As filed with the Securities and Exchange Commission on January 15, 1999.
1933 Act File No: 333-
1940 Act File No: 811-09119
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
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Post-Effective Amendment No.
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. [X]
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Jackson National Separate Account V
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(Exact Name of Registrant)
Jackson National Life Insurance Company
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(Name of Depositor)
5901 Executive Drive, Lansing, Michigan 48911
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(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code:
(517) 394-3400
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With a copy to:
Thomas J. Meyer Judith A. Hasenauer
Vice Pres. & General Counsel Principal
Jackson National Life Blazzard, Grodd &
Insurance Company Hasenauer, P.C.
5901 Executive Dr. P.O. Box 5108
Lansing, MI 48911 Westport, CT 06881
(Name and Address of Agent for Service)
Approximate date of proposed public offering: (Upon the effective date of this
Registration Statement).
Title of Securities Being Registered
Individual Deferred Variable Annuity Contracts
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.
<PAGE>
JACKSON NATIONAL SEPARATE ACCOUNT V
REFERENCE TO ITEMS REQUIRED BY FORM N-4
Caption in Prospectus or
Statement of Additional
Information relating to
N-4 Item each Item
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Part A. Information Required in a Prospectus Prospectus
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1. Cover Page Cover Page
2. Definitions Not Applicable
3. Synopsis Key Facts; Fee Tables
4. Condensed Financial Information Fee Table; Advertising
5. General Description of Registrant, The Company; The
Depositor and Portfolio Companies Separate Account;
Investment Portfolios
6. Deductions Contract Charges
7. General Description of Variable The Annuity Contract;
Annuity Contracts Purchases; Transfers;
Access To Your Money;
Income Payments (The
Income Phase); Death
Benefit; Other
Information
8. Annuity Period Income Payments (The
Income Phase)
9. Death Benefit Death Benefit
10. Purchases and Contract Value Purchases
11. Redemptions Access To Your Money
12. Taxes Taxes
13. Legal Proceedings Other Information
14. Table of Contents of the Statement of Table of Contents of the
Additional Information Statement of Additional
Information
Information Required in a Statement of Statement of
Part B. Additional Information Additional Information
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15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History General Information
and History
18. Services Services
19. Purchase of Securities Being Offered Purchase of Securities
Being Offered
20. Underwriters Underwriters
21. Calculation of Performance Data Calculation of
Performance
22. Annuity Payments Income Payments; Net
Investment Factor
23. Financial Statements Financial Statements
Part C.
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Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Amendment to Registration Statement.
<PAGE>
THE PERSPECTIVE ADDVANTAGE
FIXED AND VARIABLE ANNUITY
Issued by Jackson National Life Insurance Company and Jackson National Separate
Account V
o Individual, flexible premium deferred annuity
o 2 guaranteed accounts which offer an interest rate that is guaranteed by
Jackson National Life Insurance Company (Jackson National)
o 20 investment portfolios which purchase shares of the following series of
the JNL Series Trust:
JNL Series Trust
JNL/Alliance Growth Series
JNL/J.P. Morgan International & Emerging Markets Series
JNL/Janus Aggressive Growth Series
JNL/Janus Global Equities Series
JNL/PIMCO Total Return Bond Series
JNL/S&P Conservative Growth Series II
JNL/S&P Moderate Growth Series II
JNL/S&P Aggressive Growth Series II
JNL/S&P Very Aggressive Growth Series II
JNL/S&P Equity Growth Series II
JNL/S&P Equity Aggressive Growth Series II
Goldman Sachs/JNL Growth & Income Series
Lazard/JNL Mid Cap Value Series
Lazard/JNL Small Cap Value Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Balanced Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL High Yield Bond Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
Please read this prospectus before you purchase a Perspective ADDvantage Fixed
and Variable Annuity. It contains important information about the contract that
you ought to know before investing. You should keep this prospectus on file for
future reference.
To learn more about the Perspective ADDvantage Fixed and Variable Annuity
contract, you can obtain a free copy of the Statement of Additional Information
(SAI) dated _____________, 1999, by calling Jackson National at (800) 766-4683
or by writing Jackson National at: Annuity Service Center, P.O. Box 378002,
Denver, Colorado 80237-8002. The SAI has been filed with the Securities and
Exchange Commission (SEC) and is legally a part of this prospectus. The Table of
Contents of the SAI appears at the end of this prospectus. The SEC maintains a
website (http://www.sec.gov) that contains the SAI, material incorporated by
reference and other information regarding registrants that file electronically
with the SEC.
The SEC has not approved or disapproved the Perspective ADDvantage Fixed and
Variable Annuity or passed upon the adequacy of this prospectus. It is a
criminal offense to represent otherwise.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
_____________________, 1999
<PAGE>
TABLE OF CONTENTS
Key Facts
Fee Table
The Annuity Contract
The Company
The Guaranteed Accounts
The Separate Account
Investment Portfolios
Contract Charges
Purchases
Transfers
Access to Your Money
Income Payments (The Income Phase)
Death Benefit
Taxes
Other Information
Table of Contents of the Statement of Additional Information
<PAGE>
KEY FACTS
Annuity Service Center: 1 (800) 766-4683
Mail Address: P.O. Box 378002, Denver, Colorado
80237-8002
Delivery Address: 8055 East Tufts Avenue, Second Floor,
Denver, Colorado 80237
Institutional Marketing
Group Service Center: 1 (800) 777-7779
Mail Address: P.O. Box 30386, Lansing, Michigan 48909-9692
Delivery Address: 5901 Executive Drive, Lansing, Michigan
48911 Attn: IMG
Home Office: 5901 Executive Drive, Lansing, Michigan
48911
The Annuity Contract The fixed and variable annuity contract
offered by Jackson National provides a means
for investing on a tax-deferred basis in the
guaranteed accounts of Jackson National and
the investment portfolios. The contract is
intended for retirement savings or other
long-term investment purposes and provides
for a death benefit and income options.
The contract has two phases: the
accumulation phase and the income 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 accumulate
in your contract during the accumulation
phase will determine the amount of income
payments during the income phase.
Investment Options You can put money into any of the guaranteed
accounts and/or the investment portfolios
but you may not put your money in more than
eighteen of the investment options during
the life of your contract.
The guaranteed accounts offer an interest
rate that is guaranteed by Jackson National.
While your money is in a guaranteed account,
the interest your money earns and your
principal are guaranteed by Jackson
National.
The investment portfolios purchase shares of
series of a mutual fund. These series are
described in the attached JNL Series Trust
prospectus. The value of the investment
portfolios will vary in accordance with the
investment performance of the series. You
bear the investment risk under the contract
for all amounts allocated to the investment
portfolios.
Expenses The contract has insurance features and
investment features, and there are costs
related to each.
Jackson National makes a deduction for its
insurance charges which is equal to 1.50% of
the daily value of the contracts invested in
the investment portfolios. During the
accumulation phase, Jackson National deducts
a $35 annual contract maintenance charge
from your contract. If you choose the
optional enhanced death benefit, Jackson
National will deduct a charge equal to .15%
of the daily value of your contract invested
in the investment portfolios.
If you take your money out of the contract,
Jackson National may assess a withdrawal
charge. The withdrawal charge starts at 8.5%
in the first year, declines to 8% in the
second year, and declines 1% a year
thereafter to 0% after 9 years.
Jackson National may assess a state premium
tax charge which ranges from 0-4%, depending
upon the state, when you begin receiving
regular income payments from your contract,
when you make a withdrawal or, in states
where required, at the time premium payments
are made.
There are also investment charges which
range from .20% to 1.18% of the average
daily value of the series, depending on the
series.
Purchases Under most circumstances, you can buy a
contract for $5,000 or more ($2,000 or more
for a qualified plan contract). You can add
$500 ($50 under the automatic payment plan)
or more at any time during the accumulation
phase.
Contract Enhancements Each time you make a premium payment,
Jackson National will add an additional
amount to your contract equal to 4% of your
premium payment. Jackson National will not
add contract enhancements to premium
payments made within 12 months prior to a
withdrawal, distribution or payment of a
death benefit.
Access to Your Money You can take money out of your contract
during the accumulation phase. You will
incur a withdrawal charge when you withdraw
premiums which have been in your contract
for nine years or less. Once each year, you
can withdraw 10% of the value of your
contract less any previous withdrawals
without incurring a withdrawal charge. You
may also have to pay income tax and a tax
penalty on any money you take out.
Income Payments If you want to receive regular income from
your annuity, you can choose one of four
options:
(1) monthly payments for the
annuitant's life;
(2) monthly payments for the
annuitant's life and the life of
another person (usually the
annuitant's spouse);
(3) monthly payments for the
annuitant's life, but with
payments continuing to you or
your designated beneficiary for
10 or 20 years if the annuitant
dies before the end of the
selected period; and
(4) payments for a period of 5
to 30 years.
During the income phase, you have the same
investment choices you had during the
accumulation phase. You can choose to have
payments come from the guaranteed accounts,
the investment portfolios or both. 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. If you choose a variable income
option, you may make transfers between
investment portfolios and in to the
guaranteed accounts.
Death Benefit If you die before moving to the income
phase, the person you have chosen as your
beneficiary will receive a death benefit.
When you purchase your contract, you must
elect the standard death benefit or the
optional enhanced death benefit. You cannot
change your election after we have issued
your contract.
Free Look If you cancel your contract within twenty
days after receiving it (or whatever period
is required in your state), Jackson National
will return the amount your contract is
worth on the day we receive your request,
less any contract enhancements applied to
your contract. This may be more or less than
your original payment. If required by law,
Jackson National will return your premium.
Taxes The Internal Revenue Code provides that you
will not be taxed on the earnings on the
money held in your contract until you take
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 you have (non-qualified or
qualified).
<PAGE>
FEE TABLE
Owner Transaction Expenses
Withdrawal Charge (as a percentage of premium payments):
Years Since Premium Payment 0 1 2 3 4 5 6 7 8 9+
Charge 8.5% 8% 7% 6% 5% 4% 3% 2% 1% 0%
Transfer Fee:
$25 for each transfer in excess of 15 in a contract year
Contract Maintenance Charge:
$35 per contract per year
Separate Account Annual Expenses (as a percentage of average account value)
Mortality and Expense Risk Charges 1.35%
Administration Charge .15%
Total Separate Account Annual Expenses 1.50%
Series Annual Expenses
(as a percentage of the series average net assets)
<TABLE>
<CAPTION>
Management
and Total Series
Administrative Other Annual
JNL Series Trust Fee Expenses Expenses
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<S> <C> <C> <C>
JNL/Alliance Growth Series .875% 0% .875%
JNL/J.P. Morgan International & Emerging Markets Series 1.075% 0% 1.075%
JNL/Janus Aggressive Growth Series 1.05% 0% 1.05%
JNL/Janus Global Equities Series 1.10% 0% 1.10%
JNL/PIMCO Total Return Bond Series .80% 0% .80%
JNL/S&P Conservative Growth Series II .20% 0% .20%
JNL/S&P Moderate Growth Series II .20% 0% .20%
JNL/S&P Aggressive Growth Series II .20% 0% .20%
JNL/S&P Very Aggressive Growth Series II .20% 0% .20%
JNL/S&P Equity Growth Series II .20% 0% .20%
JNL/S&P Equity Aggressive Growth Series II .20% 0% .20%
Goldman Sachs/JNL Growth & Income Series 1.025% 0% 1.025%
Lazard/JNL Small Cap Value Series 1.15% 0% 1.15%
Lazard/JNL Mid Cap Value Series 1.075% 0% 1.075%
PPM America/JNL Money Market Series .70% 0% .70%
Salomon Brothers/JNL Balanced Series .90% 0% .90%
Salomon Brothers/JNL Global Bond Series .95% 0% .95%
Salomon Brothers/JNL High Yield Bond Series .90% 0% .90%
T. Rowe Price/JNL International Equity Investment Series 1.18% 0% 1.18%
T. Rowe Price/JNL Mid-Cap Growth Series 1.05% 0% 1.05%
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</TABLE>
Effective January 4, 1999, certain Series pay Jackson National Financial
Services, LLC, the adviser, an Administrative Fee of .10% for certain services
provided to the Trust by Jackson National Financial Services, LLC. The Annual
Series Operating Expenses have been restated to reflect the Administrative Fee.
<PAGE>
Examples. You would pay the following expenses on a $1,000 investment, assuming
a 5% annual return on assets:
(a) if you surrender your contract at the end of each time period;
(b) if you do not surrender your contract or if you begin receiving income
payments from your contract after the first year.
<TABLE>
<CAPTION>
Time Periods
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1 3
year years
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<S> <C> <C>
JNL/Alliance Growth Portfolio (a) $ $
(b)
JNL/J.P. Morgan International & Emerging Markets Portfolio (a)
(b)
JNL/Janus Aggressive Growth Portfolio (a)
(b)
JNL/Janus Global Equities Portfolio (a)
(b)
JNL/PIMCO Total Return Bond Portfolio (a)
(b)
JNL/S&P Conservative Growth Portfolio II (a)
(b)
JNL/S&P Moderate Growth Portfolio II (a)
(b)
JNL/S&P Aggressive Growth Portfolio II (a)
(b)
JNL/S&P Very Aggressive Growth Portfolio II (a)
(b)
JNL/S&P Equity Growth Portfolio II (a)
(b)
JNL/S&P Equity Aggressive Growth Portfolio II (a)
(b)
Goldman Sachs/JNL Growth & Income Portfolio (a)
(b)
Lazard/JNL Small Cap Value Portfolio (a)
(b)
Lazard/JNL Mid Cap Value Portfolio (a)
(b)
PPM America/JNL Money Market Portfolio (a)
(b)
Salomon Brothers/JNL Balanced Portfolio (a)
(b)
Salomon Brothers/JNL Global Bond Portfolio (a)
(b)
Salomon Brothers/JNL High Yield Bond Portfolio (a)
(b)
T. Rowe Price/JNL International Equity Investment Portfolio (a)
(b)
T. Rowe Price/JNL Mid-Cap Growth Portfolio (a)
(b)
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</TABLE>
Explanation of Fee Table and Examples. The purpose of the Fee Table and Examples
is to assist you in understanding the various costs and expenses that you will
bear directly or indirectly. The Fee Table reflects the expenses of the separate
account and the series. Premium taxes may also apply.
The Examples reflect the contract maintenance charge which is determined by
dividing the total amount of such charges expected to be collected during the
year by the total estimated average net assets of the investment portfolios.
A withdrawal charge is imposed on income payments which occur within one year of
the date the contract is issued.
The Example does not represent past or future expenses. The actual expenses that
you incur may be greater or less than those shown.
Financial Statements. You can find the following financial statements in the
SAI:
o the financial statements of Jackson National for the year ended December
31, 1998
o the financial statements of Jackson National for the year ended December
31, 1997
o the financial statements of Jackson National for the year ended December
31, 1996
The financial statements of Jackson National for the years ended December 31,
1998, December 31, 1997, and December 31, 1996, have been audited by
PricewaterhouseCoopers LLP, independent accountants.
<PAGE>
THE ANNUITY CONTRACT
The fixed and variable annuity contract offered by Jackson National is a
contract between you, the owner, and Jackson National, an insurance company. The
contract provides a means for investing on a tax-deferred basis in guaranteed
accounts and investment portfolios. The contract is intended for retirement
savings or other long-term investment purposes and provides for a death benefit
and guaranteed income options.
The contract, like all deferred annuity contracts, has two phases: (1) the
accumulation phase, and (2) the income phase. During the accumulation phase,
earnings accumulate on a tax-deferred basis and are taxed as income when you
make a withdrawal.
The contract offers guaranteed accounts. The guaranteed accounts offer an
interest rate that is guaranteed by Jackson National for the duration of the
guaranteed account period. While your money is in a guaranteed account, the
interest your money earns and your principal are guaranteed by Jackson National.
The value of a guaranteed account may be reduced if you make a withdrawal prior
to the end of the guaranteed account period, but will never be less than the
premium payments accumulated at 3% per year. If you choose to have your annuity
payments come from the guaranteed accounts, your payments will remain level
throughout the entire income phase.
The contract also offers investment portfolios. The investment portfolios are
designed to offer a higher return than the guaranteed accounts. However, this is
not guaranteed. It is possible for you to lose your money. If you put money in
the investment portfolios, the amount of money you are able to accumulate in
your contract during the accumulation phase depends upon the performance of the
investment portfolios you select. The amount of the income payments you receive
during the income phase also will depend, in part, on the performance of the
investment portfolios you choose for the income phase.
As the owner, you can exercise all the rights under the contract. You can assign
the contract at any time before the income date, but Jackson National will not
be bound until we receive written notice of the assignment.
THE COMPANY
Jackson National is a stock life insurance company organized under the laws of
the state of Michigan in June 1961. Its legal domicile and principal business
address is 5901 Executive Drive, Lansing, Michigan 48911. Jackson National is
admitted to conduct life insurance and annuity business in the District of
Columbia and all states except New York. Jackson National is ultimately a
wholly-owned subsidiary of Prudential Corporation plc (London, England).
THE GUARANTEED ACCOUNTS
If you select a guaranteed account, your money will be placed with Jackson
National's other assets. The guaranteed accounts are not registered with the SEC
and the SEC does not review the information we provide to you about the
guaranteed accounts. Your contract contains a more complete description of the
guaranteed accounts.
THE SEPARATE ACCOUNT
The Jackson National Separate Account V was established by Jackson National on
September 25, 1998, pursuant to the provisions of Michigan law, as a segregated
asset account of the company. The separate account meets the definition of a
"separate account" under the federal securities laws and is registered with the
SEC as a unit investment trust under the Investment Company Act of 1940, as
amended.
The assets of the separate account legally belong to Jackson National and the
obligations under the contracts are obligations of Jackson National. However,
the contract assets in the separate account are not chargeable with liabilities
arising out of any other business Jackson National may conduct. All of the
income, gains and losses resulting from these assets are credited to or charged
against the contracts and not against any other contracts Jackson National may
issue.
The separate account is divided into investment portfolios. Jackson National
does not guarantee the investment performance of the separate account or the
investment portfolios.
INVESTMENT PORTFOLIOS
You can put money in any or all of the investment portfolios; however, you may
not allocate your money to more than eighteen investment options during the life
of your contract. The investment portfolios purchase shares of the following
series of the JNL Series Trust:
JNL Series Trust
JNL/Alliance Growth Series
JNL/J.P. Morgan International & Emerging Markets Series
JNL/Janus Aggressive Growth Series
JNL/Janus Global Equities Series
JNL/PIMCO Total Return Bond Series
JNL/S&P Conservative Growth Series II
JNL/S&P Moderate Growth Series II
JNL/S&P Aggressive Growth Series II
JNL/S&P Very Aggressive Growth Series II
JNL/S&P Equity Growth Series II
JNL/S&P Equity Aggressive Growth Series II
Goldman Sachs/JNL Growth & Income Series
Lazard/JNL Small Cap Value Series
Lazard/JNL Mid Cap Value Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Balanced Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL High Yield Bond Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
The series are described in the attached JNL Series Trust prospectus. Jackson
National Financial Services, LLC serves as investment adviser for all of the
series. The sub-adviser for each series is listed in the following table:
Sub-Adviser Series
- ----------- ------
Alliance Capital Management L.P. JNL/Alliance Growth Series
J.P. Morgan Investment JNL/J.P. Morgan International & Emerging
Management Inc. Markets Series
Janus Capital Corporation JNL/Janus Aggressive Growth Series
JNL/Janus Global Equities Series
Pacific Investment Management JNL/PIMCO Total Return Bond Series
Company
Standard & Poor's Investment JNL/S&P Conservative Growth Series II
Advisory Services, Inc. JNL/S&P Moderate Growth Series II
JNL/S&P Aggressive Growth Series II
JNL/S&P Very Aggressive Growth Series II
JNL/S&P Equity Growth Series II
JNL/S&P Equity Aggressive Growth Series II
Goldman Sachs Asset Management Goldman Sachs/JNL Growth & Income Series
Lazard Asset Management Lazard/JNL Small Cap Value Series
Lazard/JNL Mid Cap Value Series
PPM America, Inc. PPM America/JNL Money Market Series
Salomon Brothers Asset Salomon Brothers/JNL Balanced Series
Management Inc Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL High Yield Bond Series
Rowe Price-Fleming
International, Inc. T. Rowe Price/JNL International Equity
Investment Series
T. Rowe Price Associates, Inc. T. Rowe Price/JNL Mid-Cap Growth Series
Depending on market conditions, you can make or lose money in any of the
investment portfolios. You should read the JNL Series Trust prospectus carefully
before investing. Additional investment portfolios may be available in the
future.
Voting Rights. To the extent required by law, Jackson National will obtain from
you and other owners of the contracts instructions as to how to vote when the
series solicits proxies in conjunction with a vote of shareholders. When Jackson
National receives instructions, we will vote all the shares Jackson National
owns in proportion to those instructions.
Substitution. Jackson National may be required to substitute an investment
portfolio with another portfolio. We will not do this without the prior approval
of the SEC. Jackson National will give you notice of our intent to do this.
CONTRACT CHARGES
There are charges and other expenses associated with the contracts that reduce
the return on your investment in the contract. These charges may be a lesser
amount where required by state law or as described below, but will not be
increased. These charges and expenses are:
Insurance Charges. Each day Jackson National makes a deduction for its insurance
charges. We do this as part of our calculation of the value of the accumulation
units and annuity units. On an annual basis, this charge equals 1.50% of the
daily value of the contracts invested in an investment portfolio, after expenses
have been deducted.
This charge is for the mortality risks, expense risks and administrative
expenses assumed by Jackson National. The mortality risks that Jackson National
assumes arise from our obligations under the contracts:
o to make income payments for the life of the annuitant during the income
phase;
o to waive the withdrawal charge in the event of your death; and
o to provide both a standard and an enhanced death benefit prior to the
income date.
The expense risk that Jackson National assumes is the risk that our actual cost
of administering the contracts and the investment portfolios will exceed the
amount that we receive from the administration charge and the contract
maintenance charge.
Optional Enhanced Death Benefit Charge. If you elect the optional enhanced death
benefit when you purchase your contract, Jackson National will deduct an
optional enhanced death benefit charge from your contract. This charge, on an
annual basis, equals .15% of the daily value of your contract invested in the
investment portfolios. This charge is for the mortality risks that we assume in
connection with the optional enhanced death benefit.
Contract Maintenance Charge. During the accumulation phase, Jackson National
deducts a $35 ($30 in Washington) annual contract maintenance charge on each
anniversary of the date on which your contract was issued. If you make a
complete withdrawal from your contract, the contract maintenance charge will
also be deducted. This charge is for administrative expenses.
Jackson National will not deduct this charge, if when the deduction is to be
made, the value of your contract is $50,000 or more. Jackson National may
discontinue this practice at any time.
Transfer Fee. A transfer fee of $25 will apply to each transfer in excess of 15
in a contract year. Jackson National may waive the transfer fee in connection
with pre-authorized automatic transfer programs, or may charge a lesser fee
where required by state law.
Withdrawal Charge. During the accumulation phase, you can make withdrawals from
your contract.
You will incur a withdrawal charge when you withdraw:
o premiums which have been in your contract for nine years or less.
You will not incur a withdrawal charge when you withdraw:
o earnings;
o 10% of the value of your contract less any previous withdrawals during that
contract year
(Note: this withdrawal option is available only once each contract year).
The withdrawal charge starts at 8.5% in the first year that a premium is in your
contract, declines to 8% in the second year, and declines 1% a year thereafter
to 0% after 9 years. The withdrawal charge compensates us for costs associated
with selling the contracts.
For purposes of the withdrawal charge, Jackson National treats withdrawals as
coming from earnings first, then from the oldest remaining premium. If you make
a full withdrawal, the withdrawal charge is based on premiums remaining in the
contract. If you withdraw only part of the value of your contract, we deduct the
withdrawal charge from the remaining value in your contract.
Note: For tax purposes, withdrawals are considered to have come from the
last money into the contract. Thus, for tax purposes, earnings are considered to
come out first.
Jackson National does not assess the withdrawal charge on any payments paid out
as (1) income payments after the first year, (2) death benefits, or (3)
withdrawals necessary to satisfy the minimum distribution requirements of the
Internal Revenue Code. Withdrawals for terminal illness or other specified
conditions as defined by Jackson National may not be subject to a withdrawal
charge. These provisions are not available in all states.
Jackson National may waive the withdrawal charge on amounts you transfer from
your contract to another contract issued by us to you. The amounts that you
transfer may be subject to new withdrawal charges or other fees under the other
contract.
Jackson National may reduce or eliminate the amount of the withdrawal charge
when the contract is sold under circumstances which reduce its sales expense.
Some examples are: the purchase of a contract by a large group of individuals or
an existing relationship between Jackson National and a prospective purchaser.
Jackson National will not deduct a withdrawal charge under a contract issued to
an officer, director, agent or employee of Jackson National or any of its
affiliates.
Other Expenses. Jackson National pays the operating expenses of the Separate
Account.
There are deductions from and expenses paid out of the assets of the series.
These expenses are described in the attached JNL Series Trust prospectus.
Premium Taxes. Some states and other governmental entities charge premium taxes
or other similar taxes. Jackson National is responsible for the payment of these
taxes and may make a deduction from the value of the contract for them. Premium
taxes generally range from 0% to 4% depending on the state.
Income Taxes. Jackson National will make a deduction from the contract for any
income taxes which it incurs because of the contract. Currently, we are not
making any such deduction.
Distribution of Contracts. Jackson National Life Distributors, Inc., located at
10877 Wilshire Boulevard, Suite 1550, Los Angeles, California 90024, serves as
the distributor of the contracts. Jackson National Life Distributors, Inc. is a
wholly-owned subsidiary of Jackson National.
Commissions will be paid to broker-dealers who sell the contracts. While
commissions may vary, they are not expected to exceed 8% of any premium payment.
Under certain circumstances, Jackson National may pay bonuses, overrides, and
marketing allowances, in addition to the standard commissions. Jackson National
may under certain circumstances where permitted by applicable law, pay a bonus
to a contract purchaser to the extent the broker-dealer waives its commission.
Jackson National may use any of its corporate assets to cover the cost of
distribution, including any profit from the contract insurance charges.
PURCHASES
Minimum Initial Premium:
o $5,000 under most circumstances;
o $2,000 for a qualified plan contract.
The maximum we accept without our prior approval is $1 million.
Minimum Additional Premiums:
o $500;
o $50 under the automatic payment plan.
You can pay additional premiums at any time during the accumulation phase.
The minimum that you may allocate to a guaranteed account or investment
portfolio is $100.
When you purchase a contract, Jackson National will allocate your premium to one
or more of the guaranteed accounts and/or the investment portfolios you have
selected. Your allocations must be in whole percentages ranging from 0% to 100%.
Jackson National will allocate additional premiums in the same way unless you
tell us otherwise.
There may be more than eighteen investment options available under the contract;
however, you may not allocate your money to more than eighteen investment
options during the life of your contract.
Jackson National will issue your contract and allocate your first premium within
2 business days after we receive your complete application and first premium. If
your application is not complete, we will contact you to get the necessary
information. If for some reason Jackson National is unable to complete this
process within 5 business days, we will either return your money or get your
permission to keep it until we receive all of the necessary information.
The Jackson National business day closes when the New York Stock Exchange
closes, usually 4:00 p.m. Eastern time.
Accumulation Units. The contract value allocated to the investment portfolios
will go up or down depending on the performance of the portfolios. In order to
keep track of the value of your contract, Jackson National uses a unit of
measure called an accumulation unit. (An accumulation unit is similar to a share
of a mutual fund.) During the income phase it is called an annuity unit.
Every business day Jackson National determines the value of an accumulation unit
for each of the investment portfolios. This is done by:
1. determining the total amount of money invested in the particular
investment portfolio;
2. subtracting any insurance charges, optional enhanced death benefit
charge, and any other charges such as taxes;
3. dividing this amount by the number of outstanding accumulation units.
The value of an accumulation unit may go up or down from day to day.
When you make an allocation to an investment portfolio, Jackson National credits
your contract with accumulation units. The number of accumulation units credited
is determined at the close of Jackson National's business day by dividing the
amount of the premium and/or contract enhancement allocated to any investment
portfolio by the value of the accumulation unit for that investment portfolio.
CONTRACT ENHANCEMENTS
Each time you make a premium payment, Jackson National will add an additional
amount to your contract. This contract enhancement will equal 4% of your premium
payment. Jackson National will allocate the contract enhancement to the
guaranteed accounts and/or investment portfolios in the same proportion as the
premium payment.
You will not receive any contract enhancement applied to your contract within
the prior twelve months when:
o you return your contract within the free look period; Jackson National
o pays a death benefit under your contract; you make a partial or full
o withdrawal or receive a distribution; and
o Jackson National pays a benefit under a rider or an endorsement.
Your contract value will reflect any gains or losses attributable to a contract
enhancement described above.
Contract enhancements, and any gains or losses attributable to a contract
enhancement, distributed under your contract will be considered earnings under
the contract for tax purposes.
TRANSFERS
You can transfer money between guaranteed accounts and investment portfolios
during the accumulation phase. During the income phase, you can transfer money
between investment portfolios or from the investment portfolios to a guaranteed
option. You can make 15 transfers every contract year without charge.
Telephone Transactions. You may make transfers by telephone, unless you elect on
your application not to have this privilege. When authorizing a transfer, you
must complete your telephone call by the close of Jackson National's business
day (usually 4:00 p.m. Eastern time) in order to receive that day's accumulation
unit value for an investment portfolio.
Jackson National has procedures which are designed to provide reasonable
assurance that telephone authorizations are genuine. Our procedures include
requesting identifying information and tape recording telephone communications.
Jackson National and its affiliates disclaim all liability for any claim, loss
or expense resulting from any alleged error or mistake in connection with a
telephone transfer which was not properly authorized by you. However, if Jackson
National fails to employ reasonable procedures to ensure that all telephone
transfers are properly authorized, we may be held liable for such losses.
Jackson National reserves the right to modify or discontinue at any time and
without notice the acceptance of instructions from someone other than you and/or
the telephone transfer privilege.
ACCESS TO YOUR MONEY
You can have access to the money in your contract:
o by making either a partial or complete withdrawal, or
o by electing to receive income payments.
Your beneficiary can have access to the money in your contract when a death
benefit is paid.
When you make a complete withdrawal you will receive:
1. the value of the contract on the day you made the withdrawal;
2. less any contract charges and fees;
3. less any contract enhancements applied during the prior 12 months;
4. less any premium taxes or other taxes payable; and
5. less any withdrawal charge.
Except in connection with the systematic withdrawal program, you must withdraw
at least $500 or, if less, the entire amount in the guaranteed account or
investment portfolio from which you are making the withdrawal.
Income taxes, tax penalties and certain restrictions may apply to any withdrawal
you make.
There are limitations on withdrawals from a qualified plan referred to as a
403(b) annuity. See "Taxes."
Systematic Withdrawal Program. You can arrange to have money automatically sent
to you periodically while your contract is still in the accumulation phase. You
will have to pay taxes on money you receive and withdrawals you make before you
reach 59 1/2 may be subject to a 10% tax penalty.
We reserve the right to charge a fee for participation or to discontinue
offering this program in the future.
Suspension of Withdrawals or Transfers. Jackson National may be required to
suspend or delay withdrawals or transfers from an investment portfolio when:
o the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o trading on the New York Stock Exchange is restricted;
o an emergency exists so that it is not reasonably practicable to dispose of
shares of the investment portfolios or determine investment portfolio
values;
o the SEC, by order, may permit for the protection of owners.
Jackson National has reserved the right to defer payment for a withdrawal or
transfer from the guaranteed accounts for the period permitted by law, but not
more than six months.
INCOME PAYMENTS (THE INCOME PHASE)
The income phase occurs when you begin receiving regular payments from your
contract. The income date is the month and year in which those payments begin.
You can choose the income date and an income option.
Income Date. The income date may not be later than your 90th birthday under a
non-qualified contract (or an earlier date under a qualified contract if
required by the qualified plan, law, or regulation). When you choose an income
date, you may wish to consider the applicability of withdrawal charges which are
imposed upon income payments which occur within one year of the date the
contract is issued. If you do not choose an income date, the income date will be
your 90th birthday under a non-qualified contract (or an earlier date under a
qualified contract if required by the qualified plan, law, or regulation). You
can change the income date at any time before the income date currently in
effect. You must give us 7 days notice.
Income Options. You may elect to receive a single sum or you may elect one of
the income options described below. A single sum distribution may be deemed to
be a withdrawal. If you do not choose an income option, we will assume that you
selected Option 3 which provides a life annuity with 120 months of guaranteed
payments. You can change your income option at any time before the income date.
You must give us 7 days notice.
The annuitant is the person whose life we look to when we make income payments.
(Each description assumes that you are the owner and annuitant.) The following
income options may not be available in all states.
Option 1 - Life Income. This income option provides monthly payments for
your life.
Option 2 - Joint and Survivor Annuity. This income option provides monthly
payments for your life and for the life of another person (usually your spouse)
selected by you. At the time you elect this option, you may choose whether the
payments to the survivor will continue at the full rate or at two-thirds or
one-half of the full rate.
Option 3 - Life Annuity With 120 or 240 Monthly Payments Guaranteed. This
income option provides monthly payments for your life, but with payments
continuing to your beneficiary for the remainder of 10 or 20 years (as you
select) if you die before the end of the selected period.
Option 4 - Income for a Specified Period. This income option provides
monthly payments for any number of years from 5 to 30.
Additional Options - Other income options may be made available by Jackson
National.
If you choose Option 1, 2 or 3, you cannot make a withdrawal during the income
phase.
Income Payments. At the income date, you can choose whether payments will come
from the guaranteed accounts, the investment portfolios or both. Unless you tell
us otherwise, your income payments will be based on the investment allocations
that were in place on the income date.
You can choose to have income payments made monthly, quarterly, semi-annually,
or annually. However, if you have less than $5,000 to apply toward an income
option and state law permits, Jackson National may provide your payment in a
single lump sum. Likewise, if your first income payment would be less than $50
and state law permits, Jackson National may set the frequency of payments so
that the first payment would be at least $50.
Income Payments from Investment Portfolios. If you choose to have any
portion of your income payments come from the investment portfolio(s), the
dollar amount of your payment will depend upon three things:
1. the value of your contract in the investment portfolio(s) on the
income date;
2. the 3% assumed investment rate used in the annuity table for the
contract; and
3. the performance of the investment portfolios you selected.
Jackson National calculates the dollar amount of the first income payment that
you receive from the investment portfolios. We then use that amount to determine
the number of annuity units that you hold in each investment portfolio. The
amount of each subsequent income payment is determined by multiplying the number
of annuity units that you hold in an investment portfolio by the annuity unit
value for that investment portfolio.
The number of annuity units that you hold in each investment portfolio does not
change unless you reallocate your contract value among the investment
portfolios. The annuity unit value of each investment portfolio will vary based
on the investment performance of the series. If the actual investment
performance exactly matches the assumed rate at all times, the amount of each
income payment will remain equal. If the actual investment performance exceeds
the assumed rate, your income payments will increase. Similarly, if the actual
investment performance is less than the assumed rate, your income payments will
decrease.
DEATH BENEFIT
The contract offers a selection of death benefits. When you purchase your
contract, you must elect the death benefit that will be available before the
income date. You may elect:
o the standard death benefit; or
o the optional enhanced death benefit.
You cannot change your election after we have issued your contract.
Death of Owner Before the Income Date. If you die before moving to the income
phase, the person you have chosen as your beneficiary will receive a death
benefit. If you have a joint owner, the death benefit will be paid when the
first joint owner dies. The surviving joint owner will be treated as the
beneficiary. Any other beneficiary designated will be treated as a contingent
beneficiary. A contingent beneficiary is entitled to receive payment only after
the beneficiary dies.
Standard Death Benefit. The standard death benefit equals the greater of:
1. current contract value;
a. less any contract enhancement applied within the 12 months prior
to your death.
2. the total premiums paid prior to your death;
a. less withdrawals,
b. less withdrawal charges,
c. less contract charges and fees,
d. less premium taxes, and
e. less any contract enhancement applied within the 12 months prior
to your death.
Optional Enhanced Death Benefit. The optional enhanced death benefit is
equal to the greatest of:
1. the standard death benefit;
2. the total premiums paid prior to your death;
a. less withdrawals,
b. less withdrawal charges,
c. less contract charges and fees,
d. less premium taxes, and
e. less any contract enhancement applied within the 12 months prior
to your death,
compounded at 5% (4% if the owner is age 70 or older at the date of issue).
3. the contract value at the end of the 7th contract year;
a. plus all premiums made since the 7th year,
b. less withdrawals,
c. less withdrawal charges,
d. less contract charges and fees,
e. less premium taxes, and
f. less any contract enhancement applied within the 12 months prior
to your death,
compounded at 5% (4% if the owner is age 70 or older at the date of issue).
The optional enhanced death benefit under 2 or 3 will never exceed 250% of
premiums paid, less partial withdrawals, charges and fees, withdrawal charges,
and premium taxes.
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 income option.
The death benefit payable under an income option must be paid over the
beneficiary's lifetime or for a period not extending beyond the beneficiary's
life expectancy. Payments must begin within one year of the date of death.
Unless the beneficiary chooses to receive the death benefit in a single sum, the
beneficiary must elect an income option within the 60 day period beginning with
the date Jackson National receives proof of death. If the beneficiary chooses to
receive the death benefit in a single sum and all the necessary requirements are
met, Jackson National will pay the death benefit within 7 days. If the
beneficiary is your spouse, he/she can continue the contract in his/her own name
at the then current contract value.
Death of Owner After the Income Date. If you or a joint owner die after the
income date, and you are not the annuitant, any remaining payments under the
income option elected will continue at least as rapidly as under the method of
distribution in effect at the date of death. If you die, the beneficiary becomes
the owner. If the joint owner dies, the surviving joint owner, if any, will be
the designated beneficiary. Any other beneficiary designation on record at the
time of death will be treated as a contingent beneficiary. A contingent
beneficiary is entitled to receive payment only after the beneficiary dies.
Death of Annuitant Before the Income Date. If the annuitant is not an owner or
joint owner and the annuitant dies before the income date, you become the new
annuitant. You may name a new annuitant, subject to our administrative
requirements. 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.
Death of Annuitant After the Income Date. If the annuitant dies after the income
date, the death benefit, if any, will be as provided for in the income option
selected. Death benefits will be paid at least as rapidly as under the method of
distribution in effect at the annuitant's death.
TAXES
The following is general information and is not intended as tax advice to any
individual. You should consult your own tax adviser.
The Internal Revenue Code (Code) provides that you will not be taxed on the
earnings on the money held in your contract until you take 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 you have
(non-qualified or qualified).
Non-Qualified Contracts - General Taxation. You will not be taxed on increases
in the value of your contract until a distribution (either as a withdrawal or as
an income payment) occurs. When you make a withdrawal you are taxed on the
amount of the withdrawal that is earnings. For income payments, a portion of
each income payment is treated as a partial return of your premium and will not
be taxed. The remaining portion of the income payment will be treated as
ordinary income. How the income payment is divided between taxable and
non-taxable portions depends on the period over which income payments are
expected to be made. Income payments received after you have received all of
your premium are treated as income.
If 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 any pension plan, specially sponsored program or an
individual retirement annuity, your contract is referred to as a non-qualified
contract.
If you purchase the contract under a pension plan, specially sponsored program,
or an individual retirement annuity, your contract is referred to as a qualified
contract. Examples of qualified plans are: Individual Retirement Annuities
(IRAs), Tax-Sheltered Annuities (sometimes referred to as 403(b) contracts),
H.R. 10 Plans (sometimes referred to as Keogh Plans), and pension and
profit-sharing plans, which include 401(k) plans.
Withdrawals - Non-Qualified Contracts. If you make a withdrawal from your
contract, the Code treats the withdrawal as first coming from earnings and then
from your premium payments. 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 10% penalty. 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
premiums made prior to August 14, 1982.
Withdrawals - Qualified Contracts. There are special rules that govern qualified
contracts. We have provided additional discussion in the Statement of Additional
Information.
Withdrawals - Tax-Sheltered Annuities. The Code limits the withdrawal of
premiums from certain Tax-Sheltered Annuities. Withdrawals can only be made when
an owner: (1) reaches age 59 1/2; (2) leaves his/her job; (3) dies; (4) becomes
disabled (as that term is defined in the Code); or (5) in the case of hardship.
However, in the case of hardship, the owner can only withdraw the premium and
not any earnings.
Withdrawals - Roth IRAs. Beginning in 1998, individuals may purchase a new type
of non-deductible IRA, known as a Roth IRA. Qualified distributions from Roth
IRAs are entirely tax free. A qualified distribution requires that the
individual has held the Roth IRA for at least five years and, in addition, that
the distribution is made either after the individual reaches age 59 1/2, on
account of the individual's death or disability, or as qualified first-time home
purchase, subject to $10,000 lifetime maximum, for the individual, or for a
spouse, child, grandchild, or ancestor.
Withdrawals - Investment Adviser Fees. The Internal Revenue Service has, through
a series of Private Letter Rulings, held that the payment of investment adviser
fees from an IRA or a Tax-Sheltered Annuity is permissible under certain
circumstances and will not be considered a distribution for income tax purposes.
The Rulings require that in order to receive this favorable tax treatment, the
annuity contract must, under a written agreement, be solely liable (not jointly
with the contract owner) for payment of the adviser's fee and the fee must
actually be paid from the annuity contract to the adviser. Withdrawals from
non-qualified contracts for the payment of investment adviser fees will be
considered distributions from the contract.
Restrictions Under the Texas Optional Retirement Program (ORP). Contracts issued
to participants in ORP contain restrictions required under the Texas
Administrative Code. In accordance with those restrictions, a participant in ORP
will not be permitted to make withdrawals prior to such participant's
retirement, death, attainment of age 70 1/2 year or termination of employment in
a Texas public institution of higher education. The restrictions on withdrawal
do not apply in the event a participant in ORP transfers the contract value to
another approved contract or vendor during the period of ORP participation.
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.
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. Jackson National believes that the underlying
investments are being managed so as to comply with these 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 Jackson
National 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 owners are permitted to select investment
portfolios, to make transfers among the investment portfolios or the number and
type of investment portfolios from which owners may select. 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, Jackson National reserves the
right to modify the contract in an attempt to maintain favorable tax treatment.
OTHER INFORMATION
Dollar Cost Averaging. You can arrange to automatically have a regular amount of
money periodically transferred into the investment portfolios. This
theoretically gives you a lower average cost per unit over time than you would
receive if you made a one time purchase.
Jackson National does not currently charge for participation in this program. We
may do so in the future.
Rebalancing. You can arrange to have Jackson National automatically reallocate
money between investment portfolios periodically to keep the blend you select.
Jackson National does not currently charge for participation in this program. We
may do so in the future.
Free Look. If you cancel the contract within twenty days after receiving it (or
whatever period is required in your state), Jackson National will return the
amount your contract is worth on the day we receive your request, less any
contract enhancements. This may be more or less than your original payment. If
required by law, Jackson National will return your premium.
Advertising. From time to time, Jackson National may advertise several types of
performance for the investment portfolios.
o Total return is the overall change in the value of an investment in an
investment portfolio over a given period of time.
o Standardized average annual total return is calculated in accordance
with SEC guidelines.
o Non-standardized total return may be for periods other than those
required or may otherwise differ from standardized average annual
total return. For example, if a series has been in existence longer
than the investment portfolio, we may show non-standardized
performance for periods that begin on the inception date of the
series, rather than the inception date of the investment portfolio.
o Yield refers to the income generated by an investment over a given period
of time.
Performance will be calculated 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. Performance will
reflect the deduction of the insurance charges and may reflect the deduction of
the contract maintenance charge and withdrawal charge. The deduction of the
contract maintenance and/or the withdrawal charge would reduce the percentage
increase or make greater any percentage decrease.
Market Timing and Asset Allocation Services. Market timing and asset allocation
services offered by third parties must comply with Jackson National's
administrative systems, rules and procedures.
Modification of the Contract. Only the President, Vice President, Secretary or
Assistant Secretary of Jackson National may approve a change to or waive a
provision of the contract. Any change or waiver must be in writing. Jackson
National may change the terms of the contract in order to comply with changes in
applicable law, or otherwise as deemed necessary by Jackson National.
Year 2000 Matters. Jackson National initiated a project in 1993 to review and
analyze its computer systems to determine if they are Year 2000 compatible. This
project includes a written plan which provides for a process which ensures that
when a particular system, or software application, is determined to be
"non-compliant" the proper steps are in place to either remedy the
"non-compliance" or cease using the particular system or software.
Jackson National's plan provides for an inventory of all critical computer
systems, testing of such systems and resolution of Year 2000 issues. Jackson
National anticipates that all compliance issues will be resolved by December 31,
1999.
As of the date of this Prospectus, Jackson National has identified and made
available what it believes are the appropriate resources of hardware, people,
and dollars to ensure that the plan will be completed.
Jackson National will not conclusively know the success of its plan until the
Year 2000. Even with appropriate and diligent pursuit of a well-conceived
response plan, including testing procedures, there is no certainty that any
company will achieve complete success. Further, Jackson National's ability to
function unaffected to and through the Year 2000 may be adversely affected by
actions (or inactions) of third parties beyond its knowledge or control.
Legal Proceedings. There are no material legal proceedings, other than ordinary
routine litigation incidental to the business, to which Jackson National Life
Insurance Company, Jackson National Life Distributors, Inc., and the Jackson
National Separate Account V are parties.
Questions. If you have questions about your contract, you may call or write to
us at:
o Jackson National Life Annuity Service Center, (800) 766-4683, P.O. Box
378002, Denver, Colorado 80237-8002
o Institutional Marketing Group Service Center: (800) 777-7779, P.O. Box
30386, Lansing, Michigan 48909-9692.
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
General Information and History .............................................. 2
Services ..................................................................... 2
Purchase of Securities Being Offered ......................................... 2
Underwriters ................................................................. 2
Calculation of Performance ................................................... 3
Additional Tax Information ................................................... 8
Income Payments; Net Investment Factor .......................................16
Financial Statements .........................................................18
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
_____________________, 1999
INDIVIDUAL DEFERRED FIXED AND VARIABLE ANNUITY CONTRACTS
ISSUED BY THE JACKSON NATIONAL SEPARATE ACCOUNT V
OF JACKSON NATIONAL LIFE INSURANCE COMPANY
This Statement of Additional Information is not a prospectus. It
contains information in addition to and more detailed than set forth in the
Prospectus and should be read in conjunction with the Prospectus dated
________________, 1999. The Prospectus may be obtained from Jackson National
Life Insurance Company by writing P. O. Box 378002, Denver, Colorado 82037-8002,
or calling 1-800-766-4683.
TABLE OF CONTENTS
Page
General Information and History...............................................2
Services......................................................................2
Purchase of Securities Being Offered..........................................2
Underwriters..................................................................2
Calculation of Performance....................................................3
Additional Tax Information....................................................5
Income Payments; Net Investment Factor ......................................13
Financial Statements ........................................................15
<PAGE>
General Information and History
Jackson National Separate Account V (Separate Account) is a separate
investment account of Jackson National Life Insurance Company (Jackson
National). Jackson National is a wholly-owned subsidiary of Brooke Life
Insurance Company, and is ultimately a wholly-owned subsidiary of Prudential
Corporation plc, London, England, a life insurance company in the United
Kingdom.
Services
Jackson National has responsibility for administration of the contracts
and the Separate Account. We maintain records of the name, address, taxpayer
identification number and other pertinent information for each contract owner
and the number and type of contracts issued to each contract owner, and records
with respect to the value of each contract.
Jackson National is also the custodian of the assets of the Separate
Account.
PricewaterhouseCoopers LLP, 200 East Randolph Drive, Chicago, Illinois
60601, audits and reports on Jackson National's financial statements, including
the financial statements of the Separate Account, and performs other
professional accounting, auditing and advisory services when engaged to do so by
Jackson National.
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.
Purchase of Securities Being Offered
The contracts will be sold by licensed insurance agents in states where
the contracts may be lawfully sold. The agents will be registered
representatives of broker-dealers that are registered under the Securities
Exchange Act of 1934 and members of the National Association of Securities
Dealers, Inc. (NASD).
Underwriters
The contracts are offered continuously and are distributed by Jackson
National Life Distributors, Inc. (JNLD), 10877 Wilshire Boulevard, Suite 1550,
Los Angeles, California 90024. JNLD is a subsidiary of Jackson National.
<PAGE>
Calculation of Performance
When Jackson National advertises performance for an investment
portfolio (except the PPM America/JNL Money Market Portfolio), we will include
quotations of standardized average annual total return to facilitate comparison
with standardized average annual total return advertised by other variable
annuity separate accounts. Standardized average annual total return for an
investment portfolio will be shown for periods beginning on the date the
investment portfolio first invested in the corresponding series. We will
calculate standardized average annual total return according to the standard
methods prescribed by rules of the Securities and Exchange Commission.
Standardized average annual total return for a specific period is
calculated by taking a hypothetical $1,000 investment in an investment portfolio
at the offering on the first day of the period ("initial investment"), and
computing the ending redeemable value ("redeemable value") of that investment at
the end of the period. The redeemable value is then divided by the initial
investment and expressed as a percentage, carried to at least the nearest
hundredth of a percent. Standardized average annual total return is annualized
and reflects the deduction of the insurance charges and the contract maintenance
charge. The redeemable value also reflects the effect of any applicable
withdrawal charge that may be imposed at the end of the period. No deduction is
made for premium taxes which may be assessed by certain states.
Jackson National may also advertise non-standardized total return.
Non-standardized total return may be for periods other than those required to be
presented or may otherwise differ from standardized average annual total return.
Because the contract is designed for long term investment, non-standardized
total return that does not reflect the deduction of any applicable withdrawal
charge may be advertised. Reflecting the deduction of the withdrawal charge
decreases the level of performance advertised. Non-standardized total return may
also assume a larger initial investment which more closely approximates the size
of a typical contract.
Standardized average annual total return quotations will be current to
the last day of the calendar quarter preceding the date on which an
advertisement is submitted for publication. Both standardized average annual
total return quotations and non-standardized total return quotations will be
based on rolling calendar quarters and will cover at least periods of one, five,
and ten years, or a period covering the time the investment portfolio has been
in existence, if it has not been in existence for one of the prescribed periods.
If the corresponding series has been in existence for longer than the investment
portfolio, the non-standardized total return quotations will show the investment
performance the investment portfolio would have achieved (reduced by the
applicable charges) had it been held in the series for the period quoted.
Standardized average annual total return is not available for periods before the
investment portfolio was in existence.
Quotations of standardized average annual total return and
non-standardized total return are based upon historical earnings and will
fluctuate. Any quotation of performance should not be considered a guarantee of
future performance. Factors affecting the performance of a series include
general market conditions, operating expenses and investment management. An
owner's withdrawal value upon surrender of a contract may be more or less than
original cost.
Jackson National may advertise the current annualized yield for a
30-day period for an investment portfolio. The annualized yield of an investment
portfolio refers to the income generated by the investment portfolio over a
specified 30-day period. Because this yield is annualized, the yield generated
by an investment portfolio during the 30-day period is assumed to be generated
each 30-day period. The yield is computed by dividing the net investment income
per accumulation unit earned during the period by the price per unit on the last
day of the period, according to the following formula:
a-b 6
YIELD = 2[(---+1) -1]
cd
Where:
a = net investment income earned during the
period by the Series attributable to shares
owned by the investment portfolio.
b = expenses for the investment portfolio
accrued for the period (net of
reimbursements).
c = the average daily number of accumulation
units outstanding during the period.
d = the maximum offering price per
accumulation unit on the last day of the
period.
Net investment income will be determined in accordance with rules
established by the Securities and Exchange Commission. Accrued expenses will
include all recurring fees that are charged to all contracts.
Because of the charges and deductions imposed by the Separate Account,
the yield for an investment portfolio will be lower than the yield for the
corresponding series. The yield on amounts held in the investment portfolios
normally will fluctuate over time. Therefore, the disclosed yield for any given
period is not an indication or representation of future yields or rates of
return. An investment portfolio's actual yield will be affected by the types and
quality of portfolio securities held by the series and the series operating
expenses.
Any current yield quotations of the PPM America/JNL Money Market
Portfolio, subject to Rule 482 of the Securities Act of 1933, will consist of a
seven calendar day historical yield, carried at least to the nearest hundredth
of a percent. We may advertise yield for the Portfolio based on different time
periods, but we will accompany it with a yield quotation based on a seven day
calendar period. The PPM America/JNL Money Market Portfolio's yield will be
calculated by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one
accumulation unit at the beginning of the base period, subtracting a
hypothetical charge reflecting deductions from contracts, and dividing the net
change in account value by the value of the account at the beginning of the
period to obtain a base period return and multiplying the base period return by
(365/7). The PPM America/JNL Money Market Portfolio's effective yield is
computed similarly but includes the effect of assumed compounding on an
annualized basis of the current yield quotations of the Portfolio.
The PPM America/JNL Money Market Portfolio's yield and effective yield
will fluctuate daily. Actual yields will depend on factors such as the type of
instruments in the series' portfolio, portfolio quality and average maturity,
changes in interest rates, and the series' expenses. Although the investment
portfolio determines its yield on the basis of a seven calendar day period, it
may use a different time period on occasion. The yield quotes may reflect the
expense limitations described in the series' Prospectus or Statement of
Additional Information. There is no assurance that the yields quoted on any
given occasion will be maintained for any period of time and there is no
guarantee that the net asset values will remain constant. It should be noted
that neither a contract owner's investment in the PPM America/JNL Money Market
Portfolio nor that Portfolio's investment in the PPM America/JNL Money Market
Series, is guaranteed or insured. Yields of other money market funds may not be
comparable if a different base or another method of calculation is used.
Additional Tax Information
NOTE: INFORMATION CONTAINED HEREIN SHOULD NOT BE SUBSTITUTED FOR THE
ADVICE OF A PERSONAL TAX ADVISER. JACKSON NATIONAL DOES NOT MAKE ANY GUARANTEE
REGARDING THE TAX STATUS OF ANY CONTRACT OR ANY TRANSACTION INVOLVING 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 IN THIS PROSPECTUS MAY BE APPLICABLE IN CERTAIN
SITUATIONS. MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE
OR OTHER TAX LAWS.
General
Section 72 of the Internal Revenue Code of 1986, as amended (the
"Code"), governs taxation of annuities in general. An individual owner is not
taxed on increases in the value of a contract until distribution occurs, either
in the form of a withdrawal or as annuity payments under the annuity option
elected. For a withdrawal received as a total surrender (total redemption or a
death benefit), the recipient is taxed on the portion of the payment that
exceeds the cost basis of the contract. For a payment received as a partial
withdrawal, federal tax liability is determined on a last-in, first-out basis,
meaning taxable income is withdrawn before the cost basis of the contract is
withdrawn. For contracts issued in connection with non-qualified plans, the cost
basis is generally the premiums, while for contracts issued in connection with
qualified plans there may be no cost basis. The taxable portion of a withdrawal
is taxed at ordinary income tax rates. Tax penalties may also apply.
For annuity payments, a portion of each payment in excess of an
exclusion amount is includable 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 certain 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 amounts
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 distributions.
Jackson National is taxed as a life insurance company under the Code.
For federal income tax purposes, the Separate Account is not a separate entity
from Jackson National and its operations form a part of Jackson National.
Withholding Tax on Distributions
The Code generally requires Jackson National (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a contract. For "eligible rollover distributions" from contracts
issued under certain types of qualified plans, 20% of the distribution must be
withheld, unless the payee elects to have the distribution "rolled over" to
another eligible plan in a direct transfer. This requirement is mandatory and
cannot be waived by the owner.
An "eligible rollover distribution" is the estimated taxable portion of
any amount received by a covered employee from a plan qualified under Section
401(a) or 403(a) of the Code, or from a tax sheltered annuity qualified under
Section 403(b) of the Code (other than (1) a series of substantially equal
annuity payments for the life (or life expectancy) of the employee, or joint
lives (or joint life expectancies) of the employee, and his or her designated
beneficiary, or for a specified period of ten years or more; and (2) minimum
distributions required to be made under the Code). Failure to "rollover" the
entire amount of an eligible rollover distribution (including an amount equal to
the 20% portion of the distribution that was withheld) could have adverse tax
consequences, including the imposition of a penalty tax on premature
withdrawals, described later in this section.
Withdrawals or distributions from a contract other than eligible
rollover distributions are also subject to withholding on the estimated taxable
portion of the distribution, but the owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic
payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.
Generally, the amount of any payment of interest to a non-resident
alien of the United States shall be subject to withholding of a tax equal to
thirty (30%) percent of such amount or, if applicable, a lower treaty rate. A
payment may not be subject to withholding where the recipient sufficiently
establishes that such payment is effectively connected to the recipient's
conduct of a trade or business in the United States and such payment is included
in recipient's gross income.
Diversification -- Separate Account Investments
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 adequately
diversified, in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the contract as
an annuity contract would result in 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 contracts meet the diversification
requirements if, as of the close of each calendar quarter, the underlying assets
meet the diversification standards for a regulated investment company, and no
more than 55% of the total assets consist of cash, cash items, U.S. government
securities and securities of other regulated investment companies.
The Treasury Department has issued Regulations establishing
diversification requirements for the investment portfolios underlying variable
contracts. 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.
Jackson National intends that each series of the JNL Series Trust will
be managed by its respective investment adviser 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
contract owner control of the investments of the Separate Account will cause the
contract owner to be treated as the owner of the assets of the Separate Account,
thereby resulting in the loss of favorable tax treatment of 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 owner
being retroactively determined to be the owner of the assets of the Separate
Account.
Due to the uncertainty in this area, Jackson National reserves the
right to modify the contract in an attempt to maintain favorable tax treatment.
Multiple Contracts
The Code provides that multiple 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
multiple contracts. Owners should consult a tax adviser prior to purchasing more
than one 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 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 contracts held by a trust or other entity as an
agent for a natural person nor to contracts held by certain 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 have tax consequences, and
may also be prohibited by ERISA in some circumstances. Owners should, therefore,
consult competent legal advisers should they wish to assign or pledge their
contracts.
Qualified Plans
The contracts offered by the Prospectus are designed to be suitable for
use under various types of qualified plans. Taxation of owners in each qualified
plan varies with the type of plan and terms and conditions of each specific
plan. Owners, annuitants and beneficiaries are cautioned that benefits under a
qualified plan may be subject to the terms and conditions of the plan,
regardless of the terms and conditions of the contracts issued to fund the plan.
Tax Treatment of Withdrawals
Non-Qualified Plans
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the contract value exceeds the aggregate Premiums
made, any amount withdrawn not in the form of an annuity payment 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 included in a
taxpayer's gross income. Section 72 further provides that a 10% penalty will
apply to the income portion of any distribution. The penalty is not imposed on
amounts received: (1) after the taxpayer reaches 59 1/2; (2) upon the death of
the owner; (3) if the taxpayer is totally disabled as defined in Section
72(m)(7) of the Code; (4) in a series of substantially equal periodic payments
made at least annually for the life (or life expectancy) of the taxpayer or for
the joint lives (or joint life expectancies) of the taxpayer and his
beneficiary; (5) under an immediate annuity; or (6) which are allocable to
premium payments made prior to August 14, 1982.
Qualified Plans
In the case of a withdrawal under a qualified contract, a ratable
portion of the amount received is taxable, generally based on the ratio of the
individual's cost basis to the individual's total accrued benefit under the
retirement plan. Special tax rules may be available for certain distributions
from a qualified contract. 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 Sections 401 (H.R. 10 and
Corporate Pension and Profit Sharing plans), 403(b) (tax-sheltered annuities)
and 408 and 408A (IRAs). To the extent amounts are not included 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: (1) if
distribution is made on or after the date on which the owner or annuitant (as
applicable) reaches age 59 1/2; (2) distributions following the death or
disability of the owner or annuitant (as applicable) (for this purpose
"disability" is defined in Section 72(m)(7) of the Code); (3) after separation
from service, 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 annuitant (as applicable) or the joint lives (or
joint life expectancies) of such owner or annuitant (as applicable) and his or
her designated beneficiary; (4) distributions to an owner or annuitant (as
applicable) who has separated from service after he has attained age 55; (5)
distributions made to the owner or annuitant (as applicable) to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the owner or annuitant (as applicable) for amounts paid during
the taxable year for medical care; (6) distributions made to an alternate payee
pursuant to a qualified domestic relations order; (7) distributions from an IRA
for the purchase of medical insurance (as described in Section 213(d)(1)(D) of
the Code) for the contract owner or annuitant (as applicable) and his or her
spouse and dependents if the contract owner or annuitant (as applicable) has
received unemployment compensation for at least 12 weeks (this exception will no
longer apply after the contract owner or annuitant (as applicable) has been
re-employed for at least 60 days); (8) distributions from an Individual
Retirement Annuity made to the owner or annuitant (as applicable) 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 or annuitant (as
applicable) for the taxable year; and (9) distributions from an Individual
Retirement Annuity made to the owner or annuitant (as applicable) which are
qualified first time home buyer distributions (as defined in Section 72(t)(8) of
the Code). The exception stated in items (4) and (6) above do not apply in the
case of an IRA. The exception stated in (3) above applies to an IRA without the
requirement that there be a separation from service.
Withdrawals of amounts attributable to contributions made pursuant to a
salary reduction agreement (in accordance with Section 403(b)(11) of the Code)
are limited to the following: when the owner attains age 59 1/2, separates from
services, dies, becomes disabled (within the meaning of Section 72(m)(7) of the
Code), or in the case of hardship. Hardship withdrawals do not include any
earnings on salary reduction contributions. These limitations on withdrawals
apply to: (1) salary reduction contributions made after December 31, 1988; (2)
income attributable to such contributions; and (3) income attributable to
amounts held as of December 31, 1988. The limitations on withdrawals do not
affect rollovers or exchanges between certain qualified plans. Tax penalties may
also apply. While the foregoing limitations only apply to certain contracts
issued in connection with Section 403(b) qualified plans, all owners should seek
competent tax advice regarding any withdrawals or distributions.
The taxable portion of a withdrawal or distribution from contracts
issued under certain types of plans may, under some circumstances, be "rolled
over" into another eligible plan so as to continue to defer income tax on the
taxable portion. Effective January 1, 1993, such treatment is available for an
"eligible rollover distribution" made by certain types of plans (as described
above under "Taxes -- Withholding Tax on Distributions") that is transferred
within 60 days of receipt into another eligible plan or an IRA, or an individual
retirement account described in section 408(a) of the Code. Plans making such
eligible rollover distributions are also required, with some exceptions
specified in the Code, to provide for a direct transfer of the distribution to
the transferee plan designated by the recipient.
Amounts received from IRAs may also be rolled over into other IRAs,
individual retirement accounts or certain other plans, subject to limitations
set forth in the Code.
Generally, distributions from a qualified plan must commence no later
than April 1 of the calendar year following the year in which the employee
attains the later of age 70 1/2 or the date of retirement. In the case of an
IRA, distribution must commence no later than April 1 of the calendar year
following the year in which the owner attains age 70 1/2. Required distributions
must be over a period not exceeding the life or 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.
Types of Qualified Plans
The following are general descriptions of the types of qualified plans
with which the contracts may be used. Such descriptions are not exhaustive and
are for general information purposes only. The tax rules regarding qualified
plans are very complex and will have differing applications depending on
individual facts and circumstances. Each purchaser should obtain competent tax
advice prior to purchasing a contract issued under a qualified plan.
Contracts issued pursuant to qualified plans include special provisions
restricting contract provisions that may otherwise be available and described in
this Prospectus. Generally, contracts issued pursuant to qualified plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from qualified plan contracts.
(a) H.R. 10 Plans
Section 401 of the Code permits self-employed individuals to
establish qualified plans for themselves and their employees, commonly
referred to as "H.R. 10" or "Keogh" Plans. Contributions made to the
plan for the benefit of the employees will not be included in the gross
income of the employees until distributed from the plan. The tax
consequences to owners may vary depending upon the particular plan
design. However, the Code places limitations and restrictions on all
plans on such items as: amounts of allowable contributions; form,
manner and timing of distributions; transferability of benefits;
vesting and non-forfeitability of interests; nondiscrimination in
eligibility and participation; and the tax treatment of distributions,
withdrawals and surrenders. Purchasers of contracts for use with an
H.R. 10 Plan should obtain competent tax advice as to the tax treatment
and suitability of such an investment.
(b) Tax-Sheltered Annuities
Section 403(b) of the Code permits the purchase of
"tax-sheltered annuities" by public schools and certain charitable,
educational and scientific organizations described in Section 501(c)
(3) of the Code. These qualifying employers may make contributions to
the contracts for the benefit of their employees. Such contributions
are not included in the gross income of the employee until the employee
receives distributions from the contract. The amount of contributions
to the tax-sheltered annuity is limited to certain maximums imposed by
the Code. Furthermore, the Code sets forth additional restrictions
governing such items as transferability, distributions,
non-discrimination and withdrawals. Employee loans are not allowed
under these contracts. Any employee should obtain competent tax advice
as to the tax treatment and suitability of such an investment.
(c) Individual Retirement Annuities
Section 408(b) of the Code permits eligible individuals to
contribute to an individual retirement program known as an "Individual
Retirement Annuity" ("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. 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 IRAs should obtain competent tax advice
as to the tax treatment and suitability of such an investment.
(d) Corporate Pension and Profit-Sharing Plans
Sections 401(a) and 401(k) of the Code permit corporate
employers to establish various types of retirement plans for employees.
These retirement plans may permit the purchase of the contracts to
provide benefits under the plan. Contributions to the plan for the
benefit of employees will not be included in the gross income of the
employee until distributed from the plan. The tax consequences to
owners may vary depending upon the particular plan design. However, the
Code places limitations on all plans on such items as amount of
allowable contributions; form, manner and timing of distributions;
vesting and non-forfeitability of interests; nondiscrimination in
eligibility and participation; and the tax treatment of distributions,
transferability of benefits, withdrawals and surrenders. Purchasers of
contracts for use with corporate pension or profit sharing plans should
obtain competent tax advice as to the tax treatment and suitability of
such an investment.
(e) Non-Qualified Deferred Compensation Plans -- Section 457
Under Section 457 of the Code, governmental and certain other
tax-exempt employers may establish, for the benefit of their employees,
deferred compensation plans which may invest in annuity contracts. The
Code, as in the case of qualified plans, establishes limitations and
restrictions on eligibility, contributions and distributions. Under
these plans, contributions made for the benefit of the employees will
not be included in the employees' gross income until distributed from
the plan.
(f) Roth IRAs
Beginning in 1998, individuals may purchase a new type of
non-deductible IRA, known as a Roth IRA. Purchase payments for a Roth
IRA are limited to a maximum of $2,000 per year. Lower maximum
limitations apply to individuals with adjusted gross incomes between
$95,000 and $110,000 in the case of single taxpayers, between $150,000
and $160,000 in the case of married taxpayers filing joint returns, and
between $0 and $10,000 in the case of married taxpayers filing
separately. An overall $2,000 annual limitation continues to apply to
all of a taxpayer's IRA contributions, including Roth IRAs and non-Roth
IRAs.
Qualified distributions from Roth IRAs are free from federal
income tax. A qualified distribution requires that the individual has
held the Roth IRA for at least five years and, in addition, that the
distribution is made either after the individual reaches age 59 1/2, on
the individual's death or disability, or as a qualified first-time home
purchase, subject to a $10,000 lifetime maximum, for the individual, a
spouse, child, grandchild, or ancestor. Any distribution which is not a
qualified distribution is taxable to the extent of earnings in the
distribution. Distributions are treated as made from contributions
first and therefore no distributions are taxable until distributions
exceed the amount of contributions to the Roth IRA. The 10% penalty tax
and the regular IRA exceptions to the 10% penalty tax apply to taxable
distributions from a Roth IRA.
Amounts may be rolled over from one Roth IRA to another Roth
IRA. Furthermore, an individual may make a rollover contribution from a
non-Roth IRA to a Roth IRA, unless the individual has adjusted gross
income over $100,000 or the individual is a married taxpayer filing a
separate return. The individual must pay tax on any portion of the IRA
being rolled over that represents income or a previously deductible IRA
contribution. However, for rollovers in 1998, the individual may pay
that tax ratably over the four taxable year periods beginning with the
tax year 1998. There are no similar limitations on rollovers from a
Roth IRA to another Roth IRA.
Income Payments; Net Investment Factor
See "Income Payments (The Income Phase)" in the Prospectus.
The net investment factor is an index applied to measure the net
investment performance of an investment portfolio from one business day to the
next. Since the net investment factor may be greater or less than or equal to
one, and the factor that offsets the 3% investment rate assumed is slightly less
than one, the value of an annuity unit (which changes with the product of that
factor) and the net investment may increase, decrease or remain the same.
The net investment factor for any investment portfolio for any business
day is determined by dividing (a) by (b) and then subtracting (c) from the
result where:
(a) is the net result of:
(1) the net asset value of a series share held in the
investment portfolio determined as of the end of the
business day, plus
(2) the per share amount of any dividend or other
distribution declared by the series if the
"ex-dividend" date occurs on the business day, plus
or minus
(3) a per share credit or charge with respect to any
taxes paid or reserved for by Jackson National which
are determined by Jackson National to be attributable
to the operation of the investment portfolio (no
federal income taxes are applicable under present
law);
(b) is the net asset value of the series share held in the
investment portfolio determined as of the end of the preceding
business day; and
(c) is the contract insurance charges, optional enhanced death
benefit charge and any other charge or fee as applicable.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, in the City of Lansing, and State of
Michigan, on this 15th day of January, 1999.
Jackson National Separate Account V
-----------------------------------
(Registrant)
By: Jackson National Life Insurance Company
By: /s/ Andrew B. Hopping
-----------------------
by Thomas J. Meyer*
Andrew B. Hopping
Executive Vice President -
Chief Financial Officer and Director
Jackson National Life Insurance Company
---------------------------------------
(Depositor)
By: /s/ Andrew B. Hopping
-----------------------
by Thomas J. Meyer*
Andrew B. Hopping
Executive Vice President -
Chief Financial Officer and Director
As required by the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
/s/ Peter Davis by Thomas J. Meyer* January 15, 1999
- -------------------------------------------- ----------------
Peter Davis, Chairman and Director
/s/ Robert P. Saltzman by Thomas J. Meyer* January 15, 1999
- -------------------------------------------- ----------------
Robert P. Saltzman, President, Chief
Executive Officer and Director
/s/ Clark P. Manning by Thomas J. Meyer* January 15, 1999
- -------------------------------------------- ----------------
Clark P. Manning, Chief Operating
Officer and Director
/s/ Andrew B. Hopping by Thomas J. Meyer* January 15, 1999
- -------------------------------------------- ----------------
Andrew B. Hopping, Executive Vice President -
Chief Financial Officer and Director
/s/ Thomas J. Meyer January 15, 1999
- -------------------------------------------- ----------------
* Thomas J. Meyer, Attorney-in-Fact
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned as directors and/or
officers of JACKSON NATIONAL LIFE INSURANCE COMPANY, a Michigan corporation,
which has filed or will file with the Securities and Exchange Commission under
the provisions of the Securities Act of 1933 and Investment Company Act of 1940,
as amended, various Registration Statements and amendments thereto for the
registration under said Acts of the sale of Individual Deferred Fixed and
Variable Annuity Contracts in connection with the Jackson National Separate
Account V and other separate accounts of Jackson National Life Insurance
Company, hereby constitute and appoint Andrew B. Hopping, Thomas J. Meyer and
Robert P. Saltzman, his attorney, with full power of substitution and
resubstitution, for and in his name, place and stead, in any and all capacities
to approve and sign such Registration Statements and any and all amendments
thereto, with power where appropriate to affix the corporate seal of said
corporation thereto and to attest with seal and to file the same, with all
exhibits thereto and other granting unto said attorneys, each of them, full
power and authority to do and perform all and every act and thing requisite to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming that which said attorneys, or any of them, may lawfully do or cause
to be done by virtue hereof. This instrument may be executed in one or more
counterparts.
IN WITNESS WHEREOF, the undersigned have herewith set their names as of the
dates set forth below.
/s/ Peter Davis 10/19/98
- -------------------------------------------- ----------------
Peter Davis, Director Date
/s/ Robert P. Saltzman 10/13/98
- -------------------------------------------- ----------------
Robert P. Saltzman, President, Chief Date
Executive Officer and Director
/s/ Clark P. Manning 10/12/98
- -------------------------------------------- ----------------
Clark P. Manning, Chief Operating Officer Date
and Director
/s/ Andrew B. Hopping 10/12/98
- -------------------------------------------- ----------------
Andrew B. Hopping, Executive Vice President, Date
Chief Financial Officer and Director
<PAGE>
EXHIBIT LIST
Exhibit
Number Description
1. Resolution of Depositor's Board of Directors
authorizing the establishment of the Registrant,
attached hereto as EX-99.B1.
4.a. Form of the Perspective ADDvantage Fixed and Variable
Annuity Contract, attached hereto as EX-99.B4-a.
b. Form of the Perspective ADDvantage Fixed and Variable
Annuity Contract (Unisex Tables), attached hereto as
EX-99.B4-b.
6.a. Articles of Incorporation of Depositor, attached
hereto as EX-99.B6-a.
b. Bylaws of Depositor, attached hereto as EX-99.B6-b.
CERTIFICATE OF SECRETARY
JACKSON NATIONAL LIFE INSURANCE COMPANY
The undersigned, being the duly elected, qualified and acting Secretary of
Jackson National Life Insurance Company, a Michigan corporation ("JNL"), hereby
certifies that the attached is a full, true and correct copy of resolutions duly
adopted by the Board of Directors of JNL at a meeting held on the 25th day of
September, 1998 at which a quorum was present; and that such resolutions have
not been altered or repealed and remain in full force and effect as of the date
hereof.
WHEREAS, Section 500.925 of the Michigan Insurance Laws permits a
domestic life insurance company to establish one or more separate
accounts;
WHEREAS, it is desired that the Company create such a separate
account to house certain of its variable annuity products;
NOW, THEREFORE, BE IT RESOLVED, that a separate account referred
to herein as "Separate Account V" is hereby established:
FURTHER RESOLVED that the assets of Separate Account V shall be
derived solely from (a) sale of variable annuity products, (b)
funds corresponding to dividend accumulation with respect to
investment of such assets, and (c) advances made by the Company in
connection with operation of Separate Account V;
FURTHER RESOLVED that this Company shall maintain in Separate
Account V assets with a fair market value at least equal to the
statutory valuation reserves for the variable annuity policies;
FURTHER RESOLVED that any two of the President, Vice Presidents
and/or the Treasurer of the Company (the "Officers") be, and each
of them hereby is authorized in his or her discretion, as it may
deem appropriate from time to time, in accordance with applicable
laws and regulations (a) to divide Separate Account V into
divisions and sub-divisions with each division or sub-division
investing in shares of designated classes of designated investment
companies or other appropriate securities, (b) to modify or
eliminate any such divisions or sub-divisions, (c) to designate
further any division or sub-division thereof and (d) to change the
designation of Separate Account V to another designation;
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized to invest cash from the Company's
general account in Separate Account V or in any division thereof
as may be deemed necessary or appropriate to facilitate the
commencement of the operations of Separate Account V or to meet
any minimum capital requirements under the Investment Company Act
of 1940, as amended, and to transfer cash or securities from time
to time between the Company's general account and Separate Account
V as deemed necessary or appropriate so long as such transfers are
not prohibited by law and are consistent with the terms of the
variable annuity policies issued by the Company providing for
allocations to Separate Account V;
FURTHER RESOLVED that the income, gains and losses (whether or not
realized) from assets allocated to Separate Account V shall, in
accordance with any variable annuity policies issued by the
Company providing for allocations to Separate Account V, be
credited to or charged against Separate Account V without regard
to the other income, gains or losses of the Company;
FURTHER RESOLVED that authority is hereby delegated to the
President of the Company to adopt procedures providing for, among
other things, criteria by which the Company shall provide for a
pass-through of voting rights to the owners of variable annuity
policies issued by the Company, providing for allocation to
Separate Account V with respect to the shares of any investment
companies which are held in Separate Account V.
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized and directed to prepare and execute any
necessary agreements to enable Separate Account V to invest or
reinvest the assets of Separate Account V in securities issued by
investment companies registered under the Investment Company Act
of 1940, as amended; or other appropriate securities as the
Officers of the Company may designate pursuant to the provisions
of the variable annuity policies issued by the Company providing
for allocations to Separate Account V;
FURTHER RESOLVED that the fiscal year of Separate Account V shall
end on the 31st day of December each year;
FURTHER RESOLVED that the Company may register under the
Securities Act of 1933 variable annuity policies, or units of
interest thereunder, under which amounts will be allocated by the
Company to Separate Account V to support reserves for such
policies and, in connection therewith, the Officers of the Company
be, and each of them hereby is, authorized to prepare, execute and
file with the Securities and Exchange Commission, in the name and
on behalf of the Company, registration statements under the
Securities Act of 1933, including prospectuses, supplements,
exhibits and other documents relating thereto, and amendments to
the foregoing, in such form as the Officer executing the same may
deem necessary or appropriate;
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized to take all actions necessary to
register Separate Account V as a unit investment trust under the
Investment Company Act of 1940, as amended, and to take such
related actions as they deem necessary and appropriate to carry
out the foregoing;
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized to prepare, execute and file with the
Securities and Exchange Commission, applications and amendments
thereto for such exemptions from or orders under the Investment
Company Act of 1940, as amended, and the Securities Act of 1933,
and to request from the Securities and Exchange Commission no
action and interpretative letters as they may from time to time
deem necessary or desirable.
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized to prepare, execute and file all
periodic reports required under the Investment Company Act of
1940, as amended, and the Securities Exchange Act of 1934.
FURTHER RESOLVED that the President of the Company, or such person
as is designated by him, is hereby appointed as agent for service
under any such registration statement and is duly authorized to
receive communications and notices from the Securities and
Exchange Commission with respect thereto, and to exercise powers
given to such agent by the Securities Act of 1933 and the Rules
thereunder and any other necessary Acts.
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized to effect in the name and on behalf of
the Company, all such registrations, filings and qualifications
under blue sky or other applicable securities laws and regulations
and under insurance securities laws and insurance laws and
regulations of such states and other jurisdictions as they may
deem necessary or appropriate, with respect to the Company, and
with respect to any variable annuity policies under which amounts
will be allocated by the Company to Separate Account V to support
reserves for such policies; such authorization shall include
registration, filing and qualification of the Company and of said
policies, as well as registration, filing and qualification of
officers, employees and agents of the Company as brokers, dealers,
agents, salesmen or otherwise; and such authorization shall also
include, in connection therewith, authority to prepare, execute,
acknowledge and file all such applications, applications for
exemptions, certificates, affidavits, covenants, consents to
service of process and other instruments, and to take all such
action as the Officer executing the same or taking such action may
deem necessary or desirable.
FURTHER RESOLVED that the Officers of the Company be, and each of
them hereby is, authorized to execute and deliver all such
documents and papers and to do or cause to be done all such acts
and things as they may deem necessary or desirable to carry out
the foregoing resolutions and the intent and purpose thereof.
Dated: January 14, 1999 /s/ Thomas J. Meyer
-------------------
Thomas J. Meyer, Secretary
JACKSON NATIONAL LIFE INSURANCE COMPANY
5901 Executive Drive
Lansing, Michigan 48911
A Stock Company [COMPANY LOGO]
("the Company" or Jackson National)
Thank you for choosing Jackson National. If You have any questions,
please contact the Company at the Service Center address and telephone number
shown on the Contract Data Page.
THIS ANNUITY CONTRACT OFFERED BY JACKSON NATIONAL IS A CONTRACT
BETWEEN YOU, THE OWNER, AND JACKSON NATIONAL, AN INSURANCE COMPANY.
READ YOUR CONTRACT CAREFULLY.
AMOUNTS IN THE SEPARATE ACCOUNT(S) ARE NOT GUARANTEED AND MAY INCREASE OR
DECREASE BASED UPON THE INVESTMENT EXPERIENCE OF THE INVESTMENT PORTFOLIO(S).
THE GUARANTEED OPTIONS ARE SUBJECT TO AN EXCESS INTEREST ADJUSTMENT WHICH MAY
INCREASE OR DECREASE AMOUNTS WITHDRAWN, BUT THE GUARANTEED ACCOUNT CONTRACT
VALUE WILL NEVER DECREASE TO LESS THAN THE GUARANTEED ACCOUNT MINIMUM VALUE.
- --------------------------------------------------------------------------------
NOTICE OF TWENTY-DAY RIGHT TO EXAMINE POLICY
YOU MAY RETURN THIS CONTRACT TO THE SELLING PRODUCER OR JACKSON NATIONAL WITHIN
20 DAYS AFTER YOU RECEIVE IT. THE COMPANY WILL REFUND THE CONTRACT VALUE LESS
ANY CONTRACT ENHANCEMENT FOR THE BUSINESS DAY ON WHICH THE CONTRACT IS RECEIVED
AT ITS SERVICE CENTER. UPON SUCH REFUND, THE CONTRACT SHALL BE VOID.
- --------------------------------------------------------------------------------
INDIVIDUAL DEFERRED VARIABLE AND This Contract is signed by the Company
FIXED ANNUITY CONTRACT (FLEXIBLE /s/ Thomas J. Meyer
PREMIUM). DEATH BENEFIT. Secretary
NON-PARTICIPATING. /s/ Robert P. Salztman
President
<PAGE>
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TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Provision Page Number
--------- -----------
CONTRACT DATA PAGE i
DEFINITIONS 1
GENERAL PROVISIONS 4
ACCUMULATION PROVISIONS 7
WITHDRAWAL PROVISIONS 10
DEATH BENEFIT PROVISIONS 11
INCOME PROVISIONS 13
TABLE OF INCOME OPTIONS 16
<PAGE>
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CONTRACT DATA PAGE
- --------------------------------------------------------------------------------
Contract Number:
Owner:
Joint Owner:
Annuitant:
Joint Annuitant:
Issue Date:
Issue State:
Initial Premium Amount: $
Annual Contract Maintenance Charge: An Annual Contract Maintenance Charge of
no more than $35.00 will be deducted
annually from Your Contract Value.
Death Benefit: You have elected the Death Benefit.
Optional Enhanced Death If You selected the Optional Enhanced
Benefit Charge: Death Benefit, this charge, on an annual
basis, equals .15% of the daily net
asset value of the Investment
Portfolios.
Insurance Charge: This charge, on an annual basis, equals
1.50% of the daily net asset value of
the Investment Portfolios.
Beneficiary(ies):
<PAGE>
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CONTRACT DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Premium(s): Premiums are flexible. This means that
the Owner may change the amounts,
frequency or timing of Premiums. The
initial Premium must be at least $5,000
for Nonqualified Plan Contracts and
$2,000 for Qualified Plan Contracts.
Subsequent Premiums must be at least
$500 ($50 if made in connection with an
automatic payment plan). Total Premiums
under a contract may not exceed
$1,000,000. The Company may waive the
minimums or maximums at any time.
The Owner may allocate Premiums among
the Guaranteed Options and the
Investment Portfolios. Such election may
be made in any percent from 0% to 100%
in whole percentages, provided that the
minimum Premium amount that may be
allocated to a Guaranteed Option or an
Investment Portfolio is $100.
Contract Enhancement: The Company will add a credit to the
Contract Value at the time Premium is
applied to the Contract. This is 4% of
each Premium applied. Please note,
Premium payments made within 12 months
of a withdrawal or distribution from
this Contract will not receive a
Contract Enhancement. (See Contract
Enhancement provision in the
Accumulation Provisions.)
Transfer/Transfer Charge: A fee of $25.00 is charged for each
transfer in excess of 15 in a Contract
year.
FROM INVESTMENT PORTFOLIO TO INVESTMENT
PORTFOLIO. Both prior to and after the
Income Date, You may transfer all or a
portion of Your Contract Value in one
Investment Portfolio to another
Investment Portfolio, subject to
Contract provisions.
FROM INVESTMENT PORTFOLIO TO A
GUARANTEED OPTION. Both prior to and
after the Income Date, You may transfer
all or a portion of Your Investment
Portfolio(s) to a Guaranteed Option(s).
FROM A GUARANTEED OPTION TO A GUARANTEED
OPTION OR INVESTMENT PORTFOLIO. Prior to
the Income Date, other than transfers
made during the 30-day period after the
end of a maturing Guaranteed Option
period, (see Guaranteed Options under
Accumulation Provisions), transfers of
amounts between Guaranteed Options or
from a Guaranteed Option to an
Investment Portfolio may be subject to
an Excess Interest Adjustment. Please
note that transfers are not allowed from
the Guaranteed Option after the Income
Date.
<PAGE>
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CONTRACT DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Withdrawal Charge: The Company may assess a Withdrawal
Charge upon withdrawal of the Contract
Value, in whole or in part, as follows:
Completed Years Since Percent of
Receipt of Premium Premium
------------------ -----------------
0 8.5%
1 8.0%
2 7.0%
3 6.0%
4 5.0%
5 4.0%
6 3.0%
7 2.0%
8 1.0%
9 0%
This charge will apply to annuitizations
which occur within one year of the Issue
Date.
A specified amount of the Withdrawal
Value may be withdrawn free of
Withdrawal Charges each Contract Year
(see Withdrawal Provisions).
<PAGE>
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CONTRACT DATA PAGE (CONT'D)
- --------------------------------------------------------------------------------
Contract Options: GUARANTEED OPTIONS
Guaranteed Options may be elected for
periods of 1 and 5 years.
INVESTMENT PORTFOLIOS
Investment Portfolios available on the
Issue Date of the Contract:
JNL Aggressive Growth
JNL Global Equities
JNL/Alliance Growth
JNL/First Trust The DowTM Target 10
JNL/JPM International & Emerging Markets
JNL/PIMCO Total Return Bond
Goldman Sachs/JNL Growth & Income
Lazard/JNL Small Cap Value
Lazard/JNL Mid Cap Value
PPM America/JNL Money Market
Salomon Brothers/JNL Balanced
Salomon Brothers/JNL Global Bond
Salomon Brothers/JNL High Yield Bond
T. Rowe Price/JNL International Equity
Investment
T. Rowe Price/JNL Mid-Cap Growth
JNL/S&P Conservative Growth II
JNL/S&P Moderate Growth II
JNL/S&P Aggressive Growth II
JNL/S&P Very Aggressive Growth II
JNL/S&P Equity Growth II
JNL/S&P Equity Aggressive Growth II
Periodically the Company will make
available additional Investment
Portfolios.
<PAGE>
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CONTRACT DATA PAGE (CONT'D)
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"S&P 500(R)" is a trademark of the McGraw Hill Companies, Inc. and has been
licensed for use by the Company. This annuity is not sponsored, endorsed, sold
or promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the annuity.
This Contract is not sponsored, endorsed, sold or promoted by Dow Jones. Dow
Jones makes no representation or warranty, express or implied, to the owners of
this Contract or any member of the public regarding the advisability of
purchasing this Contract. Dow Jones' only relationship to Jackson National Life
Insurance Company (JNL) is the licensing of certain copyrights, trademarks,
servicemarks and service names of Dow Jones. Dow Jones has no obligation to take
the needs of JNL or the owners of this Contract into consideration in
determining, composing or calculating the Dow Jones Industrial AverageSM. Dow
Jones is not responsible for and has not participated in the determination of
the terms and conditions of this Contract to be issued, including the pricing or
the amount payable under the Contract. Dow Jones has no obligation or liability
in connection with the administration or marketing of this Contract.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE DOW
JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN AND DOW JONES SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW JONES
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY JNL,
OWNERS OF THIS CONTRACT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW
JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING
ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THERE ARE NO
THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN DOW JONES
AND JNL.
- --------------------------------------------------------------------------------
Jackson National Life Service Center: Express Mail:
P.O. Box 378002 8055 E. Tufts Ave., 2nd Floor
Denver, CO 80237 Denver, CO 80237
800/766-4683
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------
ANNUITANT. The natural person on whose life the income benefit for this Contract
is based. The Owner may change the Annuitant at any time prior to the Income
Date, unless the Owner is not a natural person, which could include but not be
limited to a business or a trust.
BENEFICIARY(IES). The person(s) designated to receive any Contract benefits upon
the death of the Owner.
BUSINESS DAY. Each day when both the Company's Service Center and the New York
Stock Exchange are open for business. The Company Business Day closes when the
New York Stock Exchange closes, usually 4:00 p.m. Eastern time.
COMPANION CONTRACT. Any contract made available and issued to You by the Company
into which You may exchange this Contract.
CONTRACT ENHANCEMENT. An amount added to the Contract Value at the time Premium
is applied. Please note that Premium payments made within 12 months of a
withdrawal or distribution from this Contract will not receive a Contract
Enhancement.
CONTRACT OPTION. One of the options offered by the Company under this Contract.
(Each Contract Option is more fully explained in the Accumulation Provisions).
CONTRACT VALUE. The sum of the Separate Account Contract Value and the
Guaranteed Account Contract Value.
EARNINGS. An amount equal to the Contract Value, less any Contract Enhancements
applied during the previous 12 months, less total Remaining Premium.
EXCESS INTEREST ADJUSTMENT. An adjustment applied, with certain exceptions, to
amounts withdrawn or transferred from the Guaranteed Option(s) prior to the end
of the Guaranteed Option period.
GUARANTEED ACCOUNT. The Guaranteed Account consists of the Guaranteed Options
under this Contract. Allocations made to the Guaranteed Account are invested in
the general account of the Company. The general account is made up of all
general assets of the Company, other than those in the Separate Account, and
other segregated asset accounts.
GUARANTEED ACCOUNT CONTRACT VALUE. The sum of the Guaranteed Option Values under
this Contract.
GUARANTEED ACCOUNT MINIMUM VALUE. The sum of the Guaranteed Option Minimum
Value(s) under this Contract.
GUARANTEED OPTION(S). A Contract Option within the Guaranteed Account which
earns a declared rate of interest for a specified number of years and which may
be subject to an Excess Interest Adjustment.
<PAGE>
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DEFINITIONS (CONT'D)
- --------------------------------------------------------------------------------
GUARANTEED OPTION MINIMUM VALUE. The sum of Premiums, Contract Enhancements, and
any subsequent amounts allocated to a Guaranteed Option, less any amounts
withdrawn for transfers, charges, deductions or withdrawals, accumulated at 3%,
less any Withdrawal Charges, any Contract Enhancements applied that resulted
from Premium paid within the previous 12 month period, and any premium tax due.
GUARANTEED OPTION VALUE. The Guaranteed Option Value is: (1) the Premium,
Contract Enhancements, and any subsequent amounts allocated to the Guaranteed
Option period; plus (2) any interest credited; less (3) any amounts canceled or
withdrawn for transfers, charges, deductions, or withdrawals.
INCOME DATE. The date on which income payments are to begin.
INVESTMENT PORTFOLIO. A Contract Option within the Separate Account. Values in
the Investment Portfolios will go up or down depending on the performance of the
portfolios. (The Investment Portfolios available at issue are shown on the
Contract Data Page.)
ISSUE DATE. The date the Contract was issued by the Company, as shown on the
Contract Data Page.
JOINT OWNER. If there is more than one Owner, each Owner shall be a Joint Owner
of the Contract. Joint Owners have equal ownership rights and must both
authorize any exercising of those ownership rights under this Contract.
LATEST INCOME DATE. The date on which the Owner attains age 90 under a
Nonqualified Plan Contract, or such earlier date as required by the applicable
Qualified Plan, law, or regulation, unless otherwise approved by the Company.
NONQUALIFIED PLAN. A retirement plan which does not qualify for favorable tax
treatment under Section 401, 403, 408 or 457 of the Internal Revenue Code as
amended.
OWNER ("YOU," "YOUR"). The person or entity shown on the Contract Data Page who
is entitled to exercise all rights and privileges under this Contract. Usually,
but not always, the Owner is also the Annuitant. If Joint Owners are named all
references to Owner shall mean Joint Owner.
PREMIUM(S). Considerations paid into this Contract by or on behalf of the Owner.
QUALIFIED PLAN. A retirement plan which qualifies for favorable tax treatment
under Sections 401, 403, 408 or 457 of the Internal Revenue Code as amended.
REMAINING PREMIUM. The total Premium in the Contract reduced due to withdrawals.
The Remaining Premium will be reduced by withdrawals that incur Withdrawal
Charges, as well as the withdrawal of Premiums that are no longer subject to
Withdrawal Charges.
<PAGE>
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DEFINITIONS (CONT'D)
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT(S). Segregated asset accounts established by the Company in
accordance with Michigan law. The assets of a Separate Account belong to the
Company. However, those Contract assets in a Separate Account are not chargeable
with liabilities arising out of any other business the Company may conduct. All
the income, gains and losses resulting from these assets are credited to or
charged against the Contracts and not against any other Contracts the Company
may issue. A Separate Account consists of several Investment Portfolios. This
Contract may allocate funds to more than one Separate Account.
SEPARATE ACCOUNT CONTRACT VALUE. The current value of the amounts allocated to
the Investment Portfolios within the Separate Account(s) of the Contract.
SERVICE CENTER. The Company's address and telephone number as specified on the
Contract Data Page or as may be designated by Us from time to time.
WE, OUR, US, THE COMPANY. Jackson National Life Insurance Company.
WITHDRAWAL CHARGE, CONTINGENT DEFERRED SALES CHARGE. The charge assessed against
certain withdrawals. (Please see Contract Data Page and Withdrawal Provisions).
WITHDRAWAL VALUE. The Contract Value reduced by any applicable Contract charges
or fees, any Contract Enhancements applied during the previous 12 month period,
and any premium taxes or other taxes payable; and, further adjusted by any
Excess Interest Adjustments.
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ASSIGNMENT. The Owner may not use this Contract as collateral or security for a
loan. However, the Owner may assign this Contract before the Income Date, but We
will not be bound by an assignment unless it is in writing and has been recorded
at the Company's Service Center. An assignment will take effect when recorded by
the Company. We are not responsible for any payment made before an assignment is
recorded. The Owner may exercise these rights subject to the interest of any
assignee or irrevocable beneficiary. We assume no responsibility for the
validity or tax consequences of any assignment. If You make an assignment, You
may have to pay income tax.
You are encouraged to seek competent legal and/or tax advice.
BENEFICIARY. The Owner may designate the Beneficiary(ies) to receive any amount
payable under this Contract on the Owner's death or, as applicable, on the
Annuitant's death. The original Beneficiary(ies) will be named in the
application, if any, and on the Contract Data Page. If two or more persons are
named, those surviving the Owner will share equally unless otherwise stated. If
there are no surviving Beneficiaries at the death of the Owner, the Death
Benefit will be paid to the Owner's estate. Upon the death of a Joint Owner, the
surviving Joint Owner, if any, will be treated as the primary Beneficiary and
all other Beneficiaries will be treated as Contingent Beneficiaries. The Owner
may change the Beneficiary(ies) by submitting a written request to the Service
Center, unless an irrevocable Beneficiary(ies) designation was previously filed.
Any change will take effect when recorded by the Company. The Company is not
liable for any payment made or action taken before the Company records the
change.
CHARGES AND FEES. The Company may assess fees or charges under the Contract.
Please see the Contract Data Page for more information as to fees or charges.
CONFORMITY WITH STATE LAWS. This Contract will be interpreted under the law of
the state in which it is issued. Any provision which is in conflict with the law
of such state, is amended to conform to the minimum requirements of such law.
CONTESTABILITY. The Company will not contest this Contract from its Issue Date,
as shown on the Contract Data Page.
DEFERMENT OF PAYMENTS. We may defer making payments from the Guaranteed Account
for up to 6 months. Interest, subject to state requirements, will be credited
during the deferral period.
DOLLAR COST AVERAGING. The Owner may arrange to have a regular amount of money
transferred automatically from the one year Guaranteed Option or one of the
Investment Portfolios of the Contract to (an) Investment Portfolio(s).
ENTIRE CONTRACT. The Contract, application, if any, and any applicable riders,
endorsements and amendments together make up the entire Contract.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Annuitant has been
misstated, the benefits will be those which the Premiums paid would have
purchased at the correct age and sex. Any underpayments will be adjusted
immediately by the Company. Overpayments will be deducted from future payments.
<PAGE>
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GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
MODIFICATION OF CONTRACT. Any change or waiver of the provisions of this
Contract must be in writing and signed by the President, a Vice President, the
Secretary or Assistant Secretary of the Company. No broker or producer has
authority to change or waive any provision of this Contract. The Company may
amend or waive any portion of this Contract without notice or consent if state
or federal law so requires.
NONPARTICIPATING. This Contract does not share in Our surplus or earnings.
PROOF OF AGE, SEX OR SURVIVAL. The Company may require satisfactory proof of
correct age or sex, as applicable, at any time. If any payment under this
Contract is contingent upon the Annuitant, Owner or Beneficiary being alive, the
Company may require satisfactory proof of survival.
PROTECTION OF PROCEEDS. No Beneficiary may commute, encumber, alienate or assign
any payment under this Contract before it is due. To the extent permitted by
law, no payment will be subject to the debts, contracts or engagements of any
Beneficiary. In addition, to the extent permitted by law, no payment will be
subject to any judicial process to levy You or attach the same for payment
thereof.
REPORTS. The Company will send You a report at least once a year. We will also
send You reports as required by law. They shall be addressed to the last address
of the Owner known to the Company.
SUBSTITUTION OF INVESTMENT PORTFOLIOS. If any Investment Portfolio is no longer
available for investment by the Separate Account or if, in the judgment of the
Company's Board of Directors, further investment in the Investment Portfolio is
no longer appropriate in view of the purpose of the Contract, the Company may
substitute one Investment Portfolio for another. No substitution of securities
may take place without prior approval of the Securities and Exchange Commission.
SUSPENSION OF PAYMENTS. The Company may suspend or postpone any payments from
the Investment Portfolios if any of the following occur:
a) The New York Stock Exchange is closed;
b) Trading on the New York Stock Exchange is restricted;
c) An emergency exists such that it is not reasonably practical to dispose of
securities in the Separate Account or to determine the value of its assets;
or
d) The Securities and Exchange Commission, by order, so permits for the
protection of Contract Owners.
TAXES. The Company may deduct from the Contract Value any premium taxes or other
taxes payable to a state or other government entity. Should We advance any
amount so due, We are not waiving any right to collect such amount at a later
date. The Company will deduct any withholding taxes required by applicable law.
<PAGE>
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GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
TELEPHONE REQUESTS. Subject to the Contract Data Page Transfers/Transfer Charge
provisions, the Owner may transfer amounts within the Contract by written notice
or telephone request. Telephone transactions are permitted if the Owner has
given the Company appropriate authorization. The Company has in place procedures
which are designed to provide reasonable assurance that telephone authorizations
are genuine, including tape recording of telephone communications and requesting
identifying information. Accordingly, the Company and its affiliates disclaim
all liability for any claim, loss or expense resulting from any alleged error or
mistake in connection with a telephone request which was not properly authorized
by the Owner. The Company reserves the right to modify or discontinue at any
time and without notice the use of telephone transfers and the acceptance of
transfer instructions from someone other than the Owner.
WRITTEN NOTICE. Any notice We send to the Owner will be sent to the Owner's last
known address unless the Owner requests otherwise in writing. Any written
request or notice must be sent to the Service Center, unless We advise You
otherwise. You are responsible for promptly notifying the Company of any address
change.
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION PROVISIONS
- --------------------------------------------------------------------------------
An Owner may not allocate Contract Values to more than eighteen Contract Options
at one time. The Company may waive this restriction at its discretion.
CONTRACT ENHANCEMENT. The Company will add a credit to your Contract Value for
each Premium applied to the Contract at a rate as specified on the Contract Data
Page at the time such Premium is applied. The Contract Enhancement will be
allocated among Contract Options in the same proportion that the applicable
Premium is allocated.
The Contract Enhancement is subject to the following conditions:
o The amount returned if the Owner exercises the right to return the Contract
under the Notice of Twenty-Day Right to Examine Policy provision will be
reduced by any Contract Enhancement applied.
o If a death benefit is payable, any Contract Enhancement based on any
Premium payment received within 12 months prior to the date of death of the
Owner or Annuitant (when the Owner is not a natural person) will be
deducted from the death benefit payable.
o For withdrawals or distributions, including partial withdrawals, any
Contract Enhancement resulting from Premium paid 12 months prior to the
receipt of the request for the withdrawal or distribution will be deducted
from the Contract Value prior to determining the amount available for
withdrawal or distribution.
o For benefits provided by riders or endorsements, any Contract Enhancement
resulting from Premium paid 12 months prior to the receipt of the request
for the payment of the benefit will be deducted from the Contract Value
prior to determining the amount available.
Any gains or losses attributable to the Contract Enhancement will not be
considered part of any amount deducted as described above.
Contract Enhancements, and any gains or losses attributable to a Contract
Enhancement, distributed under this Contract will be considered earnings under
the Contract for tax purposes.
INVESTMENT PORTFOLIOS. The Contract offers Investment Portfolios.
Accumulation Units. The Separate Account Contract Value will go up or down
depending on the performance of the Investment Portfolios. In order to monitor
the Separate Account Contract Value during the accumulation phase, the Company
uses a unit of measure called an accumulation unit. The value of an accumulation
unit may go up or down from day to day. The assessment of Withdrawal Charges,
transfer fees, Annual Contract Maintenance Charges, and any other fees or
charges are effected by redemption of accumulation units and do not affect the
accumulation unit value. During the income payout phase, the unit of measure is
called an annuity unit (please see Income Provisions for further information).
Every Business Day the Company determines the value of an accumulation unit for
each of the Investment Portfolios. This is done by:
1. determining the total amount of money invested in the particular
Investment Portfolio;
2. subtracting from the amount any Insurance Charges, Optional Enhanced
Death Benefit Charge, if applicable, and any other charges such as
taxes;
3. dividing this amount by the number of outstanding accumulation units.
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
When you make an allocation to Investment Portfolios, the Company credits Your
Contract with accumulation units. The number of accumulation units credited is
determined by dividing the amount of the Premium and Contract Enhancement
allocated to any Investment Portfolio by the value of the accumulation unit for
that Investment Portfolio.
GUARANTEED OPTIONS. The Contract offers Guaranteed Options for a specified
number of years. Amounts allocated to a Guaranteed Option may be subject to an
Excess Interest Adjustment if amounts are transferred or withdrawn prior to the
end of such Guaranteed Option period.
You may allocate Premium or make transfers to one or more Guaranteed Options at
any time prior to the Latest Income Date, subject to the provisions of this
Contract. If You do not specify both a Contract Option and period by the end of
the maturing Guaranteed Option period, We will automatically allocate such
amounts to a Guaranteed Option with the same Guaranteed Option period. You will
then be permitted, within 30 calendar days of Our allocation, to transfer (upon
written notice or telephone request to the Service Center), or withdraw (upon
written notice to the Service Center) amounts from such Guaranteed Option as
permitted under this Contract. Withdrawals may be subject to Withdrawal Charges.
If You do not provide Us notice within the 30 calendar day period, such amounts
shall remain in the Guaranteed Option period until You otherwise notify the
Company.
If the Guaranteed Option elected extends beyond the Latest Income Date, We will
automatically allocate such amounts to a Guaranteed Option with the longest
period that will not extend beyond such date. If reallocation of an amount to a
Guaranteed Option period due to completion of the then current Guaranteed Option
period occurs within one year of the Latest Income Date, We will credit interest
up to the Latest Income Date at the then current One Year Guaranteed Option
interest rate.
Interest To Be Credited. The Company will credit interest to the Guaranteed
Option. Such interest will be credited at such rate or rates as the Company
prospectively declares from time to time, at the sole discretion of the Company.
Any such rate or rates so determined will remain in effect for a period of not
less than the selected Guaranteed Option period, so long as such deposited
amount remains in the Guaranteed Option. Interest will be credited to subsequent
Guaranteed Option periods at a rate of interest declared by the Company. The
Company guarantees that it will credit interest at not less than 3%.
Excess Interest Adjustment. Any amount withdrawn or transferred from a
Guaranteed Option will be subject to an Excess Interest Adjustment unless
otherwise provided in this Contract. The Excess Interest Adjustment will be
calculated by multiplying the amount withdrawn or transferred by the formula
described below:
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
(m/12)
[1 + I]
------------- -1
(m/12)
[1 + J]
where:
I = the interest rate credited to the current Guaranteed Option period.
J = the interest rate that would be credited, at the time of withdrawal or
transfer, to a new Guaranteed Option period of the same duration, increased
by 0.50%. When no Guaranteed Option period of the required duration is
available, the rate will be established by linear interpolation.
m = number of complete months remaining to the end of the current Guaranteed
Option period.
There will be no Excess Interest Adjustment when J is greater than I, provided
that the difference between J and I is less than or equal to 0.50%.
In addition, the Excess Interest Adjustment will not apply to:
a) the payment of death benefit proceeds;
b) amounts withdrawn for Contract charges or fees;
c) an Income Option that results in payments spread over at least 5
years;
d) amounts either withdrawn or transferred during the 30-day period after
the end of a maturing Guaranteed Option period;
e) amounts transferred or withdrawn from any One-Year Guaranteed Option.
In no event will a total withdrawal from a Guaranteed Option be less than the
Guaranteed Option Minimum Value.
<PAGE>
- --------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
At or before the Income Date, the Owner may withdraw all or part of the amounts
under this Contract by informing Us at Our Service Center. For full withdrawal,
this Contract, or a Lost Contract Affidavit, must be returned to Our Service
Center.
Each Premium payment withdrawn from the Contract will be subject to Withdrawal
Charges, in accordance with the table shown on the Contract Data Page. Earnings
withdrawn are not subject to Withdrawal Charges.
Upon full withdrawal, the Owner will receive the Withdrawal Value.
If the withdrawal request does not specify from which Investment Portfolio(s) or
Guaranteed Option(s) the withdrawal is to be made, the request will be processed
by making withdrawals from each Investment Portfolio and each Guaranteed Option
in proportion to their current value.
Each Contract Year an amount of up to 10% of the Contract Value as of the
Business Day that the request for withdrawal is received, less any previous
withdrawals taken during that Contract Year, may be withdrawn without incurring
a Withdrawal Charge (see table on Contract Data Page). However, any applicable
Excess Interest Adjustments will be assessed. Withdrawals during the Contract
Year in excess of this amount may be subject to a Withdrawal Charge, as well as
any applicable Excess Interest Adjustment.
For purposes of the Withdrawal Charge, withdrawals are treated as coming first
from Earnings, and then from the oldest Remaining Premium. Any part of a partial
withdrawal consisting of Earnings does not reduce Remaining Premium for the
purpose of calculating Withdrawal Charges. The Withdrawal Charge is based on the
portion of the Remaining Premiums withdrawn. If you withdraw only part of the
value of your Contract, we deduct the Withdrawal Charge from the remaining value
in your Contract.
The Owner may elect to take a systematic withdrawal by surrendering a specific
sum, subject to a $50 minimum withdrawal, or a certain percentage on a monthly,
quarterly, semiannual or annual basis. Such withdrawals may be subject to a
Withdrawal Charge, or an Excess Interest Adjustment. Such withdrawals will be
counted in determining the portion of the Contract Value that may be taken
without incurring a Withdrawal Charge, as described above. As such, these
withdrawals may be subject to a Withdrawal Charge or an Excess Interest
Adjustment.
Except in connection with a systematic withdrawal program, the minimum partial
withdrawal amount is $500, or if less, the Owner's entire interest in the
Investment Portfolio or Guaranteed Option from which a withdrawal is requested.
The Company will waive the Withdrawal Charge on any withdrawal necessary to
satisfy the minimum distribution requirements of the Internal Revenue Code.
However, any applicable Excess Interest Adjustment will be assessed.
The Company may allow the Owner to transfer funds from this Contract to a
Companion Contract issued by the
Company without incurring Withdrawal Charges. New Withdrawal Charges or other
fees and charges may apply to the Companion Contract under the provisions of
that Contract.
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
- --------------------------------------------------------------------------------
This Contract contains several death benefits, before and after the Income Date.
The Death Benefit available before the Income Date is the Standard Death Benefit
or the Optional Enhanced Death Benefit if elected. The Contract Data Page shows
which death benefit the Owner elected upon issue of the Contract. The death
benefit election cannot be changed once the Contract is issued.
DEATH OF OWNER BEFORE THE INCOME DATE: Upon the Owner's death, or the death of
any Joint Owner, before the Income Date, the elected death benefit will be paid
to the Beneficiary(ies) designated by the Owner. Upon the death of a Joint
Owner, the surviving Joint Owner, if any, will be treated as the primary
Beneficiary. Any other Beneficiary designation on record at the Service Center
at the time of death will be treated as a contingent Beneficiary.
DEATH BENEFIT AMOUNT BEFORE THE INCOME DATE:
Standard Death Benefit. This Standard Death Benefit is equal to the greater
of either:
1) the Contract Value at the end of the Business Day on which due proof
of death and an election of the type of payment to the
Beneficiary(ies) is received at the Service Center; or
2) the total Premiums paid prior to the death of the Owner, minus any
withdrawals and any charges, fees, Withdrawal Charges previously
assessed and premium taxes incurred.
Optional Enhanced Death Benefit. The Optional Enhanced Death Benefit is
equal to the greater of either:
1) the Standard Death Benefit; or
2) the total Premiums paid prior to the death of the Owner, minus any
withdrawals and any charges, fees, Withdrawal Charges previously
assessed and premium taxes incurred, compounded at 5% (4% if the Owner
is over age 70 at the date of issue); or
3) the Contract Value at the end of the 7th Contract Year PLUS all
Premiums paid since the 7th year (less withdrawals, Withdrawal Charges
previously assessed, and any applicable charges, fees and premium
taxes incurred since the 7th year) compounded at 5% (4% if the Owner
is over age 70 at the date of issue).
Under item (2) or item (3) immediately above, the Optional Enhanced Death
Benefit will never exceed 250% of Premiums paid, less withdrawals and any
charges, fees, Withdrawal Charges previously assessed and premium taxes
incurred.
Adjustment for Contract Enhancements. Any Contract Enhancement based on any
Premium payment received within 12 months prior to the date of death of the
Owner or Annuitant (when the Owner is not a natural person) will be
deducted from the death benefit payable.
<PAGE>
- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTIONS BEFORE INCOME DATE: In the event of the Owner's death or
the death of a Joint Owner before the Income Date, a Beneficiary must request
that the elected death benefit be paid under one of the death benefit Options
below. The following are the selected death benefit Options:
o Option 1 - single sum payment of the death benefit; or
o Option 2 - payment of the entire death benefit within five (5) years
of the date of the death of the Owner or any Joint Owner; or
o Option 3 - payment of the death benefit under an income 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 the death of the Owner or 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 (5) years of the
date of the Owner's death.
If a single sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless either the Suspension
of Payments or Deferment of Payments under General Provisions is in effect.
Payment to the Beneficiary, other than in a single sum, may only be elected
during the sixty-day (60) period beginning with the date of receipt of proof of
death by Our Service Center.
In addition, if the Beneficiary is the spouse of the Owner, he or she may elect
to continue the Contract, at the current Contract Value, in his or her own name
and exercise all the Owner's rights under the Contract.
DEATH OF OWNER AFTER THE INCOME DATE: If the Owner, or any Joint Owner, dies
after the Income Date, and the Owner is not an Annuitant, any remaining payments
under the income option elected will continue at least as rapidly as under the
method of distribution in effect at the Owner's death. Upon the Owner's death
after the Income Date, the Beneficiary becomes the Owner.
DEATH OF ANNUITANT BEFORE INCOME DATE: Upon the death of an Annuitant, who is
not an Owner, before the Income Date, the Contract remains in force and the
Owner will become the Annuitant. The Owner may designate a new Annuitant,
subject to the Company's administrative rules then in effect. However, if the
Owner is not a natural person, the death of the primary Annuitant will be
treated as the death of the Owner and a new Annuitant may not be designated.
DEATH OF ANNUITANT AFTER INCOME DATE: Upon the death of the Annuitant after
the Income Date, the death benefit, if any, will be as specified in the
income option elected. Death benefits will be paid at least as rapidly as
under the method of distribution in effect at the Annuitant's death.
<PAGE>
- --------------------------------------------------------------------------------
INCOME PROVISIONS
- --------------------------------------------------------------------------------
INCOME DATE. If no Income Date is selected, the Income Date will be the Latest
Income Date. At any time at least seven (7) days prior to the Income Date then
indicated on the Company's records, the Owner may change the Income Date, to any
date not later than the Latest Income Date, by written notice to the Service
Center. In selecting an Income Date, the Owner may wish to consider the
applicability of a Withdrawal Charge which is imposed upon annuitizations which
occur within one year of the Issue Date of the Contract.
INCOME OPTIONS. The Owner, or any Beneficiary who is so entitled, may elect to
receive a single sum. However, a single-sum distribution may be deemed to be a
withdrawal. Alternatively, an income option may be elected. The Owner may, upon
prior written notice to the Company at its Service Center, elect an income
option at any time prior to the Income Date or change an income option up to 7
days before the Income Date. Unless otherwise designated, the Owner will be the
payee.
If no other income option is elected, monthly annuity payments will be made in
accordance with Option 3 below, a life annuity with 120-month period certain.
Payments will be made in monthly, quarterly, semiannual or annual installments
as selected by the Owner. However, if the amount available to apply under an
income option is less than $5,000, and state law permits, the Company has the
right to make payments in one lump sum. In addition, if the first payment
provided would be less than $50, and state law permits, the Company may require
the frequency of payments be at quarterly, semiannual or annual intervals so as
to result in an initial payment of at least $50.
NO WITHDRAWALS OF CONTRACT VALUE ARE PERMITTED DURING THE ANNUITY PERIOD FOR ANY
INCOME OPTION UNDER WHICH PAYMENTS ARE BEING MADE PURSUANT TO LIFE
CONTINGENCIES.
Upon written election filed with the Company at its Service Center, all of the
Contract Value will be applied to provide one of the following income options,
provided that a Withdrawal Charge will apply to all annuitizations within one
(1) year of the Issue Date. The portion of the Contract Value which is in the
Guaranteed Account immediately prior to the Income Date, applied to an income
option, may be subject to the applicable Excess Interest Adjustment.
OPTION 1 - LIFE INCOME An annuity payable monthly during the lifetime of the
Annuitant. Under this income option, no further annuity payments are payable
after the death of the Annuitant, and there is no provision for a death benefit
payable to the Owner. Therefore, it is possible under Option 1 for the Owner to
receive only one monthly annuity payment under this income option if the
Annuitant has an early death.
OPTION 2 - JOINT AND SURVIVOR An annuity payable monthly while both the
Annuitant and a designated second person are living. Upon the death of either
person, the monthly annuity payments will continue during the lifetime of the
survivor at either the full amount previously payable or as a percentage (either
one-half or two-thirds) of the full amount, as chosen at the time of election of
the income option. If a reduced annuity payment to the survivor is desired,
variable annuity payments will be determined using either one-half or two-thirds
of the number of each type of annuity unit credited. Fixed annuity payments will
be equal to either one-half or two-thirds of the fixed annuity payment payable
during the joint life of the Annuitant and the designated second person.
<PAGE>
- --------------------------------------------------------------------------------
INCOME PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
Annuity payments terminate automatically and immediately upon the death of the
surviving person without regard to the number or total amount of payments
received. There is no minimum number of guaranteed annuity payments, and it is
possible to have only one annuity payment if both the Annuitant and the
designated second person die before the due date of the second payment.
OPTION 3 - LIFE ANNUITY WITH 120 OR 240 MONTHLY PERIODS GUARANTEED An annuity
payable monthly during the lifetime of the Annuitant with the guarantee that if,
at the death of the Annuitant, payments have been made for fewer than the
guaranteed 120 or 240 monthly periods, as elected, the balance of the guaranteed
number of payments will continue to be made to the Owner as scheduled.
OPTION 4 - INCOME FOR A SPECIFIED PERIOD Under this income option, an Owner can
elect an annuity payable monthly for any period of years from 5 to 30. This
election must be made for full 12-month periods. In the event the Owner dies
before the specified number of payments has been made, the Beneficiary(ies) may
elect to continue receiving the scheduled payments or may alternatively elect to
receive the present value of any remaining guaranteed payments in a single sum,
the amount of which is calculated by the Company.
ADDITIONAL OPTIONS. Other income options may be made available by the Company.
FIXED ANNUITY PAYMENTS. To the extent a fixed income option has been elected,
the proceeds payable under this Contract, less any applicable premium taxes,
shall be applied to the payment of the income option elected at whichever of the
following is more favorable to the Owner; (a) the annuity rates based upon the
applicable tables in the Contract; or (b) the then current rates provided by the
Company on contracts of this type on the Income Date. In no event will the fixed
payments be changed once they begin.
VARIABLE ANNUITY PAYMENTS. The initial annuity payment is determined by taking
the Contract Value allocated to that Investment Portfolio, less any premium tax
and any applicable Contract charges, and then applying it to the income option
table specified in the Contract. The appropriate rate must be determined by the
sex (except where, as in the case of certain Qualified Plans and other
employer-sponsored retirement plans, such classification is not permitted) and
age of the Annuitant and designated second person, if any.
The dollars applied are divided by 1,000 and the result multiplied by the
appropriate annuity factor appearing in the table to compute the amount of the
first monthly payment. That amount is divided by the value of an annuity unit as
of the Income Date to establish the number of annuity units representing each
variable payment. The number of annuity units determined for the first variable
payment remains constant for the second and subsequent monthly variable
payments, assuming that no reallocation of Contract Values is made.
<PAGE>
- --------------------------------------------------------------------------------
INCOME PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
The amount of the second and each subsequent monthly variable payment is
determined by multiplying the number of annuity units by the annuity unit value
as of the Business Day next preceding the date on which each payment is due.
ANNUITY UNIT VALUE. The initial value of an annuity unit of each Investment
Portfolio was set when the Investment Portfolios were established. The value may
increase or decrease from one Business Day to the next. The income option tables
contained in the Contract are based on a per annum assumed interest rate stated
by the Company but never less than 3%. If the actual net investment rate
experienced by an Investment Portfolio exceeds the assumed interest rate,
variable payments will increase over time. Conversely, if the actual rate is
less than the assumed interest rate, variable payments will decrease over time.
If the net investment rate equals the assumed interest rate, the variable
payments will remain constant.
The value of a fixed number of annuity units will reflect the investment
performance of the Investment Portfolios elected, and the amount of each payment
will vary accordingly.
For each Investment Portfolio, the value of an annuity unit for any Business Day
is determined by multiplying the annuity unit value for the immediately
preceding Business Day by the net investment factor for the Business Day for
which the annuity unit value is being calculated. The result is then multiplied
by a second factor which offsets the effect of the assumed interest rate. The
net investment factor, which reflects changes in the net asset value of
Investment Portfolios is determined by dividing (a) by (b) and then subtracting
(c) from the result where:
a) is the net result of:
1) the net asset value of an Investment Portfolio determined as of
the end of the Business Day, plus
2) the per share amount of any dividend or other distribution
declared by the Investment Portfolio if the "ex-dividend" date
occurs on the Business Day, plus or minus
3) a per share credit or charge with respect to any taxes paid or
reserved for by the Company which are determined by the Company
to be attributable to the operation of the Investment Portfolio
(no federal income taxes are applicable under present law);
b) is the net asset value of the Investment Portfolio determined as of
the end of the preceding Business Day; and
c) is the Contract Insurance Charges, Optional Enhanced Death Benefit
Charges and any other charge or fees as applicable.
BASIS OF COMPUTATION. The actuarial basis for the Table of Income Options is the
Annuity 2000 Mortality Table and the assumed interest rate of not less than 3%.
The Table of Income Options does not include any applicable premium tax.
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF INCOME OPTIONS
- --------------------------------------------------------------------------------
The following table is for this Contract whose net proceeds are $1,000, and will
apply pro rata to the amount payable under this Contract.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
UNDER OPTION 4 MONTHLY INSTALLMENT UNDER OPTIONS 1 OR 3
- --------------------------------------------------------------------------------------------------------------------
No. of Monthly Age No. of Mos. Age No. of Mos. Age No. of Mos. Age No. of Mos.
MonthlyInstall- of Certain of Certain of Certain of Certain
Install- ments Payee Payee Payee Payee
ments
- --------------------------------------------------------------------------------------------------------------------
Male Life 120 240 Male Life 120 240 Female Life 120 240 Female Life 120 240
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 17.95 40 3.55 3.54 3.51 70 6.71 6.26 5.18 40 3.39 3.38 3.37 70 6.04 5.81 5.07
72 15.18 41 3.59 3.58 3.55 71 6.95 6.42 5.23 41 3.42 3.42 3.40 71 6.25 5.97 5.13
84 13.20 42 3.64 3.63 3.59 72 7.21 6.59 5.27 42 3.46 3.46 3.43 72 6.48 6.14 5.19
96 11.71 43 3.69 3.67 3.63 73 7.48 6.76 5.31 43 3.50 3.49 3.47 73 6.72 6.32 5.24
108 10.56 44 3.74 3.72 3.67 74 7.77 6.94 5.34 44 3.54 3.54 3.51 74 6.99 6.51 5.28
120 9.64 45 3.79 3.77 3.72 75 8.09 7.11 5.38 45 3.59 3.58 3.55 75 7.27 6.70 5.33
132 8.88 46 3.85 3.83 3.76 76 8.42 7.29 5.40 46 3.63 3.62 3.59 76 7.58 6.90 5.36
144 8.26 47 3.90 3.88 3.81 77 8.78 7.47 5.43 47 3.68 3.67 3.63 77 7.92 7.10 5.39
156 7.73 48 3.96 3.94 3.86 78 9.16 7.64 5.45 48 3.73 3.72 3.68 78 8.28 7.30 5.42
168 7.28 49 4.03 4.00 3.91 79 9.57 7.82 5.46 49 3.78 3.77 3.72 79 8.67 7.50 5.44
180 6.89 50 4.09 4.06 3.96 80 10.01 7.99 5.48 50 3.84 3.83 3.77 80 9.10 7.70 5.46
192 6.54 51 4.16 4.13 4.02 81 10.48 8.15 5.49 51 3.90 3.88 3.82 81 9.56 7.90 5.48
204 6.24 52 4.24 4.20 4.07 82 10.98 8.30 5.50 52 3.96 3.94 3.88 82 10.06 8.09 5.49
216 5.98 53 4.32 4.27 4.13 83 11.52 8.45 5.51 53 4.03 4.01 3.93 83 10.61 8.27 5.50
228 5.74 54 4.40 4.35 4.19 84 12.09 8.59 5.51 54 4.10 4.07 3.99 84 11.20 8.43 5.51
240 5.53 55 4.48 4.43 4.25 85 12.70 8.72 5.52 55 4.17 4.14 4.05 85 11.83 8.59 5.51
252 5.33 56 4.57 4.51 4.31 86 13.35 8.85 5.52 56 4.25 4.22 4.11 86 12.52 8.74 5.52
264 5.16 57 4.67 4.60 4.38 87 14.04 8.96 5.52 57 4.33 4.30 4.17 87 13.25 8.87 5.52
276 5.00 58 4.77 4.70 4.44 88 14.78 9.06 5.52 58 4.42 4.38 4.23 88 14.04 8.98 5.52
288 4.85 59 4.88 4.80 4.51 89 15.56 9.15 5.52 59 4.51 4.46 4.30 89 14.87 9.09 5.52
300 4.72 60 5.00 4.90 4.57 90 16.39 9.23 5.53 60 4.61 4.56 4.37 90 15.74 9.18 5.53
61 5.13 5.01 4.64 91 17.27 9.31 5.53 61 4.71 4.65 4.44 91 16.66 9.26 5.53
62 5.26 5.13 4.71 92 18.20 9.37 5.53 62 4.82 4.75 4.51 92 17.61 9.33 5.53
63 5.40 5.25 4.77 93 19.19 9.43 5.53 63 4.94 4.86 4.58 93 18.60 9.40 5.53
64 5.55 5.38 4.84 94 20.25 9.48 5.53 64 5.07 4.98 4.66 94 19.64 9.45 5.53
65 5.72 5.51 4.90 95 21.38 9.52 5.53 65 5.20 5.10 4.73 95 20.72 9.50 5.53
66 5.89 5.65 4.96 96 22.60 9.56 5.53 66 5.35 5.22 4.80 96 21.86 9.54 5.53
67 6.08 5.79 5.02 97 23.94 9.58 5.53 67 5.50 5.36 4.87 97 23.09 9.57 5.53
68 6.28 5.94 5.08 98 25.43 9.60 5.53 68 5.67 5.50 4.94 98 24.44 9.59 5.53
69 6.49 6.10 5.13 99 27.12 9.62 5.53 69 5.85 5.65 5.01 99 25.97 9.61 5.53
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Due to the length of the information, the Table for Option 2 is available
from the Service Center upon Your request.
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ASSIGNMENT. The Owner may not use this Contract as collateral or security for a
loan. However, the Owner may assign this Contract before the Income Date, but We
will not be bound by an assignment unless it is in writing and has been recorded
at the Company's Service Center. An assignment will take effect when recorded by
the Company. We are not responsible for any payment made before an assignment is
recorded. The Owner may exercise these rights subject to the interest of any
assignee or irrevocable beneficiary. We assume no responsibility for the
validity or tax consequences of any assignment. If You make an assignment, You
may have to pay income tax. You are encouraged to seek competent legal and/or
tax advice.
BENEFICIARY. The Owner may designate the Beneficiary(ies) to receive any amount
payable under this Contract on the Owner's death or, as applicable, on the
Annuitant's death. The original Beneficiary(ies) will be named in the
application, if any, and on the Contract Data Page. If two or more persons are
named, those surviving the Owner will share equally unless otherwise stated. If
there are no surviving Beneficiaries at the death of the Owner, the Death
Benefit will be paid to the Owner's estate. Upon the death of a Joint Owner, the
surviving Joint Owner, if any, will be treated as the primary Beneficiary and
all other Beneficiaries will be treated as Contingent Beneficiaries. The Owner
may change the Beneficiary(ies) by submitting a written request to the Service
Center, unless an irrevocable Beneficiary(ies) designation was previously filed.
Any change will take effect when recorded by the Company. The Company is not
liable for any payment made or action taken before the Company records the
change.
CHARGES AND FEES. The Company may assess fees or charges under the Contract.
Please see the Contract Data Page for more information as to fees or charges.
CONFORMITY WITH STATE LAWS. This Contract will be interpreted under the law of
the state in which it is issued. Any provision which is in conflict with the law
of such state, is amended to conform to the minimum requirements of such law.
CONTESTABILITY. The Company will not contest this Contract from its Issue Date,
as shown on the Contract Data Page.
DEFERMENT OF PAYMENTS. We may defer making payments from the Guaranteed Account
for up to 6 months. Interest, subject to state requirements, will be credited
during the deferral period.
DOLLAR COST AVERAGING. The Owner may arrange to have a regular amount of money
transferred automatically from the one year Guaranteed Option or one of the
Investment Portfolios of the Contract to (an) Investment Portfolio(s).
ENTIRE CONTRACT. The Contract, application, if any, and any applicable riders,
endorsements and amendments together make up the entire Contract.
MISSTATEMENT OF AGE. If the age of the Annuitant has been misstated, the
benefits will be those which the Premiums paid would have purchased at the
correct age. Any underpayments will be adjusted immediately by the Company.
Overpayments will be deducted from future payments.
<PAGE>
- --------------------------------------------------------------------------------
GENERAL PROVISIONS (CONT'D)
- --------------------------------------------------------------------------------
MODIFICATION OF CONTRACT. Any change or waiver of the provisions of this
Contract must be in writing and signed by the President, a Vice President, the
Secretary or Assistant Secretary of the Company. No broker or producer has
authority to change or waive any provision of this Contract. The Company may
amend or waive any portion of this Contract without notice or consent if state
or federal law so requires.
NONPARTICIPATING. This Contract does not share in Our surplus or earnings.
PROOF OF AGE OR SURVIVAL. The Company may require satisfactory proof of correct
age at any time. If any payment under this Contract is contingent upon the
Annuitant, Owner or Beneficiary being alive, the Company may require
satisfactory proof of survival.
PROTECTION OF PROCEEDS. No Beneficiary may commute, encumber, alienate or assign
any payment under this Contract before it is due. To the extent permitted by
law, no payment will be subject to the debts, contracts or engagements of any
Beneficiary. In addition, to the extent permitted by law, no payment will be
subject to any judicial process to levy You or attach the same for payment
thereof.
REPORTS. The Company will send You a report at least once a year. We will also
send You reports as required by law. They shall be addressed to the last address
of the Owner known to the Company.
SUBSTITUTION OF INVESTMENT PORTFOLIOS. If any Investment Portfolio is no longer
available for investment by the Separate Account or if, in the judgment of the
Company's Board of Directors, further investment in the Investment Portfolio is
no longer appropriate in view of the purpose of the Contract, the Company may
substitute one Investment Portfolio for another. No substitution of securities
may take place without prior approval of the Securities and Exchange Commission.
SUSPENSION OF PAYMENTS. The Company may suspend or postpone any payments from
the Investment Portfolios if any of the following occur:
a) The New York Stock Exchange is closed;
b) Trading on the New York Stock Exchange is restricted;
c) An emergency exists such that it is not reasonably practical to dispose of
securities in the Separate Account or to determine the value of its assets;
or
d) The Securities and Exchange Commission, by order, so permits for the
protection of Contract Owners.
TAXES. The Company may deduct from the Contract Value any premium taxes or other
taxes payable to a state or other government entity. Should We advance any
amount so due, We are not waiving any right to collect such amount at a later
date. The Company will deduct any withholding taxes required by applicable law.
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF INCOME OPTIONS
- --------------------------------------------------------------------------------
The following table is for this Contract whose net proceeds are $1,000, and
will apply pro rata to the amount payable under this Contract.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
UNDER OPTION 4 MONTHLY INSTALLMENT UNDER OPTIONS 1 OR 3
----------------------------------------------------------------------------------------------------------------
No. of Monthly No. of Mos. No. of Mos. No. of Mos.
Monthly Install-menAge of Certain Age of Certain Age of Certain
Install- Payee Payee Payee
ments Life 120 240 Life 120 240 Life 120 240
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 17.95 40 3.53 3.52 3.50 60 4.97 4.88 4.57 80 10.23 8.11 5.49
72 15.17 41 3.57 3.56 3.53 61 5.10 4.99 4.64 81 10.77 8.29 5.50
84 13.19 42 3.62 3.61 3.57 62 5.23 5.11 4.71 82 11.33 8.45 5.50
96 11.71 43 3.67 3.66 3.61 63 5.37 5.23 4.78 83 11.95 8.61 5.51
108 10.56 44 3.72 3.71 3.66 64 5.52 5.36 4.85 84 12.61 8.74 5.51
120 9.64 45 3.77 3.75 3.70 65 5.68 5.49 4.91 85 13.31 8.88 5.52
132 8.89 46 3.82 3.80 3.75 66 5.86 5.63 4.98 86 14.07 8.99 5.52
144 8.26 47 3.89 3.86 3.79 67 6.04 5.79 5.04 87 14.87 9.10 5.52
156 7.73 48 3.94 3.92 3.84 68 6.23 5.93 5.10 88 15.73 9.18 5.52
168 7.28 49 4.00 3.98 3.90 69 6.45 6.10 5.16 89 16.65 9.26 5.52
180 6.88 50 4.07 4.04 3.95 70 6.68 6.27 5.20 90 17.61 9.34 5.52
192 6.55 51 4.14 4.10 4.00 71 6.92 6.44 5.25 91 18.63 9.40 5.52
204 6.25 52 4.21 4.18 4.06 72 7.20 6.62 5.30 92 19.71 9.45 5.52
216 5.97 53 4.29 4.25 4.11 73 7.48 6.80 5.34 93 20.85 9.49 5.52
228 5.74 54 4.37 4.32 4.18 74 7.79 6.99 5.37 94 22.05 9.52 5.52
240 5.52 55 4.46 4.41 4.24 75 8.13 7.19 5.40 95 23.33 9.56 5.52
252 5.34 56 4.54 4.49 4.30 76 8.48 7.37 5.42 96 24.69 9.59 5.52
264 5.16 57 4.65 4.57 4.37 77 8.87 7.56 5.45 97 26.17 9.60 5.52
276 5.00 58 4.74 4.67 4.44 78 9.30 7.75 5.46 98 27.79 9.62 5.52
288 4.86 59 4.86 4.77 4.50 79 9.74 7.94 5.48 99 29.61 9.63 5.52
300 4.72
</TABLE>
Note: Due to the length of the information, the Table for Option 2 is available
from the Service Center upon Your request.
EX-99.B6-a
ARTICLES OF INCORPORATION
OF THE
JACKSON NATIONAL LIFE
INSURANCE COMPANY
We, the undersigned, desiring to become incorporated under the
provisions of Act No. 218 of the Public Acts of 1956, "The Insurance Code," do
hereby make, execute, and adopt the following Articles of Association, to-wit:
ARTICLE I.
The names of the incorporators and their respective places of residence
are as follows:
- --------------------------------------------------------------------------------
NAME PLACE OF RESIDENCE
- --------------------------------------------------------------------------------
A. J. Pasant 3226 Hartzell, Evanston, Illinois
Leslie W. Scott 304 W. Washington, Ilinsdale, Illinois
Charles H. Bruce 3445 W. 97th St., Evergreen Park, Illinois
Herbert J. Schoen 9520 Central Park, Evanston, Illinois
Joseph J. Pernick 19801 Monte Vista, Detroit, Michigan
Solomon A. Weisgal 3222, Hartzell, Evanston,
John G. Schafer 43 Beaconhill, Grosse Pointe, Michigan
Philip J. May 829 Southlawn, East Lansing, Michigan
Jordan J. Popkin 1500 W. Hillsdale, Lansing, Michigan
Jane B. Hart Mackinac Island, Michigan
Frank H. Lindquist 3128 N. Ernst St., Franklin Post, Illinois
Bert Nielsen 14018 Stahelin Avenue, Detroit, Michigan
Ira L. Grinnell 1195 Haslett Road, Williamston, Michigan
Morrice Henderson 533 Grove Street, East Lansing, Michigan
Edgar L. Harden 537 W. Kaye Avenue, Marquette, Michigan
Maurus J. Schumacher 164 Ridgemont Rd., Grosse Pte Farms, Michigan
Howard J. Grimes 403 Southlawn, East Lansing, Michigan
Richard A. McNichol 92 Shadywood Lane, Battle Creek, Michigan
Raymond Crouse 2626 Court Street, Saginaw, Michigan
Erik G. Dall Route #2, Berrien Springs, Michigan
Peter F. Hurst 5500 Browns Lake Road, Jackson, Michigan
John J. Collins 2339 Jefferson Road, Clarklake, Michigan
Apex Investment Co. 3001 Cadillac Tower, Detroit, Michigan
- --------------------------------------------------------------------------------
ARTICLE II.
The name assumed by this Corporation and by which it shall be known in
law is JACKSON NATIONAL LIFE INSURANCE COMPANY and its principal office for the
transaction of business shall be in the City of Lansing, State of Michigan.
ARTICLE III.
This corporation is organized for the following purposes, as authorized
by Chapter 6, Act No. 218 of the Public Acts of 1956, as amended, namely:
To make insurance upon the lives and health of persons and every
insurance pertaining thereto, and to grant, purchase or dispose of annuities and
endowments of every kind and description whatsoever and to reinsure any risk
authorized to be undertaken by it and to grant reinsurance upon any similar risk
undertaken by any other insurer.
To make insurance upon any person against bodily injury or death by
accident or against disability on account of sickness or accident, including
also the granting of specific hospital benefits and medical surgical and sick
care benefits to any person, family or group, subject to such limitations as may
be prescribed with respect thereto, and to reinsure any risk authorized to be
undertaken by it and to grant reinsurance upon any similar risk undertaken by
any other insurer.
The corporation may issue Founders Policies not to exceed an aggregate
face amount of $30,000,000 to be held by not more than 3,000 holders. The
corporation shall not issue any of the aforementioned Founders Policies after
five (5) years from the date the corporation receives its certificate of
authority. The Founders Policies are subject to the rights and provisions
hereinafter set forth.
The corporation may issue participating and non-participating policies
or contracts provided that any participating policy or contract to be issued by
the corporation shall, by its terms, give the right to participate in the
divisible surplus earnings of the corporation as provided by law and as more
particularly provided by Section 4020 of The Insurance Code of 1956.
ARTICLE IV.
The term of existence of the corporation shall be perpetual.
ARTICLE V.
The annual meeting of the Shareholders shall be held each year at a
time and place as the Board of Directors deems advisable.
ARTICLE VI.
The capital stock of the corporation shall be Fifty Seven Million Five
Hundred Thousand ($57,500,000.00) Dollars, divided into fifty million
(50,000,000) shares of Common Stock, one dollar and fifteen cents ($1.15) per
value per share.
Voting Rights
Each holder of Common Stock of the Corporation shall be entitled to one
vote for each share of Common Stock standing in his name on the books of the
Corporation and may vote the same in person or by proxy.
No Pre-Emptive Rights
No holder of the Common Stock shall have any pre-emptive or
preferential right of subscription to any shares of stock of this Corporation
heretofore or hereafter authorized or to any obligations convertible into stock
issued or sold, and the Board of Directors may issue stock ofthis Corporation or
obligations convertible into stock without offering such issue of stock either
in whole or in part to the holders of the Common Stock of this Corporation, upon
such terms and conditions as the Board of Directors shall prescribe: provided,
however, that any offering of shares of stock not be at a price per share less
than the par value thereto.
ARTICLE VII.
1. In each and every calendar year commencing with the calendar year
1965, an amount equal to twenty-five (25%) per cent of the net gain from
operations before dividends to policyholders and excluding capital gains and
losses of the corporation for such year, after making provisions for all taxes
and after deduction of the sum of Fifty-Six Thousand ($56,000.00) Dollars, all
as reflected in the annual statement for such year filed by the Corporation with
the Insurance Department of the State of Michigan, shall be set aside and make
available to eligible Founders Policyholders for the purpose and subject to the
limitation hereinafter set forth.
1.01 Eligible Founders Policyholders shall be holders of such Founders
Policies as may be sold and issued by the Corporation from time to time, who
shall have currently paid premiums on their respective Founders Policies for the
current year and who shall have paid in full all premiums on their respective
Founders Policies for the preceding three (3) years.
1.02 Each eligible Founders Policyholder shall be entitled to receive a
proportion of the amount allocated as provided in paragraph 1 hereof, which
proportion shall be the proportion which the amount of the annual premium for
said individual Founders Policy shall be the total amount of the annual premiums
for all Founders Policies, except those Founders Policies on which premiums have
not been paid for three (3) full years, at any time issued by the Corporation;
provided, however, that no eligible Founders Policyholder shall be entitled to
receive in any one year an amount in excess of the amount of the annual premium
for said Founders Policy.
ARTICLE VIII.
The corporate powers of the Corporation shall be exercised by a Board
of Directors consisting of not less than three (3), and at least one (1) members
of the Directors shall be a resident of the State of Michigan.
ARTICLE IX.
The Directors shall hold a meeting immediately following the Annual
Shareholders Meeting in each year; at which time they shall elect from their
membership a President and may elect a Chairman of the Board of Directors. At
such meeting, the Directors shall also elect one or more Vice Presidents, a
Secretary, a Treasurer, and such other officers and committees as the By-Laws
may require, none of whom need be Directors of the corporation, and whose
appointments shall be during the pleasure of the Board. The President shall be
the Chief Executive Officer of the corporation and the duties and
responsibilities of all other officers shall be such as may be assigned to them
from time to time by the Chief Executive Officer, or the Board of Directors in
accordance with the By-Laws of the corporation.
ARTICLE X.
The time for holding the annual meeting of the corporation shall be as
above provided and notice of all meetings of the shareholders shall be given by
mailing to each shareholder a copy of such notice, postage prepaid, directed to
his last known place of residence, at least twenty-one (21) days prior to the
time fixed for such meeting. Such notice shall state the time and place, and if
it be a Special Meeting, the purpose of such meeting.
ARTICLE XI.
The Directors may adopt By-Laws and amend the same from time to time
for the proper conduct and operation of the business of the corporation not
inconsistent with these Articles of Incorporation.
EX-99.B6-b
BY-LAWS
OF THE
JACKSON NATIONAL LIFE INSURANCE COMPANY
(Enacted 8/61; Amended 8/64, 9/64, 2/70, 1/71, 4/72,
2/73, 4/76)
ARTICLE I
Meetings
Section 1. Place of Meeting. The meetings of the shareholders and of
the Board of Directors of this corporation shall be held at the principal office
of the corporation, in the City of Jackson, Michigan, and such other places as
the Board of Directors may from time to time determine.
Section 2. Annual Meeting of Shareholders. The annual meeting of the
shareholders shall be held in each year on the fourth Wednesday of April, at
10:30 o'clock in the morning, one of purposes of which shall be the election of
a Board of Directors. The first annual meeting shall be held in 1962.
Section 3. Notice of Annual Meeting of Shareholders. At least
twenty-one (21) days prior to the date fixed by Section 2 of this Article for
the holding of the annual meeting of shareholders, written notice of the time,
place and purpose of such meeting shall be mailed, as hereinafter provided, to
each shareholder entitled to vote at such meeting.
Section 4. Delay Annual Meeting. If for any reason the annual meeting
of the shareholders shall not be held on the day designated in Section 2 of this
Article, such meeting may be called and held as a special meeting, and the same
proceedings may be had thereat as at the annual meeting; provided, however, that
the notice of such meeting shall be the same herein required for the annual
meeting, namely, not less than a twenty-one (21) day notice.
Section 5. Order of Business at Annual Meeting. At all meetings of
shareholders the order of business shall first be the calling of the roll, and
if a quorum is found to be present, the order of business shall then continue
and be observed as follows, as far as applicable and consistent with the
purposes of the meeting; viz:
(a) Report of notice of meeting
(b) Reading minutes of preceding meeting
(c) Report of President
(d) Report of Secretary
(e) Report of Treasurer
(f) Report of Committees
(g) Election of Directors
(h) Unfinished Business
(i) New Business
(j) Adjournment
provided that in the absence of any objection the presiding officer may vary the
order of business at his discretion.
Section 6. Special Meeting of Shareholders. A special meeting of the
shareholders may be called at any time by the President, or by a majority of the
Board of Directors, or by shareholders entitled to vote upon not less that an
aggregate of twenty (20%) per cent of outstanding shares of the corporation
having the right to vote at such special meeting. The method by which such
meeting may be called is as follows: Upon receipt of a specification in writing
setting forth the date and objects of such proposed special meeting, signed by
the President, or by a majority of the Board of Directors, or by shareholders as
above provided, the notices requisite to such meeting.
Section 7. Notice of Special Meeting of Shareholders. At least
twenty-one (21) days prior to the date fixed for the holding of any special
meeting of shareholders, written notice of the time, place and purposes of such
meeting shall be mailed, as hereinafter provided, to each shareholder entitled
to vote at such meeting.
No business not mentioned in the notice shall be transacted at the meeting.
Section 8. Organization Meeting of the Board. At the place of holding
the annual meeting of shareholders, and immediately following the same, the
Board of Directors as constituted upon final adjournment of such annual meeting
shall convene for the purpose of electing officers and transacting any other
business properly brought before it.
Section 9. Regular Meetings of the Board. Regular meetings of the Board
of Directors may be held at such times and places as the Board of Directors
shall from time to time determine. No notice of regular meetings of the Board
shall be required.
Section 10. Special Meetings of the Board. The special meetings of the
Board of Directors may be called by the President at any time and shall be
called by the President upon the written request of three members of the Board
of Directors. At least three days written notice setting forth the time, place
and purpose of the meeting shall be mailed to each Director, but action taken at
any such time shall not be invalid for want of notice if such notice shall be
waived as hereinafter provided.
Section 11. Notices and Mailing. All notices required to be given by
any provision of these By-Laws shall state the authority pursuant to which they
are issued (as "by order of the President," or "by order of the Board of
Directors," or "by order of the shareholders," as the case may be) and shall
bear the written or printed signature of the Secretary. Every notice shall be
deemed duly served when the same has been deposited in the United States mail,
with postage full prepaid, plainly addressed to the sendee at his, her or its
last address appearing upon the original or duplicate stock ledger of this
corporation at its registered office in Michigan.
Section 12. Waiver of Notice. Notice of the time, place and purpose of
any meeting of the Board of Directors, may be waived by telegram, radiogram,
cablegram, or other writing, either before or after such meeting has been held.
ARTICLE II
Quorum
Section 1. Quorum of Shareholders. A majority of the outstanding shares
of this corporation entitled to vote, present by the record holders thereof in
person or by proxy, shall constitute a quorum at any meeting of the
shareholders. In case there is no quorum present on the day fixed for the
meeting, the shareholders present may adjourn said meeting from time to time
without further notice until said quorum is obtained, or may adjourn Sine Die.
Section 2. Quorum of Directors. A majority of the Directors shall
constitute a quorum for the transaction of business.
ARTICLE III
Voting, Elections and Proxies
Section 1. Who Entitled to Vote. Except as the Articles of Association,
or amendment or amendments thereto otherwise provide, each shareholder of this
corporation shall at every meeting of the shareholders be entitled to one vote
in person or by proxy for each share of Common Stock of this corporation, held
by such shareholder, subject, however, to the full effect of the limitations
imposed by a fixed record date for determination of shareholders set forth in
Section 2 of this Article III.
Section 2. Record Date for Determination of Shareholders. The Board of
Directors in each instance shall fix a date preceding (a) the date of any
meeting of shareholders, (b) the date for the payment of any dividends, (c) the
date for the allotment of rights, (d) the date when any change or conversion or
exchange of stock shall go into effect as the record date for the determination
of the shareholders entitled to notice of and to vote at any such meeting, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion or
exchange of common stock and in such case shareholders and only such
shareholders as shall be shareholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to receive payment
of such dividend, or to receive such allotment of rights, or exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the corporation or otherwise after any such record date fixed as after
any such record date fixed as aforesaid.
Section 3. Proxies. No proxy shall be deemed operative unless and until
signed by the shareholder and filed with the corporation.
Section 4. Vote by Shareholder Corporation. Any other corporation
owning voting share in this corporation may vote upon such shares, or by proxy
appointed by it, unless some other person shall be appointed to vote upon such
shares by resolution of the Board of Directors of such shareholder corporation.
Section 5. Inspectors of Election. Whenever any person entitled to vote
at a meeting of the shareholders shall request the appointment of inspectors, a
majority of the shareholders present at such meeting and entitled to vote
thereat shall appoint not more than three inspectors, who need not be
shareholders. If the right of any person to vote at such meeting shall be
challenged, the inspectors shall determine such right. The inspectors shall
receive and count the vote either upon an election or for the decision of any
question and shall determine the result. Their certificate of any vote shall be
prima facie evidence thereof.
ARTICLE IV
Board of Directors
Section 1. Number and Term of Directors. The business property and
affairs of this corporation shall be managed by a Board of Directors composed of
not less than seven (7), nor more than twenty-five (25) members. No person shall
be eligible to the office of Director who is not the owner in his own right of
at least ten (10) shares of the capital stock of the corporation. At least a
majority of the Directors shall be residents of the State of Michigan.
Section 2. Vacancies. Any vacancy in the Board of Directors shall be
filled by appointment made by the remaining Directors, except that any vacancy
caused by reason of an increase in the number of Directors shall be filled by
the shareholders at an annual meeting, or at a special meeting called for that
purpose. Each person so elected to fill a vacancy shall remain a Director until
his successor has been elected by the shareholders, who may make such election
at their next annual meeting or at a special meeting duly called for that
particular purpose held prior thereto.
Section 3. Action by Unanimous Written Consent. If and when the
Directors shall severally or collectively consent in writing to any action to be
taken by the corporation, such action shall be as valid corporate action as
though it has been authorized at a meeting of the Board of Directors.
<PAGE>
Section 4. Power to Make By-Laws. Subject to the provisions of the
Articles of Association, the Board of Directors shall have power to make and
alter any By-Laws or By-Law, including the fixing and altering of the number of
the Directors, provided that the Board shall not make or alter any By-Law or
By-Laws fixing the qualifications, classifications, or term of office of any
member or members of the then existing Board.
Section 5. Power to Elect Officers. At the organization meeting of the
Board, provided for in Article I, Section 8 hereof, the Board of Directors shall
elect from their membership a President and may elect a Chairman of the Board of
Directors. At such meeting, the Directors shall also elect one or more Vice
Presidents, a Secretary, and a Treasurer. No officer except the Chairman of the
Board and the President need be a member of the Board of Directors, but a Vice
President who is not a Director shall not succeed to, nor fill, the office of
President.
Section 6. Power to Appoint Other Officers and Agents. The Board of
Directors shall have power to appoint such other officers and agents as the
Board may deem necessary for transaction of the business of the corporation.
Section 7. Removal of Officers and Agents. Any officer or agent may be
removed by the Board of Directors whenever in the judgement of the Board the
business interests of the corporation will be served thereby.
Section 8. Power to Fill Vacancies. The Board shall have power to fill
any vacancy in any office occurring from any reason whatsoever.
Section 9. Delegation of Powers. For any reason deemed sufficient by
the Board of Directors, whether occasioned by absence or otherwise, the Board
may delegate all or any of the powers and duties of any officer to any other
officer or Director, but no officer or Directors shall execute, acknowledge, or
verify any instrument in more one capacity.
Section 10. Power to Appoint Executive Committee. The Board of
Directors shall have power to appoint by resolution an executive committee
composed of two or more Directors who, to the extent provided in such
resolution, shall have and exercise the authority of the Board of Directors in
the management of the business of the corporation between meetings of the Board.
Section 11. Power to Require Bonds. The Board of Directors may require
any officer or agent to file with the corporation a satisfactory bond
conditioned for faithful performance of his duties.
Section 12. Compensation. The Board of Directors shall fix the salaries
of all officers of the corporation.
<PAGE>
ARTICLE V
Officers
Section 1. Chairman of the Board. The Board of Directors may select a
Chairman of the Board, who shall be selected by and from the membership of the
Board of Directors, and shall preside at all meetings of the shareholders,
directors, and the executive committee. He shall also perform such other duties
as may be delegated to him from time to time by the Board of Directors or the
Executive Committee.
Section 2. President. The President shall be selected by and from the
membership of the Board of Directors. He shall be the Chief Executive Officer of
the corporation, and shall see that all orders and resolutions of the Board are
carried into effect. He shall be ex-officio a member of all standing committees,
and shall have the general powers and duties of supervision and management
usually vested in the office of President and Chief Executive Officer of a
corporation.
Section 3. Vice President. There shall be such Vice Presidents as shall
be chosen from time to time by the Board. At least one Vice President shall be
chosen from the membership of the Board, who shall succeed to the office of
President in case of vacancy of such office. Other Vice Presidents may be
selected by the Board from time to time with such authority and duties as shall
be prescribed by the Board.
Section 4. Secretary. The Secretary shall attend all meetings of the
shareholders and of the Board of Directors, and of the executive committee, and
shall preserve in books of the corporation true minutes of the proceedings of
all such meetings. He shall safely keep in his custody the seal of the
corporation and shall have authority to affix the same to all instruments where
its use is required. He shall give all notices required by statue, By-Law, or
resolution. He shall perform such other duties as may be delegated to him by the
Board of Directors or by the executive committee.
Section 5. Treasurer. The Treasurer shall have custody of all corporate
funds and securities and shall keep in books belonging to the corporation full
and accurate accounts of all receipts and disbursements; he shall deposit all
moneys, securities and other valuable effects in the name of the corporation in
such depositories as may be ordered by the Board, taking proper vouchers for
such disbursements, and shall render to the President and Directors at the
regular meetings of the Board, and whenever requested by them, an account of all
his transactions as Treasurer and of the financial condition of the corporation.
If required by the Board, he shall deliver to the President of the corporation,
and shall keep in force, a bond in form, amount and with a surety or sureties
satisfactory to the Board, conditioned for faithful performance of the duties of
his office, and for restoration to the corporation in case of his death,
resignation, retirement, or removal from office, of all books, papers, vouchers,
money and property of whatever kind in his possession or under his control
belonging to the corporation.
Section 6. Assistant Secretary and Assistant Treasurer. The Assistant
Secretary, in the absence or disability of the Secretary, shall perform the
duties and exercise the powers of the Secretary. The Assistant Treasurer, in the
absence or disability of the Treasurer, shall perform the duties and exercise
the powers of the Treasurer.
Section 7. Other Officers. Any other officers appointed by the Board of
Directors pursuant to Section 6 of Article IV hereof shall have such power and
perform such duties as shall be delegated to them by the Board of Directors.
ARTICLE VI
Shares and Transfers
Section 1. Certificates for Shares. Every shareholder shall be entitled
to a certificate of his shares signed by the President or a Vice President and
the Secretary or the Treasurer, or by the Assistant Secretary or the Assistant
Treasurer, under the seal of the corporation, certifying the number and class of
shares represented by such certificates; provided, that where such certificate
is signed (1) by a transfer agent or an assistant transfer agent or (2) by a
transfer clerk acting on behalf of the corporation, and a registrar, the
signature of any such President, Vice President, Secretary, Assistant Secretary,
Treasurer, or Assistant Treasurer, and the seal of the corporation, may be a
facsimile.
Section 2. Transfers of Stock. Transfers of stock shall be made on the
books of the corporation only by the person named in certificate or by attorney
lawfully constituted in writing and upon surrender of the certificate therefor.
Section 3. Registered Shareholders. The corporation shall have the
right to treat the registered holder of any share as the absolute owner thereof,
and shall not be bound to recognize any equitable or other claim to, or interest
in, such share on the part of any other person, whether or not the corporation
shall have express or other notice thereof save as may be otherwise provided by
the Statutes of Michigan.
Section 4. Lost Certificates. In case of loss or destruction of any
certificate of stock, the owner shall not be entitled to receive a new
certificate in lieu thereof until proof satisfactory to the Secretary of such
loss or destruction is made and ample indemnity, by bond or otherwise, as the
President and Secretary may prescribe has been given to the company. At the
option of the company, a new certificate may not be issued until sixty days
after notice of loss is received. Any such new certificate, issued in lieu of
one lost or destroyed, shall be marked "Duplicate" on its face.
Section 5. Transfer Agent and Registrar. The Board of Directors may
appoint a transfer agent and a registrar of transfers and may require all
certificates of shares to bear the signature of such transfer agent and of such
registrar of transfers, or as the Board may otherwise direct.
Section 6. Regulations. The Board of Directors shall have power and
authority to make all such rules and regulations as the Board shall deem
expedient regulating the issue, transfer and registration of certificates for
shares in this corporation.
ARTICLE VII
Dividends and Reserves
Section 1. Sources of Dividends. The Board of Directors shall have
power and authority to declare dividends from any source permitted by law. In
determining earned surplus the judgment of the Board shall be conclusive in the
absence of bad faith or gross negligence.
Section 2. Manner of Payment of Dividend. Dividends may be paid in
cash, in property, in obligations of the corporation, or in shares of the stock
of the corporation.
Section 3. Reserves. The Board of Directors shall have power and
authority to set apart, out of any funds available for dividends, such reserve
or reserves, for any proper purpose, as the Board in its discretion shall
approve and the Board shall have power and authority to abolish any reserve
created by the Board.
ARTICLE VIII
Right of Inspection
Section 1. Inspection of List of Shareholders. At least ten (10) days
before every election of Directors a complete list of shareholders entitled to
vote at such election shall be open to examination by any registered shareholder
entitled to vote at such election, provided that no shareholder holding less
than two (2%) per cent of the outstanding common stock of the corporation shall
be entitled to exercise such privilege of inspection in advance of such meeting.
Section 2. Inspection of Books of Account and Stock Books. The books of
account and stock books of this corporation shall be open to inspection at all
reasonable times and for any proper purpose by the shareholders, provided that
no shareholder holding of record in the aggregate less than two (2%) per cent of
the outstanding shares of such class of the stock of this corporation, and no
person, whatever his or her holdings, who has not been a shareholder of record
of this corporation for at least three (3) months prior to making such
application, shall be permitted to exercise such privilege of inspection, except
pursuant to resolution of the Board of Directors.
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ARTICLE IX
Execution of Instruments
Section 1. Checks, Etc. All checks, drafts, and orders for payment of
money shall be signed in the name of the corporation by such officers or agents
as the Board of Directors shall from time to time designate for that purpose.
Section 2. Contracts, Conveyances, Etc. When the execution of any
contract, conveyance, or other instrument has been authorized without
specification of the executing officers, the President, or any Vice President,
and the Secretary, or Assistant Secretary, may execute the same in the name and
behalf of this corporation any may affix the corporate seal thereto. The Board
of Directors shall have the power to designate the officers and agents who shall
have authority to execute any instrument in behalf of this corporation.
ARTICLE X
Seal
The seal of this corporation shall be the seal, an imprint of which is
affixed to the margin of these Articles.
ARTICLE XI
Indemnification of Directors and Officers
This Corporation shall indemnify to the full extent permitted by law
any person who was or is a party or is threatened to be made a party to civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was a director, officer, employee or agent 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, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably believed to be in or not
opposed to the best interests of the Corporation or its shareholders, and with
respect to any criminal action or proceeding, had no reasonable cause to believe
his or her contract was unlawful. The foregoing right of indemnification shall
not be exclusive of other rights to which such person may be entitled.
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ARTICLE XII
Amendment of By-Laws
These By-Laws may be amended, altered, changed, added to, or repealed,
by the majority vote of the Board of Directors.
ARTICLE XIII
Fiscal Year
The Fiscal Year of the corporation shall be determined and fixed from
time to time by the Board of Directors.
