<PAGE> 1
Registration Statement No. 333-82013
811-09413
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
Pre-Effective Amendment No. 1 to the
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
And
Pre-Effective Amendment No. 1 to the
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
THE TRAVELERS SEPARATE ACCOUNT TEN FOR VARIABLE ANNUITIES
---------------------------------------------------------
(Exact name of Registrant)
THE TRAVELERS LIFE AND ANNUITY COMPANY
--------------------------------------
(Name of Depositor)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
---------------------------------------------
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including area code: (860) 277-0111
ERNEST J. WRIGHT
The Travelers Life and Annuity Company
One Tower Square
Hartford, Connecticut 06183
---------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable following
the effectiveness of the
Registration Statement
It is proposed that this filing will become effective (check appropriate box):
N/A immediately upon filing pursuant to paragraph (b) of Rule 485.
-----
N/A on ___________ pursuant to paragraph (b) of Rule 485.
-----
N/A 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
-----
N/A on ___________ pursuant to paragraph (a)(1) of Rule 485.
-----
If appropriate, check the following box:
_____this post-effective amendment designates a new effective date for a
previously filed post- effective amendment.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE> 2
PART A
Information Required in a Prospectus
<PAGE> 3
TRAVELERS VINTAGE II
PROSPECTUS
This prospectus describes Travelers VINTAGE II, a flexible premium deferred
variable annuity contract (the "Contract") issued by The Travelers Life and
Annuity (the "Company," "we," or "our"). The Contract is available in connection
with certain retirement plans that qualify for special federal income tax
treatment ("qualified Contracts") as well as those that do not qualify for such
treatment ("nonqualified Contracts"). Vintage II may be issued as an individual
Contract or as a group Contract. In states where only group Contracts are
available, you will be issued a certificate summarizing the provisions of the
group Contract. For convenience, this prospectus refers to both Contracts and
certificates as "Contracts." The terms "we," "us," "our" and the "Company" refer
to The Travelers Life and Annuity. "You" and "your" refer to the Contract Owner.
You can choose to have your premiums ("purchase payments") accumulate on a fixed
and/or a variable basis. Your contract value will vary daily to reflect the
investment experience of the subaccounts ("funding options") you select and any
interest credited to the Fixed Account. The variable funding options are:
ALLIANCE VARIABLE PRODUCT SERIES FUND
Premier Growth Portfolio Class B
AMERICAN VARIABLE INSURANCE SERIES CLASS 2
Global Growth Fund
Growth Fund
Growth-Income Fund
GREENWICH STREET SERIES FUND
Appreciation Portfolio
Diversified Strategic Income Portfolio
Equity Index Portfolio Class II
Total Return Portfolio
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Capital Fund
Salomon Brothers Variable Investors Fund
Salomon Brothers Variable Small Cap
Growth Fund
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund Class 2
Templeton International Fund Class 2
THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock Portfolio
Equity Income Portfolio
Large Cap Portfolio
MFS Emerging Growth Portfolio
MFS Research Portfolio
Strategic Stock Portfolio
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio
MFS Total Return Portfolio
Smith Barney Aggressive Growth Portfolio
Smith Barney High Income Portfolio
Smith Barney International Equity Portfolio
Smith Barney Large Capitalization Growth
Portfolio
Smith Barney Large Cap Value Portfolio
Smith Barney Mid Cap Portfolio
Smith Barney Money Market Portfolio
Travelers Managed Income Portfolio
Van Kampen Enterprise Portfolio
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio
VARIABLE INSURANCE PRODUCTS FUND II
Contrafund(R) Portfolio -- Service Class
The Fixed Account is described in Appendix A. The contracts and/or some of the
funding options may not be available in all states. Additionally, not all
contract features may be offered in all states. THIS PROSPECTUS IS VALID ONLY
WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR THE VARIABLE FUNDING OPTIONS.
THESE PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about The Travelers
Separate Account Ten for Variable Annuities ("Separate Account") by requesting a
copy of the Statement of Additional Information ("SAI") dated , 1999.
The SAI has been filed with the Securities and Exchange Commission ("SEC") and
is incorporated by reference into this prospectus. To request a copy, write to
The Travelers Life and Annuity, Annuity Investor Services, One Tower Square,
Hartford, Connecticut 06183-9061, call 1-800-842-8573, or access the SEC's
website (http://www.sec.gov). See Appendix B for the SAI's table of contents.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
PROSPECTUS DATED OCTOBER 7, 1999
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
Index of Special Terms................ 2
Summary............................... 3
Fee Table............................. 6
The Annuity Contract.................. 12
Contract Owner Inquiries......... 12
Purchase Payments................ 12
Accumulation Units............... 12
The Funding Options.............. 12
Charges and Deductions................ 15
General.......................... 15
Withdrawal Charge................ 16
Free Withdrawal Allowance........ 17
Administrative Charges........... 17
Mortality and Expense Risk
Charge......................... 17
Funding Option Expenses.......... 18
Premium Tax...................... 18
Changes in Taxes Based Upon
Premium or Value............... 18
Transfers............................. 18
Dollar Cost Averaging............ 18
Access to Your Money.................. 19
Systematic Withdrawal Program.... 19
Loans............................ 20
Ownership Provisions.................. 20
Types of Ownership............... 20
Beneficiary...................... 20
Annuitant........................ 20
Death Benefit......................... 21
Death Proceeds Before the
Maturity Date.................. 21
Death Proceeds After the Maturity
Date........................... 24
The Annuity Period.................... 24
Maturity Date.................... 24
Allocation of Annuity............ 25
Variable Annuity................. 25
Determination of First Annuity
Payment........................ 25
Determination of Payments After
the First Payment.............. 25
Fixed Annuity.................... 26
Payment Options....................... 26
Election of Options.............. 26
Annuity Options.................. 26
Miscellaneous Contract Provisions..... 27
Right to Return.................. 27
Termination...................... 27
Required Reports................. 27
Suspension of Payments........... 27
Transfers of Contract Values to
Other Annuities................ 28
The Separate Account.................. 28
Performance Information.......... 28
Federal Tax Considerations............ 29
General Taxation of Annuities.... 29
Types of Contracts: Qualified or
Nonqualified................... 29
Nonqualified Annuity Contracts... 29
Qualified Annuity Contracts...... 30
Penalty Tax for Premature
Distributions.................. 30
Diversification Requirements for
Variable Annuities............. 30
Ownership of the Investments..... 30
Mandatory Distributions for
Qualified Plans................ 31
Other Information..................... 31
The Insurance Company............ 31
Financial Statements............. 31
IMSA............................. 31
Year 2000 Compliance............. 32
Distribution of Variable Annuity
Contracts...................... 32
Conformity with State and Federal
>Laws.......................... 32
Voting Rights.................... 33
Legal Proceedings And Opinions... 33
Appendix A: The Fixed Account......... A-1
Appendix B: Contents of the Statement
of Additional Information........... B-1
</TABLE>
INDEX OF SPECIAL TERMS
The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.
Accumulation Unit..................... 12
Annuitant............................. 21
Annuity Payments...................... 24
Annuity Unit.......................... 12
Cash Surrender Value.................. 19
Contract Date......................... 12
Contract Owner (You, Your)............ 20
Contract Value........................ 12
Contract Year......................... 12
Fixed Account......................... A-1
Funding Options....................... 12
Maturity Date......................... 24
Purchase Payments..................... 12
Written Request....................... 12
2
<PAGE> 5
SUMMARY:
TRAVELERS VINTAGE II VARIABLE ANNUITY
THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND
CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS
CAREFULLY.
CAN YOU GIVE ME A GENERAL DESCRIPTION OF THE VARIABLE ANNUITY CONTRACT? The
Contract offered by The Travelers Life and Annuity is a variable annuity that is
intended for retirement savings or other long-term investment purposes. The
Contract provides a death benefit as well as guaranteed income options. Under a
qualified Contract, you can make one or more payments, as you choose, on a
tax-deferred basis. Under a nonqualified Contract, you can make one or more
payments with after-tax dollars. You direct your payment(s) to one or more of
the variable funding options, and/or to the Fixed Account. We guarantee money
directed to the Fixed Account as to principal and interest. The variable funding
options are designed to produce a higher rate of return than the Fixed Account;
however, this is not guaranteed. You may also lose money in the variable funding
options.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase. During the accumulation phase
generally, under a qualified contract, your pre-tax contributions accumulate on
a tax-deferred basis and are taxed as income when you make a withdrawal,
presumably when you are in a lower tax bracket. During the accumulation phase,
under a nonqualified contract, earnings on your after-tax contributions
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The payout phase occurs when you begin receiving payments from your
Contract. The amount of money you accumulate in your Contract determines the
amount of income (annuity payments) you receive during the payout phase. During
the payout phase, you may chose to receive annuity payments from the Fixed
Account or the variable funding options. If you want to receive scheduled
payments from your annuity, you can choose from a number of annuity options.
Once you elect an annuity option and begin to receive payments, it cannot be
changed. During the payout phase, you have the same investment choices you had
during the accumulation phase. If amounts are directed to the variable funding
options, the dollar amount of your payments may increase or decrease.
WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with (1) individual non-taxqualified purchases; (2) Individual
Retirement Annuities (IRAs); and (3) other qualified retirement plans. Qualified
contracts include contracts qualifying under Section 401(a), 403(b), or 408(b)
of the Internal Revenue Code of 1986, as amended.
You may purchase the Contract with an initial payment of at least $5,000. You
may make additional payments of at least $500 at any time during the
accumulation phase. (In some states, additional payments are not allowed).
IS THERE A RIGHT TO RETURN PERIOD? If you cancel the Contract within ten days
after you receive it, you will receive a full refund of the contract value
(including charges). Where state law requires a longer right to return period,
or the return of purchase payments, the Company will comply. You bear the
investment risk during the right to return period; therefore, the contract value
returned may be greater or less than your purchase payment. If the Contract is
purchased as an Individual Retirement Annuity, and is returned within the first
seven days after delivery, your full purchase payment will be refunded; during
the remainder of the right to return period, the contract value(including
charges) will be refunded. The contract value will be determined at the close of
business on the day we receive a written request for a refund.
WHAT TYPES OF INVESTMENT OPTIONS ARE AVAILABLE? You can direct your money into
the Fixed Account and/or to any variable funding option(s)shown on the cover
page. The funding options are described in the accompanying fund prospectuses.
Depending on market conditions, you may make or lose money in any of these
options.
3
<PAGE> 6
The value of the Contract will vary depending upon the investment performance of
the funding options you choose. Past performance is not a guarantee of future
results. Standard and nonstandard performance is shown in the Statement of
Additional Information that you may request free of charge.
You can transfer between the variable funding options as frequently as you wish
without any current tax implications. Currently there is no charge for
transfers, nor a limit to the number of transfers allowed. We may, in the
future, charge a fee for any transfer requests, or may limit the number of
transfers allowed. We, at the minimum, would always allow one transfer every six
months. You may transfer between the Fixed Account and the variable funding
options twice a year (during the 30 days after the six-month contract date
anniversary), subject to certain restrictions.
WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance
features and investment features, and there are costs related to each. For
Contracts with a value of less than $40,000 on the deduction date, the Company
deducts an annual administrative charge of $30. The annual insurance charge
varies depending on which death benefit you choose. For the standard death
benefit, the insurance charge is 1.15% of the amounts you direct to the funding
options; for the step-up death benefit, the insurance charge is 1.25% and for
the roll-up death benefit, the insurance charge is 1.40%. The sub-account
administrative charge is .15% annually, regardless of which death benefit is
selected. Each funding option also charges for management and other expenses.
Please refer to the Fee Table for more information about the charges.
We may deduct a withdrawal charge equal to a percentage of the purchase payments
withdrawn from the Contract. If you withdraw all amounts under the Contract, or
if you begin receiving annuity payments, the Company may be required by your
state to deduct a premium tax.
HOW WILL MY CONTRIBUTIONS AND WITHDRAWALS BE TAXED? Generally, the payments you
make to a qualified Contract during the accumulation phase are made with
before-tax dollars. You will be taxed on your purchase payments and on any
earnings when you make a withdrawal or begin receiving annuity payments. Under a
nonqualified Contract, payments to the Contract are made with after-tax dollars,
and any earnings will accumulate tax-deferred. You will be taxed on these
earnings when they are withdrawn from the Contract.
For owners of qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59 1/2 when you
take money out, you may be charged a 10% federal penalty tax on the amount
withdrawn.
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. A withdrawal charge may apply. The amount of the charge
depends on a number of factors, including the length of time since the purchase
payment was made (6% maximum, gradually decreasing to 0% for payments held by
the Company for 8 years or more). After the first contract year, you may
withdraw up to 15% of the contract value (as of the end of the previous contract
year) without a withdrawal charge. Of course, you may also have to pay income
taxes and a tax penalty on taxable amounts you withdraw. Withdrawals during the
annuity period are allowed only if you elect an annuity with a variable payout
for a fixed period (that is, not based on anyone's life).
WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? The death benefit applies upon
the first death of the owner, joint owner or annuitant. Assuming you are the
annuitant, if you die before you move to the payout phase, the person you have
chosen as your beneficiary will receive a death benefit. The death benefit paid
depends on your age at the time of your death and the death benefit option
purchased. The death benefit value is calculated at the close of the business
day on which the Company's Administrative Office receives due proof of death and
written distribution instructions. Please refer to the Death Benefit section in
the prospectus for details.
4
<PAGE> 7
ARE THERE ANY ADDITIONAL FEATURES? This Contract has other features you may be
interested in. These include:
-- DOLLAR COST AVERAGING. This is a program that allows you to invest a
fixed amount of money in funding options each month, theoretically
giving you a lower average cost per unit over time than a single
one-time purchase. Dollar Cost Averaging requires regular investments
regardless of fluctuating price levels and does not guarantee profits
or prevent losses in a declining market. Potential investors should
consider their financial ability to continue purchases through periods
of low price levels.
-- SYSTEMATIC WITHDRAWAL PROGRAM. Before the maturity date, you can
arrange to have money sent to you at set intervals throughout the
year. Of course any applicable income and penalty taxes will apply on
amounts withdrawn.
-- AUTOMATIC REBALANCING. You may elect to have the Company periodically
reallocate the values in your contract to match your original (or your
latest) funding option allocation request.
-- MANAGED DISTRIBUTION PROGRAM. This program allows us to automatically
calculate and distribute to you, in November of the applicable tax
year, an amount that will satisfy the Internal Revenue Service's
minimum distribution requirements imposed on certain contracts once
the owner reaches age 70 1/2 or retires. These minimum distributions
occur during the accumulation phase.
5
<PAGE> 8
FEE TABLE
- --------------------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
WITHDRAWAL CHARGE (as a percentage of purchase payments
withdrawn):
LENGTH OF TIME FROM PURCHASE PAYMENT
</TABLE>
<TABLE>
<CAPTION>
(NUMBER OF YEARS) CHARGE
<S> <C>
1 or less 6%
2 6%
3 6%
4 5%
5 5%
6 4%
7 3%
8 and over 0%
</TABLE>
<TABLE>
<S> <C>
ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30
(Waived if contract value is $40,000 or more)
</TABLE>
<TABLE>
<S> <C> <C> <C>
ANNUAL SEPARATE ACCOUNT CHARGES:
(as a percentage of the average daily net assets of
the Separate Account)
</TABLE>
<TABLE>
<CAPTION>
STANDARD STEP-UP
DEATH DEATH ROLL-UP
BENEFIT BENEFIT DEATH BENEFIT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mortality and Expense Risk Charge............... 1.15% 1.25% 1.40%
Administrative Expense Charge................... 0.15% 0.15% 0.15%
----- ----- -----
Total Separate Account Charges................ 1.30% 1.40% 1.55%
FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the funding option as of December 31, 1998,
unless otherwise noted.)
</TABLE>
<TABLE>
<CAPTION>
TOTAL
ANNUAL
OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: REIMBURSEMENT) 12B-1 FEES REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ALLIANCE VARIABLE PRODUCT SERIES FUND
Premier Growth Portfolio Class B....... 0.97% 0.25% 0.09% 1.31%(1)
AMERICAN VARIABLE INSURANCE SERIES CLASS 2
SHARES
Global Growth Fund..................... 0.69% 0.25% 0.06% 1.00%
Growth Fund............................ 0.40% 0.25% 0.01% 0.66%
Growth-Income Fund..................... 0.35% 0.25% 0.01% 0.61%
GREENWICH STREET SERIES FUND
Appreciation Portfolio................. 0.75% -- 0.05% 0.80%(2)
Diver. Strategic Income Portfolio...... 0.65% -- 0.13% 0.78%(2)
Equity Index Portfolio Class II........ 0.21% 0.25% 0.09% 0.55%(3)
Total Return Portfolio................. 0.75% -- 0.04% 0.79%
SALOMON BROTHERS VARIABLE SERIES FUNDS,
INC.
Salomon Brothers Variable Capital
Fund................................. 0.85% -- 0.15% 1.00%(4)
Salomon Brothers Variable Investors
Fund................................. 0.70% -- 0.30% 1.00%(4)
Salomon Brothers Variable Small Cap
Growth Fund.......................... 0.80% -- 0.20% 1.00%(4)
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund
Class 2.............................. 0.15% 0.25% 0.85% 1.25%(5)
Templeton International Fund Class 2... 0.69% 0.25% 0.17% 1.11%
THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock
Portfolio............................ 0.80% -- 0.20% 1.00%(6)
Equity Income Portfolio................ 0.75% -- 0.20% 0.95%(7)
</TABLE>
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<TABLE>
<CAPTION>
TOTAL
ANNUAL
OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: (CONTINUED) REIMBURSEMENT) 12B-1 FEES REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Large Cap Portfolio.................... 0.75% -- 0.20% 0.95%(7)
MFS Emerging Growth Portfolio.......... 0.75% -- 0.14% 0.89%
MFS Research Portfolio................. 0.80% -- 0.20% 1.00%(8)
Strategic Stock Portfolio.............. 0.60% -- 0.30% 0.90%(6)
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio.............. 0.80% -- 0.02% 0.82%(8)
MFS Total Return Portfolio............. 0.80% -- 0.04% 0.84%(8)
Smith Barney Aggressive Growth
Portfolio............................ 0.80% -- 0.20% 1.00%*
Smith Barney High Income Portfolio..... 0.60% -- 0.07% 0.67%(8)
Smith Barney International Equity
Portfolio............................ 0.90% -- 0.10% 1.00%(8)
Smith Barney Large Capitalization
Growth Portfolio..................... 0.75% -- 0.25% 1.00%(9)
Smith Barney Large Cap Value
Portfolio............................ 0.65% -- 0.03% 0.68%(8)
Smith Barney Mid Cap Portfolio......... 0.75% -- 0.20% 0.95%*
Smith Barney Money Market Portfolio.... 0.50% -- 0.14% 0.64%(8)
Travelers Managed Income Portfolio..... 0.65% -- 0.19% 0.84%(8)
Van Kampen Enterprise Portfolio........ 0.70% -- 0.03% 0.73%(8)
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio.............. 0.32% -- 0.53% 0.85%(10)
VARIABLE INSURANCE PRODUCTS FUND II
Contrafund(R) Portfolio -- Service
Class................................ 0.59% 0.10% 0.06% 0.75%(11)
</TABLE>
NOTES:
The purpose of this Fee Table is to assist Contract Owners in understanding the
various costs and expenses that a Contract Owner will bear, directly or
indirectly. See "Charges and Deductions" in this prospectus for additional
information. Expenses shown do not include premium taxes, which may be
applicable. "Other Expenses" include operating costs of the fund. These expenses
are reflected in each funding option's net asset value and are not deducted from
the account value under the Contract.
(1) Fees are stated net of waivers and/or reimbursements. Absent fee waivers
and/or reimbursements, the fee paid to Alliance for advisory services by
PREMIER GROWTH PORTFOLIO would have been 1.34%.
(2) The Portfolio Management Fee for the SMITH BARNEY APPRECIATION PORTFOLIO and
the DIVERSIFIED STRATEGIC INCOME PORTFOLIO includes 0.20% for fund
administration.
(3) Other expenses for the EQUITY INDEX PORTFOLIO have been restated to reflect
the current expense reimbursement arrangement whereby the adviser has agreed
to reimburse the Portfolio for the amount by which expenses exceed 0.30%.
Without such arrangement, Total Annual Operating Expenses would have been
0.42%. In addition, the Portfolio Management Fee includes 0.06% for fund
administration.
(4) SBAM has waived all of its Management Fees for the following Salomon
Brothers Funds for the period ended December 31, 1998. If such fees were not
waived or expenses reimbursed, the actual annualized Total Annual Operating
Expenses for the INVESTORS FUND, would have been 2.07%.
(5) Figures reflect expenses from the Fund's inception on May 1, 1998 and are
annualized. The Investment Manager agreed in advance to limit management
fees and make certain payments to reduce Fund expenses as necessary so that
Total Fund Operating Expenses did not exceed 1.25% of the Fund's Class 2 net
assets in 1998. The Investment Manager is contractually obligated to
continue this arrangement through 1999. Management Fees, Other Expenses and
Total Fund Operating Expenses in 1998 before any waivers were 0.75%, 1.00%,
and 2.00%, respectively.
(6) Travelers Insurance has agreed to reimburse the STRATEGIC STOCK PORTFOLIO,
and the DISCIPLINED SMALL CAP STOCK PORTFOLIO for expenses for the period
ended December 31, 1998. If such expenses were not reimbursed, the actual
annualized Total Annual Operating Expenses would have been 1.51% and 2.98%,
respectively.
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<PAGE> 10
(7) Other Expenses reflect the current expense reimbursement arrangement with
Travelers where Travelers has agreed to reimburse the Portfolios for the
amount by which their aggregate expenses (including management fees, but
excluding brokerage commissions, interest charges and taxes) exceeds 0.95%.
Without such arrangements, the Total Annual Operating Expenses for the
Portfolios would have been 1.22% for the TRAVELERS DISCIPLINED MID CAP STOCK
PORTFOLIO, 1.23% for the LARGE CAP PORTFOLIO, and 1.09% for the EQUITY
INCOME PORTFOLIO.
(8) Expenses are as of October 31, 1998 (the Fund's fiscal year end). There were
no fees waived or expenses reimbursed for these funds in 1998.
(9) The Manager waived all or part of its fees for the period ended October 31,
1998. If such fees were not waived, the annualized Total Annual Operating
Expenses for the SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO would
have been 1.77%.
(10) Van Kampen has voluntarily agreed to a reduction in its management fees and
to reimburse the EMERGING GROWTH PORTFOLIO if such fees would cause total
annual operating expenses to exceed 0.85%. Absent such reductions, the
expenses would have been 1.23%.
(11) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, FMR on behalf of the fund, has entered
into an arrangement with its custodian whereby credits realized as a result
of uninvested cash balances were used to reduce custodian expenses. Without
these reductions, the total operating expenses for CONTRAFUND PORTFOLIO
would have been 0.80%.
* These funds are new and therefore have no operating history. The expenses
shown are estimates.
8
<PAGE> 11
EXAMPLE*: STANDARD DEATH BENEFIT
Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------------- -------------------------------------
FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCT SERIES FUND
Premier Growth Portfolio Class B...... $ 87 $141 $189 $295 $27 $81 $139 $295
AMERICAN VARIABLE INSURANCE SERIES CLASS 2
SHARES
Global Growth Fund.................... 83 132 173 264 23 72 123 264
Growth Fund........................... 80 122 156 229 20 62 106 229
Growth-Income Fund.................... 79 120 154 224 19 60 104 224
GREENWICH STREET SERIES FUND
Appreciation Portfolio................ 81 126 163 244 21 66 113 244
Diversified Strategic Income
Portfolio........................... 81 125 162 242 21 65 112 242
Equity Index Portfolio Class II....... 79 118 151 218 19 58 101 218
Total Return Portfolio................ 81 126 163 243 21 66 113 243
SALOMON BROTHERS VARIABLE SERIES FUNDS,
INC.
Salomon Brothers Variable Capital
Fund................................ 83 132 173 264 23 72 123 264
Salomon Brothers Variable Investors
Fund................................ 83 132 173 264 23 72 123 264
Salomon Brothers Variable Small Cap
Growth Fund......................... 83 132 173 264 23 72 123 264
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund
Class 2............................. 86 140 186 289 26 80 136 289
Templeton International Fund Class
2................................... 85 135 179 276 25 75 129 276
THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock
Portfolio........................... 83 132 173 264 23 72 123 264
Equity Income Portfolio............... 83 131 171 259 23 71 121 269
Large Cap Portfolio................... 83 131 171 259 23 71 121 269
MFS Emerging Growth Portfolio......... 82 129 168 253 22 69 118 253
MFS Research Portfolio................ 83 132 173 264 23 72 123 264
Strategic Stock Portfolio............. 82 129 168 254 22 69 118 264
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............. 82 127 164 246 22 67 114 246
MFS Total Return Portfolio............ 82 127 165 248 22 67 115 248
Smith Barney Aggressive Growth
Portfolio........................... 83 132 173 264 23 72 123 264
Smith Barney High Income Portfolio.... 80 122 157 231 20 62 107 231
Smith Barney International Equity
Portfolio........................... 83 132 173 264 23 72 123 264
Smith Barney Large Capitalization
Growth Portfolio.................... 83 132 173 264 23 72 123 264
Smith Barney Large Cap Value
Portfolio........................... 80 122 157 232 20 62 107 232
Smith Barney Mid Cap Portfolio........ 83 131 171 259 23 71 121 259
Smith Barney Money Market Portfolio... 80 121 155 227 20 61 105 227
Travelers Managed Income Portfolio.... 82 127 165 248 22 67 115 248
Van Kampen Enterprise Portfolio....... 81 124 160 237 21 64 110 237
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio............. 82 128 166 249 22 68 116 249
VARIABLE INSURANCE PRODUCTS FUND II
Contrafund(R) Portfolio -- Service
Class............................... 81 125 161 239 21 65 111 239
</TABLE>
* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
EXAMPLE REFLECTS THE $30 ANNUAL CONTRACT ADMINISTRATIVE CHARGE AS AN ANNUAL
CHARGE OF .009% OF ASSETS.
** The Withdrawal Charge is waived if a lifetime annuity payout has begun or
if, after the first contract year, you elect annuity payments for a fixed
period of at least five years. (See "Charges and Deductions.")
9
<PAGE> 12
EXAMPLE*: STEP-UP DEATH BENEFIT
Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------------- -------------------------------------
FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCT SERIES FUND
Premier Growth Portfolio Class B...... $88 $144 $194 $305 $28 $84 $144 $305
AMERICAN VARIABLE INSURANCE SERIES
CLASS 2 SHARES
Global Growth Fund.................... 84 135 178 275 24 75 128 275
Growth Fund........................... 81 125 161 240 21 65 111 240
Growth-Income Fund.................... 80 123 159 235 20 63 109 235
GREENWICH STREET SERIES FUND
Appreciation Portfolio................ 82 129 168 254 22 69 118 254
Diversified Strategic Income
Portfolio........................... 82 128 167 252 22 68 117 252
Equity Index Portfolio Class II....... 80 121 156 228 20 61 106 228
Total Return Portfolio................ 82 129 168 253 22 69 118 253
SALOMON BROTHERS VARIABLE SERIES FUNDS,
INC.
Salomon Brothers Variable Capital
Fund................................ 84 135 178 275 24 75 128 275
Salomon Brothers Variable Investors
Fund................................ 84 135 178 275 24 75 128 275
Salomon Brothers Variable Small Cap
Growth Fund......................... 84 135 178 275 24 75 128 275
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund
Class 2............................. 87 143 191 299 27 83 141 299
Templeton International Fund Class
2................................... 86 138 184 285 26 78 134 285
THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock
Portfolio........................... 84 135 178 275 24 75 128 275
Equity Income Portfolio............... 84 134 176 270 24 74 126 270
Large Cap Portfolio................... 84 134 176 270 24 74 126 270
MFS Emerging Growth Portfolio......... 83 132 173 263 23 72 123 263
MFS Research Portfolio................ 84 135 178 275 24 75 128 275
Strategic Stock Portfolio............. 83 132 173 264 23 72 123 284
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............. 83 132 173 264 23 72 123 264
MFS Total Return Portfolio............ 83 130 169 256 23 70 119 256
Smith Barney Aggressive Growth
Portfolio........................... 84 135 178 275 24 75 128 275
Smith Barney High Income Portfolio.... 81 125 162 241 21 65 112 241
Smith Barney International Equity
Portfolio........................... 84 136 178 275 24 75 128 275
Smith Barney Large Capitalization
Growth Portfolio.................... 84 135 178 275 24 75 128 275
Smith Barney Large Cap Value
Portfolio........................... 81 125 162 242 21 65 112 242
Smith Barney Mid Cap Portfolio........ 84 134 176 270 24 74 126 270
Smith Barney Money Market Portfolio... 81 124 160 238 21 64 110 238
Travelers Managed Income Portfolio.... 83 130 170 258 23 70 120 258
Van Kampen Enterprise Portfolio....... 82 127 165 247 22 87 115 247
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio............. 83 131 171 259 23 71 121 259
VARIABLE INSURANCE PRODUCTS FUND II
Contrafund(R) Portfolio -- Service
Class............................... 82 128 166 249 22 68 116 249
</TABLE>
* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
EXAMPLE REFLECTS THE $30 ANNUAL CONTRACT ADMINISTRATIVE CHARGE AS AN ANNUAL
CHARGE OF .009% OF ASSETS.
** The Withdrawal Charge is waived if a lifetime annuity payout has begun or
if, after the first contract year, you elect annuity payments for a fixed
period of at least five years. (See "Charges and Deductions.")
10
<PAGE> 13
EXAMPLE*: ROLL-UP DEATH BENEFIT
Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------------- -------------------------------------
FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCT SERIES FUND
Premier Growth Portfolio Class B...... $89 $149 $201 $319 $29 $89 $151 $319
AMERICAN VARIABLE INSURANCE SERIES
CLASS 2 SHARES
Global Growth Fund.................... 86 140 186 289 26 80 136 289
Growth Fund........................... 82 129 169 255 22 69 119 255
Growth-Income Fund.................... 82 128 166 250 22 68 116 250
GREENWICH STREET SERIES FUND
Appreciation Portfolio................ 84 134 176 270 24 74 126 270
Diversified Strategic Income
Portfolio........................... 84 133 175 268 24 73 125 268
Equity Index Portfolio Class II....... 81 126 163 244 21 66 113 244
Total Return Portfolio................ 84 133 175 269 24 73 125 269
SALOMON BROTHERS VARIABLE SERIES FUNDS,
INC.
Salomon Brothers Variable Capital
Fund................................ 86 140 186 289 26 80 136 289
Salomon Brothers Variable Investors
Fund................................ 86 140 186 289 26 80 136 289
Salomon Brothers Variable Small Cap
Growth Fund......................... 86 140 186 289 26 80 136 289
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund
Class 2............................. 88 147 198 314 28 87 148 314
Templeton International Fund Class
2................................... 87 143 191 300 27 83 141 300
THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock
Portfolio........................... 86 140 186 289 26 80 136 289
Equity Income Portfolio............... 85 138 183 284 25 78 133 284
Large Cap Portfolio................... 85 138 183 284 25 78 133 284
MFS Emerging Growth Portfolio......... 85 136 181 279 25 76 131 279
MFS Research Portfolio................ 86 140 186 289 26 80 136 289
Strategic Stock Portfolio............. 85 137 181 280 25 77 131 280
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio............. 84 134 177 272 24 74 127 272
MFS Total Return Portfolio............ 84 135 178 274 24 75 128 274
Smith Barney Aggressive Growth
Portfolio........................... 86 140 186 289 26 80 136 289
Smith Barney High Income Portfolio.... 83 130 169 256 23 70 119 256
Smith Barney International Equity
Portfolio........................... 86 140 186 289 26 80 136 289
Smith Barney Large Capitalization
Growth Portfolio.................... 86 140 186 289 26 80 136 289
Smith Barney Large Cap Value
Portfolio........................... 83 130 170 257 23 70 120 257
Smith Barney Mid Cap Portfolio........ 85 138 183 284 25 78 133 284
Smith Barney Money Market Portfolio... 82 129 168 253 22 69 118 253
Travelers Managed Income Portfolio.... 84 135 178 274 24 75 128 274
Van Kampen Enterprise Portfolio....... 83 132 172 262 23 72 122 262
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio............. 84 135 178 275 24 75 128 275
VARIABLE INSURANCE PRODUCTS FUND II
Contrafund(R) Portfolio -- Service
Class............................... 83 132 173 264 23 72 123 264
</TABLE>
* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
EXAMPLE REFLECTS THE $30 ANNUAL CONTRACT ADMINISTRATIVE CHARGE AS AN ANNUAL
CHARGE OF .009% OF ASSETS.
** The Withdrawal Charge is waived if a lifetime annuity payout has begun or
if, after the first contract year, you elect annuity payments for a fixed
period of at least five years. (See "Charges and Deductions.")
11
<PAGE> 14
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
Travelers Vintage II is a contract between you (the contract owner) and The
Travelers Life and Annuity ("us" or the "Company"). Under this contract, you
make purchase payments to us and we credit them to your Contract. The Company
promises to pay you an income, in the form of annuity payments, beginning on a
future date that you choose, the maturity date. The purchase payments accumulate
tax deferred in the funding options of your choice. You assume the risk of gain
or loss according to the performance of the funding options. The contract value
is the amount of purchase payments, plus or minus any investment experience or
interest. The contract value also reflects all surrenders made and charges
deducted. There is generally no guarantee that at the maturity date the contract
value will equal or exceed the total purchase payments made under the Contract.
The date the Contract and its benefits become effective is referred to as the
contract date. Each 12-month period following the contract date is called a
contract year.
Certain changes and elections must be made in writing to the Company. Where the
term "written request" is used, it means that written information must be sent
to the Company's Home Office in a form and content satisfactory to us.
CONTRACT OWNER INQUIRIES
Any questions you have about your contract should be directed to the Company's
Home Office at 1-800-842-8573.
PURCHASE PAYMENTS
The initial purchase payment must be at least $5,000. Additional payments of at
least $500 may be made under the Contract at any time. Under certain
circumstances, we may waive the minimum purchase payment requirement. Purchase
payments over $1,000,000 may be made with our prior consent. In some states, we
do not accept additional purchase payments. The initial purchase payment is due
and payable before the Contract becomes effective.
We will apply the initial purchase payment within two business days after we
receive it at our Home Office. Subsequent purchase payments will be credited to
a Contract on the same business day, if received in good order at our Home
Office by 4:00 p.m. eastern time.
ACCUMULATION UNITS
An accumulation unit is used to calculate the value of a Contract. An
accumulation unit works like a share of a mutual fund. Each funding option has a
corresponding accumulation unit value. The accumulation units are valued each
business day and may increase or decrease from day to day. The number of
accumulation units we will credit to your Contract once we receive a purchase
payment is determined by dividing the amount directed to each funding option by
the value of the accumulation unit. We calculate the value of an accumulation
unit for each funding option each day the New York Stock Exchange is open. These
values are calculated as of 4:00 p.m. eastern time. After the value is
calculated, your account is credited. During the annuity period (i.e., after the
maturity date), you are credited with annuity units.
THE FUNDING OPTIONS
You choose which of the following variable funding options to have your purchase
payments allocated to. These funding options are subsections of a Separate
Account, which invest in the underlying mutual funds. You are not investing
directly in the underlying mutual fund. You will find detailed information about
the options and their inherent risks in the current prospectuses for the funding
options which must accompany this prospectus. You are not investing directly in
the underlying mutual fund. Since each option has varying degrees of risk,
please read the
12
<PAGE> 15
prospectuses carefully before investing. Additional copies of the prospectuses
may be obtained by contacting your registered representative or by calling
1-800-842-8573.
If any of the funding options should become unavailable for allocating purchase
payments, or if we believe that further investment in a funding option becomes
inappropriate for the purposes of the Contract, we may substitute another
funding option. However, we will not make any substitutions without notifying
you and obtaining any applicable state and SEC approval. From time to time we
may make new funding options available.
The current funding options are listed below, along with their investment
objective, investment advisers and any subadviser:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALLIANCE VARIABLE PRODUCT SERIES FUND
Premier Growth Portfolio Class Seeks long-term growth of capital by investing Alliance Capital Management
B primarily in equity securities of a limited number
of large, carefully selected, high quality U.S.
companies that are judged likely to achieve
superior earning momentum.
AMERICAN VARIABLE INSURANCE SERIES
CLASS 2 SHARES
Global Growth Fund Seeks capital appreciation by investing primarily Capital Research and Management
in common stocks of companies located around the Company
world.
Growth Fund Seeks capital appreciation by investing primarily Capital Research and Management
in common stocks of companies that appear to offer Company
superior opportunities for growth and capital.
Growth-Income Fund Seeks capital appreciation and income by investing Capital Research and Management
primarily in common stocks or other securities Company
which demonstrate the potential for appreciation
and/or dividends.
GREENWICH STREET SERIES FUND
Appreciation Portfolio Seeks long term appreciation of capital by SSBC Fund Management Inc.
investing primarily in equity securities. ("SSBC")
Diversified Strategic Seeks high current income by investing primarily SSBC
Income Portfolio in the following fixed income securities: U.S. Subadviser: Smith Barney Global
Gov't and mortgage-related securities, foreign Capital Management, Inc.
gov't bonds and corporate bonds rated below
investment grade.
Equity Index Portfolio Seeks to replicate, before deduction of expenses, Travelers Investment Management
Class II the total return performance of the S&P 500 index. Co. ("TIMCO")
Total Return Portfolio (an equity portfolio) Seeks to provide total SSBC
return, consisting of long-term capital
appreciation and income. The Portfolio will invest
primarily in a diversified portfolio of
dividend-paying common stocks.
SALOMON BROTHERS VARIABLE SERIES FUND, INC.
Salomon Brothers Variable Seeks capital appreciation, primarily through Salomon Brothers Asset
Capital Fund investments in common stocks which are believed to Management ("SBAM")
have above-average price appreciation potential
and which may involve above average risk.
Salomon Brothers Variable Seeks long-term growth of capital, and, SBAM
Investors Fund secondarily, current income, through investments
in common stocks of well-known companies.
Salomon Brothers Variable Seeks long-term growth of capital by investing SBAM
Small Cap Growth Fund primarily in equity securities of companies with
market capitalizations similar to that of
companies included in the Russell 2000 Index.
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Seeks long-term capital growth. The Fund seeks to Franklin Advisers, Inc.
Investments Fund (Class 2) accomplish its objective by investing primarily
(normally at least 65% of its assets) in equity
securities of smaller capitalization growth
companies.
Templeton International Seeks long-term capital growth through a flexible Templeton Investment Counsel,
Fund (Class 2) policy of investing in stocks and debt obligations Inc.
of companies and governments outside the United
States. Any income realized will be incidental.
THE TRAVELERS SERIES TRUST
Disciplined Small Cap Stock Seeks long term capital appreciation by investing Travelers Asset Management
Portfolio primarily (at least 65% of its total assets) in International Co. ("TAMIC")
the common stocks of U.S. Companies with Subadviser: TIMCO
relatively small market capitalizations at the
time of investment.
Equity Income Portfolio Seeks reasonable income by investing at least 65% TAMIC
in income-producing equity securities. The balance Subadviser: Fidelity Management
may be invested in all types of domestic and & Research Co.
foreign securities, including bonds. The Portfolio
seeks to achieve a yield that exceeds that of the
securities comprising the S&P 500. The Subadviser
also considers the potential for capital
appreciation.
Large Cap Portfolio Seeks long-term growth of capital by investing TAMIC
primarily in equity securities of companies with Subadviser: Fidelity Management
large market capitalizations. & Research Co.
MFS Emerging Growth Seeks to provide long-term growth of capital. TAMIC
Portfolio Dividend and interest income from portfolio Subadviser: MFS
securities, if any, is incidental to the MFS
Portfolio's investment objective.
MFS Research Portfolio Seeks to provide long-term growth of capital and TAMIC
future income. Subadviser: MFS
Strategic Stock Portfolio Seeks to provide an above-average total return TAMIC
through a combination of potential capital Subadviser: TIMCO
appreciation and dividend income by investing
primarily in high dividend yielding stocks
periodically selected from the companies included
in (i) the Dow Jones Industrial Average and (ii) a
subset of the S&P Industrial Index.
TRAVELERS SERIES FUND, INC.
Alliance Growth Portfolio Seeks long-term growth of capital. Current income Travelers Investment Advisers,
is only an incidental consideration. The Portfolio Inc. ("TIA")
invests predominantly in equity securities of Subadviser: Alliance Capital
companies with a favorable outlook for earnings Management L.P.
and whose rate of growth is expected to exceed
that of the U.S. economy over time.
MFS Total Return Portfolio (a balanced portfolio) Seeks to obtain TIA
above-average income (compared to a portfolio Subadviser: MFS
entirely invested in equity securities) consistent
with the prudent employment of capital. Generally,
at least 40% of the Portfolio's assets are
invested in equity securities.
Smith Barney Aggressive Seeks capital appreciation by investing primarily SSBC
Growth Portfolio in common stocks of companies that are
experiencing, or have the potential to experience,
growth of earnings, or that exceed the average
earnings growth rate of companies whose securities
are included in the S&P 500.
Smith Barney High Income Seeks high current income. Capital appreciation is SSBC
Portfolio a secondary objective. The Portfolio will invest
at least 65% of its assets in high-yielding
corporate debt obligations and preferred stock.
Smith Barney International Seeks total return on assets from growth of SSBC
Equity Portfolio capital and income by investing at least 65% of
its assets in a diversified portfolio of equity
securities of established non-U.S. issuers.
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Smith Barney Large Cap Seeks current income and long-term growth of SSBC
Value Portfolio income and capital by investing primarily, but not
exclusively, in common stocks.
Smith Barney Large Seeks long-term growth of capital by investing in SSBC
Capitalization Growth equity securities of companies with large market
Portfolio capitalizations.
Smith Barney Mid Cap Seeks long-term growth of capital by investing SSBC
Portfolio primarily in equity securities of medium-sized
companies with market capitalizations between $1
billion and $5 billion at the time of investment.
Smith Barney Money Market Seeks maximum current income and preservation of SSBC
Portfolio capital.
Travelers Managed Income Seeks high current income consistent with prudent TIA
Portfolio risk of capital through investments in corporate
debt obligations, preferred stocks, and
obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.
Van Kampen Enterprise Seeks capital appreciation through investment in SSBC
Portfolio securities believed to have above-average Subadviser: Van Kampen Asset
potential for capital appreciation. Any income Management Inc.
received on such securities is incidental to the
objective of capital appreciation.
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio Seeks capital appreciation by investing primarily Van Kampen Asset
in common stocks of small and medium sized compa- Management Inc.
nies considered to be emerging growth companies.
VARIABLE INSURANCE PRODUCTS FUND II
Contrafund(R)Portfolio -- Seeks long-term capital appreciation by investing Fidelity Management & Research
Service Class primarily in common stocks of companies whose Company
value the adviser believes is not fully recognized
by the public.
</TABLE>
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
GENERAL
We deduct the charges described below. The charges are for the service and
benefits we provide, costs and expenses we incur, and risks we assume under the
Contracts. Unless otherwise specified, charges are deducted proportionately from
all funding options in which you are invested. Services and benefits we provide
include:
- the ability for you to make withdrawals and surrenders under the
Contracts;
- the death benefit paid on the death of the contract owner, annuitant, or
first of the joint contract owners,
- the available funding options and related programs (including dollar-cost
averaging, portfolio rebalancing, and systematic withdrawal programs);
- administration of the annuity options available under the Contracts; and
- the distribution of various reports to contract owners.
Costs and expenses we incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts,
15
<PAGE> 18
- sales and marketing expenses, including commission payments to your Smith
Barney Financial Consultant, and
- other costs of doing business.
Risks we assume include:
- risks that annuitants may live longer than estimated when the annuity
factors under the Contracts were established,
- that the amount of the death benefit will be greater than the contract
value, and
- that the costs of providing the services and benefits under the Contracts
will exceed the charges deducted.
We may also deduct a charge for taxes.
We may reduce or eliminate the withdrawal charge, the administrative charges,
the mortality and expense risk charge, and the distribution charge under the
Contract when certain sales or administration of the Contract result in savings
or reduced expenses and/or risks. For certain trusts, we may change the order in
which purchase payments and earnings are withdrawn in order to determine the
withdrawal charge. In no event will we reduce or eliminate the withdrawal charge
or the administrative charge where such reduction or elimination would be
unfairly discriminatory to any person.
WITHDRAWAL CHARGE
We do not deduct a sales charge from purchase payments when they are applied
under the Contract. However, a withdrawal charge will be deducted if any or all
of the contract value is withdrawn during the first six years following a
purchase payment. The length of time from when we receive the purchase payment
to the time of withdrawal determines the amount of the charge. We will deduct
the withdrawal charge from the total amount requested unless you instruct us to
deduct it from the remaining contract value.
The withdrawal charge is equal to a percentage of purchase payments withdrawn
from the Contract and is calculated as follows:
<TABLE>
<CAPTION>
LENGTH OF TIME FROM
PURCHASE PAYMENT WITHDRAWAL
(NUMBER OF YEARS) CHARGE
<S> <C>
1 or less 6%
2 6%
3 6%
4 5%
5 5%
6 4%
7 3%
8 and over 0%
</TABLE>
For purposes of the withdrawal charge calculation, we will make withdrawals in
the following order:
(1) first, from any purchase payments to which no withdrawal charge
applies;
(2) next from any remaining free withdrawal allowance (as described
below) after reduction by the amount of (a);
(3) next from any purchase payments to which withdrawal charges apply
(on a first-in, first-out basis); and, then
(4) from any Contract earnings.
NOTE: Any free withdrawals taken will not reduce purchase payments still
subject to a withdrawal charge.
16
<PAGE> 19
We will not deduct a withdrawal charge:
(1) from payments we make due to the distribution of death proceeds;
(2) if a lifetime annuity payout has begun;
(3) due to a minimum distribution under Travelers' managed distribution
program then in effect;
(4) if, after the first contract year, you elect annuity payments for a
fixed period of at least five years; or
(5) if amounts withdrawn under this contract are applied to other
contract(s) issued by us or our affiliates (subject to our approval
).
FREE WITHDRAWAL ALLOWANCE
After the first contract year, you may withdraw up to 15% of the contract value
annually without a withdrawal charge. (If you have purchase payments no longer
subject to a withdrawal charge, the maximum you may withdraw without a
withdrawal charge is the greater of (a) the free withdrawal allowance, or (b)
the total amount of purchase payments no longer subject to a withdrawal charge.
Note: Any free withdrawal taken will reduce purchase payments no longer subject
to a withdrawal charge.) The available amount will be calculated as of the end
of the previous contract year. The free withdrawal allowance applies to any
partial withdrawals and to full withdrawals, except those transferred directly
to annuity contracts issued by other financial institutions. In Washington
state, the free withdrawal provision applies to all withdrawals. You may
withdraw up to 15% in the first contract year only if you take withdrawals under
the Systematic Withdrawal Program.
ADMINISTRATIVE CHARGES
We deduct a Contract administrative charge of $30 annually. This charge
compensates us for expenses incurred in establishing and maintaining the
Contract. This charge is deducted on the fourth Friday of each August by
canceling accumulation units from each funding option on a pro rata basis. This
charge will be prorated from the date of purchase to the next charge deduction
date. A prorated charge will also be made if the Contract is completely
withdrawn or terminated. We will not deduct a contract administrative charge:
(1) from the distribution of death proceeds;
(2) after an annuity payout has begun, or
(3) if the contract value on the deduction date is $40,000 or more.
An administrative expense charge (sometimes called "sub-account administrative
charge") is deducted on each business day from amounts allocated to the variable
funding options. This charge compensates us for certain related administrative
and operating expenses. The charge equals, on an annual basis, 0.15% of the
daily net asset value allocated to each of the variable funding options.
MORTALITY AND EXPENSE RISK CHARGE
Each business day, the Company deducts a mortality and expense risk ("m&e")
charge from amounts held in the variable funding options. The deduction is
reflected in our calculation of accumulation and annuity unit values. The m&e
charge depends on the death benefit you elect, and is a percentage of the
amounts held in each funding option. For the standard death benefit, the m&e
charge equals 1.15% annually, for the step-up death benefit, the charge is 1.25%
annually, and for the roll-up death benefit, the m&e charge is 1.40% annually.
We reserve the right to lower this charge at any time.
17
<PAGE> 20
FUNDING OPTION EXPENSES
The charges and expenses of the various funding options are summarized in the
fee table and are described in the accompanying prospectuses.
PREMIUM TAX
Certain state and local governments charge premium taxes ranging from 0% to 5%,
depending upon jurisdiction. The Company is responsible for paying these taxes
and will determine the method used to recover premium tax expenses incurred.
Where required, the Company will deduct any applicable premium taxes from the
contract value either upon death, surrender, annuitization, or at the time
purchase payments are made to the Contract, but no earlier than when the Company
has a tax liability under state law.
CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against the Company based upon
the premiums, contract gains or value of the contract, we reserve the right to
charge you proportionately for this tax.
TRANSFERS
- --------------------------------------------------------------------------------
Up to 30 days before the maturity date, you may transfer all or part of the
contract value between variable funding options. There are no charges or
restrictions on the amount or frequency of transfers currently; however, we
reserve the right to charge a fee for any transfer request, and to limit the
number of transfers to one in any six-month period. Since different funding
options have different expenses, a transfer of contract values from one funding
option to another could result in your investment becoming subject to higher or
lower expenses. After the maturity date, you may make transfers between funding
options only with our consent. Please refer to Appendix A for information
regarding the transfer of funds between the Fixed Account and variable funding
options.
DOLLAR COST AVERAGING
Dollar cost averaging or the pre-authorized transfer program (the "DCA Program")
allows you to transfer a set dollar amount to other funding options on a monthly
or quarterly basis during the accumulation phase of the Contract. Using this
method, more accumulation units are purchased in a funding option if the value
per unit is low and fewer accumulation units are purchased if the value per unit
is high. Therefore, a lower-than-average cost per unit may be achieved over the
long run.
You may elect the DCA Program through written request or other method acceptable
to the Company. You must have a minimum total contract value of $5,000 to enroll
in the DCA Program. The minimum amount that may be transferred through this
program is $400.
You may establish pre-authorized transfers of contract values from the Fixed
Account, subject to certain restrictions. Under the DCA Program, automated
transfers from the Fixed Account may not deplete your Fixed Account Value in
less than twelve months from your enrollment in the DCA Program.
In addition to the DCA Program, Travelers may credit increased interest rates to
contract owners under an administrative Special DCA Program established at the
discretion of Travelers, depending on availability and state law. Under this
program, the contract owner may pre-authorize level transfers to any of the
funding options under either a 6 Month Program or 12 Month Program. The 6 Month
Program and the 12 Month Program will generally have different credited interest
rates. Under the 6 Month Transfer Program, the interest rate can accrue up to 6
months on funds in the
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Special DCA Program and all purchase payments and accrued interest must be
transferred on a level basis to the selected funding option in 6 months. Under
the 12 Month Program, the interest rate can accrue up to 12 months on funds in
the Special DCA Program and all purchase payments and accrued interest in this
Program must be transferred on a level basis to the selected funding options in
12 months.
The pre-authorized transfers will begin after the initial Program purchase
payment and complete enrollment instructions are received by Travelers. If
complete Program enrollment instructions are not received by the Company within
15 days of receipt of the initial Program purchase payment, the entire balance
in the Program will be credited with the non-Program interest rate then in
effect for the Fixed Account.
You may start or stop participation in the DCA Program at any time, but you must
give the Company at least 30 days' notice to change any automated transfer
instructions that are currently in place. If you stop the Special DCA Program
and elect to remain in the Fixed Account, your contract value will be credited
for the remainder of 6 or 12 months with the interest rate for non-Program
funds.
A contract owner may only have one DCA Program or Special DCA Program in place
at one time. Any subsequent purchase payments received by the Company within the
Program period selected will be allocated to the current funding options over
the remainder of that Program transfer period, unless otherwise directed by the
contract owner.
All provisions and terms of the Contract apply to the DCA and Special DCA
Programs, including provisions relating to the transfer of money between
investment options. We reserve the right to suspend or modify transfer
privileges at any time and to assess a processing fee for this service.
ACCESS TO YOUR MONEY
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Any time before the maturity date, you may redeem all or any portion of the cash
surrender value, that is, the contract value, less any withdrawal charge and any
premium tax not previously deducted. You must submit a written request
specifying the fixed or variable funding option(s) from which amounts are to be
withdrawn. The cash surrender value will be determined as of the close of
business after we receive your surrender request at the Home Office. The cash
surrender value may be more or less than the purchase payments made. Withdrawals
during the annuity period are allowed only if you elect a nonlifetime variable
annuity payout. For information about withdrawals from your variable payout
option (with no life contingency) after the maturity date, refer to the
Statement of Additional Information.
We may defer payment of any cash surrender value for up to seven days after the
request is received, but it is our intent to pay as soon as possible. We cannot
process withdrawal requests that are not in good order. We will contact you if
there is a deficiency causing a delay and will advise what is needed to act upon
the withdrawal request.
SYSTEMATIC WITHDRAWAL PROGRAM
Before the maturity date, you may choose to withdraw a specified dollar amount
(at least $100) on a monthly, quarterly, semiannual or annual basis. Any
applicable withdrawal charges (in excess of the free withdrawal allowance) and
any applicable premium taxes will be deducted. To elect systematic withdrawals,
you must have a minimum contract value of $15,000. We will surrender
accumulation units pro rata from all funding options in which you have an
interest, unless you instruct us otherwise. You may begin or discontinue
systematic withdrawals at any time by notifying us in writing, but at least 30
days' notice must be given to change any systematic withdrawal instructions that
are currently in place.
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We reserve the right to discontinue offering systematic withdrawals or to assess
a processing fee for this service upon 30 days' written notice to contract
owners (where allowed by state law).
Each systematic withdrawal is subject to federal income taxes on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the contract owner is under age 59 1/2. You should consult with
your tax adviser regarding the tax consequences of systematic withdrawals.
MANAGED DISTRIBUTION PROGRAM. Under the systematic withdrawal program, you may
choose to participate in the Managed Distribution Program. At no cost to you,
you may instruct us to calculate and make minimum distributions that may be
required by the IRS upon reaching age 70 1/2. (See "Federal Tax
Considerations.") These payments will not be subject to the withdrawal charge
and will be in lieu of the free withdrawal allowance. No Dollar Cost Averaging
will be permitted if you are participating in the Managed Distribution Program.
LOANS
Loans may be available under your Contract. If available, all loan provisions
are described in your Contract or loan agreement.
OWNERSHIP PROVISIONS
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TYPES OF OWNERSHIP
CONTRACT OWNER ("you"). The Contract belongs to the contract owner named in the
contract (on the Specifications page), or to any other person to whom the
Contract is subsequently assigned. An assignment of ownership or a collateral
assignment may be made only for nonqualified contracts. You have sole power
during the annuitant's lifetime to exercise any rights and to receive all
benefits given in the contract, provided you have not named an irrevocable
beneficiary and provided the Contract is not assigned.
You receive all payments while the annuitant is alive unless you direct them to
an alternate recipient. An alternate recipient does not become the contract
owner.
JOINT OWNER. For nonqualified contracts only, joint owners (i.e., spouses) may
be named in a written request before the Contract is in effect. Joint owners may
independently exercise transfers allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal shares of any
benefits accruing or payments made to them. All rights of a joint owner end at
death if the other joint owner survives. If the first joint owner to die is also
the annuitant, the death benefit will be paid to the beneficiary if there is no
contingent annuitant. If the first joint owner to die is not the annuitant, the
entire interest under the Contract will pass to the surviving joint owner.
BENEFICIARY
You name the beneficiary in a written request. The beneficiary has the right to
receive any remaining contractual benefits upon the death of the annuitant or
the contract owner. If more than one beneficiary survives the annuitant, they
will share equally in benefits unless the Company receives other instructions by
written request before the death of the annuitant or contract owner.
With nonqualified contracts, as discussed under "Death Benefit," the beneficiary
named in the Contract may differ from the designated beneficiary. (For example,
the designated beneficiary may be the joint owner.) In such cases, the
designated beneficiary receives the contract (rather than the beneficiary) upon
your death.
Unless an irrevocable beneficiary has been named, you have the right to change
any beneficiary by written request during the lifetime of the annuitant and
while the Contract continues.
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ANNUITANT
The annuitant is designated in the Contract (on the Specifications page), and is
the individual on whose life the maturity date and the amount of the monthly
annuity payments depend. The annuitant may not be changed after the Contract is
in effect.
For nonqualified Contracts only, where the owner and annuitant are not the same
person, the contract owner may also name an individual as a contingent annuitant
by written request before the Contract becomes effective. If the annuitant dies
before the maturity date while the owner is still living and a contingent
annuitant has been named, the contingent annuitant becomes the annuitant, and
the contract continues. However, if the annuitant who is also the owner dies,
the death benefit is paid to the beneficiary. The contingent annuitant does not
become the annuitant and is not entitled to receive any contract benefits. A
contingent annuitant may not be changed, deleted or added after the Contract
becomes effective.
DEATH BENEFIT
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DEATH PROCEEDS BEFORE THE MATURITY DATE
Before the maturity date, where there is no contingent annuitant, a death
benefit is payable when either the annuitant or a contract owner dies. At
purchase, you select the death benefit. The death benefit is calculated at the
close of the business day on which the Company's Home Office receives due proof
of death and written payment instructions (the death report date).
Three different types of death benefits are available under the Contract:
- the standard death benefit
- the step-up death benefit
- the roll-up death benefit
The step-up and roll-up death benefits may not be available in all
jurisdictions.
For all Death Benefits, we must be notified of the annuitant's death no later
than six months from the date of death in order to pay the death proceeds as
described under "Death Proceeds Before the Maturity Date." If we are notified
more than six months after the death, we will pay death proceeds equal to the
contract value on the death report date, less any applicable premium tax.
STANDARD DEATH BENEFIT
IF ANNUITANT WAS YOUNGER THAN AGE 76 ON THE CONTRACT DATE, the death benefit
will be the greatest of a), b) or c) below:
a) the contract value;
b) the total purchase payments made under this contract (less all partial
surrenders); or
c) the step-up value (if any, as described below).
STEP-UP VALUE (FOR STANDARD DEATH BENEFIT)
IF ANNUITANT WAS YOUNGER THAN AGE 68 ON THE CONTRACT DATE. A step-up value will
be established on the seventh contract date anniversary (provided it is before
the death report date). The initial step-up value will equal the contract value
on that anniversary. Whenever a purchase payment is made, the step-up value will
be increased by the amount of that purchase payment. Whenever a partial
surrender is taken, the step-up value will be reduced by a partial surrender
reduction as described below. On each contract date anniversary that occurs
before the annuitant's 76th birthday and before the annuitant's death, if the
contract value is greater than the step-up
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value, the step-up value will be reset to equal the contract value on that date.
If the step-up value is greater than the contract value, the step-up value will
remain unchanged. The step-up value will not be reduced on these anniversary
recalculations (provided no surrenders are made on that day). The only changes
made to the step-up value on or after the annuitant's 76th birthday will be
those related to additional purchase payments or partial surrenders as described
above. If the death report date is before the seventh contract date anniversary,
there is no step-up value.
IF ANNUITANT WAS AGE 68 THROUGH 75 ON THE CONTRACT DATE. A step-up value will
be established on the seventh contract date anniversary (provided it is before
the death deport date). The step-up value will equal the contract value on that
anniversary. Whenever a purchase payment is made, the step-up value will be
increased by the amount of that purchase payment. Whenever a partial surrender
is taken, the step-up value will be reduced by a partial surrender reduction as
described below. The only changes made to the step-up value on or after the
seventh contract date anniversary will be those related to additional purchase
payments or partial surrenders as described above. If the death report date is
before the seventh contract date anniversary, there is no step-up value.
The PARTIAL SURRENDER REDUCTION equals: 1) the step-up value in effect
immediately before the reduction for the partial surrender, multiplied by 2) the
amount of the partial surrender divided by 3) the contract value immediately
before the partial surrender.
IF ANNUITANT WAS AGE 76 THROUGH 80 ON THE CONTRACT DATE, the death benefit will
be the greater of a) or b) below:
a) the contract value; or
b) the total purchase payments made under this contract (less all partial
surrenders).
IF ANNUITANT WAS AGE 81 OR OLDER ON THE CONTRACT DATE, the death benefit will be
the contract value.
STEP-UP DEATH BENEFIT
(not available when either the annuitant or owner is age 76 or older on the
contract date)
The death benefit will be the greatest of a), b) or c) below:
a) the contract value;
b) the total purchase payments made under this contract (less all partial
surrenders); or
c) the step-up value (if any, as described below).
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ROLL-UP DEATH BENEFIT
(not available when either the annuitant or owner is age 76 or older on the
contract date)
IF THE ANNUITANT DIES BEFORE AGE 80, the death benefit will be the greatest of
a), b) or c) below:
a) the contract value
b) the roll-up death benefit value (as described below); or
c) the step-up value (if any, as described below).
IF THE ANNUITANT DIES ON OR AFTER AGE 80, the death benefit will be the greatest
of a), b) or c) below:
a) the contract value
b) the roll-up death benefit value (as described below) available at the
annuitant's 80th birthday, plus any additional purchase payments and
minus any partial surrender reductions (as described below) that occur
after the annuitant's 80th birthday; or
c) the step-up value (if any, as described below).
ROLL-UP DEATH BENEFIT VALUE. On the contract date, the roll-up death benefit
value is equal to the purchase payment. On each contract date anniversary, the
roll-up death benefit value will be recalculated to equal a) plus b) minus c),
increased by 5%, where:
a) is the roll-up death benefit as of the previous contract date
anniversary
b) is any purchase payments made during the previous Contract year
c) is any partial surrender reductions (as described below) during the
previous Contract year
On dates other than the contract date anniversary, the roll-up death benefit
value will equal a) plus b) minus c), where:
a) is the roll-up death benefit value on the previous contract date
anniversary
b) is any purchase payments made since the previous contract date
anniversary
c) is any partial surrender reductions (as described below) since the
previous contract date anniversary.
The maximum roll-up death benefit equals 200% of the difference between all
purchase payments and all partial surrender reductions (as described below).
STEP-UP VALUE (FOR STEP-UP AND ROLL-UP DEATH BENEFITS)
A step-up value will be established on each contract date anniversary that
occurs on or before the death report date. The initial step-up value will equal
the contract value on that anniversary. Whenever a purchase payment is made, the
step-up value will be increased by the amount of that purchase payment. Whenever
a partial surrender is taken, the step-up value will be reduced by a partial
surrender reduction as described below. On each contract date anniversary that
occurs before the annuitant's 80th birthday and before the annuitant's death, if
the contract value is greater than the step-up value, the step-up value will be
reset to equal the contract value on that date. If the step-up value is greater
than the contract value, the step-up value will remain unchanged. The step-up
value will not be reduced on these anniversary recalculations (provided no
surrenders are made on that day). The only changes made to the step-up value on
or after the annuitant's 80th birthday will be those related to additional
purchase payments or partial surrenders as described above. If the death report
date is before the first contract date anniversary, there is no step-up value.
PARTIAL SURRENDER REDUCTION. The partial surrender reduction equals: 1) the
death benefit value (i.e., the greatest of the contract, step-up or roll-up
value) in effect immediately before the reduction for the partial surrender,
multiplied by 2) the amount of the partial surrender divided by 3) the contract
value immediately before the partial surrender.
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PAYMENT OF PROCEEDS
The process of paying death benefit proceeds under various situations is
described below. Generally, the person(s) receiving the benefit may request that
the proceeds be paid in a lump sum, or be applied to one of the settlement
options available under the Contract.
DEATH OF ANNUITANT WHO IS THE CONTRACT OWNER. The Company will pay the proceeds
to the beneficiary(ies), or if none, to the contract owner's estate.
Under a nonqualified contract, the death benefit proceeds must be distributed to
the beneficiary within five years of the contract owner's death. Or, the
beneficiary may elect to receive payments from an annuity which begins within
one year of the contract owner's death and is payable over the life of the
beneficiary or over a period not exceeding the beneficiary's life expectancy.
Under a nonqualified contract, if the beneficiary is the contract owner's
spouse, he or she may elect to continue the contract as the new contract owner
rather than receiving the distribution. In such case, the distribution rules
applicable when a contract owner dies generally will apply when that spouse, as
contract owner, dies.
DEATH OF ANNUITANT WHO IS NOT THE CONTRACT OWNER (NONQUALIFIED CONTRACTS
ONLY). If there is no contingent annuitant, the Company will pay the death
proceeds to the beneficiary. However, if there is a contingent annuitant, he or
she becomes the annuitant and the Contract continues in effect (generally using
the original maturity date). The proceeds described above will be paid upon the
death of the last surviving contingent annuitant.
DEATH OF CONTRACT OWNER WHO IS NOT THE ANNUITANT (NONQUALIFIED CONTRACTS
ONLY). The Company will pay the proceeds to any surviving joint owner, or if
none, to the beneficiary(ies), or if none, to the contract owner's estate. If
the surviving joint owner (or if none, the beneficiary) is the Contract Owner's
spouse, he or she may elect to continue the contract as the new contract owner
rather than receiving the distribution.
ENTITY AS OWNER. In the case of a nonqualified Contract owned by a nonnatural
person (e.g. a trust or another entity), the death benefit will be paid only
upon the death of the annuitant.
DEATH PROCEEDS AFTER THE MATURITY DATE
If the owner or annuitant dies on or after the maturity date, the Company will
pay the beneficiary a death benefit consisting of any benefit remaining under
the annuity option then in effect.
THE ANNUITY PERIOD
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MATURITY DATE
Under the Contract, you can receive scheduled annuity payments. You can choose
the month and the year in which those payments begin (maturity date). You can
also choose among annuity options. While the annuitant is alive, you can change
your selection any time up to the maturity date. Annuity payments will begin on
the maturity date stated in the Contract unless the Contract has been fully
surrendered or the proceeds have been paid to the beneficiary before that date,
or unless you elect otherwise. Annuity payments are a series of periodic
payments (a) for life; (b) for life with either a minimum number of payments or
a specific amount assured; or (c) for the joint lifetime of the annuitant and
another person, and thereafter during the lifetime of the survivor. We may
require proof that the annuitant is alive before annuity payments are made.
Unless you elect otherwise, for qualified contracts, the maturity date will be
the annuitant's 70th birthday. For nonqualified contracts, unless you elect
otherwise, the maturity date will be the later
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of the annuitant's 95th birthday or ten years after the effective date of the
contract. (For Contracts issued in Florida, the maturity date elected may not be
later than the annuitant's 90th birthday.)
For nonqualified Contracts, at least 30 days before the original maturity date,
a contract owner may elect to extend the maturity date to any time before the
annuitant's 95th birthday or, for qualified Contracts, to a later date with the
Company's consent. Certain annuity options taken at the maturity date may be
used to meet the minimum required distribution requirements of federal tax law,
or a program of partial surrenders may be used instead. These mandatory
distribution requirements take effect generally upon the death of the contract
owner, or with qualified contracts upon the later of the April 1 following the
contract owner's attainment of age 70 1/2 or the year of retirement; or upon the
death of the contract owner. Independent tax advice should be sought regarding
the election of minimum required distributions.
ALLOCATION OF ANNUITY
When an annuity option is elected, it may be elected as a variable annuity, a
fixed annuity, or a combination of both. (Variable payouts may not be available
in all states. Refer to your contract.) If, at the time annuity payments begin,
no election has been made to the contrary, the cash surrender value shall be
applied to provide an annuity funded by the same funding options selected during
the accumulation period. At least 30 days prior to the maturity date, you may
transfer your contract value among the funding options in order to change the
basis on which annuity payments will be determined. (See "Transfers.")
VARIABLE ANNUITY
You may choose to receive annuity payments that are based on the performance of
one or more of the variable funding options. This is called a variable payout
because the amount you receive each month will increase or decrease depending on
how the variable funding options perform. When you annuitize, we will credit you
with annuity units. An annuity unit measures the dollar value of an annuity
payment. We determine the number of annuity units to credit you with by dividing
the first monthly annuity payment for each funding option by the accumulation
unit value for that funding option as of 14 days before the annuity payments
begin. The number of annuity units (but not their value) remains fixed during
the annuity period.
HOW WE DETERMINE THE FIRST ANNUITY PAYMENT. The Contract contains tables used
to determine the first monthly annuity payment. If a variable annuity is
elected, the amount applied to it will be the value of the funding options as of
14 days before the annuity payments begin less any premium taxes due.
The first monthly payment amount depends on the annuity option elected and the
annuitant's adjusted age. The Contract contains a formula for determining the
adjusted age. We calculate the first monthly payment by multiplying the benefit
per $1,000 applied, shown in the Contract tables, by the number of thousands of
dollars of Contract value applied to the annuity option. We also factor in an
assumed daily net investment factor of 3%. This assumed daily net investment
factor is used to determine the guaranteed payout rates shown. If net investment
rates are higher at the time annuitization is selected, payout rates will be
higher than those shown. We reserve the right to require satisfactory proof of
an annuitant's age before we make the first annuity payment.
HOW WE DETERMINE THE PAYMENTS AFTER THE FIRST. The dollar amount of all annuity
payments after the first will change from month to month based on the investment
performance of the applicable funding options. The total amount of each annuity
payment will equal the sum of the basic payments in each funding option. The
actual amounts of these payments are determined by multiplying the number of
annuity units credited to each funding option by the corresponding annuity unit
value as of the date 14 days before the payment is due.
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FIXED ANNUITY
You may choose a fixed annuity that provides payments which do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
annuity payment as described under "Variable Annuity" above, except that the
amount applied to effect the annuity will be the cash surrender value,
determined as of the date annuity payments begin. Payout rates will not be lower
than those shown in the Contract. If it would produce a larger payment, the
first fixed annuity payment will be determined using the Life Annuity Tables in
effect on the maturity date.
PAYMENT OPTIONS
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ELECTION OF OPTIONS
While the annuitant is alive, you can change your annuity option selection any
time up to the maturity date. Once annuity payments have begun, no further
elections are allowed.
During the annuitant's lifetime, if you do not elect otherwise before the
maturity date, we will pay you (or another designated payee) the first of a
series of monthly annuity payments based on the life of the annuitant, in
accordance with Annuity Option 2 (Life Annuity with 120 monthly payments
assured). For certain qualified contracts, Annuity Option 4 (Joint and Last
Survivor Joint Life Annuity -- Annuity Reduced on Death of Primary Payee) will
be the automatic option as described in the contract. The automatic annuity
option will be funded by the investment options selected during the accumulation
period.
The minimum amount that can be placed under an annuity option will be $2,000
unless we agree to a lesser amount. If any monthly periodic payment due is less
than $100, the Company reserves the right to make payments at less frequent
intervals, or to pay the cash surrender value in a lump sum.
On the maturity date, we will pay the amount due under the Contract in
accordance with the payment option that you select. You may choose to receive a
single lump-sum payment. You must elect an option in writing, in a form
satisfactory to the Company. Any election made during the lifetime of the
annuitant must be made by the contract owner.
ANNUITY OPTIONS
Subject to the conditions described in "Election of Options" above, all or any
part of the cash surrender value of the Contract may be paid under one or more
of the following annuity options. Payments under the annuity options may be
elected on a monthly, quarterly, semiannual or annual basis. We may offer
additional options.
Option 1 -- Life Annuity -- No Refund. The Company will make annuity payments
during the lifetime of the annuitant, terminating with the last payment
preceding death. This option offers the maximum periodic payment, since there is
no assurance of a minimum number of payments or provision for a death benefit
for beneficiaries.
Option 2 -- Life Annuity with 120, 180 or 240 Monthly Payments Assured. The
Company will make monthly annuity payments during the lifetime of the annuitant,
with the agreement that if, at the death of that person, payments have been made
for less than 120, 180 or 240 months, as elected, payments will be continued
during the remainder of the period to the beneficiary.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make annuity payments during the joint lifetime of the two persons on whose
lives payments are based, and during the lifetime of the survivor. No further
payments will be made following the death of the survivor.
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Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. The Company will make annuity payments during the lifetime of the
annuitant and a second person. One will be designated as the primary payee, the
other will be designated as the secondary payee. On the death of the secondary
payee, the Company will continue to make annuity payments to the primary payee
in the same amount that would have been payable during the joint lifetime of the
two persons. On the death of the primary payee, the Company will continue to
make annuity payments to the secondary payee in an amount equal to 50% of the
payments which would have been made during the lifetime of the primary payee. No
further payments will be made once both payees have died.
Option 5 -- Payments for a Fixed Period. We will make monthly payments for the
period selected.
MISCELLANEOUS CONTRACT PROVISIONS
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RIGHT TO RETURN
You may return the Contract for a full refund of the contract value (including
charges) within ten days after you receive it (the "right to return period").
You bear the investment risk during the right to return period; therefore, the
contract value returned may be greater or less than your purchase payment. If
the Contract is purchased as an Individual Retirement Annuity and is returned
within the first seven days after delivery, your purchase payment will be
refunded in full; during the remainder of the right to return period, the
contract value (including charges) will be refunded. The contract value will be
determined following the close of the business day on which we receive the
contract and a written request for a refund. Where state law requires a longer
period, or the return of purchase payments or other variation of this provision,
the Company will comply. Refer to your contract for any state-specific
information.
TERMINATION
You do not need to make any purchase payments after the first to keep the
Contract in effect. However, the Company reserves the right to terminate the
Contract on any business day if the contract value as of that date is less than
$1,000 and no purchase payments have been made for at least two years, unless
otherwise specified by state law. Termination will not occur until 31 days after
the Company has mailed notice of termination to the contract owner at his or her
last known address and to any assignee of record. If the Contract is terminated,
the Company will pay to the contract owner the cash surrender value (contract
value, in the states that so require), less any applicable charges and any
outstanding loans.
REQUIRED REPORTS
As often as required by law, but at least once in each contract year before the
due date of the first annuity payment, we will furnish a report showing the
number of accumulation units credited to the Contract and the corresponding
accumulation unit value(s) as of the date of the report for each funding option
to which the contract owner has allocated amounts during the applicable period.
The Company will keep all records required under federal or state laws.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
("Exchange") is closed; (2) when trading on the Exchange is restricted; (3) when
an emergency exists as determined by the SEC so the sale of securities held in
the Separate Account may not reasonably occur or so that the Company may not
reasonably determine the value of the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders.
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TRANSFERS OF CONTRACT VALUES TO OTHER ANNUITIES
We may permit contract owners to transfer their contract values into other
annuities offered by us or our affiliated insurance companies under rules then
in effect.
THE SEPARATE ACCOUNT
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The Travelers Separate Account Ten for Variable Annuities ("Separate Account")
was established on June 18, 1999 and is registered with the SEC as a unit
investment trust under the Investment Company Act of 1940, as amended (the "1940
Act"). The assets of The Separate Account will be invested exclusively in the
shares of the variable funding options.
The assets of the Separate Account are held for the exclusive benefit of the
owners of the contracts described in this prospectus, according to the laws of
Connecticut. Income, gains and losses, whether or not realized, from assets
allocated to are, in accordance with the Contracts, credited to or charged
against the Separate Account without regard to other income, gains and losses of
the Company. The assets held by are not chargeable with liabilities arising out
of any other business which the Company may conduct. Obligations under the
Contract are obligations of the Company.
All investment income and other distributions of the funding options are payable
to the Separate Account. All such income and/or distributions are reinvested in
shares of the respective funding options at net asset value. Shares of the
funding options are currently sold only to life insurance company separate
accounts to fund variable annuity and variable life insurance contracts.
PERFORMANCE INFORMATION
From time to time, we may advertise different types of historical performance
for the Contract's funding options. We may advertise the "standardized average
annual total returns" of the funding option, calculated in a manner prescribed
by the SEC, as well as the "non-standardized total returns," as described below.
Specific examples of the performance information appear in the SAI.
STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). The deduction for the annual
administrative charge is converted to a percentage of assets based on the actual
fee collected (or anticipated to be collected, if a new product), divided by the
average net assets for Contracts sold (or anticipated to be sold). Each
quotation assumes a total redemption at the end of each period with the
applicable withdrawal charge deducted at that time.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be calculated in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of any withdrawal charge or the annual contract administrative charge,
which, if reflected, would decrease the level of performance shown. The
withdrawal charge is not reflected because the contract is designed for
long-term investment.
For underlying funds that were in existence prior to the date they became
available under the Separate Account, the standardized average annual total
return quotations may be accompanied by returns showing the investment
performance that such underlying funds would have achieved (reduced by the
applicable charges) had they been held under the Contract for the period quoted.
The total return quotations are based upon historical earnings and are not
necessarily representative of future performance.
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GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the variable funding
options.
FEDERAL TAX CONSIDERATIONS
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The following description of the federal income tax consequences under this
Contract is not exhaustive and is not intended to cover all situations and is
not meant to provide tax advice. Because of the complexity of the law and the
fact that the tax results will vary depending on many factors, you should
consult your tax advisor regarding your personal situation. For your
information, a more detailed discussion is contained in the SAI.
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.
TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED
If you purchase an annuity contract with proceeds of an eligible rollover
distribution from any pension plan, specially sponsored program, or individual
retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a
qualified contract. Some examples of qualified contracts are: IRAs, 403(b)
annuities, pension and profit-sharing plans (including 401(k) plans), and Keogh
Plans and certain other qualified deferred compensation plans. An exception to
this is a qualified plan called a Roth IRA. Under Roth IRAs, after-tax
contributions accumulate until maturity, when amounts (including earnings) may
be withdrawn tax-free. If you purchase the contract on an individual basis with
after-tax dollars and not under one of the programs described above, your
contract is referred to as nonqualified.
NONQUALIFIED ANNUITY CONTRACTS
As the owner of a nonqualified annuity, you do not receive any tax benefit
(deduction or deferral of income) on purchase payments, but you will not be
taxed on increases in the value of your contract until a distribution
occurs -- either as a withdrawal (distribution made prior to the maturity date),
or as annuity payments. When a withdrawal is made, you are taxed on the amount
of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.
If a nonqualified annuity is owned by other than an individual, however, (e.g.,
by a corporation), increases in the value of the contract attributable to
purchase payments made after February 28, 1986 are includible in income
annually. Furthermore, for contracts issued after April 22, 1987, if
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you transfer the contract without adequate consideration, all deferred increases
in value will be includible in your income at the time of the transfer.
If you make a partial withdrawal, this money will generally be taxed as first
coming from earnings, (income in the contract), and then from your purchase
payments. These withdrawn earnings are includible in your income. (See "Penalty
Tax for Premature Distributions" below). There is income in the contract to the
extent the cash value exceeds your investment in the contract. The investment in
the contract equals the total purchase payments you paid less any amount
received previously which was excludable from gross income. Any direct or
indirect borrowing against the value of the contract or pledging of the contract
as security for a loan will be treated as a cash distribution under the tax law.
Federal tax law requires that nonqualified annuity contracts meet minimum
mandatory distribution requirements upon the death of the contract owner,
including the first of joint owners. If these requirements are not met, the
surviving joint owner, or the beneficiary, will have to pay taxes prior to
distribution. The distribution required depends, among other things, upon
whether an annuity option is elected or whether the new contract owner is the
Surviving spouse. We will administer Contracts in accordance with these rules
and we will notify you when you should begin receiving payments.
QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the contract have not yet
been taxed, the full amount of all distributions, including lump-sum withdrawals
and annuity payments, are taxed at the ordinary income tax rates, unless the
distribution is transferred to an eligible rollover account or contract. The
Contract is available as a vehicle for IRA rollovers and for other qualified
contracts. There are special rules which govern the taxation of qualified
contracts, including requirements for mandatory distributions and contribution
limits. We have provided a more complete discussion in the SAI.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the contract owner.
Other exceptions may be available in certain tax-qualified plans.
DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES
The Code requires that any nonqualified variable annuity contracts based on a
separate account shall not be treated as an annuity for any period if
investments made in the account are not adequately diversified. Final tax
regulations define how separate accounts must be diversified. The Company
monitors the diversification of investments constantly and believes that its
accounts are adequately diversified. The consequence of any failure is
essentially the loss to the Contract Owner of tax deferred treatment. The
Company intends to administer all contracts subject to this provision of law in
a manner that will maintain adequate diversification.
OWNERSHIP OF THE INVESTMENTS
Assets in the separate accounts, also referred to as segregated asset accounts
must be owned by the Company and not by the Contract Owner for federal income
tax purposes. Otherwise, the deferral of taxes is lost and income and gains from
the accounts would be includible annually in the Contract Owner's gross income.
The Internal Revenue Service has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses an incident of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department announced, in connection
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with the issuance of temporary regulations concerning investment
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor, rather than the insurance company, to be treated
as the owner of the assets of the account." This announcement, dated September
15, 1986, also stated that the guidance would be issued by way of regulations or
rulings on the "extent to which policyholders may direct their investments to
particular subaccounts [of a segregated asset account] without being treated as
owners of the underlying assets." As of the date of this prospectus, no such
guidance has been issued.
The Company does not know if such guidance will be issued, or if it is, what
standards it may set. Furthermore, the Company does not know if such guidance
may be issued with retroactive effect. New regulations are generally issued with
a prospective-only effect as to future sales or as to future voluntary
transactions in existing contracts. The Company therefore reserves the right to
modify the contract as necessary to attempt to prevent Contract Owners from
being considered the owner of the assets of the separate account.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2 or the year of retirement.
Distributions must begin or be continued according to required patterns
following the death of the contract owner or annuitant of both qualified and
nonqualified annuities.
OTHER INFORMATION
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THE INSURANCE COMPANY
The Travelers Life and Annuity (the "Company") is a stock insurance company
chartered in 1973 in Connecticut and continuously engaged in the insurance
business since that time. The Company is licensed to conduct a life insurance
business in all states of the United States (except New Hampshire and New York)
and the District of Columbia and Puerto Rico. The Company is an indirect wholly
owned subsidiary of Citigroup Inc., a bank holding company. The Company's Home
Office is located at One Tower Square, Hartford, Connecticut 06183.
FINANCIAL STATEMENTS
The financial statements for the insurance company are located in the Statement
of Additional Information. The financial statements for the separate account
will be available through annual reports to shareholders. These reports are
accessible through the SEC's website that appears on the first page of the
prospectus.
IMSA
The Company is a member of the Insurance Marketplace Standards Association
("IMSA"), and as such may use the IMSA logo and IMSA membership in its
advertisements. Companies that belong to IMSA subscribe to a act of ethical
standards covering the various aspects of sales and service for individually
sold life insurance and annuities. IMSA members have adopted policies and
procedures that demonstrate a commitment to honesty, fairness and integrity in
all customer contracts involving the sale and service of individual life
insurance and annuity products.
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YEAR 2000 COMPLIANCE
The Company is highly dependent on computer systems and system applications for
conducting its ongoing business functions. In 1996, The Travelers Insurance
Company (TIC) and its subsidiaries began the process of identifying, assessing
and implementing changes to computer programs to address the Year 2000 issue and
developed a comprehensive plan that encompasses TIC and its insurance
subsidiaries, to address the issue. The issue involves the ability of computer
systems that have time sensitive programs to recognize properly the Year 2000.
The inability to do so could result in major failures or miscalculations that
would disrupt the Company's ability to meet its customer and other obligations
on a timely basis.
The Company has achieved compliance with respect to its business critical
systems in accordance with its Year 2000 plan and has completed the process of
certification to validate compliance. An ongoing recertification process will be
put in place for third and fourth quarters 1999 to ensure all business critical
systems and products remain compliant.
The total pre-tax cost associated with the required modifications and
conversions for TIC and its subsidiaries, including the Company, is expected to
be between $25 million and $35 million and is being expensed as incurred in the
period 1996 through 1999. TIC and its subsidiaries, including the Company, has
incurred approximately $28 million to date on these efforts. The Company also
has third party customers, financial institutions, vendors and others with which
it conducts business and has confirmed their plans to address and resolve Year
2000 issues on a timely basis. While it is likely that these efforts by third
party vendors and customers will be successful, it is possible that a series of
failures by third parties could have a material adverse effect on the Company's
results of operations in future periods.
In addition, the Company has developed business resumption contingency plans to
address perceived risks associated with the Year 2000 effort. These plans
address the possibility of internal systems failures and the possibility of
failure of systems or processes outside the Company's control. These business
resumption contingency plans would enable business critical units to function
January 1, 2000 in the event of an unexpected failure. Preparations for the
management of the date change will continue through 1999.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The Company intends to sell the Contracts in all jurisdictions where it is
licensed to do business and where the Contract is approved. Any sales
representative or employee who sells the Contracts will be qualified to sell
variable annuities under applicable federal and state laws. Each broker-dealer
is registered with the SEC under the Securities Exchange Act of 1934, and all
are members of the NASD. The principal underwriter and distributor of the
Contracts is CFBDS, Inc., 21 Milk St., Boston, MA. CFBDS, Inc. is not affiliated
with the Company or the Separate Account.
Up-front compensation paid to sales representatives will not exceed 7.00% of the
purchase payments made under the Contracts. If asset-based compensation is paid,
it will not exceed 2% of the average account value annually. From time to time,
the Company may pay or permit other promotional incentives, in cash, credit or
other compensation.
CONFORMITY WITH STATE AND FEDERAL LAWS
The Contract is governed by the laws of the state in which it is delivered.
Where a state has not approved a contract feature or funding option, it will not
be available in that state. Any paid-up annuity, cash surrender value or death
benefits that are available under the Contract are not less than the minimum
benefits required by the statutes of the state in which the Contract is
delivered. We reserve the right to make any changes, including retroactive
changes, in the Contract to the extent that the change is required to meet the
requirements of any law or regulation issued by any governmental agency to which
the company, the Contract or the contract owner is subject.
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VOTING RIGHTS
The Company is the legal owner of the shares of the funding options. However, we
believe that when a funding option solicits proxies in conjunction with a vote
of shareholders we are required to obtain from you and from other owners
instructions on how to vote those shares. When we receive those instructions, we
will vote all of the shares we own in proportion to those instructions. This
will also include any shares we own on our own behalf. Should we determine that
we are no longer required to comply with the above, we will vote on the shares
in our own right.
LEGAL PROCEEDINGS AND OPINIONS
There are no pending material legal proceedings affecting the Separate Account,
the Principal Underwriter or the Company. Legal matters in connection with the
federal laws and regulations affecting the issue and sale of the Contract
described in this Prospectus, as well as the organization of the Company, its
authority to issue variable annuity contracts under Connecticut law and the
validity of the forms of the variable annuity contracts under Connecticut law,
have been passed on by the General Counsel of the Company.
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APPENDIX A
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THE FIXED ACCOUNT
The Fixed Account is secured by part of the general assets of the Company. The
general assets of the Company include all assets of the Company other than those
held in the Separate Account or any other separate account sponsored by the
Company or its affiliates.
The staff of the SEC does not generally review the disclosure in the prospectus
relating to the Fixed Account. Disclosure regarding the Fixed Account and the
general account may, however, be subject to certain provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
the prospectus.
Under the Fixed Account, the Company assumes the risk of investment gain or
loss, guarantees a specified interest rate, and guarantees a specified periodic
annuity payment. The investment gain or loss of the Separate Account or any of
the funding options does not affect the Fixed Account portion of the contract
owner's contract value, or the dollar amount of fixed annuity payments made
under any payout option.
We guarantee that, at any time, the Fixed Account contract value will not be
less than the amount of the purchase payments allocated to the Fixed Account,
plus interest credited, less any applicable premium taxes or prior surrenders.
If the contract owner effects a surrender, the amount available from the Fixed
Account will be reduced by any applicable withdrawal charge as described under
"Charges and Deductions" in this prospectus.
Purchase payments allocated to the Fixed Account and any transfers made to the
Fixed Account become part of the Company's general account which supports
insurance and annuity obligations. Neither the general account nor any interest
therein is registered under, nor subject to the provisions of the Securities Act
of 1933 or Investment Company Act of 1940. We will invest the assets of the
Fixed Account at our discretion. Investment income from such Fixed Account
assets will be allocated to us and to the Contracts participating in the Fixed
Account.
Investment income from the Fixed Account allocated to us includes compensation
for mortality and expense risks borne by us in connection with Fixed Account
Contracts. The amount of such investment income allocated to the Contracts will
vary from year to year in our sole discretion at such rate or rates as the
Company prospectively declares from time to time.
The initial rate for any allocations into the Fixed Account is guaranteed for
one year from the date of such allocation. Subsequent renewal rates will be
guaranteed for the calendar quarter. We also guarantee that for the life of the
Contract we will credit interest at not less than 3% per year. Any interest
credited to amounts allocated to the Fixed Account in excess of 3% per year will
be determined in our sole discretion. You assume the risk that interest credited
to the Fixed Account may not exceed the minimum guarantee of 3% for any given
year.
TRANSFERS
You may make transfers from the Fixed Account to any other available variable
funding option(s) twice a year during the 30 days following the semiannual
anniversary of the Contract effective date. The transfers are limited to an
amount of up to 15% of the Fixed Account Value on the semiannual Contract
effective date anniversary. (This restriction does not apply to transfers from
the Dollar Cost Averaging Program.) Amounts previously transferred from the
Fixed Account to other funding options may not be transferred back to the Fixed
Account for a period of at least 6 months from the date of transfer. We reserve
the right to waive either of these restrictions.
Automated transfers from the Fixed Account to any of the funding options may
begin at any time. Automated transfers from the Fixed Account may not deplete
your Fixed Account value in a period of less than twelve months from your
enrollment in the Dollar Cost Averaging program.
A-1
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APPENDIX B
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CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to The Travelers Life and Annuity. A list of the
contents of the Statement of Additional Information is set forth below:
The Insurance Company
Principal Underwriter
Distribution and Principal Underwriting Agreement
Valuation of Assets
Mixed and Shared Funding
Performance Information
Federal Tax Considerations
Independent Accountants
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated October 7, 1999 (Form
No. L-20669 S) are available without charge. To request a copy, please clip this
coupon on the dotted line, enter your name and address in the spaces provided
below, and mail to: The Travelers Life and Annuity, Annuity Investor Services,
One Tower Square, Hartford, Connecticut 06183-9061.
Name:
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Address:
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B-1
<PAGE> 38
PART B
Information Required in a Statement of Additional Information
<PAGE> 39
TRAVELERS VINTAGE II
STATEMENT OF ADDITIONAL INFORMATION
dated
October, 1999
for
THE TRAVELERS SEPARATE ACCOUNT TEN FOR VARIABLE ANNUITIES
ISSUED BY
THE TRAVELERS LIFE AND ANNUITY COMPANY
This Statement of Additional Information ("SAI") is not a prospectus
but relates to, and should be read in conjunction with, the Individual Variable
Annuity Contract Prospectus dated October, 1999. A copy of the Prospectus may
be obtained by writing to The Travelers Life and Annuity Company, Annuity
Investor Services, One Tower Square, Hartford, Connecticut 06183-9061, or by
calling 1-800-842-8573 or by accessing the Securities and Exchange Commission's
website at http://www.sec.gov.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
THE INSURANCE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PRINCIPAL UNDERWRITER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
VALUATION OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
MIXED AND SHARED FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FEDERAL TAX CONSIDERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
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THE INSURANCE COMPANY
The Travelers Life and Annuity Company (the "Company") is a stock
insurance company chartered in 1973 in Connecticut and continuously engaged in
the insurance business since that time. The Company is licensed to conduct a
life insurance business in all states (except New Hampshire and New York) and
the District of Columbia and Puerto Rico. The Company's Home Office is located
at One Tower Square Hartford, Connecticut 06183 and its telephone number is
(860) 277-0111.
It is a wholly owned subsidiary of The Travelers Insurance Company,
which is indirectly owned, through a wholly owned subsidiary, by Citigroup Inc.
Citigroup Inc. consists of businesses that produce a broad range of financial
services, including asset management, banking and consumer finance, credit and
charge cards, insurance, investments, investment banking and trading. Among its
businesses are Citibank, Commercial Credit, Primerica Financial Services,
Salomon Smith Barney, Salomon Smith Barney Asset Management, and Travelers
Property Casualty Corp.
STATE REGULATION. The Company is subject to the laws of the state of Connecticut
governing insurance companies and to regulation by the Insurance Commissioner of
the state of Connecticut (the "Commissioner"). An annual statement covering the
operations of the Company for the preceding year, as well as its financial
conditions as of December 31 of such year, must be filed with the Commissioner
in a prescribed format on or before March 1 of each year. The Company's books
and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted at
least once every four years.
The Company is also subject to the insurance laws and regulations of
all other states in which it is licensed to operate. However, the insurance
departments of each of these states generally apply the laws of the home state
(jurisdiction of domicile) in determining the field of permissible investments.
THE SEPARATE ACCOUNT. Separate Account Nine meets the definition of a separate
account under the federal securities laws, and will comply with the provisions
of the 1940 Act. Additionally, the operations of Separate Account Nine are
subject to the provisions of Section 38a-433 of the Connecticut General Statutes
which authorizes the Commissioner to adopt regulations under it. Section 38a-433
contains no restrictions on the investments of the Separate Account, and the
Commissioner has adopted no regulations under the Section that affect the
Separate Account.
PRINCIPAL UNDERWRITER
CFBDS, Inc. serves as principal underwriter for Separate Account Ten
and the Contracts. The offering is continuous. CFBDS's principal executive
offices are located at 21 Milk Street, Boston, Massachusetts.
CFBDS is not affiliated with the Company or the Separate Account.
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
Under the terms of the Distribution and Principal Underwriting
Agreement among Separate Account Ten, CFBDS and the Company, CFBDS acts as
agent for the distribution of the Contracts and as principal underwriter for
the Contracts. The Company reimburses CFBDS for certain sales and overhead
expenses connected with sales functions.
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<PAGE> 41
VALUATION OF ASSETS
FUNDING OPTIONS: The value of the assets of each Funding Option is determined on
each business day as of the close of the New York Stock Exchange. Each security
traded on a national securities exchange is valued at the last reported sale
price on the business day. If there has been no sale on that day, then the value
of the security is taken to be the mean between the reported bid and asked
prices on the business day or on the basis of quotations received from a
reputable broker or any other recognized source.
Any security not traded on a securities exchange but traded in the
over-the-counter-market and for which market quotations are readily available is
valued at the mean between the quoted bid and asked prices on the business day
or on the basis of quotations received from a reputable broker or any other
recognized source.
Securities traded on the over-the-counter-market and listed securities
with no reported sales are valued at the mean between the last reported bid and
asked prices or on the basis of quotations received from a reputable broker or
other recognized source.
Short-term investments for which a quoted market price is available are
valued at market. Short-term investments maturing in more than sixty days for
which there is no reliable quoted market price are valued by "marking to market"
(computing a market value based upon quotations from dealers or issuers for
securities of a similar type, quality and maturity.) "Marking to market" takes
into account unrealized appreciation or depreciation due to changes in interest
rates or other factors which would influence the current fair values of such
securities. Short-term investments maturing in sixty days or less for which
there is no reliable quoted market price are valued at amortized cost which
approximates market.
THE CONTRACT VALUE: The value of an Accumulation Unit on any business day is
determined by multiplying the value on the preceding business day by the net
investment factor for the valuation period just ended. The net investment factor
is used to measure the investment performance of a Funding Option from one
valuation period to the next. The net investment factor for a Funding Option for
any valuation period is equal to the sum of 1.000000 plus the net investment
rate (the gross investment rate less any applicable Funding Option deductions
during the valuation period relating to the mortality and expense risk charge
and the administrative expense charge). The gross investment rate of a Funding
Option is equal to (a) minus (b), divided by (c) where:
(a) = investment income plus capital gains and losses (whether realized
or unrealized);
(b) = any deduction for applicable taxes (presently zero); and
(c) = the value of the assets of the funding option at the beginning of
the valuation period.
The gross investment rate may be either positive or negative. A Funding
Option's investment income includes any distribution whose ex-dividend date
occurs during the valuation period.
ACCUMULATION UNIT VALUE. The value of the accumulation unit for each Funding
Option was initially established at $1.00. The value of an accumulation unit on
any business day is determined by multiplying the value on the preceding
business day by the net investment factor for the valuation period just ended.
The net investment factor is calculated for each Funding Option and takes into
account the investment performance, expenses and the deduction of certain
expenses.
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<PAGE> 42
ANNUITY UNIT VALUE. The initial Annuity Unit Value applicable to each Funding
Option was established at $1.00. An Annuity Unit Value as of any business day is
equal to (a) the value of the Annuity Unit on the preceding business day,
multiplied by (b) the corresponding net investment factor for the business day
just ended, divided by (c) the assumed net investment factor for the valuation
period. (For example, the assumed net investment factor based on an annual
assumed net investment rate of 3.0% for a valuation period of one day is
1.000081 and, for a period of two days, is 1.000081 x 1.000081.) After the
maturity date, withdrawals from the annuity will be permitted only if you have
elected a variable payout option for a fixed period which is not based on any
lifetime. The maximum withdrawal amount will be calculated by computing the
payments at 7% annual interest rate.
MIXED AND SHARED FUNDING
Certain variable annuity separate accounts and variable life insurance
separate accounts may invest in the Funding Options simultaneously (called
"mixed" and "shared" funding). It is conceivable that in the future it may be
disadvantageous to do so. Although the Company and the Funding Options do not
currently foresee any such disadvantages either to variable annuity contract
owners or variable life policy owners, each Funding Option's Board of Directors
intends to monitor events in order to identify any material conflicts between
them and to determine what action, if any, should be taken. If a Board of
Directors was to conclude that separate funds should be established for variable
life and variable annuity separate accounts, the variable annuity contract
owners would not bear any of the related expenses, but variable annuity contract
owners and variable life insurance policy owners would no longer have the
economies of scale resulting from a larger combined fund.
PERFORMANCE INFORMATION
From time to time, the Company may advertise several types of
historical performance for the Funding Options of the Separate Account. The
Company may advertise the "standardized average annual total returns" of the
Funding Options available through the Separate Account, calculated in a manner
prescribed by the Securities and Exchange Commission, as well as the
"nonstandardized total returns," as described below:
STANDARDIZED METHOD. Quotations of average annual total returns are
computed according to a formula in which a hypothetical initial investment of
$1,000 is allocated to the Funding Option, and then related to ending redeemable
values over one-, five- and ten-year periods, or for a period covering the time
during which the Funding Option has been in existence, if less. If a Funding
Option has been in existence for less than one year, the "since inception" total
return performance quotations are year-to-date and are not average annual total
returns. These quotations reflect the deduction of all recurring charges during
each period (on a pro rata basis in the case of fractional periods). The
deduction for the annual contract administrative charge is converted to a
percentage of assets based on the actual fee collected, divided by the average
net assets per contract sold under the Prospectus to which this SAI relates.
Each quotation assumes a total redemption at the end of each period with the
assessment of any applicable withdrawal charge at that time.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be
calculated in a similar manner based on the performance of the Funding Options
over a period of time, usually for the calendar year-to-date, and for the past
one-, three-, five- and ten-year periods. Nonstandardized total returns will not
reflect the deduction of the annual contract administrative charge, which, if
reflected,
4
<PAGE> 43
would decrease the level of performance shown. The withdrawal charge is not
reflected because the Contract is designed for long-term investment.
For Funding Options that were in existence before they became available
under the Separate Account, the standardized average annual total return
quotations may be accompanied by returns showing the investment performance that
such Funding Options would have achieved (reduced by the applicable charges) had
they been held under the Contract for the period quoted. The total return
quotations are based upon historical earnings and are not necessarily
representative of future performance.
GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the Funding Options.
Average annual total returns for each of the Funding Options excluding
Money Market Portfolio computed according to nonstandardized method for the
period ending December 31, 1998 are set forth in the following table. Actual
returns for the Separate Account are not available, since the separate account
is new and therefore has no investment history. However, average annual total
returns have been calculated using each Funding Option's investment performance
since inception.
5
<PAGE> 44
TRAVELERS VINTAGE II
NONSTANDARDIZED PERFORMANCE AS OF 12/31/98
<TABLE>
<CAPTION>
CUMULATIVE RETURNS
- ---------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT YTD 1 YR 3YR 5YR 10YR
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.38% 27.38% 107.19% - -
- ---------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio Class B 46.06% 46.06% 133.74% 220.22% -
- ---------------------------------------------------------------------------------------------------
American Funds Global Growth Fund 26.99% 26.99% - - -
- ---------------------------------------------------------------------------------------------------
American Funds Growth Fund 33.39% 33.39% 90.42% 146.73% 388.87%
- ---------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 16.58% 16.58% 68.91% 122.24% 277.06%
- ---------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) 10.96% 10.96% - - -
- ---------------------------------------------------------------------------------------------------
Equity Index Portfolio Class II 26.94% 26.94% 103.82% 180.24% -
- ---------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund (R) Portfolio -
Service Class 28.29% 28.29% 88.06% - -
- ---------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II - - - - -
- ---------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 33.82% 33.82% - - -
- ---------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio 32.58% 32.58% - - -
- ---------------------------------------------------------------------------------------------------
MFS Research Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Growth Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio 17.59% 17.59% 73.67% 115.76% -
- ---------------------------------------------------------------------------------------------------
Smith Barney Diversified Strategic Income
Portfolio 5.03% 5.03% 23.12% 35.16% -
- ---------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 5.12% 5.12% 23.81% - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 8.40% 8.40% 60.19% - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Total Return Portfolio 3.61% 3.61% 47.93% 94.25% -
- ---------------------------------------------------------------------------------------------------
Strategic Stock Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Templeton International Fund Class II 7.59% 7.59% 47.95% 63.22% -
- ---------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Van Kampen Emerging Growth Portfolio 35.77% 35.77% 85.87% - -
- ---------------------------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio 23.51% 23.51% 90.23% - -
- ---------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio -0.86% -0.86% 24.43% - -
- ---------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 3.71% 3.71% 14.22% - -
- ---------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Total Return Fund - - - - -
- ---------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 10.22% 10.22% 49.02% - -
- ---------------------------------------------------------------------------------------------------
MONEY MARKET ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.69% 3.69% 11.43% - -
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS CALENDAR YEAR RETURNS
- ---------------------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT 3YR 5YR 10YR Inception 1998 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCK ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.48% - - 26.33% 6/20/94 27.36% 27.71% -
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio Class B 32.71% 26.21% - 23.82% 6/26/92 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Global Growth Fund - - - 20.36% 4/30/97 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Growth Fund 23.95% 19.80% 17.20% 15.82% 2/8/84 28.02% 11.51% 31.09%
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 19.09% 17.32% 14.19% 14.28% 2/28/85 23.94% 16.90% 30.95%
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) - - - 22.65% 8/30/96 30.61% - -
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Index Portfolio Class II 26.79% 22.89% - 19.74% 11/30/91 31.72% 21.90% 36.06%
- ---------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund (R) Portfolio -
Service Class 23.43% - - 28.02% 1/31/95 22.51% 19.66% -
- ---------------------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II - - - -8.52% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) - - - 29.79% 8/30/96 21.86% - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio - - - 24.65% 8/30/96 19.57% - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio - - - 4.87% 3/23/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund - - - 16.64% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund - - - 9.33% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Growth Fund - - - - 9/1/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio - - - - 9/3/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio 20.20% 16.63% - 13.53% 10/16/91 24.78% 18.36% 27.18%
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Diversified Strategic Income
Portfolio 7.18% 6.21% - 5.99% 10/16/91 6.74% 9.82% 14.56%
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 7.38% - - 5.92% 6/20/94 1.37% 16.19% -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio - - - 23.56% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 17.01% - - 17.33% 6/20/94 24.99% 18.22% -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio - - - - 9/2/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Total Return Portfolio 13.94% 14.20% - 14.55% 12/3/93 15.33% 23.79% -
- ---------------------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio - - - -6.52% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund Class II 13.95% 10.29% - 12.62% 5/1/92 12.27% 22.49% -
- ---------------------------------------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio - - - -11.85% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Van Kampen Emerging Growth Portfolio 22.95% - - 24.67% 7/3/95 18.89% 15.15% -
- ---------------------------------------------------------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio 23.91% - - 23.32% 6/21/94 26.94% 21.33% -
- ---------------------------------------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 7.56% - - 8.44% 6/22/94 12.38% 11.67% -
- ---------------------------------------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 4.53% - - 6.02% 6/28/94 8.31% 1.68% -
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Total Return Fund - - - 4.46% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 14.22% - - 13.96% 6/20/94 19.62% 13.02% -
- ---------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.67% - - 3.66% 6/20/94 3.73% 3.59% -
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 45
<TABLE>
<CAPTION>
CUMULATIVE RETURNS
- ---------------------------------------------------------------------------------------------------
STEP-UP DEATH BENEFIT YTD 1 YR 3YR 5YR 10YR
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.26% 27.26% 106.57% - -
- ---------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio Class B 45.92% 45.92% 133.04% 218.63% -
- ---------------------------------------------------------------------------------------------------
American Funds Global Growth Fund 26.99% 26.99% - - -
- ---------------------------------------------------------------------------------------------------
American Funds Growth Fund 33.39% 33.39% 90.42% 146.73% 388.87%
- ---------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 16.46% 16.46% 68.41% 121.14% 273.34%
- ---------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) 10.85% 10.85% - - -
- ---------------------------------------------------------------------------------------------------
Equity Index Portfolio Class II 26.81% 26.81% 103.22% 178.86% -
- ---------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund (R) Portfolio -
Service Class 28.16% 28.16% 87.51% - -
- ---------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II - - - - -
- ---------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 33.69% 33.69% - - -
- ---------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio 32.44% 32.44% - - -
- ---------------------------------------------------------------------------------------------------
MFS Research Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Growth Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio 17.47% 17.47% 73.15% 114.69% -
- ---------------------------------------------------------------------------------------------------
Smith Barney Diversified Strategic Income
Portfolio 4.93% 4.93% 22.76% 34.49% -
- ---------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 5.01% 5.01% 23.44% - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 8.30% 8.30% 59.71% - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Total Return Portfolio 3.50% 3.50% 47.48% 93.28% -
- ---------------------------------------------------------------------------------------------------
Strategic Stock Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Templeton International Fund Class II 7.48% 7.48% 47.51% 62.41% -
- ---------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Van Kampen Emerging Growth Portfolio 35.64% 35.64% 85.32% - -
- ---------------------------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio 23.38% 23.38% 89.66% - -
- ---------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio -0.95% -0.95% 24.06% - -
- ---------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 3.61% 3.61% 13.88% - -
- ---------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Total Return Fund - - - - -
- ---------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 10.11% 10.11% 48.57% - -
- ---------------------------------------------------------------------------------------------------
MONEY MARKET ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.59% 3.59% 11.10% - -
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS CALENDAR YEAR RETURNS
- ---------------------------------------------------------------------------------------------------------------------------------
STEP-UP DEATH BENEFIT 3YR 5YR 10YR Inception 1998 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCK ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.36% - - 26.21% 6/20/94 27.23% 27.58% -
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio Class B 32.58% 26.08% - 23.70% 6/26/92 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Global Growth Fund - - - 20.36% 4/30/97 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Growth Fund 23.95% 19.80% 17.20% 15.82% 2/8/84 28.02% 11.51% 31.09%
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 18.97% 17.20% 14.08% 14.17% 2/28/85 23.82% 16.78% 30.83%
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) - - - 22.53% 8/30/96 30.48% - -
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Index Portfolio Class II 26.66% 22.77% - 19.63% 11/30/91 31.59% 21.78% 35.93%
- ---------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund (R) Portfolio -
Service Class 23.31% - - 27.89% 1/31/95 22.39% 19.55% -
- ---------------------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II - - - -8.59% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) - - - 29.67% 8/30/96 21.74% - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio - - - 24.52% 8/30/96 19.45% - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio - - - 4.78% 3/23/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund - - - 16.54% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund - - - 9.24% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Growth Fund - - - - 9/1/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio - - - - 9/3/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio 20.08% 16.51% - 13.42% 10/16/91 24.66% 18.24% 27.05%
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Diversified Strategic Income
Portfolio 7.07% 6.11% - 5.89% 10/16/91 6.63% 9.72% 14.45%
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 7.27% - - 5.81% 6/20/94 1.27% 16.07% -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio - - - 23.48% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 16.89% - - 17.21% 6/20/94 24.87% 18.11% -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio - - - - 9/2/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Total Return Portfolio 13.83% 14.09% - 14.43% 12/3/93 15.22% 23.67% -
- ---------------------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio - - - -6.58% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund Class II 13.84% 10.19% - 12.51% 5/1/92 12.16% 22.37% -
- ---------------------------------------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio - - - -11.91% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Van Kampen Emerging Growth Portfolio 22.83% - - 24.55% 7/3/95 18.77% 15.03% -
- ---------------------------------------------------------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio 23.78% - - 23.20% 6/21/94 26.82% 21.21% -
- ---------------------------------------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 7.45% - - 8.33% 6/22/94 12.27% 11.56% -
- ---------------------------------------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 4.43% - - 5.91% 6/28/94 8.20% 1.58% -
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Total Return Fund - - - 4.37% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 14.11% - - 13.84% 6/20/94 19.51% 12.90% -
- ---------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.57% - - 3.55% 6/20/94 3.63% 3.49% -
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Returns for periods less than one year are cumulative; all others are
annualized. *Inception date reflects the date the underlying fund began
operating.
7
<PAGE> 46
<TABLE>
<CAPTION>
CUMULATIVE RETURNS
- ---------------------------------------------------------------------------------------------------
ROLL-UP DEATH BENEFIT YTD 1 YR 3YR 5YR 10YR
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.07% 27.07% 105.64% - -
- ---------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio Class B 45.70% 45.70% 131.99% 216.26% -
- ---------------------------------------------------------------------------------------------------
American Funds Global Growth Fund 26.99% 26.99% - - -
- ---------------------------------------------------------------------------------------------------
American Funds Growth Fund 33.39% 33.39% 90.42% 146.73% 388.87%
- ---------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 16.29% 16.29% 67.66% 119.51% 267.84%
- ---------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) 10.68% 10.68% - - -
- ---------------------------------------------------------------------------------------------------
Equity Index Portfolio Class II 26.62% 26.62% 102.32% 176.80% -
- ---------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund (R) Portfolio -
Service Class 27.97% 27.97% 86.68% - -
- ---------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II - - - - -
- ---------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 33.49% 33.49% - - -
- ---------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio 32.24% 32.24% - - -
- ---------------------------------------------------------------------------------------------------
MFS Research Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Growth Fund - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio 17.30% 17.30% 72.38% 113.10% -
- ---------------------------------------------------------------------------------------------------
Smith Barney Diversified Strategic Income
Portfolio 4.77% 4.77% 22.21% 33.48% -
- ---------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 4.85% 4.85% 22.88% - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 8.13% 8.13% 58.99% - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Smith Barney Total Return Portfolio 3.35% 3.35% 46.82% 91.84% -
- ---------------------------------------------------------------------------------------------------
Strategic Stock Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Templeton International Fund Class II 7.32% 7.32% 46.86% 61.21% -
- ---------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio - - - - -
- ---------------------------------------------------------------------------------------------------
Van Kampen Emerging Growth Portfolio 35.43% 35.43% 84.49% - -
- ---------------------------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio 23.20% 23.20% 88.81% - -
- ---------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio -1.10% -1.10% 23.50% - -
- ---------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 3.46% 3.46% 13.37% - -
- ---------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Total Return Fund - - - - -
- ---------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 9.95% 9.95% 47.90% - -
- ---------------------------------------------------------------------------------------------------
MONEY MARKET ACCOUNTS:
- ---------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.43% 3.43% 10.60% - -
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS CALENDAR YEAR RETURNS
- ---------------------------------------------------------------------------------------------------------------------------------
ROLL-UP DEATH BENEFIT 3YR 5YR 10YR Inception 1998 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCK ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Growth Portfolio 27.16% - - 26.02% 6/20/94 27.04% 27.38% -
- ---------------------------------------------------------------------------------------------------------------------------------
Alliance Premier Growth Portfolio Class B 32.38% 25.89% - 23.51% 6/26/92 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Global Growth Fund - - - 20.36% 4/30/97 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Growth Fund 23.95% 19.80% 17.20% 15.82% 2/8/84 28.02% 11.51% 31.09%
- ---------------------------------------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund 18.80% 17.03% 13.91% 14.00% 2/28/85 23.64% 16.61% 30.63%
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) - - - 22.35% 8/30/96 30.29% - -
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Index Portfolio Class II 26.48% 22.58% - 19.45% 11/30/91 31.40% 21.60% 35.73%
- ---------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund (R) Portfolio -
Service Class 23.13% - - 27.70% 1/31/95 22.21% 19.37% -
- ---------------------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II - - - -8.68% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) - - - 29.47% 8/30/96 21.55% - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio - - - 24.34% 8/30/96 19.27% - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio - - - 4.66% 3/23/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund - - - 16.39% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund - - - 9.10% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Growth Fund - - - - 9/1/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Aggressive Growth Portfolio - - - - 9/3/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio 19.90% 16.34% - 13.25% 10/16/91 24.47% 18.07% 26.87%
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Diversified Strategic Income
Portfolio 6.91% 5.95% - 5.73% 10/16/91 6.47% 9.55% 14.28%
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 7.11% - - 5.65% 6/20/94 1.12% 15.90% -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio - - - 23.35% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 16.72% - - 17.03% 6/20/94 24.68% 17.93% -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Mid Cap Portfolio - - - - 9/2/99 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Total Return Portfolio 13.66% 13.92% - 14.26% 12/3/93 15.05% 23.48% -
- ---------------------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio - - - -6.68% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Templeton International Fund Class II 13.67% 10.02% - 12.34% 5/1/92 12.00% 22.18% -
- ---------------------------------------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio - - - -12.00% 5/1/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Van Kampen Emerging Growth Portfolio 22.65% - - 24.37% 7/3/95 18.60% 14.86% -
- ---------------------------------------------------------------------------------------------------------------------------------
Van Kampen Enterprise Portfolio 23.60% - - 23.02% 6/21/94 26.63% 21.03% -
- ---------------------------------------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 7.29% - - 8.17% 6/22/94 12.10% 11.39% -
- ---------------------------------------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 4.27% - - 5.75% 6/28/94 8.04% 1.43% -
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Total Return Fund - - - 4.23% 2/17/98 - - -
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 13.94% - - 13.67% 6/20/94 19.33% 12.73% -
- ---------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET ACCOUNTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 3.41% - - 3.40% 6/20/94 3.48% 3.33% -
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Returns for periods less than one year are cumulative; all others are
annualized. *Inception date reflects the date the underlying fund began
operating.
8
<PAGE> 47
FEDERAL TAX CONSIDERATIONS
The following description of the federal income tax consequences under
this Contract is not exhaustive and is not intended to cover all situations.
Because of the complexity of the law and the fact that the tax results will vary
according to the factual status of the individual involved, tax advice may be
needed by a person contemplating purchase of an annuity contract and by a
contract owner or beneficiary who may make elections under a contract. For
further information, please consult a qualified tax adviser.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law generally requires that minimum annual distributions
begin by April 1st of the calendar year following the calendar year in which a
participant under a qualified plan, a Section 403(b) annuity, or an IRA attains
age 70 1/2. Distributions must also begin or be continued according to required
patterns following the death of the contract owner or the annuitant.
NONQUALIFIED ANNUITY CONTRACTS
Individuals may purchase tax-deferred annuities without tax law funding
limits. The purchase payments receive no tax benefit, deduction or deferral, but
increases in the value of the contract are generally deferred from tax until
distribution. If a nonqualified annuity is owned by other than an individual,
however, (e.g., by a corporation), the increases in value attributable to
purchase payments made after February 28, 1986 are includible in income
annually. Furthermore, for contracts issued after April 22, 1987, all deferred
increases in value will be includible in the income of a contract owner when the
contract owner transfers the contract without adequate consideration.
If two or more annuity contracts are purchased from the same insurer
within the same calendar year, distributions from any of them will be taxed
based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.
Those receiving partial distributions made before the maturity date
will generally be taxed on an income-first basis to the extent of income in the
contract. If you are exchanging another annuity contract for this annuity,
certain pre-August 14, 1982 deposits into an annuity contract that have been
placed in the contract by means of a tax-deferred exchange under Section 1035 of
the Code may be withdrawn first without income tax liability. This information
on deposits must be provided to the Company by the other insurance company at
the time of the exchange. There is income in the contract generally to the
extent the cash value exceeds the investment in the contract. The investment in
the contract is equal to the amount of premiums paid less any amount received
previously which was excludable from gross income. Any direct or indirect
borrowing against the value of the contract or pledging of the contract as
security for a loan will be treated as a cash distribution under the tax law.
The federal tax law requires that nonqualified annuity contracts meet
minimum mandatory distribution requirements upon the death of the contract
owner, including the first of joint owners. Failure to meet these requirements
will cause the surviving joint owner, or the beneficiary to lose the tax
benefits associated with annuity contracts, i.e., primarily the tax deferral
prior to distribution. The distribution required depends, among other things,
upon whether an annuity option is elected or whether the new contract owner is
the surviving spouse. Contracts will be administered by the
9
<PAGE> 48
Company in accordance with these rules and the Company will make a notification
when payments should be commenced.
INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding $2,000
per individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and based on
their participation in a retirement plan. If an individual is married and the
spouse does not have earned income, the individual may establish IRAs for the
individual and spouse. Purchase payments may then be made annually into IRAs for
both spouses in the maximum amount of 100% of earned income up to a combined
limit of $4,000.
The Code provides for the purchase of a Simplified Employee Pension
(SEP) plan. A SEP is funded through an IRA with an annual employer contribution
limit of 15% of compensation up to $30,000 for each participant.
SIMPLE Plan IRA Form
Effective January 1, 1997, employers may establish a savings incentive
match plan for employees ("SIMPLE plan") under which employees can make elective
salary reduction contributions to an IRA based on a percentage of compensation
of up to $6,000. (Alternatively, the employer can establish a SIMPLE cash or
deferred arrangement under IRS Section 401(k)). Under a SIMPLE plan IRA, the
employer must either make a matching contribution of 100% on the first 3% or 7%
contribution for all eligible employees. Early withdrawals are subject to the
10% early withdrawal penalty generally applicable to IRAs, except that an early
withdrawal by an employee under a SIMPLE plan IRA, within the first two years of
participation, shall be subject to a 25% early withdrawal tax.
ROTH IRAS
Effective January 1, 1998, Section 408A of the Code permits certain
individuals to contribute to a Roth IRA. Eligibility to make contributions is
based upon income, and the applicable limits vary based on marital status and/or
whether the contribution is a rollover contribution from another IRA or an
annual contribution. Contributions to a Roth IRA, which are subject to certain
limitations ($2,000 per year for annual contributions), are not deductible and
must be made in cash or as a rollover or transfer from another Roth IRA or other
IRA. A conversion of a "traditional" IRA to a Roth IRA may be subject to tax and
other special rules apply. You should consult a tax adviser before combining any
converted amounts with other Roth IRA contributions, including any other
conversion amounts from other tax years.
Qualified distributions from a Roth IRA are tax-free. A qualified
distribution requires that the Roth IRA has been held for at least 5 years, and
the distribution is made after age 59 1/2, on death or disability of the owner,
or for a limited amount ($10,000) for a qualified first time home purchase for
the owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2)
during five taxable years starting with the year in which the first contribution
is made to the Roth IRA.
10
<PAGE> 49
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Under a qualified pension or profit-sharing plan, purchase payments
made by an employer are not currently taxable to the participant and increases
in the value of a contract are not subject to taxation until received by a
participant or beneficiary.
Distributions are taxable to the participant or beneficiary as ordinary
income in the year of receipt. Any distribution that is considered the
participant's "investment in the contract" is treated as a return of capital and
is not taxable. Certain lump-sum distributions may be eligible for special
forward averaging tax treatment for certain classes of individuals.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient
will be subject to federal income tax withholding as follows:
1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR
ARRANGEMENTS OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS
There is a mandatory 20% tax withholding for plan distributions that are
eligible for rollover to an IRA or to another retirement plan but that are not
directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:
(a) a periodic settlement distribution is elected based upon a life or
life expectancy calculation, or
(b) a term-for-years settlement distribution is elected for a period of
ten years or more, payable at least annually, or
(c) a minimum required distribution as defined under the tax law is taken
after the attainment of the age of 70 1/2 or as otherwise required by
law.
A distribution including a rollover that is not a direct rollover will
be subject to the 20% withholding, and a 10% additional tax penalty may apply to
any amount not added back in the rollover. The 20% withholding may be recovered
when the participant or beneficiary files a personal income tax return for the
year if a rollover was completed within 60 days of receipt of the funds, except
to the extent that the participant or spousal beneficiary is otherwise
underwithheld or short on estimated taxes for that year.
2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)
To the extent not described as requiring 20% withholding in 1 above, the
portion of a non-periodic distribution which constitutes taxable income will be
subject to federal income tax withholding, if the aggregate distributions exceed
$200 for the year, unless the recipient elects not to have taxes withheld. If no
such election is made, 10% of the taxable distribution will be withheld as
federal income tax. Election forms will be provided at the time distributions
are requested. This form of withholding applies to all annuity programs.
11
<PAGE> 50
3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE
YEAR)
The portion of a periodic distribution which constitutes taxable income
will be subject to federal income tax withholding under the wage withholding
tables as if the recipient were married claiming three exemptions. A recipient
may elect not to have income taxes withheld or have income taxes withheld at a
different rate by providing a completed election form. Election forms will be
provided at the time distributions are requested. This form of withholding
applies to all annuity programs. As of January 1, 1999, a recipient receiving
periodic payments (e.g., monthly or annual payments under an annuity option)
which total $14,700 or less per year, will generally be exempt from periodic
withholding.
Recipients who elect not to have withholding made are liable for
payment of federal income tax on the taxable portion of the distribution. All
recipients may also be subject to penalties under the estimated tax payment
rules if withholding and estimated tax payments are not sufficient to cover tax
liabilities.
Recipients who do not provide a social security number or other
taxpayer identification number will not be permitted to elect out of
withholding. Additionally, U.S citizens residing outside of the country, or U.S.
legal residents temporarily residing outside the country, are not permitted to
elect out of withholding.
INDEPENDENT ACCOUNTANTS
The financial statements of The Travelers Life and Annuity Company as
of December 31, 1998 and 1997, and for each of the years in the three-year
period ended December 31, 1998, have been included herein in reliance upon the
report of KPMG LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.
12
<PAGE> 51
VINTAGE II
STATEMENT OF ADDITIONAL INFORMATION
THE TRAVELERS SEPARATE ACCOUNT TEN FOR VARIABLE ANNUITIES
Individual Variable Annuity Contract
issued by
The Travelers Life and Annuity Company
One Tower Square
Hartford, Connecticut 06183
L-20669S October, 1999
<PAGE> 52
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) The financial statements of the Registrant will not be provided since the
Registrant will have no assets as of the effective date of the Registrant
Statement.
The financial statements of The Travelers Life and Annuity Company and the
report of Independent Accountants, are contained in the Statement of
Additional Information. The financial statements of The Travelers Life and
Annuity Company include:
Statements of Income for the years ended December 31, 1998, 1997 and
1996 Balance Sheets as of December 31, 1998 and 1997 Statements of
Changes in Retained Earnings and Accumulated Other Changes in Equity
from Non-Owner Sources for the years ended December 31, 1998, 1997 and
1996 Statements of Cash Flows for the years ended December 31, 1998,
1997 and 1996 Notes to Financial Statements
(b) Exhibits
1. Resolution of The Travelers Life and Annuity Company Board of Directors
authorizing the establishment of the Registrant. (Incorporated herein by
reference to Exhibit 1 to the Registration Statement on Form N-4 filed
June 30, 1999.)
2. Not Applicable.
3(a). Distribution and Principal Underwriting Agreement among the Registrant,
The Travelers Life and Annuity Company and CFBDS, Inc. To be provided by
amendment.
3(b). Selling Agreement. (Incorporated herein by reference to Exhibit 3(b) to
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4,
File No. 333-60215 filed November 9, 1998)
4. Variable Annuity Contract.
5. Application.
6(a). Charter of The Travelers Life and Annuity Company, as amended on April 10,
1990. (Incorporated herein by reference to Exhibit 6(a) to the
Registration Statement on Form N-4, File No. 333-40191, filed November 13,
1998.)
6(b). By-Laws of The Travelers Life and Annuity Company, as amended on October
20, 1994. (Incorporated herein by reference to Exhibit 6(b) to the
Registration Statement on Form N-4, File No. 333-40191, filed November 13,
1998.)
9. Opinion of Counsel as to the legality of securities being registered.
(Incorporated herein by reference to Exhibit 9 to the Registration
Statement on Form N-4 filed June 30, 1999.)
10. Consent of KPMG LLP, Independent Certified Public Accountants.
13. Computation of Total Return Calculations - Standardized and
Non-Standardized..
<PAGE> 53
15. Powers of Attorney authorizing Ernest J. Wright or Kathleen A. McGah as
signatory for Michael A. Carpenter, J. Eric Daniels, Jay S. Benet, George
C. Kokulis, Robert I. Lipp, Katherine M. Sullivan and Marc P. Weill.
(Incorporated herein by reference to Exhibit 15 to the Registration
Statement on Form N-4 filed June 30, 1999.)
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor
<S> <C>
Name and Principal Positions and Offices
Business Address with Insurance Company
- ---------------- ----------------------
Michael A. Carpenter* Director, Chairman of the Board
J. Eric Daniels** Director, President and Chief Executive Officer
Jay S. Benet** Director and Senior Vice President
Chief Financial Officer, Chief
Accounting Officer and Controller
George C. Kokulis** Director and Executive Vice President
Robert I. Lipp** Director
Katherine M. Sullivan** Director and Senior Vice President
Marc P. Weill* Director and Senior Vice President
Stuart Baritz*** Senior Vice President
Elizabeth C. Georgakopoulos** Senior Vice President
Barry Jacobson** Senior Vice President
Russell H. Johnson** Senior Vice President
Marla Berman Lewitus** Senior Vice President and General Counsel
Warren H. May** Senior Vice President
Christine M. Modie** Senior Vice President
Kathleen Preston** Senior Vice President
Mary Jean Thornton** Senior Vice President
David A. Tyson** Senior Vice President
F. Denney Voss* Senior Vice President
Virginia M. Meany** Vice President
Ernest J. Wright** Vice President and Secretary
Kathleen A. McGah** Assistant Secretary and Deputy General Counsel
Donald R. Munson, Jr.** Second Vice President
Anthony Cocolla** Second Vice President
Scott R. Hansen** Second Vice President
Principal Business Address:
* Citigroup Inc. ** The Travelers Insurance Company
388 Greenwich Street One Tower Square
New York, NY 10013 Hartford, CT 06183
*** Travelers Portfolio Group
1345 Avenue of the Americas
New York, NY 10105
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Incorporated herein by reference to Exhibit 16 to Post-Effective Amendment
No. 2 to the Registration Statement on Form N-4, File No. 333-27689, filed April
16, 1999.
<PAGE> 54
Item 27. Number of Contract Owners
Not applicable.
Item 28. Indemnification
Sections 33-770 to 33-778, inclusive of the Connecticut General Statutes
("C.G.S.") regarding indemnification of directors and officers of Connecticut
corporations provides in general that Connecticut corporations shall indemnify
their officers, directors and certain other defined individuals against
judgments, fines, penalties, amounts paid in settlement and reasonable expenses
actually incurred in connection with proceedings against the corporation. The
corporation's obligation to provide such indemnification generally does not
apply unless (1) the individual is wholly successful on the merits in the
defense of any such proceeding; or (2) a determination is made (by persons
specified in the statute) that the individual acted in good faith and in the
best interests of the corporation and in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and in a criminal
case he had no reasonable cause to believe his conduct was unlawful; or (3) the
court, upon application by the individual, determines in view of all of the
circumstances that such person is fairly and reasonably entitled to be
indemnified, and then for such amount as the court shall determine. With respect
to proceedings brought by or in the right of the corporation, the statute
provides that the corporation shall indemnify its officers, directors and
certain other defined individuals, against reasonable expenses actually incurred
by them in connection with such proceedings, subject to certain limitations.
Citigroup Inc. also provides liability insurance for its directors and officers
and the directors and officers of its subsidiaries, including the Registrant.
This insurance provides for coverage against loss from claims made against
directors and officers in their capacity as such, including, subject to certain
exceptions, liabilities under the federal securities laws.
Rule 484 Undertaking
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 29. Principal Underwriter
(a) CFBDS, Inc.
21 Milk Street
Boston, MA 02109
CFBDS, Inc. also serves as principal underwriter for the following :
(a) CFBDS, the Registrant's Distributor, is also the distributor for
CitiFunds(SM) International Growth & Income Portfolio, CitiFunds(SM)
International Growth Portfolio, CitiFunds(SM) U.S.
<PAGE> 55
Treasury Reserves, CitiFunds(SM) Cash Reserves, CitiFunds(SM) Premium U.S.
Treasury Reserves, CitiFunds(SM) Premium Liquid Reserves, CitiFunds(SM)
Institutional U.S. Treasury Reserves, CitiFunds(SM) Institutional Liquid
Reserves, CitiFunds(SM) Institutional Cash Reserves, CitiFunds(SM) Tax Free
Reserves, CitiFunds(SM) Institutional Tax Free Reserves, CitiFunds(SM)
California Tax Free Reserves, CitiFunds(SM) Connecticut Tax Free Reserves,
CitiFunds(SM) New York Tax Free Reserves, CitiFunds(SM) New York Tax Free Income
Portfolio, CitiFunds(SM) National Tax Free Income Portfolio, CitiFunds(SM)
California Tax Free Income Portfolio, CitiFunds(SM) Intermediate Income
Portfolio, CitiFunds(SM) Balanced Portfolio, CitiFunds(SM) Small Cap Value
Portfolio, CitiFunds(SM) Growth & Income Portfolio, CitiFunds(SM) Large Cap
Growth Portfolio, CitiFunds(SM) Small Cap Growth Portfolio, CitiSelect(R) VIP
Folio 200, CitiSelect(R) VIP Folio 300, CitiSelect(R) VIP Folio 400,
CitiSelect(R) VIP Folio 500, CitiFunds(SM) Small Cap Growth VIP Portfolio,
CitiSelect(R) Folio 100, CitiSelect(R) Folio 200, CitiSelect(R) Folio 300,
CitiSelect(R) Folio 400, and CitiSelect(R) Folio 500.
CFBDS is also the placement agent for Large Cap Value Portfolio, Small Cap Value
Portfolio, International Portfolio, Foreign Bond Portfolio, Intermediate Income
Portfolio, Short-Term Portfolio, Growth & Income Portfolio, U.S. Fixed Income
Portfolio, High Yield Portfolio, Large Cap Growth Portfolio, Small Cap Growth
Portfolio, International Equity Portfolio, Balanced Portfolio, Government Income
Portfolio, Tax Free Reserves Portfolio, Cash Reserves Portfolio and U.S.
Treasury Reserves Portfolio.
CFBDS also serves as the distributor for the following funds: The Travelers Fund
U for Variable Annuities, The Travelers Fund VA for Variable Annuities, The
Travelers Fund BD for Variable Annuities, The Travelers Fund BD II for Variable
Annuities, The Travelers Fund BD III for Variable Annuities, The Travelers Fund
BD IV for Variable Annuities, The Travelers Fund ABD for Variable Annuities, The
Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for Variable
Annuities, The Travelers Separate Account QP for Variable Annuities, The
Travelers Separate Account TM for Variable Annuities, The Travelers Separate
Account TM II for Variable Annuities, The Travelers Separate Account Five for
Variable Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The Travelers
Separate Account Eight for Variable Annuities, The Travelers Fund UL for
Variable Life Insurance, The Travelers Fund UL II for Variable Life Insurance,
The Travelers Fund UL III for Variable Life Insurance, The Travelers Variable
Life Insurance Separate Account One, The Travelers Variable Life Insurance
Separate Account Two, The Travelers Variable Life Insurance Separate Account
Three, The Travelers Variable Life Insurance Separate Account Four, The
Travelers Separate Account MGA, The Travelers Separate Account MGA II, The
Travelers Growth and Income Stock Account for Variable Annuities, The Travelers
Quality Bond Account for Variable Annuities, The Travelers Money Market Account
for Variable Annuities, The Travelers Timed Growth and Income Stock Account for
Variable Annuities, The Travelers Timed Short-Term Bond Account for Variable
Annuities, The Travelers Timed Aggressive Stock Account for Variable Annuities,
The Travelers Timed Bond Account for Variable Annuities, Emerging Growth Fund,
Government Fund, Growth and Income Fund, International Equity Fund, Municipal
Fund, Balanced Investments, Emerging Markets Equity Investments, Government
Money Investments, High Yield Investments, Intermediate Fixed Income
Investments, International Equity Investments, International Fixed Income
Investments, Large Capitalization Growth Investments, Large Capitalization Value
Equity Investments, Long-Term Bond Investments, Mortgage Backed Investments,
Municipal Bond Investments, Small Capitalization Growth Investments, Small
<PAGE> 56
Capitalization Value Equity Investments, Appreciation Portfolio, Diversified
Strategic Income Portfolio, Emerging Growth Portfolio, Equity Income Portfolio,
Equity Index Portfolio, Growth & Income Portfolio, Intermediate High Grade
Portfolio, International Equity Portfolio, Money Market Portfolio, Total Return
Portfolio, Smith Barney Adjustable Rate Government Income Fund, Smith Barney
Aggressive Growth Fund Inc., Smith Barney Appreciation Fund, Smith Barney
Arizona Municipals Fund Inc., Smith Barney California Municipals Fund Inc.,
Balanced Portfolio, Conservative Portfolio, Growth Portfolio, High Growth
Portfolio, Income Portfolio, Global Portfolio, Select Balanced Portfolio, Select
Conservative Portfolio, Select Growth Portfolio, Select High Growth Portfolio,
Select Income Portfolio, Concert Social Awareness Fund, Smith Barney Large Cap
Blend Fund, Smith Barney Fundamental Value Fund Inc., Large Cap Value Fund,
Short-Term High Grade Bond Fund, U.S. Government Securities Fund, Smith Barney
Balanced Fund, Smith Barney Convertible Fund, Smith Barney Diversified Strategic
Income Fund, Smith Barney Exchange Reserve Fund, Smith Barney High Income Fund,
Smith Barney Municipal High Income Fund, Smith Barney Premium Total Return Fund,
Smith Barney Total Return Bond Fund, Cash Portfolio, Government Portfolio,
Municipal Portfolio, Concert Peachtree Growth Fund, Smith Barney Contrarian
Fund, Smith Barney Government Securities Fund, Smith Barney Hansberger Global
Small Cap Value Fund, Smith Barney Hansberger Global Value Fund, Smith Barney
Investment Grade Bond Fund, Smith Barney Special Equities Fund, Smith Barney
Intermediate Maturity California Municipals Fund, Smith Barney Intermediate
Maturity New York Municipals Fund, Smith Barney Large Capitalization Growth
Fund, Smith Barney S&P 500 Index Fund, Smith Barney Mid Cap Blend Fund, Smith
Barney Managed Governments Fund Inc., Smith Barney Managed Municipals Fund Inc.,
Smith Barney Massachusetts Municipals Fund, Cash Portfolio, Government
Portfolio, Retirement Portfolio, California Money Market Portfolio, Florida
Portfolio, Georgia Portfolio, Limited Term Portfolio, New York Money Market
Portfolio, New York Portfolio, Pennsylvania Portfolio, Smith Barney Municipal
Money Market Fund, Inc., Smith Barney Natural Resources Fund Inc., Smith Barney
New Jersey Municipals Fund Inc., Smith Barney Oregon Municipals Fund, Zeros Plus
Emerging Growth Series 2000, Smith Barney Security and Growth Fund, Smith Barney
Small Cap Blend Fund, Inc., Smith Barney Telecommunications Income Fund, Income
and Growth Portfolio, Reserve Account Portfolio, U.S. Government/High Quality
Securities Portfolio, Emerging Markets Portfolio, European Portfolio, Global
Government Bond Portfolio, International Balanced Portfolio, International
Equity Portfolio, Pacific Portfolio, AIM Capital Appreciation Portfolio,
Alliance Growth Portfolio, GT Global Strategic Income Portfolio, MFS Total
Return Portfolio, Putnam Diversified Income Portfolio, Smith Barney High Income
Portfolio, Smith Barney Large Cap Value Portfolio, Smith Barney International
Equity Portfolio, Smith Barney Large Capitalization Growth Portfolio, Smith
Barney Money Market Portfolio, Smith Barney Pacific Basin Portfolio, TBC Managed
Income Portfolio, Van Kampen American Capital Enterprise Portfolio, Centurion
Tax-Managed U.S. Equity Fund, Centurion Tax-Managed International Equity Fund,
Centurion U.S. Protection Fund, Centurion International Protection Fund, Global
High-Yield Bond Fund, International Equity Fund, Emerging Opportunities Fund,
Core Equity Fund, Long-Term Bond Fund, Global Dimensions Fund L.P., Citicorp
Private Equity L.P., AIM V.I. Capital Appreciation Fund, AIM V.I. Government
Series Fund, AIM V.I. Growth Fund, AIM V.I. International Equity Fund, AIM V.I.
Value Fund, Fidelity VIP Growth Portfolio, Fidelity VIP High Income Portfolio,
Fidelity VIP Equity Income Portfolio, Fidelity VIP Overseas Portfolio, Fidelity
VIP II Contrafund Portfolio, Fidelity VIP II Index 500 Portfolio, MFS World
Government Series, MFS Money Market Series, MFS Bond Series, MFS Total Return
Series, MFS Research Series, MFS Emerging Growth Series, Salomon Brothers
Institutional Money Market Fund, Salomon Brothers Cash Management Fund, Salomon
Brothers New York Municipal Money Market Fund, Salomon Brothers National
Intermediate Municipal Fund, Salomon Brothers U.S. Government Income Fund,
Salomon
<PAGE> 57
Brothers High Yield Bond Fund, Salomon Brothers Strategic Bond Fund, Salomon
Brothers Total Return Fund, Salomon Brothers Asia Growth Fund, Salomon Brothers
Capital Fund Inc, Salomon Brothers Investors Fund Inc, Salomon Brothers
Opportunity Fund Inc, Salomon Brothers Institutional High Yield Bond Fund,
Salomon Brothers Institutional Emerging Markets Debt Fund, Salomon Brothers
Variable Investors Fund, Salomon Brothers Variable Capital Fund, Salomon
Brothers Variable Total Return Fund, Salomon Brothers Variable High Yield Bond
Fund, Salomon Brothers Variable Strategic Bond Fund, Salomon Brothers Variable
U.S. Government Income Fund, and Salomon Brothers Variable Asia Growth Fund.
(b) The information required by this Item 27 with respect to each director and
officer of CFBDS is incorporated by reference to Schedule A of Form BD filed by
CFBDS pursuant to the Securities and Exchange Act of 1934 (File No. 8-32417).
(c) Not Applicable
Item 30. Location of Accounts and Records
(1) The Travelers Life and Annuity Company
One Tower Square
Hartford, Connecticut 06183
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
The undersigned 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 sixteen 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 post card or similar
written communication affixed to or included in the prospectus that the
applicant can remove to send for a Statement of Additional Information;
and
(c) To deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly upon
written or oral request.
The Company hereby represents:
(a). That the aggregate charges under the Contracts of the Registrant described
herein are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the Company.
<PAGE> 58
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this amendment to this registration statement to
be signed on its behalf, in the City of Hartford, and State of Connecticut, on
this 24th day of September 1999.
THE TRAVELERS SEPARATE ACCOUNT TEN FOR VARIABLE ANNUITIES
(Registrant)
THE TRAVELERS LIFE AND ANNUITY COMPANY
(Depositor)
By: *JAY S. BENET
----------------------------------------------
Jay S. Benet
Senior Vice President, Chief Financial Officer
Chief Accounting Officer and Controller
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities indicated on the 24th day of
September 1999.
<TABLE>
<S> <C>
*MICHAEL A. CARPENTER Director and Chairman of the Board
- ----------------------------------
(Michael A. Carpenter)
*J. ERIC DANIELS Director, President and Chief Executive Officer
- ----------------------------------
(J. Eric Daniels)
*JAY S. BENET Director, Senior Vice President, Chief
- ---------------------------------- Financial Officer, Chief Accounting Officer
(Jay S. Benet) and Controller
*GEORGE C. KOKULIS Director and Executive Vice President
- ----------------------------------
(George C. Kokulis
*ROBERT I. LIPP Director
- ----------------------------------
(Robert I. Lipp)
*KATHERINE M. SULLIVAN Director and Senior Vice President
- ----------------------------------
(Katherine M. Sullivan)
*MARC P. WEILL Director and Senior Vice President
- ----------------------------------
(Marc P. Weill)
</TABLE>
*By: /s/Ernest J. Wright, Attorney-in-Fact
<PAGE> 59
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
No. Description Method of Filing
- --- ----------- ----------------
<S> <C> <C>
4. Variable Annuity Contract. Electronically
5. Application. Electronically
10. Consent of KPMG LLP, Independent Certified Public Accountants. Electronically
13. Computation of Total Return Calculations - Standardized and Electronically
Non-Standardized.
</TABLE>
<PAGE> 1
THE TRAVELERS LIFE AND ANNUITY COMPANY - ONE TOWER SQUARE - HARTFORD,
CONNECTICUT - 06183
A STOCK COMPANY
We are pleased to provide You the benefits of this contract. Please read
your contract and all attached forms carefully.
RIGHT TO EXAMINE THIS CONTRACT
IN ORDER TO RETURN THIS CONTRACT FOR CANCELLATION, IT MUST BE
GIVEN TO US IN A WRITTEN REQUEST AT OUR OFFICE OR TO OUR AGENT.
AFTER THE CONTRACT IS RETURNED, IT WILL BE CONSIDERED AS NEVER IN
EFFECT.
IF THIS CONTRACT IS ISSUED AS AN INDIVIDUAL RETIREMENT ANNUITY
(IRA), AND IS RETURNED FOR CANCELLATION WITHIN 7 DAYS AFTER ITS
DELIVERY TO YOU, WE WILL PAY YOU THE FULL AMOUNT OF ANY PURCHASE
PAYMENTS MADE, WITHOUT ADJUSTMENT FOR ANY PREMIUM TAX CHARGES OR
CONTRACT CHARGES PAID. IF THIS CONTRACT IS RETURNED WITHIN 8 TO 10
DAYS AFTER ITS DELIVERY TO YOU, WE WILL PAY YOU THE CONTRACT VALUE
AS STATED BELOW.
IF THIS CONTRACT IS ISSUED OTHER THAN AS AN IRA AND IS RETURNED
FOR CANCELLATION WITHIN 10 DAYS AFTER ITS DELIVERY TO YOU, WE WILL
PAY YOU THE CONTRACT VALUE DETERMINED AS OF THE NEXT VALUATION
DATE AFTER WE RECEIVE THE WRITTEN REQUEST AT OUR OFFICE, PLUS ANY
PREMIUM TAX CHARGES OR CONTRACT CHARGES PAID.
This contract is issued in consideration of the Purchase Payments. It is
subject to the terms and conditions stated on the attached pages, all of
which are a part of it.
Executed at Hartford, Connecticut
[SIG]
President
This is a legal contract between You and Us.
READ YOUR CONTRACT CAREFULLY.
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
ELECTIVE OPTIONS NON-PARTICIPATING
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND
MAY INCREASE OR DECREASE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR
AMOUNT.
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<PAGE> 2
TABLE OF CONTENTS
Right to Examine this Contract Cover Page
Contract Specifications Pages 3-5
Definitions Page 7
Owner, Beneficiary and Annuitant Provisions Pages 8-9
Purchase Payment and Valuation Provisions Pages 10-12
Death Benefit Provisions Page 13-14
Settlement Provisions Pages 15-16
General Provisions Pages 17-18
Table of Values Page 19
Annuity Tables Pages 20-25
Any Riders or Endorsements follow the Annuity Tables.
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<PAGE> 3
CONTRACT SPECIFICATIONS
OWNER John Doe 12345 CONTRACT NUMBER
JOINT OWNER
CONTINGENT ANNUITANT
ANNUITANT John Doe
CONTRACT DATE 11/1/1999
MATURITY DATE 11/1/2024
INITIAL PURCHASE PAYMENT $20,000
- --------------------------------------------------------------------------------
IF YOU HAVE ANY QUESTIONS CONCERNING YOUR CONTRACT, PLEASE CONTACT US AT
- -800-842-8573.
MINIMUM INITIAL PURCHASE PAYMENT: $5,000
MINIMUM SUBSEQUENT PURCHASE PAYMENT: $500
MAXIMUM PURCHASE PAYMENT WITHOUT OUR APPROVAL: $1,000,000
FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is
guaranteed for one year from date of deposit. Subsequent renewal rates will be
guaranteed for a calendar quarter.
TRANSFERS: You may transfer up to 15% of the Fixed Account value to any of the
Funding Options twice per year during the 30 days following the semi-annual
Contract Date anniversary.
TRANSFER CHARGE: $0. We reserve the right to assess a transfer charge of up to
$10.00 on transfers exceeding 12 per year.
CONTRACT FEE: $30.00 per year. This fee will be waived if Your contract value is
equal to or greater than $40,000 on the date the charge is assessed. This fee is
assessed annually on fourth Friday of August. The contract fee will be prorated
upon full surrender or termination of the contract.
CONTINGENT DEFERRED SALES CHARGE: The contingent deferred sales charge is
calculated as a percentage of the Purchase Payments withdrawn on a first-in,
first-out basis. For the purpose of determining the contingent deferred sales
charge, the order of withdrawal will be deemed to be taken first from (a) any
Purchase Payments that are not subject to the contingent deferred sales charge;
(b) next from any remaining free withdrawal allowance (as described below) after
the reduction by the amount of (a); (c) next from remaining Purchase Payments
(on a first-in, first-out basis); and then (d) from contract earnings. Any free
withdrawals taken will not reduce Purchase Payments still subject to the
contingent deferred sales charge.
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE PERCENT OF PURCHASE PAYMENTS
PAYMENT WAS MADE (NOT PREVIOUSLY SURRENDERED)
<S> <C>
1 - 3 6%
4 - 5 5%
6 4%
7 3%
8 + 0%
</TABLE>
DISTRIBUTIONS ARE NOT SUBJECT TO THE CONTINGENT DEFERRED SALES CHARGE IF:
- - A life annuity option has begun;
- - Payments for a fixed period of at least 5 years' duration have begun;
- - The Annuitant dies;
- - Subject to Our approval, withdrawals of a specified amount are taken from
this contract to be deposited to other contracts issued by Us or Our
affiliates. Such withdrawals will be processed upon Our receipt of a
Written Request.
- - Taken as minimum distributions as defined by the IRS made under Our Managed
Distribution Program then in effect if elected by the Owner in a Written
Request.
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FREE WITHDRAWAL ALLOWANCE: After the first Contract Year, You may withdraw up to
15% of Your contract value annually as of the first Valuation Date of any given
Contract Year without imposition of the contingent deferred sales charge. (If
You have Purchase Payments no longer subject to the contingent deferred sales
charge, the maximum You may withdraw without the contingent deferred sales
charge is the greater of (a) the free withdrawal allowance, or (b) the total
amount of Purchase Payments no longer subject to a contingent deferred sales
charge. Note: Any free withdrawal taken will reduce Purchase Payments no longer
subject to a contingent deferred sales charge.) The available amount will be
calculated as of the end of the previous Contract Year. The free withdrawal
allowance applies to any partial withdrawals and to full withdrawals, except
those transferred directly to annuity contracts issued by unaffiliated carriers
and financial institutions. We allow the 15% free withdrawal allowance during
the first Contract Year if taken under the systematic withdrawal program.
SETTLEMENT OPTION ELECTION: You cannot elect a settlement option during the
first Contract Year.
TERMINATION: We reserve the right to terminate this contract when the contract
value is less than $2,000 and no Purchase Payments have been made to the
contract for two years.
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CONTRACT SPECIFICATIONS
SEPARATE ACCOUNT: THE TRAVELERS SEPARATE ACCOUNT TEN FOR VARIABLE ANNUITIES
INVESTMENT OPTIONS:
FUNDING OPTIONS:
Greenwich Street Series Fund
Equity Index Portfolio Class II
Appreciation Portfolio
Total Return Portfolio
Diversified Strategic Income Portfolio
Salomon Brothers Variable Series Fund Inc.
Investors Fund
Total Return Fund
Templeton Variable Products Series Fund
Franklin Small Cap Investments Fund Class II
Templeton International Fund Class II
The Travelers Series Trust
MFS Emerging Growth Portfolio
MFS Research Portfolio
Large Cap Portfolio
Equity Income Portfolio
Disciplined Small Cap
Strategic Stock
Travelers Series Fund, Inc.
Alliance Growth Portfolio
Smith Barney High Income Portfolio
Smith Barney Large Cap Growth Portfolio
Smith Barney Large Cap Value Portfolio
Smith Barney International Equity Portfolio
MFS Total Return Portfolio
Van Kampen Enterprise Portfolio
Smith Barney Money Market Portfolio
Travelers Managed Income Portfolio
American Variable Insurance Growth and Income Fund
American Variable Insurance Growth Fund
American Variable Insurance Global Fund
Alliance Premier Growth Fund
Smith Barney Aggressive Growth Fund
Smith Barney Mid Cap Fund
Van Kampen Emerging Growth
FIXED ACCOUNT
ADMINISTRATIVE CHARGE: .15% on an annual basis
MORTALITY AND EXPENSE RISK CHARGE: [ 1.15% ]on an annual basis assuming a
365-day year.
The Administrative Charge and Mortality and Expense Risk Charge result in a
daily deduction of [.00003562] per fund.
ASSUMED DAILY NET INVESTMENT FACTOR upon annuitization is 1.000081 for Funding
Options. When expressed on an annual basis this equals 3%.
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- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------
ACCUMULATION UNIT - an accounting unit of measure used to calculate the value of
this contract before annuity payments begin.
AGE - age last birthday.
ANNUITANT - the person on whose life the Maturity Date and annuity payments
depend.
ANNUITY UNIT - an accounting unit of measure used to calculate the amount of
annuity payments.
BENEFICIARY - the person named to receive any death benefits under this
contract.
CODE - the Internal Revenue Code of 1986, as amended, and all related laws and
regulations that are in effect during the term of this contract.
CONTRACT DATE - the date on which the contract is issued.
CONTRACT YEARS - twelve-month periods beginning with the Contract Date.
DEATH REPORT DATE - the Valuation Date coincident with or next following the day
on which We have received 1) Due Proof of Death and 2) a Written Request for an
election of a single sum payment or an alternate Settlement Option as described
in the contract.
DUE PROOF OF DEATH - (i) a copy of a certified death certificate; (ii) a copy of
a certified decree of a court of competent jurisdiction as to the finding of
death; (iii) a written statement by a medical doctor who attended the deceased;
or (iv) any other proof satisfactory to Us.
FIXED ACCOUNT(s) - an account(s) that consists of the assets under this contract
other than those in the Separate Account.
FUNDING OPTION - that portion of the assets of a Separate Account which is
allocated to a particular Underlying Fund.
INVESTMENT OPTIONS - the Funding Options and/or the Fixed Accounts under this
contract.
MATURITY DATE - the date on which the annuity payments are to begin.
NONQUALIFIED CONTRACT - A contract other than a Qualified Contract.
OUR OFFICE - the Home Office of The Travelers Life and Annuity Company or any
other office which We may designate for the purpose of administering this
contract.
PREMIUM TAX - the amount of tax, if any, charged by the state or municipality.
We will deduct any applicable Premium Tax from the contract value either upon
surrender, annuitization, death, or at the time a Purchase Payment is made, but
no earlier than when We have the liability under state law.
PURCHASE PAYMENT(s) - payments of premium You make to Us under this contract.
QUALIFIED CONTRACT - a contract used in a retirement plan or program that is
intended to qualify under Sections 401, 403, 408 or 414(d) of the Code.
RECORDED - a Written Request is Recorded when the information is noted in Our
file for this contract.
SEPARATE ACCOUNT(s) - those Separate Account(s) indicated in the Contract
Specifications that We established for this class of contracts and certain other
contracts.
SETTLEMENT OPTIONS - an annuity option elected under this contract.
TERMINATION - discontinuance of this contract by Us or by Your Written Request.
UNDERLYING FUND - an open-end diversified management investment company
indicated in the Contract Specifications, which serves as a variable investment
option under the Separate Account.
VALUATION DATE - a date on which an Investment Option is valued.
VALUATION PERIOD - the period between successive valuations.
WE, US, OUR - The Travelers Life and Annuity Company.
WRITTEN REQUEST - written information including requests for contract changes
sent to Us in a form and content satisfactory to Us and received at Our Office.
YOU, YOUR - the owner, including a joint owner.
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- --------------------------------------------------------------------------------
OWNER, BENEFICIARY AND ANNUITANT PROVISIONS
- --------------------------------------------------------------------------------
OWNER
This contract belongs to the owner shown on the Contract Specifications or to
any person subsequently named in a Written Request of transfer of owner as
provided below. As owner, You have sole power during the Annuitant's lifetime to
exercise any rights and to receive all benefits given in this contract provided
You have not named an irrevocable Beneficiary and provided the contract is not
assigned.
You will be the recipient of all payments while the Annuitant is alive unless
You direct them to an alternate recipient under a Recorded payment direction. An
alternate recipient under a payment direction does not become the owner. A
payment direction is revocable by You at any time by Written Request giving 30
days' advance notice.
JOINT OWNER
Joint Owners may be named in a Written Request prior to the Contract Date. Joint
owners may independently exercise transfers among Investment Options. All other
rights of ownership must be exercised by joint action. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights of a joint
owner end at death if another joint owner survives.
If the owner dies and is survived by the Annuitant before payment of an annuity
option begins, any surviving joint owner is the "designated beneficiary"
referred to in Section 72(s) of the Code, and his or her rights pre-empt those
of the Beneficiary named in a Written Request.
BENEFICIARY
The Beneficiary is the party named in a Written Request. The Beneficiary has the
right to receive any remaining contractual benefits upon the death of the
Annuitant, or under certain circumstances, upon the death of the owner. If there
is more than one Beneficiary surviving the Annuitant, the Beneficiaries will
share equally in benefits unless different shares are Recorded with Us by
Written Request prior to the death of the Annuitant.
If an owner dies and is survived by the Annuitant before payment of an annuity
option begins, any surviving joint owner is the "designated beneficiary"
referred to in Section 72(s) of the Code, and his or her rights pre-empt those
of the Beneficiary named in a Written Request.
Unless an irrevocable Beneficiary has been named, You have the right to change
any Beneficiary by Written Request during the lifetime of the Annuitant and
while the contract continues.
Once a change in Beneficiary is Recorded by Us, it will take effect as of the
date of the Written Request, subject to any payments made or other actions taken
by Us before the recording.
When the Annuitant dies, if no Beneficiary has been named by You, or if no
Beneficiary is living, We will pay the death benefit to You or Your estate.
ANNUITANT
The Annuitant is the individual shown on the Contract Specifications on whose
life the first annuity payment is made. The Annuitant may not be changed after
the Contract Date.
CONTINGENT ANNUITANT
You may name one individual as a contingent annuitant by Written Request prior
to the Contract Date. A contingent annuitant may not be changed, deleted or
added to the contract after the Contract Date. For purposes of this provision,
the owner cannot be the Annuitant.
If the Annuitant dies prior to the Maturity Date while this contract is in
effect and while the contingent annuitant is living:
a. the death benefit will not be payable upon the Annuitant's death;
b. the contingent annuitant becomes the Annuitant; and
c. all other rights and benefits provided by this contract will
continue in effect.
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<PAGE> 9
TRANSFER OF OWNER
You may transfer ownership by Written Request. You may not revoke any transfer
after the effective date. Once the transfer of owner is Recorded by Us, it will
take effect as of the date of Your Request, subject to any payments made or
other actions taken by Us before the recording.
Unless provided otherwise, a transfer of owner does not affect the interest of
any Beneficiary designated prior to the effective date of the transfer.
A transfer of ownership may have adverse tax consequences to You as the former
owner; please consult Your tax advisor.
ASSIGNMENT
You may collaterally assign ownership of all or a portion of this contract by
Written Request without the approval of any Beneficiary unless irrevocably
named. You may not exercise any rights of ownership while the assignment remains
in effect without the approval of the collateral assignee. We are not
responsible for the validity of any assignment. Once the collateral assignment
is Recorded by Us, it will take effect as of the date of Your Written Request,
subject to any payments made or other actions taken by Us before the Request is
received.
If a claim is made based on an assignment, We may require proof of interest of
the claimant. A Recorded assignment takes precedence over any rights of a
Beneficiary. Any amounts due under a Recorded assignment will be paid in a
single sum.
An assignment may have adverse tax consequences to You; please consult Your tax
advisor.
CREDITOR CLAIMS
To the extent permitted by law, no right or benefit of the owner or Beneficiary
under this contract shall be subject to the claims of creditors or any legal
process except as may be provided by an assignment.
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<PAGE> 10
- --------------------------------------------------------------------------------
PURCHASE PAYMENT AND VALUATION PROVISIONS
- --------------------------------------------------------------------------------
PURCHASE PAYMENT
PURCHASE PAYMENT
A Purchase Payment is any payment You make for this contract and the benefits it
provides. An initial lump sum Purchase Payment must be made to the contract and
is due and payable before the contract becomes effective. Each Purchase Payment
is payable as shown in the Contract Specifications to Us at Our Office or to one
of Our authorized representatives. No Purchase Payment after the initial
Purchase Payment is required to keep this contract in force, except as provided
in the Termination provision.
Net Purchase Payments are that part of Your Purchase Payments applied to the
contract value. A net Purchase Payment is equal to the Purchase Payment less any
applicable premium tax charge.
ALLOCATION OF PURCHASE PAYMENT
We will apply any net Purchase Payment to provide Accumulation Units of selected
Funding Options and/or the Fixed Account of this contract. The initial net
Purchase Payment will be applied within two business days following its receipt
in good order at Our Office. Subsequent net Purchase Payments will be applied on
the same business day if received in good order at Our Office on or before 4:00
pm., Eastern Standard Time. The net Purchase Payment will be allocated to the
Investment Options in the proportion specified by You for this contract. The
available Underlying Funds to which Funding Option assets are allocated are
shown on the Contract Specifications; Underlying Funds may be subsequently added
or deleted.
FUNDING OPTION VALUATION
NUMBER OF ACCUMULATION UNITS
The number of Accumulation Units to be credited to each Funding Option once a
Purchase Payment has been received by Us will be determined by dividing the net
Purchase Payment applied to that Funding Option by the then Accumulation Unit
value of that Funding Option.
ACCUMULATION UNIT VALUE
We determine the value of an Accumulation Unit in each Funding Option on each
Valuation Date by multiplying the value on the immediately preceding Valuation
Date by the net investment factor for that Funding Option for the Valuation
Period just ended.
The value of an Accumulation Unit on any date other than a Valuation Date will
be equal to its value as of the next Valuation Date.
NET INVESTMENT FACTOR
The net investment factor is a factor applied to measure the investment
performance of a Funding Option from one Valuation Period to the next. The net
investment factor for a Funding Option for any Valuation Period is equal to the
sum of 1.0000 plus the net investment rate.
Each Funding Option's net investment rate for a Valuation Period is equal to the
gross investment rate for that Funding Option, less the applicable Funding
Option deduction for the Valuation Period.
All Funding Option deductions are shown on the Contract Specifications.
The gross investment rate of a Funding Option for a Valuation Period is equal to
(1) divided by (2) where (1) is:
a) investment income, plus
b) capital gains and losses, whether realized or unrealized; less
c) a deduction for any tax levied against the Separate Account and its
Underlying Funds; and
(2) is the amount of the assets at the beginning of the Valuation Period.
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<PAGE> 11
The gross investment rate for a Funding Option may be either positive or
negative. Since a Funding Option is invested in shares of an Underlying Fund,
assets are based on the net asset value of the Underlying Fund. Investment
income includes any distribution whose ex-dividend date occurs during the
Valuation Period.
FIXED ACCOUNT VALUATION
NUMBER OF ACCUMULATION UNITS - We will determine the number of Accumulation
Units to be credited to the Fixed Account on receipt of a Purchase Payment by
dividing the net Purchase Payment applied to the Fixed Account by the then
dollar value of one Accumulation Unit of the Fixed Account.
ACCUMULATION UNIT VALUE - We determine the value of an Accumulation Unit in the
Fixed Account on any day by multiplying the value on the immediately preceding
day by the net interest factor for the day on which the value is being
determined.
NET INTEREST FACTOR - The net interest factor for any day is the guaranteed net
interest rate that is equivalent to an effective annual interest rate of 0.03
(3%), plus 1.0000. The method of crediting additional interest will be at Our
discretion.
Interest is declared in advance. Before annuity payments begin, We may credit
the Fixed Account with annual interest rates higher than the minimum guaranteed
interest rate of 3%. Interest rates may be higher or lower than the initial
interest rates, but not less than the minimum guaranteed interest rate of 3%.
Additional amounts may be credited by Us at Our discretion for the guaranteed
interest periods shown on the Contract Specifications.
TRANSFER BETWEEN INVESTMENT OPTIONS
You may transfer all or any part of the contract value from one Funding Option
to any other Funding Option at any time up to 30 days before the due date of the
first annuity payment. Additionally, You may transfer a part of the Fixed
Account value to any of the Funding Options, twice a year during the 30 days
following the semi-annual Contract Date Anniversary in the amount shown on the
Contract Specifications.
Amounts may generally be transferred from the Funding Options to the Fixed
Account at any time, up to 30 days before the due date of the first annuity
payment. Amounts previously transferred from the Fixed Account to the Funding
Options may not be transferred back to the Fixed Account for a period of at
least 6 months from the date of transfer. We reserve the right to limit the
number of transfers from one Funding Option to any other Funding Option or to
the Fixed Account. We will not limit these transfers to less than one in any
six-month period.
Transfers between Investment Options will result in the addition or deletion of
Accumulation Units having a total value equal to the dollar amount being
transferred to or from a particular Investment Option. The number of
Accumulation Units will be determined by using the Accumulation Unit Value of
the Investment Options involved as of the next valuation after We receive
notification of request for transfer. Transfers will be subject to any
applicable Transfer charge stated on the Contract Specifications.
CONTRACT VALUES
CONTRACT VALUE
The contract value of this contract on any date equals the sum of the
accumulated values in the Investment Options. The accumulated value in a Funding
Option equals the number of outstanding Accumulation Units credited to that
Funding Option, multiplied by the then Accumulation Unit Value for that Funding
Option.
The guaranteed value of the Fixed Account equals the accumulated value of the
Fixed Account calculated by using the guaranteed net interest factor. The
guaranteed values of the Fixed Account are shown in the Table of Values.
CONTRACT FEE
A contract fee in the amount and for the period shown on the Contract
Specifications will be deducted from the contract value to reimburse Us for
administrative expenses relating to the contract. The contract fee will be
deducted by surrendering on a pro rata basis Accumulation Units from all Funding
Options in which You have an interest. No contract fee will be deducted from the
Fixed Account.
We will deduct the charge on a pro rata basis if the contract has been in effect
for less than a full period on the date a contract fee is deducted. The contract
fee will also be prorated upon full surrender or termination of the contract.
CASH SURRENDER VALUE
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<PAGE> 12
The cash surrender value of this contract is equal to the contract value less
any contingent deferred sales charge which is shown on the Contract
Specifications and less any applicable contract fee and Premium Tax not
previously deducted.
The guaranteed cash surrender value of the Fixed Account equals the guaranteed
value of the Fixed Account less any contingent deferred sales charge which is
shown on the Contract Specifications, less any applicable Premium Tax not
previously deducted. For guaranteed cash surrender values of the Fixed Account,
see the Table of Values.
CASH SURRENDER
You may elect by Written Request to receive the cash surrender value of this
contract before the due date of the first annuity payment and without the
consent of any Beneficiary unless irrevocably named. You may elect either a full
or partial surrender of the cash surrender value. In the case of a full
surrender, this contract will be canceled. A partial surrender will result in a
reduction in Your contract value. If You have a balance in more than one
Investment Option, Your contract value will be reduced from all Your Investment
Options on a pro rata basis, unless You request otherwise.
The cash surrender value will be determined as of the next valuation following
receipt of Your Written Request. We may delay payment of the cash surrender
value of the Funding Options for a period of not more than five business days
after We receive Your Written Request. We may delay payment of the cash
surrender value of the Fixed Account for a period of not more than six months
after We receive Your Written Request.
CONTRACT CONTINUATION
Except as provided in the Termination provision, this contract does not require
continuing Purchase Payments and will automatically continue as a paid-up
contract during the lifetime of the Annuitant until the Maturity Date, or until
it is surrendered.
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- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
- --------------------------------------------------------------------------------
DEATH OF ANNUITANT
A death benefit is payable to the Beneficiary upon the death of the Annuitant
before the Maturity Date, unless there is a contingent annuitant surviving. A
death benefit is also payable under those Settlement Options which provide for
death benefits. We will pay the Beneficiary the death benefit in a single sum as
described below upon receiving Due Proof of Death. A Beneficiary may request
that a death benefit payable under this contract be applied to a Settlement
Option subject to the provisions of this contract and the current tax laws.
DEATH OF OWNER WITH ANNUITANT SURVIVING
If the owner is not the Annuitant, and the owner dies (including the first of
joint owners) before the Maturity Date and with the Annuitant surviving, We will
recalculate the value of the death benefit under the provisions of Death
Proceeds Prior To The Maturity Date below. The value of the death benefit, as
recalculated, will be paid in a single lump sum or by other election to the
party taking proceeds under the current tax laws. The party must take
distributions no later than under the applicable elections of that provision.
All references to Annuitant in the Death Proceeds Prior to Maturity Date
provision will be replaced with reference to the owner.
DEATH PROCEEDS PRIOR TO THE MATURITY DATE
If the Annuitant is younger than age 76 on the Contract Date, the death benefit
payable as of the Death Report Date will be the greatest of a), b) or c) below,
less any applicable premium tax and outstanding loans:
a) the contract value on the Death Report Date;
b) the total Purchase Payments less the total amount of any partial surrenders
made under this contract; or
c) the step-up value (if any, as described below).
STEP-UP VALUE
WHERE ANNUITANT WAS YOUNGER THAN AGE 68 ON THE CONTRACT DATE
A step-up value will be established on the seventh Contract Date
anniversary which occurs on or prior to the Death Report Date. The initial
step-up value will equal the contract value on that anniversary. Whenever a
Purchase Payment is made, the step-up value will be increased by the amount
of that Purchase Payment. Whenever a partial surrender is taken, the
step-up value will be reduced by a partial surrender reduction as described
below. On each Contract Date anniversary that occurs before the Annuitant's
76th birthday and before the Annuitant's death, if the contract value is
greater than the step-up value, the step-up value will be reset to equal
the contract value on that date. If the step-up value is greater than the
contract value, the step-up value will remain unchanged. The step-up value
will not be reduced on these anniversary recalculations (provided no
surrenders are made on that day). The only changes made to the step-up
value on or after the Annuitant's 76th birthday will be those related to
additional Purchase Payments or partial surrenders as described above. If
the Death Report Date is before the seventh Contract Date anniversary,
there is no step-up value.
WHERE ANNUITANT WAS AGE 68 THROUGH 75 ON THE CONTRACT DATE
A step-up value will be established on the seventh Contract Date
anniversary prior to the Death Report Date. The step-up value will equal
the contract value on that anniversary. Whenever a Purchase Payment is
made, the step-up value will be increased by the amount of that Purchase
Payment. Whenever a partial surrender is taken, the step-up value will be
reduced by a partial surrender reduction as described below. The only
changes made to the step-up value on or after the seventh Contract Date
anniversary will be those related to additional Purchase Payments or
partial surrenders as described above. If the Death Report Date is before
the seventh Contract Date anniversary, there is no step-up value.
PARTIAL SURRENDER REDUCTION
The partial surrender reduction is equal to 1) the step-up value in effect
immediately prior to the reduction for the partial surrender, multiplied
by 2) the amount of the partial surrender divided by 3) the contract
value immediately prior to the partial surrender.
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If the Annuitant is age 76 through 80 on the Contract Date, the death benefit
payable as of the Death Report Date will be the greater of a) or b) below, less
any applicable premium tax and outstanding loans:
a) the contract value on the Death Report Date; or
b) the total Purchase Payments less the total amount of any partial surrenders
made under this contract.
If the Annuitant is age 81 or older on the Contract Date, the death benefit
payable as of the Death Report Date will be the contract value on the Death
Report Date, less any applicable premium tax and outstanding loans.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the contract value on the Death Report Date, less any applicable premium tax and
outstanding loans.
DEATH PROCEEDS AFTER THE MATURITY DATE
If the Annuitant dies on or after the Maturity Date, We will pay the Beneficiary
a death benefit consisting of any benefit remaining under the annuity option
then in effect.
INTEREST ON DEATH PROCEEDS
Any interest on death proceeds will be paid only if required by law.
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- --------------------------------------------------------------------------------
SETTLEMENT PROVISIONS
- --------------------------------------------------------------------------------
MATURITY DATE
The Maturity Date is shown on the Contract Specifications. This is the date on
which We will begin paying to You the first of a series of annuity payments in
accordance with the Settlement Option elected by You. Annuity payments will
begin under this contract on the Maturity Date unless the contract has been
fully surrendered or the proceeds have been paid to the Beneficiary prior to
that date. We may require proof that the Annuitant is alive before annuity
payments are made. If no Maturity Date is specified, the automatic Maturity Date
will be the greater of when the Annuitant reaches age 95 or ten years after the
Contract Date.
Additionally, to the extent permitted by law, at least 30 days before the
original Maturity Date, You may change the Maturity Date by Written Request to
any time prior to the Annuitant's 95th birthday or to a later date with Our
consent.
ELECTION OF SETTLEMENT OPTIONS
On the Maturity Date, or other agreed upon date, We will pay the amount payable
under this contract to You in one lump sum or in accordance with the Settlement
Option elected by You, subject to the conditions shown on the Contract
Specifications. While the Annuitant is alive, You may change Your Settlement
Option election by Written Request, but only before the Maturity Date. Once
annuity payments have commenced, no further election changes are allowed.
During the Annuitant's lifetime, if no election has been made on the Maturity
Date, We will pay to You the first of a series of monthly annuity payments based
on the life of the Annuitant, in accordance with annuity Option 2, with 120
monthly payments assured.
MINIMUM AMOUNTS
The minimum amount that can be placed under a Settlement Option is $2,000 unless
We consent to a lesser amount. If any periodic payments due are less than $100,
We reserve the right to make annuity payments at less frequent intervals,
resulting in a payment of at least $100 per year.
ALLOCATION OF ANNUITY
At the time an annuity option is elected, the person electing the option may
further elect to have the cash surrender value applied to provide a variable
annuity, a fixed annuity or a combination of both.
Unless You elect otherwise, when annuity payments start, the value of a Funding
Option will be applied to provide an annuity that varies with the investment
experience of that same Funding Option and the value of the Fixed Account will
be applied to provide a fixed annuity.
Before You begin receiving annuity payments, You may transfer contract value
from one Investment Option to another, as described in the provision "Transfer
Between Accounts," in order to reallocate the basis on which annuity payments
will be determined. Once annuity payments start, You may, with Our consent,
change the allocation of Your values in each Funding Option.
VARIABLE ANNUITY
AMOUNT OF BASIC FIRST PAYMENT
The Life Annuity Tables are used to determine the basic first monthly annuity
payment. They show the dollar amount of the basic first monthly annuity payment
that can be purchased with each $1,000 applied. The actual amount of the basic
annuity payments in each Funding Option is found by multiplying the number of
Annuity Units credited to the contract in that Funding Option by the Annuity
Unit value of the Funding Option as of the date 14 days prior to the date on
which the payment is due. We reserve the right to require satisfactory proof of
the age of any person on whose life annuity payments are based before making the
first payment under any of these options.
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<PAGE> 16
ANNUITY UNIT VALUE
On any Valuation Date, the Annuity Unit value for a Funding Option equals the
Funding Option Annuity Unit value on the immediately preceding Valuation Date,
multiplied by the net investment factor for that Funding Option for the
Valuation Period just ended, divided by the assumed daily net investment factor.
The assumed daily net investment factor is shown on the Contract Specifications.
The value of an Annuity Unit as of any date other than a Valuation Date will be
equal to its value as of the next succeeding Valuation Date.
NUMBER OF ANNUITY UNITS
We determine the number of Annuity Units credited to this contract in each
Funding Option by dividing the basic first monthly annuity payment attributable
to that Funding Option by the Funding Option's Annuity Unit value as of 14 days
before the due date of the first annuity payment.
AMOUNT OF SECOND AND SUBSEQUENT BASIC PAYMENTS
The dollar amount of the second and subsequent payments may change from month to
month. The total amount of each annuity payment will be equal to the sum of the
basic payments in each Funding Option.
FIXED ANNUITY
A fixed annuity is an annuity with payments that remain fixed as to dollar
amount throughout the payment period. The Life Annuity Tables are used to
determine the monthly annuity payment. They show the dollar amount of monthly
annuity payment that can be purchased with each $1,000 applied. The amount
applied to the fixed annuity will be equal to the cash surrender value
applicable to the fixed annuity determined as of the date fixed annuity payments
start. If it would produce a larger payment, We agree that the fixed annuity
payment will be determined using the Life Annuity Tables in effect on the
Maturity Date.
ANNUITY OPTIONS
Subject to conditions stated in Elections Of Settlement Options and Minimum
Amounts, all or any part of the cash surrender value of this contract may be
paid under one or more of the annuity options below if available on the Maturity
Date. We may offer additional options.
OPTION 1. LIFE ANNUITY - NO REFUND
We will make monthly annuity payments during the lifetime of the person on whose
life the payments are based, ending with the last monthly payment preceding
death.
OPTION 2. LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED
We will make monthly annuity payments during the lifetime of the person on whose
life the payments are based. If at the death of that person, payments have been
made for less than 120, 180, or 240 months, as elected, We will continue to make
payments to the Beneficiary during the remainder of the period.
OPTION 3. JOINT AND LAST SURVIVOR LIFE ANNUITY
We will make monthly annuity payments during the joint lifetime of two persons
on whose lives payments are based and during the lifetime of the survivor. No
more payments will be made after the death of the survivor.
OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY - ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE
We will make monthly annuity payments during the joint lifetime of two persons
on whose lives payments are based. One of the two persons will be designated as
the primary payee. The other will be designated as the secondary payee. On the
death of the secondary payee, if survived by the primary payee, We will continue
to make monthly annuity payments to the primary payee in the same amount that
would have been payable during the joint lifetime of the two persons. On the
death of the primary payee, if survived by the secondary payee, We will continue
to make monthly annuity payments to the secondary payee in an amount equal to
50% of the payments that would have been made during the lifetime of the primary
payee. No further payments will be made following the death of the survivor.
OPTION 5. PAYMENTS FOR A FIXED PERIOD
We will make monthly payments for the period selected.
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<PAGE> 17
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------
THE CONTRACT
The entire contract between You and Us consists of the contract and all attached
pages.
CONTRACT CHANGES
The only way this contract may be changed is by a written endorsement signed by
one of Our officers.
SUBSTITUTION OF SEPARATE ACCOUNT, FUNDING OPTION OR UNDERLYING FUNDS
If it is not possible to continue to offer a Separate Account, Funding Option or
Underlying Fund, or, if, in Our judgment, it becomes inappropriate for the
purposes of this contract, We may substitute another Separate Account, Funding
Option or Underlying Fund without Your consent. Substitution may be made with
respect to both existing investments and investment of future premium payments.
However, no such substitution will be made without notice to You and without
prior approval of the Securities and Exchange Commission, to the extent required
by law.
MISSTATEMENT
If the Annuitant's sex, if applicable, or date of birth was misstated, all
benefits of this contract are what the Purchase Payments paid would have
purchased at the correct sex and age. Proof of the Annuitant's and owner's age
may be filed at any time at Our Office.
INCONTESTABILITY
We will not contest this contract from its Contract Date.
TERMINATION
We reserve the right to terminate this contract on any Valuation Date if the
contract value as of the date is less than the termination amount shown on the
Contract Specifications. Termination will not occur until 31 days after We have
mailed notice of termination to You at Your last known address. If this contract
is terminated, We will pay You the cash surrender value, if any.
REQUIRED REPORTS
We will furnish a report to the owner as often as required by law, but at least
once in each Contract Year before the due date of the first annuity payment. The
report will show the number of Accumulation Units credited to the contract in
each Investment Option and the corresponding Accumulation Unit value as of the
date of the report.
VOTING RIGHTS
If required by federal law, You may have the right to vote at the meetings of
the Shareholders of the Underlying Funds. If You have voting rights, We will
send a notice to You telling You the time and place of a meeting. The notice
will also explain matters to be voted upon and how many votes You may exercise.
MORTALITY AND EXPENSES
Our actual mortality and expense experience will not affect the amount of any
annuity payments or any other values under this contract.
NON-PARTICIPATING
This contract does not share in Our surplus earnings, so You will receive no
dividends under it.
TAXES BASED UPON PREMIUM OR VALUE
If there is a law or change in law assessing taxes against Us based upon the
premium or value of this contract, We reserve the right to charge You
proportionately for that tax. This would include a tax based upon Our realized
net capital gains in the Funding Options and on earnings in the Fixed Account,
on which We are not currently taxed.
CONFORMITY WITH STATE AND FEDERAL LAWS
This contract is governed by the law of the state in which it is delivered. Any
paid-up annuity, cash surrender or death benefits that are available under this
contract are not less than the minimum benefits required by the statutes of the
state in which this contract is delivered.
Upon receiving appropriate state approval, We may at any time make any changes,
including retroactive changes, in this contract to the extent that the change is
required to meet the requirements of any law or regulation issued by an
governmental agency to which We or You are subject.
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<PAGE> 18
EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
is closed; (2) when trading on the Exchange is restricted; (3) when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the securities held in the Funding Options is not reasonably practicable or
it is not reasonably practicable to determine the value of the Funding Option's
net assets, or (4) during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of security holders. Any
provision of this contract which specifies a Valuation Date will be superseded
by this Emergency Procedure.
RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNTS AND FUNDING OPTIONS
We will have exclusive and absolute ownership and control of the assets of Our
Separate Account and the Funding Options. That portion of the assets of a
Separate Account or Funding Option equal to the reserves and other contract
liabilities with respect to such Separate Account or Funding Option shall not be
chargeable with liabilities arising out of any other business We conduct. Our
determination of the value of an Accumulation Unit and an Annuity Unit by the
method described in this contract will be conclusive.
REDUCTION OR ELIMINATION OF CONTRACT CHARGES
All charges and fees under the contract may be reduced or eliminated when
certain sales or administration of the contract result in savings or reduction
of expenses, and/or risks.
TRANSFERS TO OTHER CONTRACTS ISSUED BY US
Under specific conditions, We may allow You to transfer funds held by You to
another contract issued by Us without incurring charges deducted upon surrender
as shown on the Contract Specifications page. Once the transfer is complete and
We have established a new contract at Your direction, new deferred sales charges
or surrender charges may apply to the new contract in accordance with the
provisions of such contract.
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<PAGE> 19
TABLE OF VALUES
GUARANTEED VALUES OF THE FIXED ACCOUNT PER $1,000 OF NET PURCHASE PAYMENT
APPLIED
<TABLE>
<CAPTION>
NO. OF
YEARS FROM GUARANTEED NO. OF YEARS FROM
DATE PAYMENT GUARANTEED CASH SURRENDER DATE PAYMENT IS GUARANTEED CASH
IS APPLIED VALUE VALUE APPLIED GUARANTEED VALUE SURRENDER VALUE
<S> <C> <C> <C> <C> <C>
1 1030 970 36 2898 2898
2 1060 1000 37 2985 2985
3 1092 1032 38 3074 3074
4 1125 1075 39 3167 3167
5 1159 1109 40 3262 3262
6 1194 1154 41 3359 3359
7 1229 1199 42 3460 3460
8 1266 1266 43 3564 3564
9 1304 1304 44 3671 3671
10 1343 1343 45 3781 3781
11 1384 1384 46 3895 3895
12 1425 1425 47 4011 4011
13 1468 1468 48 4132 4132
14 1512 1512 49 4256 4256
15 1557 1557 50 4383 4383
16 1604 1604 51 4515 4515
17 1652 1652 52 4650 4650
18 1702 1702 53 4790 4790
19 1753 1753 54 4934 4934
20 1806 1806 55 5082 5082
21 1860 1860 56 5234 5234
22 1916 1916 57 5391 5391
23 1973 1973 58 5553 5553
24 2032 2032 59 5720 5720
25 2093 2093 60 5891 5891
26 2156 2156 61 6068 6068
27 2221 2221 62 6250 6250
28 2287 2287 63 6437 6437
29 2356 2356 64 6631 6631
30 2427 2427 65 6829 6829
31 2500 2500 66 7034 7034
32 2575 2575 67 7245 7245
33 2652 2652 68 7463 7463
34 2731 2731 69 7687 7687
35 2813 2813 70 7917 7917
</TABLE>
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<PAGE> 20
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, AND 2- SINGLE LIFE ANNUITIES
THIS TABLE WILL BE USED FOR NONQUALIFIED CONTRACTS
<TABLE>
<CAPTION>
MALE NUMBER OF MONTHLY PAYMENTS GUARANTEED
ADJUSTED NONE 120 180 240
AGE
<S> <C> <C> <C> <C>
45 3.59 3.57 3.56 3.53
46 3.64 3.62 3.60 3.57
47 3.69 3.67 3.65 3.62
48 3.75 3.73 3.70 3.67
49 3.81 3.78 3.76 3.71
50 3.87 3.84 3.81 3.77
51 3.93 3.90 3.87 3.82
52 4.00 3.97 3.93 3.87
53 4.07 4.04 3.99 3.93
54 4.15 4.11 4.06 3.99
55 4.23 4.19 4.13 4.05
56 4.32 4.27 4.20 4.11
57 4.41 4.35 4.28 4.17
58 4.50 4.44 4.36 4.24
59 4.61 4.53 4.44 4.31
60 4.72 4.63 4.53 4.37
61 4.83 4.74 4.62 4.44
62 4.96 4.85 4.71 4.51
63 5.09 4.97 4.81 4.58
64 5.24 5.09 4.90 4.65
65 5.39 5.22 5.01 4.72
66 5.56 5.36 5.11 4.79
67 5.73 5.50 5.21 4.86
68 5.92 5.64 5.32 4.93
69 6.12 5.80 5.43 4.99
70 6.34 5.96 5.53 5.05
71 6.56 6.12 5.64 5.11
72 6.81 6.29 5.75 5.16
73 7.07 6.46 5.85 5.21
74 7.35 6.64 5.95 5.26
75 7.64 6.82 6.05 5.30
</TABLE>
Dollar amounts of the monthly annuity payments for the first and second options
are based on the Annuity 2000 Table. The above tables assume a year 2000 issue,
and project mortality improvements into the future using Projection Scale G.
These tables assume a net investment rate of 3% per Annum assuming a 365 day
year.
Calendar Year in which 1st payment is due:
Adjusted age is actual age:
<TABLE>
<S> <C> <C> <C> <C>
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
</TABLE>
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<PAGE> 21
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, AND 2- SINGLE LIFE ANNUITIES
THIS TABLE WILL BE USED FOR NONQUALIFIED CONTRACTS
<TABLE>
<CAPTION>
FEMALE NUMBER OF MONTHLY PAYMENTS GUARANTEED
ADJUSTED NONE 120 180 240
AGE
<S> <C> <C> <C> <C>
45 3.39 3.39 3.38 3.37
46 3.43 3.43 3.42 3.40
47 3.48 3.47 3.46 3.44
48 3.52 3.52 3.50 3.48
49 3.57 3.56 3.55 3.53
50 3.62 3.61 3.60 3.57
51 3.68 3.66 3.65 3.62
52 3.74 3.72 3.70 3.67
53 3.80 3.78 3.76 3.72
54 3.86 3.84 3.81 3.78
55 3.93 3.90 3.88 3.83
56 4.00 3.97 3.94 3.89
57 4.07 4.05 4.01 3.95
58 4.15 4.12 4.08 4.01
59 4.24 4.20 4.15 4.08
60 4.33 4.29 4.23 4.15
61 4.43 4.38 4.32 4.22
62 4.53 4.48 4.40 4.29
63 4.64 4.58 4.49 4.36
64 4.76 4.69 4.59 4.44
65 4.89 4.80 4.69 4.52
66 5.02 4.92 4.79 4.59
67 5.17 5.05 4.89 4.67
68 5.32 5.19 5.00 4.75
69 5.49 5.33 5.12 4.82
70 5.68 5.48 5.23 4.90
71 5.87 5.64 5.35 4.97
72 6.09 5.81 5.47 5.04
73 6.32 5.99 5.59 5.10
74 6.57 6.18 5.71 5.16
75 6.84 6.37 5.83 5.22
</TABLE>
Dollar amounts of the monthly annuity payments for the first and second options
are based on the Annuity 2000 Table. The above tables assume a year 2000 issue,
and project mortality improvements into the future using Projection Scale G.
These tables assume a net investment rate of 3% per Annum assuming a 365 day
year.
Calendar Year in which 1st payment is due:
Adjusted age is actual age:
<TABLE>
<S> <C> <C> <C> <C>
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
</TABLE>
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<PAGE> 22
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, AND 2- SINGLE LIFE ANNUITIES
THIS TABLE WILL BE USED FOR QUALIFIED CONTRACTS
<TABLE>
<CAPTION>
UNISEX NUMBER OF MONTHLY PAYMENTS GUARANTEED
ADJUSTED NONE 120 180 240
AGE
<S> <C> <C> <C> <C>
45 3.49 3.48 3.47 3.45
46 3.54 3.53 3.51 3.49
47 3.59 3.57 3.56 3.53
48 3.64 3.62 3.60 3.58
49 3.69 3.68 3.65 3.62
50 3.75 3.73 3.71 3.67
51 3.81 3.79 3.76 3.72
52 3.87 3.85 3.82 3.77
53 3.94 3.91 3.88 3.83
54 4.01 3.98 3.94 3.88
55 4.08 4.05 4.01 3.94
56 4.16 4.12 4.07 4.00
57 4.24 4.20 4.15 4.07
58 4.33 4.28 4.22 4.13
59 4.42 4.37 4.30 4.20
60 4.52 4.46 4.38 4.27
61 4.63 4.56 4.47 4.34
62 4.75 4.67 4.56 4.41
63 4.87 4.78 4.65 4.48
64 5.00 4.89 4.75 4.55
65 5.14 5.01 4.85 4.62
66 5.29 5.14 4.95 4.70
67 5.45 5.28 5.06 4.77
68 5.62 5.42 5.17 4.84
69 5.81 5.57 5.28 4.91
70 6.00 5.72 5.39 4.98
71 6.22 5.89 5.50 5.04
72 6.44 6.06 5.62 5.10
73 6.69 6.23 5.73 5.16
74 6.95 6.41 5.84 5.21
75 7.24 6.60 5.95 5.26
</TABLE>
Dollar amounts of the monthly annuity payments for the first and second options
are based on the Annuity 2000 Table (blended 50%/50% female/male). The above
tables assume a year 2000 issue, and project mortality improvements into the
future using Projection Scale G. These tables assume a net investment rate of 3%
per Annum assuming a 365 day year.
Calendar Year in which 1st payment is due:
Adjusted age is Actual age:
<TABLE>
<S> <C> <C> <C> <C>
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
</TABLE>
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<PAGE> 23
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THESE TABLES WILL BE USED FOR NONQUALIFIED CONTRACTS
OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
MALE
ADJUSTED FEMALE ADJUSTED AGE
AGE 45 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C> <C>
45 3.18 3.27 3.35 3.42 3.47 3.51 3.54
50 3.24 3.36 3.47 3.58 3.66 3.73 3.78
55 3.29 3.43 3.59 3.74 3.87 3.99 4.08
60 3.32 3.49 3.69 3.89 4.09 4.28 4.43
65 3.35 3.54 3.76 4.02 4.31 4.59 4.84
70 3.36 3.57 3.82 4.13 4.49 4.89 5.29
75 3.37 3.59 3.86 4.21 4.63 5.14 5.71
</TABLE>
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
REDUCED BY 50% ON DEATH OF PRIMARY PAYEE
<TABLE>
<CAPTION>
AGE OF PRIMARY MALE
AND SECONDARY FEMALE DOLLAR AMOUNT
<S> <C>
45 3.37
50 3.60
55 3.88
60 4.26
65 4.79
70 5.52
75 6.54
</TABLE>
Dollar amounts of the monthly annuity payments for the third and fourth options
are based on the Annuity 2000 Table. The above tables assume a year 2000 issue,
and project mortality improvements into the future using Projection Scale G.
These tables assume a net investment rate of 3% per Annum assuming a 365 day
year.
Calendar Year in which 1st payment is due:
Adjusted age is actual age:
<TABLE>
<S> <C> <C> <C> <C>
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
</TABLE>
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<PAGE> 24
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THESE TABLES WILL BE USED FOR QUALIFIED CONTRACTS
OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
UNISEX
ADJUSTED UNISEX ADJUSTED AGE
AGE 45 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C> <C>
45 3.19 3.26 3.33 3.38 3.41 3.44 3.46
50 3.26 3.37 3.46 3.54 3.61 3.66 3.69
55 3.33 3.46 3.60 3.72 3.83 3.91 3.98
60 3.38 3.54 3.72 3.90 4.07 4.22 4.33
65 3.41 3.61 3.83 4.07 4.32 4.56 4.75
70 3.44 3.66 3.91 4.22 4.56 4.91 5.23
75 3.46 3.69 3.98 4.33 4.75 5.23 5.74
</TABLE>
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
REDUCED BY 50% ON DEATH OF PRIMARY PAYEE
<TABLE>
<CAPTION>
AGE OF PRIMARY
AND SECONDARY UNISEX DOLLAR AMOUNT
<S> <C>
45 3.34
50 3.55
55 3.82
60 4.19
65 4.70
70 5.40
75 6.40
</TABLE>
Dollar amounts of the monthly annuity payments for the third and fourth options
are based on the Annuity 2000 Table (blended 50%/50% female/male). The above
tables assume a year 2000 issue, and project mortality improvements into the
future using Projection Scale G. These tables assume a net investment rate of 3%
per Annum assuming a 365 day year.
Calendar Year in which 1st payment is due:
Adjusted age is actual age:
<TABLE>
<S> <C> <C> <C> <C>
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
</TABLE>
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<PAGE> 25
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTION 5 - PAYMENTS FOR A FIXED PERIOD
<TABLE>
<CAPTION>
MONTHLY MONTHLY
NUMBER OF PAYMENT NUMBER OF PAYMENT
YEARS AMOUNT YEARS AMOUNT
<S> <C> <C> <C>
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
</TABLE>
The dollar amounts of the monthly annuity payments for the fifth option are
based on a net investment rate of 3% per annum assuming a 365 day year.
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<PAGE> 28
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
ELECTIVE OPTIONS NON-PARTICIPATING
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON
THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY
INCREASE OR DECREASE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
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<PAGE> 29
DEATH BENEFIT ENDORSEMENT II
THIS ENDORSEMENT IS NOT AVAILABLE WHEN EITHER THE ANNUITANT OR OWNER IS AGE 76
OR OLDER ON THE CONTRACT DATE.
This endorsement is made a part of this contract as of the date it is attached
to the contract.
The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:
DEATH PROCEEDS PRIOR TO MATURITY DATE
If the Annuitant dies before age 80 and before the Maturity Date, the death
benefit payable as of the Death Report Date will be the greatest of a), b) or c)
below, less any applicable premium tax and outstanding loans:
a) the contract value on the Death Report Date
b) the roll-up death benefit value (as described below) available at the Death
Report Date; or
c) the step-up value (if any, as described below).
If the Annuitant dies on or after age 80 and before the Maturity Date, the death
benefit payable as of the Death Report Date will be the greatest of a), b) or c)
below, less any applicable premium tax and outstanding loans:
a) the contract value on the Death Report Date
b) the roll-up death benefit value (as described below) available at the
Annuitant's 80th birthday, plus any additional Purchase Payments and minus
any partial surrender reductions (as described below) which occur after the
Annuitant's 80th birthday; or
c) the step-up value (if any, as described below).
ROLL-UP DEATH BENEFIT VALUE
On the Contract Date, the roll-up death benefit value is equal to the
Purchase Payment. On each Contract Date anniversary, the roll-up death
benefit value will be recalculated to equal a) plus b) minus c),
increased by 5%, where:
a) is the Roll-Up Death Benefit as of the previous Contract Date
anniversary
b) any Purchase Payments made during the previous Contract Year
c) any partial surrender reductions (as described below) during the
previous Contract Year
On dates other than the Contract Date anniversary, the roll-up death
benefit value will equal a) plus b) minus c), where:
a) the roll-up death benefit value on the previous Contract Date
anniversary
b) any Purchase Payments made since the previous Contract Date
anniversary
c) any partial surrender reductions (as described below) since the
previous Contract Date anniversary.
The maximum roll-up death benefit equals 200% of the difference between all
Purchase Payments and all partial surrender reductions (as described
below).
STEP-UP VALUE
A step-up value will be established on each Contract Date anniversary which
occurs on or prior to the Death Report Date. The initial step-up value will
equal the contract value on that anniversary. Whenever a Purchase Payment
is made, the step-up value will be increased by
TL-22272 TLAC Ed. 07-99
<PAGE> 30
the amount of that Purchase Payment. Whenever a partial surrender is taken,
the step-up value will be reduced by a partial surrender reduction as
described below. On each Contract Date anniversary that occurs before the
Annuitant's 80th birthday and before the Annuitant's death, if the contract
value is greater than the step-up value, the step-up value will be reset to
equal the contract value on that date. If the step-up value is greater than
the contract value, the step-up value will remain unchanged. The step-up
value will not be reduced on these anniversary recalculations (provided no
surrenders are made on that day). The only changes made to the step-up
value on or after the Annuitant's 80th birthday will be those related to
additional Purchase Payments or partial surrenders as described above. If
the Death Report Date is before the first Contract Date anniversary, there
is no step-up value.
PARTIAL SURRENDER REDUCTION
The partial surrender reduction is equal to 1) the death benefit value
(contract, step-up or roll-up value) in effect immediately prior to the
reduction for the partial surrender, multiplied by 2) the amount of the
partial surrender divided by 3) the contract value immediately prior to the
partial surrender.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the contract value on the Death Report Date, less any applicable premium tax and
outstanding loans.
THE TRAVELERS LIFE AND ANNUITY COMPANY
[SIG]
Chairman
TL-22272 TLAC Ed. 07-99
<PAGE> 31
DEATH BENEFIT ENDORSEMENT I
THIS ENDORSEMENT IS NOT AVAILABLE WHEN EITHER THE ANNUITANT OR OWNER IS AGE 76
OR OLDER ON THE CONTRACT DATE.
This endorsement is made a part of this contract as of the date it is attached
to the contract.
The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:
DEATH PROCEEDS PRIOR TO MATURITY DATE
If the Annuitant dies before the Maturity Date, the death benefit payable as of
the Death Report Date will be the greatest of a), b) or c) below, less any
applicable premium tax and outstanding loans:
a) the contract value on the Death Report Date
b) the total Purchase Payments less the total amount of any partial surrenders
made under this contract; or
c) the step-up value (if any, as described below).
STEP-UP VALUE
A step-up value will be established on each Contract Date anniversary which
occurs on or prior to the Death Report Date. The initial step-up value will
equal the contract value on that anniversary. Whenever a Purchase Payment
is made, the step-up value will be increased by the amount of that Purchase
Payment. Whenever a partial surrender is taken, the step-up value will be
reduced by a partial surrender reduction as described below. On each
Contract Date anniversary that occurs before the Annuitant's 80th birthday
and before the Annuitant's death, if the contract value is greater than the
step-up value, the step-up value will be reset to equal the contract value
on that date. If the step-up value is greater than the contract value, the
step-up value will remain unchanged. The step-up value will not be reduced
on these anniversary recalculations (provided no surrenders are made on
that day). The only changes made to the step-up value on or after the
Annuitant's 80th birthday will be those related to additional Purchase
Payments or partial surrenders as described above. If the Death Report Date
is before the first Contract Date anniversary, there is no step-up value.
PARTIAL SURRENDER REDUCTION
The partial surrender reduction is equal to 1) the step-up value in effect
immediately prior to the reduction for the partial surrender, multiplied by
2) the amount of the partial surrender divided by 3) the contract value
immediately prior to the partial surrender.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the contract value on the Death Report Date, less any applicable premium tax and
outstanding loans.
THE TRAVELERS LIFE AND ANNUITY COMPANY
[SIG]
President
TL-22271 TLAC Ed. 07-99
<PAGE> 1
VINTAGE II
[TRAVELERS INSURANCE COMPANY LOGO] DATA COLLECTION FORM
The Travelers Life and Annuity Company
One Tower Square - Hartford, CT 06183-9061 [ ] 1-800-842-8573
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
OWNER INFORMATION (The Owner will be used for all correspondence and tax reporting purposes)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Name Sex [ ] M [ ] F Date of Birth (DOB):
- ------------------------------------------------------------------------------------------------------------------------------------
Address
- ------------------------------------------------------------------------------------------------------------------------------------
SS# U.S. Citizen [] Y [] N (If no, indicate country of citizenship ____________)
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Succeeding Owner [ ] Joint Owner (Nonqualified only) Name:
- ------------------------------------------------------------------------------------------------------------------------------------
Relationship to Owner: SS# DOB
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ANNUITANT (IF DIFFERENT FROM OWNER) (If no Annuitant is specified, the Owner stated above will be the Annuitant.)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name
- ------------------------------------------------------------------------------------------------------------------------------------
SS# Sex [] M [] F DOB:
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Contingent Annuitant (Nonqualified only) Name:
- ------------------------------------------------------------------------------------------------------------------------------------
SS# Sex [] M [] F DOB:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
BENEFICIARY INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
PRIMARY CONTINGENT FULL NAME RELATIONSHIP TO OWNER % TO RECEIVE
- ------------------------------------------------------------------------------------------------------------------------------------
[]
- ------------------------------------------------------------------------------------------------------------------------------------
[] []
- ------------------------------------------------------------------------------------------------------------------------------------
[] []
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TYPE OF PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[] Nonqualified [] Roth IRA Rollover/Transfer INITIAL PURCHASE
[] 403(b) TSA Rollover [] Roth IRA Conversion PAYMENT
[] IRA Rollover/Transfer [] Other: ______________________ ----------------
$ _______________
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
REPLACEMENT INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Will the contract applied for replace any existing annuity contract or life insurance policy? [] Y [] N
If yes, please specify company name & contract #: _________________________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[] Standard [] Annual Step Up [] Roll-Up (If no option is checked, you will receive the Standard Death Benefit)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT OPTIONS (total must equal 100%)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FUND PERCENTAGE FUND PERCENTAGE
<S> <C><C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Growth % Smith Barney Aggressive Growth Fund %
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Premier Growth Fund Class B % Smith Barney Diversified Strategic Income Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
American Funds Growth & Income Fund % Smith Barney Mid Cap Fund %
- ------------------------------------------------------------------------------------------------------------------------------------
American Funds Global Growth Fund % Smith Barney High Income Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
American Funds Growth Fund % Smith Barney International Equity Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio Class II % Smith Barney Large Cap Growth Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
Equity Income Portfolio (Fidelity) % Smith Barney Large Cap Value Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II ContraFund (Fidelity) % Smith Barney Money Market Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II % Strategic Stock Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) % Templeton International Fund Class II %
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Portfolio % Total Return Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio % Travelers Disciplined Small Cap Stock Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio % Travelers Managed Income Portfolio %
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Capital Fund % Van Kampen Emerging Growth %
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund % Van Kampen Enterprise Port. %
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Small Cap Fund % Travelers Fixed Account %
- ------------------------------------------------------------------------------------------------------------------------------------
Smith Barney Appreciation Portfolio % Total %
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-21791FL VII-SB; Rev. 8/99
<PAGE> 2
- --------------------------------------------------------------------------------
[] No - I do choose to lock in the current Fixed Account rate. I understand
that I will receive the rate in effect when Travelers receives the
purchase payment. (default option)
[] Yes - I want to lock in at the current Fixed Account rate in effect on the
date I signed this application. I have been informed of this rate and
am aware of the Rate Lock guarantee period. (Guaranteed Rate held for
45 days.)
-----------------------------
(CLIENT SIGNATURE - REQUIRED)
- --------------------------------------------------------------------------------
SPECIAL REMARKS:
- --------------------------------------------------------------------------------
ACKNOWLEDGMENT
- --------------------------------------------------------------------------------
NOTE: Any person who knowingly and with intent to injure, defraud, or deceive
any insurer, or who files a statement of claim or an application containing any
false, incomplete or misleading information, is guilty of a felony of the third
degree.
I understand the contract will take effect when the first purchase payment is
received and the application is approved in the Travelers Home Office. I
understand that annuity payments and termination values provided by this
contract are variable and are not guaranteed as to a fixed dollar amount. No
representation is authorized to make changes to the contract or application. I
acknowledge receipt of a current prospectus.
In Nonqualified situations if the owner is a trust, I/we hereby certify the
trust is solely for the benefit of a natural person and not a Deferred
Compensation Plan.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Owner's Signature Date:
- ------------------------------------------------------------------------------------------------------------------------------------
Joint Owner's Signature Date:
- ------------------------------------------------------------------------------------------------------------------------------------
City, State where signed:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
REPRESENTATIVE USE ONLY
- --------------------------------------------------------------------------------
I acknowledge that all data representations and signatures were recorded by me
or in my presence in response to my inquiry and request and that all such
representations and signatures are accurate and valid to the best of my
knowledge and belief. Will the contract applied for replace any existing annuity
contract or life insurance policy? [] Y [] N
Please Include: Phone #: ( ) _________________ Fax #: ( ) __________
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Representative's Name Date
- -----------------------------------------------------------------------------------------------------------------------------------
Representative's Signature SS# License #
- -----------------------------------------------------------------------------------------------------------------------------------
Broker/Dealer SELECT ONE: [ ] A [ ] B [ ] C
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
L-21791FL VII-SB; Rev. 8/99
<PAGE> 1
Consent of Independent Certified Public Accountants
Board of Directors
The Travelers Life and Annuity Company
We consent to the use of our report included herein and to the reference to our
firm as experts under the heading "Independent Accountants".
Hartford, Connecticut
September 23, 1999
<PAGE> 1
Exhibit 13
THE TRAVELERS SEPARATE ACCOUNT TEN FOR VARIABLE ANNUITIES
SCHEDULE FOR COMPUTATION OF TOTAL RETURN CALCULATIONS
The standardized and nonstandardized average annual total returns are computed
according to the formula described below. A hypothetical initial invetment of
$1,000 is applied to the Funding Option, and then related to ending redeemable
values as of the most recent fiscal year end, for the calendar year-to-date
(nonstandardized only), and over a 1-year, 3-year (nonstandardized only),
5-year, and 10-year period, or since inception if a Funding Option has not been
in exixtence for one of the prescribed periods.
T=(ERV/P)1/n-1 where:
T = average annual total return
P = a hypothetical initial payment of $1,000
n = the applicable year (1,3,5,10) or portion thereof
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of each of the periods
Both the standardized and nonstandardized performance returns reflect the
deduction for the management fees and other expenses for a Funding Option, the
mortality and expense risk charge(s) and the administrative expense charge.
For Funding Options that were in existence prior to the date they became
available under the Separate Account, the standardized average total return
quotations may be accompanied by returns showing the investment performance
that such Fund Options would have achieved (reduced by applicable charges/fees)
had they been held under the Contract for the period quoted. The total return
quotations are based on historical earnings and are not necessarily
representative of future performance.
Standardized Method
- -------------------
The standardized returns take into consideration all fees and/or charges
applicable to the Funding Option or contract, for both the standard death
benefit and the enhanced death benefit. Standardized performance figures will
only be available after the product offered through the Separate Account has
been operating.
Under the standardized method, the anual contract administrative charge is
reflected in the calculation and is assumed to be deducted at the end of August
each year. It is expressed as a percentage of assets based on the actual fees
collected (or, anticipated, if a new product) divided by the average net assets
(or, anticipated average net assets, if a new product) for contracts sold under
the prospectus for each year for which performance is shown.
Nonstandardized Method
- ----------------------
Nonstandardized returns do not reflect the deduction of any fees or charges,
except the contingent deferred sales charge, which, if reflected, would
decrease the level of performance shown.
For a Schedule of the Computation of the Historical Total Return Quotations,
see attached.
<PAGE> 2
EXHIBIT 13
1.30% M&E
<TABLE>
<CAPTION>
Fund Name Fund Code Inception Date Pricing Track 12/31/98 12/31/97
<S> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio KM 6/20/94 pr1 1.176816 1.134917
Alliance Growth Portfolio KA 6/20/94 pr1 2.886209 2.265743
Smith Barney Total Return Portfolio KR 12/3/93 pr1 1.9934 1.92402
Salomon Brothers Total Return Fund AE 2/17/98 pr1 1.044597 #N/A
MFS Research Portfolio DR 3/23/98 pr1 1.048658 #N/A
MFS Total Return Portfolio KT 6/20/94 pr1 1.808358 1.640607
Smith Barney High Income Portfolio KH 6/22/94 pr1 1.443438 1.455897
Smith Barney International Equity Portfolio KI 6/20/94 pr1 1.297759 1.234592
Smith Barney Large Cap Value Portfolio HJ 6/20/94 pr1 2.063779 1.903771
Van Kampen Enterprise Portfolio KE 6/21/94 pr1 2.585794 2.093622
Travelers Managed Income Portfolio KF 6/28/94 pr1 1.301625 1.255007
Strategic Stock Portfolio AC 5/1/98 pr1 0.934805 #N/A
Smith Barney Large Cap Growth Portfolio AB 5/1/98 pr1 1.235609 #N/A
Smith Barney Appreciation Portfolio WL 10/16/91 pr1 2.498137 2.124446
Smith Barney Diversified Strategic Income Port. 1O 10/16/91 pr1 1.521692 1.448808
Salomon Brothers Capital Fund C3 2/17/98 pr1 1.166382 #N/A
Salomon Brothers Investors Fund C2 2/17/98 pr1 1.093318 #N/A
Equity Income Portfolio 1F 8/30/96 pr1 1.611529 1.452389
Travelers Disciplined Small Cap Stock Portfolio AN 5/1/98 pr1 0.881495 #N/A
Van Kampen Emerging Growth 1W 7/3/95 pr1 2.163057 1.593169
Large Cap Portfolio 1G 8/30/96 pr1 1.839409 1.374552
MFS Emerging Growth Portfolio KB 8/30/96 pr1 1.673417 1.262236
Franklin Small Cap Investments Fund Class II UW 5/1/98 pr1 0.914761 #N/A
Templeton International Fund Class II VG 5/1/92 pr1 2.209626 2.05383
Smith Barney Equity Index Portfolio Class II GF 11/30/91 pr1 3.588029 2.826576
American Funds Growth-Income II 2/28/85 pr1 6.348063 5.445303
Alliance Premier Growth Portfolio PF 6/26/92 pr1 4.025151 2.755801
VIP II Contrafund - SC FC 1/31/95 pr1 2.631829 2.051522
Salomon Brothers Small Cap Growth Fund SS 9/1/99 pr1 #N/A #N/A
Smith Barney Mid Cap Portfolio SM 9/2/99 pr1 #N/A #N/A
Smith Barney Aggressive Growth Portfolio SG 9/3/99 pr1 #N/A #N/A
American Funds Growth IG 2/8/84 pr1 8.923848 6.689891
American Funds Global Growth IL 4/30/97 pr1 1.362995 1.073323
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Fund Name 12/31/96 12/31/95 12/31/94 12/31/93 12/31/88
<S> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio 1.094055 1.05609 #N/A #N/A #N/A
Alliance Growth Portfolio 1.778982 1.393039 #N/A #N/A #N/A
Smith Barney Total Return Portfolio 1.668206 1.347564 #N/A 1.026195 #N/A
Salomon Brothers Total Return Fund #N/A #N/A #N/A #N/A #N/A
MFS Research Portfolio #N/A #N/A #N/A #N/A #N/A
MFS Total Return Portfolio 1.371462 1.213522 #N/A #N/A #N/A
Smith Barney High Income Portfolio 1.295466 1.160047 #N/A #N/A #N/A
Smith Barney International Equity Portfolio 1.217863 1.048186 #N/A #N/A #N/A
Smith Barney Large Cap Value Portfolio 1.523084 1.288299 #N/A #N/A #N/A
Van Kampen Enterprise Portfolio 1.649261 1.359266 #N/A #N/A #N/A
Travelers Managed Income Portfolio 1.158728 1.139554 #N/A #N/A #N/A
Strategic Stock Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 1.702546 1.438439 1.131038 1.157819 #N/A
Smith Barney Diversified Strategic Income Port. 1.357324 1.235906 1.078827 1.125854 #N/A
Salomon Brothers Capital Fund #N/A #N/A #N/A #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A #N/A #N/A #N/A
Equity Income Portfolio 1.111979 #N/A #N/A #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A #N/A #N/A #N/A
Van Kampen Emerging Growth 1.340025 1.163736 #N/A #N/A #N/A
Large Cap Portfolio 1.127996 #N/A #N/A #N/A #N/A
MFS Emerging Growth Portfolio 1.055687 #N/A #N/A #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A #N/A #N/A #N/A
Templeton International Fund Class II 1.829297 1.493464 #N/A 1.353764 #N/A
Smith Barney Equity Index Portfolio Class II 2.145899 1.760368 1.293811 1.28035 #N/A
American Funds Growth-Income 4.393469 3.758309 2.869949 2.856426 1.683563
Alliance Premier Growth Portfolio #N/A 1.722085 #N/A 1.257009 #N/A
VIP II Contrafund - SC 1.674631 1.399444 #N/A #N/A #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A #N/A #N/A
American Funds Growth 5.225516 4.686328 3.574774 3.616885 1.825419
American Funds Global Growth #N/A #N/A #N/A #N/A #N/A
</TABLE>
<TABLE>
<CAPTION>
Cumulative
--------------------------------------
Fund Name Inception YTD 1YR 3YR
<S> <C> <C> <C> <C>
Smith Barney Money Market Portfolio 1 3.69% 3.69% 11.43%
Alliance Growth Portfolio 1 27.38% 27.38% 107.19%
Smith Barney Total Return Portfolio 1 3.61% 3.61% 47.93%
Salomon Brothers Total Return Fund 1 #N/A #N/A #N/A
MFS Research Portfolio 1 #N/A #N/A #N/A
MFS Total Return Portfolio 1 10.22% 10.22% 49.02%
Smith Barney High Income Portfolio 1 -0.86% -0.86% 24.43%
Smith Barney International Equity Portfolio 1 5.12% 5.12% 23.81%
Smith Barney Large Cap Value Portfolio 1 8.40% 8.40% 60.19%
Van Kampen Enterprise Portfolio 1 23.51% 23.51% 90.23%
Travelers Managed Income Portfolio 1 3.71% 3.71% 14.22%
Strategic Stock Portfolio 1 #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio 1 #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 1 17.59% 17.59% 73.67%
Smith Barney Diversified Strategic Income Port. 1 5.03% 5.03% 23.12%
Salomon Brothers Capital Fund 1 #N/A #N/A #N/A
Salomon Brothers Investors Fund 1 #N/A #N/A #N/A
Equity Income Portfolio 1 10.96% 10.96% #N/A
Travelers Disciplined Small Cap Stock Portfolio 1 #N/A #N/A #N/A
Van Kampen Emerging Growth 1 35.77% 35.77% 85.87%
Large Cap Portfolio 1 33.82% 33.82% #N/A
MFS Emerging Growth Portfolio 1 32.58% 32.58% #N/A
Franklin Small Cap Investments Fund Class II 1 #N/A #N/A #N/A
Templeton International Fund Class II 1 7.59% 7.59% 47.95%
Smith Barney Equity Index Portfolio Class II 1 26.94% 26.94% 103.82%
American Funds Growth-Income 1 16.58% 16.58% 68.91%
Alliance Premier Growth Portfolio 1 46.06% 46.06% 133.74%
VIP II Contrafund - SC 1 28.29% 28.29% 88.06%
Salomon Brothers Small Cap Growth Fund 1 #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio 1 #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio 1 #N/A #N/A #N/A
American Funds Growth 1 33.39% 33.39% 90.42%
American Funds Global Growth 1 26.99% 26.99% #N/A
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Annualized
-----------------------------------
Fund Name 5YR 10YR 3YR 5YR 10YR
<S> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio #N/A #N/A 3.67% #N/A #N/A
Alliance Growth Portfolio #N/A #N/A 27.48% #N/A #N/A
Smith Barney Total Return Portfolio 94.25% #N/A 13.94% 14.20% #N/A
Salomon Brothers Total Return Fund #N/A #N/A #N/A #N/A #N/A
MFS Research Portfolio #N/A #N/A #N/A #N/A #N/A
MFS Total Return Portfolio #N/A #N/A 14.22% #N/A #N/A
Smith Barney High Income Portfolio #N/A #N/A 7.56% #N/A #N/A
Smith Barney International Equity Portfolio #N/A #N/A 7.38% #N/A #N/A
Smith Barney Large Cap Value Portfolio #N/A #N/A 17.01% #N/A #N/A
Van Kampen Enterprise Portfolio #N/A #N/A 23.91% #N/A #N/A
Travelers Managed Income Portfolio #N/A #N/A 4.53% #N/A #N/A
Strategic Stock Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 115.76% #N/A 20.20% 16.63% #N/A
Smith Barney Diversified Strategic Income Port. 35.16% #N/A 7.18% 6.21% #N/A
Salomon Brothers Capital Fund #N/A #N/A #N/A #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A #N/A #N/A #N/A
Equity Income Portfolio #N/A #N/A #N/A #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A #N/A #N/A #N/A
Van Kampen Emerging Growth #N/A #N/A 22.95% #N/A #N/A
Large Cap Portfolio #N/A #N/A #N/A #N/A #N/A
MFS Emerging Growth Portfolio #N/A #N/A #N/A #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A #N/A #N/A #N/A
Templeton International Fund Class II 63.22% #N/A 13.95% 10.29% #N/A
Smith Barney Equity Index Portfolio Class II 180.24% #N/A 26.79% 22.89% #N/A
American Funds Growth-Income 122.24% 277.06% 19.09% 17.32% 14.19%
Alliance Premier Growth Portfolio 220.22% #N/A 32.71% 26.21% #N/A
VIP II Contrafund - SC #N/A #N/A 23.43% #N/A #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A #N/A #N/A
American Funds Growth 146.73% 388.87% 23.95% 19.80% 17.20%
American Funds Global Growth #N/A #N/A #N/A #N/A #N/A
</TABLE>
<TABLE>
<CAPTION>
Fund Name Prod Incept YE1997
<S> <C> <C>
Smith Barney Money Market Portfolio 3.66% 3.73%
Alliance Growth Portfolio 26.33% 27.36%
Smith Barney Total Return Portfolio 14.55% 15.33%
Salomon Brothers Total Return Fund 4.46% #N/A
MFS Research Portfolio 4.87% #N/A
MFS Total Return Portfolio 13.96% 19.62%
Smith Barney High Income Portfolio 8.44% 12.38%
Smith Barney International Equity Portfolio 5.92% 1.37%
Smith Barney Large Cap Value Portfolio 17.33% 24.99%
Van Kampen Enterprise Portfolio 23.32% 26.94%
Travelers Managed Income Portfolio 6.02% 8.31%
Strategic Stock Portfolio -6.52% #N/A
Smith Barney Large Cap Growth Portfolio 23.56% #N/A
Smith Barney Appreciation Portfolio 13.53% 24.78%
Smith Barney Diversified Strategic Income Port. 5.99% 6.74%
Salomon Brothers Capital Fund 16.64% #N/A
Salomon Brothers Investors Fund 9.33% #N/A
Equity Income Portfolio 22.65% 30.61%
Travelers Disciplined Small Cap Stock Portfolio -11.85% #N/A
Van Kampen Emerging Growth 24.67% 18.89%
Large Cap Portfolio 29.79% 21.86%
MFS Emerging Growth Portfolio 24.65% 19.57%
Franklin Small Cap Investments Fund Class II -8.52% #N/A
Templeton International Fund Class II 12.62% 12.27%
Smith Barney Equity Index Portfolio Class II 19.74% 31.72%
American Funds Growth-Income 14.28% 23.94%
Alliance Premier Growth Portfolio 23.82% #N/A
VIP II Contrafund - SC 28.02% 22.51%
Salomon Brothers Small Cap Growth Fund #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A
American Funds Growth 15.82% 28.02%
American Funds Global Growth 20.36% #N/A
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Fund Name YE1996 YE1995
<S> <C> <C>
Smith Barney Money Market Portfolio 3.59% #N/A
Alliance Growth Portfolio 27.71% #N/A
Smith Barney Total Return Portfolio 23.79% #N/A
Salomon Brothers Total Return Fund #N/A #N/A
MFS Research Portfolio #N/A #N/A
MFS Total Return Portfolio 13.02% #N/A
Smith Barney High Income Portfolio 11.67% #N/A
Smith Barney International Equity Portfolio 16.19% #N/A
Smith Barney Large Cap Value Portfolio 18.22% #N/A
Van Kampen Enterprise Portfolio 21.33% #N/A
Travelers Managed Income Portfolio 1.68% #N/A
Strategic Stock Portfolio #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A
Smith Barney Appreciation Portfolio 18.36% 27.18%
Smith Barney Diversified Strategic Income Port. 9.82% 14.56%
Salomon Brothers Capital Fund #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A
Equity Income Portfolio #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A
Van Kampen Emerging Growth 15.15% #N/A
Large Cap Portfolio #N/A #N/A
MFS Emerging Growth Portfolio #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A
Templeton International Fund Class II 22.49% #N/A
Smith Barney Equity Index Portfolio Class II 21.90% 36.06%
American Funds Growth-Income 16.90% 30.95%
Alliance Premier Growth Portfolio #N/A #N/A
VIP II Contrafund - SC 19.66% #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A
American Funds Growth 11.51% 31.09%
American Funds Global Growth #N/A #N/A
</TABLE>
<PAGE> 6
1.40% M&E
<TABLE>
<CAPTION>
Fund Name Fund Code Inception Date Pricing Track 12/31/98 12/31/97
<S> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio KM 6/20/94 pr2 1.171493 1.130913
Alliance Growth Portfolio KA 6/20/94 pr2 2.87316 2.257755
Smith Barney Total Return Portfolio KR 12/3/93 pr2 1.983318 1.916204
Salomon Brothers Total Return Fund AE 2/17/98 pr2 1.043693 #N/A
MFS Research Portfolio DR 3/23/98 pr2 1.047846 #N/A
MFS Total Return Portfolio KT 6/20/94 pr2 1.800181 1.634822
Smith Barney High Income Portfolio KH 6/22/94 pr2 1.436918 1.45077
Smith Barney International Equity Portfolio KI 6/20/94 pr2 1.291888 1.230236
Smith Barney Large Cap Value Portfolio HJ 6/20/94 pr2 2.054448 1.897059
Van Kampen Enterprise Portfolio KE 6/21/94 pr2 2.57411 2.086246
Travelers Managed Income Portfolio KF 6/28/94 pr2 1.295766 1.250608
Strategic Stock Portfolio AC 5/1/98 pr2 0.93418 #N/A
Smith Barney Large Cap Growth Portfolio AB 5/1/98 pr2 1.234784 #N/A
Smith Barney Appreciation Portfolio WL 10/16/91 pr2 2.480314 2.111398
Smith Barney Diversified Strategic Income Port. 1O 10/16/91 pr2 1.510794 1.439871
Salomon Brothers Capital Fund C3 2/17/98 pr2 1.165376 #N/A
Salomon Brothers Investors Fund C2 2/17/98 pr2 1.092374 #N/A
Equity Income Portfolio 1F 8/30/96 pr2 1.607783 1.450462
Travelers Disciplined Small Cap Stock Portfolio AN 5/1/98 pr2 0.880905 #N/A
Van Kampen Emerging Growth 1W 7/3/95 pr2 2.155595 1.589249
Large Cap Portfolio 1G 8/30/96 pr2 1.835136 1.372729
MFS Emerging Growth Portfolio KB 8/30/96 pr2 1.669517 1.260553
Franklin Small Cap Investments Fund Class II UW 5/1/98 pr2 0.914137 #N/A
Templeton International Fund Class II VG 5/1/92 pr2 2.195081 2.042332
Smith Barney Equity Index Portfolio Class II GF 11/30/91 pr2 3.562962 2.809634
American Funds Growth-Income II 2/28/85 pr2 6.261597 5.37646
Alliance Premier Growth Portfolio PF 6/26/92 pr2 3.999175 2.740754
VIP II Contrafund - SC FC 1/31/95 pr2 2.621731 2.045664
Salomon Brothers Small Cap Growth Fund SS 9/1/99 pr2 #N/A #N/A
Smith Barney Mid Cap Portfolio SM 9/2/99 pr2 #N/A #N/A
Smith Barney Aggressive Growth Portfolio SG 9/3/99 pr2 #N/A #N/A
American Funds Growth IG 2/8/84 pr2 8.923848 6.689891
American Funds Global Growth IL 4/30/97 pr2 1.362995 1.073323
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Fund Name 12/31/96 12/31/95 12/31/94 12/31/93 12/31/88
<S> <C> <C> <C> <C>
Smith Barney Money Market Portfolio 1.091287 1.05448 #N/A #N/A #N/A
Alliance Growth Portfolio 1.774482 1.390916 #N/A #N/A #N/A
Smith Barney Total Return Portfolio 1.66309 1.344785 #N/A 1.026118 #N/A
Salomon Brothers Total Return Fund #N/A #N/A #N/A #N/A #N/A
MFS Research Portfolio #N/A #N/A #N/A #N/A #N/A
MFS Total Return Portfolio 1.367993 1.211673 #N/A #N/A #N/A
Smith Barney High Income Portfolio 1.292195 1.158285 #N/A #N/A #N/A
Smith Barney International Equity Portfolio 1.21478 1.046587 #N/A #N/A #N/A
Smith Barney Large Cap Value Portfolio 1.519232 1.286335 #N/A #N/A #N/A
Van Kampen Enterprise Portfolio 1.645093 1.357199 #N/A #N/A #N/A
Travelers Managed Income Portfolio 1.155822 1.137842 #N/A #N/A #N/A
Strategic Stock Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 1.693765 1.432436 1.127423 1.155276 #N/A
Smith Barney Diversified Strategic Income Port. 1.3503 1.230734 1.075375 1.123378 #N/A
Salomon Brothers Capital Fund #N/A #N/A #N/A #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A #N/A #N/A #N/A
Equity Income Portfolio 1.111613 #N/A #N/A #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A #N/A #N/A #N/A
Van Kampen Emerging Growth 1.338047 1.163179 #N/A #N/A #N/A
Large Cap Portfolio 1.127627 #N/A #N/A #N/A #N/A
MFS Emerging Growth Portfolio 1.055334 #N/A #N/A #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A #N/A #N/A #N/A
Templeton International Fund Class II 1.820859 1.48805 #N/A 1.351539 #N/A
Smith Barney Equity Index Portfolio Class II 2.135135 1.753267 1.289849 1.277705 #N/A
American Funds Growth-Income 4.342195 3.718126 2.842044 2.831481 1.677164
Alliance Premier Growth Portfolio #N/A 1.716114 #N/A 1.255128 #N/A
VIP II Contrafund - SC 1.671489 1.398208 #N/A #N/A #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A #N/A #N/A
American Funds Growth 5.225516 4.686328 3.574774 3.616885 1.825419
American Funds Global Growth #N/A #N/A #N/A #N/A #N/A
</TABLE>
<TABLE>
<CAPTION>
Fund Name Inception YTD 1YR 3YR
<S> <C> <C> <C> <C>
Smith Barney Money Market Portfolio 1 3.59% 3.59% 11.10%
Alliance Growth Portfolio 1 27.26% 27.26% 106.57%
Smith Barney Total Return Portfolio 1 3.50% 3.50% 47.48%
Salomon Brothers Total Return Fund 1 #N/A #N/A #N/A
MFS Research Portfolio 1 #N/A #N/A #N/A
MFS Total Return Portfolio 1 10.11% 10.11% 48.57%
Smith Barney High Income Portfolio 1 -0.95% -0.95% 24.06%
Smith Barney International Equity Portfolio 1 5.01% 5.01% 23.44%
Smith Barney Large Cap Value Portfolio 1 8.30% 8.30% 59.71%
Van Kampen Enterprise Portfolio 1 23.38% 23.38% 89.66%
Travelers Managed Income Portfolio 1 3.61% 3.61% 13.88%
Strategic Stock Portfolio 1 #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio 1 #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 1 17.47% 17.47% 73.15%
Smith Barney Diversified Strategic Income Port. 1 4.93% 4.93% 22.76%
Salomon Brothers Capital Fund 1 #N/A #N/A #N/A
Salomon Brothers Investors Fund 1 #N/A #N/A #N/A
Equity Income Portfolio 1 10.85% 10.85% #N/A
Travelers Disciplined Small Cap Stock Portfolio 1 #N/A #N/A #N/A
Van Kampen Emerging Growth 1 35.64% 35.64% 85.32%
Large Cap Portfolio 1 33.69% 33.69% #N/A
MFS Emerging Growth Portfolio 1 32.44% 32.44% #N/A
Franklin Small Cap Investments Fund Class II 1 #N/A #N/A #N/A
Templeton International Fund Class II 1 7.48% 7.48% 47.51%
Smith Barney Equity Index Portfolio Class II 1 26.81% 26.81% 103.22%
American Funds Growth-Income 1 16.46% 16.46% 68.41%
Alliance Premier Growth Portfolio 1 45.92% 45.92% 133.04%
VIP II Contrafund - SC 1 28.16% 28.16% 87.51%
Salomon Brothers Small Cap Growth Fund 1 #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio 1 #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio 1 #N/A #N/A #N/A
American Funds Growth 1 33.39% 33.39% 90.42%
American Funds Global Growth 1 26.99% 26.99% #N/A
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Fund Name 5YR 10YR 3YR 5YR
<S> <C> <C> <C> <C>
Smith Barney Money Market Portfolio #N/A #N/A 3.57% #N/A
Alliance Growth Portfolio #N/A #N/A 27.36% #N/A
Smith Barney Total Return Portfolio 93.28% #N/A 13.83% 14.09%
Salomon Brothers Total Return Fund #N/A #N/A #N/A #N/A
MFS Research Portfolio #N/A #N/A #N/A #N/A
MFS Total Return Portfolio #N/A #N/A 14.11% #N/A
Smith Barney High Income Portfolio #N/A #N/A 7.45% #N/A
Smith Barney International Equity Portfolio #N/A #N/A 7.27% #N/A
Smith Barney Large Cap Value Portfolio #N/A #N/A 16.89% #N/A
Van Kampen Enterprise Portfolio #N/A #N/A 23.78% #N/A
Travelers Managed Income Portfolio #N/A #N/A 4.43% #N/A
Strategic Stock Portfolio #N/A #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 114.69% #N/A 20.08% 16.51%
Smith Barney Diversified Strategic Income Port. 34.49% #N/A 7.07% 6.11%
Salomon Brothers Capital Fund #N/A #N/A #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A #N/A #N/A
Equity Income Portfolio #N/A #N/A #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A #N/A #N/A
Van Kampen Emerging Growth #N/A #N/A 22.83% #N/A
Large Cap Portfolio #N/A #N/A #N/A #N/A
MFS Emerging Growth Portfolio #N/A #N/A #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A #N/A #N/A
Templeton International Fund Class II 62.41% #N/A 13.84% 10.19%
Smith Barney Equity Index Portfolio Class II 178.86% #N/A 26.66% 22.77%
American Funds Growth-Income 121.14% 273.34% 18.97% 17.20%
Alliance Premier Growth Portfolio 218.63% #N/A 32.58% 26.08%
VIP II Contrafund - SC #N/A #N/A 23.31% #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A #N/A
American Funds Growth 146.73% 388.87% 23.95% 19.80%
American Funds Global Growth #N/A #N/A #N/A #N/A
</TABLE>
<TABLE>
<CAPTION>
Fund Name 10YR Prod Incept YE1997
<S> <C> <C> <C>
Smith Barney Money Market Portfolio #N/A 3.55% 3.63%
Alliance Growth Portfolio #N/A 26.21% 27.23%
Smith Barney Total Return Portfolio #N/A 14.43% 15.22%
Salomon Brothers Total Return Fund #N/A 4.37% #N/A
MFS Research Portfolio #N/A 4.78% #N/A
MFS Total Return Portfolio #N/A 13.84% 19.51%
Smith Barney High Income Portfolio #N/A 8.33% 12.27%
Smith Barney International Equity Portfolio #N/A 5.81% 1.27%
Smith Barney Large Cap Value Portfolio #N/A 17.21% 24.87%
Van Kampen Enterprise Portfolio #N/A 23.20% 26.82%
Travelers Managed Income Portfolio #N/A 5.91% 8.20%
Strategic Stock Portfolio #N/A -6.58% #N/A
Smith Barney Large Cap Growth Portfolio #N/A 23.48% #N/A
Smith Barney Appreciation Portfolio #N/A 13.42% 24.66%
Smith Barney Diversified Strategic Income Port. #N/A 5.89% 6.63%
Salomon Brothers Capital Fund #N/A 16.54% #N/A
Salomon Brothers Investors Fund #N/A 9.24% #N/A
Equity Income Portfolio #N/A 22.53% 30.48%
Travelers Disciplined Small Cap Stock Portfolio #N/A -11.91% #N/A
Van Kampen Emerging Growth #N/A 24.55% 18.77%
Large Cap Portfolio #N/A 29.67% 21.74%
MFS Emerging Growth Portfolio #N/A 24.52% 19.45%
Franklin Small Cap Investments Fund Class II #N/A -8.59% #N/A
Templeton International Fund Class II #N/A 12.51% 12.16%
Smith Barney Equity Index Portfolio Class II #N/A 19.63% 31.59%
American Funds Growth-Income 14.08% 14.17% 23.82%
Alliance Premier Growth Portfolio #N/A 23.70% #N/A
VIP II Contrafund - SC #N/A 27.89% 22.39%
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A
American Funds Growth 17.20% 15.82% 28.02%
American Funds Global Growth #N/A 20.36% #N/A
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
Fund Name YE1996 YE1995
<S> <C> <C>
Smith Barney Money Market Portfolio 3.49% #N/A
Alliance Growth Portfolio 27.58% #N/A
Smith Barney Total Return Portfolio 23.67% #N/A
Salomon Brothers Total Return Fund #N/A #N/A
MFS Research Portfolio #N/A #N/A
MFS Total Return Portfolio 12.90% #N/A
Smith Barney High Income Portfolio 11.56% #N/A
Smith Barney International Equity Portfolio 16.07% #N/A
Smith Barney Large Cap Value Portfolio 18.11% #N/A
Van Kampen Enterprise Portfolio 21.21% #N/A
Travelers Managed Income Portfolio 1.58% #N/A
Strategic Stock Portfolio #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A
Smith Barney Appreciation Portfolio 18.24% 27.05%
Smith Barney Diversified Strategic Income Port. 9.72% 14.45%
Salomon Brothers Capital Fund #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A
Equity Income Portfolio #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A
Van Kampen Emerging Growth 15.03% #N/A
Large Cap Portfolio #N/A #N/A
MFS Emerging Growth Portfolio #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A
Templeton International Fund Class II 22.37% #N/A
Smith Barney Equity Index Portfolio Class II 21.78% 35.93%
American Funds Growth-Income 16.78% 30.83%
Alliance Premier Growth Portfolio #N/A #N/A
VIP II Contrafund - SC 19.55% #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A
American Funds Growth 11.51% 31.09%
American Funds Global Growth #N/A #N/A
</TABLE>
<PAGE> 10
1.55% M&E
<TABLE>
<CAPTION>
Fund Name Fund Code Inception Date Pricing Track 12/31/98 12/31/97
<S> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio KM 6/20/94 pr3 1.163554 1.124935
Alliance Growth Portfolio KA 6/20/94 pr3 2.853698 2.245825
Smith Barney Total Return Portfolio KR 12/3/93 pr3 1.96829 1.904539
Salomon Brothers Total Return Fund AE 2/17/98 pr3 1.042339 #N/A
MFS Research Portfolio DR 3/23/98 pr3 1.046629 #N/A
MFS Total Return Portfolio KT 6/20/94 pr3 1.787986 1.626183
Smith Barney High Income Portfolio KH 6/22/94 pr3 1.427193 1.443115
Smith Barney International Equity Portfolio KI 6/20/94 pr3 1.283132 1.223731
Smith Barney Large Cap Value Portfolio HJ 6/20/94 pr3 2.040532 1.887036
Van Kampen Enterprise Portfolio KE 6/21/94 pr3 2.556683 2.075231
Travelers Managed Income Portfolio KF 6/28/94 pr3 1.287028 1.244038
Strategic Stock Portfolio AC 5/1/98 pr3 0.933244 #N/A
Smith Barney Large Cap Growth Portfolio AB 5/1/98 pr3 1.233548 #N/A
Smith Barney Appreciation Portfolio WL 10/16/91 pr3 2.453816 2.091975
Smith Barney Diversified Strategic Income Port. 1O 10/16/91 pr3 1.494592 1.426567
Salomon Brothers Capital Fund C3 2/17/98 pr3 1.163868 #N/A
Salomon Brothers Investors Fund C2 2/17/98 pr3 1.09096 #N/A
Equity Income Portfolio 1F 8/30/96 pr3 1.60218 1.447577
Travelers Disciplined Small Cap Stock Portfolio AN 5/1/98 pr3 0.880021 #N/A
Van Kampen Emerging Growth 1W 7/3/95 pr3 2.14445 1.583385
Large Cap Portfolio 1G 8/30/96 pr3 1.828745 1.37
MFS Emerging Growth Portfolio KB 8/30/96 pr3 1.663684 1.258033
Franklin Small Cap Investments Fund Class II UW 5/1/98 pr3 0.913203 #N/A
Templeton International Fund Class II VG 5/1/92 pr3 2.17344 2.025204
Smith Barney Equity Index Portfolio Class II GF 11/30/91 pr3 3.525686 2.784409
American Funds Growth-Income II 2/28/85 pr3 6.134088 5.274814
Alliance Premier Growth Portfolio PF 6/26/92 pr3 3.960524 2.718336
VIP II Contrafund - SC FC 1/31/95 pr3 2.606656 2.036906
Salomon Brothers Small Cap Growth Fund SS 9/1/99 pr3 #N/A #N/A
Smith Barney Mid Cap Portfolio SM 9/2/99 pr3 #N/A #N/A
Smith Barney Aggressive Growth Portfolio SG 9/3/99 pr3 #N/A #N/A
American Funds Growth IG 2/8/84 pr3 8.923848 6.689891
American Funds Global Growth IL 4/30/97 pr3 1.362995 1.073323
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
Fund Name 12/31/96 12/31/95 12/31/94 12/31/93
<S> <C> <C> <C> <C>
Smith Barney Money Market Portfolio 1.087147 1.05207 #N/A #N/A
Alliance Growth Portfolio 1.767753 1.387738 #N/A #N/A
Smith Barney Total Return Portfolio 1.655446 1.340628 #N/A 1.026003
Salomon Brothers Total Return Fund #N/A #N/A #N/A #N/A
MFS Research Portfolio #N/A #N/A #N/A #N/A
MFS Total Return Portfolio 1.362804 1.208904 #N/A #N/A
Smith Barney High Income Portfolio 1.287305 1.155647 #N/A #N/A
Smith Barney International Equity Portfolio 1.210171 1.044194 #N/A #N/A
Smith Barney Large Cap Value Portfolio 1.513471 1.283396 #N/A #N/A
Van Kampen Enterprise Portfolio 1.638861 1.354103 #N/A #N/A
Travelers Managed Income Portfolio 1.151475 1.135279 #N/A #N/A
Strategic Stock Portfolio #N/A #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A #N/A #N/A
Smith Barney Appreciation Portfolio 1.680677 1.423478 1.122022 1.15147
Smith Barney Diversified Strategic Income Port. 1.33983 1.223015 1.070218 1.119674
Salomon Brothers Capital Fund #N/A #N/A #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A #N/A #N/A
Equity Income Portfolio 1.111065 #N/A #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A #N/A #N/A
Van Kampen Emerging Growth 1.335084 1.162343 #N/A #N/A
Large Cap Portfolio 1.127073 #N/A #N/A #N/A
MFS Emerging Growth Portfolio 1.054804 #N/A #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A #N/A #N/A
Templeton International Fund Class II 1.808273 1.479965 #N/A 1.348209
Smith Barney Equity Index Portfolio Class II 2.119088 1.742669 1.283929 1.273748
American Funds Growth-Income 4.266397 3.658649 2.800689 2.794468
Alliance Premier Growth Portfolio #N/A 1.707194 #N/A 1.252311
VIP II Contrafund - SC 1.666788 1.396357 #N/A #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A #N/A
American Funds Growth 5.225516 4.686328 3.574774 3.616885
American Funds Global Growth #N/A #N/A #N/A #N/A
</TABLE>
<TABLE>
<CAPTION>
Fund Name 12/31/88 Inception YTD 1YR 3YR
<S> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio #N/A 1 3.43% 3.43% 10.60%
Alliance Growth Portfolio #N/A 1 27.07% 27.07% 105.64%
Smith Barney Total Return Portfolio #N/A 1 3.35% 3.35% 46.82%
Salomon Brothers Total Return Fund #N/A 1 #N/A #N/A #N/A
MFS Research Portfolio #N/A 1 #N/A #N/A #N/A
MFS Total Return Portfolio #N/A 1 9.95% 9.95% 47.90%
Smith Barney High Income Portfolio #N/A 1 -1.10% -1.10% 23.50%
Smith Barney International Equity Portfolio #N/A 1 4.85% 4.85% 22.88%
Smith Barney Large Cap Value Portfolio #N/A 1 8.13% 8.13% 58.99%
Van Kampen Enterprise Portfolio #N/A 1 23.20% 23.20% 88.81%
Travelers Managed Income Portfolio #N/A 1 3.46% 3.46% 13.37%
Strategic Stock Portfolio #N/A 1 #N/A #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A 1 #N/A #N/A #N/A
Smith Barney Appreciation Portfolio #N/A 1 17.30% 17.30% 72.38%
Smith Barney Diversified Strategic Income Port. #N/A 1 4.77% 4.77% 22.21%
Salomon Brothers Capital Fund #N/A 1 #N/A #N/A #N/A
Salomon Brothers Investors Fund #N/A 1 #N/A #N/A #N/A
Equity Income Portfolio #N/A 1 10.68% 10.68% #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A 1 #N/A #N/A #N/A
Van Kampen Emerging Growth #N/A 1 35.43% 35.43% 84.49%
Large Cap Portfolio #N/A 1 33.49% 33.49% #N/A
MFS Emerging Growth Portfolio #N/A 1 32.24% 32.24% #N/A
Franklin Small Cap Investments Fund Class II #N/A 1 #N/A #N/A #N/A
Templeton International Fund Class II #N/A 1 7.32% 7.32% 46.86%
Smith Barney Equity Index Portfolio Class II #N/A 1 26.62% 26.62% 102.32%
American Funds Growth-Income 1.66761 1 16.29% 16.29% 67.66%
Alliance Premier Growth Portfolio #N/A 1 45.70% 45.70% 131.99%
VIP II Contrafund - SC #N/A 1 27.97% 27.97% 86.68%
Salomon Brothers Small Cap Growth Fund #N/A 1 #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A 1 #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A 1 #N/A #N/A #N/A
American Funds Growth 1.825419 1 33.39% 33.39% 90.42%
American Funds Global Growth #N/A 1 26.99% 26.99% #N/A
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Fund Name 5YR 10YR 3YR 5YR 10YR Prod Incept YE1997
<S> <C> <C> <C> <C> <C> <C> <C>
Smith Barney Money Market Portfolio #N/A #N/A 3.41% #N/A #N/A 3.40% 3.48%
Alliance Growth Portfolio #N/A #N/A 27.16% #N/A #N/A 26.02% 27.04%
Smith Barney Total Return Portfolio 91.84% #N/A 13.66% 13.92% #N/A 14.26% 15.05%
Salomon Brothers Total Return Fund #N/A #N/A #N/A #N/A #N/A 4.23% #N/A
MFS Research Portfolio #N/A #N/A #N/A #N/A #N/A 4.66% #N/A
MFS Total Return Portfolio #N/A #N/A 13.94% #N/A #N/A 13.67% 19.33%
Smith Barney High Income Portfolio #N/A #N/A 7.29% #N/A #N/A 8.17% 12.10%
Smith Barney International Equity Portfolio #N/A #N/A 7.11% #N/A #N/A 5.65% 1.12%
Smith Barney Large Cap Value Portfolio #N/A #N/A 16.72% #N/A #N/A 17.03% 24.68%
Van Kampen Enterprise Portfolio #N/A #N/A 23.60% #N/A #N/A 23.02% 26.63%
Travelers Managed Income Portfolio #N/A #N/A 4.27% #N/A #N/A 5.75% 8.04%
Strategic Stock Portfolio #N/A #N/A #N/A #N/A #N/A -6.68% #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A #N/A #N/A #N/A 23.35% #N/A
Smith Barney Appreciation Portfolio 113.10% #N/A 19.90% 16.34% #N/A 13.25% 24.47%
Smith Barney Diversified Strategic Income Port. 33.48% #N/A 6.91% 5.95% #N/A 5.73% 6.47%
Salomon Brothers Capital Fund #N/A #N/A #N/A #N/A #N/A 16.39% #N/A
Salomon Brothers Investors Fund #N/A #N/A #N/A #N/A #N/A 9.10% #N/A
Equity Income Portfolio #N/A #N/A #N/A #N/A #N/A 22.35% 30.29%
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A #N/A #N/A #N/A -12.00% #N/A
Van Kampen Emerging Growth #N/A #N/A 22.65% #N/A #N/A 24.37% 18.60%
Large Cap Portfolio #N/A #N/A #N/A #N/A #N/A 29.47% 21.55%
MFS Emerging Growth Portfolio #N/A #N/A #N/A #N/A #N/A 24.34% 19.27%
Franklin Small Cap Investments Fund Class II #N/A #N/A #N/A #N/A #N/A -8.68% #N/A
Templeton International Fund Class II 61.21% #N/A 13.67% 10.02% #N/A 12.34% 12.00%
Smith Barney Equity Index Portfolio Class II 176.80% #N/A 26.48% 22.58% #N/A 19.45% 31.40%
American Funds Growth-Income 119.51% 267.84% 18.80% 17.03% 13.91% 14.00% 23.64%
Alliance Premier Growth Portfolio 216.26% #N/A 32.38% 25.89% #N/A 23.51% #N/A
VIP II Contrafund - SC #N/A #N/A 23.13% #N/A #N/A 27.70% 22.21%
Salomon Brothers Small Cap Growth Fund #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A #N/A #N/A #N/A #N/A #N/A
American Funds Growth 146.73% 388.87% 23.95% 19.80% 17.20% 15.82% 28.02%
American Funds Global Growth #N/A #N/A #N/A #N/A #N/A 20.36% #N/A
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
Fund Name YE1996 YE1995
<S> <C> <C>
Smith Barney Money Market Portfolio 3.33% #N/A
Alliance Growth Portfolio 27.38% #N/A
Smith Barney Total Return Portfolio 23.48% #N/A
Salomon Brothers Total Return Fund #N/A #N/A
MFS Research Portfolio #N/A #N/A
MFS Total Return Portfolio 12.73% #N/A
Smith Barney High Income Portfolio 11.39% #N/A
Smith Barney International Equity Portfolio 15.90% #N/A
Smith Barney Large Cap Value Portfolio 17.93% #N/A
Van Kampen Enterprise Portfolio 21.03% #N/A
Travelers Managed Income Portfolio 1.43% #N/A
Strategic Stock Portfolio #N/A #N/A
Smith Barney Large Cap Growth Portfolio #N/A #N/A
Smith Barney Appreciation Portfolio 18.07% 26.87%
Smith Barney Diversified Strategic Income Port. 9.55% 14.28%
Salomon Brothers Capital Fund #N/A #N/A
Salomon Brothers Investors Fund #N/A #N/A
Equity Income Portfolio #N/A #N/A
Travelers Disciplined Small Cap Stock Portfolio #N/A #N/A
Van Kampen Emerging Growth 14.86% #N/A
Large Cap Portfolio #N/A #N/A
MFS Emerging Growth Portfolio #N/A #N/A
Franklin Small Cap Investments Fund Class II #N/A #N/A
Templeton International Fund Class II 22.18% #N/A
Smith Barney Equity Index Portfolio Class II 21.60% 35.73%
American Funds Growth-Income 16.61% 30.63%
Alliance Premier Growth Portfolio #N/A #N/A
VIP II Contrafund - SC 19.37% #N/A
Salomon Brothers Small Cap Growth Fund #N/A #N/A
Smith Barney Mid Cap Portfolio #N/A #N/A
Smith Barney Aggressive Growth Portfolio #N/A #N/A
American Funds Growth 11.51% 31.09%
American Funds Global Growth #N/A #N/A
</TABLE>
