As filed with the Securities and Exchange Commission on January 28, 1999
Registration No. 333-____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
SEPARATE ACCOUNT IPL-1
(Exact name of trust)
INVESTORS PARTNER LIFE INSURANCE COMPANY
(Name of depositor)
JOHN HANCOCK PLACE
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02117
(Complete address of depositor's principal executive offices)
RONALD J. BOCAGE, ESQ.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02117
(Name and complete address of agent for service)
Copy to:
THOMAS C. LAUERMAN, ESQ.
FREEDMAN, LEVY, KROLL & SIMONDS
1050 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20036
Title of securities being registered: interests under flexible premium variable
life insurance policies
Approximate date of proposed public offering: as soon as practicable after the
effective date of this Registration Statement.
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>
CROSS-REFERENCE TABLE
Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------
1 "Additional Information - How we support
the policy and investment options
- Separate Account IPL-1"
2 Cover Page
3 Not Applicable
4 "Additional Information - How we market
the policies"
5, 6 "Additional Information - How we support
the policy and investment options
- Separate Account IPL-1"
7, 8, 9 Not Applicable
10(a), (b), (c), (d) "Basic Information - How can I access my
investment in the policy?"; "Basic
Information - How can I change my
policy's investment allocations?"; "Basic
Information - Who owns the policy?"
10(e) "Basic Information - Is there a minimum
amount I must invest?"
10(f) "Additional Information - Voting
privileges that you will have"
10(g), (h) "Additional Information - Changes that
IPL can make as to your policy"
10(i) Not Applicable
11, 12 Cover Page
13 "Basic Information - What charges will
IPL deduct from my investment in the
policy?"; "Basic Information - What
charges will the Trust deduct from my
investment in the policy?"
14, 15 "Additional Information - Procedures for
issuance of a policy"; "Additional
Information - How we process certain
policy transactions"
16 "Additional Information - How we support
the policy and investment options"
<PAGE>
Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------
17 "Basic Information - How do I communicate
with IPL?"; "Basic Information - Is there
a minimum amount I must invest?";
"Additional Information - Effect of policy
loans"
18 "Basic Information - How will the value of
my investment in the policy change over
time"; "Additional Information - How we
support the policy and investment options"
19 "Additional Information - Reports that you
will receive"
20 Not Applicable
21 "Basic Information - How can I access my
investment in the policy?"; "Additional
Information - Effects of policy loans"
22, 23 Not Applicable
24 "Additional Information - Adjustments we
make to death benefits"
25 "Additional Information - Description of
IPL"
26 "Basic Information - What charges will IPL
deduct from my investment in the policy?";
"Basic Information - What charges will the
Trust deduct from my investment in the
policy?"
27 "Additional Information - Reports that you
will receive"
28 "Additional Information - List of
Directors and Executive Officers of IPL"
29 "Additional Information - Description of
IPL"
30, 31, 32, 33, 34 Not Applicable
35 "Additional Information - Description of
IPL"
36, 37 Not Applicable
38, 39 "Additional Information - How we market
the policies"
40 Not Applicable
41(a) "Additional Information - How we market
the policies"
<PAGE>
Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------
41(b), (c), (d), 42, 43 Not Applicable
44 "Additional Information - How we support
the policy and investment options -
Separate Account IPL-1"
45 Not Applicable
46,47 "Additional Information - How we support
the policy and investment options -
Separate Account IPL-1"; "Additional
Information - When we pay policy proceeds"
48, 49, 50 Not Applicable
51(a) - (f) Cover Page; "Basic Information - What is
the policy?"
51(g) "Basic Information - How can I invest
money in the policy?"; "Basic Information
- Is there a minimum amount I must
invest?"
51(h) - (j) Not Applicable
52 "Additional Information - Changes that IPL
can make as to your policy"
53(a) Cover Page; "Additional Information - How
we support the policy and investment
options"
53(b), 54, 55, 56, 57, 58, 59 Not Applicable
<PAGE>
PROSPECTUS DATED MARCH 1, 1999
INVESTORS PARTNER VARIABLE LIFE
a flexible premium variable life insurance policy
issued by
INVESTORS PARTNER LIFE INSURANCE COMPANY ("IPL")
IPL SERVICING OFFICE
--------------------
EXPRESS DELIVERY
----------------
Department 5111
P.O. Box 30000
99 Founders Plaza
East Hartford, CT 06108
U.S. MAIL
---------
Department 5111
P.O. Box 30000
Hartford, CT 06150-5111
PHONE: 1-877-619-4888
FAX: 1-877-329-4751
The policy provides an investment option with fixed rates of return declared
by IPL and the following 23 variable investment options:
<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
-------------------------- ----------
- -----------------------------------------------------------------------------------------------------
<S> <C>
Managed ................................... Independence Investment Associates, Inc.
Growth & Income ........................... Independence Investment Associates, Inc.
Equity Index ............................. State Street Global Advisors
Large Cap Value ........................... T. Rowe Price Associates, Inc.
Large Cap Growth .......................... Independence Investment Associates, Inc.
Mid Cap Value ............................. Neuberger & Berman Management, LP
Mid Cap Growth ............................ Janus Capital Corporation
Diversified Mid Cap Growth ................ John Hancock Advisers, Inc.
Real Estate Equity ........................ Independence Investment Associates, Inc.
Small/Mid Cap CORE ........................ Goldman Sachs Asset Management
Small Cap Value ........................... INVESCO Management & Research, Inc.
Small Cap Growth .......................... John Hancock Advisers, Inc.
Global Equity ............................. Scudder Kemper Investments, Inc.
International Balanced .................... Brinson Partners, Inc.
International Equity Index ................ Independence International Associates, Inc.
International Opportunities ............... Rowe Price-Fleming International, Inc.
Emerging Markets Equity ................... Montgomery Asset Management, LLC
Short-Term Bond ........................... Independence Investment Associates, Inc.
Bond Index ................................ Mellon Bond Associates
Sovereign Bond ............................ John Hancock Advisers, Inc.
Strategic Bond ............................ J.P. Morgan Investment Management, Inc.
High Yield Bond ........................... Wellington Management Company, LLP
Money Market .............................. John Hancock Mutual Life Insurance Company
- -----------------------------------------------------------------------------------------------------
</TABLE>
We may add or delete variable investment options in the future.
<PAGE>
When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of the John Hancock
Variable Series Trust I (the "Trust"). The Trust is a mutual fund that offers 23
different investment options (which are called "portfolios"). The investment
results of each variable investment option you select will depend on those of
the corresponding Trust portfolio. Attached to this prospectus is a prospectus
for the Trust that contains detailed information about each portfolio. Be sure
to read the prospectus for the Trust before selecting any of the variable
investment options shown on page 1.
GUIDE TO THIS PROSPECTUS
This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
---
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.
This prospectus is arranged in the following way:
. The section which follows is called "Basic Information". It is in a
question and answer format. We suggest you read the Basic Information
section before reading any other section of the prospectus.
. Behind the Basic Information section are illustrations of
hypothetical policy benefits that help clarify how the policy works.
These start on page 17.
. Behind the illustrations is a section called "Additional Information"
that gives more details about the policy. It generally does not
---
repeat information that is in the Basic Information section. A table
of contents for the Additional Information section appears on page
22.
. Behind the Additional Information section are the financial
statements for IPL. These start on page 35.
. Finally, there is an Alphabetical Index of Key Words and Phrases at
the back of the prospectus on page 36.
After the Alphabetical Index of Key Words and Phrases, this prospectus ends and
the Trust prospectus begins.
**********
Please note that the Securities and Exchange Commission ("SEC") has not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
2
<PAGE>
BASIC INFORMATION
This part of the prospectus provides answers to commonly asked questions about
the policy.
Here are the page numbers where the questions and answers appear:
<TABLE>
<CAPTION>
<S> <C>
Question Pages to See
- --------
.What is the policy?.......................................... 4
.Who owns the policy?......................................... 4
.How can I invest money in the policy?........................ 4-5
.Is there a minimum amount I must invest?..................... 5-6
.How will the value of my investment in the policy change over
time?......................................................... 7
.What charges will IPL deduct from my investment in the
policy?....................................................... 7-9
.What charges will the Trust deduct from my investment in the
policy?....................................................... 9
.What other charges could IPL impose in the future?........... 10
.How can I change my policy's investment allocations?......... 10-11
.How can I access my investment in the policy?................ 11-12
.How much will IPL pay when the insured person dies?.......... 12-13
.How can I change my policy's insurance coverage?............. 13-14
.Can I cancel my policy after it's issued?.................... 14
.Can I choose the form in which IPL pays out proceeds from my
policy?....................................................... 14
.To what extent can IPL vary the terms and conditions of its
policies in particular cases?................................ 15
.How will my policy be treated for income tax purposes?....... 15
.How do I communicate with IPL?............................... 15-16
</TABLE>
3
<PAGE>
WHAT IS THE POLICY?
The policy's primary purpose is to provide lifetime protection against
economic loss due to the death of the insured person. The value of the amount
you have invested under the policy may increase or decrease daily based upon the
investment results of the variable investment options that you choose. The
amount we pay to the policy's beneficiary if the insured person dies (we call
this the "death benefit") may be similarly affected.
While the insured person is alive, you will have a number of options under the
policy. Here are some major ones:
. Determine when and how much you invest in the various investment
options
. Borrow or withdraw amounts you have in the investment options
. Change the beneficiary who will receive the death benefit
. Change the amount of insurance
. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value
. Choose the form in which we will pay out the death benefit or other
proceeds
Most of these options are subject to limits that are explained later in this
prospectus.
WHO OWNS THE POLICY?
That's up to the person who applies for the policy. The owner of the policy is
the person who can exercise most of the rights under the policy, such as the
right to choose the investment options or the right to surrender the policy. In
many cases, the person buying the policy is also the person who will be the
owner. However, the application for a policy can name another person or entity
(such as a trust) as owner. Whenever we've used the term "you" in this
prospectus, we've assumed that the reader is the person who has whatever right
or privilege is being discussed. There may be tax consequences if the owner and
the insured person are different, so you should discuss this issue with your tax
adviser.
HOW CAN I INVEST MONEY IN THE POLICY?
Premium Payments
We call the investments you make in the policy "premiums" or "premium
payments". The amount we require as your first premium depends upon the
-----
specifics of your policy and the insured person. Except as noted below, you can
make any other premium payments you wish at any time. That's why the policy is
called a "flexible premium" policy.
4
<PAGE>
Maximum premium payments
Federal tax law limits the amount of premium payments you can make relative to
the amount of your policy's insurance coverage. We will not accept any amount by
which a premium payment exceeds the maximum. If you exceed certain other limits,
the law may impose a penalty on amounts you take out of your policy. We'll
monitor your premium payments and let you know if you're about to exceed this
limit. More discussion of these tax law requirements begins on page 29. Also, we
may refuse to accept any amount of an additional premium if:
. that amount of premium would increase our insurance risk exposure,
and
. the insured person doesn't provide us with adequate evidence that he
or she continues to meet our requirements for issuing insurance.
In no event, however, will we refuse to accept any premium necessary to prevent
the policy from terminating.
Ways to pay premiums
If you pay premiums by check or money order, they must be drawn on a U.S. bank
in U.S. dollars and made payable to "Investors Partner Life Insurance Company."
Premiums after the first must be sent to the IPL Servicing Office at one of the
addresses shown on page 1 of this prospectus.
We will also accept premiums:
. by wire or by exchange from another insurance company,
. via an electronic funds transfer program (any owner interested in
making monthly premium payments must use this method), or
-------
. if we agree to it, through a salary deduction plan with your
employer.
You can obtain information on these other methods of premium payment by
contacting your IPL representative or by contacting the IPL Servicing Office.
IS THERE A MINIMUM AMOUNT I MUST INVEST?
Planned Premiums
The Policy Specifications page of your policy will show the "Planned Premium"
for the policy. You choose this amount in the policy application. The premium
reminder notice we send you is based on this amount. You will also choose how
often to pay premiums-- annually, semi-annually, quarterly or monthly. However,
payment of Planned Premiums is not necessarily required. You need only invest
enough to keep the policy in force (see "Lapse and reinstatement" and
"Guaranteed death benefit feature" below).
5
<PAGE>
Lapse and reinstatement
If the policy's surrender value is not sufficient to pay the charges and the
guaranteed death benefit feature is not in effect, we will notify you of how
much you will need to pay to keep the policy in force. You will have a 61 day
"grace period" to make that payment. If you don't pay at least the required
amount by the end of the grace period, your policy will terminate (i.e., lapse).
All coverage under the policy will then cease. Even if the policy terminates in
this way, you can still reactivate (i.e., "reinstate") it within 1 year from the
beginning of the grace period. You will have to provide evidence that the
insured person still meets our requirements for issuing coverage. You will also
have to pay a minimum amount of premium and be subject to the other terms and
conditions applicable to reinstatements, as specified in the policy. If the
insured person dies during the grace period, we will deduct any unpaid monthly
charges from the death benefit.
Guaranteed death benefit feature
This feature guarantees that your policy will not lapse, regardless of adverse
investment performance, if, on the immediately preceding monthly deduction date,
the amount of cumulative premiums you have paid (less all withdrawals and
outstanding loans taken from the policy) equals or exceeds a defined minimum as
of that date. ("Monthly deduction date "is defined under "Procedures for
issuance of a policy" beginning on page 24.) The defined minimum is the
"Guaranteed Death Benefit Premium" or "GDB Premium" applicable on the date in
question multiplied by the number of monthly deduction dates since the policy's
date of issue. There are three types of GDB Premium:
. one that will maintain no-lapse status until the end of the fifth
policy year;
. another that will maintain no-lapse status until the policy
anniversary nearest the insured person's 75th birthday (this applies
only if the insured person is less than attained age 70 when the
policy is issued); and
. a third that will maintain no-lapse status until the policy
anniversary nearest the insured person's 100th birthday.
The second GDB Premium is higher than the first and the third is higher still.
However, no GDB Premium will ever be greater than the so-called "guideline
premium" for the policy as defined in Section 7702 of the Internal Revenue Code.
Also, the GDB Premiums may change in the event of any change in the face amount
of the policy or any change in the death benefit option (see "How much will IPL
pay when the insured person dies?" on page 12).
Each time we test to see if this feature is still in effect, we will use the
lowest of the GDB Premiums that is still in effect.
If there are monthly charges that remain unpaid because of this feature, we
will deduct such charges when there is sufficient surrender value to pay them.
6
<PAGE>
HOW WILL THE VALUE OF MY INVESTMENT IN THE POLICY CHANGE OVER TIME?
From each premium payment you make, we deduct the charges described under
"Deductions from premium payments" below. We invest the rest in the investment
options you've elected. Special investment rules apply for the first 20 days
after your policy becomes effective. (See "How we process certain policy
transactions" beginning on page 25.)
Over time, the amount you've invested in any variable investment option will
--------
increase or decrease the same as if you had invested the same amount in the
corresponding Trust portfolio directly and had reinvested all portfolio
dividends and distributions in additional portfolio shares; except that we will
deduct certain additional charges which will reduce your account value. We
describe these charges under "What charges will IPL deduct from my investment in
the policy?" below.
The amount you've invested in the fixed investment option will earn interest
-----
at a rate we declare from time to time. We guarantee that this rate will be at
least 4%. If you want to know what the current declared rate is, just call or
write to us. The current declared rate will also appear in the annual statement
we will send you. Amounts you invest in the fixed investment option will not be
---
subject to the mortality and expense risk charge described on page 8. Otherwise,
the charges applicable to the fixed investment option are the same as those
applicable to the variable investment options.
At any time, the "account value" of your policy is equal to:
. the amount you invested,
. plus or minus the investment experience of the investment options
you've chosen,
. minus all charges we deduct, and
. minus all withdrawals you have made.
If you take a loan on the policy, however, your account value will be computed
somewhat differently. This is discussed beginning on page 11.
WHAT CHARGES WILL IPL DEDUCT FROM MY INVESTMENT IN THE POLICY?
Deductions from premium payments
. Premium and DAC tax charge - A charge to cover state premium taxes we
----------------------------
currently expect to pay, on average, and the increased Federal income tax
burden that we currently expect will result from receipt of premiums. This
charge is currently 3.55% of each premium.
. Sales and administrative charge - A charge to help defray our sales and
---------------------------------
administrative costs. The charge is 2% of a certain portion of the premium
you pay in the first nine policy years. The portion of each year's premium
that is subject to the charge is called
7
<PAGE>
the "Target Premium". It's determined at the time the policy is issued and
will appear in the "Policy Specifications" section of the policy. We will
stop making this charge on premiums received after the 9th policy year.
Deductions from account value
. Sales and administrative charge - A monthly charge to help defray our
---------------------------------
sales and administrative costs. This charge has two parts: (1) a flat
dollar charge of up to $10 (currently $6) and (2) a charge based on the
amount of insurance and the insured person's attained age on the policy's
date of issue. (The insured person's "attained age" on any date is his or her
age on the birthday nearest that date.) This charge will appear in the
"Policy Specifications" section of the policy.
. Insurance charge - A monthly charge for the cost of insurance. To
------------------
determine the charge, we multiply the amount of insurance for which we are
at risk by a cost of insurance rate. The rate is derived from an actuarial
table. The table in your policy will show the maximum cost of insurance
-------
rates. The cost of insurance rates that we currently apply are generally
less than the maximum rates. The table of rates we use will depend on the
insurance risk characteristics and (usually) gender of the insured person,
the face amount of insurance and the length of time the policy has been in
effect. Regardless of the table used, cost of insurance rates generally
increase each year that you own your policy, as the insured person's
attained age increases.
. Extra mortality charge - A monthly charge specified in your policy for
------------------------
additional mortality risk if the insured person is subject to certain
types of special insurance risk.
. M &E charge - A monthly charge for mortality and expense risks we assume.
-------------
The current charge is .70% of that portion of your account value allocated
to variable investment options for policy years 1 - 15 and .30%
--------
thereafter. This charge does not apply to the fixed investment option. The
reduction after 15 years has not occurred yet under any policy, since no
policy has yet been outstanding for 15 years. We guarantee that this
charge will never exceed the following percentages of that portion of your
account value allocated to variable investment options: .90% for policy
years 1 -15 and .50% thereafter.
. Optional benefits charge - Monthly charges for any optional insurance
--------------------------
benefits added to the policy by means of a rider. We currently offer a
number of optional riders, such as disability waiver of charges,
disability payment of premium, and accidental death.
. Surrender charge - A charge we deduct if the policy lapses or is
------------------
surrendered within the first 9 policy years or if there is a decrease in
the face amount. We deduct this "surrender charge" to compensate us for
expenses that we would otherwise not recover in the event of early lapse
or surrender. The charge is a percentage of that portion of the current
Target Premium that is not attributable to optional benefit riders.
("Target Premium" is described above under "Deductions from premium
payments.") The percentage is higher in the early years and decreases to
zero as shown in the following table:
8
<PAGE>
FOR SURRENDERS OR LAPSES DURING PERCENTAGE
------------------------------- -----------
Policy year 1 100%
Policy year 2 100%
Policy year 3 90%
Policy year 4 80%
Policy year 5 70%
Policy year 6 60%
Policy year 7 50%
Policy year 8 35%
Policy year 9 20%
Policy year 10 and later 0%
Because the surrender charge is computed with reference to "Target
Premiums", it will be the same regardless of how much premiums have been
paid.
. Partial withdrawal charge - A charge for each partial withdrawal of
---------------------------
account value to compensate us for the administrative expenses of
processing the withdrawal. The charge is equal to the lesser of $20 or 2%
of the withdrawal amount.
WHAT CHARGES WILL THE TRUST DEDUCT FROM MY INVESTMENT IN THE POLICY?
The Trust must pay investment management fees and other operating expenses.
These fees and expenses are different for each portfolio of the Trust and reduce
the investment return of each portfolio. Therefore, they also indirectly reduce
the return you will earn on any variable investment options you select. These
fees and expenses currently are as follows:
<TABLE>
<CAPTION>
Other Trust
Other Trust Expenses
Management Expenses After Total Trust Absent
Fee Expense Operating Expense
Portfolio Name Reimbursement Expenses Reimbursement*
<S> <C> <C> <C> <C>
Managed . . . . . . . 0.33% 0.04% 0.37% N/A
Growth & Income . . . 0.25% 0.03% 0.28% N/A
Equity Index. . . . . 0.15% 0.25% 0.40% 0.40%
Large Cap Value . . . 0.75% 0.25% 1.00% 0.31%
Large Cap Growth. . . 0.39% 0.05% 0.44% N/A
Mid Cap Value . . . . 0.80% 0.25% 1.05% 0.34%
Mid Cap Growth. . . . 0.85% 0.25% 1.10% 0.57%
Diversified Mid Cap
Growth . . . . . . . 0.75% 0.10% 0.85% N/A
Real Estate Equity. . 0.60% 0.09% 0.69% N/A
Small/Mid Cap CORE. . 0.80% 0.25% 1.05% N/A
Small Cap Value . . . 0.80% 0.25% 1.05% 0.50%
Small Cap Growth. . . 0.75% 0.25% 1.00% 0.37%
Global Equity . . . . 0.90% 0.25% 1.15% N/A
International Balanced 0.85% 0.25% 1.10% 0.71%
International Equity
Index. . . . . . . . 0.18% 0.19% 0.37% N/A
International
Opportunities. . . . 0.97% 0.25% 1.22% 0.60%
Emerging Markets
Equity . . . . . . . 1.30% 0.25% 1.55% N/A
Short-Term Bond . . . 0.30% 0.21% 0.51% N/A
Bond Index. . . . . . 0.15% 0.25% 0.40% N/A
Sovereign Bond. . . . 0.25% 0.06% 0.31% N/A
Strategic Bond. . . . 0.75% 0.25% 1.00% 0.57%
High yield Bond . . . 0.65% 0.25% 0.90% N/A
Money Market. . . . . 0.25% 0.08% 0.33% N/A
</TABLE>
* A portfolio is reimbursed when the portfolio's other Trust expenses exceed
0.25% of the portfolio's average daily assets.
9
<PAGE>
WHAT OTHER CHARGES COULD IPL IMPOSE IN THE FUTURE?
We currently make no charge against account value for our Federal income
taxes, but if we incur, or expect to incur, income taxes attributable to any
Subaccount or this class of policies in future years, we reserve the right to
make such a charge. Any such charge would reduce what you earn on any affected
investment options. However, we expect that no such charge will be necessary.
Under current laws, we may incur state and local taxes (in addition to premium
taxes) in several states. At present, these taxes are not significant. If there
is a material change in applicable state or local tax laws, we may make charges
for such taxes.
HOW CAN I CHANGE MY POLICY'S INVESTMENT ALLOCATIONS?
Future premium payments
At any time, you may change the investment options in which future premium
payments will be invested. You make the original allocation in the application
for the policy. Also, the percentages you select must be in whole numbers and
must equal 100% in total.
Transfers of existing account value
You may also transfer your existing account value from one investment option
to another. To do so, you must tell us how much to transfer, either as a
percentage or as a specific dollar amount.
You can make transfers out of any variable investment option anytime you wish,
--------
but transfers out of the fixed investment option are subject to the following
-----
restrictions:
. You can only make such a transfer once a year and only during the 31 day
period following your policy anniversary.
. We must receive the request for such a transfer during the period
beginning 60 days prior to the policy anniversary and ending 30 days after
it.
. The most you can transfer at any one time is the greater of $500 or 20%
of the assets in your fixed investment option.
Dollar cost averaging
This is a program of automatic monthly transfers out of the Money Market
investment option into one or more of the other variable investment options. You
choose the investment options and the dollar amount and timing of the transfers.
The program is designed to reduce the risks that result from market
fluctuations. It does this by spreading out the allocation of your money to
investment options over a longer period of time. This allows you to reduce the
risk of investing most of your money at a time when market prices are high.
Obviously, the success of this strategy depends on market trends and is not
guaranteed.
10
<PAGE>
Rebalancing
This is a program that automatically re-sets the percentage of your account
value allocated to each of the variable investment options. Over time, the
variations in the investment results for each variable investment option will
shift the percentage allocations among them. The rebalancing program will
periodically transfer your account value among the variable investment options
to reestablish the preset percentages you have chosen. Rebalancing can result in
transfering amounts from a variable investment option with relatively higher
investment performance to one with relatively lower investment performance. Of
course, the reverse can also happen. Rebalancing and dollar cost averaging
cannot be in effect at the same time.
HOW CAN I ACCESS MY INVESTMENT IN THE POLICY?
Full surrender
You may surrender your policy in full at any time. If you do, we will pay you
the account value, less any policy loans and less any surrender charge that then
applies. This is called your "surrender value." You must return your policy when
you request a full surrender.
Partial withdrawals
You may make a partial withdrawal of your surrender value at any time. Each
partial withdrawal must be at least $500. There is a charge (usually $20) for
each partial withdrawal. We will automatically reduce the account value of your
policy by the amount of the withdrawal and the related charge. Unless you
designate otherwise, each investment option will be reduced in the same
proportion as the account value is then allocated among them. We will not permit
a partial withdrawal if it would cause your surrender value to fall below 3
months' worth of monthly charges (see "Deductions from account value"). If the
Option A death benefit is then in effect, we generally will automatically reduce
your face amount of insurance by the amount of the withdrawal and the related
charge (see "How much will IPL pay when the insured person dies?" on page 12).
If we make any such reduction in the face amount, we will also reduce the GDB
Premiums due after the date of the withdrawal. If such a face amount reduction
would cause your policy to fail the Code's definition of life insurance, we will
not permit the partial withdrawal.
Policy loans
You may borrow from your policy at any time after it has been in effect for 1
year by completing a form satisfactory to us or, if the telephone transaction
authorization form has been completed, by telephone. The maximum amount you can
borrow is determined as follows:
. We first determine the surrender value of your policy.
. We then subtract an amount equal to 12 times the monthly charges then
being deducted from account value.
11
<PAGE>
. We then multiply the resulting amount by the ratio of 1 plus the
interest rate credited to the special loan account (see below)
divided by 1 plus the interest rate charged on the loan.
The minimum amount of each loan is $300. The interest charged on any loan is
4.0% in all policy years. Accrued interest will be added to the loan daily and
will bear interest at the same rate as the original loan amount. A loan does not
reduce your account value, but the amount of the loan is deducted from the
investment options in the proportions you designate (or, in the absence of such
a designation, in the same proportion as the account value is then allocated
among them) and is placed in a special loan account. This special loan account
will earn interest at 3.0% in the first 9 policy years and 4.0% after that.
However, if we determine that a loan will be treated as taxable distribution
because of the differential between the loan interest rate and the rate being
credited on the special loan account, we reserve the right to decrease the rate
credited on the special loan account to a rate that would, in our reasonable
judgement, result in the transaction being treated as a loan under Federal tax
law.
You can repay all or part of a loan at any time. Each repayment will be
allocated among the investment options as follows:
. The same proportionate part of the loan as was borrowed from the
fixed investment option will be repaid to the fixed investment
option.
. The remainder of the repayment will be allocated among the investment
options in the proportions you designate (or, in the absence of such
a designation, in the same way a new premium payment would be
allocated).
If you want a payment to be used as a loan repayment, you must include
instructions to that effect. Otherwise, all payments will be assumed to be
premium payments.
HOW MUCH WILL IPL PAY WHEN THE INSURED PERSON DIES?
In your application for the policy, you will tell us how much life insurance
coverage you want on the life of the insured person. This is called the "face
amount" of insurance.
When the insured person dies, we will pay the death benefit minus any
outstanding loans. There are 2 ways of calculating the death benefit. You choose
which one you want in the application. The two death benefit options are:
. Option A - The death benefit will equal the greater of (1) the face
amount or (2) the minimum insurance amount (as defined below).
. Option B - The death benefit will equal the greater of (1) the face
amount plus your policy's account value on the date of death, or (2)
the minimum insurance amount.
For the same premium payments, the death benefit under Option B will tend to
be higher than the death benefit under Option A. On the other hand, the monthly
insurance charge will be
12
<PAGE>
higher under Option B to compensate us for the additional insurance risk.
Because of that, the account value will tend to be higher under Option A than
under Option B for the same premium payments.
The minimum insurance amount
In order for a policy to qualify as life insurance under Federal tax
law, there has to be a minimum amount of insurance in relation to account value.
We compute the minimum insurance amount each business day by multiplying the
account value on that date by the so-called "corridor factor" applicable on that
date. The corridor factors are derived by applying the "guideline premium and
cash value corridor test" of the Internal Revenue Code. The corridor factor
starts out at 2.50 for ages at or below 40 and decreases as attained age
increases, reaching a low of 1.0 at age 95. A table showing the factor for each
age will appear in the policy.
When the insured person reaches 100
If the insured person reaches attained age 100, the death benefit will become
equal to the account value on the date of death. Death benefit Options A and B
(as described above) will cease to apply. Also, we will stop deducting any
monthly charges.
HOW CAN I CHANGE MY POLICY'S INSURANCE COVERAGE?
Increase in coverage
After the first policy year, you may request an increase in the face amount of
insurance coverage at any time. Each such increase must be at least $50,000.
However, you will have to provide us with evidence that the insured person still
meets our requirements for issuing insurance coverage.
In many respects, we treat an increase in face amount as if it were the
issuance of a new policy. For example, the monthly cost of insurance charge for
the increase will be based on the insured person's attained age and risk class
at the time of the increase.
Decrease in coverage
After the first policy year, you may request a reduction in the face amount of
insurance coverage at any time, but only if:
. your account value exceeds any surrender charge associated with the
reduction,
. the remaining face amount will be at least $100,000, and
. the remaining face amount will at least equal the minimum required by
the tax laws to maintain the policy's life insurance status.
At the time of any reduction in face amount (other than one resulting from a
partial withdrawal as explained on page 11), we will deduct the surrender charge
associated with the reduction from your account value.
13
<PAGE>
Change of death benefit option
At any time, you may change your coverage from death benefit Option A to
Option B or vice-versa. However, if you change from Option A to Option B, we
will require evidence that the insured person still meets our requirements for
issuing coverage. This is because such a change increases our insurance risk
exposure.
Tax consequences
Please read "Tax considerations" starting on page 29 to learn about possible
tax consequences of changing your insurance coverage under the policy.
CAN I CANCEL MY POLICY AFTER IT'S ISSUED?
You have the right to cancel your policy within 10 days (or longer in some
states) after you receive it. This is often referred to as the "free look"
period. To cancel your policy, simply deliver or mail the policy to:
. IPL at one of the addresses shown on page 1, or
. the IPL representative who delivered the policy to you.
In most states, you will receive a refund of any premiums you've paid. In some
states, the refund will be your account value on the date of cancellation plus
all charges deducted by IPL or the Trust prior to that date. The date of
cancellation will be the date we receive the policy.
CAN I CHOOSE THE FORM IN WHICH IPL PAYS OUT PROCEEDS FROM MY POLICY?
Choosing a payment option
You may choose to receive proceeds from the policy as a single sum. This
includes proceeds that become payable because of death or full surrender.
Alternatively, you can elect to have proceeds of $1,000 or more applied to any
of a number of other payment options, a description of which will be provided to
you upon request. We will issue a supplementary agreement when the proceeds are
applied to any payment option. That agreement will spell out the terms of the
option in full.
Changing a payment option
You can change the payment option at any time before the proceeds are payable.
If you haven't made a choice, the payee of the proceeds has a prescribed period
in which he or she can make that choice.
Tax impact
There may be tax consequences to you or your beneficiary depending upon which
payment option is chosen. You should consult with a qualified tax adviser before
making that choice.
14
<PAGE>
TO WHAT EXTENT CAN IPL VARY THE TERMS AND CONDITIONS OF ITS POLICIES IN
PARTICULAR CASES?
Listed below are some variations we can make in the terms of our policies. Any
variation will be made only in accordance with uniform rules that we apply
fairly to all of our customers.
State law insurance requirements
Insurance laws and regulations apply to IPL in every state in which its
policies are sold. As a result, various terms and conditions described in the
prospectus may vary depending upon where you reside. These variations will be
reflected in your policy or in endorsements attached to your policy.
Variations in expenses or risks
We may vary the charges and other terms of our policies where special
circumstances result in sales or administrative expenses, mortality risks or
other risks that are different from those normally associated with the policies.
These include the type of variations discussed under "Reduced charges for
eligible classes" on page 28.
HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?
Generally, death benefits paid under policies such as yours are not subject to
income tax. Earnings on your account value are not subject to income tax as long
as we don't pay them out to you. If we do pay out any amount of your account
value upon surrender or partial withdrawal, all or part of that distribution
should generally be treated as a return of the premiums you've paid and should
not be subject to income tax. Amounts you borrow are generally not taxable to
you.
However, some of the tax rules change if your policy is found to be a
"modified endowment contract." This can happen if you've paid more than a
certain amount of premiums that is prescribed by the tax laws. Under those
circumstances, additional taxes and penalties may be payable for policy
distributions of any kind.
For further information about the tax consequences of owning a policy, please
read "Tax considerations" beginning of page 29.
HOW DO I COMMUNICATE WITH IPL?
General Rules
You should mail or express all checks and money orders for premium payments
and loan repayments to the IPL Servicing Office at the appropriate address shown
on page 1.
Certain requests must be made in writing and be signed and dated by you. They
include the following:
. loans, surrenders or partial withdrawals
. transfers of account value among investment options
15
<PAGE>
. change of allocation among investment options for new premium
payments
. change of death benefit option
. increase or decrease in face amount
. change of beneficiary
. election of payment option for policy proceeds
. tax withholding elections
. election of telephone transaction privilege
You should mail or express these requests to the IPL Servicing Office at the
appropriate address shown on page 1. You should also send notice of the insured
person's death and related documentation to the IPL Servicing Office. We don't
consider that we've "received" any communication until such time as it has
arrived at the proper place and in the proper and complete form.
We have special forms that must be used for a number of the requests mentioned
above. You can obtain these forms from the IPL Servicing Office or your IPL
representative. Each communication to us must include your name, your policy
number and the name of the insured person. We cannot process any request that
doesn't include this required information. Any communication that arrives after
the close of our business day, or on a day that is not a business day, will be
considered "received" by us on the next following business day. Our business day
currently closes at 4:00 p.m. Eastern Standard Time, but special circumstances
(such as suspension of trading on a major exchange) may dictate an earlier
closing time.
Telephone Transactions
If you complete a special authorization form, you can request loans, transfers
among investment options and changes of allocation among investment options
simply by telephoning us at 1-877-619-4888 or by faxing us at 1-877-329-4751.
Any fax request should include your name, daytime telephone number, policy
number and, in the case of transfers and changes of allocation, the names of the
investment options involved. We will honor telephone instructions from anyone
who provides the correct identifying information, so there is a risk of loss to
you if this service is used by an unauthorized person. However, you will receive
written confirmation of all telephone transactions. There is a risk that you
will be unable to place your request due to equipment malfunction or heavy phone
line usage. If this occurs, you should submit your request in writing.
The policies are not designed for professional market timing organizations or
other entities that use programmed and frequent transfers among investment
options. For reasons such as that, we reserve the right to change our telephone
transaction policies or procedures at any time. We also reserve the right to
suspend or terminate the privilege altogether.
16
<PAGE>
ILLUSTRATION OF DEATH BENEFITS,ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables illustrate the changes in death benefit, account value
and surrender value of the policy under certain hypothetical circumstances that
we assume solely for this purpose. Each table separately illustrates the
operation of a policy for a specified issue age, premium payment schedule and
face amount. The amounts shown are for the end of each policy year and assume
that all of the account value is invested in portfolios that achieve investment
returns at constant annual rates of 0%, 6% and 12% before any fees or expenses.
(Investment return reflects investment income and all realized and unrealized
capital gains and losses.) The tables assume annual Planned Premiums that are
paid at the beginning of each policy year for an insured person who is a 35 year
old male standard non-smoker underwriting risk when the policy is issued.
Tables are provided for each of the two death benefit options. The tables
headed "Current Charges" assume that the current rates for all charges deducted
by IPL will apply in each year illustrated, including the reduction in the M&E
charge after the 15th policy year. The tables headed "Maximum Charges" are the
same, except that the maximum permitted rates for all years are used for all
charges. The tables do not reflect any charge that we reserve the right to make
but are not currently making.
With respect to fees and expenses deducted from Trust assets, the amounts
shown in all tables reflect (1) investment management fees equivalent to an
effective annual rate of .58%, and (2) an assumed average asset charge for all
other Trust operating expenses equivalent to an effective annual rate of .18%.
These rates are based on the hypothetical assumption that policy account values
are allocated equally among the variable investment options. The actual rates
associated with any policy will vary depending upon the actual allocation of
policy values among the investment options.
The second column of each table shows the amount you would have at the end of
each Policy year if an amount equal to the assumed Planned Premiums were
invested to earn interest, after taxes, at 5% compounded annually. This is not a
policy value. It is included for comparison purposes only.
Because your circumstances will doubtless differ from those in the
illustrations that follow, values under your policy will differ, in most cases
substantially. Upon request, we will furnish you with a comparable illustration
reflecting your proposed insured person's issue age, sex and underwriting risk
classification, and the face amount and annual Planned Premium amount requested.
17
<PAGE>
DEATH BENEFIT OPTION A: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 71
3 2,516 100,000 100,000 100,000 1,091 1,241 1,405 0 149 312
4 3,439 100,000 100,000 100,000 1,504 1,758 2,046 411 666 953
5 4,409 100,000 100,000 100,000 1,897 2,285 2,741 804 1,193 1,648
6 5,428 100,000 100,000 100,000 2,272 2,823 3,495 1,179 1,730 2,402
7 6,497 100,000 100,000 100,000 2,625 3,369 4,312 1,532 2,276 3,219
8 7,620 100,000 100,000 100,000 2,957 3,923 5,198 2,063 3,029 4,304
9 8,799 100,000 100,000 100,000 3,265 4,484 6,160 2,570 3,789 5,465
10 10,037 100,000 100,000 100,000 3,558 5,061 7,219 3,261 4,765 6,922
11 11,337 100,000 100,000 100,000 3,854 5,676 8,404 3,656 5,479 8,207
12 12,702 100,000 100,000 100,000 4,127 6,302 9,701 4,029 6,203 9,602
13 14,135 100,000 100,000 100,000 4,375 6,937 11,119 4,375 6,937 11,119
14 15,640 100,000 100,000 100,000 4,596 7,580 12,670 4,596 7,580 12,670
15 17,220 100,000 100,000 100,000 4,787 8,228 14,369 4,787 8,228 14,369
16 18,879 100,000 100,000 100,000 4,948 8,883 16,232 4,948 8,883 16,232
17 20,621 100,000 100,000 100,000 5,069 9,534 18,270 5,069 9,534 18,270
18 22,450 100,000 100,000 100,000 5,143 10,176 20,499 5,143 10,176 20,499
19 24,370 100,000 100,000 100,000 5,166 10,803 22,938 5,166 10,803 22,938
20 26,387 100,000 100,000 100,000 5,131 11,409 25,609 5,131 11,409 25,609
25 38,086 100,000 100,000 100,000 3,846 13,872 43,500 3,846 13,872 43,500
30 53,018 ** 100,000 100,000 ** 14,354 73,356 ** 14,354 73,356
35 72,076 ** 100,000 143,268 ** 9,914 124,581 ** 9,914 124,581
40 96,398 ** ** 219,421 ** ** 208,973 ** ** 208,973
45 127,441 ** ** 366,521 ** ** 349,067 ** ** 349,067
</TABLE>
- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
18
<PAGE>
DEATH BENEFIT OPTION A: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,010 1,153 1,307 0 60 214
4 3,439 100,000 100,000 100,000 1,394 1,634 1,905 301 541 812
5 4,409 100,000 100,000 100,000 1,758 2,123 2,550 665 1,030 1,457
6 5,428 100,000 100,000 100,000 2,102 2,619 3,247 1,009 1,526 2,154
7 6,497 100,000 100,000 100,000 2,424 3,119 3,999 1,332 2,026 2,906
8 7,620 100,000 100,000 100,000 2,725 3,624 4,810 1,831 2,730 3,916
9 8,799 100,000 100,000 100,000 3,000 4,131 5,684 2,305 3,435 4,989
10 10,037 100,000 100,000 100,000 3,252 4,640 6,630 2,956 4,344 6,334
11 11,337 100,000 100,000 100,000 3,477 5,149 7,650 3,279 4,951 7,452
12 12,702 100,000 100,000 100,000 3,672 5,654 8,750 3,573 5,555 8,651
13 14,135 100,000 100,000 100,000 3,837 6,154 9,939 3,837 6,154 9,939
14 15,640 100,000 100,000 100,000 3,971 6,649 11,224 3,971 6,649 11,224
15 17,220 100,000 100,000 100,000 4,070 7,133 12,612 4,070 7,133 12,612
16 18,879 100,000 100,000 100,000 4,133 7,605 14,114 4,133 7,605 14,114
17 20,621 100,000 100,000 100,000 4,153 8,057 15,737 4,153 8,057 15,737
18 22,450 100,000 100,000 100,000 4,123 8,483 17,489 4,123 8,483 17,489
19 24,370 100,000 100,000 100,000 4,041 8,877 19,380 4,041 8,877 19,380
20 26,387 100,000 100,000 100,000 3,896 9,228 21,421 3,896 9,228 21,421
25 38,086 100,000 100,000 100,000 2,009 10,042 34,419 2,009 10,042 34,419
30 53,018 ** 100,000 100,000 ** 7,972 54,285 ** 7,972 54,285
35 72,076 ** ** 100,000 ** ** 86,922 ** ** 86,922
40 96,398 ** ** 148,635 ** ** 141,557 ** ** 141,557
45 127,441 ** ** 240,512 ** ** 229,059 ** ** 229,059
</TABLE>
- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
19
<PAGE>
DEATH BENEFIT OPTION B: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,269 217 243 269 0 0 0
2 1,636 100,660 100,734 100,812 660 734 812 0 0 68
3 2,516 101,087 101,237 101,399 1,087 1,237 1,399 0 144 306
4 3,439 101,496 101,749 102,035 1,496 1,749 2,035 403 657 942
5 4,409 101,885 102,271 102,723 1,885 2,271 2,723 792 1,178 1,630
6 5,428 102,255 102,801 103,467 2,255 2,801 3,467 1,162 1,709 2,374
7 6,497 102,601 103,337 104,270 2,601 3,337 4,270 1,509 2,245 3,177
8 7,620 102,925 103,879 105,138 2,925 3,879 5,138 2,031 2,985 4,244
9 8,799 103,225 104,425 106,075 3,225 4,425 6,075 2,530 3,730 5,380
10 10,037 103,506 104,984 107,102 3,506 4,984 7,102 3,210 4,687 6,806
11 11,337 103,789 105,575 108,247 3,789 5,575 8,247 3,592 5,378 8,049
12 12,702 104,049 106,174 109,492 4,049 6,174 9,492 3,950 6,075 9,393
13 14,135 104,280 106,776 110,845 4,280 6,776 10,845 4,280 6,776 10,845
14 15,640 104,482 107,379 112,315 4,482 7,379 12,315 4,482 7,379 12,315
15 17,220 104,653 107,981 113,912 4,653 7,981 13,912 4,653 7,981 13,912
16 18,879 104,791 108,581 115,649 4,791 8,581 15,649 4,791 8,581 15,649
17 20,621 104,887 109,168 117,530 4,887 9,168 17,530 4,887 9,168 17,530
18 22,450 104,933 109,734 119,564 4,933 9,734 19,564 4,933 9,734 19,564
19 24,370 104,925 110,271 121,760 4,925 10,271 21,760 4,925 10,271 21,760
20 26,387 104,855 110,772 124,129 4,855 10,772 24,129 4,855 10,772 24,129
25 38,086 103,365 112,395 139,032 3,365 12,395 39,032 3,365 12,395 39,032
30 53,018 ** 111,247 160,376 ** 11,247 60,376 ** 11,247 60,376
35 72,076 ** 104,150 189,745 ** 4,150 89,745 ** 4,150 89,745
40 96,398 ** ** 229,025 ** ** 129,025 ** ** 129,025
45 127,441 ** ** 277,606 ** ** 177,606 ** ** 177,606
</TABLE>
- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
20
<PAGE>
DEATH BENEFIT OPTION B: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,190 100,216 100,241 190 216 241 0 0 0
2 1,636 100,607 100,678 100,751 607 678 751 0 0 8
3 2,516 101,006 101,148 101,302 1,006 1,148 1,302 0 55 209
4 3,439 101,387 101,626 101,895 1,387 1,626 1,895 294 533 802
5 4,409 101,747 102,109 102,533 1,747 2,109 2,533 654 1,016 1,440
6 5,428 102,086 102,598 103,221 2,086 2,598 3,221 993 1,505 2,128
7 6,497 102,402 103,089 103,959 2,402 3,089 3,959 1,309 1,997 2,866
8 7,620 102,695 103,583 104,753 2,695 3,583 4,753 1,801 2,689 3,859
9 8,799 102,962 104,076 105,605 2,962 4,076 5,605 2,267 3,380 4,910
10 10,037 103,204 104,568 106,522 3,204 4,568 6,522 2,908 4,272 6,225
11 11,337 103,417 105,056 107,505 3,417 5,056 7,505 3,220 4,858 7,307
12 12,702 103,600 105,536 108,558 3,600 5,536 8,558 3,501 5,437 8,459
13 14,135 103,751 106,007 109,688 3,751 6,007 9,688 3,751 6,007 9,688
14 15,640 103,868 106,466 110,899 3,868 6,466 10,899 3,868 6,466 10,899
15 17,220 103,949 106,909 112,197 3,949 6,909 12,197 3,949 6,909 12,197
16 18,879 103,992 107,332 113,586 3,992 7,332 13,586 3,992 7,332 13,586
17 20,621 103,991 107,729 115,070 3,991 7,729 15,070 3,991 7,729 15,070
18 22,450 103,938 108,089 116,649 3,938 8,089 16,649 3,938 8,089 16,649
19 24,370 103,831 108,408 118,329 3,831 8,408 18,329 3,831 8,408 18,329
20 26,387 103,659 108,671 120,109 3,659 8,671 20,109 3,659 8,671 20,109
25 38,086 101,637 108,821 130,610 1,637 8,821 30,610 1,637 8,821 30,610
30 53,018 ** 105,640 143,760 ** 5,640 43,760 ** 5,640 43,760
35 72,076 ** ** 158,340 ** ** 58,340 ** ** 58,340
40 96,398 ** ** 170,746 ** ** 70,746 ** ** 70,746
45 127,441 ** ** 171,683 ** ** 71,683 ** ** 71,683
</TABLE>
- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
21
<PAGE>
ADDITIONAL INFORMATION
This section of the prospectus provides additional detailed information that
is not contained in the Basic Information section on pages 3 through 16.
<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION PAGES TO SEE
- ------------------------ ------------
<S> <C>
Description of IPL........................ 23
How we support the policy and investment options 23-24
Procedures for issuance of a policy....... 24-25
Commencement of investment performance.... 25
How we process certain policy transactions 25-27
Effects of policy loans................... 27
Additional information about how certain policy charges work 27-28
How we market the policies................ 28-29
Tax considerations........................ 29-30
Reports that you will receive............. 31
Voting privileges that you will have...... 31
Changes that IPL can make as to your policy 31-32
Adjustments we make to death benefits..... 32
When we pay policy proceeds............... 32-33
Other details about exercising rights and paying benefits 33
Legal matters............................. 33
Registration statement filed with the SEC. 33
Accounting and actuarial experts.......... 33
Financial statements of IPL and the Account 33
List of Directors and Executive Officers of IPL 34
</TABLE>
22
<PAGE>
DESCRIPTION OF IPL
We are IPL, a stock life insurance company incorporated in 1981 under Delaware
law. We are authorized to transact a life insurance business in 44 states and
the District of Columbia and intend to acquire such authority in all states
other than New York. We did not sell variable life insurance policies prior to
1999.
We are regulated and supervised by the Delaware Commissioner of Insurance, who
periodically examines its affairs. It also is subject to the applicable
insurance laws and regulations of all jurisdictions in which it is authorized to
do business. We are required to submit annual statements of its operations,
including financial statements, to the insurance departments of the various
jurisdictions in which it does business for purposes of determining solvency and
compliance with local insurance laws and regulations. The regulation to which we
are subject, however, does not provide a guarantee as to such matters.
We are an indirect wholly-owned subsidiary of John Hancock Mutual Life
Insurance Company ("John Hancock"), a company chartered in Massachusetts in
1862. John Hancock's home office is at John Hancock Place, Boston, Massachusetts
02117. John Hancock's assets are approximately $59 billion. It is anticipated
that John Hancock or an affiliate will from time to time make capital
contributions to IPL to enable us to meet our reserve requirements and expenses
in connection with our business. John Hancock is committed to make all necessary
capital contributions, either directly or through an affiliate, to ensure that
we maintain a positive net worth.
HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS
Separate Account IPL-1
The variable investment options shown on page 1 are in fact subaccounts of
Separate Account IPL-1 (the "Account"), a separate account established by us
under Delaware law. The Account meets the definition of "separate account" under
the Federal securities laws and is registered as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act"). Such registration does not
involve supervision by the SEC of the management of the Account or IPL.
The Account's assets are the property of IPL. Each policy provides that
amounts we hold in the Account pursuant to the policies cannot be reached by any
other persons who may have claims against us.
The assets in each subaccount are invested in the corresponding portfolio of
the Trust, but the assets of one subaccount are not necessarily legally
insulated from liabilities associated with another subaccount. New subaccounts
may be added or existing subaccounts may be deleted as new portfolios are added
to or deleted from the Trust and made available to policy owners.
We will purchase and redeem Trust shares for the Account at their net asset
value without any sales or redemption charges. Shares of the Trust represent an
interest in one of the portfolios of the Trust which corresponds to a subaccount
of the Account. Any dividend or capital gains distributions received by the
Account will be reinvested in shares of that same Trust portfolio at their net
asset value as of the dates paid.
On each business day, shares of each portfolio are purchased or redeemed by us
for each subaccount based on, among other things, the amount of net premiums
allocated to the subaccount, distributions reinvested, and transfers to, from
and among subaccounts, all to be effected as of that date. Such purchases and
redemptions are effected at each portfolio's net asset value per share
determined for that same date. A "business day" is any date on which the New
York Stock Exchange is open for trading. We compute policy values for each
business day as of the close of that day (usually 4:00 p.m. Eastern Standard
Time).
23
<PAGE>
Our general account
Our obligations under the policy's fixed investment option are backed by our
general account assets. Our general account consists of assets owned by us other
than those in the Account and in other separate accounts that we may establish.
Subject to applicable law, we have sole discretion over the investment of assets
of the general account and policy owners do not share in the investment
experience of, or have any preferential claim on, those assets. Instead, we
guarantee that the account value allocated to the fixed investment option will
accrue interest daily at an effective annual rate of at least 4% without regard
to the actual investment experience of the general account.
Because of exemptive and exclusionary provisions, interests in our fixed
investment option have not been registered under the Securities Act of 1933 and
our general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these acts, and we have been advised that the staff
of the SEC has not reviewed the disclosure in this prospectus relating to the
fixed investment option. Disclosure regarding the fixed investment option may,
however, be subject to certain generally-applicable provisions of the Federal
securities laws relating to accuracy and completeness of statements made in
prospectuses.
PROCEDURES FOR ISSUANCE OF A POLICY
Generally, the policy is available with a minimum face amount at issue of
$100,000. In the policy, the face amount may be referred to as the "Sum
Insured." At the time of issue, the insured person must be attained age 85 or
less. All insured persons must meet certain health and other insurance risk
criteria called "underwriting standards".
Policies issued in Montana or in connection with certain employee plans will
not directly reflect the sex of the insured person in either the premium rates
or the charges or values under the policy. The illustrations beginning on page
17 are sex-distinct and, therefore, do not reflect the sex-neutral rates,
charges, or values that would apply to such policies.
Minimum First Premium
The Minimum First Premium must be received by us at our Servicing Office in
order for the policy to be in full force and effect. There is no grace period
for the payment of the Minimum First Premium. The minimum amount of premium
required at the time of policy issue is equal to three Guaranteed Death Benefit
Premiums (see "Guaranteed death benefit feature" in the Basic Information
section of this prospectus). However, if an owner has chosen to pay premiums on
a monthly basis, the minimum amount required is only equal to two Guaranteed
Death Benefit Premiums.
Commencement of insurance coverage
After you apply for a policy, it can sometimes take up to several weeks, or
even months, for us to gather and evaluate all the information we need to decide
whether to issue a policy to you and, if so, what the insured person's rate
class should be. After we approve an application for a policy and assign an
appropriate insurance rate class, we will prepare the policy for delivery. We
will not pay a death benefit under a policy unless the policy is in effect when
the insured person dies (except for the circumstances described under "Temporary
insurance coverage prior to policy delivery" on page 25).
The policy will take effect on the first date that is not the 29th, 30th or
31st day of a month on which all of the following conditions are satisfied:
. The policy is delivered to and received by the applicant.
. The Minimum First Premium is received by us.
. Each insured person is living and still meets our health criteria for
issuing insurance.
24
<PAGE>
The date the policy takes effect is referred to as the policy's "date of
issue." That is the date on which we begin to deduct monthly charges. Policy
months, policy years and policy anniversaries are all measured from the date of
issue.
Backdating
In order to preserve a younger age at issue for the insured person, you can
request a date of issue that is up to 6 months earlier than the date that would
otherwise apply. This is referred to as "backdating" and is allowed under state
insurance laws. Backdating can also be used in certain corporate-owned life
insurance cases involving multiple policies to retain a common monthly deduction
date.
The conditions for coverage described above under "Commencement of insurance
coverage" must still be satisfied, but in a backdating situation the policy
takes effect retroactively. Backdating results in a lower insurance charge
(because of the insured person's younger age), but monthly charges begin earlier
than would otherwise be the case. Those monthly charges will be deducted as soon
as we receive premiums sufficient to pay them.
Temporary coverage prior to policy delivery
If a specified amount of premium is paid with the application for a policy and
other conditions are met, we will provide temporary term life insurance coverage
on the insured person for a period prior to the time coverage under the policy
takes effect. Such temporary term coverage will be subject to the terms and
conditions described in the application for the policy, including limits on
amount and duration of coverage.
Monthly deduction dates
Each charge that we deduct monthly is assessed against your account value at
the close of business on the date of issue and at the close of the first
business day in each subsequent policy month.
COMMENCEMENT OF INVESTMENT PERFORMANCE
Any premium payment processed prior to the twentieth day after the date of
issue will automatically be allocated to the Money Market investment option. On
the twentieth day following the date of issue , the policy's account value will
be reallocated automatically among the investment options you have chosen.
All other premium payments will be allocated among the investment options you
have chosen as soon as they are processed.
HOW WE PROCESS CERTAIN POLICY TRANSACTIONS
Premium payments
We will process any premium payment as of the day we receive it, unless one of
the following exceptions applies:
(1) We will process a payment received prior to a policy's date of issue as if
received on the date of issue.
(2) We will process the portion of any premium payment for which we require
evidence of the insured person's continued insurability only after we have
received such evidence and found it satisfactory to us.
(3) If we receive any premium payment that will cause a policy to become a
modified endowment or will cause a policy to lose its status as life insurance
under the tax laws, we will not accept the excess portion of that premium
payment and will immediately notify the owner. We will refund the excess premium
when the premium payment check has had time to clear the banking system (but in
no case more than two weeks after receipt), except in the following
circumstances:
. The tax problem resolves itself prior to the date the refund is to be
made; or
. The tax problem relates to modified endowment status and we receive a
signed acknowledgment from the owner prior to
25
<PAGE>
the refund date instructing us to process the premium notwithstanding the
tax issues involved.
In the above cases, we will treat the excess premium as having been received on
the date the tax problem resolves itself or the date we receive the signed
acknowledgement. We will then process it accordingly.
(4) If a premium payment is received or is otherwise scheduled to be processed
(as specified above) on a date that is not a business day, the premium payment
will be processed on the business day next following that date.
Transfers among investment options
Any reallocation among investment options must be such that the total in all
investment options after reallocation equals 100% of account value. Transfers
out of a variable investment option will be effective at the end of the business
day in which we receive at our Servicing Office notice satisfactory to us.
If received on or before the policy anniversary, requests for transfer out of
the fixed investment option will be processed on the policy anniversary (or the
next business day if the policy anniversary does not occur on a business day).
If received after the policy anniversary, such a request will be processed at
the end of the business day in which we receive the request at our Servicing
Office. If you request a transfer out of the fixed investment option 61 days or
more prior to the policy anniversary, we will not process that portion of the
reallocation, and your confirmation statement will not reflect a transfer out of
the fixed investment option as to such request. Currently, there is no minimum
amount limit on transfers into the fixed investment option, but we reserve the
right to impose such a limit in the future. We have the right to defer transfers
of amounts out of the fixed investment option for up to six months.
Dollar cost averaging.
Scheduled transfers under this option may be made from the Money Market
investment option to any number of other variable investment options. However,
the amount transferred to any one investment option must be at least $100.
Once we receive the election in form satisfactory to us at our Servicing
Office, transfers will begin on the second monthly deduction date following its
receipt. If you have any questions with respect to this provision, call
1-877-619-4888.
Once elected, the scheduled monthly transfer option will remain in effect for
so long as you have a sufficient amount of your account value in the Money
Market investment option, or until we receive written notice from the owner of
cancellation of the option or notice of the death of the insured person. The
dollar cost averaging and rebalancing options cannot be in effect at the same
time. We reserve the right to modify, terminate or suspend the dollar cost
averaging program at any time.
Rebalancing
This option can be elected in the application or by sending the appropriate
form to our Servicing Office. You must specify the frequency for rebalancing
(quarterly, semi-annually or annually), the preset percentage for each variable
investment option and a future beginning date. The first rebalancing will occur
on the monthly deduction date that occurs on or next follows the beginning date
you select.
Once elected, rebalancing will continue until we receive notice of
cancellation of the option or notice of the death of the insured person. If you
cancel rebalancing, you will have to wait 30 days before you can start it again.
The fixed investment option does not participate in and is not affected by
rebalancing.The rebalancing and dollar cost averaging options cannot be in
effect at the same time. We reserve the right to modify,
26
<PAGE>
terminate or suspend the rebalancing program at any time.
Telephone transfers and policy loans.
Once you have completed a written authorization, you may request a transfer or
policy loan by telephone or by fax. If the fax request option becomes
unavailable, another means of telecommunication will be substituted.
If you authorize telephone transactions, you will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which we reasonably believe to be genuine, unless such loss,
expense or cost is the result of our mistake or negligence. We employs
procedures which provide safeguards against the execution of unauthorized
transactions, and which are reasonably designed to confirm that instructions
received by telephone are genuine. These procedures include requiring personal
identification, tape recording calls, and providing written confirmation to the
owner. If we do not employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, we may be liable for any loss due to
unauthorized or fraudulent instructions.
Effective date of other policy transactions
The following transactions take effect on the monthly deduction date on or
next following the date we approve your request:
. Face amount increases or decreases
. Reinstatements of lapsed policies
. Change of death benefit Option from A to B
A change from Option B to Option A is effective on the monthly deduction date
on or next following the date we receive the request.
We process loans, surrenders, partial withdrawals and loan repayments as of
the day we receive such request or repayment.
EFFECTS OF POLICY LOANS
The account value, the surrender value, and any death benefit above the face
amount are permanently affected by any loan, whether or not it is repaid in
whole or in part.
The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.
Whenever the outstanding loan exceeds an amount equal to the account value
less the surrender charge, the policy will terminate 31 days after we have
mailed notice of termination to you (and to any assignee of record at such
assignee's last known address), unless a repayment of such excess is made within
that period.
ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK
Sales costs and related charges
The sales and administrative charges help to compensate us for the cost of
selling our policies. (See "What charges will IPL deduct from my investment in
the policy?" in the Basic Information section of this prospectus.) The amount of
the charges in any policy year does not specifically correspond to sales
expenses for that year. We expect to recover our total sales expenses over the
life of the policies. To the extent that sales and administrative charges do not
cover total sales expenses, the sales expenses may be recovered from other
sources, including gains from the charge for mortality and expense risks and
other gains with respect to the policies, or from our general assets. See "How
we market the policies" on page 28.
Effect of premium payment pattern.
You may structure the timing and amount of premium payments to minimize the
sales and administrative charges, although doing so involves certain risks.
Paying less than one Target Premium in the first policy year or paying more than
one Target
27
<PAGE>
Premium in any policy year could reduce your total sales and administrative
charges over time. For example, if the Target Premium was $1,000 and you paid a
premium of $1,000 in each of the first ten policy years, you would pay total
premium-related sales and administrative charges of $200. If you paid $2,000
(i.e., two times the Target Premium amount) in every other policy year up to the
tenth policy year, you would pay total premium-related sales and
administrative charges of only $100. However, delaying the payment of Target
Premiums to later policy years could increase the risk that the account value
will be insufficient to pay monthly policy charges as they come due and that, as
a result, the policy will lapse and eventually terminate. Conversely,
accelerating the payment of Target Premiums to earlier policy years could cause
aggregate premiums paid to exceed the policy's 7-pay premium limit and, as a
result, cause the policy to become a modified endowment, with adverse tax
consequences to you upon receipt of policy distributions. (See "Tax
consequences" beginning on page 29.)
Monthly charges
We deduct the monthly charges described in the Basic Information section from
your policy's investment options in proportion to the amount of account value
you have in each. For each month that we cannot deduct any charge because of
insufficient account value, the uncollected charges will accumulate and be
deducted when and if sufficient account value becomes available.
The insurance under the policy continues in full force during any grace period
but, if the insured person dies during the policy grace period, the amount of
unpaid monthly charges is deducted from the death benefit otherwise payable.
Cost of insurance rates where the face amount has changed
Because of face amount increases, different cost of insurance rates may apply
to different increments of face amount under your policy. If so, we attribute
your account value first to the older increments of face amount in order to
compute the amount of our insurance risk at each cost of insurance rate. If a
decrease in face amount occurs under a policy whose face amount has previously
been increased, we decrease first those portions of face amount that have been
most recently established.
Reduced charges for eligible classes
The charges otherwise applicable may be reduced with respect to policies
issued to a class of associated individuals or to a trustee, employer or similar
entity where we anticipate that the sales to the members of the class will
result in lower than normal sales or administrative expenses, lower taxes or
lower risks to us. We will make these reductions in accordance with our rules in
effect at the time of the application for a policy. The factors we consider in
determining the eligibility of a particular group for reduced charges, and the
level of the reduction, are as follows: the nature of the association and its
organizational framework; the method by which sales will be made to the members
of the class; the facility with which premiums will be collected from the
associated individuals and the association's capabilities with respect to
administrative tasks; the anticipated lapse and surrender rates of the policies;
the size of the class of associated individuals and the number of years it has
been in existence; and any other such circumstances which result in a reduction
in sales or administrative expenses, lower taxes or lower risks. Any reduction
in charges will be reasonable and will apply uniformly to all prospective policy
purchasers in the class and will not unfairly discriminate against any owner.
HOW WE MARKET THE POLICIES
John Hancock Funds, Inc. ("JHFI"), an indirect wholly-owned subsidiary of John
Hancock located at 101 Huntington Avenue, Boston, MA 02199, is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. JHFI acts as principal
underwriter and principal distributor
28
<PAGE>
of the policies. JHFI also serves as principal underwriter for John Hancock
Variable Annuity Accounts H and JF, both of which are registered under the 1940
Act.
The policies may be purchased through broker-dealers and certain financial
institutions who have entered into selling agreements with JHFI and IPL, and
whose representatives are authorized by applicable law to sell variable life
insurance policies.Gross first year commissions plus any expense allowance
payments paid to such broker-dealers and financial institutions is not expected
to exceed 80% of premiums paid up to the Target Premium plus 2% of any excess
premium payments. Gross renewal commissions (i.e., after the first year) are not
expected to exceed 2% of total premiums paid in policy years 2 through 10 plus
0.15% of account value less loans in policy years 2 and thereafter. In some
situations where the broker dealer provides some or all of the marketing
services required, we may pay an additional gross first year commisiion of up to
20% of premiums paid up to the Target Premium plus 1% of any excess premium
payments. In such instances, we may also pay an additional gross renewal
commission. The additional gross renewal commission would not be expected to
exceed 1% of total premiums paid in policy years 2 through 10 plus 0.10% of
account value less loans in policy years 2 and thereafter.
We reimburse JHFI for direct and indirect expenses actually incurred in
connection with the marketing and sale of the policies.
The offering of the policies is intended to be continuous, but neither IPL nor
JHFI is obligated to sell any particular amount of policies.
TAX CONSIDERATIONS
This description of federal income tax consequences is only a brief summary
and is not intended as tax advice. Tax consequences will vary based on your own
particular circumstances, and for further information you should consult a
qualified tax advisor. Federal, state and local tax laws, regulations and
interpretations can change from time to time. As a result, the tax consequences
to you and the beneficiary may be altered, in some case retroactively.
Policy proceeds and ownership
We believe the policy will receive the same federal income and estate tax
treatment as fixed benefit life insurance policies. Section 7702 of the Internal
Revenue Code ("Code") defines life insurance for federal tax purposes. If
certain standards are met at issue and over the life of the policy, the policy
will satisfy that definition. We will monitor compliance with these standards.
If the policy complies with the definition of life insurance, we believe the
death benefit under the policy will be excludable from the beneficiary's gross
income under the Code. In addition, increases in account value as a result of
interest or investment experience will not be subject to federal income tax
unless and until values are actually received through distributions.
Distributions for tax purposes can include amounts received upon surrender or
partial withdrawals. You may also be deemed to have received a distribution for
tax purposes if you assign all or part of your policy rights or change your
policy's ownership.
In general, the owner will be taxed on the amount of distributions that exceed
the premiums paid under the policy. But under certain circumstances within the
first 15 policy years, the owner may be taxed on a distribution even if total
withdrawals do not exceed total premiums paid. Any taxable distribution will be
ordinary income to the owner (rather than capital gains).
We also believe that, except as noted below, loans received under the policy
will be treated as indebtedness of an owner and that no part of any loan will
constitute income to the owner. However, the amount of any outstanding loan that
was not previously considered income (as discussed below) will be treated as if
it had been distributed to the owner if the policy terminates for any reason.
29
<PAGE>
It is possible that, despite our monitoring, a policy might fail to qualify as
life insurance under Section 7702 of the Code. This could happen, for example,
if we inadvertently failed to return to you any premium payments that were in
excess of permitted amounts, or if the Trust failed to meet certain investment
diversification or other requirements of the Code. If this were to occur, you
would be subject to income tax on the income and gains under the policy for the
period of the disqualification and for subsequent periods.
In the past, the United States Treasury Department has stated that it
anticipated issuing guidelines precsribing circumstances in which the ability of
a policy owner to direct his or her investment to particular portfolios may
cause the policy owner, rather than the insurance company, to be treated as the
owner of the shares of that portfolio. In that case, any income and gains
attributable to those shares would be included in your current gross income for
federal income tax purposes. Under current law, however, we believe that we, and
not the owner of a policy, would be considered the owner of the portfolio's
shares for tax purposes.
Tax consequences of ownership or receipt of policy proceeds under federal,
state and local estate, inheritance, gift and other tax laws depend on the
circumstances of each owner or beneficiary.
Because there may be unfavorable tax consequences (including recognition of
taxable income and the loss of income tax-free treatment for any death benefit
payable to the beneficiary), you should consult a qualified tax adviser prior to
changing the policy's ownership or making any assignment of ownership interests.
7-pay premium limit
At the time of policy issuance, we will determine whether the Planned Premium
schedule will exceed the 7-pay limit discussed below. If so, our standard
procedures prohibit issuance of the policy unless you sign a form acknowledging
that fact.
The 7-pay limit is the total of net level premiums that would have been
payable at any time for a comparable fixed policy to be fully "paid-up" after
the payment of 7 equal annual premiums. "Paid-up" means that no further premiums
would be required to continue the coverage in force until maturity, based on
certain prescribed assumptions. If the total premiums paid at any time during
the first 7 policy years exceed the 7-pay limit, the policy will be treated as a
"modified endowment", which can have adverse tax consequences.
The owner will be taxed on distributions and loans from a "modified endowment"
to the extent of any income (gain) to the owner (income-first basis). The
distributions and loans affected will be those made on or after, and within the
two year period prior to, the time the policy becomes a modified endowment.
Additionally, a 10% penalty tax may be imposed on taxable portions of such
distributions or loans that are made before the owner attains age 59 1/2.
Furthermore, any time there is a "material change" in a policy (such as a face
amount increase, the addition of certain other policy benefits after issue,
change in death benefit option, or reinstatement of a lapsed policy), the policy
will have a new 7-pay limit as if it were a newly-issued policy. If a prescribed
portion of the policy's then account value, plus all other premiums paid within
7 years after the material change, at any time exceed the new 7-pay limit, the
policy will become a modified endowment.
Moreover, if benefits under a policy are reduced (such as a reduction in the
face amount or death benefit or the reduction or cancellation of certain rider
benefits) during the 7 years in which a 7-pay test is being applied, the 7-pay
limit will be recalculated based on the reduced benefits. If the premiums paid
to date are greater than the recalculated 7-pay limit, the policy will become a
modified endowment.
All modified endowments issued by the same insurer (or its affiliates) to the
owner during any calendar year generally will be treated as one contract
30
<PAGE>
for the purpose of applying the modified endowment rules. A policy received in
exchange for a modified endowment will itself also be a modified endowment. You
should consult your tax advisor if you have questions regarding the possible
impact of the 7-pay limit on your policy.
Corporate and H.R. 10 plans
The Policy may be acquired in connection with the funding of retirement plans
satisfying the qualification requirements of Section 401 of the Code. If so, the
Code provisions relating to such plans and life insurance benefits thereunder
should be carefully scrutinized. We are not responsible for compliance with the
terms of any such plan or with the requirements of applicable provisions of the
Code.
REPORTS THAT YOU WILL RECEIVE
We will send you an annual statement setting forth the following information
as of the end of the most recent policy year: the amount of the death benefit
and account value, the portion of the account value in each investment option,
the surrender value, premiums received and charges deducted from premiums since
the last report, and any outstanding policy loan (and interest charged for the
preceding policy year). Moreover, you also will receive confirmations of premium
payments, transfers among investment options, policy loans, partial withdrawals
and certain other policy transactions.
Semiannually we will send you a report containing the financial statements of
the Trust, including a list of securities held in each portfolio.
VOTING PRIVILEGES THAT YOU WILL HAVE
All of the assets in the subaccounts of the Account are invested in shares of
the corresponding portfolios of the Trust. We will vote the shares of each of
the portfolios of the Trust which are deemed attributable to variable life
insurance policies at regular and special meetings of the Trust's shareholders
in accordance with instructions received from owners of such policies. Shares of
the Trust held in the Account which are not attributable to such policies, as
well as shares for which instructions from owners are not received, will be
represented by us at the meeting. We will vote such shares for and against each
matter in the same proportions as the votes based upon the instructions received
from the owners of such policies.
We determine the number of a portfolio's shares held in a subaccount
attributable to each owner by dividing the amount of a policy's account value
held in the subaccount by the net asset value of one share in the portfolio.
Fractional votes will be counted. We determine the number of shares as to which
the owner may give instructions as of the record date for the Trust's meeting.
Owners of policies may give instructions regarding the election of the Board of
Trustees of the Trust, ratification of the selection of independent auditors,
approval of Trust investment advisory agreements and other matters requiring a
shareholder vote. We will furnish owners with information and forms to enable
owners to give voting instructions.
However, we may, in certain limited circumstances permitted by the SEC's
rules, disregard voting instructions. If we do disregard voting instructions,
you will receive a summary of that action and the reasons for it in the next
semi-annual report to owners.
CHANGES THAT IPL CAN MAKE AS TO YOUR POLICY
Changes relating to the Trust or the Account
The voting privileges described in this prospectus reflect our understanding
of applicable Federal securities law requirements. To the extent that applicable
law, regulations or interpretations change to eliminate or restrict the need for
such voting privileges, we reserve the right to proceed in accordance with any
such revised requirements. We also reserve the right, subject to compliance with
applicable law, including approval of owners if so required, (1) to transfer
assets determined by IPL to be associated with the class of policies to which
your
31
<PAGE>
policy belongs from the Account to another separate account or subaccount, (2)
to operate the Account as a "management-type investment company" under the 1940
Act, or in any other form permitted by law, the investment adviser of which
would be IPL, an affiliate or John Hancock, (3) to deregister the Account under
the 1940 Act, (4) to substitute for the portfolio shares held by a subaccount
any other investment permitted by law, and (5) to take any action necessary to
comply with or obtain any exemptions from the 1940 Act. We would notify owners
of any of the foregoing changes and, to the extent legally required, obtain
approval of owners and any regulatory body prior thereto. Such notice and
approval, however, may not be legally required in all cases.
Other permissible changes
We reserve the right to make any changes in the policy necessary to ensure the
policy is within the definition of life insurance under the Federal tax laws and
is in compliance with any changes in Federal or state tax laws.
In our policies, we reserve the right to make certain changes if they would
serve the best interests of policy owners or would be appropriate in carrying
out the purposes of the policies. Such changes include the following:
. Changes necessary to comply with or obtain or continue exemptions under
the federal securities laws.
. Combining or removing investment options
. Changes in the form of organization of any separate account
Any such changes will be made only to the extent permitted by applicable laws
and only in the manner permitted by such laws. When required by law, we will
obtain your approval of the changes and the approval of any appropriate
regulatory authority.
ADJUSTMENTS WE MAKE TO DEATH BENEFITS
If the insured person commits suicide within certain time periods, the amount
of death benefit we pay will be limited as described in the policy. Also if an
application misstated the age or gender of the insured person, we will adjust
the amount of any death benefit as described in the policy.
WHEN WE PAY POLICY PROCEEDS
General
We will pay any death benefit, withdrawal, surrender value or loan within 7
days after we receive the last required form or request (and, with respect to
the death benefit, any other documentation that may be required). If we don't
have information about the desired manner of payment within 7 days after the
date we receive notification of the insured person's death, we will pay the
proceeds as a single sum, normally within 7 days thereafter.
Delay to challenge coverage
We may challenge the validity of your insurance policy based on any material
misstatements made to us in the application for the policy. We cannot make such
a challenge, however, beyond certain time limits that are specified in the
policy.
Delay for check clearance
We reserve the right to defer payment of that portion of your account value
that is attributable to a premium payment made by check for a reasonable period
of time (not to exceed 15 days) to allow the check to clear the banking system.
Delay of separate account proceeds
We reserve the right to defer payment of any death benefit, loan or other
distribution that is derived from a variable investment option if (a) the New
York Stock Exchange is closed (other than customary weekend and holiday
closings) or trading on the New York Stock Exchange is restricted; (b) an
emergency
32
<PAGE>
exists, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to fairly determine the account
value; or (c) the SEC by order permits the delay for the protection of owners.
Transfers and allocations of account value among the investment options may also
be postponed under these circumstances. If we need to defer calculation of
separate account values for any of the foregoing reasons, all delayed
transactions will be processed at the next values that we do compute.
OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS
Joint ownership
If more than one person owns a policy, all owners must join in most requests
to exercise rights under the policy.
Assigning your policy
You may assign your rights in the policy to someone else as collateral for a
loan or for some other reason. Assignments do not require the consent of any
revocable beneficiary. A copy of the assignment must be forwarded to us. We are
not responsible for any payment we make or any action we take before we receive
notice of the assignment in good order. Nor are we responsible for the validity
of tyhe assignment. An absolute assignment is a change of ownership. All
collateral assignees of record must consent to any full surrender, partial
withdrawal or loan from the policy.
Your beneficiary
You name your beneficiary when you apply for the policy. The beneficiary is
entitled to the proceeds we pay following the insured person's death. You may
change the beneficiary during the insured person's lifetime. Such a change
requires the consent of any irrevocable named beneficiary. A new beneficiary
designation is effective as of the date you sign it, but will not affect any
paynments we make before we receive it. If no beneficiary is living when the
insured person dies, we will pay the insurance proceeds to the owner or the
owner's estate.
LEGAL MATTERS
The legal validity of the policies described in this prospectus has been
passed on by Ronald J. Bocage, Vice President and Counsel for John Hancock.
Messrs. Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised us on
certain Federal securities law matters in connection with the policies.
REGISTRATION STATEMENT FILED WITH THE SEC
This prospectus omits certain information contained in the Registration
Statement which has been filed with the SEC. More details may be obtained from
the SEC upon payment of the prescribed fee.
ACCOUNTING AND ACTUARIAL EXPERTS
The financial statements of IPL included in this prospectus have been audited
by Ernst & Young LLP, independent auditors, for the periods indicated in their
report thereon which appears elsewhere herein and has been included in reliance
on their report given on their authority as experts in accounting and auditing.
Actuarial matters included in this prospectus have been examined by Randi
Sterrn, F.S.A.,Vice President and Actuary of IPL.
FINANCIAL STATEMENTS OF IPL AND THE ACCOUNT
The financial statements of IPL included herein should be distinguished from
the financial statements of the Account and should be considered only as bearing
upon the ability of IPL to meet its obligations under the policies. This
prospectus contains no financial statements for the Account because it had no
assets and had not commenced operations at the date of this prospectus.
33
<PAGE>
LIST OF DIRECTORS AND EXECUTIVE OFFICERS OF IPL
The Directors and Executive Officers of IPL and their principal occupations
during the past five years are as follows:
<TABLE>
<CAPTION>
Directors Principal Occupations
- --------- ---------------------
<S> <C>
David F. D'Alessandro Chairman of the Board of IPL; President and Chief
Operating Officer, John Hancock Mutual Life Insurance
Company
William A. Black Vice Chairman of the Board, President and Chief
Executive Officer of IPL; President and Chief Executive
Officer of Maritime Life Assurance Company of Halifax,
Nova Scotia
Thomas E. Moloney Director of IPL; Chief Financial Officer, John Hancock
Mutual Life Insurance Company.
Robert R. Reitano Director and Chief Investment Officer of IPL; Vice
President, John Hancock Mutual Life Insurance Company.
Barbara L. Luddy Director and Actuary of IPL; Second Vice President,
John Hancock Mutual Life Insurance Company.
Marylou Gill Fierro Director of IPL; Counsel, John Hancock Mutual Life
Insurance Company; Associate Counsel, John Hancock
Mutual Life Insurance Company
Rose Cahill Vice President of Marketing of IPL; General Director,
John Hancock Mutual Life Insurance Company.
Randi M. Sterrn Vice President of Product Development of IPL; Senior
Associate Actuary, John Hancock Mutual Life Insurance
Company
Laura Arling Vice President of Operations of IPL; Director, John
Hancock Mutual Life Insurance Company; Senior
Consultant, John Hancock Mutual Life Insurance Company.
John F. Bohinski Vice President of Sales of IPL; President, Essex
Brokerage Services, Cincinnati, Ohio
</TABLE>
The business address of all Directors and officers of IPL is John Hancock
Place, Boston, Massachusetts 02117.
34
<PAGE>
[INSERT FINANCIAL STATEMENTS HERE]
[To be filed by Pre-Effective Amendment]
35
<PAGE>
ALPHABETICAL INDEX OF KEY WORDS AND PHRASES
This index should help you locate more information about many of the important
concepts in this prospectus.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
KEY WORD OR PHRASE PAGE KEY WORD OR PHRASE PAGE
Account............... 23 mortality and expense risk charge... 8
account value......... 7 Option A; Option B.................. 12
attained age ......... 8 optional benefits................... 8
beneficiary........... 23 owner............................... 4
business day.......... 23 partial withdrawal.................. 11
changing Option A or B 27 partial withdrawal charge........... 9
changing the face payment options..................... 14
amount............... 13 Planned Premium..................... 5
charges............... 7 policy anniversary.................. 25
Code ................. 29 policy year......................... 25
cost of insurance rates 8 portfolio........................... 2
date of issue......... 25 premium; premium payment............ 4
death benefit......... 3 prospectus.......................... 2
deductions ........... 7 rebalancing......................... 11
dollar cost averaging. 10 receive; receipt.................... 16
expenses of the Trust. 9 reinstate; reinstatement............ 6
face amount........... 12 sales and administrative charges.... 7
fixed investment option 24 SEC................................. 2
full surrender........ 11 Separate Account IPL-1.............. 23
grace period ......... 6 Servicing Office.................... 1
guaranteed death special loan account................ 12
benefit feature ..... 6 subaccount.......................... 23
Guaranteed Death surrender........................... 11
Benefit Premium ..... 6 surrender charge.................... 8
insurance charge ..... 8 surrender value..................... 11
insured person ....... 4 Target Premium...................... 8
investment options ... 1 tax considerations.................. 29
IPL................... 23 telephone transfers................. 16
John Hancock Variable transfers of account value.......... 10
Series Trust ....... 2 variable investment options......... 1
lapse................. 6 we; us.............................. 23
loan ................. 11 withdrawal.......................... 11
loan interest......... 12 withdrawal charges.................. 9
you; your........................... 4
maximum premiums ..... 5
Minimum First Premium. 24
minimum insurance
amount............... 13
minimum premiums ..... 5
modified endowment
contract............. 30
monthly deduction date 25
</TABLE>
36
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.
REPRESENTATION OF REASONABLENESS
Investors Partner Life Insurance Company represents that the fees and
charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.
<PAGE>
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Article VI of Investors Partner's Bylaws and Title 8,
Subchapter IV, Section 145 of the Delaware Corporation Law, Investors Partner
indemnifies each director, former director, officer, and former officer, and his
or her heirs and legal representatives from liability incurred or imposed in
connection with any legal action in which he or she may be involved by reason of
any alleged act or omission as an officer or a director of Investors Partner.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet.
Cross-Reference Table.
The prospectus consisting of 36 pages.
The undertaking to file reports.
The undertaking regarding indemnification.
Written consents (to be filed by amendment).
The signatures.
The following exhibits:
1. A (1) Investors Partner Life Insurance Company Board
Resolution establishing the separate account. (filed
herewith).
(2) Not applicable.
(3) Distributing Contracts
(a) Principal Underwriting Agreement (to be filed by
amendment).
(b) Form of Selling Agreement between John Hancock Funds
Inc. and selling broker-dealers (to be filed by
amendment).
(c) Schedule of Sales Commissions (to be filed by
amendment).
(4) Not applicable.
(5) Form of Flexible Premium Variable Life Insurance Policy
(to be filed by amendment).
<PAGE>
(6) (a) Charter of Investors Partner Life Insurance Company
(to be filed by amendment).
(b) By-laws of Investors Partner Life Insurance Company
(filed herewith).
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of Application for Flexible Premium Variable Life
Insurance Policies (to be filed by amendment).
2. Not Applicable.
3. An opinion of counsel as to the legality of the securities being
offered. (Included in Exhibit 1. (A)(5) above).
4. Not Applicable.
5. Not Applicable.
6. Opinion and consent of actuary (to be filed by amendment).
7. Consent of independent auditors(to be filed by amendment).
8. Memorandum describing Investors Partner's transfer, pricing and
redemption procedures pursuant to Rule 6e-3(T)(b)(12)(iii) (to be filed
by amendment).
9. Power of Attorney (to be filed by amendment).
10. Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned thereunto duly authorized, and its seal to be hereunto
affixed and attested, all in the city of Boston, and the Commonwealth of
Massachusetts, on the 28th day of January, 1999.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
- --------- ----- ----
/David F. D'Alessandro/ Chairman of the Board January 28, 1999
- -----------------------
David F. D'Alessandro (Principal Executive Officer)
/Thomas E. Moloney/ Director and Chief Financial Officer January 28, 1999
- -----------------------
Thomas E. Moloney (Principal Financial Officer)
<PAGE>
Signature Title Date
- --------- ----- ----
/Barbara L. Luddy/ Director and Actuary January 28, 1999
- -------------------------
Barbara L. Luddy (Principal Accounting Officer)
/William F. Black/ Vice Chairman of the Board January 28, 1999
- --------------------------
William F. Black
/Robert R. Reitano/ Director and January 28, 1999
- --------------------------
Robert R. Reitano Chief Investment Officer
/Marylou Gill Fierro/ Director January 28, 1999
- ---------------------
Marylou Gill Fierro
</TABLE>
EXHIBIT 1. A(1) IPL Board Resolution Establishing Separate Account
INVESTORS PARTNER LIFE INSURANCE COMPANY
Boston, Massachusetts
VOTE OF BOARD OF DIRECTORS
As of September 15, 1998
The undersigned, being all of the directors of Investors Partner Life
Insurance Company, a Delaware Corporation (the "Company"), do hereby adopt the
following vote by unanimous written consent in lieu of meeting:
VOTED, with respect to separate investment accounts:
(a)To authorize the Officers of the Company to establish one or more separate
investment accounts (hereinafter referred to individually as an "Account" and
collectively as the "Accounts"), pursuant to Section 2932 of Title 18 of the
Delaware Code, as amended, for the funds attributable to individual life
insurance policies on a variable basis to be issued by the Company, the
fundamental investment policy of each such Account being to invest or reinvest
its assets in securities issued by series type mutual funds registered as
investment companies under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Officers of the Company may determine the designation of
each Account and may from time to time change its designation as they deem
necessary and appropriate. The term "Officers of the Company" as used in this
resolution shall be variously defined as follows:
(1)As used in parts (c), (g), (h), and (i) of this vote, the term "Officers
of the Company" shall mean any one or more of the following: the Chairman
of the Board, the Vice Chairman of the Board, the President, the Secretary,
and any of the several Vice Presidents of the Company; and
(2)as used in parts (a), (d), and (e) of this vote, the term "Officers of the
Company" shall mean the Chief Investment Officer of the Company, and any
one of the following: the Chairman of the Board, the Vice Chairman of the
Board, the President, the Secretary, and any of the several Vice Presidents
of the Company.
(b)To allocate to an Account amounts to provide for life insurance (including
benefits incidental thereto) payable in fixed or variable amounts or both, the
income, gains and losses, realized or unrealized, attributable to an Account
to be credited to or charged against the Account without regard to the other
income, gains or losses of the Company. An Account shall not be chargeable
with liabilities arising out of any other business of the Company.
(c)To authorize the registration of each Account as an investment company under
the 1940 Act, and the registration of interests in the Account as securities
under the Securities Act of 1933, as amended (the "1933 Act"); and to
authorize and empower the Officers of the Company to take all action necessary
to comply with the 1933 and the 1940 Acts, including but not limited to the
execution and filing of registration statements and amendments thereto,
applications for exemptions from the provisions of the Act as may be necessary
or desirable and amendments thereto, and agreements for the administration of
the Account and for the distribution of variable life insurance policies
carrying
Page 1 of 2
<PAGE>
an interest in the Account assets and any other actions necessary under all
other applicable federal and state laws and regulations.
(d)To authorize the Officers of the Company to designate the registered
investment company or companies into which the assets of the Account will be
invested and reinvested; to establish one or more subaccounts within an
Account to which net premiums under the variable life insurance policies will
be allocated in accordance with instructions received from policyowners,
reserving to the Officers of the Company the authority to increase or decrease
the number of subaccounts in the Account as they deem necessary or
appropriate; and to contract with the designated investment companies to serve
as investment vehicles for an Account; and to invest the assets of each
subaccount in the shares of such an investment company or of a single
portfolio thereof.
(e)To authorize the Officers of the Company to deposit such amount in an
Account or in each subaccount thereof as may be necessary or appropriate to
facilitate the Account's operations; to transfer funds from time to time
between the Company's general account and an Account as deemed appropriate and
consistent with the terms of the variable life insurance policies and
applicable laws; and to establish criteria by which the Company shall
institute procedures to provide for a pass-through of voting rights to the
owners of variable life insurance policies issued by the Company, as required
by applicable laws, with respect to the shares of any investment companies
which are held in any Account.
(f)To appoint Zenon C. Tencza, Staff Counsel, as agent for service of process
or the like for the Company to receive notices and communications from the
Securities and Exchange Commission with respect to such registration
statements or exemptive applications and amendments thereto as may be filed on
behalf of the Company concerning an Account or the variable life insurance
policies, and to exercise the powers given to such agent in the rules and
regulations of the 1933 Act, the 1940 Act, or the Securities Exchange Act of
1934, as amended.
(g)To authorize the Officers of the Company to do or cause to be done all
things necessary or desirable, as may be advised by counsel, to comply with,
or obtain exemptions from, federal, state or local statutes or regulations
that may be applicable to the issuance and sale of variable life insurance
policies by the Company.
(h)To authorize the Company to act as the depositor for any Account and provide
all administrative service in connection with the establishment and
maintenance of the Account and in connection with the issuance and sale of
variable life insurance policies, all on such terms and subject to such
modifications as the Officers of the Company deem necessary or appropriate to
effectuate the foregoing.
(i)
To the Officers of the Company to execute and deliver such instruments and to
take such other action as they may deem necessary or desirable in order to
carry out the purpose and intent of this vote and to comply with applicable
federal or state laws and regulations.
I, Laura L. Mangan, the Secretary of Investors Partner Life Insurance Company
(the "Company") hereby certify that the above is a true copy of the resolution
adopted by the Board of Directors on September 15, 1998.
/s/Laura L. Mangan
------------------
Laura L. Mangan
Vice President and
Secretary
October 22, 1998
Page 2 of 2
<PAGE>
To: Board of Directors, Investors Partner Life Insurance Company
Re: Establishment of Separate Account
Date: September 15, 1998
Pursuant to the authority given to us under the Board resolution dated September
15, 1998, we hereby establish a separate investment account for Investors
Partner Life Insurance Company, to be known as "Separate Account IPL-1" (the
"Account"). The Account will be operated as a unit investment trust and will be
registered as such under the Investment Company Act of 1940, as amended. The
Account will support the benefits payable under the several plans of variable
life insurance to be issued by the Company. The Account will invest or reinvest
its assets soley in securities issued by series type mutual funds registered as
investment companies under the Investment Company Act of 1940, as amended. We
anticipate that the Account initially will invest in shares of the John Hancock
Variable Series Trust I pursuant to an agreement among the Company, John Hancock
Distributors, Inc. (the principal distributor for the John Hancock Variable
Series Trust I), and John Hancock Funds, Inc. (the broker/dealer for the
Company).
/s/William A. Black
-------------------
William A. Black, President
/s/Robert R. Reitano
--------------------
Robert R. Reitano, Chief Investment Officer
EXHIBIT 1. A(6)(b) By-laws of Investors Partner Life Insurance
BY-LAWS
of
INVESTORS PARTNER LIFE INSURANCE COMPANY
AMENDED AND RESTATED FEBRUARY 12, 1998
<PAGE>
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Company shall be
located at the office of the Corporation Trust Company, in the City of
Wilmington, in the County of New Castle, in the State of Delaware, and said
corporation shall be its registered agent.
Section 2. Principal Place of Business. The principal place of business of
the Company shall be located in Wilmington, Delaware.
Section 3. Other Offices. The Company may also have offices at such other
places as the Board of Directors may from time to time designate or the
business of the Company may require.
ARTICLE II
Section 1. Corporate Seal. The Corporate Seal shall have inscribed thereon
the name of the Company, the year of its incorporation and the words "Corporate
Seal, Delaware." Such seal may be used by causing it or a facsimile thereof to
be impressed or affixed or in any manner reproduced.
<PAGE>
ARTICLE III
STOCKHOLDERS MEETINGS
Section 1. Place of Meetings. All meetings of the stockholders shall be held
at the principal place of business of the Company, or at such other place as
shall be designated in the notice, or waiver of notice, calling a particular
meeting.
Section 2. Annual Meeting. The annual meeting of the stockholders shall be
held on the 2nd Wednesday following the 2nd Monday in April in each year at the
hour of 2:00 P.M., or on such other date as may be fixed by the President, the
Chairman of the Board, or a majority of the directors, at such time and place
as the notice calling the meeting shall indicate, when the stockholders shall
elect the directors, as provided in these By-Laws, and transact such other
business as may be properly considered by the stockholders.
Section 3. Special Meetings. Special meetings of the stockholders for any
purpose or purposes, other than those regulated by statute, may be called at any
time by the President, the Chairman of the Board, or a majority of the directors
upon request to the Secretary of the Company. Business transacted at all special
meetings shall be confined to the purpose or purposes stated in the call and
matters germane thereto.
2
<PAGE>
Section 4. Notice of Meetings. Written notice of every meeting of the
stockholders shall be given by the Secretary to each stockholder of record
entitled to vote at the meeting at least thirty (30) days prior to the date
specified for the meeting, unless a greater period of notice is required by
law. The written notice may be given to a stockholder personally, or by
sending a copy thereof through the mail, or by telegram, charges prepaid, to
his address appearing on the books of the Company, or supplied by him to the
Company for the purpose of notice. Such notice shall specify the place, date
and hour of the meeting, and, in the case of a special meeting, shall also
state the general nature of the business to be transacted at the meeting;
provided, that notice of an annual meeting shall state also the general nature
of the business to be transacted thereat to the extent required by law.
Advertisement of notice of any stockholders meeting shall not be necessary
except in those cases where it is expressly required by law.
Section 5. Waiver of Notice. Any notice required to be given to the
stockholders by statute, or by these By-Laws, may be waived in writing, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein. Except in the case of a special meeting, neither the
business to be transacted at, nor the purpose of, the meeting need be specified
in the waiver of notice of such meeting. Attendance of any stockholder entitled
to notice, either in person or by proxy, at any meeting shall constitute a
waiver of notice of such meeting, except where such person attends the meeting
for the express purpose of objecting to the transaction of any business because
the meeting was not lawfully called or convened.
Section 6. Quorum. The presence, in person or by proxy, of the holder
or holders of a majority of issued and outstanding shares of stock entitled to
vote shall be requisite to and constitute a quorum at all meetings of the
stockholders for the election of directors and for the transaction of such other
business as may be properly considered by the stockholders. A majority vote of
those stockholders present in person or by proxy at any meeting at which a
quorum is present shall decide the issue on any matter brought before the
meeting for consideration, except as may be otherwise provided by statute. If,
however, any meeting of stockholders cannot be organized because a quorum has
not attended, the stockholders entitled to vote thereat, present in person or by
proxy, shall have the power to adjourn the meeting to such time and place as
they may determine. At any adjourned meeting at which a quorum be present or
represented, any business may be transacted which might have been transacted at
the meeting originally called.
3
<PAGE>
Section 7. Stockholders Entitled to Vote. Subject to the provisions of this
section, every stockholder shall have the right at every stockholders meeting
to one vote for every share of stock having voting power standing in his name
on the books of the Company. In the event the Board of Directors shall, as
permitted by these By-Laws, fix a time prior to the date of any meeting of
stockholders, as a record date for the determination of the stockholders
entitled to notice of, and to vote at any such meeting, only such stockholders
as shall be stockholders of record on the date so fixed shall be entitled to
notice of, and to vote at, such meeting notwithstanding any transfer of shares
of stock after such record date.
Section 8. Stockholders May Vote in Person or By Proxy. Every Stockholder
entitled to vote may vote either in person or by proxy. Every proxy shall be
executed in writing by the stockholder, or by his duly authorized
attorney-in-fact, and filed with the Secretary of the Company. A proxy, unless
coupled with an interest, shall be revocable at will, notwithstanding any other
agreement or any provision in the proxy to the contrary, but the revocation of a
proxy shall not be effective until notice thereof has been given to the
Secretary of the Company. No unrevoked proxy shall be valid for eleven months
from the date of its execution, unless a longer time is expressly provided
therein, but in no event shall a proxy, unless coupled with an interest, be
valid after three years from the date of its execution. A proxy shall not be
revoked by the death or incapacity of the maker unless, before the vote is
counted or the authority is exercised, written notice of such death or
incapacity is given to the Secretary of the Company.
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Section 9. Elections of Directors: Cumulative Voting. In all elections of
directors, every stockholder entitled to vote shall have the right in person or
by proxy to multiply the number of votes to which he may be entitled by the
number of directors to be elected, and he may cast the whole number of such
votes for one candidate or he may distribute them among any two or more
candidates. The candidates receiving the highest number of votes, up to the
number of directors to be elected, shall be elected.
ARTICLE IV
DIRECTORS
Section 1. Number, Qualification and Term. The business and affairs of the
Company shall be managed by a Board of Directors consisting of not less than
three (3) Directors, one of whom shall be elected as Chairman of the Board. The
number of Directors to serve each year may be fixed annually by the stockholders
or at any time between Annual Stockholders Meetings by vote of the Board of
Directors. Each Director shall hold his office for a term of one year or until
his successor shall have been duly elected and qualified.
Section 2. Vacancies. Vacancies in the Board of Directors shall be filled by
the vote of a majority of the remaining members of the Board, though less than
a quorum, and each person so elected shall be a director for the unexpired
term, or until his successor is elected by the stockholders, who may make such
election at the next annual meeting of the stockholders or at any special
meeting duly called for the purpose and held prior thereto.
Section 3. Place of Meetings. The Meetings of the Board of Directors shall be
held at the principal place of business of the Company, or at such other place
as shall be designated in the notice, or waiver of notice, calling a particular
meeting.
Section 4. Annual Meeting. The annual meeting of the Board of Directors shall be
held without notice immediately after the annual meeting of the stockholders, at
the place where the annual stockholders meeting is held, for the purpose of
organization, for the election of officers and the transaction of other
business; or such meeting may convene at such other time and place as may be
fixed by the consent in writing of all the directors.
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Section 5. Regular Meetings. The Board of Directors shall hold at least two
regular meetings each year, beginning with the annual meeting immediately
following the annual meeting of the stockholders, and at such other time(s)
during the remainder of the year as may be deemed necessary and proper; notice
of which, except for the annual meeting of the Board, shall be given in written
form to each director at least five (5) days prior to the date specified for
the meeting.
Section 6. Special Meetings. Special meetings of the Board of Directors may
be called any time by the President, the Chairman of the Board, or a majority
of the directors upon request to the Secretary of the Company. Written notice
of a special meeting shall be given to each director at least twenty-four (24)
hours before the meeting.
Section 7. Notice of Meetings. Any written notice herein required may be
given to a director personally, or by sending a copy thereof through the mail,
or by telegram, charges prepaid, to his address appearing on the books of the
Company, or supplied by him to the Company for the purpose of notice. Such
notice shall specify the place, date and time of the meeting and, in the case
of a special meeting, shall also state the general nature of the business to be
transacted at the meeting.
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Section 8. Waiver of Notice. Whenever any notice is required by law or
these By-Laws to be given to the directors or any committee of the Board, a
waiver thereof in writing, signed by the person or persons entitled to such
notice whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Except in the case of a special
meeting, neither the business to be transacted at, nor the purpose of, the
meeting need be specified in the waiver of notice of such meeting. Attendance of
any person entitled to notice, at any meeting, shall constitute a waiver of
notice of such meeting, except where such person attends the meeting for the
express purpose of objecting to the transaction of any business because the
meeting was not lawfully called or convened.
Section 9. Quorum. The presence of a majority of the directors in
office shall be requisite to, and constitute a quorum at all meetings of the
Board for the transaction of business. Any action taken by a majority of the
directors present at a meeting at which a quorum is present shall constitute the
action of the Board of Directors, except as may be otherwise provided by
statute.
Section 10. Adjournment. Adjournment or adjournments of any regular or
special meeting may be taken, and it shall not be necessary to give any notice
of the adjourned meeting or of the business to be transacted thereat, other than
by announcement at the meeting at which such adjournment is taken. At any
adjourned meeting that a quorum shall be present, any business may be transacted
which might have been transacted at the meeting originally called.
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Section 11. Compensation of Directors. Directors, as such, shall not
receive any salary for their services, but any director may serve the Company in
any other capacity and receive compensation for such services. Directors shall
not receive any fixed sum or expenses for attendance at meetings of the Board,
or any committee, unless the Board of Directors by resolution expressly
authorizes the payment of a fixed sum, expenses, or both for such attendance.
Section 12. General Powers. The Board of Directors may exercise all
such powers of the Company and do all such lawful acts and things, including the
appointment of committees, as are not be statute or by these By-Laws directed or
required to be exercised and done by the stockholders. Any committees appointed
by the Board shall have such designations and powers and consist of such
persons, who need not be members of the Board unless otherwise required by law,
as the Board shall specify in its authorizing resolution. In the event of the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not they constitute a quorum, may unanimously appoint another
director to act at the meeting in the place of any such absent or disqualified
member.
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ARTICLE V
OFFICERS, AGENTS AND EMPLOYEES
Section 1. Officers. The officers of the Company shall be a President,
one or more Vice Presidents, a Secretary, a Treasurer, one or more Actuaries,
and such other officers as may be appointed by the Board of Directors. Subject
to the subsequent confirmation by the Board, the President shall have authority
to appoint such other officers as he shall determine to be necessary or
desirable for the proper conduct of the business of the Company and to fill
vacancies which occur in any office between meetings of the Board. Unless
otherwise required by law, all officers so appointed by the President shall
hold office at the will of the President, but may also be removed by the Board
of Directors. Any two (2) offices, except those of President and Secretary,
may be filled by the same person. The Board of Directors may add to the title
of any officer a word or words descriptive of his powers or the general
character of his duties.
Section 2. Election and Duties of Officers: Vacancies.
At the annual meeting of the Board of Directors, the directors shall elect the
officers of the Company for the ensuing year who shall hold office until their
successors shall have been duly elected and qualified, unless they resign or
are earlier removed from office as provided by these By-Laws.
Section 3. President: Powers and Duties. The President shall perform
such duties as are customarily incident to the office of the President, and
shall also perform such other duties as shall be assigned to him, from time to
time, by the Board of Directors. In the absence or disability of the
President, a Vice President may temporarily exercise and perform the powers and
duties of the President, as the Board of Directors may determine.
Section 4. Vice President: Powers and Duties. Each Vice President shall
have such power and perform such duties as may be assigned to him by the
President or the Board of Directors.
Section 5. Secretary: Powers and Duties. The Secretary shall attend all
meetings of the stockholders and directors and shall keep the minutes of such
meetings. He shall also perform like duties for any duly appointed committee
when required to do so. He shall give or cause to be given, when required by
these By-Laws or the Board of Directors, notice of all meetings of the
stockholders, the Board of Directors or any duly appointed committee. He shall
keep in safe custody the corporate seal of the Company, and shall affix the same
to any instrument requiring it; and when so affixed, it shall be attested to by
his signature. In the absence of the Secretary, any duly elected Assistant
Secretary designated by the President shall perform the duties of the Secretary.
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Section 6. Treasurer: Powers and Duties. The Treasurer shall have the
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Company, and
shall deposit or cause to be deposited all moneys and other valuable effects in
the name and to the credit of the Company in such depository or depositories as
may be designated by the Board of Directors. He shall disburse the funds of the
Company, taking proper vouchers for such disbursements, and shall render to the
President and directors, at its regular meetings of the Board, or whenever they
may require it, an account of all his transactions as Treasurer and of the
financial condition of the Company. In the absence of the Treasurer, any duly
elected Assistant Treasurer designated by the President shall perform the duties
of the Treasurer. The Treasurer and Assistant Treasurers shall give their
respective bonds in such amounts and with such sureties as the Board may
require.
Section 7. Actuary: Powers and Duties. Each Actuary shall have such
power and perform such duties as may be assigned to him by the President or the
Board of Directors.
Section 8. Salaries and Other Compensation. The Board of Directors shall
approve officers' salaries and all other salaries, compensation and emoluments
as required by law.
Section 9. Removal of Agents or Employees. Any agent or employee of the
Company may be removed by a majority vote of the Board of Directors whenever in
its judgment the best interests of the Company will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed. Although the Board of Directors may appoint and remove such
agents or employees as the need of the Company shall require, it may by
resolution delegate this function in whole or in part to a designated officer
of the Company, or employee of the Company, or such person as the Board may,
from time to time, so authorize, unless otherwise prohibited by law.
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ARTICLE VI
INDEMNIFICATION OF DIRECTORS
OFFICERS AND EMPLOYEES
Section 1. The Company shall indemnify any person made a party to an
action by or in the right of the Company to procure a judgment in its favor by
reason of the fact that he, his testator or intestate, is or was a director,
officer, or employee of the Company, against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred by him in connection with the
defense of such action, or in connection with an appeal therein, except in
relation to matters or matters as to which such director, officer, or employee
is adjudged to have breached his duty to the Company. The Company shall
indemnify any person made, or threatened to be made, a party to an action or
proceeding other than one by or in the right of the Company to procure a
judgment in its favor, whether civil, criminal, administrative or investigative,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, which any director, officer, or employee of the
Company served in any capacity at the request of the Company, against judgments,
fines, amounts paid in settlement and reasonable expenses, including attorneys'
fees actually and necessarily incurred as a result of such action or proceeding,
or any appeal therein, if such director, officer, or employee acted in good
faith, for a purpose which he reasonably believed to be in the best interest of
the Company and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. The foregoing right
of indemnification shall not be exclusive of other rights to which he may be
entitled, and shall be considered in addition to the protection provided in the
Certificate of Incorporation and By-Laws of John Hancock Mutual Life Insurance
Company, to the extent such provisions apply.
Any indemnification under this Article shall be made by the Company only
as authorized in the specific case upon a determination that indemnification of
the director, officer, or employee is proper under the circumstances because he
has met the applicable standard of conduct required by law as set forth in this
Article.
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ARTICLE VII
SHARES OF CAPITAL STOCK
Section 1. Certificates of Stock. The certificate of stock of the
Company shall be in such legal form as shall be approved by the Board of
Directors. Every stock certificate shall be signed by the President, or any Vice
President, or such other officer as may be designated by the Board of Directors
and countersigned by the Secretary, and shall be sealed with the corporate seal
which may be facsimile, engraved or printed. In case any officer who has signed
any stock certificate shall have ceased to be such officer because of death,
resignation or otherwise, before the certificate is issued, it may be issued by
the Company with the same effect as if the officer had not ceased to be such at
the date of its issue.
Section 2. Registered Stockholders. The Company shall be entitled to
treat the holder of record of any share or shares of stock as the holder in
fact thereof, and, accordingly, shall not be bound to recognize any equitable
or other claim to, or interest in, such stock on the part of any other person,
whether or not it shall have express or other notice thereof, save as otherwise
expressly provided by statute.
Section 3. Transfer of Stock. Shares of stock of the Company shall be
transferred only on its books upon the surrender to the Company of the
applicable stock certificate or certificates duly endorsed by the person named
therein, or accompanied by proper evidence of succession, assignment or
authority to transfer such shares of stock; provided, that no stock shall be
transferred until all previous calls thereon have been fully paid in; nor shall
any stock which has been declared forfeited for non-payment of calls thereon be
transferable. In such event, the surrendered certificate or certificates shall
be canceled, a new certificate or certificates shall be issued to the person
entitled thereto, and the transaction shall be recorded upon the books of the
Company.
Section 4. Lost Certificates. The Board of Directors may direct a new
certificate or certificates of stock to be issued in place of any certificate or
certificates theretofore issued by the Company alleged to have been destroyed or
lost, upon the making of an affidavit of that fact by the person claiming the
certificate or certificates to be lost or destroyed; and the Board of Directors,
when authorizing such issue of a new certificate or certificates, may, in its
discretion, and as a condition precedent to the issuance thereof, either require
the owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require, or
give the Company a bond in such sum as the Board may direct as indemnity against
any claim that may be made against the Company, or both.
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ARTICLE VIII
DIVIDENDS
Section 1. Dividends. Subject to the limitations prescribed by law, the
Board of Directors, at any regular or special meeting, may declare dividends
upon the outstanding shares of stock of the Company out of its surplus or net
profits available for such dividends to such extent as the Board may deem
advisable. Dividends may be paid in cash, in property, or in shares of stock
of the Company.
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ARTICLE IX
RECORD DATE
Section 1. Directors May Fix Record Date. The Board of Directors may
fix a time not less than ten or nor more than sixty days prior to the date of
any meeting of the stockholders, or the date fixed for the payment of any
dividend or distribution, or the date for the allotment of rights, or the date
when any change or conversion or exchange of shares of stock will be made or go
into effect as a record date for the determination of the stockholders entitled
to notice of and to vote at any meeting, or as a record date for the
determination of the stockholders entitled to receive any such allotment of
rights, or to exercise the rights in respect to any such change, conversion or
exchange of shares of stock, respectively. In such case, only such stockholders
as shall be stockholders of record on the date so fixed shall be entitled to
notice of and to vote at such meeting, or to receive payment of such dividend,
or to receive such allotment of rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any shares of stock on the books of the
Company after my record date so fixed.
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ARTICLE X
EXECUTION OF DOCUMENTS AND
OTHER INSTRUMENTS
Section 1. All contracts, deeds, documents and instruments requiring a
seal shall be executed by the President, or any Vice President, under the seal
of the Company affixed and attested to by the Secretary or the Treasurer. All
such papers may also be executed and the seal of the Company affixed and
attested to by such other person or persons as may be designated by a majority
of the Board of Directors in the event the act or signature of the aforesaid
designated officers or their duly elected assistants cannot reasonably be
obtained because of absence, sickness or other incapacity. All checks, notes,
drafts, demands for money and other obligations of the Company not requiring a
seal shall be signed by such officer, officers, employee or employees as the
Board of Directors may from time to time designate, and any such signature or
signatures may be evidenced by a facsimile to the extent authorized by the Board
of Directors.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 1. Corporate Records. The Company shall keep at its principal
executive office an accurate record of the proceedings of the stockholders and
of the directors; the original or a copy of its By-Laws, including all
amendments, certified by the Secretary; a stock book or register; and complete
and accurate books or records of account.
Section 2. Fiscal Year. The fiscal year of the Company shall commence on
the first day of January of each year.
Section 3. Meeting by Conference Telephone. One or more directors or
stockholders may participate in a meeting of the Board, of a committee of the
Board or of the stockholders, by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
Section 4. Waiver of Meeting. Except as otherwise provided in the
Articles or By-Laws of this Company, any action which may be taken at a meeting
of the Board, a committee of the Board, or of the stockholders, may be taken
without a meeting, if a consent or consents in writing setting forth the
actions so taken shall be signed by all of the members of the Board, a
committee of the Board or the stockholders who would be entitled to vote at a
meeting for such purpose, and shall be filed with the Secretary of the Company.
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ARTICLE XII
BY-LAW AMENDMENTS
Section 1. The By-Laws may be altered, amended, supplemented or repealed, or new
By-Laws may be adopted, by vote of the holders of the shares entitled to vote in
the election of Directors, or by the Board of Directors, provided that any such
action by the Board may be altered, amended, supplemented or repealed by the
stockholders entitled to vote thereon.
#534/JT
