<PAGE>
EXHIBIT 3(a)
DISTRIBUTION AGREEMENT
BETWEEN
AMERICAN GENERAL LIFE INSURANCE COMPANY
AND
AMERICAN GENERAL DISTRIBUTORS, INC.
THIS DISTRIBUTION AGREEMENT (this "Agreement") is made by and between AMERICAN
GENERAL LIFE INSURANCE COMPANY, a Texas corporation (the "Company") and AMERICAN
GENERAL DISTRIBUTORS, INC., a Delaware corporation ("AGDI" or "Distributor").
WITNESSETH:
In consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt whereof is hereby acknowledged, the parties
hereto agree as follows:
FIRST: The Company hereby grants AGDI a non-exclusive right to promote the sale
of the Company's variable life insurance policies and certificates and variable
annuity contracts and certificates, as applicable, listed on Schedule A attached
hereto and made a part hereof (the "Contracts") to the public through investment
dealers which are members of the National Association of Securities Dealers,
Inc. (or exempt from such registration) in U. S. states where the Company is
licensed. The Company and AGDI agree that upon thirty (30) days written notice
to AGDI by the Company, the Company may revise Schedule A to include additional
registered products of the Company; provided, however, that AGDI shall have the
right to reject such revisions to Schedule A, by so advising the Company in
writing within such thirty (30) days notice period.
SECOND: AGDI hereby accepts the grant made herein for the sale of the Contracts
and agrees that it will use its best efforts to promote the sale of such
Contracts; provided, however, that:
A. AGDI may, and when requested by the Company, shall suspend its efforts
to promote the sale of the Contracts at any time AGDI or the Company
believes sales should be suspended because of market conditions, other
economic considerations, or other circumstances of any kind; and
B. The Company may withdraw the offering of the Contracts at any time.
THIRD: The Company shall bear:
A. The expenses of printing and distributing registration statements and
prospectuses of the Separate Account and the Contracts;
B. The expenses of state and federal qualification of such contracts for
sale in connection with such offerings;
C. All legal expenses in connection with the foregoing; and
Page 1 of 3 Pages
<PAGE>
D. Any other expenses which may be deemed mutually appropriate.
FOURTH: The solicitation of the Contracts shall be made by investment dealers
or their sales representatives who are also life insurance and variable contract
licensed agents appointed to represent the Company.
AGDI shall bear such costs of obtaining insurance department licenses and
appointment fees for registered representatives as may be mutually agreed upon
between the parties hereto from time to time. For its costs in the promotion of
the sale of the Contracts, including its administrative and ministerial costs,
AGDI shall receive the percentage of gross purchase payments received by the
Company or of the accumulation value held by the Company, as indicated in
Schedule A.
FIFTH: The Company agrees to maintain all books and records in connection with
the sale of the Contracts on behalf of AGDI in conformity with the requirements
of Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934, to the
extent that such requirements are applicable to the Contracts.
SIXTH: A transaction statement for each purchase payment for a Contract will be
sent to the Contract owner by the Company as required. The transaction
statement will reflect the facts of the transaction.
SEVENTH: The Company and AGDI shall each comply with all applicable federal and
state laws, rules, and regulations governing the issuance and sale of the
Contracts.
EIGHTH: The Company agrees to indemnify AGDI against any and all claims,
liabilities, and expenses which AGDI may incur due to any alleged untrue
statements of a material fact, or any alleged omission to state a material fact
in the registration statement or prospectus of the Company's Separate Account(s)
used in connection with the offering and sale of the Contracts. AGDI agrees to
indemnify the Company against any and all claims, demands, liabilities, and
expenses which the Company may incur arising out of or based upon any act of an
employee of AGDI.
NINTH: Nothing contained herein shall require the Company or AGDI to take any
action contrary to any provision of its charter or any applicable statutes,
regulation, or rule of the National Association of Securities Dealers, Inc.
TENTH: This Agreement shall supersede all prior agreements of the parties,
whether written or oral, with respect to sale of the Contracts issued on or
after the effective date of this Agreement.
ELEVENTH: This Agreement shall become effective as of November 1, 2000, and
shall continue in force and effect from year to year thereafter.
TWELFTH: This Agreement may be terminated at any time by either party, without
the payment of any penalty, upon thirty (30) days prior notice in writing to the
other party.
Page 2 of 3 Pages
<PAGE>
THIRTEENTH: This Agreement shall be binding upon the successors and assigns of
the parties hereto.
FOURTEENTH: Any notice under this Agreement shall be in writing addressed,
delivered, or mailed, postage paid, to the other party at such address as such
other party may designate for the receipt of such notices.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate.
AMERICAN GENERAL LIFE INSURANCE COMPANY
By: Date:
-------------------------------- ---------------------
AMERICAN GENERAL DISTRIBUTORS, INC.
By: Date:
-------------------------------- ---------------------
Page 3 of 3 Pages
<PAGE>
SCHEDULE A
This Schedule A governs the compensation to be paid by Company in connection
with the Contracts identified below, issued in accordance with this Agreement.
The compensation set forth below shall be paid semi-monthly unless otherwise
agreed to in writing signed by Company and AGDI. All capitalized terms not
otherwise defined below shall have the same meaning as in this Agreement or as
in the Contracts, as applicable.
1. Individual Variable and Fixed Retirement Annuity Contract, Form No.
10154-2-1079:
Payable to Broker-Dealer: 0%
Payable to Distributor: 0%
2. Individual Variable Annuity Contract, Form No. 8380-4-0571:
Payable to Broker-Dealer: 0%
Payable to Distributor: 0%
3. Select Reserve(SM) Flexible Payment Variable and Fixed Individual Deferred
Annuity, Form No. 97505 (Effective October 15, 1998 through December 27,
1998):
. Schedule 1: Payable to Broker-Dealer:
1.9040% of all Purchase Payments received, plus
0.09504% Trail Commission commencing at the end of the
12th month after receipt of the initial Purchase Payment.
Payable to Distributor:
0.0960% of all Purchase Payments received, plus
0.00496% Trail Commission commencing at the end of the
12th month after receipt of the initial Purchase Payment.
. Schedule 2: Payable to Broker-Dealer:
0.38100% of all Purchase Payments received, plus
0.38016% Trail Commission commencing at the end of the
12th month after receipt of the initial Purchase Payment.
i
<PAGE>
Payable to Distributor:
0.0190% of all Purchase Payments received, plus
0.01984% Trail Commission commencing at the end of the
12th month after receipt of the initial Purchase Payment.
As used above, the term "Trail Commission" refers to an amount equal to an
annual percentage of the Contract Account Value. Trail Commissions will be
initially calculated as of the date specified above. Once commenced, Trail
Commission shall be computed on each quarterly Contract anniversary by
multiplying 0.025% in the case of Schedule 1, and 0.100% in the case of Schedule
2, by the Contract Account Value computed on each quarterly Contract
anniversary. Trail Commissions shall be paid at the calendar quarter end which
follows the computation of the trail commission. The Trail Commissions will
continue until annuitization, surrender, or death which requires distribution of
the Contract Account Value.
4. Select Reserve(SM) Flexible Payment Variable and Fixed Individual Deferred
Annuity, Form No. 97505 (Effective December 27, 1998, Schedules 1 and 2
above are replaced with the following):
Payable to Broker-Dealer: 0%
Payable to Distributor: 0%
5. Platinum Investor I(SM)Flexible Premium Variable Life Insurance Policies,
Form No. 97600:
Payable to Broker-Dealer:
90% of premiums paid in the first Contract year, up to target; 4% of
premiums not in excess of target paid in Contract years 2-10; 2.5% of
all premiums in excess of target paid in years 1-10; 0.25% annually of
all Contracts' accumulation value (reduced by any outstanding loans)
in Contract years 11+.
Payable to Distributor: 0%
6. Platinum Investor II(SM)Flexible Premium Variable Life Insurance Policies,
Form No. 97610:
Payable to Broker-Dealer:
20% of all premiums paid in the first Contract year up to target; 12%
of all premiums not in excess of target paid in Contract years 2-7;
2.5% on all premiums in excess of the target amount received in
Contract years 1-7; 0.25% of all Contracts' accumulation value
(reduced by any outstanding loans) in Contract years 8+.
Payable to Distributor: 0%
ii
<PAGE>
7. Legacy Plus(SM) Variable Life Insurance Policies, Form No. 98615:
Payable to Broker-Dealer:
2.5% of the Contract's accumulation value (reduced by any outstanding
loan) in Contract year 1 paid at the end of each of the first four
quarters at the rate of 0.625% per quarter, plus 1.0% Trail
Commission commencing at the end of the first quarter of Contract year
2 through the last quarter of year 10, plus 0.50% Trail Commission at
the end of the first quarter of Contract year 11 through the last
quarter of year 20, plus 0.25% Trail Commission commencing at the end
of the first quarter of Contract year 21 and each quarter thereafter.
Payable to Distributor: 0%
As used above, the term "Trail Commission" refers to an amount equal
to an annual percentage of the Contract Account Value. Trail
Commissions will be initially calculated as of the date specified
above. Once commenced, Trail Commission shall be computed on each
quarterly Contract anniversary by multiplying the rate below by the
Contract Account Value computed on each quarterly Contract
anniversary.
Trail Commission Quarterly Rates
Year 2 through 10 - 0.25%
Years 11 through 20 - 0.125%
Years 21 and thereafter - 0.0625%
Trail Commissions shall be paid at the calendar quarter end which
follows the computation of the Trail Commission. The Trail Commission
will continue until annuitization, surrender, or death which requires
distribution of the Contract Account Value.
8. Platinum Investor Variable Annuity Contracts, Form No. 98020:
. Schedule 1: Payable to Broker-Dealer:
7% of all Purchase Payments received;
Payable to Distributor: 0%
. Schedule 2: Payable to Broker-Dealer:
5% of all Purchase Payments received, plus
0.25% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment
through the end of the year 6; 1% Trail Commission in
Contract years 7+.
Payable to Distributor: 0%
iii
<PAGE>
. Schedule 3: Payable to Broker-Dealer:
1% of all Purchase Payments received, plus
1% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment.
Payable to Distributor: 0%
As used above, the term "Trail Commission" refers to an
amount equal to an annual percentage of the Contract
Account Value. Trail Commissions will be initially
calculated as of the date specified above. Once
commenced, Trail Commission shall be computed on each
quarterly Contract anniversary by multiplying 0.0625% (in
the case of a 0.25% trail commission), and 0.25% (in the
case of a 1.0% trail commission) by the Contract Account
Value computed on each quarterly Contract anniversary.
Trail Commissions shall be paid at the calendar quarter
end which follows the computation of the trail
commission. The Trail Commissions will continue until
annuitization, surrender, or death which requires
distribution of the Contract Account Value.
9. Corporate America - Variable Flexible Premium Variable Life Insurance
Policies, Form No. 99301:
Payable to Broker-Dealer:
19% of premiums paid in the first Policy year, up to
target; 7% of premiums paid in Policy years 2-7, up to
the target; 3% of premiums paid in Policy years 8-15, up
to target; 2% of premiums paid beginning in the 16th
Policy year, up to target; 4% of all premiums in excess
of target paid in years 1-7; 2% of all premiums in excess
of target beginning in the 8th Policy year; 0.15%
annually of all Policy's accumulation value (reduced by
any outstanding loans) in Policy years 8-15; and 0.10%
annually of all Policy's accumulation value (reduced by
any outstanding loans) beginning in the 16th Policy year.
Payable to Distributor: 0%
10. The ONE VUL Solution Variable Life Insurance Policies, Form No. 99615:
Payable to Broker-Dealer:
(a) For a Policy Issued Based on Simplified Underwriting
For a Policy issued based on simplified underwriting,
compensation will be paid based on either (i) Percent of
Premium or (ii) Policy Accumulation Value (Trail).
iv
<PAGE>
(i) Compensation based on Percent of Premium.
6% of premiums paid.
(ii) Compensation based on Accumulation Value.
. Non-Modified Endowment Contract Policies. Beginning
with the first Policy year, a trail commission of
1.20% of each Policy's accumulation value (reduced by
any outstanding loans), in the variable investment
options. The trail commission will be reduced by
0.25% beginning in Policy Year 11. Thus, the schedule
in effect is as follows: (i) 1.20% of each Policy's
accumulation value (reduced by any outstanding loans)
in the variable investment options for Policy years 1
through 10; and (2) 0.95% 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 Policy year, a trail commission of 1.20% of
each Policy's accumulation value (reduced by any
outstanding loans), in the variable investment
options. The trail commission will be reduced by
0.15% beginning in Policy Year 6. Thus, the schedule
in effect is as follows: (i) 1.20% of each Policy's
accumulation value (reduced by any outstanding loans)
in the variable investment options for Policy years 1
through 5; and (2) 1.05% of each Policy's
accumulation value (reduced by any outstanding loans)
in the variable investment options for Policy years 6
through 10.
(b) For a Policy Based on Full Underwriting.
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.
. 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 Percent of Premium.
Beginning with the 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 year 11 and 0.25%
in 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
v
<PAGE>
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+.
Payable to Distributor: 0%
11. Key Legacy Plus Variable Life Insurance Policies, Form No. 99616:
Payable to Broker-Dealer:
(a) For a Policy Issued Based on Simplified Underwriting.
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.
6% of premiums paid.
(ii) Compensation based on Accumulation Value.
. Non-Modified Endowment Contract Policies.
Beginning with the 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 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
vi
<PAGE>
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.
. Compensation based on a combination of
Percent of Premium and Accumulation Value.
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.
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.
. 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 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+.
Payable to Distributor: 0%
vii
<PAGE>
12. Platinum Investor Survivor Variable Life Insurance Policies,
Form No. 99206:
Payable to Broker-Dealer:
. 90% of the premiums paid in the first Policy year up
to a "target amount;
. 3% of the premiums not in excess of the target amount
paid in each of Policy years two through 10;
. 3% of all premiums in excess of the target amount
received in any of Policy years one through 10;
. 1.5% of all premiums paid in each Policy year after
Policy year 10; and
. .20% of the Policy's accumulation value (reduced by
any outstanding loans) in the investment options after
Policy year one.
Payable to Distributor: 0%
13. GENERATIONS Variable Annuity Contracts, Form No. 980335:
. Schedule 1: Payable to Broker-Dealer:
6% of all Purchase Payments received;
Payable to Distributor: 0%
. Schedule 2: Payable to Broker-Dealer:
5% of all Purchase Payments received, plus
0.25% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment
through the end of the year 7; .50% Trail Commission in
Contract years 8+.
Payable to Distributor: 0%
. Schedule 3: Payable to Broker-Dealer:
2.25% of all Purchase Payments received, plus
.75% Trail Commission commencing at the end of the 12th
month after receipt of the initial Purchase Payment.
Payable to Distributor: 0%
viii
<PAGE>
As used above, the term "Trail Commission" refers to an
amount equal to an annual percentage of the Contract
Account Value. Trail Commissions will be initially
calculated as of the date specified above. Once
commenced, Trail Commission shall be computed on each
quarterly Contract anniversary by multiplying 0.0625% (in
the case of a 0.25% trail commission), and 0.125% (in the
case of a 0.50% trail commission) or 0.1875% ( in the
case of a 0.75% trail commission) by the Contract Account
Value computed on each quarterly Contract anniversary.
Trail Commissions shall be paid at the calendar quarter
end which follows the computation of the trail
commission. The Trail Commissions will continue until
annuitization, surrender, or death which requires
distribution of the Contract Account Value.
14. Platinum Investor III Flexible Premium Variable Life Insurance Policies,
Form No. 00600:
Payable to Broker-Dealer:
. 90% of the premiums paid in the first Policy year up
to a "target" amount;
. 3% of the premiums not in excess of the target amount
paid in each of Policy years two through 10;
. 3% of the premiums in excess of the target amount
paid in each of Policy years one through 10;
. 0.25% of the Policy's accumulation value (reduced by
any outstanding loans) in the investment options in
each of Policy years two through 20; and
. 0.15% of the Policy's accumulation value (reduced by
any outstanding loans) in the investment options in
each Policy year after Policy year 20.
Payable to Distributor: 0%
ix
