File Nos. 333-
811-08483
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [ ]
(Check appropriate box or boxes.)
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT F
---------------------------------------
(Exact Name of Registrant)
GREAT AMERICAN RESERVE INSURANCE COMPANY
----------------------------------
(Name of Depositor)
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
--------------------------------------------------- ----------
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (317) 817-3700
Name and Address of Agent for Service
Michael A. Colliflower
Great American Reserve Insurance Company
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(317) 817-3700
Copies to:
Judith A. Hasenauer
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this filing.
Title of Securities Being Registered:
Group and Individual Variable Deferred Annuity Contracts and
Certificates
================================================================================
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
CROSS REFERENCE SHEET
(required by Rule 495)
<TABLE>
<CAPTION>
ITEM NO. Location
<S> <C> <C>
PART A
Item 1. Cover Page Cover Page
Item 2. Definitions Index of Special Terms
Item 3. Synopsis Profile
Item 4. Condensed Financial Information Not Applicable
Item 5. General Description of Registrant,
Depositor, and Portfolio Companies Other Information -
Great American Reserve; The
Separate Account;
Investment Options; Business of
Great American Reserve
Item 6. Deductions and Expenses Expenses
Item 7. General Description of Variable
Annuity Contracts The Annuity Contract
Item 8. Annuity Period Annuity Payments
(The Income Phase)
Item 9. Death Benefit Death Benefit
Item 10. Purchases and Contract Value Purchase
Item 11. Redemptions Access to Your Money
Item 12. Taxes Taxes
Item 13. Legal Proceedings None
Item 14. Table of Contents of the Statement
of Additional Information Table of Contents of the
Statement of Additional
Information
</TABLE>
CROSS REFERENCE SHEET
(required by Rule 495)
<TABLE>
<CAPTION>
ITEM NO. LOCATION
<S> <C> <C>
PART B
Item 15. Cover Page Cover Page
Item 16. Table of Contents Table of Contents
Item 17. General Information and History Company
Item 18. Services Not Applicable
Item 19. Purchase of Securities Being Offered Not Applicable
Item 20. Underwriters Distribution
Item 21. Calculation of Performance Data Performance Information
Item 22. Annuity Payments Annuity Provisions
Item 23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item so numbered in Part C to this Registration Statement.
_______, 1997
PROFILE OF THE FIXED AND VARIABLE ANNUITY CONTRACT
THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD
CONSIDER AND KNOW BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE FULLY
DESCRIBED IN THE FULL PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE READ THE
PROSPECTUS CAREFULLY.
1. THE ANNUITY CONTRACT: The fixed and variable annuity contract (Contract)
offered by Great American Reserve is a contract between you, the owner, and
Great American Reserve, an insurance company. The Contract provides a means for
investing on a tax-deferred basis in a fixed account of Great American Reserve,
the 1, 3 and 5 year guarantee periods of the market value adjustment option (mva
option) and 36 investment portfolios. The annuity is intended for retirement
savings or other long-term investment purposes. It provides a death benefit and
guaranteed income options.
This Contract offers 36 investment portfolios which are listed in Section 4.
These portfolios are designed to offer a better return than the fixed account.
However, this is NOT guaranteed. Market conditions determine whether you make or
lose money.
The fixed account offers an interest rate that is guaranteed by the insurance
company, Great American Reserve. This interest rate is set periodically. While
your money is in the fixed account, the interest your money will earn is
guaranteed to be no less than 3% annually by Great American Reserve. The
principal is backed by Great American Reserve.
The Contract also offers 3 guarantee periods of the mva option, each for a
different time period and with a different interest rate that is guaranteed by
Great American Reserve. Currently, 1, 3 and 5 year periods are available. An
adjustment to the value of your Contract may apply to withdrawals or transfers
from the guarantee period prior to the end of the period.
You can put money in up to 15 of the investment portfolios, the 3 guarantee
periods of the mva option and/or the fixed account. You can transfer once in
each 30-day period during the accumulation phase without charge or tax
implication. After that, a charge of $25 per transfer may be assessed. During
the income phase, you may make two transfers each year which are without charge
or tax implications.
The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. When you are contributing to the
contract, it is called the accumulation phase. During the accumulation phase,
earnings accumulate on a tax-deferred basis and are taxed as income when you
make a withdrawal. The income phase occurs when you begin receiving regular
payments from your Contract.
The amount of money you are able to accumulate in your account during the
accumulation phase will determine the amount of income payments during the
income phase.
2. ANNUITY PAYMENTS (THE INCOME PHASE): If you want to receive regular income
from your annuity, you can choose one of four options: (1) monthly payments for
a specific number of years in equal installments; (2) monthly payments for your
life, but with payments continuing to the beneficiary for 5, 10 or 20 years (as
you select) if you die before the end of the selected period; (3) monthly
payments of a specified amount until the principal and interest are exhausted;
and (4) monthly payments for your lifetime and your survivor's lifetime. Once
you begin receiving regular payments, you cannot change your payment plan.
During the income phase, you can choose to have payments come from the fixed
account, the investment portfolios or both. Annuity payments cannot come from
the mva option. If you choose to have any part of your payments come from the
investment portfolios, the dollar amount of your payments may go up or down.
3. PURCHASE: You can buy this Contract with $5,000 or more under most
circumstances. You can add $500 ($200 monthly if you use the automatic premium
check option) or more any time you like during the accumulation phase. We
require at least $2,000 to be invested in a guarantee period of the mva options.
If you buy the Contract as an Individual Retirement Annuity (IRA), the minimum
we will accept is $2,000 initially and $50 thereafter. Your registered
representative can help you fill out the proper forms.
4. INVESTMENT OPTIONS: You can put your money in any or all of these investment
portfolios which are described in the prospectuses for the funds:
CONSECO SERIES TRUST
MANAGED BY CONSECO CAPITAL MANAGEMENT
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
THE ALGER AMERICAN FUND
MANAGED BY FRED ALGER MANAGEMENT, INC.
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
MANAGED BY AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
VP International
VP Value
VP Income & Growth
BERGER INSTITUTIONAL PRODUCTS TRUST
MANAGED BY BERGER ASSOCIATES
Berger IPT - 100 Fund
Berger IPT - Growth and Income Fund
Berger IPT - Small Company Growth Fund
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International Fund
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
MANAGED BY THE DREYFUS CORPORATION
DREYFUS STOCK INDEX FUND
MANAGED BY THE DREYFUS CORPORATION
FEDERATED INSURANCE SERIES
MANAGED BY FEDERATED ADVISERS
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
JANUS ASPEN SERIES
MANAGED BY JANUS CAPITAL CORPORATION
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
MANAGED BY LAZARD ASSET MANAGEMENT
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
MANAGED BY LORD, ABBETT & CO.
Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
MANAGED BY NEUBERGER & BERMAN MANAGEMENT INCORPORATED
Limited Maturity Bond Portfolio
Partners Portfolio
PAINE WEBBER SERIES TRUST
MANAGED BY MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
Growth and Income Portfolio
STRONG OPPORTUNITY FUND II
MANAGED BY STRONG CAPITAL MANAGEMENT, INC.
STRONG VARIABLE INSURANCE FUNDS, INC.
MANAGED BY STRONG CAPITAL MANAGEMENT, INC.
Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
MANAGED BY VAN ECK ASSOCIATES CORPORATION
Worldwide Hard Assets Fund
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Real Estate Fund
Depending upon market conditions, you can make or lose money in any of these
portfolios.
5. EXPENSES: The Contract has insurance features and investment features, and
there are costs related to each.
Each year Great American Reserve deducts a $30 contract maintenance charge from
your Contract. Great American Reserve currently waives this charge if the value
of your Contract is at least $50,000. Great American Reserve also deducts for
its insurance charges which total 1.40% of the average daily value of your
Contract allocated to the investment portfolios.
If you take your money out of the Contract, Great American Reserve may assess a
contingent deferred sales charge which is equal to:
No. of Years From Receipt Contingent Deferred Sales
of Purchase Payment Charge
------------------- ------
First Year 7%
Second Year 7%
Third Year 6%
Fourth Year 5%
Fifth Year 4%
Sixth Year 3%
Seventh Year 2%
Eighth Year and more 0%
You may be assessed a premium tax charge which generally ranges from 0%-4%
depending on the state.
As with other professionally managed investments, there are also investment
charges which range from .30% to 1.50% of the average daily value of the
investment portfolio depending upon the investment portfolio.
The following chart is designed to help you understand the expenses in the
Contract. The column "Total Annual Expenses" shows the total of the $30 contract
maintenance charge (which has been converted to a percentage and is represented
as .10% below), the 1.40% insurance charges and the investment expenses for each
investment portfolio.
The next two columns show you two examples of the expenses, in dollars, you
would pay under a Contract. The examples assume that you invested $1,000 in a
contract which earns 5% annually and that you withdraw your money: (1) at the
end of year 1, and (2) at the end of year 10. For year 1, the Total Annual
Expenses are assessed as well as the contingent deferred sales charges. For year
10, the example shows the aggregate of all the annual expenses assessed for the
10 years, but there is no contingent deferred sales charge.
The premium tax is assumed to be 0% in both examples.
<TABLE>
<CAPTION>
EXAMPLES:
Total Annual Total Annual Total Total Annual
Insurance Portfolio Annual At End of:
Portfolio Charges Expenses Expenses 1 Year 10 Years
- --------------------------- --------- ----------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
CONSECO SERIES TRUST
Asset Allocation 1.50% .75% 2.25% $85 $255
Common Stock 1.50% .80% 2.30% $86 $260
Corporate Bond 1.50% .70% 2.20% $85 $250
Government Securities 1.50% .70% 2.20% $85 $250
Money Market 1.50% .45% 1.95% $82 $224
THE ALGER AMERICAN FUND
Alger American Growth 1.50% .79% 2.29% $86 $259
Alger American Leveraged AllCap 1.50% 1.09% 2.59% $89 $289
Alger American MidCap Growth 1.50% .84% 2.34% $86 $264
Alger American Small 1.50% .88% 2.38% $87 $268
Capitalization
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.
VP International 1.50% 1.50% 3.00% $93 $328
VP Value 1.50% 1.00% 2.50% $88 $280
VP Income & Growth 1.50% .70% 2.20% $85 $250
BERGER INSTITUTIONAL PRODUCTS
TRUST
Berger IPT - 100 1.50% 1.00% 2.50% $88 $280
Berger IPT - Growth and Income 1.50% 1.00% 2.50% $88 $280
Berger IPT - Small Company 1.15% 1.15% 2.65% $89 $295
Growth
Berger/BIAM IPT-International 1.50% 1.20% 2.70% $90 $300
THE DREYFUS SOCIALLY 1.50% .99% 2.49% $88 $279
RESPONSIBLE GROWTH FUND, INC.
DREYFUS STOCK INDEX FUND 1.50% .30% 1.80% $81 $208
FEDERATED INSURANCE SERIES
Federated High Income Bond II 1.50% .80% 2.30% $86 $260
Federated International 1.50% 1.25% 2.75% $90 $305
Equity II
Federated Utility II 1.50% .85% 2.35% $86 $265
JANUS ASPEN SERIES
Aggressive Growth 1.50% .76% 2.26% $85 $256
Growth 1.50% .69% 2.19% $85 $249
Worldwide Growth 1.50% .80% 2.30% $86 $260
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity 1.50% 1.50% 3.00% $93 $328
Lazard Retirement Small Cap 1.50% 1.50% 3.00% $93 $328
LORD ABBETT SERIES FUND, INC.
Growth and Income 1.50% .59% 2.09% $84 $239
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
Limited Maturity Bond 1.50% .78% 2.28% $86 $258
Partners 1.50% .95% 2.48% $87 $275
PAINE WEBBER SERIES TRUST
Growth and Income 1.50% 1.58% 3.08% $__ $___
STRONG OPPORTUNITY FUND II 1.50% 1.17% 2.67% $90 $297
STRONG VARIABLE INSURANCE
FUNDS, INC.
Growth II 1.50% 1.20% 2.70% $90 $300
VAN ECK WORLDWIDE INSURANCE
TRUST
Worldwide Hard Assets 1.50% 1.23% 2.73% $90 $303
Worldwide Bond 1.50% 1.16% 2.66% $89 $296
Worldwide Emerging Markets 1.50% 1.32% 2.82% $___ $___
Worldwide Real Estate 1.50% 1.25% 2.75% $90 $305
</TABLE>
The expenses reflect any expense reimbursement or fee waivers. For newly formed
portfolios, the expenses have been estimated. For more detailed information, see
the Fee Table in the prospectus for the contract.
6. TAXES: Your earnings are not taxed until you take them out. If you take money
out during the accumulation phase, earnings come out first and are taxed as
income. If you are younger than 59 1/2 when you take money out, you may be
charged a 10% federal tax penalty on the earnings. Payments during the income
phase are considered partly a return of your original investment. That part of
each payment is not taxable as income.
7. ACCESS TO YOUR MONEY: You can take money out at any time during the
accumulation phase. Every year you can take a portion of your money out of your
Contract without a contingent deferred sales charge (CDSC). This amount is equal
to the greater of (i) 10% of the value of your Contract (on a non-cumulative
basis), or (ii) the IRS minimum distribution requirement if your Contract was
issued under an Individual Retirement Annuity, or (iii) the total of your
purchase payments that have been in the Contract more than 7 complete years.
Withdrawals in excess of these amounts will be charged a contingent deferred
sales charge which declines from 7% to 0% depending upon the number of complete
years we have had your payment. After Great American Reserve has had a payment
for 7 complete years, there is no CDSC charge for withdrawals. Each purchase
payment you add to your Contract has its own 7 year contingent deferred sales
charge period. Withdrawals from an mva option may be subject to a market value
adjustment. Of course, you may also have to pay income tax and a tax penalty on
any money you take out.
8. PERFORMANCE: The value of the Contract will vary up or down depending upon
the investment performance of the investment portfolios you choose. As of the
date of this prospectus, the sale of the Contracts had not begun. Therefore no
performance is presented here.
9. DEATH BENEFIT: If you die before entering the income phase, the beneficiary
will receive a death benefit. The death benefit will be the greater of: (1) the
value of your Contract; or (2) prior to age 90, the total purchase payments you
have made, less any adjusted partial withdrawals, increased by 5% each year.
Adjusted partial withdrawal means the amount of the partial withdrawal
multiplied by the amount of the death benefit just before the partial withdrawal
divided by the value of your Contract just before the partial withdrawal. A
partial withdrawal is the amount paid to you plus any taxes withheld less any
contingent deferred sales charges.
10. OTHER INFORMATION: Free Look. If you cancel the Contract within 10 days
after receiving it we will send you whatever your Contract is worth on the day
we receive your request (this may be more or less than your original payment)
without assessing a contingent deferred sales charge. If you have purchased the
contract as an Individual Retirement Annuity (IRA) you will receive back your
purchase payment.
No Probate. In many cases, when you die, the beneficiary will receive the death
benefit without going through probate. However, the avoidance of probate does
not mean that the beneficiary will not have tax liability as a result of
receiving the death benefit.
Who should purchase the Contract? This Contract is designed for people seeking
long-term tax-deferred accumulation of assets, generally for retirement or other
long-term purposes. The tax-deferred feature is most attractive to people in
high federal and state tax brackets. You should not buy this Contract if you are
looking for a short-term investment or if you cannot take the risk of getting
back less money than you invested.
Additional Features. The contract has additional features you might be
interested in. These include:
* You can arrange to have money automatically sent to you monthly,
quarterly, semi-annually or annually while your contract is still in the
accumulation phase. You'll have to pay taxes on money you receive and you may
have to also pay a tax penalty. We call this feature the Systematic Withdrawal
Program.
* You can arrange to have a certain amount of money automatically invested
in investment portfolios on a regular basis, theoretically giving you a lower
average cost per unit over time than a single one time purchase. We call this
feature Dollar Cost Averaging.
* Great American Reserve will automatically readjust the money between
investment portfolios periodically to keep the blend you select. We call this
feature Automatic Rebalancing.
* You can add to your contract directly from your bank account with as
little as $200 each month. We call this feature the automatic premium check
option.
* You can elect to have your fixed account interest earnings periodically
transferred to one or more investment portfolios. We call this the Sweep
Program.
11. INQUIRIES: If you need more information about buying a Contract, please
contact us at:
Great American Reserve Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
(317) 817-3700
THE FIXED AND VARIABLE ANNUITY
ISSUED BY
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT F
AND
GREAT AMERICAN RESERVE INSURANCE COMPANY
This prospectus describes the Fixed and Variable Annuity Contract offered by
Great American Reserve Insurance Company (Great American Reserve).
The annuity contract has 40 investment choices - a fixed account which offers an
interest rate which is guaranteed not to be less than 3% by Great American
Reserve, three guarantee periods of the market value adjustment account option
(MVA option) and 36 investment portfolios listed below. You can put your money
in the fixed account, any of the three guarantee periods of the MVA option
and/or the investment portfolios. Currently, you can invest in up to 15
investment portfolios at one time.
CONSECO SERIES TRUST
MANAGED BY CONSECO CAPITAL MANAGEMENT
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
THE ALGER AMERICAN FUND
MANAGED BY FRED ALGER MANAGEMENT, INC.
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
MANAGED BY AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
VP International
VP Value
VP Income & Growth
BERGER INSTITUTIONAL PRODUCTS TRUST
MANAGED BY BERGER ASSOCIATES
Berger IPT - 100 Fund
Berger IPT - Growth and Income Fund
Berger IPT - Small Company Growth Fund
MANAGED BY BBOI WORLDWIDE LLC
Berger/BIAM IPT - International Fund
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
MANAGED BY THE DREYFUS CORPORATION
DREYFUS STOCK INDEX FUND
MANAGED BY THE DREYFUS CORPORATION
FEDERATED INSURANCE SERIES
MANAGED BY FEDERATED ADVISERS
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
JANUS ASPEN SERIES
MANAGED BY JANUS CAPITAL CORPORATION
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
MANAGED BY LAZARD ASSET MANAGEMENT
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
MANAGED BY LORD, ABBETT & CO.
Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
MANAGED BY NEUBERGER & BERMAN MANAGEMENT INCORPORATED
Limited Maturity Bond Portfolio
Partners Portfolio
PAINE WEBBER SERIES TRUST
MANAGED BY MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
Growth and Income Portfolio
STRONG OPPORTUNITY FUND II
MANAGED BY STRONG CAPITAL MANAGEMENT, INC.
STRONG VARIABLE INSURANCE FUNDS, INC.
MANAGED BY STRONG CAPITAL MANAGEMENT, INC.
Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
MANAGED BY VAN ECK ASSOCIATES CORPORATION
Worldwide Hard Assets Fund
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Real Estate Fund
Please read this prospectus before investing and keep it on file for future
reference. It contains important information about the Great American Reserve
Fixed and Variable Annuity Contract.
To learn more about the Great American Reserve Fixed and Variable Annuity
Contract, you can obtain a copy of the Statement of Additional Information (SAI)
dated __________, 1997. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is legally a part of the prospectus. The SEC has a website
(http://www.sec.gov) that contains the SAI, material incorporated by reference,
and other information regarding companies that file electronically. The Table of
Contents of the SAI is on Page __ of this prospectus. For a free copy of the
SAI, call us at (800) 824-2726 or write us at our administrative office: 11815
N. Pennsylvania Street, Carmel, Indiana 46032.
INVESTMENT IN A VARIABLE ANNUITY CONTRACT IS SUBJECT TO RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________, 1997
TABLE OF CONTENTS
PAGE
INDEX OF SPECIAL TERMS.......................................................ii
FEE TABLE.....................................................................1
1. THE ANNUITY CONTRACT......................................................9
2. ANNUITY PAYMENTS (THE INCOME PHASE).......................................10
3. PURCHASE..................................................................11
Purchase Payments...................................................11
Allocation of Purchase Payments.....................................11
Accumulation Units..................................................12
4. INVESTMENT OPTIONS........................................................13
Transfers...........................................................17
Dollar Cost Averaging Program.......................................18
Rebalancing Program.................................................18
Sweep Program.......................................................19
Voting Rights.......................................................19
Substitution........................................................19
5. EXPENSES..................................................................19
Insurance Charges...................................................20
Contract Maintenance Charge.........................................20
Contingent Deferred Sales Charge....................................20
Reduction or Elimination of the Contingent Deferred Sales Charge....21
Transfer Fee........................................................21
Premium Taxes.......................................................22
Income Taxes........................................................22
Investment Portfolio Expenses.......................................22
6. TAXES ....................................................................22
Annuity Contracts in General........................................22
Qualified and Non-Qualified Contracts...............................23
Withdrawals - Non-Qualified Contracts...............................23
Withdrawals - Qualified Contracts...................................23
Diversification.....................................................23
7. ACCESS TO YOUR MONEY......................................................24
Systematic Withdrawal Program.......................................24
Suspension of Payments or Transfers.................................25
8. PERFORMANCE...............................................................25
9. DEATH BENEFIT.............................................................26
Upon Your Death.....................................................26
Death of Annuitant..................................................26
10. OTHER INFORMATION........................................................26
Great American Reserve..............................................26
The Separate Accounts...............................................27
Distributor.........................................................27
Ownership...........................................................27
Beneficiary.........................................................28
Assignment..........................................................28
Additional Information..............................................28
Selected Historical Financial Information...........................28
Business of Great American Reserve..................................29
Management's Discussion and Analysis................................37
Directors and Executive Officers....................................37
Executive Compensation..............................................38
Independent Accountants.............................................38
Legal Opinions......................................................38
Financial Statements................................................38
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION.................39
APPENDIX A
MARKET VALUE ADJUSTMENT.............................................39
INDEX OF SPECIAL TERMS
We have tried to make this prospectus as readable and understandable for you as
possible. By the very nature of the contract, however, certain technical words
or terms are unavoidable. We have identified the following as some of these
words or terms. They are identified in the text in italic and the page that is
indicated here is where we believe you will find the best explanation for the
word or term.
PAGE
Accumulation Phase...................................................... 8
Accumulation Unit....................................................... 11
Annuitant............................................................... 9
Annuity Date............................................................ 8
Annuity Options......................................................... 8
Annuity Payments........................................................ 9
Annuity Unit............................................................ 11
Beneficiary............................................................. 26
Contract.................................................................26
Fixed Account........................................................... 8
Guarantee Period........................................................ 14
Income Phase............................................................ 8
Investment Portfolios................................................... 8
Joint Owner............................................................. 25
MVA Option.............................................................. 14
Non-Qualified........................................................... 21
Owner................................................................... 25
Purchase Payment........................................................ 10
Qualified............................................................... 21
Tax Deferral............................................................ 8
FEE TABLE
OWNER TRANSACTION EXPENSES
Contingent Deferred Sales Charge (as a No. of Years
percentage of purchase payments) from Receipt
(See Note 2 below) of Payment Charge
---------- ------
First Year 7%
Second Year 7%
Third Year 6%
Fourth Year 5%
Fifth Year 4%
Sixth Year 3%
Seventh Year 2%
Eighth Year and more 0%
TRANSFER FEE (see Note 3 below) No charge for one transfer in each 30 day
period during the accumulation phase;
thereafter, a fee of $25 per transfer may
be charged. No charge for the two
transfers allowed during the income phase.
CONTRACT MAINTENANCE CHARGE $30 per contract per year
(see Note 4 below)
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Charge 1.25%
Administrative Charge .15%
-----
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES 1.40%
INVESTMENT PORTFOLIO EXPENSES (as a percentage of the average daily net assets
of an investment portfolio)
<TABLE>
<CAPTION>
Other Expenses
(after expense
reimbursement Total
Management 12b-1 for certain Annual
Fees Fees Portfolios Portfolio
Expenses
---------- ---- ---------- --------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST (1)
Asset Allocation Portfolio (2) 0.55% --- 0.20% 0.75%
Common Stock Portfolio (2) 0.60% --- 0.20% 0.80%
Corporate Bond Portfolio 0.50% --- 0.20% 0.70%
Government Securities 0.50% --- 0.20% 0.70%
Portfolio
Money Market Portfolio (2) 0.25% --- 0.20% 0.45%
THE ALGER AMERICAN FUND
Alger American Growth 0.75% --- 0.04% 0.79%
Portfolio
Alger American Leveraged 0.85% --- 0.24% 1.09%
AllCap Portfolio (3)
Alger American MidCap Growth 0.80% --- 0.04% 0.84%
Portfolio
Alger Small Capitalization 0.85% --- 0.03% 0.88%
Portfolio
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.
VP International 1.50% --- 0.0% 1.50%
VP Value 1.00% --- 0.0% 1.00%
VP Income & Growth 0.70% --- 0.0% 0.70%
BERGER INSTITUTIONAL PRODUCTS
TRUST
Berger IPT - 100 Fund (4) 0.00% --- 1.00% 1.00%
Berger IPT - Growth and Income 0.00% --- 1.00% 1.00%
Fund (4)
Berger IPT - Small Company 0.00% --- 1.15% 1.15%
Growth Fund (4)
Berger/BIAM IPT - 0.00% --- 1.20% 1.20%
International Fund (5)
THE DREYFUS SOCIALLY 0.75% --- 0.24% 0.99%
RESPONSIBLE GROWTH FUND, INC.(6)
DREYFUS STOCK INDEX FUND (7) .245% --- .055% 0.30%
FEDERATED INSURANCE SERIES
Federated High Income Bond 0.01% --- 0.79% 0.80%
Fund II (8)
Federated International Equity 0.00% --- 1.25% 1.25%
Fund II (8)
Federated Utility Fund II (8) 0.24% --- 0.61% 0.85%
JANUS ASPEN SERIES
Aggressive Growth Portfolio 0.72% --- 0.04% 0.76%
(9)
Growth Portfolio (9) 0.65% --- 0.04% 0.69%
Worldwide Growth Portfolio (9) 0.66% --- 0.14% 0.80%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity 0.75% 0.25% 0.50% 1.50%
Portfolio (10)
Lazard Retirement Small Cap 0.75% 0.25% 0.50% 1.50%
Portfolio (10)
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio 0.50% 0.07% 0.02% 0.59%
(11)
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST (12)
Limited Maturity Bond 0.65% --- 0.13% 0.78%
Portfolio
Partners Portfolio 0.84% --- 0.11% 0.95%
PAINE WEBBER SERIES TRUST
Growth and Income Portfolio 0.70% --- .88% 1.58%
STRONG OPPORTUNITY FUND II 1.00% --- 0.17% 1.17%
STRONG VARIABLE INSURANCE
FUNDS, INC.
Growth Fund II (13) 1.00% --- 0.20% 1.20%
VAN ECK WORLDWIDE INSURANCE TRUST (14)
Worldwide Hard Assets Fund 1.00% --- 0.23% 1.23%
Worldwide Bond Fund 1.00% --- 0.16% 1.16%
Worldwide Emerging Markets 1.00% --- 0.32% 1.32%
Fund
Worldwide Real Estate Fund 0.00% --- 0.00% 0.00%
</TABLE>
(1) Conseco Capital Management, Inc., the investment adviser of Conseco
Series Trust, has voluntarily agreed to reimburse all expenses, including
management fees, in excess of the following percentage of the average annual net
assets of each listed Portfolio, as long as such reimbursement would not result
in a Portfolio's inability to qualify as a regulated investment company under
the Code: 0.75% for the Asset Allocation Portfolio; 0.80% for the Common Stock
Portfolio; 0.70% for the Corporate Bond Portfolio and Government Securities
Portfolio; and 0.45% for the Money Market Portfolio. The total percentages in
the above table is after reimbursement. In the absence of expense reimbursement,
the total fees and expenses in 1996 would have totaled: 0.95% for the Asset
Allocation Portfolio; 0.81% for the Common Stock Portfolio; 0.77% for the
Corporate Bond Portfolio; 0.91% for the Government Securities Portfolio; and
0.58% for the Money Market Portfolio.
(2) Conseco Capital Management, Inc., since January 1, 1993, has
voluntarily waived its management fees in excess of the annual rates set forth
above. Absent such fee waivers, the management fees would be: .65% for the Asset
Allocation Portfolio; .65% for the Common Stock Portfolio; and .50% for the
Money Market Portfolio.
(3) The Alger American Leveraged AllCap Portfolio "Other Expenses" includes
.03% of interest expense.
(4) Berger Associates, the Fund's investment adviser, has voluntarily
agreed to waive its advisory fee and has voluntarily reimbursed the Fund for
additional expenses to the extent that normal operating expenses in any fiscal
year, including the investment advisory fee but excluding brokerage commissions,
interest, taxes and extraordinary expenses, of each of the Berger IPT - 100 Fund
and the Berger IPT Growth and Income Fund exceed 1.00%, and the normal operating
expenses in any fiscal year of the Berger IPT - Small Company Growth Fund exceed
1.15% of the respective Fund's average daily net assets. Absent the voluntary
waiver and reimbursement, the Management Fee for the Berger IPT -100 Fund,
Berger IPT - Growth and Income Fund and the Berger IPT - Small Company Growth
Fund would have been .75%, .75% and .90%, respectively, and their Total Annual
Portfolio Expenses would have been 7.69%, 7.70% and 8.57%, respectively.
(5) Based on estimated expenses for the first year of operations of the
Berger/BIAM IPT - International Fund, after fee waivers and expense
reimbursements. BBOI Worldwide LLC, the Fund's investment adviser, has
voluntarily agreed to waive its advisory fee and expects to voluntarily
reimburse the Fund for additional expenses to the extent that normal operating
expenses in any fiscal year, including the investment advisory fee but excluding
brokerage commissions, interest, taxes and extraordinary expenses, of the
Berger/BIAM IPT - International Fund exceed 1.20% of the Fund's average daily
net assets. Absent the voluntary waiver and reimbursement, the Management Fee
for the Berger/BIAM IPT - International Fund would be 0.90%, and its Total
Expenses are estimated to be 8.96%.
(6) In 1996, The Dreyfus Corporation waived .03% of its management fee. The
Dreyfus Corporation does not intend to waive a portion of its management fee for
fiscal year 1997.
(7) The Dreyfus Corporation, the Fund's manager, has voluntarily agreed
until such time as it gives investors 180 days' notice to the contrary, to
reimburse all or a portion of its advisory fee to the extent that the total
expenses of the Fund (excluding brokerage commission, transactions fees and
extraordinary expenses) are in excess of .40 of 1% of the value of the Fund's
average daily net assets.
(8) In the absence of a voluntary waiver by Federal Advisers, the Funds'
investment adviser, the Management Fee and Total Annual Portfolio Expenses would
have been 0.60% and 1.39%, respectively, for High Income Bond and 0.75% and
1.36%, respectively, for Utility. Absent a voluntary waiver of the management
fee and the voluntary reimbursement of certain other operating expenses by
Federal Advisers, the Management Fee and Total Annual Portfolio Expenses for
International Equity would have been 1.00% and 4.30%, respectively.
(9) The expense figures shown are net of certain fee waivers or reductions
from Janus Capital Corporation, the investment adviser of the Janus Aspen
Series. Without such waivers or reductions, the total fees and expenses in 1996
would have totaled: 0.83% for Aggressive Growth; 0.83% for Growth; and 0.91% for
Worldwide Growth.
(10) Lazard Asset Management, the Fund's investment adviser, has
voluntarily agreed to reimburse all expenses, including management fees, in
excess of 1.50% of the average annual net assets of the Portfolio.
(11) The Growth and Income Portfolio of Lord Abbett Series Fund, Inc. has a
12b-1 plan which provides for payments to Lord, Abbett & Co. for remittance to a
life insurance company for certain distribution expenses (see the Fund
Prospectus). The 12b-1 plan provides that such remittances, in the aggregate,
will not exceed .15%, on an annual basis, of the daily net asset value of shares
of the Growth and Income Portfolio. As of May 1, 1997, no payments had been made
under the 12b-1 plan. For the year ending December 31, 1997, the 12b-1 fees are
estimated to be .07%. The examples below for this Portfolio reflect the
estimated 12b-1 fees.
(12) Neuberger & Berman Advisers Management Trust is divided into
portfolios (Portfolios), each of which invests all of its net investable assets
in a corresponding series of Advisers Managers Trust. The figures reported under
"Management Fees" include the total of the administration fees paid by the
Portfolio and the management fees paid by its corresponding series. Similarly,
"Other Expenses" includes all other expenses of the Portfolio and its
corresponding series.
(13) Strong Capital Management, Inc., the investment advisor of the Strong
Growth Fund II, has voluntarily agreed to cap the Fund's total operating
expenses at 1.20%. The Advisor has no current intention to, but may in the
future, discontinue or modify any waiver of fees or absorption of expenses at
its discretion with appropriate notification to its shareholders.
(14) All figures are annualized. Expenses of Worldwide Real Estate Fund,
which commenced operation in June 1997, are being assumed by the Fund's
investment adviser. Without such assumption, Worldwide Real Estate Fund's
Management Fee would be 1.00%, Other Expenses would be 0.32% and Total Expenses
would be 1.32%. Other Expenses of Worldwide Real Estate Fund are an estimate
which assumes $80 million in average daily net assets, and may be greater or
less than those shown. Prior to April 30, 1997, Worldwide Hard Assets Fund was
named Gold and Natural Resources Fund.
EXAMPLES:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets:
(a) upon surrender at the end of each time period;
(b) if the contract is not surrendered;
(c) if the contract is annuitized.
<TABLE>
<CAPTION>
Time Periods
1 year 3 years
------------ -------
<S> <C> <C>
CONSECO SERIES TRUST
Asset Allocation (a) $85 (a) $123
(b) $23 (b) $ 69
(c) $85 (c) $123
Common Stock (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Corporate Bond (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
Government Securities (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
Money Market (a) $82 (a) $114
(b) $20 (b) $ 60
(c) $82 (c) $114
THE ALGER AMERICAN FUND
Alger American Growth (a) $86 (b) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Alger American Leveraged AllCap (a) $89 (a) $133
(b) $26 (b) $ 80
(c) $89 (c) $133
Alger American MidCap Growth (a) $86 (a) $126
(b) $23 (b) $ 72
(c) $86 (c) $126
Alger American Small Capitalization (a) $87 (a) $127
(b) $24 (b) $ 73
(c) $87 (c) $127
AMERICAN CENTURY VARIABLE PORTFOLIO, INC.
VP International (a) $93 (a) $145
(b) $30 (b) $ 92
(c) $93 (c) $145
VP Value (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
VP Income & Growth (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT - 100 (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
Berger IPT - Growth and Income (a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
Berger IPT - Small Company Growth (a) $89 (a) $135
(b) $27 (b) $ 81
(c) $89 (c) $135
Berger/BIAM IPT - International (a) $90 (a) $136
(b) $27 (b) $ 83
(c) $90 (c) $136
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
(a) $88 (a) $130
(b) $25 (b) $ 77
(c) $88 (c) $130
DREYFUS STOCK INDEX FUND
(a) $81 (a) $109
(b) $18 (b) $ 56
(c) $81 (c) $109
FEDERATED INSURANCE SERIES
Federated High Income Bond II (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
Federated International Equity II (a) $90 (a) $138
(b) $28 (b) $ 84
(c) $90 (c) $138
Federated Utility II (a) $86 (a) $126
(b) $24 (b) $ 72
(c) $86 (c) $126
JANUS ASPEN SERIES
Aggressive Growth (a) $85 (a) $123
(b) $23 (b) $ 70
(c) $85 (c) $123
Growth (a) $85 (a) $121
(b) $22 (b) $ 68
(c) $85 (c) $121
Worldwide Growth (a) $86 (a) $124
(b) $23 (b) $ 71
(c) $86 (c) $124
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity (a) $93 (a) $145
(b) $30 (b) $ 92
(c) $93 (c) $145
Lazard Retirement Small Cap (a) $93 (a) $145
(b) $30 (b) $ 92
(c) $93 (c) $145
LORD ABBETT SERIES FUND, INC.
Growth and Income (a) $84 (a) $118
(b) $21 (b) $ 65
(c) $84 (c) $118
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond (a) $86 (a) $124
(b) $23 (b) $ 70
(c) $86 (c) $124
Partners (a) $87 (a) $129
(b) $25 (b) $ 75
(c) $87 (c) $129
PAINE WEBBER SERIES TRUST
Growth and Income (a) $__ (a) $___
(b) $__ (b) $___
(c) $__ (c) $___
STRONG OPPORTUNITY FUND II (a) $90 (a) $136
(b) $27 (b) $ 82
(c) $90 (c) $ 82
STRONG VARIABLE INSURANCE FUNDS, INC.
Growth II (a) $90 (a) $136
(b) $27 (b) $ 83
(c) $90 (c) $136
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Hard Assets (a) $90 (a) $137
(b) $27 (b) $ 84
(c) $90 (c) $137
Worldwide Bond (a) $89 (a) $135
(b) $27 (b) $ 82
(c) $89 (c) $135
Worldwide Emerging Markets (a) $__ (a) $___
(b) $__ (b) $___
(c) $__ (c) $___
Worldwide Real Estate (a) $90 (a) $138
(b) $28 (b) $ 84
(c) $90 (c) $138
</TABLE>
EXPLANATION OF FEE TABLE AND EXAMPLES
1. The purpose of the Fee Table is to show you the various expenses you
will incur directly or indirectly with the contract. The Fee Table reflects
expenses of the Separate Account as well as the investment portfolios.
2. Every year you can take money out of your contract, without the
contingent deferred sales charge, of an amount equal to the greater of: (i) 10%
of the value of your contract (on a non-cumulative basis), or (ii) the IRS
minimum distribution requirement for your contract if issued as an Individual
Retirement Annuity, or (iii) the total of your purchase payments that have been
in the contract more than 7 complete years.
3. Great American Reserve will not charge you the transfer fee even if
there are more than one transfer in a 30-day period during the accumulation
phase if the transfer is for the Dollar Cost Averaging, Sweep or Rebalancing
Programs. We will also not charge you a transfer fee on transfers made at the
end of the free look period. All reallocations made on the same day count as one
transfer.
4. Great American Reserve will not charge the contract maintenance charge
if the value of your contract is $50,000 or more, although, if you make a
complete withdrawal, Great American Reserve will charge the contract maintenance
charge.
5. Premium taxes are not reflected. Premium taxes may apply depending on
the state where you live.
6. The assumed average contract size is $30,000.
7. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
As of the date of this prospectus, the sale of the contracts had not begun and
the investment portfolios did not have any assets. Therefore, no condensed
financial information is presented.
1. THE ANNUITY CONTRACT
This Prospectus describes the Fixed and Variable Annuity Contract offered by
Great American Reserve.
An annuity is a contract between you, the owner, and an insurance company (in
this case Great American Reserve), where the insurance company promises to pay
you an income, in the form of annuity payments, beginning on a designated date
that is at least 90 days after we issue your contract. Until you decide to begin
receiving annuity payments, your annuity is in the accumulation phase. Once you
begin receiving annuity payments, your contract switches to the income phase.
The contract benefits from tax deferral.
Tax deferral means that you are not taxed on earnings or appreciation on the
assets in your contract until you take money out of your contract.
The contract is a variable annuity. You can choose among 36 investment
portfolios and, depending upon market conditions, you can make or lose money in
any of these portfolios. If you select the variable annuity portion of the
contract, the amount of money you are able to accumulate in your contract during
the accumulation phase depends upon the investment performance of the investment
portfolio(s) you select. The amount of the annuity payments you receive during
the income phase from the variable annuity portion of the contract also depends
upon the investment performance of the investment portfolios you select for the
income phase.
The contract contains a fixed account. The fixed account offers an interest rate
that is guaranteed to be no less than 3% by Great American Reserve. If you
select the fixed account, the amount of money you are able to accumulate in your
contract during the accumulation phase depends upon the total interest credited
to your contract. The amount of the annuity payments you receive during the
income phase from the fixed account portion of the contract will remain level
for the entire income phase.
The contract also contains 3 guarantee periods within the MVA option. Your money
will earn interest at the rate set by Great American Reserve. The interest rate
is guaranteed by Great American Reserve for the time you agree to leave your
money in the guarantee period. We currently offer guarantee periods for 1, 3 and
5 years. To the extent you allocate money to a guarantee period, the amount of
money you are able to accumulate in your contract during the accumulation phase
depends upon the total interest credited to your contract. An adjustment to your
contract will apply to withdrawals, transfers or annuitizations from the 1, 3
and 5 year guarantee periods prior to the end of the selected period.
As owner of the contract, you exercise all rights under the contract. You can
change the owner at any time by notifying Great American Reserve in writing. You
and another person can be named joint owners. We have described more information
on this in Section 10 - Other Information.
2. ANNUITY PAYMENTS (THE INCOME PHASE)
Under the contract you can receive regular income payments. You can choose the
month and year in which those payments begin. We call that date the annuity
date. Your annuity date can be any date selected by you. You can also choose
among income plans. We call those annuity options.
We ask you to choose your annuity date when you purchase the contract. With 30
days notice to us, you can change the annuity date or annuity option at any time
before the annuity date. Your annuity date cannot be any earlier than 90 days
after we issue the contract. Annuity payments must begin by the earlier of the
annuitant's 90th birthday or the maximum date allowed by law. The annuitant is
the person whose life we look to when we determine annuity payments.
You can select an annuity option any time 30 days before the annuity date. If
you do not choose an annuity option, we will assume that you selected Option 2
which provides a life annuity with 10 years of guaranteed payments.
On the annuity date the value of your contract, less any premium tax, plus any
market value adjustment (which may be positive or negative), less any contingent
deferred sales charge, and less any contract maintenance charge will be applied
under the annuity option you selected. If you select an annuity date that is at
least 4 years after your contract was issued and you choose an annuity option
that has a life contingency or is for a minimum of 5 years, the value of your
contract, less any premium tax and less any contract maintenance charge will be
applied under the annuity option you selected. A CDSC will not be deducted under
these circumstances.
During the income phase, you can choose to have payments come from the
investment portfolios, the fixed account or both. Payments cannot come from the
MVA option during the income phase. If you don't tell us otherwise, your annuity
payments will be based on the investment allocations in the investment
portfolios and fixed account that were in place on the annuity date.
If you choose to have any portion of your annuity payments come from the
investment portfolio(s), the dollar amount of your payment will depend upon 3
things: 1) the value of your contract in the investment portfolio(s) on the
annuity date, 2) the 3% or 5% (as you selected) assumed investment rate used in
the annuity table for the contract, and 3) the performance of the investment
portfolios you selected. You can choose either a 5% or a 3% assumed investment
rate. If the actual performance exceeds the 3% or 5% (as you selected) assumed
rate, your annuity payments will increase. Similarly, if the actual rate is less
than 3%, your annuity payments will decrease.
Unless you notify us otherwise, we will pay the annuity payments to you. You can
change the payee at any time prior to the annuity date. Income from any
distribution will be reported to you for tax purposes.
You can choose one of the following annuity options or any other annuity option
which is acceptable to Great American Reserve. After annuity payments begin, you
cannot change the annuity option.
OPTION 1. INCOME FOR A SPECIFIED PERIOD. We will pay an income for a
specific number of years in equal installments
OPTION 2. LIFE ANNUITY WITH 5, 10 OR 20 YEARS GUARANTEED. We will make
monthly annuity payments so long as the annuitant is alive. However, if, when
the annuitant dies, we have made annuity payments for less than the selected
guaranteed period, we will then continue to make annuity payments for the rest
of the guaranteed period to the beneficiary.
OPTION 3. INCOME OF SPECIFIED AMOUNT. We will pay income of a specified
amount until the principal and interest are exhausted.
OPTION 4. JOINT AND SURVIVOR ANNUITY. We will make monthly annuity payments
so long as the annuitant and a joint annuitant are both alive. When either of
these people die, the amount of the annuity payments we will make to the
survivor can be equal to 100%, 66 2/3% or 50% of the amount that we would have
paid if both were alive.
Annuity payments are made monthly unless you have less than $5,000 to apply
toward a payment. In that case, Great American Reserve may make a single lump
sum payment to you. Likewise, if your annuity payments would be less than $50 a
month, Great American Reserve has the right to change the frequency of payments
so that your annuity payments are at least $50.
3. PURCHASE
PURCHASE PAYMENTS
A purchase payment is the money you give us to buy the contract. The minimum we
will accept is $5,000 when the contract is bought as a non-qualified contract.
If you are buying the contract as part of an IRA (Individual Retirement Annuity)
the minimum we will accept is $2,000. For each guarantee period of the MVA
option, a minimum of $2,000 is required. The maximum we accept is $500,000
without our prior approval. You can make additional purchase payments of $500 or
more to a non-qualified contract and $50 to an IRA contract. However, if you
select the automatic premium check option, you can make additional payments of
$200 each month for non-qualified contracts and $50 each month for IRA
contracts.
ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, we will allocate your purchase payment to the
fixed account, the guarantee periods of the MVA option and/or one or more of the
investment portfolios you have selected. CURRENTLY, YOU CAN ALLOCATE MONEY TO UP
TO 15 INVESTMENT PORTFOLIOS AT ANY ONE TIME. If you make additional purchase
payments, we will allocate them in the same way as your first purchase payment
unless you tell us otherwise. Currently, the minimum amount which can be
allocated to any of the guarantee periods of MVA option is $2,000. We reserve
the right to change this amount in the future.
If you change your mind about owning this contract, you can cancel it within 10
days after receiving it. When you cancel the contract within this time period,
Great American Reserve will not assess a contingent deferred sales charge. On
the day we receive your request we will return the value of your contract. If
you have purchased the contract as an IRA, we are required to give you back your
purchase payment if you decide to cancel your contract within 10 days after
receiving it.
Once we receive your purchase payment and the necessary information, we will
issue your contract and allocate your first purchase payment within 2 business
days. If you do not provide us all of the information needed, we will contact
you. If for some reason we are unable to complete this process within 5 business
days, we will either send back your money or get your permission to keep it
until we get all of the necessary information. If you add more money to your
contract by making additional purchase payments, we will credit these amounts to
your contract within one business day. Our business day closes when the New York
Stock Exchange closes, usually 4:00 P.M. Eastern time.
ACCUMULATION UNITS
The value of the variable annuity portion of your contract will increase or
decrease depending upon the investment performance of the investment
portfolio(s) you choose. In order to keep track of the value of your contract,
we use a unit of measure we call an accumulation unit. (An accumulation unit
works like a share of a mutual fund.) During the income phase of the contract we
call the unit an annuity unit.
Every day we determine the value of an accumulation unit for each of the
investment portfolios by multiplying the accumulation unit value for the
previous period by a factor for the current period. The factor is determined by:
1. dividing the value of an investment portfolio share at the end of the current
period (and any charges for taxes) by the value of an investment portfolio share
for the previous period; and
2. subtracting the daily amount of the insurance charges.
The value of an accumulation unit may go up or down from day to day.
When you make a purchase payment, we credit your contract with accumulation
units. The number of accumulation units credited is determined by dividing the
amount of the purchase payment allocated to an investment portfolio by the value
of the accumulation unit for that investment portfolio.
We calculate the value of an accumulation unit for each investment portfolio
after the New York Stock Exchange closes each day and then credit your contract.
EXAMPLE:
On Wednesday we receive an additional purchase payment of $4,000 from you.
You have told us you want this to go to the Common Stock Portfolio. When the New
York Stock Exchange closes on that Wednesday, we determine that the value of an
accumulation unit for the Common Stock Portfolio is $12.25. We then divide
$4,000 by $12.25 and credit your contract on Wednesday night with 326.53
accumulation units for the Common Stock Portfolio.
4. INVESTMENT OPTIONS
INVESTMENT PORTFOLIOS
The contract offers 36 investment portfolios which are briefly described below.
You can invest in up to 15 investment portfolios at any one time. Additional
investment portfolios may be available in the future.
Shares of the funds are offered in connection with certain variable annuity
contracts and variable life insurance policies of various life insurance
companies which may or may not be affiliated with Great American Reserve.
Certain investment portfolios are also sold directly to qualified plans. The
funds do not believe that offering their shares in this manner will be
disadvantageous to you.
YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY BEFORE INVESTING.
COPIES OF THESE PROSPECTUSES ARE ATTACHED TO THIS PROSPECTUS.
CONSECO SERIES TRUST
Conseco Series Trust is a mutual fund with multiple portfolios. Conseco Series
Trust is managed by Conseco Capital Management. The following portfolios are
available under the contract:
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
THE ALGER AMERICAN FUND
The Alger American Fund is a mutual find with multiple portfolios. Fred Alger
Management, Inc. serves as the investment adviser. The following portfolios are
available under the contract:
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
American Century Variable Portfolios, Inc. is a series of funds managed by
American Century Investment Management, Inc. The following portfolios are
available under the contract:
VP International
VP Value
VP Income & Growth
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust is a mutual fund with multiple portfolios.
Berger Associates is the investment adviser to all portfolios except the
Berger/BIAM IPT - International Fund. BBOI Worldwide LLC is the adviser to the
Berger/BIAM IPT - International Fund. The following portfolios are available
under the contract:
Berger IPT - 100 Fund
Berger IPT - Growth and Income Fund
Berger IPT - Small Company Growth Fund
Berger/BIAM IPT - International Fund
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
The Dreyfus Socially Responsible Growth Fund, Inc. is managed by The Dreyfus
Corporation. Dreyfus has hired NCM Capital Management Group, Inc. to serve as
sub-investment adviser and provided day-to-day management of the Fund's
investments.
DREYFUS STOCK INDEX FUND
The Dreyfus Corporation serves as the Fund's manager. Dreyfus has hired its
affiliate, Mellon Equity Associates, to serve as the Fund's index fund manager
and provide day-to-day management of the Fund's investments.
FEDERATED INSURANCE SERIES
Federated Insurance Series is a mutual fund with multiple portfolios. Federated
Advisers is the investment adviser. The following portfolios are available under
the contract:
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
JANUS ASPEN SERIES
The Janus Aspen Series is a mutual fund with multiple portfolios which are
advised by Janus Capital Corporation. The following portfolios are available
under the contract:
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios. Lazard
Asset Management, a division of Lazard Freres & Co. LLC, is the investment
manager for each portfolio. The following portfolios are available under the
contract:
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
Lord Abbett Series Fund, Inc. is a mutual fund with multiple portfolios. Each
portfolio is managed by Lord, Abbett & Co. The following portfolio is available
under the contract:
Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Each portfolio of Neuberger & Berman Advisers Management Trust invests in a
corresponding series of Advisers Managers Trust. All series of Advisers Managers
Trust are managed by Neuberger & Berman Management Incorporated. The following
are available under the contract:
Limited Maturity Bond Portfolio
Partners Portfolio
PAINE WEBBER SERIES TRUST
Paine Webber Series Trust is a mutual fund with multiple portfolios. Mitchell
Hutchins Asset Management Inc. provides advisory and administrative services to
the Fund. The following portfolio is available under the contract:
Growth and Income Portfolio
STRONG OPPORTUNITY FUND II
Strong Opportunity Fund II is a mutual fund managed by Strong Capital
Management, Inc.
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Variable Insurance Funds, Inc. is a mutual fund with multiple series.
Strong Capital Management, Inc. serves as the investment adviser. The following
series is available under the contract:
Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust is a mutual fund with multiple portfolios
which are managed by Van Eck Associates Corporation. The following portfolios
are available under the contract:
Worldwide Hard Assets Fund
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Real Estate Fund
THE FIXED ACCOUNT
You can invest in the one year fixed account of Great American Reserve. The
fixed account offers an interest rate that is guaranteed to be no less than 3%
annually by Great American Reserve. If you select the fixed account, your money
will be placed with the other general assets of Great American Reserve.
THE MVA OPTION
The contract also offers three guarantee periods of the market value adjustment
option (MVA option). A guarantee period is the period of time for which interest
is credited in the market value adjustment option. Each allocation or transfer
to the MVA option creates one or more new guarantee periods. We currently offer
guarantee periods of 1, 3 and 5 years. You can allocate your purchase payment or
transfer money to any of the currently available periods.
The guarantee periods of the MVA option offer interest rates that are guaranteed
by Great American Reserve. Interest rates may differ from time to time because
of changes in market conditions. The interest rates set for a guarantee period
for new purchase payments may be different from the interest rates offered for
money already in the guarantee periods. We set interest rates at our discretion.
Once we set an interest rate for a guarantee period, it will not change during
that period.
If you do not specify a guarantee period at the time of renewal, we will select
the same guarantee period that just finished so long as it does not extend
beyond the latest annuity date. If it does, we will choose the one year period.
If there is no guarantee period for the same period available, the one year
period will be selected. If it is not available, the next longest period will be
selected.
If you take money out (whether by withdrawal, transfer or annuitization) of the
guarantee period before the end of the period in excess of the free amount (see
below), an adjustment will be made to the amount withdrawn. This adjustment is
referred to as a market value adjustment. The market value adjustment can
increase or decrease the amount you take out of your contract. However, after
the first year in a period, you can make one withdrawal each year of up to a
total of 10% of the value of your MVA option in that period and no market value
adjustment will be made to that withdrawal (free amount).
We will not apply a market value adjustment for any withdrawals in the following
situations: (1) to pay a death benefit; (2) to pay fees or charges under the
contract; (3) amounts which are withdrawn or transferred during the 30-day
period before the end of the guarantee period; or (4) when your contract
switches to the annuity phase if your annuity payments begin after the 4th year
of when your contract was issued and you have chosen an annuity option that
provides for a life contingency or is for a period of at least 5 years.
The market value adjustment is determined by comparing the U.S. Treasury rate
which was in effect at the beginning of the guarantee period for the length of
the guarantee period selected versus the current U.S. Treasury Rate as of the
date of the withdrawal or transfer for the number of years remaining (rounded
up) plus .005. The U.S. Treasury Rate is the Bloomberg published Treasury rate
found in the Wall Street Journal or on the Bloomberg System, representing the
last trade made in the Treasury market for the applicable maturities related to
the product. In general, if interest rates have dropped between the time you
allocated your money to the guarantee period and the time you took it out, there
will be a positive adjustment to the value of your contract. But, if interest
rates have increased between the time you allocated your money to the guarantee
period and the time you took it out, there will be a negative adjustment.
The Appendix contains more information regarding how Great American Reserve
calculates the market value adjustment, including examples.
TRANSFERS
You can transfer money among the fixed account, the MVA option and the 38
investment portfolios. However, you cannot be invested in more than 15
investment portfolios, the 3 guarantee periods of the MVA option and/or the
fixed account at any time.
TRANSFERS DURING THE ACCUMULATION PHASE. You can make one transfer in a 30-day
period during the accumulation phase without charge. You can make a transfer to
or from the fixed account, the MVA option and to or from any investment
portfolio. Transfers from a guarantee period of the MVA option before the end of
the period may be subject to an adjustment. If you make more than one transfer
in a 30-day period, a transfer fee of $25 may be deducted. The following apply
to any transfer during the accumulation phase:
1. The minimum amount which you can transfer is $500 or your entire value
in the investment portfolio, or $2,000 into any guarantee period of the MVA
option or fixed account. This requirement is waived if the transfer is pursuant
to the dollar cost averaging or rebalancing programs.
2. You must leave at least $500 in each investment portfolio, guarantee
period of the MVA option or the fixed account after you make a transfer unless
the entire amount is being transferred. Transfers out of the fixed account are
limited to 20% of the value of your contract every 6 months.
3. Your request for a transfer must clearly state which investment
portfolio(s), the guarantee period of the MVA option or the fixed account are
involved in the transfer.
4. Your request for transfer must clearly state how much the transfer is
for.
TRANSFERS DURING THE INCOME PHASE. You can only make two transfers every year
during the income phase. The two transfers are free. We measure a year from the
anniversary of the day we issued your contract. The following apply to any
transfer during the income phase.
1. You can make transfers at least 30 days before the due date of the first
annuity payment for which the transfer will apply.
2. The minimum amount which you can transfer is $500 or your entire value in the
investment portfolio.
3. You must leave at least $500 in each investment portfolio (or $0 if you are
transferring the entire amount) after a transfer.
4. No transfers can be made between the fixed account and the investment
portfolios. You may only make transfers between the investment portfolios.
This product is not designed for professional market timing organizations. Great
American Reserve has reserved the right to modify the transfer privileges
described above.
TELEPHONE TRANSFERS. You can elect to make transfers by telephone. You can also
authorize someone else to make transfers for you. If you own the contract with a
joint owner, unless Great American Reserve is instructed otherwise, Great
American Reserve will accept instructions from either you or the other owner.
Great American Reserve will use reasonable procedures to confirm that
instructions given us by telephone are genuine. All telephone calls will be
recorded and the caller will be asked to produce personalized data about the
owner before we will make the telephone transfer. We will send you a written
confirmation of the transfer. If Great American Reserve fails to use such
procedures, we may be liable for any losses due to unauthorized or fraudulent
instructions.
DOLLAR COST AVERAGING PROGRAM
The Dollar Cost Averaging Program allows you to systematically transfer a set
amount either monthly, quarterly, semi-annually or annually from the Money
Market Portfolio or the fixed account to any of the other investment
portfolio(s). You cannot transfer to the MVA option under this program. By
allocating amounts on a regular schedule as opposed to allocating the total
amount at one particular time, you may be less susceptible to the impact of
market fluctuations.
You must have at least $2,000 in the Money Market Portfolio or the fixed account
in order to participate in the Dollar Cost Averaging Program.
All Dollar Cost Averaging transfers will be made on the first business day of
the month. Dollar Cost Averaging must be for 36-60 months. Dollar Cost Averaging
will end when the value in the Money Market Portfolio or the fixed account is
zero. We will notify you when that happens.
If you participate in the Dollar Cost Averaging Program, the transfers made
under the program are not taken into account in determining any transfer fee.
REBALANCING PROGRAM
Once your money has been allocated among the investment portfolios, the
performance of each portfolio may cause your allocation to shift. If the value
of your contract is at least $5,000, you can direct us to automatically
rebalance your contract to return to your original percentage allocations by
selecting our Rebalancing Program. You can tell us whether to rebalance
quarterly, semi-annually or annually. We will measure these periods from the
date you selected. You must use whole percentages in 1% increments for
rebalancing. There will be no rebalancing within the fixed account or the MVA
option. You can discontinue rebalancing at any time. You can change your
rebalancing requests at any time in writing which we must receive before the
next rebalancing date. If you participate in the Rebalancing Program, the
transfers made under the program are not taken into account in determining any
transfer fee.
EXAMPLE:
Assume that you want your initial purchase payment split between 2
investment portfolios. You want 40% to be in the Corporate Bond
Portfolio and 60% to be in Growth Portfolio. Over the next 2 1/2 months
the bond market does very well while the stock market performs poorly.
At the end of the first quarter, the Corporate Bond Portfolio now
represents 50% of your holdings because of its increase in value. If
you had chosen to have your holdings rebalanced quarterly, on the first
day of the next quarter, Great American Reserve would sell some of your
units in the Corporate Bond Portfolio to bring its value back to 40%
and use the money to buy more units in the Growth Portfolio to increase
those holdings to 60%.
ASSET ALLOCATION PROGRAM
Great American Reserve understands the importance of advice from a financial
adviser regarding your investments in the contract (asset allocation program).
Certain investment advisers have made arrangements with us to make their
services available to you. Great American Reserve has not made any independent
investigation of these advisers and is not endorsing such programs. You may be
required to enter into an advisory agreement with your investment adviser. You
are responsible for the fees of the adviser you choose and you may elect to have
the fees paid out of your contract during the accumulation phase.
Great American Reserve will, pursuant to an agreement with you, make a partial
withdrawal from the value of your contract to pay for the services of the
investment adviser. If the contract is non-qualified, the withdrawal will be
treated like any other distribution and may be included in gross income for
federal tax purposes and, if you are under age 59 1/2, may be subject to a tax
penalty. If the contract is qualified, the withdrawal for the payment of fees
may not be treated as a taxable distribution if certain conditions are met.
Additionally, any withdrawals for this purpose may be subject to a contingent
deferred sales charge. You should consult a tax adviser regarding the tax
treatment of the payment of investment adviser fees from your contract.
SWEEP PROGRAM
You can elect to transfer (sweep) your earnings from the fixed account to the
investment portfolios on a periodic and systematic basis.
VOTING RIGHTS
Great American Reserve is the legal owner of the investment portfolio shares.
However, Great American Reserve believes that when an investment portfolio
solicits proxies in conjunction with a vote of shareholders, it is required to
obtain from you and other owners instructions as to how to vote those shares.
When we receive those instructions, we will vote all of the shares we own in
proportion to those instructions. Should Great American Reserve determine that
it is no longer required to comply with the above, we will vote the shares in
our own right.
SUBSTITUTION
Great American Reserve may, in the interest of shareholders, deem it necessary
to discontinue one or more of the investment portfolios or substitute a new
portfolio for an existing portfolio. In the event that such a situation might
occur, you will be notified in advance. Prior approval by the Securities and
Exchange Commission will be obtained before any such change is made.
5. EXPENSES
There are charges and other expenses associated with the contract that reduce
the return on your investment in the contract. These charges and expenses are:
INSURANCE CHARGES
Each day, Great American Reserve makes a deduction for its insurance charges.
Great American Reserve does this as part of its calculation of the value of the
accumulation units and the annuity units. The insurance charge has two parts: 1)
the mortality and expense risk charge and 2) the administrative charge.
MORTALITY AND EXPENSE RISK CHARGE. This charge is equal, on an annual
basis, to 1.25% of the average daily value of the contract invested in an
investment portfolio, after expenses have been deducted. This charge is for the
insurance benefits provided under the contracts and certain administrative and
distribution expenses associated with the contract.
ADMINISTRATIVE CHARGE. This charge is equal, on an annual basis, to .15% of
the average daily value of the contract invested in an investment portfolio,
after expenses have been deducted. This charge may be increased but will not
exceed .25% of the average daily value of the contract invested in an investment
portfolio, after expenses have been deducted. We will give you 60 days' notice
if this charge is increased. This charge is for certain administrative expenses.
CONTRACT MAINTENANCE CHARGE
During the accumulation phase, every year on the anniversary of the date when
your contract was issued, Great American Reserve deducts $30 from your contract
as a contract maintenance charge. We reserve the right to change this charge but
it will not be more than $60 each year. No contract maintenance charge is
deducted during the income phase. This charge is for certain administrative
expenses associated with the contract.
Under current practices, Great American Reserve does not deduct this charge if
the value of your contract is $50,000 or more. Great American Reserve may some
time in the future discontinue this practice and deduct the charge.
If you make a complete withdrawal from your contract, the contract maintenance
charge will also be deducted. The charge will be deducted if the annuity date is
other than an anniversary.
CONTINGENT DEFERRED SALES CHARGE
During the accumulation phase, you can make withdrawals from your contract.
Great American Reserve keeps track of each purchase payment.
Every year you can take money out of your contract, without charge, of an amount
equal to the greater of: (1) 10% of the value of your contract (on a
non-cumulative basis), or (2) the IRS minimum distribution requirement for this
contract if it was issued under an Individual Retirement Annuity, or (3) the
total of your purchase payments that have been in the contract more than 7
complete years. Withdrawals in excess of these amounts will be charged a
contingent deferred sales charge which equals:
No. of Years From Receipt Contingent Deferred Sales
of Purchase Payment Charge
------------------- ------
First Year 7%
Second Year 7%
Third Year 6%
Fourth Year 5%
Fifth Year 4%
Sixth Year 3%
Seventh Year 2%
Eighth Year and more 0%
The contingent deferred sales charge is assessed against each purchase payment
withdrawn and will reduce the remaining value of your contract. The contingent
deferred sales charge compensates us for expenses associated with selling the
contract.
Withdrawals from a guarantee period of the MVA option may also be subject to a
market value adjustment. (See the Appendix for information on the market value
adjustment.)
NOTE: For tax purposes, withdrawals are generally considered to have come from
earnings first. Thus, for tax purposes, earnings are considered to come out
first.
Great American Reserve does not assess the contingent deferred sales charge on
death benefits or on any payments paid out as annuity payments if your annuity
date is at least four years after we issue your contract and your annuity option
has a life contingency or is for a minimum of 5 years.
REDUCTION OR ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE
Great American Reserve will reduce or eliminate the amount of the contingent
deferred sales charge when the contract is sold under circumstances which reduce
its sales expenses. Some examples are: if there is a large group of individuals
that will be purchasing the contract or a prospective purchaser already had a
relationship with Great American Reserve. Great American Reserve will not deduct
a contingent deferred sales charge when a contract is issued to an officer,
director of employee of Great American Reserve or any of its affiliates. Any
circumstances resulting in the reduction or elimination of the contingent
deferred sales charge requires our prior approval. In no event will elimination
of the contingent deferred sales charge be permitted where it would be unfairly
discriminatory to any person.
TRANSFER FEE
You can make one free transfer every 30 days during the accumulation phase. If
you make more than one transfer in a 30-day period, you could be charged a
transfer fee of $25 per transfer. We reserve the right to change the transfer
fee. The transfer fee is deducted from the account from which the transfer was
made. If the entire amount in the account is transferred, the fee will be
deducted from the amount transferred. If you transfer money from more than one
account, the charge is deducted from the account with the largest balance. The
two transfers permitted each year during the income phase are free.
All reallocations made in the same day count as one transfer. Transfers made at
the end of the free look period by us are not counted in determining the
transfer fee. If the transfer is part of the Dollar Cost Averaging Program, the
Rebalancing Program or the Sweep Program it will not count in determining the
transfer fee.
Transfers from a guarantee period of the MVA option may also be subject to a
market value adjustment. (See the Appendix for information on the market value
adjustment.)
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. Great American Reserve is responsible for the
payment of these taxes and will make a deduction from the value of the contract
for them. Some of these taxes are due when the contract is issued, other are due
when annuity payments begin. It is Great American Reserve's current practice to
not charge anyone for these taxes until annuity payments begin. Great American
Reserve may some time in the future discontinue this practice and assess the
charge when the tax is due. Premium taxes generally range from 0% to 4%,
depending on the state.
INCOME TAXES
Great American Reserve will deduct from the contract for any income taxes which
it incurs because of the contract. At the present time, we are not making any
such deductions.
INVESTMENT PORTFOLIO EXPENSES
There are deductions from and expenses paid out of the assets of the various
investment portfolios, which are described in the attached fund prospectuses.
6. TAXES
NOTE: GREAT AMERICAN RESERVE HAS PREPARED THE FOLLOWING INFORMATION ON TAXES AS
A GENERAL DISCUSSION OF THE SUBJECT. IT IS NOT INTENDED AS TAX ADVICE TO ANY
INDIVIDUAL. YOU SHOULD CONSULT YOUR OWN TAX ADVISER ABOUT YOUR OWN
CIRCUMSTANCES. GREAT AMERICAN RESERVE HAS INCLUDED IN THE STATEMENT OF
ADDITIONAL INFORMATION AN ADDITIONAL DISCUSSION REGARDING TAXES.
ANNUITY CONTRACTS IN GENERAL
Annuity contracts are a means of setting aside money for future needs usually
retirement. Congress recognized how important saving for retirement was and
provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated these rules provide that you will not be taxed on the earnings on
the money held in your annuity contract until you take the money out. This is
referred to as tax deferral. There are different rules as to how you will be
taxed depending on how you take the money out and the type of contract qualified
or non-qualified (see following sections).
You, as the owner, will not be taxed on increases in the value of your contract
until a distribution occurs - either as a withdrawal or as annuity payments.
When you make a withdrawal you are taxed on the amount of the withdrawal that is
earnings. For annuity payments, different rules apply. A portion of each annuity
payment is treated as a partial return of your purchase payments and will not be
taxed. The remaining portion of the annuity payment will be treated as ordinary
income. How the annuity payment is divided between taxable and non-taxable
portions depends upon the period over which the annuity payments are expected to
be made. Annuity payments received after you have received all of your purchase
payments are fully includible in income.
When a non-qualified contract is owned by a non-natural person (e.g.,
corporation or certain other entities other than tax-qualified trusts), the
contract will generally not be treated as an annuity for tax purposes.
QUALIFIED AND NON-QUALIFIED CONTRACTS
If you purchase the contract as an individual and not under an Individual
Retirement Annuity (IRA), your contract is referred to as a non-qualified
contract.
If you purchase the contract under an IRA, your contract is referred to as a
qualified contract.
WITHDRAWALS - NON-QUALIFIED CONTRACTS
If you make a withdrawal from your contract, the Code treats such a withdrawal
as first coming from earnings and then from your purchase payments. Such
withdrawn earnings are includible in income.
The Code also provides that any amount received under an annuity contract which
is included in income may be subject to a penalty. The amount of the penalty is
equal to 10% of the amount that is includible in income. Some withdrawals will
be exempt from the penalty. They include any amounts: (1) paid on or after the
taxpayer reaches age 59 1/2; (2) paid after you die; (3) paid if the taxpayer
becomes totally disabled (as that term is defined in the Code); (4) paid in a
series of substantially equal payments made annually (or more frequently) under
a lifetime annuity, (5) paid under an immediate annuity; or (6) which come from
purchase payments made prior to August 14, 1982.
WITHDRAWALS - QUALIFIED CONTRACTS
The above information describing the taxation of non-qualified contracts does
not apply to qualified contracts. There are special rules that govern with
respect to qualified contracts. We have provided a more complete discussion in
the Statement of Additional Information.
DIVERSIFICATION
The Code provides that the underlying investments for a variable annuity must
satisfy certain diversification requirements in order to be treated as an
annuity contract. Great American Reserve believes that the investment portfolios
are being managed so as to comply with the requirements.
Neither the Code nor the Internal Revenue Service Regulations issued to date
provide guidance as to the circumstances under which you, because of the degree
of control you exercise over the underlying investments, and not Great American
Reserve would be considered the owner of the shares of the investment
portfolios. If this occurs, it will result in the loss of the favorable tax
treatment for the contract. It is unknown to what extent under federal tax law
owners are permitted to select investment portfolios, to make transfers among
the investment portfolios or the number and type of investment portfolios owners
may select from. If any guidance is provided which is considered a new position,
then the guidance would generally be applied prospectively. However, if such
guidance is considered not to be a new position, it may be applied
retroactively. This would mean that you, as the owner of the contract, could be
treated as the owner of the investment portfolios.
Due to the uncertainty in this area, Great American Reserve reserves the right
to modify the contract as reasonably deemed necessary to maintain favorable tax
treatment.
7. ACCESS TO YOUR MONEY
You can have access to the money in your contract: (1) by making a withdrawal
(either a partial or a complete withdrawal); (2) by electing to receive annuity
payments; or (3) when a death benefit is paid to your beneficiary. Withdrawals
can only be made during the accumulation phase.
When you make a complete withdrawal you will receive the value of the contract
on the day you made the withdrawal less any applicable contingent deferred sales
charge, less any premium tax less any contract maintenance charge plus or minus
any market value adjustment (which may be positive or negative). (See Section 5.
Expenses for a discussion of the charges and Section 4. Investment Options - The
MVA Option and the Appendix for a discussion of withdrawals from the MVA
option.)
You must tell us which account (investment portfolio(s), guarantee periods of
the MVA option and/or the fixed account) you want the withdrawal to come from.
Under most circumstances, the amount of any partial withdrawal from any
investment portfolio, guarantee period of the MVA option or the fixed account
must be for at least $500. Great American Reserve requires that after a partial
withdrawal is made there must be at least $500 left in your contract.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to choose to receive your automatic
payments to you either monthly, quarterly, semi-annually or annually. You must
have at least $5,000 in your contract to start the program. You cannot take
systematic withdrawals from any guarantee period of the MVA option. You can
instruct us to withdraw a specific amount which can be a percentage of the value
of your contract or a dollar amount. The systematic withdrawal program will end
any time you designate. If you make a partial withdrawal outside the program and
the value of your contract is less than $5,000 the program will automatically
terminate. Great American Reserve does not have any charge for this program,
however, the withdrawal may be subject to a CDSC. For a discussion of the
withdrawal charge, see Section 5. Expenses.
All systematic withdrawals will be paid on the last business day of the month
(beginning with the first full month after you bought your contract).
You may not participate in the Systematic Withdrawal Program and the Dollar Cost
Averaging Program at the same time.
INCOME TAXES AND TAX PENALTIES MAY APPLY TO SYSTEMATIC WITHDRAWALS.
SUSPENSION OF PAYMENTS OR TRANSFERS
Great American Reserve may be required to suspend or postpone payments for
withdrawal or transfers for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
investment portfolios is not reasonably practicable or Great American Reserve
cannot reasonably value the shares of the investment portfolios;
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of owners.
Great American Reserve has reserved the right to defer payment for a withdrawal
or transfer from the fixed account for the period permitted by law but not for
more than six months.
8. PERFORMANCE
Great American Reserve may periodically advertise performance of the annuity
investment in the various investment portfolios. Great American Reserve will
calculate performance by determining the percentage change in the value of an
accumulation unit by dividing the increase (decrease) for that unit by the value
of the accumulation unit at the beginning of the period. This performance number
reflects the deduction of the insurance charges and the fees and expenses of the
investment portfolio. It does not reflect the deduction of any applicable
contract maintenance charge and contingent deferred sales charge. The deduction
of any applicable contract maintenance charge and contingent deferred sales
charge would reduce the percentage increase or make greater any percentage
decrease. Any advertisement will also include total return figures which reflect
the deduction of the insurance charges, contract maintenance charge, contingent
deferred sales charge and the fees and expenses of the investment portfolio.
For periods starting prior to the date the contracts were first offered, the
performance will be based on the historical performance of the corresponding
portfolios, modified to reflect the charges and expenses of the contract as if
the contract had been in existence during the period stated in the
advertisement. These figures should not be interpreted to reflect actual
historic performance.
Great American Reserve may, from time to time, include in its advertising and
sales materials, tax deferred compounding charts and other hypothetical
illustrations, which may include comparisons of currently taxable and tax
deferred investment programs, based on selected tax brackets.
9. DEATH BENEFIT
UPON YOUR DEATH
If you die before annuity payments begin, Great American Reserve will pay a
death benefit to your beneficiary (see below). If you have a joint owner, the
death benefit will be paid when the first owner dies. The surviving joint owner
will be treated as the beneficiary.
The amount of the death benefit will be the greater of:
(1) the value of your contract; or (2) if under age 90, the total purchase
payments you have made, less any adjusted partial withdrawals, increased by
5% each year. Adjusted partial withdrawal means the amount of the partial
withdrawal multiplied by the amount of the death benefit just before the
partial withdrawal divided by the value of your contract just before the
partial withdrawal. A partial withdrawal is the amount paid to you plus any
taxes withheld less any contingent deferred sales charge.
The entire death benefit must be paid within 5 years of the date of death unless
the beneficiary elects to have the death benefit payable under an annuity
option. The death benefit payable under an annuity option must be paid over the
beneficiary's lifetime or for a period not extending beyond the beneficiary's
life expectancy. Payment must begin within one year of the date of death. If the
beneficiary is the spouse of the owner, he/she can continue the contract in
his/her own name at the then current value. If a lump sum payment is elected and
all the necessary requirements are met, the payment will be made within 7 days.
If you or any joint owner (who is not the annuitant) dies during the income
phase, any remaining payments under the annuity option elected will continue at
least as rapidly as under the method of distribution prior to the death of the
owner or joint owner. If you die during the income phase, the beneficiary
becomes the owner. If any joint owner dies during the income phase, the
surviving joint owner, if any, will be treated as the primary beneficiary. Any
other beneficiary on record at the time of death will be treated as a contingent
beneficiary.
DEATH OF ANNUITANT
If the annuitant, who is not an owner or joint owner, dies during the
accumulation phase, you can name a new annuitant. If no annuitant is named
within 30 days of the death of the annuitant, you will become the annuitant.
However, if the owner is a non-natural person (for example, a corporation), then
the death of the annuitant will be treated as the death of the owner, and a new
annuitant may not be named.
Upon the death of the annuitant during the income phase, the death benefit, if
any, will be as provided for in the annuity option selected.
10. OTHER INFORMATION
GREAT AMERICAN RESERVE
Great American Reserve Insurance Company (Great American Reserve) was originally
organized in 1937. It is principally engaged in the life insurance business in
49 states and the District of Columbia. Great American Reserve is a stock
company organized under the laws of the state of Texas and is an indirect
wholly-owned subsidiary of Conseco, Inc. (Conseco). The operations of Great
American Reserve are handled by Conseco. Conseco is a publicly owned financial
services organization headquartered in Carmel, Indiana. Through its
subsidiaries, Conseco is one of the nation's leading providers of supplemental
health insurance, retirement annuities and universal life insurance.
THE SEPARATE ACCOUNTS
Great American Reserve has established two separate accounts to hold the assets
that underlie the contracts. One account, Great American Reserve Variable
Annuity Account F, serves the variable annuity portion of the contract. The
other separate account, Great American Reserve Market Value Adjustment Account,
serves the portion of the contract that may be subject to a market value
adjustment. The Board of Directors of Great American Reserve adopted a
resolution to establish the Separate Accounts under Texas Insurance law on
September 26, 1997. Great American Reserve Variable Annuity Account F is
registered with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. Great American Reserve Market
Value Adjustment Account is not registered with the Securities and Exchange
Commission.
The assets of the Separate Accounts are held in Great American Reserve's name on
behalf of the Separate Accounts and legally belong to Great American Reserve.
However, those assets that underlie the contracts, are not chargeable with
liabilities arising out of any other business Great American Reserve may
conduct. All the income, gains and losses (realized or unrealized) resulting
from these assets are credited to or charged against the contracts and not
against any other contracts Great American Reserve may issue.
DISTRIBUTOR
Conseco Equity Sales, Inc. (CES), 11815 N. Pennsylvania Street, Carmel, Indiana
46032 acts as the distributor of the contracts. CES, an affiliate of Great
American Reserve, is registered as a broker-dealer under the Securities Exchange
Act of 1934. CES is a member of the National Association of Securities Dealers,
Inc.
Commissions will be paid to broker-dealers who sell the contracts.
Broker-dealers commissions may cost up to 8.25% of purchase payments and may
include reimbursement of promotional or distribution expenses associated with
the marketing of the contracts. Great American Reserve may, by agreement with
the broker-dealer, pay commissions as a combination of a certain percentage
amount at the time of sale and a trail commission. This combination may result
in the broker-dealer receiving more commission over time than would be the case
if it had elected to receive only a commission at the time of sale. The
commission rate paid to the broker-dealer will depend upon the nature and level
of services provided by the broker-dealer.
OWNERSHIP
The contract is an allocated fixed and variable deferred annuity contract. This
group contract is issued to a contract holder, for the benefit of the
participants in the group. You are a participant in the group and will receive a
certificate evidencing your ownership. You, as the owner of a certificate, are
entitled to all the rights and privileges of ownership. As used in this
prospectus, the term contract refers to your certificate. In some states, an
individual fixed and variable deferred annuity contract may be available
instead, which is identical to the group contract described in this prospectus
except that it is issued directly to the owner.
Spousal joint owners are allowed with this contract. Upon the death of either
joint owner, the surviving owner will be the designated beneficiary. Any other
beneficiary designation at the time the contract was issued or as may have been
later changed will be treated as a contingent beneficiary unless otherwise
indicated.
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued. Unless an
irrevocable beneficiary has been named, you can change the beneficiary at any
time before you die.
ASSIGNMENT
You can assign the contract at any time during your lifetime. Great American
Reserve will not be bound by the assignment until it receives the written notice
of the assignment. Great American Reserve will not be liable for any payment or
other action we take in accordance with the contract before we receive notice of
the assignment. AN ASSIGNMENT MAY BE A TAXABLE EVENT.
If the contract is issued pursuant to a qualified plan, there may be limitations
on your ability to assign the contract.
ADDITIONAL INFORMATION
Great American Reserve is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended. In accordance with such
requirements, we file reports and other information with the SEC. Such reports
and other information we file can be inspected and copied. Copies can be
obtained at the public reference facilities of the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, or at the regional offices in Chicago and
New York. The addresses of these regional offices are as follows: 500 West
Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material also can be obtained by mail
from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the rules and
regulations of the SEC at prescribed rates.
Registration statements have been filed with the SEC, Washington, D.C., under
the Securities Act of 1933 as amended, relating to the contracts offered by this
prospectus. This prospectus does not contain all the information set forth in
the registration statements and the exhibits filed as part of the registration
statements. Reference should be made to such registration statements and
exhibits for further information concerning the separate accounts, Great
American Reserve and its general account, the investment portfolios and the
contract.
SELECTED HISTORICAL FINANCIAL INFORMATION
[TO BE FILED BY AMENDMENT]
BUSINESS OF GREAT AMERICAN RESERVE
Background
Great American Reserve Insurance Company ("Great American Reserve"), with
total assets of $2.7 billion at December 31, 1996, markets tax-qualified
annuities and certain employee benefit-related insurance products through
professional independent agents. Since August 1995, Great American Reserve has
been a wholly owned subsidiary of Conseco, Inc. ("Conseco"), a financial
services holding company engaged in the development, marketing and
administration of annuity, individual health insurance and individual life
insurance products. During 1994, Conseco effectively owned 36 percent of Great
American Reserve, through its ownership interest in CCP Insurance, Inc. ("CCP"),
a holding company organized for companies previously acquired by Conseco Capital
Partners, L.P. (the "Partnership"), a limited partnership organized by Conseco.
Great American Reserve was acquired by the Partnership in 1990. During 1995,
Conseco's ownership in CCP (and in Great American Reserve) increased to 49
percent as a result of purchases of CCP common stock by CCP and Conseco. In
August 1995, Conseco completed the purchase of the remaining shares of CCP
common stock it did not already own in a transaction pursuant to which CCP was
merged with Conseco, with Conseco being the surviving corporation (the "Conseco
Acquisition").
Great American Reserve was organized as a Texas corporation and commenced
operations in 1937. Its main administrative offices are located at 11825 N.
Pennsylvania Street, Carmel, Indiana 46032, and its telephone number is (317)
817-3700.
MARKETING
Great American Reserve primarily utilizes independent market specialists to
distribute its products. Great American Reserve does not have the fixed costs
associated with recruiting, training and maintaining employee agents. Rather, a
relatively small number of in-house marketing personnel develop, direct and
support the external distribution channels through which Great American
Reserve's products are marketed.
Products. Great American Reserve's collected premiums (net of reinsurance
ceded) by product categories for the years ended December 31, 1996 and 1995, are
set forth below (dollars in millions).
<TABLE>
<CAPTION>
1996
-----------------------------------------------------------------------------
First Year
Premiums Renewal Premiums Total Premiums
Products Amount % Amount % Amount %
- -------- ------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
Single premium immediate $17.1 21% $ -- --% $17.1 8%
annuities
Flexible premium deferred 15.4 18 $27.9 21 43.3 20
annuities
Variable annuities 37.9 45 43.6 32 81.5 37
---- -- ---- -- ---- --
Total annuities $70.4 84% $71.5 53% $141.9 65%
Individual life 2.1 3 45.0 33 47.1 22
Accidental and health and 11.1 13 18.2 14 29.3 13
other
Guaranteed investment .1 -- -- -- .1 --
contracts ---- ---- ---- ---- ----- ----
Total collected $83.7 100% $134.7 100% $218.4 100%
premiums ===== ==== ====== ==== ====== ====
</TABLE>
<TABLE>
<CAPTION>
1995
-----------------------------------------------------------------------------
First Year
Premiums Renewal Premiums Total Premiums
Products Amount % Amount % Amount %
- -------- ------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
Single premium immediate $29.9 38% $ -- --% $29.9 14%
annuities
Flexible premium deferred 16.3 20 23.6 17 39.9 18
annuities
Variable annuities 17.2 22 40.1 30 57.3 27
----- --- ----- ---- ----- ----
Total annuities $63.4 80% $63.7 47% $127.1 59%
Individual life 1.8 2 49.3 36 51.1 24
Accident and health and 11.8 15 22.6 17 34.4 16
other
Guaranteed investment 2.4 3 -- -- 2.4 1
contracts ----- --- ---- ---- ----- ----
Total collected $79.4 100% $135.6 100% $215.0 100%
premiums ===== ==== ====== ==== ====== ====
</TABLE>
Annuities
Premiums collected by Great American Reserve in 1996 totaled $218.4
million, of which approximately 65 percent (84 percent of first-year premiums)
were from the sale of annuity products. Premiums collected in 1995 totaled
$215.0 million, of which approximately 59 percent (80 percent of first-year
premiums) were from the sale of annuities. Great American Reserve markets
several basic types of annuities: single premium immediate annuities ("SPIAs"),
flexible premium deferred annuities ("FPDAs") and variable annuities.
Single Premium Immediate Annuities. SPIAs accounted for $17.1 million, or 8
percent, of Great American Reserve's total premiums collected in 1996 and $29.9
million, or 14 percent of premiums collected in 1995. Great American Reserve's
SPIAs are designed to provide a series of periodic payments for a fixed period
of time or for life, according to the policyholder's choice at the time of
issue. Once the payments have begun, the amount, frequency and length of time
for which they are payable are fixed. SPIAs often are purchased by persons at or
near retirement age who desire a steady stream of payments over a future period
of years. The single premium is often the payout from a terminated annuity
contract. The implicit interest rate on SPIAs is based on market conditions when
the policy is issued.
Flexible Premium Deferred Annuities. FPDAs accounted for $43.3 million, or
20 percent, of Great American Reserve's premiums collected in 1996 and $39.9
million, or 18 percent, of premiums collected in 1995. Great American Reserve's
FPDAs allow more than one premium payment, usually on a salary reduction basis.
FPDAs are marketed through networks of educator market specialists primarily to
teachers and employees of not-for-profit institutions as tax-qualified
salary-reduction retirement programs as permitted under Section 403(b) of the
Internal Revenue Code. A tax-qualified annuity purchased under Section 403(b) is
similar to contributions made to a 401(k) plan, but with different (and somewhat
more generous) rules on the maximum amount of current income which may be
contributed by the participant on a pre-tax basis. Generally, a participant may
elect to defer (through the purchase of a tax-qualified annuity under a 403(b)
plan) a percentage of includible compensation limited by statute and subject to
a maximum of $9,500 per year.
Great American Reserve's FPDAs typically have a guaranteed crediting rate
for the first policy year that exceeds the minimum annual guaranteed rate of at
least 3 percent. After the first year, the crediting rate may be changed at
least annually. The policyholder is permitted to withdraw all or part of the
accumulation value, less a surrender charge for withdrawals during an initial
penalty period of up to 15 years. The initial surrender charges range from 5
percent to 19 percent of the first year premium and decline over the penalty
period.
Variable Annuities. Variable annuities accounted for $81.5 million, or 37
percent, of Great American Reserve's total premiums collected in 1996 and $57.3
million, or 27 percent, of premiums collected in 1995. Great American Reserve
markets variable annuities primarily to the educator market. Variable annuities,
sold on a single or flexible premium basis, differ from fixed annuities in that
the original principal value may fluctuate depending on the performance of
assets allocated pursuant to various investment options chosen by the contract
owner. Variable annuities offer contract owners a fixed interest option or a
variable rate of return based upon the specific investment portfolios into which
premiums may be directed.
Individual Life
Individual life products, consisting of interest sensitive life and
traditional life products, accounted for $47.1 million, or 22 percent, of Great
American Reserve's premiums collected in 1996 and $51.1 million, or 24 percent,
of premiums collected in 1995. Although Great American Reserve no longer
actively markets these products, it continues to have a substantial block of
in-force policies on which renewal premiums are collected. These products were
sold through professional independent producers.
Interest-sensitive life insurance products (including universal life
products) provide whole life insurance with adjustable rates of return related
to current interest rates. The principal differences between Great American
Reserve's universal life products and other interest-sensitive life insurance
products are policy provisions affecting the amount and timing of premium
payments. Universal life policyholders may vary the frequency and size of their
premium payments, although policy benefits may also fluctuate according to such
payments. Premium payments under the other interest-sensitive policies may not
be varied by the policyholders and, as a result, are designed to reduce the
administrative costs typically associated with monitoring universal life premium
payments and policy benefits.
Individual life products also include whole life and term life products.
Under whole life policies, which were the standard industry product prior to the
advent of universal life insurance, the policyholder generally pays a level
premium over the policyholder's expected lifetime, which exceeds the premium on
comparable term insurance when the policyholder is younger but is less as the
policyholder grows older. These policies combine insurance protection with a
savings component that increases in amount gradually over the life of the
policy. The policyholder may borrow against the savings generally at a rate of
interest lower than that available from other lending sources. The policyholder
may also choose to surrender the policy and receive the accumulated cash value
rather than continuing the insurance protection. Term life products offer pure
insurance protection for a specified period of time-typically one, five, 10 or
20 years.
Accident and Health and Other
Accident and health and other products accounted for $29.3 million, or 13
percent, of Great American Reserve's total premiums collected in 1996 and $34.4
million, or 16 percent, of premiums collected in 1995. Great American Reserve
offers group dental, group disability, blanket student accident and a limited
amount of other health insurance products, primarily through independent market
specialists. Great American Reserve markets accident and health policies
primarily because it believes that offering a broad range of products is
important to successfully market life insurance and annuity products, although
such accident and health policies are also designed to be profitable. Group
dental coverage provides a range of benefits for dental care and related
procedures. Disability products provide defined monthly benefits up to specified
levels in the case of disability. Student accident products provide limited
supplemental reimbursement coverage to students for accidents and sickness.
Great American Reserve's health business is subject to the risk that its claims
experience deviates from the assumptions used in setting premium rates. However,
Great American Reserve has the right to change rates to correct for adverse
experience every six months on many group policies and annually on all others.
Experience may be adversely affected by inflationary trends in the costs of
medical treatment, competition-driven business cycles and the extent to which
insureds utilize covered services.
Great American Reserve collected premiums of $.1 million in 1996 and $2.4
million in 1995, from guaranteed investment contracts issued as investment
options for qualified retirement plans maintained by Conseco.
INVESTMENTS
Conseco Capital Management, Inc. ("CCM"), a registered investment adviser
wholly owned by Conseco, manages the investment portfolio of Great American
Reserve. CCM's investment philosophy is to maintain a largely investment-grade
fixed-income portfolio, provide adequate liquidity for expected liability
durations and other requirements and maximize total return through active
investment management. Investment activities are an integral part of Great
American Reserve's business, since investment income is a significant component
of Great American Reserve's total revenues. Profitability is significantly
affected by spreads between interest yields on investments and rates credited on
insurance liabilities. Although substantially all credited rates on flexible
premium deferred annuities may be changed annually, changes in crediting rates
may not be sufficient to maintain targeted investment spreads in all economic
and market environments. In addition, competition and other factors, including
the impact of the level of surrenders and withdrawals, may limit Great American
Reserve's ability to adjust or to maintain crediting rates at levels necessary
to avoid narrowing of spreads under certain market conditions.
For information regarding the composition and diversification of the
investment portfolio of Great American Reserve, see "Management's Discussion and
Analysis of Consolidated Financial Condition and Results of Operations of Great
American Reserve Investments" and note 3 to Great American Reserve's financial
statements for the year ended December 31, 1996.
COMPETITION
Great American Reserve operates in a highly competitive environment. The
life insurance industry consists of a large number of insurance companies, many
of which are substantially larger and have greater financial resources, broader
and more diversified product lines and larger staffs than those of Great
American Reserve. An expanding number of banks, securities brokerage firms and
other financial intermediaries also market insurance products or offer competing
products, such as mutual fund products, traditional bank investments and other
investment and retirement funding alternatives. In most areas, competition is
based on a number of factors, including pricing, service provided to
distributors and policyholders, and ratings. Great American Reserve must also
compete with other insurers to attract and retain the allegiance of agents.
Financial institutions, school districts, marketing companies, agents who
market insurance products and policyholders use the financial strength ratings
assigned to an insurer by independent rating agencies as one factor in
determining which insurer's annuity to market or purchase. Great American
Reserve is rated "A (Excellent)" by A.M. Best Company ("A.M. Best"). A.M. Best's
insurance company ratings for the industry currently range from "A++ (Superior)"
to "F ( In Liquidation)". Publications of A.M. Best indicate that the "A" rating
is assigned to those companies that, in A.M. Best's opinion, have demonstrated
excellent overall performance when compared to the standards established by A.M.
Best and have demonstrated a strong ability to meet their obligations to
policyholders over a long period of time. A.M. Best's rating procedure includes
quantitative and qualitative evaluations of a company's financial condition and
operating performance. Its quantitative evaluation is based on an analysis of a
company's financial performance in the areas of profitability,
leverage/capitalization and liquidity. A.M. Best's review also includes a
qualitative evaluation of a company's spread of risk, quality and
appropriateness of the reinsurance program, quality and diversification of
assets, adequacy of policy or loss reserves, management experience and
objectives, market presence and policyholders' confidence.
Great American Reserve has been assigned a claims paying ability rating of
"A+" from Duff & Phelps Credit Rating Company ("Duff & Phelps"). Duff & Phelps'
claims-paying ability ratings range from "AAA (Highest claims-paying ability)"
to "DD (Company is under an order of liquidation)." Publications of Duff &
Phelps indicate that the"A+" rating represents "High claims-paying ability." A
plus or minus sign attached to a Duff & Phelps claims paying rating shows
relative standing within a ratings category.
In addition, Great American Reserve has been assigned a claims paying
ability rating of BBBq from Standard & Poor's Corporation ("Standard & Poor's").
Claims-paying ability ratings from Standard & Poor's range from "AAA (Superior)"
to "R (Regulatory Action)". A "BBB" is assigned by Standard & Poor's to those
companies which, in its opinion, have adequate financial security, but their
capacity to meet policyholder obligations is susceptible to adverse economic and
underwriting conditions. A "q" subscript indicates that the rating is based
solely on quantitative analysis of publicly available financial data.
Generally, rating agencies base their ratings upon information furnished to
them by the insurer and upon their own investigations, studies and assumptions.
A.M. Best's ratings, Duff & Phelps' claims-paying ratings and Standard & Poor's
claims-paying ratings are principally based upon factors of concern to
policyholders, agents and intermediaries and are not directed toward the
protection of investors. Given the competitive nature of Great American
Reserve's business and the increasing focus placed on the aforementioned
ratings, Great American Reserve manages its business with the objective of
preserving existing ratings and, where possible, achieving more favorable
ratings. There can be no assurance that any particular rating will continue for
any given period of time, or that it will not be changed or withdrawn entirely
if, in the judgement of the rating agency, circumstances so warrant. If Great
American Reserve's ratings are downgraded from their current levels, sales of
its products and the persistency of its in-force policies could be adversely
affected in a material way.
Great American Reserve believes that it is able to compete effectively
because: (i) it is experienced in establishing and cultivating relationships
with independent market specialists which can respond rapidly to changing
customer needs; (ii) it can offer competitive rates as a result of the
lower-than-average operating costs and higher-than-average investment yields
achieved by applying active investment portfolio management techniques; and
(iii) it has reliable policyholder administrative services, supported by
customized information technology systems.
UNDERWRITING
Underwriting with respect to the majority of products sold by Great American
Reserve (FPDAs and variable annuities) is minimal. Substantially all life
insurance policies issued by Great American Reserve are underwritten
individually, although standardized underwriting procedures have been adopted
for certain low face-amount life insurance coverages. Great American Reserve's
group accident and health policies are underwritten based on the characteristics
of a group and its past claim experience.
REINSURANCE
Consistent with the general practice of the life insurance industry, Great
American Reserve reinsures portions of the risk assumed under its insurance
policies with other insurance companies under agreements of indemnity
reinsurance. Great American Reserve also reinsures risks from other insurers,
which are accounted for in the same manner as direct business.
The policy risk retention limit on the life of one individual is $.5
million. At December 31, 1996, reinsurance ceded by Great American Reserve
represented 8.3 percent of gross life insurance in force and reinsurance assumed
represented 5.3 percent of net life insurance in force. At December 31, 1996,
Great American Reserve's largest reinsurer accounted for less than .4 percent of
total insurance liabilities and 28 percent of total reinsurance receivables.
EMPLOYEES
Great American Reserve has no full-time employees. Great American Reserve's
day-to-day operations are administered by Conseco pursuant to agreements between
Great American Reserve and Conseco.
GOVERNMENTAL REGULATION
Great American Reserve is subject to regulation and supervision by the
states in which it transacts business. State laws generally establish
supervisory agencies with broad administrative authority, including power to:
(i) grant and revoke business licenses; (ii) regulate and supervise trade
practices and market conduct; (iii) establish guaranty associations; (iv)
license agents; (v) approve policy forms; (vi) regulate premium rates for some
lines of business; (vii) establish reserve requirements; (viii) prescribe the
form and content of required financial statements and reports; (ix) determine
the reasonableness and adequacy of statutory capital and surplus; and (x)
regulate the type and amount of permitted investments. Great American Reserve is
subject to periodic examinations by state regulatory authorities. Management
does not expect the results of any on-going examinations to have a material
effect on the financial condition of Great American Reserve.
The federal government does not directly regulate the insurance business.
However, federal legislation and administrative policies in several areas,
including pension regulation, age and sex discrimination, financial services
regulation and federal taxation, do affect the insurance business. In addition,
legislation has been introduced from time to time in recent years which, if
enacted, could result in the federal government assuming a more direct role in
the regulation of the insurance industry.
In December 1992, the NAIC adopted the Risk-Based Capital for Life and/or
Health Insurers Model Act (the "Model Act"). The Model Act provides a tool for
insurance regulators to determine the levels of capital and surplus an insurer
must maintain in relation to its insurance and investment risks and whether
there is a need for possible regulatory attention.
The Model Act provides for four levels of regulatory attention, varying with
the ratio of the company's total adjusted capital (defined as the total of its
statutory capital, surplus, asset valuation reserve and certain other
adjustments) to its risk-based capital ("RBC"). If a company's total adjusted
capital is less than 100 percent but greater than or equal to 75 percent of its
RBC, or if a negative trend (as defined by the regulators) has occurred and
total adjusted capital is less than 125 percent of RBC (the "Company Action
Level"), the company must submit a comprehensive plan to the regulatory
authority proposing corrective actions aimed at improving its capital position.
If a company's total adjusted capital is less than 75 percent but greater than
or equal to 50 percent of its RBC (the "Regulatory Action Level"), the
regulatory authority will perform a special examination of the company and issue
an order specifying corrective actions that must be followed. If a company's
total adjusted capital is less than 50 percent but greater than or equal to 35
percent of its RBC (the "Authorized Control Level"), the regulatory authority
may take any action it deems necessary, including placing the company under
regulatory control. If a company's total adjusted capital is less than 35
percent of its RBC (the "Mandatory Control Level") the regulatory authority must
place the company under its control. At December 31, 1996, the total adjusted
capital for Great American Reserve was greater than twice the respective Company
Action Level.
The Texas Insurance Department has adopted its own RBC requirements, the
stated purpose of which is to require a minimum level of capital and surplus to
absorb the financial, underwriting, and investment risks assumed by an insurer.
Texas' RBC requirements differ from those adopted by the NAIC in two principal
respects: (i) they use different elements to determine minimum RBC levels in
their calculation formulas; and (ii) they do not stipulate "Action Levels" (like
those adopted by the NAIC) where corrective actions are required. However, the
Commissioner of the Texas Insurance Department does have the power to take
similar corrective actions if a company does not maintain the required minimum
level of capital and surplus. Under the Texas Regulations, an insurer has met
RBC requirements if its admitted assets exceed its liabilities by at least 3
percent. Great American Reserve is domiciled in Texas and must comply with Texas
RBC requirements. At December 31, 1996, the admitted assets of Great American
Reserve exceeded liabilities by more than twice the required 3 percent level.
On the basis of statutory statements filed with state regulators annually,
the NAIC calculates twelve financial ratios to assist state regulators in
monitoring the financial condition of insurance companies. A "usual range" of
results for each ratio is used as a benchmark. In the past, variances in certain
ratios of Great American Reserve have resulted in inquiries from insurance
departments to which Great American Reserve has responded. Such inquiries did
not lead to any restrictions affecting Great American Reserve's operations.
Under the solvency or guaranty laws of most states in which it does
business, Great American Reserve is required to pay guaranty fund assessments
(up to certain prescribed limits). Guaranty funds are established by various
states to fund policyholder losses or the liabilities of insolvent or
rehabilitated insurance companies. These assessments may be deferred or forgiven
under most guaranty laws if they would threaten an insurer's financial strength.
In certain instances, the assessments may be offset against future premium
taxes. Great American Reserve believes that the liability established at
December 31, 1996, is sufficient to provide for assessments related to known
insolvencies. This reserve is based upon management's current expectation of the
availability of this right of offset and state guaranty fund assessment bases.
However, changes in the basis whereby assessments are charged to individual
companies or changes to the availability of the right to offset assessments
against premium tax payments could materially affect Great American Reserve's
results. Great American Reserve's statutory financial statements for the year
ended December 31, 1996, include $1.4 million of expenses as a result of such
assessments.
FEDERAL INCOME TAXATION
The annuity and life insurance products marketed and issued by Great
American Reserve generally provide the policyholder with an income tax
advantage, as compared to other saving investments such as certificates of
deposit and bonds, in that income taxation on the increase in value of the
product is deferred until receipt by the policyholder. With other savings
investments, the increase in value is taxed as earned. Annuity benefits, and
life insurance benefits which accrue prior to the death of the policyholder, are
generally not taxable until paid. Life insurance death benefits are generally
exempt from income tax. Also, benefits received on immediate annuities (other
than structured settlements) are recognized as taxable income ratably as opposed
to the methods used for some other investments, which tend to accelerate taxable
income into earlier years. The tax advantage for annuities and life insurance is
provided in the Internal Revenue Code (the "Code"), and is generally followed in
all states and other United States taxing jurisdictions. Accordingly, the tax
advantage is subject to change by Congress and by the legislatures of the
respective taxing jurisdictions.
Great American Reserve is taxed under the life insurance company provisions
of the Code. Provisions in the Code require a portion of the expenses incurred
in selling insurance products to be deducted over a period of years, as opposed
to immediate deduction in the year incurred. This provision increases the tax
for statutory accounting purposes, which reduces statutory surplus and,
accordingly, decreases the amount of cash dividends that may be paid by Great
American Reserve. As of December 31, 1996, the cumulative taxes paid as a result
of this provision were $5.6 million.
MANAGEMENT'S DISCUSSION AND ANALYSIS
[TO BE FILED BY AMENDMENT]
DIRECTORS AND EXECUTIVE OFFICERS
Great American Reserve's directors and executive officers as of
________________, 1997, are listed below:
Principal Business Occupation
NAME During Last Five Years
- -------------------- --------------------------------------------
Ngaire E. Cuneo Since 1993, Director of Conseco's principal
(Age __) Insurance subsidiaries. Since 1992,
Executive Vice President, Corporate
Development of Conseco, Inc. and various
positions with certain of its affiliates.
Prior thereto, Ms. Cuneo was Senior Vice
President/Managing Director of GE Capital
from 1986 - 1992.
Stephen C. Hilbert Since 1979, Chairman of the Board, Chief
(Age __) Executive Officer and Director of Conseco,
Inc. Since 1988, President and various
positions with the Company and certain of
its affiliates.
Rollin M. Dick Since 1986, Executive Vice President, Chief
(Age __) Financial Officer and Director of Conseco,
Inc. and various positions with the Company
and certain of its affiliates.
Donald F. Gongaware Since 1985, Executive Vice President, Chief
(Age __) Operations Officer and Director of Conseco,
Inc. and various positions with certain of
its affiliates.
Michael A. Colliflower Senior Vice President, Legal of Conseco. Mr
(Age __) Colliflower is also Chief Compliance Officer,
Secretary and Director of Great American Reserve.
Prior to joining Conseco, Mr. Colliflower was
Senior Vice President and Assistant General
Counsel of Life Partners Group, Inc. and
affiliated insurance companies. (Life Partners
was acquired by Conseco in 1996).
James S. Adams Chief Accounting Officer of Conseco.
(Age __)
EXECUTIVE COMPENSATION
Great American Reserve has no full-time employees and does not compensate any
employee, officer or director of Great American Reserve.
INDEPENDENT ACCOUNTANTS
The financial statements of Great American Reserve as of December 31, 1996 and
1995, and for the year ended December 31, 1996, the four months ended December
31, 1995, the eight months ended August 31, 1995, and the year ended December
31, 1994, included in this prospectus, have been audited by _______________,
independent accountants, as set forth in their report appearing herein, and have
been so included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
LEGAL OPINIONS
Blazzard, Grodd & Hasenauer, P.C., Westport, Connecticut, has provided advice on
certain matters relating to the federal securities and income tax laws in
connection with the contracts described in this prospectus.
FINANCIAL STATEMENTS
The financial statements of Great American Reserve which are included in this
prospectus should be considered only as bearing on the ability of Great American
Reserve to meet its obligations under the contracts. They should not be
considered as bearing on the investment performance of the investment
portfolios. The value of the investment portfolios is affected primarily by the
performance of the underlying investments.
[FINANCIAL STATEMENTS WILL BE FILED BY AMENDMENT]
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
PAGE
Company
Experts
Legal Opinions
Distribution
Performance Information
Tax Status
Annuity Provisions
Financial Statements
APPENDIX A
MARKET VALUE ADJUSTMENT
The market value adjustment reflects the impact that changing interest rates
have on the value of your money in a guarantee period of the MVA option. The
longer the period of time remaining in the term you selected, the greater the
impact of changing interest rates. The market value adjustment can be positive
or negative. We will apply the following factor to amounts withdrawn,
transferred or annuitized from a guarantee period in excess of the MVA waiver
amount (see below):
(1 + A) N/365
[_______] - 1
(1 + B)
where:
A is the U.S. Treasury rate that is in effect at the beginning of the
guarantee period for the length of the guarantee period you selected.
B is the current U.S. Treasury rate as of the date of the withdrawal or
transfer plus .005. The Treasury rate period is determined by N/365 rounded
to the next highest year.
N is the number of days remaining in the guarantee period.
If the Treasury rate is not available for the period, the rate will be
determined by interpolation. If no Treasury rates are available, an index will
be selected by Great American Reserve and which will be approved by the state
insurance commissioners.
MVA Waiver Amount: After the first year in a guarantee period, you can make one
withdrawal or transfer from a guarantee period each year of up to 10% of the
value in that guarantee period without the market value adjustment.
EXAMPLES OF THE MARKET VALUE ADJUSTMENT:
EXAMPLE 1: FIVE-YEAR GUARANTEE PERIOD; INCREASE IN TREASURY RATE
Assume you make a $50,000 payment allocated to a 5-year guarantee period on
January 1, 1998. The current 5-year Treasury rate is 6.00%, and the current
interest rate is 7.00%. On June 13, 1999 you surrender the contract with 3 years
and 202 days, or 1,297 days (12/31/2002-6/13/1999) remaining in the guarantee
period. The current Treasury rate at this point is found by rounding 3 years,
202 days to the next greatest year and taking the rate for that guarantee
period. In this case, we would look at the 4-year rate. Assume that the 4-year
Treasury rate on June 13, 1997 is 6.50%. The market value adjustment would be
calculated as follows:
Contract value at 6/13/1999 (529 days from the day your contract was issued):
(529/365)
$50,000 x(1.07) = $55,151.38 MVA Waiver Amount: $ 5,515.14 (10% after year 1)
Amount remaining: $49,636.24
(1,297/365)
$49,636.24 x [( (1+.06)/(1+.065+.005) ) -1] = -$1,628.83
resulting in an adjustment to the amount you withdraw as follows:
$49,636.24 - $1,628.83 + $5,515.14 = $53,522.55
EXAMPLE 2: FIVE-YEAR GUARANTEE PERIOD; DECREASE IN TREASURY RATE
Assuming the same facts as Example 1, but with a 4-year Treasury rate as of the
date of surrender of 5.00%, the following market value adjustment would result:
Contract value at 6/13/1999 (529 days from the day your contact was issued):
(529/365)
$50,000 x(1.07) = $55,151.38 MVA Waiver Amount: $ 5,515.14 (10% after 1 year)
Amount remaining: $49,636.24
(1,297/365)
$49,636.24 x [( (1+.06)/(1+.050+.005) ) - 1] = $840.99
resulting in an adjustment to the amount you withdraw as follows:
$49,636.24 + $840.99 + $5,515.14 = $55,992.37
(contingent deferred sales charges may also apply)
If you would like a free copy of the Statement of Additional
Information dated _________, 1997, for this prospectus, please
complete this form, detach, and mail to:
Great American Reserve Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
-----------------------------------------------------------------
Please send me a free copy of the statement of additional
information for the fixed and variable annuity at the following
address:
Name: _____________________________________________
Mailing Address: _________________________________________
_________________________________________
Sincerely,
---------------------------
(Signature)
PART B
STATEMENT OF ADDITIONAL INFORMATION
GROUP AND INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
ISSUED BY
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT F
AND
GREAT AMERICAN RESERVE INSURANCE COMPANY
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED ________________, 1997, FOR THE
GROUP AND INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT WHICH IS
DESCRIBED HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
OUGHT TO KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS CALL US AT (800)
342-6307 OR WRITE US AT OUR ADMINISTRATIVE OFFICE: 11815 N. Pennsylvania Street,
Carmel, Indiana 46032.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED , 1997.
TABLE OF CONTENTS
Page
COMPANY
EXPERTS
LEGAL OPINIONS
DISTRIBUTION
Reduction or Elimination of the Contingent Deferred Sales Charge
PERFORMANCE INFORMATION
Total Return
Performance Information
Historical Unit Values
Reporting Agencies
TAX STATUS
General
Diversification
Multiple Contracts
Contracts Owned by Other than Natural Persons
Tax Treatment of Assignments
Income Tax Withholding
Tax Treatment of Withdrawals - Non-Qualified Contracts
Qualified Plans
Tax Treatment of Withdrawals - Qualified Contracts
Tax-Sheltered Annuities - Withdrawal Limitations
ANNUITY PROVISIONS
Variable Annuity
Fixed Annuity
Annuity Unit
Net Investment Factor
Mortality and Expense Guarantee
FINANCIAL STATEMENTS
COMPANY
Information regarding Great American Reserve Insurance Company ("Company") is
contained in the prospectus.
EXPERTS
The financial statements of Great American Reserve as of December 31, 1996 and
1995, and for the year ended December 31, 1996, the four months ended December
31, 1995, the eight months ended August 31, 1995, and the year ended December
31, 1994, included in the prospectus, have been audited by _____________________
, independent accountants, as set forth in their report appearing herein, and
have been so included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
LEGAL OPINIONS
Blazzard, Grodd & Hasenauer, P.C. of Westport, Connecticut has provided advice
on certain matters relating to the federal securities and income tax laws in
connection with the Contracts described in the Prospectus.
DISTRIBUTION
Conseco Equity Sales, Inc., an affiliate of the Company, acts as the
distributor. The offering is on a continuous basis.
REDUCTION OR ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE
The amount of the Contingent Deferred Sales Charge on the Contracts may be
reduced or eliminated when sales of the Contracts are made to individuals or to
a group of individuals in a manner that results in savings of sales expenses.
The entitlement to reduction of the Contingent Deferred Sales Charge will be
determined by the Company after examination of all the relevant factors such as:
1. The size and type of group to which sales are to be made will be
considered. Generally, the sales expenses for a larger group are less than for a
smaller group because of the ability to implement large numbers of Contracts
with fewer sales contacts.
2. The total amount of purchase payments to be received will be considered.
Per Contract sales expenses are likely to be less on larger purchase payments
than on smaller ones.
3. Any prior or existing relationship with the Company will be considered.
Per Contract sales expenses are likely to be less when there is a prior existing
relationship because of the likelihood of implementing the Contract with fewer
sales contacts.
4. There may be other circumstances, of which the Company is not presently
aware, which could result in reduced sales expenses.
If, after consideration of the foregoing factors, the Company determines that
there will be a reduction in sales expenses, the Company may provide for a
reduction or elimination of the Contingent Deferred Sales Charge.
The Contingent Deferred Sales Charge may be eliminated when the Contracts are
issued to an officer, director or employee of the Company or any of its
affiliates. In no event will any reduction or elimination of the Contingent
Deferred Sales Charge be permitted where the reduction or elimination will be
unfairly discriminatory to any person.
PERFORMANCE INFORMATION
TOTAL RETURN
From time to time, the Company may advertise performance data. Such data will
show the percentage change in the value of an Accumulation Unit based on the
performance of an investment portfolio over a period of time, usually a calendar
year, determined by dividing the increase (decrease) in value for that unit by
the Accumulation Unit value at the beginning of the period.
Any such advertisement will include total return figures for the time periods
indicated in the advertisement. Such total return figures will reflect the
deduction of a 1.25% Mortality and Expense Risk Charge, a .15% Administrative
Charge, the expenses for the underlying investment portfolio being advertised
and any applicable Contract Maintenance Charges and Contingent Deferred Sales
Charges.
The hypothetical value of a Contract purchased for the time periods described in
the advertisement will be determined by using the actual Accumulation Unit
values for an initial $1,000 purchase payment, and deducting any applicable
Contract Maintenance Charges and any applicable Contingent Deferred Sales
Charges to arrive at the ending hypothetical value. The average annual total
return is then determined by computing the fixed interest rate that a $1,000
purchase payment would have to earn annually, compounded annually, to grow to
the hypothetical value at the end of the time periods described. The formula
used in these calculations is:
n
P (1 + T) = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the time periods used (or
fractional portion thereof) of a hypothetical $1,000 payment made at
the beginning of the time periods used.
The Company may also advertise performance data which will be calculated in the
same manner as described above but which will not reflect the deduction of any
Contingent Deferred Sales Charge. The deduction of any Contingent Deferred Sales
Charge would reduce any percentage increase or make greater any percentage
decrease.
Owners should note that the investment results of each investment portfolio will
fluctuate over time, and any presentation of the investment portfolio's total
return for any period should not be considered as a representation of what an
investment may earn or what an Owner's total return may be in any future period.
The Contracts are new and therefore do not have investment performance history.
However, the corresponding Portfolios have been in existence for some time and
consequently have investment performance history. In order to demonstrate how
the actual investment experience of the Portfolios affects Accumulation Unit
values, the Company may develop performance information. The information will be
based upon the historical experience of the Portfolios and will be for the
periods shown.
Actual performance will vary and the hypothetical results which may be shown are
not necessarily representative of future results. Performance for periods ending
after those shown may vary substantially. The performance of the Accumulation
Units will be calculated for a specified period of time assuming an initial
Purchase Payment of $1,000 allocated to each Portfolio and a deduction of all
charges and deductions (see "Expenses" in the Prospectus for more information).
Performance may also be shown without certain charges being included. If the
charges were included in the calculations, the performance would be lower. The
percentage increases are determined by subtracting the initial Purchase Payment
from the ending value and dividing the remainder by the beginning value.
PERFORMANCE INFORMATION
The accumulation units of the Separate Account are new and therefore have no
performance history. However, the corresponding portfolios have been in
existence for some time and consequently have investment performance history. In
order to demonstrate how the historical investment experience of the portfolios
affects accumulation unit values, the following performance information was
developed. The information is based upon the historical experience of the
portfolios and is for the periods shown.
ACTUAL PERFORMANCE WILL VARY AND THE HYPOTHETICAL RESULTS SHOWN ARE NOT
NECESSARILY REPRESENTATIVE OF FUTURE RESULTS. Performance for periods ending
after those shown may vary substantially from the examples shown below. Chart 1
shows the performance of the accumulation units calculated for a specified
period of time assuming an initial purchase payment of $1,000 allocated to each
portfolio and a deduction of all charges and deductions (see "Expenses" in the
prospectus). Chart 2 is identical to Chart 1 except that it does not reflect the
deduction of the contingent deferred sales charge. The performance figures in
both charts also reflect the actual fees and expenses paid by each portfolio.
The percentage increases are determined by subtracting the initial purchase
payment from the ending value and dividing the remainder by the beginning value.
The calculations do not reflect the deduction of any premium taxes.
Historical Fund Performance for Periods Ending __________________:
CHART 1 - AVERAGE ANNUAL TOTAL RETURN
Portfolio 10 Years or
Portfolio Inception Date 1 Year 5 Years Since Inception
--------- -------------- ------ -------- ---------------
CONSECO SERIES TRUST
Asset Allocation
Common Stock
Corporate Bond
Government Securities
Money Market
THE ALGER AMERICAN FUND
Alger American Growth
Alger American Leveraged
AllCap
Alger American MidCap
Growth
Alger American Small
Capitalization
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP International
VP Value
VP Income & Growth
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT - 100
Berger IPT - Growth and
Income
Berger IPT - Small Company
Growth
Berger/BIAM IPT - International
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
DREYFUS STOCK INDEX FUND
FEDERATED INSURANCE SERIES
Federated High Income Bond II
Federated International
Equity II
Federated Utility II
JANUS ASPEN SERIES
Aggressive Growth
Growth
Worldwide Growth
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity
Lazard Retirement Small Cap
LORD ABBETT SERIES FUND, INC.
Growth and Income
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond
Partners
PAINE WEBBER SERIES TRUST
Growth and Income
STRONG OPPORTUNITY FUND II
STRONG VARIABLE INSURANCE FUNDS, INC.
Growth II
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Hard Assets
Worldwide Bond
Worldwide Emerging Markets
HISTORICAL UNIT VALUES
The Company may also show historical Accumulation Unit values in certain
advertisements containing illustrations. These illustrations will be based on
actual Accumulation Unit values.
In addition, the Company may distribute sales literature which compares the
percentage change in Accumulation Unit values for any of the investment
portfolios against established market indices such as the Standard & Poor's 500
Composite Stock Price Index, the Dow Jones Industrial Average or other
management investment companies which have investment objectives similar to the
investment portfolio being compared. The Standard & Poor's 500 Composite Stock
Price Index is an unmanaged, unweighted average of 500 stocks, the majority of
which are listed on the New York Stock Exchange. The Dow Jones Industrial
Average is an unmanaged, weighted average of thirty blue chip industrial
corporations listed on the New York Stock Exchange. Both the Standard & Poor's
500 Composite Stock Price Index and the Dow Jones Industrial Average assume
quarterly reinvestment of dividends.
REPORTING AGENCIES
The Company may also distribute sales literature which compares the performance
of the Accumulation Unit values of the Contracts with the unit values of
variable annuities issued by other insurance companies. Such information will be
derived from the Lipper Variable Insurance Products Performance Analysis
Service, the VARDS Report or from Morningstar.
The Lipper Variable Insurance Products Performance Analysis Service is published
by Lipper Analytical Services, Inc., a publisher of statistical data which
currently tracks the performance of almost 4,000 investment companies. The
rankings compiled by Lipper may or may not reflect the deduction of asset-based
insurance charges. The Company's sales literature utilizing these rankings will
indicate whether or not such charges have been deducted. Where the charges have
not been deducted, the sales literature will indicate that if the charges had
been deducted, the ranking might have been lower.
The VARDS Report is a monthly variable annuity industry analysis compiled by
Variable Annuity Research & Data Service of Roswell, Georgia and published by
Financial Planning Resources, Inc. The VARDS rankings may or may not reflect the
deduction of asset-based insurance charges. In addition, VARDS prepares risk
adjusted rankings, which consider the effects of market risk on total return
performance. This type of ranking may address the question as to which funds
provide the highest total return with the least amount of risk. Other ranking
services may be used as sources of performance comparison, such as
CDA/Weisenberger.
Morningstar rates a variable annuity against its peers with similar investment
objectives. Morningstar does not rate any variable annuity that has less than
three years of performance data.
TAX STATUS
GENERAL
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING OF
CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE COMPANY
CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE MADE.
PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE POSSIBILITY
OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF THE CONTRACTS.
PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS
"ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER
UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT SPECIAL
RULES NOT DESCRIBED HEREIN MAY BE APPLICABLE IN CERTAIN SITUATIONS. MOREOVER, NO
ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX LAWS.
Section 72 of the Internal Revenue Code of 1986, as amended ("Code") governs
taxation of annuities in general. An Owner is not taxed on increases in the
value of a Contract until distribution occurs, either in the form of a lump sum
payment or as annuity payments under the Annuity Option selected. For a lump sum
payment received as a total withdrawal (total surrender), the recipient is taxed
on the portion of the payment that exceeds the cost basis of the Contract. For
Non-Qualified Contracts, this cost basis is generally the purchase payments,
while for Qualified Contracts there may be no cost basis. The taxable portion of
the lump sum payment is taxed at ordinary income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed annuity option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period or refund feature) bears
to the expected return under the Contract. The exclusion amount for payments
based on a variable annuity option is determined by dividing the cost basis of
the Contract (adjusted for any period certain or refund guarantee) by the number
of years over which the annuity is expected to be paid. Payments received after
the investment in the Contract has been recovered (i.e. when the total of the
excludable amount equals the investment in the Contract) are fully taxable. The
taxable portion is taxed at ordinary income tax rates. For certain types of
Qualified Plans there may be no cost basis in the Contract within the meaning of
Section 72 of the Code. Owners, Annuitants and Beneficiaries under the Contracts
should seek competent financial advice about the tax consequences of any
distributions.
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from the
Company, and its operations form a part of the Company.
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contract meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.
On March 2, 1989, the Treasury Department issued Regulations (Treas.
Reg.1.817-5), which established diversification requirements for the investment
portfolios underlying variable contracts such as the Contract. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, an investment portfolio will be deemed adequately
diversified if: (1) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (2) no more than 70% of the
value of the total assets of the portfolio is represented by any two
investments; (3) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
The Company intends that all investment portfolios underlying the Contracts will
be managed in such a manner as to comply with these diversification
requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Separate Account will cause the Owner to be treated as the
owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the Contract. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.
The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the Owner to be considered as the owner of the assets of the Separate
Account resulting in the imposition of federal income tax to the Owner with
respect to earnings allocable to the Contract prior to receipt of payments under
the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Owners being
retroactively determined to be the owners of the assets of the Separate Account.
Due to the uncertainty in this area, the Company reserves the right to modify
the Contract in an attempt to maintain favorable tax treatment.
MULTIPLE CONTRACTS
The Code provides that multiple non-qualified annuity contracts which are issued
within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse tax
consequences including more rapid taxation of the distributed amounts from such
combination of contracts. Owners should consult a tax adviser prior to
purchasing more than one non-qualified annuity contract in any calendar year.
CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS
Under Section 72(u) of the Code, the investment earnings on premiums for the
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to a Contract held by a trust or other entity as an
agent for a natural person nor to Contracts held by Qualified Plans. Purchasers
should consult their own tax counsel or other tax adviser before purchasing a
Contract to be owned by a non-natural person.
TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge of a Contract may be a taxable event. Owners should
therefore consult competent tax advisers should they wish to assign or pledge
their Contracts.
INCOME TAX WITHHOLDING
All distributions or the portion thereof which is includible in the gross income
of the Owner are subject to federal income tax withholding. Generally, amounts
are withheld from periodic payments at the same rate as wages and at the rate of
10% from non-periodic payments. However, the Owner, in most cases, may elect not
to have taxes withheld or to have withholding done at a different rate.
Effective January 1, 1993, certain distributions from retirement plans qualified
under Section 401 or Section 403(b) of the Code, which are not directly rolled
over to another eligible retirement plan or individual retirement account or
individual retirement annuity, are subject to a mandatory 20% withholding for
federal income tax. The 20% withholding requirement generally does not apply to:
a) a series of substantially equal payments made at least annually for the life
or life expectancy of the participant or joint and last survivor expectancy of
the participant and a designated beneficiary or for a specified period of 10
years or more; or b) distributions which are required minimum distributions; or
c) the portion of the distributions not includible in gross income (i.e. returns
of after-tax contributions). Participants should consult their own tax counsel
or other tax adviser regarding withholding requirements.
TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income. It further
provides that a ten percent (10%) penalty will apply to the income portion of
any premature distribution. However, the penalty is not imposed on amounts
received: (a) after the taxpayer reaches age 59 1/2; (b) after the death of the
Owner; (c) if the taxpayer is totally disabled (for this purpose disability is
as defined in Section 72(m)(7) of the Code); (d) in a series of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the taxpayer or for the joint lives (or joint life
expectancies) of the taxpayer and his or her Beneficiary; (e) under an immediate
annuity; or (f) which are allocable to purchase payments made prior to August
14, 1982.
The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals - Individual Retirement Annuities" below.)
INDIVIDUAL RETIREMENT ANNUITIES
The Contracts offered by the Prospectus are designed to be suitable for use as
an Individual Retirement Annuity (IRA). Generally, individuals who purchase IRAs
are not taxed on increases to the value of the contributions until distribution
occurs. Following is a general description of IRAs which the Contract may be
used. The description is not exhaustive and is for general informational
purposes only.
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an IRA. Under applicable limitations,
certain amounts may be contributed to an IRA which will be deductible from the
individual's gross income. These IRAs are subject to limitations on eligibility,
contributions, transferability and distributions. (See "Tax Treatment of
Withdrawals - Individual Retirement Annuities" below.) Under certain conditions,
distributions from other IRAs and other Qualified Plans may be rolled over or
transferred on a tax-deferred basis into an IRA. Sales of Contracts for use with
IRAs are subject to special requirements imposed by the Code, including the
requirement that certain informational disclosure be given to persons desiring
to establish an IRA. Purchasers of Contracts to be qualified as Individual
Retirement Annuities should obtain competent tax advice as to the tax treatment
and suitability of such an investment.
TAX TREATMENT OF WITHDRAWALS - INDIVIDUAL RETIREMENT ANNUITIES
Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of
any distribution from qualified retirement plans, including Contracts issued and
qualified under Code Section 408(b) (Individual Retirement Annuities). To the
extent amounts are not includible in gross income because they have been rolled
over to an IRA or to another eligible Qualified Plan, no tax penalty will be
imposed. The tax penalty will not apply to the following distributions: (a) if
distribution is made on or after the date on which the Owner reaches age 59 1/2;
(b) distributions following the death or disability of the Owner (for this
purpose disability is as defined in Section 72(m) (7) of the Code); (c)
distributions that are part of substantially equal periodic payments made not
less frequently than annually for the life (or life expectancy) of the Owner or
the joint lives (or joint life expectancies) of such Owner and his or her
designated Beneficiary; (d) distributions made to the Owner to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the Owner for amounts paid during the taxable year for medical
care; (e) distributions from an Individual Retirement Annuity for the purchase
of medical insurance (as described in Section 213(d)(1)(D) of the Code) for the
Owner and his or her spouse and dependents if the Owner has received
unemployment compensation for at least 12 weeks. This exception will no longer
apply after the Owner has been re-employed for at least 60 days; (f)
distributions made to the Owner to the extent such distributions do not exceed
the qualified higher education expenses (as defined in Section 72(t)(7) of the
Code) of the Owner for the taxable year; and (g) distributions made to the Owner
which are qualified first-time home buyer distributions (as defined in Section
72(t)(8) of the Code).
Generally, distributions from a IRA must begin no later than April 1st of the
calendar year following the year in which the participant attains age 70 1/2.
Required distributions must be over a period not exceeding the life expectancy
of the individual or the joint lives or life expectancies of the individual and
his or her designated beneficiary. If the required minimum distributions are not
made, a 50% penalty tax is imposed as to the amount not distributed.
ANNUITY PROVISIONS
The Company makes available payment plans on a fixed and variable basis.
VARIABLE ANNUITY PAYOUT
A Variable Annuity is an annuity with payments which: (1) are not predetermined
as to dollar amount; and (2) will vary in amount with the net investment results
of the applicable investment portfolio. Annuity Payments also depend upon the
age of the annuitant and any joint annuitant and the assumed interest factor
utilized. The Annuity Table used will depend upon the annuity option chosen. The
dollar amount of annuity payments after the first is determined as follows:
1. The dollar amount of the first variable annuity payment is divided by
the value of an annuity unit for each investment portfolio as of the annuity
date. This sets the number of annuity units for each monthly payment for the
applicable investment portfolio.
2. The fixed number of annuity units for each payment in each investment
portfolio is multiplied by the annuity unit value for that investment portfolio
for the last valuation period of the month preceding the month for which the
payment is due. This result is the dollar amount of the payment for each
applicable investment portfolio.
The total dollar amount of each variable annuity payment is the sum of all
variable annuity payments reduced by the applicable portion of the Contract
Maintenance Charge.
FIXED ANNUITY PAYOUT
All fixed annuity is an annuity with payments which are guaranteed as to dollar
amount by the Company and do not vary with the investment experience of the
investment portfolios. The dollar amount of each fixed annuity payment is
determined in accordance with Annuity Tables contained in the Contract.
ANNUITY UNIT
The value of any annuity unit was arbitrarily set initially at $10.
The annuity unit value at the end of any subsequent valuation period is
determined as follows:
1. The Net Investment Factor for the current valuation period is multiplied
by the value of the annuity unit for the immediately preceding valuation period.
2. The result in (1) is then divided by the Assumed Investment Rate Factor
which equals 1.00 plus the Assumed Investment Rate for the number of days since
the preceding valuation date. The Owner can choose either a 5% or a 3% Assumed
Investment Rate.
FINANCIAL STATEMENTS
The financial statements of the Company included in the Prospectus should be
considered only as bearing upon the ability of the Company to meet its
obligations under the Contracts and Certificates.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
A. FINANCIAL STATEMENTS
The financial statements of the Company will be filed by Amendment.
B. EXHIBITS
1. Resolution of Board of Directors of the Company authorizing the
establishment of the Separate Account.
2. Not Applicable.
3. (i) Form of Principal Underwriters Agreement (to be filed by Amendment).
(ii) Form of Selling Agreement.
4. (i) Individual Fixed and Variable Deferred Annuity
Contract.
(ii) Allocated Fixed and Variable Group Annuity
Contract.
(iii) Allocated Fixed and Variable Group Annuity
Certificate.
5. Application Form.
6. (i) Articles of Incorporation of the Company.
(ii) Bylaws of the Company.
7. Not Applicable.
8. Form of Fund Participation Agreements (to be filed by Amendment).
9. Opinion and Consent of Counsel (to be filed by Amendment).
10. Consent of Independent Accountants (to be filed by Amendment).
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.
14. Not Applicable.
15. Company Organizational Chart (to be filed by Amendment).
27. Financial Data Schedule - Not Applicable.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
The following are the Executive Officers and Directors of the Company:
Name and Principal Position and Offices
Business Address* with Depositor
- ------------------- ---------------------------------------
Ngaire E. Cuneo Director
Stephen C. Hilbert Director and Chairman of the Board
Rollin M. Dick Director, Executive Vice President and
Chief Financial Officer
Donald F. Gongaware Director, President and Chief Executive
Officer
Michael A. Colliflower Chief Compliance Officer and Secretary
John J. Sabl Director, Executive Vice President and General
Counsel
*The Principal business address for all officers and directors listed above is
11825 N. Pennsylvania Street, Carmel, Indiana 46032.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT
The Company organizational chart will be filed by Amendment.
ITEM 27. NUMBER OF CONTRACT OWNERS
Not Applicable.
ITEM 28. INDEMNIFICATION
The Bylaws (Article VI) of the Company provide, in part, that:
The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative,
by reason of the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (collectively, "Agent") against expenses
(including attorneys' fees), judgments, fines, penalties, court costs and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement (whether with or
without court approval), conviction or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the Agent did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. If several claims, issues or matters are involved, an
Agent may be entitled to indemnification as to some matters even though he is
not entitled as to other matters. Any director or officer of the Corporation
serving in any capacity of another corporation, of which a majority of the
shares entitled to vote in the election of its directors is held, directly or
indirectly, by the Corporation, shall be deemed to be doing so at the request of
the Corporation.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted directors and officers or controlling persons of the
Company pursuant to the foregoing, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Not Applicable.
(b) Conseco Equity Sales, Inc. ("CES") is the principal underwriter for the
Contracts. The following persons are the officers and directors of CES. The
principal business address for each officer and director of CES is 11815 N.
Pennsylvania Street, Carmel, Indiana 46032.
Name and Principal Positions and Offices
Business Address with Underwriter
------------------------ ---------------------------------------
L. Gregory Gloeckner President and Director
William P. Latimer Vice President, Senior Counsel,
Secretary and Director
James S. Adams Senior Vice President, Treasurer
and Director
William T. Devanney, Jr. Senior Vice President, Corporate
Taxes
Christene H. Darnell Assistant Vice President, Management
Reporting
Lisa M. Zimmerman Assistant Vice President, Corporate Tax
(c) Not Applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Lowell Short, whose address is 11825 N. Pennsylvania Street, Carmel, IN
46032, maintains physical possession of the accounts, books or documents of the
Separate Account required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
a. Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than sixteen
(16) months old for so long as payment under the variable annuity contracts may
be accepted.
b. Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
c. Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statement required to be made available under this
Form promptly upon written or oral request.
d. Great American Reserve Insurance Company (the "Company") hereby
represents that the fees and charges deducted under the Contracts described in
the Prospectus, in the aggregate, are reasonable in relation to the services
rendered, the expenses to be incurred and the risks assumed by the Company.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it has caused this Registration Statement to
be signed on its behalf, in the City of Carmel, and State of Indiana on this 3rd
day of November, 1997.
GREAT AMERICAN RESERVE VARIABLE ANNUITY
ACCOUNT F
Registrant
By: GREAT AMERICAN RESERVE INSURANCE COMPANY
By: /s/ DONALD F. GONGAWARE
-----------------------
Donald F. Gongaware
President
By: GREAT AMERICAN RESERVE INSURANCE COMPANY
Depositor
By: /s/ DONALD F. GONGAWARE
-----------------------
Donald F. Gongaware
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------ -------------------------- ---------------
/S/ NGAIRE E. CUNEO Director 10/31/97
- ------------------------ -----------------
Ngaire E. Cuneo
/S/ STEPHEN C. HILBERT Director and Chairman of 10/31/97
- ------------------------ the Board -----------------
Stephen C. Hilbert
/S/ ROLLIN M. DICK Director, Executive Vice 10/31/97
- ------------------------ President and Chief -----------------
Rollin M. Dick Financial Officer
(Principal Financial Officer
and Accounting Officer of
the Registrant)
/S/ JOHN J. SABL Director, Executive Vice 10/31/97
- ----------------------- President, General Counsel ----------------
John J. Sabl
Director, President and
/S/ DONALD F. GONGAWARE Chief Executive Officer 10/31/97
- ------------------------ (Principal Executive -----------------
Donald F. Gongaware Officer of the Registrant)
EXHIBITS
TO
FORM N-4
FOR
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT F
GREAT AMERICAN RESERVE INSURANCE COMPANY
INDEX TO EXHIBITS
EXHIBIT PAGE
EX-99.B1 Resolution of the Board of Directors Authorizing the
Establishment of the Separate Account
EX-99.B3(ii) Form of Selling Agreement
EX-99.B4(i) Individual Fixed and Variable Deferred Annuity Contract
EX-99.B4(ii) Allocated Fixed and Variable Group Annuity Contract
EX-99.B4(iii) Allocated Fixed and Variable Group Annuity Certificate
EX-99.B5 Application Form
EX-99.B6(i) Articles of Incorporation of the Company
EX-99.B6(ii) Bylaws of the Company
WRITTEN CONSENT TO RESOLUTIONS
OF THE BOARD OF DIRECTORS OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
The undersigned, being all of the members of the Board of Directors of
Great American Reserve Insurance Company (the "Company") hereby unanimously
consent to the adoption of the following resolutions without a meeting of the
Board of Directors of the Company:
RESOLVED, that the Company develop and implement a program for the offer
and sale of individual and group fixed and variable annuity contracts (the
"Contracts") with market value adjustment account options and a fixed account
option, to be issued by the Company; and
RESOLVED, that the Company establish separate accounts pursuant to the
Texas Insurance Code, one said separate account being designated "Great American
Reserve Variable Account F" (the "Variable Account") and the other said separate
account being designated "Great American Reserve Market Value Adjustment Account
F" (the "MVA Account"); and
RESOLVED, that the Contracts issued pursuant to these resolutions from the
Variable Account shall provide that the assets of the Variable Account, equal to
the reserves and other contract liabilities with respect to the Variable
Account, are not chargeable with liabilities out of any other business the
Company may conduct; and
RESOLVED, that the Contracts issued pursuant to these resolutions from the
MVA Account shall provide that the assets of the MVA Account, equal to the
reserves and other contract liabilities with respect to the MVA Account, are not
chargeable with liabilities out of any other business the Company may conduct;
and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
pursuant to Section 5 of the Securities Act of 1933 of a Form N-4 registration
statement for the Variable Account and Contracts, including the filing of any
amendments thereto and all matters properly incident thereto, is hereby
authorized and approved; and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
pursuant to Section 5 of the Securities Act of 1933 of a Form S-1 registration
statement for the MVA Account Guaranteed Period options in the Contracts,
including the filing of any amendments thereto and all matters properly incident
thereto, is hereby authorized and approved; and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
pursuant to Section 8 of the Investment Company Act of 1940 ("1940 Act"),
registering the Variable Account as a unit investment trust under said Act,
including the filing of any amendments thereto and all matters properly incident
thereto, is hereby authorized and approved; and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
of applications, and amendments thereto, for exemptions from the provisions of
the Investment Company Act of 1940 and the rules and regulations thereunder as
may be necessary or appropriate to effectuate the purposes of these resolutions,
are hereby authorized and approved; and
RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized to make all actions necessary to maintain the registration of the
Variable Account as a unit investment trust under the 1940 Act, and to take such
related actions as they deem necessary or appropriate to carry out the
foregoing, including, without limitation, the following: determining that the
fundamental investment policy of the Variable Account shall be to invest and
reinvest its assets in securities issued by such open-end management investment
companies registered under the 1940 Act as the officers may designate consistent
with provisions of the Contracts issued by the Company; establishing one or more
sub-accounts of the Variable Account to which payments under the Contracts will
be allocated in accordance with orders received from Contract owners or
Participants; reserving to the officers the authority to increase or decrease
the number of sub-accounts in the Variable Account as they deem necessary or
appropriate; investing each sub-account only in shares of a single investment
company or a single portfolio of an investment company organized as a series
fund pursuant to the 1940 Act, including substituting from time to time the
shares of another single investment company or single portfolio of a series fund
for such shares then invested in such sub-account, as the officers acting in
accordance with the provisions of the Contracts deem necessary or appropriate;
and the aforesaid being subject to the commencement of the Variable Account's
operations as a unit investment trust which invests in shares of one or more
portfolios of the Conseco Series Trust; and
RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized to take all actions necessary to establish and maintain the MVA
Account as a separate account under the Texas Insurance Code, and to take such
related actions as they deem necessary or appropriate to carry out the
foregoing, including, without limitation, the following: establishing, if
necessary, a Trust under the laws of the State of Texas; establishing one or
more sub-accounts of the MVA Account to which payments under the MVA Contracts
will be allocated in accordance with orders received from MVA Contract owners or
Participants; reserving to the officers the authority to increase or decrease
the number of sub-accounts in the MVA Account as they deem necessary or
appropriate; the aforesaid being subject to the commencement of the MVA
Account's operations as an option under the Contracts; and
RESOLVED, that in connection with the Variable Account and the MVA Account
and the offer and sale of Contracts and MVA Contracts, the officers of the
Company be, and each of them hereby is, authorized to execute and file with such
authorities of the states of the United States of America, and to take such
related actions as they deem necessary or appropriate to carry out the
foregoing, including, without limitation, the following: such applications,
notices, certificates, affidavits, powers of attorney, consents of service of
process, covenants of an issuer, bonds, escrow and impending agreements, and
other writing and instruments as may be necessary or appropriate in order to
render permissible the offering and sale of Contracts and MVA Contracts in any
jurisdiction within the United States of America; the forms of any resolutions
required by any state authority to be filed in connection with any of the
documents or instruments referred to above be, and the same hereby are, adopted
by this Board of Directors as if such resolutions were fully set forth herein if
(i) in the opinion of the officers of the Company, the adoption of such
resolutions is necessary or advisable, and (ii) the Secretary or any Assistant
Secretary of the Company evidences the adoption of any such resolution by filing
a copy of such resolution with this Written Consent; and
RESOLVED, that the officers of the Company be and hereby are authorized to
take such further action and to execute such additional documents as they deem
necessary or appropriate to effectuate the purposes of the foregoing
resolutions.
The resolutions adopted pursuant to this Written Consent shall be effective
as of November 7, 1997.
/S/ NGAIRE E. CUNEO /S/ ROLLIN M. DICK
- ------------------- -------------------
Ngaire E. Cuneo Rollin M. Dick
/S/ DONALD G. GONGAWARE /S/ STEPHEN C. HILBERT
- ----------------------- -----------------------
Donald F. Gongaware Stephen C. Hilbert
/S/ JOHN J. SABL
- -----------------------
John J. Sabl
GREAT AMERICAN RESERVE INSURANCE COMPANY
CONSECO EQUITY SALES, INC.
GROUP SELLING AGREEMENT
This Agreement is made between Great American Reserve Insurance Company
("Company"), Conseco Equity Sales, Inc. ("Underwriter") with Administrative
Offices in Carmel, Indiana, and the Broker-Dealer named herein registered as a
Broker-Dealer ("Broker") and a member of the National Association of Securities
Dealers, Inc. (the "NASD"). The parties do hereby agree as follows:
1. AUTHORIZATION.
Broker, either an individual, partnership, or corporation, is hereby authorized
by Company and Underwriter to solicit applications for variable annuity policies
("Policies"), as set forth in the Compensation Schedule which is made a part of
the Group Selling Agreement, to collect and remit initial required premiums to
Company, and to deliver Policies issued by Company:
a. only in jurisdictions where Broker is duly licensed and appointed by
the appropriate regulatory agencies, and;
b. only in states or territories in which Company is admitted to do
business and only for those Policies offered by Company that have been
approved by the appropriate regulatory agencies.
Broker shall supply Company with copies of all certificates of qualification or
licenses required of Broker under this Agreement.
1.1. LIMITATION OF AUTHORITY.
Broker has no authority during the time this Agreement is in effect, or after
termination, to:
a. make or modify Policies on behalf of Company or waive any of Company's
rights or requirements;
b. collect or receive premiums or renewals other than the initial
required premium;
c. endorse, cash or deposit any checks or drafts payable to Company;
d. open any bank account or trust account on behalf of, for the benefit
of, or containing the name of, Company;
e. advertise or publish any matter or thing, including use of the names
or logos of Company or those of its subsidiaries or affiliates,
concerning Company or its Policies without prior written permission of
Company;
f. directly or indirectly cause or endeavor to cause any Broker of
Company and Underwriter or registered representatives of Underwriter
to terminate or alter its/his contract with Company, or induce or
attempt to induce any policyholder of Company to relinquish,
surrender, replace or lapse a Policy; or
g. do or perform any acts or things other than expressly authorized
herein.
This Agreement shall not create an employer-employee relationship. The
relationship of Broker to Company shall be that of independent contractor.
Broker shall indemnify and hold harmless Company, Underwriter, and their
affiliates from any and all claims, demands, penalties, suits, or actions, and
from any and all losses, costs, and expenses in connection therewith, including
attorney's fees and expenses, arising out of or resulting from sales of the
Policies by or through the Broker, or from the default in the performance of, or
in the negligent performance of, by Broker or Broker's partners, directors,
officers, employees or agents, the obligations of Broker under this Agreement.
In addition, Broker agrees to furnish and maintain a satisfactory bond of
indemnity when requested by Company, a copy of such bond to be submitted to
Company within 30 days of request. The provisions of this paragraph shall
survive the termination of this Agreement.
1.2. REPRESENTATION AND SERVICE.
Broker agrees:
a. that Broker will supervise the securities activities of Broker's with
respect to the sale of the Policies and agrees to establish such rules
and procedures as are necessary to insure compliance with applicable
federal and state securities laws and to accept such supervision;
b. to observe the rules, procedures and other directives established, and
given by Underwriter relating to the sale of the Policies by Broker,
as initially set forth in the Broker-Dealer Manual which Underwriter
must provide, provided, however, that provision of the Broker-Dealer
Manual shall not be deemed to imply a duty of supervision by Company
or Underwriter over Broker, or to relieve Broker of it's duty to
supervise its personnel. Broker will also comply with the rules and
regulations o the Securities and Exchange Commission and the NASD
relating to the sale and distribution of the Policies and will observe
all applicable federal and state laws relating to the Policies;
c. that all solicitations for Policies are accompanied by the appropriate
current prospectuses for the Policies conforming to the requirements
of the Securities Act of 1933;
d. no representations concerning the Policies will be made except those
contained in the appropriate current prospectuses and in information
supplemental to the prospectuses, which may be supplied by Underwriter
and designated for use with the public. In this regard, Broker further
agrees to refrain from using advertising or sales literature
concerning the Policies unless and until it has been approved by
Underwriter;
e. to become fully informed as to the provisions and benefits of each
Policy offered by Company for which Broker solicits applications;
f. to represent such Policies adequately and fairly to prospects;
g. to provide all usual and customary service to policyholders and effort
to maintain in force any business placed with Company; and
h. to hold in a fiduciary capacity all premiums received with any
applications for Policies solicited for Company.
1.3. BROKER'S AGENTS.
Broker will recruit, train and supervise registered representatives
("Representatives") for the sale of the Policies. Appointment of each
Representative shall be subject to Company's prior approval. Company may require
termination of any Representative's authority to sell the Policies. Broker is
responsible for the Representatives' compliance with the terms and conditions of
this Agreement and for the Representatives being duly licensed pursuant to
applicable state and federal laws.
1.4. DELIVERY OF POLICY.
Broker shall promptly deliver all issued Policies in accordance with Company
rules.
1.5. ADMINISTRATIVE GUIDELINES AND COMPLIANCE.
Company's administrative guidelines, including bulletins, product and procedure
updates, the revisions, additions and amendments thereto, from the time made by
Company, shall be for all purposes a part of this Agreement as fully as if set
out word for word herein and shall be complied with by Broker provided, however,
that this shall not be deemed to imply a duty of supervision by Company or
Underwriter over Broker, or to relieve Broker of its duty to supervise its
personnel. Broker agrees to comply fully with all applicable regulations,
bulletins, rulings, circular letters, proclamations and statutes, now or
hereafter in force, and to promptly notify Company in writing of all contacts
and/or correspondence received from insurance regulatory or other governmental
authorities, and to cooperate fully with Company in making responses to those
authorities.
2. COMPENSATION.
All compensation payable for sales of the Policies shall be paid by Company to
Broker through Underwriter and nothing contained herein shall create any right,
title or interest in Underwriter to such compensation nor any responsibility on
the part of Underwriter for payment of such compensation. Company agrees to pay
compensation in the form of commissions and service fees as provided in the
Compensation Schedule(s) delivered to Broker by Company and incorporated herein
by reference, upon any cash premium received by Company for Policies issued on
applications submitted by Broker. Such compensation shall be payment in full for
all services performed and all expenses incurred by Broker. Company reserves the
right to accrue compensation under this Agreement until a minimum of $25.00 has
become due. If this Agreement is terminated for any reason, regardless of what
the Compensation Schedule(s) might provide, no compensation of any kind shall
thereafter be payable.
2.1. COMPENSATION SCHEDULE(S).
The Compensation Schedule(s) attached, or which may hereafter be added, is
incorporated herein and made a part of this Agreement. Company reserves the
right to change such Compensation Schedule(s) at any time upon written notice to
Broker. However, no such change shall be applicable to Policies for which
Company has accepted premiums prior to the effective date of such change.
2.2. ACCOUNTING.
Company will give to Broker a monthly statement of all compensation becoming due
and payable since the date of the previous monthly statement. Unless Company
receives written objection to such monthly statement from Broker, within 90 days
after the date it is mailed to Broker's last known address or delivered to
Broker in person, the same shall be deemed final and binding upon Broker.
2.3. EXCHANGES.
If in the sole discretion of Company a new Policy is issued to replace a
terminated or in force policy of Company or its affiliates or subsidiaries, the
new Policy shall be regarded as an exchanged Policy, and any compensation
payable shall be determined and adjusted by Company in accordance with Company's
then current exchange rules, independent of the Compensation Schedule(s).
2.4. RETURN OF PREMIUM.
If no Policy is issued on an application, the whole amount of all monies
collected by Broker will be immediately returned to the applicant. If Company
finds it necessary, for any reason, to cancel a Policy and refund premiums, any
compensation paid to Broker on the amount refunded shall be repaid to Company,
or may be deducted from any compensation payable to Broker under this Agreement.
2.5. LOCAL TAXES.
Broker is responsible for any county or municipal occupational or privilege fee,
tax or license which may be required of Broker or Representatives as a result of
business submitted hereunder.
3. INDEBTEDNESS.
Company shall have a first lien upon any amounts due, or to become due, Broker
for indebtedness to Company or its affiliates and subsidiaries, whether due or
contingent, of Broker or Broker's assigns under this Agreement. Such
indebtedness may be deducted by Company from such amounts due or to become due.
3.1. GUARANTEE.
If Broker is a corporation or partnership, the principal(s) signing this
Agreement on behalf of Broker jointly and severally guarantee to repay to
Company any indebtedness Company is unable to collect from Broker. Should it
become necessary to take legal action to recover such indebtedness, the
principal(s) jointly and severally agree to be responsible for the reasonable
attorney fees and expenses of Company.
4. TERMINATION.
Termination of this Agreement is effected as follows:
a. Cause. This Agreement may be terminated for cause by Company,
immediately upon written notice to Broker, when Broker or Broker's
partner, director, officer, employee or agent has, or is reasonably
believed to have: (i) misappropriated funds from any policyowner or
from Company; (ii) endeavored to induce Brokers of Company and
Underwriter or registered representatives of Underwriter to leave its
services or policyowners of Company to relinquish their policies;
(iii) interfered with the collection of renewal premiums; (iv) engaged
in fraudulent acts or any other act violative of federal or state law
or other applicable rules or regulations, including the Conduct Rules
of the NASD; (v) been adjudged a bankrupt or executed a general
assignment for benefit of creditors or committed an act of bankruptcy;
or (vi) otherwise acted to prejudice materially the interest of
Company in breach of this Agreement. If Company does not terminate
this Agreement for any such cause, a waiver shall not result and this
Agreement may be terminated under this subparagraph for any subsequent
cause.
b. Death or Dissolution. If Broker is not a corporation or partnership,
this Agreement will terminate on the date of Broker's death. If Broker
is a corporation or partnership, this Agreement will terminate on the
date that the corporation or partnership is dissolved or otherwise
judged by appropriate regulatory agencies to no longer be a legal
entity.
c. License Suspension or Revocation. This Agreement will terminate
immediately in the event of any order of suspension, revocation or
termination of Broker's license by any regulatory authority.
d. Default. This Agreement will terminate immediately upon notice in the
event of:
1. default under this Agreement; or
2. Broker or Broker's associated person's failure to timely and
fully comply with Company directives, rules, regulations or
manuals.
e. Ownership Change. This Agreement will terminate if Broker is not a
natural person and in the event of a significant change in Broker's
ownership or management, or in the event of the execution of an
agreement of sale, transfer or merger of Broker, without prior notice
and consent of Company.
f. Notice. This Agreement may be terminated by either party for any
reason by giving the other party at least 30 days advance written
notice delivered personally or mailed to the last known address of the
other party.
g. Indebtedness. Upon termination of this Agreement, any indebtedness to
Company becomes immediately due and payable.
5. PREVIOUS AGREEMENT.
By execution of this Agreement, any prior agreement between the Company,
Underwriter and the Broker or between Company and the signing principal(s)
related specifically to the business transacted under this Agreement is
terminated as of the effective date of this Agreement; but while this Agreement
remains in force, any rights of Broker to receive compensation under the terms
and conditions of the prior agreement are continued hereunder, and such earned
compensation shall be payable at the rate, for the remainder of the period, and
on the basis applicable as if that agreement remained in force.
6. ENTIRE AGREEMENT.
This Agreement, including any supplements and the Compensation Schedule(s), is
the entire Agreement between the parties for all dealings after its effective
date. This Agreement shall not be assigned without the prior written consent of
Company. No amendment of this Agreement shall be valid unless made in writing by
Company.
7. WAIVER.
No waiver by Company of rights arising from wrongdoing or failure by Broker
shall occur by Company's election not to enforce any provision of this
Agreement, nor reduce or affect Company's rights arising from subsequent
wrongdoing or failure by Broker. Broker releases Company from any liability for
providing social security numbers and tax data to authorized governmental
agencies.
8. NOTICE.
Any written notice given under any provision of this Agreement shall be complete
upon deposit, postage paid, in the U.S. Mail addressed to Broker at Broker's
last known address according to Company's records or to Company or Underwriter
at its Administrative Offices.
9. ARBITRATION.
Any dispute, claim or controversy arising out of or relating to this Agreement,
performance hereunder or the breach hereof, or otherwise arising between Broker
and Company or Underwriter, shall be subject to mandatory arbitration under the
auspices, rules and by-laws of the NASD, as may be amended from time to time,
and any arbitration award may be entered as a judgment in a court of competent
jurisdiction. Notwithstanding the foregoing arbitration requirement, at its
option, Company and/or Underwriter may seek injunctive relief either within the
arbitration process or from a court of competent jurisdiction. Venue for any
such injunctive action shall be in a court located in Noblesville, Hamilton
County, Indiana. Venue for arbitration hearing shall be in Hamilton County,
Indiana.
10. CONSTRUCTION
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
INDIANA EXCLUSIVE OF CHOICE OF LAWS PROVISIONS.
The effective date of this Group Selling Agreement with Great American Reserve
Insurance Company and Conseco Equity Sales, Inc., shall be:
- ------------------------------ ---------------, ---------------.
(Month) (Day) (Year)
<TABLE>
<CAPTION>
<S> <C>
_____________________________________________ Check Type of Legal Entity:
Contract Account Number (Assigned by Company) [ ] Individual [ ] Partnership
[ ] Corporation (NOTE: IF PARTNERSHIP OR
CORPORATION TWO DIFFERENT
SIGNATURES ARE NECESSARY)
- ---------------------------------------------
Type or Print Name of Broker/Dealer
- ---------------------------------------------
Taxpayer Identification Number of Broker/Dealer
- --------------------------------------------- ---------------------------------------------
Type or Print Name of Principal Type or Print Name of Principal
- ---------------------------------------------- ----------------------------------------------
Signature of Principal Signature of Principal
- --------------------------------------------- ----------------------------------------------
Social Security Number of Principal Social Security Number of Principal
GREAT AMERICAN RESERVE CONSECO EQUITY SALES, INC.
INSURANCE COMPANY
By: ________________________________________ By: ________________________________________
Authorized Signature Authorized Signature
---------------------------------------- ----------------------------------------
Type or Print Name Type or Print Name
---------------------------------------- ----------------------------------------
Title Title
---------------------------------------- ----------------------------------------
Date Date
</TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(317) 817-3700
A Stock Company
GREAT AMERICAN RESERVE INSURANCE COMPANY (the "Company") agrees with the Owner
to provide benefits to the Owner, subject to the provisions set forth in this
Contract and in consideration of Purchase Payments received from the Owner.
RIGHT TO EXAMINE CONTRACT: Within 10 days of the date of receipt of this
Contract by the Owner, it may be returned by delivering or mailing it to the
Company at its Administrative Office. When the Contract is received by the
Company, it will be voided as if it had never been in force. The Company will
refund the Contract Value computed at the end of the Valuation Period during
which the Contract is received by the Company at its Administrative Office.
THIS IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY
READ YOUR CONTRACT CAREFULLY
SIGNED FOR THE COMPANY AT CARMEL, INDIANA, ON THE CONTRACT DATE.
ABCDEFGH ABCDEFGH
SECRETARY PRESIDENT
INDIVIDUAL FIXED AND VARIABLE
ANNUITY CONTRACT
NON-PARTICIPATING
WITHDRAWAL VALUES AND THE DEATH BENEFITS PROVIDED BY THIS CONTRACT, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. NON FORFEITURE VALUES MAY INCREASE OR DECREASE
BASED ON THE MARKET VALUE ADJUSTMENT SPECIFIED IN THIS CONTRACT.
TABLE OF CONTENTS
CONTRACT SCHEDULE.............................................................4
DEFINITIONS...................................................................7
PURCHASE PAYMENT PROVISIONS...................................................8
PURCHASE PAYMENTS....................................................8
ALLOCATION OF PURCHASE PAYMENTS......................................9
SEPARATE ACCOUNT PROVISIONS...................................................9
THE SEPARATE ACCOUNTS................................................9
VARIABLE ACCOUNT.....................................................9
VALUATION OF ASSETS..................................................9
ACCUMULATION UNITS...................................................9
ACCUMULATION UNIT VALUE..............................................9
MORTALITY AND EXPENSE RISK CHARGE...................................10
ADMINISTRATIVE CHARGE...............................................10
DISTRIBUTION EXPENSE CHARGE.........................................10
MVA ACCOUNT PROVISIONS.......................................................10
MVA ACCOUNT.........................................................10
INTEREST TO BE CREDITED.............................................10
GUARANTEE PERIOD....................................................10
MULTIPLE GUARANTEE PERIODS..........................................10
CHANGE IN GUARANTEE PERIOD..........................................10
MARKET VALUE ADJUSTMENT.............................................11
MVA ACCOUNT VALUES..................................................11
FIXED ACCOUNT PROVISIONS.....................................................11
FIXED ACCOUNT VALUES................................................11
INTEREST TO BE CREDITED.............................................11
CONTRACT VALUE...............................................................11
CONTRACT MAINTENANCE CHARGE..................................................12
DEDUCTION FOR CONTRACT MAINTENANCE CHARGE...........................12
TRANSFERS....................................................................12
TRANSFERS DURING THE ACCUMULATION PERIOD............................12
TRANSFERS DURING THE ANNUITY PERIOD.................................12
WITHDRAWAL PROVISIONS........................................................13
WITHDRAWALS.........................................................13
CONTINGENT DEFERRED SALES CHARGE....................................13
WITHDRAWAL CHARGE...................................................13
PROCEEDS PAYABLE ON DEATH....................................................13
DEATH OF OWNER DURING THE ACCUMULATION PERIOD.......................13
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD.................13
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD................14
DEATH OF OWNER DURING THE ANNUITY PERIOD............................14
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD...................14
DEATH OF THE ANNUITANT DURING THE ANNUITY PERIOD....................14
PAYMENT OF DEATH BENEFIT............................................14
BENEFICIARY.........................................................14
CHANGE OF BENEFICIARY...............................................15
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION.................................15
OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS...........................15
OWNER...............................................................15
JOINT OWNER.........................................................15
ANNUITANT...........................................................15
ASSIGNMENT OF A CONTRACT............................................16
ANNUITY PROVISIONS...........................................................16
GENERAL.............................................................16
ANNUITY DATE........................................................16
SELECTION OF AN ANNUITY OPTION......................................16
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS............................16
ANNUITY OPTIONS.....................................................16
OPTION 1. INCOME FOR SPECIFIED PERIOD
OPTION 2. LIFE INCOME.......................................16
OPTION 3. INCOME OF SPECIFIED AMOUNT.........................16
OPTION 4. JOINT AND SURVIVOR INCOME..........................16
ANNUITY.............................................................17
FIXED ANNUITY.......................................................17
VARIABLE ANNUITY....................................................17
ANNUITY UNIT........................................................17
MORTALITY TABLES....................................................17
GENERAL PROVISION............................................................17
THE CONTRACT........................................................17
MISSTATEMENT OF AGE.................................................18
INCONTESTABILITY....................................................18
MODIFICATION........................................................18
NON-PARTICIPATION...................................................18
EVIDENCE OF SURVIVAL................................................18
PROOF OF AGE`.......................................................18
PROTECTION OF PROCEEDS..............................................18
REPORTS.............................................................18
PREMIUM TAXES.......................................................18
OTHER TAXES.........................................................18
REGULATORY REQUIREMENTS.............................................18
ANNUITY OPTION TABLES........................................................19
CONTRACT SCHEDULE
OWNER: [John Doe] CONTRACT ISSUE DATE: [November 1, 1997]
CONTRACT NUMBER: [12345] ANNUITY DATE: [November 1, 2032]
<TABLE>
<CAPTION>
<S> <C>
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$5,000 Non-Qualified; $2,000 IRA]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: [$500 ($50 for IRAs & EFTs); or $200 monthly for
non qualified contracts if the automatic premium
check option is elected.]
MAXIMUM TOTAL PURCHASE PAYMENT: [$500,000, without prior Company approval]
</TABLE>
ALLOCATION GUIDELINES:
[1. The Owner can select any of the investment options, including the
Sub-Accounts of the Variable Account, the MVA Account and the Fixed
Account Options. However, Owners are limited to 15 Sub-Accounts at any
one time.
2. If the Purchase Payments and forms required to issue a Contract are
in good order, the initial Purchase Payment will be credited to the
Contract within two (2) business days after receipt at the
Administrative Office. Additional Purchase Payments will be credited
to the Contract as of the Valuation Period when they are received.
3. Allocation percentages must be in whole numbers. Each allocation
must be at least 1%.
4. The minimum amount which must be allocated for any Guarantee Period
in the MVA Account is $2,000. The company reserves the right to change
this minimum in the future.]
BENEFICIARY:
[As designated by the Owner at the Contract Issue Date, unless
subsequently changed.]
CONTRACT MAINTENANCE CHARGE:
[The Contract Maintenance Charge is $30 each Contract Year. The
Company reserves the right to change the Contract Maintenance Charge
but it will not exceed $60 per Contract Year. During the Accumulation
Period, if the Contract Value on the Contract Anniversary is at least
$50,000, then no Contract Maintenance Charge will be deducted. During
the Accumulation Period, a total withdrawal is made on other than a
Contract Anniversary and the Contract Value for the Valuation Period
during which the total withdrawal is made is less than $50,000, the
full Contract Maintenance Charge will be deducted at the time of the
total withdrawal. If at annuitization, the Annuity Date is not the
Contract Anniversary and the Contract Value on the Annuity Date is
less than $50,000, then the full Contract Maintenance Charge will be
deducted on the Annuity Date. During the Annuity Period, no Contract
Maintenance Charge will be deducted.]
MORTALITY AND EXPENSE RISK CHARGE:
[Equal, on an annual basis, to 1.25% of the average daily net asset
value of the Variable Account.]
ADMINISTRATIVE CHARGE:
Equal, on an annual basis, to .15% of the average daily net asset
value of the Variable Account. The Company may increase this charge;
however, the maximum Administrative Charge will not exceed .25% of the
average daily net asset value of the Variable Account. In the event of
an increase, the Company will give Owners 90 days prior notice of the
increase.]
DISTRIBUTION EXPENSE CHARGE:
[NONE]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: [There are currently no limits on the
number of transfers that can be made during the Accumulation Period.
Owners are permitted two transfers per Contract Year during the
Annuity Period.]
TRANSFER FEE: [The Company does not assess a Transfer Fee on one
transfer in a 30 day period during the Accumulation Period or the two
transfers permitted during the Annuity Period. You can transfer among
the Sub-Accounts at least once every 30 days. If you transfer more
often, you may be assessed a $25 fee. The Company reserves the right
to change the transfer fee. All reallocations made on a given date
count as one transfer. Transfers made at the end of the Right to
Examine Contract period by the Company and any transfers made pursuant
to a pre-approved Dollar Cost Averaging Program or pursuant to a
pre-approved Rebalancing Program will not be counted in determining
the application of the Transfer Fee.]
MINIMUM AMOUNT TO BE TRANSFERRED: [$500 (from any Sub-Account or any
Guarantee Period of the MVA Account), or the Owner's entire interest
in the Sub-Account or the Guarantee Period, if less. This requirement
is waived if the transfer is pursuant to a pre-approved Dollar Cost
Averaging Program or Rebalancing Program. Transfers from the Fixed
Account are limited to 20% of the Contract Value every six (6)
months.]
MINIMUM AMOUNT WHICH MUST REMAIN IN EACH ACCOUNT AFTER A TRANSFER:
[$500 per Sub-Account or a Guarantee Period in the MVA Account; or $0
if the entire amount in any Sub-Account of the Variable Account or a
Guarantee Period in the MVA Account is transferred.]
MAXIMUM AMOUNT WHICH CAN BE TRANSFERRED FROM THE FIXED ACCOUNT OR MVA
ACCOUNT TO THE VARIABLE ACCOUNT: [NONE]
WITHDRAWALS:
CONTINGENT DEFERRED SALES CHARGE: A Contingent Deferred Sales Charge
is assessed against each Purchase Payment withdrawn [and will result
in a reduction in remaining Contract Value.] The Purchase Payment is
tracked from its date of receipt and the charges are determined in
accordance with the following:
Number of Years from Receipt Contingent Deferred
of Purchase Payment Sales Charge
------------------- ------------
1st Year 7%
2nd Year 7%
3rd Year 6%
4th Year 5%
5th Year 4%
6th Year 3%
7th Year 2%
8th Year and later 0%
Waiver of Contingent Deferred Sales Charge: In every Contract Year, an amount
equal to the greater of: (i) 10% of the Contract Value, on a non-cumulative
basis, (ii) the IRS minimum distribution requirement, if the Contract was issued
as an IRA, or (iii) the total premiums paid that have been in the Contract more
than seven complete years is available free of Contingent Deferred Sales
Charges.
WITHDRAWAL CHARGE: [NONE]
MINIMUM PARTIAL WITHDRAWAL: [$500 from each Sub-Account of the Variable Account,
each Guarantee Period of the MVA Account and the Fixed Account. This requirement
is waived if the partial withdrawal is pursuant to the Systematic Withdrawal
Program.]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN CONTRACT AFTER A PARTIAL WITHDRAWAL:
[$500]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN ANY SUB-ACCOUNT OF THE VARIABLE
ACCOUNT AFTER A PARTIAL WITHDRAWAL: [$500]
MAXIMUM AMOUNT WHICH CAN BE WITHDRAWN FROM THE FIXED AND MVA ACCOUNTS: [There is
currently no limitation on the maximum amount which can be withdrawn from the
Fixed Account or the MVA Account.]
<TABLE>
<CAPTION>
<S> <C>
SEPARATE ACCOUNTS: Variable Account [Great American Reserve Variable Annuity Account F for the
Variable Annuity portion of the Contract.]
and
MVA Account [Great American Reserve Market Value Adjustment Account for the
portion of the Contract that may be subject to a Market Value Adjustment.]
</TABLE>
MVA ACCOUNT:
Minimum Guaranteed Interest Rate: 3%
Current MVA Account Guarantee Period Options and
Credited Interest Rates:
[1 Year]. [XX%]
[3 Years] [XX%]
[5 Years] [XX%]
MARKET VALUE ADJUSTMENT FACTOR: [The Market Value Adjustment Factor is equal to:
N/365
[(1 + A)/ (1 + B)] - 1
where:
A = the U.S. Treasury rate in effect at the beginning of the
Guarantee Period for the length of the guarantee period
selected.
B = the current U.S. Treasury rate as of the transaction date
plus .005. Treasury rate period is determined by N/365
rounded to the next highest year.
N = the number of days remaining in the MVA Guarantee Period.]
If the Treasury rate is not available for the period, the rate will be
arrived at by interpolation. If no Treasury rates are available, an
Index will be selected by the Company and approved by the State
Insurance Commissioner.
[MVA Waiver: For withdrawals from MVA Account Guarantee Period Option,
after the first year in such Guarantee Period option, the Owner can
make one withdrawal each Contract Year of up to a total of 10% of each
such Guarantee Period option of the MVA Account without the Market
Value Adjustment.]
FIXED ACCOUNT:
Minimum Guarantee Interest Rate: 3%
Current Interest Rate as of Issue Date: [X%]
RIDERS:
[IRA ENDORSEMENT]
ADMINISTRATIVE OFFICE:
<TABLE>
<CAPTION>
<S> <C>
[Great American Reserve Insurance Company Great American Reserve Insurance Company
Administrative Office Administrative Office
P.O. Box 1927..... OR 11815 N. Pennsylvania Street
Carmel, IN 46032 Carmel. IN 46032]
(800) 824-2726
(317) 817-3700
</TABLE>
DEFINITIONS
ACCOUNT(S): The Fixed Account, the MVA Account and the General Account and/or
one or more of the Sub-Accounts of the Variable Account.
ACCUMULATION PERIOD: The period prior to the Annuity Date during which Purchase
Payments may be made by an Owner.
ACCUMULATION UNIT: A unit of measure used to determine the value of an Owner's
interest in a Sub-Account of the Variable Account during the Accumulation
Period.
ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax, and
Contract Maintenance Charge and plus the applicable Market Value Adjustment
which may be positive or negative. This amount is applied to the applicable
Annuity Tables to determine Annuity Payments.
AGE: The age of any Owner or Annuitant on his or her last birthday. For Joint
Owners, all provisions which are based on age are based on the Age of the older
of the Joint Owners.
ADMINISTRATIVE OFFICE: The office address indicated on the Contract Schedule of
the Contract to which notices, requests and Purchase Payments must be sent. All
sums payable to the Company under this Contract are payable at the
Administrative Office or an address designated by the Company in writing.
ANNUITANT: The natural person on whose life Annuity Payments are based. On or
after the Annuity Date, the Annuitant shall also include any Joint Annuitant.
ANNUITY DATE: The date on which Annuity Payments begin. The Annuity Date is
shown on the Contract Schedule.
ANNUITY OPTIONS: Options available for Annuity Payments.
ANNUITY PAYMENTS: The series of payments made to the Owner or any named payee
after the Annuity Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning with the Annuity Date during which
Annuity Payments are made.
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
Annuity Payments.
AUTHORIZED REQUEST: A request, in a form satisfactory to the Company, which is
received by the Administrative Office.
BENEFICIARY: The person(s) or entity(ies) who will receive the death benefit
payable under this Contract.
COMPANY: Great American Reserve Insurance Company
CONTRACT ANNIVERSARY: An anniversary of the Contract Issue Date.
CONTRACT ISSUE DATE: The later of the date on the cover of the Contract or the
date Purchase Payments are received. The Contract Issue Date is shown on the
Contract Schedule.
CONTRACT VALUE: The dollar value as of any Valuation Period of all amounts in
the Contract.
CONTRACT WITHDRAWAL VALUE: The Contract Value, less any applicable Premium Tax,
plus any Market Value Adjustment which may be positive or negative, less any
Contingent Deferred Sales Charge and less any applicable Contract Maintenance
Charge.
CONTRACT YEAR: The first Contract Year is the annual period which begins on the
Contract Issue Date. Subsequent Contract Years begin on each anniversary of the
Contract Issue Date.
CREDITED INTEREST RATE: The interest rate credited to the Contract by the
Company for any given Guarantee Period in the MVA Account or the Fixed Account.
The Credited Interest Rates for the available Guarantee Periods for the MVA
Account and the Fixed Account are shown on the Contract Schedule.
EFFECTIVE DATE: The beginning date of a Guarantee Period with a Credited
Interest Rate.
ELIGIBLE FUND: An investment entity that is made available for this Contract.
FIXED ACCOUNT: An investment option within the General Account.
FIXED ANNUITY: A series of payments made during the Annuity Period which are
guaranteed as to dollar amount by the Company.
GENERAL ACCOUNT: The Company's general investment account which contains all the
assets of the company except for the Variable Account and any other segregated
asset accounts.
GUARANTEE PERIOD: The period for which the Credited Interest Rate is credited in
the MVA Account. Each deposit or transfer to the MVA Account creates one or more
new Guarantee Period(s). The Guarantee Periods selected by the Owner are shown
on the Contract Schedule.
MARKET VALUE ADJUSTMENT: An adjustment to the amount withdrawn or transferred
from an MVA Account prior to the end of the applicable Guarantee Period. The
adjustment reflects the change in the value of the funds withdrawn or
transferred due to the change in the interest rates since the beginning of the
Guarantee Period.
MVA ACCOUNT: A separate account which provides investment options where the
Company guarantees the rate of interest for a specified Guarantee Period and
where withdrawals or transfers may be subject to a Market Value Adjustment.
OWNER: The person(s) who owns the Contract.
PORTFOLIO: A segment of an Eligible Fund which constitutes a separate and
distinct class of shares.
PREMIUM TAX: Any premium taxes payable to any government entity and assessed
against Purchase Payments or Contract Value.
PURCHASE PAYMENT: A payment made by or for an Owner with respect to this
Contract. All payments must be made payable to the Company.
SUB-ACCOUNT: Variable Account assets are divided into Sub-Accounts. Assets of
each Sub-Account will be invested in shares of an Eligible Fund or a Portfolio
of an Eligible Fund.
VALUATION DATE: Each day on which the New York Stock Exchange ("NYSE") is open
for business.
VALUATION PERIOD: The period of time beginning at the close of business of the
NYSE on each Valuation Date and ending at the close of business for the next
succeeding Valuation Date.
VARIABLE ACCOUNT: A separate account which provides investment options where the
benefits are variable and are not guaranteed as to dollar amount,
WRITTEN REQUEST: A request in writing, in a form satisfactory to the Company,
which is received by the Administrative Office.
PURCHASE PAYMENT PROVISIONS
PURCHASE PAYMENTS: The initial Purchase Payment for an Owner is due on the
Contract Issue Date. Subject to the maximum and minimum amounts shown on the
Contract Schedule, the Owner may make subsequent Purchase Payments and may
increase or decrease or change the frequency of such payments. The Company
reserves the right to reject any Application or Purchase Payment.
ALLOCATION OF PURCHASE PAYMENTS: Purchase Payments are allocated to the Fixed
Account and/or to one or more of the MVA Account Guarantee Period options and/or
to one or more Sub-Accounts of the Variable Account in accordance with the
selections made by the Owner. The allocation of the initial Purchase Payment for
an Owner is made in accordance with the selection made by the Owner at the
Contract Issue Date. Unless otherwise changed by the Owner, subsequent Purchase
Payments are allocated in the same manner as the initial Purchase Payment.
Allocation of the Purchase Payments is subject to the Allocation Guidelines
shown on the Contract Schedule. The Company reserves the right to allocate
initial Purchase Payment to the Money Market Sub-Account (except for any amounts
allocated to the Fixed Account and/or MVA Account) until the expiration of the
Right to Examine Period.
SEPARATE ACCOUNT PROVISIONS
THE SEPARATE ACCOUNTS: The Separate Account consist of assets set aside by the
Company, which are kept separate from that of the general assets and any other
separate account assets of the Company.
VARIABLE ACCOUNT: The assets of the Variable Account will not be charged with
liabilities arising out of any other business the Company may conduct.
The Variable Account assets are divided into Sub-Accounts. The assets of the
Sub-Accounts are allocated to the Eligible Fund(s) and the Portfolio(s), if any,
within an Eligible Fund. Should the shares of any such Eligible Fund(s) or any
Portfolio(s) within an eligible Fund become unavailable for investment by the
Variable Account, or the Company's Board of Directors deems further investment
in these shares inappropriate, the Company may limit further purchase of such
shares or substitute shares of another Eligible Fund or Portfolio for shares
already purchased under a Contract.
VALUATION OF ASSETS: The assets of the Accounts are valued at their fair market
value in accordance with procedures of the Company.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Sub-Accounts of the Variable Account as a
result of Purchase Payments, withdrawals, transfers, or fees and charges. The
Company will determine the number of Accumulation Units of a Sub-Account
purchased or canceled. This will be done by dividing the amount allocated to (or
the amount withdrawn from) the Sub-Account by the dollar value of one
Accumulation Unit of the Sub-Account as of the end of the Valuation Period
during which the request of the transaction is received at the Administrative
Office.
ACCUMULATION UNIT VALUE: The Accumulation Unit Value for each Sub-Account is
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Sub-Account are determined by multiplying the Accumulation Unit Value for the
immediately preceding Valuation Period by the Net Investment Factor for the
Sub-Account for the current period.
The Net Investment Factor for each Sub-Account is determined by dividing A by B
and subtracting C where:
A is (i) the net asset value per share of the Eligible Fund or
Portfolio of an Eligible Fund held by the Sub-Account at the
end of the current Valuation Period; plus
(ii) any dividend or capital gains per share declared on
behalf of such Eligible Fund or Portfolio that has an
ex-dividend date within the current Valuation Period; plus
(iii) a charge factor, if any, for any taxes or any tax
reserve established by the Company as a result of the
operation or maintenance of the Sub-Account.
B is the net asset value per share of the Eligible Fund or Portfolio
held by the Sub-Account for the immediately preceding Valuation Period.
C is the Valuation Period equivalent of the per month Mortality and
Expense Risk Charge, for the Administrative Charge and for the
Distribution Charge, if any, which are shown on the Contract Schedule.
The Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
MORTALITY AND EXPENSE RISK CHARGE: Each Valuation Period, the Company deducts a
Mortality and Expense Risk Charge from the Variable Account which is equal, on
an annual basis, to the amount shown on the Contract Schedule. The Mortality and
Expense Risk charge compensates the Company for assuming the mortality and
expense risks under this Contract.
ADMINISTRATIVE CHARGE: Each Valuation Period, the Company deducts an
Administrative Charge from the Variable Account which is equal, on an annual
basis, to the amount shown on the Contract Schedule. The Administrative Charge
compensates the Company for the costs associated with the administration of this
Contract and the Variable Account.
DISTRIBUTION EXPENSE CHARGE: Each Valuation Period, the Company deducts a
Distribution Expense Charge from the Variable Account which is equal, on an
annual basis, to the amount shown on the Contract Schedule. The Distribution
charge compensates the Company for the costs associated with the distribution of
the Contracts.
MVA ACCOUNT PROVISIONS
MVA ACCOUNT: The assets of the MVA Account will not be charged with liabilities
arising out of any other business the Company may conduct.
Purchase Payments may be allocated to one or more of the MVA Account Guarantee
Period options which are available at the time the Purchase Payment is made. The
initial MVA Account Guarantee Period options are shown on the Contract Schedule.
In addition, during the Accumulation Period, Contract Values can be transferred
from the Variable Account and/or the Fixed Account to one or more of the MVA
Account Guarantee Period options.
INTEREST TO BE CREDITED: The Credited Interest Rate for the Guarantee Period(s)
of the MVA Account is shown on the Contract Schedule. After the initial
Guarantee Period, the Credited Interest Rate for any subsequent Guarantee Period
of the MVA Account may change. All interest payable under this Contract is
compounded daily at the stated effective annual interest rate. In no event will
the Credited Interest Rate be less than the Minimum Guaranteed Interest Rate,
prior to the application of the Market Value Adjustment, specified on the
Contract Schedule.
GUARANTEE PERIOD: The Current MVA Account Guarantee Period is shown on the
Contract Schedule. During the thirty (30) days prior to the end of a current
Guarantee Period, the Owner may renew for the same or any other Guarantee Period
then available at the then Credited Interest Rate or may elect to transfer all
or a portion of the amount to a Fixed Account option, if available, or to the
Variable Account. Any transfer elected during the thirty (30) days prior to the
end of a current Guarantee Period will be made as of the date the request is
received by the Company and will not be subject to any Market Value Adjustment.
If the Owner does not specify a Guarantee Period at the time of renewal, the
Company will select and transfer to the same Guarantee Period as has just
expired, so long as such Guarantee Period does not extend beyond the latest
Annuity Date that can be selected by an Owner. If such Guarantee Period does
extend beyond the latest Annuity Date, the Company will choose the one year
period. If there is no Guarantee Period for the same period available, the one
year period will be selected. If the one year period is no longer available, the
next longest period available will be selected.
MULTIPLE GUARANTEE PERIODS: The Owner may elect one or more Guarantee Periods
subject to the Company's underwriting rules. Multiple Guarantee Periods are
treated separately for purposes of applying the Market Value Adjustment. The
Company reserves the right to credit different Credited Interest Rates to the
Contract Value attributable:
1. to different Guarantee Periods; and
2. to Guarantee Periods of the same duration with different Effective
Dates.
CHANGES IN GUARANTEE PERIOD: The Owner may, upon Written Request, change to any
Guarantee Period then being offered by the Company with respect to contracts of
this type and class. The Market Value Adjustment will apply to a change made at
any time other than at the end of a Guarantee Period. The Market Value
Adjustment will not apply to a change made at the end of a Guarantee Period if
Written Request is received by the Company within thirty (30) days prior to the
end of the Guarantee Period.
MARKET VALUE ADJUSTMENT: Any amount withdrawn, transferred or annuitized prior
to the end of a Guarantee Period may be subject to a Market Value Adjustment.
The Market Value Adjustment will be calculated by multiplying the amount
withdrawn, transferred or annuitized by the formula shown on the Contract
Schedule.
There will be no Market Value Adjustment on withdrawals from the MVA Account in
the following situations: (1) death benefit paid under this Contract; (2)
amounts withdrawn to pay fees or charges; (3) amounts withdrawn or transferred
from the MVA Account during the thirty (30) days prior to the end of the
Guarantee Period; (4) an Owner annuitizes this Contract under an Annuity Option
providing for at least sixty (60) monthly Annuity Payments; and (5) any
withdrawal subject to the MVA Waiver shown on the Contract Schedule.
MVA ACCOUNT VALUES: The MVA Account portion of a Contract at any time is equal
to:
1. The Purchase Payments allocated to the MVA Account on behalf of an
Owner; plus
2. the Contract Value transferred to the MVA Account; plus
3. interest credited to the Contract Value in the MVA Account; less
4. any prior withdrawals of Contract Value in the MVA Account and any
Contingent Deferred Sales Charge; less
5. any Contract Value transferred from the MVA Account; less
6. Contract Maintenance Charges or Transfer Fees deducted from the
Contract Value allocated to the MVA Account.
Any subsequent Purchase Payments and transfers to the MVA Account will be
allocated to a new Guarantee Period with a new Effective Date.
FIXED ACCOUNT PROVISIONS
FIXED ACCOUNT VALUES: The Fixed Account portion of a contract at any time is
equal to:
1. the Purchase Payments allocated to the Fixed Account on behalf of an
Owner; plus
2. the Contract Value transferred to the Fixed Account; plus
3. interest credited to the Contract Value in the Fixed Account; less
4. any prior withdrawals of Contract Value in the Fixed Account and any
Contingent Deferred Sales Charge; less
5. any Contract Value transferred from the Fixed Account; less
6. Contract Maintenance Charges or Transfer Fees deducted from the
Contract Value allocated to the Fixed Account.
INTEREST TO BE CREDITED: The Company guarantees that the interest to be credited
to the Fixed Account will not be less than the Minimum Guaranteed Interest Rate
shown on the Contract Schedule. The Company may credit additional interest at
its sole discretion for any Fixed Account option. The Fixed Account option and
the Initial Current Interest Rate are shown on the Contract Schedule.
CONTRACT VALUE
The Contract Value for any Valuation Period is the sum of the Contract Value in
each of the Sub-Accounts of the Variable Account, the Contract Value in the MVA
Account and the Contract Value in the Fixed Account.
The Contract Value in a Sub-Account of the Variable Account is determined by
multiplying the number of Accumulation Units allocated to the Owner's Account
for the Sub-Account by the Accumulation Unit Value.
Withdrawals will result in the cancellation of Accumulation Units in a
Sub-Account or a reduction in the Contract Value in the Fixed Account or the MVA
Account, as applicable.
CONTRACT MAINTENANCE CHARGE
DEDUCTION FOR CONTRACT MAINTENANCE CHARGE: During the Accumulation Period, on
each Contract Anniversary the Company will deduct a Contract Maintenance Charge
from the Contract Value by reducing the Contract Value in the Fixed Account
and/or the MVA Account and by canceling Accumulation Units from each applicable
Sub-Account to reimburse it for expenses relating to maintenance of the
Contract. The Contract Maintenance Charge will be deducted first from the Fixed
Account and if there is insufficient value in the Fixed Account, then the
Contract Maintenance Charge will be deducted from the MVA Account or the
Sub-Account of the Variable Account with the largest balance. The Contract
Maintenance Charge is shown on the Contract Schedule.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: Subject to any limitation imposed by
the Company on the number of transfers during the Accumulation Period shown on
the Contract Schedule, an Owner may transfer all or part of this Contract Value
in the Fixed Account, the MVA Account or a Sub-Account by Authorized Request
without the imposition of any Transfer Fee if there have been no more than the
number of free transfers shown on the Contract Schedule for the Contract Year.
All transfers are subject to the following:
1. If more than the number of free transfers, shown on the Contract
Schedule, have been made in a Contract Year, the Company will deduct a
Transfer Fee, shown on the Contract Schedule, for each subsequent
transfer permitted. The Transfer Fee is deducted from the Account which
is the source of the transfer. However, if the Owner's entire interest
in an Account is being transferred, the Transfer Fee will be deducted
from the amount which is transferred. If there are multiple source
Accounts, the Transfer Fee will be allocated first to the Fixed Account
and then to the Sub-Account or the MVA Account with the largest balance
involved in a transfer transaction.
2. The minimum amount which can be transferred from a Sub-Account is
shown on the Contract Schedule. The minimum amounts which must remain
in a Sub-Account, the Fixed and the MVA Account are shown on the
Contract Schedule. The maximum amounts which can be transferred from
the Fixed Account or the MVA Account to the Variable Account are shown
on the Contract Schedule.
3. The Company reserves the right, at any time and without prior notice
to any party, to terminate, suspend or modify the transfer privilege
described above.
If an Owner elects to use this transfer privilege, the Company will not be
liable for transfers made in accordance with the instructions received from the
Owner or other authorized persons. All amounts and Accumulation Units will be
determined as of the end of the Valuation Period during which the request for
transfer is received at the Administrative Office.
TRANSFERS DURING THE ANNUITY PERIOD: Subject to any limitations imposed by the
Company on the number of transfers during the Annuity Period shown on the
Contract Schedule, the Owner may transfer Annuity Units in accordance with the
following::
1. Transfers may be made upon written notice to the Company at least
thirty (30) days before the due date of the first Annuity Payment for
which the change will apply. Transfers will be made by converting the
number of Annuity Units being transferred to the number of Annuity
Units of the Sub-Account to which the transfer is made, so that the
next Annuity Payment, if it were made at that time would be the same
amount that it would have been without the transfer. Thereafter,
Annuity Payments will reflect changes in the value of the new Annuity
Units.
2. If more than the number of free transfers, shown on the Contract
Schedule, have been made in a Contract Year, the Company will deduct a
Transfer Fee, shown on the Contract Schedule, for each subsequent
transfer. The Transfer Fee is deducted from the Account which is the
source of the transfer. However, if the Owner's entire interest in an
Account is being transferred, the Transfer Fee will be deducted from
the amount which is transferred. If there are multiple source Accounts,
the Transfer Fee will be allocated first to the Fixed Account and then
to the Sub-Account or the MVA Account with the largest balance involved
in the transfer transaction.
3. The minimum amount which can be transferred from a Sub-Account is
shown on the Contract Schedule. The minimum amount which must remain in
a Sub-Account after a transfer is shown on the Contract Schedule.
4. No transfers can be made between the General Account and the
Variable Account.
5. The Company reserves the right, at any time and without prior
notice, to terminate, suspend or modify the transfer privilege
described above.
If an Owner elects to use this transfer privilege, the Company will not be
liable for transfers made in accordance with instructions received from the
Owner or other authorized persons. All amounts and Annuity Units will be
determined as of the end of the Valuation Period during which the request for
transfer is received at the Administrative Office.
WITHDRAWAL PROVISIONS
WITHDRAWALS: During the Accumulation Period, the Owner may, upon Written
Request, make a total or partial withdrawal of the Contract Withdrawal Value.
The Owner must specify by Written Request which Sub-Account or Guarantee Period
of the MVA Account or Fixed Account, as applicable, is the source of the partial
withdrawal.
A withdrawal from the MVA Account may be subject to a Market Value Adjustment.
The Company will pay the amount of any withdrawal from the Variable Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payment Provision is in effect.
Each partial withdrawal must be for an amount which is not less than the minimum
amount shown on the Contract Schedule. The minimum Contract Value which must
remain in a Sub-Account after a partial withdrawal is shown on the Contract
Schedule. The maximum amounts which can be withdrawn from the Fixed Account
and/or the MVA Account are shown on the Contract Schedule.
CONTINGENT DEFERRED SALES CHARGE: Upon a withdrawal of Contract Value, a
Contingent Deferred Sales Charge, as set forth on the Contract Schedule, may be
assessed.
WITHDRAWAL CHARGE: Upon a withdrawal of Contract Value, a Withdrawal Charge, as
set forth on the Contract Schedule, may be assessed.
PROCEEDS PAYABLE ON DEATH
DEATH OF OWNER:
DURING THE ACCUMULATION PERIOD: Upon the death of the Owner, or any Joint Owner,
during the Accumulation Period, the death benefit will be paid to the
Beneficiary(ies) designated by the Owner. Upon the death of any Joint Owner, the
surviving Joint Owner, if any, will be treated as the Primary Beneficiary. Any
other Beneficiary designation on record at the time of death will be treated as
a contingent Beneficiary.
A Beneficiary may request that the death benefit be paid under one of the Death
Benefit Options below. If the Beneficiary is the spouse of the Owner, he or she
may elect to continue the Contract at the then current Contract Value in his or
her own name and exercise all the Owner's right under the Contract.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD: If death occurs prior to
age 90, the death benefit will be the greater of:
1. the total Purchase Payments, less any prior Adjusted Partial
Withdrawals, accumulated at 5% per year up to the date of death . Adjusted
Partial Withdrawals are equal to: the Partial Withdrawal multiplied by the
Death Benefit just before the Partial Withdrawal, divided by the Contract
Value just before Partial Withdrawal; or
2. the Contract Value determined as of the end of the Valuation Period
during which the Company receives both due proof of death and an election
for the payment method.
If death occurs at age 90 or later, the death benefit will be the Contract Value
determined as of the end of the Valuation Period during which the Company
received both due proof of death and an election for the payment method.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD: A non-spousal Beneficiary
must elect the death benefit to be paid under one of the following options in
the event of the death of the Owner or any Joint Owner during the Accumulation
Period:
Option 1 - lump sum payment of the death benefit; or
Option 2 - the payment of the entire death benefit within 5 years of
the date of the death of the Owner or any Joint Owner; or
Option 3 - payment of the death benefit under an Annuity Option over
the lifetime of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the Owner or any Joint Owner.
Any portion of the death benefit not applied under Option 3 within one year of
the date of the Owner's death, must be distributed within five years of the date
of death.
A spousal Beneficiary may elect to continue the Contract in his or her own name
at the then current Contract Value, elect a lump sum payment of the death
benefit or apply the death benefit to an Annuity Option.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision, as set forth on page 15 of this Contract, is in
effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period beginning with the date of receipt of proof of death.
DURING THE ANNUITY PERIOD: If the Owner, or any Joint Owner, who is not the
Annuitant, dies during the Annuity Period, any remaining payments under the
Annuity Option elected will continue at least as rapidly as under the method of
distribution in effect at such Owner's or Joint Owner's death. Upon the death of
any Owner during the Annuity Period, the Beneficiary becomes the Owner. Upon the
death of any Joint Owner during the Annuity Period, the surviving Joint Owner,
if any, will be treated as the Primary Beneficiary. Any other Beneficiary
designation on record at the time of death will be treated as a Contingent
Beneficiary.
DEATH OF ANNUITANT:
DURING THE ACCUMULATION PERIOD: Upon the death of an Annuitant, who is not the
Owner, during the Accumulation Period, the Owner may designate a new Annuitant,
subject to the Company's underwriting rules then in effect. If no designation is
made within thirty (30) days of the death of the Annuitant, the Owner will
become the Annuitant effective as of the death of the Annuitant. If the Owner is
a non-natural person, the death of the Annuitant will be treated as the death of
the Owner and a new Annuitant may not be designated.
DURING THE ANNUITY PERIOD: Upon the death of the Annuitant during the Annuity
Period, the death benefit, if any, will be as specified in the Annuity Option
elected. Death benefits will be paid at least as rapidly as under the method of
distribution in effect at the Annuitant's death.
PAYMENT OF DEATH BENEFIT: The Company will require due proof of death before any
death benefit is paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the
finding of death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
BENEFICIARY: The Beneficiary designation in effect on the Contract Issue Date
will remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the Owner.
Unless the Owner provides otherwise, the death benefit will be paid in equal
shares to the survivor(s) as follows:
1. to the Primary Beneficiary(ies) who survive the Owner's and/or the
Annuitant's death, as applicable; or if there are none
2. to the Contingent Beneficiary(ies) who survive the Owner's and/or the
Annuitant's death, as applicable; or if there are none
3. to the estate of the Owner.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), the Owner may change the Primary Beneficiary(ies) or
Contingent Beneficiary(ies). A change may be made by Written Request. The change
will take effect as of the date the Written Request is signed. The Company will
not be liable for any payment made or action taken before it records the change.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
The Company reserves the right to suspend or postpone payments from the Variable
Account for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);or
2. trading on the New York Stock Exchange is restricted; or
3. an emergency exists as a result of which disposal of securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Variable
Account's net assets; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners;
providing that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) or (3)
exist.
The Company further reserves the right to postpone payments from the Fixed
Account and the MVA Account for a period of up to six (6) months.
OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS
OWNER: The Owner has all interest and right to amounts held in this Contract.
The Owner is the person designated as such on the Contract Issue Date, unless
changed.
The Owner may change owners of the Contract at any time by Written Request. A
change of owner will automatically revoke any prior designation of owner. The
change will become effective as of the date the Written Request is signed. The
Company will not be liable for any payment made or action taken before it
records the change..
JOINT OWNER: A Contract may be owned by Joint Owners. If Joint Owners are named,
any Joint Owner must be the spouse of the other Owner. Upon the death the either
Joint Owner, the surviving spouse will be the Primary Beneficiary. Any other
Beneficiary designation will be treated as a Contingent Beneficiary unless
otherwise indicated in a Written Request.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by the Owner at the Contract Issue Date,
unless changed prior to the Annuity Date. In the event that the Annuitant dies
prior to the Annuity Date, the Owner must designate a new Annuitant. If no new
Annuitant is designated by the Owner within 30 days of the death of the
Annuitant, effective as of the death of the Annuitant, the Owner becomes the
Annuitant. The Annuitant may not be changed in a Contact which is owned by a
non-natural person. Any change of Annuitant is subject to the Company's
underwriting rules in effect at the time the request is recorded by the Company.
ASSIGNMENT OF A CONTRACT: A Written Request specifying the terms of an
assignment of a Contact must be provided to the Administrative Office. The
Company will not be liable for any payment made or action taken before it
records the assignment. The Company will not be responsible for the validity or
tax consequences of any assignment. Any assignment made after the death benefit
has become payable will be valid only with Company consent. If the Contract is
assigned, the Owner's rights may only be exercised with the consent of the
assignee of record.
ANNUITY PROVISIONS
GENERAL: On the Annuity Date, the Contract Withdrawal Value will be applied
under the Annuity Option selected by the Owner. The Owner may elect to have the
Contract Withdrawal Value applied to provide a Fixed Annuity, a Variable Annuity
or a combination Fixed and Variable Annuity. The Contract Value may be applied
under the Annuity Option selected if the annuitization is after the 4th policy
year and the option is life contingent or for a minimum of 5 years. If a
combination is elected, the Owner must specify what part of the Contract
Withdrawal Value is to be applied to the Fixed and Variable Options.
ANNUITY DATE: The Annuity Date is selected by the Owner at the Contract Issue
Date, The Annuity Date must be the first day of a calendar month and must be at
least ninety (90) days after the Contract Issue Date. The Annuity Date may not
be later than the earlier of when the Annuitant reaches attained age 90 or the
maximum date permitted under the law of the state in which the Contract is
delivered.
Prior to the Annuity Date, the Owner, subject to the above, may change the
Annuity Date by Written Request. Any change must be requested at least thirty
(30) days prior to the new Annuity Date.
SELECTION OF AN ANNUITY OPTION: An Annuity Option may be selected by Written
Request of the Owner. If no Annuity Option is selected, Option 2 with 120
monthly payments guaranteed will automatically be applied. Unless specified
otherwise, that portion of the Contract Withdrawal Value allocated to the
Variable Account shall be used to provide a Variable Annuity and that portion of
the Contract Withdrawal Value allocated to the Fixed Account and the MVA Account
will be used to provide a Fixed Annuity. Prior to the Annuity Date, the Owner
can change the Annuity Option selected by Written Request. Any change must be
requested at least thirty (30) days prior to the Annuity Date.
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS: Annuity Payments are paid in monthly
installments. The Contract Withdrawal Value is applied to the Annuity Table for
the Annuity Option selected. If the Contract Withdrawal Value to be applied
under an Annuity Option is less than $5,000, the Company reserves the right to
make a lump sum payment in lieu of Annuity Payments. If the Annuity Payment
would be or become less than $40, the Company reserves the right to reduce the
frequency of payments to an interval which will result in each payment being at
least $50.
ANNUITY OPTIONS: The following Annuity Options or any other annuity option
acceptable to the Company may be selected:
OPTION 1. INCOME FOR SPECIFIED PERIOD: We will pay an income for a specific
number of years in equal installments. We guarantee these payments to be at
least those shown in Table 1.
OPTION 2. LIFE INCOME: We will pay equal monthly payments for a specified
period certain and then for life. We guarantee these payments will be at
least those shown in Table 2.
OPTION 3. INCOME OF SPECIFIED AMOUNT: We will pay income of the specified
amount until the principal and interest are exhausted.
OPTION 4. JOINT AND SURVIVOR INCOME: We will pay equal monthly payments
during the joint lifetime of the Annuitant and the named Beneficiary/Payee.
We will determine the payment by the sex and Age of each person from Table
4. The Annuitant must be at least 50 years old, and the Beneficiary/Payee
must be at least 45 years old, at the time of the first monthly payment.
ANNUITY: If the Owner selects a Fixed Annuity, the Contract Withdrawal Value is
allocated to the General Account and the Annuity is paid as a Fixed Annuity. If
the Owner selects a Variable Annuity, the Contract Withdrawal Value will be
allocated to the Sub-Accounts of the Variable Account in accordance with the
selection made by the Owner, and the Annuity will be paid as a Variable Annuity.
If no selection is made, the Contract Withdrawal Value will be applied in the
same proportions to the same Sub-Accounts as the allocations are at the time of
election. Unless the Owner specifies otherwise, the payee of the Annuity
Payments shall be the Owner. The Contract withdrawal Value will be applied to
the applicable Annuity Table contained in the Contract based upon the Annuity
Option selected by the Owner. The amount of the first payment for each $1,000 of
Contract Withdrawal Value is shown in the Annuity Tables.
FIXED ANNUITY: The Owner may elect to have the Contract Withdrawal Value applied
to provide a Fixed Annuity.
The dollar amount of each Fixed Annuity Payment shall be determined in
accordance with Annuity Tables contained in this Contract which are based on the
minimum guaranteed interest rate of 3% per year.
VARIABLE ANNUITY: The Owner may elect to have the Contract Withdrawal Value
applied to provide a Variable Annuity. Variable Annuity Payments reflect the
investment performance of the Variable Account in accordance with the allocation
of the Contract Withdrawal Value to the Sub-Accounts during the Annuity Period.
Variable Annuity Payments are not guaranteed as to the dollar amount.
The dollar amount of the first Variable Annuity Payment is determined in
accordance with the description above. The dollar amount of the Variable Annuity
Payment for each applicable Sub-Account after the first Variable Annuity Payment
is determined as follows:
1. The dollar amount of the first Variable Annuity Payment is divided
by the value of an Annuity Unit for each applicable Sub-Account as of
the Annuity Date. This sets the number of Annuity Units for each
monthly payment for the applicable Sub-Accounts.
2. The fixed number of Annuity Units per payment in each Sub-Account is
multiplied by the Annuity Unit Value for that Sub-Account for the last
Valuation Period of the month preceding the month for which the payment
is due. This result is the dollar amount of the payment for each
applicable Sub-Account.
The total dollar amount of each Variable Annuity Payment is the sum of all
Sub-Account Variable Annuity Payments reduced by the applicable portion of the
Contract Maintenance Charge.
ANNUITY UNIT: The value of any Annuity Unit for each Sub-Account of the Variable
Account was set initially at $10.
The Sub-Account Annuity Unit Value at the end of any subsequent Valuation Period
is determined as follows:
1. the Net Investment Factor for the current Valuation Period is
multiplied by the value of the Annuity Unit for the Sub-Account for the
immediately preceding Valuation Period.
2. The result in (1) is then divided by the Assumed Investment Rate
Factor which equals 1.00 plus the Assumed Investment Rate for the
number of days since the preceding Valuation Date. The Owner can choose
either a 5% or a 3% Assumed Investment Rate.
MORTALITY TABLES: The mortality table used in establishing the Annuity Table is
the Annuity 2000 Mortality Table.
The dollar amount of an Annuity Payment for any Age or combination of Ages not
shown in the Tables or for any other form of Annuity Option agreed to by the
Company will be provided by the Company upon request.
GENERAL PROVISIONS
THE CONTRACT: The entire contract consists of this Contract, the Application and
any riders or endorsements attached to this Contract. This Contract may be
changed or altered only by the President or Senior Vice President and the
Secretary of the Company. A change or alteration must be made in writing.
MISSTATEMENT OF AGE: If the Age of any Annuitant has been misstated, any Annuity
benefits payable will be the Annuity benefits provided by the correct Age. After
Annuity Payments have begun, any underpayments will be made up in one sum with
the next Annuity Payment. Any overpayment will be deducted from future Annuity
Payments until the total is repaid.
INCONTESTABILITY: This Contract will not be contestable from the date of issue.
MODIFICATION: This Contract may be modified in order to maintain compliance with
applicable state and/or federal law.
NON-PARTICIPATING: This Contract will not share in any distribution of
dividends, profits or income of the Company.
EVIDENCE OF SURVIVAL: The Company may require satisfactory evidence of the
continued survival of any person(s) on whose life Annuity Payments are based.
PROOF OF AGE: The Company may require evidence of Age of any Annuitant and any
Owner.
PROTECTION OF PROCEEDS: To the extent permitted by law, death benefits and
Annuity Payments shall be free from legal process and the claim of any creditor
other than the person entitled to them under any Contract. No payment and no
amount under this Contract can be taken or assigned in advance of its payment
date unless the Company receives the Owner's written consent.
REPORTS: At least once each calendar year, the Company will furnish each Owner
with a report showing the Contract Value and any other information as may be
required by law. The Company will also furnish an annual report of the Variable
Account.
PREMIUM TAXES: Any taxes paid to any governmental entity relating to the
Contract will be deducted from the Purchase Payment or Contract Value. The
Company may, in its sole discretion, pay taxes when due and deduct that amount
from the Contract Value at a later date. Payment at an earlier date does not
waive any right the Company may have to deduct amounts at a later date.
OTHER TAXES: The Company reserves the right to establish a provision for federal
income taxes if it determines, in its sole discretion, that it will incur a tax
as a result of the operation of the Separate Account. The Company will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not is was
sufficient. The Company will deduct any withholding taxes required by applicable
law.
REGULATORY REQUIREMENTS: All values payable under any Contract will not be less
than the minimum benefits required by the laws and regulations of the states in
which the Contract is delivered.
<TABLE>
<CAPTION>
TABLE 1
INCOME FOR SPECIFIED PERIOD FACTORS
Installments shown are for each $1,000 of net Proceeds applied. Interest is 3%,
and is subject to change as described in the Interest On Settlement Options
Section.
Annual Semi
Years Annual Annual Quarterly Monthly *
----- ------ ------ --------- ---------
<S> <C> <C> <C> <C>
1 N/A N/A N/A N/A
2 N/A N/A N/A N/A
3 N/A N/A N/A N/A
4 N/A N/A N/A N/A
5 $211.99 $106.78 $53.59 $17.91
6 179.22 90.27 45.30 15.14
7 155.83 78.49 39.39 13.16
8 138.31 69.66 34.96 11.68
9 124.69 62.81 31.52 10.53
10 113.82 57.33 28.77 9.61
11 104.93 52.85 26.52 8.86
12 97.54 49.13 24.65 8.24
13 91.29 45.98 23.08 7.71
14 85.95 43.29 21.73 7.26
15 81.33 40.96 20.56 6.87
16 77.29 38.93 19.54 6.53
17 73.74 37.14 18.64 6.23
18 70.59 35.56 17.84 5.96
19 67.78 34.14 17.13 5.73
20 65.26 32.87 16.50 5.51
<FN>
* Equal monthly payment for the number of years elected, not to exceed 25 years.
Payments will begin on the option date.
</FN>
</TABLE>
<TABLE>
<CAPTION>
TABLE 2
MONTHLY INCOME FOR LIFE WITH GUARANTEED PERIOD OF:
Equal monthly payments for a guaranteed period of 10, 15 or 20 years as elected
and for life thereafter as shown in the table below. Amount of each monthly
installment per $1,000 net proceeds. Amounts based on Annuity 2000 Mortality
Tables and 3% interest.
MALE
AGE OF PAYEE 10 15 20 AGE OF PAYEE 10 15 20
YEARS YEARS YEARS YEARS YEARS YEARS
- --------------- ----- ----- ----- ------------ ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
25 $3.08 $3.08 3.07 53 $4.25 $4.20 $4.12
26 3.10 3.10 3.09 54 4.33 4.27 4.18
27 3.12 3.12 3.11 55 4.41 4.34 4.24
28 3.15 3.14 3.14 56 4.49 4.42 4.30
29 3.17 3.17 3.16 57 4.58 4.49 4.36
30 3.20 3.19 3.19 58 4.68 4.58 4.43
31 3.22 3.22 3.21 59 4.78 4.66 4.49
32 3.25 3.25 3.24 60 4.88 4.75 4.56
33 3.28 3.28 3.27 61 4.99 4.84 4.62
34 3.31 3.31 3.30 62 5.10 4.93 4.69
35 3.34 3.34 3.33 63 5.23 5.03 4.75
36 3.38 3.37 3.36 64 5.35 5.13 4.82
37 3.41 3.40 3.39 65 5.48 5.22 4.88
38 3.45 3.44 3.42 66 5.62 5.33 4.94
39 3.49 3.48 3.46 67 5.77 5.43 5.00
40 3.53 3.52 3.50 68 5.92 5.53 5.06
41 3.57 3.56 3.53 69 6.07 5.63 5.11
42 3.62 3.60 3.57 70 6.23 5.73 5.16
43 3.66 3.64 3.62 71 6.39 5.83 5.21
44 3.71 3.69 3.66 72 6.56 5.93 5.25
45 3.76 3.74 3.70 73 6.73 6.02 5.29
46 3.81 3.79 3.75 74 6.90 6.11 5.33
47 3.87 3.84 3.80 75 7.08 6.20 5.36
48 3.92 3.89 3.85 76 7.25 6.28 5.39
49 3.98 3.95 3.90 77 7.43 6.35 5.41
50 4.05 4.01 3.95 78 7.61 6.42 5.43
51 4.11 4.07 4.00 79 7.78 6.49 5.45
52 4.18 4.13 4.06 80 7.95 6.55 5.46
</TABLE>
<TABLE>
<CAPTION>
TABLE 2
MONTHLY INCOME FOR LIFE WITH A GUARANTEED PERIOD OF:
Equal monthly payments for a guaranteed period of 10, 15 or 20 years as elected
and for life thereafter as shown in the table below. Amount of each monthly
installment per $1,000 net proceeds. Amounts based on Annuity 2000 Mortality
Tables and 3% interest.
FEMALE
AGE OF PAYEE 10 15 20 AGE OF PAYEE 10 15 20
YEARS YEARS YEARS YEARS YEARS YEARS
------------ ----- ----- ----- ------------ ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
25 $2.99 $2.99 $2.99 53 $3.99 $3.96 $3.92
26 3.01 3.01 3.00 54 4.06 4.02 3.97
27 3.03 3.03 3.02 55 4.13 4.09 4.03
28 3.05 3.05 3.04 56 4.20 4.16 4.09
29 3.07 3.07 3.06 57 4.28 4.23 4.15
30 3.09 3.09 3.09 58 4.36 4.30 4.22
31 3.11 3.11 3.11 59 4.45 4.38 4.28
32 3.14 3.14 3.13 60 4.54 4.46 4.35
33 3.16 3.16 3.15 61 4.63 4.55 4.42
34 3.19 3.19 3.18 62 4.73 4.64 4.49
35 3.22 3.21 3.21 63 4.84 4.73 4.57
36 3.24 3.24 3.23 64 4.95 4.83 4.64
37 3.27 3.27 3.26 65 5.07 4.93 4.71
38 3.30 3.30 3.29 66 5.20 5.03 4.78
39 3.34 3.33 3.32 67 5.33 5.14 4.85
40 3.37 3.36 3.35 68 5.47 5.25 4.92
41 3.41 3.40 3.39 69 5.62 5.36 4.99
42 3.44 3.44 3.42 70 5.78 5.47 5.05
43 3.48 3.47 3.46 71 5.94 5.58 5.11
44 3.52 3.51 3.50 72 6.11 5.70 5.17
45 3.57 3.55 3.54 73 6.29 5.81 5.22
46 3.61 3.60 3.58 74 6.48 5.92 5.27
47 3.66 3.64 3.62 75 6.67 6.03 5.31
48 3.71 3.69 3.66 76 6.86 6.13 5.35
49 3.76 3.74 3.71 77 7.06 6.22 5.38
50 3.81 3.79 3.76 78 7.26 6.31 5.40
51 3.87 3.85 3.81 79 7.46 6.39 5.43
52 3.93 3.90 3.86 80 7.66 6.47 5.45
</TABLE>
TABLE 3
EQUAL PAYMENTS OF A SPECIFIED AMOUNT
Equal monthly payments of at least $4.71 per month for each $1,000 of
proceeds. Payments will begin on the option date and will continue until the
proceeds and interest at the rate of 3.00% compounded annually are
exhausted.
<TABLE>
<CAPTION>
TABLE 4
JOINT AND SURVIVOR INCOME FACTORS
We will furnish values for age or sex combinations not shown in the table on
request.
Male Age
_____________________________________________________________________________________________
Female Age 45 50 55 60 65 70
<S> <C> <C> <C> <C> <C> <C>
45 $3.34 $3.41 $3.46 $3.50 $3.54 $3.58
50 3.44 3.54 3.62 3.69 3.74 3.79
55 3.53 3.66 3.79 3.90 3.99 4.06
60 3.60 3.78 3.95 4.12 4.27 4.38
65 3.66 3.87 4.10 4.34 4.57 4.77
70 3.71 3.95 4.22 4.54 4.87 5.19
</TABLE>
Installments shown are monthly and are for each $1,000 of net Proceeds applied.
Based on Annuity 2000 Tables and 3% interest: Amounts are subject to change as
described in the Interest On Settlement Options Section.
<TABLE>
<CAPTION>
GREAT AMERICAN RESERVE INSURANCE COMPANY
FIXED FUND
ACCUMULATION TABLE FOR FLEXIBLE PREMIUM DEFERRED ANNUITY
$1,000 FOR FIRST FIVE YEARS
GUARANTEED SURRENDER VALUE*
End of Accumulated
Policy Value Accumulated Surrender
Year Increase Value Value
---- -------- ----- -----
<S> <C> <C> <C>
1 1,030.00 1,030.00 967.21
2 1,060.90 2,090.90 1,965.54
3 1,092.73 3,183.63 3,002.73
4 1,125.51 4,309.14 4,080.68
5 1,159.27 5,468.41 5,200.28
- ---------------------------- ------------------------- -------------------------- --------------------------
6 164.05 5,632.46 5,399.36
7 168.97 5,801.44 5,613.04
8 174.04 5,975.48 5,835.48
9 179.26 6,154.74 6,064.74
10 184.64 6,339.39 6,289.39
- ---------------------------- ------------------------- -------------------------- --------------------------
11 190.18 6,529.57 6,509.57
12 195.89 6,725.45 6,725.45
13 201.76 6,927.22 6,927.22
14 207.82 7,135.03 7,135.03
15 214.05 7,349.09 7,349.09
- ---------------------------- ------------------------- -------------------------- --------------------------
16 220.47 7,569.56 7,569.56
17 227.09 7,796.64 7,796.64
18 233.90 8,030.54 8,030.54
19 240.92 8,271.46 8,271.46
20 248.14 8,519.60 8,519.60
- ---------------------------- ------------------------- -------------------------- --------------------------
21 255.59 8,775.19 8,775.19
22 263.26 9,038.45 9,038.45
23 271.15 9,309.60 9,309.60
24 279.29 9,588.89 9,588.89
25 287.67 9,876.56 9,876.56
- ---------------------------- ------------------------- -------------------------- --------------------------
26 296.30 10,172.85 10,172.85
27 305.19 10,478.04 10,478.04
28 314.34 10,792.38 10,792.38
29 323.77 11,116.15 11,116.15
30 333.48 11,449.64 11,449.64
- ---------------------------- ------------------------- -------------------------- --------------------------
31 343.49 11,793.13 11,793.13
32 353.79 12,146.92 12,146.92
33 364.41 12,511.33 12,511.33
34 375.34 12,886.67 12,886.67
35 386.60 13,273.27 13,273.27
- ---------------------------- ------------------------- -------------------------- --------------------------
36 398.20 13,671.46 13,671.46
37 410.14 14,081.61 14,081.61
38 422.45 14,504.06 14,504.06
39 435.12 14,939.18 14,939.18
40 448.18 15,387.35 15,387.35
- ---------------------------- ------------------------- -------------------------- --------------------------
<FN>
*Values Shown are Based on an Interest Rate of 3% for All Years.
</FN>
</TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. PENNSYLVANIA STREET
CARMEL, INDIANA 46032-4572
(317) 817-3700
INDIVIDUAL FIXED AND VARIABLE
ANNUITY CONTRACT
NON-PARTICIPATING
22-4061
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(317) 817-3700
A Stock Company
GREAT AMERICAN RESERVE INSURANCE COMPANY (the "Company") agrees with the Group
Contract Owner to provide benefits to the Certificate Owners, subject to the
provisions set forth in this Contract and in consideration of Purchase Payments
received from the Certificate Owners.
RIGHT TO EXAMINE CONTRACT: Within 10 days of the date of receipt of a
Certificate under this Contract by a Certificate Owner, it may be returned by
delivering or mailing it to the Company at its Administrative Office. When the
Certificate is received by the Company, it will be voided as if it had never
been in force. The Company will refund the Certificate Value computed at the end
of the Valuation Period during which the Certificate is received by the Company
at its Administrative Office.
THIS IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY
READ YOUR CONTRACT CAREFULLY
SIGNED FOR THE COMPANY AT CARMEL, INDIANA, ON THE CONTRACT DATE.
ABCDEFGH ABCDEFGH
SECRETARY PRESIDENT
ALLOCATED FIXED AND VARIABLE
GROUP ANNUITY CONTRACT
NON-PARTICIPATING
WITHDRAWAL VALUES AND THE DEATH BENEFITS PROVIDED BY THIS CONTRACT, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. NON FORFEITURE VALUES MAY INCREASE OR DECREASE
BASED ON THE MARKET VALUE ADJUSTMENT SPECIFIED IN THIS CONTRACT.
TABLE OF CONTENTS
CONTRACT SCHEDULE............................................................4
DEFINITIONS..................................................................7
PURCHASE PAYMENT PROVISIONS..................................................8
PURCHASE PAYMENTS...................................................8
ALLOCATION OF PURCHASE PAYMENTS.....................................9
SEPARATE ACCOUNT PROVISIONS..................................................9
THE SEPARATE ACCOUNTS...............................................9
VARIABLE ACCOUNT....................................................9
VALUATION OF ASSETS.................................................9
ACCUMULATION UNITS..................................................9
ACCUMULATION UNIT VALUE.............................................9
MORTALITY AND EXPENSE RISK CHARGE..................................10
ADMINISTRATIVE CHARGE..............................................10
DISTRIBUTION EXPENSE CHARGE........................................10
MVA ACCOUNT PROVISIONS......................................................10
MVA ACCOUNT........................................................10
INTEREST TO BE CREDITED............................................10
GUARANTEE PERIOD...................................................10
MULTIPLE GUARANTEE PERIODS.........................................10
CHANGE IN GUARANTEE PERIOD.........................................10
MARKET VALUE ADJUSTMENT............................................11
MVA ACCOUNT VALUES.................................................11
FIXED ACCOUNT PROVISIONS....................................................11
FIXED ACCOUNT VALUES...............................................11
INTEREST TO BE CREDITED............................................11
CERTIFICATE VALUE...........................................................11
CERTIFICATE MAINTENANCE CHARGE..............................................12
DEDUCTION FOR CERTIFICATE MAINTENANCE CHARGE.......................12
TRANSFERS...................................................................12
TRANSFERS DURING THE ACCUMULATION PERIOD...........................12
TRANSFERS DURING THE ANNUITY PERIOD................................12
WITHDRAWAL PROVISIONS.......................................................13
WITHDRAWALS........................................................13
CONTINGENT DEFERRED SALES CHARGE...................................13
WITHDRAWAL CHARGE..................................................13
PROCEEDS PAYABLE ON DEATH...................................................13
DEATH OF OWNER DURING THE ACCUMULATION PERIOD......................13
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD................13
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD...............14
DEATH OF OWNER DURING THE ANNUITY PERIOD...........................14
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD..................14
DEATH OF THE ANNUITANT DURING THE ANNUITY PERIOD...................14
PAYMENT OF DEATH BENEFIT...........................................14
BENEFICIARY........................................................14
CHANGE OF BENEFICIARY..............................................15
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION................................15
CERTIFICATE OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS..............15
CERTIFICATE OWNER..................................................15
JOINT CERTIFICATE OWNER............................................15
GROUP CONTRACT OWNER...............................................15
ANNUITANT..........................................................15
ASSIGNMENT OF A CERTIFICATE........................................16
ANNUITY PROVISIONS..........................................................16
GENERAL............................................................16
ANNUITY DATE.......................................................16
SELECTION OF AN ANNUITY OPTION.....................................16
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS...........................16
ANNUITY OPTIONS....................................................16
OPTION 1. INCOME FOR SPECIFIED PERIOD
OPTION 2. LIFE INCOME......................................16
OPTION 3. INCOME OF SPECIFIED AMOUNT........................16
OPTION 4. JOINT AND SURVIVOR INCOME.........................16
ANNUITY............................................................17
FIXED ANNUITY......................................................17
VARIABLE ANNUITY...................................................17
ANNUITY UNIT.......................................................17
MORTALITY TABLES...................................................17
GENERAL PROVISION...........................................................17
THE CONTRACT.......................................................17
MISSTATEMENT OF AGE................................................18
INCONTESTABILITY...................................................18
MODIFICATION.......................................................18
NON-PARTICIPATION..................................................18
EVIDENCE OF SURVIVAL...............................................18
PROOF OF AGE`......................................................18
PROTECTION OF PROCEEDS.............................................18
REPORTS............................................................18
PREMIUM TAXES......................................................18
OTHER TAXES........................................................18
REGULATORY REQUIREMENTS............................................18
ANNUITY OPTION TABLES.......................................................19
CONTRACT SCHEDULE
CONTRACT OWNER: [ABC Trust] CONTRACT ISSUE DATE: [November 1, 1997]
CONTRACT NUMBER: [12345] ANNUITY DATE: [November 1, 2032]
<TABLE>
<CAPTION>
<S> <C>
PURCHASE PAYMENTS UNDER EACH CERTIFICATE:
INITIAL PURCHASE PAYMENT: [$5,000 Non-Qualified; $2,000 IRA]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: [$500 ($50 for IRAs & EFTs); or $200 monthly for
non qualified contracts if the automatic premium
check option is elected.]
MAXIMUM TOTAL PURCHASE PAYMENT: [$500,000, without prior Company approval]
</TABLE>
ALLOCATION GUIDELINES:
[1. The Certificate Owner can select any of the investment options,
including the Sub-Accounts of the Variable Account, the MVA Account
and the Fixed Account Options. However, Certificate Owners are limited
to 15 Sub-Accounts at any one time.
2. If the Purchase Payments and forms required to issue a Certificate
are in good order, the initial Purchase Payment will be credited to
the Certificate Owners Account within two (2) business days after
receipt at the Administrative Office. Additional Purchase Payments
will be credited to the Certificate Owner's Account as of the
Valuation Period when they are received.
3. Allocation percentages must be in whole numbers. Each allocation
must be at least 1%.
4. The minimum amount which must be allocated for any Guarantee Period
in the MVA Account is $2,000. The company reserves the right to change
this minimum in the future.]
BENEFICIARY:
[As designated by the Certificate Owner at the Certificate Issue Date,
unless subsequently changed.]
CERTIFICATE MAINTENANCE CHARGE:
[The Certificate Maintenance Charge is $30 each Certificate Year. The
Company reserves the right to change the Certificate Maintenance
Charge but it will not exceed $60 per Certificate Year. During the
Accumulation Period, if the Certificate Value on the Certificate
Anniversary is at least $50,000, then no Certificate Maintenance
Charge will be deducted. During the Accumulation Period, a total
withdrawal is made on other than a Certificate Anniversary and the
Certificate Value for the Valuation Period during which the total
withdrawal is made is less than $50,000, the full Certificate
Maintenance Charge will be deducted at the time of the total
withdrawal. If at annuitization, the Annuity Date is not the
Certificate Anniversary and the Certificate Value on the Annuity Date
is less than $50,000, then the full Certificate Maintenance Charge
will be deducted on the Annuity Date. During the Annuity Period, no
Certificate Maintenance Charge will be deducted.]
MORTALITY AND EXPENSE RISK CHARGE:
[Equal, on an annual basis, to 1.25% of the average daily net asset
value of the Variable Account.]
ADMINISTRATIVE CHARGE:
[Equal, on an annual basis, to .15% of the average daily net asset
value of the Variable Account. The Company may increase this charge;
however, the maximum Administrative Charge will not exceed .25% of the
average daily net asset value of the Variable Account. In the event of
an increase, the Company will give Certificate Owners 90 days prior
notice of the increase.]
DISTRIBUTION EXPENSE CHARGE:
[NONE]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: [There are currently no limits on the
number of transfers that can be made during the Accumulation Period.
Certificate Owners are permitted two transfers per Certificate Year
during the Annuity Period.]
TRANSFER FEE: [The Company does not assess a Transfer Fee on one
transfer in a 30 day period during the Accumulation Period or the two
transfers permitted during the Annuity Period. You can transfer among
the Sub-Accounts at least once every 30 days. If you transfer more
often, you may be assessed a $25 fee. The Company reserves the right
to change the transfer fee. All reallocations made on a given date
count as one transfer. Transfers made at the end of the Right to
Examine Contract period by the Company and any transfers made pursuant
to a pre-approved Dollar Cost Averaging Program or pursuant to a
pre-approved Rebalancing Program will not be counted in determining
the application of the Transfer Fee.]
MINIMUM AMOUNT TO BE TRANSFERRED: [$500 (from any Sub-Account or any
Guarantee Period of the MVA Account), or the Certificate Owner's
entire interest in the Sub-Account or the Guarantee Period, if less.
This requirement is waived if the transfer is pursuant to a
pre-approved Dollar Cost Averaging Program or Rebalancing Program.
Transfers from the Fixed Account are limited to 20% of the Contract
Value every six (6) months.]
MINIMUM AMOUNT WHICH MUST REMAIN IN EACH ACCOUNT AFTER A TRANSFER:
[$500 per Sub-Account or a Guarantee Period in the MVA Account; or $0
if the entire amount in any Sub-Account of the Variable Account or a
Guarantee Period in the MVA Account is transferred.]
MAXIMUM AMOUNT WHICH CAN BE TRANSFERRED FROM THE FIXED ACCOUNT OR MVA
ACCOUNT TO THE VARIABLE ACCOUNT: [NONE]
WITHDRAWALS:
CONTINGENT DEFERRED SALES CHARGE: A Contingent Deferred Sales Charge
is assessed against each Purchase Payment withdrawn [and will result
in a reduction in remaining Contract Value.] The Purchase Payment is
tracked from its date of receipt and the charges are determined in
accordance with the following:
Number of Years from Receipt Contingent Deferred
of Purchase Payment Sales Charge
------------------- ------------
1st Year 7%
2nd Year 7%
3rd Year 6%
4th Year 5%
5th Year 4%
6th Year 3%
7th Year 2%
8th Year and later 0%
Waiver of Contingent Deferred Sales Charge: In every Certificate Year, an amount
equal to the greater of: (i) 10% of the Certificate Value, on a non-cumulative
basis, (ii) the IRS minimum distribution requirement, if the Certificate was
issued as an IRA, or (iii) the total premiums paid that have been in the
Certificate more than seven complete years is available free of Contingent
Deferred Sales Charges.
WITHDRAWAL CHARGE: [NONE]
MINIMUM PARTIAL WITHDRAWAL: [$500 from each Sub-Account of the Variable Account,
each Guarantee Period of the MVA Account and the Fixed Account. This requirement
is waived if the partial withdrawal is pursuant to the Systematic Withdrawal
Program.]
MINIMUM CERTIFICATE VALUE WHICH MUST REMAIN IN CERTIFICATE AFTER A PARTIAL
WITHDRAWAL: [$500]
MINIMUM CERTIFICATE VALUE WHICH MUST REMAIN IN ANY SUB-ACCOUNT OF THE VARIABLE
ACCOUNT AFTER A PARTIAL WITHDRAWAL: [$500]
MAXIMUM AMOUNT WHICH CAN BE WITHDRAWN FROM THE FIXED AND MVA ACCOUNTS: [There is
currently no limitation on the maximum amount which can be withdrawn from the
Fixed Account or the MVA Account.]
<TABLE>
<CAPTION>
<S> <C>
SEPARATE ACCOUNTS: Variable Account [Great American Reserve Variable Annuity Account F for the
Variable Annuity portion of the Contract.]
and
MVA Account [Great American Reserve Market Value Adjustment Account for the
portion of the Contract that may be subject to a Market Value
Adjustment.]
</TABLE>
MVA ACCOUNT:
Minimum Guaranteed Interest Rate: 3%
Current MVA Account Guarantee Period Options and
Credited Interest Rates:
[1 Year]. [XX%]
[3 Years] [XX%]
[5 Years] [XX%]
MARKET VALUE ADJUSTMENT FACTOR: [The Market Value Adjustment Factor is equal to:
N/365
[(1 + A)/(1 + B)] - 1
where:
A = the U.S. Treasury rate in effect at the beginning of the
Guarantee Period for the length of the guarantee period selected.
B = the current U.S. Treasury rate as of the transaction date plus
.005. Treasury rate period is determined by N/365 rounded to the
next highest year.
N = the number of days remaining in the MVA Guarantee Period.]
If the Treasury rate is not available for the period, the rate will be
arrived at by interpolation. If no Treasury rates are available, an Index
will be selected by the Company and approved by the State Insurance
Commissioner.
[MVA Waiver: For withdrawals from MVA Account Guarantee Period Option,
after the first year in such Guarantee Period option, the Certificate Owner
can make one withdrawal each Certificate Year of up to a total of 10% of
each such Guarantee Period option of the MVA Account without the Market
Value Adjustment.]
FIXED ACCOUNT:
Minimum Guarantee Interest Rate: 3%
Current Interest Rate as of Issue Date: [X%]
RIDERS:
[IRA ENDORSEMENT]
<TABLE>
<CAPTION>
<S> <C>
ADMINISTRATIVE OFFICE:
[Great American Reserve Insurance Company Great American Reserve Insurance Company
Administrative Office Administrative Office
P.O. Box 1927..... OR 11815 N. Pennsylvania Street
Carmel, IN 46032 Carmel. IN 46032]
(800) 824-2726
(317) 817-3700
</TABLE>
DEFINITIONS
ACCOUNT(S): The Fixed Account, the MVA Account and the General Account and/or
one or more of the Sub-Accounts of the Variable Account.
ACCUMULATION PERIOD: The period prior to the Annuity Date during which Purchase
Payments may be made by an Owner.
ACCUMULATION UNIT: A unit of measure used to determine the value of a
Certificate Owner's interest in a Sub-Account of the Variable Account during the
Accumulation Period.
ADJUSTED CERTIFICATE VALUE: The Certificate Value less any applicable Premium
Tax, and Certificate Maintenance Charge and plus the applicable Market Value
Adjustment which may be positive or negative. This amount is applied to the
applicable Annuity Tables to determine Annuity Payments.
AGE: The age of any Certificate Owner or Annuitant on his or her last birthday.
For Joint Certificate Owners, all provisions which are based on age are based on
the Age of the older of the Joint Certificate Owners.
ADMINISTRATIVE OFFICE: The office address indicated on the Contract Schedule of
the Contract to which notices, requests and Purchase Payments must be sent. All
sums payable to the Company under this Contract or any Certificate are payable
at the Administrative Office or an address designated by the Company in writing.
ANNUITANT: The natural person on whose life Annuity Payments are based. On or
after the Annuity Date, the Annuitant shall also include any Joint Annuitant.
ANNUITY DATE: The date on which Annuity Payments begin. The Annuity Date is
shown on the Contract Schedule.
ANNUITY OPTIONS: Options available for Annuity Payments.
ANNUITY PAYMENTS: The series of payments made to the Certificate Owner or any
named payee after the Annuity Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning with the Annuity Date during which
Annuity Payments are made.
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
Annuity Payments.
AUTHORIZED REQUEST: A request, in a form satisfactory to the Company, which is
received by the Administrative Office.
BENEFICIARY: The person(s) or entity(ies) who will receive the death benefit
payable under this Contract.
CERTIFICATE: The document issued to a Certificate Owner to evidence a
Certificate Owner's Account established under this Group Contract.
CERTIFICATE ANNIVERSARY: An Anniversary of the Certificate Issue Date.
CERTIFICATE ISSUE DATE: The later of the date on the cover of the Contract or
the date Purchase Payments are received. The Certificate Issue Date is shown on
the Certificate Schedule.
CERTIFICATE OWNER: A person who has established a Certificate Owner's Account
under this Group Contract.
CERTIFICATE OWNER'S ACCOUNT: A record established for each Certificate to
maintain values under this Group Contract.
CERTIFICATE VALUE: The dollar value as of any Valuation Period of all amounts in
a Certificate Owner's Account.
CERTIFICATE WITHDRAWAL VALUE: The Certificate Value less any applicable Premium
Tax, less any Contingent Deferred Sales Charge, less any applicable Certificate
Maintenance Charge and plus any Market Value Adjustment which may be positive or
negative.
CERTIFICATE YEAR: The first Certificate Year is the annual period which begins
on the Certificate Issue Date. Subsequent Certificate Years begin on each
anniversary of the Certificate Issue Date.
COMPANY: Great American Reserve Insurance Company
CREDITED INTEREST RATE: The interest rate credited to the Certificate Owner's
Account by the Company for any given Guarantee Period in the MVA Account or the
Fixed Account. The Credited Interest Rates for the available Guarantee Periods
for the MVA Account and the Fixed Account are shown on the Certificate Schedule.
EFFECTIVE DATE: The beginning date of a Guarantee Period with a Credited
Interest Rate.
ELIGIBLE FUND: An investment entity that is made available for this Contract.
FIXED ACCOUNT: An investment option within the General Account.
FIXED ANNUITY: A series of payments made during the Annuity Period which are
guaranteed as to dollar amount by the Company.
GENERAL ACCOUNT: The Company's general investment account which contains all the
assets of the company except for the Variable Account and any other segregated
asset accounts.
GROUP CONTRACT OWNER: The person on entity to which this Group Contract is
issued.
GUARANTEE PERIOD: The period for which the Credited Interest Rate is credited in
the MVA Account. Each deposit or transfer to the MVA Account creates one or more
new Guarantee Period(s). The Guarantee Periods selected by the Certificate Owner
are shown on the Certificate Schedule.
MARKET VALUE ADJUSTMENT: An adjustment to the amount withdrawn or transferred
from an MVA Account prior to the end of the applicable Guarantee Period. The
adjustment reflects the change in the value of the funds withdrawn or
transferred due to the change in the interest rates since the beginning of the
Guarantee Period.
MVA ACCOUNT: A separate account which provides investment options where the
Company guarantees the rate of interest for a specified Guarantee Period and
where withdrawals or transfers may be subject to a Market Value Adjustment.
OWNER: The person(s) who owns the Contract.
PORTFOLIO: A segment of an Eligible Fund which constitutes a separate and
distinct class of shares.
PREMIUM TAX: Any premium taxes payable to any government entity and assessed
against Purchase Payments or Contract Value.
PURCHASE PAYMENT: A payment made by or for a Certificate Owner with respect to
this Contract. All payments must be made payable to the Company.
SUB-ACCOUNT: Variable Account assets are divided into Sub-Accounts. Assets of
each Sub-Account will be invested in shares of an Eligible Fund or a Portfolio
of an Eligible Fund.
VALUATION DATE: Each day on which the New York Stock Exchange ("NYSE") is open
for business.
VALUATION PERIOD: The period of time beginning at the close of business of the
NYSE on each Valuation Date and ending at the close of business for the next
succeeding Valuation Date.
VARIABLE ACCOUNT: A separate account which provides investment options where the
benefits are variable and are not guaranteed as to dollar amount,
WRITTEN REQUEST: A request in writing, in a form satisfactory to the Company,
which is received by the Administrative Office.
PURCHASE PAYMENT PROVISIONS
PURCHASE PAYMENTS: The initial Purchase Payment for an Owner is due on the
Certificate Issue Date. Subject to the maximum and minimum amounts shown on the
Certificate Schedule, the Owner may make subsequent Purchase Payments and may
increase or decrease or change the frequency of such payments. The Company
reserves the right to reject any Application or Purchase Payment.
ALLOCATION OF PURCHASE PAYMENTS: Purchase Payments are allocated to the Fixed
Account and/or to one or more of the MVA Account Guarantee Period options and/or
to one or more Sub-Accounts of the Variable Account in accordance with the
selections made by the Owner. The allocation of the initial Purchase Payment for
an Owner is made in accordance with the selection made by the Owner at the
Certificate Issue Date. Unless otherwise changed by the Owner, subsequent
Purchase Payments are allocated in the same manner as the initial Purchase
Payment. Allocation of the Purchase Payments is subject to the Allocation
Guidelines shown on the Certificate Schedule. The Company reserves the right to
allocate initial Purchase Payment to the Money Market Sub-Account (except for
any amounts allocated to the Fixed Account and/or MVA Account) until the
expiration of the Right to Examine Period.
SEPARATE ACCOUNT PROVISIONS
THE SEPARATE ACCOUNTS: The Separate Account consist of assets set aside by the
Company, which are kept separate from that of the general assets and any other
separate account assets of the Company.
VARIABLE ACCOUNT: The assets of the Variable Account will not be charged with
liabilities arising out of any other business the Company may conduct.
The Variable Account assets are divided into Sub-Accounts. The assets of the
Sub-Accounts are allocated to the Eligible Fund(s) and the Portfolio(s), if any,
within an Eligible Fund. Should the shares of any such Eligible Fund(s) or any
Portfolio(s) within an eligible Fund become unavailable for investment by the
Variable Account, or the Company's Board of Directors deems further investment
in these shares inappropriate, the Company may limit further purchase of such
shares or substitute shares of another Eligible Fund or Portfolio for shares
already purchased under a Certificate.
VALUATION OF ASSETS: The assets of the Accounts are valued at their fair market
value in accordance with procedures of the Company.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Sub-Accounts of the Variable Account as a
result of Purchase Payments, withdrawals, transfers, or fees and charges. The
Company will determine the number of Accumulation Units of a Sub-Account
purchased or canceled. This will be done by dividing the amount allocated to (or
the amount withdrawn from) the Sub-Account by the dollar value of one
Accumulation Unit of the Sub-Account as of the end of the Valuation Period
during which the request of the transaction is received at the Administrative
Office.
ACCUMULATION UNIT VALUE: The Accumulation Unit Value for each Sub-Account is
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Sub-Account are determined by multiplying the Accumulation Unit Value for the
immediately preceding Valuation Period by the Net Investment Factor for the
Sub-Account for the current period.
The Net Investment Factor for each Sub-Account is determined by dividing A by B
and subtracting C where:
A is (i) the net asset value per share of the Eligible Fund or Portfolio
of an Eligible Fund held by the Sub-Account at the end of the current
Valuation Period; plus
(ii) any dividend or capital gains per share declared on behalf of
such Eligible Fund or Portfolio that has an ex-dividend date within
the current Valuation Period; plus
(iii) a charge factor, if any, for any taxes or any tax reserve
established by the Company as a result of the operation or maintenance
of the Sub-Account.
B is the net asset value per share of the Eligible Fund or Portfolio
held by the Sub-Account for the immediately preceding Valuation
Period.
C is the Valuation Period equivalent of the per month Mortality and
Expense Risk Charge, for the Administrative Charge and for the
Distribution Charge, if any, which are shown on the Certificate
Schedule.
The Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
MORTALITY AND EXPENSE RISK CHARGE: Each Valuation Period, the Company deducts a
Mortality and Expense Risk Charge from the Variable Account which is equal, on
an annual basis, to the amount shown on the Certificate Schedule. The Mortality
and Expense Risk charge compensates the Company for assuming the mortality and
expense risks under this Contract and each Certificate issued hereunder.
ADMINISTRATIVE CHARGE: Each Valuation Period, the Company deducts an
Administrative Charge from the Variable Account which is equal, on an annual
basis, to the amount shown on the Contract Schedule. The Administrative Charge
compensates the Company for the costs associated with the administration of this
Contract and each Certificate issued hereunder and the Variable Account.
DISTRIBUTION EXPENSE CHARGE: Each Valuation Period, the Company deducts a
Distribution Expense Charge from the Variable Account which is equal, on an
annual basis, to the amount shown on the Contract Schedule. The Distribution
charge compensates the Company for the costs associated with the distribution of
Contracts and Certificates.
MVA ACCOUNT PROVISIONS
MVA ACCOUNT: The assets of the MVA Account will not be charged with liabilities
arising out of any other business the Company may conduct.
Purchase Payments may be allocated to one or more of the MVA Account Guarantee
Period options which are available at the time the Purchase Payment is made. The
initial MVA Account Guarantee Period options are shown on the Certificate
Schedule. In addition, during the Accumulation Period, Certificate Values can be
transferred from the Variable Account and/or the Fixed Account to one or more of
the MVA Account Guarantee Period options.
INTEREST TO BE CREDITED: The Credited Interest Rate for the Guarantee Period(s)
of the MVA Account is shown on the Certificate Schedule. After the initial
Guarantee Period, the Credited Interest Rate for any subsequent Guarantee Period
of the MVA Account may change. All interest payable under this Certificate is
compounded daily at the stated effective annual interest rate. In no event will
the Credited Interest Rate be less than the Minimum Guaranteed Interest Rate,
prior to the application of the Market Value Adjustment, specified on the
Contract Schedule.
GUARANTEE PERIOD: The Current MVA Account Guarantee Period is shown on the
Contract Schedule. During the thirty (30) days prior to the end of a current
Guarantee Period, the Certificate Owner may renew for the same or any other
Guarantee Period then available at the then Credited Interest Rate or may elect
to transfer all or a portion of the amount to a Fixed Account option, if
available, or to the Variable Account. Any transfer elected during the thirty
(30) days prior to the end of a current Guarantee Period will be made as of the
date the request is received by the Company and will not be subject to any
Market Value Adjustment.
If the Certificate Owner does not specify a Guarantee Period at the time of
renewal, the Company will select and transfer to the same Guarantee Period as
has just expired, so long as such Guarantee Period does not extend beyond the
latest Annuity Date that can be selected by a Certificate Owner. If such
Guarantee Period does extend beyond the latest Annuity Date, the Company will
choose the one year period. If there is no Guarantee Period for the same period
available, the one year period will be selected. If the one year period is no
longer available, the next longest period available will be selected.
MULTIPLE GUARANTEE PERIODS: The Certificate Owner may elect one or more
Guarantee Periods subject to the Company's underwriting rules. Multiple
Guarantee Periods are treated separately for purposes of applying the Market
Value Adjustment. The Company reserves the right to credit different Credited
Interest Rates to the Certificate Value attributable:
1. to different Guarantee Periods; and
2. to Guarantee Periods of the same duration with different Effective
Dates.
CHANGES IN GUARANTEE PERIOD: The Certificate Owner may, upon Written Request,
change to any Guarantee Period then being offered by the Company with respect to
contracts of this type and class. The Market Value Adjustment will apply to a
change made at any time other than at the end of a Guarantee Period. The Market
Value Adjustment will not apply to a change made at the end of a Guarantee
Period if Written Request is received by the Company within thirty (30) days
prior to the end of the Guarantee Period.
MARKET VALUE ADJUSTMENT: Any amount withdrawn, transferred or annuitized prior
to the end of a Guarantee Period may be subject to a Market Value Adjustment.
The Market Value Adjustment will be calculated by multiplying the amount
withdrawn, transferred or annuitized by the formula shown on the Contract
Schedule.
There will be no Market Value Adjustment on withdrawals from the MVA Account in
the following situations: (1) death benefit paid under this Certificate; (2)
amounts withdrawn to pay fees or charges; (3) amounts withdrawn or transferred
from the MVA Account during the thirty (30) days prior to the end of the
Guarantee Period; (4) a Certificate Owner annuitizes this Certificate under an
Annuity Option providing for at least sixty (60) monthly Annuity Payments; and
(5) any withdrawal subject to the MVA Waiver shown on the Contract Schedule.
MVA ACCOUNT VALUES: The MVA Account portion of a Certificate at any time is
equal to:
1. The Purchase Payments allocated to the MVA Account on behalf of a
Certificate Owner; plus
2. the Certificate Value transferred to the MVA Account; plus
3. interest credited to the Certificate Value in the MVA Account; less
4. any prior withdrawals of Certificate Value in the MVA Account and any
Contingent Deferred Sales Charge; less
5. any Certificate Value transferred from the MVA Account; less
6. Certificate Maintenance Charges or Transfer Fees deducted from the
Certificate Value allocated to the MVA Account.
Any subsequent Purchase Payments and transfers to the MVA Account will be
allocated to a new Guarantee Period with a new Effective Date.
FIXED ACCOUNT PROVISIONS
FIXED ACCOUNT VALUES: The Fixed Account portion of a Certificate at any time is
equal to:
1. the Purchase Payments allocated to the Fixed Account on behalf of a
Certificate Owner; plus
2. the Certificate Value transferred to the Fixed Account; plus
3. interest credited to the Certificate Value in the Fixed Account; less
4. any prior withdrawals of Certificate Value in the Fixed Account and
any Contingent Deferred Sales Charge; less
5. any Certificate Value transferred from the Fixed Account; less
6. Certificate Maintenance Charges or Transfer Fees deducted from the
Certificate Value allocated to the Fixed Account.
INTEREST TO BE CREDITED: The Company guarantees that the interest to be credited
to the Fixed Account will not be less than the Minimum Guaranteed Interest Rate
shown on the Contract Schedule. The Company may credit additional interest at
its sole discretion for any Fixed Account option. The Fixed Account option and
the Initial Current Interest Rate are shown on the Contract Schedule.
CERTIFICATE VALUE
The Certificate Value for any Valuation Period is the sum of the Certificate
Value in each of the Sub-Accounts of the Variable Account, the Certificate Value
in the MVA Account and the Certificate Value in the Fixed Account.
The Certificate Value in a Sub-Account of the Variable Account is determined by
multiplying the number of Accumulation Units allocated to the Certificate
Owner's Account for the Sub-Account by the Accumulation Unit Value.
Withdrawals will result in the cancellation of Accumulation Units in a
Sub-Account or a reduction in the Certificate Value in the Fixed Account or the
MVA Account, as applicable.
CERTIFICATE MAINTENANCE CHARGE
DEDUCTION FOR CERTIFICATE MAINTENANCE CHARGE: During the Accumulation Period, on
each Certificate Anniversary the Company will deduct a Certificate Maintenance
Charge from the Certificate Value by reducing the Certificate Value in the Fixed
Account and/or the MVA Account and by canceling Accumulation Units from each
applicable Sub-Account to reimburse it for expenses relating to maintenance of a
Certificate issued under this Contract. The Certificate Maintenance Charge will
be deducted first from the Fixed Account and if there is insufficient value in
the Fixed Account, then the Certificate Maintenance Charge will be deducted from
the MVA Account or the Sub-Account of the Variable Account with the largest
balance. The Certificate Maintenance Charge is shown on the Contract Schedule.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: Subject to any limitation imposed by
the Company on the number of transfers during the Accumulation Period shown on
the Contract Schedule, a Certificate Owner may transfer all or part of this
Certificate Value in the Fixed Account, the MVA Account or a Sub-Account by
Authorized Request without the imposition of any Transfer Fee if there have been
no more than the number of free transfers shown on the Contract Schedule for the
Certificate Year. All transfers are subject to the following:
1. If more than the number of free transfers, shown on the Contract
Schedule, have been made in a Certificate Year, the Company will deduct
a Transfer Fee, shown on the Contract Schedule, for each subsequent
transfer permitted. The Transfer Fee is deducted from the Account which
is the source of the transfer. However, if the Certificate Owner's
entire interest in an Account is being transferred, the Transfer Fee
will be deducted from the amount which is transferred. If there are
multiple source Accounts, the Transfer Fee will be allocated first to
the Fixed Account and then to the Sub-Account or the MVA Account with
the largest balance involved in a transfer transaction.
2. The minimum amount which can be transferred from a Sub-Account is
shown on the Contract Schedule. The minimum amounts which must remain
in a Sub-Account, the Fixed and the MVA Account are shown on the
Contract Schedule. The maximum amounts which can be transferred from
the Fixed Account or the MVA Account to the Variable Account are shown
on the Contract Schedule.
3. The Company reserves the right, at any time and without prior notice
to any party, to terminate, suspend or modify the transfer privilege
described above.
If a Certificate Owner elects to use this transfer privilege, the Company will
not be liable for transfers made in accordance with the instructions received
from the Certificate Owner or other authorized persons. All amounts and
Accumulation Units will be determined as of the end of the Valuation Period
during which the request for transfer is received at the Administrative Office.
TRANSFERS DURING THE ANNUITY PERIOD: Subject to any limitations imposed by the
Company on the number of transfers during the Annuity Period shown on the
Contract Schedule, the Certificate Owner may transfer Annuity Units in
accordance with the following::
1. Transfers may be made upon written notice to the Company at least
thirty (30) days before the due date of the first Annuity Payment for
which the change will apply. Transfers will be made by converting the
number of Annuity Units being transferred to the number of Annuity
Units of the Sub-Account to which the transfer is made, so that the
next Annuity Payment, if it were made at that time would be the same
amount that it would have been without the transfer. Thereafter,
Annuity Payments will reflect changes in the value of the new Annuity
Units.
2. If more than the number of free transfers, shown on the Contract
Schedule, have been made in a Certificate Year, the Company will
deduct a Transfer Fee, shown on the Contract Schedule, for each
subsequent transfer. The Transfer Fee is deducted from the Account
which is the source of the transfer. However, if the Certificate
Owner's entire interest in an Account is being transferred, the
Transfer Fee will be deducted from the amount which is transferred. If
there are multiple source Accounts, the Transfer Fee will be allocated
first to the Fixed Account and then to the Sub-Account or the MVA
Account with the largest balance involved in the transfer transaction.
3. The minimum amount which can be transferred from a Sub-Account is
shown on the Contract Schedule. The minimum amount which must remain
in a Sub-Account after a transfer is shown on the Contract Schedule.
4. No transfers can be made between the General Account and the
Variable Account.
5. The Company reserves the right, at any time and without prior
notice, to terminate, suspend or modify the transfer privilege
described above.
If a Certificate Owner elects to use this transfer privilege, the Company will
not be liable for transfers made in accordance with instructions received from
the Certificate Owner or other authorized persons. All amounts and Annuity Units
will be determined as of the end of the Valuation Period during which the
request for transfer is received at the Administrative Office.
WITHDRAWAL PROVISIONS
WITHDRAWALS: During the Accumulation Period, the Certificate Owner may, upon
Written Request, make a total or partial withdrawal of the Certificate
Withdrawal Value.
The Certificate Owner must specify by Written Request which Sub-Account or
Guarantee Period of the MVA Account or Fixed Account, as applicable, is the
source of the partial withdrawal.
A withdrawal from the MVA Account may be subject to a Market Value Adjustment.
The Company will pay the amount of any withdrawal from the Variable Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payment Provision is in effect.
Each partial withdrawal must be for an amount which is not less than the minimum
amount shown on the Contract Schedule. The minimum Certificate Value which must
remain in a Sub-Account after a partial withdrawal is shown on the Contract
Schedule. The maximum amounts which can be withdrawn from the Fixed Account
and/or the MVA Account are shown on the Certificate Schedule.
CONTINGENT DEFERRED SALES CHARGE: Upon a withdrawal of Certificate Value, a
Contingent Deferred Sales Charge, as set forth on the Contract Schedule, may be
assessed.
WITHDRAWAL CHARGE: Upon a withdrawal of Certificate Value, a Withdrawal Charge,
as set forth on the Contract Schedule, may be assessed.
PROCEEDS PAYABLE ON DEATH
DEATH OF CERTIFICATE OWNER:
DURING THE ACCUMULATION PERIOD: Upon the death of the Certificate Owner, or any
Joint Certificate Owner, during the Accumulation Period, the death benefit will
be paid to the Beneficiary(ies) designated by the Certificate Owner. Upon the
death of any Joint Certificate Owner, the surviving Joint Certificate Owner, if
any, will be treated as the Primary Beneficiary. Any other Beneficiary
designation on record at the time of death will be treated as a contingent
Beneficiary.
A Beneficiary may request that the death benefit be paid under one of the Death
Benefit Options below. If the Beneficiary is the spouse of the Certificate
Owner, he or she may elect to continue the Certificate at the then current
Certificate Value in his or her own name and exercise all the Certificate
Owner's right under the Certificate.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD: If death occurs prior to
age 90, the death benefit will be the greater of:
1. the total Purchase Payments, less any prior Adjusted Partial
Withdrawals, accumulated at 5% per year up to the date of death .
Adjusted Partial Withdrawals are equal to: the Partial Withdrawal
multiplied by the Death Benefit just before the Partial Withdrawal,
divided by the Certificate Value just before Partial Withdrawal; or
2. the Certificate Value determined as of the end of the Valuation Period
during which the Company receives both due proof of death and an
election for the payment method.
If death occurs at age 90 or later, the death benefit will be the Certificate
Value determined as of the end of the Valuation Period during which the Company
received both due proof of death and an election for the payment method.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD: A non-spousal Beneficiary
must elect the death benefit to be paid under one of the following options in
the event of the death of the Certificate Owner or any Joint Certificate Owner
during the Accumulation Period:
Option 1 - lump sum payment of the death benefit; or
Option 2 - the payment of the entire death benefit within 5 years of
the date of the death of the Certificate Owner or any Joint Certificate
Owner; or
Option 3 - payment of the death benefit under an Annuity Option over
the lifetime of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the Certificate Owner or any
Joint Certificate Owner.
Any portion of the death benefit not applied under Option 3 within one year of
the date of the Certificate Owner's death, must be distributed within five years
of the date of death.
A spousal Beneficiary may elect to continue the Certificate in his or her own
name at the then current Certificate Value, elect a lump sum payment of the
death benefit or apply the death benefit to an Annuity Option.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision, as set forth on page 15 of this Certificate, is
in effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period beginning with the date of receipt of proof of death.
DURING THE ANNUITY PERIOD: If the Certificate Owner, or any Joint Certificate
Owner, who is not the Annuitant, dies during the Annuity Period, any remaining
payments under the Annuity Option elected will continue at least as rapidly as
under the method of distribution in effect at such Certificate Owner's or Joint
Certificate Owner's death. Upon the death of any Certificate Owner during the
Annuity Period, the Beneficiary becomes the Certificate Owner. Upon the death of
any Joint Certificate Owner during the Annuity Period, the surviving Joint
Certificate Owner, if any, will be treated as the Primary Beneficiary. Any other
Beneficiary designation on record at the time of death will be treated as a
Contingent Beneficiary.
DEATH OF ANNUITANT:
DURING THE ACCUMULATION PERIOD: Upon the death of an Annuitant, who is not the
Owner, during the Accumulation Period, the Certificate Owner may designate a new
Annuitant, subject to the Company's underwriting rules then in effect. If no
designation is made within thirty (30) days of the death of the Annuitant, the
Certificate Owner will become the Annuitant effective as of the death of the
Annuitant. If the Certificate Owner is a non-natural person, the death of the
Annuitant will be treated as the death of the Certificate Owner and a new
Annuitant may not be designated.
DURING THE ANNUITY PERIOD: Upon the death of the Annuitant during the Annuity
Period, the death benefit, if any, will be as specified in the Annuity Option
elected. Death benefits will be paid at least as rapidly as under the method of
distribution in effect at the Annuitant's death.
PAYMENT OF DEATH BENEFIT: The Company will require due proof of death before any
death benefit is paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the
finding of death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
BENEFICIARY: The Beneficiary designation in effect on the Certificate Issue Date
will remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the Certificate Owner.
Unless the Certificate Owner provides otherwise, the death benefit will be paid
in equal shares to the survivor(s) as follows:
1. to the Primary Beneficiary(ies) who survive the Certificate Owner's
and/or the Annuitant's death, as applicable; or if there are none
2. to the Contingent Beneficiary(ies) who survive the Certificate Owner's
and/or the Annuitant's death, as applicable; or if there are none
3. to the estate of the Certificate Owner.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), the Certificate Owner may change the Primary Beneficiary(ies)
or Contingent Beneficiary(ies). A change may be made by Written Request. The
change will take effect as of the date the Written Request is signed. The
Company will not be liable for any payment made or action taken before it
records the change.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
The Company reserves the right to suspend or postpone payments from the Variable
Account for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);or
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Variable
Account's net assets; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Certificate Owners;
providing that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) or (3)
exist.
The Company further reserves the right to postpone payments from the Fixed
Account and the MVA Account for a period of up to six (6) months.
CERTIFICATE OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS
CERTIFICATE OWNER: The Certificate Owner has all interest and right to amounts
held in this Certificate. The Certificate Owner is the person designated as such
on the Certificate Issue Date, unless changed.
The Certificate Owner may change owners of the Certificate at any time by
Written Request. A change of Certificate Owner will automatically revoke any
prior designation of Certificate Owner. The change will become effective as of
the date the Written Request is signed. The Company will not be liable for any
payment made or action taken before it records the change..
JOINT CERTIFICATE OWNER: A Certificate may be owned by Joint Certificate Owners.
If Joint Certificate Owners are named, any Joint Certificate Owner must be the
spouse of the other Certificate Owner. Upon the death the either Joint
Certificate Owner, the surviving spouse will be the Primary Beneficiary. Any
other Beneficiary designation will be treated as a Contingent Beneficiary unless
otherwise indicated in a Written Request.
GROUP CONTRACT OWNER: The Group Contract Owner has title to the Contract. The
Contract and any amounts accumulated thereunder are not subject to the claims of
the Group Contract Owner nor any of its creditors. The Group Contract Owner may
transfer ownership of this Group Contract. Any transfer of ownership terminates
the interest of any existing Group Contract Owner. It does not change the right
of any Certificate Owner.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by the Certificate Owner at the
Certificate Issue Date, unless changed prior to the Annuity Date. In the event
that the Annuitant dies prior to the Annuity Date, the Certificate Owner must
designate a new Annuitant. If no new Annuitant is designated by the Certificate
Owner within 30 days of the death of the Annuitant, effective as of the death of
the Annuitant, the Certificate Owner becomes the Annuitant. The Annuitant may
not be changed in a Certificate which is owned by a non-natural person. Any
change of Annuitant is subject to the Company's underwriting rules in effect at
the time the request is recorded by the Company.
ASSIGNMENT OF A CERTIFICATE: A Written Request specifying the terms of an
assignment of a Certificate must be provided to the Administrative Office. The
Company will not be liable for any payment made or action taken before it
records the assignment. The Company will not be responsible for the validity or
tax consequences of any assignment. Any assignment made after the death benefit
has become payable will be valid only with Company consent.If the Certificate is
assigned, the Certificate Owner's rights may only be exercised with the consent
of the assignee of record.
ANNUITY PROVISIONS
GENERAL: On the Annuity Date, the Certificate Withdrawal Value will be applied
under the Annuity Option selected by the Owner. The Certificate Owner may elect
to have the Certificate Withdrawal Value applied to provide a Fixed Annuity, a
Variable Annuity or a combination Fixed and Variable Annuity. The Certificate
Value may be applied under the Annuity Option selected if the annuitization is
after the 4th policy year and the option is life contingent or for a minimum of
5 years. If a combination is elected, the Certificate Owner must specify what
part of the Certificate Withdrawal Value is to be applied to the Fixed and
Variable Options.
ANNUITY DATE: The Annuity Date is selected by the Certificate Owner at the
Certificate Issue Date, The Annuity Date must be the first day of a calendar
month and must be at least ninety (90) days after the Certificate Issue Date.
The Annuity Date may not be later than the earlier of when the Annuitant reaches
attained age 90 or the maximum date permitted under the law of the state in
which the Certificate is delivered.
Prior to the Annuity Date, the Certificate Owner, subject to the above, may
change the Annuity Date by Written Request. Any change must be requested at
least thirty (30) days prior to the new Annuity Date.
SELECTION OF AN ANNUITY OPTION: An Annuity Option may be selected by Written
Request of the Certificate Owner. If no Annuity Option is selected, Option 2
with 120 monthly payments guaranteed will automatically be applied. Unless
specified otherwise, that portion of the Certificate Withdrawal Value allocated
to the Variable Account shall be used to provide a Variable Annuity and that
portion of the Certificate Withdrawal Value allocated to the Fixed Account and
the MVA Account will be used to provide a Fixed Annuity. Prior to the Annuity
Date, the Owner can change the Annuity Option selected by Written Request. Any
change must be requested at least thirty (30) days prior to the Annuity Date.
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS: Annuity Payments are paid in monthly
installments. The Certificate Withdrawal Value is applied to the Annuity Table
for the Annuity Option selected. If the Certificate Withdrawal Value to be
applied under an Annuity Option is less than $5,000, the Company reserves the
right to make a lump sum payment in lieu of Annuity Payments. If the Annuity
Payment would be or become less than $40, the Company reserves the right to
reduce the frequency of payments to an interval which will result in each
payment being at least $50.
ANNUITY OPTIONS: The following Annuity Options or any other annuity option
acceptable to the Company may be selected:
OPTION 1. INCOME FOR SPECIFIED PERIOD: We will pay an income for a specific
number of years in equal installments. We guarantee these payments to be at
least those shown in Table 1.
OPTION 2. LIFE INCOME: We will pay equal monthly payments for a specified
period certain and then for life. We guarantee these payments will be at
least those shown in Table 2.
OPTION 3. INCOME OF SPECIFIED AMOUNT: We will pay income of the specified
amount until the principal and interest are exhausted.
OPTION 4. JOINT AND SURVIVOR INCOME: We will pay equal monthly payments
during the joint lifetime of the Annuitant and the named Beneficiary/Payee.
We will determine the payment by the sex and Age of each person from Table
4. The Annuitant must be at least 50 years old, and the Beneficiary/Payee
must be at least 45 years old, at the time of the first monthly payment.
ANNUITY: If the Certificate Owner selects a Fixed Annuity, the Certificate
Withdrawal Value is allocated to the General Account and the Annuity is paid as
a Fixed Annuity. If the Certificate Owner selects a Variable Annuity, the
Certificate Withdrawal Value will be allocated to the Sub-Accounts of the
Variable Account in accordance with the selection made by the Certificate Owner,
and the Annuity will be paid as a Variable Annuity. If no selection is made, the
Certificate Withdrawal Value will be applied in the same proportions to the same
Sub-Accounts as the allocations are at the time of election. Unless the
Certificate Owner specifies otherwise, the payee of the Annuity Payments shall
be the Certificate Owner. The Certificate Withdrawal Value will be applied to
the applicable Annuity Table contained in the Certificate based upon the Annuity
Option selected by the Certificate Owner. The amount of the first payment for
each $1,000 of Certificate Withdrawal Value is shown in the Annuity Tables.
FIXED ANNUITY: The Certificate Owner may elect to have the Certificate
Withdrawal Value applied to provide a Fixed Annuity.
The dollar amount of each Fixed Annuity Payment shall be determined in
accordance with Annuity Tables contained in this Contract which are based on the
minimum guaranteed interest rate of 3% per year.
VARIABLE ANNUITY: The Certificate Owner may elect to have the Certificate
Withdrawal Value applied to provide a Variable Annuity. Variable Annuity
Payments reflect the investment performance of the Variable Account in
accordance with the allocation of the Certificate Withdrawal Value to the
Sub-Accounts during the Annuity Period. Variable Annuity Payments are not
guaranteed as to the dollar amount.
The dollar amount of the first Variable Annuity Payment is determined in
accordance with the description above. The dollar amount of the Variable Annuity
Payment for each applicable Sub-Account after the first Variable Annuity Payment
is determined as follows:
1. The dollar amount of the first Variable Annuity Payment is divided
by the value of an Annuity Unit for each applicable Sub-Account as of
the Annuity Date. This sets the number of Annuity Units for each
monthly payment for the applicable Sub-Accounts.
2. The fixed number of Annuity Units per payment in each Sub-Account is
multiplied by the Annuity Unit Value for that Sub-Account for the last
Valuation Period of the month preceding the month for which the payment
is due. This result is the dollar amount of the payment for each
applicable Sub-Account.
The total dollar amount of each Variable Annuity Payment is the sum of all
Sub-Account Variable Annuity Payments reduced by the applicable portion of the
Certificate Maintenance Charge.
ANNUITY UNIT: The value of any Annuity Unit for each Sub-Account of the Variable
Account was set initially at $10.
The Sub-Account Annuity Unit Value at the end of any subsequent Valuation Period
is determined as follows:
1. the Net Investment Factor for the current Valuation Period is
multiplied by the value of the Annuity Unit for the Sub-Account for the
immediately preceding Valuation Period.
2. The result in (1) is then divided by the Assumed Investment Rate
Factor which equals 1.00 plus the Assumed Investment Rate for the
number of days since the preceding Valuation Date. The Certificate
Owner can choose either a 5% or a 3% Assumed Investment Rate.
MORTALITY TABLES: The mortality table used in establishing the Annuity Table is
the Annuity 2000 Mortality Table.
The dollar amount of an Annuity Payment for any Age or combination of Ages not
shown in the Tables or for any other form of Annuity Option agreed to by the
Company will be provided by the Company upon request.
GENERAL PROVISIONS
THE CONTRACT: The entire contract consists of this Contract, the Application and
any riders or endorsements attached to this Contract. This Contract may be
changed or altered only by the President or Senior Vice President and the
Secretary of the Company. A change or alteration must be made in writing.
MISSTATEMENT OF AGE: If the Age of any Annuitant has been misstated, any Annuity
benefits payable will be the Annuity benefits provided by the correct Age. After
Annuity Payments have begun, any underpayments will be made up in one sum with
the next Annuity Payment. Any overpayment will be deducted from future Annuity
Payments until the total is repaid.
INCONTESTABILITY: This Certificate will not be contestable from the date of
issue.
MODIFICATION: This Contract and any Certificate issued hereunder may be modified
in order to maintain compliance with applicable state and/or federal law.
NON-PARTICIPATING: This Contract and any Certificate issued hereunder will not
share in any distribution of dividends, profits or income of the Company.
EVIDENCE OF SURVIVAL: The Company may require satisfactory evidence of the
continued survival of any person(s) on whose life Annuity Payments are based.
PROOF OF AGE: The Company may require evidence of Age of any Annuitant and any
Certificate Owner.
PROTECTION OF PROCEEDS: To the extent permitted by law, death benefits and
Annuity Payments shall be free from legal process and the claim of any creditor
other than the person entitled to them under any Certificate. No payment and no
amount under this Certificate can be taken or assigned in advance of its payment
date unless the Company receives the Certificate Owner's written consent.
REPORTS: At least once each calendar year, the Company will furnish each Owner
with a report showing the Certificate Value and any other information as may be
required by law. The Company will also furnish an annual report of the Variable
Account.
PREMIUM TAXES: Any taxes paid to any governmental entity relating to the
Certificate will be deducted from the Purchase Payment or Certificate Value. The
Company may, in its sole discretion, pay taxes when due and deduct that amount
from the Contract Value at a later date. Payment at an earlier date does not
waive any right the Company may have to deduct amounts at a later date.
OTHER TAXES: The Company reserves the right to establish a provision for federal
income taxes if it determines, in its sole discretion, that it will incur a tax
as a result of the operation of the Separate Account. The Company will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not is was
sufficient. The Company will deduct any withholding taxes required by applicable
law.
REGULATORY REQUIREMENTS: All values payable under any Certificate will not be
less than the minimum benefits required by the laws and regulations of the
states in which the Certificate is delivered.
<TABLE>
<CAPTION>
TABLE 1
INCOME FOR SPECIFIED PERIOD FACTORS
Installments shown are for each $1,000 of net Proceeds applied. Interest is 3%,
and is subject to change as described in the Interest On Settlement Options
Section.
- ------------------- --------------------- -------------------- -------------------- --------------------
Annual Semi
Years Annual Annual Quarterly Monthly *
- ------------------- --------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1 N/A N/A N/A N/A
2 N/A N/A N/A N/A
3 N/A N/A N/A N/A
4 N/A N/A N/A N/A
5 $211.99 $106.78 $53.59 $17.91
6 179.22 90.27 45.30 15.14
7 155.83 78.49 39.39 13.16
8 138.31 69.66 34.96 11.68
9 124.69 62.81 31.52 10.53
10 113.82 57.33 28.77 9.61
11 104.93 52.85 26.52 8.86
12 97.54 49.13 24.65 8.24
13 91.29 45.98 23.08 7.71
14 85.95 43.29 21.73 7.26
15 81.33 40.96 20.56 6.87
16 77.29 38.93 19.54 6.53
17 73.74 37.14 18.64 6.23
18 70.59 35.56 17.84 5.96
19 67.78 34.14 17.13 5.73
20 65.26 32.87 16.50 5.51
- ------------------- --------------------- -------------------- -------------------- --------------------
<FN>
* Equal monthly payment for the number of years elected, not to exceed 25 years.
Payments will begin on the option date.
</FN>
</TABLE>
<TABLE>
<CAPTION>
TABLE 2
MONTHLY INCOME FOR LIFE WITH GUARANTEED PERIOD OF:
Equal monthly payments for a guaranteed period of 10, 15 or 20 years as elected
and for life thereafter as shown in the table below. Amount of each monthly
installment per $1,000 net proceeds. Amounts based on Annuity 2000 Mortality
Tables and 3% interest.
MALE
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
AGE OF PAYEE 10 15 20 AGE OF PAYEE 10 15 20
YEARS YEARS YEARS YEARS YEARS YEARS
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
25 $3.08 $3.08 3.07 53 $4.25 $4.20 $4.12
26 3.10 3.10 3.09 54 4.33 4.27 4.18
27 3.12 3.12 3.11 55 4.41 4.34 4.24
28 3.15 3.14 3.14 56 4.49 4.42 4.30
29 3.17 3.17 3.16 57 4.58 4.49 4.36
30 3.20 3.19 3.19 58 4.68 4.58 4.43
31 3.22 3.22 3.21 59 4.78 4.66 4.49
32 3.25 3.25 3.24 60 4.88 4.75 4.56
33 3.28 3.28 3.27 61 4.99 4.84 4.62
34 3.31 3.31 3.30 62 5.10 4.93 4.69
35 3.34 3.34 3.33 63 5.23 5.03 4.75
36 3.38 3.37 3.36 64 5.35 5.13 4.82
37 3.41 3.40 3.39 65 5.48 5.22 4.88
38 3.45 3.44 3.42 66 5.62 5.33 4.94
39 3.49 3.48 3.46 67 5.77 5.43 5.00
40 3.53 3.52 3.50 68 5.92 5.53 5.06
41 3.57 3.56 3.53 69 6.07 5.63 5.11
42 3.62 3.60 3.57 70 6.23 5.73 5.16
43 3.66 3.64 3.62 71 6.39 5.83 5.21
44 3.71 3.69 3.66 72 6.56 5.93 5.25
45 3.76 3.74 3.70 73 6.73 6.02 5.29
46 3.81 3.79 3.75 74 6.90 6.11 5.33
47 3.87 3.84 3.80 75 7.08 6.20 5.36
48 3.92 3.89 3.85 76 7.25 6.28 5.39
49 3.98 3.95 3.90 77 7.43 6.35 5.41
50 4.05 4.01 3.95 78 7.61 6.42 5.43
51 4.11 4.07 4.00 79 7.78 6.49 5.45
52 4.18 4.13 4.06 80 7.95 6.55 5.46
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
</TABLE>
<TABLE>
<CAPTION>
TABLE 2
MONTHLY INCOME FOR LIFE WITH A GUARANTEED PERIOD OF:
Equal monthly payments for a guaranteed period of 10, 15 or 20 years as elected
and for life thereafter as shown in the table below. Amount of each monthly
installment per $1,000 net proceeds. Amounts based on Annuity 2000 Mortality
Tables and 3% interest.
FEMALE
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
AGE OF PAYEE 10 15 20 AGE OF PAYEE 10 15 20
YEARS YEARS YEARS YEARS YEARS YEARS
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
25 $2.99 $2.99 $2.99 53 $3.99 $3.96 $3.92
26 3.01 3.01 3.00 54 4.06 4.02 3.97
27 3.03 3.03 3.02 55 4.13 4.09 4.03
28 3.05 3.05 3.04 56 4.20 4.16 4.09
29 3.07 3.07 3.06 57 4.28 4.23 4.15
30 3.09 3.09 3.09 58 4.36 4.30 4.22
31 3.11 3.11 3.11 59 4.45 4.38 4.28
32 3.14 3.14 3.13 60 4.54 4.46 4.35
33 3.16 3.16 3.15 61 4.63 4.55 4.42
34 3.19 3.19 3.18 62 4.73 4.64 4.49
35 3.22 3.21 3.21 63 4.84 4.73 4.57
36 3.24 3.24 3.23 64 4.95 4.83 4.64
37 3.27 3.27 3.26 65 5.07 4.93 4.71
38 3.30 3.30 3.29 66 5.20 5.03 4.78
39 3.34 3.33 3.32 67 5.33 5.14 4.85
40 3.37 3.36 3.35 68 5.47 5.25 4.92
41 3.41 3.40 3.39 69 5.62 5.36 4.99
42 3.44 3.44 3.42 70 5.78 5.47 5.05
43 3.48 3.47 3.46 71 5.94 5.58 5.11
44 3.52 3.51 3.50 72 6.11 5.70 5.17
45 3.57 3.55 3.54 73 6.29 5.81 5.22
46 3.61 3.60 3.58 74 6.48 5.92 5.27
47 3.66 3.64 3.62 75 6.67 6.03 5.31
48 3.71 3.69 3.66 76 6.86 6.13 5.35
49 3.76 3.74 3.71 77 7.06 6.22 5.38
50 3.81 3.79 3.76 78 7.26 6.31 5.40
51 3.87 3.85 3.81 79 7.46 6.39 5.43
52 3.93 3.90 3.86 80 7.66 6.47 5.45
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
</TABLE>
TABLE 3
EQUAL PAYMENTS OF A SPECIFIED AMOUNT
Equal monthly payments of at least $4.71 per month for each $1,000 of
proceeds. Payments will begin on the option date and will continue until the
proceeds and interest at the rate of 3.00% compounded annually are
exhausted.
<TABLE>
<CAPTION>
TABLE 4
JOINT AND SURVIVOR INCOME FACTORS
We will furnish values for age or sex combinations not shown in the table on
request.
Male Age
_____________________________________________________________________________________________
Female Age 45 50 55 60 65 70
<S> <C> <C> <C> <C> <C> <C>
45 $3.34 $3.41 $3.46 $3.50 $3.54 $3.58
50 3.44 3.54 3.62 3.69 3.74 3.79
55 3.53 3.66 3.79 3.90 3.99 4.06
60 3.60 3.78 3.95 4.12 4.27 4.38
65 3.66 3.87 4.10 4.34 4.57 4.77
70 3.71 3.95 4.22 4.54 4.87 5.19
</TABLE>
Installments shown are monthly and are for each $1,000 of net Proceeds applied.
Based on Annuity 2000 Tables and 3% interest: Amounts are subject to change as
described in the Interest On Settlement Options Section.
<TABLE>
<CAPTION>
GREAT AMERICAN RESERVE INSURANCE COMPANY
FIXED FUND
ACCUMULATION TABLE FOR FLEXIBLE PREMIUM DEFERRED ANNUITY
$1,000 FOR FIRST FIVE YEARS
GUARANTEED SURRENDER VALUE*
- ---------------------------- ------------------------- -------------------------- --------------------------
End of Accumulated
Policy Value Accumulated Surrender
Year Increase Value Value
- ---------------------------- ------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
1 1,030.00 1,030.00 967.21
2 1,060.90 2,090.90 1,965.54
3 1,092.73 3,183.63 3,002.73
4 1,125.51 4,309.14 4,080.68
5 1,159.27 5,468.41 5,200.28
- ---------------------------- ------------------------- -------------------------- --------------------------
6 164.05 5,632.46 5,399.36
7 168.97 5,801.44 5,613.04
8 174.04 5,975.48 5,835.48
9 179.26 6,154.74 6,064.74
10 184.64 6,339.39 6,289.39
- ---------------------------- ------------------------- -------------------------- --------------------------
11 190.18 6,529.57 6,509.57
12 195.89 6,725.45 6,725.45
13 201.76 6,927.22 6,927.22
14 207.82 7,135.03 7,135.03
15 214.05 7,349.09 7,349.09
- ---------------------------- ------------------------- -------------------------- --------------------------
16 220.47 7,569.56 7,569.56
17 227.09 7,796.64 7,796.64
18 233.90 8,030.54 8,030.54
19 240.92 8,271.46 8,271.46
20 248.14 8,519.60 8,519.60
- ---------------------------- ------------------------- -------------------------- --------------------------
21 255.59 8,775.19 8,775.19
22 263.26 9,038.45 9,038.45
23 271.15 9,309.60 9,309.60
24 279.29 9,588.89 9,588.89
25 287.67 9,876.56 9,876.56
- ---------------------------- ------------------------- -------------------------- --------------------------
26 296.30 10,172.85 10,172.85
27 305.19 10,478.04 10,478.04
28 314.34 10,792.38 10,792.38
29 323.77 11,116.15 11,116.15
30 333.48 11,449.64 11,449.64
- ---------------------------- ------------------------- -------------------------- --------------------------
31 343.49 11,793.13 11,793.13
32 353.79 12,146.92 12,146.92
33 364.41 12,511.33 12,511.33
34 375.34 12,886.67 12,886.67
35 386.60 13,273.27 13,273.27
- ---------------------------- ------------------------- -------------------------- --------------------------
36 398.20 13,671.46 13,671.46
37 410.14 14,081.61 14,081.61
38 422.45 14,504.06 14,504.06
39 435.12 14,939.18 14,939.18
40 448.18 15,387.35 15,387.35
- ---------------------------- ------------------------- -------------------------- --------------------------
<FN>
*Values Shown are Based on an Interest Rate of 3% for All Years.
</FN>
</TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. PENNSYLVANIA STREET
CARMEL, INDIANA 46032-4572
(317) 817-3700
INDIVIDUAL FIXED AND VARIABLE
ANNUITY CONTRACT
NON-PARTICIPATING
32-4008M
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(317) 817-3700
A Stock Company
GREAT AMERICAN RESERVE INSURANCE COMPANY (the "Company") agrees with the Group
Contract Owner to provide benefits to the Certificate Owners, subject to the
provisions set forth in this Certificate and in consideration of Purchase
Payments received from the Certificate Owners.
RIGHT TO EXAMINE CERTIFICATE: Within 10 days of the date of receipt of a
Certificate under this Certificate by a Certificate Owner, it may be returned by
delivering or mailing it to the Company at its Administrative Office. When the
Certificate is received by the Company, it will be voided as if it had never
been in force. The Company will refund the Certificate Value computed at the end
of the Valuation Period during which the Certificate is received by the Company
at its Administrative Office.
THIS IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY
READ YOUR CONTRACT CAREFULLY
SIGNED FOR THE COMPANY AT CARMEL, INDIANA, ON THE CERTIFICATE DATE.
ABCDEFGH ABCDEFGH
SECRETARY PRESIDENT
ALLOCATED FIXED AND VARIABLE
GROUP ANNUITY CERTIFICATE
NON-PARTICIPATING
WITHDRAWAL VALUES AND THE DEATH BENEFITS PROVIDED BY THIS CERTIFICATE, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO DOLLAR AMOUNT. NON FORFEITURE VALUES MAY INCREASE OR
DECREASE BASED ON THE MARKET VALUE ADJUSTMENT SPECIFIED IN THIS CERTIFICATE.
TABLE OF CONTENTS
CERTIFICATE SCHEDULE.........................................................4
DEFINITIONS..................................................................7
PURCHASE PAYMENT PROVISIONS..................................................8
PURCHASE PAYMENTS...................................................8
ALLOCATION OF PURCHASE PAYMENTS.....................................9
SEPARATE ACCOUNT PROVISIONS..................................................9
THE SEPARATE ACCOUNTS...............................................9
VARIABLE ACCOUNT....................................................9
VALUATION OF ASSETS.................................................9
ACCUMULATION UNITS..................................................9
ACCUMULATION UNIT VALUE.............................................9
MORTALITY AND EXPENSE RISK CHARGE..................................10
ADMINISTRATIVE CHARGE..............................................10
DISTRIBUTION EXPENSE CHARGE........................................10
MVA ACCOUNT PROVISIONS......................................................10
MVA ACCOUNT........................................................10
INTEREST TO BE CREDITED............................................10
GUARANTEE PERIOD...................................................10
MULTIPLE GUARANTEE PERIODS.........................................10
CHANGE IN GUARANTEE PERIOD.........................................10
MARKET VALUE ADJUSTMENT............................................11
MVA ACCOUNT VALUES.................................................11
FIXED ACCOUNT PROVISIONS....................................................11
FIXED ACCOUNT VALUES...............................................11
INTEREST TO BE CREDITED............................................11
CERTIFICATE VALUE...........................................................11
CERTIFICATE MAINTENANCE CHARGE..............................................12
DEDUCTION FOR CERTIFICATE MAINTENANCE CHARGE.......................12
TRANSFERS...................................................................12
TRANSFERS DURING THE ACCUMULATION PERIOD...........................12
TRANSFERS DURING THE ANNUITY PERIOD................................12
WITHDRAWAL PROVISIONS.......................................................13
WITHDRAWALS........................................................13
CONTINGENT DEFERRED SALES CHARGE...................................13
WITHDRAWAL CHARGE..................................................13
PROCEEDS PAYABLE ON DEATH...................................................13
DEATH OF OWNER DURING THE ACCUMULATION PERIOD......................13
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD................13
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD...............14
DEATH OF OWNER DURING THE ANNUITY PERIOD...........................14
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD..................14
DEATH OF THE ANNUITANT DURING THE ANNUITY PERIOD...................14
PAYMENT OF DEATH BENEFIT...........................................14
BENEFICIARY........................................................14
CHANGE OF BENEFICIARY..............................................15
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION................................15
CERTIFICATE OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS..............15
CERTIFICATE OWNER..................................................15
JOINT CERTIFICATE OWNER............................................15
GROUP CONTRACT OWNER...............................................15
ANNUITANT..........................................................15
ASSIGNMENT OF A CERTIFICATE........................................16
ANNUITY PROVISIONS..........................................................16
GENERAL............................................................16
ANNUITY DATE.......................................................16
SELECTION OF AN ANNUITY OPTION.....................................16
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS...........................16
ANNUITY OPTIONS....................................................16
OPTION 1. INCOME FOR SPECIFIED PERIOD
OPTION 2. LIFE INCOME......................................16
OPTION 3. INCOME OF SPECIFIED AMOUNT........................16
OPTION 4. JOINT AND SURVIVOR INCOME.........................16
ANNUITY............................................................17
FIXED ANNUITY......................................................17
VARIABLE ANNUITY...................................................17
ANNUITY UNIT.......................................................17
MORTALITY TABLES...................................................17
GENERAL PROVISION...........................................................17
THE CERTIFICATE....................................................17
MISSTATEMENT OF AGE................................................18
INCONTESTABILITY...................................................18
MODIFICATION.......................................................18
NON-PARTICIPATION..................................................18
EVIDENCE OF SURVIVAL...............................................18
PROOF OF AGE`......................................................18
PROTECTION OF PROCEEDS.............................................18
REPORTS............................................................18
PREMIUM TAXES......................................................18
OTHER TAXES........................................................18
REGULATORY REQUIREMENTS............................................18
ANNUITY OPTION TABLES.......................................................19
CERTIFICATE SCHEDULE
CERTIFICATE OWNER: [John Doe] CERTIFICATE ISSUE DATE: [November 1, 1997]
CERTIFICATE NUMBER: [12345] ANNUITY DATE: [November 1, 2032]
<TABLE>
<CAPTION>
PURCHASE PAYMENTS UNDER EACH CERTIFICATE:
<S> <C>
INITIAL PURCHASE PAYMENT: [$5,000 Non-Qualified; $2,000 IRA]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: [$500 ($50 for IRAs & EFTs); or $200 monthly for
non qualified contracts if the automatic premium
check option is elected.]
MAXIMUM TOTAL PURCHASE PAYMENT: [$500,000, without prior Company approval]
</TABLE>
ALLOCATION GUIDELINES:
[1. The Certificate Owner can select any of the investment options,
including the Sub-Accounts of the Variable Account, the MVA Account
and the Fixed Account Options. However, Certificate Owners are limited
to 15 Sub-Accounts at any one time.
2. If the Purchase Payments and forms required to issue a Certificate
are in good order, the initial Purchase Payment will be credited to
the Certificate Owners Account within two (2) business days after
receipt at the Administrative Office. Additional Purchase Payments
will be credited to the Certificate Owner's Account as of the
Valuation Period when they are received.
3. Allocation percentages must be in whole numbers. Each allocation
must be at least 1%.
4. The minimum amount which must be allocated for any Guarantee Period
in the MVA Account is $2,000. The company reserves the right to change
this minimum in the future.]
BENEFICIARY:
[As designated by the Certificate Owner at the Certificate Issue Date,
unless subsequently changed.]
CERTIFICATE MAINTENANCE CHARGE:
[The Certificate Maintenance Charge is $30 each Certificate Year. The
Company reserves the right to change the Certificate Maintenance
Charge but it will not exceed $60 per Certificate Year. During the
Accumulation Period, if the Certificate Value on the Certificate
Anniversary is at least $50,000, then no Certificate Maintenance
Charge will be deducted. During the Accumulation Period, a total
withdrawal is made on other than a Certificate Anniversary and the
Certificate Value for the Valuation Period during which the total
withdrawal is made is less than $50,000, the full Certificate
Maintenance Charge will be deducted at the time of the total
withdrawal. If at annuitization, the Annuity Date is not the
Certificate Anniversary and the Certificate Value on the Annuity Date
is less than $50,000, then the full Certificate Maintenance Charge
will be deducted on the Annuity Date. During the Annuity Period, no
Certificate Maintenance Charge will be deducted.]
MORTALITY AND EXPENSE RISK CHARGE:
[Equal, on an annual basis, to 1.25% of the average daily net asset
value of the Variable Account.]
ADMINISTRATIVE CHARGE:
[Equal, on an annual basis, to .15% of the average daily net asset
value of the Variable Account. The Company may increase this charge;
however, the maximum Administrative Charge will not exceed .25% of the
average daily net asset value of the Variable Account. In the event of
an increase, the Company will give Certificate Owners 90 days prior
notice of the increase.]
DISTRIBUTION EXPENSE CHARGE:
[NONE]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: [There are currently no limits on the
number of transfers that can be made during the Accumulation Period.
Certificate Owners are permitted two transfers per Certificate Year
during the Annuity Period.]
TRANSFER FEE: [The Company does not assess a Transfer Fee on one
transfer in a 30 day period during the Accumulation Period or the two
transfers permitted during the Annuity Period. You can transfer among
the Sub-Accounts at least once every 30 days. If you transfer more
often, you may be assessed a $25 fee. The Company reserves the right
to change the transfer fee. All reallocations made on a given date
count as one transfer. Transfers made at the end of the Right to
Examine Certificate period by the Company and any transfers made
pursuant to a pre-approved Dollar Cost Averaging Program or pursuant
to a pre-approved Rebalancing Program will not be counted in
determining the application of the Transfer Fee.]
MINIMUM AMOUNT TO BE TRANSFERRED: [$500 (from any Sub-Account or any
Guarantee Period of the MVA Account), or the Certificate Owner's
entire interest in the Sub-Account or the Guarantee Period, if less.
This requirement is waived if the transfer is pursuant to a
pre-approved Dollar Cost Averaging Program or Rebalancing Program.
Transfers from the Fixed Account are limited to 20% of the Certificate
Value every six (6) months.]
MINIMUM AMOUNT WHICH MUST REMAIN IN EACH ACCOUNT AFTER A TRANSFER:
[$500 per Sub-Account or a Guarantee Period in the MVA Account; or $0
if the entire amount in any Sub-Account of the Variable Account or a
Guarantee Period in the MVA Account is transferred.]
MAXIMUM AMOUNT WHICH CAN BE TRANSFERRED FROM THE FIXED ACCOUNT OR MVA
ACCOUNT TO THE VARIABLE ACCOUNT: [NONE]
WITHDRAWALS:
CONTINGENT DEFERRED SALES CHARGE: A Contingent Deferred Sales Charge
is assessed against each Purchase Payment withdrawn [and will result
in a reduction in remaining Certificate Value.] The Purchase Payment
is tracked from its date of receipt and the charges are determined in
accordance with the following:
Number of Years from Receipt Contingent Deferred
of Purchase Payment Sales Charge
------------------- ------------
1st Year 7%
2nd Year 7%
3rd Year 6%
4th Year 5%
5th Year 4%
6th Year 3%
7th Year 2%
8th Year and later 0%
Waiver of Contingent Deferred Sales Charge: In every Certificate Year, an amount
equal to the greater of: (i) 10% of the Certificate Value, on a non-cumulative
basis, (ii) the IRS minimum distribution requirement, if the Certificate was
issued as an IRA, or (iii) the total premiums paid that have been in the
Certificate more than seven complete years is available free of Contingent
Deferred Sales Charges.
WITHDRAWAL CHARGE: [NONE]
MINIMUM PARTIAL WITHDRAWAL: [$500 from each Sub-Account of the Variable Account,
each Guarantee Period of the MVA Account and the Fixed Account. This requirement
is waived if the partial withdrawal is pursuant to the Systematic Withdrawal
Program.]
MINIMUM CERTIFICATE VALUE WHICH MUST REMAIN IN CERTIFICATE AFTER A PARTIAL
WITHDRAWAL: [$500]
MINIMUM CERTIFICATE VALUE WHICH MUST REMAIN IN ANY SUB-ACCOUNT OF THE VARIABLE
ACCOUNT AFTER A PARTIAL WITHDRAWAL: [$500]
MAXIMUM AMOUNT WHICH CAN BE WITHDRAWN FROM THE FIXED AND MVA ACCOUNTS:
[There is currently no limitation on the maximum amount which can be
withdrawn from the Fixed Account or the MVA Account.]
<TABLE>
<CAPTION>
<S> <C>
SEPARATE ACCOUNTS: Variable Account [Great American Reserve Variable Annuity Account F for the
Variable Annuity portion of the Contract.]
and
MVA Account [Great American Reserve Market Value Adjustment Account for the
portion of the Contract that may be subject to a Market Value
Adjustment.]
</TABLE>
MVA ACCOUNT:
Minimum Guaranteed Interest Rate: 3%
Current MVA Account Guarantee Period Options and
Credited Interest Rates:
[1 Year]. [XX%]
[3 Years] [XX%]
[5 Years] [XX%]
MARKET VALUE ADJUSTMENT FACTOR: [The Market Value Adjustment Factor is equal to:
N/365
[1 + A) / (1 + B)] - 1
where:
A = the U.S. Treasury rate in effect at the beginning of the
Guarantee Period for the length of the guarantee period selected.
B = .the current U.S. Treasury rate as of the transaction date plus
.005. Treasury rate period is determined by N/365 rounded to the
next highest year.
N = the number of days remaining in the MVA Guarantee Period.]
If the Treasury rate is not available for the period, the rate will be
arrived at by interpolation. If no Treasury rates are available, an
Index will be selected by the Company and approved by the State
Insurance Commissioner.
[MVA Waiver: For withdrawals from MVA Account Guarantee Period Option,
after the first year in such Guarantee Period option, the Certificate
Owner can make one withdrawal each Certificate Year of up to a total of
10% of each such Guarantee Period option of the MVA Account without the
Market Value Adjustment.]
FIXED ACCOUNT:
Minimum Guarantee Interest Rate: 3%
Current Interest Rate as of Issue Date: [X%]
RIDERS:
[IRA ENDORSEMENT]
<TABLE>
<CAPTION>
<S> <C>
ADMINISTRATIVE OFFICE:
[Great American Reserve Insurance Company Great American Reserve Insurance Company
Administrative Office Administrative Office
P.O. Box 1927..... OR 11815 N. Pennsylvania Street
Carmel, IN 46032 Carmel. IN 46032]
(800) 824-2726
(317) 817-3700
</TABLE>
DEFINITIONS
ACCOUNT(S): The Fixed Account, the MVA Account and the General Account and/or
one or more of the Sub-Accounts of the Variable Account.
ACCUMULATION PERIOD: The period prior to the Annuity Date during which Purchase
Payments may be made by an Owner.
ACCUMULATION UNIT: A unit of measure used to determine the value of a
Certificate Owner's interest in a Sub-Account of the Variable Account during the
Accumulation Period.
ADJUSTED CERTIFICATE VALUE: The Certificate Value less any applicable Premium
Tax, and Certificate Maintenance Charge and plus the applicable Market Value
Adjustment which may be positive or negative. This amount is applied to the
applicable Annuity Tables to determine Annuity Payments.
AGE: The age of any Certificate Owner or Annuitant on his or her last birthday.
For Joint Certificate Owners, all provisions which are based on age are based on
the Age of the older of the Joint Certificate Owners.
ADMINISTRATIVE OFFICE: The office address indicated on the Certificate Schedule
of the Certificate to which notices, requests and Purchase Payments must be
sent. All sums payable to the Company under this Certificate or any Certificate
are payable at the Administrative Office or an address designated by the Company
in writing.
ANNUITANT: The natural person on whose life Annuity Payments are based. On or
after the Annuity Date, the Annuitant shall also include any Joint Annuitant.
ANNUITY DATE: The date on which Annuity Payments begin. The Annuity Date is
shown on the Certificate Schedule.
ANNUITY OPTIONS: Options available for Annuity Payments.
ANNUITY PAYMENTS: The series of payments made to the Certificate Owner or any
named payee after the Annuity Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning with the Annuity Date during which
Annuity Payments are made.
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
Annuity Payments.
AUTHORIZED REQUEST: A request, in a form satisfactory to the Company, which is
received by the Administrative Office.
BENEFICIARY: The person(s) or entity(ies) who will receive the death benefit
payable under this Certificate.
CERTIFICATE: The document issued to a Certificate Owner to evidence a
Certificate Owner's Account established under this Group Contract.
CERTIFICATE ANNIVERSARY: An Anniversary of the Certificate Issue Date.
CERTIFICATE ISSUE DATE: The later of the date on the cover of the Certificate or
the date Purchase Payments are received. The Certificate Issue Date is shown on
the Certificate Schedule.
CERTIFICATE OWNER: A person who has established a Certificate Owner's Account
under this Group Contract.
CERTIFICATE OWNER'S ACCOUNT: A record established for each Certificate to
maintain values under this Group Contract.
CERTIFICATE VALUE: The dollar value as of any Valuation Period of all amounts in
a Certificate Owner's Account.
CERTIFICATE WITHDRAWAL VALUE: The Certificate Value less any applicable Premium
Tax, less any Contingent Deferred Sales Charge, less any applicable Certificate
Maintenance Charge and plus any Market Value Adjustment which may be positive or
negative.
CERTIFICATE YEAR: The first Certificate Year is the annual period which begins
on the Certificate Issue Date. Subsequent Certificate Years begin on each
anniversary of the Certificate Issue Date.
COMPANY: Great American Reserve Insurance Company
CREDITED INTEREST RATE: The interest rate credited to the Certificate Owner's
Account by the Company for any given Guarantee Period in the MVA Account or the
Fixed Account. The Credited Interest Rates for the available Guarantee Periods
for the MVA Account and the Fixed Account are shown on the Certificate Schedule.
EFFECTIVE DATE: The beginning date of a Guarantee Period with a Credited
Interest Rate.
ELIGIBLE FUND: An investment entity that is made available for this Certificate.
FIXED ACCOUNT: An investment option within the General Account.
FIXED ANNUITY: A series of payments made during the Annuity Period which are
guaranteed as to dollar amount by the Company.
GENERAL ACCOUNT: The Company's general investment account which contains all the
assets of the company except for the Variable Account and any other segregated
asset accounts.
GROUP CONTRACT OWNER: The person on entity to which this Group Contract is
issued.
GUARANTEE PERIOD: The period for which the Credited Interest Rate is credited in
the MVA Account. Each deposit or transfer to the MVA Account creates one or more
new Guarantee Period(s). The Guarantee Periods selected by the Certificate Owner
are shown on the Certificate Schedule.
MARKET VALUE ADJUSTMENT: An adjustment to the amount withdrawn or transferred
from an MVA Account prior to the end of the applicable Guarantee Period. The
adjustment reflects the change in the value of the funds withdrawn or
transferred due to the change in the interest rates since the beginning of the
Guarantee Period.
MVA ACCOUNT: A separate account which provides investment options where the
Company guarantees the rate of interest for a specified Guarantee Period and
where withdrawals or transfers may be subject to a Market Value Adjustment.
PORTFOLIO: A segment of an Eligible Fund which constitutes a separate and
distinct class of shares.
PREMIUM TAX: Any premium taxes payable to any government entity and assessed
against Purchase Payments or Certificate Value.
PURCHASE PAYMENT: A payment made by or for a Certificate Owner with respect to
this Certificate. All payments must be made payable to the Company.
SUB-ACCOUNT: Variable Account assets are divided into Sub-Accounts. Assets of
each Sub-Account will be invested in shares of an Eligible Fund or a Portfolio
of an Eligible Fund.
VALUATION DATE: Each day on which the New York Stock Exchange ("NYSE") is open
for business.
VALUATION PERIOD: The period of time beginning at the close of business of the
NYSE on each Valuation Date and ending at the close of business for the next
succeeding Valuation Date.
VARIABLE ACCOUNT: A separate account which provides investment options where the
benefits are variable and are not guaranteed as to dollar amount,
WRITTEN REQUEST: A request in writing, in a form satisfactory to the Company,
which is received by the Administrative Office.
PURCHASE PAYMENT PROVISIONS
PURCHASE PAYMENTS: The initial Purchase Payment for an Owner is due on the
Certificate Issue Date. Subject to the maximum and minimum amounts shown on the
Certificate Schedule, the Owner may make subsequent Purchase Payments and may
increase or decrease or change the frequency of such payments. The Company
reserves the right to reject any Application or Purchase Payment.
ALLOCATION OF PURCHASE PAYMENTS: Purchase Payments are allocated to the Fixed
Account and/or to one or more of the MVA Account Guarantee Period options and/or
to one or more Sub-Accounts of the Variable Account in accordance with the
selections made by the Owner. The allocation of the initial Purchase Payment for
an Owner is made in accordance with the selection made by the Owner at the
Certificate Issue Date. Unless otherwise changed by the Owner, subsequent
Purchase Payments are allocated in the same manner as the initial Purchase
Payment. Allocation of the Purchase Payments is subject to the Allocation
Guidelines shown on the Certificate Schedule. The Company reserves the right to
allocate initial Purchase Payment to the Money Market Sub-Account (except for
any amounts allocated to the Fixed Account and/or MVA Account) until the
expiration of the Right to Examine Period.
SEPARATE ACCOUNT PROVISIONS
THE SEPARATE ACCOUNTS: The Separate Account consist of assets set aside by the
Company, which are kept separate from that of the general assets and any other
separate account assets of the Company.
VARIABLE ACCOUNT: The assets of the Variable Account will not be charged with
liabilities arising out of any other business the Company may conduct.
The Variable Account assets are divided into Sub-Accounts. The assets of the
Sub-Accounts are allocated to the Eligible Fund(s) and the Portfolio(s), if any,
within an Eligible Fund. Should the shares of any such Eligible Fund(s) or any
Portfolio(s) within an eligible Fund become unavailable for investment by the
Variable Account, or the Company's Board of Directors deems further investment
in these shares inappropriate, the Company may limit further purchase of such
shares or substitute shares of another Eligible Fund or Portfolio for shares
already purchased under a Certificate.
VALUATION OF ASSETS: The assets of the Accounts are valued at their fair market
value in accordance with procedures of the Company.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Sub-Accounts of the Variable Account as a
result of Purchase Payments, withdrawals, transfers, or fees and charges. The
Company will determine the number of Accumulation Units of a Sub-Account
purchased or canceled. This will be done by dividing the amount allocated to (or
the amount withdrawn from) the Sub-Account by the dollar value of one
Accumulation Unit of the Sub-Account as of the end of the Valuation Period
during which the request of the transaction is received at the Administrative
Office.
ACCUMULATION UNIT VALUE: The Accumulation Unit Value for each Sub-Account is
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Sub-Account are determined by multiplying the Accumulation Unit Value for the
immediately preceding Valuation Period by the Net Investment Factor for the
Sub-Account for the current period.
The Net Investment Factor for each Sub-Account is determined by dividing A by B
and subtracting C where:
A is (i) the net asset value per share of the Eligible Fund or
Portfolio of an Eligible Fund held by the Sub-Account at the end
of the current Valuation Period; plus
(ii) any dividend or capital gains per share declared on behalf
of such Eligible Fund or Portfolio that has an ex-dividend date
within the current Valuation Period; plus
(iii) a charge factor, if any, for any taxes or any tax reserve
established by the Company as a result of the operation or
maintenance of the Sub-Account.
B is the net asset value per share of the Eligible Fund or
Portfolio held by the Sub-Account for the immediately preceding
Valuation Period.
C is the Valuation Period equivalent of the per month Mortality and
Expense Risk Charge, for the Administrative Charge and for the
Distribution Charge, if any, which are shown on the Certificate
Schedule.
The Accumulation Unit Value may increase or decrease from Valuation Period to
Valuation Period.
MORTALITY AND EXPENSE RISK CHARGE: Each Valuation Period, the Company deducts a
Mortality and Expense Risk Charge from the Variable Account which is equal, on
an annual basis, to the amount shown on the Certificate Schedule. The Mortality
and Expense Risk charge compensates the Company for assuming the mortality and
expense risks under this Certificate.
ADMINISTRATIVE CHARGE: Each Valuation Period, the Company deducts an
Administrative Charge from the Variable Account which is equal, on an annual
basis, to the amount shown on the Certificate Schedule. The Administrative
Charge compensates the Company for the costs associated with the administration
of this Certificate and the Variable Account.
DISTRIBUTION EXPENSE CHARGE: Each Valuation Period, the Company deducts a
Distribution Expense Charge from the Variable Account which is equal, on an
annual basis, to the amount shown on the Certificate Schedule. The Distribution
charge compensates the Company for the costs associated with the distribution of
Contracts and Certificates.
MVA ACCOUNT PROVISIONS
MVA ACCOUNT: The assets of the MVA Account will not be charged with liabilities
arising out of any other business the Company may conduct.
Purchase Payments may be allocated to one or more of the MVA Account Guarantee
Period options which are available at the time the Purchase Payment is made. The
initial MVA Account Guarantee Period options are shown on the Certificate
Schedule. In addition, during the Accumulation Period, Certificate Values can be
transferred from the Variable Account and/or the Fixed Account to one or more of
the MVA Account Guarantee Period options.
INTEREST TO BE CREDITED: The Credited Interest Rate for the Guarantee Period(s)
of the MVA Account is shown on the Certificate Schedule. After the initial
Guarantee Period, the Credited Interest Rate for any subsequent Guarantee Period
of the MVA Account may change. All interest payable under this Certificate is
compounded daily at the stated effective annual interest rate. In no event will
the Credited Interest Rate be less than the Minimum Guaranteed Interest Rate,
prior to the application of the Market Value Adjustment, specified on the
Contract Schedule.
GUARANTEE PERIOD: The Current MVA Account Guarantee Period is shown on the
Contract Schedule. During the thirty (30) days prior to the end of a current
Guarantee Period, the Certificate Owner may renew for the same or any other
Guarantee Period then available at the then Credited Interest Rate or may elect
to transfer all or a portion of the amount to a Fixed Account option, if
available, or to the Variable Account. Any transfer elected during the thirty
(30) days prior to the end of a current Guarantee Period will be made as of the
date the request is received by the Company and will not be subject to any
Market Value Adjustment.
If the Certificate Owner does not specify a Guarantee Period at the time of
renewal, the Company will select and transfer to the same Guarantee Period as
has just expired, so long as such Guarantee Period does not extend beyond the
latest Annuity Date that can be selected by a Certificate Owner. If such
Guarantee Period does extend beyond the latest Annuity Date, the Company will
choose the one year period. If there is no Guarantee Period for the same period
available, the one year period will be selected. If the one year period is no
longer available, the next longest period available will be selected.
MULTIPLE GUARANTEE PERIODS: The Certificate Owner may elect one or more
Guarantee Periods subject to the Company's underwriting rules. Multiple
Guarantee Periods are treated separately for purposes of applying the Market
Value Adjustment. The Company reserves the right to credit different Credited
Interest Rates to the Certificate Value attributable:
1. to different Guarantee Periods; and
2. to Guarantee Periods of the same duration with different Effective
Dates.
CHANGES IN GUARANTEE PERIOD: The Certificate Owner may, upon Written Request,
change to any Guarantee Period then being offered by the Company with respect to
contracts and certificates of this type and class. The Market Value Adjustment
will apply to a change made at any time other than at the end of a Guarantee
Period. The Market Value Adjustment will not apply to a change made at the end
of a Guarantee Period if Written Request is received by the Company within
thirty (30) days prior to the end of the Guarantee Period.
MARKET VALUE ADJUSTMENT: Any amount withdrawn, transferred or annuitized prior
to the end of a Guarantee Period may be subject to a Market Value Adjustment.
The Market Value Adjustment will be calculated by multiplying the amount
withdrawn, transferred or annuitized by the formula shown on the Certificate
Schedule.
There will be no Market Value Adjustment on withdrawals from the MVA Account in
the following situations: (1) death benefit paid under this Certificate; (2)
amounts withdrawn to pay fees or charges; (3) amounts withdrawn or transferred
from the MVA Account during the thirty (30) days prior to the end of the
Guarantee Period; (4) a Certificate Owner annuitizes this Certificate under an
Annuity Option providing for at least sixty (60) monthly Annuity Payments; and
(5) any withdrawal subject to the MVA Waiver shown on the Certificate Schedule.
MVA ACCOUNT VALUES: The MVA Account portion of a Certificate at any time is
equal to:
1. The Purchase Payments allocated to the MVA Account on behalf of a
Certificate Owner; plus
2. the Certificate Value transferred to the MVA Account; plus
3. interest credited to the Certificate Value in the MVA Account; less
4. any prior withdrawals of Certificate Value in the MVA Account and any
Contingent Deferred Sales Charge; less
5. any Certificate Value transferred from the MVA Account; less
6. Certificate Maintenance Charges or Transfer Fees deducted from the
Certificate Value allocated to the MVA Account.
Any subsequent Purchase Payments and transfers to the MVA Account will be
allocated to a new Guarantee Period with a new Effective Date.
FIXED ACCOUNT PROVISIONS
FIXED ACCOUNT VALUES: The Fixed Account portion of a Certificate at any time is
equal to:
1. the Purchase Payments allocated to the Fixed Account on behalf of a
Certificate Owner; plus
2. the Certificate Value transferred to the Fixed Account; plus
3. interest credited to the Certificate Value in the Fixed Account; less
4. any prior withdrawals of Certificate Value in the Fixed Account and
any Contingent Deferred Sales Charge; less
5. any Certificate Value transferred from the Fixed Account; less
6. Certificate Maintenance Charges or Transfer Fees deducted from the
Certificate Value allocated to the Fixed Account.
INTEREST TO BE CREDITED: The Company guarantees that the interest to be credited
to the Fixed Account will not be less than the Minimum Guaranteed Interest Rate
shown on the Certificate Schedule. The Company may credit additional interest at
its sole discretion for any Fixed Account option. The Fixed Account option and
the Initial Current Interest Rate are shown on the Certificate Schedule.
CERTIFICATE VALUE
The Certificate Value for any Valuation Period is the sum of the Certificate
Value in each of the Sub-Accounts of the Variable Account, the Certificate Value
in the MVA Account and the Certificate Value in the Fixed Account.
The Certificate Value in a Sub-Account of the Variable Account is determined by
multiplying the number of Accumulation Units allocated to the Certificate
Owner's Account for the Sub-Account by the Accumulation Unit Value.
Withdrawals will result in the cancellation of Accumulation Units in a
Sub-Account or a reduction in the Certificate Value in the Fixed Account or the
MVA Account, as applicable.
CERTIFICATE MAINTENANCE CHARGE
DEDUCTION FOR CERTIFICATE MAINTENANCE CHARGE: During the Accumulation Period, on
each Certificate Anniversary the Company will deduct a Certificate Maintenance
Charge from the Certificate Value by reducing the Certificate Value in the Fixed
Account and/or the MVA Account and by canceling Accumulation Units from each
applicable Sub-Account to reimburse it for expenses relating to maintenance of a
Certificate. The Certificate Maintenance Charge will be deducted first from the
Fixed Account and if there is insufficient value in the Fixed Account, then the
Certificate Maintenance Charge will be deducted from the MVA Account or the
Sub-Account of the Variable Account with the largest balance. The Certificate
Maintenance Charge is shown on the Certificate Schedule.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: Subject to any limitation imposed by
the Company on the number of transfers during the Accumulation Period shown on
the Certificate Schedule, a Certificate Owner may transfer all or part of this
Certificate Value in the Fixed Account, the MVA Account or a Sub-Account by
Authorized Request without the imposition of any Transfer Fee if there have been
no more than the number of free transfers shown on the Certificate Schedule for
the Certificate Year. All transfers are subject to the following:
1. If more than the number of free transfers, shown on the Certificate
Schedule, have been made in a Certificate Year, the Company will deduct a
Transfer Fee, shown on the Certificate Schedule, for each subsequent
transfer permitted. The Transfer Fee is deducted from the Account which is
the source of the transfer. However, if the Certificate Owner's entire
interest in an Account is being transferred, the Transfer Fee will be
deducted from the amount which is transferred. If there are multiple source
Accounts, the Transfer Fee will be allocated first to the Fixed Account and
then to the Sub-Account or the MVA Account with the largest balance
involved in a transfer transaction.
2. The minimum amount which can be transferred from a Sub-Account is shown
on the Certificate Schedule. The minimum amounts which must remain in a
Sub-Account, the Fixed and the MVA Account are shown on the Certificate
Schedule. The maximum amounts which can be transferred from the Fixed
Account or the MVA Account to the Variable Account are shown on the
Certificate Schedule.
3. The Company reserves the right, at any time and without prior notice to
any party, to terminate, suspend or modify the transfer privilege described
above.
If a Certificate Owner elects to use this transfer privilege, the Company will
not be liable for transfers made in accordance with the instructions received
from the Certificate Owner or other authorized persons. All amounts and
Accumulation Units will be determined as of the end of the Valuation Period
during which the request for transfer is received at the Administrative Office.
TRANSFERS DURING THE ANNUITY PERIOD: Subject to any limitations imposed by the
Company on the number of transfers during the Annuity Period shown on the
Certificate Schedule, the Certificate Owner may transfer Annuity Units in
accordance with the following::
1. Transfers may be made upon written notice to the Company at least thirty
(30) days before the due date of the first Annuity Payment for which the
change will apply. Transfers will be made by converting the number of
Annuity Units being transferred to the number of Annuity Units of the
Sub-Account to which the transfer is made, so that the next Annuity
Payment, if it were made at that time would be the same amount that it
would have been without the transfer. Thereafter, Annuity Payments will
reflect changes in the value of the new Annuity Units.
2. If more than the number of free transfers, shown on the Certificate
Schedule, have been made in a Certificate Year, the Company will deduct a
Transfer Fee, shown on the Certificate Schedule, for each subsequent
transfer. The Transfer Fee is deducted from the Account which is the source
of the transfer. However, if the Certificate Owner's entire interest in an
Account is being transferred, the Transfer Fee will be deducted from the
amount which is transferred. If there are multiple source Accounts, the
Transfer Fee will be allocated first to the Fixed Account and then to the
Sub-Account or the MVA Account with the largest balance involved in the
transfer transaction.
3. The minimum amount which can be transferred from a Sub-Account is shown
on the Certificate Schedule. The minimum amount which must remain in a
Sub-Account after a transfer is shown on the Certificate Schedule.
4. No transfers can be made between the General Account and the Variable
Account.
5. The Company reserves the right, at any time and without prior notice, to
terminate, suspend or modify the transfer privilege described above.
If a Certificate Owner elects to use this transfer privilege, the Company will
not be liable for transfers made in accordance with instructions received from
the Certificate Owner or other authorized persons. All amounts and Annuity Units
will be determined as of the end of the Valuation Period during which the
request for transfer is received at the Administrative Office.
WITHDRAWAL PROVISIONS
WITHDRAWALS: During the Accumulation Period, the Certificate Owner may, upon
Written Request, make a total or partial withdrawal of the Certificate
Withdrawal Value.
The Certificate Owner must specify by Written Request which Sub-Account or
Guarantee Period of the MVA Account or Fixed Account, as applicable, is the
source of the partial withdrawal.
A withdrawal from the MVA Account may be subject to a Market Value Adjustment.
The Company will pay the amount of any withdrawal from the Variable Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payment Provision is in effect.
Each partial withdrawal must be for an amount which is not less than the minimum
amount shown on the Certificate Schedule. The minimum Certificate Value which
must remain in a Sub-Account after a partial withdrawal is shown on the
Certificate Schedule. The maximum amounts which can be withdrawn from the Fixed
Account and/or the MVA Account are shown on the Certificate Schedule.
CONTINGENT DEFERRED SALES CHARGE: Upon a withdrawal of Certificate Value, a
Contingent Deferred Sales Charge, as set forth on the Certificate Schedule, may
be assessed.
WITHDRAWAL CHARGE: Upon a withdrawal of Certificate Value, a Withdrawal Charge,
as set forth on the Certificate Schedule, may be assessed.
PROCEEDS PAYABLE ON DEATH
DEATH OF CERTIFICATE OWNER:
DURING THE ACCUMULATION PERIOD: Upon the death of the Certificate Owner, or any
Joint Certificate Owner, during the Accumulation Period, the death benefit will
be paid to the Beneficiary(ies) designated by the Certificate Owner. Upon the
death of any Joint Certificate Owner, the surviving Joint Certificate Owner, if
any, will be treated as the Primary Beneficiary. Any other Beneficiary
designation on record at the time of death will be treated as a contingent
Beneficiary.
A Beneficiary may request that the death benefit be paid under one of the Death
Benefit Options below. If the Beneficiary is the spouse of the Certificate
Owner, he or she may elect to continue the Certificate at the then current
Certificate Value in his or her own name and exercise all the Certificate
Owner's right under the Certificate.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD: If death occurs prior to
age 90, the death benefit will be the greater of:
1. the total Purchase Payments, less any prior Adjusted Partial
Withdrawals, accumulated at 5% per year up to the date of death . Adjusted
Partial Withdrawals are equal to: the Partial Withdrawal multiplied by the
Death Benefit just before the Partial Withdrawal, divided by the
Certificate Value just before Partial Withdrawal; or
2. the Certificate Value determined as of the end of the Valuation Period
during which the Company receives both due proof of death and an election
for the payment method.
If death occurs at age 90 or later, the death benefit will be the Certificate
Value determined as of the end of the Valuation Period during which the Company
received both due proof of death and an election for the payment method.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD: A non-spousal Beneficiary
must elect the death benefit to be paid under one of the following options in
the event of the death of the Certificate Owner or any Joint Certificate Owner
during the Accumulation Period:
Option 1 - lump sum payment of the death benefit; or
Option 2 - the payment of the entire death benefit within 5 years of
the date of the death of the Certificate Owner or any Joint Certificate
Owner; or
Option 3 - payment of the death benefit under an Annuity Option over
the lifetime of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the Certificate Owner or any
Joint Certificate Owner.
Any portion of the death benefit not applied under Option 3 within one year of
the date of the Certificate Owner's death, must be distributed within five years
of the date of death.
A spousal Beneficiary may elect to continue the Certificate in his or her own
name at the then current Certificate Value, elect a lump sum payment of the
death benefit or apply the death benefit to an Annuity Option.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision, as set forth on page 15 of this Certificate, is
in effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period beginning with the date of receipt of proof of death.
DURING THE ANNUITY PERIOD: If the Certificate Owner, or any Joint Certificate
Owner, who is not the Annuitant, dies during the Annuity Period, any remaining
payments under the Annuity Option elected will continue at least as rapidly as
under the method of distribution in effect at such Certificate Owner's or Joint
Certificate Owner's death. Upon the death of any Certificate Owner during the
Annuity Period, the Beneficiary becomes the Certificate Owner. Upon the death of
any Joint Certificate Owner during the Annuity Period, the surviving Joint
Certificate Owner, if any, will be treated as the Primary Beneficiary. Any other
Beneficiary designation on record at the time of death will be treated as a
Contingent Beneficiary.
DEATH OF ANNUITANT:
DURING THE ACCUMULATION PERIOD: Upon the death of an Annuitant, who is not the
Owner, during the Accumulation Period, the Certificate Owner may designate a new
Annuitant, subject to the Company's underwriting rules then in effect. If no
designation is made within thirty (30) days of the death of the Annuitant, the
Certificate Owner will become the Annuitant effective as of the death of the
Annuitant. If the Certificate Owner is a non-natural person, the death of the
Annuitant will be treated as the death of the Certificate Owner and a new
Annuitant may not be designated.
DURING THE ANNUITY PERIOD: Upon the death of the Annuitant during the Annuity
Period, the death benefit, if any, will be as specified in the Annuity Option
elected. Death benefits will be paid at least as rapidly as under the method of
distribution in effect at the Annuitant's death.
PAYMENT OF DEATH BENEFIT: The Company will require due proof of death before any
death benefit is paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the
finding of death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
BENEFICIARY: The Beneficiary designation in effect on the Certificate Issue Date
will remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the Certificate Owner.
Unless the Certificate Owner provides otherwise, the death benefit will be paid
in equal shares to the survivor(s) as follows:
1. to the Primary Beneficiary(ies) who survive the Certificate Owner's
and/or the Annuitant's death, as applicable; or if there are none
2. to the Contingent Beneficiary(ies) who survive the Certificate Owner's
and/or the Annuitant's death, as applicable; or if there are none.
3. to the estate of the Certificate Owner.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), the Certificate Owner may change the Primary Beneficiary(ies)
or Contingent Beneficiary(ies). A change may be made by Written Request. The
change will take effect as of the date the Written Request is signed. The
Company will not be liable for any payment made or action taken before it
records the change.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
The Company reserves the right to suspend or postpone payments from the Variable
Account for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);or
2. trading on the New York Stock Exchange is restricted; or
3. an emergency exists as a result of which disposal of securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Variable
Account's net assets; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Certificate Owners;
providing that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) or (3)
exist.
The Company further reserves the right to postpone payments from the Fixed
Account and the MVA Account for a period of up to six (6) months.
CERTIFICATE OWNER, ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS
CERTIFICATE OWNER: The Certificate Owner has all interest and right to amounts
held in this Certificate. The Certificate Owner is the person designated as such
on the Certificate Issue Date, unless changed.
The Certificate Owner may change owners of the Certificate at any time by
Written Request. A change of Certificate Owner will automatically revoke any
prior designation of Certificate Owner. The change will become effective as of
the date the Written Request is signed. The Company will not be liable for any
payment made or action taken before it records the change..
JOINT CERTIFICATE OWNER: A Certificate may be owned by Joint Certificate Owners.
If Joint Certificate Owners are named, any Joint Certificate Owner must be the
spouse of the other Certificate Owner. Upon the death the either Joint
Certificate Owner, the surviving spouse will be the Primary Beneficiary. Any
other Beneficiary designation will be treated as a Contingent Beneficiary unless
otherwise indicated in a Written Request.
GROUP CONTRACT OWNER: The Group Contract Owner has title to the Contract. The
Contract and any amounts accumulated thereunder are not subject to the claims of
the Group Contract Owner nor any of its creditors. The Group Contract Owner may
transfer ownership of this Group Contract. Any transfer of ownership terminates
the interest of any existing Group Contract Owner. It does not change the right
of any Certificate Owner.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by the Certificate Owner at the
Certificate Issue Date, unless changed prior to the Annuity Date. In the event
that the Annuitant dies prior to the Annuity Date, the Certificate Owner must
designate a new Annuitant. If no new Annuitant is designated by the Certificate
Owner within 30 days of the death of the Annuitant, effective as of the death of
the Annuitant, the Certificate Owner becomes the Annuitant. The Annuitant may
not be changed in a Certificate which is owned by a non-natural person. Any
change of Annuitant is subject to the Company's underwriting rules in effect at
the time the request is recorded by the Company.
ASSIGNMENT OF A CERTIFICATE: A Written Request specifying the terms of an
assignment of a Certificate must be provided to the Administrative Office. The
Company will not be liable for any payment made or action taken before it
records the assignment. The Company will not be responsible for the validity or
tax consequences of any assignment. Any assignment made after the death benefit
has become payable will be valid only with Company consent.If the Certificate is
assigned, the Certificate Owner's rights may only be exercised with the consent
of the assignee of record.
ANNUITY PROVISIONS
GENERAL: On the Annuity Date, the Certificate Withdrawal Value will be applied
under the Annuity Option selected by the Owner. The Certificate Owner may elect
to have the Certificate Withdrawal Value applied to provide a Fixed Annuity, a
Variable Annuity or a combination Fixed and Variable Annuity. The Certificate
Value may be applied under the Annuity Option selected if the annuitization is
after the 4th policy year and the option is life contingent or for a minimum of
5 years. If a combination is elected, the Certificate Owner must specify what
part of the Certificate Withdrawal Value is to be applied to the Fixed and
Variable Options.
ANNUITY DATE: The Annuity Date is selected by the Certificate Owner at the
Certificate Issue Date, The Annuity Date must be the first day of a calendar
month and must be at least ninety (90) days after the Certificate Issue Date.
The Annuity Date may not be later than the earlier of when the Annuitant reaches
attained age 90 or the maximum date permitted under the law of the state in
which the Certificate is delivered.
Prior to the Annuity Date, the Certificate Owner, subject to the above, may
change the Annuity Date by Written Request. Any change must be requested at
least thirty (30) days prior to the new Annuity Date.
SELECTION OF AN ANNUITY OPTION: An Annuity Option may be selected by Written
Request of the Certificate Owner. If no Annuity Option is selected, Option 2
with 120 monthly payments guaranteed will automatically be applied. Unless
specified otherwise, that portion of the Certificate Withdrawal Value allocated
to the Variable Account shall be used to provide a Variable Annuity and that
portion of the Certificate Withdrawal Value allocated to the Fixed Account and
the MVA Account will be used to provide a Fixed Annuity. Prior to the Annuity
Date, the Owner can change the Annuity Option selected by Written Request. Any
change must be requested at least thirty (30) days prior to the Annuity Date.
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS: Annuity Payments are paid in monthly
installments. The Certificate Withdrawal Value is applied to the Annuity Table
for the Annuity Option selected. If the Certificate Withdrawal Value to be
applied under an Annuity Option is less than $5,000, the Company reserves the
right to make a lump sum payment in lieu of Annuity Payments. If the Annuity
Payment would be or become less than $40, the Company reserves the right to
reduce the frequency of payments to an interval which will result in each
payment being at least $50.
ANNUITY OPTIONS: The following Annuity Options or any other annuity option
acceptable to the Company may be selected:
OPTION 1. INCOME FOR SPECIFIED PERIOD: We will pay an income for a specific
number of years in equal installments. We guarantee these payments to be at
least those shown in Table 1.
OPTION 2. LIFE INCOME: We will pay equal monthly payments for a specified
period certain and then for life. We guarantee these payments will be at
least those shown in Table 2.
OPTION 3. INCOME OF SPECIFIED AMOUNT: We will pay income of the specified
amount until the principal and interest are exhausted.
OPTION 4. JOINT AND SURVIVOR INCOME: We will pay equal monthly payments
during the joint lifetime of the Annuitant and the named Beneficiary/Payee.
We will determine the payment by the sex and Age of each person from Table
4. The Annuitant must be at least 50 years old, and the Beneficiary/Payee
must be at least 45 years old, at the time of the first monthly payment.
ANNUITY: If the Certificate Owner selects a Fixed Annuity, the Certificate
Withdrawal Value is allocated to the General Account and the Annuity is paid as
a Fixed Annuity. If the Certificate Owner selects a Variable Annuity, the
Certificate Withdrawal Value will be allocated to the Sub-Accounts of the
Variable Account in accordance with the selection made by the Certificate Owner,
and the Annuity will be paid as a Variable Annuity. If no selection is made, the
Certificate Withdrawal Value will be applied in the same proportions to the same
Sub-Accounts as the allocations are at the time of election. Unless the
Certificate Owner specifies otherwise, the payee of the Annuity Payments shall
be the Certificate Owner. The Certificate Withdrawal Value will be applied to
the applicable Annuity Table contained in the Certificate based upon the Annuity
Option selected by the Certificate Owner. The amount of the first payment for
each $1,000 of Certificate Withdrawal Value is shown in the Annuity Tables.
FIXED ANNUITY: The Certificate Owner may elect to have the Certificate
Withdrawal Value applied to provide a Fixed Annuity.
The dollar amount of each Fixed Annuity Payment shall be determined in
accordance with Annuity Tables contained in this Certificate which are based on
the minimum guaranteed interest rate of 3% per year.
VARIABLE ANNUITY: The Certificate Owner may elect to have the Certificate
Withdrawal Value applied to provide a Variable Annuity. Variable Annuity
Payments reflect the investment performance of the Variable Account in
accordance with the allocation of the Certificate Withdrawal Value to the
Sub-Accounts during the Annuity Period. Variable Annuity Payments are not
guaranteed as to the dollar amount.
The dollar amount of the first Variable Annuity Payment is determined in
accordance with the description above. The dollar amount of the Variable Annuity
Payment for each applicable Sub-Account after the first Variable Annuity Payment
is determined as follows:
1. The dollar amount of the first Variable Annuity Payment is divided by
the value of an Annuity Unit for each applicable Sub-Account as of the
Annuity Date. This sets the number of Annuity Units for each monthly
payment for the applicable Sub-Accounts.
2. The fixed number of Annuity Units per payment in each Sub-Account is
multiplied by the Annuity Unit Value for that Sub-Account for the last
Valuation Period of the month preceding the month for which the payment is
due. This result is the dollar amount of the payment for each applicable
Sub-Account.
The total dollar amount of each Variable Annuity Payment is the sum of all
Sub-Account Variable Annuity Payments reduced by the applicable portion of the
Certificate Maintenance Charge.
ANNUITY UNIT: The value of any Annuity Unit for each Sub-Account of the Variable
Account was set initially at $10.
The Sub-Account Annuity Unit Value at the end of any subsequent Valuation Period
is determined as follows:
1. the Net Investment Factor for the current Valuation Period is multiplied
by the value of the Annuity Unit for the Sub-Account for the immediately
preceding Valuation Period.
2. The result in (1) is then divided by the Assumed Investment Rate Factor
which equals 1.00 plus the Assumed Investment Rate for the number of days
since the preceding Valuation Date. The Certificate Owner can choose either
a 5% or a 3% Assumed Investment Rate.
MORTALITY TABLES: The mortality table used in establishing the Annuity Table is
the Annuity 2000 Mortality Table.
The dollar amount of an Annuity Payment for any Age or combination of Ages not
shown in the Tables or for any other form of Annuity Option agreed to by the
Company will be provided by the Company upon request.
GENERAL PROVISIONS
THE CERTIFICATE: The entire certificate consists of this Certificate, the
Application and any riders or endorsements attached to this Certificate. This
Certificate may be changed or altered only by the President or Senior Vice
President and the Secretary of the Company. A change or alteration must be made
in writing.
MISSTATEMENT OF AGE: If the Age of any Annuitant has been misstated, any Annuity
benefits payable will be the Annuity benefits provided by the correct Age. After
Annuity Payments have begun, any underpayments will be made up in one sum with
the next Annuity Payment. Any overpayment will be deducted from future Annuity
Payments until the total is repaid.
INCONTESTABILITY: This Certificate will not be contestable from the date of
issue.
MODIFICATION: This Certificate may be modified in order to maintain compliance
with applicable state and/or federal law.
NON-PARTICIPATING: This Certificate will not share in any distribution of
dividends, profits or income of the Company.
EVIDENCE OF SURVIVAL: The Company may require satisfactory evidence of the
continued survival of any person(s) on whose life Annuity Payments are based.
PROOF OF AGE: The Company may require evidence of Age of any Annuitant and any
Certificate Owner.
PROTECTION OF PROCEEDS: To the extent permitted by law, death benefits and
Annuity Payments shall be free from legal process and the claim of any creditor
other than the person entitled to them under any Certificate. No payment and no
amount under this Certificate can be taken or assigned in advance of its payment
date unless the Company receives the Certificate Owner's written consent.
REPORTS: At least once each calendar year, the Company will furnish each Owner
with a report showing the Certificate Value and any other information as may be
required by law. The Company will also furnish an annual report of the Variable
Account.
PREMIUM TAXES: Any taxes paid to any governmental entity relating to the
Certificate will be deducted from the Purchase Payment or Certificate Value. The
Company may, in its sole discretion, pay taxes when due and deduct that amount
from the Certificate Value at a later date. Payment at an earlier date does not
waive any right the Company may have to deduct amounts at a later date.
OTHER TAXES: The Company reserves the right to establish a provision for federal
income taxes if it determines, in its sole discretion, that it will incur a tax
as a result of the operation of the Separate Account. The Company will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not is was
sufficient. The Company will deduct any withholding taxes required by applicable
law.
REGULATORY REQUIREMENTS: All values payable under any Certificate will not be
less than the minimum benefits required by the laws and regulations of the
states in which the Certificate is delivered.
<TABLE>
<CAPTION>
TABLE 1
INCOME FOR SPECIFIED PERIOD FACTORS
Installments shown are for each $1,000 of net Proceeds applied. Interest is 3%,
and is subject to change as described in the Interest On Settlement Options
Section.
- ------------------- --------------------- -------------------- -------------------- --------------------
Annual Semi
Years Annual Annual Quarterly Monthly *
- ------------------- --------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1 N/A N/A N/A N/A
2 N/A N/A N/A N/A
3 N/A N/A N/A N/A
4 N/A N/A N/A N/A
5 $211.99 $106.78 $53.59 $17.91
6 179.22 90.27 45.30 15.14
7 155.83 78.49 39.39 13.16
8 138.31 69.66 34.96 11.68
9 124.69 62.81 31.52 10.53
10 113.82 57.33 28.77 9.61
11 104.93 52.85 26.52 8.86
12 97.54 49.13 24.65 8.24
13 91.29 45.98 23.08 7.71
14 85.95 43.29 21.73 7.26
15 81.33 40.96 20.56 6.87
16 77.29 38.93 19.54 6.53
17 73.74 37.14 18.64 6.23
18 70.59 35.56 17.84 5.96
19 67.78 34.14 17.13 5.73
20 65.26 32.87 16.50 5.51
- ------------------- --------------------- -------------------- -------------------- --------------------
<FN>
* Equal monthly payment for the number of years elected, not to exceed 25 years.
Payments will begin on the option date.
</FN>
</TABLE>
<TABLE>
<CAPTION>
TABLE 2
MONTHLY INCOME FOR LIFE WITH GUARANTEED PERIOD OF:
Equal monthly payments for a guaranteed period of 10, 15 or 20 years as elected
and for life thereafter as shown in the table below. Amount of each monthly
installment per $1,000 net proceeds. Amounts based on Annuity 2000 Mortality
Tables and 3% interest.
MALE
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
AGE OF PAYEE 10 15 20 AGE OF PAYEE 10 15 20
YEARS YEARS YEARS YEARS YEARS YEARS
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
25 $3.08 $3.08 3.07 53 $4.25 $4.20 $4.12
26 3.10 3.10 3.09 54 4.33 4.27 4.18
27 3.12 3.12 3.11 55 4.41 4.34 4.24
28 3.15 3.14 3.14 56 4.49 4.42 4.30
29 3.17 3.17 3.16 57 4.58 4.49 4.36
30 3.20 3.19 3.19 58 4.68 4.58 4.43
31 3.22 3.22 3.21 59 4.78 4.66 4.49
32 3.25 3.25 3.24 60 4.88 4.75 4.56
33 3.28 3.28 3.27 61 4.99 4.84 4.62
34 3.31 3.31 3.30 62 5.10 4.93 4.69
35 3.34 3.34 3.33 63 5.23 5.03 4.75
36 3.38 3.37 3.36 64 5.35 5.13 4.82
37 3.41 3.40 3.39 65 5.48 5.22 4.88
38 3.45 3.44 3.42 66 5.62 5.33 4.94
39 3.49 3.48 3.46 67 5.77 5.43 5.00
40 3.53 3.52 3.50 68 5.92 5.53 5.06
41 3.57 3.56 3.53 69 6.07 5.63 5.11
42 3.62 3.60 3.57 70 6.23 5.73 5.16
43 3.66 3.64 3.62 71 6.39 5.83 5.21
44 3.71 3.69 3.66 72 6.56 5.93 5.25
45 3.76 3.74 3.70 73 6.73 6.02 5.29
46 3.81 3.79 3.75 74 6.90 6.11 5.33
47 3.87 3.84 3.80 75 7.08 6.20 5.36
48 3.92 3.89 3.85 76 7.25 6.28 5.39
49 3.98 3.95 3.90 77 7.43 6.35 5.41
50 4.05 4.01 3.95 78 7.61 6.42 5.43
51 4.11 4.07 4.00 79 7.78 6.49 5.45
52 4.18 4.13 4.06 80 7.95 6.55 5.46
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
</TABLE>
<TABLE>
<CAPTION>
TABLE 2
MONTHLY INCOME FOR LIFE WITH A GUARANTEED PERIOD OF:
Equal monthly payments for a guaranteed period of 10, 15 or 20 years as elected
and for life thereafter as shown in the table below. Amount of each monthly
installment per $1,000 net proceeds. Amounts based on Annuity 2000 Mortality
Tables and 3% interest.
FEMALE
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
AGE OF PAYEE 10 15 20 AGE OF PAYEE 10 15 20
YEARS YEARS YEARS YEARS YEARS YEARS
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
25 $2.99 $2.99 $2.99 53 $3.99 $3.96 $3.92
26 3.01 3.01 3.00 54 4.06 4.02 3.97
27 3.03 3.03 3.02 55 4.13 4.09 4.03
28 3.05 3.05 3.04 56 4.20 4.16 4.09
29 3.07 3.07 3.06 57 4.28 4.23 4.15
30 3.09 3.09 3.09 58 4.36 4.30 4.22
31 3.11 3.11 3.11 59 4.45 4.38 4.28
32 3.14 3.14 3.13 60 4.54 4.46 4.35
33 3.16 3.16 3.15 61 4.63 4.55 4.42
34 3.19 3.19 3.18 62 4.73 4.64 4.49
35 3.22 3.21 3.21 63 4.84 4.73 4.57
36 3.24 3.24 3.23 64 4.95 4.83 4.64
37 3.27 3.27 3.26 65 5.07 4.93 4.71
38 3.30 3.30 3.29 66 5.20 5.03 4.78
39 3.34 3.33 3.32 67 5.33 5.14 4.85
40 3.37 3.36 3.35 68 5.47 5.25 4.92
41 3.41 3.40 3.39 69 5.62 5.36 4.99
42 3.44 3.44 3.42 70 5.78 5.47 5.05
43 3.48 3.47 3.46 71 5.94 5.58 5.11
44 3.52 3.51 3.50 72 6.11 5.70 5.17
45 3.57 3.55 3.54 73 6.29 5.81 5.22
46 3.61 3.60 3.58 74 6.48 5.92 5.27
47 3.66 3.64 3.62 75 6.67 6.03 5.31
48 3.71 3.69 3.66 76 6.86 6.13 5.35
49 3.76 3.74 3.71 77 7.06 6.22 5.38
50 3.81 3.79 3.76 78 7.26 6.31 5.40
51 3.87 3.85 3.81 79 7.46 6.39 5.43
52 3.93 3.90 3.86 80 7.66 6.47 5.45
- --------------- --------------- -------------- -------------- -------------- -------------- --------------- --------------
</TABLE>
TABLE 3
EQUAL PAYMENTS OF A SPECIFIED AMOUNT
Equal monthly payments of at least $4.71 per month for each $1,000 of
proceeds. Payments will begin on the option date and will continue until the
proceeds and interest at the rate of 3.00% compounded annually are
exhausted.
<TABLE>
<CAPTION>
TABLE 4
JOINT AND SURVIVOR INCOME FACTORS
We will furnish values for age or sex combinations not shown in the table on
request.
Male Age
_____________________________________________________________________________________________
Female Age 45 50 55 60 65 70
<S> <C> <C> <C> <C> <C>
45 $3.34 $3.41 $3.46 $3.50 $3.54 $3.58
50 3.44 3.54 3.62 3.69 3.74 3.79
55 3.53 3.66 3.79 3.90 3.99 4.06
60 3.60 3.78 3.95 4.12 4.27 4.38
65 3.66 3.87 4.10 4.34 4.57 4.77
70 3.71 3.95 4.22 4.54 4.87 5.19
</TABLE>
Installments shown are monthly and are for each $1,000 of net Proceeds
applied.
Based on Annuity 2000 Tables and 3% interest: Amounts are subject to change
as described in the Interest On Settlement Options Section.
<TABLE>
<CAPTION>
GREAT AMERICAN RESERVE INSURANCE COMPANY
FIXED FUND
ACCUMULATION TABLE FOR FLEXIBLE PREMIUM DEFERRED ANNUITY
$1,000 FOR FIRST FIVE YEARS
GUARANTEED SURRENDER VALUE*
- ---------------------------- ------------------------- -------------------------- --------------------------
End of Accumulated
Policy Value Accumulated Surrender
Year Increase Value Value
- ---------------------------- ------------------------- -------------------------- --------------------------
<S> <C> <C> <C>
1 1,030.00 1,030.00 967.21
2 1,060.90 2,090.90 1,965.54
3 1,092.73 3,183.63 3,002.73
4 1,125.51 4,309.14 4,080.68
5 1,159.27 5,468.41 5,200.28
- ---------------------------- ------------------------- -------------------------- --------------------------
6 164.05 5,632.46 5,399.36
7 168.97 5,801.44 5,613.04
8 174.04 5,975.48 5,835.48
9 179.26 6,154.74 6,064.74
10 184.64 6,339.39 6,289.39
- ---------------------------- ------------------------- -------------------------- --------------------------
11 190.18 6,529.57 6,509.57
12 195.89 6,725.45 6,725.45
13 201.76 6,927.22 6,927.22
14 207.82 7,135.03 7,135.03
15 214.05 7,349.09 7,349.09
- ---------------------------- ------------------------- -------------------------- --------------------------
16 220.47 7,569.56 7,569.56
17 227.09 7,796.64 7,796.64
18 233.90 8,030.54 8,030.54
19 240.92 8,271.46 8,271.46
20 248.14 8,519.60 8,519.60
- ---------------------------- ------------------------- -------------------------- --------------------------
21 255.59 8,775.19 8,775.19
22 263.26 9,038.45 9,038.45
23 271.15 9,309.60 9,309.60
24 279.29 9,588.89 9,588.89
25 287.67 9,876.56 9,876.56
- ---------------------------- ------------------------- -------------------------- --------------------------
26 296.30 10,172.85 10,172.85
27 305.19 10,478.04 10,478.04
28 314.34 10,792.38 10,792.38
29 323.77 11,116.15 11,116.15
30 333.48 11,449.64 11,449.64
- ---------------------------- ------------------------- -------------------------- --------------------------
31 343.49 11,793.13 11,793.13
32 353.79 12,146.92 12,146.92
33 364.41 12,511.33 12,511.33
34 375.34 12,886.67 12,886.67
35 386.60 13,273.27 13,273.27
- ---------------------------- ------------------------- -------------------------- --------------------------
36 398.20 13,671.46 13,671.46
37 410.14 14,081.61 14,081.61
38 422.45 14,504.06 14,504.06
39 435.12 14,939.18 14,939.18
40 448.18 15,387.35 15,387.35
- ---------------------------- ------------------------- -------------------------- --------------------------
<FN>
*Values Shown are Based on an Interest Rate of 3% for All Years.
</FN>
</TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. PENNSYLVANIA STREET
CARMEL, INDIANA 46032-4572
(317) 817-3700
INDIVIDUAL FIXED AND VARIABLE
ANNUITY CERTIFICATE
NON-PARTICIPATING
32-4008C
<TABLE>
<CAPTION>
GREAT AMERICAN RESERVE INSURANCE COMPANY VARIABLE ANNUITY
ADMINISTRATIVE OFFICE: 11815 N. PENNSYLVANIA STREET, P O BOX 1909, CARMEL, INDIANA 46032-4909 APPLICATION
FOR GROUP APPLICANTS ONLY: APPLICATION IS HEREBY MADE TO THE GARCO GROUP BENEFITS INSURANCE TRUST.
- ------------------------------------------------------------------------------------------------------------------------------------
1. ANNUITANT (OWNER IF NO OTHER SPECIFIED IN SECTION 3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Name ________________________________________________________________________ DOB __/__/__ Age __
first mi last
________________________________________________________________________
Street Address Sex __ Marital Status __
________________________________________________________________________
City State Zip SS# ___-__-____
___________________________________ ____________________________________
Home Phone # ( ) Work Phone # ( )
- ------------------------------------------------------------------------------------------------------------------------------------
2. EMPLOYMENT GROUP INFORMATION (REQUIRED ONLY FOR GROUP APPLICANTS)
- ------------------------------------------------------------------------------------------------------------------------------------
Specify the nature of the industry in which you are (or were at retirement)
employed:
[ ] A. Education, Government Employees, Service Industry
[ ] B. Wholesale Trade Industry [ ]E. Finance, Insurance, Real Estate Industry
[ ] C. Retail Trade Industry [ ]F. Transportation, Communication, Public Utilities
[ ] D. Agriculture [ ]G. Manufacturing, Contract Construction Industry
- ------------------------------------------------------------------------------------------------------------------------------------
3. CONTRACT/CERTIFICATE OWNER(S) (COMPLETE IF DIFFERENT FROM ANNUITANT IN
SECTION 1 - MUST BE THE SAME FOR 403(B), IRA, IRA/SEP. USE SECTION 8 FOR
ADDITIONAL SPACE. ANY JOINT OWNER MUST BE THE SPOUSE OF THE OTHER OWNER. WE MUST
HAVE THE SOCIAL SECURITY NUMBER AND ALL OTHER INFORMATION FOR EACH OWNER.)
- ------------------------------------------------------------------------------------------------------------------------------------
Name ________________________________________________________________________ DOB __/__/__ Age __
first mi last
________________________________________________________________________
Street Address Sex __ Marital Status __
________________________________________________________________________
City State Zip SS# ___-__-____
___________________________________ ____________________________________
Home Phone # ( ) Work Phone # ( )
- ------------------------------------------------------------------------------------------------------------------------------------
4.BENEFICIARY(UPON DEATH OF A JOINT OWNER, THE SURVIVING JOINT OWNER WILL BE
TREATED AS THE PRIMARY BENEFICIARY.)
- ------------------------------------------------------------------------------------------------------------------------------------
Primary_______________________________________________ Relationship_____________________________________
Contingent____________________________________________ Relationship_____________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
5. TYPE OF PLAN (PLEASE CHECK APPROPRIATE BOXES IN SECTIONS [a] OR [b])
- ------------------------------------------------------------------------------------------------------------------------------------
--- -- -- --- -- -- --
a. Nonqualified b. Qualified 403 (B) IRA/SEP ORP 457 SIMPLE IRA (Attach Form 5304)
--- -- -- --- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
6. PRODUCT SELECTION
- ------------------------------------------------------------------------------------------------------------------------------------
-- --- --- --- --- ---
Monument Achievement Educator Maxiflex Group Conseco Advantage
Maxiflex
Conseco Advantage
-- --- --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------------
7. PORTFOLIO SELECTION
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio selections are made on the attached "Variable Annuity Application
Supplement For Portfolio Selection" dated:
__________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
8. SPECIAL REQUESTS (INCLUDE ADDITIONAL INFORMATION FOR ANY ANSWERS TO
APPLICATION QUESTIONS.)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
9. TELEPHONE TRANSFER
- ------------------------------------------------------------------------------------------------------------------------------------
I hereby authorize and direct Great American Reserve Insurance Company (GARCO)
to act on telephone instructions, when proper identification is furnished, to
exchange units form any fixed, Market Value Adjustment (MVA) or sub-account to
any other fixed, MVA or other sub-account and/or to change the allocation of
future deposits. The undersigned agrees that GARCO is not liable for any loss
arising from any exchange or change in allocation of future deposits by acting
in accordance with these telephone instructions. GARCO will employ reasonable
procedures to confirm that telephone instructions are genuine. If it does not,
it may be liable for any losses due to unauthorized or fraudulent transfers.
Please refer to the Prospectus for restrictions regarding the MVA accounts.
Initials of contract owner:_________________
- ------------------------------------------------------------------------------------------------------------------------------------
10. INVESTMENT AMOUNT, REPLACEMENT INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
a. Initial investment: $ b. Periodic investment: beginning:
--------------------------- --------------- ------ ----- -------
--- ---
c. Will the proposed contract replace any existing annuity or insurance contract? Yes No
--- ---
If Yes, list company name, plan and year of issue_______________________________
--- --- -- ---
d. Is this a transfer or rollover? No Yes - Check one: 90-24 102-318 (ADDITIONAL FORMS REQUIRED)
--- --- -- ---
- ------------------------------------------------------------------------------------------------------------------------------------
11. BILLING INFORMATION (NOT APPLICABLE TO IRA OR IRA/SEP CONTRACTS.)
- ------------------------------------------------------------------------------------------------------------------------------------
--- -- ---
a. Bill to the: Annuitant Owner See Section 8 or Section 11b.
--- -- ---
------------------------------------------------------------------------------------------------------------
b. Billing Address:
------------------------------------------------------------------------------------------------------------
--- --- --- --- --
c. Billing Frequency: Annual Quarterly Monthly Semi-Monthly
--- --- --- --- -- -----------------
--- -- -- -- -- -- --- --- --- --- --- ---
d. Non-Paying Months (X): J F M A M J J A S O N D
--- -- -- -- -- -- --- --- --- --- --- ---
- ---------------------------- --------------------------- -----------------------
- ---------------------------- --------------------------- -----------------------
All statements made in this application (including the reverse side) are true to
the best of our knowledge and belief, and we agree to all terms and conditions
as shown on the front and back. We further agree that this application shall be
a part of the annuity contract, and verify our understanding that all payments
and values provided by the contract, when based on investment experience of the
variable account, are variable and not guaranteed as to dollar amount. We
acknowledge receipt of current prospectuses. The variable annuity applied for is
not unsuitable for my investment objective, financial situation and needs. Under
penalty of perjury, the contract owner(s) certifies that the Social Security (or
Taxpayer Identification) number is correct as it appears in this application.
Signed at this day of , 19
------------------------------------------------- ---------- ------------------------- ----
- ------------------------------------------------------------------- ----------------------------------------------------------
X
- ------------------------------------------------------------------- ----------------------------------------------------------
Signature of Owner/Applicant (if other than Annuitant) Signature of Annuitant
- -------------------------------------------------------------------
Amounts payable under the contract may be
subject to a market value adjustment if withdrawals
or transfers are made prior to a date specified in
the contract.
- -------------------------------------------------------------------
Signature of Joint Owner/Applicant (if other than Annuitant)
- ------------------------------------------------------------------------------------------------------------------------------------
AGENT'S REPORT
- ------------------------------------------------------------------------------------------------------------------------------------
-- ---
Will the proposed contract replace any existing annuity or insurance contract? No Yes - replacement
-- ---
----------
requirements must be completed. Agent's initials certifying any replacement requirements has been met:
----------
- ------------------------------------------------------------------------------------------------------------------------------------
REGISTERED REPRESENTATIVE CERTIFICATION
- ------------------------------------------------------------------------------------------------------------------------------------
I certify that I have asked all the questions in the application and correctly
recorded the proposed Annuitant's answers. To the best of my knowledge I have
presented to the Company all the pertinent facts, and I know nothing unfavorable
about the proposed Annuitant that is not stated in the application.
I further certify that I am properly licensed to sell variable annuities in the
state in which the proposed Annuitant resides and that no sales material other
than that furnished by the Home Office was used.
Signed at this day of , 19
--------------------------------------------- --------------- -----------------------------
- ------------------------------------ ----- ---------------------------------------------------------
- ------------------------------------ ----- ---------------------------------------------------------
Agent's Number Trail Registered Representative
</TABLE>
22-8075
<TABLE>
<CAPTION>
<S> <C>
GREAT AMERICAN RESERVE INSURANCE COMPANY VARIABLE ANNUITY
ADMINISTRATIVE OFFICE: 11815 N. PENNSYLVANIA STREET, P O BOX 1909, CARMEL, INDIANA 46032-4909 APPLICATION
[ ]FOR GROUP APPLICANTS ONLY: SUPPLEMENT FOR
APPLICATION IS HEREBY MADE TO THE GARCO GROUP BENEFITS INSURANCE TRUST. INVESTMENT
SELECTION
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
1. CONTRACT/CERTIFICATE OWNER(S) (SAME AS THE APPLICATION TO WHICH THIS SUPPLEMENT IS ATTACHED)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Name Age(s)
first mi last
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
2. PRODUCT SELECTION (SAME AS THE APPLICATION TO WHICH THIS SUPPLEMENT IS ATTACHED)
- ------------------------------------------------------------------------------------------------------------------------------------
- ----- --------------
X CONSECO ADVANTAGE This Supplement is a part of the application attached and dated:
- ----- --------------
- ------------------------------------------------------------------------------------------------------------------------------------
3. INVESTMENT SELECTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Limit of 15 funds per payment type. Use whole percentages. The percentage for all portfolios must equal 100%.
AMERICAN CENTURY NEUBERGER &
VARIABLE PORTFOLIOS, INC BERMAN ADVISORS STRONG OPPORTUNITY FUND II STRONG VARIABLE INSURANCE
MANAGEMENT TRUST FUNDS, INC.
- ----- ---- ---- ----
% VP International Fund % ATM Limited Maturity % Strong Opportunity % Growth Fund II
Bond Portfolio Fund II
- ----- ---- ---- ----
- ----- ----
%VP Value Fund % ATM Partners Portfolio
- ----- ----
- -----
% VP Growth & Income
Fund
- -----
VAN ECK WORLDWIDE FEDERATED INSURANCE
CONSECO SERIES TRUST INSURANCE TRUST ALGER AMERICAN FUND SERIES
- ----- ---- ---- ----
% Asset Allocation % Worldwide Bond % Leveraged AllCap % High Income Bond
Fund II
- ----- ---- ---- ----
- ----- ---- ---- ----
% Common Stock % Worldwide Hard % Small Cap % International Equity
Assets Fund II
- ----- ---- ---- ----
- ----- ---- ---- ----
% Corp. Bond % Worldwide Emerging % Growth % Utility Fund II
Markets
- ----- ---- ---- ----
- ----- ---- ----
% Gov't Securities % Real Estate Trust % Midcap Growth
- ----- ---- ----
- -----
% Money Market
- -----
BERGER INSTITUTIONAL
GENERAL ACCOUNT JANUS ASPEN SERIES PRODUCTS TRUST DREYFUS CORPORATION
- ----- ---- ---- ---
% Fixed Interest % Aggressive Growth % 100 Fund % Social Responsible
Account
- ----- ---- ---- ---
---- ---- ---
% Growth % Growth and Income % Stock Index
---- ---- ---
---- ----
% Worldwide Growth % Small Company Growth
----
----
LAZARD FRERES & COMPANY LORD ABBETT SERIES FUND, INC PAINEWEBBER SERIES TRUST MARKET VALUE ADJUSTMENT
ACCOUNTS
- ----- ---- ----
% Retirement Equity % Growth & Income % Growth & Income Indicate percentage and
Portfolio period for each selected.
---- ----
- -----
- ----- ---- ----
% Retirement Small Cap % Tactical Allocation % 1 Year
Portfolio Portfolio
- ----- ---- ----
---- ---
% Strategic Income % 3 Years
Portfolio
---- ---
---
% 5 Years
---
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
All statements made in this application supplemental form are true to the best
of our knowledge and belief, and we agree to all terms and conditions as shown
on this supplemental form. We further agree that this supplement shall be a part
of the annuity contract, and verify our understanding that all payments and
values provided by the contract, when based on investment experience of the
variable account, are variable and not guaranteed as to dollar amount. The
benefits may increase or decrease in accordance with the experience of the
variable separate accounts or Market Value Adjustment accounts. We acknowledge
receipt of current prospectuses. The variable annuity applied for is not
unsuitable for my investment objective, financial situation and needs. Under
penalty of perjury, the contract owner certifies that the Social Security (or
Taxpayer Identification) number is correct as it appears in the application to
which this supplemental form is attached.
Signed at this day of , 19
-------------------------------------------------- ---------- ------------------------ ----
- -------------------------------------------------------------------- -----------------------------------------------------------
X X
- -------------------------------------------------------------------- -----------------------------------------------------------
Signature of Joint Owner(s) Signature of Owner/Applicant (if other than Annuitant)
</TABLE>
22-8080
COPY OF ARTICLES OF INCORPORATION OF THE COMPANY
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and Article 3.05 of the Insurance Code of Texas, Great American
Reserve Insurance Company (herein after referred to as the "Corporation") adopts
the following Articles of Amendment to its Articles of Incorporation:
ARTICLE ONE
The name of the corporation is Great American Reserve Insurance Company.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
sole shareholder of the Corporation pursuant to a written consent dated June 27,
1990:
RESOLVED, that Article II of the Articles of Incorporation of the
Corporation be amended to read as follows:
"ARTICLE II
The location of its home office shall be Amarillo, Potter County, Texas."
ARTICLE THREE
The following amendment to the Articles of Incorporation was adopted by the
sole shareholder of the Corporation pursuant to a written consent dated June 27,
1990:
RESOLVED, that Article VI of the Articles of Incorporation of the
Corporation be amended to read as follows:
"ARTICLE VI
The corporation shall have a Board of Directors of not less than five (5)
nor more than fifteen (15), which shall manage the affairs and property of the
corporation. The By-Laws shall specify the number of directors within the limits
herein specified, and such number may be increased or decreased from time to
time by amendment to the By-Laws of the corporation, but shall never be
decreased to less than five (5) in number. The directors shall be elected
annually or as provided by law and shall hold office until their successors are
elected and qualify. The initial Board of Directors shall consist of seven (7)
directors."
ARTICLE FOUR
The total number of shares of the Corporation outstanding at the time of
such adoption was one million fifty-three thousand five hundred sixty-five
(1,053,565) and the number of shares entitled to vote thereon was one million
forty-three thousand five hundred sixty-five (1,043,565).
ARTICLE FIVE
The holder of all of the one million forty-three thousand five hundred
sixty-five (1,043,565) shares outstanding and entitled to vote on said amendment
has signed a consent in writing voting for said amendment. No votes were cast
against said amendment.
IN WITNESS WHEREOF, the undersigned officer executes these Articles of
Amendment to the Articles of Incorporation of Great American Reserve Insurance
Company, this 28th day of September, 1990.
GREAT AMERICAN RESERVE INSURANCE
COMPANY
/s/DONALD F. GONGAWARE
____________________________
Donald F. Gongaware, President
Attest:
/s/ ERIC S. TOOKER
________________________________
Eric S. Tooker, Assistant
Secretary
STATE OF INDIANA )
)
COUNTY OF HAMILTON )
Before me, a Notary Public in and for said County and State personally
appeared Donald F. Gongaware, President, and Eric S. Tooker, Assistant
Secretary, of Great American Reserve Insurance Company who acknowledged the
execution of the foregoing instrument, and who, having been duly sworn, stated
that any representations contained therein are true.
Witness my hand and Notarial Seal this 28th day of September, 1990.
/s/DEBORAH A. NEAL
_____________________________
Deborah A. Neal, Notary Public
Residing in Clinton County, IN
Commission Expires 8/4/94
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and Article 3.05 of the Insurance Code of Texas, the undersigned
corporation adopts the following Articles of Amendment to the Articles of
Incorporation of GREAT AMERICAN RESERVE INSURANCE COMPANY, which amendment has
the effect of eliminating the personal liability of a director of the
corporation to the corporation or its stockholders for monetary damages for an
act or omission in the director's capacity as a director as authorized by
Article 13.02-7.06, Texas Miscellaneous Corporation Laws Act.
ARTICLE ONE
The name of the corporation is GREAT AMERICAN RESERVE INSURANCE COMPANY.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
shareholders of the Corporation on the 17th day of December, 1987. The
Amendment, Article VII, is an addition to the Articles of Incorporation as
amended and the full text of the provision added is as follows:
"ARTICLE VII
A director of the corporation shall not be liable to the corporation or its
shareholders for monetary damages for an act or omission in the director's
capacity as a director, except that this Article does not eliminate or limit the
liability of a director for:
(1) a breach of a director's duty of loyalty to the corporation or its
shareholders;
(2) an act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law;
(3) a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of the
director's office;
(4) an act or omission for which the liability of a director is expressly
provided for by statute; or
(5) an act related to an unlawful stock repurchase or payment of a
dividend.
No repeal or modification of this Article VII by the shareholders of the
corporation shall adversely affect any right or protection of a director
existing at the time of such repeal or modification with respect to events or
circumstances occurring or existing prior to such time.
ARTICLE THREE
The total number of shares of the corporation outstanding at the time of
such adoption was one million fifty-three thousand five hundred sixty-five
(1,053,565) and the number of shares entitled to vote thereon was one million
forty-three thousand five hundred sixty-five (1,043,565).
ARTICLE FOUR
Th holder of all of the one million forty-three thousand five hundred
sixty-five (1,043,565) shares outstanding and entitled to vote on said amendment
has signed a consent in writing voting for said amendment. No votes were cast
against said amendment.
Date: December 17, 1987 GREAT AMERICAN RESERVE INSURANCE
COMPANY
By: /s/ THOMAS C. HARDY
_____________________________
THOMAS C. HARDY, President
By: /s/ J. RALPH WOOD, JR.
______________________________
J. RALPH WOOD, JR., SECRETARY
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
Before me, a Notary Public on this 17th day of December, 1987, personally
appeared Thomas C. Hardy, known to me to be the person whose name is subscribed
to the foregoing document, and being by me first duly sworn, declared that the
statements therein contained are true and correct.
Given under my hand and seal of office, this day of December 17, 1987.
(Notary Seal) /s/ ISABEL WOODFORD
_______________________
Notary Public in and for
the State of Texas
My commission expires:
3-23-91
_______
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and Article 3.05 of the Insurance Code of Texas, the undersigned
corporation adopts the following Articles of Amendment to the Articles of
Incorporation of GREAT AMERICAN RESERVE INSURANCE COMPANY, which amendment has
the effect of increasing the authorized capital stock from $5,112,000.00 to
$9,112,000.00 by creating a new class of preferred stock of 40,000 shares of the
par value of $100.00 each so that the capital stock of the corporation shall be
$9,112,000.00 divided into 1,065,000 shares of common stock of the par value of
$4.80 each and 40,000 shares of preferred stock of the par value of $100.00
each.
ARTICLE ONE
The name of the corporation is GREAT AMERICAN RESERVE INSURANCE COMPANY.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
shareholders on the 28th day of May, 1985.
"Article IV of the Article of Incorporation of GREAT AMERICAN RESERVE
INSURANCE COMPANY is hereby amended so as to hereafter read as follows:
"ARTICLE IV
"The aggregate amount of the authorized capital stock of this corporation
shall be $9,112,000.00, divided into: (1) 1,065,000 shares of common stock, each
of the par value of $4.80; and (2) 40,000 shares of preferred stock, each of the
par value of $100.00.
"The preferred stock may be issued in one or more series. The designations,
preferences and other special rights, of the preferred stock of each series
shall be such as are stated and expressed herein and, to the extent not stated
and expressed herein, shall be such as may be fixed by the Board of Directors
(authority so to do being hereby expressly granted) and stated and expressed in
a resolution of resolutions adopted by the Board of Directors providing for the
issue of preferred stock of such series. Such resolution or resolutions shall
(a) specify the series to which the preferred stock shall belong, (b) state
whether a dividend shall be payable in cash, stock or otherwise, whether such
dividend shall be cumulative or non-cumulative and whether the preferred stock
of such series shall rank on parity with any other series of preferred stock as
to dividend and fix the dividend rate therefor (or the manner of computing the
rate of such dividends thereon), (c) fix the amount which the holders of the
preferred stock of such series shall be entitled to be paid in the event of a
voluntary or involuntary liquidation, dissolution or winding up of the
corporation, (d) state whether or not the preferred stock of such series shall
be redeemable and at what times and under what conditions and the amount or
amounts payable thereon in the event of redemption; and may provide for a
sinking fund for the purchase or redemption; or a purchase fund for the purchase
of shares of such series and the terms and provisions governing the operation of
any such fund and the status as to reissuance of shares of preferred stock
purchased or otherwise reacquired or redeemed or retired through operation
thereof, and that so long as the corporation is in default as to such sinking or
purchase fund the corporation shall not (with such exceptions, if any, as may be
provided) pay any dividends upon or purchase or redeem shares of capital common
stock with respect to dividends or distribution of assets upon liquidation; and
grant such other special rights to the holders of shares of such series as the
Board of Directors may determine and as shall not be inconsistent with the
provisions of this Article."
ARTICLE THREE
The total number of shares of the corporation outstanding at the time of
such adoption was one million forty-three thousand five hundred sixty-five
(1,043,565) and the number of shares entitled to vote thereon was one million
forty-three thousand five hundred sixty-five (1,043,565).
ARTICLE FOUR
The holder of all of the one million forty three thousand five hundred
sixty-five (1,043,565) shares outstanding and entitled to vote on said amendment
has signed a consent in writing voting for said amendment. No votes were cast
against said amendment.
ARTICLE FIVE
The amendment does not provide for any exchange, reclassification or
cancellation of issued shares. The amendment does not change the amount of
stated capital, but creates a new class of shares, same being forty thousand
(40,000) preferred shares of $100.00 par value, with all the rights and
privileges specified in Article Two hereof, which will be authorized but
unissued. If any of such preferred shares are issued, the amount of stated
capital will be increased by a sum equal to the par value of those shares
issued.
DATED: May 28, 1985. GREAT AMERICAN RESERVE INSURANCE
COMPANY
By: /s/ THOMAS C. HARDY
_____________________________
THOMAS C. HARDY, President
By: /s/ J. RALPH WOOD, JR.
_______________________________
J. RALPH WOOD, JR., SECRETARY
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
I, Wanda Lee, a Notary Public, do hereby certify that on this the 28th day
of May, 1985, personally appeared before me Thomas C. Hardy, who declared that
he is President of the corporation executing the foregoing instrument, and being
by me first duly sworn, acknowledged that he signed the foregoing document in
the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I hereunto set my hand and seal of office, the date and
year before written.
(Notary Seal) /s/ WANDA LEE
_______________________
Notary Public in and for
the State of Texas
My commission expires:
November 30, 1988 WANDA LEE
_________________ _______________________
(Printed Name of Notary)
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
I, Wanda Lee, a Notary Public, do hereby certify that on this the 28th day
of May, 1985, personally appeared before me J. Ralph Wood, Jr., who declared
that he is Secretary of the corporation executing the foregoing instrument, and
being by me first duly sworn, acknowledged that he signed the foregoing document
in the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I hereunto set my hand and seal of office, the date and
year before written.
(Notary Seal) /s/ WANDA LEE
_______________________
Notary Public in and for
the State of Texas
My commission expires:
November 30, 1988 WANDA LEE
_________________ ________________________
(Printed Name of Notary)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and Article 3.05 of the Insurance Code of Texas, the undersigned
corporation adopts the following Articles of Amendment to the Articles of
Incorporation of GREAT AMERICAN RESERVE INSURANCE COMPANY, which amendment has
the effect of increasing the authorized capital stock from $2,130,000.00 to
$5,112,000.00 by increasing the par value of the shares of common stock from Two
and No/100 Dollars ($2.00) par value to Four and 80/100 Dollars ($4.80) par
value; the number of authorized shares remains unchanged.
ARTICLE ONE
The name of the corporation is GREAT AMERICAN RESERVE INSURANCE COMPANY.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by the
shareholders on the 8th day of November, 1984.
"Article IV of the Articles of Incorporation of GREAT AMERICAN RESERVE
INSURANCE COMPANY is hereby amended so as to hereafter read as follows:
"ARTICLE IV.
"The amount of the authorized capital stock of this corporation shall be
$5,112,000.00, divided into 1,063,000 shares of common stock of the par value of
$4.80 each."
ARTICLE THREE
The total number of shares of the corporation outstanding at the time of
such adoption was one million forty-three thousand five hundred sixty-five
(1,043,565) and the number of shares entitled to vote thereon was one million
forty-three thousand five hundred sixty-five (1,043,565).
ARTICLE FOUR
The holder of all of the shares outstanding and entitled to vote on said
amendment has signed a consent in writing adopting said amendment.
ARTICLE FIVE
The amendment does not provide for any reclassification or cancellation of
issued shares; present shares of $2.00 par value will be exchanged for shares of
$4.80 par value.
ARTICLE SIX
The manner in which such amendments effect a change in the amount of the
stated capital, and the amount of stated capital as changed by such amendment,
are as follows: The amount of stated capital is increased from Two Million
Eighty-seven Thousand One Hundred Thirty and No/100 Dollars ($2,087,130.00) to
Five Million Nine Thousand One Hundred Twelve and No/100 Dollars (5,009,112.00),
and the number of authorized shares representing such capital shall remain the
same but the par value of each share shall be increased from Two and No/100
Dollars ($2.00) to Four and 80/100 Dollars ($4.80). Such increase in stated
capital will be effected by a transfer of Two Million Nine Hundred Twenty-One
Thousand Nine Hundred Eighty-two and No/100 Dollars ($2,921,982.00) from
contributed surplus of the corporation to its capital account. Present
outstanding shares of $2.00 par value common stock shall be exchanged share for
share for $4.80 par value common stock.
DATED: November 8, 1984.
GREAT AMERICAN RESERVE INSURANCE
COMPANY
By: /s/ THOMAS C. HARDY
_____________________________
Thomas C. Hardy, President
and
By: /s/ TERRENCE L. WHITWORTH
_____________________________
Terrence L. Whitworth, SECRETARY
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
I, Nancy L. Casper, a Notary Public, do hereby certify that on this the 8th
day of November, 1984, personally appeared before me Tom Hardy, who declared
that he is President of the corporation executing the foregoing instrument, and
being by me first duly sworn, acknowledged that he signed the foregoing document
in the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I hereunder set my hand and seal of office, the date
and year before written.
(Notary Seal) /s/ NANCY L. CASPER
_______________________
Notary Public in and for
the State of Texas
My commission expires:
May 24, 1988 Nancy L. Casper
_________________ ________________________
(Printed Name of Notary)
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
I, Nancy L. Casper, a Notary Public, do hereby certify that on this the 8th
day of November, 1984, personally appeared before me Terrence L. Whitworth, who
declared that he is Secretary of the corporation executing the foregoing
instrument, and being by me first duly sworn, acknowledged that he signed the
foregoing document in the capacity therein set forth and declared that the
statements therein contained are true.
IN WITNESS WHEREOF, I hereunder set my hand and seal of office, the date
and year before written.
(Notary Seal) /s/ NANCY L. CASPER
_______________________
Notary Public in and for
the State of Texas
My commission expires:
May 24, 1988 NANCY L. CASPER
_________________ ____________________________
(Printed Name of Notary)
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and the provisions of Chapter 3 of the Insurance Code of Texas,
the undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
ARTICLE ONE. The name of the corporation is GREAT AMERICAN RESERVE
INSURANCE COMPANY.
ARTICLE TWO. The following amendment to the Articles of Incorporation was
adopted by the shareholders of the corporation on April 28, 1965. Article IV of
the Articles of Incorporation was amended to increase the capital stock of the
corporation from $2,100,000.00, divided into 1,050,000 shares of common stock of
the par value of $2.00 each to $2,130,000.00 by increasing the number of shares
to 1,065,000 of the common stock of the par value of $2.00 each.
The amendment changes Article IV of the Articles of Incorporation, and said
Article IV is hereby amended to read as follows:
"ARTICLE IV.
"The amount of the authorized capital stock of this corporation shall be
$2,130,000.00 divided into 1,065,000 shares of common stock of the par value of
$2.00 each."
ARTICLE THREE. The number of shares outstanding at the time of the adoption
of such amendment was 1,050,000 of common stock, all of the same class and all
entitled to vote.
ARTICLE FOUR. The number of shares voting for such amendment was 959,014
and the number of shares voting against such amendment was none.
ARTICLE FIVE. The manner in which the amendment shall be effected is as
follows:
14,900 shares will be issued to the stockholders of Hub Insurance Company
pursuant to Articles of Merger filed contemporaneously herewith.
ARTICLE SIX. The manner in which such amendment effects a change in the
amount of stated capital, and the amount of stated capital as changed by the
amendment, are as follows:
The amount of stated capital is increased from $2,100,000.00 to
$2,129,800.00. Said increase results from the application to capital of
$29,800.00 of earned surplus of the Company. The remaining 100 shares have not
been issued or paid for, and shall not constitute capital or stock or capital
stock of this company.
Dated this 3rd day of May, 1965.
GREAT AMERICAN RESERVE INSURANCE COMPANY
By /s/ C. D. SCOTT
___________________________________
Its President
And /s/ C. ROBERT HALL, JR.
____________________________________
Its Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
I, Peggy L. Edwards, a Notary Public, do hereby certify that on the 3rd day
of May, 1965, personally appeared before me C. D. SCOTT and C. ROBERT HALL, JR.,
who declared to me that they are President and Secretary, respectively, of the
corporation executing the foregoing document, and being first duly sworn, each
acknowledged that they signed the foregoing document in the capacities therein
set forth and declared that the said statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
/s/ PEGGY L. EDWARDS
____________________________________
Notary Public, Dallas County, Texas
My Commission Expires:
June 1, 1968
ARTICLES OF MERGER
OF DOMESTIC CORPORATIONS
Pursuant to the provisions of Article 5.07 of the Texas Business
Corporation Act, the undersigned domestic corporations adopt the following
Articles of Merger for the purpose of merging them into one of such
corporations:
1. The names of the undersigned corporations of the State of Texas are:
GREAT AMERICAN RESERVE INSURANCE COMPANY
HUB INSURANCE COMPANY
2. The name of the surviving corporation is GREAT AMERICAN RESERVE
INSURANCE COMPANY.
3. There is attached hereto a copy of the Plan of Merger.
4. The Plan of Merger hereto attached was approved by the shareholders of
the undersigned corporations in the manner prescribed by the Texas Business
Corporation Act.
5. As to each of the undersigned corporations, only stock of one class is
outstanding; and the number of shares outstanding, the number entitled to vote,
and the total voted for or against are shown in the following tabulation,
to-wit:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name of Corporation Outstanding Entitled to Vote Voted for Voted Against
- ---------------------- ----------- ---------------- --------- -------------
Great American Reserve
Insurance Company 1,050,000 1,050,000 959,014 None
Hub Insurance Company 150,000 150,000 150,000 None
</TABLE>
Dated May 3rd, 1965.
GREAT AMERICAN RESERVE INSURANCE COMPANY
By /s/ C. D. SCOTT
______________________________________
Its President
And /s/ C. ROBERT HALL, JR.
_______________________________________
Its Secretary
HUB INSURANCE COMPANY
By /s/ E. C. PANNELL
______________________________________
Its President
And
______________________________
Its Secretary
THE STATE OF TEXAS )
OF DALLAS )
I, Peggy L. Edwards, a Notary Public, do hereby certify that on this 30th
day of April, 1965, personally appeared before me C. D. SCOTT, who, being by me
first duly sworn, declared that he is President of Great American Reserve
Insurance Company, that he signed the foregoing document as President of the
corporation, and that the statements therein contained are true.
/s/ PEGGY L. EDWARDS
____________________________________
Notary Public, Dallas County, Texas
THE STATE OF TEXAS )
COUNTY OF DALLAS )
I, Bernice L. Stedwick, a Notary Public, do hereby certify that on this 5th
day of May, 1965, personally appeared before me E. C. PANNELL, who, being by me
first duly sworn, declared that he is President of Hub Insurance Company, that
he signed the foregoing document as President of the corporation, and that the
statements therein contained are true.
/s/ BERNICE L. STEDWICK
____________________________________
Notary Public, Dallas County, Texas
GREAT AMERICAN RESERVE INSURANCE COMPANY
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and the provisions of Chapter 3 of the Insurance Code of Texas,
the undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
ARTICLE ONE. The name of the corporation is GREAT AMERICAN RESERVE
INSURANCE COMPANY.
ARTICLE TWO. The following amendment to the Articles of Incorporation was
adopted by the shareholders of the corporation on March 10, 1964. Article IV of
the Articles of Incorporation was amended to increase the capital stock of the
corporation from $1,545,000.00 to $2,100,000.00, reducing the par value of
shares from $3.00 to $2.00 per share, and thus increasing the number of shares
from 515,000 of common stock of the par value of $3.00 per share to 1,050,000
shares of common stock of the par value of $2.00 per share.
The amendment changes Article IV of the Articles of Incorporation, and said
Article IV is hereby amended to read as follows:
"ARTICLE IV.
"The amount of the capital stock of this corporation shall be
$2,100,000.00, divided into 1,050,000 shares of common stock of the par value of
$2.00 each."
ARTICLE THREE. The number of shares outstanding at the time of the adoption
of such amendment was 515,000 of common stock, all of the same class and all
entitled to vote.
ARTICLE FOUR. The number of shares voting for such amendment was 428,690
and the number voting against such amendment was none.
ARTICLE FIVE. The manner in which the amendment shall be effected is as
follows:
To accomplish the net result of the reduction in par value and the stock
dividend, one additional share will be issued for each outstanding share.
ARTICLE SIX. The manner in which such amendment effects a change in the
amount of stated capital, and the amount of stated capital as changed by the
amendment, are as follows:
The amount of stated capital is increased from $1,545,000.00 to
$2,060,000.00. Said increase results from the application to capital of
$515,000.00 of surplus of the Company, for which a stock dividend of 257,500
shares of the par value of $2.00 each has been declared pro rata to all
stockholders of record as of March 6, 1964. The remaining 20,000 shares have not
been issued or paid for, and shall not constitute capital or stock or capital
stock of this Company.
Dated this 10th day of March, 1964.
GREAT AMERICAN RESERVE INSURANCE COMPANY
By /s/ C. D. SCOTT
___________________________________
Its President
And /s/ C. ROBERT HALL, JR.
____________________________________
Its Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
I, Doris L. Pockmann, a Notary Public, do hereby certify that on the 12th
day of March, 1964, personally appeared before me C. D. SCOTT and C. ROBERT
HALL, JR., who, declared to me that they are President and Secretary,
respectively, of the corporation executing the foregoing document, and being
first duly sworn, each acknowledged that they signed the foregoing document in
the capacities therein set forth and declared that the said statements therein
contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
/s/ DORIS L. POCKMANN
____________________________________
Notary Public, Dallas County, Texas
My Commission Expires
June 1, 1965
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS )
That we, C.V. Compton, T. W. Reagan, William Crawford III, T. V. Meyer and
Julia Shapard, all residents of the City and County of Dallas and citizens of
the State of Texas, under and by virtue of the laws of this State, do hereby
form and organize a body corporate for the purpose of transacting a health, life
and accident insurance business, and to that end we do hereby adopt and
subscribe the following Charter and Articles of Incorporation:
ARTICLE I.
The name of this company shall be ALL AMERICAN ASSURANCE COMPANY.
ARTICLE II.
The principal business office of said company shall be located at the City
of Dallas, County of Dallas, State of Texas.
ARTICLE III.
The purpose for which this corporation is formed is to engage in the life,
health and accident insurance business, and it shall have power only to transact
business within this State, and to write insurance only on the weekly or monthly
premium plan, and to issue no policy promising to pay more than one thousand
dollars in the event of death of the insured from natural causes, nor more than
two thousand dollars in the event of death of any person from accidental causes,
and it may issue, combined or separately, life, accident or health insurance
policies; all of which business may be conducted in one department, and to do
and perform all other kinds and character of business, as such limited capital
stock, life, health and accident insurance company, permitted or authorized by
the laws of the State of Texas.
ARTICLE IV.
The amount of its capital stock shall be $25,000.00, divided into 2,500
shares of $10.00 each. The entire amount of said capital has been subscribed and
paid in and is possessed by said company in money and the same is the bona fide
property of the said company.
ARTICLE V.
The period of time for which this company shall exist shall be 100 years.
ARTICLE VI.
The business and affairs of this corporation shall be supervised, managed
and controlled by a Board of Directors, the number of which is fixed at this
time at seven.
IN TESTIMONY WHEREOF, we hereunto subscribe our names this 8th day of
February, A. D. 1937.
NAME ADDRESS
/s/ C.V. COMPTON Dallas, Texas
________________________ _________________
/s/ T. W. REAGAN Dallas, Texas
________________________ _________________
/s/ WILLIAM CRAWFORD III Dallas, Texas
________________________ _________________
/s/ T. V. MEYER Dallas, Texas
________________________ _________________
/s/ JULIA SHAPARD Dallas, Texas
________________________ _________________
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public, in and for the
County of Dallas, State of Texas, on this day personally appeared C.V. Compton,
T. W. Reagan, William Crawford III, T. V. Meyer and Julia Shapard, of Dallas
County, Texas, who being by me duly sworn do jointly and severally depose and
say:
That all of the material allegations and facts set forth and contained in
the annexed and foregoing Charter and Articles of Incorporation are to us as
therein stated, and we are and each of us is personally cognizant of all of said
facts.
That the $27,500.00 in cash representing the present capital stock of said
company and $2,500.00 surplus is now actually on deposit with the First National
Bank in Dallas, Texas, to the credit of said insurance company and subject to
the check of said company, and that the entire amount thereof has been paid in
and is possessed by said company in money and that the same is the bona fide
property of said insurance company.
WITNESS our hands this the 9th day of February, A. D. 1937.
/s/ C.V. Compton
________________________
/s/ T. W. Reagan
________________________
/s/ William Crawford III
________________________
/s/ T. V. Meyer
________________________
/s/ Julia Shapard
________________________
SWORN TO AND SUBSCRIBED BEFORE ME, by C.V. Compton, T. W. Reagan, William
Crawford III, T. V. Meyer and Julia Shapard, this the 9th day of February A. D.
1937.
/s/ FAE WELLS
___________________________________
Notary Public, Dallas County, Texas
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, within and for the County of Dallas,
State of Texas, on this day personally appeared C.B. Parrott, who being duly
sworn, says on oath:
I am Active Vice President of the First National Bank in Dallas, of Dallas,
Texas, and am duly authorized to make this affidavit.
That All American Assurance Company, of Dallas, Texas, now in process of
being chartered, has now in the said First National Bank in Dallas, of Dallas,
Texas, to its credit, subject to its draft when organized, in actual cash,
$27,500.00, the amount of its capital stock and surplus; that said funds belong
to and are the property of the said proposed corporation and that said funds are
absolutely and unconditionally the property of the said corporation.
WITNESS MY HAND at Dallas, Texas, this the 9th day of February, A. D. 1937.
/s/ C. B. PARROTT
______________________________
SUBSCRIBED AND SWORN TO BEFORE ME, this the 9th day of February, A. D.
1937.
/s/ JACK C. BURBRON
______________________________
Notary Public, Dallas County, Texas
AMENDMENT TO THE ARTICLES OF INCORPORATION
OF GREAT AMERICAN RESERVE INSURANCE COMPANY
INCREASING ITS CAPITAL STOCK
TO $1,545,000.00
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at the regular meeting of the stockholders of Great American
Reserve Insurance Company, a corporation heretofore duly organized and chartered
under the laws of the State of Texas, held at the office of the company in the
City of Dallas, Dallas County, Texas, on the 8th day of March, 1960, in
conformity with the laws of this State and the By-Laws of said corporation, a
majority of the stockholders of said corporation voted to increase the
authorized capital of said corporation from $1,030,000.00 to $1,545,000.00, by
increasing the number of shares to 515,000 and reducing the par value of all
shares to $3.00 per share; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company held on the 8th day of March, 1960 in the City of
Dallas, Texas, a quorum of said Board of Directors being present, pursuant to
the action and vote of the stockholders of said corporation above referred to,
said Board of Directors did unanimously vote to amend the Charter and Articles
of Incorporation of said Great American Reserve Insurance Company by increasing
the capital stock of said corporation from the present authorized capital of
$1,030,000.00 to the amount of $1,545,000.00, by increasing the number of shares
to 515,000 and reducing the par value of all shares to $3.00 per share; and
WHEREAS, pursuant to Resolutions of the stockholders and Board of
Directors, $515,000.00 of the increase in capital stock has been paid in by
application of earned surplus to capital and a stock dividend has been declared,
authorizing the issuance of an additional 171,666-2/3 shares of common stock of
the par value of $3.00 each, all as reflected in the certified copy of the
Resolutions and the affidavits of the officers of said corporation hereto
attached and accompanying this amendment, and the said amount of $515,000.00
being now in possession of the company and credited to capital:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, being a majority of the Board of Directors of
said Great American Reserve Insurance Company, and also being stockholders of
said corporation, by virtue of the laws of the State of Texas and the authority
vested in us by the action of the stockholders and the Board of Directors of
said corporation above referenced to, do hereby amend Article IV of the Articles
of Incorporation of said Great American Reserve Insurance Company now on file
with the State Board of Insurance of Texas, by changing and increasing the
amount of authorized capital stock of said corporation from $1,030,000.00 to
$1,545,000.00, divided into 515,000 shares of the par value of $3.00 each, so
that said Article IV shall hereafter read as follows:
"ARTICLE IV.
"The amount of the capital stock of this corporation shall be
$1,545,000.00, divided into 515,000 shares of common stock of the par value of
$3.00 each."
And we do hereby adopt, authenticate and certify this amendment to the
State Board of Insurance of Texas for the purpose and to the end that this
amendment when approved and filed, together with the original Charter and
Articles of Incorporation and all prior amendments thereto filed with said State
Board of Insurance of Texas, shall constitute the amended Articles of
Incorporation and Charter of said Great American Reserve Insurance Company.
IN WITNESS WHEREOF, we have hereunto subscribed our names this the 15th day
of March, 1960.
/s/ EARLE E. BAILEY
_______________________________
Earle E. Bailey
/s/ E. E. COMBEST
_______________________________
E. E. Combest
/s/ JEROME K. CROSSMAN
_______________________________
Jerome K. Crossman
/s/ L. E. ELLIOTT
_______________________________
L. E. Elliott
/s/ RICHARD J. HAMBLETON
_______________________________
Richard J. Hambleton
/s/ ORLO L. KARSTEN
_______________________________
Orlo L. Karsten
/s/ BLAGDEN MANNING
_______________________________
Blagden Manning
/s/ AVERY MAYS
_______________________________
Avery Mays
/s/ HENRY NEUHOFF, JR.
_______________________________
Henry Neuhoff, Jr.
/s/ W. H. PIERCE
_______________________________
W. H. Pierce
/s/ CHARLES D. SCOTT
_______________________________
Charles D. Scott
/s/ GLEN WALLACE
_______________________________
Glen Wallace
/s/ TRAVIS T. WALLACE
_______________________________
Travis T. Wallace
/s/ JOHN W. CROMWELL
_______________________________
John W. Cromwell
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, on this day personally appeared Earle
E. Bailey, E. E. Combest, John W. Cromwell, Jerome K. Crossman, L. E. Elliott,
Richard J. Hambleton, Orlo L. Karsten, Blagden Manning, Avery Mays, Henry
Neuhoff, Jr., W. H. Pierce, Charles D. Scott, Glen Wallace and Travis T.
Wallace, known to me to be the persons whose names are subscribed to the
foregoing instrument (Amendment to the Charter and Articles of Incorporation of
Great American Reserve Insurance Company) and severally acknowledged to me that
they each executed the same for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 15th day of March, 1960.
/s/ PAT HOFFMAN
____________________________________
Notary Public, Dallas County, Texas
My commission expires June 1, 1961
AMENDMENT TO THE CHARTER
OF GREAT AMERICAN RESERVE INSURANCE COMPANY
INCREASING ITS CAPITAL STOCK
TO $1,030,000.00
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at the regular annual meeting of the Stockholders of Great
American Reserve Insurance Company held at the office of said company in the
City of Dallas, Dallas County, Texas, on the 8th day of March, 1955, in
conformity with the laws of this State and the By-Laws of said corporation, the
Stockholders of said corporation by a vote of more than a majority of all the
stock of said company, voted to increase the authorized capital of said
corporation; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company held on the 8th day of March, 1955 at the office of
said company in the City of Dallas, Texas, a quorum of said Board of Directors
being present, pursuant to the action and vote of the Stockholders of said
corporation above referred to, said Board of Directors did unanimously vote to
amend the Charter of said Great American Reserve Insurance Company by increasing
the capital stock of said corporation from the present authorized capital of
$400,000.00 to the amount of $1,030,000.00, said total capital of said
$1,030,000.00 to be divided into 103,000 shares of the par value of $10.00 each;
and
WHEREAS, pursuant to Resolutions of the Stockholders and Board of
Directors, $600,000.00 of the increase in capital stock has been paid in by
application of earned surplus to capital and a stock dividend has been declared,
authorizing the issuance of an additional 60,000 shares of common stock of the
par value of $10.00 each, all as reflected in the certified copy of the
Resolutions and the affidavits of the officers of said corporation hereto
attached and accompanying this amendment, and the said amount of $600,000.00 is
now in possession of the company and credited to capital; and
WHEREAS, the remaining 3,000 shares of the increase of capital was
subscribed by Travis T. Wallace, as Trustee, and paid in cash and is now in
possession of the company; NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS:
That we, Travis T. Wallace and John W. Cromwell, being the President and
Secretary respectively of said Great American Reserve Insurance Company, and
also being Stockholders and Directors of said corporation, by virtue of the laws
of the State of Texas and the authority vested in us by the action of the
Stockholders and the Board of Directors of said corporation above referred to,
do hereby amend Article IV of the Charter of said Great American Reserve
Insurance Company now on file with the Board of Insurance Commissioners of the
State of Texas, by changing and increasing the amount of authorized capital
stock of said corporation from $4,000,000.00 to $1,030,000.00 divided into
103,000 shares of the par value of $10.00 each, and we do hereby adopt,
authenticate and certify this amendment to the Board of Insurance Commissioners
of the State of Texas for action thereon as required by law, for the purpose and
to the end that this amendment when approved and filed, together with the
original Charter and all prior amendments thereto filed with the Board of
Insurance Commissioners of the State of Texas, shall constitute the amended
Charter of said Great American Reserve Insurance Company.
IN WITNESS WHEREOF, we have hereunto subscribed our names this the 23rd day
of March, 1955.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ JOHN W. CROMWELL
____________________________________
Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, on this day personally appeared
Travis T. Wallace and John W. Cromwell, President and Secretary respectively of
Great American Reserve Insurance Company, known to me to be the persons whose
names are subscribed to the foregoing instrument (Amendment to the Charter of
Great American Reserve Insurance Company), and severally acknowledged to me that
they each executed the same for the purposes and consideration therein
expressed, and in the capacities therein stated.
GIVEN under my hand and seal of office this 23rd day of March, 1955.
/s/ RUTH WYLIE
____________________________________
Notary Public, Dallas County, Texas.
AMENDMENT TO THE CHARTER
OF GREAT AMERICAN RESERVE INSURANCE COMPANY
INCREASING ITS CAPITAL STOCK
TO $1,030,000.00
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at the regular annual meeting of the Stockholders of Great
American Reserve Insurance Company held at the office of said company in the
City of Dallas, Dallas County, Texas, on the 8th day of March, 1955, in
conformity with the laws of this State and the By-Laws of said corporation, the
Stockholders of said corporation by a vote of more than a majority of all the
stock of said company, voted to increase the authorized capital of said
corporation; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company held on the 8th day of March, 1955, at the office of
said company in the City of Dallas, Texas, a quorum of said Board of Directors
being present, pursuant to the action and vote of the Stockholders of said
corporation above referred to, said Board of Directors did unanimously vote to
amend the Charter of said Great American Reserve Insurance Company by increasing
the capital stock of said corporation from the present authorized capital of
$400,000.00 to the amount of $1,030,000.00, said total capital of said
$1,030,000.00 to be divided into 103,000 shares of the par value of $10.00 each;
and
WHEREAS, pursuant to Resolutions of the Stockholders and Board of
Directors, $600,000.00 of the increase in capital stock has been paid in by
application of earned surplus to capital and a stock dividend has been declared,
authorizing the issuance of an additional 60,000 shares of common stock of the
par value of $10.00 each, all as reflected in the certified copy of the
Resolutions and the affidavits of the officers of said corporation hereto
attached and accompanying this amendment, and the said amount of $600,000.00 is
now in possession of the company and credited to capital; and
WHEREAS, the remaining 3,000 shares of the increase of capital was
subscribed by Travis T. Wallace, as Trustee, and paid in cash and is now in
possession of the company; NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, being a majority of the Board of Directors of
said Great American Reserve Insurance Company, and also being Stockholders of
said corporation, by virtue of the laws of the State of Texas and the authority
vested in us by the action of the Stockholders and the Board of Directors of
said corporation above referred to, do hereby amend Article IV of the Charter of
said Great American Reserve Insurance Company now on file with the Board of
Insurance Commissioners of the State of Texas, by changing and increasing the
amount of authorized capital stock of said corporation from $400,000.00 to
$1,030,000.00 divided into 103,000 shares of the par value of $10.00 each; and
we do hereby adopt, authenticate and certify this amendment to the Board of
Insurance Commissioners of the State of Texas for the purpose and to the end
that this amendment when approved and filed, together with the original Charter
and all prior amendments thereto filed with the Board of Insurance Commissioners
of the State of Texas, shall constitute the amended Charter of said Great
American Reserve Insurance Company.
IN WITNESS WHEREOF, we have hereunto subscribed our names this the 8th day
of April, 1955.
/s/ TRAVIS T. WALLACE
____________________________________
/s/ C. O. HAMBLETON
____________________________________
/s/ EARLE E. BAILEY
____________________________________
/s/ E. E. COMBEST
____________________________________
/s/ CHARLES D. SCOTT
____________________________________
/s/ CECIL H. JONES
____________________________________
/s/ JOHN W. CROMWELL
____________________________________
/s/ L. E. ELLIOTT
____________________________________
/s/ C. C. MARTIN, SR.
____________________________________
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, on this day personally appeared
Travis T. Wallace, C. O. Hambleton, Earle E. Bailey, E. E. Combest, Charles D.
Scott, Cecil H. Jones, John W. Cromwell, L. E. Elliott and C. C. Martin, Sr.,
known to me to be the persons whose names are subscribed to the foregoing
instrument (Amendment to the Charter of Great American Reserve Insurance
Company), and severally acknowledged to me that they each executed the same for
the purposes and consideration therein expressed, and in the capacities therein
stated.
GIVEN under my hand and seal of office this 8th day of April, 1955.
/s/ SALLY JONES
____________________________________
Notary Public, Dallas County, Texas.
AMENDMENT TO THE CHARTER
OF GREAT AMERICAN RESERVE INSURANCE COMPANY
INCREASING ITS CAPITAL STOCK
TO $400,000.00
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at the regular annual meeting of the Stockholders of Great
American Reserve Insurance Company held at the office of said company in the
City of Dallas, Dallas County, Texas, on the 8th day of March, 1949, in
conformity with the laws of this State and the By-Laws of said corporation, the
Stockholders of said corporation by a vote of more than two-thirds of all of the
stock of said company, voted to increase the authorized capital of said
corporation; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company held on the 8th day of March, 1949, at the office of
said company in the City of Dallas, Texas, a quorum of said Board of Directors
being present, pursuant to the action and vote of the Stockholders of said
corporation above referred to, said Board of Directors did unanimously vote to
amend the Charter of said Great American Reserve Insurance Company by increasing
the capital stock of said corporation from the present authorized capital of
$250,000.00 to the amount of $400,000.00, said total capital of said $400,000.00
to be divided into 40,000 shares of the par value of $10.00 each, and did
furthermore authorize and direct said corporation to take all necessary and
proper legal steps to certify the Amendment to the Charter and the increase in
the capital of said corporation to the Board of Insurance Commissions of the
State of Texas for the purpose and to the end that said amendment and the
original Charter now on file with the said Board of Insurance Commissioners,
together with all amendments thereto heretofore made, shall constitute the
amended Charter of said corporation; and
WHEREAS, the said Stockholders and Board of Directors did by Resolution
duly adopted, authorize and declare a stock dividend of $150,000.00, by
increasing the 10,000 shares of the par value of $25.00 each to 40,000 shares of
the par value of $10.00 each: NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS: that
We, Travis T. Wallace and Cecil H. Jones, being the President and Secretary
respectively of said Great American Reserve Insurance Company, and also being
Stockholders and Directors of said corporation, by virtue of the laws of the
State of Texas and the authority vested in us by the action of the Stockholders
and the Board of Directors of said corporation above referred to, do hereby
amend Article IV of the original Charter of said Great American Reserve
Insurance Company now on file with the Board of Insurance Commissioners of the
State of Texas, by changing and increasing the amount of authorized capital
stock of said corporation from $250,000.00 to $400,000.00 divided into 40,000
shares of $10.00 each; and we do hereby adopt, authenticate and certify this
amendment to the Board of Insurance Commissioners of the State of Texas for
action thereon as required by law, for the purpose and to the end that this
amendment when approved and filed, together with the original Charter and all
prior amendments thereto filed with the Board of Insurance Commissioners of the
State of Texas, shall constitute the amended Charter of said Great American
Reserve Insurance Company.
IN WITNESS WHEREOF, we have hereunto subscribed our names this the 8th day
of March, 1949.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ CECIL H. JONES
____________________________________
Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, on this day personally appeared
Travis T. Wallace and Cecil H. Jones, President and Secretary respectively of
Great American Reserve Insurance Company, known to me to be the persons whose
names are subscribed to the foregoing instrument (Amendment to the Charter of
Great American Reserve Insurance Company), and severally acknowledged to me that
they each executed the same for the purposes and consideration therein
expressed, and in the capacities therein stated.
GIVEN under my hand and seal of office this 8th day of March, 1949.
/s/ RUTH WYLIE
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
We, Travis T. Wallace and Cecil H. Jones, President and Secretary
respectively of Great American Reserve Insurance Company of Dallas, Texas, being
duly sworn, do jointly and severally depose and say:
That all of the material allegations and facts set forth and contained in
the annexed and foregoing Amendment to the Charter of Great American Reserve
Insurance Company of Dallas, Texas, are true as therein stated, and that they
are personally cognizant of all of said facts.
That the earned surplus of said corporation is in excess of said sum of
$150,000.00; that the Great American Reserve Insurance Company actually has on
hand on this date, in cash and other admissible property and securities under
the laws of the State of Texas, surplus in excess of said $150,000.00; that the
same is the bona fide property of said Great American Reserve Insurance Company,
and that there are no liens or claims of any kind against the same, and it is
available for transfer to the capital of said corporation as of this date.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ CECIL H. JONES
____________________________________
Secretary
SUBSCRIBED and sworn to before me by Travis T. Wallace and Cecil H. Jones
this the 8th day of March, 1949.
/s/ RUTH WYLIE
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
We, Travis T. Wallace, President and Cecil H. Jones, Secretary of Great
American Reserve Insurance Company, being duly sworn, do jointly and severally
depose and say:
That the above and foregoing is a true and correct statement of the
financial condition of Great American Reserve Insurance Company as of December
31, 1948, and shows an earned surplus in excess of $150,000.00, which said
surplus is possessed by Great American Reserve Insurance Company in cash and
other admitted assets, and that the amount of said earned surplus of said
corporation on March 8, 1949, is equal to or in excess of the surplus shown by
said statement as of December 31, 1948.
That the cash balances in bank, as shown by the attached and foregoing
statement, do not to any extent, directly or indirectly, represent borrowed
money; that the company is not indebted to said banks or to any of them, or to
any one else for the whole or any part of the funds represented by such bank
balances; that the same are unconditionally the property of the company, and
that there are no collateral agreements by which such funds or any part thereof
are withdrawable by any one except by the company for its own proper uses, and
as its unconditional assets; that the cash, securities and other property of the
company are unconditionally the assets of the company, and sufficient in amount
and value to provide the payment of the increased capital stock of $150,000.00
in full, with surplus in addition thereto of approximately $400,000.00.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ CECIL H. JONES
____________________________________
Secretary
SUBSCRIBED and sworn to before me by Travis T. Wallace and Cecil H. Jones
this the 8th day of March, 1949.
/s/ RUTH WYLIE
___________________________________
Notary Public, Dallas County, Texas
AMENDMENT OF CHARTER
OF GREAT AMERICAN RESERVE INSURANCE COMPANY
INCREASING ITS CAPITAL STOCK
TO $250,000.00
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at a Special Meeting of the stockholders of Great American Reserve
Insurance Company held at the office of said company in the City of Dallas,
Dallas County, Texas, on the 30th day of December, A.D., 1946, in conformity
with the laws of this state and the By-Laws of said Corporation, the
stockholders of said Corporation by a vote of more than two-thirds of all the
stock of said company, voted to increase the authorized capital of said
Corporation; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company held on the 30th day of December, 1946, in the office
of said company in the City of Dallas, Dallas County, Texas, a quorum of said
Board of Directors being present, pursuant to the action and vote of the
stockholders of said Corporation above referred to, said Board of Directors did
unanimously vote to amend the Charter of said Great American Reserve Insurance
Company by increasing the capital stock of said Corporation from the present
authorized capital of $100,000.00 to the amount of $250,000.00, said total
capital of said $250,000.00 to be divided into 10,000 shares of the par value of
$25.00 each, and did furthermore authorize and direct said Corporation to take
all necessary and proper legal steps to certify the amendment to the Charter and
the increase in the capital of said Corporation to the Board of Insurance
Commissioners of the State of Texas for the purpose and to the end that said
amendment and original Charter now on file with the said Board of Insurance
Commissioners, together with all amendments thereto heretofore made, shall
constitute the amended charter of said Corporation; and,
WHEREAS, the said stockholders and Board of Directors did by Resolutions
duly adopted, authorize and declare a stock dividend of 150% by increasing the
par value of each share issued and outstanding stock of said Corporation from
its present par value to the par value of $25.00:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS: that we, Travis T. Wallace
and Earle E. Bailey, being the President and Secretary, respectively, of said
Great American Reserve Insurance Company, and also being stockholders and
directors of said Corporation, by virtue of the laws of the State of Texas and
the authority vested in us by action of the stockholders and Board of Directors
of said Corporation above referred to, do hereby amend Article IV of the
Original Charter of the said Great American Reserve Insurance Company now on
file with the Board of Insurance Commissioners of the State of Texas, by
changing and increasing the amount of authorized capital stock of said
Corporation from $100,000.00 to $250,000.00, divided into 10,000 shares of
$25.00 each, and we do hereby adopt, authenticate and certify this amendment to
the Board of Insurance Commissioners of the State of Texas for action thereon as
required by law, for the purpose and to the end that this amendment, when
approved and filed, together with the original Charter and all prior amendments
thereto filed with the Board of Insurance Commissioners of the State of Texas
shall constitute the Amended Charter of said Great American Reserve Insurance
Company.
IN WITNESS WHEREOF, we have hereunto subscribed our names this the 30th day
of December, 1946.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ EARLE E. BAILEY
____________________________________
Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, on this day personally appeared
TRAVIS T. WALLACE and EARLE E. BAILEY, known to me to be the persons whose names
are subscribed to the foregoing instrument (Amendment to the Charter of Great
American Reserve Insurance Company), and severally acknowledged to me that they
each executed the same for the purposes and consideration therein expressed, and
in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 30th day of December, 1946.
/s/ SALLY JONES
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
We, Travis T. Wallace and Earle E. Bailey, President and Secretary,
respectively, of the Great American Reserve Insurance Company, of Dallas, Texas,
being duly sworn, do jointly and severally depose and say:
That all of the material allegations and facts set forth and contained in
the annexed and foregoing amendment to the Charter of the Great American Reserve
Insurance Company of Dallas, Texas, are true, as therein stated, and that they
are personally cognizant of all the said facts.
That the earned surplus of said Corporation is in excess of the said sum of
$150,000.00. That the Great American Reserve Insurance Company actually has on
hand on this date in cash and other admissible property and securities, under
the laws of the State of Texas, surplus in excess of said amount of $150,000.00;
that the same is the bona fide property of said Great American Reserve Insurance
Company.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ EARLE E. BAILEY
____________________________________
Secretary
SUBSCRIBED AND SWORN TO before me by Travis T. Wallace and Earle E. Bailey
this the 30th day of December, 1946.
/s/ SALLY JONES
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at a meeting of the stockholders of Great American Reserve
Insurance Company, held at the offices of said company in the City of Dallas,
Dallas County, Texas, on the 14th day of March, A.D. 1944, in conformity with
the laws of this State and the By-Laws of said corporation, the stockholders of
said corporation, by a vote of a majority of all of the stockholders of said
company, voted to change, amend and modify the purpose clause of said
corporation; and,
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company, held on the 14th day of March, A.D. 1944, at the
offices of said company in the City of Dallas, Dallas County, Texas, a quorum of
said Board of Directors being present, pursuant to the action and vote of the
stockholders of said corporation above referred to, did vote to amend Article
III of the Charter of said corporation, changing, amending and modifying the
purpose clause of the Charter of said corporation; and did further authorize and
direct the President and Secretary of said corporation to take all necessary,
and proper legal steps to certify the said amendment to the charter of said
corporation to the Board of Insurance Commissioners of the State of Texas:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, That we, Travis T. Wallace
and Earle E. Bailey, being the President and Secretary respectively of said
Great American Reserve Insurance Company, by virtue of the laws of the State of
Texas and the authority vested in us by the action of the stockholders and the
Board of Directors of said corporation above referred to;
DO HEREBY CERTIFY that Article III of the Charter of this corporation has
been, and is hereby amended to read as follows:
"ARTICLE III. The purpose for which this corporation is formed is to engage
in the life, health and accident insurance business, in accordance with and as
defined by Chapter 3 of Title 78 of the Revised Statutes of the State of Texas,
and to do and perform all other kinds and character of business, as such life,
health and accident insurance company is permitted or authorized to do by the
laws of the State of Texas."
AND WE DO HEREBY ADOPT, AUTHENTICATE AND CERTIFY this Amendment to the
Board of Insurance Commissioners of the State of Texas for action thereon as
required by law, for the purpose and to the end that this Amendment, when
approved and filed by said Board, together with the original Charter and former
amendments now on file with said Board of Insurance Commissioners, shall
constitute the amended charter of said Great American Reserve Insurance Company.
IN WITNESS WHEREOF, we hereunto subscribe our names this the 15th day of
March, A.D. 1944.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ EARLE E. BAILEY
____________________________________
Secretary
STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared
Travis T. Wallace and Earle E. Bailey, known to me to be the persons whose names
are subscribed to the foregoing instrument, (amendment to the charter of Great
American Reserve Insurance Company) and severally, as President and Secretary,
respectively, of the Great American Reserve Insurance Company, acknowledged to
me that they each executed the same for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 16th day of March, A. D.
1944.
/s/ H. WALLACE
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
We, Travis T. Wallace, President, and Earle E. Bailey, Secretary,
respectively, of the Great American Reserve Insurance Company, being duly sworn,
do jointly and severally depose and say:
That all of the material allegations of fact set forth and contained in the
annexed and foregoing amendment to the Charter of Great American Reserve
Insurance Company of Dallas, Texas, are true as therein stated, and that we are
personally cognizant of all of said facts.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ EARLE E. BAILEY
____________________________________
Secretary
SUBSCRIBED AND SWORN to before me by Travis T. Wallace and Earle E. Bailey
this the 16th day of March, A. D. 1944.
/s/ H. WALLACE
___________________________________
Notary Public, Dallas County, Texas.
AMENDMENT TO THE CHARTER
OF GREAT AMERICAN RESERVE INSURANCE COMPANY
INCREASING ITS CAPITAL STOCK TO $100,000.00
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at the annual meeting of the stockholders of Great American
Reserve Insurance Company held at the office of said Company in the City of
Dallas, Dallas County, Texas, on the 9th day of March, A. D. 1943, in conformity
with the laws of this State, and the By-Laws of said corporation, the
stockholders of said corporation by a vote of more than two-thirds of all of the
stock of said Company, voted to increase the authorized capital of said
corporation; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company held on the 9th day of March, A. D. 1943 at the
offices of said Company in the City of Dallas, Dallas County, Texas, a quorum of
said Board of Directors being present, pursuant to the action and vote of the
stockholders of said corporation above referred to, said Board of Directors did
unanimously vote to amend the Charter of the said Great American Reserve
Insurance Company by increasing the capital stock of said corporation from the
present authorized capital of $33,330.00 to the amount of $100,000.00, said
total capital of said $100,000.00 to be divided into 10,000 shares of the par
value of $10.00 each, and did furthermore authorize and direct the President and
Secretary of said corporation to take all necessary and proper legal steps to
certify the amendment to the Charter and the increase in the capital of said
corporation to the Board of Insurance Commissioners of the State of Texas, for
the purpose and to the end that said amendment and the original Charter now on
file with said Board of Insurance Commissioners, together with all amendments
thereto heretofore made, shall constitute the amended Charter of said
corporation; and,
WHEREAS, the said stockholders and Board of Directors did, by Resolution
duly adopted, authorize and declare a stock dividend of two hundred per cent
(200%), being 6,666 shares of said increased capital stock to be issued to the
present stockholders of said corporation; and,
WHEREAS, the full amount of the balance of said increased capital, namely
$10.00, has been in good faith subscribed and paid in, and is possessed by said
Company in money, all of the aforesaid authorizations, actions and proceedings
of the stockholders and directors of said corporation, and the subscriptions and
payment to capital being reflected and set forth in the certified copy of
Resolution and the affidavit of the officers of said corporation hereto
attached, and accompanying this amendment:
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, That we, Travis T. Wallace
and C. O. Hambleton, being the President and Secretary, respectively, of said
Great American Reserve Insurance Company, and also being stockholders and
directors of said corporation, by virtue of the laws of the State of Texas and
the authority vested in us by the action of the stockholders and Board of
Directors of said corporation above referred to, do hereby amend Article IV, of
the original Charter of said Great American Reserve Insurance Company, now on
file with the Board of Insurance Commissioners of the State of Texas, by
changing and increasing the amount of authorized capital stock of said
corporation from $33,330.00 to $100,000.00 to be divided into 10,000 shares of
$10.00 each, and do hereby adopt, authenticate and certify this amendment to the
Board of Insurance Commissioners of the State of Texas for action thereon as
required by law, for the purpose and to the end that this amendment, when
approved and filed, together with the original Charter and all amendments
thereon filed with the Board of Insurance Commissioners of the State of Texas,
shall constitute the amended Charter of said Great American Reserve Insurance
Company.
IN WITNESS WHEREOF, we hereunto subscribe our names, this the 9th day of
March, A.D. 1943.
/s/ TRAVIS T. WALLACE
____________________________________
/s/ C. O. HAMBLETON
____________________________________
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared
Travis T. Wallace and C. O. Hambleton, known to me to be the persons whose names
are subscribed to the foregoing instrument (amendment to the Charter of Great
American Reserve Insurance Company) and severally acknowledged to me that they
each executed the same for the purposes and consideration therein expressed, and
in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 9th day of March, A. D.
1943.
/s/ E. ACHILLES
___________________________________
E. ACHILLES, Notary Public, Dallas County, Texas
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
We, Travis T. Wallace and C. O. Hambleton, President and Secretary,
respectively, of the Great American Reserve Insurance Company, of Dallas, Texas,
being duly sworn, do jointly and severally depose and say:
That all of the material allegations and facts set forth and contained in
the annexed and foregoing amendment to the Charter of the Great American Reserve
Insurance Company of Dallas, Texas, are true, as therein stated, and that we are
personally cognizant of all of said facts.
That the sum of $20.00 in cash representing one (1) share of the increased
capital stock of said Great American Reserve Insurance Company, and an increase
in the surplus of said Company of a like amount, has been actually deposited by
Travis T. Wallace to the credit of Great American Reserve Insurance Company in
the Texas Bank & Trust Company of Dallas, Texas, and is possessed by said
Company, and that the same is the bona fide property of the said Great American
Reserve Insurance Company. That the Great American Reserve Insurance Company
actually has on hand on this date, in cash and other admissible property and
securities, under the laws of the State of Texas, surplus in the amount of
$66,660.00; that the same is the bona fide property of said Great American
Reserve Insurance Company.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ C. O. HAMBLETON
____________________________________
Secretary
SWORN TO AND SUBSCRIBED before me, by Travis T. Wallace and C. O.
Hambleton, this the 9th day of March, A. D. 1943.
/s/ E. ACHILLES
____________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared E. O. Terry, President of Texas Bank & Trust Company, of
Dallas, Texas, who, after being by me duly sworn, deposes and says: That he is
President of the Texas Bank & Trust Company, of Dallas. That the Great American
Reserve Insurance Company has on deposit in said Bank on this date the sum of
$53,958.77, and that said funds are free of all claims of any kind or character
insofar as said bank is concerned, and is the bona fide property of the said
Great American Reserve Insurance Company insofar as affiant has any knowledge
of.
Affiant further says that he is cognizant of the facts herein stated, and
makes this affidavit for the purpose of assisting the Great American Reserve
Insurance Company in securing an amendment to its charter, by which the capital
stock of said Company is increased from $33,330.00 to $100,000.00, one (1) share
of which has been paid by the deposit of Travis T. Wallace in this bank to the
credit of said corporation this date in the sum of $20.00.
/s/ E. O. TERRY
_____________________________
President, Texas Bank & Trust
Company of Dallas, Texas.
SUBSCRIBED AND SWORN TO BEFORE ME this the 9th day of March, A. D. 1943.
/s/ E. ACHIILLES
______________________________
Notary Public, Dallas County,
Texas
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at a meeting of the stockholders of Great American Reserve
Insurance Company, held at the Home Office of said corporation in the City of
Dallas, Dallas County, Texas, on the 10th day of March, A.D. 1942, in conformity
with the laws of this State and the by-laws of said corporation, the
stockholders of said corporation by a vote of more than two-thirds of all of the
stock of said company voted to increase the authorized capital stock of said
corporation; and
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company, held on the 10th day of March, A.D. 1942, at the
offices of said company in the City of Dallas, Dallas County, Texas, a quorum of
said Board of Directors being present, pursuant to the action and vote of the
stockholders of said corporation above referred to, said Board of Directors did
unanimously vote to amend the charter of said Great American Reserve Insurance
Company by increasing the capital stock of said corporation from $31,000.00 to
$33,330.00, said total capital stock of $33,330.00 to be divided into 3,333
shares of the par value of $10.00 each; and did furthermore authorize and direct
the President and Secretary of corporation to take all necessary and proper
legal steps to certify the amendment to its charter and the increase in the
capital stock of said corporation to the Board of Insurance Commissioners of the
State of Texas, for the purpose and to the end that said amendment and the
original charter now on file with said Board of Insurance Commissioners,
together with such other amendments as have heretofore been approved, shall
constitute the amended charter of said corporation; and
WHEREAS, said increased capital to the number of 233 shares has been in
good faith subscribed, and the sum of $2,330.00 is possessed by said company in
money, and in addition thereto the sum of $1165.00. has been in good faith
subscribed and paid in cash to the surplus of said corporation; and
WHEREAS, the stockholders and directors of said corporation have voted to
issue 233 shares of stock as set out and reflected in the certified copy of
resolution and the affidavit of the officers of said corporation hereto attached
and accompanying this amendment; NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS, That we, Travis T. Wallace, President, and
C. O. Hambleton, Secretary, of said Great American Reserve Insurance Company, by
virtue of the laws of the State of Texas and the authority vested in us by the
action of the stockholders and the Board of Directors of said corporation, above
referred to, do hereby amend Article V of the original charter of said Great
American Reserve Insurance Company, now on file with the Board of Insurance
Commissioners of the State of Texas, by changing and increasing the amount of
the authorized capital of said corporation from $31,000.00 to $33,330.00 to be
divided into 3,333 shares of $10.00 each, and we do hereby adopt, authenticate
and certify this amendment to the Board of Insurance Commissioners of the State
of Texas for action thereon as required by law, for the purpose and to the end
that this amendment, when approved and filed by them, together with the original
charter and prior amendment now on file with said Board of Insurance
Commissioners, shall constitute the amended charter of said Great American
Reserve Insurance Company.
IN WITNESS WHEREOF, we hereunto subscribe our names, this 10th day of
March, A.D. 1942.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ C. O. HAMBLETON
____________________________________
Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
Before me, the undersigned authority, on this day personally appeared
Travis T. Wallace and C. O. Hambleton, known to me to be the persons whose names
are subscribed to the foregoing instrument (amendment to charter of Great
American Reserve Insurance Company), and severally acknowledged to me that they
each executed the same for the purposes and consideration therein expressed and
in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 10th day of March, A. D. 1942.
/s/ H. JOHNSEY
___________________________________
Notary Public, Dallas County, Texas
THE STATE OF TEXAS )
)
COUNTY OF DALLAS )
We, Travis T. Wallace, President, and C. O. Hambleton, Secretary,
respectively, of the Great American Reserve Insurance Company of Dallas, Texas,
being duly sworn, do jointly and severally depose and say:
That all of the material allegations and facts set forth and contained in
the annexed and foregoing amendment to the charter of Great American Reserve
Insurance Company are true as therein stated, and that we are personally
cognizant of all of said facts.
That the sum of $2,330.00 in cash, representing the full amount of
subscription for 233 shares of increased capital stock of the Great American
Reserve Insurance Company, and $1165.00 in cash, representing the increase in
surplus of said company, is now on deposit in the Texas Bank & Trust Company of
Dallas, Texas, to the credit of said Great American Reserve Insurance Company
and subject to the check of said company; that said amount of said capital and
surplus has been paid in and is possessed by said company in money, and that the
same is the bona fide property of the said Great American Reserve Insurance
Company. The certificate of the said Texas Bank & Trust Company is hereto
attached and made a part hereof showing such cash to be so deposited and held by
said bank.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ C. O. HAMBLETON
____________________________________
Secretary
SWORN TO AND SUBSCRIBED BEFORE ME by Travis T. Wallace and C. O. Hambleton,
this 10th day of March, A. D. 1942.
/s/ H. JOHNSEY
___________________________________
Notary Public, Dallas County, Texas
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at a meeting of the stockholders of Great American Reserve
Insurance Company, held at the Home Office of said corporation in the City of
Dallas, Dallas County, Texas, on the 12th day of March, A. D. 1940, in
conformity with the laws of this State and the by-laws of said corporation, the
stockholders of said corporation by a vote of more than two-thirds of all of the
stock of said company voted to increase the authorized capital stock of said
corporation; and,
WHEREAS, at a meeting of the Board of Directors of said Great American
Reserve Insurance Company, held on the 12th day of March, A. D. 1940, at the
offices of said company in the City of Dallas, Dallas County, Texas, a quorum of
said Board of Directors being present, pursuant to the action and vote of the
stockholders of said corporation above referred to, said Board of Directors did
unanimously vote to amend the charter of the said Great American Reserve
Insurance Company by increasing the capital stock of said corporation from
$25,000.00 to $31,000.00, said total capital of $31,000.00 to be divided into
3,100 shares of the par value of $10.00 each; and did furthermore authorize and
direct the President and Secretary of said corporation to take all necessary and
proper legal steps to certify the amendment to its charter and the increase in
the capital of said corporation to the Board of Insurance Commissioners of the
State of Texas, for the purpose and to the end that said amendment and the
original charter now on file with said Board of Insurance Commissioners,
together with such other amendments as have heretofore been approved, shall
constitute the amended charter of said corporation; and,
WHEREAS, said increased capital to the number of 600 shares, has been in
good faith subscribed, and the sum of $6,000.00 is possessed by said company in
money, and in addition thereto the sum of $3,000.00 has been in good faith
subscribed and paid in cash to the surplus of said corporation; and,
WHEREAS, the stockholders and directors of said corporation have voted to
issue 600 shares of stock as set out and reflected in the certified copy of
resolution and the affidavit of the officers of said corporation hereto attached
and accompanying this amendment; NOW, THEREFORE,
KNOW ALL MEN BY THESE PRESENTS, That we, Travis T. Wallace, President, and
C. O. Hambleton, Secretary, of the said Great American Reserve Insurance
Company, by virtue of the laws of the State of Texas and the authority vested in
us by the action of the stockholders and Board of Directors of said corporation,
above referred to, do hereby amend Article V of the original charter of said
Great American Reserve Insurance Company, now on file with the Board of
Insurance Commissioners of the State of Texas, by changing and increasing the
amount of the authorized capital stock of said corporation from $25,000.00 to
$31,000.00, to be divided into 3,100 shares of $10.00 each, and we do hereby
adopt, authenticate and certify this amendment to the Board of Insurance
Commissioners of the State of Texas for action thereon as required by law, for
the purpose and to the end that this amendment, when approved and filed by them,
together with the original charter and prior amendment now on file with said
Board of Insurance Commissioners, shall constitute the amended charter of said
Great American Reserve Insurance Company. IN WITNESS WHEREOF, we hereunto
subscribe our names, this 12th day of March, A.D. 1940.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ C. O. HAMBLETON
____________________________________
Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
Before me, the undersigned authority, on this day personally appeared
Travis T. Wallace and C. O. Hambleton, known to me to be the persons whose names
are subscribed to the foregoing instrument (amendment to charter of Great
American Reserve Insurance Company), and severally acknowledged to me that they
each executed the same for the purposes and consideration therein expressed and
in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 14th day of March, A. D. 1940.
/s/ H. JOHNSEY
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
We, Travis T. Wallace, President, and C. O. Hambleton, Secretary,
respectively, of the Great American Reserve Insurance Company of Dallas, Texas,
being duly sworn, do jointly and severally depose and say:
That all of the material allegations and facts set forth and contained in
the annexed and foregoing amendment to the charter of the Great American Reserve
Insurance Company are true as therein stated, and that we are personally
cognizant of all of said facts.
That the sum of $6,000.00 in cash, representing the full amount of
subscriptions for 600 shares of increased capital stock of the Great American
Reserve Insurance Company, and $3,000.00 in cash, representing the increase in
surplus of said company, is now on deposit in the Texas Bank & Trust Company of
Dallas, Texas, to the credit of said Great American Reserve Insurance Company
and subject to the check of said company; that said amount of said capital and
surplus has been paid in and is possessed by said company in money, and that the
same is the bona fide property of said Great American Reserve Insurance Company.
The certificate of said Texas Bank & Trust Company is hereto attached and made a
part hereof showing such cash to be so deposited and held by said bank.
/s/ TRAVIS T. WALLACE
____________________________________
President
/s/ C. O. HAMBLETON
____________________________________
Secretary
SWORN TO AND SUBSCRIBED BEFORE ME by Travis T. Wallace and C. O. Hambleton
this 14th day of March, A. D. 1940.
/s/ H. JOHNSEY
___________________________________
Notary Public, Dallas County, Texas.
THE STATE OF TEXAS )
COUNTY OF DALLAS )
WHEREAS, at a special meeting of the Stockholders of All American Assurance
Company, held at the office of said Company, in the City of Dallas, Dallas
County, Texas, on the 16th day of July, A. D. 1937, in conformity with the laws
of the State and by-laws of said corporation, the stockholders of said
corporation by a vote of more than two-thirds of all of the stock of said
company voted to change the name of said corporation; and,
WHEREAS, at a meeting of the Board of Directors of said All American
Assurance Company, held on the 16th day of July, A.D. 1937, at the office of the
Company, in the City of Dallas, Dallas County, Texas, a quorum of said Board of
Directors being present, pursuant to the action and vote of the stockholders of
said corporation above referred to, the said Board of Directors did unanimously
vote to amend Article I of the Charter of said corporation by changing the name
of said corporation; and did further authorize and direct the President and
Assistant Secretary of said corporation to take all necessary and proper legal
steps to certify the aforesaid amendment to the Charter of said corporation to
the Board of Insurance Commissioners of the State of Texas, for the purpose and
to the end that said amendment and the original Charter now on file with said
Board of Insurance Commissioners shall constitute the amended Charter of said
corporation; and,
WHEREAS, all the aforesaid authorizations, actions and proceedings of the
stockholders and directors of said corporation are reflected and set forth in
certified copies of the resolutions hereto attached and accompanying this
amendment.
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, That we, C.V. Compton,
President, and T. V. Meyer, Assistant Secretary, of said All American Assurance
Company, by virtue of the laws of the State of Texas and the authority vested in
us by the action of the stockholders and Board of Directors of said corporation
above referred to,
DO HEREBY CERTIFY that Article I of the Charter of this corporation has
been and is hereby amended to read as follows:
"ARTICLE I.
"The name of this corporation shall be GREAT AMERICAN RESERVE INSURANCE
COMPANY."
And we do hereby adopt, authenticate and certify this amendment to the
Board of Insurance Commissioners of the State of Texas for action on as required
by law, for the purpose and to the end that this amendment when approved and
filed by said Board, together with the original Charter now on file with said
Board of Insurance Commissioners, shall constitute the amended charter of said
All American Assurance Company.
IN WITNESS WHEREOF we hereunto subscribe our names, this 16th day of July,
A. D. 1937.
/s/ C.V. COMPTON
____________________
President
/s/ T. V. MEYER
____________________
Assistant Secretary
THE STATE OF TEXAS )
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, on this day personally appeared C. V.
Compton and T. V. Meyer, known to me to be the persons whose names are
subscribed to the foregoing instrument ( amendment to the charter of All
American Assurance Company), and severally, as President and Assistant
Secretary, respectively, of the All American Assurance Company, acknowledged to
me that they executed the same for the purposes and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 16th day of July, A. D.
1937.
/s/ O. D. BROWDRIDGE
___________________________________
Notary Public, Dallas County, Texas.
BY-LAWS OF THE COMPANY
Amended and Restated
BY-LAWS
_______
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
_______________________________________
June 8, 1993
TABLE OF CONTENTS
_________________
Page
____
ARTICLE I Identification
Section 1. Name
Section 2. Registered Office and Registered Agent
Section 3. Principal Office
Section 4. Other Offices
Section 5. Seal
Section 6. Fiscal Year
ARTICLE II Shareholders
Section 1. Place of Meeting
Section 2. Annual Meetings
Section 3. Special Meetings
Section 4. Notice of Meeting
Section 5. Waiver of Notice
Section 6. Voting at Meetings
(a) Voting Rights
(b) Record Date
(c) Proxies
(d) Quorum
(e) Adjournments
Section 7. List of Shareholders
Section 8. Action by Written Consent
Section 9. Meeting by Telephone or Similar Communications Equipment
ARTICLE III Directors
Section 1. Duties
Section 2. Number of Directors
Section 3. Election and Term
Section 4. Resignation
Section 5. Vacancies
Section 6. Annual Meetings
Section 7. Regular Meetings
Section 8. Special Meetings
Section 9. Notice
Section 10. Waiver of Notice
Section 11. Business to be Transacted
Section 12. Quorum - Adjournment if Quorum is Not Present
Section 13. Presumption of Assent
Section 14. Action by Written Consent
Section 15. Committees
Section 16. Meeting by Telephone or Similar Communication Equipment
ARTICLE IV Officers
Section 1. Principal Officers
Section 2. Election and Terms
Section 3. Resignation and Removal
Section 4. Vacancies
Section 5. Powers and Duties of Officers
Section 6. Chairman of the Board
Section 7. President
Section 8. Vice Presidents
Section 9. Secretary
Section 10. Treasurer
Section 11. Assistant Secretaries
Section 12. Assistant Treasurers
Section 13. Delegation of Authority
Section 14. Securities of Other Corporations
ARTICLE V Directors' Services, Limitation of Liability and Reliance on
Corporate Records, and Interest of Directors in Contracts
Section 1. Services
Section 2. General Limitation of Liability
Section 3. Reliance on Corporate Records and Other Information
Section 4. Interest of Directors in Contracts
ARTICLE VI Indemnification
Section 1. Indemnification Against Underlying Liability
Section 2. Successful Defense
Section 3. Determination of Conduct
Section 4. Payment of Expenses in Advance
Section 5. Indemnity Not Exclusive
Section 6. Insurance Indemnification
Section 7. Employee Benefit Plans
Section 8. Application of Indemnification and Advancement of Expenses
Section 9. Indemnification Payments
ARTICLE VII Shares
Section 1. Share Certificates
Section 2. Transfer of Shares
Section 3. Registered Holders
Section 4. Lost, Destroyed and Mutilated Certificates
Section 5. Consideration for Shares
Section 6. Payment for Shares
Section 7. Distributions to Shareholders
Section 8. Regulations
ARTICLE VIII Corporate Books and Reports
Section 1. Place of Keeping Corporate Books and Records
Section 2. Place of Keeping Certain Corporate Books and Records
Section 3. Permanent Records
Section 4. Shareholder Records
Section 5. Shareholder Rights of Inspection
Section 6. Additional Rights of Inspection
ARTICLE IX Miscellaneous
Section 1. Notice and Waiver of Notice
Section 2. Depositories
Section 3. Signing of Checks, Notes, etc.
Section 4. Gender and Number
Section 5. Laws
Section 6. Headings
ARTICLE X Amendments
ARTICLE XI The Texas Business Corporation Act
BY-LAWS
_______
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
________________________________________
ARTICLE I
_________
Identification
_______________
Section 1. Name. The name of the Corporation is Great American Reserve
Insurance Company (hereinafter referred to as the "Corporation").
Section 2. Registered Office and Registered Agent. The street address of
the Registered Office of the Corporation is 205 E. 10th Street, Amarillo, Texas
79105; and the name of its Registered Agent located at such office is William O.
Daniel, Jr.
Section 3. Principal Office. The address of the Principal Office of the
Corporation is 11815 North Pennsylvania Street, Carmel, Indiana 46032. The
Principal Office of the Corporation shall be the principal executive and
administrative offices of the Corporation, and such Principal Office may be
changed from time to time by the Board of Directors in the manner provided by
law and need not be the same as the Registered Office of the Corporation.
Section 4. Other Offices. The Corporation may also have offices at such
other places or locations, within or without the State of Texas, as the Board of
Directors may determine or the business of the Corporation may require.
Section 5. Seal. The Corporation need not use a seal. If one is used, it
shall be circular in form and mounted upon a metal die suitable for impressing
the same upon paper. About the upper periphery of the seal shall appear the
words "Great American Reserve Insurance Company" and about the lower periphery
thereof the word "Texas". In the center of the seal shall appear the word
"Seal". The seal may be altered by the Board of Directors at its pleasure and
may be used by causing it or a facsimile thereof to be impressed, affixed,
printed or otherwise reproduced.
Section 6. Fiscal Year. The fiscal year of the Corporation shall begin at
the beginning of the first day of January in each year and end at the close of
the last day of December next succeeding.
ARTICLE II
__________
Shareholders
____________
Section 1. Place of Meeting. All meetings of shareholders of the
Corporation shall be held at such place, within or without the State of Texas,
as may be determined by the President or Board of Directors and specified in the
notices or waivers of notice thereof or proxies to represent shareholders at
such meetings.
Section 2. Annual Meetings. An annual meeting of shareholders shall be held
each year on such date and at such time as may be determined by the President or
Board of Directors. The failure to hold an annual meeting at the designated time
shall not affect the validity of any corporate action. Any and all business of
any nature or character may be transacted, and action may be taken thereon, at
any annual meeting, except as otherwise provided by law or by these By-laws.
Section 3. Special Meetings. A special meeting of shareholders shall be
held: (a) on call of the Board of Directors or the President; or (b) if the
holders of at least twenty-five percent (25%) of all the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting
sign, date and deliver to the Secretary one (1) or more written demands for the
meeting describing the purpose or purposes for which it is to be held. At any
special meeting of the shareholders, only business within the purpose or
purposes described in the notice of the meeting may be conducted.
Section 4. Notice of Meeting. Written or printed notice stating the date,
time and place of a meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered or mailed by the
Secretary, or by the officers or persons calling the meeting, to each
shareholder of record of the Corporation entitled to vote at the meeting, at
such address as appears upon the records of the Corporation, no fewer than ten
(10) days nor more than sixty (60) days, before the meeting date. If mailed,
such notice shall be effective when mailed if correctly addressed to the
shareholder's address shown in the Corporation's current record of shareholders.
Section 5. Waiver of Notice. A shareholder may waive any notice required by
law, the Articles of Incorporation or these By-laws before or after the date and
time stated in the notice. The waiver by the shareholder entitled to the notice
must be in writing and be delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. A shareholder's attendance at a
meeting, in person or by proxy: (a) waives objection to lack of notice or
defective notice of the meeting, unless the shareholder at the beginning of the
meeting objects to holding the meeting or transacting business at the meeting;
and (b) waives objection to consideration of a particular matter at the meeting
that is not within the purpose or purposes described in the meeting notice,
unless the shareholder objects to considering the matter when it is presented.
Section 6. Voting at Meetings.
(a) Voting Rights. At each meeting of the shareholders, each
outstanding share, regardless of class, is entitled to one (1) vote on each
matter voted on at such meeting, except to the extent cumulative voting is
allowed by the Articles of Incorporation. Only shares are entitled to vote.
(b) Record Date. The record date for purposes of determining
shareholders entitled to vote at any meeting shall be ten (10) days prior
to the date of such meeting or such different date not more than seventy
(70) days prior to such meeting as may be fixed by the Board of Directors.
(c) Proxies.
(1) A shareholder may vote the shareholder's shares in person or
by proxy.
(2) A shareholder may appoint a proxy to vote or otherwise act
for the shareholder by executing in writing an appointment form,
either personally or by the shareholder's attorney-in-fact. For
purposes of this Section, a proxy appointed by telegram, telex,
telecopy or other document transmitted electronically for or by a
shareholder shall be deemed "executed in writing" by the shareholder.
(3) An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate votes. An
appointment is valid for eleven (11) months, unless a longer period is
expressly provided in the appointment form.
(4) An appointment of a proxy is revocable by the shareholder,
unless the appointment form conspicuously states that it is
irrevocable and the appointment is coupled with an interest.
(d) Quorum. At all meetings of shareholders, a majority of the votes
entitled to be cast on a particular matter constitutes a quorum on that
matter. If a quorum exists, action on a matter (other than the election of
directors) is approved if the votes cast favoring the action exceed the
votes cast opposing the action, unless the Articles of Incorporation or law
require a greater number of affirmative votes.
(e) Adjournments. Any meeting of shareholders, including both annual
and special meetings and any adjournments thereof, may be adjourned to a
different date, time or place. Notice need not be given of the new date,
time or place if the new date, time or place is announced at the meeting
before adjournment, even though less than a quorum is present. At any such
adjourned meeting at which a quorum is present, in person or by proxy, any
business may be transacted which might have been transacted at the meeting
as originally notified or called.
Section 7. List of Shareholders.
(a) After a record date has been fixed for a meeting of shareholders,
the Secretary shall prepare or cause to be prepared an alphabetical list of
the names of the shareholders of the Corporation who are entitled to vote
at such meeting. The list shall show the address of and number of shares
held by each shareholder.
(b) The shareholders' list must be available for inspection by any
shareholder entitled to vote at the meeting, beginning five (5) business
days before the date of the meeting for which the list was prepared and
continuing through the meeting, at the Corporation's principal office or at
a place identified in the meeting notice in the city where the meeting will
be held. Subject to the restrictions of applicable law, a shareholder, or
the shareholder's agent or attorney authorized in writing, is entitled on
written demand to inspect and to copy the list, during regular business
hours and at the shareholder's expense, during the period it is available
for inspection.
(c) The Corporation shall make the shareholders' list available at the
meeting, and any shareholder, or the shareholder's agent or attorney
authorized in writing, is entitled to inspect the list at any time during
the meeting or any adjournment.
Section 8. Action by Written Consent. Any action required or permitted to
be taken at any meeting of the shareholders may be taken without a meeting if
the action is taken by all the shareholders entitled to vote on the action.
The action must be evidenced by one or more written consents describing the
action taken, signed by all the shareholders entitled to vote on the action, and
delivered to the Corporation for inclusion in the minutes or filing with the
corporate records. Such action is effective when the last shareholder signs the
consent, unless the consent specifies a different prior or subsequent effective
date. Such consent shall have the same force and effect as a unanimous vote at a
meeting of the shareholders, and may be described as such in any document or
instrument.
Section 9. Meeting by Telephone or Similar Communications Equipment. Any or
all shareholders may participate in and hold a meeting of shareholders by, or
through the use of, any means of conference telephone or other similar
communications equipment by which all persons participating in the meeting may
simultaneously hear each other during the meeting. Participation in a meeting
pursuant to this Section shall constitute presence in person at such meeting,
except where a person participates in the meeting for the express purposes of:
(a) objecting to holding the meeting or transacting business at the meeting on
the ground that the meeting is not lawfully called or convened; or (b) objecting
to the consideration of a particular matter that is not within the purpose or
purposes described in the meeting notice.
ARTICLE III
Directors
Section 1. Duties. The business, property and affairs of the Corporation
shall be managed and controlled by the Board of Directors and, subject to such
restrictions, if any, as may be imposed by law, the Articles of Incorporation or
by these By-laws, the Board of Directors may, and are fully authorized to, do
all such lawful acts and things as may be done by the Corporation which are not
directed or required to be exercised or done by the shareholders. Directors need
not be residents of the State of Texas or shareholders of the Corporation.
Section 2. Number of Directors. The Board of Directors shall consist of at
least five (5) and not more than fifteen (15) directors. A Board of Directors
shall be chosen annually by the shareholders at their annual meeting, except as
hereinafter provided. Subject to Article VI of the Articles of Incorporation,
the number of directors may be increased or decreased from time to time by
amendment to these By-Laws, but no decrease shall have the effect of shortening
the term of any incumbent director. A person need not be a shareholder of the
Corporation to serve as a Director. The Directors' terms of office shall be for
one year, or until their successors are elected and have qualified.
Section 3. Election and Term. Except as otherwise provided in Section 5 of
this Article, the directors shall be elected each year at the annual meeting of
the shareholders, or at any special meeting of the shareholders. Each such
director shall hold office, unless he is removed in accordance with the
provisions of these By-laws or he resigns or dies or becomes so incapacitated he
can no longer perform any of his duties as a director, for the term for which he
is elected and until his successor shall have been elected and qualified. Each
director shall qualify by accepting his election to office either expressly or
by acting as a director. The shareholders or directors may remove any director,
with or without cause, and elect a successor at a meeting called expressly for
such purpose.
Section 4. Resignation. Any director may resign at any time by delivering
written notice to the Board of Directors, the President, or the Secretary of the
Corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. The acceptance of a resignation shall
not be necessary to make it effective, unless expressly so provided in the
resignation.
Section 5. Vacancies. Vacancies occurring in the membership of the Board of
Directors caused by resignation, death or other incapacity, or increase in the
number of directors shall be filled by a majority vote of the remaining members
of the Board, and each director so elected shall serve until the next meeting of
the shareholders, or until a successor shall have been duly elected and
qualified.
Section 6. Annual Meetings. The Board of Directors shall meet annually,
without notice, immediately following, and at the same place as, the annual
meeting of the shareholders.
Section 7. Regular Meetings. Regular meetings shall be held at such times
and places, either within or without the State of Texas, as may be determined by
the President or the Board of Directors.
Section 8. Special Meetings. Special meetings of the Board of Directors may
be called by the President or by two (2) or more members of the Board of
Directors, at any place within or without the State of Texas, upon twenty-four
(24) hours' notice, specifying the time, place and general purposes of the
meeting, given to each director personally, by telephone, telegraph, teletype,
or other form of wire or wireless communication; or notice may be given by mail
if mailed at least three (3) days before such meeting.
Section 9. Notice. The Secretary or an Assistant Secretary shall give
notice of each special meeting, and of the date time and place of the particular
meeting, in person or by mail, or by telephone, telegraph, teletype, or other
form of wire or wireless communication, and in the event of the absence of the
Secretary or an Assistant Secretary or the failure, inability, refusal or
omission on the part of the Secretary or an Assistant Secretary so to do, any
other officer of the Corporation may give said notice.
Section 10. Waiver of Notice. A director may waive any notice required by
law, the Articles of Incorporation, or these By-laws before or after the date
and time stated in the notice. Except as otherwise provided in this Section, the
waiver by the director must be in writing, signed by the director entitled to
the notice, and included in the minutes or filed with the corporate records. A
director's attendance at or participation in a meeting waives any required
notice to the director of the meeting unless the director at the beginning of
the meeting (or promptly upon the director's arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting.
Section 11. Business to be Transacted. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or any waiver of notice of such
meeting. Any and all business of any nature or character whatsoever may be
transacted and action may be taken thereon at any meeting, regular or special,
of the Board of Directors.
Section 12. Quorum - Adjournment if Quorum is Not Present. A majority of
the number of directors fixed by, or in the manner provided in, the Articles of
Incorporation or these By-laws shall constitute a quorum for the transaction of
any and all business, unless a greater number is required by law or Articles of
Incorporation or these By-laws. At any meeting, regular or special, of the Board
of Directors, if there be less than a quorum present, a majority of those
present, or if only one director be present, then such director, may adjourn the
meeting from time to time without notice until the transaction of any and all
business submitted or proposed to be submitted to such meeting or any
adjournment thereof shall have been completed. In the event of such adjournment,
written, telegraphic or telephonic announcement of the time and place at which
the meeting will reconvene must be provided to all directors. The act of the
majority of the directors present at any meeting of the Board of Directors at
which a quorum is present shall constitute the act of the Board of Directors,
unless the act of a greater number is required by law or the Articles of
Incorporation or these By-laws.
Section 13. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent or abstention shall be entered in the minutes of the meeting or
unless he shall file his written dissent or abstention to such action with the
presiding officer of the meeting before the adjournment thereof or to the
Secretary of the Corporation immediately after the adjournment of the meeting.
Such right to dissent or abstain shall not apply to a director who voted in
favor of such action.
Section 14. Action by Written Consent. Any action required or permitted to
be taken at a meeting of the Board of Directors or any committee thereof may be
taken without a meeting if the action is taken by all the members of the Board
of Directors or committee, as the case may be. The action must be evidenced by
one or more written consents describing the action taken, signed by each
director or committee member, and included in the minutes or filed with the
corporate records reflecting the action taken. Such action is effective when the
last director or committee member signs the consent, unless the consent
specifies a different prior or subsequent effective date. Such consent shall
have the same force and effect as a unanimous vote at a meeting, and may be
described as such in any document or instrument.
Section 15. Committees. The Board of Directors, by resolution adopted by a
majority of the Board of Directors, may designate from among its members an
executive committee and one or more other committees, each of which, to the
extent provided in such resolution or in the Articles of Incorporation or in
these By-laws of the Corporation, shall have and may exercise such authority of
the Board of Directors as shall be expressly delegated by the Board from time to
time; except that no such committee shall have the authority of the Board of
Directors in reference to (a) amending the Articles of Incorporation; (b)
approving a plan of merger even if the plan does not require shareholder
approval; (c) authorizing dividends or distributions, except a committee may
authorize or approve a reacquisition of shares, if done according to a formula
or method prescribed by the Board of Directors; (d) approving or proposing to
shareholders action that requires shareholder approval; (e) amending, altering
or repealing the By-laws of the Corporation or adopting new By-laws for the
Corporation; (f) filling vacancies in the Board of Directors or in any of its
committees; or (g) electing or removing officers or members of any such
committee. A majority of all the members of any such committee may determine its
action and fix the time and place of its meetings, unless the Board of Directors
shall otherwise provide. The Board of Directors shall have power at any time to
change the number and members of any such committee, to fill vacancies and to
discharge any such committee. The designation of such committee and the
delegation thereto of authority shall not alone constitute compliance by the
Board of Directors, or any member thereof, with the standard of conduct imposed
upon it or him by the Texas Business Corporation Act, as the same may, from time
to time, be amended.
Section 16. Meeting by Telephone or Similar Communication Equipment. Any or
all directors may participate in and hold a regular or special meeting of the
Board of Directors or any committee thereof by, or through the use of, any means
of conference telephone or other similar communications equipment by which all
directors participating in the meeting may simultaneously hear each other during
the meeting. Participation in a meeting pursuant to this Section shall
constitute presence in person at such meeting, except where a director
participates in the meeting for the express purpose of objecting to holding the
meeting or transacting business at the meeting on the ground that the meeting is
not lawfully called or convened.
ARTICLE IV
Officers
Section 1. Principal Officers. The officers of the Corporation shall be
chosen by the Board of Directors and shall consist of a Chairman of the Board, a
President, a Treasurer and a Secretary. There may also be one or more Vice
Presidents and such other officers or assistant officers as the Board shall from
time to time create and so elect. Any two (2) or more offices may be held by the
same person.
Section 2. Election and Terms. Each officer shall be elected by the Board
of Directors at the annual meeting thereof and shall hold office until the next
annual meeting of the Board or until his or her successor shall have been
elected and qualified or until his or her death, resignation or removal. The
election of an officer shall not of itself create contract rights.
Section 3. Resignation and Removal. An officer may resign at any time by
delivering notice to the Board of Directors, its President or the Secretary of
the Corporation. A resignation is effective when the notice is delivered unless
the notice specifies a later effective date. If an officer's resignation is made
effective at a later date and the Corporation accepts the future effective date,
the Board of Directors may fill the pending vacancy before the effective date,
if the Board of Directors provides that the successor does not take office until
the effective date. The acceptance of a resignation shall not be necessary to
make it effective, unless expressly provided in the resignation. An officer's
resignation does not affect the Corporation's contract rights, if any, with the
officer. Any officer may be removed at any time, with or without cause, by vote
of a majority of the whole Board. Such removal shall not affect the contract
rights, if any, of the officer so removed.
Section 4. Vacancies. Whenever any vacancy shall occur in any office by
death, resignation, increase in the number of officers of the Corporation, or
otherwise, the same shall be filled by the Board of Directors, and the officer
so elected shall hold office until the next annual meeting of the Board or until
his or her successor shall have been elected and qualified.
Section 5. Powers and Duties of Officers. The officers so chosen shall
perform the duties and exercise the powers expressly conferred or provided for
in these By-laws, as well as the usual duties and powers incident to such
office, respectively, and such other duties and powers as may be assigned to
them by the Board of Directors or by the President.
Section 6. Chairman of the Board. The Chairman of the Board shall be the
Chief Executive Officer of the Corporation and shall have general charge of, and
supervision and authority over, all of the affairs and business of the
Corporation. He shall have general supervision of and direct all officers,
agents and employees of the Corporation; shall see that all orders and
resolutions of the Board are carried into effect; and in general, shall exercise
all powers and perform all duties incident to his office and such other powers
and duties as may from time to time be assigned to him by the Board.
Section 7. President. The President shall be the Chief Marketing Officer of
the Corporation. He shall have the authority to sign, with the Secretary or an
Assistant Secretary, any and all certificates for shares of the capital stock of
the Corporation, and shall have the authority to sign singly deeds, bonds,
mortgages, contracts, or other instruments to which the Corporation is a party
(except in cases where the signing and execution thereof shall be expressly
delegated by the Board or by these By-laws, or by law to some other officer or
agent of the Corporation); and, in the absence, disability or refusal to act of
the Chairman of the Board, shall preside at meetings of the shareholders and of
the Board of Directors and shall possess all of the powers and perform all of
the duties of the Chairman of the Board. He shall also serve the Corporation in
such other capacities and perform such other duties and have such additional
authority and powers as are incident to his office or as may be defined in these
By-laws or delegated to him from time to time by the Board of Directors or by
the Chairman of the Board.
Section 8. Vice Presidents. The Vice Presidents shall assist the President
and shall perform such duties as may be assigned to them by the Board of
Directors or the President. Unless otherwise provided by the Board, in the
absence or disability of the President, the Vice President (or, if there be more
than one, the Vice President first named as such by the Board of Directors at
its most recent meeting at which Vice Presidents were elected) shall execute the
powers and perform the duties of the President. Any action taken by a Vice
President in the performance of the duties of the President shall be conclusive
evidence of the absence or inability to act of the President at the time such
action was taken.
Section 9. Secretary. The Secretary (a) shall keep the minutes of all
meetings of the Board of Directors and the minutes of all meetings of the
shareholders in books provided for that purpose; (b) shall attend to the giving
and serving of all notices; (c) when required, may sign with the President or a
Vice President in the name of the Corporation, and may attest the signature of
any other officers of the Corporation to all contracts, conveyances, transfers,
assignments, encumbrances, authorizations and all other instruments, documents
and papers, of any and every description whatsoever, of or executed for or on
behalf of the Corporation and affix the seal of the Corporation thereto; (d) may
sign with the President or a Vice President all certificates for shares of the
capital stock of the Corporation and affix the corporate seal of the Corporation
thereto; (e) shall have charge of and maintain and keep or supervise and control
the maintenance and keeping of the stock certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
authorize, direct or provide for, all of which shall at all reasonable times be
open to the inspection of any director, upon request, at the office of the
Corporation during business hours; (f) shall, in general, perform all the duties
incident to the office of Secretary; and (g) shall have such other powers and
duties as may be conferred upon or assigned to him by the Board of Directors.
Section 10. Treasurer. The Treasurer shall have custody of all the funds
and securities of the Corporation which come into his hands. When necessary or
proper, he may endorse on behalf of the Corporation, for collection, checks,
notes and other obligations, and shall deposit the same to the credit of the
Corporation in such banks or depositories as shall be selected or designated by
or in the manner prescribed by the Board of Directors. He may sign all receipts
and vouchers for payments made to the Corporation, either alone or jointly with
such officer as may be designated by the Board of Directors. Whenever required
by the Board of Directors, he shall render a statement of his cash account. He
shall enter or cause to be entered, punctually and regularly, on the books of
the Corporation, to be kept by him or under his supervision or direction for
that purpose, full and accurate accounts of all moneys received and paid out by,
for or on account of the Corporation. He shall at all reasonable times exhibit
his books and accounts and other financial records to any director of the
Corporation during business hours. He shall have such other powers and duties as
may be conferred upon or assigned to him by the Board of Directors. The
Treasurer shall perform all acts incident to the position of Treasurer, subject
always to the control of the Board of Directors. He shall, if required by the
Board of Directors, give such bond for the faithful discharge of his duties in
such form and amount as the Board of Directors may require.
Section 11. Assistant Secretaries. The Assistant Secretaries shall assist
the Secretary in the performance of his or her duties. In the absence of the
Secretary, any Assistant Secretary shall exercise the powers and perform the
duties of the Secretary. The Assistant Secretaries shall exercise such other
powers and perform such other duties as may from time to time be assigned to
them by the Board, the President, or the Secretary.
Section 12. Assistant Treasurers. The Assistant Treasurers shall assist the
Treasurer in the performance of his or her duties. Any Assistant Treasurer
shall, in the absence or disability of the Treasurer, exercise the powers and
perform the duties of the Treasurer. The Assistant Treasurers shall exercise
such other duties as may from time to time be assigned to them by the Board, the
President, or the Treasurer.
Section 13. Delegation of Authority. In case of the absence of any officer
of the Corporation, or for any reason that the Board may deem sufficient, a
majority of the entire Board may transfer or delegate the powers or duties of
any officer to any other officer or officers for such length of time as the
Board may determine.
Section 14. Securities of Other Corporations. The President or any Vice
President or Secretary or Treasurer of the Corporation shall have power and
authority to transfer, endorse for transfer, vote, consent or take any other
action with respect to any securities of another issuer which may be held or
owned by the Corporation and to make, execute and deliver any waiver, proxy or
consent with respect to any such securities.
ARTICLE V
Directors' Services, Limitation of Liability
and Reliance on Corporate Records, and
Interest of Directors in Contracts
Section 1. Services. No director of this Corporation who is not an officer
or employee of this Corporation shall be required to devote his time or any
particular portion of his time or render services or any particular services
exclusively to this Corporation. Every director of this Corporation shall be
entirely free to engage, participate and invest in any and all such businesses,
enterprises and activities, either similar or dissimilar to the business,
enterprise and activities of this Corporation, without breach of duty to this
Corporation or to its shareholders and without accountability or liability to
this Corporation or to its shareholders.
Every director of this Corporation shall be entirely free to act for, serve
and represent any other corporation, any entity or any person, in any capacity,
and be or become a director or officer, or both, of any other corporation or any
entity, irrespective of whether or not the business, purposes, enterprises and
activities, or any of them thereof, be similar or dissimilar to the business,
purposes, enterprises and activities, or any of them, of this Corporation,
without breach of duty to this Corporation or to its shareholders and without
accountability or liability of any character or description to this Corporation
or to its shareholders.
Section 2. General Limitation of Liability. A director shall, based on
facts then known to the director, discharge the duties as a director, including
the director's duties as a member of a committee, in good faith, with the care
an ordinarily prudent person in a like position would exercise under similar
circumstances, and in a manner the director reasonably believes to be in the
best interests of the Corporation. A director is not liable to the Corporation
for any action taken as a director, or any failure to take any action, unless:
(a) the director has breached or failed to perform the duties of the director's
office in accordance with the standard of care set forth above; and (b) the
breach or failure to perform constitutes willful misconduct or recklessness.
Section 3. Reliance on Corporate Records and Other Information. Any person
acting as a director of the Corporation shall be fully protected, and shall be
deemed to have complied with the standard of care set forth in Section 2 of this
Article, in relying in good faith upon any information, opinions, reports or
statements, including financial statements and other financial data, if prepared
or presented by (a) one or more officers or employees of the Corporation whom
such person reasonably believes to be reliable and competent in the matters
presented; (b) legal counsel, public accountants, or other persons as to matters
such person reasonably believes are within the person's professional or expert
competence; or (c) a committee of the Board of Directors of which such person is
not a member, if such person reasonably believes the committee merits
confidence; provided, however, that such person shall not be considered to be
acting in good faith if such person has knowledge concerning the matter in
question that would cause such reliance to be unwarranted.
Section 4. Interest of Directors in Contracts. Any contract or other
transaction between the Corporation and (a) any director, or (b) any
corporation, unincorporated association, business trust, estate, partnership,
trust, joint venture, individual or other legal entity (1) in which any director
has a material financial interest or is a general partner, or (2) of which any
director is a director, officer, or trustee, shall be valid for all purposes, if
the material facts of the contract or transaction and the director's interest
were disclosed or known to the Board of Directors, a committee of the Board of
Directors with authority to act thereon, or the shareholders entitled to vote
thereon, and the Board of Directors, such committee or such shareholders
authorized, approved or ratified the contract or transaction. Such a contract or
transaction is authorized, approved or ratified: (i) by the Board of Directors
or such committee, if it receives the affirmative vote of a majority of the
directors who have no interest in the contract or transaction, notwithstanding
the fact that such majority may not constitute a quorum or a majority of the
directors present at the meeting, and notwithstanding the presence or vote of
any director who does have such an interest; provided, however, that no such
contract or transaction may be authorized, approved or ratified by a single
director; and (ii) by such shareholders, if it receives the vote of a majority
of the shares entitled to be counted, in which vote shares owned by or voted
under the control of any director who, or of any corporation, unincorporated
association, business trust, estate, partnership, trust, joint venture,
individual or other legal entity that, has an interest in the contract or
transaction may be counted; provided, however, that a majority of such shares,
whether or not present, shall constitute a quorum for the purpose of
authorizing, approving or ratifying such a contract or transaction. This Section
shall not be construed to require authorization, ratification or approval by the
shareholder of any such contract or transaction, or to invalidate any such
contract or transaction that is fair to the Corporation or would otherwise be
valid under the common and statutory law applicable thereto.
ARTICLE VI
Indemnification
Section 1. Indemnification Against Underlying Liability. The Corporation
shall indemnify any person who was or is a party, or is threatened to be made a
party, to any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative, or investigative, by reason of the fact
that he is or was a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
(collectively, "Agent") against expenses (including attorneys' fees), judgments,
fines, penalties, court costs and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement (whether with or without court approval), conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Agent did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. If several claims,
issues or matters are involved, an Agent may be entitled to indemnification as
to some matters even though he is not entitled as to other matters. Any director
or officer of the Corporation serving in any capacity of another corporation, of
which a majority of the shares entitled to vote in the election of its directors
is held, directly or indirectly, by the Corporation, shall be deemed to be doing
so at the request of the Corporation.
Section 2. Successful Defense. To the extent that an Agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 1 of this Article, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 3. Determination of Conduct. Subject to any rights under any
contract between the Corporation and any Agent, any indemnification against
underlying liability provided for in Section 1 of this Article (unless ordered
by a court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the Agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Section. Such determination shall be made (a) by the Board of Directors by
a majority vote of a quorum consisting of directors not at the time parties to
the proceeding; (b) if such an independent quorum is not obtainable, by majority
vote of a committee duly designated by the full Board of Directors (in which
designation directors who are parties may participate), consisting solely of one
or more directors not at the time parties to the proceeding; (c) by special
legal counsel (1) selected by the independent quorum of the Board of Directors
(or the independent committee thereof if no such quorum can be obtained), or (2)
if no such independent quorum or committee thereof can be obtained, selected by
majority vote of the full Board of Directors (in which selection directors who
are parties may participate); or (d) by the shareholders, but shares owned by or
voted under the control of directors who are at the time parties to the
proceeding may not be voted on the determination. Notwithstanding the foregoing,
an Agent shall be able to contest any determination that the Agent has not met
the applicable standard of conduct by petitioning a court of appropriate
jurisdiction.
Section 4. Payment of Expenses in Advance. Expenses incurred in defending
or settling a civil, criminal, administrative or investigative action, suit or
proceeding by an Agent who may be entitled to indemnification pursuant to
Section 1 of this Article shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of a written
affirmation by the Agent of his good faith belief that he has met the applicable
standard of conduct set forth in Section 1 of this Article and a written
undertaking by or on behalf of the Agent to repay such amount if it is
ultimately determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article. Notwithstanding the foregoing, such
expenses shall not be advanced if the Corporation conducts the determination of
conduct procedure referred to in Section 3 of this Article and it is determined
from the facts then known that the Agent will be precluded from indemnification
against underlying liability because he has failed to meet the applicable
standard of conduct set forth in Section 1 of this Article. The full Board of
Directors (including directors who are parties) may authorize the Corporation to
implement the determination of conduct procedure, but such procedure is not
required for the advancement of expenses. The full Board of Directors (including
directors who are parties) may authorize the Corporation to assume the Agent's
defense where appropriate rather than to advance expenses for such defense.
Section 5. Indemnity Not Exclusive. The indemnification against underlying
liability, and advancement of expenses provided by, or granted pursuant to, this
Article shall not be deemed exclusive of, and shall be subject to, any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any By-law, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
Section 6. Insurance Indemnification. The Corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was an
Agent of the Corporation, or is or was serving at the request of the Corporation
as an Agent against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.
Section 7. Employee Benefit Plans. For purposes of this Article, references
to "other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with respect to any
employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries. A person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article.
Section 8. Application of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article shall, unless otherwise provided when authorized or ratified, be
applicable to claims, actions, suits or proceedings made or commenced after the
adoption thereof, whether arising from acts or omissions to act during, before
or after the adoption hereof, and shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person. The right of any
person to indemnification and advancement of expenses shall vest at the time of
occurrence or performance of any event, act or omission giving rise to any
action, suit or proceeding of the nature referred to in Section 1 of this
Article and, once vested, shall not later be impaired as a result of any
amendment, repeal, alteration or other modification of any or all of these
provisions.
Section 9. Indemnification Payments. Any payments made to any indemnified
party under this Article or under any other right to indemnification shall be
deemed to be an ordinary and necessary business expense of the Corporation, and
payment thereof shall not subject any person responsible for the payment, or the
Board of Directors, to any action for corporate waste or to any similar action.
Such payments shall be reported to the shareholders of the Corporation before or
with the notice of the next shareholders' meeting.
ARTICLE VII
Shares
Section 1. Share Certificates. The certificate for shares of the
Corporation shall be in such form as shall be approved by the Board of
Directors. Each share certificate shall state on its face the name and state of
organization of the Corporation, the name of the person to whom the certificate
is issued, and the number and class of shares the certificate represents. Share
certificates shall be consecutively numbered and shall be entered in the books
of the Corporation as they are issued. Every certificate for shares of the
Corporation shall be signed (either manually or in facsimile) by, or in the name
of, the Corporation by the Chairman of the Board, President or a Vice President
and either the Secretary or an Assistant Secretary of the Corporation, with the
seal of the Corporation, if any, or a facsimile thereof impressed or printed
thereon. If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
Section 2. Transfer of Shares. Except as otherwise provided by law,
transfers of shares of the capital stock of the Corporation, whether part paid
or fully paid, shall be made only on the books of the Corporation by the owner
thereof in person or by duly authorized attorney, on payment of all taxes
thereon and surrender for cancellation of the certificate or certificates for
such shares (except as hereinafter provided in the case of loss, destruction or
mutilation of certificate) properly endorsed by the holder thereof or
accompanied by the proper evidence of succession, assignment or authority to
transfer, and delivered to the Secretary or an Assistant Secretary.
Section 3. Registered Holders. The Corporation shall be entitled to treat
the person in whose name any share of stock or any warrant, right or option is
registered as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such share, warrant,
right or option on the part of any other person, whether or not the Corporation
shall have notice thereof, save as may be expressly provided otherwise by the
laws of the State of Texas, the Articles of Incorporation of the Corporation or
these By-laws. In no event shall any transferee of shares of the Corporation
become a shareholder of the Corporation until express notice of the transfer
shall have been received by the Corporation.
Section 4. Lost, Destroyed and Mutilated Certificates. The holder of any
share certificate of the Corporation shall immediately notify the Corporation of
any loss, destruction or mutilation of the certificate, and the Board may, in
its discretion, cause to be issued to such holder of shares a new certificate or
certificates of shares of capital stock, upon the surrender of the mutilated
certificate, or, in case of loss or destruction, upon the furnishing of an
affidavit or satisfactory proof of such loss or destruction. The Board may, in
its discretion, require the owner of the lost or destroyed certificate or such
owner's legal representative to give the Corporation a bond in such sum and in
such form, and with such surety or sureties as it may direct, to indemnify the
Corporation, its transfer agents and registrars, if any, against any claim that
may be made against them or any of them with respect to the certificate or
certificates alleged to have been lost or destroyed, but the Board may, in its
discretion, refuse to issue a new certificate or new certificates, save upon the
order of a court having jurisdiction in such matters.
Section 5. Consideration for Shares. The Corporation may issue shares for
such consideration received or to be received as the Board of Directors
determines to be adequate. That determination by the Board of Directors is
conclusive insofar as the adequacy of consideration for the issuance of shares
relates to whether the shares are validly issued, fully paid and nonassessable.
When the Corporation receives the consideration for which the Board of Directors
authorized the issuance of shares, the shares issued therefor are fully paid and
nonassessable.
Section 6. Payment for Shares. The Board of Directors may authorize shares
to be issued for consideration consisting of any tangible or intangible property
or benefit to the Corporation, including cash, promissory notes, services
performed, contracts for services to be performed, or other securities of the
Corporation. If shares are authorized to be issued for promissory notes or for
promises to render services in the future, the Corporation must report in
writing to the shareholders the number of shares authorized to be so issued
before or with the notice of the next shareholders' meeting.
Section 7. Distributions to Shareholders. The Board of Directors may
authorize and the Corporation may make distributions to the shareholders subject
to any restrictions set forth in the Articles of Incorporation of the
Corporation and any limitations in the Texas Business Corporation Act, as
amended.
Section 8. Regulations. The Board of Directors shall have power and
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer and registration or the replacement of
certificates for shares of the Corporation.
ARTICLE VIII
Corporate Books and Reports
Section 1. Place of Keeping Corporate Books and Records. Except as
expressly provided otherwise in this Article, the books of account, records,
documents and papers of the Corporation shall be kept at any place or places,
within or without the State of Texas, as directed by the Board of Directors. In
the absence of a direction, the books of account, records, documents and papers
shall be kept at the principal office of the Corporation.
Section 2. Place of Keeping Certain Corporate Books and Records. The
Corporation shall keep a copy of the following records at its principal office:
(1) Its Articles or restated Articles of Incorporation and all
amendments to them currently in effect;
(2) Its By-laws or restated By-laws and all amendments to them
currently in effect;
(3) Resolutions adopted by the Board of Directors with respect to one
or more classes or series of shares and fixing their relative rights,
preferences and limitations, if shares issued pursuant to those resolutions
are outstanding;
(4) The minutes of all shareholders' meetings and records of all
action taken by shareholders without a meeting for the past three (3)
years;
(5) All written communications to shareholders generally within the
past three (3) years, including financial statements furnished to
shareholders:
(6) A list of the names and business addresses of its current
directors and officers; and
(7) The Corporation's most recent annual report.
Section 3. Permanent Records. The Corporation shall keep as permanent
records minutes of all meetings of its shareholders and Board of Directors, a
record of all actions taken by the shareholders or Board of Directors without a
meeting, and a record of all actions taken by a committee of the Board of
Directors in place of the Board of Directors on behalf of the Corporation. The
Corporation shall also maintain appropriate accounting records.
Section 4. Shareholder Records. The Corporation shall maintain a record of
its shareholders, in a form that permits preparation of a list of the names and
addresses of all shareholders, in alphabetical order by class of shares showing
the number and class of shares held by each.
Section 5. Shareholder Rights of Inspection. The records designated in
Section 2 of this Article may be inspected and copied by shareholders of record,
during regular business hours at the Corporation's principal office, provided
that the shareholder gives the Corporation written notice of the shareholder's
demand at least five (5) business days before the date on which the shareholder
wishes to inspect and copy. A shareholder's agent or attorney, if authorized in
writing, has the same inspection and copying rights as the shareholder
represented. The Corporation may impose a reasonable charge, covering the costs
of labor and material, for copies of any documents provided to the shareholder.
Section 6. Additional Rights of Inspection. Shareholder rights enumerated
in Section 5 of this Article may also apply to the following corporate records,
provided that the notice requirements of Section 5 are met, the shareholder's
demand is made in good faith and for a proper purpose, the shareholder describes
with reasonable particularity the shareholder's purpose and the records the
shareholder desires to inspect, and the records are directly connected with the
shareholder's purpose: excerpts from minutes of any meeting of the Board of
Directors, records of any action of a committee of the Board of Directors while
acting in place of the Board of Directors on behalf of the Corporation, minutes
of any meeting of the shareholders, and records of action taken by the
shareholders or Board of Directors without a meeting, to the extent not subject
to inspection under Section 5 of this Article, as well as accounting records of
the Corporation and the record of shareholders. Such inspection and copying is
to be done during regular business hours at a reasonable location specified by
the Corporation. The Corporation may impose a reasonable charge, covering the
costs of labor and material, for copies of any documents provided to the
shareholder.
ARTICLE IX
Miscellaneous
Section 1. Notice and Waiver of Notice. Subject to the specific and express
notice requirements set forth in other provisions of these By-laws, the Articles
of Incorporation, and the Texas Business Corporation Act, as the same may, from
time to time, be amended, notice may be communicated to any shareholder or
director in person, by telephone, telegraph, teletype, or other form of wire or
wireless communication, or by mail. If the foregoing forms of personal notice
are deemed to be impracticable, notice may be communicated in a newspaper of
general circulation in the area where published or by radio, television, or
other form of public broadcast communication. Subject to Section 4 of ARTICLE II
of these By-laws, written notice is effective at the earliest of the following:
(a) when received; (b) if correctly addressed to the address listed in the most
current records of the Corporation, five days after its mailing, as evidenced by
the postmark or private carrier receipt; or (c) if sent by registered or
certified United States mail, return receipt requested, on the date shown on the
return receipt which is signed by or on behalf of the addressee. Oral notice is
effective when communicated. A written waiver of notice, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be equivalent to the giving of such notice.
Section 2. Depositories. Funds of the Corporation not otherwise employed
shall be deposited in such banks or other depositories as the Board of
Directors, the President or the Treasurer may select or approve.
Section 3. Signing of Checks, Notes, etc. In addition to and cumulative of,
but in no way limiting or restricting, any other provision of these By-laws
which confers any authority relative thereto, all checks, drafts and other
orders for the payment of money out of funds of the Corporation and all notes
and other evidence of indebtedness of the Corporation may be signed on behalf of
the Corporation, in such manner, and by such officer or person as shall be
determined or designated by the Board of Directors; provided, however, that if,
when, after and as authorized or provided for by the Board of Directors, the
signature of any such officer or person may be a facsimile or engraved or
printed, and shall have the same force and effect and bind the Corporation as
though such officer or person had signed the same personally; and, in the event
of the death, disability, removal or resignation of any such officer or person,
if the Board of Directors shall so determine or provide, as though and with the
same effect as if such death, disability, removal or resignation had not
occurred.
Section 4. Gender and Number. Wherever used or appearing in these By-laws,
pronouns of the masculine gender shall include the female gender and the neuter
gender, and the singular shall include the plural wherever appropriate.
Section 5. Laws. Wherever used or appearing in these By-laws, the words
"law" or "laws" shall mean and refer to laws of the State of Texas, to the
extent only that such are expressly applicable, except where otherwise expressly
stated or the context requires that such words not be so limited.
Section 6. Headings. The headings of the Certificate and Sections of these
By-laws are inserted for convenience of reference only and shall not be deemed
to be a part thereof or used in the construction or interpretation thereof.
ARTICLE X
Amendments
These By-laws may, from time to time, be added to, changed, altered,
amended or repealed or new By-laws may be made or adopted by a majority vote of
the whole Board of Directors at any meeting of the Board of Directors, if the
notice or waiver of notice of such meeting shall have stated that the By-laws
are to be amended, altered or repealed at such meeting, or if all directors at
the time are present at such meeting, have waived notice of such meeting, or
have consented to such action in writing.
ARTICLE XI
The Texas Business Corporation Act
The provisions of the Texas Business Corporation Act, as the same may, from
time to time, be amended, applicable to any of the matters not herein
specifically covered by these By-laws, are hereby incorporated by reference in
and made a part of these By-laws.
