Registration No. 333-
Registration No. 811-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [ ]
(Check appropriate box or boxes)
--------------------
SEPARATE ACCOUNT VA
of
THE EQUITABLE OF COLORADO, INC.
(Exact Name of Registrant)
--------------------
THE EQUITABLE OF COLORADO, INC.
(Name of Depositor)
370 17th Street, Suite 4950, Denver, Colorado 80202
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (303) 892-5700
--------------------
Joseph G. Williams, Jr.
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas, New York, New York 10104
(Name and Address of Agent for Service)
--------------------
Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036
<PAGE>
Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of the Registration Statement.
It is proposed that this filing will become effective (check
appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On ______________ pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
[ ] On (date) pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
previously filed post-effective amendment.
Title of Securities Being Registered:
Units of interest in Separate Account under variable annuity contracts.
<PAGE>
[Outside Wrapper]
EQUITABLE OF COLORADO ACCUMULATOR PLUS(SM)
A VARIABLE DEFERRED ANNUITY CONTRACT
PROSPECTUS DATED ________, 1999
[EQUITABLE OF COLORADO AXA LOGO]
<PAGE>
EQUITABLE OF COLORADO ACCUMULATOR PLUS(SM)
A variable deferred annuity Contract
__________, 1999
[Equitable of Colorado AXA Logo]
Please read and keep this prospectus for future reference. It contains
important information that you should know before purchasing, or taking any
other action under your Contract. Also, at the end of this prospectus you will
find attached the prospectuses for The Hudson River Trust and EQ Advisors Trust,
which contain important information about their Portfolios.
WHAT IS THE EQUITABLE OF COLORADO ACCUMULATOR PLUS? The Equitable of Colorado
Accumulator Plus ("Accumulator Plus(SM)") Contract is issued by THE EQUITABLE OF
COLORADO, INC. It provides for the accumulation of retirement savings and for
income. The Contract offers death benefit protection. It also offers a number of
payout options. You invest to accumulate value on a tax-deferred basis in one or
more of our variable investment options. This Contract is not available in New
York.
<TABLE>
<CAPTION>
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VARIABLE INVESTMENT OPTIONS
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<S> <C> <C>
o ALLIANCE MONEY MARKET o EQ/EVERGREEN o MERRILL LYNCH BASIC VALUE EQUITY
o ALLIANCE HIGH YIELD o EQ/EVERGREEN FOUNDATION o MERRILL LYNCH WORLD STRATEGY
o ALLIANCE COMMON STOCK o JPM CORE BOND o MORGAN STANLEY EMERGING MARKETS
o ALLIANCE AGGRESSIVE STOCK o LAZARD LARGE CAP VALUE EQUITY
o ALLIANCE SMALL CAP GROWTH o LAZARD SMALL CAP VALUE o EQ/PUTNAM GROWTH & INCOME VALUE
o BT EQUITY 500 INDEX o MFS GROWTH WITH INCOME o EQ/PUTNAM INVESTORS GROWTH
o BT SMALL COMPANY INDEX o MFS RESEARCH o EQ/PUTNAM INTERNATIONAL EQUITY
o BT INTERNATIONAL EQUITY INDEX o MFS EMERGING GROWTH
COMPANIES
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</TABLE>
You may allocate amounts to any of the variable investment options. They,
in turn, invest in a corresponding securities portfolio ("Portfolio") of The
Hudson River Trust or EQ Advisors Trust. Your investment results in a variable
investment option will depend on the investment performance of the related
Portfolio. Each variable investment option is a subaccount of our Separate
Account VA.
TYPES OF CONTRACTS. We offer the Contracts for use as:
o A nonqualified annuity ("NQ") for o An investment vehicle for a
after tax contributions only qualified defined contribution or
defined benefit plan ("QP")
o An individual retirement annuity
("IRA"), either Traditional IRA or
Roth IRA
A contribution of at least $25,000 is required to purchase a Contract. We
add an amount ("credit") to your Contract with each contribution you make.
<PAGE>
A registration statement relating to this offering has been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated _______, 1999, is a part of the registration
statement. It is available free of charge. You may request one by writing to our
Processing Office or calling 1-800-789-7771. The SAI has been incorporated by
reference into this prospectus. This prospectus and the SAI can also be obtained
from the SEC's website at http://www.sec.gov. The table of contents for the SAI
appears at the back of this prospectus.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY.
THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
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COPYRIGHT 1999 THE EQUITABLE OF COLORADO, INC. ALL RIGHTS
RESERVED. THE EQUITABLE OF COLORADO, INC. IS AN AUTHORIZED LICENSEE OF
ACCUMULATOR PLUS(SM), A SERVICE MARK OF THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES.
PROS 1AMLPLUS (5/99)
<PAGE>
WHO IS EQUITABLE OF COLORADO? We are The Equitable of Colorado, Inc. ("Equitable
of Colorado"), a stock life insurance company. We are a Colorado corporation and
have been doing business since 1984. Equitable of Colorado is a wholly owned
subsidiary of The Equitable Life Assurance Society of the United States
("Equitable Life"). Equitable Life is a stock life insurance company
incorporated under the laws of the state of New York and has been in business
since 1859. Equitable Life is a wholly owned subsidiary of The Equitable
Companies Incorporated, whose majority shareholder is AXA, a French insurance
holding company. As a majority shareholder, and under its other arrangements
with Equitable Life and Equitable Life's parent, AXA exercises significant
influence over the operations and capital structure of Equitable Life, including
Equitable of Colorado, and its parent. Equitable of Colorado's related
companies, however, have no legal responsibility to pay amounts that Equitable
of Colorado owes under the Contract.
Equitable Life, and its parent, and their subsidiaries, including Equitable of
Colorado, managed over $__________ billion in assets as of December 31, 1998. We
are licensed to sell life insurance in forty-six states, and annuities in
twenty-four states and Puerto Rico. Our home office is located at 370 17th
Street, Denver, Colorado 80202.
HOW TO REACH US. You may communicate with our Processing Office as listed below
for any of the following purposes:
<TABLE>
<CAPTION>
<S> <C>
o FOR CONTRIBUTIONS SENT BY REGULAR MAIL: o FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
Equitable of Colorado Accumulator Plus Equitable of Colorado Accumulator Plus
P.O. Box 13014 c/o First Chicago National Processing Center
Newark, NJ 07188-0014 300 Harmon Meadow Boulevard, 3rd Floor
Attn: Box 13014
Secaucus, NJ 07094
o FOR ALL OTHER COMMUNICATIONS (E.G., o FOR ALL OTHER COMMUNICATIONS (E.G.,
REQUESTS FOR TRANSFERS, WITHDRAWALS, REQUESTS FOR TRANSFERS, WITHDRAWALS,
OR REQUIRED NOTICES) SENT BY REGULAR OR REQUIRED NOTICES) SENT BY EXPRESS
MAIL: DELIVERY:
Equitable of Colorado Accumulator Plus Equitable of Colorado Accumulator Plus
P.O. Box 1547 200 Plaza Drive, 4th Floor
Secaucus, NJ 07096-1547 Secaucus, NJ 07094
</TABLE>
o TOLL-FREE TELEPHONE SERVICE: You may reach us toll-free by calling
1-800-789-7771 for a recording of daily unit values for the variable investment
options.
o TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") SYSTEM
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. You can obtain information on:
o Your current account value;
2
<PAGE>
o Your current allocation percentages;
o The number of units you have in the variable investment options; and
o To change your allocation percentages and/or transfer among the variable
investment options.
TOPS is normally available seven days a week, 24 hours a day, by calling
toll-free 1-888-909-7770. Of course, for reasons beyond our control, the service
may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone are genuine. For example, we will require certain
personal identification information before we will act on telephone instructions
and we will provide written confirmation of your transfers. We will not be
liable for following telephone instructions we reasonably believe to be genuine.
During our regular business hours you may also use our toll-free number to speak
with one of our customer service representatives or to make telephone transfers
among the variable investment options.
---------------------
You should send all contributions, notices, and requests to our Processing
Office at the address above.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1) authorization for telephone transfer by your registered
representative;
(2) cancellation of your Roth IRA contract and return to a Traditional IRA
contract;
(3) election of the automatic investment program;
(4) election of the rebalancing program;
(5) to obtain a personal identification number required for TOPS;
(6) tax withholding election; and
(7) beneficiary continuation option election.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES OF
REQUESTS:
(1) address changes;
(2) beneficiary changes;
(3) transfers between variable investment options;
(4) withdrawal requests; and
(5) Contract surrender.
You must sign and date all these requests. Any written request that is not
on one of our forms must include your name and your Contract number along
with adequate details about the notice you wish to give or the action you
wish us to take.
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<PAGE>
TO CANCEL OR CHANGE ANY OF THE FOLLOWING WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1) automatic investment program;
(2) dollar cost averaging;
(3) rebalancing;
(4) substantially equal withdrawals;
(5) systematic withdrawals; and
(6) the date annuity payments are to begin.
SIGNATURES: The proper person to sign forms, notices and requests would normally
be the owner. If there are joint owners both must sign. Any irrevocable
beneficiary or assignee that we have on our records also must sign certain types
of requests.
4
<PAGE>
CONTENTS OF THIS PROSPECTUS
PAGE IN
PROSPECTUS
----------
ACCUMULATOR PLUS AT A GLANCE -- KEY FEATURES 7
FEE TABLE 9
Examples 12
CONTRACT FEATURES AND BENEFITS 13
How You Can Purchase and Contribute to Your Contract 13
Owner and Annuitant Requirements 15
How You Can Make Your Contributions 15
What Are Your Variable Investment Options Under the Contract? 16
Portfolios of The Hudson River Trust 16
Portfolios of EQ Advisors Trust 16
Allocating Your Contributions 19
Guaranteed Minimum Death Benefit 20
Your Right to Cancel Within a Certain Number of Days 21
DETERMINING YOUR CONTRACT'S VALUE 22
Your Account Value 22
Your Contract's Value in each Variable Investment Option 22
TRANSFERRING YOUR MONEY AMONG THE VARIABLE INVESTMENT OPTIONS 22
Transferring Your Account Value 22
Dollar Cost Averaging Your Account Value 23
Rebalancing Your Account Value 24
ACCESSING YOUR MONEY 24
Withdrawing Your Account Value 24
How Withdrawals Are Taken From Your Account Value 27
How Withdrawals Affect Your Guaranteed Minimum Death Benefit 27
Surrendering Your Contract to Receive its Cash Value 28
When To Expect Payments 28
Choosing Your Annuity Payout Options 28
CHARGES AND EXPENSES 31
Charges That Equitable of Colorado Deducts 31
Charges That the Trusts Deduct 34
Group Or Sponsored Arrangements 34
Other Distribution Arrangements 35
PAYMENT OF DEATH BENEFIT 35
Your Beneficiary and Payment of Benefit 35
How Death Benefit Payment is Made 36
Beneficiary Continuation Option for Traditional IRA Contracts 37
TAX INFORMATION 38
Overview 38
Transfers among Variable Investment Options 38
Taxation of Nonqualified Annuities 38
5
<PAGE>
Special Rules for NQ Contracts Issued in Puerto Rico 40
Individual Retirement Arrangements ("IRAs") 41
Special Rules for Nonqualified Contracts in Qualified Plans 53
Federal and State Income Tax Withholding and Information Reporting 53
Impact of Taxes to Equitable of Colorado 55
MORE INFORMATION 55
About Our Separate Account VA 55
About The Hudson River Trust and EQ Advisors Trust 56
About the General Account 56
About Other Methods of Payment 57
Date and Prices at Which Contract Events Occur 58
About Your Voting Rights 58
About Our Year 2000 Progress 60
About Legal Proceedings 60
About Our Financial Statements 60
Transfers of Ownership, Collateral Assignments, Loans, and Borrowing 60
Distribution of the Contracts 60
INVESTMENT PERFORMANCE 61
Benchmarks 62
Communicating Performance Data 63
APPENDIX I: PURCHASE CONSIDERATIONS FOR QP CONTRACTS 72
APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE 73
APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES 74
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS 75
"WE," "OUR" AND "US" REFERS TO EQUITABLE OF COLORADO.
WHEN WE ADDRESS THE READER OF THIS PROSPECTUS WITH WORDS SUCH AS "YOU" AND
"YOUR," WE MEAN THE PERSON WHO HAS THE RIGHT OR RESPONSIBILITY THAT THE
PROSPECTUS IS DISCUSSING AT THAT POINT. THIS IS USUALLY THE CONTRACT OWNER.
WHEN WE USE THE WORD "CONTRACT" IT ALSO INCLUDES CERTIFICATES WHICH ARE ISSUED
UNDER GROUP CONTRACTS IN SOME STATES. ALSO, TO MAKE THIS PROSPECTUS EASIER TO
READ, WE SOMETIMES USE DIFFERENT WORDS THAN IN THE CONTRACT. YOUR REGISTERED
REPRESENTATIVE CAN PROVIDE FURTHER EXPLANATION ABOUT YOUR CONTRACT.
PLEASE SEE APPENDIX III FOR AN INDEX OF KEY WORDS AND PHRASES USED IN THIS
PROSPECTUS. THE INDEX WILL REFER YOU TO THE PAGE WHERE PARTICULAR TERMS ARE
DEFINED OR EXPLAINED.
6
<PAGE>
ACCUMULATOR PLUS AT A GLANCE -- KEY FEATURES
<TABLE>
<S> <C> <C>
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PROFESSIONAL Accumulator Plus' variable investment options invest in 22 different Portfolios
INVESTMENT managed by professional investment advisers.
MANAGEMENT
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TAX ADVANTAGES o ON EARNINGS No tax on any dividends, interest or capital gains
INSIDE THE until you make withdrawals or receive
CONTRACT distributions. However, all earnings will be taxed
at your ordinary income tax rate when they are
withdrawn or distributed.
o ON TRANSFERS No tax on transfers among variable investment
INSIDE THE options.
CONTRACT
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CONTRIBUTION AMOUNTS o INITIAL MINIMUM: $25,000
o ADDITIONAL MINIMUM: $1,000
$100 monthly, $300 quarterly under our
automatic investment program (NQ Contracts only)
o MAXIMUM INVESTMENT: $1,500,000 (higher with our approval)
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CREDIT We allocate a credit to your account value at the time you make a
contribution. The amount of the credit is equal to 3% of each contribution.
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ACCESS TO YOUR o Lump sum withdrawals
MONEY o Several withdrawal options on a periodic basis
o Contract surrender
You may incur a withdrawal charge for certain withdrawals. You may also
incur income tax and a tax penalty.
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PAYOUT ALTERNATIVES Traditional annuity payout options
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</TABLE>
7
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<TABLE>
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<S> <C> <C> <C>
ADDITIONAL FEATURES o Dollar cost averaging
o Automatic investment program
o Account value rebalancing (quarterly, semiannually and annually)
o Unlimited free transfers
o Waiver of withdrawal charge for disability
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FEES AND o 1.60% annual rate on assets invested in variable investment options
CHARGES for mortality and expense risks, administration, and distribution charges.
o No sales charge deducted at the time you make contributions and no annual
contract fee.
o During the first nine Contract Years following a contribution, a charge
will be deducted from amounts that you withdraw that exceed 15% of your
account value. We use the account value on the most recent Contract
anniversary to calculate the 15% amount available. The charge begins at 8%
in the first Contract Year following a contribution. It declines each year
beginning in the third Contract Year to 1% in the ninth Contract Year. There
is no withdrawal charge in the tenth and later Contract Years following a
contribution.
[Sidebar: The 12-month period beginning on your Contract Date and each
anniversary of that date is a "Contract Year." The "Contract Date" is the
effective date of a Contract. This usually is the business day we receive
your initial contribution.]
o Annual expenses of The Hudson River Trust and EQ Advisors Trust Portfolios
are calculated as a percentage of the average daily net assets invested in
each Portfolio. These expenses include management and advisory fees ranging
from 0.25% to 1.15% annually, 12b-1 fees of 0.25% and other expenses.
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ANNUITANT ISSUE NQ: 0-80 IRA: 20-78 QP: 20-70
AGES
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</TABLE>
THE ABOVE IS NOT A COMPLETE DESCRIPTION OF ALL MATERIAL PROVISIONS OF THE
CONTRACT. IN SOME CASES RESTRICTIONS OR EXCEPTIONS APPLY. ALSO, ALL FEATURES OF
THE CONTRACT ARE NOT NECESSARILY AVAILABLE IN YOUR STATE OR AT CERTAIN AGES.
For more detailed information we urge you to read the contents of this
prospectus, as well as your Contract. Please feel free to speak with your
registered representative, or call us, if you have any questions.
8
<PAGE>
FEE TABLE
The fee table below will help you understand the various charges and
expenses that apply to your Contract. The table reflects charges you will
directly incur under the Contract, as well as charges and expenses of the
Portfolios that you will bear indirectly. Charges for taxes, such as state or
local premium taxes, may also apply. Each of the charges and expenses is more
fully described under "Charges and Expenses" later in this prospectus. For a
complete description of Portfolio charges and expenses, please see the attached
prospectuses for The Hudson River Trust and EQ Advisors Trust.
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS EXPRESSED
AS AN ANNUAL OF DAILY NET ASSETS 1.10%
- --------------------------------
MORTALITY AND EXPENSE RISKS(1) 0.25%
ADMINISTRATION(2) 0.25%
-----
DISTRIBUTION(3) 1.60%
TOTAL ANNUAL EXPENSES =====
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST CERTAIN
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TRANSACTIONS
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<TABLE>
<S> <C> <C>
WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted if you surrender CONTRACT
your Contract or make certain withdrawals. The withdrawal charge percentage YEAR
we use is determined by the Contract Year in which you make the withdrawal or ----
surrender your Contract. For each contribution, we consider the Contract Year 1...............8.00%
in which we receive that contribution to be "Contract Year 1").(4) 2...............8.00
3...............7.00
4...............6.00
5...............5.00
6...............4.00
7...............3.00
8...............2.00
9...............1.00
10+..............0.00
</TABLE>
You also bear your proportionate share of all fees and expenses paid by a
Portfolio that corresponds to any variable investment option you are using:
This table shows the fees and expenses paid by each Portfolio for the year ended
December 31, 1998. These fees and expenses are reflected in the value of the
Portfolio's net assets each day. Therefore, they reduce the investment return of
the Portfolio and of the related variable investment option. Actual fees and
expenses are likely to fluctuate from year to year. All figures are expressed as
an annual percentage of each Portfolio's daily average net assets.
<TABLE>
<CAPTION>
INVESTMENT TOTAL
MANAGEMENT & OTHER ANNUAL
ADVISORY FEES 12B-1 FEE (5) EXPENSES EXPENSES
------------- --------- -------- --------
<S> <C> <C> <C> <C>
PORTFOLIOS
Alliance Money Market(6) 0.35% 0.25%
Alliance High Yield(6) 0.60% 0.25%
Alliance Common Stock(6) 0.37% 0.25%
Alliance Aggressive Stock (6) 0.54% 0.25%
</TABLE>
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<TABLE>
<CAPTION>
PORTFOLIOS INVESTMENT TOTAL
MANAGEMENT & OTHER ANNUAL
ADVISORY FEES 12B-1 FEE (5) EXPENSES EXPENSES
------------- --------- -------- --------
<S> <C> <C> <C> <C>
Alliance Small Cap Growth(6) 0.90% 0.25%
BT Equity 500 Index(7) 0.25% 0.25%
BT Small Company Index(7) 0.25% 0.25%
BT International Equity Index(7) 0.35% 0.25%
EQ/Evergreen(7) 0.75% 0.25%
EQ/Evergreen Foundation(7) 0.63% 0.25%
JPM Core Bond(7) 0.45% 0.25%
Lazard Large Cap Value(7) 0.55% 0.25%
Lazard Small Cap Value(7) 0.80% 0.25%
MFS Growth with Income(7) 0.55% 0.25%
MFS Research(7) 0.55% 0.25%
MFS Emerging Growth Companies(7) 0.55% 0.25%
Merrill Lynch Basic Value Equity(7) 0.55% 0.25%
Merrill Lynch World Strategy(7) 0.70% 0.25%
Morgan Stanley Emerging Markets
Equity(7) 1.15% 0.25%
EQ/Putnam Growth & Income
Value(7) 0.55% 0.25%
EQ/Putnam Investors Growth(7) 0.55% 0.25%
EQ/Putnam International Equity(7) 0.70% 0.35%
</TABLE>
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See footnotes below.
(1) A portion of this charge is for providing the guaranteed minimum death
benefit.
(2) We reserve the right to increase this charge to a maximum annual rate of
0.35%.
(3) The deduction of this charge is subject to regulatory limits.
(4) Deducted upon a withdrawal of amounts in excess of the 15% free withdrawal
amount, and upon surrender of a Contract.
(5) Portfolio shares are all subject to fees imposed under distribution plans
(the "Rule 12b-1 Plans" ) adopted by The Hudson River Trust and EQ Advisors
Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. The 12b-1 fee will not be increased for the life of the Contracts.
The Rule 12b-1 Plan for the Alliance Small Cap Growth Portfolio provides
that Equitable Distributors, Inc. ("EDI") will receive an annual fee not to
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exceed the lesser of (a) 0.25% of the average daily net assets of the
Portfolio attributable to Class IB shares and (b) an amount that, when
added to certain other expenses of the Class IB shares, would result in the
ratio of expenses to average daily net assets attributable to Class IB
shares equaling 1.20%.
(6) The investment management and advisory fees for each Portfolio of The
Hudson River Trust may vary from year to year depending upon the average
daily net assets of the respective Portfolio. The maximum investment
management and advisory fees, however, cannot be increased without a vote
of that Portfolio's shareholders. See the prospectus for The Hudson River
Trust. The other direct operating expenses will also fluctuate from year to
year depending on actual expenses.
(7) The maximum investment management and advisory fees for each Portfolio of
EQ Advisors Trust cannot be increased without a vote of that Portfolio's
shareholders. See the prospectus for EQ Advisors Trust. The amounts shown
as "Other Expenses" will fluctuate from year to year depending on actual
expenses. However, EQ Financial Consultants, Inc. ("EQ Financial"), EQ
Advisors Trust's manager, has entered into an expense limitation agreement
with respect to each Portfolio. Under this agreement EQ Financial has
agreed to waive or limit its fees and assume other expenses. Under the
expense limitation agreement, total annual operating expenses of each
Portfolio (other than interest, taxes, brokerage commissions, capitalized
expenditures, extraordinary expenses, and 12b-1 fees) are limited for the
average daily net assets of each Portfolio as follows: BT Equity 500 Index
- 0.30%; BT Small Company Index - 0.35%; BT International Equity Index and
JPM Core Bond - 0.55%; MFS Research, MFS Emerging Growth Companies, Merrill
Lynch Basic Value Equity, EQ/Putnam Growth & Income Value, and EQ/Putnam
Investors Growth - 0.60%; Lazard Large Cap Value - 0.65%; MFS Growth with
Income - 0.85%; Merrill Lynch World Strategy, EQ/Putnam International
Equity, Lazard Small Cap Value, and EQ/Evergreen Foundation, - 0.95%;
EQ/Evergreen - 1.05%; Morgan Stanley Emerging Markets Equity - 1.50%.
Absent the expense limitation, the "Other Expenses" for 1998 on an
annualized basis for each of the following Portfolios would have been as
follows: EQ/Putnam Growth & Income Value - ____%; MFS Research - ____%; MFS
Emerging Growth Companies - ____%; Merrill Lynch Basic Value Equity -
____%; and Merrill Lynch World Strategy - ____%; Morgan Stanley Emerging
Markets Equity - ____%; EQ/Putnam Investors Growth - ____%; and EQ/Putnam
International Equity - ____%. BT Equity 500 Index - ____%; BT Small Company
Index - ____%; BT International Equity Index - ____%; JPM Core Bond -
____%; ____%; Lazard Large Cap Value - ____%; Lazard Small Cap Value -
____%. For the following Portfolios, which had initial seed capital
invested on December 31, 1998, the "Other Expenses" for 1999, absent the
expense limitation, are estimated to be as follows: EQ/Evergreen and MFS
Growth with Income - 0.78%; EQ/Evergreen Foundation - 0.85%.
Each Portfolio may at a later date make a reimbursement to EQ Financial for
any of the management fees waived or limited and other expenses assumed and
paid by EQ Financial pursuant to the expense limitation agreement provided
that, among other things, such Portfolio has reached sufficient size to
permit such reimbursement to be made and provided that the Portfolio's
current annual operating expenses do not exceed the operating expense limit
determined for such Portfolio.
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<PAGE>
EXAMPLES
The examples below show the expenses that a hypothetical contract owner would
pay in the two situations illustrated assuming a $1,000 contribution plus a $30
credit is invested in one of the variable investment options listed, and a 5%
annual return on assets.(1)
These examples should not be considered a representation of past or future
expenses for each option. Actual expenses may be greater or less than those
shown. Similarly, the annual rate of return assumed in the examples is not an
estimate or guarantee of future investment performance.
<TABLE>
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<CAPTION>
IF YOU SURRENDER YOUR CONTRACT AT THE END IF YOU DO NOT SURRENDER YOUR CONTRACT AT THE
OF EACH PERIOD SHOWN, THE EXPENSES WOULD END OF EACH PERIOD SHOWN, THE EXPENSES WOULD
BE: BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
THE HUDSON RIVER TRUST
- ----------------------
OPTIONS
-------
Alliance Money
Market
Alliance High Yield
Alliance Common
Stock
Alliance Aggressive
Stock
Alliance Small Cap
Growth
[to be inserted by amendment]
EQ ADVISORS TRUST OPTIONS
- -------------------------
BT Equity 500 Index
BT Small Company Index
BT International Equity Index
EQ/Evergreen
EQ/Evergreen Foundation
JPM Core Bond
Lazard Large Cap Value
Lazard Small Cap Value
MFS Growth with Income
MFS Research
MFS Emerging
Growth Companies
Merrill Lynch Basic Value
Equity
Merrill Lynch World Strategy
Morgan Stanley Emerging
Markets Equity
EQ/Putnam Growth
& Income Value
EQ/Putnam
Investors Growth
EQ/Putnam International
Equity
</TABLE>
- --------------------
(1) The amount accumulated from the $1,000 contribution plus $30 credit could
not be paid in the form of an annuity at the end of any of the periods
shown in the examples. This is because if the amount applied to purchase an
annuity is less than $2,000, or the initial payment is less than $20, we
may pay the amount to you in a single sum instead of as payments under an
annuity payout option. See "Accessing Your Money."
12
<PAGE>
CONTRACT FEATURES AND BENEFITS
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase and contribute to a Contract by making payments to us
we call "contributions." We require a minimum initial contribution of $25,000
for you to purchase a Contract. You may make additional contributions of at
least $1,000 each, subject to limitations noted below. The following table
summarizes our rules regarding contributions to your Contract. All ages in the
table refer to the age of the annuitant named in the Contract.
[Sidebar: The "annuitant" is the person who is the measuring life for
determining Contract benefits. The annuitant is not necessarily the contract
owner.]
<TABLE>
<CAPTION>
AVAILABLE FOR
ANNUITANT ISSUE LIMITATIONS ON
CONTRACT TYPE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NQ 0 through 80 o After-tax money. o No additional
contributions after
o Paid to us by check or transfer age 81.
of contract value in a tax
deferred exchange under
Section 1035 of the
Internal Revenue Code.
- -----------------------------------------------------------------------------------------------------------------------
Traditional 20 through 78 o Rollovers from a qualified o No additional
IRA plan. rollover or direct
transfer
o Rollovers from an Internal contributions after
Revenue Code Section 403(b) tax age 79.
sheltered annuity
("TSA").
o Contributions
o Rollovers from another after age 70 1/2
traditional individual mustbe net of
retirement arrangement. required
minimum
distributions.
o Direct custodian-to-custodian
transfers from other
traditional individual
retirement arrangements.
o "Regular" IRA contributions
are not permitted.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
AVAILABLE FOR
ANNUITANT ISSUE LIMITATIONS ON
CONTRACT TYPE AGES SOURCE OF CONTRIBUTIONS CONTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Roth IRA 20 through 78 o Rollovers from another Roth o No additional
IRA. rollover or direct
transfer
o Conversion rollovers from a contributions after
Traditional IRA. age 79.
o Direct transfers from another
Roth IRA. o Conversion
rollovers after age
o You cannot roll over funds 70 1/2 must be net
from a Traditional if of required
your adjusted gross income is minimum
$100,000 or more. distributions for
the Traditional
IRA you are
rolling over.
o "Regular" after-tax
contributions are not
permitted.
- -----------------------------------------------------------------------------------------------------------------------
o Only transfer contributions o Regular ongoing
QP 20 through 70 from an existing qualified plan payroll
trust as a change of investment contributions are
vehicle under the plan. not permitted.
o The plan must be qualified o No additional
under Section 401(a) of the transfer
Internal Revenue Code. contributions after
age 71.
o For 401(k) plans, transferred
contributions may only
include employee pre-tax
contributions.
o For defined benefit plans,
employee contributions are
not permitted.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See "Tax Information" for a more detailed discussion of certain
contribution limitations. We may refuse to accept any contribution if the sum of
all contributions under all Accumulator Plus Contracts with the same annuitant
would then total more than $1,500,000. We reserve the right to limit aggregate
contributions made after the first Contract Year to 150% of first-year
contributions. We may also refuse to accept any contribution if the sum of all
contributions under all Equitable of Colorado annuity accumulation contracts
that you own would then total more than $2,500,000.
14
<PAGE>
OWNER AND ANNUITANT REQUIREMENTS
Under NQ Contracts, the annuitant can be different than the owner. A
joint owner may also be named. Only natural persons can be joint owners. This
means that an entity such as a corporation cannot be a joint owner.
Under IRA Contracts, the owner and annuitant must be the same person.
Under QP Contracts, the owner must be the trustee of the qualified plan
and the annuitant must be the plan participant/employee.
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a bank
in the U.S. clearing through the Federal Reserve System, in U.S. dollars, and
made payable to Equitable of Colorado. We do not accept third party checks
endorsed to us except for rollover contributions, tax-free exchanges or trustee
checks that involve no refund. All checks are subject to collection. We reserve
the right to reject a payment if it is received in an unacceptable form.
For your convenience, we will accept initial and additional
contributions by wire transmittal from certain broker-dealers who have
agreements with us for this purpose. Additional contributions may also be made
under our automatic investment program. These methods of payment are discussed
in detail under "More Information" later in this prospectus.
Your initial contribution must generally be accompanied by an
application and any other form we need to process the payments. If any
information is missing or unclear, we will try to obtain that information. If we
are unable to obtain all of the information we require within five Business
Days, we will inform the registered representative submitting the application,
on your behalf. We will then return the contribution to you unless you
specifically direct us to keep your contribution until we receive the required
information.
[Sidebar: Our "Business Day" generally is any day on which the New
York Stock Exchange is open for trading.]
SECTION 1035 EXCHANGES
You may apply the value of an existing nonqualified deferred annuity
contract (or life insurance or endowment contract) to purchase an Accumulator
Plus NQ Contract in a tax-free exchange if you follow certain procedures as
shown in the form that we require you to use. Also see "Tax Information" later
in this prospectus.
WHAT ARE YOUR VARIABLE INVESTMENT OPTIONS UNDER THE CONTRACT?
We allocate your contributions among the variable investment options
available under the Contracts as you direct us to.
15
<PAGE>
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the 22 variable investment
options will depend on the investment performance of the underlying Portfolios.
Listed below are the currently available Portfolios, their investment
objectives, and their advisers.
[Sidebar: You can choose among 22 variable investment options.]
<TABLE>
<CAPTION>
PORTFOLIOS OF THE HUDSON RIVER TRUST
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------
Alliance Money Market High level of current income while Alliance Capital Management L.P.
preserving assets and maintaining
liquidity
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Alliance High Yield High return by maximizing current Alliance Capital Management L.P.
income and, to the extent
consistent with that objective,
capital appreciation
- ----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock Long-term growth of capital and Alliance Capital Management L.P.
increasing income
- ----------------------------------------------------------------------------------------------------------------------
Alliance Aggressive Stock Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth Long-term growth of capital Alliance Capital Management L.P.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index Replicate as closely as possible Bankers Trust Company
the total return of the Standard &
Poor's 500 Composite Stock Price
Index
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BT Small Company Index Replicate the total return of the Bankers Trust Company
Russell 2000 Index
- ----------------------------------------------------------------------------------------------------------------------
BT International Equity Index Replicate as closely as possible Bankers Trust Company
the total return of the Morgan
Stanley Capital International
Europe, Australia, Far East Index
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Capital appreciation Evergreen Asset
Management Corp.
- ----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation In order of priority, reasonable Evergreen Asset
income, conservation of capital, Management Corp.
and capital appreciation
- ----------------------------------------------------------------------------------------------------------------------
JPM Core Bond Provide high total return J.P. Morgan Investment Management Inc.
consistent with moderate risk of
capital and maintenance of
liquidity
- ----------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value Capital appreciation by investing Lazard Asset Management
primarily in equity securities of
companies with relatively large
capitalizations
- ----------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value Capital appreciation by investing Lazard Asset Management
in equity securities of U.S.
companies with small market
capitalizations
- ----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Reasonable current income and Massachusetts Financial Services Company
long-term growth of capital and
income
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIOS OF EQ ADVISORS TRUST (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME OBJECTIVE ADVISER
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MFS Research Long-term growth of capital and Massachusetts Financial Services Company
future income
- ----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Long-term capital growth Massachusetts Financial Services Company
Companies
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch Basic Value Equity Capital appreciation and Merrill Lynch Asset Management, L.P.
secondarily, income
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch World Strategy High total investment return Merrill Lynch Asset Management, L.P.
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Long-term capital appreciation by Morgan Stanley Asset
Markets Equity investing primarily in equity Management Inc.
securities of emerging country
issuers
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth Capital growth, current income is Putnam Investment Management, Inc.
& Income Value a secondary objective
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth Long-term growth of capital and Putnam Investment Management, Inc.
any increased income that results
from this growth
- ----------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Capital appreciation Putnam Investment Management, Inc.
Equity
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Other important information about the Portfolios is included in the
separate prospectuses for The Hudson River Trust and EQ Advisors Trust attached
at the end of this prospectus.
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more, or all, of the
variable investment options. Allocations must be in whole percentages and you
may change your allocations at any time. However, the total of your allocations
must equal 100%.
18
<PAGE>
CREDITS
A credit will be allocated to your account value when we receive a
contribution from you. The credit is equal to 3% of the amount of each
contribution. Credits are allocated to the same variable investment options
based on the same percentages used to allocate your contributions.
We do not consider credits to be contributions for purposes of any
discussion in this prospectus. Credits are also not considered to be your
investment in the Contract for tax purposes.
---------------------
GUARANTEED MINIMUM DEATH BENEFIT
Applicable for annuitant ages 0 through 79 at issue of NQ Contracts;
20 through 78 at issue of Traditional IRA and Roth IRA Contracts; and
20 through 70 at issue of QP Contracts.
You may elect either the "5% roll up to age 80" or the "annual ratchet
to age 80" guaranteed minimum death benefit when you apply for a Contract. Once
you have made your election, you may not change it.
5% ROLL UP TO AGE 80. On the Contract Date, the guaranteed minimum
death benefit equals your initial contribution plus the credit. Thereafter, the
guaranteed minimum death benefit will be credited with interest on each Contract
Date anniversary (compounded annually) through the annuitant's age 80. The
interest rate is 5% except for amounts invested in the Alliance Money Market
option. The interest rate is 3% for the Alliance Money Market option. No
interest is credited after the annuitant is age 80.
If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the additional
contribution plus the amount of the credit on the date the contribution is
allocated to your variable investment options. If you take a withdrawal from
your Contract, we will adjust your guaranteed minimum death benefit for the
withdrawal on the date you take the withdrawal.
ANNUAL RATCHET TO AGE 80. On the Contract Date, your guaranteed minimum
death benefit equals your initial contribution plus the credit. Then, on each
Contract Date anniversary, we will determine your guaranteed minimum death
benefit by comparing your current guaranteed minimum death benefit to your
account value on that Contract Date anniversary. If your account value is higher
than your guaranteed minimum death benefit, we will increase your guaranteed
minimum death benefit to equal your account value. On the other hand, if your
account value on the Contract Date anniversary is less than your guaranteed
minimum death benefit, we will not adjust your guaranteed minimum death benefit
either up or down.
If you make additional contributions, we will increase your current
guaranteed minimum death benefit by the dollar amount of the contribution plus
the amount of the credit on the date the contribution is allocated to your
variable investment options. If you take a withdrawal from
19
<PAGE>
your Contract, we will adjust your guaranteed minimum death benefit on the date
you take the withdrawal.
Applicable for an annuitant who is age 80 when the Contract is issued.
On the Contract Date, your guaranteed minimum death benefit equals your
initial contribution plus the credit. Thereafter, it will be increased by the
dollar amount of any additional contributions. We will adjust your guaranteed
minimum death benefit if you take any withdrawals.
--------------------
Please see "How Withdrawals Affect Guaranteed Minimum Death Benefit"
under "Accessing Your Money" for information on how withdrawals affect your
guaranteed minimum death benefit.
See Appendix II for an example of how we calculate the guaranteed
minimum death benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your Contract, you may
return it to us for a refund. To exercise this cancellation right you must mail
the Contract directly to our Processing Office within 10 days after you receive
it. In some states, this "free look" period may be longer.
Your refund will equal your account value under the Contract and will
reflect any investment gain or loss in the variable investment options through
the date we receive your Contract. Please note that you will forfeit the credit
by exercising this right of cancellation. Some states or Federal income tax
regulations may require us to calculate the refund differently. If you cancel
your Contract during the free look period, we may require that you wait six
months before you may apply for a Contract with us again.
We follow these same procedures if you change your mind before you
receive your Contract, but after you have made a contribution. Please see "Tax
Information" for possible consequences of canceling your Contract.
If you fully convert an existing Traditional IRA Contract to a Roth IRA
Contract, you may cancel your Roth IRA Contract and return to a Traditional IRA
Contract. Our Processing Office, or your registered representative, can provide
you with the cancellation instructions. Ask for the form entitled "Request for
Full Conversion."
20
<PAGE>
DETERMINING YOUR CONTRACT'S VALUE
YOUR ACCOUNT VALUE
Your "account value" is the total value of your contributions plus the
credit allocated to the variable investment options. These amounts are subject
to certain fees and charges discussed under "Charges and Expenses."
Your Contract also has a "cash value." At any time before annuity
payments begin, your Contract's cash value is equal to the account value, less
any withdrawal charge that may apply if you surrender your Contract.
Please see "Surrendering Your Contract to Receive its Cash Value" below.
YOUR CONTRACT'S VALUE IN EACH VARIABLE INVESTMENT OPTION
You may allocate your contributions to one or more of the variable
investment options. We will allocate the credit that applies to each
contribution to those same variable investment options. Each variable investment
option invests in shares of a corresponding Portfolio. Your value in each
variable investment option is measured by "units." The value of your units will
increase or decrease as though you had invested it in the corresponding
Portfolio's shares directly. Your value, however, will be reduced by the amount
of the fees and charges that we deduct under the Contract. Your value will also
be reduced by the dollar amount of any withdrawals that you make.
[Sidebar: Units measure your value in each variable investment option.]
The unit value for each variable investment option depends on the
investment performance of that option, minus daily charges. On any day, your
value in any variable investment option equals the number of units credited to
your Contract under that option, multiplied by that day's value for one unit.
The number of your Contract units in any variable investment option does not
change unless you make additional contributions, make a withdrawal, or transfer
amounts between variable investment options. In addition, when we deduct any
withdrawal charge the number of units credited to your Contract will be reduced.
A description of how unit values are calculated is found in the SAI.
TRANSFERRING YOUR MONEY AMONG THE VARIABLE INVESTMENT OPTIONS
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can
transfer some or all of your account value among the variable investment
options.
You must send all transfer requests directly to our Processing
Office. You may request a transfer in writing or by telephone. Transfer requests
should specify:
21
<PAGE>
(1) the Contract number,
(2) the dollar amounts or percentages of your current account value
to be transferred, and
(3) the variable investment options to and from which you are
transferring.
You can also use our TOPS system to make transfers among the variable
investment options.
We may, at any time, restrict the use of market timers and other agents
acting under a power of attorney who are acting on behalf of more than one
contract owner. Any agreements to use market timing services to make transfers
are subject to our rules in effect at that time.
We will confirm all transfers in writing.
DOLLAR COST AVERAGING YOUR ACCOUNT VALUE
Dollar cost averaging allows you to gradually transfer amounts from the
Alliance Money Market option to the other variable investment options by
periodically transferring approximately the same dollar amount to the variable
investment options you select. This will cause you to purchase more units if the
unit's value is low and fewer units if the unit's value is high. Therefore, you
may get a lower average cost per unit over the long term. This plan of
investing, however, does not guarantee that you will earn a profit or be
protected against losses.
If your value in the Alliance Money Market option is at least $5,000,
you may choose, at any time, to have a specified dollar amount or percentage of
your value transferred from that option to the other variable investment
options. You can select to have transfers made on a monthly, quarterly or annual
basis. The transfer date will be the same calendar day of the month as the
Contract Date, but not later than the 28th.
The minimum amount that we will transfer each time is $250. The maximum
amount we will transfer is equal to your value in the Alliance Money Market
option at the time the program is elected, divided by the number of transfers
scheduled to be made in the next 12 months.
If, on any transfer date, your value in the Alliance Money Market
option is equal to or less than the amount you have elected to have transferred,
the entire amount will be transferred. The dollar cost averaging program will
then end. You may change the transfer amount once each Contract Year, or cancel
this program at any time.
Dollar cost averaging may not be elected if you are participating in
the rebalancing program.
REBALANCING YOUR ACCOUNT VALUE
We currently offer a rebalancing program that you can use to
automatically reallocate your account value among the variable investment
options. You must tell us:
22
<PAGE>
(a) the percentage you want invested in each variable investment
option (whole percentages only), and
(b) how often you want the rebalancing to occur (quarterly,
semiannually, or annually on a Contract Year basis. However, it will
occur on the same day of the month as the Contract Date).
While your rebalancing program is in effect, we will transfer amounts
among each variable investment option so that the percentage of your account
value that you specify is invested in each option at the end of each rebalancing
date.
[Sidebar: Rebalancing does not assure a profit or protect against loss. You
should periodically review your allocation percentages as your needs change. You
may want to discuss the rebalancing program with your registered representative
or other financial adviser before electing the program.]
You may elect the rebalancing program at any time. You may also change
your allocation instructions or cancel the program at any time. If you request a
transfer while the rebalancing program is in effect, we will process the
transfer as requested and then cancel the rebalancing program.
You may not elect the rebalancing program if the dollar cost averaging
program is in effect.
ACCESSING YOUR MONEY
WITHDRAWING YOUR ACCOUNT VALUE
You have several ways to withdraw your account value before annuity
payments begin. The table below shows the methods available under each type of
Contract. More information follows the table. For the tax consequences of
withdrawals, see "Tax Information."
<TABLE>
<CAPTION>
METHOD OF WITHDRAWAL
SUBSTANTIALLY MINIMUM
CONTRACT LUMP SUM SYSTEMATIC EQUAL DISTRIBUTION
- -------- -------- ---------- ----- ------------
<S> <C> <C> <C> <C>
NQ Yes Yes No No
Traditional IRA Yes Yes Yes Yes
Roth IRA Yes Yes Yes No
QP Yes No No No
</TABLE>
23
<PAGE>
LUMP SUM WITHDRAWALS
(All Contracts)
You may take lump sum withdrawals of your account value at any time.
The minimum amount you may withdraw is $1,000. If you request to withdraw more
than 90% of a Contract's current cash value we will treat it as a request to
surrender the Contract for its cash value. See "Surrendering your Contract to
Receive its Cash Value" below.
Lump sum withdrawals in excess of the 15% free withdrawal amount may be
subject to a withdrawal charge.
SYSTEMATIC WITHDRAWALS
(Traditional IRA, Roth IRA and NQ Contracts Only)
You may take systematic withdrawals of a particular dollar amount or a
particular percentage of your account value. You may take systematic withdrawals
on a monthly, quarterly or annual basis as long as the withdrawals do not exceed
the following percentages of your account value: 1.2% monthly, 3.6% quarterly,
and 15.0% annually. The minimum amount you may take in each systematic
withdrawal is $250. If the amount withdrawn would be less than $250 on the date
a withdrawal is to be taken, we will not make a payment and we will terminate
your systematic withdrawal election.
We will make the withdrawals on any day of the month that you select as
long as it is not later than the 28th day of the month. If you do not select a
date, we will make the withdrawals on the same calendar day of the month as the
Contract Date. You must wait at least 28 days after your Contract is issued
before your systematic withdrawals can begin.
You may elect to take systematic withdrawals at any time. If you own a
Traditional IRA or Roth IRA Contract, you may elect this withdrawal method only
if you are between ages 59 1/2 and 70 1/2.
You may change the payment frequency, or the amount or percentage of
your systematic withdrawals, once each Contract Year. However, you may not
change the amount or percentage in any Contract Year in which you have already
taken a lump sum withdrawal. You can cancel the systematic withdrawal option at
any time.
Systematic withdrawals are not subject to a withdrawal charge, except
to the extent that, when added to a lump sum withdrawal previously taken in the
same Contract Year, the systematic withdrawal exceeds the 15% free withdrawal
amount.
24
<PAGE>
SUBSTANTIALLY EQUAL WITHDRAWALS
(Traditional IRA and Roth IRA Contracts only)
The substantially equal withdrawals option allows you to receive
distributions from your account value without triggering the 10% additional
federal tax penalty which normally applies to distributions made before age 59
1/2. See "Tax Information." Once you begin to take substantially equal
withdrawals, you should not stop them or change the pattern of your withdrawals
until the later of age 59 1/2 or five full years after the first withdrawal. If
you stop or change the withdrawals or take a lump sum withdrawal, you may be
liable for the 10% federal tax penalty that would have otherwise been due on
prior withdrawals made under this option and for any interest on those
withdrawals.
You may elect to take substantially equal withdrawals at any time
before age 59 1/2. We will make the withdrawal on any day of the month that you
select as long as it is not later than the 28th day of the month. You may not
elect to receive the first payment in the same Contract Year in which you took a
lump sum withdrawal. We will calculate the amount of your substantially equal
withdrawals under a method we select and payments will be made monthly,
quarterly or annually as you select. These payments will continue until we
receive written notice from you to cancel this option or you take a lump sum
withdrawal. You may elect to start receiving substantially equal withdrawals
again, but the payments may not restart in the same Contract Year in which you
took a lump sum withdrawal. We will calculate the new withdrawal amount.
Substantially equal withdrawals are not subject to a withdrawal charge.
MINIMUM DISTRIBUTION WITHDRAWALS
(Traditional IRA Contracts only -- See "Tax Information")
We offer the minimum distribution withdrawal option to help you meet
required minimum distributions under federal income tax rules. You may elect
this option in the year in which you attain age 70 1/2. The minimum amount we
will pay out is $250. You may elect minimum distribution withdrawals for each
Traditional IRA Contract you own, subject to our rules then in effect.
Currently, minimum distribution withdrawal payments will be made annually.
We do not impose a withdrawal charge on minimum distribution
withdrawals except if when added to a lump sum withdrawal previously taken in
the same Contract Year, the minimum distribution withdrawal exceeds the 15% free
withdrawal amount.
We will calculate your payment each year based on your account value at
the end of each calendar year, using the recalculation method of determining
payments.
[Sidebar: For Traditional IRA retirement benefits subject to minimum
distribution requirements, we will send a form outlining the distribution
options available before you reach age 70 1/2 (if you have not begun your
annuity payments before that time).]
25
<PAGE>
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
Lump Sum Withdrawal
You must specify the variable investment options from which you want to
take the withdrawal. If we receive only partial information, our Processing
Office will contact you for complete instructions before processing your
request.
Systematic Withdrawals, Substantially Equal Withdrawals, and Minimum
Distribution Withdrawals
Unless you specify otherwise, we will subtract your withdrawals on a
pro rata basis from each variable investment option in which you have value.
HOW WITHDRAWALS AFFECT YOUR GUARANTEED MINIMUM DEATH BENEFIT
Withdrawals will reduce your guaranteed minimum death benefit on either a
dollar-for-dollar basis or on a pro rata basis as explained below:
5% roll up to age 80 - If you elect the 5% roll up to age 80 guaranteed minimum
death benefit, your current guaranteed minimum death benefit will be reduced on
a dollar-for-dollar basis as long as the sum of your withdrawals in a Contract
Year is 5% or less of the guaranteed minimum death benefit on the most recent
Contract Date anniversary. Once you take a withdrawal that causes the sum of
your withdrawals in a Contract Year to exceed 5% of the guaranteed minimum death
benefit on the most recent Contract Date anniversary, that withdrawal and any
subsequent withdrawals in that same Contract Year will reduce your current
guaranteed minimum death benefit on a pro rata basis.
Annual ratchet to age 80 - If you elect the annual ratchet to age 80 guaranteed
minimum death benefit, each withdrawal will always reduce your current
guaranteed minimum death benefit on a pro rata basis.
Annuitant Issue Age 80 - If your Contract was issued when the annuitant was age
80, each withdrawal will always reduce your current guaranteed minimum death
benefit on a pro rata basis.
Reduction on a dollar-for-dollar basis means that your current benefit will be
reduced by the dollar amount of the withdrawal. Reduction on a pro rata basis
means that we calculate the percentage of your current account value that is
being withdrawn and we reduce your current benefit by that same percentage. For
example, if your account value is $30,000 and you withdraw $12,000, you have
withdrawn 40% of your account value. If your guaranteed minimum death benefit
was $40,000 before the withdrawal, it would be reduced by $16,000 ($40,000 x
.40) and your new guaranteed minimum death benefit after the withdrawal would be
$24,000 ($40,000 - $16,000).
26
<PAGE>
The timing of your withdrawals and whether they exceed the 5% threshold
described above can have a significant impact on your guaranteed minimum death
benefit.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your Contract to receive its cash value at any time
while the annuitant is living and before you begin to receive annuity payments.
For a surrender to be effective, we must receive your written request and your
Contract at our Processing Office. We will determine your cash value on the date
we receive the required information. All benefits under the Contract will
terminate as of that date.
You may receive your cash value in a single sum payment or apply it to
one or more of the annuity payout options. See "Choosing Your Annuity Payout
Options" below. We will usually pay the cash value within seven calendar days,
but we may delay payment as described in "When To Expect Payments," below. For
the tax consequences of surrenders, see "Tax Information."
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable
investment options within seven calendar days after the date of the transaction
to which the request relates. These transactions may include applying proceeds
to a variable annuity, payment of a death benefit, payment of any portion of
your account value (less any withdrawal charge) and, upon surrender, payment of
the cash value. We may postpone such payments or applying proceeds for any
period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) sales of securities or determination of the fair value of a
variable investment option's assets is not reasonably practicable
because of an emergency, or
(3) the SEC, by order, permits us to defer payment to protect people
remaining in the variable investment option.
We also may defer payments for a reasonable amount of time (not to
exceed 15 days) while we are waiting for a contribution check to clear.
CHOOSING YOUR ANNUITY PAYOUT OPTIONS
The Accumulator Plus offers you several choices for receiving
retirement income. Each choice enables you to receive fixed or, in some cases,
variable annuity payments.
You can choose from among the four different annuity payout options
listed below. Restrictions apply, depending on the type of Contract you own.
27
<PAGE>
- --------------------------------------------------------------------------------
TRADITIONAL ANNUITY PAYOUT OPTIONS Life Annuity
Life Annuity -- Period Certain
Life Annuity -- Refund Certain
Period Certain Annuity
- --------------------------------------------------------------------------------
TRADITIONAL ANNUITY PAYOUT OPTIONS
You can choose from among the following traditional annuity payout
options:
o Life Annuity: An annuity that guarantees payments for the rest of
the annuitant's life. Payments end with the last monthly payment
before the annuitant's death. Because there is no death benefit
with this payout option, it provides the highest monthly payment
of any of the life annuity options, so long as the annuitant is
living.
o Life Annuity -- Period Certain: An annuity that guarantees
payments for the rest of the annuitant's life, and, if the
annuitant dies before the end of a selected period of time
("period certain"), provides payments to the beneficiary for the
balance of the period certain. A life annuity with a period
certain of 10 years is the normal form of annuity under the
Contracts.
o Life Annuity -- Refund Certain: An annuity that guarantees
payments for the rest of the annuitant's life, and, if the
annuitant dies before the amount applied to purchase the annuity
option has been recovered, provides payments to the beneficiary
that will continue until that amount has been recovered. This
payout option is available only as a fixed annuity.
o Period Certain Annuity: An annuity that guarantees payments for a
specific period of time, usually 5, 10, 15 or 20 years. This
option does not guarantee payments for the rest of the annuitant's
life. Currently, this payout option is available only as a fixed
annuity.
All of the above payout options are available as fixed annuities. With
fixed annuities, we guarantee fixed annuity payments that will be based either
on the tables of guaranteed annuity payments in your Contract or on our then
current annuity rates, whichever is more favorable for you.
The life annuity, life annuity -- period certain, and life annuity --
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments for
the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor.
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The following traditional annuity payout options are available as
variable annuities:
O Life Annuity.
O Life Annuity -- Period Certain.
O Joint and Survivor Life Annuity.
O Joint and Survivor Life Period Certain Annuity (100% to Survivor).
Variable annuities may be funded through your choice of variable
investment options investing in Portfolios of The Hudson River Trust. The amount
of each variable annuity payment will fluctuate, depending upon the performance
of the variable investment options, and whether the actual rate of investment
return is higher or lower than an assumed base rate. Please see "Annuity Unit
Values" in the SAI.
We may offer other payout options not outlined here. Your registered
representative can provide details.
SELECTING A TRADITIONAL ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written
agreement confirming your right to receive annuity payments. We require you to
return your Contract before annuity payments begin.
For Traditional IRA, Roth IRA, and NQ Contracts, unless you choose a
different payout option, we will pay fixed annuity payments under a life annuity
with a certain period of 10 years. The only payout options available under QP
Contracts are the Life Annuity 10 Year Period Certain and the Joint and Survivor
Life Annuity 10 Year Period Certain.
You can choose the date annuity payments begin but it may not be
earlier than five years from the Contract Date. You can change the date your
annuity payments are to begin anytime before that date as long as you do not
choose a date later than the 28th day of any month. Also, that date may not be
later than the Contract Date anniversary that follows the annuitant's 90th
birthday. This may be different in some states.
If you elect to start receiving annuity payments within three years of
making an additional contribution, we will recover the amount of any credit that
applies to that contribution.
Before your annuity payments are to begin, we will notify you by letter
that the annuity payout options are available. Once you have selected a payout
option and payments have begun, no change can be made.
The amount of the annuity payments will depend on the amount applied to
purchase the annuity, the type of annuity chosen and, in the case of a life
annuity, the annuitant's age (or the annuitant's and joint annuitant's ages) and
in certain instances, the sex of the annuitant(s).
The amount we apply to provide annuity payments will depend on the type
of payout option you select. If you select a payout option that provides for
payments for the rest of the
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annuitant's life, then we will apply your account value. If you select a payout
option that provides for payments for a period certain, then we will apply your
cash value. However, if the period certain is more than five years, we will
apply not less than 95% of the account value.
If, at the time you elect a payout option, the amount to be applied is
less than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a lump sum rather than
as payments under the payout option chosen.
CHARGES AND EXPENSES
CHARGES THAT EQUITABLE OF COLORADO DEDUCTS
We deduct the following charges each day from the net assets of each
variable investment option:
o A mortality and expense risks charge.
o An administration charge.
o A distribution charge.
We deduct the following charges from your account value:
o At the time you make certain withdrawals or surrender your Contract
-- a withdrawal charge.
o At the time annuity payments are to begin -- charges for state
premium and other taxes.
More information about these charges appears below. We will not
increase these charges for the life of your Contract, except as noted. We may
reduce certain charges under group or sponsored arrangements. See "Group or
Sponsored Arrangements" below.
MORTALITY AND EXPENSE RISKS CHARGE
We deduct a daily charge from the net assets in each variable
investment option to compensate us for mortality and expense risks, including
the guaranteed minimum death benefit. The daily charge is equivalent to an
annual rate of 1.10% of the net assets in each variable investment option.
The mortality risk we assume is the risk that annuitants as a group
will live for a longer time than our actuarial tables predict. If that happens,
we would be paying more in annuity income than we planned. We also assume a risk
that the mortality assumptions reflected in our guaranteed annuity payment
tables, shown in each Contract, will differ from actual mortality experience.
Lastly, we assume a mortality risk to the extent that at the time of death, the
guaranteed minimum death benefit exceeds the cash value of the Contract. The
expense risk we assume is the risk that it will cost us more to issue and
administer the Contracts than we expect.
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ADMINISTRATION CHARGE
We deduct a daily charge from the net assets in each variable
investment option to compensate us for administration expenses under the
Contracts. The daily charge is equivalent to an annual rate of 0.25% of the net
assets in each variable investment option. We reserve the right under the
Contracts to increase this charge to an annual rate of 0.35%.
DISTRIBUTION CHARGE
We deduct a daily charge from the net assets in each variable
investment option to compensate us for a portion of our sales expenses under the
Contracts. The daily charge is equivalent to an annual rate of 0.25% of the net
assets in each variable investment option. This charge will never exceed
applicable regulatory limitations.
WITHDRAWAL CHARGE
A withdrawal charge applies in two circumstances: (1) if you make one
or more withdrawals during a Contract Year that, in total, exceed the 15% free
withdrawal amount, described below, or (2) if you surrender your Contract to
receive its cash value.
The withdrawal charge equals a percentage of the contributions
withdrawn. The percentage that applies depends on how long each contribution has
been invested in the Contract. We determine the withdrawal charge separately for
each contribution according to the following table:
<TABLE>
<CAPTION>
CONTRACT YEAR
1 2 3 4 5 6 7 8 9 10+
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage of
Contribution 8% 8% 7% 6% 5% 4% 3% 2% 1% 0%
</TABLE>
For purposes of calculating the withdrawal charge, we treat the
Contract Year in which we receive a contribution as "Contract Year 1." Amounts
withdrawn up to the free withdrawal amount are not considered withdrawal of any
contribution. We also treat contributions that have been invested the longest as
being withdrawn first. We treat contributions as withdrawn before earnings for
purposes of calculating the withdrawal charge. However, federal income tax rules
treat earnings under your Contract as withdrawn first. See "Tax Information."
We deduct the withdrawal charge from your account value in the variable
investment options from which you have taken a withdrawal. We deduct the charge
in proportion to the amount withdrawn from each variable investment option. The
initial amount deducted to pay each withdrawal charge is also subject to a
withdrawal charge. The withdrawal charge helps cover our sales expenses.
The withdrawal charge does not apply in the circumstances described
below.
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15% FREE WITHDRAWAL AMOUNT. Each Contract Year you can withdraw up to
15% of your account value without paying a withdrawal charge. The 15%
free withdrawal amount is determined using your account value on the
most recent Contract Date anniversary, minus any other withdrawals made
during the Contract Year. The 15% free withdrawal amount does not apply
if you surrender your Contract.
MINIMUM DISTRIBUTIONS. The withdrawal charge does not apply to
withdrawals taken under our minimum distribution withdrawal option.
However, those withdrawals are counted towards the 15% free withdrawal
amount if you also make a lump sum withdrawal in any Contract Year.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The
withdrawal charge also does not apply if:
o The annuitant has qualified to receive Social Security disability
benefits as certified by the Social Security Administration.
o We receive proof satisfactory to us (including certification by a
licensed physician) that the annuitant's life expectancy is six
months or less.
o The annuitant has been confined to a nursing home for more than 90
days (or such other period, as required in your state) as verified
by a licensed physician. A nursing home for this purpose means one
that is (a) approved by Medicare as a provider of skilled nursing
care service, or (b) licensed as a skilled nursing home by the
state or territory in which it is located (it must be within the
United States, Puerto Rico, U.S. Virgin Islands, or Guam) and meets
all of the following:
- its main function is to provide skilled, intermediate, or
custodial nursing care;
- it provides continuous room and board to three or more
persons;
- it is supervised by a registered nurse or licensed
practical nurse;
- it keeps daily medical records of each patient;
- it controls and records all medications dispensed; and
- its primary service is other than to provide housing for
residents.
We reserve the right to impose a withdrawal charge, in accordance with
your Contract and applicable state law, if the disability is caused by
a preexisting condition or a condition that began within 12 months of
the Contract Date. Some states may not permit us to waive the
withdrawal charge in the foregoing circumstances, or may limit the
circumstances for which the withdrawal charge may not apply. Your
registered representative can provide more information or you may
contact our Processing Office.
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CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge for applicable taxes such as state or local premium
taxes that may be imposed in your state. Generally, we deduct the charge from
the amount applied to provide an annuity payout. The current tax charge that
might be imposed varies by state and ranges from 0% to 3.5% (1% in Puerto Rico
and 5% in the U.S. Virgin Islands).
CHARGES THAT THE TRUSTS DEDUCT
The Hudson River Trust and EQ Advisors Trust each deducts charges for
the following types of fees and expenses:
o Investment advisory fees ranging from 0.25% to 1.15%.
o 12b-1 fees of 0.25%.
o Operating expenses, such as trustees' fees, independent auditors'
fees, legal counsel fees, administrative service fees, custodian
fees, and liability insurance.
o Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each Portfolio.
For more information about these charges, please refer to the prospectuses of
the Trusts.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the
withdrawal charge or the mortality and expense risks charge, or change the
minimum initial contribution requirements. We also may change the guaranteed
minimum death benefit or offer variable investment options that invest in shares
of The Hudson River Trust or EQ Advisors Trust that are not subject to the 12b-1
fee. Group arrangements include those in which a trustee or an employer, for
example, purchases contracts covering a group of individuals on a group basis.
Group arrangements are not available for Traditional IRA and Roth IRA Contracts.
Sponsored arrangements include those in which an employer allows us to sell
Contracts to its employees or retirees on an individual basis.
Our costs for sales, administration, and mortality generally vary with
the size and stability of the group or sponsoring organization, among other
factors. We take all these factors into account when reducing charges. To
qualify for reduced charges, a group or sponsored arrangement must meet certain
requirements, such as requirements for size and number of years in existence.
Group or sponsored arrangements that have been set up solely to buy Contracts or
that have been in existence less than six months will not qualify for reduced
charges.
We will make these and any similar reductions according to our rules in
effect when we approve a Contract for issue. We may change these rules from time
to time. Any variation in the withdrawal charge will reflect differences in
costs or services and will not be unfairly discriminatory.
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Group or sponsored arrangements may be governed by federal income tax
rules, the Employee Retirement Income Securities Act of 1974 or both. We make no
representations as to the impact of those and other applicable laws on such
programs. We recommend that employers, trustees, and others purchasing or making
Contracts available for purchase under such programs seek the advice of their
own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that
result in savings of sales and administrative expenses, such as sales through
persons who are compensated by clients for recommending investments and who
receive no commission or reduced commissions in connection with the sale of the
Contracts. We will not permit a reduction or elimination of charges where it
would be unfairly discriminatory.
PAYMENT OF DEATH BENEFIT
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
You designate your beneficiary when you apply for your Contract. In a
QP Contract, the beneficiary must be the trustee. You may change your
beneficiary at any time. Under jointly owned Contracts, the surviving owner is
deemed the beneficiary, and will supersede any other beneficiary.
The death benefit is equal to your account value, or, if greater, the
guaranteed minimum death benefit. We determine the amount of the death benefit
as of the date we receive satisfactory proof of the annuitant's death and any
required instructions as to the method of payment.
WHEN THE ANNUITANT DIES BEFORE ANNUITY PAYMENTS BEGIN
If the annuitant dies before the annuity payments begin, we will pay
the death benefit to your beneficiary.
CHANGE OF OWNER ON DEATH
Under certain conditions the owner can change after the original
owner's death. Under NQ Contracts when the owner dies the person designated as
successor owner becomes the new owner. Under Traditional IRA and Roth IRA
Contracts only, a beneficiary who is the surviving spouse can choose to be
treated as the successor owner/annuitant. Only a spouse can be a successor
owner/annuitant.
For Traditional IRA Contracts, a beneficiary who is not a surviving
spouse may be able to have limited ownership.
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WHEN AN NQ CONTRACT OWNER DIES BEFORE THE ANNUITANT
When you are not the annuitant under an NQ Contract and you die before
annuity payments begin, the beneficiary named to receive the death benefit upon
the annuitant's death will automatically become the contract owner (unless you
have named a different person as successor owner and have notified us of the
change). If the Contract is jointly owned and the first owner to die is not the
annuitant, the surviving owner becomes the sole contract owner and will be
deemed the "beneficiary" for purposes of the distribution rules described in
this section, automatically superseding any other beneficiary designation.
Unless the surviving spouse of the owner who has died (or in the case
of a joint ownership situation, the surviving spouse of the first owner to die)
is the designated beneficiary for this purpose, the entire interest in the
Contract must be distributed under the following rules.
The cash value of the Contract must be fully paid to the designated
beneficiary (new owner) by December 31st of the fifth calendar year after your
death (or in a joint ownership situation, the death of the first owner to die).
A permissible alternative is for the new owner to elect to receive the
cash value as a life annuity (or payments for a period certain of not longer
than the new owner's life expectancy). Payments must begin no later than
December 31st following the calendar year of the non-annuitant owner's death.
Unless this alternative is elected, we will pay any cash value on December 31st
of the fifth calendar year following the year of your death (or the death of the
first owner to die).
Where a surviving spouse is designated beneficiary or joint owner, the
spouse may elect to continue the Contract. No distributions are required as long
as the surviving spouse and annuitant are living.
HOW DEATH BENEFIT PAYMENT IS MADE
We will pay the death benefit to the beneficiary in the form of the
annuity payout option you have chosen. If you have not chosen an annuity payout
option as of the time of the annuitant's death, the beneficiary will receive the
death benefit in a lump sum. However, subject to any exceptions in the Contract,
our rules and any applicable requirements under federal income tax rules, the
beneficiary may elect to apply the death benefit to one or more annuity payout
options we offer at the time. See "Choosing Your Annuity Payout Options." Please
note that if you are both the contract owner and the annuitant, you may elect
only a life annuity or an annuity that does not extend beyond the life
expectancy of the beneficiary.
SUCCESSOR OWNER AND ANNUITANT
If you are both the owner and the annuitant, and your spouse is the
sole beneficiary or the joint owner, then your spouse may elect to receive the
death benefit or continue the Contract as successor owner/annuitant.
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If your surviving spouse decides to continue the Contract, then on the
Contract Date anniversary following your death, we will increase the account
value to equal your current guaranteed minimum death benefit, if it is higher
than the account value. In determining whether the guaranteed minimum death
benefit will continue to grow, we will use your surviving spouse's age (as of
the Contract Date anniversary).
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA CONTRACTS
Upon the death of the annuitant under a Traditional IRA Contract, a
non-spouse beneficiary may generally elect to keep the Contract in the name of
the deceased annuitant, and receive distributions under the Contract instead of
the death benefit being paid in a lump sum.
If the annuitant dies after the "Required Beginning Date" (see "Tax
Information") for required minimum distributions, the Contract will continue if:
(a) the annuitant was receiving minimum distribution withdrawals
from this Contract; and
(b) the pattern of minimum distribution withdrawals the annuitant
chose was based in part on the life of the designated
beneficiary.
The withdrawals will then continue to be paid to the beneficiary on the
same basis as the annuitant chose before death. We will be able to tell your
beneficiary whether this option is available to them. You should contact our
Processing Office for further information.
If the annuitant dies before the "Required Beginning Date" (and
therefore was not taking minimum distribution withdrawals under the Contract),
the beneficiary may begin taking minimum distribution withdrawals under the
Contract. We will increase the account value to equal the death benefit if the
death benefit is greater than the account value. That amount will be used to
provide the withdrawals. These withdrawals will begin by December 31st of the
calendar year following the annuitant's death and will be based on the
beneficiary's life expectancy. If there is more than one beneficiary, the
shortest life expectancy is used.
The designated beneficiary must be a natural person and of legal age at
the time of election. The beneficiary must elect this option within 30 days
following the date we receive proof of the annuitant's death. This option may
not currently be available in all states. Your registered representative can
provide information about state availability, or you may contact our Processing
Office.
While the Contract continues in the name of the deceased annuitant, the
beneficiary may make transfers among the variable investment options. However,
additional contributions will not be permitted and the death benefit (including
the guaranteed minimum death benefit) provision will no longer be in effect.
Although the only withdrawals that will be permitted are minimum distribution
withdrawals, the beneficiary may choose at any time to withdraw all of the
account value and no withdrawal charges will apply.
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TAX INFORMATION
OVERVIEW
In this part of the prospectus, we discuss the current federal income
tax rules that generally apply to Accumulator Plus Contracts owned by United
States taxpayers. The tax rules can differ, depending on the type of contract,
whether NQ, Traditional IRA, Roth IRA or QP Contracts. Therefore, we discuss the
tax aspects of each type of Contract separately.
We cannot provide detailed information on all tax aspects of the
Contracts. Moreover, the tax aspects that apply to a particular person's
Contract may vary depending on the facts applicable to that person. We do not
discuss state income and other state taxes, federal income tax and withholding
rules for non-U.S. taxpayers, or federal gift and estate taxes. Transfers of the
Contract, rights under the Contract, or payments under the Contract may be
subject to gift or estate taxes. You should not rely only on this document, but
should consult your tax adviser before your purchase.
Federal income tax rules include the United States laws in the Internal
Revenue Code, and Treasury Department Regulations and Internal Revenue Service
interpretations of the Internal Revenue Code. These tax rules may change. We
cannot predict whether, when, or how these rules could change. Any change could
affect Contracts purchased before the change.
TRANSFERS AMONG VARIABLE INVESTMENT OPTIONS
You can make transfers among variable investment options inside the
Contract without triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
CONTRIBUTIONS
You may not deduct the amount of your contributions for a nonqualified
annuity contract.
CONTRACT EARNINGS
Generally, you are not taxed on Contract earnings until you receive a
distribution from your Contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
o if a Contract fails specified investment diversification
requirements;
o if you transfer a Contract, for example, as a gift to someone other
than your spouse (or former spouse);
o if you use a Contract as security for a loan (in this case, the
amount pledged will be treated as a distribution); and
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o if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person).
All nonqualified deferred annuity contracts that we issue to you
during the same calendar year are linked together and treated as one contract
for computing the taxable amount of any distribution from any of those
contracts.
ANNUITY PAYMENTS
Once annuity payments begin, a portion of each payment is taxable as
ordinary income. The remaining portion is a tax-free recovery of investment in
the contract. Generally, your investment in the Contract equals the
contributions you made, less any amounts you previously withdrew that were not
taxable.
For fixed annuity payments, the tax-free portion of each payment is
determined by (1) dividing your investment in the Contract by the total amount
you are expected to receive out of the Contract, and (2) multiplying the result
by the amount of the payment. For variable annuity payments, your investment in
the Contract divided by the number of expected payments is your tax-free portion
of each payment.
The remaining portion of each payment, and all of the payments you
receive after you received the amount of your investment in the Contract, are
fully taxable. If payments under a life annuity stop because the annuitant dies,
there is an income tax deduction for any unrecovered investment in the contract.
PAYMENT MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your
Contract, they are taxable to you as ordinary income if there are earnings in
the Contract. Generally, earnings are your account value less your investment in
the Contract. If you withdraw an amount which is more than the earnings in the
contract measured at the time of the withdrawal, the balance of the distribution
is treated as a return of your investment in the Contract and is not taxable.
CONTRACTS PURCHASED THROUGH EXCHANGES
You may purchase your NQ Contract through an exchange of another
contract. Normally, exchanges of contracts are taxable events. The exchange will
not be taxable under Section 1035 of the Internal Revenue Code if:
o The Contract which is the source of the funds your are using to
purchase the NQ Contract is another nonqualified deferred annuity
contract (or life insurance or endowment contract).
o The owner and the annuitant are the same under the source contract
and the Accumulator Plus NQ Contract (if you are using a life
insurance or endowment contract the owner and the insured must be
the same on both sides of the exchange transaction).
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The tax basis of the source contract carries over to the Accumulator
Plus NQ Contract.
SURRENDERS
If you surrender or cancel the Contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the Contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of Death
Benefit" and "When an NQ Contract Owner Dies Before the Annuitant" earlier in
this prospectus. The tax treatment of a death benefit taken as a lump sum is
generally the same as the tax treatment of a withdrawal from or surrender of
your Contract. The tax treatment of a death benefit taken as annuity payments is
generally the same as the tax treatment of annuity payments under your Contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2 a penalty tax of
10% of the taxable portion of your distribution applies in addition to the
income tax. The extra penalty tax does not apply if the distribution is covered
by an exception. No penalty tax applies to pre-age 59 1/2 distributions made:
o on or after your death;
o because you are disabled (special federal income tax definition);
or
o in the form of substantially equal periodic annuity payments for
your life (or life expectancy) or the joint lives (or joint life
expectancy) of you and a beneficiary.
SPECIAL RULES FOR NQ CONTRACTS ISSUED IN PUERTO RICO
Under current law we treat income from NQ Contracts as U.S.-source. A
Puerto Rico resident is subject to U.S. taxation on such U.S.-source income.
Only Puerto Rico-source income of Puerto Rico residents is excludable from U.S.
taxation. Income from NQ Contracts is also subject to Puerto Rico tax. The
computation of the taxable portion of amounts distributed from a Contract may
differ in the two jurisdictions. Therefore, you might have to file both U.S. and
Puerto Rico tax returns, showing different amounts of income from the contract
for each tax return. Puerto Rico generally provides a credit against Puerto Rico
tax for U.S. tax paid. Depending on your personal situation and the timing of
the different tax liabilities, you may not be able to take full advantage of
this credit.
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INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement and the two basic
types of such arrangements, Individual Retirement Accounts and Individual
Retirement Annuities. In an Individual Retirement Account, a trustee or
custodian holds the assets for the benefit of the IRA owner. The assets can
include mutual funds and certificates of deposit. In an Individual Retirement
Annuity, an insurance company issues an annuity contract that serves as the IRA.
There are several types of IRAs, as follows:
o "Traditional IRAs," typically funded on a pre-tax basis;
o Roth IRAs, first available in 1998, funded on an after-tax basis;
and
o SEP-IRAs and SIMPLE-IRAs, issued and funded in connection with
employer-sponsored retirement plans.
Regardless of the type of IRA, your ownership interest in the IRA
cannot be forfeited. You or your beneficiaries who survive you are the only ones
who can receive the IRA's benefits or payments.
You can hold your IRA assets in as many different accounts and
annuities as you would like, as long as you meet the rules for setting up and
making contributions to IRAs. However, if you own multiple IRAs, you may be
required to aggregate IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This Publication is usually updated annually, and can be obtained from any IRS
district office or the IRS Website (www.irs.usstreas.gov).
The Accumulator Plus IRA Contract is designed to qualify as an
"individual retirement annuity" under Section 408(b) of the Internal Revenue
Code. This prospectus contains the information that the Internal Revenue Service
("IRS") requires you to have before you purchase an IRA. This section of the
prospectus covers some of the special tax rules that apply to IRAs. The next
section covers Roth IRAs. Education IRAs are not discussed in this prospectus
because they are not available in individual retirement annuity form.
The Accumulator Plus IRA Contract has been approved by the IRS as to
form for use as a Traditional IRA. We expect to submit the Roth IRA version for
formal IRS approval in the Spring of 1999. This IRS approval is a determination
only as to the form of the annuity. It does not represent a determination of the
merits of the annuity as an investment. The IRS approval does not address every
feature possibly available under the Accumulator Plus IRA Contract.
CANCELLATION
You can cancel an Accumulator Plus IRA Contract by following the
directions under "Your Right to Cancel within a Certain Number of Days" earlier
in the prospectus. You can
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cancel an Accumulator Plus Roth IRA Contract issued as a result of a full
conversion of an Equitable Accumulator Plus Traditional IRA Contract by
following the instructions in the request for full conversion form. The form is
available from our Processing Office or your registered representative. If you
cancel a Traditional IRA or Roth IRA Contract, we may have to withhold tax, and
we must report the transaction to the IRS. A contract cancellation could have
unfavorable tax impact.
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS
Individuals may make three different types of contributions to a
Traditional IRA:
o tax-free "rollover" contributions; or
o direct custodian-to-custodian transfers from other Traditional IRAs
("direct transfers"); or
o "regular" contributions out of earned income or compensation.
We require that your initial contribution to the Accumulator Plus
Traditional IRA Contract must be either a rollover or a direct
custodian-to-custodian transfer. See "Rollovers and Transfers" below. Any
additional contributions you make may be rollovers or direct transfers. Since we
only permit rollover and direct transfer contributions under the Accumulator
Plus Traditional IRA Contract, we do not discuss regular after-tax contributions
here.
EXCESS CONTRIBUTIONS
Excess contributions to IRAs are subject to a 6% excise tax for the
year in which made and for each year after until withdrawn. The following are
excess contributions to IRAs:
o "regular" contributions of more than $2,000;
o "regular" contributions of more than earned income for the year, if
that amount is under $2,000;
o "regular" contributions to a Traditional IRA made after you reach
age 70 1/2; and
o rollover contributions of amounts which are not eligible to be
rolled over (for example, after-tax contributions to a qualified
plan or minimum distributions required to be made after age 70
1/2).
You can avoid the excise tax by withdrawing an excess contribution
(rollover or "regular") before the due date (including extensions) for filing
your federal income tax return for the year. If it is an excess "regular"
Traditional IRA contribution, you cannot take a tax deduction for the amount
withdrawn. The excess contribution withdrawn is not includable in income and is
not subject to the 10% additional penalty tax on early distributions (discussed
below under "Early Distribution Penalty Tax"). You do have to withdraw any
earnings
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attributable to the excess contribution. The withdrawn earnings would
be includable in your gross income and could be subject to the 10% penalty tax.
Even after the due date for filing your return, you may withdraw an
excess rollover contribution, without income inclusion or 10% penalty, if (1)
the rollover was from a qualified retirement plan to a Traditional IRA, (2) the
excess contribution was due to incorrect information that the plan provided, and
(3) you took no tax deduction for the excess contribution.
ROLLOVERS AND TRANSFERS
Rollover contributions may be made to a Traditional IRA from these
sources:
o qualified plans;
o TSAs (including Internal Revenue Code Section 403(b)(7) custodial
accounts); and
o other Traditional IRAs.
You may also recharacterize Roth IRA funds as Traditional IRA funds, in
accordance with special federal income tax rules, if you use the forms we
prescribe.
Any amount contributed to a Traditional IRA after you attain age 70 1/2
must be net of your required minimum distribution for the year in which the
rollover or direct transfer contribution is made.
ROLLOVERS FROM QUALIFIED PLANS OR TSAS
There are two ways to do rollovers:
o Do It Yourself
You actually receive a distribution which can be rolled over and
you roll it over to a Traditional IRA within 60 days after the date
you receive the funds. The distribution from your qualified plan or
TSA will be net of 20% mandatory federal income tax withholding. If
you want, you can replace the withheld funds yourself and roll over
the full amount.
o Direct rollover.
You tell your qualified plan trustee or TSA
issuer/custodian/fiduciary to send the distribution directly to
your Traditional IRA issuer. Direct rollovers are not subject to
mandatory federal income tax withholding.
All distributions from a TSA or qualified plan are eligible
rollover distributions, unless the distribution is:
o only after-tax contributions you made to the plan;
o "required minimum distributions" after age 70 1/2 or separation
from service;
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o substantially equal periodic payments made at least annually for
your life (or life expectancy) or the joint lives (or joint life
expectancies) of you and your designated beneficiary;
o substantially equal periodic payments made for a specified period
of 10 years or more;
o if you have contributed too much, corrective distributions which
fit specified technical tax rules;
o loans that are treated as deemed distributions;
o a death benefit payment to a beneficiary who is not your surviving
spouse; and
o a qualified domestic relations order distribution to a beneficiary
who is not your current spouse or former spouse.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one Traditional IRA to one or more of
your other Traditional IRAs if you complete the transaction within 60 days after
you receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently than
once in every 12-month period.
The surviving spouse beneficiary of a deceased individual can roll over
or directly transfer an inherited Traditional IRA to one or more other
Traditional IRAs. Also, in some cases, Traditional IRAs can be transferred on a
tax-free basis between spouses or former spouses as a result of a court ordered
divorce or separation decree.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
No Federal Income Tax Law Restrictions on Withdrawals
You can withdraw any or all of your funds from a Traditional IRA at any
time. You do not need to wait for a special event like retirement.
Taxation of Payments
Earnings in Traditional IRAs are not subject to federal income tax
until you or your beneficiary receive them. Taxable payments or distributions
include withdrawals from your Contract, surrender of your Contract and annuity
payments from your Contract. Death benefits are also taxable. Except as
discussed below, the amount of any distribution from a Traditional IRA is fully
includable in your gross income as ordinary income.
If you have ever made nondeductible IRA contributions to any
Traditional IRA (it does not have to be to this particular Traditional IRA
Contract), those contributions are recovered tax free when you get distributions
from any Traditional IRA. You must keep permanent tax records of all of your
nondeductible contributions to Traditional IRAs. At the end of any year in which
you have
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received a distribution from any Traditional IRA, you compute the ratio
of your total nondeductible Traditional IRA contributions (less any amounts
previously withdrawn tax free) to the total account balances of all Traditional
IRAs you own at the end of the year plus all Traditional IRA distributions made
during the year. Multiply this by all distributions from the Traditional IRA
during the year to compute the nontaxable portion of each distribution.
In addition, a distribution is not taxable if:
o the amount received is a withdrawal of excess contributions, as
described under "Excess Contributions" above;
o the entire amount received is rolled over to another Traditional
IRA (see "Rollovers and Transfers" above); or
o in certain limited circumstances, where the Traditional IRA acts as
a "conduit," you roll over the entire amount into a qualified plan
or TSA that accepts rollover contributions. To get this "conduit"
Traditional IRA treatment:
o the source of funds you used to establish the Traditional IRA
must have been a rollover contribution from a qualified plan,
and
o the entire amount received from the Traditional IRA (including
any earnings on the rollover contribution) must be rolled over
into another qualified plan within 60 days of the date
received.
Similar rules apply in the case of a TSA.
However, you may lose conduit treatment, if you make an eligible
rollover distribution contribution to a Traditional IRA and you commingle this
contribution with other contributions. In that case, you may not be able to roll
over these eligible rollover distribution contributions and earnings to another
qualified plan (or TSA) at a future date.
Distributions from a Traditional IRA are not eligible for favorable
five-year averaging (or, in some cases, ten-year averaging and long-term capital
gain treatment) available to certain distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS
Lifetime Required Minimum Distributions
You must start taking annual distributions from your Traditional IRAs
beginning at age 70 1/2.
When you have to take the first required minimum distribution
The first required minimum distribution is for the calendar year in
which you turn age 70 1/2. You have the choice to take this first required
minimum distribution during the calendar year you actually reach age 70 1/2, or
to delay taking it until the first three-month period in the
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next calendar year (January 1 - April 1). Distributions must start no later than
your "Required Beginning Date," which is April 1st of the calendar year after
the calendar year in which you turn age 70 1/2. If you choose to delay taking
the first annual minimum distribution, then you will have to take two minimum
distributions in that year -- the delayed one for the first year and the one
actually for that year. Once minimum distributions begin, they must be made at
some time each year.
How you can calculate required minimum distributions
There are two approaches to taking required minimum distributions --
"account-based" or "annuity-based." If you choose an "account-based" method, you
divide the value of your Traditional IRA as of December 31st of the past
calendar year by a life expectancy factor from IRS tables. This gives you the
required minimum distribution amount for that particular IRA for that year. If
you choose an account-based method, the required minimum distribution amount
will vary each year as the account value and your life expectancy factors
change. If you choose an "annuity-based" method, you do not have to do annual
calculations. You apply the account value to an annuity payout for your life or
the joint lives of you and a designated beneficiary, or for a period certain not
extending beyond applicable life expectancies.
If you pick an account-based method, you have a choice of life
expectancy factors, depending on whether you choose a method based only on your
life expectancy, or the joint life expectancies of you and another individual.
You can decide to "recalculate" your life expectancy every year by using your
current life expectancy factor. You can decide instead to use the "term certain"
method, where you reduce your life expectancy by one every year after the
initial year. If your spouse is your designated beneficiary for the purpose of
figuring out annual account-based required minimum distributions, you can also
annually "recalculate" your spouse's life expectancy if you want. If you choose
someone who is not your spouse as your designated beneficiary for the purpose of
figuring out annual account-based required minimum distributions, you have to
use the "term certain" method of calculating that person's life expectancy. If
you pick a nonspouse designated beneficiary, you may also have to do another
special calculation.
If you pick an account-based method, you can later apply your
Traditional IRA funds to a life annuity-based payout. You can only do this if
you already chose to recalculate your life expectancy annually (and your
spouse's life expectancy if you select a spousal joint annuity). For example, if
you anticipate selecting any other form of life annuity payout after you are age
70 1/2, you must have elected to recalculate life expectancies.
Do you have to pick the same method to calculate your required minimum
distributions for all of your Traditional IRAs and other retirement plans?
No. If you want, you can choose a different method and a different
beneficiary for each of your Traditional IRAs and other retirement plans. For
example, you can choose an annuity payout from one IRA, a different annuity
payout from a qualified plan, and an account-based annual withdrawal from
another IRA.
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Will we pay you the annual amount every year from your Traditional IRA
based on the method you choose?
No, unless you affirmatively select an annuity payout option or an
account-based withdrawal option such as our minimum distribution withdrawal
option. Because the options we offer do not cover every option permitted under
federal income tax rules, you may prefer to do your own required minimum
distribution calculations for one or more of your Traditional IRAs.
What if you take more than you need to for any year?
The correct required minimum distribution amount for your Traditional
IRAs is calculated on a year-by-year basis. There are no carry-back or
carry-forward provisions. Also, you cannot apply required minimum distribution
amounts you take from your qualified plans to the amounts you have to take from
your Traditional IRAs and vice-versa. However, the IRS will let you figure out
the required minimum distribution for each Traditional IRA that you maintain,
using the method that you picked for that particular IRA. You can add these
required minimum distribution amount calculations together. As long as the total
amount you take out every year satisfies your overall Traditional IRA required
minimum distribution amount, you may choose to take your annual required minimum
distribution from any one or more Traditional IRAs that you own.
What if you take less than you need to for any year?
Your IRA could be disqualified, and you could have to pay tax on the
entire value. Even if your IRA is not disqualified, you could have to pay a 50%
penalty tax on the shortfall (required amount for Traditional IRAs less amount
actually taken). It is your responsibility to meet the required minimum
distribution rules. We will remind you when our records show that your age 70
1/2 is approaching. If you do not select a method with us, we will assume you
are taking your required minimum distribution from another Traditional IRA that
you own.
What are the required minimum distribution payments after you die?
If you die after either (a) the start of annuity payments, or (b) your
Required Beginning Date, your beneficiary must receive payment of the remaining
values in the Contract at least as rapidly as under the distribution method
before your death. In some circumstances, your surviving spouse may elect to
become the owner of the Traditional IRA and halt distributions until he or she
reaches age 70 1/2.
If you die before your Required Beginning Date and before annuity
payments begin, federal tax rules require complete distribution of your entire
value in the Contract within five years after your death. Payments to a
designated beneficiary over the beneficiary's life or over a period certain that
does not extend beyond the beneficiary's life expectancy are also permitted, if
these payments start within one year of your death. A surviving spouse
beneficiary can also (a) delay starting any payments until you would have
attained 70 1/2 or (b) roll over your Traditional IRA into his or her own
Traditional IRA.
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Successor Annuitant and Owner
If your spouse is the sole primary beneficiary and elects to become the
successor annuitant and owner, no death benefit is payable until your surviving
spouse's death.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a Traditional IRA. You cannot use a
Traditional IRA as collateral for a loan or other obligation. If you borrow
against your IRA or use it as collateral, its tax-favored status will be lost as
of the first day of the tax year in which this prohibited event occurs. If this
happens, you must include in federal gross income for that year an amount equal
to the fair market value of the Traditional IRA Contract as of the first day of
that tax year, less the amount of any nondeductible contributions not previously
recovered. Also, the early distribution penalty tax of 10% will apply if you
have not reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies
to distributions from a Traditional IRA made before you reach age 59 1/2. The
extra penalty tax does not apply if the distribution is covered by an exception.
No penalty tax applies to pre-age 59 1/2 distributions made:
o on or after your death;
o because you are disabled (special federal income tax definition);
o used to pay certain extraordinary medical expenses (special federal
income tax definition);
o used to pay medical insurance premiums for unemployed individuals
(special federal income tax definition);
o used to pay certain first-time home buyer expenses (special federal
income tax definition);
o used to pay certain higher education expenses (special federal
income tax definition); or
o in the form of substantially equal periodic payments made at least
annually over your life (or your life expectancy), or over the
joint lives of you and your beneficiary (or your joint life
expectancy) using an IRS-approved distribution method.
To meet this last exception, you could elect the substantially equal
withdrawals option. We will calculate the substantially equal annual payments
under a method we select based on guidelines issued by the IRS (currently
contained in IRS Notice 89-25, Question and Answer
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12). Although substantially equal withdrawals are not subject to the 10% penalty
tax, they are taxable as discussed in "Withdrawals, Payments and Transfers of
Funds Out of Traditional IRAs" above. Once substantially equal withdrawals
begin, the distributions should not be stopped or changed until the later of
your attaining age 59 1/2 or five years after the date of the first
distribution, or the penalty tax, including an interest charge for the prior
penalty avoidance, may apply to all prior distributions under this option. Also,
it is possible that the IRS could view any additional withdrawal or payment you
take from your Contract as changing your pattern of substantially equal
withdrawals for purposes of determining whether the penalty applies.
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRAS)
This section of the Prospectus covers some of the special tax rules
that apply to Roth IRAs. If the rules are the same as those that apply to the
Traditional IRA, we will refer you to the same topic under "Traditional IRAs."
The Accumulator Plus Roth IRA Contract is designed to qualify as a Roth
individual retirement annuity under Sections 408A and 408(b) of the Internal
Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth
IRA:
o taxable "rollover" contributions from Traditional IRAs
("conversion" contributions);
o tax-free rollover contributions from other Roth IRAs;
o tax-free direct custodian-to-custodian transfers from other Roth
IRAs ("direct transfers"); or
o "regular" after-tax contributions out of earnings.
Since we only permit direct transfer and rollover contributions under
the Accumulator Plus Roth IRA Contract, we do not discuss regular after-tax
contributions here. If you use the forms we require, we will also accept
Traditional IRA funds which are subsequently recharacterized as Roth IRA funds
following special federal income tax rules.
Rollovers and Direct Transfers -- What Is the Difference between
Rollover and Direct Transfer Transactions?
You may make rollover contributions to a Roth IRA from only two
sources:
o another Roth IRA ("tax-free rollover contribution"); or
o another Traditional IRA, including a SEP-IRA or SIMPLE-IRA, in a
taxable "conversion" rollover ("conversion contribution").
You may not make contributions to a Roth IRA from a qualified plan
under Section 401(a) of the Internal Revenue Code, or a tax-sheltered
arrangement under Section 403(b) of
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the Internal Revenue Code. You may make direct transfer contributions to a Roth
IRA only from another Roth IRA.
The difference between a rollover transaction and a direct transfer
transaction is the following: In a rollover transaction you actually take
possession of the funds rolled over, or constructively receive them in the case
of a change from one type of plan to another. In a direct transfer transaction,
you never take possession of the funds, but direct the first Roth IRA custodian,
trustee, or issuer to transfer the first Roth IRA funds directly to Equitable of
Colorado, as the Roth IRA issuer. You can make direct transfer transactions only
between identical plan types (for example, Roth IRA to Roth IRA). You can also
make rollover transactions between identical plan types. However, you can only
use rollover transactions between different plan types (for example, Traditional
IRA to Roth IRA).
You may make both Roth IRA to Roth IRA rollover transactions and Roth
IRA to Roth IRA direct transfer transactions. This can be accomplished on a
completely tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over
or directly transfer an inherited Roth IRA to one or more other Roth IRAs. In
some cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court ordered divorce or separation decree.
Conversion Contributions to Roth IRAs
In a conversion rollover transaction, you withdraw (or are deemed to
withdraw) all or a portion of funds from a Traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are deemed to
receive) the Traditional IRA proceeds. Unlike a rollover from a Traditional IRA
to another Traditional IRA, the conversion rollover transaction is not tax
exempt. Instead, the distribution from the Traditional IRA is generally fully
taxable. For this reason, we are required to withhold 10% federal income tax
from the amount converted unless you elect out of such withholding. (If you have
ever made nondeductible regular contributions to any Traditional IRA -- whether
or not it is the Traditional IRA you are converting -- a pro rata portion of the
distribution is tax exempt.)
There is, however, no early distribution penalty tax on the Traditional
IRA withdrawal that you are converting to a Roth IRA, even if you are under age
59 1/2.
You cannot make conversion contributions to a Roth IRA for any taxable
year in which your adjusted gross income exceeds $100,000. (For this purpose,
your adjusted gross income is computed without the gross income stemming from
the Traditional IRA conversion.) You also cannot make conversion contributions
to a Roth IRA for any taxable year in which your federal income tax filing
status is "married filing separately."
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Finally, you cannot make conversion contributions to a Roth IRA to the
extent that the funds in your Traditional IRA are subject to the annual required
minimum distribution rule applicable to Traditional IRAs beginning at age 70
1/2.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
No Federal Income Tax Law Restrictions on Withdrawals
You can withdraw any or all of your funds from a Roth IRA at any time;
you do not need to wait for a special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your Contract, surrender of your
Contract and annuity payments from your Contract. Death benefits are also
distributions.
The following distributions from Roth IRAs are free of income tax:
o Rollovers from a Roth IRA to another Roth IRA;
o Direct transfers from a Roth IRA to another Roth IRA;
o "Qualified Distributions" from Roth IRAs; and
o Return of excess contributions (see "Excess Contributions" below)
or amount recharacterized to a Traditional IRA.
Qualified Distributions from Roth IRAs
Qualified distributions from Roth IRAs made because of one of the
following four qualifying events or reasons are not includable in income:
o you reach age 59 1/2;
o you die;
o you become disabled (special federal income tax definition); or
o your distribution is a "qualified first-time homebuyer
distribution" (special federal income tax definition; $10,000
lifetime total limit for these distributions from all of your
Traditional and Roth IRAs).
You also have to meet a 5-year aging period. A qualified distribution
is any distribution made after the five-taxable year period beginning with the
first taxable year for which you made any contribution to any Roth IRA (whether
or not the one from which the distribution is being made).
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Nonqualified Distributions from Roth IRAs
Nonqualified distributions from Roth IRAs are distributions that do not
meet the qualifying event and five-year aging period tests described above. Such
distributions are potentially taxable as ordinary income. Nonqualified
distributions receive return-of-investment-first treatment. Only the difference
between the amount of the distribution and the amount of contributions to all of
your Roth IRAs is taxable. You have to reduce the amount of contributions to all
of your Roth IRAs to reflect any previous tax-free recoveries.
You must keep your own records of regular and conversion contributions
to all Roth IRAs to assure appropriate taxation. You may have to file
information on your contributions to and distributions from any Roth IRA on your
tax return. You may have to retain all income tax returns and records pertaining
to such contributions and distributions until your interests in all Roth IRAs
are distributed.
Like Traditional IRAs, taxable distributions from a Roth IRA are not
entitled to the special favorable five-year averaging method (or, in certain
cases, favorable ten-year averaging and long-term capital gain treatment)
available in certain cases to distributions from qualified plans.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as Traditional IRA under "What are the required minimum
distribution payments after you die?" Lifetime Required Minimum Distributions do
not apply.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment
as if the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as Traditional IRA.
EXCESS CONTRIBUTIONS
Same as Traditional IRA, except that "Regular" contributions made after
age 70 1/2 are not "excess contributions."
Excess rollover contributions to Roth IRAs are contributions not
eligible to be rolled over (for example, conversion contributions from a
Traditional IRA if your adjusted gross income is in excess of $100,000 in the
conversion year).
You can withdraw or recharacterize any contribution to a Roth IRA
before the due date (including extensions) for filing your federal income tax
return for the tax year. If you do this, you must also withdraw or
recharacterize any earnings attributable to the contribution.
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EARLY DISTRIBUTION PENALTY TAX
Same as Traditional IRA.
For Roth IRAs, special penalty rules may apply to amounts withdrawn
attributable to 1998 conversion rollovers.
SPECIAL RULES FOR NONQUALIFIED CONTRACTS IN QUALIFIED PLANS
Under QP Contracts your plan administrator or trustee notifies you as
to tax consequences.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity
contracts. You may be able to elect out of this income tax withholding in some
cases. Generally, we do not have to withhold if your distributions are not
taxable. The rate of withholding will depend on the type of distribution and, in
certain cases, the amount of your distribution. Any income tax withheld is a
credit against your income tax liability. If you do not have sufficient income
tax withheld or do not make sufficient estimated income tax payments, you may
incur penalties under the estimated income tax rules.
You must file your request not to withhold in writing before the
payment or distribution is made. Our Processing Office will provide forms for
this purpose. You cannot elect out of withholding unless you provide us with
your correct Taxpayer Identification Number and a United States residence
address. You cannot elect out of withholding if we are sending the payment out
of the United States.
You should note the following special situations:
o We might have to withhold on amounts we pay under a free look or
cancellation.
o We are generally required to withhold on conversion rollovers of
Traditional IRAs to Roth IRAs, as the deemed withdrawal from the
Traditional IRA is taxable.
o We are required to withhold on the gross amount of a distribution
from a Roth IRA unless you elect out of withholding. This may
result in tax being withheld even though the Roth IRA distribution
is not taxable in whole or in part.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here.
Certain states have indicated that state income tax withholding will also apply
to payments from the Contracts made to residents. In some states, you may elect
out of state withholding, even if federal withholding applies. Generally, an
election out of federal withholding will also be considered an election out of
state withholding. If you need more information concerning a particular state or
any required forms, call our Processing Office at the toll-free number.
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FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
We withhold differently on "periodic" and "non-periodic" payments. For
a periodic annuity payment, for example, unless you specify a different number
of withholding exemptions, we withhold assuming that you are married and
claiming three withholding exemptions. If you do not give us your correct
Taxpayer Identification Number, we withhold as if you are single with no
exemptions.
Based on the assumption that you are married and claiming three
withholding exemptions, if you receive less than $14,700 in periodic annuity
payments in 1999 your payments will generally be exempt from federal income tax
withholding. You could specify a different choice of withholding exemption or
request that tax be withheld. Your withholding election remains effective unless
and until you revoke it. You may revoke or change your withholding election at
any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS
(WITHDRAWALS)
For a non-periodic distribution (total surrender or partial
withdrawal), we withhold generally at a flat 10% rate. We apply that rate to the
taxable amount in the case of nonqualified Contracts, and to the payment amount
in the case of IRAs and Roth IRAs).
You cannot elect out of withholding if the payment is an "eligible
rollover distribution" from a qualified plan or TSA. If a non-periodic
distribution from a qualified plan or TSA is not an "eligible rollover
distribution" then the 10% withholding rate applies.
MANDATORY WITHHOLDING FROM TSA AND QUALIFIED PLAN DISTRIBUTIONS
Unless you have the distribution go directly to the new plan, eligible
rollover distributions from qualified plans and TSAs are subject to mandatory
20% withholding. An eligible rollover distribution from a TSA can be rolled over
to another TSA or a Traditional IRA. An eligible rollover distribution from a
qualified plan can be rolled over to another qualified plan or IRA. All
distributions from a TSA or qualified plan are eligible rollover distributions
unless they are on the following list of exceptions.
o any after-tax contributions you made to the plan;
o any distributions which are "required minimum distributions" after
age 70 1/2 or separation from service;
o substantially equal periodic payments made at least annually for
your life (or life expectancy) or the joint lives (or joint life
expectancy) of you and your designated beneficiary;
o substantially equal periodic payments made for a specified period
of 10 years or more;
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o if you have contributed too much, corrective distributions which
fit specified technical tax rules;
o loans that are treated as deemed distributions;
o a death benefit payment to a beneficiary who is not your surviving
spouse; and
o a qualified domestic relations order distribution to a beneficiary
who is not your current spouse or former spouse.
A death benefit payment to your surviving spouse, or a qualified
domestic relations order distribution to your current or former spouse, may be a
distribution subject to mandatory 20% withholding.
IMPACT OF TAXES TO EQUITABLE OF COLORADO
The Contracts provide that we may charge Separate Account VA for taxes.
We do not now, but may in the future set up reserves for such taxes.
MORE INFORMATION
ABOUT OUR SEPARATE ACCOUNT VA
Each variable investment option is a subaccount of our Separate
Account VA. We established Separate Account VA in 1996 under Colorado Law. These
provisions prevent creditors from any other business we conduct from reaching
the assets we hold in our variable investment options for owners of our variable
annuity contracts, including these Contracts. The results of Separate Account VA
operations are accounted for without regard to Equitable of Colorado's other
operations. We are the legal owner of all of the assets in Separate Account VA
and may withdraw any amounts that exceed our reserves and other liabilities with
respect to variable investment options under our contracts.
Separate Account VA is registered under the Investment Company Act of
1940 and is classified by that act as a "unit investment trust." The SEC,
however, does not manage or supervise Equitable of Colorado or Separate Account
VA.
Each subaccount (variable investment option) within Separate Account VA
invests solely in class IB shares issued by the corresponding Portfolio of The
Hudson River Trust and EQ Advisors Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable
investment options from, Separate Account VA, or to add other
separate accounts;
(2) to combine any two or more variable investment options;
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(3) to transfer the assets we determine to be the shares of the class
of contracts to which the Contracts belong from any variable
investment option to another variable investment option;
(4) to operate Separate Account VA or any variable investment option as
a management investment company under the Investment Company Act of
1940 (in which case, charges and expenses that otherwise would be
assessed against an underlying mutual fund would be assessed
against Separate Account VA or a variable investment option
directly);
(5) to deregister Separate Account VA under the Investment Company Act
of 1940;
(6) to restrict or eliminate any voting rights as to Separate Account
VA; and
(7) to cause one or more variable investment options to invest some or
all of their assets in one or more other trusts or investment
companies.
ABOUT THE HUDSON RIVER TRUST AND EQ ADVISORS TRUST
Both of the Trusts are registered under the Investment Company Act of
1940. They are classified as "open-end management investment companies," more
commonly called mutual funds. Each Trust issues different series of stock
relating to a different Portfolio of the Trust.
The Trusts do not impose sales charges or "loads" for buying and
selling their shares. All dividends and other distributions on a Trust's shares
are reinvested in full. The Board of Trustees of each Trust may establish
additional Portfolios or eliminate existing Portfolios at any time. More
detailed information about the Trusts, their investment objectives, policies,
restrictions, risks, expenses, their Rule 12b-1 Plans relating to their Class IB
shares, and other aspects of their operations, appears in their prospectuses, or
in their SAIs, which are available upon request.
ABOUT THE GENERAL ACCOUNT
Our general account supports all of our policy and contract guarantees
as well as our general obligations. Credits allocated to your account value are
funded from our general account.
The general account is subject to regulation and supervision by the
Insurance Department of the State of Colorado and to the insurance laws and
regulations of all jurisdictions where we are authorized to do business. Because
of exemptions and exclusionary provisions that apply, interests in the general
account have not been registered under the Securities Act of 1933. The general
account is not an investment company under the Investment Company Act of 1940.
We have been advised that the staff of the SEC has not reviewed the
portions of this prospectus that relate to the general account. The disclosure,
however, may be subject to certain provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
55
<PAGE>
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS
We accept initial contributions sent by wire to our Processing Office
by agreement with certain broker-dealers. The transmittals must be accompanied
by information we require to allocate your contribution. Wire orders not
accompanied by complete information may be retained as described under "How You
Can Make Your Contributions."
Even if we accept the wire order and essential information, a Contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a Contract based on information
forwarded electronically. In these cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, no financial transactions will
be permitted until we receive the signed application and have issued the
Contract. Where we require an Acknowledgement of Receipt form, financial
transactions are only permitted if you request them in writing, sign the request
and have it signature guaranteed, until we receive the signed Acknowledgement of
Receipt form.
After your Contract has been issued, additional contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM - FOR NQ CONTRACTS ONLY
You may use our automatic investment program, or "AIP," to have a
specified amount automatically deducted from a checking account, money market
account, or credit union checking account and contributed as an additional
contribution into an NQ Contract on a monthly or quarterly basis. AIP is not
available for Roth IRA or QP Contracts.
The minimum amounts we will deduct are $100 monthly and $300
quarterly. AIP additional contributions may be allocated to any of the variable
investment options. You choose the day of the month you wish to have your
account debited as long as it is not later than the 28th day of the month.
You may cancel AIP at any time by notifying our Processing Office in
writing at least two Business Days before the next scheduled transaction. We are
not responsible for any debits made to your account before the time written
notice of cancellation is received at our Processing Office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices,
events under your Contract will occur. Other portions of this prospectus
describe circumstances that may cause exceptions. We generally do not repeat
those exceptions below.
56
<PAGE>
BUSINESS DAY
Our Business Day is generally any day that the New York Stock Exchange
is open for trading. Our Business Day ends at 4:00 p.m., Eastern Time for
purposes of determining the date when contributions are applied and any other
transaction requests are processed. Contributions will be applied and any other
transaction requests will be processed when they are received along with all the
required information.
o If your contribution, transfer or any other transaction request,
containing all the required information, reaches us on a
non-Business Day or after 4:00 on a Business Day, we will use the
next Business Day.
o If your transaction is set to occur on the same day of the month as
the Contract Date and that date is the 29th, 30th or 31st of the
month, then the transaction will occur on either the 28th day of
the month or the 1st day of the next month, whichever is the
closest Business Day.
CONTRIBUTIONS, CREDITS, AND TRANSFERS
o Contributions and credits allocated to the variable investment
options are invested at the value determined after the close of the
Business Day.
o Transfers to or from variable investment options will be made at
the value determined after the close of the Business Day.
ABOUT YOUR VOTING RIGHTS
As the owner of the shares of The Hudson River Trust and EQ Advisors
Trust we have the right to vote on certain matters involving the Portfolios,
such as:
o The election of Trustees.
o The ratification of independent auditors selected for each Trust.
o Any other matters described in the prospectuses for the Trusts or
requiring a shareholders' vote under the Investment Company Act of
1940.
We will give contract owners the opportunity to instruct us how to vote
the number of shares attributable to their Contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a Portfolio for which no instructions have been received
in the same proportion as we vote shares of that Portfolio for which we have
received instructions. We will also vote any shares that we are entitled to vote
directly because of amounts we have in a Portfolio in the same proportions that
contract owners vote.
57
<PAGE>
VOTING RIGHTS OF OTHERS
Currently, Equitable Life controls each Trust. Like Equitable Life,
however, Equitable of Colorado contract owners who have an interest in the trust
are given the opportunity to provide voting instructions in the manner described
above. EQ Advisors Trust shares are sold only to separate accounts of Equitable
Life, including Equitable of Colorado, and an affiliated qualified plan trust.
The Hudson River Trust shares are held by other separate accounts of Equitable
Life, including Equitable of Colorado, and by separate accounts of insurance
companies unaffiliated with us. Shares held by these separate accounts will
probably be voted according to the instructions of the owners of insurance
policies and contracts issued by those insurance companies. While this will
dilute the effect of the voting instructions of the contract owners, we
currently do not foresee any disadvantages because of this. The Hudson River
Trust Board of Trustees intends to monitor events in order to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a response to any of
those events insufficiently protects our contract owners, we will see to it that
appropriate action is taken.
SEPARATE ACCOUNT VA VOTING RIGHTS
If actions relating to Separate Account VA require contract owner
approval, contract owners will be entitled to one vote for each unit they have
in the variable investment options. Each contract owner who has elected a
variable annuity payout option may cast the number of votes equal to the dollar
amount of reserves we are holding for that annuity in a variable investment
option divided by the unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under
applicable federal securities laws. To the extent that those laws or the
regulations published under those laws eliminate the necessity to submit matters
for approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
ABOUT OUR YEAR 2000 PROGRESS
[To be supplied.]
ABOUT LEGAL PROCEEDINGS
Equitable of Colorado and its affiliates are parties to various legal
proceedings. In our view, none of these proceedings is likely to have a material
adverse effect upon Separate Account VA, our ability to meet our obligations
under the Contracts, or the distribution of the Contracts.
58
<PAGE>
ABOUT OUR FINANCIAL STATEMENTS
The financial statements of Equitable of Colorado are contained in the
SAI.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
NQ Contracts can be assigned at any time before annuity payments begin.
You cannot, however, assign your NQ Contract as collateral or security for a
loan. Loans are also not available under your NQ Contract. We will not be bound
by an assignment unless it is in writing and we have received it at our
Processing Office. In some cases, an assignment may have adverse tax
consequences. See "Tax Information."
You cannot assign or transfer ownership of a Traditional IRA, Roth IRA
or QP Contract except by surrender to us. Loans are not available and you cannot
assign Traditional IRA, Roth IRA, and QP Contracts as security for a loan or
other obligation.
For limited transfers of ownership after the owner's death see "Payment
of Death Benefit" and "Beneficiary Continuation Option for Traditional IRA
Contracts." You may direct the transfer of the values under your Traditional
IRA, Roth IRA or QP Contract to another similar arrangement. Under federal
income tax rules, in the case of such a transfer, we will impose a withdrawal
charge, if one applies.
DISTRIBUTION OF THE CONTRACTS
Equitable Distributors, Inc. ("EDI"), an indirect, wholly owned
subsidiary of Equitable Life, is the distributor of the Contracts and has
responsibility for sales and marketing functions. EDI serves as the principal
underwriter of Separate Account VA. EDI is registered with the SEC as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. EDI's principal business address is 1290 Avenue of the Americas, New York,
New York 10104. Under a distribution agreement between EDI, Equitable of
Colorado, and certain of Equitable of Colorado's separate accounts, including
Separate Account VA, Equitable of Colorado will pay EDI distribution fees as the
distributor of these Contracts, and as the principal underwriter of Separate
Account VA.
The Contracts will be sold by registered representatives of EDI, as
well as by affiliated and unaffiliated broker-dealers with which EDI has entered
into selling agreements. Broker-dealer sales compensation will generally not
exceed 7% of total contributions made under the Contracts. EDI may also receive
compensation and reimbursement for its marketing services under the terms of its
distribution agreement with Equitable of Colorado. Broker-dealers receiving
sales compensation will generally pay a portion of it to their registered
representatives as commissions related to sales of the Contracts. The offering
of the Contracts is intended to be continuous.
59
<PAGE>
INVESTMENT PERFORMANCE
We provide the following tables to show five different measurements of
the investment performance of the variable investment options and/or the
Portfolios in which they invest. We include these tables because they may be of
general interest to you. THE RESULTS SHOWN REFLECT PAST PERFORMANCE. THEY DO NOT
INDICATE HOW THE VARIABLE INVESTMENT OPTIONS MAY PERFORM IN THE FUTURE. THEY
ALSO DO NOT REPRESENT THE RESULTS EARNED BY ANY PARTICULAR INVESTOR. YOUR
RESULTS WILL DIFFER.
Table 1 shows the average annual total return of the variable
investment options. Average annual total return is the annual rate of growth
that would be necessary to achieve the ending value of a contribution invested
in the variable investment option for the period shown.
Table 2 shows the growth of a hypothetical $1,000 investment plus a $30
credit in the variable investment options over the periods shown. Both Tables 1
and 2 take into account all fees and charges under the Contract but do not take
the charges for any applicable taxes such as premium taxes into account.
Tables 3, 4, and 5 show the rates of return of the variable investment
options on an annualized, cumulative, and year-by-year basis. These tables take
into account all fees and charges under the Contract, but do not reflect the
withdrawal charge or the charges for any applicable taxes such as premium taxes.
If the charges were reflected they would effectively reduce the rates of return
shown.
In all cases the results shown are based on the actual historical
investment experience of the Portfolio in which the variable investment option
invests. The results shown relate to periods when the variable investment
options and the Contracts were not available. As the Contracts are being offered
for the first time, as of the date of this prospectus, we adjusted the results
of the Portfolios to reflect the charges under the Contracts that would have
applied had the variable investment options and Contracts been available.
In addition, we have adjusted the results prior to October 1996, when
The Hudson River Trust Class IB shares were not available, to reflect the 12b-1
fees currently imposed. Finally, the results shown for the Alliance Money Market
and Alliance Common Stock options for periods before March 22, 1985 reflect the
results of the variable investment options that preceded them. The "Since
Inception" figures for these options are based on the date of inception of the
preceding variable investment options. We have adjusted these results to reflect
the maximum investment advisory fee payable for the Portfolios, as well as an
assumed charge of 0.06% for direct operating expenses.
All rates of return presented are time-weighted and include
reinvestment of investment income, including interest and dividends.
60
<PAGE>
BENCHMARKS
Tables 3 and 4 compare the performance of variable investment options
to market indices that serve as benchmarks. Market indices are not subject to
any charges for investment advisory fees, brokerage commission or other
operating expenses typically associated with a managed portfolio. Also, they do
not reflect other Contract charges such as the mortality and expense risks
charge, administration charge, distribution charge or any withdrawal charge.
Comparisons with these benchmarks, therefore, may be of limited use. We include
them because they are widely known and may help you to understand the universe
of securities from which each Portfolio is likely to select its holdings.
Benchmark data reflect the reinvestment of dividend income. The benchmarks
include:
ALLIANCE MONEY MARKET: Salomon Brothers Three-Month T-Bill Index.
ALLIANCE HIGH YIELD: Merrill Lynch High Yield Master Index.
ALLIANCE COMMON STOCK: Standard & Poor's 500 Index.
ALLIANCE AGGRESSIVE STOCK: 50% Russell 2000 Small Stock Index and 50% Standard
& Poor's Mid-Cap Total Return Index.
ALLIANCE SMALL CAP GROWTH: Russell 2000 Growth Index.
BT EQUITY 500 INDEX: Standard & Poor's 500 Index.
BT SMALL COMPANY INDEX: Russell 2000 Index.
BT INTERNATIONAL EQUITY INDEX: Morgan Stanley Capital International Europe,
Australia, Far East Index.
EQ/EVERGREEN: Russell 2000 Index.
EQ/EVERGREEN FOUNDATION: 60 % Standard & Poor's 500
Index/40% Lehman Brothers Aggregate Bond
JPM CORE BOND: Salomon Brothers Broad Investment Grade Bond.
LAZARD LARGE CAP VALUE: Standard & Poor's 500 Index.
LAZARD SMALL CAP VALUE: Russell 200 Index.
MFS GROWTH WITH INCOME: Standard & Poor's 500 Index.
MFS RESEARCH: Standard & Poor's 500 Index.
MFS EMERGING GROWTH COMPANIES: Russell 2000 Index.
MERRILL LYNCH BASIC VALUE EQUITY: Standard & Poor's 500 Index.
MERRILL LYNCH WORLD STRATEGY: 36% Standard & Poor's 500 Index/24% Morgan
Stanley Capital International Europe, Australia,
Far East Index/21% Salomon Brothers U.S.
Treasury bond 1 Year+14% Salomon Brothers World
Government Bond (excluding U.S.)/and 5%
Three-Month U.S. Treasury Bill.
MORGAN STANLEY EMERGING MARKETS EQUITY: Morgan Stanley Capital International
Emerging Markets Free Price Return
Index.
EQ/PUTNAM GROWTH & INCOME VALUE: Standard & Poor's 500 Index.
EQ/PUTNAM INVESTORS GROWTH: Standard & Poor's 500 Index.
EQ/PUTNAM INTERNATIONAL EQUITY: Morgan Stanley Capital International Europe,
Australia, Far East Index.
LIPPER. The Lipper Variable Insurance Products Performance Analysis
Survey records the performance of a large group of variable annuity products,
including managed separate
61
<PAGE>
accounts of insurance companies. According to Lipper Analytical Services, Inc.,
the data are presented net of investment management fees, direct operating
expenses and asset-based charges applicable under annuity contracts. Lipper data
provide a more accurate picture than market benchmarks of the Accumulator Plus
performance relative to other variable annuity products.
COMMUNICATING PERFORMANCE DATA
We may advertise the investment performance of the variable investment
options using the measurements shown in the tables below. We also may advertise
the current yield and effective yield of the Alliance Money Market and Alliance
High Yield options, described below.
YIELD INFORMATION
Current yield for the Alliance Money Market option will be based on net
changes in a hypothetical investment over a given seven-day period, exclusive of
capital changes, and then "annualized" (assuming that the same seven-day result
would occur each week for 52 weeks). Current yield for the Alliance High Yield
option will be based on net changes in a hypothetical investment over a given
30-day period, exclusive of capital changes, and then "annualized" (assuming
that the same 30-day result would occur each month for 12 months).
"Effective yield" is calculated in a similar manner, but when
annualized, any income earned by the investment is assumed to be reinvested. The
"effective yield" will be slightly higher than the "current yield" because any
earnings are compounded weekly for the Alliance Money Market option and monthly
for the Alliance High Yield option. The yields and effective yields assume the
deduction of all Contract charges and expenses other than the withdrawal charge
and any charge for taxes such as premium tax. For more information, see
"Alliance Money Market Option and Alliance High Yield Option Yield Information"
in the SAI.
62
<PAGE>
<TABLE>
<CAPTION>
TABLE 1
AVERAGE ANNUAL TOTAL RETURN UNDER A CONTRACT SURRENDERED ON
DECEMBER 31, 1998*
- -------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------------------
VARIABLE SINCE SINCE
INVESTMENT ONE THREE FIVE TEN OPTION PORTFOLIO
OPTION YEAR YEARS YEARS YEARS INCEPTION** INCEPTION***
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Money Market
Alliance High Yield
Alliance Common Stock
Alliance Aggressive Stock
Alliance Small Cap Growth
BT Equity 500 Index [to be inserted by amendment]
BT Small Company Index
BT International Equity Index
EQ/Evergreen
EQ/Evergreen Foundation
JPM Core Bond
Lazard Large Cap Value
Lazard Small Cap Value
MFS Growth with Income
MFS Research
MFS Emerging Growth Companies
Merrill Lynch Basic Value Equity
Merrill Lynch World Strategy
Morgan Stanley Emerging
Markets Equity
EQ/Putnam Growth & Income
Value
EQ/Putnam Investors Growth
EQ/Putnam International Equity
- -------------------------------------------------------------------------------------------------------------------------------
- --------------------
</TABLE>
See footnotes below.
63
<PAGE>
<TABLE>
<CAPTION>
TABLE 2
GROWTH OF $1,000 UNDER A CONTRACT SURRENDERED ON DECEMBER 31, 1998*
- -------------------------------------------------------------------------------------------------------------------------------
LENGTH OF INVESTMENT PERIOD
------------------------------------------------------------------------------------
VARIABLE
INVESTMENT ONE THREE FIVE TEN SINCE
OPTION YEAR YEARS YEARS YEARS INCEPTION***
- ------------------------------------------ ----------------- ----------------- ----------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Alliance Money Market
Alliance High Yield
Alliance Common Stock
Alliance Aggressive Stock
Alliance Small Cap Growth
BT Equity 500 Index [to be inserted by amendment]
BT Small Company Index
BT International Equity Index
EQ/Evergreen
EQ/Evergreen Foundation
JPM Core Bond
Lazard Large Cap Value
Lazard Small Cap Value
MFS Growth with Income
MFS Research
MFS Emerging Growth Companies
Merrill Lynch Basic Value Equity
Merrill Lynch World Strategy
Morgan Stanley Emerging
Markets Equity
EQ/Putnam Growth & Income
Value
EQ/Putnam Investors Growth
EQ/Putnam International Equity
- -------------------
</TABLE>
* The tables reflect the withdrawal charge.
** The "Since Inception" date for the variable investment options is
*** The "Since Inception" dates for the corresponding Portfolios of The Hudson
River Trust and EQ Advisors Trust are as follows: Alliance Money Market
(July 13, 1981); Alliance High Yield (January 2, 1987); Alliance Common
Stock (January 13, 1976); Alliance Aggressive Stock (January 27, 1986);
Alliance Small Cap Growth (May 1, 1997); BT Equity 500 Index (December 31,
1997); BT Small Company Index (December 31, 1997); BT International Equity
Index (December 31, 1997); EQ/Evergreen (December 31, 1998); EQ/Evergreen
Foundation (December 31, 1998); JPM Core Bond (December 31, 1997); Lazard
Large Cap Value (December 31, 1997); Lazard Small Cap Value (December 31,
1997); MFS Growth with Income (December 31, 1998); MFS Research (May 1,
1997); MFS Emerging Growth Companies (May 1, 1997); Merrill Lynch Basic
Value Equity (May 1, 1997); Merrill Lynch World Strategy (May 1, 1997);
Morgan Stanley Emerging Markets Equity (August 20, 1997); EQ/Putnam Growth
& Income Value (May 1, 1997); EQ/Putnam Investors Growth (May 1, 1997);
and EQ/Putnam International Equity (May 1, 1997).
64
<PAGE>
<TABLE>
<CAPTION>
TABLE 3
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET
Lipper Money Market
Benchmark
ALLIANCE HIGH YIELD
Lipper High Yield
Benchmark
ALLIANCE COMMON STOCK
Lipper Growth
Benchmark
ALLIANCE AGGRESSIVE STOCK
Lipper Mid-Cap
Benchmark
ALLIANCE SMALL CAP
GROWTH
Lipper Small Cap
Benchmark
BT EQUITY 500 INDEX
Lipper S&P 500 Index
Benchmark
BT SMALL COMPANY INDEX [to be inserted by amendment]
Lipper Small Cap
Benchmark
BT INTERNATIONAL EQUITY INDEX
Lipper International
Benchmark
EQ/EVERGREEN
Lipper Growth
Benchmark
EQ/EVERGREEN FOUNDATION
Lipper Balanced
Benchmark
JPM CORE BOND
Lipper Intermediate Investment
Grade Debt
Benchmark
LAZARD LARGE CAP VALUE
Lipper Capital Appreciation
Benchmark
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
TABLE 3 (CONTINUED)
ANNUALIZED RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE
Lipper Small Cap
Benchmark
MFS GROWTH WITH INCOME
Lipper Growth & Income
Benchmark
MFS RESEARCH
Lipper Growth
Benchmark
MFS EMERGING GROWTH
COMPANIES
Lipper Mid-Cap [to be inserted by amendment]
Benchmark
MERRILL LYNCH BASIC VALUE EQUITY
Lipper Growth & Income
Benchmark
MERRILL LYNCH WORLD STRATEGY
Lipper Global Flexible
Portfolio
Benchmark
MORGAN STANLEY
EMERGING MARKETS
EQUITY
Lipper Emerging Markets
Benchmark
EQ/PUTNAM GROWTH &
INCOME VALUE
Lipper Growth & Income
Benchmark
EQ/PUTNAM INVESTORS
GROWTH
Lipper Growth
Benchmark
EQ/PUTNAM INTERNATIONAL
EQUITY
Lipper International
Benchmark
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
*See footnotes on page .
66
<PAGE>
<TABLE>
<CAPTION>
TABLE 4
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY MARKET
Lipper Money Market
Benchmark
ALLIANCE HIGH YIELD
Lipper High Yield
Benchmark
ALLIANCE COMMON STOCK
Lipper Growth
Benchmark
ALLIANCE AGGRESSIVE STOCK
Lipper Mid-Cap
Benchmark
ALLIANCE SMALL CAP
GROWTH
Lipper Small Cap [to be inserted by amendment]
Benchmark
BT EQUITY 500 INDEX
Lipper S&P 500 Index
Benchmark
BT SMALL COMPANY INDEX
Lipper Small Cap
Benchmark
BT INTERNATIONAL EQUITY INDEX
Lipper International
Benchmark
EQ/EVERGREEN
Lipper Growth
Benchmark
EQ/EVERGREEN FOUNDATION
Lipper Balanced
Benchmark
JPM CORE BOND
Lipper Intermediate Investment
Grade Debt
Benchmark
LAZARD LARGE CAP VALUE
Lipper Capital Appreciation
Benchmark
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
TABLE 4 (CONTINUED)
CUMULATIVE RATES OF RETURN FOR PERIODS ENDED DECEMBER 31, 1998:*
- -------------------------------------------------------------------------------------------------------------------------------
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS 20 YEARS INCEPTION
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LAZARD SMALL CAP VALUE
Lipper Small Cap
Benchmark
MFS GROWTH WITH INCOME
Lipper Growth & Income
Benchmark
MFS RESEARCH
Lipper Growth
Benchmark
MFS EMERGING GROWTH
COMPANIES
Lipper Mid-Cap
Benchmark
MERRILL LYNCH BASIC VALUE EQUITY
Lipper Growth & Income [to be inserted by amendment]
Benchmark
MERRILL LYNCH WORLD STRATEGY
Lipper Global Flexible Portfolio
Benchmark
MORGAN STANLEY
EMERGING MARKETS
EQUITY
Lipper Emerging Markets
Benchmark
EQ/PUTNAM GROWTH &
INCOME VALUE
Lipper Growth & Income
Benchmark
EQ/PUTNAM INVESTORS
GROWTH
Lipper Growth
Benchmark
EQ/PUTNAM INTERNATIONAL
EQUITY
Lipper International
Benchmark
- -------------------------------------------------------------------------------
</TABLE>
*See footnotes on page .
68
<PAGE>
<TABLE>
<CAPTION>
70
TABLE 5
YEAR-BY-YEAR RATES OF RETURN*
- ------------------------------------------------------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE MONEY
MARKET***
ALLIANCE HIGH
YIELD
ALLIANCE COMMON
STOCK***
ALLIANCE
AGGRESSIVE
STOCK
BT EQUITY 500
INDEX
BT SMALL COMPANY
INDEX
BT INTER-
NATIONAL
EQUITY INDEX
JPM CORE BOND [to be inserted by amendment]
LAZARD LARGE CAP
VALUE
LAZARD SMALL CAP
VALUE
MFS GROWTH WITH
INCOME
MFS RESEARCH
MFS EMERGING
GROWTH
COMPANIES
MERRILL LYNCH
BASIC VALUE
EQUITY
MERRILL LYNCH
WORLD STRATEGY
MORGAN STANLEY
EMERGING
MARKETS EQUITY
EQ/PUTNAM GROWTH
& INCOME VALUE
EQ/PUTNAM
INVESTORS
GROWTH
EQ/PUTNAM
INTERNATIONAL
EQUITY
</TABLE>
69
<PAGE>
- --------------------
* Returns do not reflect the withdrawal charge and any charge for tax such
as premium taxes. No returns are shown in Table 5 for any variable
investment option investing in shares of a Portfolio of EQ Advisors Trust
with less than one year of performance.
**Unannualized
<TABLE>
<CAPTION>
***Prior to 1984 the Year-by-Year Rates of Return were: 1976 1977 1978 1979 1980 1981 1982 1983
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALLIANCE COMMON STOCK [to be inserted by amendment]
ALLIANCE MONEY MARKET
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
70
<PAGE>
APPENDIX I: PURCHASE CONSIDERATIONS FOR QP CONTRACTS
- --------------------------------------------------------------------------------
Trustees who are considering the purchase of an Accumulator Plus QP Contract
should discuss with their tax advisers whether this is an appropriate investment
vehicle for the employer's plan. Trustees should consider whether the plan
provisions permit the investment of plan assets in the QP Contract, the
distribution of such an annuity and the payment of death benefits in accordance
with the requirements of the Internal Revenue Code. The QP Contract and this
prospectus should be reviewed in full, and the following factors, among others,
should be noted. This QP Contract accepts transfer contributions only and not
regular, ongoing payroll contributions. For 401(k) plans under defined
contribution plans, no employee after-tax contributions are accepted. Under
defined benefit plans, we will not accept rollovers from a defined contribution
plan to a defined benefit plan. We will only accept transfers from a defined
benefit plan or a change of investment vehicles in the plan.
For defined benefit plans, the maximum percentage of actuarial value of the plan
participant/employee's "normal retirement benefit" which can be funded by a QP
Contract is 80%. The account value under a QP Contract may at any time be more
or less than the lump sum actuarial equivalent of the "accrued benefit" for a
defined benefit plan participant/employee. Equitable of Colorado does not
guarantee that the account value under a QP Contract will at any time equal the
actuarial value of 80% of a participant/employee's accrued benefit. If
overfunding of a plan occurs, withdrawals from the QP Contract may be required.
A withdrawal charge may apply. Further, Equitable of Colorado will not perform
or provide any plan recordkeeping services with respect to the QP Contracts. The
plan's administrator will be solely responsible for performing or providing for
all such services. There is no loan feature offered under the QP Contracts, so
if the plan provides for loans and a participant/employee takes a loan from the
plan, other plan assets must be used as the source of the loan and any loan
repayments must be credited to other investment vehicles and/or accounts
available under the plan.
Finally, because the method of purchasing the QP Contract and the features of
the QP Contract may appeal more to plan participants/employees who are older and
tend to be highly paid, and because certain features of the QP Contract are
available only to plan participants/employees who meet certain minimum and/or
maximum age requirements, plan trustees should discuss with their advisers
whether the purchase of the QP Contract would cause the plan to engage in
prohibited discrimination in contributions, benefits or otherwise.
71
<PAGE>
APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT EXAMPLE
- --------------------------------------------------------------------------------
The death benefit under the Contracts is equal to the account value or, if
greater, the guaranteed minimum death benefit.
The following illustrates the guaranteed minimum death benefit calculation.
Assuming $100,000 is allocated to the variable investment options (with no
allocation to the Alliance Money Market option), no subsequent contributions, no
transfers and no withdrawals, the guaranteed minimum death benefit for an
annuitant age 45 would be calculated as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
5% ROLL UP TO
END OF AGE 80 ANNUAL RATCHET TO AGE 80
CONTRACT GUARANTEED MINIMUM GUARANTEED MINIMUM
YEAR ACCOUNT VALUE DEATH BENEFIT(1) DEATH BENEFIT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 $105,000 $105,000(1) $105,000(3)
2 $115,500 $110,250(2) $115,500(3)
3 $129,360 $115,763(2) $129,360(3)
4 $103,488 $121,551(1) $129,360(4)
5 $113,837 $127,628(1) $129,360(4)
6 $127,497 $134,010(1) $129,360(4)
7 $127,497 $140,710(1) $129,360(4)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The account values for Contract Years 1 through 7 are based on hypothetical
rates of return of 5.00%, 10.00%, 12.00%, (20.00)%, 10.00%, 12.00% and 0.00%. We
are using these rates solely to illustrate how the benefit is determined. The
return rates bear no relationship to past or future investment results.
5% ROLL UP TO AGE 80
(1) At the end of Contract Year 1, and again at the end of Contract Years 4
through 7, the death benefit will be equal to the guaranteed minimum death
benefit.
(2) At the end of Contract Years 2 and 3, the death benefit will be equal to
the current account value since it is higher than the current guaranteed
minimum death benefit.
ANNUAL RATCHET TO AGE 80
(3) At the end of Contract Years 1 through 3, the guaranteed minimum death
benefit is equal to the current account value.
(4) At the end of Contract Years 4 through 7, the guaranteed minimum death
benefit is equal to the guaranteed minimum death benefit at the end of the
prior year since it is equal to or higher than the current account value.
72
<PAGE>
<TABLE>
<CAPTION>
APPENDIX III: AN INDEX OF KEY WORDS AND PHRASES
- -------------------------------------------------------------------------------------------------------------------
This index should help you locate more information on the terms used in
this prospectus.
PAGE IN PAGE IN
TERM PROSPECTUS TERM PROSPECTUS
- ---- ---------- ---- ----------
<S> <C> <C> <C>
account value.......................21 payout option...............................27
annuitant...........................13 Portfolio...................................Cover
beneficiary.........................34 Processing Office...........................2
business day........................59 QP..........................................Cover
cash value..........................21 Rebalancing.................................22
Contract Date.......................8 Required Beginning Date.....................47
Contract Year.......................8 Roth IRA....................................Cover
contributions.......................13 SAI.........................................Cover
credit..............................7 TOPS........................................2
guaranteed minimum Traditional IRA.............................Cover
death benefit...................19 Unit........................................21
NQ..................................Cover variable investment options.................Cover
</TABLE>
73
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- ----------------------------------------------------------------------------------------------------------------------
Page
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------
Unit Values 2
- ----------------------------------------------------------------------------------------------------------------------
Annuity Unit Values 2
- ----------------------------------------------------------------------------------------------------------------------
Custodian and Independent Accountants 3
- ----------------------------------------------------------------------------------------------------------------------
Alliance Money Market Option and Alliance High Yield Option Yield Information 3
- ----------------------------------------------------------------------------------------------------------------------
Long-Term Market Trends 4
- ----------------------------------------------------------------------------------------------------------------------
Key Factors in Retirement Planning 6
- ----------------------------------------------------------------------------------------------------------------------
Financial Statements 10
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO OBTAIN AN EQUITABLE OF COLORADO ACCUMULATOR PLUS STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT VA
Send this request form to:
Equitable of Colorado Accumulator Plus
P.O. Box 1547
Secaucus, NJ 07096-1547
Please send me an Equitable of Colorado Accumulator Plus SAI dated ,
1999:
--------------------------------------------------------------------------
Name
--------------------------------------------------------------------------
Address
--------------------------------------------------------------------------
City State Zip
74
<PAGE>
EQUITABLE OF COLORADO ACCUMULATOR PLUS(SM)
STATEMENT OF ADDITIONAL INFORMATION
, 1999
---------------------------------------
VARIABLE DEFERRED ANNUITY CONTRACTS
THE EQUITABLE OF COLORADO, INC. ("EQUITABLE OF COLORADO")
370 17TH STREET, DENVER, COLORADO 80202
---------------------------------------
This statement of additional information ("SAI") is not a prospectus. It should
be read in conjunction with the related Equitable of Colorado Accumulator
Plus(SM) prospectus, dated , 1999 issued by Equitable of Colorado. That
prospectus provides detailed information concerning the Contracts and the
variable investment options that fund the Contracts. Each variable investment
option is a subaccount of Equitable of Colorado's Separate Account VA.
Definitions of special terms used in the SAI are found in the prospectus.
A copy of the prospectus is available free of charge by writing the Processing
Office (Post Office Box 1547, Secaucus, NJ 07096-1547), by calling
1-800-789-7771 toll-free, or by contacting your registered representative.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
Unit Values 2
- --------------------------------------------------------------------------------
Annuity Unit Values 2
- --------------------------------------------------------------------------------
Custodian and Independent Accountants 3
- --------------------------------------------------------------------------------
Alliance Money Market Option and
Alliance High Yield Option Yield Information 3
- --------------------------------------------------------------------------------
Long-Term Market Trends 4
- --------------------------------------------------------------------------------
Key Factors in Retirement Planning 6
- --------------------------------------------------------------------------------
Financial Statements 10
- --------------------------------------------------------------------------------
Copyright 1999 The Equitable of Colorado, Inc.
All rights reserved. The Equitable of Colorado is an
authorized licensee of Accumulator Plus, a service mark of
The Equitable Life Assurance Society of the United States.
(MLPLUSSAI 5/99)
<PAGE>
- --------------------------------------------------------------------------------
UNIT VALUES
Unit values are determined at the end of each valuation period for each of the
variable investment options. We may offer other annuity contracts and
certificates which will have their own unit values for the variable investment
options. They may be different from the unit values for the Equitable of
Colorado Accumulator Plus ("Accumulator Plus").
The unit value for a variable investment option for any valuation period is
equal to: (1) the unit value for the preceding valuation period multiplied by
(ii) the net Investment factor for that option for that valuation period. A
valuation period is each Business Day together with any preceding non-business
days. The net investment factor is:
(a/b)-c
where:
(a) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the valuation period. Any amounts
allocated to or withdrawn from the option for the valuation period are not
taken into account. For this purpose, we use the share value reported to us
by The Hudson River Trust or EQ Advisors Trust.
(b) is the value of the variable investment option's shares of the
corresponding Portfolio at the end of the preceding valuation period. (Any
amounts allocated or withdrawn for that valuation period are taken into
account.)
(c) is the daily mortality and expense risks charge, administration charge, and
distribution charge relating to the Contracts, times the number of calendar
days in the valuation period. These daily charges are at an effective
annual rate not to exceed a total of 1.60%.
ANNUITY UNIT VALUES
The annuity unit value for each variable investment option was fixed at $1.00 on
each option's respective effective date (as shown in the prospectus) for
Contracts with assumed base rates of net investment return of both 5% and 3 1/2%
a year. For each valuation period after that date, it is the annuity unit value
for the immediately preceding valuation period multiplied by the adjusted net
investment factor under the Contract. For each valuation period, the adjusted
net investment factor is equal to the net investment factor reduced for each day
in the valuation period by:
o .00013366 of the net investment factor if the assumed base rate of net
investment return is 5% a year; or
o .00009425 of the net investment factor if the assumed base rate of net
investment return is 3 1/2%.
Because of this adjustment, the annuity unit value rises and falls depending on
whether the actual rate of net investment return (after deduction of charges) is
higher or lower than the assumed base rate.
All Contracts have a 5% assumed base rate of net investment return, except in
states where that rate is not permitted. Annuity payments under Contracts with
an assumed base rate of 3 1/2% will at first be smaller than those under
Contracts with a 5% assumed base rate. Payments under the 3 1/2% Contracts,
however, will rise more rapidly when unit values are rising, and payments will
fall more slowly when unit values are falling than those under 5% Contracts.
The amounts of variable annuity payments are determined as follows:
Payments normally start on the Business Day specified on your election form, or
on such other future date you specify. The payments are made on a monthly basis.
The first three payments are of equal amounts. Each of the first three payments
will be based on the amount specified in the Tables of Guaranteed Annuity
Payments in your Contract.
The first three payments depend on the assumed base rate of net investment
return and the form of annuity chosen (and any fixed period or period certain).
If the annuity involved is a life contingency, the risk class and the age of the
annuitants will affect payments.
The amount of the fourth and each later payment will vary according to the
investment performance of the variable investment options. We calculate each
monthly payment by multiplying the number of annuity units credited by the
average annuity unit value for the second calendar month immediately preceding
the due date of the payment. We calculate the number of units by dividing the
first monthly payment by the annuity unit value for the valuation period. This
includes the due date of the first monthly payment. The average annuity unit
value is the average of the annuity unit values for the valuation periods ending
in that month. Variable income annuities may also be available by separate
prospectus through other separate accounts we offer.
ILLUSTRATION OF CHANGES IN ANNUITY UNIT VALUES
To show how we determine variable annuity payments from month to month, assume
that the account value on the date annuity payments are to begin is enough to
fund an annuity with a monthly payment of $363. Also assume that the annuity
unit value for the valuation period that includes the due date of the first
annuity payment is $1.05. The number of annuity units credited under the
Contract would be 345.71 (363 divided by 1.05 = 345.71).
2
<PAGE>
- --------------------------------------------------------------------------------
If the fourth monthly payment is due in March, and the average annuity unit
value for January was $1.10, the annuity payment for March would be the number
of units (345.71) times the average annuity unit value ($1.10), or $380.28. If
the average annuity unit value was $1 in February, the annuity payment for April
would be 345.71 times $1, or $345.71.
CUSTODIAN AND INDEPENDENT ACCOUNTANTS
Equitable of Colorado is the custodian for the shares of The Hudson River Trust
and EQ Advisors Trust owned by Separate Account VA.
The consolidated financial statements of Equitable of Colorado at December 31,
1998 and 1997 and for each of the three years ended December 31, 1998 included
in this SAI have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing.
ALLIANCE MONEY MARKET OPTION
AND ALLIANCE HIGH YIELD
OPTION YIELD INFORMATION
ALLIANCE MONEY MARKET OPTION
The Alliance Money Market option calculates yield information for seven-day
periods. The seven-day current yield calculation is based on a hypothetical
Contract with one unit at the beginning of the period. To determine the
seven-day rate of return, the net change in the unit value is computed by
subtracting the unit value at the beginning of the period from a unit value,
exclusive of capital changes, at the end of the period.
Unit values reflect all other accrued expenses of the Alliance Money Market
option but do not reflect any withdrawal charges or charges for applicable taxes
such as state or local premium taxes.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain what is called the adjusted base period rate of return. This
seven-day adjusted base period return is then multiplied by 365/7 to produce an
annualized seven-day current yield figure carried to the nearest one-hundredth
of one percent.
The effective yield is obtained by modifying the current yield to take into
account the compounding nature of the Alliance Money Market option's
investments, as follows: the unannualized adjusted base period return is
compounded by adding one to the adjusted base period return, raising the sum to
a power equal to 365 divided by 7, and subtracting one from the result, i.e.,
effective yield = (base period return + 1 ) [superscript 365/7] - 1. The
Alliance Money Market option yields will fluctuate daily. Accordingly, yields
for any given period do not necessarily represent future results. In addition,
the value of units of the Alliance Money Market option will fluctuate and not
remain constant.
ALLIANCE HIGH YIELD OPTION
The Alliance High Yield option calculates yield information for 30-day periods.
The 30-day current yield calculation is based on a hypothetical Contract with
one unit at the beginning of the period. To determine the 30-day rate of return,
the net change in the unit value is computed by subtracting the unit value at
the beginning of the period from a unit value, exclusive of capital changes, at
the end of the period.
Unit values reflect all other accrued expenses of the Alliance High Yield option
but do not reflect any withdrawal charges or charges for applicable taxes such
as state or local premium taxes.
The adjusted net change is divided by the unit value at the beginning of the
period to obtain the adjusted base period rate of return. This 30-day adjusted
base period return is then multiplied by 365/30 to produce an annualized 30-day
current yield figure carried to the nearest one-hundredth of one percent.
The effective yield is obtained by modifying the current yield to give effect to
the compounding nature of the Alliance High Yield option's investments, as
follows: the unannualized adjusted base period return is compounded by adding
one to the adjusted base period return, raising the sum to a power equal to 365
divided by 30, and subtracting one from the result, i.e., effective yield =
(base period return + 1)[superscript 365/30] - 1. Alliance High Yield option
yields will fluctuate daily. Accordingly, yields for any given period do not
necessarily represent future results. In addition, the value of units of the
Alliance High Yield option will fluctuate and not remain constant.
ALLIANCE MONEY MARKET OPTION AND
ALLIANCE HIGH YIELD OPTION YIELD INFORMATION
The yields for the Alliance Money Market option and Alliance High Yield option
reflect charges that are not normally reflected in the yields of other
investments. Therefore, they may be lower when compared with yields of other
investments. The yields for Alliance Money Market option and Alliance High Yield
option should not be compared to the return on fixed rate investments which
guarantee rates of interest for specified periods, such as the fixed interest
options. Nor should the yields be compared to the yields of money market options
made available to the general public.
Because the Accumulator Plus Contracts described in the prospectus are being
offered for the first time in 1999, no yield information is presented.
3
<PAGE>
- --------------------------------------------------------------------------------
LONG-TERM MARKET TRENDS
As a tool for understanding how different investment strategies may affect
long-term results, it may be useful to consider the historical returns on
different types of assets. The following charts present historical return trends
for various types of securities. The information presented, while not directly
related to the performance of the variable investment options, helps to provide
a perspective on the potential returns of different asset classes over different
periods of time. By combining this information with knowledge of your own
financial needs (for example, the length of time until you retire, your
financial requirements at retirement), you may be able to better determine how
you wish to allocate contributions among the variable investment options.
Historically, the long-term investment performance of common stocks has
generally been superior to that of long- or short-term debt securities. For
those investors who have many years until retirement, or whose primary focus is
on long-term growth potential and protection against inflation, there may be
advantages to allocating some or all of their account value to those variable
investment options that invest in stocks.
Growth of $1 Invested on January 1, 1958
(Values are as of last business day)
[OBJECT OMITTED]
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
Over shorter periods of time, however, common stocks tend to be subject to more
dramatic changes in value than fixed-income (debt) securities. Investors who are
nearing retirement age, or who have a need to limit short-term risk, may find it
preferable to allocate a smaller percentage of their account value to those
variable investment options that invest in common stocks. The following graph
illustrates the monthly fluctuations in value of $1 based on monthly returns of
the Standard & Poor's 500 during 1990, a year that represents more typical
volatility than 1998.
Growth of $1 Invested on January 1, 1990
(Values are as of last business day)
[OBJECT OMITTED]
Source: Ibbotson Associates, Inc. See discussion and information preceding and
following chart on next page.
The following chart illustrates average annual rates of return over selected
time periods between December 31, 1926 and December 31, 1998 for different types
of securities: common stocks, long-term government bonds, long-term corporate
bonds, intermediate-term government bonds and U.S. Treasury Bills. For
comparison purposes, the Consumer Price Index is shown as a measure of
inflation. The average annual returns shown in the chart reflect capital
appreciation and assume the reinvestment of dividends and interest. Investment
management fees or expenses and charges typically associated with deferred
annuity products, are not reflected.
4
<PAGE>
- --------------------------------------------------------------------------------
The information presented is merely a summary of past experience for unmanaged
groups of securities and is neither an estimate nor guarantee of future
performance. Any investment in securities, whether equity or debt, involves
varying degrees of potential risk, in addition to offering varying degrees of
potential reward.
The rates of return illustrated do not represent returns of the variable
investment options. In addition, there is no assurance that the performance of
the variable investment options will correspond to rates of return such as those
illustrated in the chart.
For a comparative illustration of performance results of the variable investment
options (which reflect the trusts and variable investment options charges), see
"Investment Performance" in the prospectus.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
MARKET TRENDS:
ILLUSTRATIVE ANNUAL RATES OF RETURN
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
LONG-TERM INTERMEDIATE- U.S.
FOR THE FOLLOWING PERIODS COMMON LONG-TERM CORPORATE TERM TREASURY CONSUMER
ENDING 12/31/98: STOCKS GOVT. BONDS BONDS GOVT. BONDS BILLS PRICE INDEX
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year
3 Years
5 Years
10 Years
20 Years
30 Years
40 Years
50 Years
60 Years
Since 12/31/27
Inflation adjusted since 1927
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
SOURCE: Ibbotson, Roger G., and Rex A. Sinquefield, Stocks, Bonds, Bills, and
Inflation (SBBI), 1982, updated in Stocks, Bonds, Bills and Inflation 1998
Yearbook,(TM) Ibbotson Associates, Inc., Chicago. All rights reserved.
COMMON STOCKS (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
LONG-TERM GOVERNMENT BONDS -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
LONG-TERM CORPORATE BONDS -- For the period 1969-1997, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers Index was backdated using Salomon Brothers
monthly yield data and a methodology similar to that used by Salomon Brothers
for 1969-1997; for the period 1927-1945, the Standard and Poor's monthly
High-Grade Corporate Composite yield data were used, assuming a 4 percent coupon
and a twenty-year maturity.
INTERMEDIATE-TERM GOVERNMENT BONDS -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. TREASURY BILLS -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
INFLATION -- Measured by the Consumer Price Index for all Urban Consumers
(CPI-U), not seasonally adjusted.
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
KEY FACTORS IN RETIREMENT PLANNING
INTRODUCTION
The Accumulator Plus is available to help meet the retirement income and
investment needs of individuals. In assessing these retirement needs, some key
factors need to be addressed: (1) the impact of inflation on fixed retirement
incomes; (2) the importance of planning early for retirement; (3) the benefits
of tax deferral; (4) the selection of an appropriate investment strategy; and
(5) the benefit of receiving annuity payments. Each of these factors is
addressed below.
Unless otherwise noted, all of the following presentations use an assumed annual
rate of return of 7.5% compounded annually. This rate of return is for
illustrative purposes only and is not intended to represent an expected or
guaranteed rate of return for any investment vehicle.
In addition, unless otherwise noted, none of the illustrations reflect any
charges that may be applied under a particular investment vehicle. Such charges
would effectively reduce the actual return under any type of investment.
All earnings in these presentations are assumed to accumulate tax deferred
unless otherwise noted. Most programs designed for retirement savings offer tax
deferral. Monies are taxed upon withdrawal and a 10% penalty tax may apply to
premature withdrawals. Certain retirement programs prohibit early withdrawals.
See "Tax Information" in the prospectus. Where taxes are taken into
consideration in these presentations, a 28% tax rate is assumed.
The source of the data used by us to compile the charts which appear in this
section (other than charts 1, 2, 3, 4 and 7) is Ibbotson Associates, Inc.,
Chicago, Stocks, Bonds, Bills and Inflation [1998] Yearbook.(TM) All rights
reserved.
In reports or other communications or in advertising material, we may make use
of these or other graphic or numerical illustrations that we prepare showing the
impact of inflation, planning early for retirement, tax deferral,
diversification and other concepts important to retirement planning.
INFLATION
Inflation erodes purchasing power. This means that, in an inflationary period,
the dollar is worth less as time passes. Because many people live on a fixed
income during retirement, inflation is of particular concern to them. The charts
that follow illustrate the harmful impact of inflation over an extended period
of time. Between 1968 and 1998, the average annual inflation rate was %. As
demonstrated in Chart 1, this % annual rate of inflation would cause the
purchasing power of $35,000 to decrease to only $ after 30 years.
In Chart 2, the impact of inflation is examined from another perspective.
Specifically, the chart illustrates the additional income needed to maintain the
purchasing power of $35,000 over a thirty-year period. Again, the 1968-1998
historical inflation rate of % is used. In this case, an additional $
would be required to maintain the purchasing power of $35,000 after 30 years.
CHART 1
[OBJECT OMITTED]
6
<PAGE>
- --------------------------------------------------------------------------------
CHART 2
[OBJECT OMITTED]
STARTING EARLY
The impact of inflation highlights the need to begin a retirement program early.
The value of starting early is illustrated in the following charts.
As shown in Chart 3, if an individual makes annual contributions of $2,500 to
his or her retirement program beginning at age 30, he or she would accumulate
$ by age 65 under the assumptions described earlier. If that individual
waited until age 50, he or she would only accumulate $ by age 65 under
the same assumptions.
CHART 3
[OBJECT OMITTED]
In Table 1, the impact of starting early is demonstrated in another format. For
example, if an individual invests $300 monthly, he or she would accumulate
$ in thirty years under our assumptions. In contrast, if that individual
invested the same $300 per month for 15 years, he or she would accumulate only
$ under our assumptions.
TABLE 1
- --------------------------------------------------------------------------------
MONTHLY
CONTRI- YEAR YEAR YEAR YEAR YEAR
BUTION 10 15 20 25 30
$ 20
50
100
200
300
- --------------------------------------------------------------------------------
Chart 4 presents an additional way to demonstrate the significant impact of
starting to make contributions to a retirement program earlier rather than
later. It assumes that an individual had a goal to accumulate $250,000 (pretax)
by age 65. If he or she starts at age 30, under our assumptions he or she could
reach the goal by making a monthly pretax contribution of $ (equivalent to
$ after taxes). The total net cost for the 30-year-old in this hypothetical
example would be $ . If the individual in this hypothetical example waited
until age 50, he or she would have to make a monthly pretax contribution of $
(equivalent to $ after taxes) to attain the goal, illustrating the importance
of starting early.
CHART 4
GOAL: $250,000 BY AGE 65
[OBJECT OMITTED]
7
<PAGE>
- --------------------------------------------------------------------------------
TAX DEFERRAL
Contributing to a retirement plan early is part of an effective strategy for
addressing the impact of inflation. Another part of such a strategy is to
carefully select the types of retirement programs in which to invest. In
deciding where to invest retirement contributions, there are three basic types
of programs.
The first type offers the most tax benefits, and therefore is potentially the
most beneficial for accumulating funds for retirement. Contributions are made
with pre-tax dollars or are tax deductible and earnings grow income tax
deferred. An example of this type of program is the deductible Traditional IRA.
The second type of program also provides for tax-deferred earnings growth;
however, contributions are made with after-tax dollars. Examples of this type of
program are nondeductible Traditional IRAs and non-qualified annuities.
The third approach to retirement savings is fully taxable. Contributions are
made with after-tax dollars and earnings are taxed each year. Examples of this
type of program include certificates of deposit, savings accounts, and taxable
stock, bond or mutual fund investments.
Consider an example. For the type of retirement program that offers both pre-tax
contributions and tax deferral, assume that a $2,000 annual pre-tax contribution
is made for thirty years. In this example, the retirement funds would be
$164,527 after thirty years (assuming a 7.5% rate of return, no withdrawals and
assuming the deduction of the 1.60% Separate Account VA daily asset charge --
but no withdrawal charge under the Contract, or trust charges to Portfolios),
and such funds would be $222,309 without the effect of any charges. Assuming a
lump sum withdrawal was made in year thirty and a 28% tax bracket, these amounts
would be $ and $ , respectively.
For the type of program that offers only tax deferral, assume an after-tax
annual contribution of $1,440 for thirty years and the same rate of return. The
after-tax contribution is derived by taxing the $2,000 pre-tax contribution,
again assuming a 28% tax bracket. In this example, the retirement funds would be
$118,460 after thirty years assuming the deduction of charges and no
withdrawals, and $160,062 without the effect of charges. Assuming a lump sum
withdrawal in year thirty, the total after-tax amount would be $ with
charges deducted and $ without charges as described above.
For the fully taxable investment, assume an after-tax contribution of $1,440 for
thirty years. Earnings are taxed annually. After thirty years, the amount of
this fully taxable investment is $108,046.
Keep in mind that taxable investments have fees and charges, too (investment
advisory fees, administrative charges, 12b-1 fees, sales loads, brokerage
commissions, etc.). We have not attempted to apply these fees and charges to the
fully taxable amounts since this is intended merely as an example of tax
deferral.
Again, it must be emphasized that the assumed rate of return of 7.5% compounded
annually used in these examples is for illustrative purposes only. It is not
intended to represent a guaranteed or expected rate of return on any type of
investment. Moreover, early withdrawals of tax-deferred investments are
generally subject to a 10% penalty tax.
INVESTMENT FOR RETIREMENT
Selecting an appropriate retirement program is clearly an important part of an
effective retirement planning strategy. Carefully choosing among available
investments is another essential component.
During the 1968-1998 period, common stock average annual returns outperformed
the average annual returns of fixed investments such as long-term government
bonds and Treasury Bills (T-Bills). See "Notes" below. Common stocks earned an
average annual return of % over this period, in contrast to % and %
for the other two investment categories. Significantly, common stock returns
also outpaced inflation, which grew at % over this period.
Although common stock returns have historically outpaced returns of fixed
investments, people often allocate a significant percentage of their retirement
funds to fixed return investments. Their primary concern is the preservation of
principal. Given this concern, Chart 5 illustrates the impact of exposing only
the interest generated by a fixed investment to the stock market. In this
illustration, the fixed investment is represented by a Treasury Bill return and
the stock investment is represented by the Standard & Poor's 500 ("S&P 500").
The chart assumes that a $20,000 fixed investment was made on January 1, 1980.
If the interest on that investment were to accumulate based upon the return of
the S&P 500, the total investment would have been worth $ in 1998. Had
the interest been reinvested in the fixed investment, the fixed investment would
have grown to $ . As illustrated in Chart 5, significant opportunities for
growth exist while preserving principal. See "Notes" below.
8
<PAGE>
- --------------------------------------------------------------------------------
CHART 5
[OBJECT OMITTED]
Another variation of the example in Chart 5 is to gradually transfer principal
from a fixed investment into the stock market. Chart 6 assumes that a $20,000
fixed investment was made on January 1, 1980. For the next two years, $540 is
transferred monthly into the stock market (represented by the S&P 500).
The total investment, given this strategy, would have grown to $ in 1998.
In contrast, had the principal not been transferred, the fixed investment would
have grown to $ . See "Notes" below.
CHART 6
[OBJECT OMITTED]
NOTES
1. Common Stocks: Standard & Poor's ("S&P") Composite Index is an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies. Results shown assume reinvestment of
dividends. Both market value and return on common stock will vary.
2. U.S. Government Securities: Long-term Government Bonds are measured using a
one-bond portfolio constructed each year containing a bond with
approximately a 20-year maturity and a reasonably current coupon. U.S.
Treasury Bills are measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month. U.S. Government securities are guaranteed
as to principal and interest, and if held to maturity, offer a fixed rate
of return. However, market value and return on such securities will
fluctuate prior to maturity.
The Accumulator Plus can be an effective program for diversifying ongoing
investments between various asset categories. In addition, the Accumulator Plus
offers special features which help address the risk associated with timing the
equity markets, such as dollar cost averaging. By transferring the same dollar
amount each month from the Alliance Money Market option to other variable
investment options, dollar cost averaging attempts to shield your investment
from short-term price fluctuations. This, however, does not assure a profit or
protect against a loss in declining markets.
THE BENEFIT OF ANNUITIZATION
An individual may shift the risk of outliving his or her principal by electing a
lifetime income annuity. See "Choosing Your Annuity Payout Options" under
"Transferring and Accessing Your Money" in the prospectus. Chart 7 below shows
the monthly income that can be generated under various forms of life annuities,
as compared to receiving level payments of interest only or principal and
interest from the investment. Calculations in the Chart are based on the
following assumption: a $100,000 contribution was made at one of the ages shown,
annuity payments begin immediately, and a 5% annuitization interest rate is
used. For purposes of this example, principal and interest are paid out on a
level basis over 15 years. In the case of the interest-only scenario, the
principal is always available and may be left to other individuals at death.
Under the principal and interest scenario, a portion of the principal will be
left at death, assuming the individual dies within the 15-year period. In
contrast, under the life annuity scenarios, there is no residual amount left.
9
<PAGE>
- --------------------------------------------------------------------------------
CHART 7
MONTHLY INCOME
($100,000 CONTRIBUTION)
- --------------------------------------------------------------------------------
PRINCIPAL JOINT AND SURVIVOR*
AND -----------------------------
INTEREST INTEREST 50% 66.67% 100%
ONLY FOR SINGLE TO TO TO
ANNUITANT FOR LIFE 15 YEARS LIFE SURVIVOR SURVIVOR SURVIVOR
- --------------------------------------------------------------------------------
Male 65 $401 $785 $ 617 $560 $544 $513
Male 70 401 785 685 609 588 549
Male 75 401 785 771 674 646 598
Male 80 401 785 888 760 726 665
Male 85 401 785 1,045 878 834 757
- -------------------
The numbers are based on 5% interest compounded annually and the 1983 Individual
Annuity Mortality Table "a" projected with modified Scale G. Annuity purchase
rates available at annuitization may vary, depending primarily on the
annuitization interest rate, which may not be less than an annual rate of 2.5%.
* The Joint and Survivor Annuity Forms are based on male and female Annuitants
of the same age.
FINANCIAL STATEMENTS
The consolidated financial statements of Equitable of Colorado included herein
should be considered only as bearing upon the ability of Equitable of Colorado
to meet its obligations under the Contracts.
There are no financial statements for Separate Account VA as the Contracts
offered under the prospectus and SAI are being offered for the first time in
1999.
10
<PAGE>
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits.
(a) Financial Statements included in Part B.
1. The Equitable of Colorado, Inc.
(to be filed by amendment)
The following exhibits are filed herewith:
1. Certified Resolutions of the Board of Directors of The Equitable
of Colorado, Inc. ("EOC") authorizing the establishment of
separate accounts, dated December 16, 1996.
2. Not applicable.
3. (a) Form of Distribution Agreement among EOC and Equitable
Distributors, Inc., ("EDI"), authorizing EDI to distribute
all EOC Products in the retail channel.
(b) Form of Distribution and Servicing Agreement among EOC and
EQ Financial Consultants ("EQFC") authorizing EQFC to
distribute all EOC Products in the agency channel.
(c) Form of Sales Agreement between EQFC and EOC committing EQFC
to provide shares of the Hudson River Trust ("HRT") for all
EOC Separate Account Products sold in the agency channel.
(d) Form of Sales Agreement between EOC and EDI committing EDI to
provide HRT shares for all EOC Separate Account Products
sold in the retail channel.
(e) Form of Participation Agreement by and among EQ Advisors
Trust ("EQAT"), EDI, EOC and EQFC, committing EQAT and its
distributors, EQFC and EDI, to provide EQAT shares for all
EOC Separate Account Products sold in the agency channel and
the retail channel.
(f) Agreement for Cooperative and Joint Use of Personnel,
Property and Services between Equitable Life Assurance
Society of the United States and EOC dated April 16, 1984.
C-1
<PAGE>
4. (a) Form of annuity contract no. EOC99APICB-INDV.
(b) Form of Data Pages for Accumulator Plus NQ.
(c) Form of Data Pages for Accumulator Plus Traditional
IRA and Roth IRA.
(d) Form of Data Pages for Accumulator Plus QP - Defined Benefit
and Defined Contribution
(e) Form of Endorsement Applicable to IRA Contracts
No. 98EOCENIRAIA-AP
C-2
<PAGE>
(f) Form of Custodial owned Roth IRA Endorsement No. 98COROTHI
(g) Form of Defined Benefit Endorsement no. 98EOCENDBQPII.
(h) Form of Endorsement Applicable to Defined Contribution
Qualified Plan.
(i) Form of Endorsement for Extra Credit Annuity No. 98EOCECEND
IIA/B.
5. (a) Form of Application for Accumulator Plus (IRA, NQ, and QP).
6. (a) Restated Charter of EOC, as amended.
(b) By-Laws of EOC, as amended.
7. Not applicable.
8. Not applicable.
9. Opinion and Consent of Counsel (to be filed by amendment).
10. (a) Consent of PricewaterhouseCoopers LLP.
(to be filed by amendment).
(b) Powers of Attorney.
11. Not applicable.
12. Not applicable.
13. (a) Formulae for Determining Money Market Fund Yield for a
Seven-Day Period.
C-3
<PAGE>
(b) Formulae for Determining Cumulative and Annualized Rates of
Return.
(c) Formulae for Determining Standardized Performance Value and
Annualized Average Performance Ratio.
C-4
<PAGE>
Item 25: Directors and Officers of EOC.
Set forth below is information regarding the directors and principal
officers of EOC. EOC's address is 370 17th Street, Suite 4950, Denver,
Colorado 80202. The business address of the persons whose names are
preceded by an asterisk is that of Equitable Life Assurance Society of
the United States, 1290 Avenue of the Americas, New York, NY 10104.
DIRECTORS AND OFFICERS
*Samuel B. Shlesinger Chairman of the Board, President,
Chief Executive Officer and Director
*Michael S. Martin Executive Vice President and
Director
*Michel Beaulieu Director
*Harvey E. Blitz Director
*Kevin R. Byrne Senior Vice President and Treasurer
*Alvin Fenichel Senior Vice President and Chief
Financial Officer
*Linda J. Galasso Vice President and Secretary
*Mark A. Hug Senior Vice President
*Charles Marino Vice President and Actuary
*John P. Natoli Vice President and Chief
Administrative Officer
Michael J. Remur Vice President and Chief
Administrative Officer
3001 Westown Parkway
West Des Moines, IA 50266
Allen Zabusky Vice President and Controller
135 West 50th Street
New York, NY 10020
*Barbara Fraser Vice President and Actuary
*Mildred M. Oliver Vice President
*Naomi J. Weinstein Vice President
C-5
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Insurance
Company or Registrant:
Separate Account VA of The Equitable of Colorado, Inc. ("EOC"), (the
"Separate Account") is a separate account of EOC. EOC is a wholly owned
subsidiary of The Equitable Life Assurance Society of the United States
("Equitable"). Equitable, a New York stock life insurance company, is a wholly
owned subsidiary of The Equitable Companies Incorporated (the "Holding
Company"), a publicly traded company.
The largest stockholder of the Holding Company is AXA, which as of
September 1, 1998 beneficially owned 58.5% of the Holding Company's outstanding
common stock. AXA is able to exercise significant influence over the operations
and capital structure of the Holding Company and its subsidiaries, including
Equitable. AXA, a French company, is the holding company for an international
group of insurance and related financial services companies.
C-6
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (l991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (41.8%) (See
Addendum B(1) for subsidiaries)
The Equitable Life Assurance Society of the United States (1859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
EVLICO, INC. (1995) (Delaware)
EVLICO East Ridge, Inc. (1995) (California)
GP/EQ Southwest, Inc. (1995) (Texas)
Franconom, Inc. (1985) (Pennsylvania)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage, and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
Alliance Capital Management L.P. (2.7% limited partnership
interest)
ACMC, Inc. (1991) (Delaware)(s)
Alliance Capital Management L.P. (1988) (Delaware)
(39.6% limited partnership interest)
EVCO, Inc. (1991) (New Jersey)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-7
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Fox Run, Inc. (1994) (Massachusetts)
STCS, Inc. (1992) (Delaware)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
Camelback JVS, Inc. (1995) (Arizona)
ELAS Realty, Inc. (1996) (Delaware)
100 Federal Street Realty Corporation (Massachusetts)
Equitable Structured Settlement Corporation (1996) (Delaware)
Prime Property Funding II, Inc. (1997) (Delaware)
Sarasota Prime Hotels, Inc. (1997) (Florida)
ECLL, Inc. (1997) (Michigan)
Equitable Holdings LLC (1997) (New York) (into which Equitable Holding
Corporation was merged in 1997)
EQ Financial Consultants, Inc. (formerly
Equico Securities, Inc.) (l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
EquiSource of New York, Inc. (1986) (New York) (See
Addendum A for subsidiaries)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-8
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holdings, LLC (cont.)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EQ and
EHC) (Delaware) (34.4%) (See Addendum B(1) for
subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership (50% limited
partnership interest) (l984)
Equitable JV Holding Corporation (1989) (Delaware)
Alliance Capital Management Corporation (l991) (Delaware) (b)
(See Addendum B(2) for subsidiaries)
Equitable Capital Management Corporation (l985)
(Delaware)(b)
Alliance Capital Management L.P. (1988) (Delaware) (14.6%
limited partnership interest)
EQ Services, Inc. (1992) (Delaware)
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P.
(a) Registered Broker/Dealer (b) Registered Investment
Advisor
C-9
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM A - SUBSIDIARY
OF EQUITABLE HOLDINGS, LLC
HAVING MORE THAN FIVE SUBSIDIARIES
-------------------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business Corporation
of New York) has the following subsidiaries that are brokerage companies to
make available to Equitable Agents within each state traditional (non-equity)
products and services not manufactured by Equitable:
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988)
(Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource of Puerto Rico, Inc. (1997) (Puerto Rico)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-10
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
------------------------------------
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 150 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corp. (1985)
(Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation (as general partner) (b) has the
following subsidiaries:
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware) (a)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Capital Oceanic Corp. (Delaware)
Alliance Capital Management Australia Pty. Ltd.
(Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Eastern Europe Inc. (Delaware)
Alliance Barra Research Institute, Inc. (Delaware)
(50%)
Alliance Capital Management Canada, Inc. (Canada)
(99.99%)
Alliance Capital Management (Brazil) Llda
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance International Fund Services S.A.
(Luxembourg)
Alliance Capital Management (India) Ltd. (Delaware)
Alliance Capital Mauritius Ltd.
Alliance Corporate Finance Group, Incorporated
(Delaware)
Equitable Capital Diversified Holdings, L.P. I
Equitable Capital Diversified Holdings, L.P. II
Curisitor Alliance L.L.C. (Delaware)
Curisitor Holdings Limited (UK)
Alliance Capital Management (Japan), Inc.
Alliance Capital Management (Asia) Ltd.
Alliance Capital Management (Turkey), Ltd.
Cursitor Alliance Management Limited (UK)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-11
<PAGE>
AXA GROUP CHART
The information listed below is dated as of December 31, 1997; percentages
shown represent voting power. The name of the owner is noted when AXA
indirectly controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Assurances Iard France 100% by AXA France Assurance
AXA Assurances Vie France 100% by AXA France Assurance
AXA Courtage Iard France 97.4% by AXA France Assurance
and UAP Iard
AXA Courtage Vie France 100% by AXA France Assurance
Alpha Assurances Vie France 100% by AXA France Assurance
AXA Direct France 100%
Direct Assurances Iard France 100% by AXA Direct
Direct Assurance Vie France 100% by AXA Direct
AXA Tellit Versicherung Germany 50% owned by AXA Direct and
50% by CKAG
Axiva France 100% by AXA France Assurance
Juridica France 88.4% by UAP Iard, 10.9% by
AXA France Assurance
AXA Assistance France France 100% by AXA Assistance SA
Monvoisin Assurances France 99.9% by different companies
and Mutuals
Societe Beaujon France 100%
Lor Finance France 100%
Jour Finance France 100% by AXA Conseil Iard and
by AXA Assurances Iard
Financiere 45 France 99.8%
Mofipar France 100%
Compagnie Auxiliaire pour le France 99.8% by Societe Beaujon
Commerce and l'Industrie
C.F.G.A. France 99.96% owned by Mutuals and
Finaxa
AXA Global Risks France 100% owned by AXA France
Assurance, UAP Iard and
Mutuals
Argovie France 100% by Axiva and SCA Argos
C-12
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Astral Finance France 99.33% by AXA Courtage Vie
Argos France N.S.
AXA France Assurance France 100%
UAP Incendie Accidents France 100% by AXA France
Assurance
UAP Vie France 100% by AXA France
Assurance
UAP Collectives France 50% by AXA Assurances
Iard, 3.3% by AXA Conseil
Iard and 46.6% UAP Vie
Thema Vie France 30% by Axiva, 11.9% by
UAP Collectives, 10.9% by
UAP Iard and 46.8% by UAP Vie.
La Reunion Francaise France 49% by UAP Iard and 51% by
AXA Global Risks
UAP Assistance France 52% by UAP Incendie-Accidents
and 48% by UAP Vie
UAP International France 50.1% by AXA and 49.9% by
AXA Global Risks
Sofinad France 100%
AXA-Colonia Konzern AG (AXA-
CKAG) Germany 39.7% by Vinci BV, 25.6% by
Kolnische Verwaltungs and
5.5% by AXA-UAP
Finaxa Belgium Belgium 100%
AXA Belgium Belgium 27.1% by AXA and 72.6%
by Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8% by AXA Belgium
Juris Belgium 100% owned by Finaxa Belgium
Royale Vendome Belgium 49% by AXA and 20.2% by
AXA Global Risks
Royale Belge Belgium 51.2% by Royale Vendome and
9.5% by different companies
of the Group
Royale Belge 1994 Belgium 97.9% by Royale Belge and 2%
by UAB
UAB Belgium 99.9% by Royale Belge
Ardenne Prevoyante Belgium 99.4% by Royale Belge
GB Lex Belgium 55% by Royale Belge, 25% by
Royale Belge 1994, 10% by
Juridica and 10% by AXA
Conseil Assurance
Royale Belge Re Belgium 99.9% by Royale Belge
Parcolvi Belgium 100% by Vinci Belgium
Vinci Belgium Belgium 99.5% by Vinci BV
Finaxa Luxembourg Luxembourg 100%
AXA Assurance IARD Luxembourg Luxembourg 99.9%
AXA Assurance Vie Luxembourg Luxembourg 99.9%
Royale UAP Luxembourg 100% by Royale Belge
Paneurolife Luxembourg 90% by different companies of
the AXA Group
Paneurore Luxembourg 90% by different companies of
the AXA Group
Crealux Luxembourg 100% by Royale Belge
Futur Re Luxembourg 100% by AXA Global Risks
General Re-CKAG Luxembourg 37.8% by AXA-CKAG and 12.1%
by Colonia Nordstern
Versicherung
Royale Belge Investissements Luxembourg 100% by Royale Belge
AXA Aurora Spain 30% owned by AXA and 40%
by UAP International
Aurora Polar SA de Seguros y Spain 99.4% owned by AXA Aurora
Reaseguros
Aurora Vida SA de Seguros y Spain 90% owned by Aurora Polar and
Reaseguros 5% by AXA
AXA Gestion de Seguros y Spain 99.1% owned by AXA Aurora
Reaseguros
Hilo Direct Seguros Spain 71.4% by AXA Aurora
Ayuda Legal Spain 59% owned by Aurora Polar,
29% by AXA Gestion and 12%
by Aurora Vida
UAP Iberica Spain 100% by UAP International
General Europea (GESA) Spain 100% by Societe Generale
d'Assistance
AXA Assicurazioni Italy 100%
Eurovita Italy 30% owned by AXA Assicurazioni
Gruppo UAP Italia (GUI) Italy 97% by UAP International and
3% by UAP Vie
UAP Italiana Italy 96% by AXA and 4% by GUI
UAP Vita Italy 62.2% by GUI and 37.8% by UAP
Vie
Allsecures Assicurazioni Italy 90% by GUI and 10% by UAP
Italiana
Allsecures Vita Italy 92.9% by GUI and 7% by AXA
Centurion Assicurazioni Italy 100% by GUI
AXA Equity & Law plc U.K. 100%
AXA Equity & Law Life U.K. 100% by SLPH
Assurance Society
AXA Insurance U.K. 100% owned by SLPH
AXA Global Risks U.K. 51% owned by AXA Global
Risks (France) and 49% by
AXA Courtage IARD
Sun Life and Provincial U.K. 71.6% by AXA and AXA
Holdings (SLPH) Equity & Law Plc
Sun Life Corporation Plc U.K. 100% by AXA Sun Life Holding
Sun Life Assurance U.K. 100% by AXA Sun Life Holding
UAP Provincial Insurance U.K. 100% by SLPH
English & Scottish U.K. 100% by AXA UK
Servco U.K. 100% by AXA Sun Life Holding
AXA Sun Life U.K. 100% by AXA Sun Life Holding
AXA Leven The Nether- 100% by AXA Equity & Law Life
lands Assurance Society
UAP Nieuw Rotterdam The Nether- 51% by Royale Belge, 38.9% by
Holding BV lands Gelderland BV and 4.1% by
AXA
UNIROBE Groep BV The Nether- 100% by UAP Nieuw Rotterdam
lands Holding BV
UAP Nieuw Rotterdam Verzkerigen The Nether- 100% by UAP Nieuw Rotterdam
lands Holding BV
UAP Nieuw Rotterdam Schade The Nether- 100% by UAP Nieuw Rotterdam
lands Verzekerigen
UAP Nieuw Rotterdam Leven The Nether- 100% by UAP Nieuw Rotterdam
lands Verzekerigen
UAP Nieuw Rotterdam Zorg The Nether- 100% by UAP Nieuw Rotterdam
lands Schade
Societe Generale d'Assistance The Nether- 51% by UAP Incendie-Accidents,
lands 29% by UAP Vie and 20% by
AXA-UAP
Gelderland BV The Nether- 100% by UAP Vie
lands
Royale Belge International The Nether- 100% by Royale Belge
lands Investissements
Vinci BV The Nether- 94.8% by AXA and 5.2% by
lands Parcolvi
AXA Portugal Companhia de Portugal 43.1% by different companies
Serguros SA of the AXA Group
AXA Portugal Companhia de Portugal 95.1% by UAP Vie and 7.5% UAP
Serguros de Vida SA International
Union UAP Switzerland 99.9% by UAP International
Union UAP Vie Switzerland 95% by UAP International
AXA Oyak Hayat Sigorta Turkey 60% owned by AXA
Oyak Sigorta Turkey 11% owned by AXA
Al Amane Assurances Morocco 52% by UAP International
AXA Canada Inc. Canada 100%
AXA Boreal Insurance Inc. Canada 100% owned by Gestion Fracapar
Inc
AXA Assurances Inc Canada 100% owned by AXA Canada Inc
C-13
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Insurance Inc Canada 100% owned by AXA Canada Inc.
and AXA Assurance Inc
Anglo Canada General Insurance Canada 100% owned by AXA Canada Inc.
Cy
AXA Pacific Insurance Cy Canada 100% by AXA Boreal Insurance
Inc
AXA Boreal Assurances Canada 100% by AXA Boreal Insurance
Agricoles Inc Inc
AXA Life Insurance Japan 100%
Dongbu AXA Life Korea 50%
Insurance Co. Ltd.
Sime AXA Berhad Malaysia 30% owned by AXA and
AXA Reassurance
AXA Investment Holdings Pte Ltd Singapore 100%
AXA Insurance Singapore 100% owned by AXA Investment
Holdings Pte Ltd
AXA Insurance Hong Kong 100% owned by AXA Investment
Holdings Pte Ltd
AXA Life Insurance Hong Kong 100%
PT Asuransi AXA Indonesia Indonesia 80%
The Equitable Companies U.S.A. 58.7% of which AXA owns
Incorporated 42.0%, Financiere 45, 3.2%,
Lorfinance 6.4%, AXA Equity
& Law Life Association Society
4.1% and AXA Reassurance 3.0%
The Equitable Life Assurance U.S.A. 100% owned by The Equitable
Society of the United States Companies Incorporated
(ELAS)
National Mutual Holdings Ltd Australia 51% between AXA, 42.1%
and AXA Equity & Law Life
Assurance Society 8.9%
The National Mutual Life Australia 100% owned by National Mutual
Association of Australasia Ltd Holdings Ltd
National Mutual International Australia 100% owned by National Mutual
Pty Ltd Holdings Ltd
National Mutual (Bermuda) Ltd Australia 100% owned by National Mutual
International Pty Ltd
National Mutual Asia Ltd Australia 41% owned by National Mutual
Holdings Ltd, 20% by Datura
Ltd and 13% by National Mutual
Life Association of
Australasia
Australian Casualty & Life Ltd Australia 100% owned by National Mutual
Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
C-14
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Reassurance France 100% owned by AXA, AXA
Assurances Iard and AXA Global
Risks
AXA Re Finance France 79% owned by AXA Reassurance
AXA Cessions France 100%
AXA Re Asia Singapore 100% owned by AXA Reassurance
AXA Re U.K. Plc U.K. 100% owned by AXA Re U.K.
Holding
AXA Re U.K. Holding U.K. 100% owned by AXA Reassurance
AXA Re U.S.A. U.S.A. 100% owned by AXA America
AXA America U.S.A. 100% owned by AXA Reassurance
AXA Space U.S.A. 80% owned by AXA America
AXA Re Life U.S.A. 100% owned by AXA America
C.G.R.M. Monaco 100% owned by AXA Reassurance
C-15
<PAGE>
AXA FINANCIAL BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 97.2% (100% with Mutuals)
(C.F.P.)
AXA Banque France 98.7% owned by C.F.P.
AXA Credit France 65% owned by C.F.P.
AXA Gestion Interessement France 100% owned by AXA Investment
Managers
Sofapi France 100% owned by C.F.P.
Soffim France 100% owned by C.F.P.
Societe de Placements France 98.8% with Mutuals
Selectionnes S.P.S.
Presence et Initiative France 100% with Mutuals
Vamopar France 100% owned by Societe Beaujon
Financiere Mermoz France 100%
AXA Investment Managers France 100% by some AXA Group
companies
AXA Asset Management France 100% owned by AXA Investment
Partenaires Managers
AXA Investment Managers Paris France 100% owned by AXA Investment
Managers
AXA Asset Management France 99.6% owned by AXA Investment
Distribution Managers
UAP Gestione Financiere France 99.9 by AXA
Assurinvestissements France 50% by UAP Vie, 30% UAP
Collectives, 20% UAP
Incendie-Accidents
Banque Worms France 51% by CFP and 49% by
three UAP insurance companies
Colonia Bausbykasse Germany 97.8% by AXA-CKAG
Banque Ippa Belgium 99.9% by Royale Belge
Banque Bruxelles Lambert Belgium 9.3% by Royale Belge, 3.1%
Royale Belge 1994, 0.2% by
AXA Belgium
AXA Equity & Law Home Loans U.K. 100% owned by AXA Equity & Law
Plc
AXA Equity & Law Commercial U.K. 100% owned by AXA Equity & Law
Loans Plc Loans
Sun Life Asset Management U.K. 66.7% owned by SLPH and 33.4%
by AXA Asset Management Ltd.
C-16
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management U.S.A. 57.9% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 76.2% owned by Equitable
Holdings LLC and ELAS
National Mutual Funds Australia 100% owned by National
Management (Global) Ltd Mutual Holdings Ltd
National Mutual Funds USA 100% by National Mutual Funds
Management North America Management (Global) Ltd.
Holding Inc.
Cogefin Luxembourg 100% owned by AXA Belgium
ORIA France 100% owned by AXA Millesimes
AXA Oeuvres d'Art France 100% by Mutuals
AXA Cantenac Brown France 100%
AXA Suduiraut France 99.6% owned by AXA and
Societe Beaujon
C-17
<PAGE>
AXA REAL ESTATE BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Prebail France 100% owned by AXA Immobilier
Axamur France 100% by different companies
and Mutuals
Parimmo France 100% by different companies
and Mutuals
S.G.C.I. France 100% by different companies
and Mutuals
Transaxim France 100% owned by S.G.C.I. and
C.P.P.
Compagnie Parisienne de France 100% owned by S.G.C.I.
Participations (C.P.P.)
Monte Scopeto France 100% owned by C.P.P.
Matipierre France 100% by different companies
Securimo France 87.12% by different companies
and Mutuals
Paris Orleans France 100% by different companies
AXA Courtage Iard
Colisee Bureaux France 100% by different companies
and Mutuals
Colisee Premiere France 100% by different companies
and Mutuals
Colisee Laffitte France 100% by Colisee Bureaux
Fonciere Carnot Laforge France 100% by Colisee Premiere
Parc Camoin France 100% by Colisee Premiere
Delta Point du Jour France 100% owned by Matipierre
Paroi Nord de l'Arche France 100% owned by Matipierre
Falival France 100% owned by AXA Reassurance
Compagnie du Gaz d'Avignon France 100% owned by AXA Assurances
Iard
Ahorro Familiar France 44% owned by AXA Assurances
Iard, 1% by AXA Aurora Polar
and 1% by AXA Seguros
Fonciere du Val d'Oise France 100% owned by C.P.P.
Sodarec France 100% owned by C.P.P.
C-18
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Centrexpo France 99.3% owned by C.P.P.
Fonciere de la Ville du Bois France 99.6% owned by Centrexpo
Colisee Seine France 100% owned by different
companies
Translot France 100% owned by SGCI
Colisee Alpha France 100% owned by Colisee Bureaux
Colisee Silly France 100% owned by Colisee Bureaux
S.N.C. Dumont d'Urville France 100% owned by Colisee Premiere
Colisee Federation France 100% by SGCI
Colisee Saint Georges France 100% by SGCI
Drouot Industrie France 50% by SGCI and 50% by Axamur
Colisee Vauban France 99.6% by Matipierre
Fonciere Colisee France 100% by Matipierre and other
companies of the AXA Group
AXA Pierre S.C.I. France 97.6% owned by different
companies and Mutuals
AXA Millesimes France 85.4% owned by AXA and the
Mutuals
Chateau Suduirault France 100% owned by AXA Millesimes
Diznoko Hungary 95% owned by AXA Millesimes
Compagnie Fonciere Matignon France 100% by different companies
and Mutuals
Fidei France 20.7% owned by C.F.P. and
10.8% by Axamur
Fonciere Saint Sebastien France 99.9% by UAP Vie
Fonciere Vendome France 91% by different companies of
the Group
La Holding Vendome France 99.9% by AXA Global Risks
10, boulevard Haussmann France 69% by La Fonciere Vendome and
31% by AXA Conseil Iard
37-39 Le Peletier France 100% by AXA Courage Iard
Ugici France 100% by different companies of
the AXA Group of which
93.1% by UAP Vie
Ugicomi France 100% by different companies of
the AXA Group of which
63.8% by UAP Vie
Ugif France 100% by different companies of
the AXA Group of which
59.6% by UAP Vie and 32.6%
by UAP Collectives
Ugil France 93.9% by different companies
of the AXA Group of which
65.8% by UAP Vie
Ugipar France 100% by different companies
of the AXA Group of which
39.4% by UAP Vie, 35.4% by AXA
Courtage Iard and 20.8% by UAP
Collectives
AXA Immobiller France 100% by AXA
Quinta do Noval Vinhos S.A. Portugal 99.6% owned by AXA Millesimes
C-19
<PAGE>
OTHER AXA BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
A.N.F. France 95.4% owned by Finaxa
Lucia France 20.6% owned by AXA Assurances
Iard and 8.6% by Mutuals
Schneider S.A. France 10.4%
C-20
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
-----
1. The year of formation or acquisition and state or country of incorporation
of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or
develop a single real estate property or a group of related properties,
and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except: (a) The Equitable Companies Incorporated's 41.8% interest in
Donaldson, Lufkin & Jenrette, Inc. and Equitable Holdings, LLC's
34.4% interest in same; (b) as noted for certain partnership interests; (c)
Equitable Life's ACMC, Inc.'s and Equitable Capital Management
Corporation's limited partnership interests in Alliance Capital Management
L.P.; and (d) as noted for certain subsidiaries of Alliance Capital
Management Corp. of Delaware, Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up
situations.
5. The following entities are not included in this chart because, while they
have an affiliation with The Equitable, their relationship is not the
ongoing equity-based form of control and ownership that is characteristic
of the affiliations on the chart, and, in the case of the first two
entities, they are under the direction of at least a majority of "outside"
trustees:
The Hudson River Trust
EQ Advisors Trust
Separate Accounts
6. This chart was last revised on January 12, 1999.
C-21
<PAGE>
Item 27. Number of Contractowners
Currently, there are no holders of the contracts to be offered.
Item 28. Indemnification
Indemnification of Principal Underwriters
To the extent permitted by law of the State of Colorado and subject to
all applicable requirements thereof, Equitable Distributors, Inc. and EQ
Financial Consultants, Inc. have undertaken to indemnify each of their directors
and officers who is made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact the director or
officer, or his or her testator or intestate, is or was a director or officer of
Equitable Distributors, Inc. or EQ Financial Consultants, Inc.
Undertaking
Insofar as indemnification for liability arising under the Securities
Act of 1933 ("Act") 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.
Item 29. Principal Underwriters
(a) Equitable Distributors, Inc., and EQ Financial Consultants, Inc.,
both indirect wholly owned subsidiaries of Equitable, are the proposed principal
underwriters for Separate Account VA. The principal business address of both
companies is 1290 Avenue of the Americas, New York, NY 10104. The proposed
principal underwriters, Equitable Distributors, Inc., and EQ Financial
Consultants, Inc. are not currently distributing securities of the Registrant.
(b) Set forth below is certain information regarding the directors and
principal officers of Equitable Distributors, Inc. and EQ Financial Consultants,
Inc. The business address of the persons whose names are preceded by an asterisk
is 1290 Avenue of the Americas, New York, NY 10104.
C-22
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES WITH UNDERWRITER
BUSINESS ADDRESS (EQUITABLE DISTRIBUTORS, INC.)
- ---------------- ----------------------
*Jose S. Suquet Chairman of the Board and Director
James A. Shepherdson, III Co-Chief Executive Officer, Co-President,
660 Newport Center Drive Managing Director, and Director
Suite 1200
Newport Beach, CA 92660
Greg Brakovich Co-Chief Executive Officer, Co-President,
660 Newport Center Drive Managing Director, and Director
Suite 1200
Newport Beach, CA 92660
Edward J. Hayes Director
200 Plaza Drive
Secaucus, NJ 07096-1583
*Charles Wilder Director
Hunter Allen Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Michael Dougherty Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Elizabeth Forget Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Jennifer Hall Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Al Haworth Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
David Hughes Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Stuart Hutchins Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Ken Jaffe Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Michael McDaniel Senior Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
*Mark A. Silberman Vice President and Chief
Financial Officer
*Norman J. Abrams Vice President and Counsel
Debora Buffington Vice President and Chief Compliance
660 Newport Center Drive Officer
Newport Beach, CA 92660
*Raymond T. Barry Vice President
Mark Brandengerber Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
Michelle O'Haren Vice President
660 Newport Center Drive
Suite 1200
Newport Beach, CA 92660
*Ronald R. Quist Treasurer
*Janet Hannon Secretary
*Linda Galasso Assistant Secretary
C-23
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES WITH UNDERWRITER
BUSINESS ADDRESS (EQ FINANCIAL CONSULTANTS)
- ---------------- --------------------------
*Michael S. Martin Chairman of the Board and Director
*Richard J. Matteis Vice Chairman of the Board and Director
*Michael F. McNelis President, Chief Operating Officer
and Director
*Martin J. Telles Executive Vice President and Chief
Marketing Officer
*Derry E. Bishop Executive Vice President and Director
*Harvey E. Blitz Executive Vice President and Director
*Michael J. Laughlin Director
*Richard V. Silver Director
*Mark R. Wutt Director
*William J. Green Executive Vice President
Edward J. Hayes Executive Vice President
200 Plaza Drive
Secaucus, NJ 07096
*Craig A. Junkins Executive Vice President
*Peter D. Noris Executive Vice President
*Mark A. Silberman Senior Vice President and Chief
Financial Officer
Stephen T. Burnthall Senior Vice President
6435 Shiloh Road
Suite A
Althretta, GA 30005
Richard Magaldi Senior Vice President
6435 Shiloh Road
Suite A
Althretta, GA 30005
*Theresa A. Nurge-Alws Senior Vice President
*Donna M. Dazzo First Vice President
*Robin K. Murray First Vice President
*Mary P. Breen Vice President and Counsel
*Michael Brzozowski Vice President and Compliance Director
*Marie D. Godolsky Vice President and Controller
*Janet E. Hannon Secretary
*Linda J. Galasso Assistant Secretary
(c) Not Applicable
Item 30. Location of Accounts and Records
C-24
<PAGE>
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder will be
maintained by EOC at 200 Plaza Drive, Secaucus, NJ 07096. The contract files
will be kept at Vantage Computer System, Inc., 301 W. 11th Street, Kansas City,
MO 64105.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration statement
as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable
annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can
check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included
in the prospectus that the applicant can remove to send for a
Statement of Additional Information;
(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form promptly upon written or oral request.
EOC represents that the fees and charges deducted under the Contracts
described in this Registration Statement, in the aggregate, in each case, are
reasonable in relation to the services rendered, the expenses to be incurred,
and the risks assumed by EOC under the respective Contracts. EOC bases its
representation on its assessment of all of the facts and circumstances,
including such relevant factors as: the nature and extent of such services,
expenses and risks, the need for EOC to earn a profit, the degree to which the
Contracts include innovative features, and regulatory standards for the grant
of exemptive relief under the Investment Company Act of 1940 used prior to
October 1996, including the range of industry practice. This representation
applies to all Contracts sold pursuant to this Registration Statement,
including those sold on the terms specifically described in the prospectuses
contained herein, or any variations therein, based on supplements, endorsements,
data pages, or riders to any Contracts or prospectus, or otherwise.
C-25
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has caused this Registration Statement to be signed
on its behalf, in the City and State of New York, on this 12th day of February,
1999.
SEPARATE ACCOUNT VA OF
THE EQUITABLE OF COLORADO, INC.
(Registrant)
By: The Equitable of Colorado, Inc.
(Depositor)
By: /s/ Naomi J. Weinstein
---------------------------------
Naomi J. Weinstein
Vice President,
The Equitable of Colorado, Inc.
C-26
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, and the Investment Company
Act of 1940, the Depositor, has caused this Registration Statement to be signed
on its behalf, in the City and State of New York, on this 12th day of February,
1999.
THE EQUITABLE OF COLORADO, INC.
(Depositor)
By: /s/ Naomi J. Weinstein
---------------------------------
Naomi J. Weinstein
Vice President,
The Equitable of Colorado, Inc.
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the date
indicated:
PRINCIPAL EXECUTIVE OFFICER:
Samuel B. Shlesinger President, Chief Operating Officer
and Director
PRINCIPAL FINANCIAL OFFICER:
/s/ Alvin H. Fenichel
- ---------------------
Alvin H. Fenichel Vice Chairman of the Board
February 12, 1999 Chief Financial Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
Allen Zabusky Senior Vice President and Controller
DIRECTORS:
Michel Beaulieu Michael S. Martin
Harvey E. Blitz Samuel B. Schlesinger
By: /s/ Naomi J. Weinstein
------------------------
Naomi J. Weinstein
Attorney-in-Fact
February 12, 1999
C-27
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. TAG VALUE
- ----------- ---------
1. Certified Resolutions of the Board of
Directors of The Equitable of Colorado, Inc.
("EOC") authorizing the establishment of
separate accounts, dated December 16, 1996. EX-99.1
3.(a) Form of Distribution Agreement among EOC
and Equitable Distributors, Inc., ("EDI"). EX-99.3a
3.(b) Form of Distribution and Servicing Agreement
among EOC and EQ Financial Consultants
("EQFC"). EX-99.3b
3.(c) Form of Sales Agreement between EQFC and EOC
regarding shares of the Hudson River Trust
("HRT"). EX-99.3c
3.(d) Form of Sales Agreement between EOC and EDI
regarding shares of HRT. EX-99.3d
3.(e) Form of Participation Agreement by and among
EQ Advisors Trust ("EQAT"), EDI, EOC and EQFC,
regarding EQAT shares. EX-99.3e
3.(f) Agreement for Cooperative and Joint Use of
Personnel, Property and Services between
Equitable Life Assurance Society of the
United States and EOC. EX-99.3f
4.(a) Form of annuity contract No. EOC99APICB-INDV EX-99.4a
4.(b) Form of Data Pages for Accumulator Plus NQ EX-99.4b
4.(c) Form of Data Pages for Accumulator Plus
Traditional IRA and Roth IRA EX-99.4c
4.(d) Form of Data Pages for Acumulator Plus QP -
Defined Benefit and Defined Contribution EX-99.4d
4.(e) Form of Endorsement Applicable to IRA Contracts
Form No. 98EOCENIRAIA-AP EX-99.4e
4.(f) Form of Custodial Owned Roth IRA Endorsement
no. 98COROTHI EX-99.4f
4.(g) Form of Defined Benefit Endorsement no.
98EOCENDBQPII EX-99.4g
4.(h) Form of Endorsement applicable to Defined
Contribution Qualified Plan Contracts No.
98EOCENDCQPII EX-99.4h
4.(i) Form of Endorsement for Extra Credit Annuity
Form No. 98EOCECENDIIA/B EX-99.4i
5.(a) Form of Application for Accumulator
Plus (IRA, NQ, and QP). EX-99.5a
6.(a) Restated Charter of EOC, as amended. EX-99.6a
6.(b) By-Laws of EOC, as amended. EX-99.6b
10.(b) Powers of Attorney. EX-99.10b
13.(a) Formulae for Determining Money Market Fund
Yield for a Seven-Day Period. EX-99.13a
13.(b) Formulae for Determining Cumulative and
Annualized Rates of Return. EX-99.13b
13.(c) Formulae for Determining Standardized
Performance Value and Annualized Average
Performance Ratio. EX-99.13c
C-28
[EQUITABLE LOGO]
I, Linda Galasso, Secretary of THE EQUITABLE OF COLORADO, INC., do hereby
certify that attached hereto marked "EXHIBIT A" is a true and correct copy of
Resolution No. EOC7-96 duly adopted by the Board of Directors on December 16,
1996 and that said resolution has not been amended, annulled, rescinded, or
revoked; and is in full force and effect.
[SEAL] IN WITNESS WHEREOF, I have hereunto affixed my
signature and Seal of THE EQUITABLE OF COLORADO,
INC., this 10th day of February 1999.
/s/ Linda Galasso
-----------------------------
Secretary
1901/4
<PAGE>
EXHIBIT "A"
EOC BOARD DECEMBER 16, 1996
AUTHORITY TO MARKET VARIABLE LIFE INSURANCE
AND VARIABLE ANNUITY CONTRACTS AND
ESTABLISH SEPARATE ACCOUNTS
---------------------------
RESOLVED, That upon the recommendation of Chairman, President and Chief
Executive Officer Samuel B. Shlesinger, authority is hereby given to The
Equitable of Colorado, Inc. (the "Company") to engage in the variable life
insurance and annuity business and authorize the establishment of Separate
Accounts to support the Company's variable life insurance policies and annuity
contracts;
FURTHER RESOLVED, That the Chief Investment Officer of the Company, with
power to sub-delegate, is authorized in his discretion as he may deem
appropriate from time to time and in accordance with applicable laws and
regulations (a) to divide the Separate Accounts into one or more divisions or
subdivisions, (b) to modify or eliminate any such division or subdivision, (c)
to change the designation of the Separate Accounts to another designation, (d)
to designate additional divisions or subdivisions thereof and (e) to authorize
and establish any and all additional separate accounts as may be deemed by such
officer to be necessary or desirable for the Company's variable life insurance
and annuity business and having investment policies substantially similar to any
current or future separate account of the Company which has been or may be
specifically approved by this Board;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to invest cash in the Separate Accounts or in any division
thereof as may be deemed necessary or appropriate to facilitate the commencement
of the Separate Account's operations or to meet any minimum capital requirements
under the Investment Company Act of 1940 (the "1940 Act") and to transfer cash
or securities from time to time between the Company's general account and any
Separate Account as deemed necessary or appropriate as long as such transfers
are not prohibited by law and are consistent with the terms of the variable life
insurance policies and annuity contracts issued by the Company providing for
allocations to such Separate Account;
FURTHER RESOLVED, That authority is hereby delegated to the Chief Executive
Officer, the President and the Chief Investment Officer, with power to
sub delegate, to adopt Rules and Regulations for Certain Operations of the
Separate Accounts, providing for, among other things, 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 and annuity contracts
issued by the Company providing for allocation to any Separate Account with
respect to the shares of any investment companies which are held in such
Separate Account;
<PAGE>
-2-
FURTHER RESOLVED, That the Company may register under the Securities Act of
1933 (the "1933 Act") variable life insurance policies and variable annuity
contracts, or units of interest thereunder, under which amounts will be
allocated by the Company to the Separate Accounts to support reserves for such
policies and, in connection therewith, the officers of the Company be, and each
of them hereby is, authorized, with the assistance of accountants, legal counsel
and other consultants, to prepare, execute and file with the Securities and
Exchange Commission, in the name and on behalf of the Company, registration
statements under the 1933 Act, including prospectuses, supplements, exhibits and
other documents relating thereto, and amendments to the foregoing, in such form
as the officer executing the same may deem necessary or appropriate;
FURTHER RESOLVED, That the officers of the Company are authorized, with the
assistance of accountants, legal counsel and other consultants, to take all
actions necessary to register the Separate Accounts under the 1940 Act and to
take such related actions as they deem necessary and appropriate to carry out
the foregoing;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to prepare, execute, and file with the Securities and
Exchange Commission such no-action requests and applications for such exemptions
from or orders under the federal or state securities laws as they may from time
to time deem necessary or desirable;
FURTHER RESOLVED, That the President of the Company is hereby appointed as
agent for service under any registration statement under the 1933 Act or the
1940 Act relating to the Separate Accounts, such person to be duly authorized to
receive communications and notices from the Securities and Exchange Commission
with respect to such registration statement and to exercise powers given to such
agent by the 1933 Act and 1940 Act and the rules and regulations thereunder, and
any other applicable law;
FURTHER RESOLVED, That the officers of the Company be, and each of them
hereby is, authorized to effect, in the name and on behalf of the Company, all
such registrations, filings and qualifications under applicable securities laws
and regulations and under insurance securities laws and insurance laws and
regulations of such states and other jurisdictions as they may deem necessary or
appropriate, with respect to the Company, and with respect to any variable life
insurance policies and variable annuity contracts under which amounts will be
allocated by the Company to the Separate Accounts to support reserves for such
policies and contracts; such authorization to include registration, filing and
qualification of the Company and of said policies and contracts, as well as
registration, filing and qualification of officers,
<PAGE>
-3-
employees and agents of the Company as brokers, dealers, agents, salesmen, or
otherwise; and such authorization shall also include, in connection therewith,
authority to prepare, execute, acknowledge and file all such applications for
exemptions, certificates, affidavits, covenants, consents to service of process
and other instruments and to take all such action as the officer executing the
same or taking such action may deem necessary or desirable;
FURTHER RESOLVED, That the standards of suitability and code of conduct
relating to the doing by the Company of a variable life insurance and annuity
business, in the forms annexed hereto, are hereby approved; and
FURTHER RESOLVED, That the officers of the Company are, and each of them
hereby is, authorized and instructed to take all such acts and prepare and
deliver all such documents in the name and on behalf of the Company, including
all documents required by state licensing authorities to conduct a variable life
insurance and annuity business, as may be necessary or desirable to effectuate
the purposes of the foregoing resolutions.
<PAGE>
CODE OF CONDUCT - VARIABLE LIFE INSURANCE AND ANNUITY CONTRACT
SEPARATE ACCOUNTS
Unless otherwise approved by the New York State Superintendent of Insurance,
with respect to variable life insurance and variable annuity contract separate
accounts, neither the Company nor any of its affiliates nor any director,
officer or employee thereof, shall (i) sell to, or purchase from, any such
separate account established by the Company any securities or other property,
other than variable life insurance policies or variable annuity contracts, as
appropriate; (ii) purchase, or allow to be purchased, for any such separate
account, any securities of which the Company or an affiliate is the issuer;
(iii) accept any compensation, other than a regular salary or wages from the
Company or any affiliate, for the sale or purchase of securities to or from any
such separate account except in the course of acting as a broker in connection
with the sale of securities to or by such separate account if the compensation
for such sale of securities does not exceed (a) the usual and customary broker's
commission if the sale is effected on a securities exchange; or (b) two percent
of the sales price if the sale is effected in connection with a secondary
distribution of such securities; or (c) one percent of the purchase or sale
price of such securities if the sale is otherwise effected, unless the
Securities and Exchange Commission permits a larger commission; (iv) engage in
any joint transaction, participation, or common undertaking whereby the Company
or an affiliate participates with such a separate account in any transaction in
which the Company or any of its affiliates obtains an advantage in the price or
quality of the item purchased, in the service received, or in the cost of such
service and the Company or any of its other affiliates is disadvantaged in any
of these respects by the same transaction; and (v) borrow money or securities
from any such separate account other than under a policy loan provision.
<PAGE>
STANDARDS OF SUITABILITY - VARIABLE LIFE INSURANCE POLICIES
AND ANNUITY CONTRACTS
A recommendation shall be made to a potential applicant to purchase a variable
life insurance policy or variable annuity contract and a variable life insurance
policy or variable annuity contract shall be issued only if the Company has
reasonable grounds to believe that the purchase of such policy or contract is
suitable for such applicant on the basis of information furnished after
reasonable inquiry of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and any other information
known to the Company or to the agent making the recommendation.
FORM OF DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of _____________________ by and between
THE EQUITABLE OF COLORADO, INC. ("EOC") for itself and as depositor on behalf of
each presently existing or hereafter created separate accounts supporting EOC
variable products (the "Separate Accounts"), and EQUITABLE DISTRIBUTORS, INC.
(the "Distributor").
W I T N E S S E T H :
WHEREAS, EOC is a life insurance company which offers or may hereafter
offer a number of products, including without limitation, fixed and variable
annuities, fixed and variable life insurance, long-term care coverage and the
like;
WHEREAS, the net consideration from the sale of such products may be
allocated for investment in whole or in part to EOC's general account and/or one
or more of the Separate Accounts;
WHEREAS, the Separate Accounts are separate accounts established and
maintained by EOC pursuant to the laws of the State of Colorado under which
income, gains and losses, whether or not realized, from assets allocated to the
Separate Accounts, are credited to or charged against the Separate Accounts
without regard to other income, gains or losses of EOC;
WHEREAS, the Separate Accounts for which registration is required are
registered as investment companies under the Investment Company Act of 1940
("1940 Act"), and units of interest in the Separate Accounts are registered
under the Securities Act of 1933 ("1933 Act");
WHEREAS, certain general account and/or separate account interests, such
as MVA interests, are registered under the 1933 Act;
WHEREAS, the Distributor, a wholly-owned subsidiary of Equitable Life
Assurance Society of the United States ("Equitable Life"), is a broker-dealer
registered under the Securities Exchange Act of 1934 ("1934 Act") and is a
member of the National Association of Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Distribution Responsibilities
Section 1.1 EOC authorizes the Distributor to act, and the Distributor
agrees to serve, as a principal underwriter and distributor of the EOC products
listed on Schedule I attached hereto
<PAGE>
and such other EOC products as the parties may from time to time agree will be
distributed by EOC (the "Products") for and on behalf of EOC and, if applicable,
the Separate Accounts with respect to such Products in all states and other
jurisdictions in which the Products may legally be sold. During the term of this
Agreement the Distributor agrees in turn that during such same period it will
act exclusively for Equitable Life and EOC and will not underwrite or distribute
or contract to underwrite or distribute any other financial services products
without the prior written consent of EOC in each instance.
Section 1.2 The Distributor represents that it is a broker-dealer duly
registered under the 1934 Act and is a member in good standing of the NASD and,
to the extent necessary to perform the activities contemplated hereunder, is
duly registered, or otherwise qualified, under the securities laws of every
state and other jurisdiction in which the Products are available for sale, and
the Distributor agrees to maintain such status.
Section 1.3 The Distributor shall at all times function as and be deemed
to be an independent contractor and will be under no obligation to effectuate
any particular number of sales of Products or to promote or make sales, except
to the extent the Distributor deems advisable. The Distributor shall be fully
responsible for carrying out all compliance and supervisory obligations in
connection with its distribution of the Products, to the extent the same are
securities, as required by the NASD Rules of Fair Practice ("NASD Rules") and by
federal and any applicable state or foreign securities laws. The Distributor
shall assume full responsibility for the oversight of securities activities of
any person associated with the Distributor, as defined in Section 3(a)(18) of
the 1934 Act, and engaged directly or indirectly in the distribution of the
Products ("Associated Persons"), and shall have the authority to require that
disciplinary action be taken with respect to the Associated Persons. The
Distributor shall be fully responsible for any and all compensation due and
payable to any persons distributing the Products and/or soliciting applications
therefor directly or indirectly by reason of the authorization granted to
Distributor herein.
Section 1.4 The Distributor is presently a party to or may hereafter enter
into written agreements ("Sales Agreements") with (a) broker-dealers ("Third
Party Broker Dealers") to solicit applications for the sale of securities, (b)
with general agents ("Third Party General Agents") to solicit applications for
insurance products and (c) with Third Party Broker Dealers and their affiliated
Third Party General Agents to jointly solicit applications for the sale of
products that are both securities and insurance products, and is hereby
authorized to PERMIT the solicitation of the products pursuant thereto. A Third
Party Broker Dealer may be a Third Party General Agent. Where state law does not
provide for or require general agents, existing Sales Agreements and new Sales
Agreements may be with individual insurance agents affiliated with a Third Party
Broker Dealer to act as designated insurance principals in place of a Third
Party General Agent, and all references herein to Third Party General Agents
shall also apply to such designated insurance principals. The Distributor
warrants and represents that it has delivered true and complete copies of all
existing Sales Agreements to EOC and that all the terms and conditions of this
Agreement applicable to Sales Agreements hereafter entered into are true with
respect to the existing Sales Agreements. All Sales Agreements hereafter entered
into herein for any Product shall be in the standard form thereof as to such
Product approved in advance by
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EOC with such nonmaterial changes thereto as the other parties thereto may
require. The Distributor shall not hereafter enter into any other form of Sales
Agreement without the prior approval of EOC in each case. EOC has reviewed the
compensation agreements in all existing Sales Agreements and approved such
arrangements. All compensation arrangements in any Sales Agreement with Third
Party Broker Dealers and/or Third Party General Agents hereafter entered into
shall be approved in advance by EOC. The Distributor shall not modify or amend
any compensation arrangement in any Sales Agreement or offer any commission
specials, promotions, bonuses or other cash or non-cash compensation incentives,
without in each case first obtaining the prior consent of EOC thereto;
Section 1.5 The Sales Agreements hereafter entered into shall require that
each party thereto which is a Third Party Broker Dealer shall assume full
responsibility for continued compliance by itself and its associated persons (as
defined in Section 3(a)(18) of the 1934 Act) with the NASD Rules and applicable
federal and state securities and insurance laws. Each Third Party Broker Dealer
and its registered representatives ("Registered Representatives") soliciting
applications for the Products shall be duly and appropriately licensed,
registered and otherwise qualified for the sale of the Products under the NASD
Rules and federal and state securities and insurance laws applicable to the
offer and sale of the Products. The Distributor shall have full responsibility
for the supervision of all Third Party Broker Dealers and shall assume, and
indemnify and hold EOC harmless from and against, all liability for the acts and
omissions of any Third Party Broker Dealer or its Registered Representatives.
Section 1.6 The Distributor is authorized to recommend the appointment of
Third Party General Agents and Qualified Agents (as hereinafter defined) of such
Third Party General Agent as agents of EOC for the sale of particular Products.
As used herein a "Qualified Agent" shall mean an insurance agent of a Third
Party General Agent who is licensed to sell products such as the Products it is
being appointed to sell in all states and other jurisdictions in which such
agent intends to sell such Products and, if such Products are both securities
and insurance products, is also a Registered Representative of the Third Party
Broker Dealer affiliated with such Third Party General, an "Appointed EOC Agent"
shall mean a Qualified Agent who has been appointed as an agent of EOC for the
sale of particular Products, and a "Sales Representative" shall mean a
Registered Representative or Appointed EOC Agent, as the case may be. Each Sales
Agreement with a Third Party General Agent, hereafter entered into, shall
obligate such party to apply for and maintain proper insurance licenses for
itself and each of its Appointed EOC Agents in all states and other
jurisdictions in which applications for Products are to be solicited by such
agent. EOC will appoint Qualified Agents recommended by the Distributor as
Appointed EOC Agents in all states and other jurisdictions in which such agent
proposes to solicit applications for Products, provided that EOC reserves the
right to refuse to appoint any Third Party General Agent or individual agent
recommended by the Distributor which EOC determines in its sole discretion to be
unsatisfactory for appointment and, following written notice to the Distributor,
to terminate any such appointment thereafter.
Section 1.7 The parties hereto recognize that Appointed EOC Agents will be
acting as insurance agents of EOC and that the obligations and rights of the
Distributor to supervise such persons shall be limited to the extent
specifically described herein or required under applicable
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federal or state securities laws or NASD Rules. All Sales Agreements hereinafter
entered into shall specifically provide that no sales representative shall be a
third party beneficiary of this Agreement or of such Sales Agreement. No Sales
Representative shall be considered an agent or employee of either EOC or the
Distributor.
Section 1.8 The Distributor shall take reasonable steps to ensure that no
Sales Representative shall recommend the purchase of a Product to any applicant
in the absence of reasonable grounds to believe that the purchase of the Product
is suitable for such applicant. While not limited to the following, a
determination of suitability shall be based on information furnished to the
Sales Representative after reasonable inquiry of such applicant (and any other
information known about the applicant) concerning the applicant's insurance and
investment objectives and financial situation and needs, including the
likelihood (depending upon the nature of the Product) that the applicant will
make sufficient payments or retain the Product for a sufficient period of time
to derive the benefits of the Product.
Section 1.9 The Distributor shall not use, develop or distribute, nor
permit any other person, including, without limitation, any Third Party Broker
Dealer, Third Party General Agent or Sales Representative to use, develop or
distribute, any promotional, sales, marketing and advertising materials relating
to Products, including, without limitation, advertisements, sales brochures,
circulars, research reports, market letters, form letters, seminar texts,
proposals, illustrations, or other materials and communications (collectively,
"Sales Materials") which have not been approved in advance by EOC. The
Distributor agrees that it will make timely filings, as required, with the NASD
and all other securities regulators of all Sales Materials and obtain such
approvals as may be necessary. EOC will be responsible for filing all Sales
Materials, as necessary, with insurance regulatory authorities and obtaining any
required approvals. The Distributor shall not make, nor shall it permit any
other person including, without limitation, any Third Party Broker Dealer, Third
Party General Agent or Sales Representative to make, any warranties or
representations with respect to the Products or communicate any information
regarding EOC, the Products, any Separate Account, any MVA interests or the
funding media as to any Product which is not contained in Sales Materials
approved by EOC, as provided in this Agreement, or included in any registration
statements with respect to such Product effective under the 1933 Act at the time
of such warranty, representation or communication.
Section 1.10 The Distributor shall not possess or exercise any authority
on behalf of EOC other than that expressly conferred pursuant to this Agreement.
In particular, and without limiting the foregoing, the Distributor shall not,
nor shall it permit any Third Party Broker Dealer, Third Party General Agent or
Sales Representative to, (i) modify or amend any Product in any respect or make,
alter or discharge any contract or policy or other contract entered into
pursuant to any such contract or policy; (ii) waive any contract or policy
provision; (iii) extend the time for payment of any premiums; (iv) receive any
monies in payment of premiums in respect of any contract or policy (except for
the sole purpose of forwarding the same to EOC); (v) make any representations
concerning any of the terms, rates, charges or provisions of any contract or
policy except as expressly authorized in writing by EOC, (vi) agree to any
private labeling of any Product or sell or distribute any Product under any name
other than EOC, (vii) enter into any reinsurance or coinsurance agreement or
undertaking, or (viii) issue, modify or amend any regulations or
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<PAGE>
procedures concerning the Products or the sale or distribution of the Products,
without in each case first obtaining the prior consent of EOC thereto.
Section 1.11 The Distributor shall be responsible for maintaining all
records with respect to Sales Representatives and for furnishing periodic
reports to EOC as to the sale of Products made pursuant to Sales Agreements
entered into pursuant to this Agreement.
Section 1.12 Anything in this Agreement to the contrary notwithstanding,
EOC shall retain the ultimate right of control over, and the responsibility for,
the issuance, servicing and marketing of the Products, including the right to
review and approve all advertising concerning the Products, to suspend sales of
the Products in any jurisdiction or jurisdictions, to appoint and discharge its
agents authorized to sell the Products, and to refuse to sell a Product to any
applicant for any reason whatsoever.
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<PAGE>
ARTICLE II
Recordkeeping Responsibility for the Products
Section 2.1 The Distributor and EOC shall each cause to be maintained and
preserved such accounts, books and other documents as are required of each of
them by the 1934 Act and 1940 Act and any other applicable laws and regulations.
In particular, without limiting the foregoing, the Distributor shall cause all
the books and records in connection with the offer and sale of the Products to
be maintained and preserved in conformity with the requirements of Rules 17a-3
and 17a-4 under the 1934 Act and as may otherwise be required under the NASD
Rules and federal and applicable state securities laws, to the extent that such
requirements are applicable to the Products.
Section 2.2 The Distributor and EOC shall each submit to all regulators
and administrative bodies having jurisdiction over the sales of the Products,
present or future, any information, reports or other material that any such body
may request or require pursuant to applicable laws or regulations. In
particular, without limiting the foregoing, EOC agrees that any books and
records which it maintains which are required to be maintained by the
Distributor under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to
inspection by the Securities and Exchange Commission ("SEC") in accordance with
Section 17(a) of the 1934 Act.
Section 2.3 The Distributor and EOC each agree and understand that all
documents, reports, records, books, files and other materials required under
applicable NASD regulations and federal and state securities laws relative to
the sale of Products shall be the property of the Distributor, with the
exception of any books and records maintained by EOC which relate to sales
compensation and which shall be the joint property of EOC and the Distributor.
If, however, such documents, reports, records, books, files and other materials
which are the property of the Distributor are required by applicable regulation
or law to be maintained also by EOC, such material shall be the joint property
of the Distributor and EOC. All other documents, reports, records, books, files
and other materials maintained relative to this Agreement shall be the property
of EOC. Upon the termination of this Agreement, all such material shall be
returned to the applicable party.
Section 2.4 The Distributor and EOC, from time to time during the term of
this Agreement, shall allocate among themselves, subject to a right of further
delegation, the administrative responsibility for maintaining and preserving the
books, records and accounts kept in connection with the Products; provided,
however, in the case of books, records and accounts kept pursuant to a
requirement of applicable law or regulation, the ultimate responsibility for
maintaining and preserving such books, records and accounts shall be that of the
party which is required to maintain or preserve such books, records and accounts
under the applicable law or regulation, and such books, records and accounts
shall be maintained and preserved under the supervision of that party. The
Distributor and EOC shall cause each other to be furnished with such reports as
each may reasonably request for the purpose of meeting its respective reporting
and recordkeeping requirements under such regulations and laws and under the
insurance laws of the State of Colorado and any other applicable states or
jurisdictions.
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ARTICLE III
Sale Procedures
Section 3.1 EOC represents and warrants that all Products and units of
interest therein, if any, which must be registered under the 1933 Act have been
so registered, that all Separate Accounts to which any of the products are
allocated are registered under the 1940 Act, that the Products which are
insurance products are qualified to be sold under the insurance laws and that
the Products which are securities are qualified to be sold under the applicable
securities laws of all states and other jurisdictions in which the Products are
authorized for sale. EOC further represents and warrants that it is a life
insurance company duly organized under the laws of the State of Colorado in good
standing and authorized to conduct business under the laws of each state in
which the Products are offered and sold.
Section 3.2 The Sales Agreements hereafter entered into will obligate
Third Party Broker Dealers, Third Party General Agents and Sales Representatives
to use only the currently effective prospectuses, statements of additional
information ("SAIs") and other authorized materials in soliciting the sale of
the Products.
Section 3.3 The Sales Agreements hereafter entered into shall provide that
all applications for the Products shall be made on application forms supplied by
EOC or in a form otherwise satisfactory to EOC, and shall be forwarded directly
to EOC, together with any other required documentation and all premiums and
other sums at the address indicated on such application or to such other address
as EOC may, from time to time, designate in writing. Checks, money orders or
electronic transmissions of funds in payment on any Product shall be drawn to
the order of "Equitable of Colorado, Inc." All applications for Products shall
be subject to acceptance or rejection by EOC at its discretion. Any
applications, other documents or payments received by the Distributor shall be
immediately remitted by the Distributor to EOC. All matters relating to the
review and acceptance of applications and the negotiation and issuance of the
Products shall be solely within EOC's control.
Section 3.4 All money payable in connection with the Products, whether as
purchase payments or otherwise, and whether paid by, or on behalf of any
applicant or Product owner, is the property of EOC. If such money is not
transmitted directly by a Third Party Broker Dealer or the Third Party General
Agent to EOC in accordance with the administrative procedures of EOC and is
received by the Distributor, it shall be transmitted promptly by the Distributor
in accordance with the administrative procedures of EOC without any deduction or
offset for any reason, including by example but not limitation, any deduction or
offset for compensation claimed by the Distributor or payable to the Third Party
Broker Dealers or Third Party General Agents, without the prior written consent
of EOC. No payments shall be accepted by the Distributor in connection with the
Products.
Section 3.5 Subject to Section 4.2 below, EOC shall provide to the
Distributor copies of such prospectuses, statements of additional information,
financial statements sales materials and other documents in such numbers as the
Distributor shall reasonably request for use in connection with the solicitation
of applications for the Products.
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<PAGE>
Section 3.6 Unless otherwise agreed in writing by EOC, neither the
Distributor, the Third Party Broker Dealers, the Third Party General Agents nor
the Sales Representatives shall have any interest in any premiums, surrender
charges, deductions or other fees payable to EOC.
ARTICLE IV
Commissions and Expense Allowances
Section 4.1 EOC will pay the Distributor as full and complete compensation
for its services under this Agreement a commission and an expense allowance on
each premium actually received by EOC on a contract or policy (a "Contract") for
a Product solicited by a Third Party Broker Dealer and its affiliated Third
Party General Agent pursuant to a Sales Agreement. The amount of such commission
and such expense allowance shall, in each case, be determined in accordance with
the provisions of Schedule II annexed hereto. In no event, however, shall any
compensation paid hereunder exceed the compensation paid in the relevant market
for comparable services. Commissions and expense allowances shall be due and
payable by EOC to the Distributor monthly following the end of each calendar
month in an amount equal to the difference between (1) the total amount of all
commissions and expense allowances due and payable for the calendar year in
question calculated as above provided through and including the last day of such
calendar month and (2) all commissions and expense allowances previously paid to
the Distributor on account of such calendar year. EOC will maintain appropriate
documentation supporting the calculation of commissions and expense allowances
due and payable hereunder which shall be available to the Distributor upon
request. For the purposes of the above formula, the amount of total annual
premiums collected shall be reduced by the amount of premiums returned in the
year in question because of declinations, free look cancellations and, if within
twelve months of original issuance, rescissions.
Section 4.2 The Distributor shall pay all costs and expenses incurred by
it in the performance of its services hereunder, including without limitation,
sums due and payable to Third Party Broker Dealers and/or Third Party General
Agents under the Sales Agreements, without reimbursement or contribution by EOC
or any Separate Account, except that (a) unless otherwise provided in Schedule 1
to the contrary, EOC will reimburse the Distributor for sums due and payable to
Third Party Broker Dealers and/or Third Party General Agents under the Sales
Agreements, (b) the costs of printing the prospectuses, statements of additional
information and sales material used in connection with the solicitation of
applications for the Products pursuant to the Sales Agreements shall be borne by
EOC or the Distributor, or shall be paid in part by each of them, as EOC and the
Distributor shall from time to time mutually agree and (c) appointment and
similar fees with respect to Appointed EOC Agents, including without limitation,
initial appointment fees, renewal appointment fees, transfer fees and
termination fees, shall be borne by EOC or the Distributor, or shall be paid in
part by each of them, as EOC and the Distributor shall from time to time
mutually agree. Sums paid to Third Party Broker Dealers and/or Third Party
General Agents under the Sales Agreements shall be commissions and/or expense
allowances as provided in such Sales Agreements. Sums, if any, borne by EOC with
respect to printing costs pursuant to subsection (b) above and/or appointment
and/or similar fees pursuant to subsection (c) above will be expense allowances.
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ARTICLE V
Complaints and Regulatory Proceedings
Section 5.1 The Distributor and EOC agree to cooperate fully in insurance
regulatory investigations or proceedings or judicial proceedings arising in
connection with the offering, sale or distribution of the Products. The
Distributor and Equitable Life further agree to cooperate fully in any
securities regulatory investigation or proceeding or judicial proceeding with
respect to Equitable Life, the Distributor, their respective affiliates and
agents or representatives, to the extent that such investigation or proceeding
is in connection with the Products.
Section 5.2 Without limiting the generality of Section 5.1, the
Distributor and EOC agree that:
(A) Each will promptly notify the other of any customer complaint or
notice of any regulatory investigation or proceeding or judicial proceeding
received by either of them or any agent or representative thereof which may
affect EOC's issuance of the Products and/or the Distributor.
(B) Each will promptly notify the other of any customer complaint or
notice of any regulatory investigation or proceeding received by it or any of
its affiliates with respect to any Product or the sale thereof.
(C) In the case of a substantive customer complaint, the Distributor
and EOC will cooperate in investigating such complaint and any response to such
complaint which either of them has prepared will be sent to the other for
approval not less than five (5) business days prior to its transmittal to the
customer or regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or facsimile
transmission.
ARTICLE VI
Indemnification
Section 6.1 EOC agrees to indemnify and hold harmless the Distributor and
its officers, directors, employees, agents and representatives against any
losses, claims, damages or liabilities, joint or several, to which the
Distributor or its affiliates or such officer or director may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact, required to be
stated therein or necessary to make the statements therein not misleading,
contained in
(A) any registration statement relating the Products or any interests
offered under the Products, or any amendment thereof, or
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(B) any document executed by EOC specifically for the purpose of
qualifying the Products for sale under the securities laws of any jurisdiction.
EOC will reimburse the Distributor and each such officer, director, employee,
agent and/or representative for any legal or other expenses reasonably incurred
by the Distributor or such officer, director, employee, agent and/or
representative in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that EOC will not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
information (including, without limitation, negative responses to inquiries)
furnished to EOC by or on behalf of the Distributor specifically for use in the
preparation of any such registration statement or any amendment thereof or any
such qualification document or any amendment thereof.
Section 6.2 The Distributor agrees to indemnify and hold harmless EOC, its
directors, each of its officers who has signed a registration statement relating
to a Product, each person, if any, who controls EOC within the meaning of the
1933 Act or the 1934 Act, and the Separate Accounts against any losses, claims,
damages or liabilities to which EOC and any such director, officer, employee,
agent and/or representative or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon:
(A) Any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, contained in (i)
any registration statement relating to a Product or any interest offered under
the Product or any amendment thereof, or (ii) any qualification document
relating to the Product or interest offered under the Product or any amendment
thereof, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information (including without
limitation, negative responses to inquiries) furnished to EOC by the Distributor
specifically for use in the preparation of such registration statement,
qualification document or amendment thereof; or
(B) Any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning the Products by
the Distributor or otherwise attributable to a failure by the Distributor to
discharge properly its responsibilities under this Agreement; or
(C) Claims by officers, directors, employees, agents or
representatives or employees of the Distributor for commissions, service fees,
expense allowances or other compensation or remuneration of any type.
The Distributor will reimburse EOC and any director, officer, employee, agent,
representative or controlling person for any legal or other expenses reasonably
incurred by EOC, such director, officer, employee, agent and/or representative
or controlling person in connection with
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investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which the
Distributor may otherwise have.
Section 6.3 Promptly after receipt by a party entitled to indemnification
("Indemnified Party") under this Article VI of notice of the commencement of any
action, if a claim in respect thereof is to be made against any person obligated
to provide indemnification under this Article VI ("Indemnifying Party"), such
Indemnified Party will notify the Indemnifying Party in writing of the
commencement thereof, but the omission so to notify the Indemnifying Party will
not relieve it from any liability under this Article VI, except to the extent
that the omission results in a failure of actual notice to the Indemnifying
Party and such Indemnifying Party is damaged solely as a result of the failure
to give such notice. In case any such action is brought against any Indemnified
Party, and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party will be entitled to participate therein, and, to the extent
that it may wish to assume the defense thereof, with separate counsel
satisfactory to the Indemnified Party. Such participation shall not relieve such
Indemnifying Party of the obligation to reimburse the Indemnified Party for
reasonable legal and other expenses incurred by such Indemnified Party in
defending itself, except for such expenses incurred after the Indemnifying Party
has deposited funds sufficient to effect the settlement, with prejudice, of the
claim in respect of which indemnity is sought. Any such Indemnifying Party shall
not be liable to any such Indemnified Party on account of any settlement of any
claim or action effected without the consent of such Indemnifying Party.
Section 6.4 The indemnity agreements contained in this Article VI shall
remain operative and in full force and effect, regardless of:
(A) any investigation made by or on behalf of the Distributor or any
officer or director thereof or by or on behalf of Equitable Life or any officer
or director thereof;
(B) delivery of any Products and payments therefor; and
(C) any termination of this Agreement.
A successor by law of the Distributor or of any other party to this Agreement,
as the case may be, shall be entitled to the benefits of the indemnity
agreements contained in this Article VI.
ARTICLE VII
Term of Agreement
Section 7.1 This Agreement shall become effective as of the date first
above written and shall continue in full force and effect from year to year
thereafter, until terminated as herein provided.
Section 7.2 This Agreement may be terminated by any party hereto on not
less than sixty (60) days' prior written notice to the other parties or by an
agreement in writing signed by all of the parties hereto. Unless otherwise
agreed by the parties hereto, this Agreement shall automatically be terminated
in the event of its assignment.
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Section 7.3 Upon termination of this Agreement, all authorizations,
rights, and obligations shall cease except as expressly provided to the contrary
herein and except for the obligations of the parties to settle accounts
hereunder, including the settlement of monies due in connection with Products in
effect at the time of termination or issued pursuant to applications received by
EOC prior to termination, and the agreements contained in Articles V and VI.
ARTICLE VIII
Miscellaneous
Section 8.1 None of the parties hereto shall be liable to the other for
any action taken or omitted by it, or any of its officers, agents or employees,
in performing their respective responsibilities under this Agreement in good
faith and without negligence, willful misfeasance or reckless disregard of such
responsibilities.
Section 8.2 The Distributor will execute such papers and do such acts and
things as shall from time to time be reasonably requested by EOC for the purpose
of (a) maintaining the registration of the interests under the Contracts under
the 1933 Act and the Separate Accounts under the 1940 Act, and (b) qualifying
and maintaining qualification of the Contracts for sale under the applicable
laws of any state.
Section 8.3 All notices under this Agreement shall be given in writing and
addressed as follows:
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<PAGE>
if to the Distributor, to:
Equitable Distributors, Inc.
1290 Avenue of the Americas
New York, New York 10104
Attention: President
if to EOC, to:
The Equitable of Colorado, Inc.
370 17th Street, Suite 4950
Denver, Colorado 80202
Attention: Chief Distribution Officer
or to such other address as such party may hereafter specify in writing. Each
such notice shall be either hand delivered or transmitted by certified United
States mail, return receipt requested, and shall be effective upon delivery.
Section 8.4 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
Section 8.5 This Agreement constitutes the entire agreement between the
parties hereto and may be amended only in a written instrument executed by all
parties hereto.
Section 8.6 This Agreement shall be subject to the provisions of the 1934
Act and, to the extent applicable, the 1940 Act and the rules, regulations and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
Section 8.7 This Agreement shall be interpreted in accordance with the
laws of the State of Colorado.
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<PAGE>
Section 8.8 This Agreement may be executed in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
amended and restated as of [Date] and to be signed by their respective officials
thereunto duly authorized, as of said date.
THE EQUITABLE OF COLORADO EQUITABLE DISTRIBUTORS, INC.
for itself and as depositor on behalf
of each of the Separate Accounts. By:
--------------------------------
James A. Shepherdson, III
By: Co-President and Co-Chief
------------------------------------ Executive Officer
James B. Shlesinger
Chairman of the Board
and Chief Executive Officer By:
--------------------------------
Greg Brakovich
Co-President and Co-Chief
Executive Officer
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<PAGE>
SCHEDULE I
PRODUCTS
PART 1 - Separate Account VLI
------ --------------------
The Distributor shall distribute the following Products allocated to
Separate Account VLI and/or MVA interests:
IL Protector
PART 2.-Separate Account VA
------ -------------------
The Distributor shall distribute the following Products allocated to
Separate Account VA and/or MVA interests:
Accumulator plus (Non-Qualified)
Accumulator plus (IRA)
Accumulator Roth IRA
Accumulator plus (QP)
-i-
<PAGE>
SCHEDULE II
COMPENSATION
This Schedule II is annexed to the Distribution Agreement dated as of
January 1, 1998 by and between Equitable of Colorado, Inc., and Equitable
Distributors, Inc.
Compensation payable pursuant to Section 4.1 of the Distribution Agreement
shall be payable as follows:
<TABLE>
<CAPTION>
Aggregate Base Expense
Compensation Commision Allowance
Total Annual Premiums on Premiums on Premiums on Premiums
Received(i) Received(ii) Received Received(iii) Trail
---------- ----------- -------- ------------ -----
<S> <C> <C> <C> <C>
Up to $350 Million
The next $350 Million
(i.e., over $350 but not more
than $700 Million)
The next $350 Million
(i.e., over $700 but not more
than $1,050 Million)
The next $350 Million
(i.e., over $1,050 but not more
than $1,400 Million)
All additional premiums
(i.e., over $1,400 Million)
</TABLE>
- -------------------------
(i) Compensation will be paid on each premium received by EOC on any contract
or policy for a Product which was solicited by a Third Party Broker Dealer and
its affiliated Third Party General Agent pursuant to a Sales Agreement (a
"Contract"). Compensation on each such premium will be in an amount equal to the
premium in question multiplied by the appropriate percentage provided for above.
The percentage used in each case will be determined on the basis of the
aggregate amount of all premiums previously received by EOC on all Contracts
during the calendar year in question.
(ii) Aggregate compensation on premiums received is the sum of base commissions
on premiums received and expense allowances on premiums received.
(iii) Expense allowances are paid in accordance with Colorado Insurance Law and
regulations thereunder. No payment hereunder will be used to effect compensation
in excess of the limits for the sale of insurance.
-i-
FORM OF DISTRIBUTION AND SERVICING AGREEMENT
This DISTRIBUTION AND SERVICING AGREEMENT, dated as of , is made by
and among The Equitable of Colorado, Inc. ("EOC"), and EQ Financial Consultants,
Inc. ("EQFC") as follows:
WHEREAS, pursuant to a Distribution Agreement, dated as of June 30, 1996
and a Distribution Agreement dated July 1, 1998 EQFC is a principal underwriter
of The Hudson River Trust ("Trust"), a series mutual fund registered under the
Investment Company Act of 1940 ("1940 Act") whose shareholders are separate
accounts of EOC and of other insurance companies;
WHEREAS, EOC issues variable insurance contracts ("Variable Contracts")
whose net premiums or considerations are allocated in whole or in part to the
respective separate accounts of EOC for investment in the Trust, for direct
investment or for investment in other funding media ("Separate Accounts");
WHEREAS, units of interest in the Separate Accounts are registered under
the Securities Act of 1933 ("1933 Act") to the extent such registration is
required;
WHEREAS, EOC is a broker-dealer registered under the Securities Exchange
Act of 1934, as amended ("1934 Act"), and is a member of the National
Association of Securities Dealers, Inc. ("NASD");
<PAGE>
-2-
WHEREAS, EOC desires to engage EQFC, which is a registered broker-dealer
under the 1934 Act and a member of the NASD to assume the responsibilities set
forth in this Agreement with respect to the distribution of the Variable
Contracts, including in particular the responsibility for compliance with
broker-dealer requirements under federal and any applicable state or foreign
securities laws and the NASD Rules of Fair Practice ("NASD Rules") with respect
to the offering of the Variable Contracts, and EQFC desires to assume such
responsibilities;
NOW, THEREFORE, the parties hereto agree as follows;
<PAGE>
-3-
ARTICLE I
Distribution Responsibility for the Variable Contracts
Sec. 1.1 EOC authorizes to act, and EQFC agrees to serve, as broker-dealer
in connection with the distribution of their respective Variable Contracts to
the extent provided in this Agreement. EQFC shall be fully responsible for
carrying out all compliance and supervisory obligations in connection with the
distribution of the Variable Contracts, as required by the NASD rules and by
federal and any applicable state or foreign securities laws. Equitable shall be
fully responsible for compensating the Agents for their sales of Variable
Contracts, as provided in Section 1.4.
Sec. 1.2 Without limiting the generality of Section 1.1, EQFC agrees that
it shall be fully responsible for:
(A) Requiring that each person who is appointed by EOC as an insurance
agent and is authorized to offer and sell the Variable Contracts under the
insurance laws (an "Agent")is duly registered as a representative of EQFC and is
appropriately licensed, registered or otherwise qualified to offer and sell the
Variable Contracts under the federal securities laws and any applicable
securities laws of each state or other jurisdiction in which the Variable
Contracts offered by such person may be lawfully sold;
(B) Training, supervising and directing the Agents for purposes of
complying on a continuous basis with the NASD rules and with federal and state
securities laws applicable in connection with the offer and sale of the Variable
Contracts. In this connection EQFC shall:
<PAGE>
-4-
(i) Establish and implement reasonable written procedures which
provide for diligent supervision of sales practices of the Agents;
(ii) Require that Agents shall recommend the purchase of Variable
Contracts only upon reasonable grounds to believe that the purchase is suitable
for each prospective purchaser, and verify their compliance with such
requirement;
(iii) Provide a sufficient number of registered principals and an
adequate compliance staff to carry out the responsibilities set forth herein;
and
(iv) Impose disciplinary measures on the Agents.
(C) Oversight of the securities activities of all persons engaged
directly or indirectly in operations of EQFC and EOC related to the offer or
sale of the Variable Products, each of whom shall be considered a "person
associated" with EQFC, as defined in Section 3(a)(18) of the 1934 Act. EQFC
shall have full responsibility for each such person with regard to his or her
training, supervision and control, as contemplated by Section 15 of the 1934
Act, and, in that connection, shall have the authority to require that
disciplinary action be taken with respect to such persons.
Sec. 1.3 EQFC represents that it is a broker-dealer duly registered under
1934 Act and is a member in good standing of the NASD and, to the extent
necessary to perform the activities contemplated hereunder, is duly registered,
or otherwise qualified, under securities laws of every state or other
jurisdiction in
<PAGE>
-5-
which the Variable Contracts are available for sale, and EQFC agrees to maintain
such status. Consistent with its designation as distributor of the Variable
Contracts, as provided in Section 1.1 of this Agreement, EQFC acknowledges that
it may be deemed to be an "underwriter" of a "principal underwriter" of the
Separate Accounts under the federal securities laws.
Sec. 1.4 EOC shall have exclusive responsibility for the payment of
commissions or other fees to the Agents. All compensation paid by EOC to the
Agents with respect to sales of the Variable Contracts shall be paid by EOC on
its own behalf, and shall be reflected on the books and records of EOC. The
responsibility of EOC shall include the performance of all activities necessary
in order that the payment of compensation hereunder complies with all applicable
federal securities laws and state securities and insurance laws. EOC retains the
ultimate right to determine the rates of commission and other fees to be paid to
the Agents in connection with their respective Variable Contracts. Nothing
contained in this Agreement shall obligate EQFC to pay any commissions or other
fees to Agents or to reimburse any Agents for expenses incurred by them with
respect to the Variable Contracts, nor shall EQFC have any responsibility for
the adequacy or accuracy of any amount paid to an Agent in connection with the
sale of the Variable Contracts. EQFC shall have no right or interest whatsoever
in any commissions or other fees payable to Agents by EOC.
<PAGE>
-6-
Sec. 1.5 EQFC and EOC shall each cause to be maintained and perserved such
accounts, books and other documents as are required by the 1934 Act and 1940 Act
and any other applicable laws and regulations. In particular, without limiting
the foregoing, EQFC shall cause all the books and records in connection with the
offer and sale of the Variable Contracts to be maintained and perserved in
conformity with the requirements of Rules 17a-3 and 17a-4 under the 1934 Act, to
the extent that such requirements are applicable to the Variable Contracts. The
payment of premiums, purchase payments, commissions and other fees and payments
in connection with the Variable Contracts shall be reflected on the books and
records of EOC and, as provided in Section 1.4 here of and as may otherwise be
required under applicable NASD regulations and federal and applicable state
securities laws requirements.
<PAGE>
-7-
Sec. 1.6 EQFC, and EOC shall each submit to all regulators and
administrative bodies having jurisdiction over the sales of the Variable
Contracts, present or future, any information, reports, or other material that
any such body by reason of this Agreement may request or require pursuant to
applicable laws or regulations. In particular, without limiting the foregoing,
EOC agrees that any books and records which it maintains pursuant to Section 1.5
of this Agreement which are required to be maintained under Rule 17a-3 or 17a-4
of the 1934 Act shall be subject to inspection by the SEC in accordance with
Section 17(a) of the 1934 Act.
Sec. 1.7 EQFC, and EOC each agree and understand that all documents,
reports, records, books, files and other materials required under applicable
NASD regulations and federal and state securities laws relative to the sale of
Variable Contracts shall be the property of EQFC, with the exception of those
books and records maintained by EOC pursuant to Section 1.4 which relate to
sales compensation and shall be the joint property of EOC and EQFC. If, however,
such documents, reports, records, books, files and other materials which are the
property of EQFC are required by applicable regulation or law to be maintained
also by EOC, such material shall be the joint property of EQFC and EOC. All
other documents, reports, records, books, files and other materials maintained
relative to this Agreement shall be the property of EOC. Upon the termination of
<PAGE>
-8-
this Agreement, all such material shall be returned to the applicable party.
Sec. 1.8 EQFC and EOC from time to time during the term of this Agreement,
shall allocate among themselves, subject to a right of further delegaiton, the
administrative responsibility for maintaining and preserving the books, records
and accounts kept in connection with the Variable Contracts; provided, however,
in the case of books, records and accounts kept pursuant to a requirement of
applicable law or regulation, the ultimate responsibility for maintaining and
preserving such books, records and accounts shall be that of the party which is
required to maintain or preserve such books, records and accounts under the
applicable law or regulation, and such books, records and accounts shall be
maintained and preserved under the supervision of that party. EQFC and EOC shall
cause each other to be furnished with such reports as each may reasonably
request for the purpose of meeting its respective reporting and recordkeeping
requirements under such regulations and laws and under the insurance laws of the
State of Colorado and any other applicable states or jurisdictions.
ARTICLE II
Procedures for Sale of Variable Contracts
Sec. 2.1 EOC represents and warrants that units of interest of its
respective Separate Accounts offered under the Variable Contracts are registered
under the 1933 Act to the extent such registration is required, that the
Separate Accounts are registered under the 1940 Act unless
<PAGE>
-9-
exempt from such registration, and that the Variable Contracts are qualified to
be sold under the insurance laws and any applicable securities laws of all
states and other jurisdictions in which the Variable Contracts are authorized
for sale. EOC further repesents and warrants that it is a life insurance company
duly organized under the laws of the State of Colorado and in good standing and
authorized to conduct business under the laws of each state in which the
Variable Contracts are offered and sold.
Sec. 2.2 EQFC will require that the Agents use only the effective
prospectuses, statements of additional information ("SAIs") and other authorized
materials in soliciting and selling the Variable Contracts. EQFC is not
authorized to give any information or to make any representations concerning the
Variable Contracts other than those contained in the current prospectus or SAI
therefor filed with the SEC or in such materials as may be authorized by EOC.
SEC. 2.3 All applications for Variable Contracts shall be made on
application forms supplied by EOC, as appropriate, and all payments collected by
EQFC shall be remitted by EQFC promptly in full, together with such application
or enrollment forms and any other required documentation, directly to EOC, at
the address indicated on such application or to such other address as EOC may,
from time to time, designate in writing. EOC shall review all such applications
for suitability. Checks or money orders in payment on any Variable Contract
shall be drawn to the order of "Equitable of Colorado, Inc." All applications
for Variable Contracts shall be subject to
<PAGE>
-10-
acceptance or rejection by EOC at its discretion.
Sec. 2.4 All money payable in connection with any of the Variable
Contracts, whether as premiums, purchase payment or otherwise, and whether paid
by, or on behalf of any applicant or contractowner, is the property of EOC and
shall be transmitted promptly in accordance with the administrative procedures
of EOC without any deduction or offset for any reason, including by example but
not limitation, any deduction or offset for compensation claimed by EQFC. No
cash payments shall be accepted by EQFC in connection with the Variable
Contracts.
Sec. 2.5 EOC shall be responsible for payment of the costs of printing the
prospectuses, SAIs and sales material used in connection with the solicitation
of applications for the Variable Contracts and to allocate such costs between
themselves. EOC shall provide to EQFC copies of such prospectusus. SAIs and
sales material in such number as EQFC shall reasonably request. EOC shall make
available to EQFC copies of all financial statements and other documents that
EQFC shall reasonably request for use in connection with the distribution of the
Variable Contracts.
Sec. 2.6 Notwithstanding anything in this Agreement to the contrary, EQFC
may enter into sales agreements with independent broker-dealers for the sale of
the Variable Contracts, subject to the prior written approval of EOC of each
such sales agreement and the terms thereof. All such
<PAGE>
-11-
sales agreements entered into by EQFC shall provide that each independent
broker-dealer will assume full responsibility for continued compliance by itself
and its associated persons with the NASD Rules and applicable federal and state
securities and insurance laws. All associated persons of such independent
broker-deal soliciting applications for the Variable Contracts shall be duly and
appropriately licensed or appointed for the sale of the Variable Contracts under
the NASD Rules and federal and state securities and insurance laws in which such
person shall offer or sell the Variable Contracts.
Sec. 2.7 EOC shall apply for and maintain the proper insurance licenses for
each of the Agents selling the Variable Contracts in all states or jurisdictions
in which the Variable Contracts are offered for sale by such Agent. EOC reserves
the right to refuse to appoint any proposed agent, independent broker-dealer, or
any representative thereof as an Agent, and may terminate an Agent or
independent broker-dealer once appointed. EOC shall promptly notify EQFC of each
such termination. EOC agrees to be responsible for all licensing or other fees
required under pertinent state insurance laws to properly authorize Agents for
the sale of the Variable Contracts; however, the foregoing shall not limit EOC's
right to collect such amount from any person or entity other than EQFC.
Sec.2.8 The parties hereto recognize that any person selling the Variable
Contracts as contemplated by this Agreement shall be acting as an insurance
agent of EOC or as an insurance broker, and that the rights of EQFC to supervise
such persons shall be limited to the extent specifically described herein or
required under applicable federal or state securities laws or NASD regulations.
Such persons shall not be considered employees of EQFC and
<PAGE>
-12-
shall be considered agents of EQFC only as and to the extent required by such
laws and regulations. Further, it is intended by the parties hereto that such
persons are and shall continue to be considered to have a common law independent
contractor relationship with EOC and not to be common law employees of EOC,
unless any contract between EQFC and any person selling the Variable Contracts
specifically provides otherwise.
Sec. 2.9 Consistent with the responsibility of EQFC to discharge all
compliance and supervisory obligations relating to the distribution of the
Variable Contracts as provided in this Agreement and consistent with the
authority given to EQFC hereunder, EOC shall retain the ultimate right of
control over, and responsibility for, the issuance, servicing and marketing of
its Variable Contracts. In that connection, EOC shall review and approve all
advertising concerning the Variable Contracts issued by each of them; however,
EQFC shall be responsible for filing such materials, as required, with the NASD
and with state securities regulators and for obtaining such approvals as may be
necessary.
Sec. 2.10 Unless otherwise agreed in writing by EOC, neither EQFC nor any
Agent nor any independent broker-dealer shall have an interest in any surrender
charges, deductions or other fees payable to EOC.
<PAGE>
-13-
ARTICLE III
Services and Personnel Provied by EOC
Sec. 3.1 EOC agrees to furnish compliance and related support services,
including personnel, to assist EQFC in the performance of the services which
EQFC is required to provide hereunder. In furnishing such services, all
personnel of EOC shall be subject at all times to the supervision and control of
EQFC.
ARTICLE IV
Compensation and Expenses
Sec. 4.1 EQFC shall be compensated, not less frequently than quarterly, by
EOC for its services under this Agreement in an aggregate annual amount which
shall be equal to the actual expenses incurred by EQFC to provide compliance and
related support services, plus a percentage of such expenses which shall
approximate the annual rate of profit earned by EQFC from its performance of
comparable services for unaffiliated clients.
Sec 4.2 EQFC shall pay the costs and expenses, direct and indirect,
incurred by EOC in furnishing services and personnel, pursuant to Article III of
this Agreement. In determining the basis for the apportionment of expenses,
specific identification or estimates based on time, company assets, square
footage or any other mutually agreeable method providing for a fair and
reasonable allocation of cost may be used, provided such method is in conformity
with the requirements of the Colorado Insurance Law and regulations. The charge
<PAGE>
-14-
to EQFC for such apportioned expenses shall be at cost as described in this
Section 4.2.
Sec. 4.3 Within 45 days after the end of each calendar quarter, and more
often if desired, EOC shall submit to EQFC a statement of apportioned expenses
showing the basis for such apportionment; and settlement shall be made within 15
days thereafter. The statement of apportioned expenses shall set forth in
reasonable detail the nature of the expenses being apportioned and other
relevant information to support the charge.
ARTICLE V
Term of Agreement
Sec. 5.1 Subject to termination as herein provided, this Agreement shall
remain in full force and effect for a two-year peroid commencing on the date
first above written, and this Agreement shall continue in full force and effect
from year to year thereafter, until terminated as herein provided.
<PAGE>
-15-
Sec. 5.2 This Agreement may be terminated by any party hereto on not less
than 60 days' prior written notice to the other parties or by an agreement in
writing signed by all of the parties hereto, except that data processing
services may not be terminated on less than 180 days' prior written notice, if
requested by Equico in writing promptly following its receipt of written notice
of termination of this Agreement. This Agreement shall automatically be
terminated in the event of its assignment.
Sec. 5.3 Upon termination of this Agreement, all authorizations, rights,
and obligations shall cease except the obligations to settle accounts hereunder,
including the settlement of monies due in connection with Variable Contracts in
effect at the time of termination or issued pursuant to applications received by
EOC prior to termination.
ARTICLE VI
Miscellaneous
Sec. 6.1 Should an irreconcilable difference of opinion arise between or
among the parties to this Agreement as to the interpretation of any matter
respecting this Agreement, it is hereby mutually agreed that such differences
shall be submitted to arbitration as the sole remedy available to the parties.
Such arbitration shall be in accordance with the rules of the American
Arbitration Association, the arbitrators shall have extensive experience in the
insurance industry, and the arbitration shall take place in New York, New York.
<PAGE>
-16-
Sec. 6.2 For purposes of this Agreement, the term "Variable Contracts"
shall not include any vairable insurance contract issued by EOC which is not
offered and sold by employees or agents of EOC.
Sec. 6.3 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule, or otherwise, the remainder of this
Agreement shall not be affected thereby.
Sec. 6.4 This Agreement constitutes the entire agreement between the
parties hereto and may not be modified except in a written instrument executed
by all parties hereto.
Sec. 6.5 This Agreement shall be subject to the provisions of the 1934 Act
and, to the extent applicable, the 1940 Act and the rules, requlations and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and constured in accordance therewith.
Sec. 6.6 This Agreement shall be interpreted in accordance with the laws of
the State of New York.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized, as of the day
and year first above written.
THE EQUITABLE OF COLORADO, INC.
By: /s/Name
----------------------------
Name:
-----------------------
Title:----------------------
EQ FINANCIAL CONSULTANTS SECURITIES, INC.
By: /s/Name
----------------------------
Name:
-----------------------
Title:
-----------------------
Document Summary: In this agreement EQFC as a principal underwriter of HRT
shares agrees to make HRT shares available to eligible EOC separate accounts in
connection with the sale of EOC variable products.
FORM OF AGREEMENT
CONCERNING
SALES OF SHARES
OF
THE HUDSON RIVER TRUST
AGREEMENT, dated as of [ ] by and among EQ FINANCIAL CONSULTANTS, INC.
("EQFC") and THE EQUITABLE OF COLORADO, INC.("EOC"), individually and as
depositor on behalf of each presently existing or hereafter created separate
account supporting EOC variable products (each an EOC "Separate Account" and
collectively the "EOC Separate Accounts").
W I T N E S S E T H:
WHEREAS, EQFC is a principal underwriter of shares of The Hudson River
Trust (the "Trust") pursuant to a Distribution Agreement between the Trust and
EQFC dated as of July 8, 1996 (the "Distribution Agreement");
WHEREAS, the Trust is a series mutual fund, registered as an open-end
investment company under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, shares of the Trust are sold only to (a) separate accounts
("Eligible Separate Accounts") of insurance companies ("Participating Insurance
Companies") issuing variable life insurance and annuity products ("Variable
Products") whose net premiums, contributions or other considerations are
allocated to such Eligible Separate Accounts, and (b) tax-qualified retirement
plans ("Retirement Plans");
WHEREAS, the Board of Trustees of the Trust may, in its sole discretion,
determine that certain classes of shares and/or portfolios shall be available
only to certain types of Variable Products or to certain Participating Insurance
Companies and/or Retirement Plans;
WHEREAS, EOC is a Participating Insurance Company and issues Variable
Products, whose net premiums are allocated to the EOC Separate Accounts;
WHEREAS, the Separate Accounts are Eligible Separate Accounts and are
eligible to invest in shares of the portfolios of the Trust more particularly
described in the Distribution Agreement;
WHEREAS, EQFC is authorized pursuant to the Distribution Agreement to enter
into sales agreements with Participating Insurance Companies which agree to
participate in the distribution of the shares directly or through affiliates by
means of the distribution of Variable Products;
WHEREAS, EOC intends to distribute its Variable Products on behalf of the
EOC Separate Accounts through its affiliates EQFC and Equitable Distributors,
Inc.("EDI"), each of which is a registered broker-dealer under the Securities
Exchange Act of 1934 (the "1934 Act") and a member of the National Association
of Securities Dealers, Inc. (the "NASD");
WHEREAS, EQFC and EOC for itself and on behalf of the Separate Accounts
wish to define and describe the conditions under which shares of the Trust will
be made available for investment by the EOC Separate Accounts;
NOW, THEREFORE, EQFC and EOC for itself and as depositor on behalf of the
EOC Separate Accounts hereby agree as follows:
108082
<PAGE>
1. The Board of Trustees of the Trust has adopted a Policy on Conflicts
(the "Policy"). This Agreement shall be subject to the provisions of the Policy,
the terms of which shall be incorporated herein by reference, made a part hereof
and controlling. The Policy may be amended or superseded, without prior notice,
and this Agreement shall be deemed amended to the extent the Policy is amended
or superseded. EOC warrants and represents for itself and each of the EOC
Separate Accounts that it will act in a manner consistent with the Policy as so
set forth and as it may be amended or superseded, so long such EOC Separate
Account owns any shares of the Trust. This provision shall survive the
termination of this Agreement.
2. EQFC will make available to the Separate Accounts all classes of shares
of all of the portfolios of the Trust which it is authorized to distribute under
the Distribution Agreement in connection with the distribution by EOC of its
Variable Products allocated to the Separate Accounts.
3. Purchases and redemptions of shares of any class of any portfolio of the
Trust will be at net asset value of the shares of such portfolio, computed as
set forth in the most recent Trust prospectus and Statement of Additional
Information (respectively, "Trust Prospectus" and "SAI") for such class and
portfolio and any supplements thereto, and shall be submitted by EOC to the
Trust's transfer agent pursuant to procedures and in accordance with payment
provisions adopted by the parties from time to time. No shares may be sold or
transferred by EOC or any of the EOC Separate Accounts except to the Trust or an
Eligible Separate Account which is authorized to own shares of such class of
such portfolio.
4. In good faith and as soon as practicable, EQFC will provide, at Trust
expense, camera ready copy of the current Trust Prospectus and SAI and any
supplements thereto for distribution by EOC with the prospectus for the Variable
Products, and camera ready copy of Trust proxy materials, annual and semi-annual
reports, and any supplements thereto. To the extent that the foregoing documents
are distributed by EOC to existing owners of Variable Products, EQFC will
request reimbursement from the Trust for the printing and mailing costs
associated with such distribution, upon receipt from EOC of adequate
documentation for presentation to the Trust. EQFC will use its best efforts to
coordinate with EOC and to provide notice of anticipated filings or supplements.
EOC may alter the form of the Trust Prospectus, SAI, annual and semi-annual
reports, proxy statements or other Trust documents, with the prior approval of
the Trust's officers. EOC shall bear all costs associated with such alteration
of form. Without the prior written consent of EQFC, which shall not be
unreasonably withheld or delayed, EOC shall not (i) give any information or make
any representations concerning the Trust, its shares or operations except those
contained in the most recent Trust Prospectus and SAI and any supplements
thereto or (ii) use any description of the Trust in any sales literature or
advertising (including brochures, letters, illustrations and other similar
materials, whether transmitted directly to potential purchasers of Variable
Products or published in print or audio-visual media).
5. (a) EOC shall indemnify and hold harmless EQFC from any and all losses,
claims, damages or liabilities (or actions in respect thereof) to which EQFC may
be subject, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or result from negligent, improper, fraudulent
or unauthorized acts or omissions by EOC, their broker-dealers or their
respective employees, agents or representatives, including but not limited to
improper solicitation of applications for the Variable Products; provided,
however, that EOC shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon the
negligent, improper, fraudulent or unauthorized acts or omissions by EQFC or its
employees, agents or representatives in EQFC's capacity as a broker-dealer of
EOC.
(b) EQFC will indemnify and hold harmless EOC and the EOC Separate
Accounts against any losses, claims, damages or liabilities, to which EOC or the
EOC Separate Accounts may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Trust Prospectus and/or SAI or any supplements thereto, (ii)
the omission or alleged omission to state any material fact required to be
stated in any Trust Prospectus and/or SAI or any supplements thereto or
necessary to make the statements therein not misleading, or (iii) other
misconduct or negligence of EQFC in its capacity as a
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<PAGE>
distributor of the Trust; and will reimburse EOC and the EOC Separate Accounts
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that EQFC shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Trust Prospectus and/or SAI or any such supplement in good
faith reliance upon and in conformity with written information furnished by EOC
specifically for use in the preparation thereof.
(c) EQFC shall not indemnify EOC for the failure to furnish, send or
give an applicant for a Variable Product, a contract owner or a policyholder at
or prior to written confirmation of the sale thereof and at such later times as
required by state or federal securities laws, a copy of the prospectus relating
to the Variable Products, together with the applicable Trust Prospectus, any
supplements to the applicable Trust Prospectus furnished to EOC and, if
requested by the applicant from EOC or required by applicable law, the
applicable Trust SAI and any supplements thereto and, as required by applicable
law, the Trust's annual and semi-annual reports, other required reports and
proxy statements.
6. This Agreement will terminate automatically if it is assigned. The
Agreement shall also terminate automatically in its entirety if the Distribution
Agreement is terminated or in part as to any Class 1B Shares which EQFC is no
longer authorized to distribute under the Distribution Agreement, as the same
may be modified and amended from time to time.
7. If EQFC is notified that the Distribution Agreement will be terminated
and that it shall cease to be a principal underwriter of the Class 1B Shares of
the Trust, EQFC shall immediately notify EOC in writing of such termination,
and this Agreement shall continue in effect until the effective date of the
termination of the Distribution Agreement. This Agreement may be terminated by
any party at any time on one hundred eighty days' written notice to the other
parties, without the payment of any penalty.
8. This Agreement shall be subject to the provisions of the 1940 Act, the
1934 Act and the Securities Act of 1933 and the rules, regulations, and rulings
thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act and no-action positions as the Securities and
Exchange Commission or its staff may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transaction exempt from section 15(b)(2) of the Investment Company Act by order
of the Securities and Exchange Commission or any transaction as to which the
staff of the Securities and Exchange Commission has taken a no-action position.
9. EOC shall, in connection with its obligations hereunder, comply with all
laws and regulations applicable thereto, whether federal or state, and whether
relating to insurance, securities or other general areas, including but not
limited to the record keeping and sales supervision requirements of such laws
and regulations.
10. EQFC shall immediately notify EOC of the issuance by any regulatory
body of any stop order with respect to any Trust Prospectus or SAI or the
initiation of any proceeding for that purpose or for any other purpose relating
to the registration or an offering of shares of the Trust and of any other
action or circumstances that may prevent the lawful offer or sale of shares of
the Trust in any state or jurisdiction.
11. EQFC and EOC shall each submit to all regulatory and administrative
bodies having jurisdiction over the operation of any party hereto or the Trust,
present or future, any information, reports or other material which any such
body by reason of this Agreement may request or require as authorized by
applicable laws or regulations.
12. EQFC shall keep confidential any information about the Variable
Products or policy owners obtained pursuant to this Agreement and shall disclose
such information only if EOC has authorized such disclosure, or if such
disclosure is required by state or federal regulatory bodies, as authorized by
applicable law. EQFC will notify EOC of disclosures required by regulatory
bodies as soon as possible.
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<PAGE>
13. EQFC agrees that all records and other data pertaining to the Variable
Products are the exclusive property of EOC and that all such records and other
data in EQFC's possession, whether maintained in written or electronic format,
shall be furnished to EOC upon termination of this Agreement for any reason
whatsoever. This shall not preclude EQFC from keeping copies of such data or
records for its own files subject to the provisions of this paragraph.
14. EOC retains the ultimate right of control over, and responsibility for
marketing the Variable Products.
15. EQFC represents that neither EQFC nor any person employed in any
material connection with respect to the services provided pursuant to this
Agreement:
(a) Within the last 10 years has been convicted of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, or involving violations
of Sections 1341, 1342, or 1343 of Title 18, United States Code; or
(b) Within the last 10 years has been found by any state regulatory
authority to have violated or has acknowledged violation of any provision of any
state insurance law involving fraud, deceit or knowing misrepresentation; or
(c) Within the last 10 years has been found by any federal or state
regulatory authorities to have violated or have acknowledged violation of any
provision of federal or state securities laws involving fraud, deceit or knowing
misrepresentation.
16. EQFC and EOC each represent to the other that no commission or other
fee shall be charged or paid to any person or entity in connection with the sale
or purchase of any shares of the Trust to or from the EOC Separate Accounts,
other than regular salary or wages.
17. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written. The effective date of
this Agreement shall be the date first above written.
THE EQUITABLE OF COLORADO, INC. EQ FINANCIAL CONSULTANTS, INC.
for itself and as depositor on behalf of
all presently existing and hereafter
created separate accounts supporting its
variable products
By:
------------------------------
James A. Shepherdson, III
Co-President and Co-Chief
By: Executive Officer
-----------------------------------
Jose Suquet
Senior Executive Vice President
and Chief Distribution Officer
By:
------------------------------
Greg Brakovich
Co-President and Co-Chief
Executive Officer
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FORM OF AGREEMENT
CONCERNING
SALES OF SHARES
OF
THE HUDSON RIVER TRUST
AGREEMENT, dated as of [ ] by and among EQUITABLE DISTRIBUTORS, INC.
("EDI") and THE EQUITABLE OF COLORADO, INC.("EOC"), individually and as
depositor on behalf of each presently existing or hereafter created separate
account supporting EOC variable products (each an EOC "Separate Account" and
collectively the "EOC Separate Accounts").
W I T N E S S E T H:
WHEREAS, EDI is a principal underwriter of shares of The Hudson River
Trust (the "Trust") pursuant to a Distribution Agreement between the Trust and
EDI dated as of July 8, 1996 (the "Distribution Agreement");
WHEREAS, the Trust is a series mutual fund, registered as an open-end
investment company under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, shares of the Trust are sold only to (a) separate accounts
("Eligible Separate Accounts") of insurance companies ("Participating Insurance
Companies") issuing variable life insurance and annuity products ("Variable
Products") whose net premiums, contributions or other considerations are
allocated to such Eligible Separate Accounts, and (b) tax-qualified retirement
plans ("Retirement Plans");
WHEREAS, the Board of Trustees of the Trust may, in its sole
discretion, determine that certain classes of shares and/or portfolios shall be
available only to certain types of Variable Products or to certain Participating
Insurance Companies and/or Retirement Plans;
WHEREAS, EOC is a Participating Insurance Company and issues Variable
Products, whose net premiums are allocated to the EOC Separate Accounts;
WHEREAS, the Separate Accounts are Eligible Separate Accounts and are
eligible to invest in shares of the portfolios of the Trust more particularly
described in the Distribution Agreement;
WHEREAS, EDI is authorized pursuant to the Distribution Agreement to
enter into sales agreements with Participating Insurance Companies which agree
to participate in the distribution of the shares directly or through affiliates
by means of the distribution of Variable Products;
WHEREAS, EOC intends to distribute its Variable Products on behalf of
the EOC Separate Accounts through its affiliates, EDI and EQ Financial
Consultants, Inc. ("EQFC"), each of which is a registered broker-dealer under
the Securities Exchange Act of 1934 (the "1934 Act") and a member of the
National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, EDI and EOC for itself and on behalf of the Separate Accounts
wish to define and describe the conditions under which shares of the Trust will
be made available for investment by the EOC Separate Accounts;
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<PAGE>
NOW, THEREFORE, EDI and EOC for itself and as depositor on behalf of
the EOC Separate Accounts hereby agree as follows:
1. The Board of Trustees of the Trust has adopted a Policy on Conflicts
(the "Policy"). This Agreement shall be subject to the provisions of the Policy,
the terms of which shall be incorporated herein by reference, made a part hereof
and controlling. The Policy may be amended or superseded, without prior notice,
and this Agreement shall be deemed amended to the extent the Policy is amended
or superseded. EOC warrants and represents for itself and each of the EOC
Separate Accounts that it will act in a manner consistent with the Policy as so
set forth and as it may be amended or superseded, so long such EOC Separate
Account owns any shares of the Trust. This provision shall survive the
termination of this Agreement.
2. EDI will make available to the Separate Accounts all classes of
shares of all of the portfolios of the Trust which it is authorized to
distribute under the Distribution Agreement in connection with the distribution
by EOC of its Variable Products allocated to the Separate Accounts.
3. Purchases and redemptions of shares of any class of any portfolio of
the Trust will be at net asset value of the shares of such portfolio, computed
as set forth in the most recent Trust prospectus and Statement of Additional
Information (respectively, "Trust Prospectus" and "SAI") for such class and
portfolio and any supplements thereto, and shall be submitted by EOC to the
Trust's transfer agent pursuant to procedures and in accordance with payment
provisions adopted by the parties from time to time. No shares may be sold or
transferred by EOC or any of the EOC Separate Accounts except to the Trust or an
Eligible Separate Account which is authorized to own shares of such class of
such portfolio.
4. In good faith and as soon as practicable, EDI will provide, at Trust
expense, camera ready copy of the current Trust Prospectus and SAI and any
supplements thereto for distribution by EOC with the prospectus for the Variable
Products, and camera ready copy of Trust proxy materials, annual and semi-annual
reports, and any supplements thereto. To the extent that the foregoing documents
are distributed by EOC to existing owners of Variable Products, EDI will request
reimbursement from the Trust for the printing and mailing costs associated with
such distribution, upon receipt from EOC of adequate documentation for
presentation to the Trust. EDI will use its best efforts to coordinate with EOC
and to provide notice of anticipated filings or supplements. EOC may alter the
form of the Trust Prospectus, SAI, annual and semi-annual reports, proxy
statements or other Trust documents, with the prior approval of the Trust's
officers. EOC shall bear all costs associated with such alteration of form.
Without the prior written consent of EDI, which shall not be unreasonably
withheld or delayed, EOC shall not (i) give any information or make any
representations concerning the Trust, its shares or operations except those
contained in the most recent Trust Prospectus and SAI and any supplements
thereto or (ii) use any description of the Trust in any sales literature or
advertising (including brochures, letters, illustrations and other similar
materials, whether transmitted directly to potential purchasers of Variable
Products or published in print or audio-visual media.
5. (a) EOC shall indemnify and hold harmless EDI from any and all
losses, claims, damages or liabilities (or actions in respect thereof) to which
EDI may be subject, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or result from negligent, improper,
fraudulent or unauthorized acts or omissions by EOC, their broker-dealers or
their respective employees, agents or representatives, including but not limited
to improper solicitation of applications for the Variable Products; provided,
however, that EOC shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon the
negligent, improper, fraudulent or unauthorized acts or omissions by EDI or its
employees, agents or representatives in EDI's capacity as a broker-dealer of
EOC.
(b) EDI will indemnify and hold harmless EOC and the EOC Separate
Accounts against any losses, claims, damages or liabilities, to which EOC or the
EOC Separate Accounts may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Trust Prospectus and/or SAI or any supplements thereto, (ii)
the omission or alleged omission to state any material
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<PAGE>
fact required to be stated in any Trust Prospectus and/or SAI or any supplements
thereto or necessary to make the statements therein not misleading, or (iii)
other misconduct or negligence of EDI in its capacity as a distributor of the
Trust; and will reimburse EOC and the EOC Separate Accounts for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending against such loss, claim, damage, liability or action; provided,
however, that EDI shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Trust Prospectus and/or SAI or any such supplement in good faith reliance
upon and in conformity with written information furnished by EOC specifically
for use in the preparation thereof.
(c) EDI shall not indemnify EOC for the failure to furnish, send or
give an applicant for a Variable Product, a contract owner or a policyholder at
or prior to written confirmation of the sale thereof and at such later times as
required by state or federal securities laws, a copy of the prospectus relating
to the Variable Products, together with the applicable Trust Prospectus, any
supplements to the applicable Trust Prospectus furnished to EOC and, if
requested by the applicant from EOC or required by applicable law, the
applicable Trust SAI and any supplements thereto and, as required by applicable
law, the Trust's annual and semi-annual reports, other required reports and
proxy statements.
6. This Agreement will terminate automatically if it is assigned. The
Agreement shall also terminate automatically in its entirety if the Distribution
Agreement is terminated or in part as to any Class 1B Shares which EDI is no
longer authorized to distribute under the Distribution Agreement, as the same
may be modified and amended from time to time.
7. If EDI is notified that the Distribution Agreement will be
terminated and that it shall cease to be a principal underwriter of the Class 1B
Shares of the Trust, EDI shall immediately notify EOC in writing of such
termination, and this Agreement shall continue in effect until the effective
date of the termination of the Distribution Agreement. This Agreement may be
terminated by any party at any time on one hundred eighty days' written notice
to the other parties, without the payment of any penalty.
8. This Agreement shall be subject to the provisions of the 1940 Act,
the 1934 Act and the Securities Act of 1933 and the rules, regulations, and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the 1940 Act and no-action positions as the Securities and
Exchange Commission or its staff may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transaction exempt from section 15(b)(2) of the Investment Company Act by order
of the Securities and Exchange Commission or any transaction as to which the
staff of the Securities and Exchange Commission has taken a no-action position.
9. EOC shall, in connection with its obligations hereunder, comply with
all laws and regulations applicable thereto, whether federal or state, and
whether relating to insurance, securities or other general areas, including but
not limited to the record keeping and sales supervision requirements of such
laws and regulations.
10. EDI shall immediately notify EOC of the issuance by any regulatory
body of any stop order with respect to any Trust Prospectus or SAI or the
initiation of any proceeding for that purpose or for any other purpose relating
to the registration or an offering of shares of the Trust and of any other
action or circumstances that may prevent the lawful offer or sale of shares of
the Trust in any state or jurisdiction.
11. EDI and EOC shall each submit to all regulatory and administrative
bodies having jurisdiction over the operation of any party hereto or the Trust,
present or future, any information, reports or other material which any such
body by reason of this Agreement may request or require as authorized by
applicable laws or regulations.
12. EDI shall keep confidential any information about the Variable
Products or policy owners obtained pursuant to this Agreement and shall disclose
such information only if EOC has authorized such
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<PAGE>
disclosure, or if such disclosure is required by state or federal regulatory
bodies, as authorized by applicable law. EDI will notify EOC of disclosures
required by regulatory bodies as soon as possible.
13. EDI agrees that all records and other data pertaining to the
Variable Products are the exclusive property of EOC and that all such records
and other data in EDI's possession, whether maintained in written or electronic
format, shall be furnished to EOC upon termination of this Agreement for any
reason whatsoever. This shall not preclude EDI from keeping copies of such data
or records for its own files subject to the provisions of this paragraph.
14. EOC retains the ultimate right of control over, and responsibility
for marketing the Variable Products.
15. EDI represents that neither EDI nor any person employed in any
material connection with respect to the services provided pursuant to this
Agreement:
(a) Within the last 10 years has been convicted of any felony
or misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, or involving violations
of ss.ss. 1341, 1342, or 1343 of Title 18, United States Code; or
(b) Within the last 10 years has been found by any state
regulatory authority to have violated or has acknowledged violation of any
provision of any state insurance law involving fraud, deceit or knowing
misrepresentation; or
(c) Within the last 10 years has been found by any federal or
state regulatory authorities to have violated or have acknowledged violation of
any provision of federal or state securities laws involving fraud, deceit or
knowing misrepresentation.
16. EDI and EOC each represent to the other that no commission or other
fee shall be charged or paid to any person or entity in connection with the sale
or purchase of any shares of the Trust to or from the EOC Separate Accounts,
other than regular salary or wages.
17. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written. The effective date of
this Agreement shall be the date first above written.
THE EQUITABLE OF COLORADO, INC. EQUITABLE DISTRIBUTORS, INC.
for itself and as depositor on behalf of
all presently existing and hereafter
created separate accounts supporting
its variable products By:__________________________
James A. Shepherdson, III
Co-President and Co-Chief
By:________________________________ Executive Officer
Jose Suquet
Senior Executive Vice President
and Chief Distribution Officer
By:__________________________
Greg Brakovich
Co-President and Co-Chief
Executive Officer
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FORM OF PARTICIPATION AGREEMENT
-------------------------------
Among
EQ ADVISORS TRUST,
-----------------
THE EQUITABLE OF COLORADO, INC.
-------------------------------
EQUITABLE DISTRIBUTORS, INC.,
-----------------------------
and
EQ FINANCIAL CONSULTANTS, INC.
------------------------------
THIS AGREEMENT, made and entered into as of the ___day of ____ by and
among THE EQUITABLE OF COLORADO, INC., a Colorado stock life insurance company
("EOC"), on its own behalf and on behalf of each of its presently existing and
hereafter created separate accounts (each referred to as the "Account"), EQ
ADVISORS TRUST, a business trust organized under the laws of the State of
Delaware (the "Trust"), and EQUITABLE DISTRIBUTORS, INC., a Delaware
corporation, and EQ FINANCIAL CONSULTANTS, INC., a Delaware corporation
(collectively, the "Distributors").
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts of insurance companies that issue variable life insurance
policies, variable annuity contracts and certificates relating to such policies
or contracts (collectively, the "Variable Contracts") and which have entered
into participation agreements with the Trust and its Distributors (the
"Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Trust are divided into series
of shares, (each a "Portfolio"), each representing the interest in a particular
managed portfolio of securities and other assets, and each Portfolio is divided
or may be divided into one or more classes of shares, i.e., currently the Class
IA shares and the Class IB shares, or such other classes of shares as may be
created in the future (the "Classes"); and
WHEREAS, one or more Portfolios or Classes thereof may be made
available by the Trust to serve as funding vehicles for Participating Insurance
Companies and their separate accounts funding Variable Contracts; and
WHEREAS, the Trust has received an order from the Securities and
Exchange Commission (the "Commission" or the "SEC") granting Participating
Insurance Companies and their separate accounts funding Variable Contracts
exemptions from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended (the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Trust and each of its Portfolios or Classes to be sold to and held
by insurance company separate accounts funding Variable Contracts of both
affiliated and unaffiliated life insurance companies (the "Shared
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<PAGE>
Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act, and shares of its Portfolios are registered under
the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, EQ Financial Consultants, Inc., in addition to being one of
the Distributors, is also the investment manager to the Trust (the "Manager")
and is duly registered with the SEC as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is registered or exempt from
registration under all applicable state securities laws; and
WHEREAS, EOC has registered or will register each of its Accounts as a
unit investment trust under the 1940 Act and has registered or will register
interests in each Account under the 1933 Act, other than those exempt from such
registration under applicable statutory provisions or regulations; and
WHEREAS, each Account is, or will be, a duly organized, validly
existing segregated asset account, established by resolution of the Board of
Directors of EOC or through properly delegated authority, and divided into
subaccounts, to set aside and invest assets attributable to the Variable
Contracts; and
WHEREAS, each of the Distributors is registered as a broker-dealer with
the SEC under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, EOC intends to purchase shares in the Portfolios and one or more
Classes thereof, (the "Designated Portfolios and Classes") on behalf of each
Account, in order to fund certain of the Variable Contracts, and each of the
Distributors is authorized to sell such shares to each Account at the net asset
value applicable to such Portfolios and the Classes thereof.
NOW, THEREFORE, in consideration of their mutual promises, EOC, the
Trust and each of the Distributors agree as follows:
ARTICLE I. Sale of Trust Shares
--------------------
1.1. Each of the Distributors agrees to sell to each Account those
shares of the Designated Portfolios and Classes for which it serves as the
Trust's principal underwriter and which each Account orders, executing such
orders on a daily basis at the net asset value per share next computed after
receipt by the Trust or its designee of the order for the shares of the
Designated Portfolios and Classes. For purposes of this Section 1.1, neither EOC
nor any Account shall be considered the designee of the Trust for receipt of
such purchase orders and receipt by EOC or any Account shall not constitute
receipt by the Trust for purposes of calculating each Portfolio's net asset
value per share.
1.2. The Trust agrees to make its shares of the Designated Portfolios
and Classes available for purchase by each Account at the applicable net asset
value per share on those days on which the
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Trust calculates the net asset value per share of the Designated Portfolios and
Classes pursuant to rules of the SEC. The Trust shall use reasonable efforts to
calculate the net asset value per share of the Designated Portfolios and Classes
on each day on which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Trust (the "Board")
may refuse to sell shares of any Designated Portfolio or Class to any person, or
suspend or terminate the offering of shares of any Portfolio or Class thereof,
if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of such Portfolio or Class
thereof.
1.3. The Trust and each of the Distributors agree that shares of the
Designated Portfolios and Classes will be sold only to Participating Insurance
Companies and/or their separate accounts funding Variable Contracts or to other
persons or entities permitted under Section 817 of the Internal Revenue Code of
1986, as amended (the "Code"), or regulations promulgated thereunder. No shares
of any Portfolio will be sold to the general public, except to the extent
permitted under the Code.
1.4. The Trust and each of the Distributors will not sell Trust shares
to any Participating Insurance Company or separate account funding Variable
Contracts unless an agreement containing provisions substantially the same as
Articles I, III, V, VII and Section 2.5 of Article II of this Agreement is in
effect to govern such sales.
1.5. The Trust agrees to redeem for cash or in-kind, at the request of
any Account or EOC, any full or fractional shares of the Trust held by the
Account or EOC. The Trust will execute such requests on a daily basis at the net
asset value per share of the Designated Portfolios and Classes next computed
after receipt by the Trust or its designee of the request for redemption. For
purposes of this Section 1.5, neither EOC nor any Account shall be considered
the designee of the Trust for receipt of requests for redemption, and receipt by
EOC or any Account shall not constitute receipt by the Trust for purposes of
calculating each Portfolio's net asset value per share.
1.6 EOC agrees that purchases and redemptions of shares of the
Designated Portfolios and Classes offered by a then-current prospectus of the
Trust shall be made in accordance with the provisions of such prospectus.
1.7. EOC shall pay for shares of Designated Portfolios and Classes
thereof purchased for the Accounts or its general account on the business day on
which an order to purchase Trust shares is made in accordance with the
provisions of Section 1.1 hereof. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the Trust calculates
its net asset value pursuant to the rules of the SEC. Payment shall be in
federal funds transmitted by wire. For purposes of Section 2.9 and 2.10, upon
receipt by the Trust of the federal funds so wired, such funds shall cease to be
the responsibility of EOC and shall become the responsibility of the Trust.
1.8. Issuance and transfer of the shares of the Designated Portfolios
and Classes thereof will be by book entry only. Stock certificates will not be
issued to EOC or any Account. Shares ordered from the Trust will be recorded in
an appropriate title for each Account or the appropriate subaccount of each
Account.
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<PAGE>
1.9. The Trust shall furnish same day notice (by wire or telephone,
followed by written confirmation) of any income dividends or capital gain
distributions payable on the shares of the Designated Portfolios and Classes
thereof. EOC and each Account hereby elect to receive all such income dividends
and capital gain distributions as are payable on the shares of the Designated
Portfolios and Classes thereof in additional shares of the relevant Designated
Portfolios and Classes. (EOC and each Account reserve the right to revoke this
election and to receive all such income dividends and capital gain distributions
in cash.) The Trust shall provide notification by the end of the next Business
Day of the number of shares so issued as payment of such dividends and
distributions. The Trust shall provide advance notice to EOC and each Account of
any date on which the Trust reasonably expects to make a dividend distribution;
normally this notice will be given at least ten (10) days in advance of the
ex-dividend date.
1.10. The Trust shall make the net asset value per share for each
Designated Portfolio and Class thereof available to EOC and each Account or
their designee on a daily basis as soon as reasonably practical after the net
asset value per share is calculated (normally by 6:30 p.m. New York time) and
shall use its best efforts to make such net asset value per share available by
7:00 p.m. New York time.
ARTICLE II. Representations and Warranties
------------------------------
2.1. EOC represents and warrants that: (a) the EOC Contracts will be
issued and sold in compliance, in all material respects, with all applicable
federal and state laws; and (b) it requires each Distributor to comply, in all
material respects, with state insurance suitability requirements. EOC further
represents and warrants that: (a) it is an insurance company duly organized and
in good standing under applicable law; (b) it has legally and validly
established each Account, prior to any issuance or sale of interests therein, as
a segregated asset account under applicable insurance laws; (c) it has
registered or, prior to any issuance or sale of the EOC Contracts, will register
each Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the EOC Contracts,
unless such Accounts are exempt from such registration under applicable
statutory provisions or regulations; and (d) it has registered or, prior to the
issuance or sale of the EOC Contracts, will register interests in the Accounts
under the 1933 Act, unless interests in such Accounts are exempt from such
registration under applicable statutory provisions or regulations.
2.2. The Trust, to the best of its knowledge, represents and warrants
that Trust shares sold pursuant to this Agreement shall be: (a) registered under
the 1933 Act; and (b) duly authorized for issuance; and (c) sold in compliance
with and all applicable federal securities laws. The Trust further represents
and warrants that it is and shall remain registered under the 1940 Act. The
Trust shall amend the registration statement for its shares (the "Registration
Statement") under the 1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of shares of the Designated Portfolios
and Classes. This requirement shall not, however, in any manner limit the
Trust's ability to cease offering shares in one or more of the Designated
Portfolios or Classes, provided such action complies with applicable laws and
regulations.
2.3. EOC represents that the EOC Contracts are currently treated as
annuity, endowment or life insurance contracts under applicable provisions of
the Code and that it will make every effort to
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maintain such treatment and that it will notify the Trust and the Distributors
immediately upon having a reasonable basis for believing that the EOC Contracts
have ceased to be so treated or that they might not be so treated in the future.
2.4. The Trust currently intends for one or more Classes, particularly
Class IB, to make payments to finance its distribution expenses pursuant to a
Plan adopted under Rule 12b-1 under the 1940 Act, although it may determine to
discontinue such practice in the future. To the extent that any Class of the
Trust finances its distribution expenses pursuant to a Plan adopted under Rule
12b-1, the Trust undertakes to have a Board, a majority of whose members are not
interested persons of the Trust or its Distributors or Manager, and to otherwise
comply with any then current SEC and SEC staff interpretations concerning Rule
12b-1 or any successor provision.
2.5. The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states,
except that the Trust represents that the investment objectives, policies, fees
and expenses of each of the Designated Portfolios and Classes thereof are and
shall at all times remain in compliance with the insurance laws of the State of
Colorado, and the Trust and the Distributors severally represent that their
respective operations are and shall at all times remain in compliance, in all
material respects, with the insurance laws of the State of Colorado to the
extent required to perform their respective obligations under this Agreement.
2.6. Each of the Distributors represents and warrants that: (a) it is a
member in good standing of the NASD; and (b) it is registered as a broker-dealer
with the SEC and all necessary states. Each Distributor further represents that
it will sell and distribute the Trust's shares in accordance with the laws of
the State of New York and all applicable federal and state securities laws,
including without limitation the 1933 Act, the 1934 Act, the 1940 Act, and all
applicable Rules of the NASD.
2.7. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware and that it does and will
comply, in all material respects, with the 1940 Act.
2.8. EQ Financial Consultants, Inc. represents and warrants that it, in
its capacity as the Manager, is and shall remain duly registered under all
applicable federal and state securities laws and that it, in its capacity as the
Manager shall perform its obligations for the Trust in compliance, in all
material respects, with any and all applicable federal and state securities
laws.
2.9. The Trust and each of the Distributors severally represent and
warrant that all of their trustees, directors, officers, employees, investment
managers and investment advisers, and other individuals/entities dealing with
the money and/or securities of the Trust are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Trust in an amount not less than the minimal coverage required by Rule
17g-(1) of the 1940 Act or such related provisions as may be promulgated from
time to time. The aforesaid fidelity bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.10. EOC represents and warrants that all of its directors, officers,
employees, and other
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individuals/entities dealing with the money and/or securities of the Trust are
covered by a blanket fidelity bond or similar coverage for the benefit of the
Trust. EOC further represents and warrants that said fidelity bond is issued by
a reputable bonding company, includes coverage for larceny and embezzlement, and
is in an amount not less than $5 million. EOC agrees to make all reasonable
efforts to see that this fidelity bond or another bond containing these
provisions is continuously in effect and agrees to notify the Trust and the
Distributors in the event that such coverage no longer applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Trust or its Distributors shall provide EOC with as many
printed copies of the Trust's current prospectus and Statement of Additional
Information and any supplements thereto for the Designated Portfolios and
Classes thereof as EOC may reasonably request. If requested by EOC in lieu
thereof, the Trust or its Distributors shall provide camera-ready film
containing the Trust's prospectus and Statement of Additional Information and
any supplements thereto for the Designated Portfolios and Classes thereof, and
such other assistance as is reasonably necessary in order for EOC once each year
(or more frequently if the prospectus and/or Statement of Additional Information
for the Designated Portfolios and Classes thereof is amended during the year) to
have the prospectus for the Account, with respect to the EOC Contracts, and the
Trust's prospectus printed together in one document, and to have the Statement
of Additional Information for the Trust and the Statement of Additional
Information for the Account, with respect to the EOC Contracts, printed together
in one document. Alternatively, EOC may print the prospectus and/or Statement of
Additional Information for the Designated Portfolios and Classes thereof in
combination within the prospectuses and Statements of Additional Information for
other investment companies. To the extent that the foregoing Trust prospectuses,
Statements of Additional Information and any supplements thereto are with
respect to Class IB shares, or other Classes of shares subject to a Plan adopted
under Rule 12b-1 under the 1940 Act, the cost of preparing, printing, and
distributing such documents will be at the expense of such Class or Classes of
shares, with respect to prospective owners of EOC Contracts. In addition, with
respect to prospectuses and Statements of Additional Information for the
Designated Portfolios and Classes thereof provided by EOC to its existing owners
of EOC Contracts ("Contractowners") in order to update disclosure as required by
the 1933 Act and/or the 1940 Act, the cost of preparing, printing, mailing and
otherwise distributing such prospectuses and Statements of Additional
Information and any supplements thereto shall be borne by the Trust.
Furthermore, if in such case EOC or the Distributors are provided with
camera-ready film of such documents in lieu of printed documents, EOC or the
Distributors shall request reimbursement from the Trust for their printing,
mailing and other costs associated with such distribution.
EOC and the Distributors each agree to provide the Trust or its
designee with such information as may be reasonably requested by the Trust to
assure that the Trust's expenses or the expenses of any Class do not include the
cost of printing, mailing and otherwise distributing any prospectuses,
Statements of Additional Information or supplements thereto for the Designated
Portfolios and Classes thereof other than those actually distributed (a) to
existing Contractowners; or (b) under a Rule 12b-1 Plan for a particular Class
of shares to prospective Contractowners.
3.2 EOC may alter the form of the Trust's prospectus, Statement of
Additional Information, Annual and Semi-Annual Reports to shareholders, proxy
statements, and other Trust documents
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with the prior approval of the Trust. EOC shall bear all costs associated with
such alteration of form.
3.3. The Trust's prospectus for the Designated Portfolios and Classes
thereof shall state that the Statement of Additional Information for the
Designated Portfolios and Classes thereof is available from the Distributors or
EOC (or in the Trust's discretion, the prospectus shall state that such
Statement of Additional Information is available from the Trust).
3.4. The Trust, at its expense, shall provide EOC with copies of its
proxy statements, Annual and Semi-Annual Reports to shareholders, and other
communications to shareholders in such quantities as EOC shall reasonably
require for mailing or otherwise distributing such materials to Contractowners
and shall assume all expenses associated with mailing or otherwise distributing
those materials. In the alternative, the Trust shall reimburse EOC for its costs
in printing, mailing and distributing such materials to Contractowners.
3.5. If and to the extent required by law, EOC shall:
(a) solicit voting instructions from Contractowners;
(b) vote the Trust shares for the Designated Portfolios and
Classes in accordance with instructions received from Contractowners;
and
(c) vote Trust shares for the Designated Portfolios and
Classes for which no instructions have been received in a particular
Account in the same proportion as Trust shares for the Designated
Portfolios and Classes for which instructions have been received so
long as and to the extent that the SEC continues to interpret the 1940
Act to require pass-through voting privileges for Contractowners. EOC
reserves the right to vote Trust shares held in any Account in its own
right, to the extent permitted by law. Participating Insurance
Companies shall be responsible for assuring that each of their separate
accounts participating in the Trust calculates voting privileges in a
manner consistent with the standards adopted by the Board, which
standards will be provided to all other Participating Insurance
Companies.
3.6. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will comply with
Section 16(c) of the 1940 Act as well as with Sections 16(a) and, if and when
applicable, Section 16(b). Further, the Trust will act in accordance with the
SEC or SEC staff's written interpretation concerning the requirements of Section
16(a) with respect to periodic elections of Trustees and with whatever rules the
SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Distributors shall furnish, or shall cause to be furnished, to
the Trust or its designee, the form of each piece of sales literature or other
promotional material in which the Trust, the Manager or the Distributors are
named prior to its first use. No such material shall be used if the Trust or its
designee reasonably objects to its use after the Trust's receipt of such
material.
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4.2. EOC shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust in connection with the
sale of the EOC Contracts other than the information or representations
contained in or accurately derived from the Registration Statements, prospectus
or Statement of Additional Information for the Trust, as such Registration
Statements, prospectus or Statement of Additional Information may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee, except with the permission of the Trust or its designees.
4.3. The Trust or the Distributors, or their respective designees,
shall furnish, or shall cause to be furnished, to EOC or its designees, the form
of each piece of sales literature or other promotional material in which EOC is
named prior to its use. No such material shall be used if EOC or its designees
reasonably object to its use after receipt of such material.
4.4. The Trust and the Distributors shall not give any information or
make any representations on behalf of EOC or concerning EOC, each Account, or
the EOC Contracts other than the information or representations contained in or
accurately derived from a registration statement, prospectus or Statement of
Additional Information for the Accounts with respect to the EOC Contracts, as
such registration statement, prospectus or Statement of Additional Information
may be amended or supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by EOC for distribution
to Contractowners, or in sales literature or other promotional material approved
by EOC or its designees, except with the permission of EOC.
4.5. The Trust shall provide to EOC at least one complete copy of all
Registration Statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Trust or its shares, contemporaneously
with the filing of such document with the SEC, the NASD, or other regulatory
authorities.
4.6. EOC shall provide to the Trust at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the EOC
Contracts or any Account if such document also relates to the Trust,
contemporaneously with the filing of such document with the SEC, the NASD, or
other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Trust or any affiliate of the Trust: advertisements
(including materials published or designed for use in a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, electronic messages or
communications or other public media), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available
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<PAGE>
to some or all agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, and proxy materials.
However, it is anticipated that materials provided solely: (a) internally to
EOC's or the Distributors' own employees or counsel; or (b) to certain
designated third parties and that are not designed to be provided or
communicated in any manner to the general public (e.g., training materials
provided to distributors or agents) will not be filed with the SEC, the NASD, or
any state securities or insurance regulatory authorities, although such
materials will be prepared in accordance with applicable laws.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Trust and the Distributors shall pay no fee or other
compensation to EOC under this Agreement except for: (a) items covered in
Article III; or (b) pursuant to a Plan adopted by the Trust in accordance with
Rule 12b-1 under the 1940 Act to finance the distribution expenses of any Class.
Nevertheless, the Distributors may make payments to EOC or to any distributor
for the EOC Contracts in amounts agreed to by the Distributors in any writing,
and such payments by the Distributors (other than pursuant to a Rule 12b-1 Plan)
may be made out of existing fees otherwise payable to the Distributors, past
profits of the Distributors, or other resources available to the Distributors.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. Without limiting the foregoing, the Trust
shall see to it that all shares are registered and authorized for issuance prior
to their sale in accordance with applicable federal law, and shall bear all
expenses with respect to: registration and qualification of the Trust's shares;
preparation and filing of the Trust's Registration Statement, prospectus,
Statement of Additional Information, proxy materials, and reports; setting the
prospectus and Statement of Additional Information in type; setting in type,
printing, mailing or otherwise distributing proxy materials and Semi-Annual and
Annual Reports sent to Contractowners (including the costs of setting in type,
printing, mailing or otherwise distributing a prospectus that constitutes an
Annual Report) and if certain Classes of the Trust so elect and the Rule 12b-1
Plan so provides, the preparation, printing, mailing or otherwise distributing
of such materials to prospective owners of EOC Contracts; the preparation of all
statements and notices required by any federal or state law; and all taxes on
the issuance or transfer of the Trust's shares.
ARTICLE VI. Diversification
---------------
6.1. The Trust represents that: (a) it currently has elected to qualify
as a regulated investment company under Subchapter M of the Code; (b) it will
make every effort to maintain such qualification (under Subchapter M or any
successor or similar provision); (c) it will notify EOC immediately upon having
a reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future; and (d) it will seek to minimize any damages
and to rectify its failure to so qualify promptly. The Trust acknowledges that
any failure to qualify as a regulated investment company will eliminate the
ability of the Accounts to avail themselves of the "look through" provisions of
Section 817(h) of the Code and that, as a result, the EOC Contracts will almost
certainly fail to qualify as life insurance and annuity contracts under Section
817(h) of the Code.
6.2. The Trust further represents that it will at all times invest
money from the Accounts in
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such a manner as to assure that the EOC Contracts will be treated as variable
annuity or variable life insurance contracts under the Code and the regulations
issued thereunder. Without limiting the scope of the foregoing, the Trust
represents that it will at all times comply with Section 817(h) of the Code and
Treasury Regulation 1.817-5, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications to such Section or Regulations. In the event of a breach of
this Article VI by the Trust, the Trust warrants that it will take all
reasonable steps: (a) to immediately notify EOC of such breach; and (b) to
adequately diversify the Trust's assets so as to achieve compliance within the
grace period afforded by Regulation 1.817-5.
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ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contractowners of all
variable annuity and variable life insurance separate accounts investing in the
Trust. A material irreconcilable conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; or (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; or (c) an administrative or judicial decision in any
relevant proceeding; or (d) the manner in which the investments of any
Designated Portfolio are being managed; or (e) a difference in voting
instructions given by owners of Variable Contracts; or (f) a decision by an
insurer to disregard the voting instructions of owners of Variable Contracts.
The Board shall promptly inform EOC if it determines that a material
irreconcilable conflict exists and the implications thereof.
7.2. EOC will report any potential or existing conflicts, of which it
is aware, to the Board. EOC will assist the Board in carrying out its
responsibilities under any Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by EOC to
inform the Board whenever the voting instructions of owners of Variable
Contracts are disregarded. EOC's responsibilities under this Section 7.2 will be
carried out with a view only to the interests of its Contractowners.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested Trustees, that a material irreconcilable conflict exists, EOC
and other Participating Insurance Companies shall, at their expense and to the
extent reasonably practicable (as determined by a majority of the disinterested
Trustees), take whatever steps are necessary to remedy or eliminate the material
irreconcilable conflict, up to and including: (a) withdrawing the assets
allocable to some or all of the variable annuity and variable life insurance
separate accounts from the Trust or any Portfolio and reinvesting such assets in
a different investment medium, including (but not limited to) another Portfolio
of the Trust, or submitting the question of whether such withdrawal should be
implemented to a vote of all affected owners of Variable Contracts and, as
appropriate, withdrawing the assets of any appropriate group (i.e., owners of
variable annuity contracts or owners of variable life insurance contracts of one
or more Participating Insurance Companies) that votes in favor of such
withdrawal, or offering to the affected owners of Variable Contracts the option
of making such a change; and (b) establishing a new registered management
investment company or managed separate account. EOC's responsibilities under
this Section 7.3 will be carried out with a view only to the interests of
Contractowners.
7.4. If a material irreconcilable conflict were ever to arise because
of a decision by EOC to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, EOC
may be required, at the Trust's election, to withdraw the affected Account's (or
subaccount's) investment in the Trust and terminate this Agreement with respect
to such Account (or subaccount); provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. No charge or penalty shall be imposed as a result of such
withdrawal. Any such withdrawal and termination must take place
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within six (6) months after the Trust gives written notice that this provision
is being implemented and, until the end of that six (6) month period, the
Distributors and Trust shall continue to accept and implement orders by EOC for
the purchase (and redemption) of shares of the Trust.
7.5. If a material irreconcilable conflict were ever to arise because a
particular state insurance regulator's decision applicable to EOC conflicts with
the majority of other state regulators, then EOC shall withdraw the affected
Account's (or subaccount's) investment in the Trust and terminate this Agreement
with respect to such Account (or subaccount) within six (6) months after the
Board informs EOC in writing that it has determined that such decision has
created a material irreconcilable conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six (6) month
period, the Distributors and Trust shall continue to accept and implement orders
by EOC for the purchase (and redemption) of shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any material irreconcilable conflict, but in
no event will the Trust be required to establish a new funding medium for the
EOC Contracts. EOC shall not be required by Section 7.3 to establish a new
funding medium for the EOC Contracts if an offer to do so has been declined by
vote of a majority of Contractowners materially adversely affected by the
material irreconcilable conflict. In the event that the Board determines that
any proposed action does not adequately remedy any material irreconcilable
conflict, then EOC will withdraw the Account's (or subaccount's) investment in
the Trust and terminate this Agreement within six (6) months after the Board
informs EOC in writing of the foregoing determination; provided, however, that
such withdrawal and termination shall be limited to the extent required by any
such material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then: (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted; and (c) this Agreement shall be otherwise
amended by the Trust, without the need for any consent of the other parties, as
required by such change in law.
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ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By EOC
----------------------
8.1(a). EOC agrees to indemnify and hold harmless the Trust, each
member of the Board, the Distributors, and the directors and officers and each
person, if any, who controls any such person within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of EOC), investigation of
claims or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Trust's shares or the EOC Contracts or interests in the
Accounts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement, prospectus, or Statement of Additional
Information for the EOC Contracts or contained in the EOC Contracts or
sales literature for the EOC Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to EOC by or on behalf of the
Trust for use in the registration statement, prospectus, or Statement
of Additional Information for the EOC Contracts or in the EOC Contracts
or sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the EOC Contracts or Trust shares;
or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the Registration Statement, prospectus or Statement of Additional
Information, or sales literature of the Trust not supplied by EOC or
persons under its control) or wrongful conduct of EOC or persons under
its control, with respect to the sale or distribution of the EOC
Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or Statement of Additional Information, or sales literature
of the Trust or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon
information furnished to the Trust by or on behalf of EOC; or
(iv) arise as a result of any failure by EOC to provide the
services and furnish the materials required to be provided or furnished
by it under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by EOC in this Agreement or arise
out of or result from any other material breach of this Agreement by
EOC;
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as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). EOC shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities, or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to the
Trust, whichever is applicable.
8.1(c). EOC shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified EOC in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify EOC of any such claim shall not relieve EOC from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, EOC shall be
entitled to participate, at its own expense, in the defense of such action. EOC
also shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from EOC to such
party of EOC's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
EOC will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties shall promptly notify EOC of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust's shares or the EOC Contracts or the operation
of the Trust.
8.2. Indemnification by the Distributors
-----------------------------------
8.2(a). Each of the Distributors agrees to indemnify and hold harmless
EOC, and the Trust and each of their directors and officers and each person, if
any, who controls EOC within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Distributors), investigation of
claims or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Trust's shares or the EOC Contracts or interests in the
Accounts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, prospectus or Statement of Additional
Information, or sales literature of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
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<PAGE>
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributors
or Trust by or on behalf of EOC for use in the Registration Statement,
prospectus, or Statement of Additional Information for the Trust, or in
sales literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the EOC Contracts or Trust shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the registration statement, prospectus or Statement of Additional
Information, or sales literature for the EOC Contracts not supplied by
the Distributors or persons under their control) or wrongful conduct of
the Distributors or persons under their control, with respect to the
sale or distribution of the EOC Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, or Statement of Additional Information or sales literature
covering the EOC Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to EOC by or
on behalf of the Distributors or the Trust; or
(iv) arise as a result of any failure by the Distributors or
the Trust to provide the services and furnish the materials required to
be provided or furnished by the Distributors or the Trust under the
terms of this Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the diversification or other
qualification requirements specified in Article VI of this Agreement);
or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Distributors in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Distributors;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). Each of the Distributors shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities, or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to EOC or any Account, whichever is applicable.
8.2(c). Each of the Distributors shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Distributors in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated
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<PAGE>
agent), but failure to notify the Distributors of any such claim shall not
relieve the Distributors from any liability which they may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Distributors will be entitled to participate, at
their own expense, in the defense thereof. Each of the Distributors also shall
be entitled to assume the defense thereof, with counsel reasonably satisfactory
to the party named in the action. After notice from the Distributors to such
party of the Distributors' election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Distributors will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.2(d). EOC agrees promptly to notify the Distributors of the
commencement of any material litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the EOC
Contracts or the operation of each Account.
8.3. Indemnification By the Trust
----------------------------
8.3(a). The Trust agrees to indemnify and hold harmless EOC and each of
its directors and officers and each person, if any, who controls EOC within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Trust), investigation of claims or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements result
from the gross negligence, bad faith or willful misconduct of the Board or any
member thereof, are related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide
the services and furnish the materials required to be provided or
furnished by it under the terms of this Agreement (including a failure
to comply with the diversification and other qualification requirements
specified in Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Trust;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities, or
litigation incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to EOC, the Trust, the Distributors, or each Account, whichever is
applicable.
8.3(c). The Trust shall not be liable under this indemnification
provision with respect to
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<PAGE>
any claim made against an Indemnified Party unless such Indemnified Party shall
have notified the Trust in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but failure
to notify the Trust of any such claim shall not relieve the Trust from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Trust will be
entitled to participate, at its own expense, in the defense thereof. The Trust
also shall be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from the Trust to
such party of the Trust's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Trust will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.3(d). EOC and the Distributors each agree promptly to notify the
Trust of the commencement of any material litigation or proceedings against it
or any of its respective officers or directors in connection with this
Agreement, the issuance or sale of the EOC Contracts, with respect to the
operation of any Account, or the sale or acquisition of shares of the Trust.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules, and regulations as the SEC
may grant (including, but not limited to, any Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, with or without cause, upon six
(6) months' advance written notice delivered to the other
parties; or
(b) termination by EOC upon thirty (30) days' written notice to
the Trust and the Distributors with respect to any Designated
Portfolio or Class thereof based upon EOC's determination that
shares of such Designated Portfolio or Class thereof are not
reasonably available to meet the requirements of the EOC
Contracts or are not consistent with EOC's obligations to
Contractowners; or
(c) termination by EOC upon thirty (30) days' written notice to
the Trust and the Distributors with respect to any Designated
Portfolio or Class thereof in the event any of the Designated
Portfolio's shares or any shares with respect to any Class are
not registered, issued or sold in accordance with applicable
federal and/or state law
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<PAGE>
or such law precludes the use of such shares as the underlying
investment media of the EOC Contracts issued or to be issued
by EOC; or
(d) termination by EOC by written notice to the Trust and the
Distributors with respect to any Designated Portfolio or Class
thereof in the event that such Designated Portfolio or Class
thereof ceases to qualify as a regulated investment company
under Subchapter M of the Code or any other failure under
Section 817 of the Code, or under any successor or similar
provision of either, or if EOC reasonably believes that the
Trust may fail to so qualify; or
(e) termination by either the Trust or the Distributors by written
notice to EOC, if the Trust or the Distributors shall
determine, in their sole judgment exercised in good faith,
that EOC and/or its affiliated companies have suffered a
material adverse change in their business, operations,
financial condition, or prospects since the date of this
Agreement or are the subject of material adverse publicity;
but no termination shall be effective under this subsection
(e) until EOC has been afforded a reasonable opportunity to
respond to a statement by the Trust or the Distributors
concerning the reason for notice of termination hereunder; or
(f) termination by EOC by written notice to the Trust and the
Distributors, if EOC shall determine, in its sole judgment
exercised in good faith, that either the Trust or the
Distributors has suffered a material adverse change in its
business, operations, financial condition, or prospects since
the date of this Agreement or is the subject of material
adverse publicity; but no termination shall be effective under
this subsection (f) until the Trust or the Distributors have
been afforded a reasonable opportunity to respond to a
statement by EOC concerning the reason for notice of
termination hereunder.
10.2. Notwithstanding any termination of this Agreement, the Trust and
the Distributors shall, at the option of EOC, continue to make available
additional shares of the Trust pursuant to the terms and conditions of this
Agreement, for all EOC Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing EOC Contracts").
Specifically, without limitation, the owners of the Existing EOC Contracts shall
be permitted to reallocate investments in the Trust, redeem investments in the
Trust, and/or invest in the Trust upon the making of additional purchase
payments under the Existing EOC Contracts. The parties agree that this Section
10.2 shall not apply to any terminations under Article VII and the effect of
such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3. EOC shall not redeem Trust shares attributable to the EOC
Contracts (as opposed to Trust shares attributable to EOC's assets held in any
Account) except: (a) as necessary to implement Contractowner initiated or
approved transactions; or (b) as required by federal and/or state laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"); or (c) as
permitted pursuant to Section 26(b) of the 1940 Act or otherwise pursuant to an
order of the SEC that permits EOC to redeem Trust shares attributable to EOC
Contracts. Upon request, EOC shall promptly furnish to the Trust and the
Distributors the opinion of counsel for EOC (which counsel shall be reasonably
satisfactory to the Trust and the Distributors) to the effect that any
redemption pursuant to clause (b) above is a
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<PAGE>
Legally Required Redemption or any redemption pursuant to clause (b) is
permitted without first obtaining an order of the SEC pursuant to Section 26(b)
or any other provision of the 1940 Act. Furthermore, except in cases where
permitted under the terms of the EOC Contracts, and as may be in the best
interests of Contractowners, as determined by EOC, EOC shall not prevent
Contractowners from allocating payments to a Designated Portfolio or Class
thereof that was otherwise available under the EOC Contracts without first
giving the Trust or the Distributors ninety (90) days' notice of its intention
to do so.
10.4. Notwithstanding any termination of this Agreement for any reason,
the terms and conditions of the following provisions of this Agreement shall
remain in effect with respect to any Existing Contract, for so long as any
assets invested in the Trust are attributable to such Existing Contract:
Sections 1.3 to 1.10 of Article I (governing the pricing and redemption of
shares); Article II (Representations and Warranties); Sections 3.1 through 3.4
and 3.6 of Article III (Prospectuses and Proxy Statements, and Voting); Articles
IV through IX (Sales Material and Information; Fees and Expenses;
Diversification; Potential Conflicts; Indemnification; and Applicable Law);
Article XI (Notices); and Sections 12.1, 12.2, and 12.5 through 12.8 of Article
XII (Miscellaneous). Further, notwithstanding any termination of this Agreement
for any reason, the terms and conditions of the following provisions of this
Agreement shall remain in effect with regard to EOC Contracts whose assets were
previously invested in the Trust: Article II (Representations and Warranties),
Article VI (Diversification) and Article VII (Indemnification).
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
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<PAGE>
If to the Trust:
EQ Advisors Trust
1290 Avenue of the Americas
New York, New York 10104
Attention: Peter D. Noris
If to EOC:
The Equitable of Colorado, Inc.
1290 Avenue of the Americas
New York, New York 10104
Attention: Samuel B. Shlesinger
If to the Distributors:
Equitable Distributors, Inc.
1290 Avenue of the Americas
New York, New York 10104
Attention: Jamie Shepardson
EQ Financial Consultants, Inc.
1755 Broadway
New York, New York 10019
Attention: Michael F. McNelis
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust as
neither the Board (or its members), officers, agents, or shareholders shall
assume any personal liability for obligations entered into on behalf of the
Trust.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the Contractowners and all information reasonably identified as confidential
in writing by any other party hereto and, except as permitted by this Agreement,
shall not disclose, disseminate, or utilize such names and addresses and other
confidential information until such time as it may come into the public domain
without the express written consent of the affected party. Without limiting the
foregoing, no party hereto shall disclose any information that such party has
been advised is proprietary, except such information that such party is required
to disclose by any appropriate governmental authority (including without
limitation the SEC, the NASD, and state securities or insurance regulators).
12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
-20-
<PAGE>
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule, or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
12.7. The rights, remedies, and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, to which the parties hereto are entitled under
federal and state laws.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Distributors may assign this Agreement or
any rights or obligations hereunder to any affiliate of or company under common
control with the Distributors (but in such event the Distributors shall continue
to be liable under Article VIII of this Agreement for any indemnification due to
EOC, and the assignee shall also be liable), if such assignee is duly licensed
and registered to perform the obligations of the Distributors under this
Agreement.
12.9. EOC shall furnish, or shall cause to be furnished, to the Trust
or its designee upon request copies of the following reports:
(a) EOC's annual statements (prepared under statutory accounting
principles) and annual reports (prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical and in any event within
ninety (90) days after the end of each fiscal year;
(b) any material financial statement, proxy statement, notice, or
report of EOC sent to policyholders, as soon as practical after the delivery
thereof to stockholders;
(c) any registration statement (without exhibits) and financial reports
of EOC filed with the SEC or any state insurance regulator, as soon as practical
after the filing thereof; and
(d) any other report submitted to EOC by independent accountants in
connection with any annual, interim, or special audit made by them of the books
of EOC, as soon as practical after the receipt thereof; but nothing in this
subsection shall require EOC to disclose any information that is privileged or
which, if disclosed, would put EOC at a competitive disadvantage or is both: (a)
confidential; and (b) not material to EOC's financial condition.
12.10 At the request of any party to this Agreement, each other party
will make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data, and
access to operating procedures that may be reasonably requested in
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<PAGE>
connection with compliance and regulatory requirements related to this Agreement
or any party's obligations under this Agreement.
12.11 Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative as of the date specified below.
EQ ADVISORS TRUST
By: _____________________________
Name: Peter D. Noris
Title: President and Trustee
EOC
By: _____________________________
Name: Peter D. Noris
Title: Executive Vice President
and Chief Investment Officer
EOC DISTRIBUTORS, INC.
By: _____________________________
Name: Jerome S. Golden
Title: Chairman of the Board
EQ FINANCIAL CONSULTANTS, INC.
By: _____________________________
Name: Michael S. Martin
Title: Chairman of the Board
and Chief Executive Officer
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<PAGE>
SCHEDULE A
ACCOUNTS AND ASSOCIATED VARIABLE INSURANCE CONTRACTS
Name of Account
- ---------------
- ------------------------------------
EOC Contracts
Funded By Account
- -----------------
- -------------------------------------
<PAGE>
SCHEDULE B
DESIGNATED PORTFOLIOS AND CLASSES
Portfolios of
EQ Advisors Trust
-----------------
T. Rowe Price International Stock Portfolio:
Class IB Shares
T. Rowe Price Equity Income Portfolio:
Class IB Shares
EQ/Putnam Growth & Income Value Portfolio:
Class IB Shares
EQ/Putnam International Equity Portfolio:
Class IB Shares
EQ/Putnam Investors Growth Portfolio:
Class IB Shares
EQ/Putnam Balanced Portfolio:
Class IB Shares
MFS Research Portfolio:
Class IB Shares
MFS Emerging Growth Companies Portfolio:
Class IB Shares
Morgan Stanley Emerging Markets Equity Portfolio:
Class IB Shares
Warburg Pincus Small Company Value Portfolio:
Class IB Shares
<PAGE>
Merrill Lynch World Strategy Portfolio:
Class IB Shares
Merrill Lynch Basic Value Equity Portfolio:
Class IB Shares
-2-
<PAGE>
SCHEDULE C
LIST OF OTHER INVESTMENT COMPANIES
AGREEMENT FOR COOPERATIVE AND JOINT USE OF
PERSONNEL, PROPERTY AND SERVICES BETWEEN THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES AND
EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO INC.
Agreement made as of the 16th day of April, 1984 between THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New York corporation
("Equitable") and EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO Inc., a Colorado
corporation ("Colorado Life"),
Witnesseth:
WHEREAS, Colorado Life is a wholly owned subsidiary of Equitable and
desires to utilize Equitable's personnel, property and services in carrying out
some of its corporate functions and Equitable is willing to furnish the same on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties do hereby mutually agree as follows:
1. Equitable will furnish, or contract with any of its affiliates or
subsidiaries for the furnishing of, as available, personnel, property and
services, including advice and assistance with respect to investments,
requested from time to time by Colorado Life to carry out its corporate
functions.
<PAGE>
2. Colorado Life agrees to pay to Equitable those costs and expenses
incurred by Equitable or any of its affiliates or subsidiaries which, as
reasonably determined by Equitable and demonstrated to the reasonable
satisfaction of Colorado Life, reflect the actual cost to Equitable or its
affiliates or subsidiaries of furnishing such personnel, property and services.
3. The books, accounts and records of Equitable and Colorado Life as to
all transactions hereunder, shall be maintained so as to clearly and accurately
disclose the nature and details of the transactions, including such accounting
information as is necessary to support the reasonableness of the charges or fees
herein.
4. The term of this Agreement shall commence as of the date hereinabove
indicated and continue until December 31, 1984, and thereafter shall be deemed
to be renewed automatically, upon the same terms and conditions, for successive
periods of one year each, until either party, at least 60 days prior to the
expiration of the original term or of any extended term, shall give written
notice to the other party of its intention not to renew the Agreement.
5. It is understood that (a) Equitable, any of its affiliates or
subsidiaries, will invest for their own account
<PAGE>
and may act as investment adivser for others and that Equitable or such others
or persons or organizations affiliated with Equitable could have investment
interests adverse to the interests of Colorado Life in the same or related
investments, (b) Equitable is not obligated to make available to Colorado Life
any particular investment opportunity which comes to Equitable or its
subsidiaries or affiliates, regardless of whether such opportunity is consistent
with the investment policies of Colorado Life; and (c) Colorado Life shall
retain full control over its investment activities, and Equitable or any of its
affiliates or subsidiaries shall have no power or authority by virtue of this
Agreement, whether as agent or otherwise, to obligate or commit Colorado Life
for the acquisition or disposition of any investment.
6. No assignment of this Agreement shall be made by Equitable without the
consent of Colorado Life.
7. Subject to the foregoing Clause 6, this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto.
Dated: April 16, 1984
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By /s/ Ruth Block
-----------------------------------
EQUITABLE LIFE ASSURANCE
SOCIETY OF COLORADO INC.
By /s/ [illegible]
-----------------------------------
<PAGE>
AMENDMENT TO THE AGREEMENT FOR COOPERATIVE AND JOINT
USE OF PERSONNEL, PROPERTY AND SERVICES BETWEEN THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES AND THE
EQUITABLE OF COLORADO, INC.
Clause 4 is hereby restated and amended to read as follows:
The terms of this Agreement shall commence as of the
date hereinabove indicated and continue until December 31,
1984, and thereafter shall be deemed to be renewed
automatically upon the same terms and conditions, for
successive periods of one year each, unless sooner
terminated by either party upon furnishing the other party
with 90 days written notice of its intention to terminate
the Agreement as of the end of such 90 day period.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By /s/ Ruth Block
-----------------------------------
Date 7-30-85
-----------------------------------
THE EQUITABLE OF COLORADO, INC.
By /s/ Melvin Stein
-----------------------------------
Date 7/30/85
-----------------------------------
OWNER: [John Doe]
ANNUITANT: [John Doe]
CONTRACT NUMBER: [00000]
CONTRACT DATE: [January 15, 1999]
CONTRACT
Processing Office: Income Management Group, P.O. Box 1547,
Secaucus, New Jersey 07096-1547
This is the Contract which is issued under the terms of the Contract defined in
Section 1.09. This Contract is issued in return for the application for coverage
under the Contract and the Contributions to be made to us under the Contract.
In this Contract, "we", "our" and "us" mean Equitable of Colorado, Inc. "You"
and "your" mean the Owner.
We will provide the benefits and other rights pursuant to the terms of this
Contract.
TEN DAYS TO CANCEL - Not later than ten days after you receive this Contract,
you may return it to us. We will cancel it and refund any Contribution made to
us, plus or minus any investment gain or loss which applies to the Investment
Funds of the Separate Account from the date such Contribution was allocated to
such Fund to the date of cancellation.
EQUITABLE OF COLORADO, INC.
Samuel B. Shlesinger, Linda Galasso,
President and Chief Executive Officer Secretary
THE PORTION OF ANNUITY ACCOUNT VALUE HELD IN THE SEPARATE ACCOUNT MAY INCREASE
OR DECREASE IN VALUE (SEE PART II OF THIS CONTRACT).
No. EOC99APICB-INDV Page 1
<PAGE>
TABLE OF CONTENTS
Page
Part I - DEFINITIONS 3
Part II - INVESTMENT OPTIONS 5
Part III - CONTRIBUTIONS AND ALLOCATIONS 7
Part IV - TRANSFERS AMONG INVESTMENT OPTIONS 8
Part V - WITHDRAWALS AND TERMINATION 8
Part VI - DEATH BENEFITS 9
Part VII - ANNUITY BENEFITS 10
Part VIII - CHARGES 12
Part IX - GENERAL PROVISIONS 13
TABLE OF GUARANTEED ANNUITY PAYMENTS 15
No. EOC99APICB-INDV Page 2
<PAGE>
PART I - DEFINITIONS
SECTION 1.01 ANNUITANT
"Annuitant" means the individual shown as such in the Data pages, or any
successor Annuitant.
SECTION 1.02 ANNUITY ACCOUNT VALUE
"Annuity Account Value" means the sum of the amounts held for you in the
Investment Options.
SECTION 1.03 ANNUITY BENEFIT
"Annuity Benefit" means a benefit payable by us as described in Part VII.
SECTION 1.04 ANNUITY COMMENCEMENT DATE
"Annuity Commencement Date" means the date on which annuity payments are to
commence as described in Section 7.03. Such date is the date shown in the Data
pages and is subject to change as described in Section 7.03.
SECTION 1.05 BUSINESS DAY
A "Business Day" is any day on which the New York Stock Exchange is open for
trading, or any other day which may be specified in the Data pages. Our Business
Day ends at 4:00 p.m., Eastern time, or such other time as we state in writing
to you.
SECTION 1.06 CASH VALUE
"Cash Value" means an amount equal to the Annuity Account Value, less any
charges that apply as described in Part VIII and any charges that may apply as
described in any applicable Endorsement(s).
SECTION 1.07 CODE
"Code" means the Internal Revenue Code of [1986], as amended at any time, or any
corresponding provisions of prior or subsequent United States revenue laws.
SECTION 1.08 CONTRACT
"Contract" means this Contract including the Data pages and any Endorsement(s).
SECTION 1.09 CONTRACT DATE
"Contract Date" means the earlier of (a) the effective date of the Contract and
(b) the effective date of a prior Contract. Such date is shown in the Data
pages.
SECTION 1.10 CONTRACT YEAR
"Contract Year" means the twelve month period starting on (i) the Contract Date
and (ii) each anniversary of the Contract Date, unless we agree to another
period.
SECTION 1.11 CONTRIBUTION
No. EOC99APICB-INDV Page 3
<PAGE>
"Contribution" means a payment made to us under the Contract. See Section 3.01.
SECTION 1.12 EMPLOYER
"Employer" means, if applicable, an employer as defined in an endorsement
hereto.
SECTION 1.13 INVESTMENT FUND
"Investment Fund" means a sub-fund of a Separate Account. An Investment Fund may
invest its assets in a separate class (or series) or shares of a specified trust
or investment company where each class (or series) represents a separate
portfolio in such trust or investment company.
SECTION 1.14 INVESTMENT OPTION
"Investment Option" means a Separate Account or an Investment Fund of a Separate
Account.
SECTION 1.15 OWNER
"Owner" means the person or entity shown as such in the Data pages, or any
successor owner.
SECTION 1.16 PLAN
"Plan" means, if applicable, the annuity program sponsored by the Employer and
as may be defined in an endorsement hereto.
SECTION 1.17 PRIOR CONTRACT
"Prior Contract" means another contract or Contract issued by us and from which
the Owner and we have agreed to transfer amounts to this Contract.
SECTION 1.18 PROCESSING DATE
"Processing Date" means the day(s) we deduct charges from the Annuity Account
Value. The Data pages show how often a Processing Date will occur.
SECTION 1.19 PROCESSING OFFICE
"Processing Office" means the Equitable of Colorado processing office shown on
the cover page of this Contract, or such other location we may state upon
written notice to you.
SECTION 1.20 SEPARATE ACCOUNT
"Separate Account" means any of the Separate Accounts (except our Separate
Account No. 46) described or referred to in Sections 2.01 and 2.04.
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SECTION 1.21 TRANSACTION DATE
The Transaction Date is the Business Day we receive at the Processing Office a
Contribution or a transaction request providing the information we need.
Transaction requests must be in a form acceptable to us.
PART II - INVESTMENT OPTIONS
SECTION 2.01 SEPARATE ACCOUNT
We have established the Separate Account(s) and maintain such Account(s) in
accordance with the laws of New York State. Income, realized and unrealized
gains and losses from the assets of the Separate Account(s) are credited to or
charged against it without regard to our other income, gains or losses. Assets
are placed in the Separate Account(s) to support this Contract and other
variable annuity contracts and Contracts. Assets may be placed in the Separate
Account(s) for other purposes, but not to support contracts or policies other
than variable annuities and variable life insurance.
The Data pages set forth the Separate Account(s). A Separate Account may be
subdivided into Investment Funds.
The assets of a Separate Account are our property. The portion of such assets
equal to the reserves and other contract liabilities will not be chargeable with
liabilities which arise out of any other business we conduct. We may transfer
assets of a Separate Account in excess of the reserves and other liabilities
with respect to such Account to another Separate Account or to our general
account.
We may, at our discretion, invest Separate Account assets in any investment
permitted by applicable law. We may rely conclusively on the opinion of counsel
(including counsel in our employ) as to what investments we may make as law
permits.
SECTION 2.02 SEPARATE ACCOUNT ACCUMULATION UNITS AND UNIT VALUES
The amount you have in an Investment Fund at any time is equal to the number of
Accumulation Units you have in that Fund multiplied by the Fund's Accumulation
Unit Value at that time. "Accumulation Unit" means a unit which is purchased in
a Separate Account. "Accumulation Unit Value" means the dollar value of each
Accumulation unit in a Separate Account on a given date. (If Investment Funds
apply as described in Section 2.01, then the terms of this Section 2.02 apply
separately to each Fund, unless otherwise stated).
Amounts allocated or transferred to a Separate Account are used to purchase
Accumulation Units of that Account. Units are redeemed when amounts are
deducted, transferred or withdrawn.
The number of Accumulation Units you have in a Separate Account at any time is
equal to the number of Accumulation Units purchased minus the number of Units
redeemed in that Account up to that time. The number of Accumulation Units
purchased or redeemed in a transaction is equal to the dollar amount of the
transaction divided by the Account's Accumulation Unit Value for that
Transaction Date.
We determine Accumulation Unit Values for each Separate Account for each
Valuation Period. A "Valuation Period" is each Business Day together with any
consecutive preceding non-business days. For example, for each Monday which is a
Business Day, the preceding Saturday and Sunday will be included to equal a
three-day Valuation Period.
Unless the following paragraph applies, the Accumulation Unit Value for a
Separate Account for any Valuation Period is equal to the Accumulation Unit
Value for the immediately preceding Valuation Period multiplied by the ratio of
values "(i)" and "(ii)". Value "(i)" is the value of the Separate Account at the
close of business at the
No. EOC99APICB-INDV Page 5
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end of the current Valuation Period, before any amounts are allocated to or
withdrawn from the Separate Account in that Period. Value "(ii)" is the value of
the Separate Account at the close of business at the end of the preceding
Valuation Period, after all allocations and withdrawals were made for that
Period. For this purpose, "value of the Separate Account" means the market value
or, where there is no readily available market, the fair value of the assets
allocated to the Separate Account, as determined in accordance with accepted
accounting practices, and applicable laws and regulations.
To the extent the Separate Account invests in Investment Funds, and the assets
of the Funds are invested in a class or series of shares of a specified trust or
investment company, the Accumulation Unit Value of an Investment Fund for any
Valuation Period is equal to the Accumulation Unit Value for that Fund on the
immediately preceding Valuation Period multiplied by the Net Investment Factor
for that Fund for the current Valuation Period. The Net Investment Factor for a
Valuation Period is (a) divided by (b) minus (c), where
(a) is the value of the Investment Fund's shares of the related
portfolio of the specified trust or investment company at the end
of the Valuation Period (before taking into account any amounts
allocated to or withdrawn from the Investment Fund for the
Valuation Period and after deduction of investment advisory fees
and direct operating expenses of the specified trust or investment
company; for this purpose, we use the share value reported to us
by the specified trust or investment company);
(b) is the value of the Investment Fund's shares of the related
portfolio of the specified trust or investment company at the end
of the preceding Valuation Period (taking into account any amounts
allocated or withdrawn for that Valuation Period);
(c) is the daily Separate Account charges (see Section 8.04) for the
expenses and risks of this Contract, times the number of calendar
days in the Valuation Period, plus any charge for taxes or amounts
set aside as a reserve for taxes.
SECTION 2.03 AVAILABILITY OF INVESTMENT OPTIONS
Section 3.01 describes how Contributions are allocated among Investment Options
based on your election.
The Data pages list which Options are available as of the Contract Date.
SECTION 2.04 CHANGES WITH RESPECT TO SEPARATE ACCOUNT
In addition to the right reserved pursuant to subsection (b) of Section 2.03, we
have the right, subject to compliance with applicable law, including approval of
Contract owners if required:
(a) to add Investment Funds (or sub-funds of Investment Funds) to, or
to remove Investment Funds (or sub-funds) from, the Separate
Account, or to add other separate accounts;
(b) to combine any two or more Investment Funds or sub-funds thereof;
(c) to transfer the assets we determine to be the share of the class
of contracts to which this Contract belongs from any Investment
Fund to another Investment Fund;
(d) to operate the Separate Account or any Investment Fund as a
management investment company under the Investment Company Act of
1940, in which case charges and expenses that otherwise would be
assessed against an underlying mutual fund would be assessed
against the Separate Account;
(e) to operate the Separate Account or any Investment Fund as a unit
investment trust under the Investment Company Act of 1940;
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(f) to deregister the Separate Account under the Investment Company
Act of 1940, provided that such action conforms with the
requirements of applicable law;
(g) to restrict or eliminate any voting rights as to the Separate
Account;
(h) to cause one or more Investment Funds to invest some or all of
their assets in one or more other trusts or investment companies.
If the exercise of these rights results in a material change in the underlying
investment of a Separate Account, you will be notified of such exercise, as
required by law.
A Separate Account or Investment Fund which may be added by us as described
above may be one with respect to which (i) there may be periods during which
Contributions may be restricted pursuant to the maturity terms of such Account
or Fund, (ii) amounts therein may be automatically liquidated pursuant to the
investment policy of the Account, and (iii) investments therein may mature. We
will have the right to reallocate amounts arising from liquidation or maturity
according to your allocation instructions then in effect unless you specify
other instructions with respect to such amounts. If no such allocation
instructions have been made, the reallocation will be made to a designated
Investment Option, or to the next established Account or Fund of the same type
as described in this paragraph, if applicable, as specified in the Data pages.
PART III - CONTRIBUTIONS AND ALLOCATIONS
SECTION 3.01 CONTRIBUTIONS, ALLOCATIONS
You elect which Investment Option will be available under the Contract subject
to the terms of Section 2.03. Once this election is made, you may allocate
Contributions to, or transfer among, only these Options. You may add or subtract
Options by sending us a written request, but we have the right to decline your
request.
You also elect how to allocate Contributions among the Options chosen. If you
are not the Annuitant, you may delegate to the Annuitant authority to allocate
Contributions. You need not allocate Contributions to each Option available. You
may change the allocation election at any time by sending us the proper form.
Allocation percentages must be in whole numbers (no fractions) and must equal
100%.
Each Contribution is allocated (after deduction of any charges that may apply)
in accordance with the allocation election in effect on the Transaction Date.
Contributions made to a Separate Account purchase Accumulation Units in that
Account, using the Accumulation Unit Value for that Transaction Date.
SECTION 3.02 LIMITS ON CONTRIBUTIONS
We have the right not to accept any Contribution which is less than the amount
shown in the Data pages. The Data pages indicate other minimum and maximum
Contribution requirements which may apply. We also have the right, upon advance
notice to you, to:
(a) change such requirements to apply to Contributions made after the date of
such change, and
(b) discontinue acceptance of Contributions under this Contract with respect to
all Owners or with respect to all Owners to whom the same type of Contract
applies.
No. EOC99APICB-INDV Page 7
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PART IV - TRANSFERS AMONG INVESTMENT OPTIONS
SECTION 4.01 TRANSFER REQUESTS
You may request to transfer all or part of the amount held in an Investment
Option to one or more of the other Options. The request must be in a form we
accept. All transfers will be made on the Transaction Date. Transfers are
subject to the terms of Section 4.02 and to our rules in effect at the time of
transfer. With respect to a Separate Account, the transfers will be made at the
Accumulation Unit Value for that Transaction Date.
SECTION 4.02 TRANSFER RULES
The transfer rules which apply are described in the Data pages. A transfer
request will not be accepted if it involves less than the minimum amount, if
any, stated in the Data pages (unless the Annuity Account Value is less than
such amount). We have the right to change our transfer rules. Any change will be
made upon advance notice to you.
The Investment Funds may consist of funds which are classified as "Type A"
Investment Options or "Type B" Investment Options or any other type which may be
specified in the Data pages, as we designate in our discretion for purposes of
the transfer rules described in the Data pages. The Data pages specify whether
such Investment Options are designated Type A or Type B or another type as well
as the minimum or maximum limits on transfers which apply.
PART V - WITHDRAWALS AND TERMINATION
SECTION 5.01 WITHDRAWALS
Unless otherwise stated in the Data pages, you may request, pursuant to our
procedures then in effect, a withdrawal from the Investment Options before the
Annuity Commencement Date and while the Annuitant is alive. The request must be
in a form we accept.
On the Transaction Date, we will pay the amount of the withdrawal requested or,
if less, the Cash Value. The amount to be paid plus any Withdrawal Charge which
applies (see Section 8.01) will be withdrawn on a pro-rata basis from the
amounts held for you in the Investment Options, unless you elect otherwise and
unless otherwise stated in the Data pages.
We will not accept a withdrawal request if it involves less than the minimum
amount, if any, stated in the Data pages. Further conditions or restrictions may
apply if stated in the Data pages or in an Endorsement hereto.
SECTION 5.02 TERMINATION
This Contract will terminate if one or more of the following events occurs,
unless otherwise specified in the Data pages:
(a) If a withdrawal made under Section 5.01 would result in an Annuity Account
Value of an amount less than the minimum amount stated in the Data pages, we
will so advise you and have the right to pay you such Value. In that case this
Contract will be terminated.
(b) Before the Annuity Commencement Date, we have the right to pay the Cash
Value and terminate this Contract if no Contributions are made during the last
three Contract Years, and the Annuity Account Value is less than the amount
described in item (a) above.
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(C) We also have the right to terminate this Contract if no Contributions have
been made within 120 days of the Contract Date
PART VI - DEATH BENEFITS
SECTION 6.01 DEATH BENEFIT
Upon receipt of due proof that the Annuitant has died before the Annuity
Commencement Date, we will pay a death benefit to the beneficiary named under
Section 6.02. Payment may be subject to the terms of Section 6.02 and any
special rules which may apply as described in any Endorsement hereto.
The amount of the death benefit is described in the Data pages.
The death benefit will be paid as an Annuity Benefit or in a single sum, as
described in Section 6.02.
SECTION 6.02 BENEFICIARY
You give us the name of the beneficiary who is to receive any death benefit
payable on the Annuitant's death. You may change the beneficiary from time to
time during the Annuitant's lifetime and while coverage under the Contract is in
force. Any such change must be made in writing in a form we accept. A change
will, upon receipt at the Processing Office, take effect as of the date the
written form is executed, whether or not you are living on the date of receipt.
We will not be liable as to any payments we made before we receive any such
change.
You may name one or more persons to be primary beneficiary on the Annuitant's
death and one or more other persons to be successor beneficiary if the primary
beneficiary dies before the Annuitant. Unless you direct otherwise, if you have
named two or more persons as beneficiary, the beneficiary will be the named
person or persons who survive the Annuitant and payments will be made to such
persons in equal shares or to the survivor.
Any part of a death benefit payable as described in Section 6.01 for which there
is no named beneficiary living at the Annuitant's death will be payable in a
single sum to the Annuitant's surviving children. The payments will be made in
equal shares, or should none survive or should there be none, then to the
Annuitant's estate.
If you so elect in writing, any amount that would otherwise be payable to a
beneficiary in a single sum may be applied to provide an Annuity Benefit, on the
form of annuity elected by you, subject to our rules then in effect. If at the
Annuitant's death there is no election in effect, the beneficiary may make such
an election. In the absence of any election by either you or the beneficiary, we
will pay the death benefit in a single sum.
Any naming of a beneficiary is subject to the terms of the Plan, if one applies,
including any terms requiring spousal consent.
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PART VII - ANNUITY BENEFITS
SECTION 7.01 ANNUITY BENEFIT
Payments under an Annuity Benefit will be made monthly. You may elect instead to
have the Annuity Benefit paid at other intervals, such as every three months,
six months, or twelve months, instead of monthly, subject to our rules at the
time of your election or as otherwise stated in the Data pages or any
endorsement hereto. This election may be made at the time the Annuity Benefit
form as described in Section 7.02 is elected. In that event, all references in
this Contract to monthly payments will, with respect to the Annuity Benefit to
which the election applies, be deemed to mean payments at the frequency elected.
SECTION 7.02 ELECTION OF ANNUITY BENEFITS
As of the Annuity Commencement Date, provided the Annuitant is then living, the
Annuity Account Value will be applied to provide the Normal Form of Annuity
Benefit (described below). However, you may instead elect (i) to have the Cash
Value paid in a single sum, (ii) to apply the Annuity Account Value to provide
an Annuity Benefit of any form offered by us or one of our subsidiary life
insurance companies, or (iii) to apply the Cash Value to provide any other form
of benefit payment we offer, subject to our rules then in effect and applicable
laws and regulations. At the time an Annuity Benefit is purchased, we will issue
a supplementary contract which reflects the Annuity Benefit terms.
We will provide notice and election forms to you not more than six months before
the Annuity Commencement Date.
We will have the right to require you to furnish any information we need to
provide an Annuity Benefit. We will be fully protected in relying on such
information and need not inquire as to its accuracy or completeness.
SECTION 7.03 COMMENCEMENT OF ANNUITY BENEFITS
Before the Annuity Commencement Date, you may elect to change such Date to any
date after your election is filed (other than the 29th, 30th, or 31st of any
month). You must do this in writing. The change will not take effect until your
written election is received and accepted by us at our Processing Office.
However, no Annuity Commencement Date will be later than the first day of the
month which follows the date the Annuitant attains the "maximum maturity age"
or, if later, the tenth anniversary of the Contract Date. The current maximum
maturity age is shown in the Data pages, but may be changed by us in conformance
with applicable law.
SECTION 7.04 ANNUITY BENEFIT FORMS
The "Normal Form" of Annuity Benefit is an Annuity Benefit payable on the
Life-Period Certain Annuity Form described below, unless another Form is to
apply pursuant to the terms of the Plan, if applicable, the requirements of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended, or any
other law that applies. The Data pages will state the Normal Form which applies.
We may offer other annuity forms as available from us or from one of our
affiliated or subsidiary life insurance companies. Such a form may, for example,
include the Joint and Survivor Life Annuity Form which provides monthly payments
while either of two persons upon whose lives such payments depend is living. The
monthly amount to be continued when only one of the persons is living will be
equal to a percentage, as elected, of the monthly amount that was paid while
both were living.
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The Life-Period Certain Annuity is an annuity payable during the lifetime of the
person upon whose life the payments depend, but with 10 years of payments
guaranteed (10 years certain period). That is, if the original payee dies before
the certain period has ended, payments will continue to the beneficiary named to
receive such payments for the balance of the certain period.
SECTION 7.05 AMOUNT OF ANNUITY BENEFITS
If you elect pursuant to Section 7.02 to have an Annuity Benefit paid in lieu of
the Cash Value, the amount applied to provide the Annuity Benefit will, unless
otherwise stated in the Data pages or required by applicable laws or
regulations,be the (i) Annuity Account Value if the Annuity form elected
provides payments for a person's remaining lifetime or (ii) the Cash Value if
the annuity form elected does not provide such lifetime payments.
The amount applied to provide an Annuity Benefit may be reduced by a charge for
any taxes which apply on annuity purchase payments. If we have previously
deducted charges for taxes from Contributions, we will not again deduct charges
for the same taxes before an Annuity Benefit is provided. The balance will be
used to purchase the Annuity Benefit on the basis of either (i) the Table of
Guaranteed Annuity Payments or (ii) our then current individual annuity rates,
whichever rates would provide a larger benefit with respect to the payee.
SECTION 7.06 CONDITIONS
We may require proof acceptable to us that the person on whose life a benefit
payment is based is alive when each payment is due. We will require proof of the
age of any such person on whose life an Annuity Benefit is based.
If a benefit was based on information that is later found not to be correct,
such benefit will be adjusted on the basis of the correct information. The
adjustment will be made in the number or amount of the benefit payments, or any
amount used to provide the benefit, or any combination. Overpayments by us will
be charged against future payments. Underpayments will be added to future
payments. Our liability is limited to the correct information and the actual
amounts used to provide the benefits.
If the age (or sex, if applicable as stated in the Data pages or Table of
Guaranteed Annuity Payments) of any person upon whose life an Annuity Benefit
depends has been misstated, any benefits will be those which would have been
purchased at the correct age (or sex). Any overpayments or underpayments made by
us will be charged or credited with interest at the rate shown in the Data
pages. Such interest will be deducted from or added to future payments.
If we receive acceptable proof that (i) a payee entitled to receive any payment
under the terms of this Contract is physically or mentally incompetent to
receive such payment or a minor, (ii) another person or an institution is then
maintaining or has custody of such payee, and (iii) no guardian, committee, or
other representative of the estate of such payee has been appointed, we may make
the payments to such other person or institution. In the case of a minor, the
payments will not exceed $200, or such other amount as may be shown in the Data
pages. We will have no further liability with respect to the payments so made.
If the amount to be applied hereunder is less than the minimum amount stated in
the Data pages, we may pay the amount to the payee in a single sum instead of
applying it under the annuity form elected.
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SECTION 7.07 CHANGES
We have the right, upon advance notice to you, to change at any time after the
fifth anniversary of the Contract Date and at intervals of not less than five
years, the actuarial basis used in the Tables of Guaranteed Annuity Payments.
However, no such change will apply to (a) any Annuity Benefit provided before
the change or (b) Contributions made before such change which are applied to
provide an Annuity Benefit.
PART VIII - CHARGES
SECTION 8.01 WITHDRAWAL CHARGES
The amount of the Withdrawal Charge is stated in the Data pages. We have the
right to change the Charge shown in the Data Pages with respect to future
Contributions, subject to any maximum stated in the Data pages. We will give you
notice of any change.
If specified in the Data pages, a "Free Corridor Amount" will apply as follows:
"Free Corridor Amount" means an amount equal to the percentage, stated in
the Data pages, of the Annuity Account Value, minus the total of all prior
withdrawals (and associated Withdrawal Charges) made as described in
Section 5.01 in the current Contract Year. We have the right to change the
Free Corridor Amount, but it will always be a percentage between 0% and
30% if so provided in the Data.
If the amount of a withdrawal made under Part V is more than the Free
Corridor Amount (defined above), we will (a) first withdraw from the
Investment Options, on the basis described in Section 5.01, an amount
equal to the Free Corridor Amount, and (b) then withdraw from the
Investment Options an amount equal to the excess of the amount requested
over the Free Corridor Amount, plus a Withdrawal Charge if one applies.
For purposes of this Section, amounts withdrawn up to the Free Corridor
Amount will not be deemed a withdrawal of any Contributions. We have the
right to carry forward the free Corridor Amount into a future Contract
Year, if not used in any Year, if so stated in the Data pages.
Any withdrawals in excess of the Free Corridor Amount will be deemed
withdrawals of Contributions in the reverse order in which they were made.
That is, contributions will be withdrawn on a last-in, first-out basis
unless the Data pages state that a first-in, first-out basis will apply.
In addition, the Annuitant's years of participation under the Prior Contract, if
applicable, will be included for purposes of determining the Withdrawal Charge,
if so specified in the Data pages in accordance with our rules then in effect.
If specified in the Data pages we have the right to reduce or waive the
Withdrawal Charge upon such events as stated in the Data pages. Moreover, the
Withdrawal Charge will be reduced if needed in order to comply with any
applicable state or federal law.
SECTION 8.02 ADMINISTRATIVE AND OTHER CHARGES DEDUCTED FROM ANNUITY ACCOUNT
VALUE
As of each Processing Date, we will deduct Charges related to the administration
and/or distribution of this Contract from the Annuity Account Value. Such
Charges are shown in the Data pages. If specified in the Data pages, the Charges
will be deducted in full or prorated for the Contract Year, or portion thereof,
in which the Contract Date occurs or in which the Annuity Account Value is
withdrawn or applied to provide an Annuity Benefit or death benefit. If so, the
Charges will be deducted when withdrawn or so applied.
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The amount of any such Charge will in no event exceed any maximum amount shown
in the Data pages, subject to any maximum amount permitted under any applicable
law.
We have the right to change the amount of the Charges with respect to future
Contributions. We will give you advance notice of any such change.
SECTION 8.03 TRANSFER CHARGES
We have the right to impose a charge with respect to any transfer among
Investment Options after the number of free transfers, shown in the Data pages,
made on behalf of an Annuitant. The amount of such charge will be set forth in a
notice from us to you and will in no event exceed any maximum amount stated in
the Data pages.
SECTION 8.04 DAILY SEPARATE ACCOUNT CHARGE
Assets of the Investment Funds will be subject to a daily asset charge. This
daily asset charge is for mortality risk, expenses and expense risk that we
assume, as well as for financial accounting and death benefits if specified in
the Data pages. The charge will be made pursuant to item (c) of "Net Investment
Factor" as defined in Section 2.02. Such charge will be applied after any
deductions to provide for taxes. It will be at a rate not to exceed the maximum
annual rate stated in the Data pages. We have the right to charge less on a
current basis; the actual charge to apply, for at least the first Contract Year,
is also stated in the Data pages.
SECTION 8.05 CHANGES
In addition to our right to reduce or waive charges as described in this Part
VIII, we have the right, upon advance notice to you, to increase the amount of
any charge stated in the Data pages, subject to (a) any maximum amount provided
in this Part VIII or the Data pages and (b) with respect to Withdrawal Charges
and Administrative or Other Charges deducted from the Annuity Account Value, the
application of any increase only to Contributions made after the date of the
changes.
PART IX - GENERAL PROVISIONS
SECTION 9.01 CONTRACT
This Contract is the entire contract between the parties. It will govern with
respect to our rights and obligations.
This Contract may not be changed, nor may any of our rights or rules be waived,
except in writing and by our authorized officer.
SECTION 9.02 STATUTORY COMPLIANCE
We have the right to change this Contract without the consent of any other
person in order to comply with any laws and regulations that apply. Such right
will include, but not be limited to, the right to conform this Contract to
reflect changes in the Code, in Treasury regulations or published rulings of the
Internal Revenue Service, ERISA, and in Department of Labor regulations.
The benefits and values available under this Contract will not be less than the
minimum benefits required by any state law that applies.
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SECTION 9.03 DEFERMENT
The use of proceeds to provide a payment of a death benefit and payment of any
portion of the Annuity Account Value (less any Withdrawal Charge that applies)
will be made within seven days after the Transaction Date. Payments or use of
proceeds from the Investment Funds can be deferred for any period during which
(1) the New York Stock Exchange is closed or trading is restricted, (2) sales of
securities or determination of the fair value of an Investment Fund's assets is
not reasonably practicable because of an emergency, or (3) the Securities and
Exchange Commission, by order, permits us to defer payment in order to protect
persons with interests in the Investment Funds.
SECTION 9.04 REPORTS AND NOTICES
At least once each year until the Annuity Commencement Date, we will send you a
report showing:
(a) the total number of Accumulation Units in each Separate Account or
Investment Fund;
(b) the Accumulation Unit Value;
(c) the dollar amount in each Separate Account or Investment Fund;
(d) the Cash Value; and
(e) the amount of the death benefit.
The terms which require us to send you a report as described above or any
written notice as described in any other Section will be satisfied by our
mailing any such report or notice to your last known address as shown in our
records.
All written notices sent to us will not be effective until received at the
Processing Office. Your Contract Number should be included in all
correspondence.
SECTION 9.05 ASSIGNMENTS, NONTRANSFERABILITY, NONFORFEITABILITY
No amounts payable under this Contract to a payee other than you may be assigned
by that payee unless permitted herein, nor will they be subject to the claims of
creditors or to legal process, except to the extent permitted by law. Other
restrictions may apply if stated in any endorsement hereto.
SECTION 9.06 MANNER OF PAYMENT
We will pay all amounts hereunder by check (in United States dollars) or, if so
agreed by you and us, by wire transfer. All amounts payable to you will be paid
by check payable to us (in United States dollars) or by any other method
acceptable to us.
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TABLE OF GUARANTEED ANNUITY PAYMENTS
[AMOUNT OF ANNUITY BENEFIT PAYABLE MONTHLY ON THE LIFE ANNUITY FORM WITH TEN
YEARS CERTAIN PROVIDED BY APPLICATION OF $1,000.
Monthly Income Monthly Income
Ages Males Females Age Males Females
- ---- ----- ------- --- ----- -------
60 4.12 3.70 73 5.52 4.87
61 4.20 3.76 74 5.66 4.99
62 4.29 3.83 75 5.80 5.12
63 4.38 3.90 76 5.95 5.26
64 4.48 3.98 77 6.10 5.40
65 4.58 4.06 78 6.25 5.55
66 4.68 4.14 79 6.40 5.70
67 4.79 4.23 80 6.56 5.85
68 4.90 4.32 81 6.72 6.01
69 5.02 4.42 82 6.88 6.18
70 5.14 4.52 83 7.04 6.34
71 5.26 4.63 84 7.20 6.51
72 5.39 4.75 85 7.36 6.67
The amount of income provided under an Annuity Benefit payable on the Life
Annuity form with Ten Years Certain is based on 2.5% interest and the 1983
Individual Annuity Mortality Table "a" projected with modified Scale G.
Amounts required for ages not shown in the above Table or for other annuity
forms will be calculated by us on the same actuarial basis.
If a variable annuity form is available from us and elected pursuant to Section
7.02, then the amounts required will be calculated by us based on the 1983
Individual Annuity Mortality Table "a" projected with modified Scale "G" and a
modified two year age setback and on an Assumed Base Rate of Net Investment
Return of 5.0%.]
No. EOC99APICB-INDV Page 15
ACCUMULATOR PLUS (NQ)
DATA
PART A -- THIS PART LISTS YOUR PERSONAL DATA.
OWNER: [John Doe]
ANNUITANT: [JOHN DOE] Age: [60] Sex: [Male]
CONTRACT NUMBER: [00000]
ENDORSEMENTS ATTACHED: Endorsement Applicable to Non-Qualified Contracts
Endorsement for Extra Credit Annuity
ISSUE DATE: [May 1, 1999]
CONTRACT DATE: [May 1, 1999]
ANNUITY COMMENCEMENT DATE: [January 22, 2029]
THE MAXIMUM MATURITY AGE IS AGE 90 -- SEE SECTION 7.03.
The Annuity Commencement Date may not be later than the Processing
Date which follows the Annuitant's 90th birthday.
GUARANTEED BENEFITS: Guaranteed Minimum Death Benefit [5% to Age 80
Roll Up] or [Annual Ratchet to Age 80]
BENEFICIARY: [JANE DOE]
No. EOC99APICB-INDV Data page 1
<PAGE>
DATA PAGES (CONT'D)
PART B - -THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CONTRACT.
INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$25,000.00]
INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
o [ALLIANCE MONEY MARKET FUND
o ALLIANCE HIGH YIELD FUND
o ALLIANCE COMMON STOCK FUND
o ALLIANCE AGGRESSIVE STOCK FUND
o ALLIANCE SMALL CAP GROWTH FUND
o BT EQUITY 500 INDEX FUND
o BT SMALL COMPANY INDEX FUND
o BT INTERNATIONAL EQUITY INDEX FUND
o EQ/EVERGREEN FUND
o EQ/EVERGREEN FOUNDATION FUND
o JPM CORE BOND FUND
o LAZARD LARGE CAP VALUE FUND
o LAZARD SMALL CAP VALUE FUND
o MFS GROWTH WITH INCOME FUND
o MFS RESEARCH FUND
o MFS EMERGING GROWTH COMPANIES FUND $25,000.00
o MERRILL LYNCH BASIC VALUE EQUITY
o MERRILL LYNCH WORLD STRATEGY
o EQ/PUTNAM GROWTH & INCOME VALUE FUND
o EQ/PUTNAM INVESTORS GROWTH FUND
o EQ/PUTNAM INTERNATIONAL EQUITY FUND]
TOTAL: [$25,000.00]
Investment Options shown are Investment Funds of our Separate Account No. VA.
No. EOC99APICB-INDV Data page 2
<PAGE>
DATA PAGES (CONT'D)
PROCESSING DATES (SEE SECTION 1.18): A Processing Date is each Contract Date
anniversary.
AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.03): Not applicable
ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Your initial and any subsequent
Contributions are allocated according to your instructions.
CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $25,000.
Subsequent Contribution minimum: $1,000. Subsequent Contributions can be made
until the Annuitant attains age 81.We may refuse to accept any Contributions
under your Contract would then total more than $1,500,000. We reserve the right
to limit aggregate Contributions made after the first Contract Year to 150% of
first year Contributions. We may also refuse to accept any Contribution if the
sum of all Contributions under all Equitable of Colorado annuity accumulation
contracts/certificates that you own would then total more than $2,500,000.
TRANSFER RULES (SEE SECTION 4.02): Transfers among Investment Options may be
made at any time during the Contract Year.
ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must
provide withdrawal instructions indicating from which Investment Options the
Lump Sum Withdrawal and any withdrawal charge will be taken.
WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Not applicable.
MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum -
$1,000.
MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02):
Requests for a withdrawal must be for either (a) 90% or less of the Cash Value
or (b) 100% of the Cash Value (surrender of the Contract).
DEATH BENEFIT AMOUNT (SEE SECTION 6.01):
The death benefit is equal to the Annuity Account Value or, if greater, the
Guaranteed Minimum Death Benefit.
Guaranteed Minimum Death Benefit
[APPLICABLE IF THE CONTRACT OWNER ELECTS THIS BENEFIT]
5% to Age 80 Roll Up - On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial Contribution. Thereafter, the Guaranteed
Minimum Death Benefit is credited with interest at 5% (3% for amounts in the
Alliance Money Market Fund) on each Contract Date anniversary through the
Annuitant's age 80 (or at the Annuitant's death if earlier), and 0% thereafter,
and is adjusted for any subsequent Contributions and withdrawals.
No. EOC99APICB-INDV Data page 3
<PAGE>
DATA PAGES (CONT'D)
The current Guaranteed Minimum Death Benefit will be reduced on a
dollar-for-dollar basis as long as the sum of the withdrawals in any Contract
Year is 5% or less of the beginning of Contract Year Guaranteed Minimum Death
Benefit. Once a withdrawal is made that causes cumulative withdrawals in a
Contract Year to exceed 5% of the beginning of Contract Year Guaranteed Minimum
Death Benefit, that withdrawal and any subsequent withdrawals in that Contract
Year will cause a pro rata reduction to occur.
[APPLICABLE IF THE CONTRACT OWNER ELECTS THIS BENEFIT]
Annual Ratchet to Age 80 - On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial Contribution. Thereafter, the Guaranteed
Minimum Death Benefit is reset through the Annuitant's age 80, to the Annuity
Account Value on a Contract Date anniversary if higher than the current
Guaranteed Minimum Death Benefit, and is adjusted for any subsequent
Contributions and withdrawals.
Each withdrawal will cause a reduction in your current Guaranteed Minimum Death
Benefit on a pro rata basis.
NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain
INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE
SECTION 7.06): 6% per year
MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): $2,000, as well
as minimum of $20 for initial monthly annuity payment.
WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a
percentage of each Contribution made to the extent that a withdrawal exceeds
the Free Corridor Amount as discussed in Section 8.01, or, if the Contract is
surrendered to receive the Cash Value. We determine the withdrawal charge
separately for each Contribution in accordance with the table below.
Current and Maximum
Percentage of
Contract Year Contributions
------------- -------------
1 8.00%
2 8.00%
3 7.00%
4 6.00%
5 5.00%
6 4.00%
7 3.00%
8 2.00%
9 1.00%
10 0.00%
No. EOC99APICB-INDV Data page 4
<PAGE>
DATA PAGES (CONT'D)
The applicable withdrawal charge percentage is determined by the Contract Year
in which the withdrawal is made or the Contract is surrendered, beginning with
"Contract Year 1" with respect to each Contribution withdrawn or surrendered.
For purposes of the table, for each Contribution, the Contract Year in which we
receive that Contribution is "Contract Year 1."
Withdrawal charges will be deducted from the Investment Options from which each
withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the
beginning of the Contract Year minus any amount previously withdrawn during the
Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be
deemed a withdrawal of Contributions.
Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of
Contributions in the order in which they were made (that is, the first-in,
first-out basis will apply).
The Free Corridor Amount does not apply when calculating the withdrawal charge
applicable upon a surrender.
NO WITHDRAWAL CHARGES WILL APPLY IN THESE EVENTS:
1. the Annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration;
2. you give us proof that the Annuitant's life expectancy is six months or
less (such proof must include, but is not limited to, certification by a
licensed physician;
3. the Annuitant has been confined to a nursing home for more than 90 days as
verified by a licensed physician. A nursing home for this purpose means one
which is (i) approved by Medicare as a provider of skilled nursing care
service, or (ii) licensed as a skilled nursing home by the state or
territory in which it is located (it must be within the United States,
Puerto Rico, U. S. Virgin Islands, or Guam) and meets all the following:
o its main function is to provide skilled, intermediate or custodial
nursing care;
o it provides continuous room and board to three or more persons;
o it is supervised by a registered nurse or practical nurse;
o it keeps daily medical records of each patient;
o it controls and records all medications dispensed; and
o its primary service is other than to provide housing for residents.
No. EOC99APICB-INDV Data page 5
<PAGE>
DATA PAGES (CONT'D)
The withdrawal charge will apply with respect to a Contribution if the
condition as described above existed at the time the Contribution was remitted
or if the condition began within the 12 month period following remittance.
CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02):
Charges for State Premium and Other Applicable Taxes: A charge for
applicable taxes, such as state or local premium taxes generally will be
deducted from the amount applied to provide an Annuity Benefit under
Section 7.02.
The above charge will be deducted from the Annuity Account Value in the
Investment Funds on a pro rata basis.
NUMBER OF FREE TRANSFERS (SEE SECTION 8.03): Unlimited
DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04):
Mortality and Expense Risks Charge:
Current and Maximum Annual rate of 1.10% (equivalent to a
daily rate of 0.003032%).
Administration Charge:
Current and Maximum Annual rate of 0.25%
(equivalent to a daily rate of
0.000692%). We reserve the right to
increase this charge to an annual rate
of 0.35%.
Distribution Charge:
Current and Maximum Annual rate of 0.25% (equivalent to a
daily rate of 0.000695%).
ACCUMULATOR PLUS (TRADITONAL IRA)
[(ROTH IRA)]
DATA
PART A -- THIS PART LISTS YOUR PERSONAL DATA.
OWNER: [John Doe
[Owner must be the annuitant]
ANNUITANT: [JOHN DOE] Age: [60] Sex: [Male]
CONTRACT NUMBER: [00000]
ENDORSEMENTS ATTACHED: Endorsement Applicable to IRA Contracts
[Endorsement Applicable to Roth IRA Contracts]
Endorsement for Extra Credit Annuity
ISSUE DATE: [May 1, 1999]
CONTRACT DATE: [May 1, 1999]
ANNUITY COMMENCEMENT DATE: [January 22, 2029]
THE MAXIMUM MATURITY AGE IS AGE 90 -- SEE SECTION 7.03.
The Annuity Commencement Date may not be later than the Processing
Date which follows the Annuitant's 90th birthday.
[However, if you choose a date later than age 70 1/2, distributions of
at least the minimum payments required must commence by April 1 of the
calendar year following the calendar year in which you attain age 70
1/2 (see item 2 of the Endorsement Applicable IRA Contracts.]
GUARANTEED BENEFITS: Guaranteed Minimum Death Benefit [5% to Age
80 Roll Up] or [Annual Ratchet to Age 80]
BENEFICIARY: [JANE DOE]
No. EOC99APICB-INDV Data page 1
<PAGE>
DATA PAGES (CONT'D)
PART B - -THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CONTRACT.
INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$25,000.00]
INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
o [ALLIANCE MONEY MARKET FUND
o ALLIANCE HIGH YIELD FUND
o ALLIANCE COMMON
o STOCK FUND
o ALLIANCE AGGRESSIVE STOCK FUND
o ALLIANCE SMALL CAP GROWTH FUND
o BT EQUITY 500 INDEX FUND
o BT SMALL COMPANY INDEX FUND
o BT INTERNATIONAL
o EQUITY INDEX FUND
o EQ/EVERGREEN FUND
o EQ/EVERGREEN FOUNDATION FUND
o JPM CORE BOND FUND
o LAZARD LARGE CAP VALUE FUND
o LAZARD SMALL CAP VALUE FUND
o MFS GROWTH WITH INCOME FUND
o MFS RESEARCH FUND
o MFS EMERGING GROWTH COMPANIES FUND $25,000.00
o MERRILL LYNCH BASIC VALUE EQUITY
o MERRILL LYNCH WORLD STRATEGY
o EQ/PUTNAM GROWTH & INCOME VALUE FUND
o EQ/PUTNAM INVESTORS GROWTH FUND
o EQ/PUTNAM INTERNATIONAL EQUITY FUND]
TOTAL: [$25,000.00]
Investment Options shown are Investment Funds of our Separate Account No. VA.
No. EOC99APICB-INDV Data page 2
<PAGE>
DATA PAGES (CONT'D)
PROCESSING DATES (SEE SECTION 1.18): A Processing Date is each Contract Date
anniversary.
AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.03): Not applicable
ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Your initial and any subsequent
Contributions are allocated according to your instructions.
CONTRIBUTION LIMITS (SEE SECTION 3.02): [We will only accept initial
Contributions of at least $25,000 in the form of either a rollover
Contributions or a direct custodian-to-custodian transfers from other
traditional individual retirement arrangements. Subsequent rollover and direct
transfer Contributions in the amount of at least $1,000 may be made at any time
until you attain age 79. However, any amount contributed after you attain age
70 1/2 must be net of your minimum distribution for the year in which the
rollover or direct transfer Contribution is made (see item 2 Annuity
Commencement Date in Endorsement Applicable to IRA Contracts).] We may refuse
to accept any Contribution if the sum of all Contributions under your Contract
would then total more than $1,500,000. We reserve the right to limit aggregate
Contributions made after the first Contract Year to 150% of first year
Contributions. We may also refuse to accept any Contribution if the sum of all
Contributions under all Equitable of Colorado annuity accumulation
contracts/certificates that you own would total more than $2,500,000.
TRANSFER RULES (SEE SECTION 4.02): Transfers among Investment Options may be
made at any time during the Contract Year.
ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must
provide withdrawal instructions indicating from which Investment Options the
Lump Sum Withdrawal and any withdrawal charge will be taken.
WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): [Minimum Distribution Withdrawals -
May be elected in the year in which you attain age 70 1/2 or at a later date.
Minimum Distribution Withdrawals will be made annually.]
MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum -
$1,000; [Minimum Distribution Withdrawals minimum - $250.]
MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02):
Requests for a withdrawal must be for either (a) 90% or less of the Cash Value
or (b) 100% of the Cash Value (surrender of the Contract).
No. EOC99APICB-INDV Data page 3
<PAGE>
DATA PAGES (CONT'D)
DEATH BENEFIT AMOUNT (SEE SECTION 6.01):
The death benefit is equal to the Annuity Account Value or, if greater, the
Guaranteed Minimum Death Benefit.
Guaranteed Minimum Death Benefit
[APPLICABLE IF THE CONTRACT OWNER ELECTS THIS BENEFIT]
5% to Age 80 Roll Up - On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial Contribution. Thereafter, the Guaranteed
Minimum Death Benefit is credited with interest at 5% (3% for amounts in the
Alliance Money Market Fund) on each Contract Date anniversary through the
Annuitant's age 80 (or at the Annuitant's death if earlier), and 0% thereafter,
and is adjusted for any subsequent Contributions and withdrawals.
The current Guaranteed Minimum Death Benefit will be reduced on a
dollar-for-dollar basis as long as the sum of the withdrawals in any Contract
Year is 5% or less of the beginning of Contract Year Guaranteed Minimum Death
Benefit. Once a withdrawal is made that causes cumulative withdrawals in a
Contract Year to exceed 5% of the beginning of Contract Year Guaranteed Minimum
Death Benefit, that withdrawal and any subsequent withdrawals in that Contract
Year will cause a pro rata reduction to occur.
[APPLICABLE IF THE CONTRACT OWNER ELECTS THIS BENEFIT]
Annual Ratchet to Age 80 - On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial Contribution. Thereafter, the Guaranteed
Minimum Death Benefit is reset through the Annuitant's age 80, to the Annuity
Account Value on a Contract Date anniversary if higher than the current
Guaranteed Minimum Death Benefit, and is adjusted for any subsequent
Contributions and withdrawals.
Each withdrawal will cause a reduction in your current Guaranteed Minimum Death
Benefit on a pro rata basis.
NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain
INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE
SECTION 7.06): 6% per year
MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): $2,000, as well
as minimum of $20 for initial monthly annuity payment.
No. EOC99APICB-INDV Data page 4
<PAGE>
DATA PAGES (CONT'D)
WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a
percentage of each Contribution made to the extent that a withdrawal exceeds
the Free Corridor Amount as discussed in Section 8.01, or, if the Contract is
surrendered to receive the Cash Value. We determine the withdrawal charge
separately for each Contribution in accordance with the table below.
Current and Maximum
Percentage of
Contract Year Contributions
------------- -------------
1 8.00%
2 8.00%
3 7.00%
4 6.00%
5 5.00%
6 4.00%
7 3.00%
8 2.00%
9 1.00%
10 0.00%
The applicable withdrawal charge percentage is determined by the Contract Year
in which the withdrawal is made or the Contract is surrendered, beginning with
"Contract Year 1" with respect to each Contribution withdrawn or surrendered.
For purposes of the table, for each Contribution, the Contract Year in which we
receive that Contribution is "Contract Year 1."
Withdrawal charges will be deducted from the Investment Options from which each
withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the
beginning of the Contract Year minus any amount previously withdrawn during the
Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be
deemed a withdrawal of Contributions.
Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of
Contributions in the order in which they were made (that is, the first-in,
first-out basis will apply).
The Free Corridor Amount does not apply when calculating the withdrawal charge
applicable upon a surrender.
No. EOC99APICB-INDV Data page 5
<PAGE>
DATA PAGES (CONT'D)
NO WITHDRAWAL CHARGES WILL APPLY IN THESE EVENTS:
1. the Annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration;
2. you give us proof that the Annuitant's life expectancy is six months or
less (such proof must include, but is not limited to, certification by a
licensed physician;
3. the Annuitant has been confined to a nursing home for more than 90 days as
verified by a licensed physician. A nursing home for this purpose means one
which is (i) approved by Medicare as a provider of skilled nursing care
service, or (ii) licensed as a skilled nursing home by the state or
territory in which it is located (it must be within the United States,
Puerto Rico, U. S. Virgin Islands, or Guam) and meets all the following:
o its main function is to provide skilled, intermediate or custodial
nursing care;
o it provides continuous room and board to three or more persons;
o it is supervised by a registered nurse or practical nurse;
o it keeps daily medical records of each patient;
o it controls and records all medications dispensed; and
o its primary service is other than to provide housing for residents.
The withdrawal charge will apply with respect to a Contribution if the
condition as described above existed at the time the Contribution was remitted
or if the condition began within the 12 month period following remittance.
CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02):
Charges for State Premium and Other Applicable Taxes: A charge for
applicable taxes, such as state or local premium taxes generally will be
deducted from the amount applied to provide an Annuity Benefit under
Section 7.02.
The above charge will be deducted from the Annuity Account Value in the
Investment Funds on a pro rata basis.
NUMBER OF FREE TRANSFERS (SEE SECTION 8.03): Unlimited
No. EOC99APICB-INDV Data page 6
<PAGE>
DATA PAGES (CONT'D)
DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04):
Mortality and Expense Risks Charge:
Current and Maximum Annual rate of 1.10% (equivalent to a
daily rate of 0.003032%).
Administration Charge:
Current and Maximum Annual rate of 0.25%
(equivalent to a daily rate of
0.000692%). We reserve the right to
increase this charge to an annual rate
of 0.35%.
Distribution Charge:
Current and Maximum Annual rate of 0.25% (equivalent to a
daily rate of 0.000695%).
ACCUMULATOR PLUS (QP - DEFINED BENEFIT)
[(QP - DEFINED CONTRIBUTION)]
DATA
PART A -- THIS PART LISTS YOUR PERSONAL DATA.
OWNER: [Richard Roe as Trustee for the XYZ Qualified Plan]
[Owner must be the trustee]
ANNUITANT: [JOHN DOE] Age: [60] Sex: [Male]
CONTRACT NUMBER: [00000]
ENDORSEMENTS ATTACHED: Endorsement Applicable to Defined Benefit
Qualified Plan Contracts
[Endorsement Applicable to Qualified Plan
Contracts] Endorsement for Extra Credit
Annuity
ISSUE DATE: [May 1, 1999]
CONTRACT DATE: [May 1, 1999]
ANNUITY COMMENCEMENT DATE: [January 22, 2029]
THE MAXIMUM MATURITY AGE IS AGE 90 -- SEE SECTION 7.03.
The Annuity Commencement Date may not be later than the Processing
Date which follows the Annuitant's 90th birthday.
[However, any distribution option under this Contract must meet any
minimum distribution requirements under Section 401(a)(9) of the Code
which apply after the "Required Beginning Date" which is April 1st
following the calendar year which is generally the later of the year
in which the Annuitant (i) attains age 70 1/2 or (ii) retires from
service of the employer sponsoring the Plan.]
GUARANTEED BENEFITS: Guaranteed Minimum Death Benefit [5% to Age
80 Roll Up] or [Annual Ratchet to Age 80]
BENEFICIARY: [JANE DOE]
No. EOC99APICB-INDV Data page 1
<PAGE>
DATA PAGES (CONT'D)
PART B - -THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CONTRACT.
INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$25,000.00]
INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN.
[ALLIANCE MONEY MARKET FUND
ALLIANCE HIGH YIELD FUND
ALLIANCE COMMON STOCK FUND
ALLIANCE AGGRESSIVE STOCK FUND
ALLIANCE SMALL CAP GROWTH FUND
BT EQUITY 500 INDEX FUND
BT SMALL COMPANY INDEX FUND
BT INTERNATIONAL EQUITY INDEX FUND
EQ/EVERGREEN FUND
EQ/EVERGREEN FOUNDATION FUND
JPM CORE BOND FUND
LAZARD LARGE CAP VALUE FUND
LAZARD SMALL CAP VALUE FUND
MFS GROWTH WITH INCOME FUND
MFS RESEARCH FUND
MFS EMERGING GROWTH COMPANIES FUND $25,000.00
MERRILL LYNCH BASIC VALUE EQUITY
MERRILL LYNCH WORLD STRATEGY
EQ/PUTNAM GROWTH & INCOME VALUE FUND
EQ/PUTNAM INVESTORS GROWTH FUND
EQ/PUTNAM INTERNATIONAL EQUITY FUND]
TOTAL: [$25,000.00]
Investment Options shown are Investment Funds of our Separate Account No. VA.
No. EOC99APICB-INDV Data page 2
<PAGE>
DATA PAGES (CONT'D)
PROCESSING DATES (SEE SECTION 1.18): A Processing Date is each Contract Date
anniversary.
AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.03): Not applicable
ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Your initial and any subsequent
Contributions are allocated according to your instructions.
CONTRIBUTION LIMITS (SEE SECTION 3.02): Initial Contribution minimum: $25,000.
Subsequent Contribution minimum: $1,000. Subsequent Contributions can be made
at any time up until the Annuitant attains age 71. We may refuse to accept any
Contribution if the sum of all Contributions under your Contract would then
total more than $1,500,000. We reserve the right to limit aggregate
Contributions made after the first Contract Year to 150% of first year
Contributions. We may also refuse to accept any Contribution if the sum of all
Contributions under all Equitable of Colorado annuity accumulation
contracts/certificates that you own would then total more than $2,500,000.
TRANSFER RULES (SEE SECTION 4.02): Transfers among Investment Options may be
made at any time during the Contract Year.
ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must
provide withdrawal instructions indicating from which Investment Options the
Lump Sum Withdrawal and any withdrawal charge will be taken.
WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Not applicable.
MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): Lump Sum Withdrawals minimum -
$1,000.
MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02):
Requests for a withdrawal must be for either (a) 90% or less of the Cash Value
or (b) 100% of the Cash Value (surrender of the Contract).
DEATH BENEFIT AMOUNT (SEE SECTION 6.01):
The death benefit is equal to the Annuity Account Value or, if greater, the
Guaranteed Minimum Death Benefit.
Guaranteed Minimum Death Benefit
[APPLICABLE IF THE CONTRACT OWNER ELECTS THIS BENEFIT]
5% to Age 80 Roll Up - On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial Contribution. Thereafter, the Guaranteed
Minimum Death Benefit is credited with interest at 5% (3% for amounts in the
Alliance Money Market Fund) on each Contract Date anniversary through the
Annuitant's age 80 (or at the Annuitant's death if earlier), and 0% thereafter,
and is adjusted for any subsequent Contributions and withdrawals.
No. EOC99APICB-INDV Data page 3
<PAGE>
DATA PAGES (CONT'D)
The current Guaranteed Minimum Death Benefit will be reduced on a
dollar-for-dollar basis as long as the sum of the withdrawals in any Contract
Year is 5% or less of the beginning of Contract Year Guaranteed Minimum Death
Benefit. Once a withdrawal is made that causes cumulative withdrawals in a
Contract Year to exceed 5% of the beginning of Contract Year Guaranteed Minimum
Death Benefit, that withdrawal and any subsequent withdrawals in that Contract
Year will cause a pro rata reduction to occur.
[APPLICABLE IF THE CONTRACT OWNER ELECTS THIS BENEFIT]
Annual Ratchet to Age 80 - On the Contract Date, the Guaranteed Minimum Death
Benefit is equal to the initial Contribution. Thereafter, the Guaranteed
Minimum Death Benefit is reset through the Annuitant's age 80, to the Annuity
Account Value on a Contract Date anniversary if higher than the current
Guaranteed Minimum Death Benefit, and is adjusted for any subsequent
Contributions and withdrawals.
Each withdrawal will cause a reduction in your current Guaranteed Minimum Death
Benefit on a pro rata basis.
NORMAL FORM OF ANNUITY (SEE SECTION 7.04): Life Annuity 10 Year Period Certain
or Joint and Survivor Life
Annuity 10 Year Period Certain
INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE
SECTION 7.06): 6% per year
MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): $2,000, as well
as minimum of $20 for initial monthly annuity payment.
No. EOC99APICB-INDV Data page 4
<PAGE>
DATA PAGES (CONT'D)
WITHDRAWAL CHARGES (SEE SECTION 8.01): A withdrawal charge will be imposed as a
percentage of each Contribution made to the extent that a withdrawal exceeds
the Free Corridor Amount as discussed in Section 8.01, or, if the Contract is
surrendered to receive the Cash Value. We determine the withdrawal charge
separately for each Contribution in accordance with the table below.
Current and Maximum
Percentage of
Contract Year Contributions
------------- -------------
1 8.00%
2 8.00%
3 7.00%
4 6.00%
5 5.00%
6 4.00%
7 3.00%
8 2.00%
9 1.00%
10 0.00%
The applicable withdrawal charge percentage is determined by the Contract Year
in which the withdrawal is made or the Contract is surrendered, beginning with
"Contract Year 1" with respect to each Contribution withdrawn or surrendered.
For purposes of the table, for each Contribution, the Contract Year in which we
receive that Contribution is "Contract Year 1."
Withdrawal charges will be deducted from the Investment Options from which each
withdrawal is made in proportion to the amount being withdrawn from each
Investment Option.
Withdrawal charges will not apply to withdrawal of amounts applied to one of
our retirement annuities or qualified plans under Section (5.02).
FREE CORRIDOR AMOUNT (SEE SECTION 8.01): 15% of Annuity Account Value at the
beginning of the Contract Year minus any amount previously withdrawn during the
Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be
deemed a withdrawal of Contributions.
Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of
Contributions in the order in which they were made (that is, the first-in,
first-out basis will apply).
The Free Corridor Amount does not apply when calculating the withdrawal charge
applicable upon a surrender.
No. EOC99APICB-INDV Data page 5
<PAGE>
DATA PAGES (CONT'D)
NO WITHDRAWAL CHARGES WILL APPLY IN THESE EVENTS:
1. the Annuitant has qualified to receive Social Security disability benefits
as certified by the Social Security Administration;
2. you give us proof that the Annuitant's life expectancy is six months or
less (such proof must include, but is not limited to, certification by a
licensed physician;
3. the Annuitant has been confined to a nursing home for more than 90 days as
verified by a licensed physician. A nursing home for this purpose means one
which is (i) approved by Medicare as a provider of skilled nursing care
service, or (ii) licensed as a skilled nursing home by the state or
territory in which it is located (it must be within the United States,
Puerto Rico, U. S. Virgin Islands, or Guam) and meets all the following:
o its main function is to provide skilled, intermediate or custodial
nursing care;
o it provides continuous room and board to three or more persons;
o it is supervised by a registered nurse or practical nurse;
o it keeps daily medical records of each patient;
o it controls and records all medications dispensed; and
o its primary service is other than to provide housing for residents.
The withdrawal charge will apply with respect to a Contribution if the
condition as described above existed at the time the Contribution was remitted
or if the condition began within the 12 month period following remittance.
CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02):
Charges for State Premium and Other Applicable Taxes: A charge for
applicable taxes, such as state or local premium taxes generally will be
deducted from the amount applied to provide an Annuity Benefit under
Section 7.02.
The above charge will be deducted from the Annuity Account Value in the
Investment Funds on a pro rata basis.
NUMBER OF FREE TRANSFERS (SEE SECTION 8.03): Unlimited
DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04):
Mortality and Expense Risks Charge:
Current and Maximum Annual rate of 1.10% (equivalent to a daily
rate of 0.003032%).
No. EOC99APICB-INDV Data page 6
<PAGE>
DATA PAGES (CONT'D)
Administration Charge:
Current and Maximum Annual rate of 0.25% (equivalent
to a daily rate of 0.000692%). We reserve
the right to increase this charge to an
annual rate of 0.35%.
Distribution Charge:
Current and Maximum Annual rate of 0.25% (equivalent to a daily
rate of 0.000695%).
No. EOC99APICB-INDV Data page 7
ENDORSEMENT
APPLICABLE TO IRA CONTRACTS
As specified in the Data pages, this Contract is an "IRA Contract" which is
issued as an individual retirement annuity contract which meets the requirements
of Section [408(b)] of the Code. It is established for the exclusive benefit of
you and your beneficiaries, and the terms below change, or are added to,
applicable sections of this Contract. Also, your rights under this Contract are
not forfeitable.
1. OWNER (SECTION 1.16):
You must be both the Owner and the Annuitant.
2. ANNUITY COMMENCEMENT DATE (SECTION 1.04):
You may not choose an Annuity Commencement Date later than the maximum
maturity age stated in the Data pages. If you choose a Date later than age
70 1/2, you must withdraw at least the minimum payments required under
Sections [408(b)] and [401(a)(9)] of the Code and applicable Treasury
regulations. See Section 5.01 of the Contract and item 5 below.
3. CONTRIBUTIONS (SECTION 3.01 AND 3.02):
No Contributions will be accepted unless they are in cash (or check or
other form if we require). Except in the case of a "rollover Contribution,"
the total of such Contributions will not exceed [$2,000] for any taxable
year. A "rollover Contribution" is one permitted by Sections [402(c)],
[403(a)(4)], [403(b)(8)], or [408(d)(3)] of the Code.
Amounts transferred to the Contract from an individual retirement account
or annuity contract which meets the requirements of Section [408] of the
Code are not subject to the [$2,000] limit.
If you make a Contribution which is an "eligible retirement plan rollover"
as defined in Section [402(c)] or [403(b)(8)] of the Code, and you
commingle such Contribution with other Contributions, you may not be able
to roll over the eligible retirement plan Contributions and earnings to
another qualified plan or Code Section [403(b)] arrangement at a future
date, unless the Code permits.
4. DEATH BENEFITS (SECTION 6.01):
The death benefit pursuant to Section 6.01 of the Contract will not be paid
at your death before the Annuity Commencement Date and the coverage under
the Contract will continue with your surviving spouse as Successor
Annuitant and Owner if (i) you are married at the time of your death and
the person named as beneficiary under Section 6.02 of your Contract is your
surviving spouse; and (ii)
No. 98EOCENIRIA-AP - 1 -
<PAGE>
your surviving spouse elects to become "Successor Annuitant and Owner" of
your Contract.
5. BENEFICIARY CONTINUANCE:
This Item 5 shall apply only if you die before the Annuity Commencement
Date, and the beneficiary named pursuant to Section 6.02 of the Contract is
a legally competent individual who is not your surviving spouse.
If there is more than one beneficiary, then all beneficiaries must meet the
requirements of the preceding sentence, or this Item 5 does not apply and
the death benefit described in Section 6.01 of the Contract is payable.
If this Item 5 applies and there is more than one beneficiary, the Annuity
Account Value shall be apportioned among your beneficiaries as you
designate pursuant to Section 6.02 of the Contract.
If you die after your "Required Beginning Date" for "Minimum Distribution"
payments described below in Item 6, subpart A of this Endorsement and such
payments have not commenced under this Contract, the death benefit will be
paid in a lump sum and this Item 5 does not apply unless prior to your
death you have notified us in accordance with our procedures then in effect
that the beneficiary named pursuant to 6.02 of the Contract is also the
designated beneficiary for "Required Payments During Your Life" described
below in Item 6 of this Endorsement.
If we receive the beneficiary's election within 30 days of receipt of proof
of your death, the beneficiary may continue your Contract pursuant to this
Item 5 under the terms set forth in a through h below. Your Contract may be
continued by one or more beneficiaries (collectively, the "Continuation
Beneficiary"). If there is more than one beneficiary, the election must be
provided to us within 30 days by each beneficiary with respect to that
beneficiary's portion of the Annuity Account Value. For any beneficiary who
does not so timely elect, we will pay that beneficiary's share of the death
benefit pursuant to Section 6.01 of the Contract in a lump sum.
a. the Continuation Beneficiary shall automatically become the Annuitant
as defined in Section 1.01 of the Contract with respect to that
Continuation Beneficiary's portion of the Annuity Account Value.
b. the Continuation Beneficiary shall only have the right to transfer
amounts among the Investment Options.
c. the Continuation Beneficiary cannot make any additional contributions.
No. 98EOCENIRIA-AP - 2 -
<PAGE>
d. distributions to the Continuation Beneficiary will be made in
accordance with requirements described in Item 6 of this Endorsement.
If there is more than one beneficiary, and any Continuation
Beneficiary requests payment pursuant to Item 6, subpart B(i) of this
Endorsement, then all Continuation Beneficiaries must agree to make
this payment election. If all Continuation Beneficiaries cannot so
agree, then we will instead make payment pursuant to the second
paragraph of Item 6, subpart B of this Endorsement. Further, where
payment pursuant to Item 6, subpart B(i) of this Endorsement is
elected by all Continuation Beneficiaries, the Annuity Account Value
apportioned to each Continuation Beneficiary is distributed based upon
the life expectancy of the oldest of the beneficiaries designated
under Section 6.02 of the Contract, even if that individual does not
elect to be a Continuation Beneficiary.
e. the Continuation Beneficiary may withdraw the Annuity Account Value
apportioned to such Continuation Beneficiary at any time; withdrawals
made after we have received a Continuation Beneficiary's election to
continue this Contract are not subject to a withdrawal charge and will
end payment pursuant to Item 6, subpart B(i) of this Endorsement as to
that Continuation Beneficiary. Any remaining Annuity Account Value
apportioned to that Continuation Beneficiary will be distributed as a
lump sum.
f. upon the Continuation Beneficiary's death, we will make a lump sum
payment (other payment options are not available) to the person
designated by the deceased Continuation Beneficiary to receive that
deceased Continuation Beneficiary's portion of the Annuity Account
Value, if any.
g. the Contract cannot be assigned and must continue in your name for
benefit of your Continuation Beneficiary.
h. if a minimum income benefit pursuant to Section 7.07 of the Contract
and/or a minimum death benefit pursuant to Section 6.01 of the
Contract are in effect upon our receipt of proof of your death, the
charges, if any, for such benefit(s) will no longer apply and the
minimum income benefit and the minimum death benefit shall no longer
be in force.
6. REQUIRED PAYMENTS:
This Contract is subject to these "Required Payment" or "Minimum
Distribution" rules of Sections [408(b)] and [401(a)(9)] of the Code and
the Treasury Regulations which apply.
A. MINIMUM DISTRIBUTION RULES -- REQUIRED PAYMENTS DURING YOUR LIFE --
Your entire interest in this Contract will be distributed or begin to
be
No. 98EOCENIRIA-AP - 3 -
<PAGE>
distributed no later than the first day of April following the
calendar year in which you attain age 70 1/2 ( "Required Beginning
Date "). Your entire interest may be distributed, as you elect, over
(a) your life, or the lives of you and your designated beneficiary, or
(b) a period certain not extending beyond your life expectancy, or the
joint and last survivor expectancy for you and your designated
beneficiary. Distributions must be made in periodic payments at
intervals of no longer than one year. In addition, payments must be
either non-increasing or they may increase only as provided in [Q & A
F-3 of Section 1.401(a)(9)-1] of the Proposed Treasury Regulations, or
any successor Regulation thereto.
All distributions made under this Contract must be made in accordance
with the requirements of Sections [408(b)] and [401(a)(9)] of the
Code, including the incidental death benefit requirements of Section
[401(a)(9)(G)] of the Code, and applicable Treasury Regulations,
including the minimum distribution incidental benefit requirements of
Section [1.401(a)(9)-2] of the Proposed Treasury Regulations, or any
successor Regulation thereto.
For purposes of determining the "period certain" referred to in the
first paragraph of this Section, life expectancy is computed by use of
the expected return multiples in Tables [V and VI] of Treasury
Regulation Section [1.72-9]. Unless you otherwise elect prior to the
time distributions are required to begin, life expectancies will be
recalculated annually. Such election will be irrevocable and will
apply to all subsequent years. The life expectancy of a non-spouse
beneficiary, if the naming of such a beneficiary is permitted by our
rules then in effect, may not be recalculated. Instead, life
expectancy will be calculated using the attained age of such
beneficiary during the calendar year in which you attain age 70 1/2,
and payments of subsequent years will be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
B. MINIMUM DISTRIBUTION RULES -- DEATH BENEFIT - If you die after
distribution of your interest in this Contract has begun, the
remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior
to your death.
If you die before distribution of your interest in this Contract
begins, distribution of your entire interest will be completed no
later than December 31 of the calendar year containing the fifth
anniversary of your death, except to the extent that an election is
made to receive death benefit distributions in accordance with (i) or
(ii) below:
(i) If your interest is payable to a designated beneficiary, then
your entire interest may be distributed over the life of, or over
a period certain
No. 98EOCENIRIA-AP - 4 -
<PAGE>
not greater than the life expectancy of, the designated
beneficiary. Such distributions must commence on or before
December 31 of the calendar year immediately following the
calendar year of your death.
(ii) If the designated beneficiary is your surviving spouse, the date
that distributions are required to begin in accordance with (i)
above shall not be earlier than the later of (1) December 31 of
the calendar year immediately following the calendar year of your
death or (2) December 31 of the calendar year in which you would
have attained age 70 1/2.
If the designated beneficiary is your surviving spouse, and a
Successor Annuitant and Owner option (described in item 4 above of
this Endorsement) is elected, the distribution of your interest need
not be made until after your spouse's death.
For purposes of determining the "period certain" referred to above,
life expectancy is computed by use of the expected return multiples in
[Table V and VI] of Treasury Regulation Section [1.72-9]. For purposes
of distributions beginning after your death, unless otherwise elected
by the surviving spouse by the time distributions are required to
begin, life expectancies will be recalculated annually. Such election
will be irrevocable by the surviving spouse and will apply to all
subsequent years. In the case of any other designated beneficiary,
life expectancies will be calculated using the attained age of such
beneficiary during the calendar year in which distributions are
required to begin, pursuant to this item, and payments for any
subsequent calendar year will be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
Distributions under this item are considered to have begun if
distributions are made because you have reached your Required
Beginning Date, or if prior to the Required Beginning Date,
distributions irrevocably commence to you over a period permitted and
in any annuity form acceptable under Section [1.401(a)(9)-1] of the
Proposed Treasury Regulations or any successor Regulation thereto.
7. REPORTS - NOTICES (SECTION 9.04):
We will send you a report as of the end of each calendar year showing the
status of the annuity and any other reports required by the Code or
Treasury Regulations.
8. ASSIGNMENTS (SECTION 9.05):
No. 98EOCENIRIA-AP - 5 -
<PAGE>
Your rights under this Contract may not be assigned, pledged or transferred
except as permitted by law. You may not name a new Owner, except as
described in item 4 of this Endorsement.
9. TERMINATION OF CONTRACT:
If an annuity under the Contract fails to qualify as an annuity under
Section [408(b)] of the Code, we will have the right to terminate the
Contract. We may do so, upon receipt of notice of such fact, before the
Annuity Commencement Date. In that case, we will pay the Annuity Account
Value less a deduction for the part which applies to any Federal income tax
payable by you which would not have been payable with respect to an annuity
which meets the terms of the Code.
EQUITABLE OF COLORADO, INC.
/s/ Samuel B. Shlesinger /s/ Linda J. Galasso
- ------------------------------------- ------------------------------
Samuel B. Shlesinger, Linda Galasso, Secretary
President and Chief Executive Officer
No. 98EOCENIRIA-AP - 6 -
"ROTH IRA ENDORSEMENT"
ENDORSEMENT APPLICABLE TO ROTH IRA CONTRACTS
As specified in the Data pages, this Contract is a "Roth IRA Contract" which is
issued as an individual retirement annuity contract which meets the requirements
of Sections 408A and 408(b) of the Code. If the Owner of the Contract is a trust
or custodian under Section 408 of the Code and pertinent Regulations, this
Contract is an annuity contract which may be used to fund an individual
retirement account which meets the requirements of Section 408(a) of the Code.
It is established for the exclusive benefit of you and your beneficiaries, and
the terms below change, or are added to, the applicable provisions of this
Contract. Also, your entire interest under the Contract is not forfeitable.
I. DEFINITIONS
The following apply in addition to or in lieu of corresponding definitions
in the Contract.
ANNUITANT. You must be both the Annuitant and the Owner (see "Owner"
below).
ANNUITY COMMENCEMENT DATE. You may not choose an Annuity Commencement Date
later than our maximum maturity age (currently age 90, unless a different
age is required by State law), and any period certain you select must
conform to IRS life expectancy tables in Treas. Reg. Section 1.72-9.
CODE. When used in this Endorsement references to the Code include
references to applicable tax Regulations.
CONTRIBUTIONS. Contributions are subject to the limits of Section 408A of
the Code.
OWNER. The Annuitant is the Owner of the Contract and cannot be changed.
Where the contract is purchased to fund an individual retirement account
under Section 408(a) of the Code, the Owner must be a trustee or custodian
meeting the requirements of that Section and pertinent Regulations.
II. LIMITS ON CONTRIBUTIONS
No Contributions will be accepted unless they are in United States cash
(including checks). We reserve the right to accept electronic cash which
meets our specifications.
Except in the case of a rollover or direct transfer Contribution discussed
below which meets the requirements of Section 408A of the Code, the total
of your Contributions will not exceed the maximum total under Section
408A(c)(2) of the Code for any taxable year.
No. 98COROTHI
<PAGE>
A "rollover contribution" is one permitted by Section 408A(e) and 408(d)(3)
of the Code.
Roth IRA to Roth IRA Rollover Contributions. You may make a qualified
rollover contribution as permitted by Sections 408A(e) and 408(d) of the
Code from another Roth IRA. There are no limits on the amount rolled over;
however, you may be required to designate the taxable year in which you
converted any non-Roth IRA funds into Roth IRA funds.
Direct Transfer Contributions. You may make a Contribution of a direct
transfer of funds from another Roth IRA under Section 408A of the Code.
There are no limits on the amount transferred; however, you may be required
to designate the taxable year in which you converted any non-Roth IRA funds
into Roth IRA funds.
Non-Roth IRA to Roth IRA Rollover Contributions ("Conversion
Contributions"). If you meet the modified adjusted gross income limits
specified in Section 408A, you may make a qualified rollover contribution
as permitted by Section 408A(c)(3)(B) of the Code and Sections 408A(e) and
408(d)(3) of the Code from another individual retirement plan under Section
408 of the Code which is not a Roth IRA. There are no limits on the amounts
rolled over. We reserve the right to require you to designate the year to
which such a conversion of non-Roth IRA funds into Roth IRA funds applies.
Rollovers are not permitted from SEP-IRAs under Section 408(k) of the Code
or SIMPLE IRAs under Section 408(p) of the Code.
If we determine that any Contributions would cause this Contract not to
qualify under Sections 408A or 408(b) of the Code, we reserve the right to
either (i) refuse to accept any such Contributions or (ii) apply such
Contributions to a nonqualified deferred annuity contract or Contract for
the exclusive benefit of you and your beneficiaries.
III. DEATH BENEFITS
Under the following circumstances, the death benefit described in this
Contract will not be paid at your death before the Annuity Commencement
Date, and the coverage under the Contract will continue with your surviving
spouse as Successor Owner and Annuitant.
1. You are married at your death.
2. The person named as death beneficiary is your surviving spouse.
3. You or your spouse at your death have additionally requested, in
accordance with our procedures then in effect, that your spouse become
"Successor Owner and Annuitant" of your Contract if your spouse
survives you.
No. 98COROTHI
<PAGE>
If the Owner and the Annuitant are different because the Owner of the
Contract is a trustee or custodian under Section 408 of the Code and
pertinent Regulations, (i) in this item of the Endorsement, "you" refers to
the Annuitant and (ii) your spouse can become Successor Annuitant.
MINIMUM DISTRIBUTION RULES - DEATH BENEFIT. This Contract is subject to
these "Required Payment" or "Minimum Distribution" rules of Section 408(b)
and 401(a)(9) of the Code and the Treasury Regulations which apply.
If you die after distribution of your interest in this Contract has begun,
the remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior to
your death.
If you die after distribution of your interest in this Contract begins,
distribution of your entire interest shall be completed no later than
December 31 of the calendar year containing the fifth anniversary of your
death, except to the extent that an election is made to receive death
benefit distributions in accordance with (1) or (2) below:
(1) If your interest is payable to a designated beneficiary, then
your entire interest may be distributed over the life of, or
over a period certain not greater than the life expectancy of,
the designated beneficiary. Such distributions must commence on
or before December 31 of the calendar year immediately following
the calendar year of your death.
(2) If the designated beneficiary is your surviving spouse, the date
that distributions are required to begin in accordance with (1)
above shall not be earlier than the later of (a) December 31 of
the calendar year immediately following the calendar year of
your death or (b) December 31 of the calendar year in which you
would have attained age 70 1/2.
If the designated beneficiary is your surviving spouse, and a Successor
Annuitant and Owner option (described above in this Endorsement under DEATH
BENEFITS) is in effect, the distribution of your interest need not be made
until after your spouse's death.
For purposes of determining the "period certain" referred to above, life
expectancy is computed by use of the expected return multiples in Tables V
and VI of Treasury Regulation Section 1.72-9. For purposes of distributions
beginning after your death, unless otherwise elected by the surviving
spouse by the time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be irrevocable by the
surviving spouse and shall apply to all subsequent years. In the case of
any other designated beneficiary, life expectancies shall be calculated
using the attained age of such beneficiary during the calendar year in
which distributions are required to begin, pursuant to this Item, and
payments for any subsequent calendar year shall be calculated based on such
life expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
No. 98COROTHI
<PAGE>
Distributions under this Item are considered to have begun if distributions
irrevocably commence to you over a period permitted and in any annuity form
acceptable under Section 1.40(a)(9)-1 of the Proposed Treasury Regulations
or any successor Regulation thereto.
IV. ANNUITY BENEFITS
This Contract will begin to pay out as an Annuity for your life on the
Annuity Commencement Date you select on the application unless you indicate
to us another form of payment before such payments commence. If you or your
beneficiary (as described in Item III above) selects a period certain form
of payment, no period certain can be longer than applicable life expectancy
under IRS tables in Treasury Regulations Section 1.72-9.
V. GENERAL PROVISIONS
TERMINATION OF CONTRACT
If this Contract fails to qualify as a Roth individual retirement annuity
under Sections 408(b) and 408A of the Code, we will have the right to
terminate the Contract. We may do so, upon receipt of notice of such fact,
before the Annuity Commencement Date. In that case, we have the right to
pay the Annuity Account Value less a deduction for the part which applies
to any Federal income tax payable by you which would not have been payable
with respect to a Roth individual retirement annuity which meets the terms
of Sections 408A and 408(b) of the Code.
REPORTS AND NOTICES
We will send you a report as of the end of each calendar year showing the
status of the Contract and any other reports required by the Code.
ASSIGNMENTS, NONTRANSFERABILITY, NONFORFEITABILITY.
Your rights under this Contract may not be assigned, pledged or transferred
except as permitted by law. A new Owner may not be named, except as
described in the Preamble and item 1 or item 4 of this Endorsement.
EQUITABLE OF COLORADO, INC.
/s/ Samuel B. Shlesinger /s/ Linda J. Galasso
------------------------ --------------------
Samuel B. Shlesinger, Linda Galasso, Secretary
President and Chief Executive Officer
No. 98COROTHI
ENDORSEMENT
APPLICABLE TO DEFINED BENEFIT
QUALIFIED PLAN CONTRACTS
When issued with this Endorsement, this Contract is a "Qualified Plan Contract"
which is issued to a trustee of a trust forming part of a plan which is
qualified under Section 401(a) of the Code. All provisions of the Contract and
other endorsements apply except as expressly modified by this Endorsement.
EMPLOYER (SECTION 1.12): "Employer" means any Employer that has adopted a Plan
qualified under Section 401(a) of the Code. The Employer with reference to this
Contract is named in the Data pages.
OWNER (SECTION 1.15): "Owner" means the trustee of a trust for a Plan. The Owner
with reference to this Contract is named in the Data pages.
PLAN (SECTION 1.16): "Plan" means a defined benefit plan adopted by the Employer
that is intended to meet the requirements for qualification under Section 401(a)
of the Code. The Plan with reference to the Contract is named in the Data pages.
1. LIMITS ON CONTRIBUTIONS (SECTION 3.02):
No Contributions shall be accepted from any employee. The Employer shall
contribute to the Contract such amounts and at such times as shall be
determined by the Plan's trustee. Restrictions, if any, on the dollar
amount or number of Contributions are stated in the Data pages.
2. TERMINATION (SECTION 5.02):
This Contract will also terminate if,
(d) The Owner directs us to pay out the Cash Value under this Contract.
(e) The Owner directs us to convert the Contract to a Rollover IRA
according to our rules in effect at the time. However, the converted
Contract will be issued with the same Contract Date as this Contract.
3. DEATH BENEFIT (SECTION 6.01)
The beneficiary described in Section 6.02 shall be the Owner of this
Contract. After the death of the Annuitant but before the death benefit is
paid, the Owner may instruct us in writing in a form we accept to make the
death benefit payable to the Annuitant's beneficiary under the Plan.
No. 98EOCENDBQPII
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4. ANNUITY COMMENCEMENT DATE (SECTION 7.03):
Any distribution option under this Contract must meet any minimum
distribution requirements under Section 401(a)(9) of the Code which apply
after the "Required Beginning Date" which is April 1st following the
calendar year which is generally the later of the year in which the
Annuitant (i) attains age 70 1/2 or (ii) retires from service of the
employer sponsoring the Plan.
5. ASSIGNMENTS, NONTRANSFERABILITY, NONFORFEITABILITY (SECTION 9.05):
This Contract and any amounts payable pursuant to this Contract may not be
assigned, pledged, transferred or encumbered except as permitted under
applicable law. The above restriction does not apply to a change authorized
by a qualified domestic relations order defined in Section 414(p) of the
Code.
6. OWNER'S RESPONSIBILITY:
We will make no payment under this Contract without instructions from the
Owner in a form we accept and we will be fully discharged from any
liability with respect thereto to the extent such payments are made
pursuant to such instructions.
7. PLAN QUALIFICATION:
A "Qualified Plan" is a plan that meets the requirements for qualification
under Section 401(a) of the Code. The Owner is to provide a determination
letter from the Internal Revenue Service that the Plan is qualified under
Section 401(a) of the Code, or an attorney's opinion that the Plan is
qualifiable under Section 401(a) of the Code, and if at any time the Plan
is no longer a Qualified Plan, the Owner is to give us prompt written
notice thereof.
If the Owner gives notice that the Plan is no longer a Qualified Plan, then
upon at least thirty days advance written notice to the Owner, we will
terminate the Contract under Section 5.02.
EQUITABLE OF COLORADO, INC.
/s/ Samuel B. Shlesinger /s/ Linda J. Galasso
Samuel B. Shlesinger, Linda J. Galasso, Secretary
President and Chief Executive Officer
No. 98EOCENDBQPII
ENDORSEMENT
APPLICABLE TO QUALIFIED PLAN CONTRACTS
When issued with this Endorsement, this Contract is a "Qualified Plan
Contract" which is issued to a trustee of a trust forming part of a plan
which is qualified under Section 401(a) of the Code. All provisions of the
Contract and other endorsements apply except as expressly modified by this
Endorsement.
EMPLOYER (SECTION 1.13): "Employer" means any Employer that has adopted a Plan
qualified under Section 401(a) of the Code. The Employer with reference to this
Contract is named in the Data pages.
OWNER (SECTION 1.17): "Owner" means the trustee of a trust for a Plan. The Owner
with reference to this Contract is named in the Data pages.
PLAN (SECTION 1.18): "Plan" means a defined contribution plan adopted by the
Employer that is intended to meet the requirements for qualification under
Section 401(a) of the Code. The Plan with reference to the Contract is named
in the Data pages.
1. LIMITS ON CONTRIBUTIONS (SECTION 3.02):
Contributions will be accepted only if they represent the value of
employer contributions to a trust under a Plan. If the Plan contains a
cash or deferred arrangement qualified under Section 401(k) of the
Code, Contributions may include employee pre-tax and employer matching
contributions, but not employee after-tax contributions to the Plan.
Restrictions, if any, on the dollar amount or number of Contributions
are stated in the Data pages.
2. TERMINATION (SECTION 5.02):
This Contract will also terminate if,
(d) The Owner directs us to pay out the Cash Value under this
Contract.
(e) The Owner directs us to convert the Contract to an
individual retirement annuity according to our rules in effect
at the time. However, the converted Contract will be issued
with the same Contract Date as this Contract.
3. DEATH BENEFIT (SECTION 6.01)
The beneficiary described in Section 6.02 shall be the Owner of this
Contract. After the death of the Annuitant but before the death
benefit is paid, the Owner may instruct us in writing in a form we
accept to make the death benefit payable to the Annuitant's beneficiary
under the Plan.
No. 98EOCENDCQPII
<PAGE>
4. ASSIGNMENTS, NONTRANSFERABILITY, NONFORFEITABILITY (SECTION 9.05):
This Contract and any amounts payable pursuant to this Contract
may not be assigned, pledged, transferred or encumbered except as
permitted under applicable law. The above restriction does not apply to
a change authorized by a qualified domestic relations order defined in
Section 414(p) of the Code.
5. OWNER'S RESPONSIBILITY:
We will make no payment under this Contract without instructions
from the Owner in a form we accept and we will be fully discharged from
any liability with respect thereto to the extent such payments are made
pursuant to such instructions.
6. PLAN QUALIFICATION:
A "Qualified Plan" is a plan that meets the requirements for
qualification under Section 401(a) of the Code. The Owner is to provide
evidence satisfactory to us that the Plan is a Qualified Plan and, if
at any time the Plan is no longer a Qualified Plan, the Owner is to
give us prompt written notice thereof.
If the Owner gives notice that the Plan is no longer a Qualified Plan,
then upon at least thirty days advance written notice to the Owner, we
will terminate the Contract under Section 5.02.
No. 98EOCENDCQPII
ENDORSEMENT APPLICABLE TO
CREDITS APPLIED TO ANNUITY ACCOUNT VALUE
When issued with this Endorsement, this Contract provides for an amount,
referred to as a "Credit," to be allocated to your Annuity Account Value
(defined in Section 1.02) at the time a Contribution is received.
Credits
Credits are allocated pro rata to the Investment Options in the same proportion
as the applicable Contribution. The Credit is equal to [3%] of each
Contribution. If you exercise your right to cancel this Contract under the ["Ten
Days to Cancel"] provision (described on the cover page) the amount payable will
be reduced by the amount of the Credit. [However, the amount payable will
reflect any investment gain or loss which applies to the Credit.]
EQUITABLE OF COLORADO, INC.
/s/ Samuel B. Shlesinger /s/Linda J. Galasso
- ------------------------------------- -----------------------------
Samuel B. Shlesinger, Linda Galasso, Secretary
President and Chief Executive Officer
No. 98EOCECENDIIA/B
<TABLE>
[EQUITABLE OF COLORADO/AXA LOGO] EQUITABLE OF COLORADO
ACCUMULATOR(SM) PLUS
Variable Deferred Annuity
THE EQUITABLE OF COLORADO, INC. Application for Individual Contract
370 17th Street, Denver, Colorado 80202 FOR ASSISTANCE CALL (800) 789-7771
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
1. TYPE OF CONTRACT [ ] Non-Qualified (NQ) [ ] Traditional IRA [ ] Roth IRA
Subject to State Availability [ ] Qualified Plan - Defined Contribution (DC) [ ] Qualified Plan - Defined Benefit (DB)
2. OWNER For IRA Contracts, Owner and Annuitant must be the same person
[ ] Individual [ ] Trustee (for an individual) [ ] Custodian (IRA) [ ] UGMA/UTMA*
[ ] Qualified Plan Trustee - DC (Forms No. 127692 and No. 127433 must be completed)
[ ] Qualified Plan Trustee - DB (Forms No. 127691 and No. 127433 must be completed)
| | | | | | | | | | | | | | | | | | | | | | | | | | / /
- ---------------------------------------------------------------------------------- -------------------------------
Name (First, Middle, Last) Date of Birth (Month/Day/Year)
-- --
- ---------------------------------------------------------------------------------- -------------------------------
Address (Street, City, State, Zip Code) Social Security No.
[ ] Male [ ] Female
- ---------------------------------------- ----------------------------------------
Home Phone Number Office Phone Number
* As Custodian under the ________ (state) Uniform Gifts to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA). Please note
if issued under UGMA or UTMA, the beneficiary named in section 5 must be the Estate of the Annuitant.
- ------------------------------------------------------------
3. JOINT OWNER (OPTIONAL FOR NQ CONTRACTS)
- ------------------------------------------------------------
| | | | | | | | | | | | | | | | | | | | | | | | | | / /
- ---------------------------------------------------------------------------------- -------------------------------
Name (First, Middle, Last) Date of Birth (Month/Day/Year)
-- --
- ---------------------------------------------------------------------------------- -------------------------------
Address (Street, City, State, Zip Code) Social Security No.
[ ] Male [ ] Female
- ---------------------------------------- ----------------------------------------
Home Phone Number Office Phone Number
- ------------------------------------------------
4. ANNUITANT IF OTHER THAN OWNER
- ------------------------------------------------
| | | | | | | | | | | | | | | | | | | | | | | | | | / /
- ---------------------------------------------------------------------------------- -------------------------------
Name (First, Middle, Last) Date of Birth (Month/Day/Year)
-- --
- ---------------------------------------------------------------------------------- -------------------------------
Address (Street, City, State, Zip Code) Social Security No.
[ ] Male [ ] Female
- ---------------------------------------- ----------------------------------------
Home Phone Number Office Phone Number
| | | | | | | | | | | | | | | | | | | | | | | | | |
- ----------------------------------------------------------------------------------
Relationship to Owner
- --------------------------------------------------------------------------------------------
5. BENEFICIARY(IES) IF MORE THAN ONE - INDICATE %. TOTAL MUST EQUAL 100%.
IF ADDITIONAL SPACE IS NEEDED USE SECTION 12.
- --------------------------------------------------------------------------------------------
PRIMARY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
- --------------------------------------------------- --------------------------------------------------- --------
Name (First, Middle, Last) Relationship to Annuitant %
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
- --------------------------------------------------- --------------------------------------------------- --------
Name (First, Middle, Last) Relationship to Annuitant %
CONTINGENT
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
- --------------------------------------------------- --------------------------------------------------- --------
Name (First, Middle, Last) Relationship to Annuitant %
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
- --------------------------------------------------- --------------------------------------------------- --------
Name (First, Middle, Last) Relationship to Annuitant %
- -----------------------------------------------------------------------------------------------------------------------------------
REGULAR MAIL: EQUITABLE OF COLORADO EXPRESS MAIL: EQUITABLE OF COLORADO
ACCUMULATOR PLUS, P.O. Box 13014, ACCUMULATOR PLUS, c/o First Chicago National Processing
Newark, N.J. 07188-0014 Center,300 Harmon Meadow Boulevard, 3rd Floor,
Attn:. Box 13014, Secaucus, N.J. 07094
No. 127866 (2/99)
<PAGE>
- ------------------------------------------------------
6. INITIAL CONTRIBUTION INFORMATION
- ------------------------------------------------------
TOTAL INITIAL CONTRIBUTION: $
-----------------------
(minimum $25,000)
- ------------------------------------------
7. METHOD OF PAYMENT
- ------------------------------------------
IF THIS IS AN IRA AND YOU ARE AGE 70 1/2 OR OLDER OR YOU ARE SELECTING A ROTH IRA, PLEASE READ THE APPLICATION INSTRUCTIONS
APPLICABLE TO YOU.
NON-QUALIFIED: [ ] Check payable to Equitable of Colorado [ ] Wire [ ] 1035 Exchange
QUALIFIED PLAN: [ ] Check payable to Equitable of Colorado [ ] Wire
TRADITIONAL IRA: [ ] Direct rollover from qualified plan or TSA [ ] Direct transfer from other Traditional IRA
[ ] Rollover from Traditional IRA
ROTH IRA: [ ] Conversion rollover from Traditional IRA [ ] Direct transfer from other Roth IRA
[ ] Rollover from Roth IRA
- --------------------------------------------------------------------------
8. GUARANTEED MINIMUM DEATH BENEFIT ELECTION CHOOSE A OR B
PLEASE REFER TO APPLICATION INSTRUCTIONS BEFORE COMPLETING
- --------------------------------------------------------------------------
A. [ ] 5% Roll Up to Age 80 B. [ ] Annual Ratchet to Age 80
- ---------------------------------------------------------------------------------------------------
9. SYSTEMATIC WITHDRAWALS (OPTIONAL) FOR IRA CONTRACTS, AVAILABLE ONLY
IF YOU ARE AGE 59 1/2 TO 70 1/2. OTHER WITHDRAWAL OPTIONS ARE AVAILABLE FOR IRA CONTRACTS.
- ---------------------------------------------------------------------------------------------------
FREQUENCY: [ ] Monthly [ ] Quarterly [ ] Annually Start Date: ________________ (Month, Day)
AMOUNT OF WITHDRAWAL: $_______________ or _______________%
WITHHOLDING ELECTION INFORMATION (Please refer to application instructions before completing)
A. [ ] I do not want to have Federal income tax withheld. (U.S. residence address and Social Security No./TIN required)
B. [ ] I want to have Federal income tax withheld from each payment.
- ---------------------------------------------------------------------
10. SUCCESSOR OWNER (OPTIONAL FOR NQ CONTRACTS)
AVAILABLE ONLY IF THE OWNER AND ANNUITANT ARE DIFFERENT PERSONS
- ---------------------------------------------------------------------
[ ] Male [ ] Female
| | | | | | | | | | | | | | | | | | | | | | | | | | / /
- ---------------------------------------------------------------------------------- -------------------------------
Name (First, Middle, Last) Date of Birth (Month/Day/Year)
-- --
- ---------------------------------------------------------------------------------- -------------------------------
Address (Street, City, State, Zip Code) Social Security No./TIN
- --------------------------
11. SUITABILITY
- --------------------------
A. Did you receive the EQUITABLE OF COLORADO ACCUMULATOR PLUS prospectus? [ ] Yes [ ] No
- ------------------------------------------------------ ------------------------------------------------------
Date of Prospectus Date(s) of any Supplement(s) to Prospectus
B. Will any existing life insurance or annuity be (or has it been) surrendered, withdrawn from, loaned against, changed
or otherwise reduced in value, or replaced in connection with this transaction assuming the Contract
applied for will be issued? [ ] Yes [ ] No If Yes, complete the following:
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Year Issued Type of Plan Company Certificate/Contract Number
C. National Association of Securities Dealers, Inc. (NASD) information (as required by the NASD)
- ------------------------------------------------------ ------------------------------------------------------
Employer's Name & Address Owner's Occupation
- ------------------------------------------------------ ------------------------------------------------------
Estimated Annual Family Income Estimated Net Worth
Investment Objective: [ ] Income [ ] Income & Growth [ ] Growth [ ] Aggressive Growth [ ] Safety of Principal
Is Owner or Annuitant associated with or employed by a member of the NASD? [ ] Yes [ ] No
- -------------------------------------------
12. SPECIAL INSTRUCTIONS
- -------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
No. 127866 (2/99) ACCUMULATOR PLUS page 2
<PAGE>
- ----------------------------------------------------------------------------------------------------------------------
13. ALLOCATION AMONG VARIABLE INVESTMENT OPTIONS CHOOSE A OR B.
ALLOCATION AMOUNTS MUST BE IN WHOLE PERCENTAGES. PLEASE REFER TO APPLICATION INSTRUCTIONS BEFORE
COMPLETING.
- ----------------------------------------------------------------------------------------------------------------------
(087) Alliance Money Market...................... _______________%
(082) Alliance High Yield........................ _______________%
(084) Alliance Common Stock...................... _______________%
(086) Alliance Aggressive Stock.................. _______________%
-------------------------------------- (083) Alliance Small Cap Growth.................. _______________%
A. [ ] SELF-DIRECTED ALLOCATION (274) BT Equity 500 Index........................ _______________%
(275) BT Small Company Index..................... _______________%
Allocate initial contribution to the (276) BT International Equity Index.............. _______________%
variable investment options. (273) JPM Core Bond.............................. _______________%
The total must equal 100%. (271) Lazard Large Cap Value..................... _______________%
-------------------------------------- (272) Lazard Small Cap Value..................... _______________%
-------------------------------------- (268) Merrill Lynch World Strategy............... _______________%
B. [ ] SPECIAL DOLLAR COST (269) Merrill Lynch Basic Value Equity........... _______________%
AVERAGING (266) MFS Research............................... _______________%
The initial contribution is allocated (279) MFS Growth with Income..................... _______________%
to the Alliance Money Market option. (267) MFS Emerging Growth Companies.............. _______________%
Thereafter, amounts are transferred (270) Morgan Stanley Emerging Markets Equity..... _______________%
monthly over a twelve month period (297) EQ/Evergreen............................... _______________%
from the Alliance Money Market (298) EQ/Evergreen Foundation.................... _______________%
option to the other variable (261) EQ/Putnam Growth & Income Value............ _______________%
investment options based on the (262) EQ/Putnam Investors Growth................. _______________%
percentages you indicate. (265) EQ/Putnam International Equity............. _______________%
The total must equal 100%.
Do not indicate a percentage for the
Alliance Money Market option.
--------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
[ ] REBALANCING Your Annuity Account Value in the Variable investment options will be periodically re-adjusted
according to the allocation percentages you indicate above. SELECT REBALANCING FREQUENCY: [ ] Quarterly
[ ] Semi-Annually [ ] Annually
- -----------------------------------------------------------------------------------------------------------------------------
No. 127866 (2/99) ACCUMULATOR PLUS page 3
<PAGE>
- --------------------------
14. AGREEMENT
- --------------------------
All information and statements furnished in this application are true and complete to the best of my knowledge and
belief. I understand and acknowledge that no agent has the authority to make or modify any Contract on behalf of
Equitable of Colorado, or to waive or alter any of Equitable of Colorado's rights and regulations. I understand that the
Annuity Account Value attributable to allocations to the Variable investment options and variable annuity benefit
payments, if a variable settlement option has been elected, may increase or decrease and are not guaranteed as to dollar
amount. Equitable of Colorado may accept amendments to this application provided by me or under my authority. I
understand that any change in benefits applied for or age at issue must be agreed to in writing on an amendment.
X
- ---------------------------------------------------------- ------------------------ -----------------------------------
Proposed Annuitant's Signature Date Signed at: City, State
X
- ---------------------------------------------------------- ------------------------ -----------------------------------
Proposed Owner's Signature (If other than Annuitant) Date Signed at: City, State
X
- ---------------------------------------------------------- ------------------------ -----------------------------------
Proposed Joint Owner's Signature (If other than Annuitant) Date Signed at: City, State
(OREGON AND VIRGINIA RESIDENTS READ ABOVE AND SIGN ABOVE, ALL OTHER RESIDENTS READ ABOVE AND BELOW AND SIGN BELOW.)
ARKANSAS/KENTUCKY/NEW MEXICO: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON
FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION OR CONCEALS FOR THE
PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A
CRIME AND SUBJECTS SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES.
COLORADO: IT IS UNLAWFUL TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR MISLEADING FACTS OR INFORMATION TO AN INSURANCE
COMPANY FOR THE PURPOSE OF DEFRAUDING OR ATTEMPTING TO DEFRAUD THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT, FINES,
DENIAL OF INSURANCE, AND CIVIL DAMAGES. ANY INSURANCE COMPANY OR AGENT OF AN INSURANCE COMPANY WHO KNOWINGLY PROVIDES
FALSE, INCOMPLETE OR MISLEADING FACTS OR INFORMATION TO A CONTRACT OWNER OR CLAIMANT FOR THE PURPOSE OF DEFRAUDING OR
ATTEMPTING TO DEFRAUD THE CONTRACT OWNER OR CLAIMANT WITH REGARD TO A SETTLEMENT OR AWARD PAYABLE FROM INSURANCE
PROCEEDS SHALL BE REPORTED TO THE COLORADO DIVISION OF INSURANCE WITHIN THE DEPARTMENT OF REGULATORY AGENCIES.
FLORIDA: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD OR DECEIVE AN INSURER FILES A STATEMENT OF CLAIM OR
AN APPLICATION CONTAINING ANY FALSE, INCOMPLETE, OR MISLEADING INFORMATION IS GUILTY OF A FELONY OF THE THIRD DEGREE.
EQUITABLE OF COLORADO IS A WHOLLY OWNED SUBSIDIARY OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
("EQUITABLE LIFE"). EQUITABLE LIFE IS A WHOLLY OWNED SUBSIDIARY OF THE EQUITABLE COMPANIES INCORPORATED ("EQ"). AXA-UAP,
AN INSURANCE HOLDING COMPANY, IS EQ'S LARGEST SHAREHOLDER. NEITHER EQ NOR AXA-UAP HAS ANY RESPONSIBILITY FOR THE
INSURANCE OBLIGATIONS OF EQUITABLE LIFE, INCLUDING EQUITABLE OF COLORADO.
NEW JERSEY: ANY PERSON WHO KNOWINGLY FILES A STATEMENT OF CLAIM CONTAINING ANY FALSE OR MISLEADING INFORMATION IS
SUBJECT TO CRIMINAL AND CIVIL PENALTIES.
OHIO: ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT HE IS FACILITATING A FRAUD AGAINST AN INSURER, SUBMITS AN
APPLICATION OR FILES A CLAIM CONTAINING A FALSE OR DECEPTIVE STATEMENT IS GUILTY OF INSURANCE FRAUD.
ALL OTHER STATES: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY FILES AN APPLICATION OR
STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE, MISLEADING OR INCOMPLETE INFORMATION IS GUILTY OF A CRIME WHICH MAY
BE PUNISHABLE UNDER STATE OR FEDERAL LAW.
X
- ---------------------------------------------------------- ------------------------ -----------------------------------
Proposed Annuitant's Signature Date Signed at: City, State
X
- ---------------------------------------------------------- ------------------------ -----------------------------------
Proposed Owner's Signature (If other than Annuitant) Date Signed at: City, State
X
- ---------------------------------------------------------- ------------------------ -----------------------------------
Proposed Joint Owner's Signature (If other than Annuitant) Date Signed at: City, State
Do you have reason to believe that any existing life insurance or annuity has been (or will be) surrendered, withdrawn
from, loaned against, changed or otherwise reduced in value, or replaced in connection with this transaction assuming
the Contract applied for will be issued on the life of the Annuitant? [ ] Yes [ ] No
Florida License ID No(s). ________________________________________
1)
-----------------------------------------------------------------------------------------------------------------------------
Agent Signature Print Name & No. of Agent
-----------------------------------------------------------------------------------------------------------------------------
Agent Soc. Sec. No. Phone No./Fax No. Agency Code %
2)
-----------------------------------------------------------------------------------------------------------------------------
Agent Signature Print Name & No. of Agent
-----------------------------------------------------------------------------------------------------------------------------
Agent Soc. Sec. No. Phone No./Fax No. Agency Code %
No. 127866 (2/99) ACCUMULATOR PLUS page 4
</TABLE>
[EQUITABLE LOGO]
I, Linda Galasso, Secretary of THE EQUITABLE OF COLORADO, INC., do hereby
certify that:
attached hereto marked "EXHIBIT B" is a full, true and
correct copy of the Charter of The Equitable of Colorado,
Inc., with amendments to date.
IN WITHNESS WHEREOF, I have hereunto affixed my
signature and Seal of THE EQUITABLE OF COLORADO, INC.,
this 10th day of February, 1999.
/s/ Linda Galasso
Linda Galasso
<PAGE>
EXHIBIT "B"
(illegible text)
FILED
JAN 18 1984
553857
STATE OF COLORADO
DEPARTMENT OF STATE
ARTICLES OF INCORPORATION
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO INC.
I, the undersigned natural person of the age of eighteen years or
more, acting as incorporator of a corporation under the Colorado Corporation
Act, adopt the following Articles of Incorporation for such corporation:
1. The name of the corporation is Equitable Life Assurance Society of
Colorado Inc.
2. The corporation shall have a perpetual duration.
3. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the Insurance Laws of
Colorado.
4. The corporation shall have authority to issue a total of 1,000,000
shares of common stock of the par value of $1.00, which shall be non-assessable.
5. The stockholders of the corporation shall have no pre-emptive
rights.
6. The address of the corporation's registered office and principal
office in the state of Colorado is 111 South Cascade, Colorado Springs, County
of El Paso. The name of its registered agent at such address is Gerald H.
Bruning.
7. The initial Board of Directors will be comprised of seven
Directors. Their names and addresses are:
Franklin Maisano - 1285 Avenue of the Americas
New York, New York 10019
Donald J. Mooney - 1285 Avenue of the Americas
New York, New York 10019
Peter J. Moran - 1285 Avenue of the Americas
New York, New York 10019
Thomas J. Roach - 1285 Avenue of the Americas
New York, New York 10019
Melvin Stein - 1285 Avenue of the Americas
New York, New York 10019
APPROVED FOR FILING
INSURANCE DIVISION
1/16/84
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
<PAGE>
Richard M. Stenson - 1285 Avenue of the Americas
New York, New York 10019
Irwin T. Vanderhoof - 1285 Avenue of the Americas
New York, New York 10019
8. The business and affairs of the corporation shall be managed by the
Board of Directors. The stockholders and the Board of Directors shall each have
the power to make, alter or repeal the by-laws of the corporation.
9. The corporation shall indemnify to the fullest extent permitted by
Section 7-3-101 of the Colorado Corporation Code as amended from time to time
each person who is or was a director or officer of the corporation and the
heirs, executors and administrators of such a person.
10. The name of the sole incorporator is William Schor, and his
mailing address is 1285 Avenue of the Americas, New York, New York 10019.
/s/ William Schor
---------------------------------------
William Schor
Incorporator
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 11th day of January
1984, by William Schor.
In witness whereof I have hereunto set my hand and seal.
My commission expires .
-------------------------
/s/ Eleanor P. Weber
---------------------------------------
Notary Public
ELEANOR P. WEBER
NOTARY PUBLIC, STATE OF NEW YORK
NO. 41-(ILLEGIBLE)
QUALIFIED IN QUEENS COUNTY
(ILLEGIBLE)
---------------------------------------
Address
3287I
<PAGE>
IC0553857
RECEIVED 3-15-84
MAR 1 (illegible) David (illegible)
(illegible) A+C
STATE OF COLORADO
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
EQUITABLE LIFE ASSURANCE SOCIETY OF COLORADO INC.
-------------------------------------------------
Pursuant to the provisions of the Colorado Corporation Act, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Equitable Life Assurance Society
------------------------------------
of Colorado Inc.
---------------------------------------------------------------------------
SECOND: The following amendment to the Articles of Incorporation was
adopted by the directors of the corporation on March 2, 1984 in the
---------------------
manner prescribed by the Colorado Corporation Act:
(Insert Attachment)
Paragraph 4 of the Corporation's Articles of Incorporation is amended as
follows:
The par value of the shares of common stock that the
Corporation is authorized to issue is increased from $1.00
to $2.00.
APPROVED FOR FILING FILED
INSURANCE DIVISION COLO. DEPT. OF STATE
562527 (ILLEGIBLE)19
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
AR
(illegible text)
-1-
<PAGE>
ARTICLES OF AMENDMENT - Continued
THIRD: The number of shares of the corporation outstanding at the time of
such adoption was 0. No shares have been issued; and the number of shares
------------------------------
entitled to vote thereon was 0 .
--------
FOURTH: The designation and number of outstanding shares of each claim
entitled to vote thereon as a class were as follows:
Number of
Class Shares
--------- ---------
(Note 1)
None
FIFTH: The number of shares voted for such amendment was 0 ; and
------------
the number of shares voted against such amendment was 0 .
-------------
SIXTH: The number of shares of each class entitled to vote thereon as a
class voted for and against such amendment, respectively, was:
Number of Shares Voted
--------------------------
Class For Against
--------- ----- ---------
(Note 1)
None
SEVENTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: (Note 2)
No change
EIGHTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: (Note 2)
Since none of the Corporation's shares has been issued, the amendment does
not effect a change on stated capital.
Dated March 2 1984
----------------------- --
Equitable Life Assurance Society
of Colorado Inc. (Note 3)
---------------------------
By /s/ Melvin Stein )
------------------------)
Its Vice President )
-------------- )(Note 4)
Melvin Stein )
and /s/ Kevin Keefe )
-----------------------)
Its Secretary, Kevin Keefe
STATE OF NEW YORK )
----------------------)
) ss.
County of New York )
---------------------)
Before me, Joan B. Mastrowski, a Notary Public in and for the said County
--------------------
and State, personally appeared Kevin Keefe who acknowledged before me that he
----------------
is the Secretary of Equitable Life Assurance Society of Colorado, Inc.
-------------- ----------------------------------------------------------
a Colorado corporation and that he signed the foregoing Articles of Amendment as
his free and voluntary act and deed for the uses and purposes thereto set forth.
In witness whereof I have hereunto set my hand and seal this 2nd day of
-----
March , A.D. 19 84
- ------ ---
My commission expires (illegible)
-------------
/s/ Joan B. Mastrowski
---------------------------------------
Notary Public
(illegible text)
Notes: 1. If inapplicable, insert "None."
2. If inapplicable, insert "No change."
3. Exact corporate name of the corporation adopting the
Articles of Amendment
4. Signatures and titles of officers signing for the corporation.
(COLO. - 635)
-2-
<PAGE>
CHANGE OF NAME (illegible text)
FILED
COLO. DEPT. OF STATE
579257 (illegible) 10
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
SEC 553857
Equitable Life Assurance Society of Colorado Inc.
-------------------------------------------------
Pursuant to the provisions of the Colorado Corporation Act, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Equitable Life Assurance Society
--------------------------------
of Colorado Inc.
---------------------------------------------------------------------------
SECOND: The following amendment of the Articles of Incorporation was
adopted by the shareholders of the corporation on June 14, 1984 in the
---------------------
manner prescribed by the Colorado Corporation Act:
(Insert Attachment)
Paragraph 1 of the Corporation's Articles of Incorporation is amended
as follows:
The name of the corporation is changed to The Equitable of Colorado,
Inc.
APPROVED FOR FILING
INSURANCE DIVISION
6/27/84
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
AB
(illegible text)
(COLO. - illegible)
-1-
<PAGE>
ARTICLES OF AMENDMENT - Continued
THIRD: The number of shares of the corporation outstanding at the time of
such adoption was 750,000 ; and the number of shares entitled
-------------------------
to vote thereon was 750,000.
-------
FOURTH: The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows:
Number of
Class Shares
--------- ---------
(Note 1)
None
FIFTH: The number of shares voted for such amendment was 750,000 ; and
------------
the number of shares voted against such amendment was 0
-------------.
SIXTH: The number of shares of each class entitled to vote thereon as a
class voted for and against such amendment, respectively, was:
Number of Shares Voted
--------------------------
Class For Against
--------- ----- ---------
(Note 1)
None
SEVENTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: (Note 2)
The corporation will cancel its issued shares and reissue shares
containing the new corporate name.
EIGHTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: (Note 3)
no change
Dated June 14 1984
----------------------- --
Equitable Life Assurance
Society of Colorado Inc. (Note 3)
---------------------------
By /s/ Donald J. Mooney )
------------------------)
Its President )
-------------- )(Note 4)
)
and /s/ Kevin Keefe )
-----------------------)
Its Secretary
--------
STATE OF New York )
----------------------)
) ss.
County of New York )
---------------------)
Before me, Joan B. Mastrowski, a Notary Public in and for the said County
-----------------------
and State, personally appeared Donald J. Mooney who acknowledged before me that
----------------
he is the President of Equitable Life Assurance Society of Colorado, Inc.
-------------- ----------------------------------------------------------
a Colorado corporation and that he signed the foregoing Articles of Amendment as
his free and voluntary act and deed for the uses and purposes thereto set forth.
In witness whereof I have hereunto set my hand and seal this 14th day of
----
June, A.D. 1984.
- ---- --
JOAN B. MASTROWSKI
NOTARY PUBLIC, STATE OF NEW YORK
(illegible)
My commission expires
-------------
/S/ Joan B. Mastrowski
---------------------------------------
Notary Public
Notes: 1. If inapplicable, insert "None."
2. If inapplicable, insert "No change."
3. Exact corporate name of the corporation adopting the
Articles of Amendment.
4. Signatures and titles of officers signing for the corporation.
(COLO. - 635)
-2-
<PAGE>
SC Form D-4 (Rev.) for office use only
Submit in Duplicate
Filing Fee: $30.00
This document must be typewritten
MAIL TO:
Colorado Secretary of State
Corporations Office
1560 Broadway, Suite 200
Denver, Colorado 08202
(323) 866-2361
(illegible signature)
DATE: 6-5-91
----------------
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
IC 871553857
Pursuant to the provisions of the Colorado Corporation Code, the
undersigned corporation adopts the following Articles of Amendments to its
Articles of Incorporation:
FIRST: The name of the corporation is (note 1) The Equitable of Colorado,
-----------------------------
Inc. NCGS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECOND: The following amendment to the Articles of Incorporation was
adopted on May 13, 1991, as prescribed by the Colorado Corporation Code, in
-------- --
the manner marked with an X below:
Such amendment was adopted by the board of directors where no shares
---- have been issued.
X Such amendment was adopted by a vote of the shareholders. The number
---- of shares voted for the amendment was sufficient for approval.
"RESOLVED, That an amendment of the Articles of Incorporation be
made to change the address of the Home Office of the "Corporation"
from 111 South Cascade, Colorado Springs, CO 80903 to 370 17th Street,
Suite 4950, Denver, CO 80202."
APPROVED FOR FILING
INSURANCE DIVISION
6/24/91
- -----------------------------
DATE
/s/ (signature illegible)
- -----------------------------
BY
COMPUTER UPDATE COMPLETE
MRA
THIRD: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows: N/A
FOURTH: The manner in which such amendment effects a change in the amount
of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: N/A
The Equitable of Colorado, Inc.
------------------------------- (Note 1)
By (illegible signature)
----------------------------
Its
and (illegible signature)
---------------------------- (Note 2)
Its
N/A
------------------------------- (Note 3)
Its
Notes: 1. Enter corporate name of corporation adopting the Articles of
Amendment. (If this is a change of name amendment the name before
this amendment is filed.)
2. Signatures and titles of officers signing for the corporation.
3. Where no shares have been issued, signature of a director.
(illegible text)
[EQUITABLE LOGO]
I, Linda Galasso, Secretary of THE EQUITABLE OF COLORADO, INC., do hereby
certify that:
attached hereto marked "EXHIBIT A" is a full, true and correct
copy of the By-Laws of The Equitable of Colorado, Inc., as
amended to date;
IN WITNESS WHEREOF, I have hereunto affixed
my signature and Seal of THE EQUITABLE OF
COLORADO, INC.,
this 10th day of February, 1999.
/s/ Linda Galasso
-------------------------------------
<PAGE>
-2-
EXHIBIT A
================================================================================
BY-LAWS
THE EQUITABLE OF COLORADO
================================================================================
ARTICLE I
MEETINGS OF STOCKHOLDERS
------------------------
SECTION 1.1 ANNUAL MEETING. The annual meeting of the Stockholders for the
election of Directors and the transaction of other business shall be held on
the second Thursday in March of each year (or, if such day is a legal holiday,
then on the next succeeding business day), or on such other date as may be fixed
by the Board of Directors.
SECTION 1.2 SPECIAL MEETINGS. A special meeting of the Stockholders may be
called at any time by the Board of Directors, the Chairman of the Board or the
President, and shall be called by the Secretary upon the written request of the
holders of record of a majority of the outstanding shares entitled to vote at
the meeting. At any such special meeting only such business may be transacted
which is related to the purpose of purposes set forth on the notice or waiver of
notice of the meeting.
SECTION 1.3 TIME AND PLACE OF MEETINGS. Meetings of the Stockholders may be held
in or outside of Colorado at the time and place specified by the Board of
Directors or Stockholders requesting the meeting, as the case may be.
SECTION 1.4 NOTICE. Written notice shall be given to each meeting of the
Stockholders stating the place, date and hour of the meeting and, unless it is
the annual meeting, indicating that it is being issued by or at the direction of
the person or persons calling the meeting. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called. A copy of
the notice of any meeting shall be given, personally or by mail, not less than
ten (10) nor more than fifty (50) days before the date of the meeting, to each
Stockholder entitled to vote at the meeting. Notice of meeting need not be given
to any Stockholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting. The attendance of any Stockholder at any
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of the meeting, shall constitute a waiver of
notice by him.
SECTION 1.5 PROXIES; VOTING. Each Stockholder of record shall be entitled at
every meeting of the Stockholders to one vote for each share of capital stock
standing in his name or the record of Stockholders. Every Stockholder entitled
to vote at a meeting or to express consent or dissent without a meeting may
authorize another person or persons to act for
<PAGE>
-3-
him by proxy. Every proxy must be signed by the Stockholder or his
attorney-in-fact. Directors shall be elected by a plurality of the votes cast at
a meeting of the Stockholders by the holders of shares entitled to vote in the
election. Whenever any corporate action, other than the election of Directors,
is to be taken by vote of the Stockholders, it shall, except as otherwise
required by law, be authorized by a majority of the votes cast at a meeting of
the Stockholders by the holders of shares entitled to vote thereon.
SECTION 1.6 QUORUM. The presence, in person or by proxy, of the holders of the
majority of the outstanding shares entitled to vote thereat shall constitute a
quorum at a meeting of the Stockholders for the transaction of any business.
Despite the absence of a quorum, the Stockholders present in person or by
proxy may adjourn the meeting to another time or place. At any adjourned meeting
at which a quorum is present, any business may be transacted that might have
been transacted on the original date of the meeting.
SECTION 1.7 CONSENT OF STOCKHOLDERS WITHOUT A MEETING. Whenever Stockholders are
required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by the holders of all outstanding shares entitled to vote thereon.
ARTICLE II
BOARD OF DIRECTORS
------------------
SECTION 2.1 NUMBER OF DIRECTORS. The Board of Directors shall consist of not
less than three (3) or more than thirty-six (36) Directors as determined from
time to time by vote of the Stockholders or of a majority of the entire Board.
As used in these By-Laws, "entire Board of Directors" or "entire Board" means
the total number of Directors which the Company would have if there were no
vacancies.
SECTION 2.2 ELECTION AND TERMS OF DIRECTORS. At each annual meeting of the
Stockholders, Directors shall be elected to hold office until the next annual
meeting. Each Director shall hold office until the expiration of the term for
which he is elected and until his successor has been elected and qualified, or
until his death, resignation or removal.
sECTION 2.3 REGULAR MEETINGS. The Board of Directors shall meet for the purpose
of electing officers and the transaction of other business immediately following
the adjournment of the annual meeting of the Stockholders at the place or such
annual meeting. The time and place of other regular meetings of the Board shall
be fixed by the Board.
<PAGE>
-4-
SECTION 2.4 SPECIAL MEETINGS. A special meeting of the Board of Directors may be
called at any time by the Chairman of the Board, the President or three
Directors.
SECTION 2.5 QUORUM. A majority of the entire Board of Directors shall constitute
a quorum for the transaction of business at any regular or special meeting of
the Board, except as otherwise prescribed by these By-Laws. A majority of the
Directors present, whether or not a quorum is present, may adjourn any meeting
to another time or place.
SECTION 2.6 ACTION BY THE BOARD. Except as otherwise prescribed by the law, the
Articles of Incorporation of the Company or these By-Laws, the vote of a
majority of the Directors present at the time of the vote, if a quorum is
present at such time, shall be the act of the Board of Directors.
SECTION 2.7 NOTICE OF MEETINGS. Notice of a regular meeting of the Board of
Directors need not be given. Notice in writing of each special meeting of the
Board of Directors shall be given to each Director at least two days in advance
thereof and shall state in general terms the purpose or purposes of the meeting.
Any such notice shall be deemed given to a Director when delivered to him or
sent by mail, telegram, cablegram, or radiogram addressed to him at his address
furnished to the Secretary. Notice need not be given to any director who submits
a signed waiver of notice before or after the meeting, or who attends the
meeting without protesting, at the beginning of the meeting, that the meeting is
not lawfully called or convened. Notice of any adjournment of a meeting to
another time or place need not be given if such time and place are announced at
the meeting.
SECTION 2.8 PARTICIPATION IN MEETINGS; ACTION BY CONSENT WITHOUT MEETING. Any
Director may participate in a meeting of the Board or of a committee thereof by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting. Any action
required or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting if all members of the Board or
of such committee, as the case may be, consent thereto in writing and such
meeting is filed with the minutes of the Board or such committee, as the case
may be.
SECTION 2.9 RESIGNATIONS. Any Director may resign at any time by giving written
notice to the Chairman of the Board, the President or the Secretary. Such
resignation shall take effect on receipt of such notice or at any later time
specified therein.
SECTION 2.10 REMOVAL OF DIRECTORS. Any Director may be removed by action of the
Board of Directors for cause or by vote of the Stockholders with or without
cause.
<PAGE>
-5-
SECTION 2.11 VACANCIES. Newly created directorships resulting from an increase
in the number of Directors and vacancies occurring in the Board of Directors for
any reason (except the removal of Directors without cause) may be filled by vote
of the Stockholders or of a majority of the Directors then in office, although
less than a quorum exists. Vacancies occurring in the Board by reason of the
removal of Directors without cause may be filled by vote of the Stockholders or
action of the Board.
SECTION 2.12 DIRECTOR'S FEES. The Directors shall be paid such fees for services
as Directors as may have been authorized by the Board of Directors.
ARTICLE III
COMMITTEES
-----------
SECTION 3.1 GENERAL. The Board of Directors, by resolution adopted by a majority
of the entire Board, may designate from among its members, an executive
committee and other standing committees each consisting of at least three
Directors. The Board may designate by resolution adopted by a majority of the
entire Board one or more Directors as alternate members of the committee, who
may replace any absent member or members at any meeting of such committee. Each
committee shall serve at the pleasure of the Board.
SECTION 3.2 POWERS. Each committee shall have the authority of the Board of
Directors to the extent provided in the resolution designating such committee,
except that no committee shall have authority to submit to the Stockholders any
action for which Stockholders' approval is required by law, to fill vacancies in
the Board or in any committee, to fix the compensation of the Directors for
serving on the Board or any committee, to amend or repeal any of these By-Laws
or to adopt new by-laws, or to amend or repeal any resolution of the Board which
by its terms shall not be so amenable or repeatable.
SECTION 3.3 QUORUM AND MANNER OF ACTING. Except as otherwise prescribed by the
Board of Directors, a majority of the total membership which a committee would
have if there were no vacancies shall constitute a quorum for the transaction of
business and the vote of a majority of the members present at the time of the
vote, if a quorum is present at such time, shall be the act of such committee.
Except as provided in these By-Laws or otherwise prescribed by the Board, each
committee may elect a Chairman from among its members, fix the time and date of
its meetings and adopt other rules of procedure. Any action taken by a committee
shall be reported to the Board at its next meeting.
<PAGE>
-6-
SECTION 3.4 RESIGNATION. Any member of a committee may resign at any time by
giving written notice to the Chairman of the Board, the President or the
Secretary. Such resignation shall take effect on receipt of such notice or at
any later time specified therein.
SECTION 3.5 REMOVAL OF MEMBERS. Any member of a committee may be removed by
action of the Board of Directors with or without cause.
SECTION 3.6 VACANCIES. Any vacancy occurring in any committee for any reason may
be filled by resolution adopted by a majority of the entire Board.
SECTION 3.7 SUBCOMMITTEES. Any committee may appoint one or more subcommittees
from its members. Any such subcommittee may be charged with the duty of
considering and reporting to the appointing committee on any matter within the
responsibility of the committee appointing such subcommittee.
ARTICLE IV
OFFICERS
----------
SECTION 4.1 GENERAL. The officers of the Company shall be Chairman of the Board,
a President, one or more Vice Presidents, a Controller, a Secretary, a
Treasurer, an Actuary and such other officers as the Board of Directors may
determine. Each officer shall be elected by the Board to hold office for the
term for which he is elected and until his successor has been elected and
qualified or until his death, resignation or removal. Any two or more offices
may be held by the same person, except the offices of President and Secretary.
The Board may determine not to fill any office from time to time. The Board may
require any officer to give security for the faithful performance of his duties.
SECTION 4.2 RESIGNATIONS. Any officer may resign at any time by giving written
notice to the Chairman of the Board, the President or the Secretary. Such
resignation shall take effect on receipt of such notice or at any later time
specified therein.
SECTION 4.3 REMOVAL OF OFFICERS AND VACANCIES. Any officer elected by the Board
of Directors may be removed by the Board with or without cause. A vacancy
occurring in any office for any reason may be filled by action of the Board of
Directors.
SECTION 4.4 CHIEF EXECUTIVE OFFICER. The Chairman of the Board or the President
shall be chief executive officer of the Company as the Board of Directors from
time to time shall
<PAGE>
-7-
determine, and the Board of Directors from time to time may determine who shall
act as chief executive officer in the absence or inability to act of the
then incumbent. Subject to the control of the Board and to the extent not
otherwise prescribed by these By-Laws, the chief executive officer shall be
responsible for the general management and direction of all the business and
affairs of the Company.
SECTION 4.5 CHAIRMAN OF THE BOARD. The Chairman of the Board shall be elected
from among the members of the Board of Directors. He shall preside at all
meetings of the Stockholders and of the Board at which he is present. He shall
also exercise such powers and perform such duties as may be delegated or
assigned to or required of him by these By-Laws or by or pursuant to
authorization of the Board.
SECTION 4.6 PRESIDENT. The President shall exercise such powers and perform such
duties as may be delegated or assigned to or required of him by these By-Laws or
by or pursuant to the authorization of the Board or (if the President is not the
chief executive officer) by the chief executive officer. In the absence of the
Chairman of the Board, the President shall preside at all meetings of the
Stockholders and of the Board at which he is present.
SECTION 4.7 VICE PRESIDENTS. Each Vice President shall exercise such powers and
perform such duties as may be delegated or assigned to or required of him by
these By-Laws or pursuant to authorization of the Board or the President.
SECTION 4.8 CONTROLLER. The Controller shall be responsible for keeping and
maintaining the books of accounts of the Company, subject to the control of the
Board of Directors and the President. The Controller shall exercise such powers
and perform such other duties as relate to the office of the Controller, and
also such powers and duties as may be delegated or assigned to or required of
him by these By-Laws or by or pursuant to authorization of the Board or the
President.
SECTION 4.9 SECRETARY. The Secretary shall issue notices and keep the minutes of
the meetings of the Stockholders and of the Board of Directors and its
committees and shall have custody of the Company's corporate seal and records.
The Secretary shall exercise such powers and perform such other duties as relate
to the office of the Secretary, and also such powers and duties as may be
delegated or assigned to or required of him by or pursuant to the authorization
of the Board, the Chairman of the Board, or the President.
SECTION 4.10 TREASURER. The Treasurer shall be responsible for purchasing and
selling securities pursuant to authorization of the Board of Directors or any
committee thereof and the safe keeping of the Company's funds and securities.
The Treasurer shall
<PAGE>
-8-
exercise such powers and perform such other duties as relate to the office of
the Treasurer, and also such powers and duties as may be delegated or assigned
to or required of him by these By-Laws or by or pursuant to the authorization of
the Board or the President.
SECTION 4.11 ACTUARY. The Actuary shall be responsible for all actuarial
calculations and the preparation of all policy forms to be issued by the
Company, subject to the control of the Board of Directors and the President. The
Actuary shall exercise such powers and perform such other duties as relate to
the office of the Actuary, and also such powers and duties as may be delegated
or assigned to or required of him by these By-Laws or by or pursuant to the
authorization of the Board or the President.
SECTION 4.12 OTHER OFFICERS. Each other officer shall exercise such powers and
perform such duties as may be delegated or assigned to or required of him by or
pursuant to the authorization of the Board or the President.
ARTICLE V
EXECUTION OF INSTRUMENTS
SECTION 5.1 EXECUTION OF INSTRUMENTS. Any one of the following, namely, the
Chairman of the Board, the President, any Vice President (including a Deputy or
Assistant Vice President or any other Vice President designated by a number or a
word or words added before or after the title Vice President to indicate his
rank or responsibility), the Secretary or the Treasurer, or any officer,
employee or agent designated by or pursuant to authorization of the Board of
Directors or any committee thereof, shall have power to execute instruments on
behalf of the Company (other than checks, drafts and other orders drawn on
funds of the Company deposited in its name in banks) and to affix the corporate
seal. If any such instrument is to be executed on behalf of the Company by more
than one person, any two or more of the foregoing or any one or more of the
foregoing with an Assistant Secretary or an Assistant Treasurer shall have power
to execute such instrument and affix the corporate seal. If any such instrument
is to be executed on behalf of the Company by more than one person, any two or
more of the foregoing or any one or more of the foregoing with an Assistant
Secretary or an Assistant Treasurer shall have the power to execute such
instrument and affix the corporate seal.
The signature of any officer may be in facsimile on any such instrument if
it shall also bear the actual signature, or personally inscribed initials, of an
officer, employee or agent empowered by or pursuant to the first sentence of
this Section to execute such instrument, provided that the Board of Directors or
a committee thereof may authorize the issuance of insurance contracts and
annuity contracts on behalf of the Company bearing the facsimile signature of an
officer without the actual signature or personally inscribed initials of any
person.
<PAGE>
-9-
All checks, drafts and other orders drawn on funds of the Company deposited
in its name in banks shall be signed by one or more officers or employees, but
only pursuant to authorization of and in accordance with rules prescribed by the
Board, which rules may permit the use of facsimile signatures.
SECTION 5.2 FACSIMILE SIGNATURES OF FORMER OFFICERS. If any officer whose
facsimile signature has been placed upon any instrument shall have ceased to be
such officer before such instrument is issued, it may be issued with the same
effect as if he had been such officer at the time of its issue.
SECTION 5.3 MEANING OF TERM "INSTRUMENTS". As used in this Article V, the term
"instruments" includes, but is not limited to, contracts and agreements, checks,
drafts and other orders for the payment of money, transfers of bonds, stocks,
notes and other securities, and powers of attorney, deeds, leases, releases or
mortgages, satisfactions and all other instruments entitled to be recorded in
any jurisdiction.
ARTICLE VI
FINANCIAL STATEMENTS AND AUDIT
SECTION 6.1 ANNUAL STATEMENT AND REPORTS. At the meeting of the Board of
Directors following the annual meeting of the Stockholders, the Annual
Statement of the Company for the preceding year, together with a certification
of certification thereof by such independent Public Accountants as may have been
selected by the Board of Directors, shall be submitted to the Board. Interim
quarterly reports, certified by the Actuary and the Controller, on the financial
condition of the Company shall also be submitted to the Board. The Annual
Statement and interim reports shall be filed with the records of the Board and a
note of such submission shall be spread upon the minutes. The Controller shall
also report from time to time to the Board or any committee any other matters
coming to his attention in the course of his duties which in his judgment
should be brought to their attention.
SECTION 6.2 INDEPENDENT PUBLIC ACCOUNTANTS. The books and accounts of the
Company shall be audited throughout each year by such independent Public
Accountants as shall be selected by the Board of Directors.
<PAGE>
-10-
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND INCORPORATORS.
To the extent permitted by the law of the State of Colorado, subject to all
applicable requirements thereof
(a) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate, is or was a director, officer, employee or incorporator
of the Company shall be indemnified by the Company;
(b) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he, his
testator or intestate serves or served any other organization in any capacity at
the request of the Company may be indemnified by the Company; and
(c) the related expenses of any such person in any said categories may be
advanced by the Company.
ARTICLE VIII
CAPITAL STOCK
SECTION 8.1 FORM OF CERTIFICATES. Certificates representing shares of capital
stock of the Company shall be in such form as shall be approved by the Board of
Directors. Each certificate shall be signed by the Chairman of the Board, the
President or a Vice President and the Secretary or the Treasurer, and may be
sealed with the corporate seal of the Company or a facsimile thereof. The
signatures of the officers upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent or registered by a registrar
other than the Company itself or its employee.
SECTION 8.2 REGISTERED OWNER. Prior to due presentment for registration of
transfer of a certificate for shares of its capital stock, the Company may treat
the registered owner as the person exclusively entitled to vote, to receive
notifications and otherwise to exercise all the rights and powers of an owner.
SECTION 8.3 CERTIFICATES LOST OR DESTROYED. The Company may issue a new
certificate for shares in place of any certificate therefore issued by it,
alleged to have been lost or destroyed, and the Board of Directors may require
the owner of the lost or destroyed
<PAGE>
-11-
certificate, or his legal representative, to give the Company a bond sufficient
to indemnify the Company against any claim that may be made against it on
account of the alleged loss or destruction of any such certificate or the
issuance of any such new certificate.
SECTION 8.4 RECORD DATE. The Board of Directors may fix, in advance, a date as
the record date for the determination of Stockholders or any adjournment
thereof, or to express consent to or dissent from any proposal without a
meeting, or to receive payment of any dividend or the allotment or any rights.
The Board may also fix a date as the record date for the purpose of any other
action The record date may not be more than fifty (50) nor less than ten (10)
days before the date of the meeting, nor more than fifty (50) days prior to any
other action. If no record date is fixed, the record date for the determination
of Stockholders entitled to notice of or to vote at a meeting of the
Stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if no notice is given, the day on which the
meeting is held, and the record date for determining Stockholders for any other
purpose shall be at the close of business of on the day on which the resolution
of the Board relating thereto is adopted.
ARTICLE IX
AMENDMENT OF BY-LAWS
SECTION 9.1 AMENDMENT OF BY-LAWS. These By-Laws may be amended or repealed and
new by-laws may be adopted by vote of the Stockholders or of a majority of the
entire Board.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 25th day of January, 1999.
/s/ Allen Zabusky
------------------------------
[sign]
Allen Zabusky
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 29th day of January, 1999.
/s/ Samuel B. Shlesinger
------------------------------
[sign]
Samuel B. Shlesinger
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 29th day of January, 1999.
/s/ Michael S. Martin
------------------------------
[sign]
Michael S. Martin
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 26th day of January, 1999.
/s/ Harvey E. Blitz
------------------------------
[sign]
Harvey E. Blitz
------------------------------
[print]
107280v1
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable of Colorado, Inc. (the "Company"), a Colorado stock
life insurance company, hereby constitutes and appoints Michael Martin, Alvin
Fenichel, Allen Zabusky, Mark Hug, Naomi Weinstein and Mildred Oliver, and each
of them (with full power to each of them to act alone), his or her true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him or her and on his or her behalf and in his or her own name, place and stead,
to execute and file any of the documents referred to below relating to
registrations under the Securities Act of 1933, the Securities Exchange Act of
1934 and the Investment Company Act of 1940 with respect to any insurance or
annuity contracts or other agreements providing for allocation of amounts to
Separate Accounts of the Company, and related units or interests in Separate
Accounts: registration statements on any form or forms under the Securities Act
of 1933 and the Investment Company Act of 1940 and annual reports on any form or
forms under the Securities Exchange Act of 1934, and any and all amendments and
supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and his, her or their substitutes being empowered to act with or without the
others, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 25th day of January, 1999.
/s/ Michel Beaulieu
------------------------------
[sign]
Michel Beaulieu
------------------------------
[print]
107280v1
FORMULAE FOR DETERMINING MONEY MARKET FUND YIELD
FOR A SEVEN-DAY PERIOD FOR THE INCOME MANAGER
1. The value of one hypothetical Unit in an account (excluding capital
changes) at the beginning of a seven-day period
2. The value of one hypotehetical Unit in the same account (exculding capital
changes) at the end of the seven-day period
3. Net change in Unit Value [(1) subtracted from [(2)]
4. Base period return [(3) divided by (1)]
5. Current yield [(4) annualized (multiplied by 365/7)]
6. Effective Yield [ [1 + (4)] [raised to the (365/7) power] ] - 1
FORMULAE FOR DETERMINING CUMULATIVE AND ANNUALIZED
RATES OF RETURN FOR THE INCOME MANAGER
CRR = [ (UVt) -1] x 100
[ (UVt-B) ]
ARR = [ (UVt)1/B - 1] x 100
[ (UVt-B) ]
where: B is the total time of the investment, in years or fraction
threof.
UVt is the seprate account unit value at the end of the period.
UVt-B is the separate account unit value at time B years prior to
the end of the period.
CRR is the cumulative rate of return over the period of B years.
ARR is the annualized rate of return over the period of B years.
FORMULAE FOR DETERMINING STANDARDIZED PERFORMANCE VALUE AND
ANNUALIZED AVERAGE PERFORMANCE RATIO FOR INCOME MANAGER CERTIFICATES
Invested in One Investment Fund ofthe Hudson River Trust
and Surrendered at the End of a Period
AV0 = $1,000.00
