EXHIBIT 10.3

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SEC

AMENDMENT NO. 2 TO
MARKETING AGREEMENT

THIS SECOND AMENDMENT TO THE MARKETING AGREEMENT is entered into this 29th day
of July, 2001, and effective as indicated herein, by and between TRANSAMERICA
LIFE INSURANCE AND ANNUITY COMPANY, hereinafter referred to as “Transamerica,” a
North Carolina corporation, and LEGACY MARKETING GROUP, hereinafter referred to
as “LMG,” a California corporation.

WHEREAS, Transamerica and LMG entered into a Marketing Agreement, dated May 29,
1998, as amended, hereinafter referred to as the “Agreement,” wherein
Transamerica and LMG agreed to jointly develop proprietary annuity products,
wherein LMG would market such products on behalf of Transamerica, utilizing its
nationwide distribution channels of duly licensed and appointed Producers in
consideration of the compensation as set forth in APPENDIX B of the Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and mutual promises
hereinafter contained and other good and valuable consideration, the parties
hereto do agree as follows:

1.   Add to Appendix A, “Policy Forms,” the following products/riders effective
as of the effective dates noted:

     

--------------------------------------------------------------------------------

PRODUCT NAME POLICY NUMBERS/Effective Dates

--------------------------------------------------------------------------------

SelectMark® 10 Special Edition Equity Index Strategy *

--------------------------------------------------------------------------------

SelectMark® 10 Special Edition with STS and Equity Index Strategy *

--------------------------------------------------------------------------------

SelectMark® 10 Special Edition with STS *

--------------------------------------------------------------------------------

SelectMark® 5 Secure (formerly known as the SelectMark® 5 50/50) *

--------------------------------------------------------------------------------

SelectMark® 7 Secure (formerly known as the SelectMark® 7 50/50) *

--------------------------------------------------------------------------------

SelectMark® 7 Special Edition Equity Index Strategy *

--------------------------------------------------------------------------------

PreferMark Platinum *

--------------------------------------------------------------------------------

PreferMark Gold *

--------------------------------------------------------------------------------

Beneficiary Rider Plus *

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

*CONFIDENTIAL INFORMATION REDACTED.

      2. Appendix B, “Commission,” is hereby amended to add the following:  
Base Commission   Transamerica will pay LMG on the last business day of the week
commission for all premiums received by LMG during that week; i.e., the prior
Friday through Thursday, for the following products in the specified percentages
indicated hereafter. Such commission will paid by Transamerica to LMG by
authorizing LMG to write a check to itself against the Transamerica Disbursement
account for the total weekly commission amount.

      "Product Name Percentage

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SelectMark® 10 Special Edition Equity Index Strategy * SelectMark®10 STS Special
Edition Equity Index Strategy * SelectMark®10 Special Edition with STS *
SelectMark® 5 Secure * SelectMark® 7 Special Edition Equity Index Strategy *
SelectMark® 7 Secure * PreferMark Platinum * PreferMark Gold *

      Additional premiums will be subject to the same commission percentages
noted above as the initial premium.   Transamerica will pay LMG an additional *
of all premiums received on or before August 31, 2001 by LMG for the
SelectMark®10 Special Edition Equity Index Strategy, SelectMark®10 STS Special
Edition Equity Index Strategy and SelectMark®10 Special Edition with STS
products for applications received by Legacy for such products on or before
August 31, 2001.   Notwithstanding any provision of this Agreement to the
contrary, Transamerica will pay LMG an additional * of all premiums received
from January 1, 2001 through August 31, 2001 for the SelectMark® 10 Special
Edition product for applications received on or before August 31, 2001.   For
the avoidance of doubt, the following provision applies to payment of all base
commissions for all products subject to this Agreement (except for PreferMark
Gold and PreferMark Platinum, see below) if the issue age is greater than 84.
The * additional commission payable for the SelectMark® 10 series products is
considered part of the base commission.

 

--------------------------------------------------------------------------------

  *CONFIDENTIAL INFORMATION REDACTED.

        (a) If the issue age is greater than 84 as defined in the Death Benefit
Proceeds provision of the applicable policy form, base commissions paid are
reduced by *. A monthly trail base commission is paid beginning in policy year
2, calculated as follows: *, multiplied by the product specific base commission
percentage divided by 12, of the Annuity Cash Value. The monthly trail
commission continues to be paid until death of the annuitant, surrender of the
policy or election of a settlement option.

        (b) LMG may calculate the monthly trail commission for the SelectMark®
10 series products by employing “*” as the base commission as opposed to “*” for
such premiums received that are subject to the additional * commission, i.e.
calculate the monthly trail commission ignoring the additional * commission that
may be payable. LMG will collect any additional funds owed to it, if any, from
this calculation by submitting to Transamerica on a monthly basis a written
invoice for the differential.

With regard to PreferMark Gold and PreferMark Platinum, if the issue age of a
policy is greater than 84 as defined in the Death Benefit Proceeds provision of
such policy form the applicable base commission percentage above is reduced by *
for all premiums received for that policy. No monthly trail commission is
payable.

Override Commission

In addition to the Base Commissions specified above, Transamerica shall pay to
LMG an Override Commission (on the last business day of the week) for all
premiums received by LMG during that week, per product, in the following
amounts:

      Product Name Percentage SelectMark® 10 Special Edition Equity Index
Strategy * SelectMark® 10 STS Special Edition Equity Index Strategy *
SelectMark® 10 Special Edition with STS * SelectMark® 5 Secure * SelectMark® 7
Special Edition Equity Index Strategy * SelectMark® 7 Secure * PreferMark
Platinum * PreferMark Gold *   *

With regard to PreferMark Gold and PreferMark Platinum, if the issue age of a
policy is greater than 84 as defined in the Death Benefit Proceeds provision of
such policy form the applicable override commission percentage above is reduced
by * for all premiums received for that policy.

 

--------------------------------------------------------------------------------

*CONFIDENTIAL INFORMATION REDACTED.

      2. Appendix B, “Marketing Allowance,” is hereby amended to add the
following:   In addition to the Commissions specified above, Transamerica shall
pay to LMG a Marketing Allowance, per product, as specified below:

      Product Name Percentage SelectMark® 10 Special Edition Equity Index
Strategy
SelectMark® 10 STS Special Edition Equity Index Strategy
SelectMark®10 Special Edition with STS
SelectMark® 5 Secure
SelectMark® 7 Special Edition Equity Index Strategy
SelectMark® 7 Secure
PreferMark Gold *
*
*
*
*
*
*

      Such Marketing Allowance shall be paid on all premiums received, net of
free look premium refunds.

      3. APPENDIX B, “LMG Trail Commission,” is hereby amended to add the
following:

For the avoidance of doubt, LMG Trail Commission is payable with respect to the
products added to this Agreement by this Amendment 2.

4.   Appendix D, “Schedule of Authorized Personnel,” is hereby amended in its
entirety to read as follows, effective as of the execution of this Amendment 2:

  “Representing Transamerica   * * * *

Representing Legacy Marketing Group

Lynda L. Regan, Chief Executive Officer
R. Preston Pitts, President
Steve Taylor, Chief Financial Officer
H. Lynn Stafford, Chief Information Officer
Niju Vaswani, Vice President of Distribution
Bill Hrabik, Chief Operation Officer
Don Dady, Vice President of Product Implementation”

 

--------------------------------------------------------------------------------

      5. All other provisions in the Agreement not specifically amended above
remain in effect and unchanged.

IN WITNESS HEREOF, the parties have hereto executed this Amendment 2.

      LEGACY MARKETING GROUP TRANSAMERICA LIFE INSURANCE AND ANNUITY COMPANY  
By: /s/Don Dady
Title: V.P. of Product Development
Date: 8/2/01 By: /s/ Ata Azarshahi
Title: Vice President
Date: 7/25/01