<PAGE>
File Number 2-89208
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment Number
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Post-Effective Amendment Number 17 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment Number ___________
VARIABLE FUND D
-------------------------------------------------------
(Exact Name of Registrant)
MINNESOTA LIFE INSURANCE COMPANY
(formerly The Minnesota Mutual Life Insurance Company)
-------------------------------------------------------
(Name of Depositor)
400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101-2098
--------------------------------------------------------
(Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, Including Area Code: (651) 665-3500
Dennis E. Prohofsky
Senior Vice President, General Counsel and Secretary
Minnesota Life Insurance Company
400 Robert Street North
ST. PAUL, MINNESOTA 55101-2098
-------------------------------------------------------
(Name and Address of Agent for Service)
Copy to:
J. Sumner Jones, Esq.
Jones & Blouch L.L.P.
1025 Thomas Jefferson Street N.W.
Suite 405 West
Washington, D.C. 20007
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
---
on (date) pursuant to paragraph (b) of Rule 485
---
60 days after filing pursuant to paragraph (a)(1) of Rule 485
---
X on May 3, 1999 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.
TITLE OF SECURITIES BEING REGISTERED
Variable Annuity Contracts
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
Variable Fund D
Cross Reference Sheet to Prospectus
<TABLE>
<CAPTION>
Form N-4
Item Number Caption in Prospectus
<S> <C>
1. Cover Page
2. Definitions
3. Synopsis
4. Condensed Financial Information
5. General Descriptions
6. Contract Deductions
7. Description of the Contracts
8. Annuity Period
9. Death Benefit
10. Crediting Accumulation Units
11. Withdrawals and Surrender
12. Federal Tax Status
13. Not applicable
14. Table of Contents of the Statement of Additional Information
</TABLE>
<PAGE>
VARIABLE FUND D
PROSPECTUS
INDIVIDUAL VARIABLE ANNUITY CONTRACT OF MINNESOTA LIFE'S VARIABLE FUND D
This Prospectus describes a Flexible Payment Deferred Variable Annuity Contract
and a Single Premium Deferred Variable Annuity Contract offered by Minnesota
Life Insurance Company. These contracts may be used in connection with certain
retirement plans including:
- Employer pension or profit-sharing plans qualified under Section 401(a)
or 403(b) of the Internal Revenue Code ("Code");
- H.R. 10 or Keogh plans
- Annuity purchase plans adopted by public school systems and certain tax
exempt organizations pursuant to Section 403(b) of the Code
- Individual retirement annuity plans adopted by individuals under Section
408 of the Code
- State deferred compensation plans described in Section 457 of the Code
Your contract values will be invested in our General Account or Variable Fund D
according to your instructions. Variable Fund D invests in shares of the
Advantus Series Fund, Inc. Purchase payments in the General Account receive
interest and principal guarantees. Purchase payments in Variable Fund D are
invested in one or more Portfolios of Advantus Series Fund, Inc. and do not
receive any principal or interest guarantees.
This Prospectus describes only the variable aspects of the contracts, except
where fixed aspects are specifically mentioned. You may look to your contract
language for descriptions of the fixed portion of the contracts.
This Prospectus includes the information you should know before purchasing a
contract. You should read it and keep it for future reference. A Statement of
Additional Information, bearing the same date, which contains further contract
information, has been filed with the Securities and Exchange Commission ("SEC")
and is incorporated by reference into this Prospectus. A copy of the Statement
of Additional Information may be obtained without charge by calling (651)
665-3500, or by writing us at our office at 400 Robert Street North, St. Paul,
Minnesota 55101-2098.
THIS PROSPECTUS IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS OF THE
ADVANTUS SERIES FUND, INC.
THE SEC HAS NOT APPROVED OR DISAPPROVED THE CONTRACTS OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus and the Statement of Additional Information is: May
3, 1999
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101-2098
Telephone: (651) 665-3500
http://www.minnesotamutual.com
F. 30742 Rev. 5-1999
<PAGE>
THIS PROSPECTUS IS NOT AN OFFERING IN ANY JURISDICTION IN WHICH THE OFFERING
WOULD BE UNLAWFUL. WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER
PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THIS OFFERING OTHER THAN THOSE CONTAINED IN THE PROSPECTUS AND, IF GIVEN OR
MADE, SHOULD NOT BE RELIED UPON.
TABLE OF CONTENTS
DEFINITIONS 1
SYNOPSIS 2
EXPENSE TABLE 5
CONDENSED FINANCIAL INFORMATION 20
FINANCIAL STATEMENTS 20
GENERAL DESCRIPTIONS 20
CONTRACT DEDUCTIONS 22
Sales Charges 22
Premium Taxes 24
Investment Management 24
Mortality and Expense Risks 25
Expenses 25
Other Expenses 25
DESCRIPTION OF THE CONTRACTS 26
VOTING RIGHTS 28
ANNUITY PERIOD 29
DEATH BENEFIT 33
CREDITING ACCUMULATION UNITS 34
WITHDRAWALS AND SURRENDER 38
DISTRIBUTION 39
FEDERAL TAX STATUS 40
PERFORMANCE DATA 45
YEAR 2000 COMPUTER PROBLEM 46
STATEMENT OF ADDITIONAL INFORMATION 46
APPENDIX A -- CONDENSED FINANCIAL INFORMATION A-1
APPENDIX B -- TYPES OF QUALIFIED PLANS B-1
<PAGE>
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCUMULATION UNIT: an accounting device used to determine the value of a
contract before annuity payments begin.
ACCUMULATION VALUE: the sum of the values under a contract in the General
Account and in Variable Fund D.
ANNUITY: a series of payments for life; for life with a minimum number of
payments guaranteed; for the joint lifetime of the annuitant and another person
and thereafter during the lifetime of the survivor; or for a period certain.
ANNUITY UNIT: an accounting device used to determine the amount of annuity
payments.
CODE: the Internal Revenue Code of 1986, as amended.
CONTRACT OWNER: the owner of the contract, which could be the annuitant, his or
her employer, or a trustee acting on behalf of the employer.
CONTRACT YEAR: a period of one year beginning with the contract date or a
contract anniversary.
FIXED ANNUITY: an annuity providing for payments of guaranteed amounts
throughout the payment period.
FUND: the mutual fund or separate investment portfolio within a series mutual
fund which has been designated as an eligible investment for Variable Fund D,
namely, Advantus Series Fund, Inc. and its Portfolios.
GENERAL ACCOUNT: all of our assets other than those in Variable Fund D or in
other separate accounts established by us.
PARTICIPANT: a person for whom an interest is maintained under a group annuity
contract, prior to the time that annuity payments begin.
PLAN: a tax-qualified employer pension, profit-sharing, or annuity purchase
plan under which benefits are to be provided by the variable annuity contracts
described herein.
PURCHASE PAYMENTS: amounts paid to us under a contract.
VALUATION DATE: each date on which a Fund Portfolio is valued.
VARIABLE ANNUITY: an annuity providing for payments varying in amount in
accordance with the investment experience of Variable Fund D.
VARIABLE FUND D: a separate investment account called Variable Fund D, where
the investment experience of its assets is kept separate from our other assets.
This separate account has several sub-accounts.
WE, OUR, US: Minnesota Life Insurance Company (formerly "The Minnesota Mutual
Life Insurance Company").
YOU, YOUR: the Contract Owner
PAGE 1
<PAGE>
THIS SYNOPSIS CONTAINS A BRIEF SUMMARY OF SOME OF THE
IMPORTANT FEATURES OF THE VARIABLE ANNUITY CONTRACTS
DESCRIBED IN THIS PROSPECTUS.
QUESTIONS AND ANSWERS ABOUT
THE VARIABLE ANNUITY CONTRACT
WHAT IS AN ANNUITY?
An annuity is a series of payments by an insurance company to an "annuitant".
These payments may be made for the life of the annuitant; for life with a
minimum number of payments guaranteed; for the joint lifetime of the annuitant
and another person; or for a specified period of time. An annuity with payments
of a guaranteed amount is a fixed annuity. An annuity with payments which vary
with the investment experience of a separate account is a variable annuity.
WHAT TYPE OF CONTRACT IS OFFERED BY THIS PROSPECTUS?
Two types of variable annuity contracts are offered, a flexible payment deferred
variable annuity contract and a single payment deferred variable annuity. Both
provide for monthly annuity payments which begin either immediately of at a
future date you specify. According to your instructions we allocate your
purchase payments to the General Account, where they receive principal and
interest guarantees, or to Variable Fund D. Variable Fund D invests in one or
more portfolios of Advantus Series Fund, Inc. which do not receive principal or
interest guarantees.
WHAT INVESTMENT OPTIONS ARE AVAILABLE?
Any purchase payments you allocate to Variable Fund D are invested exclusively
in shares of one or more Fund Portfolios. We reserve the right to add, combine
or remove other eligible Funds and Portfolios.
The available Portfolios of Advantus Fund are:
Growth Portfolio
Bond Portfolio
Money Market Portfolio
Asset Allocation Portfolio
Mortgage Securities Portfolio
Index 500 Portfolio
Capital Appreciation Portfolio
International Stock Portfolio
Small Company Growth Portfolio
There is no assurance that any Portfolio will meet its objectives. Detailed
information about the investment objectives and policies of the Portfolios can
be
PAGE 2
<PAGE>
found in the current prospectus for each Fund, which are attached to this
Prospectus. You should carefully read each Fund prospectus before purchasing in
the contract.
CAN YOU CHANGE THE PORTFOLIO(S) THAT YOU SELECT?
Yes. You can change your allocation of future purchase payments by giving us
written notice or a telephone call notifying us of the change. Before annuity
payments begin, you may transfer all or a part of your accumulation value
between and among the Portfolios and General Account. After annuity payments
begin, you may instruct us to transfer amounts held as annuity reserves among
the variable annuity sub-accounts, subject to some restrictions. Annuity
reserves may be transferred only from a variable annuity to a fixed annuity
during the annuity period.
ARE THERE PURCHASE PAYMENT LIMITATIONS?
Yes. The minimum purchase payment for a Single Payment Deferred Variable Annuity
Contract is $5,000 and may not exceed $250,000 without our consent. The minimum
purchase payment for the Flexible Payment Deferred Annuity Contract of $25.00.
We are currently waiving the minimum for the Flexible Payment Deferred Annuity
Contract.
WHAT CHARGES ARE ASSOCIATED WITH THE CONTRACT?
We deduct a daily charge equal to an annual rate of .795% of the net asset value
of Variable Fund D for our mortality and expense risk guarantees.
Under the Flexible Payment Deferred Variable Annuity Contract a deferred sales
charge of up to 9.0% of purchase payments may apply is you make partial
withdrawals or surrender your contract within 10 or fewer years after your last
purchase payment. Under the Single Payment Deferred Immediate Annuity Contract a
deferred sales charge of up to 6.0% of the purchase payment may apply if you
make partial withdrawals or surrender you contract within 10 or fewer years
after your last purchase payment.
Deductions for any applicable premium taxes may also be made (currently such
taxes range from 0.0% to 3.5%) depending upon applicable law.
The Portfolio pays investment advisory and other expenses. Total expenses of the
Portfolios range from .45% to .82% of average daily net assets of the Portfolio
on an annual basis. To the extent the cost of investment advisory services in
the Fund exceeds .265%, Minnesota Life will make a reimbursement to Variable
Fund D contracts.
CAN YOU MAKE PARTIAL WITHDRAWALS FROM THE CONTRACT?
Yes. Subject to limitations imposed by the retirement plan or program, you may
make withdrawals of the accumulation value of your contract before an annuity
begins. Your requests for partial withdrawals must be in writing.
PAGE 3
<PAGE>
Partial withdrawals are generally subject to the deferred sales charge. In
addition, a penalty tax on the amount of the taxable distribution may be
assessed upon withdrawals from the variable annuity contract in certain
circumstances, including distributions made prior to the owner's attainment of
age 59 1/2.
DO YOU HAVE A RIGHT TO CANCEL YOUR CONTRACT?
Yes. You may cancel your contract any time within ten days of receiving it by
returning it to us or your agent. In some states, the free look period may be
longer than ten days. For example, California's free look period is thirty days.
These rights are subject to change and may vary among the states.
WHAT IF THE OWNER OR ANNUITANT DIES?
If the contract owner dies before annuity payments begin, we will pay the death
benefit to the beneficiary named in the contract application. In the case of
joint owners, this amount would be payable at the death of the second owner. The
death benefit payable to the beneficiary upon the death of the contract owner
during the accumulation period is equal to the greater of:
- the amount of the accumulation value payable at death; or
- the total amount of your purchase, less all partial withdrawals.
If the annuitant dies after annuity payments have begin, we will pay whatever
death benefit may be called for by the terms of the annuity option selected. If
the owner of this contract is other than a natural person, such as a trust or
other similar entity, we will pay a death benefit of the accumulation value to
the named beneficiary on the death of the annuitant if death occurs prior to the
commencement of annuity payments.
WHAT ANNUITY OPTIONS ARE AVAILABLE?
The annuity options available are:
- a life annuity;
- a life annuity with a period certain of either 120 months, 180 months or
240 months;
- a joint and last survivor annuity and
- a period certain annuity.
Each annuity option may be elected as either a variable annuity or fixed annuity
or a combination of the two. Other annuity options may be available from us on
request.
WHAT VOTING RIGHTS DO YOU HAVE?
Contract owners and annuitants will be able to direct us as to how to vote
shares of the Funds held for their contracts where shareholder approval is
required by law in the affairs of the Funds.
PAGE 4
<PAGE>
EXPENSE TABLE
The following contract expense information is intended to illustrate the expense
of Variable Fund D variable annuity contracts. All expenses shown are rounded to
the nearest dollar. The information contained in the tables must be considered
with the narrative information which immediately follows them in this heading.
INDIVIDUAL SINGLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Deferred Sales Load (as a percentage 6% decreasing uniformly by .05% for
of amount surrendered or withdrawn) each of the first 120 months from the
contract date
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--GROWTH SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
Other Expense Reimbursement (.050)%
--------
Total Sub-Account Annual Expenses .510%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Growth
Portfolio)
<TABLE>
<S> <C>
Growth Portfolio
Investment Management Fees .500%
Other Expenses .050%
--------
Total Growth Portfolio Annual Expenses .550%
--------
--------
</TABLE>
PAGE 5
<PAGE>
EXAMPLE--For contracts using the Growth Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 61 $ 76 $ 91 $ 129
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 34 $ 58 $ 129
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 34 $ 58 $ 129
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--BOND SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Bond
Portfolio)
<TABLE>
<S> <C>
Bond Portfolio
Investment Management Fees .500%
Other Expenses .070%
--------
Total Bond Portfolio Annual Expenses .570%
--------
--------
</TABLE>
PAGE 6
<PAGE>
EXAMPLE--For contracts using the Bond Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 62 $ 78 $ 95 $ 137
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--MONEY MARKET SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Money Market
Portfolio)
<TABLE>
<S> <C>
Money Market Portfolio
Investment Management Fees .500%
Other Expenses .090%
--------
Total Money Market Portfolio Annual Expenses .590%
--------
--------
</TABLE>
PAGE 7
<PAGE>
EXAMPLE--For contracts using the Money Market Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 62 $ 79 $ 96 $ 140
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--ASSET ALLOCATION SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Asset
Allocation Portfolio)
<TABLE>
<S> <C>
Asset Allocation Portfolio
Investment Management Fees .500%
Other Expenses .050%
--------
Total Asset Allocation Portfolio Annual Expenses .550%
--------
--------
</TABLE>
PAGE 8
<PAGE>
EXAMPLE--For contracts using the Asset Allocation Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 62 $ 78 $ 94 $ 135
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--MORTGAGE SECURITIES SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Mortgage
Securities Portfolio)
<TABLE>
<S> <C>
Mortgage Securities Portfolio
Investment Management Fees .500%
Other Expenses .090%
--------
Total Mortgage Securities Portfolio Annual Expenses .590%
--------
--------
</TABLE>
PAGE 9
<PAGE>
EXAMPLE--For contracts using the Mortgage Securities Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 62 $ 79 $ 96 $ 140
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--INDEX 500 SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.135)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .660%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Index 500
Portfolio)
<TABLE>
<S> <C>
Index 500 Portfolio
Investment Management Fees .400%
Other Expenses .050%
--------
Total Index 500 Portfolio Annual Expenses .450%
--------
--------
</TABLE>
PAGE 10
<PAGE>
EXAMPLE--For contracts using the Index 500 Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 62 $ 78 $ 94 $ 135
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--SMALL COMPANY GROWTH SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.485)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .310%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Small
Company Growth Portfolio)
<TABLE>
<S> <C>
Small Company Growth Portfolio
Investment Management Fees .750%
Other Expenses .070%
--------
Total Small Company Growth Portfolio Annual Expenses .820%
--------
--------
</TABLE>
PAGE 11
<PAGE>
EXAMPLE--For contracts using the Small Company Growth Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 62 $ 78 $ 95 $ 137
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
</TABLE>
INDIVIDUAL FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Deferred Sales Load (as a percentage 9% decreasing uniformly by .075% for
of amount surrendered or withdrawn) each of the first 120 months from the
contract date
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--GROWTH SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
Other Expense Reimbursement (.050)%
--------
Total Sub-Account Annual Expenses .510%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Growth
Portfolio)
<TABLE>
<S> <C>
Growth Portfolio
Management Fees .500%
Other Expenses .050%
--------
Total Growth Portfolio Annual Expenses .550%
--------
--------
</TABLE>
PAGE 12
<PAGE>
EXAMPLE--For contracts using the Growth Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 97 $ 108 $ 129
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 34 $ 58 $ 129
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 34 $ 58 $ 129
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--BOND SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Bond
Portfolio)
<TABLE>
<S> <C>
Bond Portfolio
Management Fees .500%
Other Expenses .070%
--------
Total Bond Portfolio Annual Expenses .570%
--------
--------
</TABLE>
PAGE 13
<PAGE>
EXAMPLE--For contracts using the Bond Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 99 $ 111 $ 137
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--MONEY MARKET SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Money Market
Portfolio)
<TABLE>
<S> <C>
Money Market Portfolio
Management Fees .500%
Other Expenses .090%
--------
Total Money Market Portfolio Annual Expenses .590%
--------
--------
</TABLE>
PAGE 14
<PAGE>
EXAMPLE--For contracts using the Money Market Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 100 $ 112 $ 140
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--ASSET ALLOCATION SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Asset
Allocation Portfolio)
<TABLE>
<S> <C>
Asset Allocation Portfolio
Management Fees .500%
Other Expenses .050%
--------
Total Asset Allocation Portfolio Annual Expenses .550%
--------
--------
</TABLE>
PAGE 15
<PAGE>
EXAMPLE--For contracts using the Asset Allocation Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 99 $ 110 $ 135
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--MORTGAGE SECURITIES SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.235)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .560%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Mortgage
Securities Portfolio)
<TABLE>
<S> <C>
Mortgage Securities Portfolio
Management Fees .500%
Other Expenses .090%
--------
Total Mortgage Securities Portfolio Annual Expenses .590%
--------
--------
</TABLE>
PAGE 16
<PAGE>
EXAMPLE--For contracts using the Mortgage Securities Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 100 $ 112 $ 140
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 37 $ 63 $ 140
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--INDEX 500 SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.135)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .660%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Index 500
Portfolio)
<TABLE>
<S> <C>
Index 500 Portfolio
Management Fees .400%
Other Expenses .050%
--------
Total Index 500 Portfolio Annual Expenses .450%
--------
--------
</TABLE>
PAGE 17
<PAGE>
EXAMPLE--For contracts using the Index 500 Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 99 $ 110 $ 135
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 11 $ 35 $ 61 $ 135
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES--SMALL COMPANY GROWTH SUB-ACCOUNT
(as a percentage of average daily sub-account net assets)
<TABLE>
<S> <C>
Investment Management Fee Reimbursement (.485)%
Mortality and Expense Risk Fees .795%
--------
Total Sub-Account Annual Expenses .310%
--------
--------
</TABLE>
ADVANTUS SERIES FUND, INC. ANNUAL EXPENSES
(as a percentage of Advantus Series Fund average net assets for the Small
Company Growth Portfolio)
<TABLE>
<S> <C>
Small Company Growth Portfolio
Investment Management Fees .750%
Other Expenses .070%
--------
Total Small Company Growth Portfolio Annual Expenses .820%
--------
--------
</TABLE>
PAGE 18
<PAGE>
EXAMPLE--For contracts using the Small Company Growth Portfolio:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS
------- ------- ------- -------
<S> <C> <C> <C> <C>
If you surrender your contract at the end of the
applicable time period:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 87 $ 99 $ 111 $ 137
If you annuitize at the end of the applicable time
period:*
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
If you do NOT surrender your contract:
You would pay the following expenses on a $1,000
investment, assuming 5% annual return on assets $ 12 $ 36 $ 62 $ 137
</TABLE>
The tables shown above are to assist a contract owner in understanding the costs
and expenses that a contract will bear directly or indirectly. For more
information on contract costs and expenses, see the Prospectus heading "Contract
Charges" and the information immediately following. The table does not reflect
deductions for any applicable premium taxes which may be made from each purchase
payment depending upon the applicable law. In addition, Variable Fund D amounts
in the Growth Portfolio are shown after the reimbursement (which is made to the
Separate Account Sub-Account for management fees). For additional information on
this reimbursement, see page 16 of this Prospectus.
* Annuitization for this purpose means the election of an Annuity Option under
which benefits are expected to continue for a period of at least five years.
Prior to May 3, 1993, several of the Portfolios were known by different names.
The Growth Portfolio was the Stock Portfolio, the Asset Allocation Portfolio was
the Managed Portfolio and the Index 500 Portfolio was the Index Portfolio.
PAGE 19
<PAGE>
CONDENSED FINANCIAL INFORMATION
The financial history of each sub-account may be found in the Appendix under the
heading "Condensed Financial Information".
FINANCIAL STATEMENTS
The complete financial statements of Variable Fund D and Minnesota Life
Insurance Company are included in the Statement of Additional Information.
GENERAL DESCRIPTIONS
A. MINNESOTA LIFE INSURANCE COMPANY
We are Minnesota Life Insurance Company ("Minnesota Life"), a life insurance
company organized under the laws of Minnesota. Minnesota Life was formerly known
as The Minnesota Mutual Life Insurance Company ("Minnesota Mutual"), a mutual
life insurance company organized in 1880 under the laws of Minnesota. On October
1, 1998, a plan of reorganization created a mutual insurance holding company
named Minnesota Mutual Companies, Inc. Minnesota Mutual reorganized as a stock
insurance company subsidiary of the new holding company and took the new name
Minnesota Life. Our home office is at 400 Robert Street North, St. Paul,
Minnesota 55101-2098, telephone: (651) 665-3500. We are licensed to do a life
insurance business in all states of the United States (except New York where we
are an authorized reinsurer), the District of Columbia, Canada, Puerto Rico and
Guam.
B. VARIABLE FUND D
We established Variable Fund D on October 16, 1967 in accordance with Minnesota
Law. Variable Fund D was registered as an open-end diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"). The separate account meets the definition of a separate account
under the federal securities laws.
The assets of Variable Fund D shall not be chargeable with liabilities arising
out of any other business which Minnesota Life may conduct, but shall be held
and applied exclusively for the benefit of the holders of those variable annuity
contracts for which Variable Fund D was established. The investment performance
of Variable Fund D is entirely independent of both the investment performance of
our general account and of any other separate account which we may have
established or may later establish. All obligations under the contracts are our
general corporate obligations.
At a Special Meeting of contract owners and participants of Variable Fund D held
October 23, 1990, the contract owners and participants approved an Agreement and
Plan of Reorganization whereby Variable Fund D (which was a management
investment company investing primarily in a portfolio of equity securities,
mainly
PAGE 20
<PAGE>
common stocks) transferred all of its assets to the Growth Portfolio of the
Advantus Series Fund, Inc. in exchange for shares of that Portfolio. Variable
Fund D was reconstituted and registered as a unit investment trust under the
1940 Act. As part of that Reorganization it now consists of seven sub-accounts,
each investing its assets solely in the shares of one of seven of the Series
Fund Portfolios. The Series Fund has a number of Portfolios which are not
available to Variable Fund D. Registration with the Securities and Exchange
Commission (the "Commission") does not involve supervision of the management or
investment policies or practices of Variable Fund D by the Commission.
C. ADVANTUS SERIES FUND, INC.
The Advantus Series Fund, Inc. ("Series Fund") is a mutual fund advised by
Advantus Capital Management, Inc. ("Advantus Capital"). The Series Fund issues
its shares only to us and our separate accounts. It may be offered to separate
accounts of insurance companies affiliated with us in the future. Advantus
Capital is a wholly-owned subsidiary of Minnesota Life.
A prospectus for the Series Fund is attached to this prospectus. You should
carefully read the prospectuses before investing in the Contract.
D. ADDITIONS, DELETIONS OR SUBSTITUTIONS
We retain the right, subject to any applicable law, to make substitutions with
respect to the investments of the sub-accounts of Variable Fund D. If investment
in a fund should no longer be possible or if we determine it becomes
inappropriate for contracts of this class, we may substitute another fund for a
sub-account. Substitution may be with respect to existing accumulation values,
future purchase payments and future annuity payments.
We may also establish additional sub-accounts in Variable Fund D and we reserve
the right to add, combine or remove any sub-accounts of Variable Fund D. Each
additional sub-account will purchase shares in a new portfolio or mutual fund.
Such sub-accounts may be established when, in our sole discretion, marketing,
tax, investment or other conditions warrant such action. Similar considerations
will be used by us should there be a determination to eliminate one or more of
the sub-accounts of Variable Fund D. The addition of any investment option will
be made available to existing contract owners on such basis as may be determined
by us.
We also reserve the right, when permitted by law, to de-register Variable Fund D
under the Investment Company Act of 1940, to restrict or eliminate any voting
rights of the contract owners, and to combine Variable Fund D with one or more
of our other separate accounts.
It is conceivable that in the future it may be disadvantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the Series Fund simultaneously. Although Minnesota Life does not currently
foresee any such disadvantages either to variable life insurance policy owners
or to variable annuity contract owners, the Series Fund's Board of Directors
intends
PAGE 21
<PAGE>
to monitor events in order to identify any material conflicts between such
policy owners and contract owners and to determine what action, if any, should
be taken in response thereto. Such action could include the sale of Series Fund
shares by one or more of the separate accounts, which could have adverse
consequences. Material conflicts could result from, for example, (1) changes in
state insurance law, (2) changes in Federal income tax laws, (3) changes in the
investment management of any of the Portfolios of the Series Fund, or (4)
differences in voting instructions between those given by policy owners and
those given by contract owners.
CONTRACT DEDUCTIONS
SALES CHARGES
No sales charge is deducted from the purchase payments for these contracts.
However, a deferred sales charge, may apply in certain circumstances.
A deferred sales charge is made on contract withdrawals or surrenders during the
first ten contract years, measured from the issue date of the contract. If
annuity payments commence during the first ten contract years, the deferred
sales charge may be assessed against the amount applied to provide the annuity.
The amount of any deferred sales charge applicable to a particular transaction
is deducted from the accumulation value.
Under the Flexible Payment Deferred Variable Annuity Contract the amount of the
deferred sales charge as a percentage of the amount surrendered, withdrawn, or
applied to provide an annuity at the end of each contract year is as shown in
Table 1. The percentages decrease uniformly by .075% for each of the first 120
months from the contract date. Any amounts withdrawn from the contract may also
be reduced by any applicable state premium taxes not previously deducted from
purchase payments.
<TABLE>
<CAPTION>
FLEXIBLE PAYMENT DEFERRED VARIABLE
ANNUITY CONTRACT
TABLE 1
- -----------------------------------
BEGINNING OF CONTRACT YEAR CHARGE
- -------------------------- ------
<S> <C>
1 9.0%
2 8.1
3 7.2
4 6.3
5 5.4
6 4.5
7 3.6
8 2.7
9 1.8
10 0.9
11 0
</TABLE>
PAGE 22
<PAGE>
Under the Single Payment Deferred Variable Annuity Contract the amount of the
deferred sales charge as a percentage of the amount surrendered, withdrawn, or
applied to provide an annuity at the end of each contract year is as shown in
Table 2. The percentages decrease uniformly by .05% for each of the first 120
months from the contract date. Any amounts withdrawn from the contract may also
be reduced by any applicable state premium taxes not previously deducted from
purchase payments.
<TABLE>
<CAPTION>
SINGLE PAYMENT DEFERRED VARIABLE
ANNUITY CONTRACT
TABLE 2
- -----------------------------------
BEGINNING OF CONTRACT YEAR CHARGE
- -------------------------- ------
<S> <C>
1 6.0%
2 5.4
3 4.8
4 4.2
5 3.6
6 3.0
7 2.4
8 1.8
9 1.2
10 0.6
11 0
</TABLE>
Under both contracts, if a withdrawal is made where the sum of all withdrawals
in that calendar year is equal to or less than 10% of the accumulation value at
the end of the previous calendar year, the deferred sales charge will not apply.
If the sum of the withdrawals exceeds that amount, the deferred sales charge
will apply only to the amount of the excess. Similarly, if the contract is
surrendered, the deferred sales charge will apply only to the extent that the
amount surrendered, when coupled with any withdrawals during the year, exceeds
10% of the accumulation value at the end of the previous calendar year.
Under current practices, we will allow withdrawals during the first calendar
year to be made without the imposition of a deferred sales charge so long as
withdrawals during the balance of the first calendar year do not exceed 10% of
the purchase payments applied to the contract during that first calendar year.
A deferred sales charge will apply on contracts in the contract years shown
except in the event of the death of the annuitant or on an election of an
annuity payment option which provides for benefits which are expected to
continue for a period of at least five years. In addition, we will waive the
deferred sales charge on that portion of a contract's accumulation value which
is applied to the purchase of an Adjustable Income Annuity, which is an
immediate variable annuity contracts, issued by us. We will also waive the sales
charge on amounts withdrawn because of an excess contribution to a tax-qualified
contract (including for example individual retirement annuities).
PAGE 23
<PAGE>
To the extent that sales charges are insufficient to recover sales expenses, we
will pay sales expenses from our other assets or surplus. These assets may
include proceeds from the mortality and expense risk charges described below.
PREMIUM TAXES
Deductions for any applicable premium taxes may be made from each purchase
payment (currently such premium taxes range from 0.5% to 3.5%) depending upon
the applicable law.
INVESTMENT MANAGEMENT
Under contracts funded by Variable Fund D, all costs of operating Variable Fund
D as an investment management company originally were covered by an investment
management fee of .265% of contract or account values on an annual basis.
Variable Fund D is now a unit investment trust rather than a managed investment
company, and therefore that investment management fee no longer will be paid.
However, contract values that are allocated to sub-accounts of Variable Fund D
will be invested in Series Fund Portfolios that do pay investment advisory fees
(at a rate of .40% on an annual basis for the Index 500 Portfolio, .75% for the
Small Company Growth Portfolio and .50% for each of the five other available
Portfolios) and do incur other operating expenses. Those other operating
expenses have been voluntarily subsidized by us to the extent that the expenses
exceed .15% on an annual basis for any Portfolio. While we have no present
intention to alter that practice, we are under no obligation to continue it.
To ensure that Contract Owners and Participants continue to get at least what
they originally expected under their contracts, we have agreed that, each
valuation period, in calculating the net investment factor for the Growth
Sub-Account of Variable Fund D, we will make adjustments that have the effect of
reimbursing the excess of any expenses indirectly incurred as a result of the
investment advisory fee paid and the operating expenses incurred by the Growth
Portfolio of the Series Fund over the former .265% investment management fee.
Accordingly, to the extent that the contract or account values continue to be
allocated to the sub-account that, in effect, continues Variable Fund D
investment objective when it was operating as a management investment company,
there will be no change in the level of charges for the provision of investment
management services. In calculating the net investment factor for the other
sub-accounts of Variable Fund D, we will make adjustments that, in effect,
reimburse the excess of the investment advisory fees incurred through indirect
investment in the Series Fund Portfolios and the former .265% investment
management fee; however, any other Series Fund Portfolio operating expenses
would not be subject to the reimbursement. Therefore, to the extent that a
Contract Owner or Participant chooses to take advantage of Variable Fund D
sub-accounts other than the Growth Sub-Account, you may incur additional
expenses.
PAGE 24
<PAGE>
MORTALITY AND EXPENSE RISKS
We assume the mortality risk under the contract by our obligation to continue to
make monthly annuity payments, to each annuitant regardless of how long you live
and regardless of how long all annuitants as a group live. Thus, neither an
annuitant's own longevity nor an improvement in life expectancy generally will
have an adverse effect on the monthly annuity payments an annuitant will receive
under the contract.
We assume an expense risk by assuming the risk that deductions provided for in
the contracts for expenses may be insufficient to cover the actual expenses
incurred.
To the extent that sales charges are insufficient to recover sales expenses, we
will pay sales expenses from our other assets or surplus. These assets may
include proceeds from the mortality and expense risks charge described below.
For assuming these risks, we currently make a deduction from Variable Fund D at
an annual rate of .1325% for the mortality risk and .6625% for the expense risk.
These deductions may be increased or decreased by resolution of the Board of
Directors of Minnesota Life, but not more often than annually. In no event will
the combined deductions exceed the amount of the present deduction of .795% per
annum. If the sum of such deductions is insufficient to cover the risks assumed,
the loss will fall on us. Conversely, if the deductions provide more than
sufficient, any excess will be profit to us.
EXPENSES
Variable Fund D has no expenses which are not covered by the deductions listed
above. We perform all the administrative functions relative to the contracts. We
also bear all expenses associated with the administration of the contracts.
These include such items as salaries, rent, postage, telephone, travel, office
equipment and stationery, and legal, actuarial and auditing fees.
OTHER EXPENSES
The underlying Portfolios also bear certain expenses. See the Advantus Series
Fund, Inc. prospectus for more information.
PAGE 25
<PAGE>
DESCRIPTION OF THE CONTRACTS
DESCRIPTION
The following material is intended to provide a general description of contract
terms. In the event that there are questions concerning the contracts which are
not discussed or should you desire additional information, inquiries may be
addressed to us at: Minnesota Mutual Center, 400 Robert Street North, St. Paul,
Minnesota 55101-2098.
1. Types of Contracts
Minnesota Life continuously offers two types of variable annuity contracts
pursuant to this Prospectus:
(a) Single Payment Deferred Variable Annuity.
This type of contract may be used in connection with a qualified pension
or profit sharing plan under which plan contributions have been
accumulating in a trust fund. It may also be used in connection with a
qualified plan which has previously been funded with insurance contracts
or fixed annuity contracts issued by us. The contract provides for a
fixed or variable annuity to begin at some future date with the purchase
payment made either in a lump sum or in a series of payments in a single
contract year. The contract may also be used to provide fixed annuity or
variable annuity payments under the state deferred compensation plans or
individual retirement annuity programs.
(b) Flexible Payment Deferred Variable Annuity.
This type of contract may be used in connection with all types of
qualified plans, state deferred compensation plans or with individual
retirement annuities adopted by or on behalf of individuals. The
contract provides for a variable annuity or a fixed annuity to begin at
some future date with the purchase payments for the contract to be paid
prior to the annuity commencement date in a series of payments flexible
in respect to the date and amount of payment.
2. Issuance of Contracts
The contracts are issued to the contract owner named in the application. The
owner may be the annuitant or someone else; however, once the owner has been
named in the application the ownership of the contract may not be changed.
3. Right of Revocation
The contract owner should read the contract carefully as soon as it is received.
The contract owner may revoke the purchase of a contract within ten days after
its delivery, for any reason, on notice to us at 400 Robert Street North, St.
Paul, Minnesota, of an intention to revoke. If the contract is revoked and
returned, we will refund the greater of (a) the accumulation value of the
contract or (b) the amount of purchase payments paid under the contract. Payment
of the requested refund will be made to the purchaser within seven days after we
receive notice of cancellation.
PAGE 26
<PAGE>
In some states, such as California, the free look period is extended to thirty
days' time for contracts issued or delivered. These rights are subject to
change, and may vary among other states.
The liability of Variable Fund D under the foregoing is limited to the
accumulation value of any contract at the time it is returned for cancellation.
Any additional amounts necessary to make the refund to the owner equal to the
purchase payments will be made by us.
4. Annuity Payments
Variable annuity payments are determined on the basis of:
- the mortality table specified in the contract, which reflects the age of
the annuitant,
- the type of annuity payment option selected, and
- the investment performance of Variable Fund D.
The amount of the variable annuity payments will not be affected by adverse
mortality experience or by an increase in our expenses in excess of the expense
deductions provided for in the contract. The annuitant will receive the value of
a fixed number of annuity units each month. The value of such units and thus the
amounts of the monthly annuity payments will reflect investment gains and losses
and investment income of Variable Fund D. Thus the annuity payments will vary
with the investment experience of the assets of Variable Fund D.
5. Modification of the Contract
The contract may be modified at any time by written agreement between Minnesota
Life and the contract owner.
6. Assignment
The contract may not be assigned, sold, transferred, discounted or pledged as
collateral for a loan or as security for the performance of an obligation or for
any other purpose, and to the maximum extent permitted by law, benefits payable
under the contract shall be exempt from the claims of creditors.
7. Limitations on Purchase Payments
The minimum purchase payment for the Single Payment Deferred Variable Annuity
Contract must be at least $5,000. It may not exceed $250,000 except with our
prior consent.
The minimum periodic purchase payment which may be made under a Flexible Payment
Deferred Variable Annuity Contract is $25. Currently, we are waiving this
provision.
There may be limits on the maximum contributions to retirement plans that
qualify for special tax treatment.
PAGE 27
<PAGE>
8. Contract Settlement
Whenever any payment under a contract is to be made in a single sum, payment
will be made within seven days after the date such payment is called for by the
terms of the contract, except as payment may be subject for postponement for:
(a) any period during which the New York Stock Exchange is closed other than
customary weekend and holiday closings, or during which trading on the New
York Stock Exchange is restricted, as determined by the Securities and
Exchange Commission;
(b) any period during which an emergency exists as determined by the Commission
as a result of which it is not reasonably practical to dispose of
securities in Variable Fund D or to fairly determine the value of the
assets of Variable Fund D; or
(c) such other periods as the Commission may by order permit for the
protection of the contract owners.
9. Participation
The contract is non-participating. Contracts issued prior to October 1, 1998,
were participating.
No assurances can be given as to the amounts, if any, that will be distributed
under participating contracts in the future. When we make any distribution, it
may take the form of additional payments to annuitant or the crediting of
additional accumulation units. We do not anticipate making dividend payments
under these contracts.
VOTING RIGHTS
The Series Fund shares held in Variable Fund D will be voted by us. Shares will
be voted by us in accordance with instructions received from contract owners
with voting interests in each sub-account of Variable Fund D. In the event no
instructions are received from a contract owner, we will vote such shares of the
Series Fund in the same proportion as shares of the Series Fund for which
instructions have been received from contract owners with voting interests in
each sub-account of Variable Fund D. In the event no instructions are received
from a contract owner, with respect to shares of a Portfolio held by a
sub-account, we will vote such shares of the Portfolio and shares not
attributable to contracts in the same proportion as shares of the Portfolio held
by such sub-account for which instructions have been received. The number of
votes which are available to a contract owner will be calculated separately for
each sub-account of Variable Fund D. If, however, the Investment Company Act of
1940 or any regulation under that Act should change so that we may be allowed to
vote shares in our own right, then we may elect to do so.
During the accumulation period of each contract, the contract owner holds the
voting interest in each contract. The number of votes will be determined by
PAGE 28
<PAGE>
dividing the accumulation value of the contract attributable to each sub-account
by the net asset value per share of the underlying Series Fund shares held by
that sub-account.
During the annuity period of each contract, the annuitant holds the voting
interest in each contract. The number of votes will be determined by dividing
the reserve for each contract allocated to each sub-account by the net asset
value per share of the underlying Series Fund shares held by that sub-account.
After an annuity begins, the votes attributable to any particular contract will
decrease as the reserves decrease. In determining any voting interest,
fractional shares will be recognized.
We shall notify each contract owner or annuitant of a Series Fund shareholders'
meeting if the shares held for the contract owner's contract may be voted at
such meeting. We will also send proxy materials and a form of instruction so
that you can instruct us with respect to voting.
ANNUITY PERIOD
1. Electing the Retirement Date and Form of Annuity
The contracts provide for four optional annuity forms, any one of which may be
elected if permitted by law. Each annuity option may be elected on either a
variable annuity or a fixed dollar annuity basis, or a combination thereof.
Other annuity options may be available on request.
While the contracts require that notice of election to begin variable annuity
payments must be received by us at least thirty days prior to the annuity
commencement date, we are currently waiving that requirement for such annuity
elections received at least two valuation days prior to the fifteenth of the
month. We reserve the right to enforce the thirty day notice requirement at our
option at anytime in the future.
Fixed annuity payments are always made as of the first day of a month. The
contracts require that the notice of election to begin fixed annuity payments
must be received by us at least thirty days prior to the annuity commencement
date. However, we are currently waiving this requirement.
Money will be transferred to the General Account for the purpose of electing
fixed annuity payments, or to the appropriate variable sub-accounts for variable
annuity payments, on the valuation date coincident with the first valuation date
following the fourteenth day of the month preceding the date on which the
annuity is to begin.
If a request for a fixed annuity is received between the first valuation date
following the fourteenth day of the month and the second to last valuation date
of the month prior to commencement, the transfer will occur on the valuation
date coincident with or next following the date on which the request is
received. If a fixed annuity request is received after the third to the last
valuation day of the month prior to commencement, it will be treated as a
request received the
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following month, and the commencement date will be changed to the first of the
month following the requested commencement date. The account value used to
determine fixed annuity payments will be the value as of the last valuation date
of the month preceding the date the fixed annuity is to begin.
If a variable annuity request is received after the third valuation date
preceding the first valuation date following the fourteenth day of the month
prior to the commencement date, it will be treated as a request received the
following month, and the commencement date will be changed to the first of the
month following the requested commencement date. The account value used to
determine the initial variable annuity payment will be the value as of the first
valuation date following the fourteenth day of the month prior to the variable
annuity begin date.
If an election has not been made otherwise, and the plan does not specify to the
contrary, the annuitant's retirement date shall be the first day of the calendar
month next following his or her 65th birthday, and the annuity option shall be
Option 2A, a life annuity with a period certain of 120 months. In this event, a
fixed annuity will be provided by any general account accumulation value and a
variable annuity will be provided by any Variable Fund D accumulation value. The
minimum first monthly annuity payment on either a variable or fixed dollar basis
is $20. If such first monthly payment would be less than $20, we may fulfill our
obligation by paying in a single sum the value of the contract which would
otherwise have been applied to provide annuity payments.
The contracts permit annuity payments to begin on the first day of any month
after the 50th birthday and before the 75th birthday of the annuitant.
Once annuity payments have commenced, the annuitant cannot surrender his or her
annuity benefit and receive a single sum settlement in lieu thereof.
The mortality and expense risks charge continues to be deducted throughout the
annuity period under each of the available annuity options, including Option 4,
under which there is no mortality risk to us.
Benefits under retirement plans that qualify for special tax treatment generally
must commence no later than the April 1 following the year in which the
participant reaches age 70 1/2 and are subject to other conditions and
restrictions.
2. Optional Annuity Forms
OPTION 1 - LIFE ANNUITY This is an annuity payable monthly during the lifetime
of the annuitant and terminating with the last monthly payment preceding the
death of the annuitant. This option offers the maximum amount of monthly
payments since there is no guarantee of a minimum number of payments or
provision for a death benefit for beneficiaries. It would be possible under this
option for the annuitant to receive only one annuity payment if he or she died
prior to the due date of the second annuity payment, two if he or she died
before the due date of the third annuity payment, etc.
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OPTION 2 - LIFE ANNUITY WITH A PERIOD CERTAIN OF 120 MONTHS (OPTION 2A), 180
MONTHS (OPTION 2B), OR 240 MONTHS (OPTION 2C) This is an annuity payable monthly
during the lifetime of the annuitant, with the guarantee that if the annuitant
dies before payments have been made for the period certain elected, payments
will continue to the beneficiary during the remainder of the period certain; or
if the beneficiary so elects at any time during the remainder of the period
certain, the present value of the remaining guaranteed number of payments, based
on the then current dollar amount of one such payment shall be paid in a single
sum to the beneficiary.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY This is an annuity payable monthly
during the joint lifetime of the annuitant and a designated joint annuitant and
continuing thereafter during the remaining lifetime of the survivor. Under this
option there is no guarantee of a minimum number of payments or provision for a
death benefit for beneficiaries.
OPTION 4 - PERIOD CERTAIN ANNUITY This is an annuity payable monthly for a
Period Certain of from 3 to 15 years, as elected. If the annuitant dies before
payments have been made for the Period Certain elected, payments will continue
to the beneficiary during the remainder of such Period Certain. At any time
during the payment period, the payee may elect that (1) the present value of the
remaining guaranteed number of payments, based on the then current dollar amount
of one such payment and using the same interest rate which served as a basis for
the annuity, shall be paid in a single sum, or (2) such commuted amount shall be
applied to effect a life annuity under Option 1 or Option 2.
3. Value of the Annuity Unit
The value of an annuity unit is determined monthly as of the first day of each
month. The value of the annuity unit on the first day of each month is
determined by multiplying the value on the first day of the preceding month by
the product of:
- .997137, and
- the ratio of the value of the accumulation unit for the valuation date
next following the fourteenth day of the preceding month to the value of
the accumulation unit for the valuation date next following the
fourteenth day of the second preceding month. (.997137 is a factor to
neutralize the assumed net investment rate, discussed in Section 4 below,
of 3.5% per annum built into the annuity rate tables contained in the
contract and which is not applicable because the actual net investment
rate is credited instead.)
The value of an annuity unit as of any date other than the first day of a month
is equal to its value as of the first day of the next succeeding month.
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4. Determination of Amount of First Monthly Annuity Payment
Under the contracts described in this Prospectus, the first monthly annuity
payment is determined by the value of the contract at retirement. In addition, a
number of states do, however, impose a premium tax on the amount used to
purchase annuity benefits, depending on the type of plan involved. These taxes,
where applicable, currently range from 0.5% to 3.5% and are deducted from the
contract value applied to provide annuity payments. We reserve the right to make
such deductions from purchase payments as they are received.
When annuity payments commence, the value of the contract is determined as the
product of (a) the number of accumulation units credited to the contract, and
(b) the value of an accumulation unit.
The contracts contain tables indicating the dollar amount of the first monthly
payment under each optional annuity form for each $1,000 of value applied. The
amount of the first monthly payment depends on the optional annuity form elected
and the adjusted age of the annuitant. If, when annuity payments are elected, we
are using tables of annuity rates for these contracts which result in larger
annuity payments, we will use those tables instead.
A formula for determining the adjusted age is contained in the contract. The
tables are determined from the Progressive Annuity Table with interest at the
rate of 3.5% per annum, assuming births in the year 1900 and an age setback of
six years. The total first monthly annuity payment is determined by multiplying
the number of thousands of dollars of value applied (less any applicable premium
taxes not previously deducted) by the amount of the first monthly payment per
$1,000 of value from the tables in the contract. The 3.5% interest rate assumed
in the annuity tables would produce level annuity payments if the net investment
rate remained constant at 3.5% per year.
Subsequent payments will be less than, equal to, or greater than the first
payment depending upon whether the actual net investment rate is less than,
equal to, or greater than 3.5%. A higher interest rate would mean a higher
initial payment, but a more slowly rising (or more rapidly falling) series of
subsequent payments. A lower assumption would have the opposite effect.
5. Amount of Second and Subsequent Monthly Annuity Payments
The amount of the first monthly annuity payment, determined as described above,
is divided by the then current annuity unit value on the date of the first
payment to determine the number of annuity units represented by the first
payment. This number of annuity units remains constant during the period of
annuity payments, and in each subsequent month, the dollar amount of the annuity
payment is determined by multiplying this constant number of annuity units by
the then current value of an annuity unit.
The Statement of Additional Information contains an illustration of the
calculation of annuity unit values and of a variable annuity payment showing the
method used for the calculation of both the initial and subsequent payments.
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DEATH BENEFIT
If the owner dies before annuity payments have started, we will pay the
accumulation value of the contract to the named beneficiary. The accumulation
value will be determined as of the valuation date coincident with or next
following the date that we receive proof of death at our home office. Death
proceeds will be paid in a single sum to the beneficiary designated by the
contract owner, unless an annuity option is elected by the beneficiary. Payment
will be made within seven days after we receive proof of death and return of the
contract. Except as noted below, the entire interest in the contract must be
distributed within five years of the owner's death. If the annuitant dies after
annuity payments have begun, we will pay to the beneficiary any death benefit
provided by the annuity option selected. The person selected by the owner as the
beneficiary of any remaining interest after the death of the annuitant under the
annuity option may be a person different from that person designated as the
contract beneficiary prior to the annuity commencement date.
If the owner dies on or before the date on which annuity payments begin and if
the designated beneficiary is a person other than the owner's spouse, that
beneficiary may elect an annuity option measured by a period not longer than
that beneficiary's life expectancy only so long as annuity payments begin not
later than one year after the owner's death. If there is no designated
beneficiary, then the entire interest in the contract must be distributed within
five years after the owner's death. If the annuitant dies after annuity payments
have begun, any payments received by a non-spouse beneficiary must be
distributed at least as rapidly as under the method elected by the annuitant as
of the date of death.
If any portion of the contract is payable to a designated beneficiary who is the
contract owner's surviving spouse, that spouse shall be treated as the contract
owner for purposes of: (1) when payments must begin, and (2) the time of
distribution in the event of the spouse's death. Payments must be made in
substantially equal installments.
If the owner of this contract is other than a natural person, such as a trust or
other entity, we will pay a death benefit of the accumulation value to the named
beneficiary on the death of the annuitant, if death occurs prior to the date for
annuity payments to begin.
The beneficiary will be the person or persons named in the contract application
unless the owner subsequently changes the beneficiary. In that event, we will
pay the amount payable at death to the beneficiary named in your last change of
beneficiary request. The owner's written request to change the beneficiary will
not be effective until it is recorded in our home office records. After it has
been recorded, it will take effect as of the date the owner signed the request.
However, if the annuitant or the owner dies before the request has been
recorded, the request will not be effective as to those death proceeds we have
paid before the request was recorded in our home office records.
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CREDITING ACCUMULATION UNITS
During the accumulation period - the period before the commencement of annuity
payments - the purchase payment (on receipt of a completed application or
subsequently) is credited on the valuation date coincident with or next
following the date such purchase payment is received. If the initial purchase
payment is accompanied by an incomplete application, the purchase payment will
not be credited until the valuation date coincident with or next following the
date a completed application is received. We will offer to return the initial
purchase payment accompanying an incomplete application if it appears that the
application cannot be completed within five business days. Purchase payments
will be credited to the contract in the form of accumulation units. The number
of accumulation units credited with respect to each purchase payment is
determined by dividing the portion of the purchase payment allocated to each
sub-account by the then current accumulation unit value for that sub-account.
The total of these separate account accumulation values in the sub-accounts will
be the separate account accumulation value. Interests in the sub-accounts will
be valued separately.
The number of accumulation units so determined shall not be changed by any
subsequent change in the value of an accumulation unit. The value of an
accumulation unit will vary from valuation date to valuation date to reflect the
investment experience of the Portfolios of the Series Fund.
We will determine the value of accumulation units on each day on which the
Portfolios of the Series Fund are valued. The net asset value of the Series
Fund's shares shall be computed once daily, and, in the case of Money Market
Portfolio, after the declaration of the daily dividend, as of the primary
closing time for business on the New York Stock Exchange (as of the date hereof
the primary close of trading is 3:00 p.m. (Central time), but this time may be
changed) on each day, Monday through Friday, except:
- days on which changes in the value of such Series Fund's portfolio
securities will not materially affect the current net asset value of such
Series Fund's shares,
- days during which no such Series Fund's shares are tendered for
redemption and no order to purchase or sell such Series Fund's shares is
received by such Series Fund and
- customary national business holidays on which the New York Stock Exchange
is closed for trading.
Accordingly, the value of accumulation units will be determined daily, and such
determinations will be applicable to all purchase payments received by us at our
home office on that day prior to the close of business of the Exchange. The
value of accumulation units applicable to purchase payments received subsequent
to the close of business of the Exchange on that day will be the value
determined as of the close of business on the next day the Exchange is open for
trading.
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In determining the value of the Series Fund on a valuation date, each security
traded on a national securities exchange is valued at the last reported sale
price on that date, as of the close of trading on the New York Stock Exchange.
If there has been no sale on such day, then the security is valued at the last
reported bid price on that day. Any security not traded on a securities
exchange, but traded in the over-the-counter market, is valued at the last
quoted bid price. Any securities or other assets for which market quotations are
not readily available are valued at fair market value as determined in good
faith by the Series Fund Board of Directors.
In addition to providing for the allocation of purchase payments to the sub-
accounts of Variable Fund D, the contracts also provide for allocation of
purchase payments to our General Account for accumulation at a guaranteed
interest rate. Purchase payments received without allocation instructions will
be allocated to the General Account.
TRANSFER OF VALUES
Upon your written request, values under the contract may be transferred between
the General Account and Variable Fund D or among the sub-accounts of Variable
Fund D. We will make the transfer on the basis of accumulation unit values on
the valuation date coincident with or next following the day we receive the
request at our home office. No deferred sales charge will be imposed on such
transfers. While the contracts currently provide that transfer amounts must be
of an amount not less than $250, we are currently waiving this restriction.
The contracts permit us to limit the frequency and amount of transfers from the
General Account to Variable Fund D sub-accounts. Currently, except as provided
below, we limit the frequency of such transfers to a single such transfer during
any calendar year and the amount of such transfers to any amount which is no
more than 20% of the General Account accumulation value at the time of the
transfer. No transfers will be allowed after annuity payments have begun.
There are three situations which are exceptions to the above restriction.
- The first is for new contracts where purchase payments are allocated to
the General Account because of the absence of initial allocation
instructions. In this situation, contract owners may make a single
transfer of any amount from the General Account.
- The second situation is where the contract owner has established a
systematic transfer arrangement with us. The contract owner may transfer
General Account current interest earnings or a specified amount from the
General Account on a monthly, quarterly, semi-annual or annual basis. For
transfers of a specified amount from the General Account the maximum
initial amount that may be transferred may not exceed 10% of the current
General Account accumulation value at the time of the first transfer. For
contracts where the General Account accumulation value is increased
during the year because of transfers into
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the General Account or additional purchase payments, made after the
program is established, systematic transfers are allowed to the extent of
the greater of the current transfer amount or 10% of the then current
General Account accumulation value. The third situation is in the case
where the General Account accumulation value is $1000 of less. In that
case, we will allow a one-time transfer of the entire accumulation value
from the General Account to Variable Fund D sub-accounts.
- The third situation is in the case where the General Account accumulation
value is $1000 or less. In that case, we will allow a one-time transfer
of the entire accumulation value from the General Account to Variable
Fund D sub-accounts. Even with respect to systematic transfer plans, we
reserve the right to alter the terms of such programs once established
where funds are being transferred out of the General Account. Our
alteration of existing systematic transfer programs will be effective
only upon our written notice to contract owners of changes affecting
their election.
Transfer arrangements may be established to begin on the 10th or 20th of any
month and if a transfer cannot be completed it will be made on the next
available transfer date. In the absence of specific instructions, transfers will
be made on a monthly basis and will remain active until the appropriate General
Account accumulation value or sub-account is depleted.
As a type of systematic transfer arrangement for certain contracts, we will
offer automatic portfolio rebalancing ("APR") of amounts on a quarterly,
semi-annual and annual basis. Instructions to us must be in whole percentages
totaling 100%. They will be treated as instructions for transfers to and from
the various sub-accounts. Rebalancing instructions will not affect the current
allocation of future contributions; they may differ from those future
allocations and are not limited to any minimum or maximum number of
sub-accounts. There will be no charge for APR transfers and this will be
available August 1, 1999. APR is not available for values in the General
Account.
You or persons authorized by you may also effect transfers terminate automatic
premium payments, or a change in the allocation of future premiums, by means of
a telephone call. Transfers and requests made pursuant to such a call are
subject to the same conditions and procedures as are outlined above for written
transfer requests. During periods of marked economic or market changes, contract
owners may experience difficulty in implementing a telephone transfer due to a
heavy volume of telephone calls. In such a circumstance, contract owners should
consider submitting a written transfer request while continuing to attempt a
telephone redemption. We reserve the right to restrict the frequency of - or
otherwise modify, condition, terminate or impose charges upon - telephone
transfer privileges. For more information on telephone transfers, contact us.
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We make this service automatically available to all contract owners. We will
employ reasonable procedures to satisfy ourselves that instructions received
from contract owners are genuine. To the extent that we do not, we may be liable
for any losses due to unauthorized or fraudulent instructions. We require
contract owners to identify themselves in those telephone conversations through
contract numbers, social security numbers and such other information as we may
deem to be reasonable. We record telephone transfer instruction conversations
and we provide the contract owners with a written confirmation of the telephone
transfer.
The interests of contract owners arising from the allocation of purchase
payments or the transfer of contract values to the general assets of Minnesota
Life are not registered under the Securities Act of 1933. Minnesota Life is not
registered as an investment company under the Investment Company Act of 1940.
Accordingly, such interests and Minnesota Life are not subject to the provisions
of those acts that would apply if registration under such acts were required.
VALUE OF THE CONTRACT
The value of the contract at any time prior to the commencement of annuity
payments can be determined by multiplying the total number of accumulation units
credited to the contract by the current value of an accumulation unit. There is
no assurance that such value will equal or exceed the purchase payments made.
The contract owner and, where applicable, each participant will be advised
periodically of the number of accumulation units credited to the contract or to
the participant's individual account, the current value of an accumulation unit,
and the total value of the contract or the individual account.
ACCUMULATION UNIT VALUE
The value of an accumulation unit was set at $1.000000 on the first valuation
date of Variable Fund D. The value of an accumulation unit on any subsequent
valuation date is determined by multiplying the value of an accumulation unit on
the immediately preceding valuation date by the net investment factor (described
below) for the valuation period just ended. The value of an accumulation unit as
of any date other than a valuation date is equal to its value on the next
succeeding valuation date.
NET INVESTMENT FACTOR
The separate account net investment factor describes the investment performance
of a sub-account of Variable Fund D. It is for the period from one valuation
period to the next. For any such sub-account, the net investment factor for a
valuation period is the gross investment rate for such sub-account for the
valuation period less a deduction for the mortality and expense risk charge at
the rate of .795%. The net investment factor for each sub-account other than the
sub-account holding shares of the Growth Portfolio of the Series Fund, shall be
increased by us. It will be increased to the extent that on an annual basis the
investment advisory fee accrued by the Portfolio in which the sub-account
invests, as a percentage of the value of the average net assets of such
Portfolio, exceeds
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.265% per annum. The net investment factor for the sub-account holding shares of
the Growth Portfolio of the Series Fund shall also be adjusted by us. It will be
adjusted so that on an annual basis the expenses, including the investment
advisory fee, of that Portfolio, as a percentage of the average net assets of
such Portfolio, exceed .265% per annum. For purposes of this computation,
"expenses" shall be determined on the basis of generally accepted accounting
principles applicable to registered investment companies. However, they shall
exclude any expenses of the Growth Portfolio which are reimbursed by us or any
other person, any interest expense or amortization of debt discount or any
income tax expense.
The gross investment rate is equal to: (1) the net asset value per share of a
fund share held in a sub-account of the separate account determined at the end
of the current valuation period; plus (2) the per share amount of any dividend
or capital gain distribution by such fund if the "ex-dividend" date occurs
during the current valuation period; divided by (3) the net asset value per
share of that fund share determined at the end of the preceding valuation
period. The gross investment rate may be positive or negative.
WITHDRAWALS AND SURRENDER
Under both contracts, partial withdrawals may be made by the contract owner from
the contract for cash amounts of at least $250. In this event, the accumulation
value will be reduced by the amount of the withdrawal and the applicable
deferred sales charge. In the absence of instruction to the contrary,
withdrawals will be first made from the general account accumulation value and
then from the separate account accumulation value. Any amounts withdrawn from
the contract may also be reduced by any applicable state premium taxes not
previously deducted from purchase payments. We will waive the applicable dollar
amount limitation on withdrawals where a systematic withdrawal program is in
place and such a smaller amount satisfies the minimum distribution requirements
of the Code. We will also waive the applicable dollar amount limitation on
withdrawals due to excess contributions, to a qualified contract.
The contracts provide that prior to the commencement of annuity payments, the
contract owner may elect to surrender the contract and receive in a single cash
sum the accumulation value computed as of the valuation date coincident with or
next following the date of surrender. The deferred sales charge will apply if
the surrender takes place in the first ten contract years. The sales charge will
be applied to the extent that amounts payable on surrender exceed 10% of the
accumulation value at the end of the previous calendar year, less any partial
withdrawals during the current calendar year.
Under any contract, once annuity payments have commenced for an annuitant under
Options 1, 2 or 3 of the optional annuity forms, the annuitant cannot surrender
his or her annuity benefit and receive a single sum settlement in lieu thereof.
For a discussion of commutation rights of payees and beneficiaries subsequent to
the annuity commencement date, see heading "Optional Annuity Forms".
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Contract owners may also submit their signed written withdrawal or surrender
requests to us by facsimile (FAX) transmission. Our FAX number is (651)
665-7942, ATTN: U of M Plan Services. Transfer instructions or changes as to
future allocations of premium payments may be communicated to us by the same
means.
The surrender of a contract or a partial withdrawal thereunder may result in a
credit against our premium tax liability. In such event, we will pay in addition
to the cash value paid in connection with the surrender or withdrawal, the
lesser of (1) the amount by which our premium tax liability is reduced, or (2)
the amount previously deducted from purchase payments for premium taxes. No
representation can be made that upon any such surrender or withdrawal any such
payment will be made, since applicable tax laws at the time of surrender or
withdrawal would be determinative.
DISTRIBUTION
The contracts will be sold by Minnesota Life insurance agents who are also
registered representatives of Ascend Financial Services, Inc. or other broker-
dealers who have entered into selling agreements with Ascend Financial Services,
Inc. Ascend Financial Services, Inc. acts as the principal underwriter of the
contracts. Ascend Financial Services, Inc. is a wholly-owned subsidiary of
Advantus Capital Management, Inc., which in turn is a wholly-owned subsidiary of
Minnesota Life. Ascend Financial Services, Inc. is registered as a broker-dealer
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc.
Commissions to dealers, paid in connection with the sale of the contracts, may
not exceed an amount which is equal to 6% of the purchase payments received for
the Flexible Payment Deferred Variable Annuity Contracts and 3.75% for the
Single Payment Deferred Variable Annuity Contracts.
In addition, Ascend Financial Services, Inc. or Minnesota Life will pay credits
which allow registered representatives (Agents) who are responsible for sales of
the contracts to attend conventions and other meetings sponsored by us or our
affiliates for the purpose of promoting the sale of insurance and/or investment
products offered by us and our affiliates. Such credits may cover the registered
representatives' transportation, hotel accommodations, meals, registration fees
and the like. We may also pay registered representatives additional amounts
based upon their production and the persistency of life insurance and annuity
business placed with us.
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FEDERAL TAX STATUS
INTRODUCTION
Our tax discussion in this prospectus is general in nature and is not intended
as tax advice. You should consult a competent tax adviser. We make no attempt to
consider any applicable state or other tax laws. In addition, this discussion is
based on our understanding of federal income tax laws as they are currently
interpreted. We make no representation regarding the likelihood of continuation
of current income tax laws or the current interpretations of the Internal
Revenue Service ("IRS"). The contract may be purchased on a non-tax qualified
basis or purchased and used in connection with certain retirement arrangements
entitled to special income tax treatment under section 401(a), 403(b), 408(b),
408A or 457 of the Code. The ultimate effect of federal income taxes on the
amount held under a contract, on annuity payments, and on the economic benefit
to the contract owner, the annuitant, or the beneficiary(s) may depend on the
tax status of the individual concerned.
We are taxed as a "life insurance company" under the Internal Revenue Code. The
operations of the Variable Fund D form a part of, and are taxed with, our other
business activities. Currently, we pay no federal income tax on income dividends
received by the Variable Fund D or on capital gains arising from the Variable
Fund D's activities. The Variable Fund D is not taxed as a "regulated investment
company" under the Code and we do not anticipate any change in that tax status.
TAXATION OF ANNUITY CONTRACTS IN GENERAL
Section 72 of the Code governs taxation of nonqualified annuities in general and
some aspects of qualified programs. No taxes are generally imposed on increases
in the value of a contract until distribution occurs, either in the form of a
payment in a single sum or as annuity payments. As a general rule, deferred
annuity contracts held by an entity (such as a corporation or trust) that is not
a natural person are not treated as annuity contracts for federal tax purposes.
The investment income on such contracts is taxed as ordinary income that is
received or accrued by the owner of the contract during the taxable year.
The taxable portion of payments made in the event of a full surrender of an
annuity is generally the amount in excess of the purchase payments for the
contract. Amounts withdrawn upon a partial surrender from the variable annuity
contracts not part of a qualified program are treated first as taxable income to
the extent of the excess of the contract value over the purchase payments made
under the contract all taxable amount received under an annuity contract are
subject to tax at ordinary rather than capital gain tax rates.
In the case of a withdrawal under an annuity that is part of a tax-qualified
retirement plan, a portion of the amount received is taxable based on the ratio
of the "investment in the contract" to the individual's balance in the
retirement plan, generally the value of the annuity. The "investment in the
contract"
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generally equals the portion of any deposits made by or on behalf of an
individual under an annuity which was not excluded from the gross income of the
individual. For annuities issued in connection with qualified plans, the
"investment in the contract" can be zero.
The taxable portion for annuity payments, is generally determined by a formula
that establishes the ratio of the cost basis of the contract to the expected
return under the contract. The taxable part is taxed at ordinary income rates.
The Code imposes a 10% penalty tax on the taxable portion of certain
distributions from annuity contracts. This additional tax does not apply:
- where the taxpayer is 59 1/2 or older,
- where payment is made on account of the taxpayer's disability, or
- where payment is made by reason of the death of the owner, and
- in certain other circumstances.
The Code also provides an exception to the penalty tax for distributions, in
periodic payments, of substantially equal installments, where they are made for
the life (or life expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of the taxpayer and beneficiary.
For some types of qualified plans, other tax penalties may apply to certain
distributions.
A transfer of ownership of a contract, a pledge or any interest in a contract as
security for a loan, the designation of an annuitant or other payee who is not
also the contract owner, or the assignment of the contract may result in certain
income or gift tax consequences to the contract owner that are beyond the scope
of this discussion. If you are contemplating such a transfer, pledge,
designation or assignment, you should consult a competent tax adviser about its
potential tax effects.
For purposes of determining a contract owner's gross income, the Code provides
that all nonqualified deferred annuity contracts issued by the same company (or
its affiliates) to the same contract owner during any calendar year shall be
treated as one annuity contract. Additional rules may be promulgated under this
provision to prevent avoidance of its effect through serial contracts or
otherwise.
DIVERSIFICATION REQUIREMENTS
Section 817(h) of the Code authorizes the Treasury Department to set standards
by regulation or otherwise for the investments of Variable Fund D to be
"adequately diversified" in order for the contract to be treated as an annuity
contract for federal tax purposes. Variable Fund D, through the Fund Portfolios,
intends to comply with the diversification requirements prescribed in
Regulations Section 1.817-5, which affect how the Portfolio's assets may be
invested. Although the investment adviser of Advantus Fund is an affiliate of
ours, we do not control
PAGE 41
<PAGE>
Advantus Fund or the investments of its Portfolios. Nonetheless, we believe that
each Portfolio of Advantus Fund in which the Variable Fund D owns shares will be
operated in compliance with the requirements prescribed by the Treasury.
Prior to the enactment of Section 817(h), the IRS published several rulings
under which owners of certain variable annuity contracts were treated as owners,
for federal income tax purposes, of the assets held in a separate account used
to support their contracts. In those circumstances, income and gains from the
separate account assets would be includable in the variable annuity contract
owner's gross income. However, the continued effectiveness of the pre-Section
817(h) published rulings is somewhat uncertain. In connection with its issuance
of proposed regulations under Section 817(h) in 1986, the Treasury Department
announced that those regulations did not "provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor (i.e., the contract owner), rather than the
insurance company to be treated as the owner of the assets in the account".
While the Treasury's 1986 announcement stated that guidance would be issued on
the "extent to which the policyholders may direct their investments to
particular sub-accounts without being treated as owners of the underlying
assets", no such guidance has been forthcoming.
The ownership rights under the contract are similar to, but different in certain
respects from, those described by the IRS in rulings in which it was determined
that contract owners were not owners of separate account assets. For example,
the owner of a contract has the choice of several sub-accounts in which to
allocate net purchase payments and contract values, and may be able to transfer
among sub-accounts more frequently than in such rulings. Minnesota Life does not
believe that the ownership rights or a contract owner under the Contract would
result in any contract owner being treated as the owner of the assets of
Variable Fund D. However, Minnesota Life does not know what standards would be
applied if the Treasury Department should proceed to issue regulations or
rulings on this issue. Minnesota Life therefore reserves the right to modify the
Contract as necessary to attempt to prevent a contract owner from being
considered the owner of a pro rata share of the assets of Variable Fund D.
REQUIRED DISTRIBUTIONS
In order to be treated as an annuity contract for federal income tax purposes,
Section 72(s) of the Code requires any nonqualified contract issued after
January 18, 1985 to provide that:
- if an owner dies on or after the annuity starting date but prior to the
time the entire interest in the contract has been distributed, the
remaining portion of such interest will be distributed at least as
rapidly as under the method of distribution being used as of the date of
that owner's death; and
PAGE 42
<PAGE>
- if an owner dies prior to the annuity starting date, the entire interest
in the contract must be distributed within five years after the date of
the owner's death.
These requirements will be considered satisfied if any portion of the owner's
interest which is payable to or for the benefit of a "designated beneficiary" is
distributed over the life of that beneficiary or over a period not extending
beyond the life expectancy of that beneficiary and such distributions begin
within one year of that owner's death. The owner's "designated beneficiary", who
must be a natural person is the person designated by the owner as a beneficiary
and to whom ownership of the contract passes by reason of death. If the owner's
"designated beneficiary" is the surviving spouse of the owner, however, the
contract may be continued with the surviving spouse as the new owner.
Nonqualified contracts issued after January 18, 1985 contain provisions which
are intended to comply with the requirements of Section 72(s) of the Code,
although no regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to assure that
they comply with the requirements of Code Section 72(s) when clarified by
regulation or otherwise.
Other rules may apply to qualified contracts.
TAXATION OF DEATH BENEFIT PROCEEDS
Death benefits paid upon the death of a contract owner, generally, are
includable in the income of the recipient as follows: (1) if distributed in a
lump sum, they are taxed in the same manner as a full surrender of the contract,
or (2) if distributed under an annuity option, they are taxed in the same manner
as annuity payments, as described above.
POSSIBLE CHANGES IN TAXATION
Although the likelihood of there being any change is uncertain, there is always
the possibility that the tax treatment of the contracts could change by
legislation or other means. Moreover, it is also possible that any change could
be retroactive (that is, effective prior to the date of the change). You should
consult a tax adviser with respect to legislative developments and their effect
on the contract.
TAX QUALIFIED PROGRAMS
The contract is designed for use with several types of retirement plans that
qualify for special tax treatment. The tax rules applicable to participants and
beneficiaries in retirement plans vary according to the type of plan and the
terms and conditions of the plan. Special favorable tax treatment may be
available for certain types of contributions and distributions. Adverse tax
consequences may result from:
- contributions in excess of specified limits;
PAGE 43
<PAGE>
- distributions prior to age 59 1/2 (subject to certain exceptions);
- distributions that do not conform to specified minimum distribution
rules; and
- other specified circumstances.
We make no attempt to provide more than general information about the use of
annuities with the various types of retirement plans. The rights of any person
to any benefits under annuity contracts purchased in connection with these plans
may be subject to the terms and conditions of the plans themselves, regardless
of the terms and conditions of the annuity issued in connection with such a
plan. Some retirement plans are subject to transfer restrictions, distribution
and other requirements that are not incorporated into our annuity administration
procedures. Owners, participants and beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the contracts comply with applicable law. If you intend to purchase a
contract for use with any retirement plan you should consult your legal counsel
and tax adviser regarding the suitability of the contract. For qualified plans
under Section 401(a), 403(b), and 457, the Code requires that distributions
generally must commence no later than the later of April 1 of the calendar year
following the calendar year in which the Owner (or plan participant)reaches age
70 1/2 or retires and must be made in a specified form or manner. If the plan
participant is a "5 percent owner" (as defined in the Code), distributions
generally must begin no later than April 1 of the calendar year following the
calendar year in which the Owner (or plan participant) reaches age 70 1/2. For
IRAs described in Section 408, distributions generally must commence no later
than the later of April 1 of the calendar year following the calendar year in
which the Owner (or plan participant) reaches age 70 1/2. Roth IRAs under
Section 408A do not require distributions at any time prior to the owner's
death.
WITHHOLDING
In general, distributions from annuity contracts are subject to federal income
tax withholding unless the recipient elects not to have tax withheld. Different
rules may apply to payments delivered outside the United States. Some states
have enacted similar rules.
Recent changes to the Code allow the rollover of most distributions from tax-
qualified plans and Section 403(b) annuities directly to other tax-qualified
plans that will accept such distributions and to individual retirement accounts
and individual retirement annuities. Distributions which may not be rolled over
are those which are:
- one of a series of substantially equal annual (or more frequent) payments
made:
- over the life or life expectancy of the employee,
- over the joint lives or joint expectancies of the employee and the
employee's designated beneficiary, or
PAGE 44
<PAGE>
- for a specified period of ten years or more;
- a required minimum distribution; or
- the non-taxable portion of a distribution.
Any distribution eligible for rollover, which may include payment to an
employee, an employee's surviving spouse or an ex-spouse who is an alternate
payee, will be subject to federal tax withholding at a 20% rate unless the
distribution is made as a direct rollover to a tax-qualified plan or to an
individual retirement account or annuity. It may be noted that amounts received
by individuals which are eligible for rollover may still be placed in another
tax-qualified plan or individual retirement account or individual retirement
annuity if the transaction is completed within 60 days after the distribution
has been received. Such a taxpayer must replace withheld amounts with other
funds to avoid taxation on the amount previously withheld.
SEE YOUR OWN TAX ADVISER
The foregoing summary of the federal income tax consequences under these
contracts is not exhaustive. Special rules are provided with respect to
situations not discussed herein. Should a plan lose its qualified status,
employees will lose some of the tax benefits described. Statutory changes in the
Code with varying effective dates, and regulations adopted thereunder may also
alter the tax consequences of specific factual situations. Due to the complexity
of the applicable laws, tax advice may be needed by a person contemplating the
purchase of a variable annuity contract or exercising elections under such a
contract. For further information you should consult a qualified tax adviser.
PERFORMANCE DATA
From time to time Variable Fund D may publish advertisements containing
performance data relating to its sub-accounts. In the case of the Money Market
Sub-Account, Variable Fund D will publish yield or effective yield quotations
for a seven-day or other specified period. In the case of the other
sub-accounts, performance data will consist of average annual total return
quotations for one year, five year and ten year periods and for the period since
the inception of the underlying Portfolios. Such performance data may be
accompanied by cumulative total return quotations for the comparable periods.
For periods prior to the date of this Prospectus the quotations will be based on
the assumption that the contracts described herein were issued when the
underlying Portfolios first became available to Variable Fund D under other
contracts issued by us. The Money Market Sub-Account may also quote such average
annual and cumulative total return figures. Performance figures used by Variable
Fund D are based on historical information of the sub-accounts for specified
periods, and the figures are not intended to suggest that such performance will
continue in the future. Performance figures of Variable Fund D will reflect
charges made pursuant to the terms of the contracts
PAGE 45
<PAGE>
offered by this Prospectus and charges of underlying funds. More detailed
information on the computations is set forth in the Statement of Additional
Information.
YEAR 2000 COMPUTER PROBLEM
The services we provide to Variable Fund D and contract owners depend on the
smooth functioning of our computer systems. Many computer software systems in
use today cannot distinguish the year 2000 from the year 1900 because of the way
that dates are encoded, stored and calculated. That failure could have a
negative impact on our ability to provide services to contract owners. We have
been actively working on necessary changes to our computer systems to deal with
the year 2000. Although there can be no assurance of complete success, we
believe that we will be able to resolve these issues on a timely basis and that
there will be no material adverse impact on our ability to provide services to
Variable Fund D.
In addition, our operations could be impacted by our service providers' or
suppliers' year 2000 efforts. We have undertaken an initiative to assess the
efforts of organizations where there is a significant business relationship.
There is no assurance, however, that we will not be affected by year 2000
problems of other organizations.
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information, which contains additional information
including financial statements, is available from us at your request. The table
of contents for that Statement of Additional Information is as follows:
Variable Fund D
Directors and Principal Management Officers of Minnesota Life
Other Contracts
Distribution of Contracts
Annuity Payments
Auditors
Financial Statements
PAGE 46
<PAGE>
APPENDIX A - CONDENSED FINANCIAL
INFORMATION
The financial statements of Variable Fund D and of Minnesota Life Insurance
Company may be found in the Statement of Additional Information.
The table below gives per unit information about the financial history of each
sub-account for the eight years ended December 31, 1998 and the period from
October 26, 1990 to December 31, 1990. This information should be read in
conjunction with the financial statements and related notes of Variable Fund D
included in the Statement of Additional Information.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1998 1997 1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Sub-Account:
Unit value at beginning
of period.............. $13.84 $11.88 $9.60 $9.57 $9.20 $8.80 $6.60
Unit value at end of
period................. $18.38 $13.84 $11.88 $9.60 $9.57 $9.20 $8.80
Number of units
outstanding at end of
period................. 4,229,239 4,666,243 4,918,859 5,406,377 5,785,198 5,758,220 5,842,088
Bond Sub-Account:
Unit value at beginning
of period.............. $1.60 $1.57 $1.32 $1.39 $1.26 $1.19 $1.02
Unit value at end of
period................. $1.75 $1.60 $1.57 $1.32 $1.39 $1.26 $1.19
Number of units
outstanding at end of
period................. 256,628 296,978 321,612 386,750 480,411 177,794 66,385
Money Market Sub-Account:
Unit value at beginning
of period.............. $1.24 $1.19 $1.13 $1.10 $1.07 $1.05 $1.00
Unit value at end of
period................. $1.29 $1.24 $1.19 $1.13 $1.10 $1.07 $1.05
Number of units
outstanding at end of
period................. 309,546 395,596 352,735 457,011 774,078 357,877 171,773
Asset Allocation
Sub-Account:
Unit value at beginning
of period.............. $2.05 $1.83 $1.47 $1.50 $1.42 $1.33 $1.04
Unit value at end of
period................. $2.42 $2.05 $1.83 $1.47 $1.50 $1.42 $1.33
Number of units
outstanding at end of
period................. 2,564,823 2,804,901 2,960,127 3,175,751 2,903,712 1,463,845 364,314
Mortgage Securities
Sub-Account:
Unit value at beginning
of period.............. $1.54 $1.47 $1.26 $1.31 $1.20 $1.14 $1.00
Unit value at end of
period................. $1.67 $1.54 $1.47 $1.26 $1.31 $1.20 $1.14
Number of units
outstanding at end of
period................. 130,573 175,022 136,987 160,939 286,125 265,381 5,173
Index 500 Sub-Account:
Unit value at beginning
of period.............. $2.60 $2.15 $1.58 $1.57 $1.44 $1.35 $1.05
Unit value at end of
period................. $3.41 $2.60 $2.15 $1.58 $1.57 $1.44 $1.35
Number of units
outstanding at end of
period................. 1,012,408 923,905 951,303 886,632 684,210 332,893 174,242
Small Company Growth
Sub-Account:
Unit value at beginning
of period.............. $1.62 $1.54 $1.17 $1.11 $1.00
Unit value at end of
period................. 1.74 $1.62 $1.54 $1.17 $1.11***
Number of units
outstanding at end of
period................. 109,961 114,187 124,882 72,272 14,148
<CAPTION>
PERIOD FROM
OCTOBER 26,
1990 TO
DECEMBER 31,
1990*
-------------
<S> <C>
Growth Sub-Account:
Unit value at beginning
of period.............. $6.06
Unit value at end of
period................. $6.60
Number of units
outstanding at end of
period................. 6,024,553
Bond Sub-Account:
Unit value at beginning
of period.............. $1.00
Unit value at end of
period................. $1.02
Number of units
outstanding at end of
period................. 20,037
Money Market Sub-Account:
Unit value at beginning
of period.............. --**
Unit value at end of
period................. --
Number of units
outstanding at end of
period................. --
Asset Allocation
Sub-Account:
Unit value at beginning
of period.............. $1.00
Unit value at end of
period................. $1.04
Number of units
outstanding at end of
period................. 13,616
Mortgage Securities
Sub-Account:
Unit value at beginning
of period.............. --**
Unit value at end of
period................. --
Number of units
outstanding at end of
period................. --
Index 500 Sub-Account:
Unit value at beginning
of period.............. $1.00
Unit value at end of
period................. $1.05
Number of units
outstanding at end of
period................. 5,000
Small Company Growth
Sub-Account:
Unit value at beginning
of period..............
Unit value at end of
period.................
Number of units
outstanding at end of
period.................
</TABLE>
* The condensed financial information is presented for the period from October
26, 1990 to December 31, 1990. October 26, 1990 was the effective date of
the 1933 Act Registration for Minnesota Mutual Variable Fund D after its
reorganization as a unit investment trust.
** As of December 31, 1990, no contract owners had elected to allocate payments
to the Money Market and Mortgage Securities sub-accounts; accordingly,
condensed financial information is not presented for the period from October
26, 1990 to December 31, 1990.
*** The information for the sub-account is shown for the period May 3, 1993 to
December 31, 1993. May 3, 1993 was the effective date of the 1933 Act
Registration Statement for the sub-account.
PAGE A-1
<PAGE>
APPENDIX B - TYPES OF QUALIFIED PLANS
PUBLIC SCHOOL SYSTEMS AND CERTAIN TAX EXEMPT ORGANIZATIONS
Under Code Section 403(b), payments made by public school systems and certain
tax exempt organizations to purchase annuity contracts for their employees are
excludable from the gross income of the employee, subject to certain
limitations. However, these payments may be subject to FICA (Social Security)
taxes.
Code Section 403(b)(11) restricts the distribution under Code Section 403(b)
annuity contracts of:
- elective contributions made in years beginning after December 31, 1988;
- earnings on those contributions; and
- earnings in such years on amounts held as of the last year beginning
before January 1, 1989.
Distribution of those amounts may only occur upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
Individual Retirement Annuity, hereinafter referred to as an "IRA". Also,
distributions from certain other types of qualified plans may be "rolled over"
on a tax-deferred basis into an IRA. The sale of a Contract for use with an IRA
may be subject to special disclosure requirements of the Internal Revenue
Service. Purchasers of a Contract for use with IRAs will be provided with
supplemental information required by the Internal Revenue Services or other
appropriate agency. Such purchasers will have the right to revoke their purchase
within seven days of the earlier of the establishment of the IRA or their
purchase. A Qualified Contract issued in connection with an IRA will be amended
as necessary to conform to the requirements of the Code. Purchasers should seek
competent advice as to the suitability of the Contract for use with IRAs.
Earnings in an IRA are not taxed until distribution. IRA contributions are
limited each year to the lesser of $2,000 or 100% of the Owner's adjusted gross
income and may be deductible in whole or in part depending on the individual's
income. The limit on the amount contributed to an IRA does not apply to
distributions from certain other types of qualified plans that are "rolled over"
on a tax-deferred basis into an IRA. Amounts in the IRA (other than
nondeductible contributions) are taxed when distributed from the IRA.
Distributions prior to age 59 1/2 (unless certain exceptions apply) are subject
to a 10% penalty tax.
PAGE B-1
<PAGE>
SIMPLIFIED EMPLOYEE PENSION (SEP) IRAS
Employers may establish Simplified Employee Pension (SEP) IRAs under Code
section 408(k) to provide IRA contributions on behalf of their employees. In
addition to all of the general Code rules governing IRAs, such plans are subject
to certain Code requirements regarding participation and amounts of
contributions.
CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS
Code Section 401(a) permits employers to establish various types of retirement
plans for employees, and permits self-employed individuals to establish
retirement plans for themselves and their employees. These retirement plans may
permit the purchase of the contracts to accumulate retirement savings under the
plans. Adverse tax or other legal consequences to the plan, to the participant
or to both may result if this annuity is assigned or transferred to any
individual as a means to provide benefit payments, unless the plan complies with
all legal requirements applicable to such benefits prior to transfer of the
annuity.
DEFERRED COMPENSATION PLANS
Code Section 457 provides for certain deferred compensation plans. These plans
may be offered with respect to service for state governments, local governments,
political subdivisions, agencies, instrumentalities and certain affiliates of
such entities, and tax exempt organizations. The plans may permit participants
to specify the form of investment for their deferred compensation account with
respect to non-governmental Section 457 plans, all investments are owned by the
sponsoring employer and are subject to the claims of the general creditors of
the employer and, depending on the terms of the particular plan, the employer
may be entitled to draw on deferred amounts for purposes unrelated to its
Section 457 plan obligations. In general, all amounts received under a Section
457 plan are taxable and are subject to federal income tax withholding as wages.
PAGE B-2
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
<PAGE>
Variable Fund D
Cross Reference Sheet to Statement of Additional Information
<TABLE>
<CAPTION>
Form N-4
Item Number Caption in Statement of Additional Information
<S> <C>
15. Cover Page
16. Table of Contents
17. Variable Fund D
18. Not Applicable
19. Not Applicable
20. Distribution of Contracts
21. Not Applicable
22. Annuity Payments
23. Financial Statements
</TABLE>
<PAGE>
VARIABLE FUND D
Statement of Additional Information
The date of this document and the Prospectus is: May 3, 1999
This Statement of Additional Information is not a prospectus. Much of the
information contained in this Statement of Additional Information expands upon
subjects discussed in the Prospectus. Therefore, this Statement should be read
in conjunction with Variable Fund D's current Prospectus, bearing the same date,
which may be obtained by calling Variable Fund D at (651) 665-3500, or writing
Variable Fund D at Minnesota Mutual Center, 400 Robert Street North, St. Paul,
Minnesota 55101-2098.
TABLE OF CONTENTS
Variable Fund D
Directors and Principal Management Officers of Minnesota Life
Other Contracts
Distribution of Contracts
Annuity Payments
Auditors
Financial Statements
Appendix A - Calculation of Unit Values
<PAGE>
VARIABLE FUND D
Variable Fund D ("Variable Fund D") is a separate account of Minnesota Life
Insurance Company ("Minnesota Life"). Variable Fund D is registered as a unit
investment trust. Prior to the Reorganization of the Fund in October of 1990
and the establishment of its several sub-accounts, the Fund was an open-end,
diversified, management investment company investing in a diversified portfolio
of equity securities, mainly common stocks.
DIRECTORS AND PRINCIPAL MANAGEMENT OFFICERS OF MINNESOTA LIFE
<TABLE>
<CAPTION>
DIRECTORS PRINCIPAL OCCUPATION
--------- --------------------
<S> <C>
Giulio Agostini Senior Vice President, Finance and Administrative
Services, 3M, St. Paul, Minnesota
Anthony L. Andersen Chair-Board of Directors, H. B. Fuller Company,
St. Paul, Minnesota, since June 1995, prior
thereto for more than five years President and
Chief Executive Officer, H. B. Fuller Company
(Adhesive Products)
Leslie S. Biller Vice Chairman and Chief Operating Officer, Wells
Fargo & Company, San Francisco, California
(Banking)
John F. Grundhofer President, Chairman and Chief Executive Officer,
U.S. Bancorp, Minneapolis, Minnesota (Banking)
David S. Kidwell, Ph.D. Dean and Professor of Finance, The Curtis L.
Carlson School of Management, University of
Minnesota, Minneapolis, Minnesota
Reatha C. King, Ph.D. President and Executive Director, General Mills
Foundation, Minneapolis, Minnesota
William B. Lawson, Sr. Chairman and Chief Executive Officer, Lawson
Software, Minneapolis, Minnesota
Thomas E. Rohricht Of Counsel, Doherty, Rumble & Butler Professional
Association, St. Paul, Minnesota (Attorneys)
Robert L. Senkler Chairman of the Board, President and Chief
Executive Officer, Minnesota Life Insurance
Company, since August 1995; prior thereto for more
than five years Vice President and Actuary,
Minnesota Life Insurance Company
</TABLE>
-2-
<PAGE>
<TABLE>
<S> <C>
Michael E. Shannon Chairman, Chief Financial and Administrative
Officer, Ecolab, Inc., St. Paul, Minnesota
(Develops and Markets Cleaning and Sanitizing
Products)
Frederick T. Weyerhaeuser Retired since April 1998, prior thereto Chairman
and Treasurer, Clearwater Investment Trust since
May 1996, prior thereto for more than five years,
Chairman, Clearwater Management Company, St. Paul,
Minnesota (Financial Management)
</TABLE>
Principal Officers (other than Directors)
<TABLE>
<CAPTION>
Name Position
<S> <C>
John F. Bruder Senior Vice President
Keith M. Campbell Senior Vice President
Robert E. Hunstad Executive Vice President
James E. Johnson Senior Vice President and Actuary
Dennis E. Prohofsky Senior Vice President, General Counsel and
Secretary
Gregory S. Strong Senior Vice President and Chief Financial
Officer
Terrence M. Sullivan Senior Vice President
Randy F. Wallake Senior Vice President
William N. Westhoff Senior Vice President and Treasurer
</TABLE>
All Directors who are not also officers of Minnesota Life have had the principal
occupation (or employers) shown for at least five years. All officers of
Minnesota Life have been employed by Minnesota Life for at least five years with
the exception of Mr. Westhoff. Mr. Westhoff has been employed by Minnesota Life
since April 1998. Prior thereto, Mr. Westhoff was employed by American Express
Financial Corporation, Minneapolis, Minnesota, from August 1994 to October 1997
as Senior Vice President, Global Investments and from November 1989 to July 1994
as Senior Vice President, Fixed Income Management.
OTHER CONTRACTS
In addition to the contracts described in the Prospectus, Minnesota Life
continually offers three types of Variable Fund D variable annuity contracts,
all incorporating a front-end loading of sales charges. These contracts are the
Individual Accumulation Annuity Contract, Group Accumulation Annuity Contract
and Group Deposit Administration Variable Annuity Contracts.
-3-
<PAGE>
DISTRIBUTION OF CONTRACTS
The contracts will be continuously sold by Minnesota Life insurance agents who
are also registered representatives of Ascend Financial Services, Inc. or other
broker-dealers who have entered into selling agreements with Ascend Financial.
Ascend Financial acts as the principal underwriter of the contracts. Ascend
Financial Services, Inc. is a wholly-owned subsidiary of Advantus Capital
Management, Inc., which is a wholly-owned subsidiary of Minnesota Life. Advantus
Capital Management, Inc., is the investment adviser for Variable Fund D and also
a wholly-owned subsidiary of Minnesota Life. Ascend Financial is registered as
a broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc.
Amounts paid by Minnesota Life for payment to the underwriter for 1998 was
$126,676. These include payments made by Minnesota Life on behalf of the
underwriter. Agents of Minnesota Life who are also registered representatives
of Ascend Financial are compensated directly by Minnesota Life.
ANNUITY PAYMENTS
Please see Appendix A to this Statement of Additional Information for an
illustration of the calculation of annuity unit values and of a variable annuity
payment, showing the method used for the calculation of both the initial and
subsequent payments.
AUDITORS
The financial statements of Variable Fund D and the Consolidated Financial
Statements of Minnesota Life Insurance Company included in this Statement of
Additional Information have been audited by KPMG Peat Marwick LLP, 4200 Norwest
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, independent
auditors, as indicated in their reports in this Statement of Additional
Information, and are included herein in reliance upon such reports and upon the
authority of such firm as experts in accounting and auditing.
-4-
<PAGE>
APPENDIX A
CALCULATION OF ACCUMULATION UNIT VALUES
Calculation of the net investment factor and the accumulation unit value may be
illustrated by the following hypothetical example. Assume the accumulation unit
value of Variable Fund D Growth Sub-Account on the immediately preceding
valuation period was $6.499041. Assume the following about the Series Fund
Growth Portfolio: (a) the net asset value per share of the Growth Portfolio was
$1.394438 at the end of the current valuation period; (2) the Growth Portfolio
declared a per share dividend and capital gain distribution in the amount of
$.037162 during the current valuation period; and (3) the net asset value per
share of the Growth Portfolio was $1.426879 at the end of the preceding
valuation period.
The gross investment rate for the valuation period would be equal to 1.0033086
(1.394438 plus .037162 divided by 1.426879). The net investment rate for the
valuation period is determined by deducting the total Growth Sub-Account
expenses from the gross investment rate. Total Growth Sub-Account expenses of
.0000162 is equal to .0000315 for mortality and risk expense (the daily
equivalent of .795% assuming 252 valuation dates per year) less .0000093 for the
investment management fee reimbursement (the daily equivalent of .235% assuming
252 valuation dates per year) less .0000060 for the other expense reimbursement
(the daily equivalent of .150% assuming 252 valuation dates per year). The net
investment rate equals 1.0032924 (1.0033086 minus .0000162).
The accumulation unit value at the end of the valuation period would be equal to
the value on the immediately preceding valuation date ($6.499041) multiplied by
the net investment factor for the current valuation period (1.003294), which
produces $6.520438.
CALCULATION OF ANNUITY UNIT VALUES AND VARIABLE ANNUITY PAYMENT
The determination of the annuity unit value and the annuity payment may be
illustrated by the following hypothetical example. Assume that the contract has
been in force for more than ten years so that no deferred sales charge will
apply and that there is no deduction for annuity premium taxes. Assume further
that at the date of his or her retirement, the annuitant has credited to his or
her account 30,000 accumulation units, and that the value of an accumulation
unit on the valuation date next following the fourteenth day of the preceding
month was $1.150000, producing a total value of $34,500. Assume also that the
annuitant elects an option for which the table in the contract indicates the
first monthly payment is $6.57 per $1,000 of value applied; the annuitant's
first monthly payment would thus be 34.500 multiplied by $6.57, or $226.67.
Assume that the annuity unit value on the due date of the first payment was
$1.100000. When this is divided into the first monthly payment, the number of
annuity units represented by that payment is determined to be 206.064. The
value of this same number of annuity units will be paid in each subsequent
month.
Assume further that the accumulation unit value on the valuation date next
following the fourteenth day of the succeeding month is $1.160000. This is
divided by the accumulation unit value on the preceding monthly valuation date
($1.150000) to produce a ratio of 1.008696.
A-1
<PAGE>
Multiplying this ratio by .997137 to neutralize the assumed investment rate of
3.5% per annum already taken into account in determining annuity units as
described above, produces a result of 1.005808. This is then multiplied by the
preceding annuity unit value ($1.100000) to produce a current annuity value of
$1.106390.
The second monthly payment is then determined by multiplying the fixed number of
annuity units (206.064) by the current annuity unit value ($1.106390), which
produces a second monthly annuity payment of $227.99.
A-2
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
Variable Fund D
Cross Reference Sheet to Other Information
Form N-4
Item Number
24. Financial Statements and Exhibits
25. Directors and Officers of the Depositor
26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
27. Number of Contract Owners
28. Indemnification
29. Principal Underwriters
30. Location of Accounts and Records
31. Management Services
32. Undertakings
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Audited Financial Statements of Variable Fund D and Minnesota Life
Insurance Company for the period ended December 31, 1998, are included
in Part B of this filing and consist of the following:
To be Filed by Subsequent Amendment.
(b) Exhibits
1. The Resolution of The Minnesota Mutual Life Insurance Company's
Board of Trustees establishing Minnesota Mutual Variable Fund D
previously filed as this exhibit to Registrant's Form N-4, File
Number 2-89208, Post-Effective Amendment Number 15, is hereby
incorporated by reference.
2. Not applicable.
3. Distribution Agreement dated July 10, 1990 previously filed as
this exhibit to Registrant's Form N-4, File Number 2-89208, Post-
Effective Amendment Number 15, is hereby incorporated by reference.
<PAGE>
4. (a) The specimen copy of the Flexible Payment Deferred Variable
Annuity Contract, form number 83-9053 Rev. 5-84 previously filed
as this exhibit to Registrant's Form N-4, File Number 2-89208,
Post-Effective Amendment Number 15, is hereby incorporated by
reference.
(b) The specimen copy of the Single Payment Deferred Variable
Annuity Contact, form number 83-9054 Rev. 5-84 previously filed
as this exhibit to Registrant's Form N-4, File Number 2-89208,
Post-Effective Amendment Number 15, is hereby incorporated by
reference.
(c) The specimen copy of the H.R. 10 Agreement, form number 83-
9057 previously filed as this exhibit to Registrant's Form N-4,
File Number 2-89208, Post-Effective Amendment Number 15, is
hereby incorporated by reference.
(d) The specimen copy of the IRA Agreement, form number 83-9058
Rev. 3-1997 previously filed as this exhibit to Registrant's
Form N-4, File Number 2-89208, Post-Effective Amendment
Number 15 is hereby incorporated by reference.
(e) The specimen copy of the Tax-Sheltered Annuity Amendment, form
number MHC-88-9213.
(f) Endorsement 90-9243, to be used with Flexible Payment Deferred
Variable Annuity Contract, form 83-9053 Rev. 5-84 and Single
Payment Deferred Variable Annuity Contract, form 83-9054 Rev.
5-84 previously filed as this exhibit to Registrant's Form N-4,
File Number 2-89208, Post-Effective Amendment Number 15, is
hereby incorporated by reference.
(g) Individual Retirement Annuity (IRA) Agreement, SEP,
Traditional IRA and Roth-IRA, form number MHC-97-9418.
(h) Individual Retirement Annuity, SIMPLE - (IRA) Agreement, form
number MHC-98-9431.
5. Application, form number 83-9056 Rev. 3-87 previously filed as
this exhibit to Registrant's Form N-4, File Number 2-89208, Post-
Effective Amendment Number 15, is hereby incorporated by reference.
6. (a) The Restated Certificate of Incorporation.
(b) The Bylaws of Minnesota Life Insurance Company.
7. Not applicable.
8. The Agreement and Plan of Reorganization previously filed as
this exhibit to Registrant's Form N-4, File Number 2-89208, Post
Effective Amendment Number 15, is hereby incorporated by reference.
9. Opinion and Consent of Donald F. Gruber, Esq., to be filed by
subsequent amendment.
10. (a) Consent of KPMG Peat Marwick LLP, to be filed by subsequent
amendment.
(b) Minnesota Life Insurance Company.
Power of Attorney to Sign Registration Statement.
<PAGE>
11. Not applicable.
12. Not applicable.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Insurance Company with Registrant
- ---------------- ---------------------- ---------------
<S> <C> <C>
Giulio Agostini Director None
3M
3M Center -
Executive 220-14W-08
St. Paul, MN 55144-1000
Anthony L. Andersen Director None
H. B. Fuller Company
2424 Territorial Road
St. Paul, MN 55114
Leslie S. Biller Director None
Wells Fargo & Company
MAC 0101-121
420 Montgomery Street
San Francisco, CA 94104
John F. Bruder Senior Vice President None
Minnesota Life Insurance
Company
400 Robert Street North
St. Paul, MN 55101
Keith M. Campbell Senior Vice President None
Minnesota Life Insurance
Company
400 Robert Street North
St. Paul, MN 55101
John F. Grundhofer Director None
U.S. Bancorp
601 2nd Avenue South
Suite 2900
Minneapolis, MN 55402-4302
Robert E. Hunstad Executive Vice President None
Minnesota Life Insurance
Company
400 Robert Street North
St. Paul, MN 55101
James E. Johnson Senior Vice President None
Minnesota Life Insurance and Actuary
Company
400 Robert Street North
St. Paul, MN 55101
David S. Kidwell, Ph.D. Director None
The Curtis L. Carlson
School of Management
University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Reatha C. King, Ph.D. Director None
General Mills Foundation
P. O. Box 1113
Minneapolis, MN 55440
William B. Lawson, Sr. Director None
Lawson Software
1300 Godward Street
Minneapolis, MN 55413
Dennis E. Prohofsky Senior Vice President, None
Minnesota Life Insurance General Counsel and
Company Secretary
400 Robert Street North
St. Paul, MN 55101
Thomas E. Rohricht Director None
Doherty, Rumble & Butler
Professional Association
2800 Minnesota World Trade
Center
30 East Seventh Street
St. Paul, MN 55101-4999
Robert L. Senkler Chairman, President and None
Minnesota Life Insurance Chief Executive Officer
Company
400 Robert Street North
St. Paul, MN 55101
Michael E. Shannon Director None
Ecolab, Inc.
370 Wabasha Street
Ecolab Center
St. Paul, MN 55102
Gregory S. Strong Senior Vice President None
Minnesota Life Insurance and Chief Financial
Company Officer
400 Robert Street North
St. Paul, MN 55101
Terrence M. Sullivan Senior Vice President None
Minnesota Life Insurance
Company
400 Robert Street North
St. Paul, MN 55101
Randy F. Wallake Senior Vice President None
Minnesota Life Insurance
Company
400 Robert Street North
St. Paul, MN 55101
William N. Westhoff Senior Vice President None
Minnesota Life Insurance and Treasurer
Company
400 Robert Street North
St. Paul, MN 55101
Frederick T. Weyerhaeuser Director None
Clearwater Investment Trust
332 Minnesota Street
Suite W-2090
St. Paul, MN 55101-1308
</TABLE>
<PAGE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
Wholly-owned subsidiary of Minnesota Mutual Companies, Inc.:
Securian Holding Company (Delaware)
Wholly-owned subsidiary of Securian Holding Company:
Securian Financial Group, Inc. (Delaware)
Wholly-owned subsidiary of Securian Financial Group, Inc.
Minnesota Life Insurance Company
Wholly-owned subsidiaries of Minnesota Life Insurance Company:
Advantus Capital Management, Inc.
HomePlus Insurance Company
Northstar Life Insurance Company (New York)
The Ministers Life Insurance Company
MIMLIC Life Insurance Company (Arizona)
Robert Street Energy, Inc.
Capitol City Property Management, Inc.
Personal Finance Company (Delaware)
Enterprise Holding Corporation
Wholly-owned subsidiary of Advantus Capital Management, Inc.:
Ascend Financial Services, Inc.
Wholly-owned subsidiaries of Ascend Financial Services, Inc.:
MIMLIC Insurance Agency of Massachusetts, Inc. (Massachusetts)
MIMLIC Insurance Agency of Texas, Inc. (Texas)
Ascend Insurance Agency of Nevada, Inc. (Nevada)
Ascend Insurance Agency of Oklahoma, Inc. (Oklahoma)
Wholly-owned subsidiaries of Enterprise Holding Corporation:
Financial Ink Corporation
Oakleaf Service Corporation
Concepts in Marketing Research Corporation
Concepts in Marketing Services Corporation
Lafayette Litho, Inc.
DataPlan Securities, Inc. (Ohio)
MIMLIC Imperial Corporation
MIMLIC Funding, Inc.
MCM Funding 1997-1, Inc.
MCM Funding 1998-1, Inc.
MIMLIC Venture Corporation
HomePlus Insurance Agency, Inc.
Ministers Life Resources, Inc.
Wedgewood Valley Golf, Inc.
Wholly-owned subsidiary of HomePlus Insurance Agency, Inc.:
HomePlus Insurance Agency of Texas, Inc. (Texas)
Majority-owned subsidiary of Ascend Financial Services, Inc.:
MIMLIC Insurance Agency of Ohio, Inc. (Ohio)
Open-end registered investment company offering shares solely to separate
accounts of Minnesota Life Insurance Company:
Advantus Series Fund, Inc.
Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:
C.R.I. Securities, Inc.
Majority-owned subsidiaries of Minnesota Life Insurance Company:
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Real Estate Securities Fund, Inc.
Less than majority owned, but greater than 25% owned, subsidiaries of Minnesota
Life Insurance Company:
Advantus Money Market Fund, Inc.
MIMLIC Cash Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Index 500 Fund, Inc.
Less than 25% owned subsidiaries of Minnesota Life Insurance Company:
Advantus Horizon Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Bond Fund, Inc.
Unless indicated otherwise parenthetically, each of the above corporations is a
Minnesota corporation.
<PAGE>
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 25, 1998, the number of holders of securities for this
Registration Statement were as follows:
Number of Record
Title of Class Holders
-------------- ----------------
Variable Annuity Contracts 343
ITEM 28. INDEMNIFICATION
The State of Minnesota has an indemnification statute, found at Minnesota
Statutes 300.083, as amended, effective January 1, 1984, which requires
indemnification of individuals only under the circumstances described by the
statute. Expenses incurred in the defense of any action, including attorneys'
fees, may be advanced to the individual after written request by the board of
directors upon receiving an undertaking from the individual to repay any amount
advanced unless it is ultimately determined that he is entitled to be
indemnified by the corporation as authorized by the statute and after a
determination that the facts then known to those making the determination would
not preclude indemnification.
Indemnification is required for persons made a part to a proceeding by reason of
their official capacity so long as they acted in good faith, received no
improper personal benefit and have not been indemnified by another
organization. In the case of a criminal proceeding, they must also have had
no reasonable cause to believe the conduct was unlawful. In respect to other
acts arising out of official capacity: (1) where the person is acting
directly for the corporation there must be a reasonable belief by the person
that his or her conduct was in the best interests of the corporation or; (2)
where the person is serving another organization or plan at the request of
the corporation, the person must have reasonably believed that his or her
conduct was not opposed to the best interests of the corporation. In the
case of persons not directors, officers or policy-making employees,
determination of eligibility for indemnification may be made by a
board-appointed committee of which a director is a member. For other
employees, directors and officers, the determination of eligibility is made
by the Board or a committee of the Board, special legal counsel, the
shareholder of the corporation or pursuant to a judicial proceeding.
The Bylaws of Minnesota Life Insurance Company expressly reaffirm the
Company's intention to extend the statutory indemnification with respect to
officers and directors who serve on outside activities such as the Variable
Fund Committee. The Company has extended this same protection to outside
members of the Variable Fund Committee, a power specifically granted to
domestic life insurance companies by the statutory provision.
<PAGE>
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Minnesota Life Insurance Company and Variable Fund D
pursuant to the foregoing provisions, or otherwise, Minnesota Life Insurance
Company and Variable Fund D have 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 Minnesota Life Insurance Company and Variable Fund D of expenses
incurred or paid by a director, officer or controlling person of Minnesota
Life Insurance Company and Variable Fund D in the successful defense of any
action, suit or proceeding) is asserted by such director, officer of
controlling person in connection with the securities being registered,
Minnesota Life Insurance Company and Variable Fund D will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) The principal underwriter is Ascend Financial Services, Inc. Ascend
Financial Services, Inc. is also the principal underwriter for twelve
mutual funds Advantus Horizon Fund, Inc.; Advantus Spectrum Fund, Inc.;
Advantus Money market Fund, Inc.' Advantus Mortgage Securities Fund,
Inc.; Advantus Bond Fund, Inc.; Advantus Cornerstone Fund, Inc.;
Advantus Enterprise Fund, Inc.; Advantus International Balanced Fund,
Inc.; Advantus Venture Fund, Inc.; Advantus Index 500 Fund, Inc.;
Advantus Real Estate Securities Fund, Inc.; and the MIMLIC Cash Fund,
Inc. and for four additional separate accounts of Minnesota Life
Insurance Company, all of which offer annual contracts and life
insurance policies on a variable basis.
(b) Directors and officers of the Underwriter.
DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices Offices
Business Address with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Robert E. Hunstad Director None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
George I. Connolly President, Chief None
Ascend Financial Services, Inc. Executive Officer, Chief
400 Robert Street North Compliance Officer and
St. Paul, Minnesota 55101 Director
Margaret Milosevich Vice President, Chief Assistant
Ascend Financial Services, Inc. Operations Officer, Secretary
400 Robert Street North Treasurer and Secretary
St. Paul, Minnesota 55101
Dennis E. Prohofsky Director None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Thomas L. Clark Assistant Treasurer Assistant
Ascend Financial Services, Inc. and Assistant Secretary Secretary
400 Robert Street North
St. Paul, Minnesota 55101
</TABLE>
(c) All commission and other compensation received by each principal
underwriter, directly or indirectly, from the Registrant during
the Registrant's last fiscal year:
<TABLE>
<CAPTION>
Name of Net Underwriting Compensation on
Principal Discounts and Redemption or Brokerage Other
Underwriter Commissions Annuitization Commissions Compensation
- ----------- ---------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
Ascend Financial
Services, Inc. $126,676
</TABLE>
Amounts paid by Minnesota Life for payment to the underwriter for 1997
includes payments made by it on behalf of the underwriter as a ministerial
service pursuant to the principles described in Release No. 34-8389 (September
13, 1968).
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules promulgated thereunder are in the
physical possession of Minnesota Life Insurance Company, St. Paul, Minnesota
55101-2098.
ITEM 31. MANAGEMENT SERVICES
None.
ITEM 32. UNDERTAKINGS
(a) The Undertaking made as Item 37(b) to Registrant's Form N-3, File
Number 2-89208, Post-Effective Amendment Number 3, is hereby
incorporated by reference.
(b) The Undertaking made as Item 37(c) to Registrant's Form N-3, File
Number 2-89208, Post-Effective Amendment Number 3, is hereby
incorporated by reference.
(c) The undertaking made as Item 37(d) to Registrant's Form N-3, File
Number 2-89208, Post-Effective Amendment Number 3, is hereby
incorporated by reference.
(d) Minnesota Life Insurance Company hereby represents that,
as to the variable annuity policies which are the subject of this
Registration Statement, File No. 2-89208, the fees and charges
deducted under the contract, in the aggregate, are reasonable
in relation to the service rendered, the expenses expected to
be incurred and the risks assumed by the Minnesota Life
Insurance Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of St. Paul and the State of Minnesota on the 3rd day of March, 1999.
VARIABLE FUND D
(Registrant)
By: MINNESOTA LIFE INSURANCE COMPANY
(Depositor)
By
-------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the Depositor,
Minnesota Life Insurance Company, has duly caused this Post-Effective Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Saint Paul, and State of Minnesota, on
the 3rd day of March, 1999.
MINNESOTA LIFE INSURANCE COMPANY
By
-------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in their capacities
with the Depositor and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
- --------------------------- Chairman, President and March 3, 1999
Robert L. Senkler Chief Executive Officer
*
- --------------------------- Director
Giulio Agostini
*
- --------------------------- Director
Anthony L. Andersen
*
- --------------------------- Director
Leslie S. Biller
*
- --------------------------- Director
John F. Grundhofer
*
- --------------------------- Director
David S. Kidwell, Ph.D.
*
- --------------------------- Director
Reatha C. King, Ph.D.
- --------------------------- Director
William B. Lawson, Sr.
*
- --------------------------- Director
Thomas E. Rohricht
*
- --------------------------- Director
Michael E. Shannon
*
- --------------------------- Director
Frederick T. Weyerhaeuser
- --------------------------- Vice President March 3, 1999
Gregory S. Strong (chief financial officer)
- --------------------------- Vice President March 3, 1999
Gregory S. Strong (chief accounting officer)
- --------------------------- Attorney-in-Fact March 3, 1999
Dennis E. Prohofsky
</TABLE>
* Pursuant to power of attorney dated October 19, 1998, a copy of which is filed
herewith.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<C> <S>
4. (e) The specimen copy of the Tax-Sheltered Annuity
Amendment, form number MHC-88-9213
(g) Individual Retirement Annuity (IRA) Agreement, SEP,
Traditional IRA and Roth-IRA, form number MHC-97-9418.
(h) Individual Retirement Annuity, SIMPLE - (IRA)
Agreement, form number MHC-98-9431.
6. (a) The Restated Certificate of Incorporation.
(b) The Bylaws of Minnesota Life Insurance Company
10. Minnesota Life Insurance Company Power of Attorney to
Sign Registration Statement
</TABLE>
<PAGE>
Exhibit 4(e)
MINNESOTA LIFE TAX SHELTERED ANNUITY AMENDMENT
We have made the following changes to your contract. They modify the contract.
They are considered to be a part of it. This agreement is effective as of the
original contract date unless a different effective date is shown here.
WHAT DOES THIS AGREEMENT PROVIDE?
This Agreement modifies your contract. The Agreement is used when the contract
is issued to fund a tax sheltered annuity program. This is as described in
Section 403(b) of the Internal Revenue Code (hereinafter "Code"), as amended.
PURCHASE PAYMENTS
ARE PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant has a tax sheltered annuity, purchase payments may be
limited. Elective deferrals which are purchase payments made by salary
reduction are limited to: (a) $9,500; or (b) an indexed amount, if greater.
A special increased limit in the case of an annuitant who has completed 15 years
of service with an educational organization, a hospital, a home health service
agency, a church, a convention or association of churches, or a health and
welfare service agency may be available. The limit for any one year is
increased by the lesser of:
(a) $3,000;
(b) $15,000 reduced by amounts already excluded for prior taxable years by
reason of this special exception; or
(c) the excess of $5,000 multiplied by the number of years of service the
annuitant has with the employer less all prior elective deferrals.
The amount of salary reduction excludable from an annuitant's gross income may
actually be less than the amount permitted under this limit on elective
deferrals. This may be true if the annuitant's exclusion allowance, described
in Section 403(b)(2), of the Code or the overall limit as described in Section
415(c) of the Code is less.
WITHDRAWAL AND SURRENDERS
ARE THERE RESTRICTIONS ON WHEN WITHDRAWALS FROM THIS CONTRACT MAY BE MADE?
Yes. Contracts issued to fund 403(b) tax sheltered annuity programs must
restrict certain withdrawals. Any purchase payment made after January 1, 1989
pursuant to a salary reduction agreement between you and your employer may be
paid only when:
MHC-88-9213 Minnesota Life Insurance Company
<PAGE>
(a) you attain age 59 1/2;
(b) when you separate from service with your employer;
(c) when you die;
(d) when you become disabled; or
(e) if you qualify for a hardship withdrawal.
WHAT IS MEANT BY A HARDSHIP WITHDRAWAL?
A hardship withdrawal is one that is made on account of an immediate and heavy
financial need and a withdrawal is necessary to satisfy that financial need.
You may be required to provide us with information so that we may be satisfied
that your hardship is one described in the Code and its regulations.
WHAT AMOUNT MAY BE WITHDRAWN UNDER THE HARDSHIP PROVISION?
You may withdraw only the amount represented by your salary reduction
contributions. Any earnings attributable to such contributions may not be
withdrawn.
MAY TAX PENALTIES APPLY?
Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if:
(a) the annuitant becomes disabled as defined by the Code;
(b) The amount received is in excess of the allowed elective deferral and
returned to the annuitant before the required tax return filing date for
that year, together with any earned interest; or
(c) if the entire amount in the contract is received and reinvested in a
similar plan entitled to similar tax treatment.
We will not be liable for any tax penalties on amounts received or paid by us
under this contract. We also retain the right to treat any transaction treated
by law as a contract distribution as a complete contract surrender.
MHC-88-9213 Minnesota Life Insurance Company
<PAGE>
GENERAL INFORMATION
IS THERE A TIME WHEN DISTRIBUTIONS FROM THIS CONTRACT MUST BE MADE?
Yes. Distributions must begin within 90 days after the end of the year in which
the annuitant reaches age 70 1/2. Distributions may be made as withdrawals or
under one of the available annuity forms. In order to avoid tax penalties, you
will have to meet certain minimum distribution requirements.
IS THIS CONTRACT TRANSFERABLE?
No. This contract is non-transferable. It may not be sold or assigned.
/s/ Dennis E. Prohofsky
Secretary
/s/ Robert L. Senkler
President
MHC-88-9213 Minnesota Life Insurance Company
<PAGE>
Minnesota Life INDIVIDUAL RETIREMENT ANNUITY
(IRA) AGREEMENT
SEP, TRADITIONAL IRA AND ROTH-IRA
WHAT DOES THIS AGREEMENT PROVIDE?
This agreement modifies the contract. Provisions are changed before issue. In
the event of a conflict between the provisions of this agreement and the
contract to which it is attached, the provisions of this agreement will control.
These changes will allow its use: (a) with a Simplified Employee Pension
(herein "SEP"); and/or (b) as a Traditional Individual Retirement Annuity under
the Employee Retirement Income Security Act of 1974, as amended (herein "IRA");
and/or (c) as a Roth Individual Retirement Annuity under section 408A of the
Internal Revenue Code (herein "Roth-IRA"). The provisions that apply for
Traditional IRAs generally apply for SEPs, unless otherwise stated.
PURCHASE PAYMENTS
ARE TRADITIONAL IRA PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant has an IRA, purchase payments may be limited. An
annual cash purchase payment may not exceed the lesser of: (a) the amount of
compensation includible in gross income in any taxable year; or (b) $2,000, or
such other maximum amount as may be allowed by law.
Where an annuitant establishes an IRA along with a lower earning spouse,
purchase payments may be limited. They are also limited if the annuitant is the
lower earning spouse. The cash purchase payments for both annuities and
accounts must then be considered together. They may not exceed the lesser of:
(a) the amount of compensation includible in the working spouse's compensation
includible in gross income in any taxable year; or (b) $4,000, or such other
maximum amount as may be allowed by law. In no event may an annuitant's annual
purchase payment exceed the cash amount of: (a) $2,000; or (b) the maximum
annual contribution allowed for an IRA.
The annuitant's employer may make purchase payments under the annuitant's SEP up
to the lesser of 15% of the annuitant's compensation (exclusive of compensation
in excess of $160,000) or $30,000. Other limits will apply if the annuitant's
IRA is used as part of a salary reduction SEP.
The annuitant, or the annuitant and his or her employer, are responsible for
determining the maximum purchase payments that may be made to an IRA.
ARE ROTH-IRA PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant has a Roth-IRA, purchase payments may be limited.
Annual purchase payments for all IRAs maintained by the annuitant may not exceed
the lesser of 100% of the annuitant's compensation includible in gross income in
any taxable year or $2,000. The maximum purchase payment that an annuitant may
make to a Roth-IRA will depend on the amount of the annuitant's income. The
maximum annual purchase payment allowed for a Roth-IRA is gradually reduced to
$0 between certain levels of Adjusted Gross Income ("AGI"). Adjusted gross
income is defined in section 408A(c)(3) of the Code and does not include amounts
transferred or rolled over to Traditional IRAs or Roth-IRAs. In accordance with
section 408A(c)(3) of the Code, if an annuitant is single, the $2,000 limit is
phased out between AGI of $95,000 and $110,000; if an annuitant is married and
files a joint federal income tax return, it is phased out between $150,000 and
$160,000; and if an annuitant is married and
MHC-97-9418 Minnesota Life Insurance Company
<PAGE>
files a separate federal income tax return, it is phased out between $0 and
$10,000.
If an annuitant is married, the maximum purchase payment to the lower-earning
spouse's Spousal Roth-IRA may not exceed the lesser of: (a) 100% of both
spouses' combined compensation minus any Roth-IRA or deductible Traditional IRA
contribution for the spouse with the higher compensation; or (b) $2,000. A
maximum of $4,000 may be contributed to both spouses' Spousal Roth-IRAs.
Purchase payments can be divided between the spouses' IRAs as the annuitant and
his spouse wish, but annual purchase payments to either one of the IRAs may not
exceed $2,000.
DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER TO A ROTH-IRA?
No. However, some individuals are not eligible to make rollover purchase
payments to a Roth-IRA.
A qualified rollover is a rollover contribution from another Roth-IRA or
Traditional individual retirement account or annuity in accordance with sections
408(d)(3), 408A(c)(3)(B), 408A(c)(6) and 408A(e) of the Code. A cash purchase
payment may be the amount received by or on behalf of the annuitant as all or
any portion of a distribution which is a rollover contribution. The
distribution may be one from a Traditional IRA or Roth-IRA, but may not be an
eligible rollover distribution from a tax-exempt employee's trust or a qualified
employee annuity plan.
A rollover or transfer from a Traditional IRA to a Roth-IRA will not be
permitted if the annuitant's AGI for the tax year exceeds $100,000 or if the
annuitant is married and files a separate federal income tax return. A rollover
contribution must be received by us not later than 60 days after the annuitant
receives it.
DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER?
No. Limits on purchase payments to the contract do not apply with a rollover
contribution. A rollover contribution is one within the meaning of sections
408(d)(3), 402(c), 403(a)(4), 403(b)(8), 408A(c)(3)(B), 408A(c)(6), 408A(d)(3)
or 408A(e) of the Internal Revenue Code (herein "Code") or a purchase payment
made in accordance with the terms of a SEP as described in section 408(k) of the
Code. In that case, a cash purchase payment may be the amount received by or on
behalf of an annuitant as all or any portion of a distribution which is a
rollover contribution. The distribution may be one from an individual
retirement account, annuity or bond plan; or an eligible rollover distribution
from a tax-exempt employee's trust; a qualified employee annuity plan; or such
other plan as may be allowed by law. A Roth-IRA, however, may not receive a
rollover contribution directly from any plan other than a Traditional IRA or
another Roth-IRA. In addition, a rollover or transfer from a Traditional IRA to
a Roth-IRA will not be permitted if the annuitant's AGI for the tax year exceeds
$100,000; or if the annuitant is married and files a separate federal income tax
return. A rollover contribution must be received by us not later than 60 days
after the annuitant receives it. A direct rollover payment may be made to us
from the plan making the distribution. A purchase payment may not include
contributions to a tax-qualified plan made by the annuitant as an employee.
MAY THE ANNUITANT ALWAYS MAKE PURCHASE PAYMENTS?
No. We will not accept purchase payments under this contract as of a date the
annuitant is not eligible for a SEP, IRA or Roth-IRA.
MHC-97-9418 Minnesota Life 2
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In addition, no additional cash contributions or rollover contributions may be
accepted under the contract if: (a) the owner dies before the distribution of
the entire interest in the contract; and (b) the beneficiary is not the
surviving spouse.
Purchase payments which exceed those allowed for an IRA or Roth-IRA may be
returned. We will send them to the annuitant. Return is without regard to the
provisions of this contract dealing with withdrawals. Excess purchase payments
to a SEP may similarly be returned. We will send them to the payer.
The annuitant has the sole responsibility for determining whether any purchase
payments meet applicable income tax requirements.
DISTRIBUTION PROVISIONS
ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS FROM AN IRA?
Yes. The distribution of an annuitant's value shall be made in accordance with
the minimum distribution requirements of section 408(b)(3) of the Code and the
regulations thereunder, including the incidental death benefit provisions of
section 1.401(a)(9)-2 of the proposed regulations. All of these rules are
incorporated herein by reference.
The annuitant's accumulation value, or withdrawal value if applicable, must be
distributed or begin to be distributed, by the annuitant's required beginning
date. This is the April 1 following the calendar year in which the annuitant
reaches age 70 1/2. For each succeeding year, a distribution must be made on or
before December 31.
The annuitant or, if applicable, the annuitant's beneficiary, is responsible for
assuring that the required minimum distribution is taken in a timely manner and
that the correct amount is distributed.
ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS FROM A ROTH-IRA WHILE THE
ANNUITANT IS ALIVE?
No. The rules that apply to Traditional IRAs regarding required distributions
while an annuitant is alive do not apply to Roth-IRAs.
WHAT FORMS OF DISTRIBUTION ARE AVAILABLE FROM AN IRA?
By the required beginning date the annuitant may elect to have the accumulation
value, or withdrawal value if applicable, distributed. It must be in one of the
following forms:
(a) a single sum payment;
(b) equal or substantially equal payments over the life of the annuitant;
(c) equal or substantially equal payments over the joint lives of the annuitant
and spouse;
(d) equal or substantially equal payments over a specified period that may not
be longer than the annuitant's life expectancy;
(e) equal or substantially equal payments over a specified period that may not
be longer than the joint life and last survivor expectancy of the annuitant
and spouse.
MHC-97-9418 Minnesota Life 3
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Options (b), (c), (d), and (e) can be satisfied by an annuity form elected by
the annuitant or by systematic withdrawal.
Payments must be made in periodic payments at intervals of no longer than one
year. In addition, payments must be either nonincreasing or they may increase
only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the Proposed Income Tax
Regulations or such final regulations as adopted.
ARE THERE SPECIAL RULES IF THE ANNUITANT DIES BEFORE THE ENTIRE VALUE IN THE
CONTRACT IS DISTRIBUTED?
Yes. If the annuitant dies on or after the date distributions have begun, the
entire remaining value must be distributed at least as rapidly as under the
method of distribution being used as of the date of the annuitant's death. If
the annuitant dies before distributions have begun, the entire remaining value
must be distributed as elected by the annuitant or, if the annuitant has not so
elected, as elected by the beneficiary or beneficiaries, as follows:
(a) by December 31st of the year containing the fifth anniversary of the
annuitant's death; or
(b) in equal or substantially equal payments over the life or life expectancy
of the designated beneficiary or beneficiaries starting by December 31st of
the year following the year of the annuitant's death. If, however, the
beneficiary is the annuitant's surviving spouse, then this distribution is
not required to begin until later. It must begin by December 31st of the
year in which the annuitant would have turned 70 1/2. Minimum payments to
the surviving spouse will be calculated in accordance with the applicable
regulations.
ARE OTHER OPTIONS AVAILABLE TO A SPOUSE BENEFICIARY?
Yes. In addition to the options discussed above, the spouse beneficiary has
other options. He or she may elect to treat the annuitant's IRA or Roth-IRA as
his or her own. This is done by either: (a) not taking a distribution within
the required time period; or (b) making eligible IRA or Roth-IRA contributions
to it.
If the beneficiary chooses one of these options then he or she is the contract
owner. He or she will assume all rights and privileges under the contract.
This right is available only to the spouse of the annuitant.
HOW ARE LIFE EXPECTANCIES FOR CALCULATING REQUIRED DISTRIBUTIONS DETERMINED?
Life expectancy is computed by use of the expected return multiples in Table V
and VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the annuitant prior to the commencement of
distributions or, if applicable, by the surviving spouse where the annuitant
dies before distributions have commenced, life expectancies of an annuitant or
spouse beneficiary shall be recalculated annually for purposes of required
distributions. An election not to recalculate shall be irrevocable and shall
apply to all subsequent years. The life expectancy of a nonspouse beneficiary
shall not be recalculated. Instead, life expectancy will be calculated using
the attained age of such beneficiary during the calendar year in which the
annuitant attains age 70 1/2; and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar year
which has elapsed since the calendar year life expectancy was first calculated.
MHC-97-9418 Minnesota Life 4
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In the case of a Roth-IRA, life expectancy will be calculated using the attained
age of such beneficiary in the calendar year distributions are required to
begin; and payments for subsequent years shall be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed since the
calendar year life expectancy was first calculated.
MAY THE ANNUITANT SATISFY MINIMUM DISTRIBUTION REQUIREMENTS BY RECEIVING A
DISTRIBUTION FROM ANOTHER IRA?
Yes. An annuitant may satisfy the minimum distribution requirements under
sections 408(a)(6) and 408(b)(3) of the Code by receiving a distribution from
one IRA that is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the owner of two or more
IRAs may use the "alternative method" described in Notice 88-38, to satisfy the
minimum distribution requirements described above.
WITHDRAWAL BENEFITS
ARE THERE LIMITS ON WITHDRAWALS FROM AN IRA?
Yes. These limits apply to a partial withdrawal or a surrender of the contract
before the annuitant's age 59 1/2. In that case, we must receive notice of the
intended disposition of the proceeds. This will not apply if the annuitant dies
or is disabled.
ARE ALL WITHDRAWALS FROM ROTH-IRAS SUBJECT TO FEDERAL INCOME TAX?
No. Purchase payments to Roth-IRAs are not deductible. Any partial withdrawal
or surrender of the contract that includes a return of the annuitant's purchase
payment(s) will not be taxable to the extent it is attributable to the purchase
payment(s). Earnings on the purchase payment(s) that are withdrawn are subject
to income tax if withdrawn within 5 years of the annuitant's first contribution
to a Roth-IRA or within 5 years of a rollover purchase payment. In addition,
earnings will be subject to income tax if withdrawn before the annuitant reaches
age 59 1/2; unless the earnings are being withdrawn because of the annuitant's
death or disability or to pay first-time home buyer expenses. If a withdrawal
is made, we must receive notice of the reason for withdrawal or intended
disposition of the proceeds. Income tax will also not apply to distributions
made if the amount received is in excess of the allowed contribution and
returned to the annuitant before the required tax return filing date for that
year, together with any earned interest; or if the entire contract is received
and reinvested in a similar plan entitled to similar tax treatment.
MAY TAX PENALTIES APPLY FOR WITHDRAWALS FROM AN IRA?
Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if: (1) the annuitant becomes disabled as defined by
the Code; (2) the amount received is in excess of the allowed deduction and
returned to the annuitant before the required tax return filing date for that
year, together with any earned interest; or (3) if the entire amount in the
contract is received and reinvested in a similar plan entitled to similar tax
treatment. Additional exceptions to tax penalties may be available to the
annuitant.
We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract.
MHC-97-9418 Minnesota Life 5
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Any transaction treated by law as a contract distribution may be treated by us
as a complete contract surrender.
MAY TAX PENALTIES APPLY FOR WITHDRAWALS FROM ROTH-IRAS?
Yes. Certain tax penalties are imposed under the Code. If the annuitant owes
income tax on the amount withdrawn, the annuitant will also generally be subject
to a 10% premature withdrawal tax penalty on the amount on which the annuitant
paid income tax. However, the tax penalties will not apply if earnings in the
Roth-IRA are withdrawn within 5 years of the annuitant's first contribution to a
Roth-IRA or within 5 years of a rollover purchase payment from a Traditional IRA
if the distribution is: (1) made on or after the date on which the annuitant
attains age 59 1/2; (2) made because of the annuitant's disability or death; or
(3) made because the amount received was in excess of the allowed contribution
and returned to the annuitant before the required tax return filing date for
that year, together with any earned interest. In addition, the tax penalty will
not apply to a distribution if the entire contract is received and reinvested in
a similar plan entitled to similar tax treatment. Additional exceptions to tax
penalties may be available to the annuitant.
We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract. Any
transaction treated by law as a contract distribution may be treated by us as a
complete contract surrender.
GENERAL INFORMATION
IS THE INTEREST OF THE ANNUITANT IN THIS CONTRACT NONFORFEITABLE?
Yes. The entire interest of the annuitant in this contract is nonforfeitable.
The annuitant shall possess the entire benefit provided by this contract. This
contract is established for the exclusive benefit of the annuitant and his or
her beneficiaries.
HOW WILL A REFUND OF PREMIUMS BE APPLIED?
Any refund of premiums (other than those attributable to excess purchase
payments) will be applied, before the close of the calendar year following the
year of the refund, toward the payment of future premiums or the purchase of
additional benefits.
MAY THIS AGREEMENT BE AMENDED?
Yes. This contract may be amended as required to reflect any change in the
Code, regulations or published revenue rulings. The annuitant will be deemed to
have consented to any such amendment. We will promptly furnish any such
amendment to the annuitant.
This agreement is effective as of the original contract date unless a different
effective date is shown here.
Secretary
President
MHC-97-9418 Minnesota Life 6
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Minnesota Life INDIVIDUAL RETIREMENT ANNUITY
SIMPLE - (IRA) AGREEMENT
WHAT DOES THIS AGREEMENT PROVIDE?
This agreement modifies the contract. Provisions are changed before issue. In
the event of a conflict between the provisions of this agreement and the
contract to which it is attached, the provisions of this agreement will control.
These changes will allow its use with a Savings Incentive Match Plan for
Employees (herein "SIMPLE-IRA").
PURCHASE PAYMENTS
ARE SIMPLE-IRA PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant's employer establishes a SIMPLE-IRA, purchase payments
may be limited. The annual cash purchase payments must be the lesser of: (a)
an amount equal to 100% of the compensation included in gross income in any
taxable year; or (b) $6,000, or such other maximum amount as may be allowed by
law. Mandated employer purchase payments, in addition to your purchase
payments, can range from 0% to 3% of your annual compensation.
DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER?
No. Limits on purchase payments to the contract do not apply with a rollover
contribution. A rollover contribution is one within the meaning of sections
408(d)(3)(G) of the Internal Revenue Code (herein "Code") or a purchase payment
made in accordance with the terms of a SIMPLE-IRA as described in section 408(p)
of the Code. In that case, a cash purchase payment may be the amount received
by or on behalf of an annuitant as all or any portion of a distribution which is
a rollover contribution. The distribution may be one as allowed by law. A
rollover contribution must be received by us not later than 60 days after the
annuitant receives it. A direct rollover payment may be made to us from the
plan making the distribution. A purchase payment may not include contributions
to a tax-qualified plan made by the annuitant as an employee.
MAY THE ANNUITANT ALWAYS MAKE PURCHASE PAYMENTS?
No. We will not accept purchase payments under this contract as of a date the
annuitant is not eligible for a SIMPLE-IRA.
In addition, no additional cash contributions or rollover contributions may be
accepted under the contract if: (a) the owner dies before the distribution of
the entire interest in the contract; and (b) the beneficiary is not the
surviving spouse.
Purchase payments which exceed those allowed for a SIMPLE-IRA may be returned.
We will send them to the payer. Return is without regard to the provisions of
this contract dealing with withdrawals.
DISTRIBUTION PROVISIONS
ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS?
Yes. The distribution of an annuitant's value shall be made in accordance with
the minimum distribution requirements of section 408(b)(3) of the Code and the
regulations thereunder, including the incidental death benefit provisions of
section 1.401(a)(9)-2 of the proposed regulations. All of these rules are
incorporated herein by reference.
MHC-98-9431 Minnesota Life Insurance Company
<PAGE>
The annuitant's accumulation value, or withdrawal value if applicable, must be
distributed or begin to be distributed, by the annuitant's required beginning
date. This is the April 1 following the calendar year in which the annuitant
reaches age 70 1/2. For each succeeding year, a distribution must be made on or
before December 31.
WHAT FORMS OF DISTRIBUTION ARE AVAILABLE?
By the required beginning date the annuitant may elect to have the accumulation
value, or withdrawal value if applicable, distributed. It must be in one of the
following forms:
(a) a single sum payment;
(b) equal or substantially equal payments over the life of the annuitant;
(c) equal or substantially equal payments over the joint lives of the annuitant
and spouse;
(d) equal or substantially equal payments over a specified period that may not
be longer than the annuitant's life expectancy;
(e) equal or substantially equal payments over a specified period that may not
be longer than the joint life and last survivor expectancy of the annuitant
and spouse.
Options (b), (c), (d), and (e) can be satisfied by an annuity form elected by
the annuitant or by systematic withdrawal.
Payments must be made in periodic payments at intervals of no longer than one
year. In addition, payments must be either nonincreasing or they may increase
only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the Proposed Income Tax
Regulations or such final regulations as adopted.
ARE THERE SPECIAL RULES IF THE ANNUITANT DIES BEFORE THE ENTIRE VALUE IN THE
CONTRACT IS DISTRIBUTED?
Yes. If the annuitant dies on or after the date distributions have begun, the
entire remaining value must be distributed at least as rapidly as under the
method of distribution being used as of the date of the annuitant's death. If
the annuitant dies before distributions have begun, the entire remaining value
must be distributed as elected by the annuitant or, if the annuitant has not so
elected, as elected by the beneficiary or beneficiaries, as follows:
(a) by December 31st of the year containing the fifth anniversary of the
annuitant's death; or
(b) in equal or substantially equal payments over the life or life expectancy
of the designated beneficiary or beneficiaries starting by December 31st of
the year following the year of the annuitant's death. If, however, the
beneficiary is the annuitant's surviving spouse, then this distribution is
not required to begin until later. It must begin by December 31st of the
year in which the annuitant would have turned 70 1/2.
ARE OTHER OPTIONS AVAILABLE TO A SPOUSE BENEFICIARY?
Yes. In addition to the options discussed above, the spouse beneficiary has
other options. He or she may elect to treat the annuitant's IRA as his or her
MHC-98-9431 Minnesota Life 2
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own. This is done by either: (a) not taking a distribution within the required
time period; or (b) making eligible IRA contributions to it.
If the beneficiary chooses one of these options then he or she is the contract
owner. He or she will assume all rights and privileges under the contract.
This right is available only to the spouse of the annuitant.
HOW ARE LIFE EXPECTANCIES FOR CALCULATING REQUIRED DISTRIBUTIONS DETERMINED?
Life expectancy is computed by use of the expected return multiples in Table V
and VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the annuitant prior to the commencement of
distributions or, if applicable, by the surviving spouse where the annuitant
dies before distributions have commenced, life expectancies of an annuitant or
spouse beneficiary shall be recalculated annually for purposes of required
distributions. An election not to recalculate shall be irrevocable and shall
apply to all subsequent years. The life expectancy of a nonspouse beneficiary
shall not be recalculated. Instead, life expectancy will be calculated using
the attained age of such beneficiary during the calendar year in which the
annuitant attains age 70 1/2, and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar year
which has elapsed since the calendar year life expectancy was first calculated.
MAY THE ANNUITANT SATISFY MINIMUM DISTRIBUTION REQUIREMENTS BY RECEIVING A
DISTRIBUTION FROM ANOTHER IRA?
Yes. An annuitant may satisfy the minimum distribution requirements under
sections 408(a)(6) and 408(b)(3) of the Code by receiving a distribution from
one IRA that is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the owner of two or more
IRAs may use the "alternative method" described in Notice 88-38, to satisfy the
minimum distribution requirements described above.
WITHDRAWAL BENEFITS
ARE THERE LIMITS ON WITHDRAWALS?
Yes. These limits apply to a partial withdrawal or a surrender of the contract
before the annuitant's age 59 1/2. In that case, we must receive notice of the
intended disposition of the proceeds. This will not apply if the annuitant dies
or is disabled.
MAY TAX PENALTIES APPLY?
Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if: (1) the annuitant becomes disabled as defined by
the Code; (2) the amount received is in excess of the allowed deduction and
returned to the annuitant before the required tax return filing date for that
year, together with any earned interest; or (3) if the entire amount in the
contract is received and reinvested in a similar plan entitled to similar tax
treatment. Additional exceptions to tax penalties may be available to the
annuitant.
We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract.
MHC-98-9431 Minnesota Life 3
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Any transaction treated by law as a contract distribution may be treated by us
as a complete contract surrender.
GENERAL INFORMATION
IS THE INTEREST OF THE ANNUITANT IN THIS CONTRACT NONFORFEITABLE?
Yes. The entire interest of the annuitant in this contract is nonforfeitable.
The annuitant shall possess the entire benefit provided by this contract. This
contract is established for the exclusive benefit of the annuitant and his or
her beneficiaries.
HOW WILL A REFUND OF PREMIUMS BE APPLIED?
Any refund of premiums (other than those attributable to excess purchase
payments) will be applied, before the close of the calendar year following the
year of the refund, toward the payment of future premiums or the purchase of
additional benefits.
MAY THIS AGREEMENT BE AMENDED?
Yes. This contract may be amended as required to reflect any change in the
Code, regulations or published revenue rulings. The annuitant will be deemed to
have consented to any such amendment. We will promptly furnish any such
amendment to the annuitant.
This agreement is effective as of the original contract date unless a different
effective date is shown here.
/s/ Dennis E. Prohofsky
Secretary
/s/ Robert L.Senkler
President
MHC-98-9431 Minnesota Life 4
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
of
MINNESOTA LIFE INSURANCE COMPANY
Robert L. Senkler and Dennis E. Prohofsky, respectively, the President and
Secretary of Minnesota Life Insurance Company, a corporation under and existing
by virtue of the laws of the State of Minnesota, do hereby certify that the
following Restated Certificate of Incorporation was duly adopted by an
affirmative vote of a majority of the stockholders at a special meeting of the
Company on December 10, 1998.
This Restated Certificate of Incorporation of Minnesota Life Insurance Company
supersedes and takes the place of the existing Certificate of Incorporation and
all amendments to it:
ARTICLE I
The name of the Company is Minnesota Life Insurance Company (the "Company").
ARTICLE II
The principal office of the Company shall be located at 400 Robert Street North,
Saint Paul, Minnesota 55101-2098.
ARTICLE III
The Company is incorporated for the purpose of transacting the business of and
making insurance upon the lives of individuals and every assurance pertaining
thereto or connected therewith, to grant, purchase and dispose of annuities and
endowments of every kind and description whatsoever, to provide an indemnity
against death and for weekly or other periodic indemnity for disability
occasioned by accident or sickness to the person of the assured and to have all
the further rights, powers and privileges granted or permitted life insurance
companies organized under the provisions of Minnesota Statutes, Chapter 300, and
all Acts amendatory thereof or additional thereto.
ARTICLE IV
The duration and continuation of the Company shall be perpetual.
ARTICLE V
The authorized capital stock of this Company shall be 5,000,000 shares initially
paid in by operation of Minnesota Statutes Section 60A.077 and subsequently paid
in cash, consisting of shares of Common Stock, with par value of $1.00 per
share. Each share of the Common Stock shall have one vote per share.
No shareholder of the Company shall have any pre-emptive or preferential right,
nor be entitled as such as a matter of right, to subscribe for or purchase any
part of any new or additional issue of stock of the Company of any class or
series, whether issued for money or for consideration other than money, or of
any issue of securities convertible into stock of the Company.
ARTICLE VI
The corporate powers of the Company shall be vested in a Board of Directors of
at least five persons and shall be exercised by the Board of Directors and by
such officers, agents, employees and committees as the Board of Directors may,
in its discretion, from time to time appoint and empower. The Board of
Directors shall have the power from time to time to make, amend or repeal such
bylaws, rules and regulations for the transaction of the business of the Company
as the Board of Directors may deem expedient and as are not inconsistent with
this Certificate of Incorporation or the constitution or other laws of the State
of Minnesota.
The directors of the Company shall be divided into three classes, as nearly
equal in number as reasonably possible: the first class, the second class and
the third class. Each such director shall serve for a term ending on the third
annual meeting of stockholders following the annual meeting at which such
director was elected, provided, that the directors first elected to the first
class shall serve for a term ending upon the election of directors at the annual
meeting in 2000, the directors
<PAGE>
first elected to the second class shall serve for a term ending upon the
election of directors at the annual meeting in 2001, and the directors first
elected to the third class shall serve for a term ending upon the election of
directors at the annual meeting in 2002.
At each annual election, commencing at the annual meeting in 2000, the
successors to the class of directors whose term expires at that time shall be
elected by stockholders to hold office for a term of three years to succeed
those directors whose term expires, so that the term of one class of directors
shall expire each year.
Notwithstanding the requirement that the three classes of directors shall be as
nearly equal in number of directors as reasonably possible, in the event of any
change in the authorized number of directors, each director then continuing to
serve as such shall nevertheless continue as a director of the class of which he
or she is a member until the expiration of his or her current term, or his or
her prior resignation, disqualification, disability or removal. There shall be
no cumulative voting in the election of the directors.
Any vacancy on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, an increase in the number of
directorships or other cause shall be filled only by the affirmative vote of a
majority of directors then in office, although less than a quorum or by the sole
remaining director. A director so chosen shall hold office for a term expiring
at the annual meeting at which the term of the class to which he or she has been
elected expires. If the number of directors is changed, any increase or
decrease shall be apportioned among the three classes by a two-thirds (2/3) vote
of the directors then in office. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
2
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ARTICLE VII
The incumbent members of the Board of Directors as of the date of the filing of
this Restated Certificate of Incorporation shall continue to be directors of the
Company until their successors are duly elected and qualified in accordance with
the bylaws. The current members of the Board of Directors who shall continue to
be directors of the Company and their respective addresses are:
NAME OF DIRECTOR ADDRESS
Giulio Agostini 3M
3M Center - Executive 220-14W-08
St. Paul, MN 55144-1000
Anthony L. Andersen H. B. Fuller Company
2424 Territorial Road
St. Paul, MN 55114
Leslie S. Biller Norwest Corporation
Sixth and Marquette
Minneapolis, MN 55479-1052
John F. Grundhofer U.S. Bancorp
601 2nd Avenue South
Suite 2900
Minneapolis, MN 55402-4302
Harold V. Haverty 701 Fourth Avenue South, Suite 300
Minneapolis, MN 55415
David S. Kidwell The Curtis L. Carlson School of
Management University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Reatha C. King General Mills Foundation
P O Box 1113
Minneapolis, MN 55440
Thomas E. Rohricht Doherty, Rumble & Butler P.A.
2800 Minnesota World Trade Center
30 East Seventh Street
St. Paul, MN 55101-4999
Terry T. Saario Bravo!, LLC
900 Hennepin Avenue
Minneapolis, MN 55403
Robert L. Senkler Minnesota Life Insurance Company
400 Robert Street North
St. Paul, MN 55101
Michael E. Shannon Ecolab, Inc.
370 Wabasha Street
Ecolab Center
St. Paul, MN 55102
Frederick T. Weyerhaeuser Clearwater Investment Trust
332 Minnesota Street
Suite W-2090
St. Paul, MN 55101-1308
3
<PAGE>
ARTICLE VIII
A director of the Company shall not be liable to the Company or the stockholders
of the Company for monetary damages for a breach of the fiduciary duty of care
as a director, except to the extent such exemption from liability or limitation
thereof is not permitted under the Minnesota Statutes, Section 300.64, as the
same currently exists or hereafter is amended. Specifically such exemption
shall not apply to:
(a) a breach of the director's duty of loyalty to the Company or its
stockholders;
(b) acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of the law;
(c) acts prohibited under Minnesota Statutes, Section 300.60, as the same
currently exists or is hereafter amended;
(d) payment of a dividend when the Company is insolvent;
(e) intentional neglect or refusal to perform a duty imposed by law;
(f) a transaction from which the director derives an improper personal
benefit; or
(g) an act or omission occurring prior to the date when this Restated
Certificate of Incorporation became effective.
ARTICLE IX
In no event shall any funds or investments be held in the name of any individual
who is an officer or employee of the Company. The Board of Directors shall
designate those banks and financial institutions in which the Company funds
shall be deposited. The Board by separate resolution also shall designate the
persons authorized to withdraw or transfer funds held in those accounts. No
funds shall be withdrawn or transferred from those accounts except upon the
authorization of the person or persons so authorized.
ARTICLE X
The annual meeting of the Company shall be held on the first Tuesday in May of
each year, if not a legal holiday, and if a legal holiday, then on the next day
not a legal holiday.
ARTICLE XI
The Company is authorized to issue any or all of its policies with or without
participation in profits, savings or unabsorbed portions of premiums; to
classify such policies issued on a participating or nonparticipating basis; and
to determine the right to participate and the extent of participation of any
class or classes of such policies, at the discretion of the Board of Directors.
The declaration and crediting of any policy dividend shall be subject to
approval by majority vote of the Minnesota Mutual Companies, Inc. Board of
Directors.
ARTICLE XII
This Restated Certificate of Incorporation may be amended at any annual meeting
of the Company, or any special meeting of the Company called for that expressly
stated purpose, by the affirmative vote of a majority of the stockholders.
IN WITNESS WHEREOF, the undersigned have executed this Restated Certificate of
Incorporation.
- -----------------, 1998 --------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
- -----------------, 1998 --------------------------------------
Dennis E. Prohofsky
Senior Vice President, Secretary
and General Counsel
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
As adopted on October 1, 1998
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2 SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.3 PLACE AND HOUR OF MEETING. . . . . . . . . . . . . . . . . . . .1
SECTION 1.4 NOTICE OF MEETINGS; RECORD DATE. . . . . . . . . . . . . . . . .1
SECTION 1.5 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.6 VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.7 VOTING BY PROXY. . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.8 VOTING OF SHARES BY CERTAIN HOLDERS. . . . . . . . . . . . . . .2
ARTICLE II BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.1 NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.1 NON-OVERLAPPING DIRECTORS. . . . . . . . . . . . . . . . . . . .2
SECTION 2.2 FILLING OF VACANCIES . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.3 PLACE OF MEETING, CORPORATE BOOKS. . . . . . . . . . . . . . . .2
SECTION 2.4 REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.5 SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.6 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.7 COMPENSATION OF DIRECTORS. . . . . . . . . . . . . . . . . . . .3
SECTION 2.8 ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS . . . . . . . .3
SECTION 2.9 REMOVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III COMMITTEES OF THE BOARD. . . . . . . . . . . . . . . . . . . . .3
SECTION 3.1 CREATION OF COMMITTEES . . . . . . . . . . . . . . . . . . . . .3
SECTION 3.2 APPOINTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.3 QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.4 COMMITTEE CHAIRS . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.5 MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.6 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.7 VACANCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.8 MINUTES AND REPORTS. . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.9 AUDIT COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.10 INVESTMENT COMMITTEE. . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.11 COMMITTEE OF NON-OVERLAPPING DIRECTORS. . . . . . . . . . . . .5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE IV OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 4.1 NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 4.2 ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 4.3 TERM OF OFFICE . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 4.4 REMOVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 4.5 VACANCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 4.6 DUTIES OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 4.7 ABSENCE OR DISABILITY. . . . . . . . . . . . . . . . . . . . . .7
ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES . . . . . . .7
ARTICLE VI DISPOSITION OF FUNDS AND INVESTMENTS. . . . . . . . . . . . . . .7
SECTION 6.1 FUNDS AND INVESTMENTS. . . . . . . . . . . . . . . . . . . . . .7
SECTION 6.2 DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE VII CORPORATE STOCK. . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 7.1 CERTIFICATES FOR SHARES. . . . . . . . . . . . . . . . . . . . .7
SECTION 7.2 TRANSFER OF SHARES . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 7.3 TRANSFER BOOKS . . . . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE VIII AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . .8
</TABLE>
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
ARTICLE I
STOCKHOLDERS
SECTION 1.1 ANNUAL MEETING.
The annual meeting of stockholders shall be held on the first Tuesday in May of
each year, if not a legal holiday, and if a legal holiday, then on the next day
not a legal holiday, when members of the Board of Directors shall be elected to
succeed those whose terms are then expiring and such other business shall be
transacted as may properly be brought before the meeting.
SECTION 1.2 SPECIAL MEETINGS.
Special meetings of stockholders for the transaction of such business as may
properly come before the meeting may be called by order of the Board of
Directors or by stockholders holding together at least a majority of all the
shares of the Company entitled to vote at the meeting. Business transacted at
all special meetings of stockholders shall be confined to the purpose or
purposes stated in the notice of the meeting.
SECTION 1.3 PLACE AND HOUR OF MEETING.
Every annual meeting of stockholders shall commence at such hour as shall be
determined by the Board of Directors. Every meeting of stockholders, whether an
annual or a special meeting, shall be held at the principal office of the
Company at 400 Robert Street North in the City of Saint Paul, in the State of
Minnesota (the "Home Office"), or at such other place as may be selected by the
Board of Directors.
SECTION 1.4 NOTICE OF MEETINGS; RECORD DATE.
Notice of each meeting of stockholders shall be mailed to each stockholder of
the Company not less than thirty days previous to such meeting, and every such
notice shall state the day and hour and the place at which the meeting is to be
held and, in the case of any special meeting, shall indicate briefly the purpose
or purposes thereof. The Board of Directors may fix in advance a date, not less
than twenty calendar days preceding the dates of the aforenamed occurrences, as
a record date for the determination of the shareholders entitled to notice of,
and to vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
shares. In such case, such stockholders, and only such stockholders as are
stockholders of the Company of record on the record date so fixed, are entitled
to notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Company after such record date so fixed. If the
Board of Directors shall not set a record date for the determination of the
stockholders entitled to notice of, and to vote at, a meeting of stockholders,
only the stockholders who are stockholders of record at the close of business on
the 20th day preceding the date of the meeting are entitled to notice of, and to
vote at, the meeting and any adjournment of the meeting.
SECTION 1.5 QUORUM.
A majority of the outstanding shares entitled to notice of and to vote at a
meeting, present in person or by proxy conforming the requirements of Section
1.7 of these bylaws, shall constitute a quorum for the transaction of any
business coming before any regular or special meeting of stockholders duly and
properly called, except as provided by law, the Restated Certificate of
Incorporation of the Company, or these bylaws. If, however, such quorum of
stockholders shall not be present or represented at any meeting of stockholders,
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a requisite number of stockholders shall be
present. At any such adjourned meeting at which the requisite number of
stockholders shall be represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
- 1 -
<PAGE>
SECTION 1.6 VOTING RIGHTS.
Each outstanding share of Common Stock shall be entitled to one vote upon each
matter submitted to a vote at any annual or special meeting of stockholders.
SECTION 1.7 VOTING BY PROXY.
Any stockholder may vote by proxy at any meeting of stockholders. To be valid,
the proxy appointment must be in writing and must be filed with, and received
by, the Secretary at the Home Office of the Company at least five days before
the meeting at which it is to be used, exclusive of the day of the meeting, but
inclusive of the day of receipt and filing of the proxy. A proxy appointment
may be for a specified period of time not to exceed one year. A proxy may be
revoked by a stockholder at any time by written notice to the Secretary of the
Company, or by executing a new proxy appointment and filing it as required
herein, or by personally appearing and exercising his or her rights as a
stockholder at any meeting of the stockholders.
SECTION 1.8 VOTING OF SHARES BY CERTAIN HOLDERS.
(a) Shares of stock in the name of another corporation, foreign or
domestic, are to be voted by such officer, agent, or proxy as the bylaws of such
corporation may determine.
(b) Shares of stock in the name of a deceased person are to be voted by
his executor or administrator in person or by proxy.
(c) Shares of stock in the name of a fiduciary, such as guardian, curator,
or trustee are to be voted by such fiduciary either in person or by proxy,
provided the books of the Company show the stock to be in the name of such
fiduciary in such capacity.
(d) Shares of stock in the name of a receiver are to be voted by such
receiver, and shares held by, or in the control of, a receiver are to be voted
by such receiver without the transfer thereof into his name, if such voting
authority is contained in an appropriate order of the court by which such
receiver was appointed.
(e) Shares of stock which have been pledged are to be voted by the pledgor
until the shares of stock have been transferred into the name of the pledgee,
and thereafter, the pledgee is entitled to vote the shares so transferred.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.1 NUMBER.
The Board of Directors shall consist of such number of Directors, not fewer than
five or more than sixteen, as the Board shall from time to time determine.
SECTION 2.1 NON-OVERLAPPING DIRECTORS.
Commencing with the first annual election of directors, and unless and until
Minnesota Mutual Companies, Inc. (or any successor mutual insurance holding
company) is converted from a mutual insurance holding company to a stock
company, the Board of Directors shall at all times include at least three
directors who are not concurrently serving as directors on the board(s) of
Minnesota Mutual Companies, Inc., Securian Holding Company or Securian Financial
Group, Inc. ("Non-overlapping Directors").
SECTION 2.2 FILLING OF VACANCIES.
If the office of any Director becomes vacant for any reason, a majority of the
remaining Directors may choose a successor. Each Director so chosen shall hold
office until the next regular annual meeting of the shareholders and until his
or her successor has been duly elected and qualified. Not more than one-third
of the maximum number of Directors may be so chosen by the Board between regular
annual meetings of the shareholders.
SECTION 2.3 PLACE OF MEETING, CORPORATE BOOKS.
The Board of Directors may hold its meetings and keep the books of the Company
at the Home Office of the Company, or at such other place or places as they may
from time to time by resolution determine, except as otherwise required by law.
- 2 -
<PAGE>
SECTION 2.4 REGULAR MEETINGS.
Regular meetings of the Board shall be held at such times and places as are
fixed from time to time by resolution of the Board. Notice need not be given of
those regular meetings of the Board held at the times and places fixed by
resolution, nor need notice be given of adjourned meetings. If either or both
the time or place of a regular meeting are other than that fixed by resolution,
a telephonic or written notice shall be given to each Director not less than
twenty-four hours prior to the time of that regular meeting.
SECTION 2.5 SPECIAL MEETINGS.
Special meetings of the Board may be held at any time upon call either of the
Chair of the Board, or of the Chief Executive Officer, or upon written request
of any three or more directors. Except as otherwise provided, notice of a
special meeting shall be given to each director either in writing or by
telephone. Notice of at least seventy-two hours prior to the meeting time is
required if written notice is deposited in the United States mail in the City of
Saint Paul. Notice of at least twenty-four hours prior to the meeting time is
required if written notice is left at either the place of business or residence
of each director. Notice of at least six hours prior to the meeting time is
required if all directors are personally either served with a written notice or
contacted by telephone. Notice need not be given to the directors of adjourned
special meetings. Also, special meetings may be held at any time without notice
if all of the directors are present, or if, before the meeting, those not
present waive such notice in writing. Notice of a special meeting shall state
the purpose of the meeting.
SECTION 2.6 QUORUM.
At all meetings of the Board of Directors, a majority of the directors then in
office shall be necessary and sufficient to constitute a quorum for the
transaction of business, but if, at any meeting, less than a quorum shall be
present, a majority of those present may adjourn the meeting from time to time,
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute or by the Restated Certificate of
Incorporation of the Company or by these bylaws.
SECTION 2.7 COMPENSATION OF DIRECTORS.
Members of the Board of Directors, who are not salaried officers of the Company,
shall receive such annual compensation as shall be fixed from time to time by
resolution of the Board of directors; and, in addition, the directors who are
not salaried officers of the Company shall receive a sum in such amount as shall
be fixed from time to time by resolution of the Board of Directors, and the
expenses of attendance, if any, for attendance at each regular or special
meeting of the Board, whether or not an adjournment be had because of the
absence of a quorum.
SECTION 2.8 ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS.
If all the directors severally or collectively consent in writing to any action
taken or to be taken by the directors, such consents have the same force and
effect as a unanimous vote of the directors at a meeting duly held, and may be
stated as such in any certificate or document filed with the Secretary of State
of Minnesota or any other state in the United States of America or other
Country. The Secretary of the Company shall file such consents with the minutes
of the meetings of the Board of Directors.
SECTION 2.9 REMOVAL.
Any director or the entire Board of Directors may be removed at any time but
only for cause or pursuant to the Company's retirement policy in effect when the
director was first elected.
ARTICLE III
COMMITTEES OF THE BOARD
SECTION 3.1 CREATION OF COMMITTEES.
The following designated standing committees of the Board are hereby authorized
and created: Audit, Investment, and Non-overlapping Directors. In addition,
the Board is authorized to create any other committee or committees of the Board
as the Board from time to time deems necessary. The name, duration and duties
of each other committee and the number of members thereof shall be as prescribed
in the action creating the committee. In the event the Board of Directors
creates an Executive Committee invested with the full powers of the Board of
Directors
- 3 -
<PAGE>
between meetings of the Board of Directors, then that Committee must have at
least the same proportion of Non-overlapping Directors as does the full Board of
Directors.
SECTION 3.2 APPOINTMENTS.
The members of each standing Board committee shall consist of those Directors
appointed by the Board of Directors. Each Director appointed to a Board
committee shall continue to serve on that committee at the will and pleasure of
the Board for the period specified in his or her appointment or until his or her
earlier death, resignation or removal.
SECTION 3.3 QUALIFICATIONS.
Each Director is qualified to be appointed and successively reappointed to one
or more committees.
SECTION 3.4 COMMITTEE CHAIRS.
The Board shall appoint one of the members of each of the Board committees to
chair that committee and, in its discretion, may also appoint one of the members
of each of the committees to serve as a vice chair of that committee. If
neither the committee chair nor the committee vice chair is present at a meeting
of a committee, the committee members present at that committee meeting shall
elect another committee member to chair that meeting.
SECTION 3.5 MEETINGS.
Each committee shall meet at such times as the chair of that committee may
designate or as a majority of that committee may determine, subject to a minimum
of not less than two meetings per calendar year.
SECTION 3.6 QUORUM.
A majority of each Board committee shall constitute a quorum at each meeting of
that committee. At any meeting of a committee at which a quorum is present, the
committee may continue to transact business until adjournment, even though
committee member(s) may have left the meeting so that less than a quorum is
present at the meeting. If a quorum is not present for a committee meeting, the
chair of that committee may request the Board to appoint a sufficient number of
other directors to serve as members of the committee only for that meeting, so
as to obtain a quorum. If the Board makes the requested appointments, any
action so taken at the committee meeting shall be valid and binding.
SECTION 3.7 VACANCIES.
In the case of the death, resignation or removal of a member of a committee, the
Board may appoint another Director to fill the vacancy so created on that
committee for the balance of the unexpired appointment. The appointment shall
be subject to the qualifications set forth for that committee.
SECTION 3.8 MINUTES AND REPORTS.
Each committee shall keep a written record of its acts and proceedings and shall
submit that record to the Board of Directors at a regular meeting of the Board
and at such other times as requested by the Board or when a majority of the
committee deems it desirable to do so. Failure to submit a record will not,
however, invalidate any action taken by the committee prior to the time the
record of the action was, or should have been, submitted to the Board. The
minutes of each committee shall be recorded by the person designated by the
chair of that committee.
SECTION 3.9 AUDIT COMMITTEE.
The Audit Committee shall consist of not fewer than four directors that are not
officers or employees of Minnesota Mutual Companies, Inc. or any of its
subsidiaries. The committee shall have the following powers and duties:
(a) Annually recommend to the Board a firm of independent certified public
accountants to audit the Company's books, records and accounts.
(b) Approve the scope of audits to be conducted by the independent
certified public accountants, taking into account the principal risks inherent
in the Company's business and the recommendations from the independent
accountants as to scope of audit.
- 4 -
<PAGE>
(c) Review all recommendations made by the independent certified public
accountants in their audit reports to the Board.
(d) Approve the scope of audits to be conducted by the Company's internal
auditors and review the reports of those audits.
(e) Review the reports which result from the examinations of the Company
conducted by state insurance authorities.
(f) Review corporate litigation involving extra-contractual damages.
(g) Periodically review the Company's plans for data security and disaster
recovery.
(h) Advise the Board of the results of the committee's reviews and
recommendations resulting therefrom.
SECTION 3.10 INVESTMENT COMMITTEE.
The Investment Committee shall consist of not fewer than four directors and
shall have the following powers and duties which shall be exercised not less
than once every twelve months:
(a) Review the written investment policy for the Company investments,
recommend changes thereto, and submit to the Board for its approval and adoption
the policy and procedures for the ensuing twelve months.
(b) Review all investments of Company funds, including their acquisition
and sale and report findings to the Board.
(c) Furnish the Board with summaries of investment transactions.
(d) Review compliance with the written investment policy and valuation
procedures and submit findings to the Board.
SECTION 3.11 COMMITTEE OF NON-OVERLAPPING DIRECTORS.
The Committee of Non-overlapping Directors shall consist of not fewer than three
Non-overlapping Directors (as described in Section 2.1 of these bylaws) and
shall have the following powers and duties:
(a) Review all agreements and material transactions between and among the
Company, its affiliates and subsidiaries to assure that such agreements and
transactions are fair and reasonable and that they comply with Minnesota
Statutes, Section 60D, and all Acts amendatory thereof or additional thereto.
For purposes of this section, the term "material" shall have the definition set
forth in Minnesota Statutes, Section 60D.19, subd. 4, as it may be amended from
time to time.
(b) Such other powers and duties as determined by the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER.
The officers of the Company shall be a Chief Executive Officer, a President, one
or more Vice Presidents, a Treasurer, an Actuary, a Controller, a Secretary, and
one or more Assistant Secretaries. In addition, there may be such other
officers as the Board of Directors from time to time may deem necessary. One
individual may hold two or more offices, except those of President and
Secretary.
SECTION 4.2 ELECTION.
Officers shall be elected or appointed by the Board of Directors.
SECTION 4.3 TERM OF OFFICE.
Each officer shall serve for the term stated in his or her election or
appointment or until his or her earlier death, resignation or removal.
- 5 -
<PAGE>
SECTION 4.4 REMOVAL.
Any officer may be removed from office, with or without cause, at any time by
the affirmative vote of the majority of the Board of Directors then in office.
SECTION 4.5 VACANCIES.
Any vacancy in any office from any cause may be filled by the Board of Directors
at its next meeting.
SECTION 4.6 DUTIES OF OFFICERS.
The duties of the officers shall be as follows:
(a) CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have
general active management of the business of the Company and, in the absence of
the Chair of the Board, shall preside at all meetings of the members and the
Board of Directors, and shall see that all orders and resolutions of the Board
are carried into effect. Except where, by law, the signature of the President
is required, the Chief Executive Officer shall possess the same power as the
President to sign and execute all authorized certificates, contracts, bonds, and
other obligations of the Company.
(b) PRESIDENT. The President, in the absence of the Chair of the Board
and the Chief Executive Officer, shall preside at all meetings of the members
and the Board of Directors. The President shall be the chief administrative
officer of the Company and shall have the power to sign and execute all
authorized certificates, contracts, bonds, and other obligations of the
Company. The President also shall perform such other duties as are incident
to the office or are properly required of him or her by the Board or the
Chief Executive Officer.
(c) VICE PRESIDENTS. Each Vice President will perform those duties as
from time to time may be assigned by the Chief Executive Officer. In the
absence of the President, a Vice President designated by the Board of Directors
shall perform the duties of the President. A Vice President shall have the
power to sign and execute all authorized certificates, contracts, bonds and
other obligations of the Company. One or more of the Vice Presidents may be
entitled Executive Vice President, Senior Vice President, Vice President, Second
Vice President, or such other variation thereof as may be designated by the
Board.
(d) SECRETARY. The Secretary shall give notice and keep the minutes of
all meetings of the members and of the Board of Directors and shall give and
serve all notices of the Company. The Secretary or an Assistant Secretary shall
have the power to sign with the Chief Executive Officer, President, or any Vice
President in the name of the Company all authorized certificates, contracts,
bonds, or other obligations of the company and may affix the Company Seal
thereto. The Secretary shall have charge and custody of the books and papers of
the Company and in general shall perform all duties incident to the office of
Secretary, except as otherwise specifically provided in these bylaws, and such
other duties as from time to time may be assigned by the Chief Executive
Officer. If Assistant Secretaries are elected or appointed, they shall have
those powers and perform those duties as from time to time may be assigned to
them by the Chief Executive Officer and, in the absence of the Secretary, one of
them shall perform the duties of the Secretary.
(e) TREASURER. The Treasurer shall have those powers and shall perform
those duties as from time to time may be assigned by the Chief Executive
Officer. If Assistant Treasurers are elected or appointed, they shall have
those powers and perform those duties as from time to time may be assigned to
them by the Chief Executive Officer and, in the absence of the Treasurer, one of
them shall perform the duties of the Treasurer.
(f) CONTROLLER. The Controller shall have those powers and shall perform
those duties as from time to time may be assigned by the Chief Executive
Officer.
(g) ACTUARY. The Actuary shall have those powers and shall perform those
duties as from time to time may be assigned by the Chief Executive Officer.
(h) OTHER OFFICERS. Other officers elected or appointed by the Board of
Directors shall have those powers and perform those duties as from time to time
may be assigned by the Chief Executive Officer.
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<PAGE>
SECTION 4.7 ABSENCE OR DISABILITY.
In the case of the absence or disability of any officer of the Company or of any
person authorized to act in his or her place during such period of absence or
disability, the Board of Directors from time to time may delegate the powers and
duties of such officer to any other officer, or any Director, or any other
person whom they may select.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
The Company shall, to the fullest extent permitted under Minnesota Statutes,
Section 300.083, as the same currently exists or hereafter is amended,
indemnify (and advance expenses to) the directors, officers and employees of
this Company. The provisions of this Article shall not be deemed to limit or
preclude indemnification of a director, officer or employee by the Company
for any liability which has not been eliminated by the provisions of this
Article.
ARTICLE VI
DISPOSITION OF FUNDS AND INVESTMENTS
SECTION 6.1 FUNDS AND INVESTMENTS.
All funds and investments of the Company shall be held in the name of "Minnesota
Life Insurance Company" or its nominee or as otherwise provided in accordance
with applicable Minnesota Statutes, as amended from time to time. In no event
shall any funds or investments be held in the name of any individual who is an
officer or employee of the Company.
SECTION 6.2 DEPOSITS.
The Board of Directors shall designate those banks and financial institutions in
which Company funds shall be deposited. The Board by separate resolution also
shall designate the persons authorized to withdraw or transfer funds held in
those accounts. No funds shall be withdrawn or transferred from those accounts
except upon the authorization of the person or persons so authorized.
ARTICLE VII
CORPORATE STOCK
SECTION 7.1 CERTIFICATES FOR SHARES.
The Board of Directors is to prescribe the form of the certificate(s) of stock
of the Company. The certificate is to be signed by the President or Vice
President and by the Secretary, Treasurer, or Assistant Secretary or Assistant
Treasurer, is to be sealed with the seal of the Company and is to be numbered
consecutively. The name of the owner of the certificate, the number of shares
of stock represented thereby, and the date of issue are to be recorded on the
books of the Company. Certificates of stock surrendered to the Company for
transfer are to be canceled, and new certificates of stock representing the
transferred shares issued. New stock certificates may be issued to replace
lost, destroyed or mutilated certificates upon such terms and with such security
to the Company as the Board of Directors may require.
SECTION 7.2 TRANSFER OF SHARES.
Shares of stock of the Company may be transferred on the books of the Company by
the delivery of the certificates representing such shares to the Company for
cancellation, and with an assignment in writing on the back of the certificate
executed by the person named in the certificates as the owner thereof, or by a
written power of attorney executed for such purpose by such person. The person
registered on the books of the Company as the owner of shares of stock of the
Company is deemed the owner thereof and is entitled to all rights of ownership
with respect to such shares.
SECTION 7.3 TRANSFER BOOKS.
Transfer books are to be maintained under the direction of the Secretary,
showing the ownership and transfer of all certificates of stock issued by the
Company.
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<PAGE>
ARTICLE VIII
AMENDMENTS
These bylaws may be amended by the Board of Directors or by the stockholders at
a regular meeting, or at a special meeting called for that expressly-stated
purpose, by the affirmative vote of a majority of the stockholders present, in
person or by proxy, at the meeting.
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<PAGE>
Minnesota Life Insurance Company
Power of Attorney
To Sign Registration Statements
WHEREAS, Minnesota Life Insurance Company ("Minnesota Life") has
established certain separate accounts to fund certain variable annuity and
variable life insurance contracts, and
WHEREAS, Variable Fund D ("Fund D") is a separate account of Minnesota Life
registered as a unit investment trust under the Investment Company Act of 1940
offering variable annuity contracts registered under the Securities Act of 1933,
and
WHEREAS, Variable Annuity Account ("Variable Annuity Account") is a
separate account of Minnesota Life registered as a unit investment trust under
the Investment Company Act of 1940 offering variable annuity contracts
registered under the Securities Act of 1933, and
WHEREAS, Minnesota Life Variable Life Account ("Variable Life Account") is
a separate account of Minnesota Life registered as a unit investment trust under
the Investment Company Act of 1940 offering variable adjustable life insurance
policies registered under the Securities Act of 1933,
WHEREAS, Group Variable Annuity Account ("Group Variable Annuity Account")
is a separate account of Minnesota Life which has been established for the
purpose of issuing group annuity contracts on a variable basis and which is to
be registered as a unit investment trust under the Investment Company Act of
1940 offering group variable annuity contracts and certificates to be registered
under the Securities Act of 1933;
WHEREAS, Minnesota Life Variable Universal Life Account ("Variable
Universal Life Account") is a separate account of Minnesota Life which has been
established for the purpose of issuing group and individual variable universal
life insurance policies on a variable basis and which is to be registered as a
unit investment trust under the Investment Company Act of 1940 offering group
and individual variable universal life insurance policies to be registered under
the Securities Act of 1933;
NOW THEREFORE, We, the undersigned Directors and Officers of Minnesota
Life, do hereby appoint Dennis E. Prohofsky and Garold M. Felland, and each
of them individually, as attorney in fact for the purpose of signing in their
names and on their behalf as Directors of Minnesota Life and filing with the
Securities and Exchange Commission Registration Statements, or any amendment
thereto, for the purpose of: a) registering contracts and policies of Fund
D, the Variable Annuity Account, the Variable Life Account, the Group
Variable Annuity Account and the Variable Universal Life Account for sale by
those entities and Minnesota Life under the Securities Act of 1933; and b)
registering Fund D, the Variable Annuity Account, the Variable Life Account,
the Group Variable Annuity Account and the Variable Universal Life Account as
unit investment trusts under the Investment Company Act of 1940.
Signature Title Date
--------- ----- ----
/s/Robert L. Senkler Chairman of the Board, October 19, 1998
- ------------------------------ President and Chief
Robert L. Senkler Executive Officer
<PAGE>
Signature Title Date
--------- ----- ----
/s/Giulio Agostini Director October 19, 1998
- ------------------------------
Giulio Agostini
/s/Anthony L. Andersen Director October 19, 1998
- ------------------------------
Anthony L. Andersen
/s/Leslie S. Biller Director October 19, 1998
- ------------------------------
Leslie S. Biller
/s/John F. Grundhofer Director October 19, 1998
- ------------------------------
John F. Grundhofer
/s/David S. Kidwell Director October 19, 1998
- ------------------------------
David S. Kidwell, Ph.D.
/s/Reatha C. King, Ph.D. Director October 19, 1998
- ------------------------------
Reatha C. King, Ph.D.
/s/Thomas E. Rohricht Director October 19, 1998
- ------------------------------
Thomas E. Rohricht
/s/Michael E. Shannon Director October 19, 1998
- ------------------------------
Michael E. Shannon
/s/Frederick T. Weyerhaeuser Director October 19, 1998
- -------------------------------
Frederick T. Weyerhaeuser
