<PAGE> 1
NATIONWIDE LIFE INSURANCE COMPANY
Deferred Variable Annuity Contracts
Issued by Nationwide Life Insurance Company through its NACo Variable Account
The date of this prospectus is May 1, 1999.
- --------------------------------------------------------------------------------
This prospectus contains basic information you should know about the contracts
before investing.
Please read it and keep it for future reference.
The following underlying mutual funds are available under the contracts:
- - American Century: Income & Growth - Investor Class
- - American Century: International Discovery Fund - Investor Class (formerly
"American Century: Twentieth Century International Discovery Fund -
Investor Class")
- - American Century: Ultra (formerly "American Century: Twentieth Century
Ultra")
- - Dreyfus Appreciation Fund, Inc.
- - Dreyfus Premier Midcap Stock Fund - Class A
- - The Dreyfus Third Century Fund, Inc.
- - Federated Bond Fund - Class F
- - Federated U.S. Government Securities Fund: 2-5 Years - Institutional Shares
- - Fidelity Advisor Growth Opportunities Fund - Class A
- - Fidelity Advisor High Yield Fund - Class T
- - Fidelity Equity - Income Fund
- - Fidelity OTC Portfolio
- - Fidelity Puritan Fund
- - INVESCO Dynamics Fund
- - INVESCO Total Return Fund
- - LifeDesigns Series
- The Aggressive Portfolio
- The Moderately Aggressive Portfolio
- The Moderate Portfolio
- The Moderately Conservative Portfolio
- The Conservative Portfolio
- - MAS Funds Fixed Income Portfolio
- - MFS(R) High Income Fund - Class A
- - Morgan Stanley Institutional Fund, Inc. - Equity Growth Portfolio - Class B
- - Nationwide(R) Fund - Class D
- - Nationwide(R) Money Market Fund
- - Nationwide S&P 500(R) Index Fund - Class Y
- - Nationwide Separate Account Trust - Nationwide Small Company Fund
(subadvisers: The Dreyfus Corporation, Neuberger Berman, L.P., Lazard Asset
Management, Strong Capital Management, Inc. and Warburg Pincus Asset
Management, Inc.) Neuberger Berman Guardian Fund, Inc.
- - Neuberger Berman Partners Trust
- - Oppenheimer Global Fund - Class A
- - Prestige Balanced Fund - Class Y
- - Prestige International Fund - Class Y
- - Prestige Large Cap Growth Fund - Class Y
- - Prestige Large Cap Value Fund - Class Y
- - Prestige Small Cap Fund - Class Y
- - Putnam Investors Fund - Class A
- - Putnam Voyager Fund - Class A
- - SEI Index Funds - S&P 500 Index Portfolio
- - Seligman Growth Fund, Inc. - Class A
- - Short-Term Investments Trust - Treasury Portfolio - Institutional Class
- - T. Rowe Price International Stock Fund(R)
- - Templeton Foreign Fund - Class A
- - Warburg Pincus Emerging Growth Fund - Common Class
1
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NOT AVAILABLE FOR NEW PLANS ESTABLISHED ON OR AFTER JUNE 30, 1998
- Fidelity Contrafund
NOT AVAILABLE FOR NEW CONTRACTS ISSUED ON OR AFTER OCTOBER 1, 1997
- Fidelity Magellan(R) Fund
NOT AVAILABLE FOR NEW CONTRACTS ISSUED ON OR AFTER MAY 1, 1997
- American Century: Growth (formerly "American Century: Twentieth
Century Growth")
- Massachusetts Investors Growth Stock Fund - Class A
MAY NOT BE AVAILABLE TO ALL CONTRACTS ISSUED ON OR AFTER JULY 1, 1994
- The Bond Fund of America(SM), Inc.
- The Investment Company of America(R), Inc.
NOT AVAILABLE FOR NEW CONTRACTS ISSUED ON OR AFTER OCTOBER 1, 1993
- Evergreen Income and Growth Fund
- MFS(R) Growth Opportunities Fund - Class A
- Nationwide(R) Growth Fund - Class D
NOT AVAILABLE FOR OWNERS WHOSE PREDECESSOR NATIONWIDE DC VARIABLE ACCOUNT
CONTRACT WAS ISSUED ON OR AFTER JANUARY 1, 1987
- Fidelity Capital & Income Fund
The Statement of Additional Information ( dated May 1, 1999) which contains
additional information about the contracts and the NACo Variable Account has
been filed with the U.S. Securities and Exchange Commission ("SEC") and is
incorporated herein by reference. The table of contents for the Statement of
Additional Information is on page 31.
For general information or to obtain FREE copies of the:
- Statement of Additional Information
- prospectus for any underlying mutual fund
- required Nationwide forms,
call:
1-800-545-4730
TDD 1-800-238-3035
or write:
NATIONWIDE LIFE INSURANCE COMPANY
P.O. BOX 16766
COLUMBUS, OHIO 43216
The Statement of Additional Information and other material incorporated by
reference can be found on the SEC website at:
WWW.SEC.GOV
THIS ANNUITY IS NOT:
- A BANK DEPOSIT - FEDERALLY INSURED
- ENDORSED BY A BANK OR - AVAILABLE IN EVERY
GOVERNMENT AGENCY STATE
Investors assume certain risks when investing in the contracts, including the
possibility of losing money.
Guarantees under the contracts are the sole responsibility of Nationwide.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, NOR HAS THE
SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
2
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GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT- An accounting unit used to calculate the contract value
allocated to the variable account before the annuitization date.
ALLOCATED CONTRACT- Contract under which Nationwide maintains individual
accounts on behalf of each participant.
ANNUITIZATION DATE- The date on which annuity payments begin.
ANNUITY COMMENCEMENT DATE- The date on which annuity payments are scheduled to
begin. This date may be changed by the contract owner with Nationwide's consent.
ANNUITY UNIT- An accounting unit used to calculate the variable payment annuity
payments.
CONTRACT VALUE- The total of all accumulation units in a contract.
CONTRACT YEAR- Each year the contract is in force beginning with the date the
contract is issued.
GENERAL ACCOUNT- All assets of Nationwide other than those of the variable
account or in other separate accounts that have been or may be established by
Nationwide.
MEMBER COUNTY- A county which is a member of the National Association of
Counties ("NACo") or an entity approved by the President of NACo for
participation under the NACo program.
NACo PROGRAM- The deferred compensation program established and administered
pursuant to Section 457 of the Internal Revenue Code for the benefit of member
counties.
NATIONWIDE- Nationwide Life Insurance Company.
PARTICIPANT ACCOUNT YEAR- For each participant, the participant account year is
each one-year period starting with either the date accumulation units were first
credited to the participant's account, or an anniversary of that date.
SUB-ACCOUNTS- Divisions of the variable account to which underlying mutual fund
shares are allocated and for which accumulation units and annuity units are
separately maintained.
UNALLOCATED CONTRACT- A contract where Nationwide maintains one single plan
contract, as opposed to maintaining individual participant accounts.
VALUATION PERIOD- Each day the New York Stock Exchange is open.
VARIABLE ACCOUNT- NACo Variable Account, a separate account of Nationwide that
contains variable account allocations. The variable account is divided into
sub-accounts, each of which invests in shares of a separate underlying mutual
fund.
3
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TABLE OF CONTENTS
GLOSSARY OF SPECIAL TERMS.....................................................3
SUMMARY OF STANDARD CONTRACT
EXPENSES.................................................................5
UNDERLYING MUTUAL FUND ANNUAL EXPENSES........................................6
EXAMPLE.......................................................................8
CONDENSED FINANCIAL INFORMATION..............................................10
FINANCIAL STATEMENTS.........................................................10
SYNOPSIS OF THE CONTRACTS....................................................10
NATIONWIDE LIFE INSURANCE COMPANY............................................11
NATIONWIDE INVESTMENT SERVICES CORPORATION...................................12
INVESTING IN THE CONTRACT....................................................12
The Variable Account and Underlying
Mutual Funds
STANDARD CHARGES AND DEDUCTIONS..............................................13
Participant Account Maintenance Charge
Variable Account Annual Expense Fee
Contingent Deferred Sales Charge
Premium Taxes
CONTRACT RIGHTS..............................................................15
OPERATION OF THE CONTRACT....................................................15
Minimum Purchase Payments
Application of Purchase Payments
Allocation of Purchase Payments
Determining Variable Account Value - Valuing an Accumulation Unit
Determining the Participant Account Value
Exchange Privilege
Experience Credits
MODIFICATION OF THE CONTRACT.................................................18
CONTRACT SUSPENSION AND TERMINATION..........................................18
REDEMPTION OF PARTICIPANT ACCOUNTS...........................................18
RETIREMENT PERIOD............................................................19
Additional Purchase Payment Before Beginning Retirement Income Payments
Retirement Income Payments
Election of Retirement Income Form and Date
Retirement Income Forms
Determination of Life Income Payments
Alternate Assumed Investment Rate
DEATH OF PARTICIPANT.........................................................22
Participant Death Before Retirement
Death of Retired Participant
FEDERAL TAX CONSIDERATIONS...................................................23
Contracts Issued under the New York
Model Plan
STATEMENTS AND REPORTS.......................................................24
YEAR 2000 COMPLIANCE ISSUES..................................................24
LEGAL PROCEEDINGS............................................................25
ADVERTISING AND SUB-ACCOUNT PERFORMANCE SUMMARY..............................26
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION.....................31
APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS...........................32
APPENDIX B: CONDENSED FINANCIAL
INFORMATION.............................................................41
4
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SUMMARY OF CONTRACT EXPENSES
All charges are subject to negotiation. Therefore, the expenses described below
vary from contract to contract. Please refer to the appropriate prospectus
provision for more details.
PARTICIPANT TRANSACTION EXPENSES
Maximum Contingent Deferred Sales
Charge ("CDSC") (as a percentage of
purchase payments) ...........................................................5%
MAXIMUM PARTICIPANT ACCOUNT
MAINTENANCE CHARGE..........................................................$50
MAXIMUM VARIABLE ACCOUNT ANNUAL
EXPENSE FEE(1)
(as a percentage of average account value)
.......................................................0.95% per annum
(1) The maximum Variable Account Annual Expense Fee does not include:
- premium taxes that may be imposed by the state in which the contract
was issued; or
- deductions for management fees and other expenses made by the
underlying mutual funds.
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UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(AS A PERCENTAGE OF UNDERLYING MUTUAL FUND NET ASSETS, AFTER EXPENSE
REIMBURSEMENT)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Management Other 12b-1 Total Mutual
Fees Expenses Fees Fund Expenses
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & Growth - Investor Class 0.69% 0.00% 0.00% 0.69%
-------------------------------------------------------------------------------------------------------------------
American Century: Growth 1.00% 0.00% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
American Century: International Discovery Fund - 1.66% 0.00% 0.00% 1.66%
Investor Class
-------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.00% 0.00% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 0.32% 0.09% 0.25% 0.66%
-------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, Inc. 0.55% 0.34% 0.00% 0.89%
-------------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap Stock Fund - Class A 1.10% 0.25% 0.00% 1.35%
-------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. 0.75% 0.22% 0.00% 0.97%
-------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth Fund 0.97% 0.28% 0.00% 1.25%
-------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class F 0.65% 0.43% 0.00% 1.08%
-------------------------------------------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 Years 0.40% 0.14% 0.00% 0.54%
- Institutional Shares
-------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth Opportunities Fund - Class A 0.46% 0.25% 0.25% 0.96%
-------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield Fund - Class T 0.58% 0.24% 0.25% 1.07%
-------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 0.58% 0.23% 0.00% 0.81%
-------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 0.45% 0.16% 0.00% 0.61%
-------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 0.47% 0.20% 0.00% 0.67%
-------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 0.42% 0.17% 0.00% 0.59%
-------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 0.49% 0.24% 0.00% 0.73%
-------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 0.44% 0.19% 0.00% 0.63%
-------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 0.55% 0.28% 0.25% 1.08%
-------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund 0.58% 0.20% 0.25% 1.03%
-------------------------------------------------------------------------------------------------------------------
The Investment Company of America(R), Inc. 0.25% 0.08% 0.22% 0.55%
-------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Aggressive Portfolio 0.50% 0.00% 0.00% 0.50%
-------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderately Aggressive 0.50% 0.00% 0.00% 0.50%
Portfolio
-------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderate Portfolio 0.50% 0.00% 0.00% 0.50%
-------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderately Conservative 0.50% 0.00% 0.00% 0.50%
Portfolio
-------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Conservative Portfolio 0.50% 0.00% 0.00% 0.50%
-------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 0.38% 0.11% 0.00% 0.49%
-------------------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 0.25% 0.22% 0.32% 0.79%
-------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities Fund - Class A 0.42% 0.21% 0.18% 0.81%
-------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - Class A 0.44% 0.27% 0.30% 1.01%
-------------------------------------------------------------------------------------------------------------------
Morgan Stanley Institutional Fund, Inc. - Equity 0.60% 0.20% 0.25% 1.05%
Growth Portfolio - Class B
-------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 0.57% 0.12% 0.00% 0.69%
-------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - Class D 0.58% 0.19% 0.00% 0.77%
-------------------------------------------------------------------------------------------------------------------
Nationwide Money Market Fund 0.40% 0.18% 0.00% 0.58%
-------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index Fund - Class Y 0.13% 0.34% 0.00% 0.47%
-------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account Trust - Nationwide Small 1.00% 0.07% 0.00% 1.07%
Company Fund
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Neuberger Berman Guardian Fund, Inc. 0.70% 0.09% 0.00% 0.79%
-------------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners Trust 0.85% 0.05% 0.00% 0.90%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
6
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UNDERLYING MUTUAL FUND ANNUAL EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Management Other 12b-1 Total Mutual
Fees Expenses Fees Fund Expenses
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oppenheimer Global Fund - Class A 0.69% 0.23% 0.22% 1.14%
-------------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - Class Y 0.25% 0.70% 0.00% 0.95%
-------------------------------------------------------------------------------------------------------------------
Prestige International Fund - Class Y 0.43% 0.82% 0.00% 1.25%
-------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth Fund - Class Y 0.35% 0.70% 0.00% 1.05%
-------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value Fund - Class Y 0.30% 0.70% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - Class Y 0.50% 0.70% 0.00% 1.20%
-------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 0.51% 0.19% 0.25% 0.95%
-------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 0.48% 0.23% 0.25% 0.96%
-------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 Index Portfolio 0.40% 0.00% 0.00% 0.40%
-------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 0.70% 0.23% 0.23% 1.16%
-------------------------------------------------------------------------------------------------------------------
Short-Term Investments Trust - Treasury Portfolio - 0.06% 0.02% 0.00% 0.08%
Institutional Class
-------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 0.67% 0.18% 0.00% 0.85%
-------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - Class A 0.61% 0.26% 0.25% 1.12%
-------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Growth Fund - Common Class 0.90% 0.32% 0.00% 1.22%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The expenses shown above are deducted by the underlying mutual fund before it
provides Nationwide with the daily net asset value. Nationwide then deducts
applicable variable account charges from the net asset value to calculate the
unit value of the corresponding sub-account. The management fees and other
expenses are more fully described in the prospectus for each underlying mutual
fund. Information relating to the underlying mutual funds was provided by the
underlying mutual funds and not independently verified by Nationwide.
Some underlying mutual funds are subject to fee waivers and expense
reimbursements. The following chart shows what the expenses would have been for
such funds without fee waivers and expense reimbursements.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Management Other 12b-1 Total Mutual
Fees Expenses Fees Fund Expenses
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Federated Bond Fund - Class F 0.75% 0.45% 0.00% 1.20%
-------------------------------------------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 Years 0.40% 0.39% 0.00% 0.79%
- Institutional Shares
-------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth Opportunities Fund - Class A 0.46% 0.26% 0.25% 0.97%
-------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield Fund - Class T 0.58% 0.28% 0.15% 1.01%
-------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 0.45% 0.20% 0.00% 0.65%
-------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 0.42% 0.18% 0.00% 0.60%
-------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 0.49% 0.26% 0.00% 0.75%
-------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 0.44% 0.21% 0.00% 0.65%
-------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index Fund - Class Y 0.13% 0.61% 0.00% 0.74%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
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EXAMPLE
The following chart shows the amount of expenses (in dollars) that would be
incurred under the contracts assuming a $1,000 investment, 5% annual return, and
no change in expenses. These dollar figures are illustrative only and should not
be considered a representation of past or future expenses. Actual expenses may
be greater or less than those shown below.
The example reflects expenses of both the variable account and the underlying
mutual funds. Deductions for premium taxes are not reflected but may apply. The
example reflects the 5 year CDSC schedule and the maximum
Variable Account Annual Expense Fee (0.95%). The example reflects the Contract
Maintenance Charge, expressed as a percentage of average account value. Since
the average contract value is greater than $1,000, the expense effect of the
Contract Maintenance Charge is reduced accordingly.
For those contracts that have a different CDSC schedule or a lower Variable
Account Annual Expense Fee, the expenses would be reduced.
The summary of contract expenses and example are to help contract owners
understand expenses associated with the contracts.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- --------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Century: Income & 67 103 142 250 17 53 92 200 17 53 92 200
Growth - Investor Class
- --------------------------------------------------------------------------------------------------------------------------
American Century: Growth 70 113 159 284 20 63 109 234 20 63 109 234
- --------------------------------------------------------------------------------------------------------------------------
American Century: 77 134 193 354 27 84 143 304 27 84 143 304
International Discovery Fund
- - Investor Class
- --------------------------------------------------------------------------------------------------------------------------
American Century: Ultra 70 113 159 284 20 63 109 234 20 63 109 234
- --------------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), 67 102 140 247 17 52 90 197 17 52 90 197
Inc.
- --------------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 69 110 153 272 19 60 103 222 19 60 103 222
Inc.
- --------------------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap Stock 74 124 177 322 24 74 127 272 24 74 127 272
Fund - Class A
- --------------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 70 112 157 281 20 62 107 231 20 62 107 231
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth 73 121 172 311 23 71 122 261 23 71 122 261
Fund
- --------------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class F 71 116 163 293 21 66 113 243 21 66 113 243
- --------------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 66 99 134 233 16 49 84 183 16 49 84 183
Securities Fund: 2-5 Years -
Institutional Shares
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 70 112 156 280 20 62 106 230 20 62 106 230
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield 71 115 162 292 21 65 112 242 21 65 112 242
Fund - Class T
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 68 107 148 263 18 57 98 213 18 57 98 213
Fund
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 66 101 138 241 16 51 88 191 16 51 88 191
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Equity - Income Fund 67 103 141 248 17 53 91 198 17 53 91 198
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- --------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Magellan(R)Fund 66 100 137 239 16 50 87 189 16 50 87 189
- --------------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 68 105 144 254 18 55 94 204 18 55 94 204
- --------------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 67 101 139 243 17 51 89 193 17 51 89 193
- --------------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 71 116 163 293 21 66 113 243 21 66 113 243
- --------------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund 71 114 160 287 21 64 110 237 21 64 110 237
- --------------------------------------------------------------------------------------------------------------------------
The Investment Company of 66 99 134 234 16 49 84 184 16 49 84 184
America(R), Inc.
- --------------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 65 97 132 228 15 47 82 178 15 47 82 178
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 65 97 132 228 15 47 82 178 15 47 82 178
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 65 97 132 228 15 47 82 178 15 47 82 178
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 65 97 132 228 15 47 82 178 15 47 82 178
Moderately Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 65 97 132 228 15 47 82 178 15 47 82 178
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income 65 97 131 227 15 47 81 177 15 47 81 177
Portfolio
- --------------------------------------------------------------------------------------------------------------------------
Massachusetts Investors 68 107 147 261 18 57 97 211 18 57 97 211
Growth Stock Fund - Class A
- --------------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities 68 107 148 263 18 57 98 213 18 57 98 213
Fund - Class A
- --------------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - 71 114 159 285 21 64 109 235 21 64 109 235
Class A
- --------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Institutional 71 115 161 290 21 65 111 240 21 65 111 240
Fund, Inc. - Equity Growth
Portfolio - Class B
- --------------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 67 103 142 250 17 53 92 200 17 53 92 200
- --------------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 68 106 146 259 18 56 96 209 18 56 96 209
Class D
- --------------------------------------------------------------------------------------------------------------------------
Nationwide Money Market Fund 66 100 136 238 16 50 86 188 16 50 86 188
- --------------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 65 96 130 225 15 46 80 175 15 46 80 175
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 71 115 162 292 21 65 112 242 21 65 112 242
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 68 107 147 261 18 57 97 211 18 57 97 211
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners 69 110 153 273 19 60 103 223 19 60 103 223
Trust
- --------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Fund - 72 118 166 299 22 68 116 249 22 68 116 249
Class A
- --------------------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - 70 112 156 279 20 62 106 229 20 62 106 229
Class Y
- --------------------------------------------------------------------------------------------------------------------------
Prestige International Fund 73 121 172 311 23 71 122 261 23 71 122 261
- - Class Y
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- --------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Prestige Large Cap Growth 71 115 161 290 21 65 111 240 21 65 111 240
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value 70 113 159 284 20 63 109 234 20 63 109 234
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - 73 120 169 306 23 70 119 256 23 70 119 256
Class Y
- --------------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 70 112 156 279 20 62 106 229 20 62 106 229
Class A
- --------------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 70 112 156 280 20 62 106 230 20 62 106 230
- --------------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 64 94 126 217 14 44 76 167 14 44 76 167
Index Portfolio
- --------------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - 72 118 167 301 22 68 117 251 22 68 117 251
Class A
- --------------------------------------------------------------------------------------------------------------------------
Short-Term Investments Trust 61 84 108 179 11 34 58 129 11 34 58 129
- - Treasury Portfolio -
Institutional Class
- --------------------------------------------------------------------------------------------------------------------------
T. Rowe Price International 69 108 151 268 19 58 101 218 19 58 101 218
Stock Fund(R)
- --------------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - 72 117 165 297 22 67 115 247 22 67 115 247
Class A
- --------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging 73 120 170 308 23 70 120 258 23 70 120 258
Growth Fund - Common Class
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONDENSED FINANCIAL INFORMATION
The accumulation unit value for each underlying mutual fund reflects changes in
the value of the underlying mutual fund and the deduction of the Variable
Account Annual Expense Fee. For specific accumulation unit value information for
each class of the underlying mutual funds, please refer to Appendix B.
FINANCIAL STATEMENTS
Financial Statements for the variable account and Nationwide are located in the
Statement of Additional Information. A current Statement of Additional
Information may be obtained without charge by contacting Nationwide's home
office at the telephone number located on page 2 of this prospectus.
SYNOPSIS OF THE CONTRACTS
The contracts are group flexible fund retirement contracts. The contracts are
designed for use in deferred compensation plans adopted by member counties under
the NACo program. The plans qualify for favorable tax treatment under Section
457 of the Internal Revenue Code.
Nationwide issues a single group contract to the contract owner, which covers
all present and future participating employees. Nationwide will provide a
certificate to the contract owner to deliver to each retired participant or
other person for whom a Retirement Income Form is purchased. The certificate
will set forth the benefits to which the recipient is entitled. Additionally, if
legally required, Nationwide will provide a certificate to the contract owner
for delivery to any other person required by law to receive a certificate.
Nationwide establishes an account for each participant under the contract. The
account contains values and reflects activity for each participant. Plan
participants generally receive tax deferral on amounts deposited into the plan
and are taxed when amounts are distributed from the plan.
10
<PAGE> 11
Purchase payments are normally submitted monthly, but the schedule may be
adjusted to fit the contract owner's payroll practices. Purchase payments made
by or on behalf of each participant must be at least $20 per month.
The contract strives to provide each participant with:
- - an initial Retirement Income Payment, which will reflect cost of living
changes during pre-retirement years (without requiring increased purchase
payments to keep pace with cost of living increases during those years),
and
- - subsequent Retirement Income Payments which will vary with the cost of
living changes during his or her retired lifetime.
Although the contract strives to achieve its goals, there can be no assurance
that the contracts will achieve them.
Nationwide will apply purchase rates set forth in the contract to accumulated
amounts in participant accounts. These accumulated amounts will reflect the
investment performance of the underlying mutual funds selected by the
participant. Consequently, a participant's Retirement Income Payments will be
directly affected by his or her investment choices under the contract.
Historically, the value of a diversified portfolio of common stocks held for an
extended period of time has tended to rise during periods of inflation. However,
there is no exact correlation and for some periods, the prices of securities
have declined while the cost of living was rising.
MINIMUM PURCHASE PAYMENTS
Purchase payments for each participant must be at least $20 per month.
CHARGES AND EXPENSES
Nationwide does not deduct a sales charge from purchase payments upon deposit
into the contract. However, Nationwide may deduct a CDSC if any amount is
withdrawn from the contract. This CDSC reimburses Nationwide for sales expenses.
The amount of the CDSC will not exceed 5% of purchase payments surrendered.
Nationwide may assess a Participant Account Maintenance Charge. This charge
varies from contract to contract and will not be assessed unless specifically
agreed upon by the contract owner and Nationwide. The maximum Participant
Account Maintenance Charge is $50 (see "Participant Account Maintenance
Charge").
Nationwide can deduct a Variable Account Annual Expense Fee at a maximum rate of
0.95% of average account value. Nationwide can assess this fee in return for
bearing certain risks and administrative expenses. The Variable Account Annual
Expense Fee is negotiable and varies from contract to contract to reflect unique
plan characteristics. This fee does not reflect deductions made by the
underlying mutual funds (see "Variable Account Annual Expense Fee").
The CDSC, Participant Account Maintenance Charge, and Variable Account Annual
Expense Fee, when negotiated, may be decreased upon notice to the contract owner
(see "Modification of the Contract").
RETIREMENT INCOME PAYMENTS
Retirement income payments begin on the annuitzation date. Payments are based on
the retirement income form chosen (see "Retirement Income Payments" and
"Retirement Income Forms").
TAXATION
How the contracts are taxed depends on the type of contract issued. Nationwide
will charge against the contract any premium taxes levied by any governmental
authority (see "Federal Tax Considerations" and "Premium Taxes").
NATIONWIDE LIFE INSURANCE COMPANY
Nationwide is a stock life insurance company organized under Ohio law in March,
1929. Nationwide is a member of the "Nationwide
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Insurance Enterprise" with its home office at One Nationwide Plaza, Columbus,
Ohio 43215. Nationwide is a provider of life insurance, annuities and retirement
products. It is admitted to do business in all states, the District of Columbia
and Puerto Rico.
NATIONWIDE INVESTMENT SERVICES CORPORATION
The contracts are underwritten and distributed by Nationwide Investment Services
Corporation ("NISC"), Two Nationwide Plaza, Columbus, Ohio 43215. NISC is a
wholly owned subsidiary of Nationwide Life Insurance Company.
INVESTING IN THE CONTRACT
THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS
The variable account is a separate account that invests in the underlying mutual
funds listed in Appendix A. Nationwide established the variable account on
September 7, 1988, pursuant to Ohio law. Although the variable account is
registered with the SEC as a unit investment trust pursuant to the Investment
Company Act of 1940 ("1940 Act"), the SEC does not supervise it or the
management of Nationwide.
Income, gains, and losses credited to, or charged against, the variable account
reflect the variable account's own investment experience and not the investment
experience of Nationwide's other assets. The variable account's assets are held
separately from Nationwide's assets and are not chargeable with liabilities
incurred in any other business of Nationwide. Nationwide is obligated to pay all
amounts promised to contract owners under the contracts.
The variable account is divided into sub-accounts. Nationwide uses the assets of
each sub-account to buy shares of the underlying mutual funds based on contract
owner instructions.
Each underlying mutual fund's prospectus contains more detailed information
about that fund. Prospectuses for the underlying mutual funds should be read in
conjunction with this prospectus.
Voting Rights
Contract owners who have allocated assets to the underlying mutual funds are
entitled to certain voting rights. Nationwide will vote contract owner shares at
special shareholder meetings based on contract owner instructions. However, if
the law changes and Nationwide is allowed to vote in its own right, it may elect
to do so.
Contract owners with voting interests in an underlying mutual fund will be
notified of issues requiring the shareholders' vote as soon as possible before
the shareholder meeting. Notification will contain proxy materials and a form
with which to give Nationwide voting instructions. Nationwide will vote shares
for which no instructions are received in the same proportion as those that are
received.
The number of shares which a contract owner may vote is determined by dividing
the cash value of the amount they have allocated to an underlying mutual fund by
the net asset value of that underlying mutual fund. Nationwide will designate a
date for this determination not more than 90 days before the shareholder
meeting.
Material Conflicts
The underlying mutual funds may be offered through separate accounts of other
insurance companies, as well as through other separate accounts of Nationwide.
Nationwide does not anticipate any disadvantages to this. However, it is
possible that a conflict may arise between the interests of the variable account
and one or more of the other separate accounts in which these underlying mutual
funds participate.
Material conflicts may occur due to a change in law affecting the operations of
variable life insurance policies and variable annuity contracts, or differences
in the voting instructions of the contract owners and those of
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<PAGE> 13
other companies. If a material conflict occurs, Nationwide will take whatever
steps are necessary to protect contract owners and variable annuity payees,
including withdrawal of the variable account from participation in the
underlying mutual fund(s) involved in the conflict.
Substitution of Securities
Nationwide may substitute, eliminate, or combine shares of another underlying
mutual fund for shares already purchased or to be purchased in the future if
either of the following occurs:
1) shares of a current underlying mutual fund are no longer available for
investment; or
2) further investment in an underlying mutual fund is inappropriate.
No substitution, elimination, or combination of shares may take place without
the prior approval of the SEC and state insurance departments.
STANDARD CHARGES AND DEDUCTIONS
The charges and fees described in this section vary from contract to contract,
depending on plan characteristics and the particular needs and preferences of
contract owners. Generally, the charges and fees are negotiable. This
flexibility allows Nationwide and the contract owner to custom design a charge
structure that meets the financial goals of both the contract owners and
Nationwide.
While a contract is in effect, a circumstance may arise that would require a
renegotiation of the contract terms. In this situation, charges and fees will
not be higher than those in effect before the re-negotiation. In other words,
the charges and fees of a renegotiated contract may decrease, but under no
circumstances will they increase.
PARTICIPANT ACCOUNT MAINTENANCE CHARGE
Nationwide may assess a Participant Account Maintenance Charge to reimburse it
for administrative expenses involved in issuing and maintaining the contracts.
The maximum Participant Account Maintenance Charge is $50. Nationwide will not
assess this charge unless it is negotiated and contractually agreed upon by
Nationwide and the contract owner.
Generally, by negotiating a higher Participant Account Maintenance Charge, a
contract owner can expect to lower other charges that are assessed in connection
with the contract. Conversely, a contract owner that negotiates a lower
Participant Account Maintenance Charge can expect to incur higher charges
elsewhere in the expense structure.
If a Participant Account Maintenance Charge is negotiated, it will be assessed
against each applicable participant in the plan. Nationwide will deduct the
charge from each participant's account on the participant anniversary, which is
the anniversary of the date accumulation units were first credited to the
participant's account. Each year's deduction will compensate Nationwide for
expenses incurred during the previous year. The deduction will occur during both
the accumulation and annuity payment periods.
The Participant Account Maintenance Charge is made by canceling a number of
accumulation units during both the accumulation and annuity periods, equal in
value to the applicable charge. If a participant account includes more than one
sub-account, the deduction will be allocated among sub-accounts on the basis of
relative values at the time the deduction is made.
On the date that a full withdrawal is taken from a participant's account,
Nationwide will deduct a pro-rated Participant Account Maintenance Charge. The
amount of the charge will be 1/12 of the applicable Participant Account
Maintenance Charge, multiplied by the number of whole or partial months between
the last participant anniversary (or participant effective date during the first
year of a participant account) and the withdrawal date.
The deduction for the Participant Account Maintenance Charge will be taken
proportionately from each sub-account based on relative value at the time the
deduction is made.
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This contract may be used by a plan in conjunction with other investment
options, such as Nationwide's Group Fixed Fund Retirement Contract. In this
case, the deduction for the Participant Account Maintenance Charge may be
reduced so that the combined total of the Participant Account Maintenance Charge
and any similar charges imposed under other investment options does not exceed
the Participant Account Maintenance Charge negotiated for this contract. The
charge will be deducted proportionately from the sub-accounts and amounts held
in the other investment options based on the relative values at the time the
deduction is made.
THE PARTICIPANT ACCOUNT MAINTENANCE CHARGE WILL NOT BE ASSESSED UNLESS
NEGOTIATED BETWEEN NATIONWIDE AND THE CONTRACT OWNER.
VARIABLE ACCOUNT ANNUAL EXPENSE FEE
Nationwide can deduct a Variable Account Annual Expense Fee up to a maximum rate
of 0.95% of average account value in exchange for assuming various risks and
administrative expenses associated with the contracts. This fee is subject to
negotiation and can vary for each contract to reflect unique plan
characteristics.
The following factors may be considered in negotiating the amount of this fee:
1) plan size;
2) the number of eligible employees;
3) the number of plan participants;
4) demographics of the plan participants;
5) general economic conditions;
6) the varying costs associated with the underlying mutual funds that are
offered in the contract;
7) the type of contract (e.g. allocated vs. unallocated);
8) distribution costs; and
9) other factors that Nationwide deems relevant.
CONTINGENT DEFERRED SALES CHARGE
No sales charge is deducted from purchase payments when amounts are deposited
into the contracts. However, if any part of the contract is surrendered,
Nationwide will deduct a CDSC when applicable. The CDSC is used to cover sales
expenses, including commissions, production of sales material, and other
promotional expenses. If expenses are greater than the CDSC, Nationwide will
make up any shortfall from its general account.
Regardless of the CDSC schedule chosen, no CDSC will be assessed against
distributions paid as:
- a life income payment option;
- a designated period payment option of 5 or more years for a
participant who has a minimum of 5 participant account years before
the beginning of the benefit payments; and
- a single-sum or periodic payment resulting from a participant's death.
Contracts Issued Beginning July 1, 1985 and Before May 1, 1998
If the contract owner terminates the contract in accordance with the section
entitled "Suspension and Termination" and directs Nationwide to withdraw all or
part of the contract value, Nationwide will assess a CDSC from each
participant's account as indicated below. For purposes of calculating the CDSC,
withdrawals are considered to come first from the oldest purchase payment made
to the contract, then the next oldest purchase payment, and so forth.
The following CDSC schedule applies to contracts issued beginning July 1, 1985
and before the later of May 1, 1998 or the date on which state insurance
authorities approve contract modifications.
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<TABLE>
<CAPTION>
-------------------------------------------------
Number of Completed
Years of Participation
CDSC Percentage (Beginning July 1,
1985)*
-------------------------------------------------
<S> <C>
4% 1 through 12
-------------------------------------------------
3% 13
-------------------------------------------------
2% 14
-------------------------------------------------
1% 15
-------------------------------------------------
0% 16 and after
-------------------------------------------------
</TABLE>
*The "Number of Completed Years of Participation" is determined beginning with
the participant's first deferral into the contract.
In any event, no CDSC will be assessed against withdrawals taken on or after
January 1, 2001 for contracts issued beginning July 1, 1985 and before the later
of May 1, 1998 or the date on which state insurance authorities approve contract
modifications.
When a CDSC of less than 4% is negotiated and assessed, the reduced charge may
reflect actual variations in expenses, usually resulting from reduced expenses
to Nationwide in connection with case acquisition costs, plan start-up expenses,
commissions and marketing expenses. Nationwide will not apply any deductions in
a discriminatory manner.
Contracts Issued On or After May 1, 1998
For contracts issued on or after the later of May 1, 1998 or the date on which
state insurance authorities approve contract modifications, a CDSC may be
negotiated and assessed.
The total CDSC assessed to any participant will never exceed 5% (or a lesser
percentage, if applicable) of the total purchase payments made on behalf of the
participant for the 16 years before the surrender date.
When a CDSC of less than 5% is negotiated and assessed, the reduced charge may
reflect actual variations in expenses, usually resulting from reduced expenses
to Nationwide in connection with case acquisition costs, plan start-up expenses,
commissions and marketing expenses. Nationwide will not apply any deductions in
a discriminatory manner.
PREMIUM TAXES
Nationwide may charge against the contract value any premium taxes levied by a
state or other government entity. Premium tax rates currently range from 0% to
3.5%. This range is subject to change. The method used to assess premium tax
will be determined by Nationwide at its sole discretion in compliance with state
law.
IF APPLICABLE, NATIONWIDE WILL DEDUCT PREMIUM TAXES FROM THE CONTRACT EITHER AT:
(1) the time the contract is surrendered;
(2) annuitization; or
(3) such earlier date as Nationwide becomes subject to premium taxes.
Premium taxes may be deducted from death benefit proceeds.
CONTRACT RIGHTS
The contract owner owns the contract for the exclusive benefit of the plan's
participants and beneficiaries. Contractual rights may be exercised by the
contract owner subject to those rights specifically reserved in the plan
documents for participants, either as a group or as individuals. The contract
owner may not take any action inconsistent with the rights of the plan's
participants. The contract may not be assigned, except to accommodate a change
in state and federal law.
OPERATION OF THE CONTRACT
MINIMUM PURCHASE PAYMENTS
Purchase payments for each participant must be at least $20 per month. Payments
must be made no less frequently than monthly, unless Nationwide agrees
otherwise.
APPLICATION OF PURCHASE PAYMENTS
Initial purchase payments allocated to sub-accounts will be priced at the
accumulation unit value determined no later than 2 business days after receipt
of an order to purchase if the application and all necessary information are
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<PAGE> 16
complete. If the application is not complete, Nationwide may retain a purchase
payment for up to 5 business days while attempting to complete it. If the
application is not completed within 5 business days, the participant will be
informed of the reason for the delay. The purchase payment will be returned
unless the participant specifically allows Nationwide to hold the purchase
payment until the application is completed.
Subsequent purchase payments will be priced based on the next available
accumulation unit value after the payment is received.
Purchase payments will not be priced when the New York Stock Exchange is closed
or on the following nationally recognized holidays:
- - New Year's Day - Independence Day
- - Martin Luther King, Jr. Day - Labor Day
- - Presidents' Day - Thanksgiving
- - Good Friday - Christmas
- - Memorial Day
Nationwide also will not price purchase payments if:
(1) trading on the New York Stock Exchange is restricted;
(2) an emergency exists making disposal or valuation of securities held in
the variable account impracticable; or
(3) the SEC, by order, permits a suspension or postponement for the
protection of security holders.
Rules and regulations of the SEC will govern as to when the conditions described
in (2) and (3) exist. If Nationwide is closed on days when the New York Stock
Exchange is open, account value may be affected since the contract owner would
not have access to their account.
When permissible under state insurance law, Nationwide may credit up to 8% of an
initial transfer into the contract. An initial transfer is the amount
transferred into the contract from a non-Nationwide investment product. It
serves as the initial purchase payment under the contract. This credit will
reimburse the contract owner for any exit penalty assessed by the previous
provider. Nationwide will recover this credit by reducing service agent and/or
broker compensation or through the negotiation of an increased Participant
Account Maintenance Charge or Variable Account Annual Expense Fee.
ALLOCATION OF PURCHASE PAYMENTS
Nationwide allocates purchase payments to each participant's account as
instructed by the contract owner. Shares of the underlying mutual funds
allocated to the sub-accounts are purchased at net asset value, then converted
into accumulation units. The contract owner, or the participant if the plan so
permits, may change allocations among sub-accounts for future purchase payments.
However, no change may be made that would result in an amount less than 1% of
the purchase payments being allocated to any sub-account for any participant.
Nationwide will accept these changes as frequently as permitted by the plan. An
allocation change will not affect the allocation of purchase payments before the
change.
DETERMINING VARIABLE ACCOUNT VALUE - VALUING AN ACCUMULATION UNIT
Purchase payments or transfers allocated to sub-accounts are accounted for in
accumulation units. Accumulation unit values (for each sub-account) are
determined by calculating the net investment factor for the underlying mutual
funds for the current valuation period and multiplying that result with the
accumulation unit values determined on the previous valuation period.
Nationwide uses the net investment factor as a way to calculate the investment
performance of a sub-account from valuation period to valuation period. For each
sub-account, the net investment factor shows the investment performance of the
underlying mutual fund in which a particular sub-account invests, including the
charges assessed against that sub-account for a valuation period.
The net investment factor for any particular sub-account is determined by
dividing (a) by (b), and then subtracting (c) from the result, where:
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<PAGE> 17
(a) is:
(1) the net asset value of the underlying mutual fund as of the end of the
current valuation period; and
(2) the per share amount of any dividend or income distributions made by
the underlying mutual fund (if the ex-dividend date occurs during the
current valuation period).
(b) is the net asset value of the underlying mutual fund determined as of the
end of the preceding valuation period.
(c) is a factor representing the daily variable account charges, which may
include charges for contract options chosen by the contract owner. The
factor is equal to an annual rate ranging from 0.00% to 0.95% of the daily
net assets of the variable account, depending on which contract features
the plan has chosen.
Based on the change in the net investment factor, the value of an accumulation
unit may increase or decrease. Changes in the net investment factor may not be
directly proportional to changes in the net asset value of the underlying mutual
fund shares because of the deduction of variable account charges.
Though the number of accumulation units will not change as a result of
investment experience, the value of an accumulation unit may increase or
decrease from valuation period to valuation period.
DETERMINING THE PARTICIPANT ACCOUNT VALUE
A participant's account value is equal to the sum of the value of all
accumulation units credited to the participant's account. The number of
accumulation units credited to each participant account for each sub-account is
determined by dividing the amount allocated to that sub-account for that
participant by the accumulation unit value for that sub-account for the
valuation period the purchase payment was received.
The value of a participant's account on any day can be determined by multiplying
the total number of accumulation units credited to the participant's account for
each sub-account by the current accumulation unit value for that sub-account.
Each participant and the contract owner will be advised periodically of the
number of accumulation units credited to his or her account for each
sub-account, the current accumulation unit values, and the total value of his or
her account. These reports are for informational purposes only and do not mean
that a participant has any rights in his or her account beyond those provided
for in the plan.
EXCHANGE PRIVILEGE
The contract owner, or the participant if the plan so provides, may exchange
amounts among the sub-accounts as frequently as permitted by the plan, subject
to the limits and rules set by each underlying mutual fund. Certain plans may
impose limitations on participant exchange privileges as a consequence of
agreements entered into to purchase mutual funds or other investments unrelated
to the contract. If the contract owner elects an exchange privilege, there is no
charge for exchanges.
For those plans funded by this contract and Nationwide's Group Fixed Fund
Retirement Contract, the contract owner, or the participant if the plan so
provides, may exchange values between any sub-account and the Group Fixed Fund
Retirement Contract. Exchanges from the Nationwide Group Fixed Fund Retirement
Contract to any sub-account will be subject to the limitations of the Nationwide
Group Fixed Fund Retirement Contract. Exchanges will be effective when received
in good order at Nationwide's home office.
If Nationwide receives the exchange request before the end of a valuation date,
the exchange will receive the accumulation unit values of that date. However, if
Nationwide receives the exchange request after the close of business on a
valuation date, the exchange will receive the next valuation date's accumulation
unit value.
EXCHANGE REQUESTS
In addition to submitting exchange requests in writing, the participant may also
make exchanges
17
<PAGE> 18
by telephone and the internet, provided that the contract owner executes
documents agreeing to certain restrictions applicable to these privileges.
Telephone and internet exchange requests must be received by Nationwide by the
close of the New York Stock Exchange in order to receive that day's closing
sub-account price.
Nationwide will use reasonable procedures to confirm that telephone and internet
instructions are genuine and will not be liable for following telephone or
internet instructions that it reasonably determined to be genuine. Nationwide
may withdraw the telephone and/or internet exchange privilege upon 30 days
written notice to contract owners and participants.
EXPERIENCE CREDITS
Depending on the state in which the contract was issued, the contracts are
either participating or non-participating. Contract owners of participating
contracts have the right to receive any surplus distributed by Nationwide. A
surplus distribution will occur if Nationwide's Board of Directors determines
that charges and fees assessed under the contracts were higher than necessary to
maintain the contracts. Nationwide will distribute any surplus by purchasing
additional accumulation units and crediting them to participant accounts. To
date, Nationwide has not made any surplus distributions to participant accounts
and Nationwide does not guarantee that there will be a surplus distribution in
the future. Non-participating contracts do not have the right to receive surplus
distributions.
MODIFICATION OF THE CONTRACT
The following charges may be decreased if negotiated, upon notice to the
contract owner:
- - Contingent Deferred Sales Charge
- - Participant Account Maintenance Charge
- - Variable Account Annual Expense Fee
No modifications may be made prior to the first contract anniversary.
Nationwide may change any other provision of the contract by giving notice to
contract owners not less than 90 days before the change is to be effective.
CONTRACT SUSPENSION AND TERMINATION
Nationwide may suspend the contract at any time upon written notice to contract
owners if:
a) the contract owner fails to remit to Nationwide any purchase payment
specified in the plan;
b) Nationwide rejects a plan amendment submitted by the contract owner
that Nationwide determines would adversely affect the contract's
financial experience.
The contract owner may suspend the contract at any time upon 90 days written
notice to Nationwide. Suspension will become effective on the 91st day after
Nationwide receives the notice. If a contract is suspended, Nationwide will not
accept new purchase payments, except by mutual consent. All other contract terms
will continue to apply.
Once the suspension is effective, the contract owner may, upon 30 days written
notice to Nationwide, terminate the contract. Termination will become effective
on the 31st day after Nationwide receives the notice. Upon termination,
Nationwide will pay to the contract owner:
1) the redemption value of participant accounts, less any applicable
CDSC; and
2) the balance of the annual payment amounts in Nationwide's General
Account transferred to make Retirement Income Payments under
Retirement Income Forms B1 and B2.
REDEMPTION OF PARTICIPANT ACCOUNTS
The contract owner's right to redeem participant accounts, either fully or
partially, will be governed by the terms of the plan.
If the plan so permits, the contract owner may redeem a participant account,
fully or partially, at any time before Retirement Income Payments
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<PAGE> 19
begin under Option B1 or B2 (see "Retirement Income Forms"). A partial
redemption will not affect requirements to make future purchase payments to that
participant account or that participant's retirement date.
For partial redemptions, Nationwide will cancel accumulation units from the
sub-accounts. The requested dollar amount cannot exceed available accumulation
unit value. The contract owner must instruct Nationwide how the redemption
should be taken from the sub-accounts. If no instruction is given, the
redemption will be taken proportionately from each sub-account based on the
value of each sub-account at the time of the redemption.
Instead of a lump sum distribution of a full or partial redemption, the contract
owner (or participant, if permitted by the plan) may elect to have the
redemption paid pursuant to Retirement Income Form A1 or A2, subject to the
minimums applicable to these options.
If the contract owner terminates the contract, all participant accounts under
that contract will be redeemed as permitted by the plan. A CDSC may apply.
However, absent contract termination, no CDSC will apply to full or partial
redemptions.
Nationwide will pay all redemption amounts to the contract owner. The contract
owner is obligated to distribute these amounts to the participant. The contract
owner and Nationwide may agree to have Nationwide pay these amounts directly to
the participant.
Nationwide will pay any redemption amounts within 7 days of receiving the
redemption request. However, Nationwide may suspend or postpone payment when:
(1) the New York Stock Exchange is closed;
(2) trading on the New York Stock Exchange is restricted;
(3) an emergency is declared by the SEC making disposal or valuation of
securities held in the variable account impracticable; or
(4) the SEC, by order, permits a suspension or postponement for the
protection of security holders.
Rules and regulations of the SEC will govern as to when the conditions described
in (2) and (3) exist. If Nationwide is closed on days when the New York Stock
Exchange is open, contract value may be affected since the contract owner and/or
participant would not have access to their account.
Participant account value upon full surrender may be more or less than the total
of all purchase payments.
RETIREMENT PERIOD
ADDITIONAL PURCHASE PAYMENT BEFORE BEGINNING RETIREMENT INCOME PAYMENTS
The contract owner may make one additional purchase payment to each
participant's account in order to increase Retirement Income Payments. The
contract owner must notify Nationwide of this election in the documentation
electing the Retirement Income Form and retirement date (see "Election of
Retirement Income Form and Date"). The purchase payment must be made by the last
business day before Retirement Income Payments begin. This purchase payment is
subject to any applicable premium taxes.
The annuity rates under the contract apply to the entire value, including any
such additional purchase payment that does not exceed 5 times the purchase
payments allocated to a participant's account before the date of notice is
given. Any amount in excess of this amount may be applied at annuity rates
currently offered to this type of contract.
RETIREMENT INCOME PAYMENTS
The distribution period is the period during which a participant account is paid
out in installments. Since the distribution period usually occurs after a
participant retires, it is also referred to as the retirement period.
Nationwide will pay all retirement distributions to the contract owner. The
contract owner is obligated to distribute these amounts to the
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<PAGE> 20
participant. The contract owner and Nationwide may agree to have Nationwide pay
these amounts directly to the participant.
Upon retirement, a participant's account value can be used to purchase either a
fixed dollar annuity, a variable payment annuity, or an available combination of
both.
Nationwide is obligated to make payments under a variable payment annuity.
However, the amount of each payment is not guaranteed. Variable payment amounts
will reflect the investment performance of the sub-accounts, but will not be
affected by adverse mortality experience or by increased expenses.
A fixed dollar annuity provides for payments that are guaranteed as to dollar
amount during the distribution period. Upon retirement, the participant's
account value is used to purchase a contract fund by Nationwide's general
account. Once this contract has been purchased, the participant's account will
no longer vary with the investment performance of the underlying mutual funds.
To determine the amount of the first fixed dollar annuity payment, the value is
applied to the applicable annuity table based on the distribution schedule
elected. The fixed payment annuity can be distributed in any of the forms listed
under the provision "Retirement Income Forms." Specifically, they can be
distributed as:
1) payments for a designated period;
2) payments of a designated amount;
3) life income with payment certain; or
4) joint and survivor life income.
Fixed dollar annuities are available under a plan upon the contract owner's
election.
ELECTION OF RETIREMENT INCOME FORM AND DATE
The contract provides for Retirement Income Payments to begin on the date and
under the retirement options set forth in the plan. At least one month before
Retirement Income Payments are set to begin, the contract owner may elect one of
the retirement income options set forth in this prospectus. Nationwide must
receive this election in writing. The plan may restrict changes in the
retirement income option elected.
If, at retirement, the present value of a participant's account is less than
$3,500, Nationwide may make a lump sum distribution instead of periodic
payments.
RETIREMENT INCOME FORMS
Retirement distributions may take any of the following forms, as permitted by
the plan:
AMOUNT AND PERIOD CERTAIN OPTIONS
Option A1: Payments for a Designated Period
Payments will be made monthly for a set number of years not to exceed 30
years. The amount of each payment will vary with the performance of the
underlying mutual funds in which the participant account invests.
Nationwide calculates each payment by multiplying (a) by (b), where:
(a) is the accumulation unit value on the day the payment is made; and
(b) is the number of accumulation units applied under this option divided
by the number of payments selected.
Once the amount of the payment is calculated, Nationwide will cancel
available accumulation units to equal the dollar amount of that payment.
Exchanges between the investment options are permitted subject to the
limitations set forth in the Group Fixed Fund Retirement Contract.
Exchanges may cause the number of accumulation units to change,
necessitating a recalculation of the payment amount.
If the period selected under this option is less than 5 years, and the
participant has less than 5 participant account years, a CDSC will be
assessed against each payment.
Option A2: Payments of a Designated Amount
Payments will be made monthly in equal installments of a set amount (not
less than $25 per month) until no accumulation units remain
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<PAGE> 21
in the participant account. The participant's account is adjusted each
valuation date to reflect investment results. Nationwide will cancel
accumulation units up to the designated dollar amount of the payment.
Exchanges between the investment options are permitted subject to the
limitations set forth in the Group Fixed Fund Retirement Contract.
If election of this option results in a payment period of less than 5
years, and the participant has less than 5 Participant Account Years, a
CDSC will be assessed against each payment.
LIFE INCOME OPTIONS
For the following options, payments will be determined annually and will remain
level throughout the year. Each year, on the anniversary of the beginning of
Retirement Income Payments, a new monthly payment will be determined. That new
payment will remain level for that year.
Nationwide will use the retired participant's adjusted age to determine each
year's set monthly payment. This adjusted age may not be the same as the retired
participant's actual age.
Life income options are based on:
- - the mortality tables specified in the contract;
- - the adjusted age of the retired participant;
- - the type of Retirement Income Payment option(s) selected; and
- - in the case of variable payments, the investment performance of the
specific sub-accounts elected.
Option B1: Life Income with Payment Certain
Payments will be made monthly during an individual's lifetime for a set
period of 60, 120, 180, 240, 300 or 360 months, as elected. If the
individual dies before the end of the selected period, level payments will
continue to the beneficiary during the remainder of the selected period.
Unless prohibited by the plan, the beneficiary may elect at any time to
receive the present value of the remaining number of payments in a single
payment, calculated using the same assumed investment rate used previously.
Nationwide will cancel accumulation units up to the designated dollar
amount of each payment.
Option B2: Joint and Survivor Life Income
Payments will be made monthly during the joint lifetime of the participant
and a beneficiary. Payments will be made as long as either of the two is
living. If the participant predeceases the beneficiary, payments will
continue to be paid to the beneficiary at 100%, 75%, 66 2/3% or 50% of the
original payment amount as elected until the beneficiary's death. If the
beneficiary predeceases the participant, payments will continue at 100% to
the participant.
Nationwide will cancel accumulation units up to the designated dollar
amount of each payment.
Other Options
Alternate distribution methods may be used with Nationwide's consent.
Frequency of Payment
The retired participant, with the contract owner's consent, may receive payments
under any option annually, semi-annually, or quarterly instead of monthly. Any
change in frequency of payments must be on the anniversary of the beginning of
Retirement Income Payments.
Withdrawal
If allowed by the plan, any amount remaining under option A1 or A2 may be
withdrawn. If that amount is at least $5,000, the withdrawn amount may be
applied to option B1 or B2, subject to minimum payment requirements.
DETERMINATION OF LIFE INCOME PAYMENTS
The amount of annuity payments will vary depending on the performance of the
underlying mutual funds selected.
21
<PAGE> 22
Assumed Investment Rate
An assumed investment rate is the percentage rate of return assumed to determine
the amount of the first payment under a variable payment annuity. Nationwide
uses the assumed investment rate of 3.5% to calculate the first annuity payment
and to calculate the investment performance of an underlying mutual fund in
order to determine subsequent payments under a variable payment annuity. If not
prohibited by law, a contract owner may, at contract issuance, elect an
alternated assumed investment rate of 5% per annum. The choice of assumed
investment rate affects the pattern of Retirement Income Payments. An assumed
investment rate is the percentage rate of return required to maintain level
variable annuity payments. Subsequent variable annuity payments may be more or
less than the first payment based on whether actual investment performance is
higher or lower than the assumed investment rate.
Value of an Annuity Unit
Annuity unit values for sub-accounts are determined by multiplying the net
investment factor for the valuation period for which the annuity unit is being
calculated by the immediately preceding valuation period's annuity unit value,
and multiplying the result by an interest factor to neutralize the assumed
investment rate built into the variable payment annuity purchase rate basis in
the contracts.
First Year's Payments
To determine the monthly payment that will be distributed monthly for the first
year after retirement, Nationwide first determines the participant's account
value as of the retirement date. This value is found by multiplying the number
of accumulation units in each sub-account for that participant's account by the
accumulation unit value for that sub-account on the last business day of the
second calendar week before the date the first payment will be made.
Based on the participant's account value, Nationwide then determines the amount
of each monthly payment. The monthly payment amount is found by dividing the
accumulation unit value of that sub-account in the participant's account by the
amount required to provide $1 per month (the purchase rate).
Once the monthly payment amount is found, Nationwide multiplies the payment by
12 to get the total payment for the year. Then Nationwide cancels the number of
accumulation units from the participant's account to equal the total payments
for the year. The accumulation units will be canceled from each sub-account in
the same proportion that new purchase payments are allocated. The value is then
transferred to Nationwide's general account from which monthly payments are
made.
The total annual amount is calculated so that if there are no partial
redemptions, and no underlying mutual fund dividends are taken in cash, the
monthly payments will be level as long as the net investment factor equals the
assumed investment rate plus an amount equal to the annual administrative
charge. Payments in subsequent years will vary depending on how the
sub-accounts' performance compares to the assumed investment rate.
Second and Subsequent Years' Payments
On each anniversary of the beginning of Retirement Income Payments, the second
year's monthly payment amount will be calculated. The calculation will be
performed in the same manner as the first year's payment, except that the
current participant account value will be used. Similarly, accumulation units
will be cancelled and the value will be transferred to Nationwide's general
account, from which monthly payments will be made. Subsequent years' payments
will be calculated in the same fashion on each anniversary date.
DEATH OF PARTICIPANT
PARTICIPANT DEATH BEFORE RETIREMENT
If a participant dies before beginning Retirement Income Payments, a death
benefit equal to the participant's account value is payable as set forth
22
<PAGE> 23
in the plan. The death benefit will be paid when Nationwide:
1) receives and verifies the participant's death; and
2) verifies beneficiary designations.
If the plan so provides, the beneficiary may receive the death benefit:
1) as a lump sum; or
2) in the form of a Retirement Income Form contained in the contract,
subject to applicable minimums. Retirement Income Payments may be
fixed, variable, or a combination of both.
DEATH OF RETIRED PARTICIPANT
If a retired participant dies while receiving payments, any payment due will be
determined according to the Retirement Income Form elected. The calculation of
the net present value of any remaining payments under a period certain option
will be based on the same assumed investment rated used in determining the
payments before the retired participant's death.
The participant account will be reduced by the number of accumulation units not
required to provide further payments during the remainder of a period certain,
if any, or to a contingent retired participant. Depending on Nationwide's
obligation under the contract, the accumulation units will either remain in the
variable account or be transferred to Nationwide's general account.
FEDERAL TAX CONSIDERATIONS
Consult a financial adviser, legal counsel or tax advisor to discuss in detail
the taxation and the use of the contracts.
Nationwide does not guarantee the tax status of the contracts or any
transactions involving the contracts. The contracts are treated as a trust under
rules similar to Internal Revenue Code Section 401(f).
Under existing federal income tax law, Nationwide is not required to pay taxes
on the variable account's investment income when it is credited to contract
owners. Nationwide is taxed as a life insurance company under Part One,
Subchapter L of the Internal Revenue Code.
Contract owners would normally be taxed on income and capital gains earned under
the contract, whether or not taken in cash. However, the contracts are issued
only to organizations exempt from federal income tax.
Distributions will normally contain purchase payments that were not previously
included in the participant's gross income. Upon distribution, these amounts
should be included in the gross income of the recipient.
The contract owner is responsible for ensuring that the plan is established and
administered in accordance with the provisions set forth in the Internal Revenue
Code.
CONTRACTS ISSUED UNDER THE NEW YORK MODEL PLAN
In order to sell the contracts to governmental employers in the state of New
York, the following amendments must be made to the contract:
- References to "annuity" payments throughout the prospectus are
modified to mean "benefit" payments.
- The "Suspension and Termination" provision is amended to allow a
participant to "freeze" his or her account and maintain the account on
deposit with Nationwide even though the contract was terminated. The
contract owner will continue to own the account, subject to the claims
of its general creditors.
- All references to Life Income Options B1 and B2 throughout this
prospectus are deleted.
- All references to "CDSC" and "Contingent Deferred Sales Charge"
throughout this prospectus are deleted.
23
<PAGE> 24
STATEMENTS AND REPORTS
Nationwide (or a designee) will provide each participant a Statement of Assets,
Liabilities and Contract Owners' Equity and a Statement of Operations and
Changes in Contract Owners' Equity for the variable account at least
semi-annually. Nationwide will also provide annual and semi-annual reports
containing all applicable information and financial statements or their
equivalent, which must be sent to the underlying mutual fund beneficial
shareholders as required by the rules under the Investment Company Act of 1940
for the variable account.
Additionally, each participant and retired participant will receive periodic
reports on the value of his or her account.
Participants should review these reports carefully. All errors or corrections
must be reported to Nationwide immediately to assure proper crediting to the
contract. Unless Nationwide is notified within 30 days of receipt of the report,
Nationwide will assume all transactions are correct.
Nationwide will provide contract owners with the variable account's prospectus
to make available to participants. The contract owner may, under the terms of
the plan, be required to provide additional information to participants, such as
changes in the plan, changes in the tax status of the plan, or the financial
condition of the contract owner as it relates to obligations under the plan.
YEAR 2000 COMPLIANCE ISSUES
Nationwide has developed and implemented a plan to address issues related to the
Year 2000. The problem relates to many existing computer systems using only two
digits to identify a year in a date field. These systems were designed and
developed without considering the impact of the upcoming change in the century.
If not corrected, many computer systems could fail or create erroneous results
when processing information dated after December 31, 1999. Like many
organizations, Nationwide is required to renovate or replace computer systems so
that the systems will function properly after December 31, 1999.
Nationwide has completed an inventory and assessment of all computer systems and
has implemented a plan to renovate or replace all applications that were
identified as not Year 2000 compliant. Nationwide has renovated all applications
that required renovation. Testing of the renovated programs included running
each application in a Year 2000 environment and was completed as planned during
1998. For applications being replaced, Nationwide had all replacement systems in
place and functioning as planned by year-end 1998. Conversions of existing
traditional life policies will continue through second quarter, 1999. In
addition, the shareholder services system that supports our mutual fund products
will be fully deployed in the first quarter of 1999.
Nationwide has completed an inventory and assessment of all vendor products and
has tested and certified that each vendor product is Year 2000 compliant. Any
vendor products that could not be certified as Year 2000 compliant were replaced
or eliminated in 1998.
Nationwide has also addressed issues associated with the exchange of electronic
data with external organizations. Nationwide has completed an inventory and
assessment of all business partners including electronic interfaces. Processes
have been put into place and programs initiated to process data irrespective of
the format by converting non-compliant data into a Year 2000 compliant format.
Systems supporting Nationwide's infrastructure such as telecommunications, voice
and networks will be compliant by March 1999. Nationwide's assessment of Year
2000 issues has also included non-information technology systems with embedded
computer chips. Nationwide's building systems such as fire, security, and
elevators and escalators supporting facilities in Columbus, Ohio have been
tested and are Year 2000 compliant.
In addition to resolving internal Year 2000 readiness issues, Nationwide is
surveying
24
<PAGE> 25
significant external organizations (business partners) to assess if they will be
Year 2000 compliant and be in a position to do business in the Year 2000 and
beyond. Specifically, nationwide has contacted mutual fund organizations that
provide funds for our variable annuity and life products. The same action will
continue during the first quarter of 1999 with wholesale producers. Nationwide
continues its efforts to identify external risk factors and is planning to
develop contingency plans as part of its ongoing risk management strategy.
Operating expenses in 1998 and 1997 included approximately $44.7 million and
$45.4 million, respectively, for technology projects, including costs related to
Year 2000. Nationwide anticipates spending approximately $5 million on Year 2000
activities in 1999. These expenses do not have an effect on the assets of the
variable account and are not charged through to the contract owner.
Management does not anticipate that the completion of Year 2000 renovation and
replacement activities will result in a reduction in operating expenses. Rather,
personnel and resources currently allocated to Year 2000 issues will be assigned
to other technology-related projects.
LEGAL PROCEEDINGS
Nationwide is a party to litigation and arbitration proceedings in the ordinary
course of its business, none of which is expected to have a material adverse
effect on Nationwide.
In recent years, life insurance companies have been named as defendants in
lawsuits, including class action lawsuits, relating to life insurance and
annuity pricing and sales practices. A number of these lawsuits have resulted in
substantial jury awards or settlements.
In February 1997, Nationwide was named as a defendant in a lawsuit filed in New
York state court related to the sale of whole life policies on a "vanishing
premium" basis (John H. Snyder v. Nationwide Life Insurance Co.). In April 1998,
Nationwide was named as a defendant in a lawsuit filed in Ohio state court
similar to the Snyder case (David and Joan Mishler v. Nationwide Life Insurance
Co.). In August 1998, Nationwide Mutual Insurance Company and Nationwide and the
plaintiffs executed a stipulation of settlement and submitted it to the New York
state court for approval. On August 20, 1998, the court in the Snyder case
signed an order preliminarily approving a class for settlement purposes (which
would include the Mishler case) and scheduled a fairness hearing for December
17, 1998. At that hearing, the court reviewed the fairness and reasonableness of
the proposed settlement and issued a final order and judgment. The approved
settlement provides for dismissal of both the Snyder and Mishler cases, bars
class members from pursuing litigation against Nationwide Mutual Insurance
Company and its affiliates, including Nationwide and its subsidiaries, relating
to the allegations in the Snyder case, and provides class members with a
potential value of approximately $100 million in policy adjustments, discounted
premiums and discounted products.
In November 1997, two plaintiffs, one who was the owner of a variable life
insurance policy and the other who was the owner of a variable annuity contract,
commenced a lawsuit in a federal court in Texas against Nationwide and the
American Century group of defendants (Robert Young and David D. Distad v.
Nationwide Life Insurance Company et al.). In this lawsuit, plaintiffs seek to
represent a class of variable life insurance policy owners and variable annuity
contract owners whom they claim were allegedly misled when purchasing these
variable contracts into believing that the performance of their underlying
mutual fund option managed by American Century, whose shares may only be
purchased by insurance companies, would track the performance of a mutual fund,
also managed by American Century, whose shares are publicly traded. The amended
complaint seeks unspecified compensatory and punitive damages. On April 27,
1998, the district court denied, in part, and granted, in part, Nationwide and
American
25
<PAGE> 26
Century's motions to dismiss the complaint. The remaining claims against
Nationwide allege securities fraud, common law fraud, civil conspiracy and
breach of contract. On December 2, 1998, the district court issued an order
denying plaintiffs' motion for class certification. On December 10, 1998, the
district court stayed the lawsuit pending plaintiffs' petition to the federal
appeals court for interlocutory review of the order denying class certification.
On December 14, 1998, plaintiffs filed their petition for interlocutory review,
on which the federal appeals court has not yet ruled. Nationwide intends to
defend the case vigorously.
On October 29, 1998, Nationwide and certain of its subsidiaries were named in a
lawsuit filed in Ohio state court related to the sale of deferred annuity
products for use as investments in tax-deferred contributory retirement plans
(Mercedes Castillo v. Nationwide Financial Services, Inc., Nationwide Life
Insurance Company and Nationwide Life and Annuity Insurance Company). The
plaintiff in such lawsuit seeks to represent a national class of Nationwide's
customers and seeks unspecified compensatory and punitive damages. Nationwide
currently is evaluating this lawsuit, which has not been certified as a class.
Nationwide intends to defend this lawsuit vigorously.
There can be no assurance that any litigation relating to pricing or sales
practices will not have a material adverse effect on Nationwide in the future.
The general distributor, NISC, is not a party to any litigation of any material
nature.
ADVERTISING AND SUB-ACCOUNT
PERFORMANCE SUMMARY
ADVERTISING
A "yield" and "effective yield" may be advertised for the NSAT- Money Market
Fund and the Short-Term Investments Trust - Treasury Portfolio. "Yield" is a
measure of the net dividend and interest income earned over a specific seven-day
period (which period will be stated in the advertisement) expressed as a
percentage of the offering price of the fund's units. Yield is an annualized
figure, which means that it is assumed that funds generate the same level of net
income over a 52-week period. The "effective yield" is calculated similarly but
includes the effect of assumed compounding, calculated under rules prescribed by
the SEC. The effective yield will be slightly higher than yield due to this
compounding effect.
Nationwide may advertise the performance of a sub-account in relation to the
performance of other variable annuity sub-accounts, underlying mutual fund
options with similar or different objectives, or the investment industry as a
whole. Other investments to which the sub-accounts may be compared include, but
are not limited to:
- - precious metals;
- - real estate;
- - stocks and bonds;
- - closed-end funds;
- - bank money market deposit accounts and passbook savings;
- - CDs; and
- - the Consumer Price Index.
Market Indexes
The sub-accounts will be compared to certain market indexes, such as:
- - S&P 500;
- - Shearson/Lehman Intermediate Government/Corporate Bond Index;
- - Shearson/Lehman Long-Term Government/Corporate Bond Index;
- - Donoghue Money Fund Average;
- - U.S. Treasury Note Index;
- - Bank Rate Monitor National Index of 2 1/2 Year CD Rates; and
- - Dow Jones Industrial Average.
Tracking & Rating Services; Publications
Nationwide's rankings and ratings are sometimes published by other services,
such as:
- - Lipper Analytical Services, Inc.;
- - CDA/Wiesenberger;
26
<PAGE> 27
- - Morningstar;
- - Donoghue's;
- - magazines such as:
Money;
Forbes;
Kiplinger's Personal Finance Magazine;
Financial World;
Consumer Reports;
Business Week;
Time;
Newsweek;
National Underwriter;
News and World Report;
- - LIMRA;
- - Value;
- - Best's Agent Guide;
- - Western Annuity Guide;
- - Comparative Annuity Reports;
- - Wall Street Journal;
- - Barron's;
- - Investor's Daily;
- - Standard & Poor's Outlook; and
- - Variable Annuity Research & Data Service (The VARDS Report).
These rating services and publications rank the underlying mutual funds'
performance against other funds. These rankings may or may not include the
effects of sales charges or other fees.
Financial Rating Services
Nationwide is also ranked and rated by independent financial rating services,
among which are Moody's, Standard & Poor's and A.M. Best Company. Nationwide may
advertise these ratings. These ratings reflect Nationwide's financial strength
or claims-paying ability. The ratings are not intended to reflect the investment
experience or financial strength of the variable account.
Some Nationwide advertisements and endorsements may include lists of
organizations, individuals or other parties that recommend Nationwide or the
contract. Furthermore, Nationwide may occasionally advertise comparisons of
currently taxable and tax deferred investment programs, based on selected tax
brackets, or discussions of alternative investment vehicles and general economic
conditions.
Historical Performance of the Sub-Accounts
Nationwide will advertise historical performance of the sub-accounts. Nationwide
may advertise for the sub-account's standardized "average annual total return,"
calculated in a manner prescribed by the SEC, and nonstandardized "total
return." Average annual total return shows the percentage rate of return of a
hypothetical initial investment of $1,000 for the most recent one, five and ten
year periods (or for a period covering the time the underlying mutual fund has
been available in the variable account if it has not been available for one of
the prescribed periods). This calculation reflects the deduction of all charges
made to the contracts, except for premium taxes, which may be imposed by certain
states.
Nonstandardized "total return," calculated similar to standardized "average
annual total return," shows the percentage rate of return of a hypothetical
initial investment of $10,000 for the most recent one, five and ten year periods
(or for a period covering the time the underlying mutual fund has been in
existence). For those underlying mutual funds which have not been available for
one of the prescribed periods, the nonstandardized total return illustrations
will show the investment performance the underlying mutual funds would have
achieved (reduced by the same charges except the CDSC) had they been available
in the variable account for one of the periods. The CDSC is not reflected
because the contracts are designed for long term investment. The CDSC, if
reflected, would decrease the level of performance shown. An initial investment
of $10,000 is assumed because that amount is closer to the size of a typical
contract than $1,000, which was used in calculating the standardized average
annual total return.
The standardized average annual total return and nonstandardized total return
quotations are calculated using data for the period ended December 31, 1998.
However, Nationwide generally provides performance information
27
<PAGE> 28
more frequently. Information relating to performance of the sub-accounts is
based on historical earnings and does not represent or guarantee future results.
SUB-ACCOUNT PERFORMANCE SUMMARY
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN MONEY MARKET FUND
- --------------------------------------------------------------------------------------------
Current Yield Effective Yield
Sub-Account Period Ending 12/31/98 Period Ending 12/31/98
Option
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Nationwide Money 3.74% 3.80%
Market Fund
- --------------------------------------------------------------------------------------------
Short-Term Investments 2.47% 2.50%
Trust - Treasury
Portfolio - Institutional
Class
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
- -------------------------------------------------------------------------------------------------------------------------
10 Years
or Date Fund
Available in Date Fund
the Variable Available in
1 Year 5 Years Account the Variable
Sub-Account Option to 12/31/98 to 12/31/98 to 12/31/98 Account
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & Growth - Investor Class N/A N/A 92.81% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
American Century: Growth 25.48% 12.82% 11.06% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
American Century: International Discovery Fund - N/A N/A 74.80% 11/13/98
Investor Class
- ------------------------------------------------------------------------------------------------------------------
American Century: Ultra 23.27% 13.96% 11.04% 10/01/93
- ------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. -5.79% -0.50% 3.19% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, Inc. N/A N/A 69.51% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap Stock Fund - Class A N/A N/A 148.72% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. 18.94% 15.14% 10.55% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth Fund -11.40% 3.58% 4.95% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class F N/A N/A 4.96% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 Years -2.92% -1.22% -1.12% 07/01/92
- - Institutional Shares
- ------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth Opportunities Fund - Class A N/A N/A 81.44% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield Fund - Class T N/A N/A 34.55% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund -6.18% 1.37% 8.48% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 20.28% 15.61% 13.30% 10/01/93
- ------------------------------------------------------------------------------------------------------------------
Fidelity Equity - Income Fund 1.46% 12.53% 12.80% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 22.36% 14.35% 11.88% 10/01/93
- ------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 29.05% N/A 18.42% 09/01/94
- ------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 5.49% N/A 8.79% 09/01/94
- ------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund N/A N/A 225.01% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund N/A N/A 9.30% 11/13/98
- ------------------------------------------------------------------------------------------------------------------
The Investment Company of America(R), Inc. 11.77% 13.99% 11.86% 07/01/92
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Aggressive Portfolio N/A N/A 5.90% 01/20/98
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderately Aggressive N/A N/A 4.97% 01/20/98
Portfolio
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderate Portfolio N/A N/A 5.23% 01/20/98
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderately Conservative N/A N/A 3.73% 01/20/98
Portfolio
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Conservative Portfolio N/A N/A 1.44% 01/20/98
- ------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio -4.10% N/A 1.58% 09/01/94
- ------------------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 28.68% 18.70% 16.46% 06/17/91
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE> 29
<TABLE>
<CAPTION>
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------------------------------------------------------------------------------
10 Years
or Date Fund
Available in Date Fund
the Variable Available in
1 Year 5 Years Account the Variable
Sub-Account Option to 12/31/98 to 12/31/98 to 12/31/98 Account
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R)Growth Opportunities Fund - Class A 17.95% 13.98% 11.21% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - Class A -9.68% 1.08% 6.27% 08/03/93
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Institutional Fund, Inc. - Equity N/A N/A 105.94% 11/13/98
Growth Portfolio - Class B
- ----------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 19.11% 18.20% 12.48% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - Class D 12.58% 12.86% 11.56% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
Nationwide Money Market Fund -5.87% -2.26% -3.13% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index Fund - Class Y N/A N/A 87.19% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Nationwide Separate Account Trust - Nationwide -9.70% N/A -15.86% 11/03/97
Small Company Fund
- ----------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian Fund, Inc. -8.43% N/A 7.36% 09/01/94
- ----------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners Trust N/A N/A 26.39% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - Class Y N/A N/A 46.53% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Prestige International Fund - Class Y N/A N/A 84.97% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth Fund - Class Y N/A N/A 159.56% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value Fund - Class Y N/A N/A 34.00% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - Class Y N/A N/A 82.70% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 24.24% 18.12% 14.54% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 12.88% 13.98% 14.83% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 Index Portfolio 17.13% N/A 20.98% 05/01/96
- ----------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 23.96% 12.73% 11.05% 06/17/91
- ----------------------------------------------------------------------------------------------------------------
Short-Term Investments Trust - Treasury Portfolio -5.50% -1.81% -2.75% 07/01/92
- - Institutional Class
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 5.04% N/A 0.50% 09/01/94
- ----------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - Class A -15.25% N/A -2.56% 09/01/94
- ----------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Growth Fund - Common Class N/A N/A 160.90% 11/13/98
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
As of December 31, 1998, no assets were invested in the sub-account for the
Oppenheimer Global Fund - Class A. Therefore, no standardized performance
information is available.
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
10 Years
to 12/31/98
1 Year 5 Years or Life of Date Fund
Sub-Account Option to 12/31/98 to 12/31/98 Fund Effective
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & Growth - Investor Class 25.97% 22.17% 20.95% 12/17/90
- ----------------------------------------------------------------------------------------------------------------
American Century: Growth 34.98% 17.68% 17.35% 06/30/71
- ----------------------------------------------------------------------------------------------------------------
American Century: International Discovery Fund - 16.25% N/A 15.96% 04/04/94
Investor Class
- ----------------------------------------------------------------------------------------------------------------
American Century: Ultra 32.77% 18.59% 22.65% 11/02/81
- ----------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 3.67% 5.13% 7.80% 05/28/74
- ----------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, Inc. 29.11% 23.06% 17.11% 01/18/84
- ----------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap Stock Fund - Class A 7.09% N/A 18.87% 04/06/94
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
29
<PAGE> 30
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
10 Years
to 12/31/98
1 Year 5 Years or Life of Date Fund
Sub-Account Option to 12/31/98 to 12/31/98 Fund Effective
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Dreyfus Third Century Fund, Inc. 28.44% 19.78% 15.40% 03/29/72
- ------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth Fund -2.23% 8.78% 9.15% 08/31/78
- ------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class F 4.12% 6.01% 8.46% 05/20/87
- ------------------------------------------------------------------------------------------------------------------
Federated U.S. Government Securities Fund: 2-5 Years 6.58% 4.49% 6.44% 02/18/83
- - Institutional Shares
- ------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth Opportunities Fund - Class A 22.54% 19.30% 18.82% 11/18/87
- ------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield Fund - Class T -1.90% 7.35% 11.62% 01/05/87
- ------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 3.26% 6.83% 9.74% 11/01/77
- ------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 29.78% 20.04% 22.65% 05/17/67
- ------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 10.96% 17.00% 14.26% 05/16/66
- ------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 31.86% 18.93% 18.49% 05/02/63
- ------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 38.55% 19.21% 18.07% 02/31/84
- ------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 14.99% 13.71% 13.37% 04/16/47
- ------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 21.59% 17.46% 18.55% 09/01/67
- ------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund 12.06% 14.71% 13.12% 09/22/87
- ------------------------------------------------------------------------------------------------------------------
The Investment Company of America(R), Inc. 21.27% 18.49% 15.82% 01/01/34
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Aggressive Portfolio N/A N/A 15.90% 01/20/98
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderately Aggressive N/A N/A 14.97% 01/20/98
Portfolio
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderate Portfolio N/A N/A 15.23% 01/20/98
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Moderately Conservative N/A N/A 13.73% 01/20/98
Portfolio
- ------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The Conservative Portfolio N/A N/A 11.44% 01/20/98
- ------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 5.40% 5.71% 8.36% 11/14/84
- ------------------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 38.18% 23.37% 20.22% 01/01/35
- ------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities Fund - Class A 27.45% 18.58% 15.34% 09/09/70
- ------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - Class A -0.43% 6.45% 8.11% 02/17/78
- ------------------------------------------------------------------------------------------------------------------
Morgan Stanley Institutional Fund, Inc. - Equity 17.14% N/A 25.05% 01/02/96
Growth Portfolio - Class B
- ------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 28.61% 22.57% 17.52% 05/11/33
- ------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - Class D 22.08% 17.41% 13.64% 02/27/61
- ------------------------------------------------------------------------------------------------------------------
Nationwide Money Market Fund 3.58% 3.42% 3.84% 01/04/99
- ------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index Fund - Class Y N/A N/A 95.06% 10/30/98
- ------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account Trust - Nationwide Small -0.45% N/A 15.71% 10/23/95
Company Fund
- ------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian Fund, Inc. 0.88% 12.12% 13.51% 06/01/50
- ------------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners Trust 4.64% 16.81% 14.79% 01/20/75
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Fund - Class A 11.14% 11.25% 12.93% 12/22/69
- ------------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - Class Y N/A N/A 50.56% 10/30/98
- ------------------------------------------------------------------------------------------------------------------
Prestige International Fund - Class Y N/A N/A 37.31% 10/30/98
- ------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth Fund - Class Y N/A N/A 137.47% 10/30/98
- ------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value Fund - Class Y N/A N/A 38.69% 10/30/98
- ------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - Class Y N/A N/A 62.90% 10/30/98
- ------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 33.74% 22.55% 18.73% 12/01/25
- ------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 22.38% 18.41% 18.91% 04/01/69
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE> 31
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
10 Years
to 12/31/98
1 Year 5 Years or Life of Date Fund
Sub-Account Option to 12/31/98 to 12/31/98 Fund Effective
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SEI Index Funds - S&P 500 Index Portfolio 26.63% 22.21% 17.50% 07/31/85
- ------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 33.46% 17.49% 16.00% 04/01/37
- ------------------------------------------------------------------------------------------------------------------
Short-Term Investments Trust - Treasury Portfolio - 3.98% 3.84% 4.29% 04/12/84
Institutional Class
- ------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 14.54% 7.38% 9.05% 05/09/80
- ------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - Class A -6.29% 4.50% 9.24% 10/05/82
- ------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Growth Fund - Common Class 4.32% 13.76% 15.11% 01/21/88
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
PAGE
General Information and History..............................................1
Services.....................................................................1
Purchase of Securities Being Offered.........................................2
Underwriters.................................................................2
Calculations of Performance..................................................2
Annuity Payments.............................................................3
Financial Statements.........................................................4
31
<PAGE> 32
APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS
A summary of the investment objective for each underlying mutual fund is listed
below.
There is no guarantee that the investment objectives will be met.
AMERICAN CENTURY: INCOME & GROWTH - INVESTOR CLASS
The investment objective of the Fund is to seek dividend growth, current income
and capital appreciation by investing in common stocks. The Fund may buy
securities convertible into common stock, such as convertible bonds, convertible
preferred stocks or warrants. The Fund may also, for liquidity purposes, invest
in high-quality money market instruments with remaining maturities of one year
or less. The Fund may also enter into repurchase agreements, collateralized by
U.S. government securities, with banks or broker-dealers deemed to present
minimal credit risk. American Century Investment Management, Inc. serves as the
Fund's investment adviser.
AMERICAN CENTURY - INTERNATIONAL DISCOVERY FUND - INVESTOR CLASS (FORMERLY
"AMERICAN CENTURY - TWENTIETH CENTURY INTERNATIONAL DISCOVERY FUND - INVESTOR
CLASS")
The investment objective of the Fund is capital growth by investing primarily in
an internationally diversified portfolio of equity securities of issuers that
meet certain fundamental and technical standards of selection (relating
primarily to acceleration of earnings and revenues). The Fund will invest its
assets primarily in equity securities of small foreign issuers (those issuers
having, at the time of investment, a market capitalization of less than U.S. $1
billion or a public float of less than U.S. $500 million). The "public float" of
an issuer is defined as the aggregate market value of the issuer's outstanding
securities held by non-affiliates of the issuer. The Fund may invest up to 50%
of its assets in securities of issuers in emerging market countries. DUE TO THE
SIGNIFICANT RISKS ASSOCIATED WITH THE FUND'S INVESTMENT STRATEGY, AN INVESTMENT
IN THE FUND MAY NOT BE APPROPRIATE FOR ALL INVESTORS. American Century
Investment Management, Inc. serves as the Fund's investment adviser.
AMERICAN CENTURY: ULTRA (FORMERLY "AMERICAN CENTURY - TWENTIETH CENTURY ULTRA")
The investment objective of the Fund is capital growth by investing primarily in
common stocks that are considered by management to have better-than-average
prospects for appreciation. It is management's intention that the portfolio will
generally consist of common stocks of medium-sized and smaller companies.
American Century Investment Services, Inc. serves as the Fund's investment
adviser.
DREYFUS APPRECIATION FUND, INC.
The primary investment objective of the Fund is to provide long-term capital
growth consistent with the preservation of capital. Current income is a
secondary investment objective. The Fund seeks to meet its objectives by
investing primarily in the common stocks of domestic and foreign issuers. The
Dreyfus Corporation serves as the Fund's investment adviser.
DREYFUS PREMIER MIDCAP STOCK FUND - CLASS A
The investment objective of the Fund is to seek total investment returns
(including capital appreciation and income) which consistently outperform the
Standard & Poor's 400 MidCap Index. The Fund attempts to maintain a diversified
holding in common stocks of medium capitalization companies (firms with a market
value between $200 million and $5 billion). The Dreyfus Corporation serves as
the Fund's investment adviser.
THE DREYFUS THIRD CENTURY FUND, INC.
The Fund's primary goal is to provide capital growth through equity investment
in companies that, in the opinion of the Fund's management, not only to meet
traditional investment
32
<PAGE> 33
standards, but which also show evidence that they conduct
their business in a manner that contributes to the enhancement of the quality of
life of America. Current income is secondary to the primary goal. The Dreyfus
Corporation serves as the Fund's investment adviser.
FEDERATED BOND FUND - CLASS F
The investment objective of the Fund is to provide as high a level of current
income as is consistent with the preservation of capital. The Fund invests
primarily in a professionally managed, diversified portfolio of bonds. Under
normal circumstances, at least 65% of the Fund's net assets will be invested in
investment grade securities, including repurchase agreements collateralized by
investment grade securities. The Fund may invest in corporate debt obligations,
U.S. Government obligations, municipal securities, asset-backed securities,
adjustable rate mortgage securities, collateralized mortgage obligations, and
other securities which are deemed to be consistent with the Fund's investment
objectives. Federated Advisers serves as the Fund's investment adviser.
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 2-5 YEARS - INSTITUTIONAL SHARES
The investment objective of the Fund is current income. The Fund pursues this
investment objective by investing in U.S. government securities with remaining
maturities of five years or less. Federated Management serves as the Fund's
investment adviser.
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS A
The investment objective of the Fund is to pursue capital growth that exceeds
market performance through investments in growth, cyclical, and value stocks.
Fidelity Management & Research Company serves as the Fund's investment adviser.
FIDELITY ADVISOR HIGH YIELD FUND -
CLASS T
The Fidelity Advisor High Yield Fund is a bond fund designed to meet the needs
of the long-term investor, seeking above-average monthly income and potential
capital growth by investing in lower-rated, high-yielding, fixed income
securities. Fidelity Management & Research Company serves as the Fund's
investment adviser.
FIDELITY EQUITY-INCOME FUND
The investment objective of the Fund is to obtain reasonable income from a
portfolio consisting primarily of income-producing equity securities. The Fund
seeks a yield which exceeds the composite yield on the securities comprising the
Standard & Poor's Composite Index of 500 Stocks. In pursuing this objective, the
Fund will also consider the potential for capital appreciation. Fidelity
Management & Research Company serves as the Fund's investment adviser.
FIDELITY OTC PORTFOLIO
The investment objective of the Fund is to seek capital appreciation by
investing primarily in securities traded on the over-the counter (OTC)
securities market. Securities traded on the OTC include, among others,
industrial corporations, financial services institutions, public utilities, and
transportation companies, common and preferred stocks, securities convertible
into common stock, warrants and similar rights, and debt securities, and
obligations of the federal government. The fund does not place any weight on
dividend and interest income unless it believes this income will have a
favorable influence on the market value of a security. Fidelity Management &
Research Company serves as the Fund's investment adviser.
FIDELITY PURITAN FUND
The investment objective of the Fund seeks to obtain as much income as possible,
consistent with the preservation and conservation of capital, by investing in a
broadly diversified portfolio of securities, including common stocks, preferred
stocks, and bonds. While emphasis on income is an important objective, this does
not preclude growth in capital since some securities offering a better than
average yield may also possess some growth
33
<PAGE> 34
possibilities. Fidelity Management & Research Company serves as the Fund's
investment adviser.
INVESCO DYNAMICS FUND
The investment objective of the Fund is to seek appreciation of capital through
aggressive investment policies. The Fund invests primarily in common stocks of
U.S. companies traded on national securities exchanges and over-the-counter. The
Fund also has the flexibility to invest in preferred stocks and convertible or
straight issues of debentures, as well as foreign securities. INVESCO Funds
Group, Inc. serves as the Fund's investment adviser.
INVESCO TOTAL RETURN FUND
The investment objective of the Fund is to seek to achieve a high total return
on investment through capital appreciation and current income by investing in a
combination of equity securities (consisting of common stocks and, to a lesser
degree, securities convertible into common stock) and fixed income securities.
The equity securities purchased by the Fund generally will be issued by
companies which are listed on a national securities exchange and which usually
pay regular dividends. This Fund seeks reasonably consistent total returns over
a variety of market cycles. INVESCO Funds Group, Inc. serves as the Fund's
investment adviser. INVESCO Capital Management, Inc. serves as the Fund's
sub-adviser.
LIFEDESIGNS SERIES
LifeDesigns Series consists of five separate nondiversified funds, each of which
is a separately managed nondiversified portfolio with its own investment
objective and policies. The objective of each of the Portfolios which is
fundamental, is to maximize total investment return (i.e. capital growth and
income) subject to investment restrictions and asset allocation policies. The
Portfolios will maximize total investment return as is specifically detailed in
the following objectives which are non-fundamental and can be changed without
approval of a Portfolio's shareholders.
THE AGGRESSIVE PORTFOLIO
The investment objective of this Fund is to provide growth of capital by
investing in underlying funds which invest primarily in equity securities
("Equity Funds"). This Fund is generally appropriate for investors seeking
higher returns over an investment time horizon of at least 15 years and having a
higher tolerance for market fluctuations. Nationwide Advisory Services, Inc.
("NAS") serves as the Fund's investment adviser.
THE CONSERVATIVE PORTFOLIO
The investment objective of this Fund is to provide primarily income and,
secondarily, long term growth of capital. This Fund will seek to meet its
objectives by primarily investing in a combination of the Nationwide Contract (a
fixed interest contract) and fixed income securities ("Bond Funds"), with a
similar investment in Equity Funds. This Fund is generally appropriate for
investors seeking low fluctuations in principal over an investment time horizon
of less than 5 years, as well more conservative investors with an investment
time horizon of between 5 and 10 years. NAS serves as the Fund's investment
adviser.
THE MODERATE PORTFOLIO
The investment objective of this Fund is to provide growth of capital and income
by investing primarily in Equity Funds, but will also invest a significant
percentage of its assets in the Nationwide Contract and in Bond Funds. This Fund
is generally appropriate for moderate investors seeking moderate returns over an
investment time horizon of between 10 and 15 years; conservative investors with
an investment time horizon of at least 15 years or more; and more aggressive
investors with an investment time horizon of 5 to 10 years. NAS serves as the
Fund's investment adviser.
34
<PAGE> 35
THE MODERATELY AGGRESSIVE PORTFOLIO
The investment objective of this Fund is to provide growth of capital by
investing primarily in Equity Funds. However, the Fund attempts to reduce
its volatility by also investing in the Nationwide Contract and Proprietary
Funds which also invest primarily in Bond Funds. This Fund is generally
appropriate for moderate investors seeking high returns over an investment
time horizon of 15 years or for more aggressive investors with an
investment time horizon of 10 to 15 years. NAS serves as the Fund's
investment adviser.
THE MODERATELY CONSERVATIVE PORTFOLIO
The investment objective of this Fund is to provide primarily income and,
secondarily, long term growth of capital. This Fund will seek to meet its
objective by generally investing half of its assets in Equity Funds with
the remainder in the Nationwide Contract and Bond Funds. This Fund is
generally appropriate for moderate investors seeking lower fluctuations in
principal combined with some of the upside potential of equity investments
over an investment time horizon of between 5 and 10 years. This Fund is
also generally appropriate for conservative investors with an investment
time horizon of between 10 and 15 years and more aggressive investors with
an investment time horizon of less than 5 years. NAS serves as the Fund's
investment adviser.
MAS FUNDS FIXED INCOME PORTFOLIO
The investment objective of the Fund is to achieve above-average total return
over a market cycle of three of five years, consistent with reasonable risk, by
investing in a diversified portfolio of U. S. government securities, corporate
bonds (including bonds rated below investment grade commonly referred to as
"junk bonds"), foreign fixed-income securities and mortgage-backed securities of
domestic issuers and other fixed-income securities. The portfolio's average
weighted maturity will ordinarily be greater than five years. Miller, Anderson &
Sherrerd, LLP serves as the Fund's investment adviser.
MFS(R) HIGH INCOME FUND - CLASS A
The investment objective of the Fund is high current income by investing
primarily in a professionally managed diversified portfolio of fixed income
securities, some of which may involve equity features. Securities offering the
high current income sought by this Fund are ordinarily in the lower rating
categories of recognized rating agencies or are unrated and generally involve
greater volatility of price and risk of principal and income than securities in
the high rating categories. Capital growth, if any, is a consideration
incidental to the investment objective of high current income. Massachusetts
Financial Services Company serves as the Fund's investment adviser.
MORGAN STANLEY INSTITUTIONAL FUND, INC. -
EQUITY GROWTH PORTFOLIO - CLASS B
The investment objective of the Portfolio is to seek long-term capital
appreciation by investing in growth-oriented equity securities of medium and
large capitalization companies. Equity securities include common and preferred
stocks, convertible securities and rights and warrants to purchase common
stocks. Under normal circumstances, the Portfolio will invest at least 65% of
the value of its total assets in equity securities. Morgan Stanley Asset
Management, Inc. serves as the Portfolio's investment adviser.
NATIONWIDE(R) FUND - CLASS D
The investment objective of the Fund is to seek total return through a flexible
combination of current income and capital appreciation. The Fund invests
primarily in common stocks, but also in convertible securities, other equity
securities, bonds and money market obligations. Nationwide Advisory Services,
Inc. serves as the Fund's investment adviser.
NATIONWIDE(R) MONEY MARKET FUND
The investment objective of the Fund is to seek as high a level of current
income as is consistent with the preservation of capital and maintenance
35
<PAGE> 36
of liquidity. The Fund invests in high-quality money market instruments maturing
in 397 days or less. Nationwide Advisory Services, Inc. serves as the Fund's
investment adviser.
NATIONWIDE S&P 500(R) INDEX FUND - CLASS Y
The investment objective of the Fund is to provide investment results that
correspond to the price and yield performance of publicly traded common stocks
as represented by the Standard & Poor's 500 Composite Stock Price Index (the
"Index"). The Fund attempts to be fully invested at all times in stocks that
comprise the Index and stock index futures, and in any event, at least 80% of
the Fund's net assets will be invested in stocks comprising the Index.
Nationwide Advisory Services, Inc. serves as the Fund's investment adviser and
The Dreyfus Corporation is the Fund's sub-adviser.
"S&P 500(R)" has been licensed for use by Nationwide Advisory Services, Inc. The
Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's and
Standard & Poor's makes no representation regarding the advisability of
investing in the Fund.
NATIONWIDE SEPARATE ACCOUNT TRUST - NATIONWIDE SMALL COMPANY FUND
Under normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities of companies whose equity market capitalizations at
the time of investment are similar to the market capitalizations of companies in
the Russell 2000 Small Stock Index. The Fund is subadvised by: The Dreyfus
Corporation, Neuberger Berman, LLC., Lazard Asset Management, Strong Capital
Management, Inc. and Warburg Pincus Asset Management, Inc.
NEUBERGER BERMAN GUARDIAN FUND, INC.
The Fund seeks capital appreciation through investments generally in
dividend-paying issues of established companies that its investment officers
believe are well managed. The emphasis of the Fund's investments is on common
stock. The Fund diversifies its holdings among different industries and
different companies in light of conditions prevailing at any given time. Current
income is a secondary objective. Neuberger Berman Management Incorporated serves
as the Fund's investment adviser.
NEUBERGER BERMAN PARTNERS TRUST
The investment objective of the Fund is to seek capital growth. The Fund invests
using a value-oriented approach to the selection of individual securities. The
Fund manager seeks capital growth through an investment approach that is
designed to increase capital with reasonable risk. Neuberger Berman Management
Incorporated serves as the Fund's investment adviser.
OPPENHEIMER GLOBAL FUND - CLASS A
The investment objective of the Fund is to seek capital appreciation. The Fund
emphasizes investment in foreign and domestic securities considered by the
Fund's investment manager to have appreciation possibilities, primarily common
stocks or securities having investment characteristics of common stocks (such as
convertible securities) of "growth-type" companies. As a matter of fundamental
policy, under normal market conditions, the Fund will invest its total assets in
securities of issuers traded in markets in at least three different countries
(which may include the United States). The portfolio may also emphasize
securities of cyclical industries and "special situations" when the Fund's
manager believes that they present opportunities for capital growth.
OppenheimerFunds, Inc. serves as the Fund's investment adviser.
PRESTIGE BALANCED FUND - CLASS Y
The investment objective of the Fund is to provide a high total return from a
diversified portfolio of equity and fixed income securities. The Fund seeks to
provide a total return that approaches the total return of the universe of
equity securities of large and medium sized companies and that exceeds the
return typical of a portfolio of fixed income securities. Under normal market
conditions, the Fund will invest
36
<PAGE> 37
approximately 60% of its assets in equity securities and 40% in fixed income
securities. The equity securities will primarily be securities of large and
medium sized companies included in the Standard & Poor's 500 Composite Stock
Price Index, and the fixed income securities will cover a range of fixed income
sectors and securities, including government, corporate, asset-backed and
mortgage-backed securities. Nationwide Advisory Services, Inc. serves as the
Fund's investment adviser and J.P. Morgan Investment Management Inc. is the
Fund's sub-adviser.
PRESTIGE INTERNATIONAL FUND - CLASS Y
The investment objective of the Fund is capital appreciation. The Fund seeks to
accomplish its investment objective by investing primarily in equity securities
of non-United States companies that, in the opinion of its subadviser, are
inexpensively priced relative to the return on total capital or equity. The Fund
invests primarily in equity securities of non-United States companies. Under
normal market conditions, the Fund will invest at least 80% of the value of its
total assets in the equity securities of companies within at least three
different countries (not including the United States). Nationwide Advisory
Services, Inc. serves as the Fund's investment adviser and Lazard Asset
Management is the Fund's sub-adviser.
PRESTIGE LARGE CAP GROWTH FUND - CLASS Y
The investment objective of the Fund is long-term capital appreciation. The Fund
seeks to achieve its investment objective from a broadly diversified portfolio
of equity securities of large capitalization companies that are expected to have
better prospects for earnings growth than the growth rate of the general
domestic economy. Dividend income is a secondary objective. A large
capitalization company is a company with a market capitalization and industry
characteristics that are similar to companies in the Russell 1000(R) Growth
Index, which currently have market capitalizations that range from $1.4 billion
to $272 billion. Nationwide Advisory Services, Inc. serves as the Fund's
investment adviser and Goldman Sachs Asset Management is the Fund's sub-adviser.
PRESTIGE LARGE CAP VALUE FUND - CLASS Y
The investment objective of the Fund is to maximize total return, consisting of
both capital appreciation and current income. The Fund seeks to achieve its
investment objective by investing in U.S. equity securities that are currently
undervalued as determined by its subadviser. Under normal market conditions,
substantially all, but in no event less than 65% of the Fund's total assets will
be invested in equity securities of large capitalization U.S. companies,
including foreign companies whose securities are traded in the United States and
who comply with U.S. accounting standards. A large capitalization company is a
company with a market capitalization and industry characteristics that are
similar to companies in the Russell 1000(R) Value Index, which currently have
market capitalizations that range from $1.4 billion to $272 billion. Nationwide
Advisory Services, Inc. serves as the Fund's investment adviser and Brinson
Partners, Inc. is the Fund's sub-adviser.
PRESTIGE SMALL CAP FUND - CLASS Y
The investment objective of the Fund is long-term capital appreciation. The Fund
seeks to accomplish its investment objective from a broadly diversified
portfolio of equity securities issued by U.S. companies that have small market
capitalizations. Under normal market conditions, the Fund will invest at least
65% of its total assets in equity securities of companies whose market
capitalizations at the time of investment do not exceed 110% of the largest
company in the Russell 2000(R) Small Stock Index; these companies currently have
market capitalizations that range from $222 million to $1.4 billion. Nationwide
Advisory Services, Inc. serves as the Fund's investment adviser and INVESCO
Management & Research, Inc. serves as the Fund's sub-adviser, providing daily
portfolio management for the Fund.
37
<PAGE> 38
PUTNAM INVESTORS FUND - CLASS A
The investment objective of the Fund is long-term growth of capital and any
increased income resulting from such growth. The Fund is designed for investors
seeking long-term growth of capital from a portfolio consisting primarily of
common stocks. The Fund's management emphasizes investment in quality growth
stocks. Putnam Investment Management, Inc., serves as the Fund's investment
adviser.
PUTNAM VOYAGER FUND - CLASS A
The investment objective of the Fund is capital appreciation. The Fund invests
primarily in common stocks believed to have potential for capital appreciation
significantly greater than the market average. The Fund is designed for
investors willing to assume above-average risk in return for above-average
capital growth potential. Putnam Investment Management, Inc. serves as the
Fund's investment adviser.
SEI INDEX FUNDS - S & P 500 INDEX PORTFOLIO
The S & P Index Portfolio seeks to provide investment results that correspond to
the aggregate price and dividend performance of the securities in the Standard &
Poor's 500 Composite Stock Price Index which is comprised of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. The investment
objective is a fundamental policy of the Portfolio. There can be no assurance
that the Portfolio will achieve its investment objective. SEI Fund Management
serves as the Fund's investment adviser.
SELIGMAN GROWTH FUND, INC. - CLASS A
The investment objective of the Fund is longer-term growth in capital value and
an increase in future income. Fund assets have been invested primarily in common
stocks with the inherent investment risks tempered by portfolio diversification.
J & W Seligman & Co., Incorporated serves as the Fund's investment adviser.
SHORT-TERM INVESTMENTS TRUST - TREASURY PORTFOLIO - INSTITUTIONAL CLASS
The investment objective of the Portfolio is the maximization of current income
to the extent consistent with the preservation of capital and maintenance of
liquidity. The Portfolio seeks to achieve its objective by investing in a
portfolio consisting of direct obligations of the U.S. Treasury and repurchase
agreements secured by such obligations. The instruments purchased by the
Portfolio will have maturities of 397 days or less. AIM Advisers, Inc. serves as
the Fund's investment adviser.
T. ROWE PRICE INTERNATIONAL STOCK FUND(R)
The Fund's objective is long-term growth of capital through investments
primarily in common stocks of established, non-U.S. Companies. T. Rowe Price
Associates, Inc. serves as the Fund's investment adviser.
TEMPLETON FOREIGN FUND - CLASS A
The investment objective of the Fund is long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States. Any income realized will be incidental.
Templeton Investment Counsel, Inc. serves as the Fund's investment adviser.
WARBURG PINCUS EMERGING GROWTH FUND - COMMON CLASS
The investment objective of the Fund is to seek maximum capital appreciation by
investing in equity securities of small- to medium- sized companies in the
United States with emerging or renewed growth potential. Warburg Pincus Asset
Management, Inc. serves as the Fund's investment adviser.
38
<PAGE> 39
THE FOLLOWING UNDERLYING MUTUAL FUND IS NOT AVAILABLE FOR NEW PLANS ESTABLISHED
ON OR AFTER JUNE 30, 1998:
FIDELITY CONTRAFUND
The investment objective of the Fund is capital appreciation by investing in
securities that its manager believes are undervalued due to an overly
pessimistic appraisal by the public. Although the Fund will usually be invested
primarily in common stocks and securities convertible into common stock, the
percentage of its assets invested in other securities may vary. Fidelity
Management & Research Company serves as the Fund's investment adviser.
THE FOLLOWING UNDERLYING MUTUAL FUND IS NOT AVAILABLE FOR NEW CONTRACTS ISSUED
ON OR AFTER OCTOBER 1, 1997:
FIDELITY MAGELLAN(R) FUND
The investment objective of the Fund is capital appreciation by investing
primarily in common stock and securities convertible into common stock. The Fund
may also invest in foreign securities, which involves additional risks. The Fund
may also invest in stock index futures and options both of which can be volatile
investments. Fidelity Management & Research Company serves as the Fund's
investment adviser.
THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR NEW CONTRACTS ISSUED
ON OR AFTER MAY 1, 1997:
AMERICAN CENTURY: GROWTH (FORMERLY "AMERICAN CENTURY - TWENTIETH CENTURY
GROWTH")
The investment objective of the Fund is capital growth through investment in
securities which the management considers to have better-than-average prospects
for appreciation. It is management's intention that the portfolio will generally
consist of common stocks of large established companies. American Century
Investment Services, Inc. serves as the Fund's investment adviser.
MASSACHUSETTS INVESTORS GROWTH STOCK FUND - CLASS A
The investment objective of the Fund is the long-term growth of capital and
future income rather than current income. Massachusetts Financial Services
Company serves as the Fund's investment adviser.
THE FOLLOWING UNDERLYING MUTUAL FUNDS MAY NOT BE AVAILABLE TO ALL ISSUED
CONTRACTS ON OR AFTER JULY 1, 1994:
THE BOND FUND OF AMERICA(SM), INC.
The Fund's investment objective is to provide as high a level of current income
as is consistent with the preservation of capital. The Fund invests
substantially all of its assets in marketable corporate debt securities, U.S.
Government securities, mortgage-related securities, other asset-backed
securities and cash or money market instruments. Normally, at least 65% of the
Fund's assets will be invested in bonds. Capital Research and Management Company
serves as the Fund's investment adviser.
THE INVESTMENT COMPANY OF AMERICA(R), INC.
The investment objectives are long-term growth of capital and income. The Fund
strives to accomplish these objectives through constant supervision, careful
selection and broad diversification. In the selection of securities for
investment, the possibilities of appreciation and potential dividends are given
more weight than current yield. The Fund ordinarily invests principally in
common stocks. However, assets may also be held in securities convertible into
common stocks, straight debt securities (rated in the top three quality
categories by Standard & Poor's Corporation or Moody's Investor Service, Inc. or
determined to be of equivalent quality by Capital Research and Management
Company), cash equivalent quality by Capital Research and Management Company),
cash or cash equivalents, U.S. Government securities, or nonconvertible
preferred stocks. Massachusetts Financial Services Company serves as the Fund's
investment adviser.
39
<PAGE> 40
THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR NEW CONTRACTS ISSUED
ON OR AFTER OCTOBER 1, 1993:
EVERGREEN INCOME AND GROWTH FUND
The investment objective of the Fund is current income and capital appreciation.
The Fund invests primarily in common and preferred stocks, securities
convertible into or exchangeable for common stocks, and fixed income securities.
The Fund's objective is to maximize the "total return" on its portfolio of
investments. Evergreen Asset Management Corp. serves as the Fund's investment
adviser.
MFS(R) GROWTH OPPORTUNITIES FUND - CLASS A
The investment objective of the Fund is growth of capital. Dividend income, if
any, is incidental to the objective of capital growth. To achieve this
objective, a flexible approach toward types of companies as well as types of
securities is maintained by the Fund, depending upon the economic environment
and the relative attractiveness of the various securities markets. Massachusetts
Financial Services Company serves as the Fund's investment adviser.
NATIONWIDE(R) GROWTH FUND - CLASS D
The investment objective of the Fund is to seek long term capital appreciation
by investing primarily in equity securities of companies of all sizes. Major
emphasis in the selection of securities is placed on companies which have
capable management, and are in fields where social and economic trends,
technological developments, and new processes or products indicate a potential
for greater-than-average growth.
THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR OWNERS WHOSE
PREDECESSOR NATIONWIDE DCVA CONTRACT WAS ISSUED ON OR AFTER JANUARY 1, 1987:
FIDELITY CAPITAL & INCOME FUND
The investment objective of the Fund is to seek to provide a combination of
income and capital growth by investing primarily in debt instruments and common
and preferred stocks, with a focus on lower-quality debt securities and
securities of companies with uncertain financial positions. Fidelity Management
& Research Company serves as the Fund's investment adviser.
Effective on and after July 1, 1991, Nationwide will no longer permit contract
owners or participants to make additional purchase payments or to exchange
contract values into the Fidelity Capital & Income Fund. However, contract
values held in the Fidelity Capital & Income Fund as of July 1, 1991 may
continue to be invested in that sub-account. Unless Nationwide is notified
otherwise, any purchase payments or exchanges which the contract owner or
participant directs Nationwide to invest in the Fidelity Capital & Income Fund
on and after July 1, 1991 will instead be automatically invested in the
Nationwide Money Market Fund.
Nationwide has determined that further investment in the Fidelity Capital &
Income Fund is not in the best interests of the contract owners and participants
in view of the Fund's adoption, effective for shares purchased on and after
February 1, 1991, of a redemption fee equal to 1.5% of the net asset value of
any Fund shares redeemed which are held less than twelve months. Any redemption
fees which the Fund may assess against Fund shares held by Nationwide in the
NACo Variable Account which were purchased from February 1, 1991 to July 1, 1991
will be paid by Nationwide from surplus and will not be paid, directly or
indirectly, by contract owners, participants or the NACo Variable Account.
40
<PAGE> 41
APPENDIX B: CONDENSED FINANCIAL INFORMATION
The condensed financial information shown in the following tables shows the
accumulation unit values for an accumulation unit outstanding throughout the
period.
Variable Account Annual Expense Fee of 0.95% of average net assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Growth 5.842997 7.915964 6,270,208 1998
- --------------------------------------------------------------------------------------------------------------------
4.562802 5.842997 17,611,062 1997
--------------------------------------------------------------------------------------
4.005400 4.562802 15,929,074 1996
--------------------------------------------------------------------------------------
3.359891 4.005400 37,362,979 1995
--------------------------------------------------------------------------------------
3.443124 3.359891 38,748,520 1994
--------------------------------------------------------------------------------------
3.350122 3.443124 41,912,416 1993
--------------------------------------------------------------------------------------
3.533694 3.350122 43,106,409 1992
--------------------------------------------------------------------------------------
2.571846 3.533694 31,955,054 1991
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.737833 2.316089 59,827,396 1998
--------------------------------------------------------------------------------------
1.424846 1.737833 125,555,220 1997
--------------------------------------------------------------------------------------
1.263551 1.424846 51,280,940 1996
--------------------------------------------------------------------------------------
0.926489 1.263551 79,405,506 1995
--------------------------------------------------------------------------------------
0.970411 0.926489 59,484,505 1994
--------------------------------------------------------------------------------------
1.000000 0.970411 21,036,904 1993
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), 2.332586 2.429862 3,149,438 1998
Inc.
--------------------------------------------------------------------------------------
2.155739 2.332586 6,366,974 1997
--------------------------------------------------------------------------------------
2.039710 2.155739 3,393,296 1996
--------------------------------------------------------------------------------------
1.741422 2.039710 6,578,720 1995
--------------------------------------------------------------------------------------
1.850918 1.741422 5,740,929 1994
--------------------------------------------------------------------------------------
1.637181 1.850918 5,644,051 1993
--------------------------------------------------------------------------------------
1.484255 1.637181 4,185,113 1992
--------------------------------------------------------------------------------------
1.338732 1.484255 3,262,200 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.532278 4.554488 172 1998
Fund, Inc.
--------------------------------------------------------------------------------------
2.756438 3.532278 14,863,803 1997
--------------------------------------------------------------------------------------
2.238323 2.756438 5,449,596 1996
--------------------------------------------------------------------------------------
1.663803 2.238323 9,402,637 1995
--------------------------------------------------------------------------------------
1.814915 1.663803 9,817,673 1994
--------------------------------------------------------------------------------------
1.740666 1.814915 10,291,485 1993
--------------------------------------------------------------------------------------
1.723855 1.740666 8,918,980 1992
--------------------------------------------------------------------------------------
1.503652 1.723855 4,654,790 1991*
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE> 42
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Evergreen Income and Growth 2.422617 2.380651 569,094 1998
Fund
--------------------------------------------------------------------------------------
1.947502 2.422617 1,666,312 1997
--------------------------------------------------------------------------------------
1.741651 1.947502 1,070,229 1996
--------------------------------------------------------------------------------------
1.419467 1.741651 2,635,928 1995
--------------------------------------------------------------------------------------
1.531292 1.419467 3,343,918 1994
--------------------------------------------------------------------------------------
1.368966 1.531292 10,220,011 1993
--------------------------------------------------------------------------------------
1.256090 1.368966 8,701,160 1992
--------------------------------------------------------------------------------------
1.146614 1.256090 7,977,105 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 1.301886 1.394078 3,088,503 1998
Securities Fund: 2-5 Years
- - Institutional Shares
--------------------------------------------------------------------------------------
1.226751 1.301886 3,296,152 1997
--------------------------------------------------------------------------------------
1.195751 1.226751 1,296,431 1996
--------------------------------------------------------------------------------------
1.062969 1.195751 2,344,091 1995
--------------------------------------------------------------------------------------
1.094086 1.062969 1,802,090 1994
--------------------------------------------------------------------------------------
1.031362 1.094086 1,501,568 1993
--------------------------------------------------------------------------------------
1.000000 1.031362 359,089 1992
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 4.654233 4.829318 187,924 1998
Fund
--------------------------------------------------------------------------------------
4.096488 4.654233 570,207 1997
--------------------------------------------------------------------------------------
3.712491 4.096488 294,263 1996
--------------------------------------------------------------------------------------
3.210584 3.712491 818,785 1995
--------------------------------------------------------------------------------------
3.397953 3.210584 900,127 1994
--------------------------------------------------------------------------------------
2.746533 3.397953 1,009,928 1993
--------------------------------------------------------------------------------------
2.165417 2.746533 1,100,291 1992
--------------------------------------------------------------------------------------
1.972198 2.165417 1,260,909 1991*
--------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 1.935931 2.522162 79,731,135 1998
--------------------------------------------------------------------------------------
1.588961 1.935931 165,606,687 1997
--------------------------------------------------------------------------------------
1.315600 1.588961 63,488,282 1996
--------------------------------------------------------------------------------------
0.974545 1.315600 86,483,728 1995
--------------------------------------------------------------------------------------
0.994981 0.974545 59,048,072 1994
--------------------------------------------------------------------------------------
1.000000 0.994981 17,300,194 1993
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 6.900916 7.691828 20,055,246 1998
--------------------------------------------------------------------------------------
5.359692 6.900916 51,141,002 1997
--------------------------------------------------------------------------------------
4.471070 5.359692 21,843,280 1996
--------------------------------------------------------------------------------------
3.424310 4.471070 41,090,717 1995
--------------------------------------------------------------------------------------
3.448520 3.424310 37,439,255 1994
--------------------------------------------------------------------------------------
2.869860 3.448520 30,564,448 1993
--------------------------------------------------------------------------------------
2.526472 2.869860 25,417,028 1992
--------------------------------------------------------------------------------------
2.283309 2.526472 24,200,256 1991*
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
42
<PAGE> 43
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Magellan(R)Fund 1.804998 2.389171 33,527,719 1998
--------------------------------------------------------------------------------------
1.439440 1.804998 68,868,962 1997
--------------------------------------------------------------------------------------
1.301185 1.439440 35,450,214 1996
--------------------------------------------------------------------------------------
0.960039 1.301185 63,751,788 1995
--------------------------------------------------------------------------------------
0.987051 0.960039 43,410,162 1994
--------------------------------------------------------------------------------------
1.000000 0.987051 9,307,585 1993
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 1.829868 2.544511 7,583,243 1998
--------------------------------------------------------------------------------------
1.680710 1.829868 17,193,114 1997
--------------------------------------------------------------------------------------
1.371346 1.680710 4,002,730 1996
--------------------------------------------------------------------------------------
1.001544 1.371346 3,611,136 1995
--------------------------------------------------------------------------------------
1.000000 1.001544 414,031 1994
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 1.596539 1.843889 10,568,994 1998
--------------------------------------------------------------------------------------
1.317344 1.596539 19,817,717 1997
--------------------------------------------------------------------------------------
1.154955 1.317344 8,701,486 1996
--------------------------------------------------------------------------------------
0.959935 1.154955 11,375,851 1995
--------------------------------------------------------------------------------------
1.000000 0.959935 3,191,039 1994
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Investment Company of 2.277283 2.773161 15,826,712 1998
America(R), Inc.
--------------------------------------------------------------------------------------
1.771097 2.277283 31,651,569 1997
--------------------------------------------------------------------------------------
1.498194 1.771097 14,871,400 1996
--------------------------------------------------------------------------------------
1.157835 1.498194 21,189,283 1995
--------------------------------------------------------------------------------------
1.167040 1.157835 15,911,747 1994
--------------------------------------------------------------------------------------
1.055548 1.167040 9,316,764 1993
--------------------------------------------------------------------------------------
1.000000 1.055548 1,904,764 1992
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income 1.335173 1.413926 1,989,011 1998
Portfolio
--------------------------------------------------------------------------------------
1.229760 1.335173 2,016,658 1997
--------------------------------------------------------------------------------------
1.156444 1.229760 554,865 1996
--------------------------------------------------------------------------------------
0.980782 1.156444 461,663 1995
--------------------------------------------------------------------------------------
1.000000 0.980782 16,059 1994
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities 9.012670 11.531693 657,789 1998
Fund - Class A
--------------------------------------------------------------------------------------
7.380232 9.012670 1,768,566 1997
--------------------------------------------------------------------------------------
6.114190 7.380232 1,022,657 1996
--------------------------------------------------------------------------------------
4.589533 6.114190 2,209,754 1995
--------------------------------------------------------------------------------------
4.834037 4.589533 2,656,048 1994
--------------------------------------------------------------------------------------
4.200054 4.834037 6,486,767 1993
--------------------------------------------------------------------------------------
3.936838 4.200054 6,897,026 1992
--------------------------------------------------------------------------------------
3.656615 3.936838 7,710,706 1991*
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE> 44
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R)High Income Fund - 6.168371 6.172749 1,376,013 1998
Class A
--------------------------------------------------------------------------------------
5.518160 6.168371 2,328,945 1997
--------------------------------------------------------------------------------------
4.949752 5.518160 1,009,326 1996
--------------------------------------------------------------------------------------
4.265493 4.949752 1,898,625 1995
--------------------------------------------------------------------------------------
4.422523 4.265493 1,736,718 1994
--------------------------------------------------------------------------------------
3.739642 4.422523 1,666,484 1993
--------------------------------------------------------------------------------------
3.225557 3.739642 1,036,199 1992
--------------------------------------------------------------------------------------
2.894993 3.225557 817,803 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Massachusetts Investors 15.968069 22.143725 310,155 1998
Growth Stock Fund - Class A
--------------------------------------------------------------------------------------
10.880822 15.968069 801,488 1997
--------------------------------------------------------------------------------------
8.942612 10.880822 491,538 1996
--------------------------------------------------------------------------------------
7.034148 8.942612 877,034 1995
--------------------------------------------------------------------------------------
7.613442 7.034148 876,723 1994
--------------------------------------------------------------------------------------
6.714892 7.613442 837,196 1993
--------------------------------------------------------------------------------------
6.368639 6.714892 711,003 1992
--------------------------------------------------------------------------------------
5.100857 6.368639 559,059 1991
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.697282 26.722904 36 1998
--------------------------------------------------------------------------------------
14.964379 20.697282 4,299,707 1997
--------------------------------------------------------------------------------------
12.191058 14.964379 1,456,965 1996
--------------------------------------------------------------------------------------
9.468045 12.191058 2,755,666 1995
--------------------------------------------------------------------------------------
9.502760 9.468045 2,754,540 1994
--------------------------------------------------------------------------------------
8.985447 9.502760 2,950,704 1993
--------------------------------------------------------------------------------------
8.810680 8.985447 3,032,348 1992
--------------------------------------------------------------------------------------
7.837093 8.810680 2,238,323 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.854877 4.725203 679,189 1998
Class D
--------------------------------------------------------------------------------------
3.083008 3.854877 1,987,181 1997
--------------------------------------------------------------------------------------
2.667201 3.083008 1,157,824 1996
--------------------------------------------------------------------------------------
2.092009 2.667201 2,409,384 1995
--------------------------------------------------------------------------------------
2.081399 2.092009 2,602,594 1994
--------------------------------------------------------------------------------------
1.887524 2.081399 6,293,504 1993
--------------------------------------------------------------------------------------
1.792687 1.887524 5,507,203 1992
--------------------------------------------------------------------------------------
1.498853 1.792687 4,283,563 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 1.706116 1.729738 9,040,807 1998
Fund, Inc.
--------------------------------------------------------------------------------------
1.460410 1.706116 23,446,031 1997
--------------------------------------------------------------------------------------
1.250781 1.460410 6,973,153 1996
--------------------------------------------------------------------------------------
0.955773 1.250781 7,940,457 1995
--------------------------------------------------------------------------------------
1.000000 0.955773 907,272 1994
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
44
<PAGE> 45
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Putnam Investors Fund - 18.110411 24.311753 2,421,935 1998
Class A
--------------------------------------------------------------------------------------
13.594501 18.110411 3,305,277 1997
--------------------------------------------------------------------------------------
11.305164 13.594501 1,545,059 1996
--------------------------------------------------------------------------------------
8.297318 11.305164 2,260,621 1995
--------------------------------------------------------------------------------------
8.652501 8.297318 2,145,377 1994
--------------------------------------------------------------------------------------
7.410567 8.652501 1,975,963 1993
--------------------------------------------------------------------------------------
6.934213 7.410567 1,682,860 1992
--------------------------------------------------------------------------------------
6.383603 6.934213 1,597,104 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.837109 4.715165 27,161,675 1998
A
--------------------------------------------------------------------------------------
3.074879 3.837109 52,162,678 1997
--------------------------------------------------------------------------------------
2.752130 3.074879 22,936,312 1996
--------------------------------------------------------------------------------------
1.982311 2.752130 27,203,903 1995
--------------------------------------------------------------------------------------
1.992379 1.982311 19,751,850 1994
--------------------------------------------------------------------------------------
1.698751 1.992379 12,946,038 1993
--------------------------------------------------------------------------------------
1.563079 1.698751 5,917,563 1992
--------------------------------------------------------------------------------------
1.256187 1.563079 1,655,847 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 1.501834 1.909266 28,576,205 1998
Index Portfolio
--------------------------------------------------------------------------------------
1.139331 1.501834 38,540,683 1997
--------------------------------------------------------------------------------------
1.000000 1.139331 4,129,102 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. 12.541848 16.801408 352,047 1998
- - Class A
--------------------------------------------------------------------------------------
10.720312 12.541848 772,926 1997
--------------------------------------------------------------------------------------
8.934609 10.720312 381,977 1996
--------------------------------------------------------------------------------------
7.020585 8.934609 616,776 1995
--------------------------------------------------------------------------------------
7.370495 7.020585 582,039 1994
--------------------------------------------------------------------------------------
6.989639 7.370495 538,601 1993
--------------------------------------------------------------------------------------
6.340967 6.989639 364,304 1992
--------------------------------------------------------------------------------------
5.483042 6.340967 308,224 1991*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Short-Term Investments 1.222017 1.276562 1,766,084 1998
Trust - Treasury Portfolio
- - Institutional Class **
--------------------------------------------------------------------------------------
1.168909 1.222017 3,399,331 1997
--------------------------------------------------------------------------------------
1.119630 1.168909 1,151,812 1996
--------------------------------------------------------------------------------------
1.066889 1.119630 1,524,715 1995
--------------------------------------------------------------------------------------
1.034183 1.066889 1,223,255 1994
--------------------------------------------------------------------------------------
1.012172 1.034183 500,957 1993
--------------------------------------------------------------------------------------
1.000000 1.012172 246,584 1992
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE> 46
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T. Rowe Price International 1.198954 1.379298 9,434,812 1998
Stock Fund(R)
--------------------------------------------------------------------------------------
1.178559 1.198954 23,881,713 1997
--------------------------------------------------------------------------------------
1.025854 1.178559 9,304,599 1996
--------------------------------------------------------------------------------------
0.929695 1.025854 10,412,582 1995
--------------------------------------------------------------------------------------
1.000000 0.929695 4,482,375 1994
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*Period from July 1, 1991 (the date participant accounts of the NACo program
were transferred from the Nationwide DC Variable Account to the NACo Variable
Account and the NACo Variable Account began operations exclusive to the NACo
program).
**The 7-day yield on the Short-Term Investment Trust - Treasury Portfolio -
Institutional Class as of December 31, 1998 was 2.47%.
46
<PAGE> 47
Variable Account Annual Expense Fee of 0.90% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Growth 5.847874 7.926529 3,210,215 1998
--------------------------------------------------------------------------------------
4.564331 5.847874 2,972,496 1997
--------------------------------------------------------------------------------------
4.258167 4.564331 6,416,724 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.739283 2.319181 25,526,505 1998
--------------------------------------------------------------------------------------
1.425323 1.739283 17,512,296 1997
--------------------------------------------------------------------------------------
1.349699 1.425323 17,364,360 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Bond Fund of 2.334569 2.433154 1,615,501 1998
America(SM), Inc.
--------------------------------------------------------------------------------------
2.156482 2.334569 838,935 1997
--------------------------------------------------------------------------------------
2.019231 2.156482 1,041,402 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth 2.424638 2.383829 288,461 1998
Fund
--------------------------------------------------------------------------------------
1.948154 2.424638 164,209 1997
--------------------------------------------------------------------------------------
1.797369 1.948154 267,437 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 1.302984 1.395957 1,498,243 1998
Securities Fund: 2-5 Years
- - Institutional Shares
--------------------------------------------------------------------------------------
1.227166 1.302984 485,556 1997
--------------------------------------------------------------------------------------
1.179520 1.227166 431,282 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 4.658156 4.835829 59,194 1998
Fund
--------------------------------------------------------------------------------------
4.097872 4.658156 50,755 1997
--------------------------------------------------------------------------------------
3.859929 4.097872 76,382 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 1.937547 2.525528 34,985,707 1998
--------------------------------------------------------------------------------------
1.589493 1.937547 23,258,606 1997
--------------------------------------------------------------------------------------
1.428112 1.589493 22,719,185 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 6.906673 7.702094 10,047,811 1998
--------------------------------------------------------------------------------------
5.361485 6.906673 6,412,368 1997
--------------------------------------------------------------------------------------
4.790401 5.361485 7,437,534 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 1.806504 2.392359 13,728,148 1998
--------------------------------------------------------------------------------------
1.439922 1.806504 9,967,418 1997
--------------------------------------------------------------------------------------
1.327329 1.439922 12,036,679 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 1.831396 2.547908 3,156,471 1998
--------------------------------------------------------------------------------------
1.681272 1.831396 2,364,115 1997
--------------------------------------------------------------------------------------
1.509365 1.681272 1,269,335 1996
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE> 48
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Puritan Fund 1.597871 1.846350 5,207,051 1998
--------------------------------------------------------------------------------------
1.317785 1.597871 2,540,462 1997
--------------------------------------------------------------------------------------
1.202745 1.317785 3,037,801 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Investment Company of 2.279183 2.776862 6,890,273 1998
America(R), Inc.
--------------------------------------------------------------------------------------
1.771690 2.279183 5,422,918 1997
--------------------------------------------------------------------------------------
1.588880 1.771690 5,329,249 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income 1.336288 1.415813 991,972 1998
Portfolio
--------------------------------------------------------------------------------------
1.230172 1.336288 274,281 1997
--------------------------------------------------------------------------------------
1.148924 1.230172 236,446 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities 9.020195 11.547088 366,180 1998
Fund - Class A
--------------------------------------------------------------------------------------
7.382705 9.020195 235,276 1997
--------------------------------------------------------------------------------------
6.921487 7.382705 323,628 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - 6.173570 6.181070 516,943 1998
Class A
--------------------------------------------------------------------------------------
5.520025 6.173570 244,788 1997
--------------------------------------------------------------------------------------
5.086868 5.520025 244,640 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Massachusetts Investors 15.981395 22.173275 143,669 1998
Growth Stock Fund - Class A
--------------------------------------------------------------------------------------
10.884466 15.981395 111,799 1997
--------------------------------------------------------------------------------------
10.146619 10.884466 155,643 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.858094 4.731510 408,603 1998
Class D
--------------------------------------------------------------------------------------
3.084040 3.858094 360,606 1997
--------------------------------------------------------------------------------------
2.839932 3.084040 507,782 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 1.707540 1.732048 4,341,380 1998
Fund, Inc.
--------------------------------------------------------------------------------------
1.460899 1.707540 3,222,201 1997
--------------------------------------------------------------------------------------
1.325880 1.460899 2,513,725 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 18.125525 24.344197 897,593 1998
Class A
--------------------------------------------------------------------------------------
13.599051 18.125525 329,877 1997
--------------------------------------------------------------------------------------
12.145782 13.599051 371,840 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.840312 4.721461 10,644,754 1998
A
--------------------------------------------------------------------------------------
3.075909 3.840312 7,200,296 1997
--------------------------------------------------------------------------------------
3.068900 3.075909 7,518,991 1996
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
48
<PAGE> 49
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SEI Index Funds - S&P 500 1.503085 1.911811 12,293,095 1998
Index Portfolio
--------------------------------------------------------------------------------------
1.139711 1.503085 5,223,019 1997
--------------------------------------------------------------------------------------
1.000000 1.139711 1,547,081 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. 12.552317 16.823830 174,614 1998
- - Class A
--------------------------------------------------------------------------------------
10.723901 12.552317 80,990 1997
--------------------------------------------------------------------------------------
9.776056 10.723901 90,771 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Short-Term Investments - 1.223047 1.278283 1,030,158 1998
Trust - Treasury Portfolio
- - Institutional Class*
--------------------------------------------------------------------------------------
1.169304 1.223047 203,199 1997
--------------------------------------------------------------------------------------
1.135916 1.169304 201,261 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International 1.199955 1.381139 3,948,203 1998
Stock Fund(R)
--------------------------------------------------------------------------------------
1.178953 1.199955 3,056,840 1997
--------------------------------------------------------------------------------------
1.108680 1.178953 3,705,323 1996
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Short-Term Investment Trust - Treasury Portfolio -
Institutional Class as of December 31, 1998 was 2.47%.
49
<PAGE> 50
Variable Account Annual Expense Fee of 0.80% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & 1.000000 1.097595 76,300 1998
Growth
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Growth 5.857641 7.947702 2,832,513 1998
--------------------------------------------------------------------------------------
4.567388 5.857641 1,491,035 1997
--------------------------------------------------------------------------------------
4.258179 4.567388 3,952,718 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: 1.000000 1.084264 103,189 1998
International Discovery Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.742188 2.325375 20,465,127 1998
--------------------------------------------------------------------------------------
1.426278 1.742188 9,471,388 1997
--------------------------------------------------------------------------------------
1.349702 1.426278 11,724,488 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), 2.338535 2.439748 954,957 1998
Inc.
--------------------------------------------------------------------------------------
2.157968 2.338535 597,695 1997
--------------------------------------------------------------------------------------
2.019264 2.157968 737,276 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 1.000000 1.080133 60,330 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap 1.000000 1.133283 6,837 1998
Stock Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.541129 4.572707 6,657,158 1998
Fund, Inc.
--------------------------------------------------------------------------------------
2.759207 3.541129 917,688 1997
--------------------------------------------------------------------------------------
2.450473 2.759207 1,075,140 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth 2.428687 2.390198 111,941 1998
Fund
--------------------------------------------------------------------------------------
1.949458 2.428687 130,014 1997
--------------------------------------------------------------------------------------
1.797374 1.949458 303,775 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class 1.000000 1.018687 77,098 1998
F
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 1.305179 1.399720 1,061,815 1998
Securities Fund: 2-5 Years
- - Institutional Shares
--------------------------------------------------------------------------------------
1.227995 1.305179 241,356 1997
--------------------------------------------------------------------------------------
1.179523 1.227995 184,497 1996
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE> 51
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Advisor Growth 1.000000 1.089301 32,561 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield 1.000000 1.064751 395 1998
Fund - Class T
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 4.666006 4.848865 60,278 1998
Fund
--------------------------------------------------------------------------------------
4.100640 4.666006 120,784 1997
--------------------------------------------------------------------------------------
3.859939 4.100640 203,017 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 1.940782 2.532274 26,018,143 1998
--------------------------------------------------------------------------------------
1.590557 1.940782 12,620,829 1997
--------------------------------------------------------------------------------------
1.428116 1.590557 13,966,075 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 6.918202 7.722666 6,525,557 1998
--------------------------------------------------------------------------------------
5.365074 6.918202 5,904,892 1997
--------------------------------------------------------------------------------------
4.790414 5.365074 6,668,170 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 1.809520 2.398748 11,284,101 1998
--------------------------------------------------------------------------------------
1.440886 1.809520 5,726,530 1997
--------------------------------------------------------------------------------------
1.327332 1.440886 6,812,829 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 1.834455 2.554714 2,759,385 1998
--------------------------------------------------------------------------------------
1.682398 1.834455 1,302,436 1997
--------------------------------------------------------------------------------------
1.509369 1.682398 886,668 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 1.600539 1.851282 3,223,535 1998
--------------------------------------------------------------------------------------
1.318667 1.600539 1,283,945 1997
--------------------------------------------------------------------------------------
1.202749 1.318667 1,390,626 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 1.000000 1.172431 38,248 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund 1.000000 1.023668 9,067 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Investment Company of 2.282988 2.784278 4,926,029 1998
America(R), Inc.
--------------------------------------------------------------------------------------
1.772876 2.282988 2,356,594 1997
--------------------------------------------------------------------------------------
1.588884 1.772876 2,306,070 1996
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE> 52
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MAS Funds Fixed Income 1.338520 1.419597 261,209 1998
Portfolio
--------------------------------------------------------------------------------------
1.230995 1.338520 94,434 1997
--------------------------------------------------------------------------------------
1.148928 1.230995 116,525 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities 9.035263 11.577941 190,471 1998
Fund - Class A
--------------------------------------------------------------------------------------
7.387651 9.035263 197,549 1997
--------------------------------------------------------------------------------------
6.921506 7.387651 330,931 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - 6.183974 6.197734 346,946 1998
Class A
--------------------------------------------------------------------------------------
5.523753 6.183974 233,869 1997
--------------------------------------------------------------------------------------
5.086882 5.523753 252,930 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Massachusetts Investors 16.008079 22.232493 125,998 1998
Growth Stock Fund - Class A
--------------------------------------------------------------------------------------
10.891758 16.008079 78,577 1997
--------------------------------------------------------------------------------------
10.146647 10.891758 136,164 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley 1.000000 1.106680 11,853 1998
Institutional Fund, Inc. -
Equity Growth Portfolio -
Class B
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.749126 26.830004 3,247,615 1998
--------------------------------------------------------------------------------------
14.979404 20.749126 355,149 1997
--------------------------------------------------------------------------------------
13.111665 14.979404 289,479 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.864536 4.744149 280,426 1998
Class D
--------------------------------------------------------------------------------------
3.086105 3.864536 89,839 1997
--------------------------------------------------------------------------------------
2.839940 3.086105 133,215 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.011419 3.139103 6,949,105 1998
Fund*
--------------------------------------------------------------------------------------
2.887772 3.011419 1,219,186 1997
--------------------------------------------------------------------------------------
2.810841 2.887772 1,754,115 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.093550 64,039 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 0.961555 0.963521 1,340,017 1998
Trust- Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 1.710392 1.736676 2,886,123 1998
Fund, Inc.
--------------------------------------------------------------------------------------
1.461877 1.710392 1,596,621 1997
--------------------------------------------------------------------------------------
1.325883 1.461877 1,655,042 1996
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
52
<PAGE> 53
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Neuberger Berman Partners 1.000000 1.041831 6 1998
Trust
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Fund - 1.000000 1.106449 2,237 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 18.155790 24.409212 549,318 1998
Class A
--------------------------------------------------------------------------------------
13.608156 18.155790 233,708 1997
--------------------------------------------------------------------------------------
12.145815 13.608156 239,486 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.846728 4.734076 7,755,689 1998
A
--------------------------------------------------------------------------------------
3.077970 3.846728 3,817,279 1997
--------------------------------------------------------------------------------------
3.068905 3.077970 4,941,310 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 1.505589 1.916911 8,439,537 1998
Index Portfolio
--------------------------------------------------------------------------------------
1.140471 1.505589 3,491,065 1997
--------------------------------------------------------------------------------------
1.000000 1.140471 1,023,459 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, 12.573280 16.868765 90,887 1998
Inc.-Class A
--------------------------------------------------------------------------------------
10.731082 12.573280 61,083 1997
-------------------------------------------------------------------------------------
9.776083 10.731082 107,031 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Short-Term Investments 1.225108 1.281729 320,548 1998
Trust - Treasury Portfolio
- - Institutional Class**
--------------------------------------------------------------------------------------
1.170093 1.225108 331,148 1997
--------------------------------------------------------------------------------------
1.135919 1.170093 394,386 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International 1.201960 1.384829 3,133,125 1998
Stock Fund(R)
--------------------------------------------------------------------------------------
1.179742 1.201960 1,722,849 1997
--------------------------------------------------------------------------------------
1.108683 1.179742 2,213,126 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - 1.287377 1.214689 13,917,762 1998
Class A
--------------------------------------------------------------------------------------
1.216800 1.287377 2,363,601 1997
--------------------------------------------------------------------------------------
1.114642 1.216800 2,314,772 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging 1.000000 1.140152 5,986 1998
Growth Fund - Common Class
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
**The 7-day yield on the Short-Term Investment Trust - Treasury Portfolio -
Institutional Class as of December 31, 1998 was 2.47%.
53
<PAGE> 54
Variable Account Annual Expense Fee of 0.70% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & 1.000000 1.097739 36,320 1998
Growth
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: 1.000000 1.084406 43,124 1998
International Discovery Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 1.000000 1.080275 52,910 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap 1.000000 1.133431 23,028 1998
Stock Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.547042 4.584920 3,080,222 1998
Fund, Inc.
--------------------------------------------------------------------------------------
2.761054 3.547042 724,635 1997
--------------------------------------------------------------------------------------
2.450480 2.761054 2,645,579 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class 1.000000 1.018821 1,037 1998
F
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 1.000000 1.089444 1,223 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield 1.000000 1.064934 116 1998
Fund - Class T
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 1.000000 1.172584 3,535 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund 1.000000 1.023803 1,276 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.152311 819,842 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.110341 382,730 1998
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.145999 1,312,884 1998
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
54
<PAGE> 55
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LifeDesigns Series - The 1.000000 1.143522 1,127,941 1998
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.131933 455,658 1998
Moderatly Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.783760 26.901646 1,298,643 1998
--------------------------------------------------------------------------------------
14.989429 20.783760 218,220 1997
--------------------------------------------------------------------------------------
13.111701 14.989429 664,951 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.016489 3.147557 3,320,018 1998
Fund*
--------------------------------------------------------------------------------------
2.889720 3.016489 1,244,833 1997
--------------------------------------------------------------------------------------
2.810849 2.889720 6,170,419 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.093694 97,706 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 0.961707 0.964638 589,435 1998
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners 1.000000 1.041968 46,617 1998
Trust
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - 1.000000 1.061002 67,659 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige International Fund 1.000000 1.092070 2,686 1998
- - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth 1.000000 1.139564 39,909 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value 1.000000 1.049429 858 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - 1.000000 1.090386 7,654 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
55
<PAGE> 56
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oppenheimer Global Fund - 1.000000 1.106594 942 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - 1.289527 1.217936 7,746,564 1998
Class A
--------------------------------------------------------------------------------------
1.217615 1.289527 1,164,252 1997
--------------------------------------------------------------------------------------
1.114645 1.217615 5,552,808 1996
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging 1.000000 1.140301 882 1998
Growth Fund - Common Class
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
56
<PAGE> 57
Variable Account Annual Expense Fee of 0.65% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Growth 5.869391 7.975584 1,377,500 1998
--------------------------------------------------------------------------------------
4.776599 5.869391 2,322,606 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.745683 2.333533 9,983,888 1998
--------------------------------------------------------------------------------------
1.474619 1.745683 19,969,711 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), 2.343312 2.448428 722,007 1998
Inc.
--------------------------------------------------------------------------------------
2.185294 2.343312 753,555 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth 2.433557 2.398586 125,423 1998
Fund
--------------------------------------------------------------------------------------
1.949492 2.433557 297,366 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 1.307818 1.404671 558,667 1998
Securities Fund: 2-5 Years
- - Institutional Shares
--------------------------------------------------------------------------------------
1.238301 1.307818 579,571 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 4.675440 4.866016 142,236 1998
Fund
--------------------------------------------------------------------------------------
4.139531 4.675440 61,610 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 1.944675 2.541159 11,832,023 1998
--------------------------------------------------------------------------------------
1.597582 1.944675 19,667,377 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 6.932074 7.749762 4,532,595 1998
--------------------------------------------------------------------------------------
5.639098 6.932074 8,086,997 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 1.813149 2.407162 5,041,523 1998
--------------------------------------------------------------------------------------
1.494160 1.813149 6,992,191 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 1.838136 2.563678 1,453,622 1998
--------------------------------------------------------------------------------------
1.604136 1.838136 2,776,451 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 1.603749 1.857778 1,260,820 1998
--------------------------------------------------------------------------------------
1.388317 1.603749 2,031,661 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Investment Company of 2.287566 2.794045 1,858,205 1998
America(R), Inc.
--------------------------------------------------------------------------------------
1.890348 2.287566 2,872,363 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income 1.341206 1.424580 278,580 1998
Portfolio
--------------------------------------------------------------------------------------
1.248067 1.341206 277,396 1997
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
57
<PAGE> 58
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R)Growth Opportunities 9.053391 11.618570 180,839 1998
Fund - Class A
--------------------------------------------------------------------------------------
7.676856 9.053391 212,160 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - 6.196477 6.219656 253,885 1998
Class A
--------------------------------------------------------------------------------------
5.615972 6.196477 418,967 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Massachusetts Investors 16.040180 22.310477 64,922 1998
Growth Stock Fund - Class A
--------------------------------------------------------------------------------------
12.126811 16.040180 117,830 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.872287 4.760794 88,677 1998
Class D
--------------------------------------------------------------------------------------
3.194767 3.872287 269,417 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 1.713822 1.742771 1,466,182 1998
Fund, Inc.
--------------------------------------------------------------------------------------
1.527855 1.713822 4,309,283 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 18.192202 24.494833 297,345 1998
Class A
--------------------------------------------------------------------------------------
14.574047 18.192202 377,276 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.854445 4.750689 4,199,459 1998
A
--------------------------------------------------------------------------------------
3.048108 3.854445 6,307,757 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 1.508603 1.923629 5,122,867 1998
Index Portfolio
--------------------------------------------------------------------------------------
1.234422 1.508603 5,095,657 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. 12.598501 16.927940 52,182 1998
- - Class A
--------------------------------------------------------------------------------------
11.006405 12.598501 124,591 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Short-Term Investments 1.227585 1.286263 891,584 1998
Trust - Treasury Portfolio
- - Institutional Class*
--------------------------------------------------------------------------------------
1.188793 1.227585 238,580 1997
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International 1.204372 1.389689 1,610,019 1998
Stock Fund(R)
--------------------------------------------------------------------------------------
1.193159 1.204372 4,374,310 1997
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Short-Term Investment Trust - Treasury Portfolio -
Institutional Class as of December 31, 1998 was 2.47%.
58
<PAGE> 59
Variable Account Annual Expense Fee of 0.60% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LifeDesigns Series - The 1.000000 1.150285 296,908 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.108390 97,738 1998
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.143985 193,617 1998
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.141512 169,925 1998
Moderatly Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.129944 135,133 1998
Moderately Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - 1.000000 1.061142 38 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige International Fund 1.000000 1.092213 19,996 1998
- - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth 1.000000 1.139713 22,783 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value 1.000000 1.049566 24,429 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - 1.000000 1.090529 33,702 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
59
<PAGE> 60
Variable Account Annual Expense Fee of 0.55% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & 1.000000 1.097955 39,351 1998
Growth - Investor Class
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: 1.000000 1.084619 7,164 1998
International Discovery
Fund - Investor Class
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 1.000000 1.080487 20,457 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.532278 4.557584 2,140,647 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 1.000000 1.089659 5,256 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield 1.000000 1.065207 2,276 1998
Fund - Class T
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 1.000000 1.172815 5,449 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.697282 26.741341 904,019 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.003821 3.129626 2,277,564 1998
Fund*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.093909 4,693 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 0.961325 0.962506 494,950 1998
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners 1.000000 1.042174 1,093 1998
Trust
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Fund - 1.000000 1.106811 6,579 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
60
<PAGE> 61
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Templeton Foreign Fund - 1.284158 1.210671 1.210671 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging 1.000000 1.140526 8,854 1998
Growth Fund - Common Class
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
61
<PAGE> 62
Variable Account Annual Expense Fee of 0.50% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Growth 5.842997 7.922098 359,828 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.737833 2.317883 3,364,116 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), 2.332586 2.431945 268,515 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 1.301886 1.395671 281,752 1998
Securities Fund: 2-5 Years
- - Institutional Shares
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 4.654233 4.834839 15,722 1998
Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 1.935931 2.524114 6,920,209 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 6.900916 7.697797 2,032,139 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R)Fund 1.800499 2.391021 2,481,152 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 1.829868 2.546479 554,256 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Puritan(R)Fund 1.596539 1.845320 1,058,070 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Investment Company of 2.277283 2.775312 1,244,473 1998
America(SM), Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income 1.335173 1.415024 100,650 1998
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities 9.012670 11.540626 63,546 1998
Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - 6.168371 6.179806 106,230 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
62
<PAGE> 63
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts Investors 15.968069 22.160876 22,289 1998
Growth Stock Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.854877 4.728868 31,217 1998
Class D
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 1.706116 1.731080 658,443 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 18.110411 24.330583 60,549 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.837109 4.718816 1,141,130 1998
A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 1.501834 1.910747 2,027,825 1998
Index Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. 12.541848 16.814429 24,055 1998
- - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Short-Term Investments 1.222017 1.278022 86,239 1998
Trust - Treasury Portfolio
- - Institutional Class*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International 1.198954 1.380367 1,224,755 1998
Stock Fund(R)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Short-Term Investment Trust - Treasury Portfolio -
Institutional Class as of December 31, 1998 was 2.47%.
63
<PAGE> 64
Variable Account Annual Expense Fee of 0.45% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LifeDesigns Series - The 1.000000 1.150582 211,746 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.108677 207,470 1998
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.144281 114,698 1998
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.141807 154,400 1998
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.130236 55,915 1998
Moderately Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth 1.000000 1.139937 6,708 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value 1.000000 1.049773 7,855 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - 1.000000 1.090743 17,596 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
64
<PAGE> 65
Variable Account Annual Expense Fee of 0.40% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & 1.000000 1.098171 636 1998
Growth - Investor Class
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Growth 5.867425 7.987376 2,228,401 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: 1.000000 1.084832 456,421 1998
International Discovery
Fund - Investor Class
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.745098 2.336984 23,187,750 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), 2.342504 2.452190 861,657 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 1.000000 1.080700 7,474 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.532278 4.558760 1,100,730 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Evergreen Income and Growth 2.432742 2.402138 242,926 1998
Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class 1.000000 1.019222 170,453 1998
F
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated U.S. Government 1.307377 1.406762 1,119,202 1998
Securities Fund: 2-5 Years
- - Institutional Shares
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 1.000000 1.089873 930 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income 4.673860 4.873259 53,798 1998
Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Contrafund 1.944023 2.544916 21,126,009 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 6.929751 7.761233 7,558,249 1998
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
65
<PAGE> 66
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Magellan(R)Fund 1.812541 2.410721 7,449,476 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 1.837520 2.567467 3,023,192 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Puritan(R)Fund 1.603211 1.860527 2,399,715 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 1.000000 1.173045 278,971 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Investment Company of 2.286799 2.798178 3,259,397 1998
America(SM), Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income 1.340756 1.426689 616,144 1998
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)Growth Opportunities 9.050357 11.635755 203,691 1998
Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MFS(R)High Income Fund - 6.194384 6.228913 451,743 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Massachusetts Investors 16.034807 22.343460 120,267 1998
Growth Stock Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley 1.000000 1.107260 10,064 1998
Institutional Fund, Inc. -
Equity Growth Portfolio -
Class B
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.697282 26.748259 481,772 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.870989 4.767838 255,124 1998
Class D
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.016489 3.154895 2,708,726 1998
Fund*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.094125 19,071 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
66
<PAGE> 67
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nationwide Separate Account 0.961784 0.966626 454,960 1998
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Guardian 1.713248 1.745353 4,117,644 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 18.186106 24.531046 684,364 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.853154 4.757715 7,057,963 1998
A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 1.508098 1.926474 9,208,478 1998
Index Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. 12.594278 16.952971 145,547 1998
- - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Short-Term Investments 1.227171 1.288178 763,114 1998
Trust - Treasury Portfolio
- - Institutional Class**
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price International 1.203968 1.391746 4,818,444 1998
Stock Fund(R)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - 1.284158 1.210984 1,884,614 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging 1.000000 1.140750 224 1998
Growth Fund - Common Class
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
**The 7-day yield on the Short-Term Investment Trust - Treasury Portfolio -
Institutional Class as of December 31, 1998 was 2.47%.
67
<PAGE> 68
Variable Account Annual Expense Fee of 0.30% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Growth 5.867425 7.988751 207,682 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: Ultra 1.745098 2.337386 1,622,498 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 1.000000 1.080842 116 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.532278 4.559545 132,409 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 1.000000 1.090017 6 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley 1.000000 1.107406 6 1998
Institutional Fund, Inc. -
Equity Growth Portfolio -
Class B
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.697282 26.752871 163,349 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 3.870989 4.768660 72,274 1998
Class D
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.003821 3.131607 289,513 1998
Fund*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.094268 81 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 0.931325 0.962923 19,582 1998
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - 18.186106 24.535266 141,978 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class 3.853154 4.758533 935,379 1998
A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
68
<PAGE> 69
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Templeton Foreign Fund - 1.284158 1.211193 572,528 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
69
<PAGE> 70
\
Variable Account Annual Expense Fee of 0.25% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Dreyfus Third Century 3.532278 4.559937 340,211 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 1.000000 1.090088 1,714 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.150978 144,398 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.109060 85,045 1998
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.144675 17,475 1998
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.142200 138,659 1998
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.130626 104,938 1998
Moderately Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.697282 26.755178 104,524 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.003821 3.132003 662,386 1998
Fund*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.094340 76,493 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 0.961325 0.963006 84,982 1998
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - 1.000000 1.091029 3,784 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
70
<PAGE> 71
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Templeton Foreign Fund - 1.284158 1.211297 599,440 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
71
<PAGE> 72
Variable Account Annual Expense Fee of 0.15% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century: Income & 1.000000 1.098531 51,660 1998
Growth
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
American Century: 1.000000 1.085187 25,538 1998
International Discovery
Fund - Investor Class
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Appreciation Fund, 1.000000 1.081055 86,357 1998
Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Dreyfus Premier Midcap 1.000000 1.134248 4,299 1998
Stock Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century 3.547042 4.602327 2,316,305 1998
Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Federated Bond Fund - Class 1.000000 1.019557 19,138 1998
F
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth 1.000000 1.090231 38,722 1998
Opportunities Fund - Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Fidelity Advisor High Yield 1.000000 1.065933 55,862 1998
Fund - Class T
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Dynamics Fund 1.000000 1.173429 2,672 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
INVESCO Total Return Fund 1.024544 12,945 1998
--------------------------------------------------------------------------------------
1.000000
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.151176 1,783 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.142397 3,674 1998
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.130821 1,110 1998
Moderately Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
72
<PAGE> 73
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Morgan Stanley 1.000000 1.107624 2,580 1998
Institutional Fund, Inc. -
Equity Growth Portfolio -
Class B
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 20.783760 27.003819 1,044,190 1998
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market 3.003821 3.132794 3,344,001 1998
Fund*
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide S&P 500(R)Index 1.000000 1.094484 25,400 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Nationwide Separate Account 0.961325 0.963171 313,865 1998
Trust - Nationwide Small
Company Fund
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Partners 1.000000 1.042722 10 1998
Trust
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Fund - 1.000000 1.1007392 1,884 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund - 1.289527 1.222569 4,225,950 1998
Class A
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging 1.000000 1.141124 2,964 1998
Growth Fund - Common Class
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
*The 7-day yield on the Nationwide(R) Money Market Fund as of December 31, 1998
was 3.74%.
73
<PAGE> 74
Variable Account Annual Expense Fee of 0.10% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LifeDesigns Series - The 1.000000 1.151275 2,524 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.109347 4,359 1998
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.144971 9,964 1998
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.142495 19,416 1998
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
74
<PAGE> 75
Variable Account Annual Expense Fee of 0.00% of average net assets
<TABLE>
<CAPTION>
- ----------------------------- ------------------------ ----------------------- ------------------------ ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT NUMBER OF ACCUMULATION YEAR
VALUE AT BEGINNING OF VALUE AT END OF PERIOD UNITS OUTSTANDING AT
PERIOD THE END OF THE PERIOD
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LifeDesigns Series - The 1.000000 1.157296 691,326 1998
Aggressive Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.115144 114,219 1998
Conservative Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.150956 257,772 1998
Moderate Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.148468 401,494 1998
Moderately Aggressive
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
LifeDesigns Series - The 1.000000 1.136829 112,759 1998
Moderately Conservative
Portfolio
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Balanced Fund - 1.000000 1.061978 25 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige International Fund 1.000000 1.093071 70
- - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Growth 1.000000 1.140610 2,886 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Large Cap Value 1.000000 1.050394 3,334 1998
Fund - Class Y
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Prestige Small Cap Fund - 1.000000 1.091387 6,727 1998
Class Y
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
75
