraphs 8 and 9.
16. This Agreement is made in the State of New Hampshire and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in duplicate
as of the date first written below.
Chubb Securities Corporation District Manager
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by:
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Date: Date:
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Date:
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3
[LOGO OF CHUBB SECURITIES CORPORATION APPEARS HERE]
Chubb Securities Corporation
Xxx Xxxxxxx Xxxxx, XX Xxx 0000
Xxxxxxx, Xxx Xxxxxxxxx 00000
(000) 000-0000
DISTRICT MANAGER COMMISSION SCHEDULE
This Commission Schedule is a part of the District Manager's Agreement entered
into by the District Manager and the Company, is incorporated by reference
therein, and supersedes any prior schedule.
Commissions will be a percentage of total dealer concession actually paid to the
Company on all business produced personally by the District Manager or by any
and all Sales Representatives assigned to the District Manager for supervision.
Commissions will be paid on the following transactions:
1. Variable or Fixed Annuity and Mutual Fund Contractual Sales - Commissions
will be paid on first year and subsequent payments.
2. Private Placements - Commissions will be paid for all staged-in payments
as well as any residual benefits available to the District Manager. For the
purposes of computing commissions on private placements, the Company shall
retain one-third of any marketing or due diligence expense allowance (or
other terminology generally accepted to mean such a concept) paid on a per
unit basis in excess of 9%, and will pay commissions out of the balance.
3. General Securities Sales of Any Other Type - No commissions are payable on
the Execution fee collected from the customer. The company will pay
commissions in accordance with the schedule below, based on 80% of the dealer
concession generated from the general securities transactions, net of ticket
and administrative charges.
4. Mutual Funds, Public Limited Partnerships, Unit Investment Trusts.
5. Any Other Sales Made Available Through the Company's Facilities - In
accordance with Supplemental Commission Schedules.
During the first contract year (12 months following the date of full
registration with the Company), the District Manager will receive 40% of
Dealer Concession. A level in excess of 40% can be established during the first
contract year if the District Manager provides the Company with proof of
earnings from Securities Sales for a period immediately preceding registration
with the Company. This higher level of commission must be authorized in writing
by a Principal of the Company.
After the first contract year, a commission level will be established for future
commission payments on the basis of the Dealer Concession achieved by the
District Manager during the first contract year. The commission level for each
subsequent year will be established thereafter in January, based on the previous
calendar year's Dealer Concession.
Overriding commission has been incorporated in the below commission levels. Any
reference to overriding commissions in the District Manager's Agreement is
superseded by this Commission Schedule.
The Dealer Concession levels to establish commission rates are as follows:
Dealer Concession Commission Level
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Up to $10,000 40%
$10,000 to $24,999 60%
$25,000 to $49,999 75%
$50,000 to $74,999 77%
$75,000 to $124,999 80%
$125,000 to $199,999 82%
$200,000 to $499,999 85%
$500,000 to $749,999 87%
$750,000 and above 90%
The above commission levels are retroactive to all Dealer Concession earned
after January 1 of the then current year if a new commission level is attained
during any given calendar year.
4
Form 3-0826 Ed. 10/92
Dealer Concession earned will be monitored to effect the change in commission
level as the District Manager becomes eligible for it. Once a higher commission
level has been achieved, it will be credited and paid on the following
commission statement.
Each District Manager's Dealer Concession production will be subject to review
on June 30th of each year. If the District Manager has not produced dealer
concession above 80% of the prorated minimum for the attained commission level,
the commission rate will be reduced on subsequent commissions earned to the
appropriate level. If the District Manager is still in the first contract year,
no reduction will take effect.
The District Manager shall be responsible for the payment of the Sales
Representative's commission from the commission paid to the District Manager.
Payment to the Sales Representative in excess of the standard commission set
forth in the Sales Representative's contract shall be permissible. Factors such
as sales ability, potential, and other factors may be taken into account in
making such payments to Sales Representatives assigned to the District Manager.
This Commission Schedule rescinds and replaces all prior commission Schedules
issued by the Company as of its effective date and will continue in effect until
such time as a new Schedule is issued by the Company.
Effective date of this Schedule: February 1, 1991.
5
Form 3-0826 Ed. 1/91
