<PAGE> 1
File No. 2-91214*
811-1979
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933** /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 24 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 28 / /
(Exact Name of Registrant)
OHIO NATIONAL VARIABLE ACCOUNT B
(Name of Depositor)
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Address of Depositor's Principal Executive Offices)
One Financial Way
Cincinnati, Ohio 45242
(Depositor's Telephone Number)
(513) 794-6100
(Name and Address of Agent for Service)
Ronald L. Benedict, Corporate Vice President, Counsel and Secretary
The Ohio National Life Insurance Company
P.O. Box 237
Cincinnati, Ohio 45201
Notice to:
W. Randolph Thompson, Esq.
Of Counsel
Jones & Blouch L.L.P.
Suite 405 West
1025 Thomas Jefferson Street, N.W.
Washington, D.C. 20007
Approximate Date of Proposed Public Offering: As soon after the effective date
of this amendment as is practicable.
It is proposed that this filing will become effective (check appropriate space):
immediately upon filing pursuant to paragraph (b)
---
on (date) pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)(i)
---
X on May 1, 1999 pursuant to paragraph (a)(i) of Rule 485.
---
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE> 2
* The prospectus contained in this registration statement also relates to
variable annuity contracts no longer being sold but for which additional
purchase payments are accepted and which are covered by earlier registration
statements under Files No. 2-36591, 2-73471, 2-68456 and 2-78653.
** Certain contracts filed pursuant to Files No. 2-73471 and 2-68456 contain a
Guarantee of the Depositor. The value of the contracts to which the Guarantee
relates is undeterminable. Pursuant to Rule 456(m) under the 1933 Act, no
separate fee is being paid for the Guarantee.
OHIO NATIONAL VARIABLE ACCOUNT B
N-4 Item Caption in Prospectus
- -------- ---------------------
1 Cover Page
2 Glossary of Special Terms
3 Not applicable
4 Accumulation Unit Values
5 The Ohio National Companies
6 Deductions and Expenses
7 Description of Variable Annuity Contracts
8 Annuity Period
9 Death Benefit
10 Accumulation Period
11 Surrender and Partial Withdrawal
12 Federal Tax Status
13 Not applicable
14 Table of Contents
Caption in Statement of Additional Information
----------------------------------------------
15 Cover Page
16 Table of Contents
17 Not applicable
18 Custodian
Independent Certified Public Accountants
19 See Prospectus (Distribution of Variable Annuity
Contracts)
20 Underwriter
21 Calculation of Money Market Subaccount Yield
<PAGE> 3
Total Return
22 See Prospectus (Annuity Period)
23 Financial Statements
Caption in Part C
-----------------
24 Financial Statements and Exhibits
25 Directors and Officers of the Depositor
26 Persons Controlled by or Under Common Control with
the Depositor or Registrant
27 Number of Contractowners
28 Indemnification
29 Principal Underwriter
30 Location of Accounts and Records
31 Not applicable
32 Undertakings and Representations
<PAGE> 4
PART A
PROSPECTUS
<PAGE> 5
PROSPECTUS
FLEXIBLE PURCHASE PAYMENT
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OHIO NATIONAL VARIABLE ACCOUNTS A AND B
THE OHIO NATIONAL LIFE INSURANCE COMPANY
One Financial Way
Montgomery, Ohio 45242
Telephone (513) 794-6452
This prospectus offers variable annuity contracts providing accumulation of
values and payment of benefits on a variable and/or fixed basis.
Variable annuities provide contract values and lifetime annuity payments that
vary with the investment results of the Funds you choose. You cannot be sure
that the contract value or annuity payments will equal or exceed your purchase
payments.
The variable annuity contracts are designed for:
- - annuity purchase plans adopted by public school systems and certain tax-exempt
organizations described in Section 501(c)(3) of the Internal Revenue Code (the
"Code"), qualifying for tax-deferred treatment pursuant to Section 403(b) of
the Code,
- - other employee pension or profit-sharing trusts or plans qualifying for
tax-deferred treatment under Section 401(a), 401(k) or 403(a) of the Code,
- - individual retirement annuities qualifying for tax-deferred treatment under
Section 408 or 408A of the Code,
- - state and municipal deferred compensation plans and
- - non-tax-qualified plans.
The minimum purchase payment is $25. You may make additional payments at any
time. We may limit your total purchase payments to $1,000,000.
You may direct the allocation of your purchase payments to one or more (but not
more than 10 variable) subaccounts of Ohio National Variable Account A ("VAA")
for tax-qualified contracts or Ohio National Variable Account B ("VAB") for
non-tax-qualified contracts. VAA and VAB are separate accounts of The Ohio
National Life Insurance Company. The assets of VAA and VAB are invested in
shares of the Funds. See page 2 for the list of available Funds. See also the
accompanying prospectuses of the Funds. The Fund prospectuses might also contain
information about other funds that are not available for these contracts.
You may withdraw all or part of the contract's value before the annuity payout
date. You might incur federal income tax penalties for those early withdrawals.
We may charge you a surrender charge equal to 7 3/4% of your total purchase
payments made during the 96 months immediately preceding the withdrawal, or
7 3/4% of the amount withdrawn, if less. After the first year, you may withdraw
up to 10% of the contract value each year without this charge. Your exercise of
contract rights may be subject to the terms of your qualified employee trust or
annuity plan. This prospectus contains no information concerning your trust or
plan.
You may revoke the contract without penalty, within 10 days of receiving it (or
a longer period if required by state law).
KEEP THIS PROSPECTUS FOR FUTURE REFERENCE. IT SETS FORTH THE INFORMATION ABOUT
VAA, VAB AND THE VARIABLE ANNUITY CONTRACTS THAT YOU SHOULD KNOW BEFORE
INVESTING. ADDITIONAL INFORMATION ABOUT VAA AND VAB HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IN STATEMENTS OF ADDITIONAL INFORMATION DATED
MAY 1, 1999. THE STATEMENTS OF ADDITIONAL INFORMATION FOR EACH OF VAA AND VAB
ARE INCORPORATED HEREIN BY REFERENCE. THEY ARE AVAILABLE UPON REQUEST AND
WITHOUT CHARGE BY WRITING OR CALLING US AT THE ABOVE ADDRESS. THE TABLE OF
CONTENTS FOR THE STATEMENTS OF ADDITIONAL INFORMATION IS ON PAGE 2.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
MAY 1, 1999
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Funds............................................. 2
Fee Table................................................... 2
Accumulation Unit Values.................................... 4
Financial Statements...................................... 9
Ohio National............................................... 9
Ohio National Life........................................ 9
Ohio National Variable Accounts A and B................... 9
Ohio National Fund, Inc................................... 10
Mixed and Shared Funding.................................. 10
Voting Rights............................................. 10
Distribution of Variable Annuity Contracts.................. 11
Deductions and Expenses..................................... 11
Surrender Charge.......................................... 11
Contract Administration Charge............................ 11
Deduction for Administrative Expenses..................... 12
Deduction for Risk Undertakings........................... 12
Transfer Fee.............................................. 12
Deduction for State Premium Tax........................... 12
Fund Expenses............................................. 12
Description of Variable Annuity Contracts................... 13
10-Day Free Look.......................................... 13
Accumulation Period....................................... 13
Annuity Period............................................ 17
Other Contract Provisions................................. 19
Federal Tax Status.......................................... 20
Prior Contracts............................................. 24
Accumulation Unit Values for Prior Contracts................ 25
IRA Disclosure Statement.................................... 33
STATEMENT OF ADDITIONAL INFORMATION CONTENTS
Custodian
Independent Certified Public Accountants
Underwriter
Calculation of Money Market Yield
Total Return
The Year 2000 Issue
Loans under Tax-Sheltered Annuities (VAA only)
Financial Statements for Ohio National Life and VAA or VAB
</TABLE>
<PAGE> 7
AVAILABLE FUNDS
<TABLE>
<S> <C>
ADVISER/SUBADVISER
Ohio National Investments, Inc.
OHIO NATIONAL FUND INC. Ohio National Investments, Inc.
Equity Portfolio Ohio National Investments, Inc.
Money Market Portfolio Ohio National Investments, Inc.
Bond Portfolio Federated Global Investment Management
Omni Portfolio (a flexible portfolio Corp.
fund) Federated Global Investment Management
International Portfolio Corp.
International Small Company Portfolio T. Rowe Price Associates, Inc.
Capital Appreciation Portfolio Founders Asset Management LLC
Small Cap Portfolio Strong Capital Management, Inc.
Aggressive Growth Portfolio Pilgrim Baxter & Associates, Ltd.
Core Growth Portfolio Robertson Stephens Investment Management,
Growth & Income Portfolio L.P.
S&P 500 Index Portfolio Ohio National Investments, Inc.
Social Awareness Portfolio Ohio National Investments, Inc.
</TABLE>
FEE TABLE
<TABLE>
<CAPTION>
CONTRACTOWNER TRANSACTION EXPENSES
----------------------------------
<S> <C>
Deferred Sales Load (this "surrender charge"
is a percentage of lesser of payments made
in the prior 8 yrs., or amount surrendered) 7.75%
(Thereafter) 0%
Exchange (transfer) Fee $3 (currently no charge for the first 4 transfers per year)
Annual Contract Fee $30
</TABLE>
<TABLE>
<S> <C>
VAA AND VAB ANNUAL EXPENSES (as a percentage of
average account value)
Mortality and Expense Risk Fees*** 0.85%
Account Fees and Expenses 0.25%
----
Total VAA and VAB Annual Expenses 1.10%
</TABLE>
2
<PAGE> 8
FUND ANNUAL EXPENSES (after fee waiver*) (as a percentage of the Fund's average
net assets)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Equity 0.53% 0.11% 0.64%
Money Market* 0.25% 0.16% 0.41%
Bond 0.58% 0.14% 0.72%
Omni 0.54% 0.11% 0.65%
International* 0.85% 0.27% 1.12%
International Small Company 1.00% 0.40% 1.40%
Capital Appreciation 0.80% 0.13% 0.93%
Small Cap 0.80% 0.11% 0.91%
Aggressive Growth 0.80% 0.14% 0.94%
Core Growth 0.95% 0.18% 1.13%
Growth & Income 0.85% 0.12% 0.97%
S&P 500 Index 0.40% 0.09% 0.49%
Social Awareness 0.60% 0.21% 0.81%
</TABLE>
EXAMPLE -- If you surrendered your contract at the end of the applicable time
period, you would pay the following aggregate expenses on a $1,000 investment in
each Fund, assuming 5% annual return:
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $96 $132 $177 $216
Money Market* 94 125 165 191
Bond 97 134 181 224
Omni 96 132 178 217
International* 101 146 202 266
International Small Company 104 154 215 293
Capital Appreciation 99 140 192 246
Small Cap 99 141 191 244
Aggressive Growth 99 141 192 247
Core Growth 101 146 202 267
Growth & Income 100 142 194 250
S&P 500 Index 95 128 169 200
Social Awareness 98 137 186 234
</TABLE>
EXAMPLE -- If you do not surrender your contract at the end of the applicable
time period, you would pay the following aggregate expenses on the same
investment:
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $19 $58 $100 $216
Money Market* 16 51 88 191
Bond 20 60 104 224
Omni 19 58 100 217
International* 24 72 124 266
International Small Company 26 81 138 293
Capital Appreciation 22 67 114 246
Small Cap 21 66 113 244
Aggressive Growth 22 67 115 247
Core Growth 24 73 125 267
Growth & Income 22 68 116 250
S&P 500 Index 17 53 92 200
Social Awareness 20 63 108 234
</TABLE>
3
<PAGE> 9
*For the Money Market and International portfolios the investment adviser is
voluntarily waiving 0.05% of the management fees. Without those waivers, the
management fees are 0.30% for the Money Market portfolio and 0.90% for the
International portfolio.
EXAMPLE -- Without the voluntary fee waivers, if you surrendered your contract
at the end of the applicable time period, you would pay the following aggregate
expense on a $1,000 investment in each Fund, assuming 5% annual return:
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market $ 94 $127 $168 $197
International 102 147 204 271
</TABLE>
EXAMPLE -- Without the voluntary fee waivers, if you do not surrender your
contract at the end of the applicable time period, you would pay the following
aggregate expenses on the same investment.
<TABLE>
<CAPTION>
1 3 5 10
YEAR YEARS YEARS YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market $ 17 $ 52 $ 90 $197
International 24 74 127 271
</TABLE>
***The Mortality and Expense risk fees may be changed at any time, but may not
be increased to more than 1.55%. We agree that the fees will not be increased on
any contract issued pursuant to this prospectus. See Deduction for Risk
Undertakings, page 12.
The purpose of the above table is to help you to understand the costs and
expenses that a you will bear directly or indirectly. THESE EXAMPLES SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSE. ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. Note that the expense amounts shown in the
examples are aggregate amounts for the total number of years indicated. Neither
the table nor the examples reflect any premium taxes that may apply to a
contract. These currently range from 0% to 3.5%. The above table and examples
reflect only the charges for contracts currently offered by this prospectus and
not other contracts that we may offer. For further details, see Deduction for
State Premium Tax, page 12.
The net annualized yield for the Money Market fund in these contracts was 4.09%
for the seven days ended December 31, 1998.
ACCUMULATION UNIT VALUES
The International fund began on April 30, 1993. The Capital Appreciation and
Small Cap funds began on March 31, 1995. The International Small Company and
Aggressive Growth funds began on October 2, 1995. The Core Growth, Growth &
Income, S&P 500 Index and Social Awareness funds began on January 3, 1997.
Values for series of contracts that we no longer issue are listed on pages 24 to
30.
VAA EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 18.231104 $ 22.218759 376,442
1990 22.218759 21.128705 589,220
1991 21.128705 25.116964 802,548
1992 25.116964 26.717609 1,048,285
1993 26.717609 30.151694 1,181,609
1994 30.151694 29.897240 1,288,052
1995 29.897240 37.616119 1,394,001
1996 37.616119 44.033562 1,505,499
1997 44.033562 51.466766 1,554,930
1998 51.466766 53.820037 1,469,467
</TABLE>
4
<PAGE> 10
VAA MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 12.642674 $ 13.616583 53,959
1990 13.616583 14.530988 92,671
1991 14.530988 15.168901 58,620
1992 15.168901 15.479601 42,940
1993 15.479601 15.731262 50,340
1994 15.731262 16.181828 69,638
1995 16.181828 16.904534 130,218
1996 16.904534 17.584720 175,232
1997 17.584720 18.327573 122,725
1998 18.327573 19.104543 133,824
</TABLE>
VAA BOND
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 14.402246 $ 15.771471 28,554
1990 15.771471 16.819063 34,836
1991 16.819063 18.791755 53,151
1992 18.791755 19.989232 83,991
1993 19.989232 21.885503 118,872
1994 21.885503 20.817057 118,724
1995 20.817057 24.481177 130,720
1996 24.481177 25.112262 139,016
1997 25.112262 27.144385 128,523
1998 27.144385 28.249407 133,824
</TABLE>
VAA OMNI
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 15.223726 $ 17.385702 620,509
1990 17.385702 17.525899 690,864
1991 17.524899 20.479652 689,306
1992 20.479652 21.999497 853,840
1993 21.999497 24.557054 1,156,731
1994 24.557054 24.162172 1,248,250
1995 24.162172 29.337035 1,272,672
1996 29.337035 33.527373 1,384,658
1997 33.527373 39.180721 1,431,184
1998 39.180721 40.510184 1,380,277
</TABLE>
VAA INTERNATIONAL
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1993 $ 10.000000 $ 12.404596 387,372
1994 12.404596 13.259582 1,626,139
1995 13.259582 14.702847 1,803,630
1996 14.702847 16.648702 2,157,623
1997 16.648702 16.815722 2,305,256
1998 16.815722 17.278635 1,878,181
</TABLE>
5
<PAGE> 11
VAA INTERNATIONAL SMALL COMPANY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 10.125502 3,870
1996 10.125502 11.226306 68,964
1997 11.226306 12.399654 115,590
1998 12.399654 12.697451 113,662
</TABLE>
VAA CAPITAL APPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 11.370573 126,633
1996 11.370573 13.018249 379,717
1997 13.018249 14.832378 550,059
1998 14.832378 15.538473 606,078
</TABLE>
VAA SMALL CAP
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 12.201273 154,063
1996 12.201273 14.205207 454,045
1997 14.205207 15.240569 649,957
1998 15.240569 16.668731 665,332
</TABLE>
VAA AGGRESSIVE GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 10.499375 9,491
1996 10.499375 10.463801 107,442
1997 10.463801 11.646359 178,651
1998 11.646359 12.422862 200,721
</TABLE>
VAA CORE GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 9.586403 146,611
1998 9.586403 10.318290 138,652
</TABLE>
VAA GROWTH & INCOME
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 13.509406 146,772
1998 13.509406 14.309421 467,063
</TABLE>
VAA S&P 500 INDEX
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 13.031676 152,864
1998 13.031676 16.757375 684,474
</TABLE>
6
<PAGE> 12
VAA SOCIAL AWARENESS
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 12.426744 22,600
1998 12.426744 9.537309 49,169
</TABLE>
VAB EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 18.669469 $ 22.753001 212,938
1990 22.753001 21.636728 262,249
1991 21.636728 25.720884 312,047
1992 25.720884 27.360011 388,812
1993 27.360011 30.876667 499,176
1994 30.876667 30.616106 561,394
1995 30.616106 38.520577 622,321
1996 38.520577 45.092323 680,118
1997 45.092323 52.704246 695,574
1998 52.704246 55.144099 670,584
</TABLE>
VAB MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 12.750508 $ 13.732719 28,714
1990 13.732719 14.654912 37,310
1991 14.654912 15.298267 38,997
1992 15.298267 15.611622 15,107
1993 15.611622 15.865417 10,933
1994 15.865417 16.319825 43,614
1995 16.319825 17.048698 43,415
1996 17.048698 17.734674 83,494
1997 17.734674 18.483863 80,528
1998 18.483863 19.267463 54,060
</TABLE>
VAB BOND
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 13.327541 $ 14.594592 23,798
1990 14.594592 15.564009 20,973
1991 15.564009 17.389500 27,244
1992 17.389500 18.497622 39,037
1993 18.497622 20.252393 79,658
1994 20.252393 19.263675 84,726
1995 19.263675 22.654830 94,683
1996 22.654830 23.238374 100,642
1997 23.238374 25.118862 103,698
1998 25.118862 26.141439 122,870
</TABLE>
7
<PAGE> 13
VAB OMNI
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 15.141013 $ 17.291232 302,288
1990 17.291232 17.429676 317,239
1991 17.429676 20.368389 314,428
1992 20.368389 21.879988 396,691
1993 21.879988 24.423644 607,420
1994 24.423644 24.030898 658,067
1995 24.030898 29.177631 646,847
1996 29.177631 33.345205 703,470
1997 33.345205 38.967842 744,774
1998 38.967842 40.290085 724,292
</TABLE>
VAB INTERNATIONAL
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1993 $ 10.000000 $ 12.404596 269,335
1994 12.404596 13.259582 909,768
1995 13.259582 14.702847 909,290
1996 14.702847 16.648702 1,186,643
1997 16.648702 16.815772 1,230,232
1998 16.815772 17.278635 1,021,072
</TABLE>
VAB INTERNATIONAL SMALL COMPANY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 10.125502 10,852
1996 10.125502 11.226306 60,596
1997 11.226306 12.399654 106,262
1998 12.399654 12.697451 111,352
</TABLE>
VAB CAPITAL APPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 11.370573 130,970
1996 11.370573 13.018249 312,799
1997 13.018249 14.832378 372,993
1998 14.832378 15.538473 366,130
</TABLE>
VAB SMALL CAP
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 12.201273 15,532
1996 12.201273 14.205207 147,557
1997 14.205207 15.240569 212,467
1998 15.240569 16.668731 236,231
</TABLE>
8
<PAGE> 14
VAB AGGRESSIVE GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995 $ 10.000000 $ 10.499375 9,448
1996 10.499375 10.463801 68,715
1997 10.463801 11.646359 109,334
1998 11.646359 12.422862 104,679
</TABLE>
VAB CORE GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 9.586403 89,830
1998 9.586403 10.318290 97,692
</TABLE>
VAB GROWTH & INCOME
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 13.509406 144,903
1998 13.509406 14.309421 270,510
</TABLE>
VAB S&P 500 INDEX
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 13.031676 103,761
1998 13.031676 16.757375 342,016
</TABLE>
VAB SOCIAL AWARENESS
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 12.426744 25,632
1998 12.426744 9.537309 35,228
</TABLE>
FINANCIAL STATEMENTS
The complete financial statements of VAA or VAB, and of Ohio National Life,
including the Independent Auditors' Reports for them, are included in the
Statements of Additional Information for VAA and VAB.
OHIO NATIONAL
OHIO NATIONAL LIFE
Ohio National Life was organized under the laws of Ohio in 1909 as a stock life
insurance company. We are now ultimately owned by a mutual holding company (Ohio
National Mutual Holdings, Inc.) with the majority ownership being by our
policyholders. We write life, accident and health insurance and annuities in 47
states, the District of Columbia and Puerto Rico. Currently we have assets in
excess of $6.5 billion and equity in excess of $600 million. Our home office is
located at One Financial Way, Montgomery, Ohio 45242.
OHIO NATIONAL VARIABLE ACCOUNTS A AND B
We established VAA and VAB in 1969 as separate accounts under Ohio law for the
purpose of funding variable annuity contracts. Purchase payments for the
variable annuity contracts are allocated to one or more subaccounts of VAA or
VAB. However, contract values may not be allocated to more than 10 variable
subaccounts at any one time. Income, gains and losses, whether or not realized,
from assets allocated to VAA and VAB are credited to or charged against VAA or
VAB without regard to our other income, gains or losses. The assets maintained
in VAA
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<PAGE> 15
and VAB will not be charged with any liabilities arising out of our other
business. Nevertheless, all obligations arising under the contracts, including
the commitment to make annuity payments, are our general corporate obligations.
Accordingly, all of our assets are available to meet our obligations under the
contracts. VAA and VAB are registered as unit investment trusts under the
Investment Company Act of 1940.
The assets of each subaccount of VAA and VAB are invested at net asset value
(without an initial sales charge) in shares of a corresponding Fund.
OHIO NATIONAL FUND, INC.
Ohio National Fund is a mutual fund registered under the Investment Company Act
of 1940. The available Funds listed on page 2 are portfolios of Ohio National
Fund. The value of Fund investments fluctuates daily and is subject to the risk
that Fund management may not anticipate or make changes necessary in the
investments to meet changes in economic conditions.
The Funds receive investment advice, for a fee, from the investment adviser,
Ohio National Investments, Inc. The investment adviser pays these subadvisers to
manage certain Funds:
- - Federated Global Investment Management Corp. (sub-adviser to the International
and International Small Company portfolios)
- - T. Rowe Price Associates, Inc. (sub-adviser to the Capital Appreciation
portfolio)
- - Founders Asset Management LLC (sub-adviser to the Small Cap portfolio)
- - Strong Capital Management, Inc. (sub-adviser to the Aggressive Growth
portfolio)
- - Pilgrim Baxter & Associates, Ltd. (sub-adviser to the Core Growth portfolio)
- - Robertson Stephens Investment Management, L.P. (sub-adviser to the Growth &
Income portfolio)
For additional information concerning the Funds, including their investment
objectives, see the Ohio National Fund prospectus. Read it carefully before
investing. The Fund prospectus contains information about other funds that are
not available for these contracts.
MIXED AND SHARED FUNDING
In addition to being offered to VAA and VAB, Fund shares are offered to our
other separate accounts for variable annuity contracts and a separate account of
Ohio National Life Assurance Corporation for variable life insurance contracts
and qualified plans. Fund shares also may be offered to other insurance company
separate accounts. It is conceivable that in the future it may become
disadvantageous for both variable life and variable annuity separate accounts to
invest in the Funds. Although neither we nor the Funds currently foresee any
such disadvantage, the Board of Directors of the Funds will monitor events to
identify any material conflict between variable life and variable annuity
contract owners and to determine if any action should be taken. That could
possibly include the withdrawal of VAA's and/or VAB's participation in a Fund.
Material conflicts could result from such things as:
- - changes in state insurance law;
- - changes in federal income tax law;
- - changes in the investment management of any Fund; or
- - differences between voting instructions given by different types of contract
owners.
VOTING RIGHTS
We will vote Fund shares held in VAA and VAB at Fund shareholders meetings in
accordance with voting instructions received from contract owners. We will
determine the number of Fund shares for which you are entitled to give
instructions as described below. This determination will be within 90 days
before the shareholders meeting. Fund proxy material and forms for giving voting
instructions will be distributed to each owner. Fund
10
<PAGE> 16
shares held in VAA and VAB, for which no timely instructions are received, will
be voted by us in proportion to the instructions that we do receive for each of
VAA and VAB.
Until annuity payments begin, the number of Fund shares for which instructions
may be given to us is determined by dividing your contract value in each Fund by
the net asset value of a share of the corresponding Fund as of the same date.
After annuity payments begin, the number of Fund shares for which such
instructions may be given is determined by dividing the actuarial liability for
your variable annuity by the net asset value of a Fund share as of the same
date. Generally, the number of votes tends to decrease as annuity payments
progress.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The variable annuity contracts are sold by our insurance agents who are also
registered representatives (a) of The O.N. Equity Sales Company ("ONESCO"), a
wholly-owned subsidiary of ours, or (b) of other broker-dealers that have
entered into distribution agreements with Ohio National Equities, Inc. ("ONEQ"),
another wholly-owned subsidiary of ours. ONEQ is the principal underwriter of
the contracts. ONESCO, ONEQ and the other broker dealers are registered under
the Securities Exchange Act of 1934, and are members of the National Association
of Securities Dealers, Inc. We pay ONEQ 6.75% of purchase payments during the
first contract year and 5.5% of purchase payments made after the contract has
been in effect for more than a year. ONEQ then pays part of that amount to
ONESCO and the other broker dealers. ONESCO and the other broker-dealers pay
their registered representatives from their own funds. Purchase payments on
which nothing is paid to registered representatives may not be included in
amounts on which the sales compensation will be paid to ONEQ. If our surrender
charge is not sufficient to recover the fee paid to ONEQ, any deficiency will be
made up from our general assets. These include, among other things, any profit
from the mortality and expense risk charges. The address of ONESCO and ONEQ is
One Financial Way, Montgomery, Ohio 45242.
DEDUCTIONS AND EXPENSES
SURRENDER CHARGE
There is no deduction from purchase payments to pay sales expense. We may assess
a surrender charge if you surrender the contract or withdraw part of its value.
The purpose of this charge is to defray expenses relating to the sale of the
contract, including compensation to sales personnel, cost of sales literature
and prospectuses, and other expenses related to sales activity. This surrender
charge equals the lesser of:
- - 7 3/4% of the total purchase payments made during the 96 months immediately
preceding the surrender or partial withdrawal, or
- - 7 3/4% of the amount being surrendered or withdrawn.
On or after the first contract anniversary, you may make a partial withdrawal of
not more than 10% of the contract value (as of the date the partial withdrawal
is requested) once each contract year without the surrender charge. The
surrender charge does not apply to surrenders or withdrawals from contracts
issued in connection with our executive officers' and directors' voluntary
deferred compensation plan. The surrender charge will not be imposed when the
values of one or more contracts owned by the trustee of a retirement plan
qualifying under Section 401, 403(b) or 457 of the Code are transferred to a
group annuity contract issued by us. If you use values of at least $250,000 from
an Ohio National Life fixed annuity to provide the initial purchase payment for
a contract offered by this prospectus, this contract will be treated (for
purposes of determining the surrender charge) as if it were issued at the same
time as the fixed annuity and as if the purchase payments made for the fixed
annuity had been made for this contract.
CONTRACT ADMINISTRATION CHARGE
Each year on the contract anniversary (or when you surrender the contract), we
will deduct a contract administration charge of $30 from the contract value.
This helps to repay us for maintaining the contract. We
11
<PAGE> 17
guarantee not to increase the contract administration charge. The charge is not
made after the annuity payout date.
DEDUCTION FOR ADMINISTRATIVE EXPENSES
At the end of each valuation period we deduct an amount equal to 0.25% on an
annual basis of the contract value. This deduction is designed to reimburse us
for expenses not covered by the contract administration charge. Examples of
these expenses are accounting, auditing, legal, contract owner services, reports
to regulatory authorities and contract owners, contract issue, etc.
DEDUCTION FOR RISK UNDERTAKINGS
We guarantee that until the annuity payout date, the contract's value will not
be affected by any excess of sales and administrative expenses over the
deductions for them. We also guarantee to pay a death benefit in the event of
the annuitant's death prior to the annuity payout date. (This death benefit is
described on page 16). After the annuity payout date, we guarantee that variable
annuity payments will not be affected by adverse mortality experience or
expenses.
For assuming these risks, when we determine the accumulation unit values and the
annuity unit values for each subaccount, we make a deduction from the applicable
investment results equal to 0.85% of the contract value on an annual basis. We
may decrease that deduction at any time and we may increase it not more often
than annually to not more than 1.55% on an annual basis. However, we agree that
the deduction for these risk undertakings for contracts purchased on and after
November 1, 1997 shall not be increased to more than the rate in effect at the
time the contract is issued. We may discontinue this limitation on our right to
increase the deduction, but only as to any contracts purchased after notice of
the discontinuance. The risk charge is an indivisible whole of the amount
currently being deducted. However, we believe that a reasonable allocation would
be 0.35% for mortality risk, and 0.50% for expense risk. We hope to realize a
profit from this charge. However, there will be a loss if the deduction fails to
cover the actual risks involved.
TRANSFER FEE
We may charge a transfer fee of $3 (which may be increased to $15) for each
transfer from one subaccount to another. The fee is charged against the
subaccount from which the transfer is effected. Currently, we do not charge for
your first four transfers each year.
DEDUCTION FOR STATE PREMIUM TAX
Most states do not presently charge a premium tax for these contracts. Where a
tax applies, the rates for tax-qualified contracts are presently 0.5% in
California, 1.0% in Puerto Rico and West Virginia, 2.0% in Kentucky and 2.25% in
the District of Columbia. For non-tax-qualified contracts, the rates are 1.0% in
Puerto Rico, West Virginia and Wyoming, 1.25% in South Dakota, 2.0% in Kansas,
Kentucky and Maine, 2.25% the District of Columbia, 2.35% in California and 3.0%
in Nevada. The deduction for premium taxes will be made when incurred. Normally,
that is not until annuity payments begin. However, in Kansas, South Dakota and
Wyoming, they are presently being deducted from purchase payments.
FUND EXPENSES
There are deductions from, and expenses paid out of, the assets of the Funds.
These are described in the Fund prospectus.
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<PAGE> 18
DESCRIPTION OF VARIABLE ANNUITY CONTRACTS
10-DAY FREE LOOK
You may revoke the contract at any time until the end of 10 days after you
receive the contract (or such longer periods as may be required by your state
law) and get a refund of the entire purchase price. To revoke you must return
the contract to us within the free look period. In those states where required
by state law, the value of the contract as of the date of cancellation will be
returned in lieu of the entire purchase price in case of revocation during the
free look period.
ACCUMULATION PERIOD
PURCHASE PAYMENTS
Your purchase payments must be at least $25. You may make payments at any time.
We may limit your total purchase payments to $1,000,000.
WHEN WE MAY TERMINATE YOUR CONTRACT
We may terminate a contract on any anniversary when its value is less than the
lesser of (a) $1,000 or (b) $250 times the number of years the contract has been
in force. This could have adverse tax consequences to you. (See Federal Tax
Status, page 20.) We will not terminate an individual retirement annuity (IRA)
if you made a purchase payment during the preceding two years. We will not
terminate an annuity funding a Section 403(b) salary reduction agreement.
ACCUMULATION UNITS
Until the annuity payout date, the contract value is measured by accumulation
units. These units are credited to your contract when you make each purchase
payment. (See Crediting Accumulation Units, below). The number of units remains
constant between purchase payments, but their dollar value varies depending upon
the investment results of each Fund to which payments are allocated.
CREDITING ACCUMULATION UNITS
Your representative will send application forms or orders, together with the
first purchase payment, to our home office for acceptance. Upon acceptance, we
issue a contract and we credit the first purchase payment to the contract in the
form of accumulation units. If all information necessary for issuing a contract
and processing the purchase payment is complete, your first purchase payment
will be credited within two business days after receipt. If we do not receive
everything within five business days, we will return the purchase payment to you
immediately unless you specifically consent to having us retain the purchase
payment until the necessary information is completed. After that, we will credit
the purchase payment within two business days. You must send any additional
purchase payments directly to our home office. They will then be applied to
provide that number of accumulation units (for each subaccount) determined by
dividing the amount of the purchase payment by the unit value next computed
after we receive the payment at our home office.
ALLOCATION OF PURCHASE PAYMENTS
You may allocate your purchase payments among up to 10 variable subaccounts of
VAA or VAB and the Guaranteed Account. The amount allocated to any Fund or the
Guaranteed Account must equal a whole percent. You may change your allocation of
future purchase payments at any time by sending written notice to our home
office.
ACCUMULATION UNIT VALUE AND CONTRACT VALUE
We set the accumulation unit value of each subaccount of VAA and VAB at $10 when
we allocated the first payments for these contracts. We determine the unit value
for any later valuation period by multiplying the unit
13
<PAGE> 19
value for the immediately preceding valuation period by the net investment
factor (described below) for such later valuation period. We determine a
contract's value by multiplying the total number of units (for each subaccount)
credited to the contract by the unit value (for such subaccount) for the current
valuation period.
NET INVESTMENT FACTOR
The net investment factor measures the investment results of each subaccount.
The net investment factor for each subaccount for any valuation period is
determined by dividing (a) by (b), then subtracting (c) from the result, where:
(a) is
(1) the net asset value the corresponding Fund share at the end of a
valuation period, plus
(2) the per share amount of any dividends or other distributions declared
for that Fund if the "ex-dividend" date occurs during the valuation
period, plus or minus
(3) a per share charge or credit for any taxes paid or reserved for the
maintenance or operation of that subaccount, (no federal income taxes
apply under present law.)
(b) is the net asset value of the corresponding Fund share at the end of the
preceding valuation period; and
(c) is the deduction for administrative and sales expenses and risk
undertakings. (See Deduction for Administrative Expenses, page 12, and
Deduction for Risk Undertakings, page 12.)
SURRENDER AND PARTIAL WITHDRAWAL
Before the annuity payout date (and also after that in the case of annuity
Option 1(e) described below), you may surrender (totally withdraw the value of)
your contract or you may elect a partial (at least $100) withdrawal. The
surrender charge may apply to these transactions. That charge is a percent of
the total amount withdrawn. For example, if a partial withdrawal of $1,000 is
requested, we would pay you $1,000, but the total amount deducted from the
accumulation value would be $1,084 (i.e., $1,084 x 7 3/4% = $84). Unless, you
specify otherwise, the withdrawal will be made pro-rata from your values in each
Fund. The amount you may withdraw is the contract value less any charge. In the
case of a complete surrender, we subtract the contract administration charge. We
will pay you within seven days after we receive your request. However, we may
defer payment as described below. Surrenders and partial withdrawals are limited
or not permitted in connection with certain tax-qualified retirement plans. See
Texas Optional Retirement Program, page 17, and Tax Deferred Annuities, page 21.
For tax consequences of a surrender or withdrawal, see Federal Tax Status, page
20.
If you request a surrender or partial withdrawal which includes contract values
derived from purchase payments that have not yet cleared the banking system, we
may delay mailing that portion which relates to such payments until the check
for the purchase payment has cleared. We require the return of the contract in
the case of a complete surrender.
The right to withdraw may be suspended or the date of payment postponed:
- - for any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings) or during which the Securities and
Exchange Commission has restricted trading on the Exchange;
- - for any period during which an emergency, as determined by the Commission,
exists as a result of which disposal of securities held in a Fund is not
reasonably practical, or it is not reasonably practical to determine the value
of a Fund's net assets; or
- - such other periods as the Commission may order to protect security holders.
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<PAGE> 20
TRANSFERS AMONG SUBACCOUNTS
You may transfer contract values from one Fund to another. You may make
transfers at any time before annuity payments begin. The amount of any transfer
must be at least $300 (or the entire contract value in a Fund, if less).
We may limit the number, frequency, method or amount of transfers. We may limit
transfers from any Fund on any one day to 1% of the previous day's total net
assets of that Fund if we or the Fund, in our discretion, believe that the Fund
might otherwise be damaged. In this case, some requested transfers will not
occur. In determining which requests to honor, scheduled transfers (under a DCA
program) will be made first, followed by mailed written requests in the order
postmarked and, lastly, telephone and facsimile requests in the order received.
We will notify you if your requested transfer is not made. Current SEC rules
preclude us from processing at a later date those requests that were not made.
Accordingly, you would need to submit a new transfer request in order to make a
transfer that was not made because of these limitations.
Certain third parties may offer you asset allocation or timing services for your
contract. We may choose to honor transfer requests from these third parties if
you give us a written power of attorney to do so. Fees you pay for such asset
allocation or timing services are in addition to any contract charges. WE DO NOT
ENDORSE, APPROVE OR RECOMMEND THESE SERVICES.
After the annuity payout date, you may make transfers among Funds only once each
calendar quarter. The transfer fee no longer applies then. (See Transfer Fee,
page 12, and Transfers after Annuity Payout Date, page 19). Not more than 20% of
a contract's Guaranteed Account value (or $1,000, if greater) as of the
beginning of a contract year may be transferred to variable Funds during that
contract year.
SCHEDULED TRANSFERS (DOLLAR COST AVERAGING)
We administer a scheduled transfer ("DCA") program enabling you to preauthorize
automatic monthly or quarterly transfers of a specified dollar amount of at
least $300 each time. At least 12 DCA transfers must be scheduled. The transfers
may be from any variable Funds to any other Funds or to the Guaranteed Account.
Transfers may be made from the Guaranteed Account to any other Funds if the DCA
program is established at the time the contract is issued, the DCA program is
scheduled to begin within 6 months of contract issue and the term of the DCA
program does not exceed 2 years. For transfers from variable Funds, the DCA
program may not exceed 5 years. There is no transfer fee for DCA transfers. We
may discontinue the DCA program at any time. You may also discontinue further
DCA transfers by giving us written notice at least 7 business days before the
next scheduled transfer.
DCA generally has the effect of reducing the risk of purchasing at the top, and
selling at the bottom, of market cycles. DCA transfers from the Guaranteed
Account or from a Fund with a stabilized net asset value, such as the Money
Market Fund, will generally reduce the average total cost of indirectly
purchasing Fund shares because greater numbers of shares will be purchased when
the share prices are lower than when prices are higher. However, DCA does not
assure you of a profit, nor does it protect against losses in a declining
market. Moreover, for transfers from a variable Fund, DCA has the effect of
reducing the average price of the shares being redeemed. DCA might also be used
to systematically transfer contract values from variable Funds to the Guaranteed
Account in anticipation of retirement, reducing the risk of making a single
transfer during a low market.
TELEACCESS
If you give us a pre-authorization form, your contract and unit values and
interest rates can be checked and transfers may be made by telephoning us
between 7:00 a.m. and 7:00 p.m. (Eastern time) on days we are open for business,
at 1-800-366-6654, #8. You may only make one telephone transfer per day. We will
honor pre-authorized telephone transfer instructions from anyone who provides
the personal identifying information requested via TeleAccess. We will not honor
telephone transfer requests after we receive notice of your death. For added
security, we send the contract owner a written confirmation of all telephone
transfers on the next business
15
<PAGE> 21
day. However, if we cannot complete a transfer as requested, our customer
service representative will contact the contract owner in writing sent within 48
hours of the TeleAccess request. YOU MAY THINK THAT YOU HAVE LIMITED THIS ACCESS
TO YOURSELF, OR TO YOURSELF AND YOUR REPRESENTATIVE. HOWEVER, ANYONE GIVING US
THE NECESSARY IDENTIFYING INFORMATION CAN USE TELEACCESS ONCE YOU AUTHORIZE ITS
USE.
DEATH BENEFIT
If the annuitant (and any contingent annuitant) dies before the annuity payout
date, the contract pays a death benefit to a designated beneficiary. (This death
benefit is not available on any contract purchased through a bank in Puerto
Rico.) The amount of the death benefit will be determined as of the end of the
valuation period in which we receive written notice of death. The amount of
death benefit is the contract value or, if greater, the total purchase payments
made less any partial withdrawals.
GUARANTEED ACCOUNT
The Guaranteed Account guarantees a fixed return for a specified period of time
and guarantees the principal against loss. The Guaranteed Account is not
registered as an investment company. Interests in it are not subject to the
provisions or restrictions of federal securities laws. The staff of the
Securities and Exchange Commission has not reviewed disclosures regarding it.
The Guaranteed Account consists of all of our general assets other than those
allocated to a separate account. You may allocate purchase payments and contract
values between the Guaranteed Account and the Funds.
We will invest our general assets in our discretion as allowed by Ohio law. We
allocate the investment income from our general assets to those contracts having
guaranteed values.
The amount of investment income allocated to the contracts varies from year to
year in our sole discretion. However, we guarantee that we will credit interest
at a rate of not less than 3.25% per year, compounded annually, to contract
values allocated to the Guaranteed Account. We may credit interest at a rate in
excess of 3.25%, but any such excess interest credit will be in our sole
discretion.
We guarantee that, before annuity payments begin, the guaranteed value of a
contract will never be less than:
- - the amount of purchase payments allocated to, and transfers into, the
Guaranteed Account, plus
- - interest credited at the rate of 3% per year compounded annually, plus
- - any additional excess interest we may credit to guaranteed values, and less
- - any partial withdrawals, loans and transfers from the guaranteed values, and
less
- - any surrender charge on partial withdrawals, loan interest, state premium
taxes, transfer fees, and the portion of the $30 annual contract
administration charge allocable to the Guaranteed Account.
No deductions are made from the Guaranteed Account for administrative expenses
or risk undertakings. (See "Deductions and Expenses".)
Other than pursuant to a DCA (scheduled transfer) program, we may restrict
transfers of a contract's Guaranteed Account value during a contract year to not
more than 20% of that value as of the beginning of a contract year (or $1,000,
if greater). As provided by state law, we may defer the payment of amounts
withdrawn from the Guaranteed Account for up to exceed six months from the date
we receive written request for withdrawal.
OHIO NATIONAL LIFE EMPLOYEE DISCOUNT
We and our affiliated companies offer a credit on the purchase of contracts by
any of our employees, directors or retirees, or their spouse or the surviving
spouse of a deceased retiree, their minor children, or any of their children
ages 18 to 21 who is either (i) living in the purchaser's household or (ii) a
full-time college student being supported by the purchaser, or any of the
purchaser's minor grandchildren under the Uniform Gifts to Minors Act. This
credit counts as additional income under the contract. The amount of the credit
equals 3.2% of all
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<PAGE> 22
purchase payments made in the first contract year and 5.5% of purchase payments
made in the second through sixth contract years. We credit the Guaranteed
Account in these amounts at the time the eligible person makes each payment.
TEXAS STATE OPTIONAL RETIREMENT PROGRAM
Under the Texas State Optional Retirement Program (the "Program"), purchase
payments may be excluded from the gross income of state employees for federal
tax purposes to the extent that such purchase payments do not exceed the
exclusion allowance provided by the Code. The Attorney General of Texas has
interpreted the Program as prohibiting any participating state employee from
receiving the surrender value of a contract funding benefits under the Program
prior to termination of employment or the state employee's retirement, death or
total disability. Therefore, a participant in the Program may not make a
surrender or partial withdrawal until the first of these events occurs.
ANNUITY PERIOD
ANNUITY PAYOUT DATE
Annuity payments begin on the annuity payout date. You may select this date when
the contract is issued. It must be at least 30 days after the contract date. You
may change it from time to time so long as it is the first day of any month at
least 30 days after the date of such change. The contract restricts the annuity
payout date to not later than the first of the month following the annuitant's
90th birthday. This restriction may be modified by applicable state law or we
may agree to waive it.
The contracts include our guarantee that (except for option 1(e), below) we will
pay annuity payments for the lifetime of the annuitant (and any joint annuitant)
in accordance with the contract annuity rates, no matter how long you live.
Other than in connection with annuity Option 1(e) described below, once annuity
payments begin, you may not surrender the contract for cash except that, upon
the death of the annuitant, the beneficiary may surrender the contract for the
commuted value of any remaining period-certain payments. You may make surrenders
and partial withdrawals from Option 1(e) at any time.
ANNUITY OPTIONS
You may elect one or more of the following annuity options. You may change the
election anytime before the annuity payout date.
Option 1(a): Life Annuity with installment payments for the lifetime of the
annuitant (the contract has no more value after annuitant's
death).
Option 1(b): Life Annuity with installment payments guaranteed for five years
and then continuing during the remaining lifetime of the
annuitant.
Option 1(c): Life Annuity with installment payments guaranteed for ten years
and then continuing during the remaining lifetime of the
annuitant.
Option 1(d): Installment Refund Life Annuity with payments guaranteed for a
period certain and then continuing during the remaining lifetime
of the annuitant. The number of period-certain payments is equal
to the amount applied under this option divided by the amount of
the first payment.
Option 1(e): Installment Refund Annuity with payments guaranteed for a fixed
number (up to thirty) of years. This option is available for
variable annuity payments only. (Although the deduction for risk
undertakings is taken from annuity unit values, we have no
mortality risk during the annuity payout period under this
option.)
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<PAGE> 23
Option 2(a): Joint & Survivor Life Annuity with installment payments during
the lifetime of the annuitant and then continuing during the
lifetime of a contingent annuitant (the contract has no more
value after the second annuitant's death).
Option 2(b): Joint & Survivor Life Annuity with installment payments guaranteed
for ten years and then continuing during the remaining lifetime of
the annuitant or a contingent annuitant.
We may agree to other settlement options.
Unless you direct otherwise, we will apply the contract value as of the annuity
payout date to provide annuity payments pro-rata from each Fund in the same
proportion as the contract values immediately before the annuity payout date.
If no election is in effect on the annuity payout date, we will apply the
contract value under Option 1(c) with the beneficiary as payee for any remaining
period-certain installments payable after the death of the annuitant. The
Pension Reform Act of 1974 might require certain contracts to provide a Joint
and Survivor Annuity. If the contingent annuitant is not related to the
annuitant, Options 2(a) and 2(b) are available only if we agree.
The Internal Revenue Service has not ruled on the tax treatment of a commutable
variable annuity. If you select Option 1(e), it is possible that the IRS could
determine that the entire value of the annuity is fully taxable at the time you
elect Option 1(e) or that variable annuity payments under this option should not
be taxed under the annuity rules (see Federal Tax Status, page 20). This could
result in your payments being fully taxable to you. Should the IRS so rule, we
may have to tax report up to the full value of the annuity as your taxable
income.
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
To determine the first variable annuity payment, we apply the contract value for
each Fund in accordance with the contract's settlement option tables. The rates
in those tables depend upon the annuitant's (and any contingent annuitant's) age
and sex and the option selected. The annuitant's sex is not a factor in
contracts issued to plans sponsored by employers subject to Title VII of the
Civil Rights Act of 1964 or similar state statutes. We determine the value to be
applied at the end of a valuation period (selected by us and uniformly applied)
not more than 10 valuation periods before the annuity payout date.
If the amount that would be applied under an option is less than $5,000, we will
pay the contract value to the annuitant in a single sum. If the first periodic
payment under any option would be less than $25, we may change the frequency of
payments so that the first payment is at least $25.
ANNUITY UNITS AND VARIABLE PAYMENTS
After your first annuity payment, later variable annuity payments will vary to
reflect the investment performance of your Funds. The amount of each payment
depends on the number your annuity units. To determine the number of annuity
units for each Fund, divide the dollar amount of the first annuity payment from
each Fund by the value of that Fund's annuity unit. This number of annuity units
remains constant during the annuity payment period unless you transfer among
Funds.
The annuity unit value for each Fund was set at $10 for the valuation period
when the first variable annuity was calculated for these contracts. The annuity
unit value for each later valuation period equals the annuity unit value for the
immediately preceding valuation period multiplied by the net investment factor
(described on page 14) for such later valuation period and by a factor
(0.9998925 for a one-day valuation period) to neutralize the 4% assumed interest
rate discussed below.
The dollar amount of each later variable annuity payment equals your constant
number of annuity units for each Fund multiplied by the value of the annuity
unit for the valuation period.
The annuity rate tables contained in the contracts are based on the Progressive
Annuity Mortality Table with compound interest at the effective rate of 4% per
year. A higher interest assumption would mean a higher initial annuity payment
but a more slowly rising series of subsequent annuity payments if annuity unit
values were
18
<PAGE> 24
increasing (or a more rapidly falling series of subsequent annuity payments if
annuity unit values were decreasing). A lower interest assumption would have the
opposite effect. If the actual net investment rate were equal to the assumed
interest rate, annuity payments would stay level.
TRANSFERS AFTER ANNUITY PAYOUT DATE
After annuity payments have been made for at least 12 months, the annuitant can,
once each calendar quarter, change the Funds on which variable annuity payments
are based. On at least 30 days written notice to our home office, we will change
that portion of the periodic variable annuity payment as you direct to reflect
the investment results of different Funds. The annuity payment immediately after
a change will be the amount that would have been paid without the change. Later
payments will reflect the new mix of Funds.
OTHER CONTRACT PROVISIONS
ASSIGNMENT
Amounts payable in settlement of a contract may not be commuted, anticipated,
assigned or otherwise encumbered, or pledged as loan collateral to anyone other
than us. To the extent permitted by law, such amounts are not subject to any
legal process to pay any claims against an annuitant before annuity payments
begin. The owner of a tax-qualified contract may not, but the owner of a
non-tax-qualified contract may, collaterally assign the contract before the
annuity payout date. Ownership of a tax-qualified contract may not be
transferred
except to:
- - the annuitant,
- - a trustee or successor trustee of a pension or profit-sharing trust which is
qualified under Section 401 of the Code,
- - the employer of the annuitant provided that the contract after transfer is
maintained under the terms of a retirement plan qualified under Section 403(a)
of the Code for the benefit of the annuitant, or
- - as otherwise permitted by laws and regulations governing plans for which the
contract may be issued.
PERIODIC REPORTS
Before the annuity payout date, we will send you semi-annual statements showing
(a) the number of units credited to the contract by Fund and (b) the value of
each unit as of the end of the last half year. In addition, as long as the
contract remains in effect, we will forward any periodic Fund reports.
SUBSTITUTION FOR FUND SHARES
If investment in a Fund is no longer possible or we believe it is inappropriate
to the purposes of the contract, we may substitute one or more other funds.
Substitution may be made as to both existing investments and the investment of
future purchase payments. However, no substitution will be made until we receive
any necessary approval of the Securities and Exchange Commission. We may also
add other Funds as eligible investments of VAA or VAB.
CONTRACT OWNER INQUIRIES
Direct any questions to Ohio National Life, Variable Annuity Administration,
P.O. Box 2669, Cincinnati, Ohio 45201; telephone 1-800-366-6654 (8:30 a.m. to
4:30 p.m., Eastern time).
PERFORMANCE DATA
We may advertise performance data for the various Funds showing the percentage
change in unit values based on the performance of the applicable Fund over a
period of time (usually a calendar year). We determine the percentage change by
dividing the increase (or decrease) in value for the unit by the unit value at
the beginning of the period. This percent reflects the deduction of any
asset-based contract charges but does not reflect the
19
<PAGE> 25
deduction of any applicable contract administration charge or surrender charge.
The deduction a contract administration charge or surrender charge would reduce
any percentage increase or make greater any percentage decrease.
Advertising may also include average annual total return figures calculated as
shown in the Statement of Additional Information. The average annual total
return figures reflect the deduction of applicable contract administration
charges and surrender charges as well as applicable asset-based charges.
We may also distribute sales literature comparing separate account performance
to the Consumer Price Index or to such established market indexes as the Dow
Jones Industrial Average, the Standard & Poor's 500 Stock Index, IBC's Money
Fund Reports, Lehman Brothers Bond Indices, the Morgan Stanley Europe Australia
Far East Index, Morgan Stanley World Index, Russell 2000 Index, or other
variable annuity separate accounts or mutual funds with investment objectives
similar to those of the Funds.
FEDERAL TAX STATUS
The following discussion of federal income tax treatment of amounts received
under a variable annuity contract does not cover all situations or issues. It is
not intended as tax advice. Consult a qualified tax adviser to apply the law to
your circumstances. Tax laws can change, even for contracts that have already
been issued. Tax law revisions, with unfavorable consequences, could have
retroactive effect on previously issued contracts or on later voluntary
transactions in previously issued contracts.
We are taxed as a life insurance company under Subchapter L of the Internal
Revenue Code (the "Code"). Since the operations of VAA and VAB are a part of,
and are taxed with, our operations, VAA and VAB are not separately taxed as
"regulated investment companies" under Subchapter M of the Code.
As to tax-qualified contracts, the law does not now provide for payment of
federal income tax on dividend income or capital gains distributions from Fund
shares held in VAA or upon capital gains realized by VAA on redemption of Fund
shares. When a non-tax-qualified contract is issued in connection with a
deferred compensation plan or arrangement, all rights, discretions and powers
relative to the contract are vested in the employer and you must look only to
your employer for the payment of deferred compensation benefits. Generally, in
that case, an annuitant will have no "investment in the contract" and amounts
received by you from your employer under a deferred compensation arrangement
will be taxable in full as ordinary income in the years you receive the
payments.
The contracts are considered annuity contracts under Section 72 of the Code,
which generally provides for taxation of annuities. Under existing provisions of
the Code, any increase in the contract value is not taxable to you as the owner
or annuitant until you receive it, either in the form of annuity payments, as
contemplated by the contract, or in some other form of distribution. The owner
of a non-tax qualified contract must be a natural person for this purpose. With
certain exceptions, where the owner of a non-tax qualified contract is a
non-natural person (corporation, partnership or trust) any increase in the
accumulation value of the contract attributable to purchase payments made after
February 28, 1986 will be treated as ordinary income received or accrued by the
contract owner during the current tax year.
When annuity payments begin each payment is taxable under Section 72 of the Code
as ordinary income in the year of receipt if you have neither paid any portion
of the purchase payments nor previously been taxed on any portion of the
purchase payments. If any portion of the purchase payments has been paid from or
included in your taxable income, this aggregate amount will be considered your
"investment in the contract." You will be entitled to exclude from your taxable
income a portion of each annuity payment equal to your "investment in the
contract" divided by the period of expected annuity payments, determined by your
life expectancy and the form of annuity benefit. Once you recover your
"investment in the contract," all further annuity payments will be included in
your taxable income.
20
<PAGE> 26
If you elect to receive the accumulated value in a single sum in lieu of annuity
payments, any amount you receive or withdraw in excess of the "investment in the
contract" will normally be taxed as ordinary income in the year received. A
partial withdrawal of contract values is taxable as income to the extent that
the accumulated value of the contract immediately before the payment exceeds the
"investment in the contract." Such a withdrawal is treated as a distribution of
earnings first and only second as a recovery of your "investment in the
contract." Any part of the value of the contract that you assign or pledge to
secure a loan will be taxed as if it had been a partial withdrawal and may be
subject to a penalty tax.
There is a penalty tax equal to 10% of any amount that must be included in gross
income for tax purposes. The penalty will not apply to a redemption that is:
- - received on or after the taxpayer reaches age 59 1/2;
- - made to a beneficiary on or after the death of the annuitant;
- - attributable to the taxpayer's becoming disabled;
- - made as a series of substantially equal periodic payments for the life of the
annuitant (or joint lives of the annuitant and beneficiary);
- - from a contract that is a qualified funding asset for purposes of a structured
settlement;
- - made under an annuity contract that is purchased with a single premium and
with an annuity payout date not later than a year from the purchase of the
annuity;
- - incident to divorce, or
- - taken from an IRA for a qualified first-time home purchase (up to $10,000) or
qualified education expenses.
If you elect not to have withholding apply to an early withdrawal or if an
insufficient amount is withheld, you may be responsible for payment of estimated
tax. You may also incur penalties under the estimated tax rules if the
withholding and estimated tax payments are not sufficient. If you fail to
provide your taxpayer identification number, any payments under the contract
will automatically be subject to withholding.
TAX-DEFERRED ANNUITIES
Under the provisions of Section 403(b) of the Code, employees may exclude from
their gross income purchase payments made for annuity contracts purchased for
them by public educational institutions and certain tax-exempt organizations
which are described in Section 501(c)(3) of the Code. You may make this
exclusion to the extent that the aggregate purchase payments plus any other
amounts contributed to purchase the contract and toward benefits under qualified
retirement plans do not exceed your exclusion allowance as determined in
Sections 403(b) and 415 of the Code. Employee contributions are, however,
subject to social security (FICA) tax withholding. All amounts you receive under
a contract, either in the form of annuity payments or cash withdrawal, will be
taxed under Section 72 of the Code as ordinary income for the year received,
except for exclusion of any amounts representing "investment in the contract."
Under certain circumstances, amounts you receive may be used to make a "tax-free
rollover" into one of the types of individual retirement arrangements permitted
under the Code. Amounts you receive that are eligible for "tax-free rollover"
will be subject to an automatic 20% withholding unless you directly roll over
such amounts from the tax-deferred annuity to the individual retirement
arrangement.
With respect to earnings accrued and purchase payments made after December 31,
1988, for a salary reduction agreement under Section 403(b) of the Code,
distributions may be paid only when the employee:
- - attains age 59 1/2,
- - separates from the employer's service,
- - dies,
21
<PAGE> 27
- - becomes disabled as defined in the Code, or
- - incurs a financial hardship as defined in the Code.
In the case of hardship, cash distributions may not exceed the amount of your
purchase payments. These restrictions do not affect your right to transfer
investments among the Funds and do not limit the availability of transfers
between tax-deferred annuities.
QUALIFIED PENSION OR PROFIT-SHARING PLANS
Under present law, purchase payments made by an employer or trustee, for a plan
or trust qualified under Section 401(a) or 403(a) of the Code, are generally
excludable from the employees gross income. Any purchase payments made by the
employee, or which are considered taxable income to the employee in the year
such payments are made, constitute an "investment in the contract" under Section
72 of the Code for the employee's annuity benefits. Salary reduction payments to
a profit sharing plan qualifying under Section 401(k) of the Code are generally
excludable from the employee's gross income.
The Code requires plans to prohibit any distribution to a plan participant prior
to age 59 1/2, except in the event of death, total disability or separation from
service (special rules apply for plan terminations). Distributions must begin no
later than April 1 of the calendar year following the year in which the
participant reaches age 70 1/2. Premature distribution of benefits or
contributions in excess of those permitted by the Code may result in certain
penalties under the Code.
If an employee, or one or more of the beneficiaries, receives the total amounts
payable with respect to an employee within one taxable year after age 59 1/2 on
account of the employee's death or separation from service of the employer, any
amount received in excess of the employee's "investment in the contract" may be
taxed under special 5-year forward averaging rules. Five-year averaging will no
longer be available after 1999 except for certain grandfathered individuals. You
can elect to have that portion of a lump-sum distribution attributable to years
of participation prior to January 1, 1974 given capital gains treatment. The
percentage of pre-74 distribution subject to capital gains treatment decreases
as follows: 100%, 1987; 95%, 1988; 75%, 1989; 50%, 1990; and 25%, 1991. For tax
years 1992 and later no capital gains treatment is available (except that
taxpayers who were age 50 before 1986 may still elect capital gains treatment).
If you receive such a distribution you may be able to make a "tax-free rollover"
of the distribution less your "investment in the contract" into another
qualified plan in which you are a participant or into one of the types of
individual retirement arrangements permitted under the Code. Your surviving
spouse receiving such a distribution may be able to make a tax-free rollover to
one of the types of individual retirement arrangements permitted under the Code.
Amounts received that are eligible for "tax-free rollover" will be subject to an
automatic 20% withholding unless such amounts are directly rolled over to
another qualified plan or individual retirement arrangement.
INDIVIDUAL RETIREMENT ANNUITIES (IRA)
Section 408(b) of the Code provides that you may invest an amount up to $2,000
per year of earned income in an IRA and claim it as a personal tax deduction if
you are not an "active participant" in an employer maintained qualified
retirement plan or you have adjusted gross income which does not exceed the
"applicable dollar limit." For a single taxpayer, the applicable dollar
limitation is $30,000, with the amount of IRA contribution which may be deducted
reduced proportionately for Adjusted Gross Income between $30,000-$40,000. For
married couples filing jointly, the applicable dollar limitation is $50,000,
with the amount of IRA contribution which may be deducted reduced
proportionately for Adjusted Gross Income between $50,000-$60,000. There is no
deduction allowed for IRA contributions when Adjusted Gross Income reaches
$40,000 for individuals and $60,000 for married couples filing jointly. In the
alternative, if you are otherwise qualified for an IRA you may elect to
contribute to an IRA for yourself and for your non-working spouse, with the
total deduction limited to $4,000.
You may make non-deductible IRA contributions to the extent you are ineligible
to make deductible IRA contributions. Any amount received from another qualified
plan (including another individual retirement
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<PAGE> 28
arrangement) which is eligible as a "tax-free rollover" may be invested in an
IRA. This is not counted toward the overall contribution limit. Earnings on
nondeductible IRA contributions are not subject to tax until they are withdrawn.
The combined limit on designated nondeductible and deductible contributions for
a tax year is the lesser of 100% of compensation or $2,000 ($4,000 in the case
of an additional contribution to a spousal IRA).
Generally, distributions (all or part) made prior to age 59 1/2 (except in the
case of death or disability) will result in a penalty tax of 10% plus ordinary
income tax treatment of the amount received. Additionally, there is an excise
tax of 6% of the amount you contributed in excess of either the deductible limit
or nondeductible limit, as indicated above, if you do not withdraw that amount
before filing your income tax return for the year of contribution or apply that
amount as an allowable contribution for a later year. The excise tax continues
to apply each year until the excess contribution is corrected. Distributions
after age 59 1/2 are treated as ordinary income at the time received.
Distributions must begin before April 1 following the year in which you reach
age 70 1/2. A 50% nondeductible excise tax is imposed on the excess in any tax
year of the amount that should have been distributed over the amount actually
distributed.
Section 408A of the Code provides for a special type of IRA called a Roth IRA.
No tax deduction is allowed for contributions to a Roth IRA, but assets grow on
a tax deferred basis. Under certain circumstances, withdrawals from a Roth IRA
can be excludable from income. Eligibility for a Roth IRA is based on adjusted
gross income and filing status. Special rules apply which allow traditional IRAs
to be rolled over or converted to a Roth IRA.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEPPS)
Under Section 408 of the Code, employers may establish SEPPs for their
employees. Under these plans the employer may contribute on behalf of an
employee to an individual retirement account or annuity. The amount of the
contribution is excludable from the employee's income.
Certain employees who participate in a SEPP may elect to have the employer make
contributions to a SEPP on their behalf or to receive the contributions in cash.
If the employee elects to have contributions made on the employee's behalf to a
SEPP, it is not treated as current taxable income to the employee. Elective
deferrals under a SEPP are subject to an inflation-indexed limit which is
$10,000 for 1998. Salary-reduction SEPPs are available only if at least 50% of
the employees elect to have amounts contributed to the SEPP and if the employer
has 25 or fewer employees at all times during the preceding year. New salary
reduction SEPPs may not be established after 1996.
An employee may also take a deduction for individual contributions to the IRA,
subject to the limits applicable to IRAs in general. Withdrawals from the IRAs
to which the employer contributes must be permitted. These withdrawals, however,
are subject to the general rules with respect to withdrawals from IRAs.
WITHHOLDING ON DISTRIBUTION
Distributions from tax-deferred annuities or qualified pension or profit sharing
plans that are eligible for "tax-free rollover" will be subject to an automatic
20% withholding unless such amounts are directly rolled over to an individual
retirement arrangement or another qualified plan. Federal income tax withholding
is required on annuity payments. However, recipients of annuity payments may
elect not to have the tax withheld. This election may be revoked at any time and
withholding would begin after that. If you do not give us your taxpayer
identification number any payments under the contract will automatically be
subject to withholding.
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<PAGE> 29
PRIOR CONTRACTS
ANNUAL PAYMENT VARIABLE ANNUITY
Before December 15, 1981, we issued Annual Payment Variable Annuity contracts.
Some of these remain active and purchase payments may still be made until
annuity payments begin. These contracts called for deductions from purchase
payments in the following amounts:
<TABLE>
<CAPTION>
DEDUCTION FOR DEDUCTION FOR DEATH TOTAL*
PORTION OF TOTAL SALES ADMINISTRATIVE BENEFIT COMBINED
PURCHASE PAYMENTS EXPENSE EXPENSE PREMIUM DEDUCTIONS
----------------- ------------- -------------- ------- ----------
<S> <C> <C> <C> <C>
First $10,000 6.3 % 2.2 % 0.5 % 9.0 %
Next $15,000 5.5 % 2.0 % 0.5 % 8.0 %
Next $25,000 4.8 % 1.7 % 0.5 % 7.0 %
Next $50,000 4.0 % 1.5 % 0.5 % 6.0 %
Balance over $100,000 3.3 % 1.2 % 0.5 % 5.0 %
</TABLE>
*Plus 50c per payment
These deductions are in lieu of any surrender charge, contract administration
charge and deduction for administrative expense as provided for in the contracts
offered in this prospectus. The deduction for mortality and expense risk
undertakings is 1% of the contract value on an annual basis. We may reduce this
deduction at any time and we may increase it not more often than annually to not
more than 1.5%.
These prior contracts provide for annuity payments on a 3 1/2% assumed interest
rate which results in a somewhat smaller initial annuity payment, but one that
rises more rapidly in a rising market and falls more slowly in a declining
market. These contracts provide for accumulation of values only in what now
constitutes the Equity Fund of VAA and VAB and/or Guaranteed Account with
limited transfer privileges between the Guaranteed Account and the Equity Fund.
VARIABLE INTEREST ANNUITY
From July 15, 1981 to November 2, 1982, we issued Variable Interest Annuity
contracts. Purchase payments for these contracts can be continued until annuity
payments begin. These contracts are substantially the same as the contracts
offered in this prospectus except that all contract values are allocated to the
Money Market Fund. There is no right to transfer the contract values to any
other Funds. These contracts also included a guarantee of the investment
performance. Such investment guarantee is regarded as a separate security. The
deduction for mortality, expense and investment risk undertaking is 1.3% of the
contract value on an annual basis. We may reduce this deduction at any time and
we may increase it not more often than annually to not more than 2%. These
contracts do not provide for a deduction from contract value for administrative
expense. They do provide for a contract administration charge and a surrender
charge.
FLEXIBLE PAYMENT COMBINATION ANNUITY
From December 1, 1981 to November 2, 1982, we issued Flexible Payment
Combination Annuity contracts. Purchase payments for these contracts can be
continued until annuity payments begin. These contracts are substantially the
same as the contracts offered in this prospectus except that values can be
accumulated only in what now constitute the Equity Fund of VAA or VAB and/or the
Guaranteed Account. A deduction is made each valuation period for the
administrative expense and mortality and expense risk undertakings equal to 1.1%
on an annual basis. We may reduce this deduction at any time and we may increase
it not more frequently than annually to not more than 1.75%. Although these
contracts provide for limited transfer of values between the Equity Fund and the
Guaranteed Account, transfers are not allowed after annuity payments begin.
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<PAGE> 30
MULTIPLE FUNDED COMBINATION ANNUITY
From November 2, 1982 to September 10, 1984, we issued Multiple Funded
Combination Annuity contracts substantially the same as the contracts offered in
this prospectus. However, such prior contracts include a guarantee of the
investment performance of the Money Market Fund and a deduction therefor each
valuation period equal to 0.2% of Money Market assets on an annual basis. Such
investment guarantee is regarded as a separate security. In addition, the rate
for the surrender charge is 5% and the deduction for risk undertakings
is 1.3%.
INVESTAR VISION/TOP SPECTRUM FLEXIBLE PAYMENT VARIABLE ANNUITY
From January 3, 1997 to April 30, 1999 we issued Investar Vision and Top
Spectrum flexible payment variable annuities. These contracts were substantially
the same as the contracts offered in this prospectus. A deduction is made each
valuation period for mortality and expense risk undertakings and for
administrative expenses equal to 1.4% on an annual basis. The annual contract
administration charge is $35. The surrender charge is a percentage of the amount
withdrawn. The percentage varies with the number of years from the date of
purchase payments as follows:
<TABLE>
<CAPTION>
YEARS PERCENT
----- -------
<S> <C>
1st and 2nd 7%
3rd 6%
4th 5%
5th 4%
6th 2%
7th 1%
8th and later 0%
</TABLE>
ACCUMULATION UNIT VALUES FOR PRIOR CONTRACTS
ANNUAL PAYMENT VARIABLE ANNUITY
VAA EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 46.685707 $ 56.953326 57,461
1990 56.953326 54.213096 54,987
1991 54.213096 64.510143 51,310
1992 64.510143 68.689335 45,754
1993 68.689335 77.594885 43,892
1994 77.594885 77.016062 40,537
1995 77.016062 96.995665 36,620
1996 96.995665 113.656777 35,244
1997 113.656777 132.974317 29,341
1998 132.974317 139.192132 26,151
</TABLE>
25
<PAGE> 31
VAB EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 49.487430 $ 60.371234 34,866
1990 60.371234 57.466552 36,191
1991 57.466552 68.381552 33,557
1992 68.381552 72.811547 30,548
1993 72.811547 82.251550 25,610
1994 82.251550 81.637986 24,924
1995 81.637986 102.816617 24,630
1996 102.816617 120.477605 22,849
1997 120.477605 140.954452 22,582
1998 140.954452 147.545413 17,171
</TABLE>
VARIABLE INTEREST ANNUITY
VAA MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 19.137568 $ 20.571199 105,231
1990 20.571199 21.909036 94,135
1991 21.909036 22.825685 76,406
1992 22.825685 23.247080 49,465
1993 23.247080 23.578345 36,485
1994 23.578345 24.205890 30,702
1995 24.205890 25.237165 23,519
1996 25.237165 26.200345 19,866
1997 26.200345 27.253241 17,074
1998 27.253241 28.352494 15,961
</TABLE>
VAB MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 19.137568 $ 20.571199 91,600
1990 20.571199 21.909036 70,747
1991 21.909036 22.825685 54,444
1992 22.825685 23.247080 44,016
1993 23.247080 23.578345 35,017
1994 23.578345 24.205890 30,075
1995 24.205890 25.237165 29,059
1996 25.237165 26.200345 28,910
1997 26.200345 27.253241 27,553
1998 27.253241 28.352494 8,368
</TABLE>
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<PAGE> 32
FLEXIBLE PAYMENT COMBINATION ANNUITY
VAA EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 26.470588 $ 32.260450 27,395
1990 32.260450 30.677737 24,226
1991 30.677737 36.468472 23,107
1992 36.468472 38.792521 22,601
1993 38.792521 43.778639 22,887
1994 43.778639 43.409203 20,039
1995 43.409203 54.616584 20,564
1996 54.616584 63.934367 20,212
1997 63.934367 74.726955 20,567
1998 74.7326955 78.143774 18,686
</TABLE>
VAB EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 25.489364 $ 31.071251 3,584
1990 31.071251 29.546880 3,439
1991 29.546880 35.124150 3,428
1992 35.124150 37.362530 1,864
1993 37.362530 42.164841 1,849
1994 42.164841 41.809023 1,833
1995 41.809023 52.603280 1,095
1996 52.603280 61.577580 1,109
1997 61.577580 71.972334 1,121
1998 71.972334 75.263201 1,141
</TABLE>
MULTIPLE FUNDED COMBINATION ANNUITY
VAA EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 21.185355 $ 25.819181 240,896
1990 25.819181 24.552478 227,378
1991 24.552478 29.187005 209,706
1992 29.187005 31.047017 195,926
1993 31.047017 35.037574 189,725
1994 35.037574 34.741902 183,889
1995 34.741902 43.711561 185,550
1996 43.711561 51.168913 183,969
1997 51.168913 59.806603 172,235
1998 59.806603 62.541201 150,434
</TABLE>
27
<PAGE> 33
VAA MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 14.500960 $ 15.587258 75,856
1990 15.587258 16.600960 66,701
1991 16.600960 17.295517 53,715
1992 17.295517 17.614815 40,163
1993 17.614815 17.865828 32,193
1994 17.865828 18.341334 33,908
1995 18.341334 19.122749 26,823
1996 19.122749 19.852565 19,326
1997 19.852565 20.650358 17,640
1998 20.650358 21.483279 24,712
</TABLE>
VAA BOND
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 15.924172 $ 17.438080 41,465
1990 17.438080 18.596379 43,782
1991 18.596379 20.777538 38,147
1992 20.777538 22.101548 40,781
1993 22.101548 24.198199 33,461
1994 24.198199 23.016849 32,609
1995 23.016849 27.068171 30,431
1996 27.068171 27.765946 26,417
1997 27.765946 30.128230 19,546
1998 30.128230 31.234606 18,756
</TABLE>
VAA OMNI
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 15.258611 $ 17.425546 134,346
1990 17.425546 17.565065 143,084
1991 17.565065 20.526604 136,984
1992 20.526604 22.049934 138,165
1993 22.049934 24.613344 151,630
1994 24.613344 24.217555 140,851
1995 24.217555 29.404272 134,309
1996 29.404272 33.604216 133,427
1997 33.604216 39.270518 127,406
1998 39.270518 40.603031 124,948
</TABLE>
VAA INTERNATIONAL
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1993* $ 10.000000 $ 12.404596 36,879
1994 12.404596 13.259582 103,976
1995 13.259582 14.702847 112,362
1996 14.702847 16.648702 116,301
1997 16.648702 16.815772 100,572
1998 16.815772 17.278635 78,452
</TABLE>
28
<PAGE> 34
VAA CAPITAL APPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995* $ 10.000000 $ 11.370573 8,261
1996 11.370573 13.018249 11,321
1997 13.018249 14.832378 21,166
1998 14.832378 15.538473 23,962
</TABLE>
VAA SMALL CAP
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995* $ 10.000000 $ 12.201273 16,139
1996 12.201273 14.205207 21,891
1997 14.205207 15.240569 21,377
1998 15.240569 16.668731 27,574
</TABLE>
VAB EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 22.125593 $ 26.965078 40,668
1990 26.965078 25.642156 37,320
1991 25.642156 30.482379 34,831
1992 30.482379 32.424943 31,442
1993 32.424943 36.592684 31,997
1994 36.592684 36.283811 30,805
1995 36.283811 45.651565 22,160
1996 45.651565 53.439888 22,720
1997 53.439888 62.460938 23,678
1998 62.460938 65.316911 23,801
</TABLE>
VAB MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 14.512201 $ 15.599344 77,381
1990 15.599344 16.613832 74,879
1991 16.613832 17.308925 71,106
1992 17.308925 17.628473 67,360
1993 17.628473 17.879672 17,645
1994 17.879672 18.355539 11,948
1995 18.355539 19.137562 5,896
1996 19.137562 19.867953 6,004
1997 19.867953 20.666372 6,102
1998 20.666372 21.499933 4,311
</TABLE>
29
<PAGE> 35
VAB BOND
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 15.914517 $ 17.427516 3,751
1990 17.427516 18.585115 5,481
1991 18.585115 20.764956 4,532
1992 20.764956 22.088165 4,261
1993 22.088165 24.183549 3,921
1994 24.183549 23.002903 3,679
1995 23.002903 27.051775 3,601
1996 27.051775 27.749128 3,122
1997 27.749128 29.994642 723
1998 29.994642 31.215693 2,869
</TABLE>
VAB OMNI
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1989 $ 15.237044 $ 17.400912 45,355
1990 17.400912 17.540233 46,036
1991 17.540233 20.497592 46,892
1992 20.497592 22.018769 48,792
1993 22.018769 24.578556 53,581
1994 24.578556 24.183329 52,580
1995 24.183329 29.362718 53,357
1996 29.362718 33.556721 53,263
1997 33.556721 39.215015 52,426
1998 39.215015 40.545640 24,611
</TABLE>
VAB INTERNATIONAL
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1993* $ 10.000000 $ 12.404596 1,427
1994 12.404596 13.259582 13,999
1995 13.259582 14.702847 17,006
1996 14.702847 16.648702 18,085
1997 16.648702 16.815772 15,613
1998 16.815772 17.278635 12,488
</TABLE>
VAB CAPITAL APPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1995* $ 10.000000 $ 11.370573 456
1996 11.370573 13.018249 786
1997 13.018249 14.832378 1,426
1998 14.832378 15.538473 1,542
</TABLE>
INVESTAR VISION AND TOP SPECTRUM FLEXIBLE PAYMENT VARIABLE ANNUITY
VAA EQUITY
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 11.599062 82,440
1998 11.599062 12.093494 277,925
</TABLE>
30
<PAGE> 36
VAA MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 10.388381 65,172
1998 10.388381 10.796720 122,681
</TABLE>
VAA BOND
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 10.791393 12,183
1998 10.791393 11.197447 126,324
</TABLE>
VAA OMNI
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 11.608584 102,587
1998 11.608584 11.966933 300,484
</TABLE>
VAA INTERNATIONAL
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 10.114943 86,113
1998 10.114943 10.362585 120,242
</TABLE>
VAA CAPITAL APPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 11.366198 93,956
1998 11.366198 11.872017 210,773
</TABLE>
VAA SMALL CAP
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 10.854875 54,898
1998 10.854875 11.836906 146,789
</TABLE>
VAA INTERNATIONAL SMALL COMPANY (GLOBAL CONTRARIAN)
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 11.036950 16,423
1998 11.036950 11.268548 27,971
</TABLE>
VAA AGGRESSIVE GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 11.150420 26,996
1998 11.150420 11.858619 92,803
</TABLE>
VAA STRATEGIC INCOME
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 10.724151 100,248
1998 10.724151 10.425769 179,803
</TABLE>
31
<PAGE> 37
VAA FIRSTAR GROWTH & INCOME (STELLAR)
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 10.818421 56,527
1998 10.818421 10.980827 122,557
</TABLE>
VAA RELATIVE VALUE
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 12.651115 250,298
1998 12.651115 15.061199 663,668
</TABLE>
VAA EMERGING MARKETS
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1997 $ 10.000000 $ 9.788417 32,560
1998 9.788417 6.030274 51,176
</TABLE>
VAA S&P 500 INDEX
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1998* $ 10.000000 $ 11.452642 118,264
</TABLE>
VAA GOLDMAN SACHS CAPITAL GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1998* $ 10.000000 $ 11.582489 36,645
</TABLE>
VAA WORLDWIDE GROWTH
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1998* $ 10.000000 $ 10.308701 63,482
</TABLE>
VAA BALANCED SUBACCOUNT
<TABLE>
<CAPTION>
YEAR ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
- ----------- ----------------- ------------- ---------------
<S> <C> <C> <C>
1998* $ 10.000000 $ 11.955678 142,767
</TABLE>
*International Fund was added April 30, 1993. Capital Appreciation and Small Cap
Funds were added March 31, 1995. S&P 500 Index, Goldman Sachs Capital Growth,
Worldwide Growth and Balanced Funds were added to Investar Vision and Top
Spectrum May 1, 1998.
32
<PAGE> 38
APPENDIX A
IRA DISCLOSURE STATEMENT
This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your simplified
employee pension IRA (SEPP-IRA) for employer contributions, your Savings
Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase for your
spouse (see "IRA for Non-working Spouse", page 32). You can obtain more
information regarding your IRA either from your sales representative or from any
district office of the Internal Revenue Service.
FREE LOOK PERIOD
The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund within 10 days after it is delivered (see
page 13). To exercise this "free-look" provision write or call the address shown
below:
The Ohio National Life Insurance Company
Variable Annuity Administration
P. O. Box 2669
Cincinnati, Ohio 45201
Telephone: 1-800-366-6654 -- 8:30 a.m. - 4:30 p.m. (Eastern time zone)
ELIGIBILITY REQUIREMENTS
IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.
CONTRIBUTIONS AND DEDUCTIONS
Contributions to your IRA will be deductible if you are not an "active
participant" in an employer maintained qualified retirement plan or you have
Adjusted Gross Income which does not exceed the "applicable dollar limit." IRA
(or SEPP-IRA) contributions must be made by no later than the time you file your
income tax return for that year. For a single taxpayer, the applicable dollar
limitation is $30,000, with the amount of IRA contribution which may be deducted
reduced proportionately for Adjusted Gross Income between $30,000-$40,000. For
married couples filing jointly, the applicable dollar limitation is $50,000,
with the amount of IRA contribution which may be deducted reduced
proportionately for Adjusted Gross Income between $50,000-$60,000. There is no
deduction allowed for IRA contributions when Adjusted Gross Income reaches
$40,000 for individuals and $60,000 for married couples filing jointly.
Contributions made by your employer to your SEPP-IRA are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEPP-IRA will be entitled to
elect to have their employer make contributions to their SEPP-IRA on their
behalf or to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEPP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEPP-IRA are subject to an inflation-adjusted limit which is $10,000 for 1998.
Salary-reduction SEPP-IRAs (also called "SARSEPs") are available only if at
least 50% of the employees elect to have amounts contributed to the SEPP-IRA and
if the employer has 25 or fewer employees at all times during the preceding
year. New salary reduction SEPPs may not be established after 1996.
The IRA maximum annual contribution and your tax deduction is limited to the
lesser of: (1) $2,000 or (2) 100% of your earned compensation. Contributions in
excess of the deduction limits may be subject to penalty. See below.
33
<PAGE> 39
Under a SEPP-IRA agreement, the maximum annual contribution which your employer
may make on your behalf to a SEPP-IRA contract which is excludable from your
income is the lesser of 15% of your salary or $24,000. An employee who is a
participant in a SEPP-IRA agreement may make after-tax contributions to the
SEPP-IRA contract, subject to the contribution limits applicable to IRAs in
general. Those employee contributions will be deductible subject to the
deductibility rules described above.
The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) $2,000 or (2) 100% of
taxable alimony.
If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEPP-IRA, the excess amount will be considered an "excess
contribution." You are permitted to withdraw an excess contribution from your
IRA or SEPP-IRA before your tax filing date without adverse tax consequences.
If, however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.
Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See Premature Distributions, page 30, for penalties imposed on
withdrawal when the contribution exceeds $2,200).
IRA FOR NON-WORKING SPOUSE
If you establish an IRA for yourself, you may also be eligible to establish an
IRA for your "non-working" spouse. In order to be eligible to establish such a
spousal IRA, you must file a joint tax return with your spouse and if your
non-working spouse has compensation, his/her compensation must be less than your
compensation for the year. Contributions of up to $2,000 each may be made to
your IRA and the spousal IRA if the combined compensation of you and your spouse
is at least equal to the amount contributed. If requirements for deductibility
(including income levels) are met, you will be able to deduct an amount equal to
the least of (i) the amount contributed to the IRA's; (ii) $4,000; or (iii) 100%
of your combined gross income.
Contributions in excess of the contribution limits may be subject to penalty.
See above under "Contributions and Deductions". If you contribute more than the
allowable amount, the excess portion will be considered an excess contribution.
The rules for correcting it are the same as discussed above for regular IRAs.
Other than the items mentioned in this section, all of the requirements
generally applicable to IRAs are also applicable to IRAs established for
non-working spouses.
ROLLOVER CONTRIBUTION
Once every year, you are permitted to withdraw any portion of the value of your
IRA or SEPP-IRA and reinvest it in another IRA or bond. Withdrawals may also be
made from other IRAs and contributed to this contract. This transfer of funds
from one IRA to another is called a "rollover" IRA. To qualify as a rollover
contribution, the entire portion of the withdrawal must be reinvested in another
IRA within 60 days after the date it is received. You will not be allowed a
tax-deduction for the amount of any rollover contribution.
A similar type of rollover to an IRA can be made with the proceeds of a
qualified distribution from a qualified retirement plan or tax-sheltered
annuity. Properly made, such a distribution will not be taxable until you
receive payments from the IRA created with it. Unless you were a self-employed
participant in the distributing plan, you may later rollover such a contribution
to another qualified retirement plan as long as you have not mixed it with IRA
(or SEPP-IRA) contributions you have deducted from your income. (You may roll
less than all of a qualified distribution into an IRA, but any part of it not
rolled over will be currently includable in your income without any capital
gains treatment.)
34
<PAGE> 40
PREMATURE DISTRIBUTIONS
At no time can your interest in your IRA or SEPP-IRA be forfeited. To insure
that your contributions will be used for your retirement, the federal tax law
does not permit you to use your IRA or SEPP-IRA as security for a loan.
Furthermore, as a general rule, you may not sell or assign your interest in your
IRA or SEPP-IRA to anyone. Use of an IRA (or SEPP-IRA) as security or assignment
of it to another will invalidate the entire annuity. It then will be includable
in your income in the year it is invalidated and will be subject to a 10%
penalty tax if you are not at least age 59 1/2 or totally disabled unless you
comply with special rules requiring distributions to be made at least annually
over your life expectancy.
The 10% penalty tax does not apply to the withdrawal of an excess contribution
as long as the excess is withdrawn before the due date of your tax return.
Withdrawals of excess contributions after the due date of your tax return will
generally be subject to the 10% penalty unless the excess contribution results
from erroneous information from a plan trustee making an excess rollover
contribution or unless you are over age 59 1/2 or are disabled.
DISTRIBUTION AT RETIREMENT
Once you have attained age 59 1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEPP-IRA) regardless of when you
actually retire. You may elect to receive the distribution in either one sum or
under any one of the periodic payment options available under the contract. The
distributions from your IRA under any one of the periodic payment options or in
one sum will be treated as ordinary income as you receive them.
INADEQUATE DISTRIBUTIONS -- 50% TAX
Your IRA or SEPP-IRA is intended to provide retirement benefits over your
lifetime. Thus, federal law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70 1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse). If the payments are not sufficient to meet
these requirements, an excise tax of 50% will be imposed on the amount of any
underpayment.
DEATH BENEFITS
If you, (or your surviving spouse) die before receiving the entire value of your
IRA (or SEPP-IRA), the remaining interest must be distributed to your
beneficiary (or your surviving spouse's beneficiary) in one lump-sum within 5
years of death, or applied to purchase an immediate annuity for the beneficiary.
This annuity must be payable over the life expectancy of the beneficiary
beginning within one year after your or your spouse's death. If your spouse is
the designated beneficiary, he or she is treated as the owner of the IRA. If
minimum required distributions have begun, the entire amount must be distributed
at least as rapidly as if the owner had survived. A distribution of the balance
of your IRA upon your death will not be considered a gift for federal tax
purposes, but will be included in your gross estate for purposes of federal
estate taxes.
ROTH IRAS
Section 408A of the Code now permits eligible individuals to contribute to a
type of IRA known as a "Roth IRA." Contributions may be made to a Roth IRA by
taxpayers with adjusted gross incomes of less than $160,000 for married
individuals filing jointly and less than $100,000 for single individuals.
Married individuals filing separately are not eligible to contribute to a Roth
IRA. The maximum amount of contributions allowable for any taxable year to all
Roth IRAs maintained by an individual is generally the lesser of $2,000 and 100%
of compensation for that year (the $2,000 limit is phased out for incomes
between $150,000 and $160,000 for married and between $95,000 and $110,000 for
singles). The contribution limit is reduced by the amount of any contributions
made to a non-Roth IRA. Contributions to a Roth IRA are not deductible.
35
<PAGE> 41
For taxpayers with adjusted gross income of $100,000 or less, all or part of
amounts in a non-Roth IRA may be converted, transferred or rolled over to a Roth
IRA. Some or all of the IRA value will typically be includable in the taxpayer's
gross income. If such a rollover, transfer or conversion occurs before 1/1/99,
the portion of the amount includable in gross income must be included in income
ratably over the next four years beginning with the year in which the
transaction occurred. Provided a rollover contribution meets the requirements
for IRAs under Section 408(d)(3) of the Code, a rollover may be made from a Roth
IRA to another Roth IRA.
UNDER SOME CIRCUMSTANCES, IT MAY NOT BE ADVISABLE TO ROLL OVER, TRANSFER OR
CONVERT ALL OR PART OF A NON-ROTH IRA TO A ROTH IRA. PERSONS CONSIDERING A
ROLLOVER, TRANSFER OR CONVERSION SHOULD CONSULT THEIR OWN TAX ADVISOR.
"Qualified distributions" from a Roth IRA are excludable from gross income. A
"qualified distribution" is a distribution that satisfies two requirements: (1)
the distribution must be made (a) after the owner of the IRA attains age 59 1/2;
(b) after the owner's death; (c) due to the owner's disability; or (d) for a
qualified first time homebuyer distribution within the meaning of Section
72(t)(2)(F) of the Code; and (2) the distribution must be made in the year that
is at least five years after the first year for which a contribution was made to
any Roth IRA established for the owner or five years after a rollover, transfer
or conversion was made from a non-Roth IRA to a Roth IRA. Distributions from a
Roth IRA that are not qualified distributions will be treated as made first from
contributions and then from earnings, and taxed generally in the same manner as
distributions from a non-Roth IRA.
Distributions from a Roth IRA need not commence at age 70 1/2. However, if the
owner dies before the entire interest in a Roth IRA is distributed, any
remaining interest in the contract must be distributed by December 31 of the
calendar year containing the fifth anniversary of the owner's death subject to
certain exceptions.
PROTOTYPE STATUS
The Internal Revenue Service has been requested to review the format of your
SEPP, and to issue an opinion letter to Ohio National Life stating that your IRA
qualifies as a prototype SEPP.
REPORTING TO THE IRS
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for under
payments), you must file Form 5329 with the Internal Revenue Service. The form
is to be attached to your federal income tax return for the tax year in which
the penalty applies. Normal contributions and distributions must be shown on
your income tax return for the year to which they relate.
36
<PAGE> 42
ILLUSTRATION OF IRA FIXED ACCUMULATIONS
<TABLE>
<CAPTION>
AGE 60 AGE 65 AGE 70
GUARANTEED GUARANTEED GUARANTEED
SURRENDER VALUE SURRENDER VALUE SURRENDER VALUE
----------------------------- ----------------------------- -----------------------------
$2,000 $2,000 $2,000
$1,000 ONE TIME $1,000 ONE TIME $1,000 ONE TIME
CONTRACT ANNUAL LUMP SUM ANNUAL LUMP SUM ANNUAL LUMP SUM
ANNIVERSARY CONTRIBUTIONS CONTRIBUTION CONTRIBUTIONS CONTRIBUTION CONTRIBUTIONS CONTRIBUTION
- ----------- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 933 $ 1,895 $ 933 $ 1,895 $ 933 $ 1,895
2 1,917 1,955 1,917 1,955 1,917 1,955
3 2,933 2,006 2,933 2,006 2,933 2,006
4 3,990 2,058 3,990 2,058 3,990 2,058
5 5,089 2,116 5,089 2,116 5,089 2,116
6 6,234 2,177 6,234 2,177 6,234 2,177
7 7,435 2,240 7,435 2,240 7,435 2,240
8 8,686 2,306 8,686 2,306 8,868 2,306
9 10,069 2,529 10,069 2,529 10,069 2,529
10 11,506 2,600 11,506 2,600 11,506 2,600
15 19,604 3,001 19,604 3,001 19,604 3,001
20 29,456 3,489 29,456 3,489 29,456 3,489
25 41,442 4,082 41,442 4,082 41,442 4,082
30 56,026 4,804 56,026 4,804 56,026 4,804
35 73,769 5,683 73,769 5,683 73,769 5,683
40 95,356 6,751 95,356 6,751 95,356 6,751
45 121,620 8,051 121,620 8,051 121,620 8,051
50 153,574 9,633 153,574 9,633 153,574 9,633
55 192,451 11,558 192,451 11,558 192,451 11,558
60 239,751 13,900 239,751 13,900 239,751 13,900
65 297,298 16,748 297,298 16,748
70 367,313 20,215 367,313 20,215
</TABLE>
X Guaranteed Interest Rate: 3.25% is applicable to each contract anniversary.
X The Surrender Value is the Accumulation Values less the Contingent Deferred
Sales Charge.
37
<PAGE> 43
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 44
OHIO NATIONAL VARIABLE ACCOUNT A
AND
OHIO NATIONAL VARIABLE ACCOUNT B
OF
THE OHIO NATIONAL LIFE INSURANCE COMPANY
One Financial Way
Montgomery, Ohio 45242
Telephone (513) 794-6514
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
This Statement of Additional Information is not a prospectus. Read it along with
the prospectus for Ohio National Variable Accounts A and B ("VAA" and "VAB")
flexible purchase payment individual variable annuity contracts dated May 1,
1999. To get a free copy of the prospectus for VAA and VAB, write or call us at
the above address.
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Custodian ......................................................................... 2
Independent Certified Public Accountants .......................................... 2
Underwriter ....................................................................... 2
Calculation of Money Market Yield ................................................. 3
Total Return ...................................................................... 3
The Year 2000 Issue ............................................................... 4
Loans Under Tax-sheltered Annuities ............................................... 4
Financial Statements .............................................................. 6
</TABLE>
"TOP TRADITION"
<PAGE> 45
CUSTODIAN
We have a custody agreement with Firstar Bank, N.A., Cincinnati, Ohio, under
which Firstar holds custody of VAA's and VAB's assets. The agreement provides
for Firstar to purchase Fund shares at their net asset value determined as of
the end of the valuation period during which we receive the deposit. At our
instruction, Firstar redeems the Fund shares held by VAA and VAB at their net
asset value determined as of the end of the valuation period during which we
receive or make a redemption request. In addition, Firstar keeps appropriate
records of all of VAA's and VAB's transactions in Fund shares.
The custody agreement requires Firstar to always have aggregate capital, surplus
and undivided profit of not less than $2 million. It does not allow Firstar to
resign until (a) a successor custodian bank having the above qualifications has
agreed to serve as custodian, or (b) VAA and VAB have been completely liquidated
and the liquidation proceeds properly distributed. Subject to these conditions,
the custody agreement may be terminated by either us or Firstar upon sixty days
written notice. We pay Firstar a fee for its services as custodian.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The financial statements of VAA and VAB as of December 31, 1998 and for the
periods indicated and our consolidated financial statements as of December 31,
1998 and 1997 and for the periods indicated have been included in reliance upon
the report of KPMG LLP, independent certified public accountants, also appearing
herein, and upon that firm's authority as experts in accounting and auditing.
UNDERWRITER
We offer the contracts continuously. Before May 1, 1997, The O. N. Equity Sales
Company ("ONESCO"), a wholly-owned subsidiary of ours, was the principal
underwriter of the contracts. Since May 1, 1997, the principal underwriter has
been Ohio National Equities, Inc. ("ONEQ"), another wholly-owned subsidiary of
ours. The aggregate amount of commissions paid to ONESCO and ONEQ for contracts
issued by VAA, and the amounts retained by ONESCO and ONEQ, for each of the last
three years have been:
<TABLE>
<CAPTION>
ONESCO ONEQ ONESCO ONEQ
Aggregate Aggregate Retained Retained
Year Commissions Commissions Commissions Commissions
- ---- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1998 None $6,658,441 None $827,720
1997 $ 903,146 2,997,646 $ 89,572 297,299
1996 2,461,096 None 239,957 None
</TABLE>
For contracts issued by VAB, those amounts have been:
2
<PAGE> 46
<TABLE>
<CAPTION>
ONESCO ONEQ ONESCO ONEQ
Aggregate Aggregate Retained Retained
Year Commissions Commissions Commissions Commissions
- ---- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1998 None $ 934,575 None $116,178
1997 $ 330,599 1,097,297 $ 32,788 108,827
1996 1,691,331 None 164,905 None
</TABLE>
CALCULATION OF MONEY MARKET YIELD
The annualized current yield of the Money Market subaccount for the seven days
ended on December 31, 1998, was 4.09%. This was calculated by determining the
net change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one Money Market accumulation unit at
the beginning of the seven-day period, dividing the net change in value by the
beginning value to obtain the seven-day return, and multiplying the difference
by 365/7. The result is rounded to the nearest hundredth of one percent.
TOTAL RETURN
The average annual compounded rate of return for a contract for each subaccount
over a given period is found by equating the initial amount invested to the
ending redeemable value using the following formula:
n
P(1 + T) = ERV
where: P = a hypothetical initial payment of $1,000,
T = the average annual total return,
n = the number of years, and
ERV = the ending redeemable value of a hypothetical $1,000
beginning-of-period payment at the end of the period (or
fractional portion thereof).
We will up-date standardized total return data based upon Fund performance in
the subaccounts within 30 days after each calendar quarter.
In addition, we may present non-standardized total return data, using the above
formula but based upon Fund performance before the date we first offered this
series of contracts (September 10, 1984). This will be presented as if the same
charges and deductions applying to these contracts had been in effect from the
inception of each Fund. Note that, for purposes of these calculations, we
convert the $30 annual contract administration charge to an annual percentage
charge of 0.10%. This is based upon an average contract value of $30,000. The
actual effect that the contract administration charge would have on total
returns would be less than that percentage for contracts having a higher value
and greater than that for contracts having a lower value.
3
<PAGE> 47
The average annual non-standardized total returns for the contracts from the
inception of each Fund and for the one-, five- and ten-year periods ending on
December 31, 1998 (assuming surrender of the contract then) are as follows:
<TABLE>
<CAPTION>
One Five Ten From Inception
Year Years Years Inception Date
---- ----- ----- --------- ----
<S> <C> <C> <C> <C> <C>
Equity 4.45% 12.15% 11.30% 9.54% 10-06-69
Money Market 4.11% 3.84% 4.09% 5.90% 03-20-80
Bond 3.95% 5.11% 6.84% 7.17% 11-02-82
Omni 3.27% 10.40% 10.15% 10.16% 09-10-84
International 2.63% 6.73% N/A 10.00% 04-30-93
Capital Appreciation 4.64% N/A N/A 12.16% 05-01-94
Small Cap 9.24% N/A N/A 17.81% 05-01-94
International Small Company 2.28% N/A N/A 8.29% 03-31-95
Aggressive Growth 6.54% N/A N/A 11.08% 03-31-95
Core Growth 7.51% N/A N/A 1.45% 01-03-97
Growth & Income 5.80% N/A N/A 19.53% 01-03-97
S&P 500 Index 28.44% N/A N/A 29.39% 01-03-97
Social Awareness (23.35%) N/A N/A (2.48%) 01-03-97
</TABLE>
THE YEAR 2000 ISSUE
We believe we have succeeded in remedying the "Year 2000" problem for all
mission critical internal computer systems and applications. Conversion testing
and implementation for those systems were completed by December 31, 1998. During
the remainder of 1999, peripheral personal computer systems will continue to be
up-graded and tested for Year 2000 implementation. While Ohio National Fund and
its investment adviser have been assured by suppliers of financial services
(including the custodians, the transfer agent and the accounting agent) that
their systems either are already compliant or will be so in sufficient time,
internal auditors intend to independently test those systems to verify their
compliance. We are also developing contingency plans to be prepared for the
possibility that one or more service providers might not be complaint. If we,
Ohio National Fund, its investment adviser or one of our service suppliers fails
to achieve timely and complete compliance, it could materially impair our
ability to conduct our business, including the ability to accurately and timely
value interests in the contracts.
LOANS UNDER TAX-SHELTERED ANNUITIES
Contracts issued as tax-sheltered annuities under plans qualifying under Section
403(b) of the Code, and allowing for voluntary contributions only, are eligible
for loans secured by a security interest in the contract. A loan must be for at
least $1,000 and may only be made from the Guaranteed Account. The loan amount
is limited by the maximum loan formula described in your contract.
We charge an annual effective rate of interest up to 7%. You must generally
repay your loans within 5 years (or 20 years if you use the loan to purchase
your primary home).
The amount of the death benefit, the amount payable on a full surrender and the
amount that will be applied to provide an annuity will all be reduced by your
loan balance, including accrued interest.
4
<PAGE> 48
OHIO NATIONAL VARIABLE ACCOUNT B
FORM N-4
PART C
OTHER INFORMATION
<PAGE> 49
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Registrant are to be included in Part
B of this Registration Statement and will be furnished in another post-effective
amendment to be filed before May 1, 1999:
Independent Auditors' Report of KPMG LLP dated February 5, 1999
Statements of Assets and Contract Owners' Equity dated December 31, 1998
Statement of Operations and Changes in Contract Owners' Equity for the
Years Ended December 31, 1998 and 1997
Notes to Financial Statements dated December 31, 1998
Schedules of Changes in Unit Values for the Years Ended December 31, 1998
and 1997
The following consolidated financial statements of the Depositor and its
subsidiaries are also to be included in Part B of this Registration Statement
and will be furnished in another post-effective amendment to be filed before
May 1, 1999:
Independent Auditors' Report of KPMG LLP dated February __, 1999
Consolidated Balance Sheets dated December 31, 1998 and 1997
Consolidated Statements of Income for the Years Ended December 31, 1998,
1997 and 1996
Consolidated Statements of Equity for the Years Ended December 31, 1998,
1997 and 1996
Consolidated Statements of Cash Flows for the Years Ended December 31,
1998, 1997 and 1996
Notes to Consolidated Financial Statements dated December 31, 1998, 1997
and 1996
The following financial information is included in Part A of this Registration
Statement:
Accumulation Unit Values
Accumulation Unit Values for Prior Contracts
Consents of the Following Persons:
Not applicable
Exhibits:
All relevant exhibits, which have previously been filed with the Commission
and are incorporated herein by reference, are as follows:
(1) Resolution of Board of Directors of the Depositor authorizing
establishment of the Registrant was filed as Exhibit A(1) of the
Registrant's registration statement on Form S-6 on August 3, 1982
(File no. 2-78653).
-1-
<PAGE> 50
(3)(a) Principal Underwriting Agreement for Variable Annuities
between the Depositor and Ohio National Equities, Inc. was
filed as Exhibit (3)(a) of Form N-4, Post-effective Amendment
no. 21 of Ohio National Variable Account A (File no. 2-91213).
(3)(b) Registered Representative's Sales Contract with Variable Annuity
Supplement was filed as Exhibit (3)(b) of the Registrant's Form
N-4, Post-effective Amendment no. 9 on February 27, 1991 (File no.
2-91214).
(3)(c) Variable Annuity Sales Commission Schedule was filed as Exhibit
A(3)(c) of the Registrant's registration statement on Form S-6 on
May 18, 1984 (File no. 2-91214).
(3)(d) Variable Contract Distribution Agreements (with compensation
schedules) between the Depositor and Ohio National Equities, Inc.
were filed as Exhibit (3)(d) of Post-effective Amendment no. 23 of
Ohio National Variable Account A registration statement on Form
N-4 on April 27, 1998 (File no. 2-91213).
(4) Combination Annuity Contract, Form 90-VB-1, was filed as Exhibit
(4) of the Registrant's Form N-4, post effective Amendment no. 9 on
February 27, 1991 (File No. 2-91214).
(5)(a) Variable Annuity Application, Form V-4890B, was filed as Exhibit
(5)(a) of the Registrant's Form N-4, Post-effective Amendment no.
18 on April 25, 1996 (File No. 2-91214).
(6)(a) Articles of Incorporation of the Depositor were filed as Exhibit
A(6)(a) of Ohio National Variable Interest Account registration
statement on Form N-8B-2 on July 11, 1980 (File no. 811-3060).
(6)(b) Code of Regulations (by-laws) of the Depositor were filed as
Exhibit A(6)(b) of Ohio National Variable Interest Account A
registration statement on Form N-8B-2 on July 11, 1980 (File no.
811-3060).
(8) Powers of Attorney by certain Directors of the Depositor were filed
as Exhibit (8) of Post-effective Amendment no. 22 of Ohio National
Variable Account A registration statement on Form N-4 on March 2,
1998 (File no. 2-91213).
(13) Computation of Performance Data was filed as Exhibit (13) of the
Form N-4 for Ohio National Variable Account A Pre-effective
Amendment no. 1 on April 10, 1998 (File no. 333-43511).
-2-
<PAGE> 51
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Trudy K. Backus* Vice President, Individual Insurance Services
Thomas A. Barefield* Senior Vice President, Institutional Sales
Howard C. Becker* Senior Vice President, Individual Insurance
& Corporate Services
Ronald L. Benedict* Corporate Vice President, Counsel and
Secretary
Michael A. Boedeker* Vice President, Fixed Income Securities
Robert A. Bowen* Senior Vice President, Information Systems
Roylene M. Broadwell* Vice President & Treasurer
Joseph P. Brom* Director and Senior Vice President & Chief
Investment Officer
Dale P. Brown Director
36 East Seventh Street
Cincinnati, Ohio 45202
Jack E. Brown Director
50 E. Rivercenter Blvd.
Covington, Kentucky 41011
William R. Burleigh Director
One West Fourth Street
Suite 1100
Cincinnati, Ohio 45202
Victoria B. Buyniski Director
2343 Auburn Avenue
Cincinnati, Ohio 45219
Raymond R. Clark Director
201 East Fourth Street
Cincinnati, Ohio 45202
David W. Cook* Senior Vice President and Actuary
Ronald J. Dolan* Director and Senior Vice President and Chief
Financial Officer
Michael J. Ferry* Vice President, Information Systems
Michael F. Haverkamp* Vice President and Counsel
John A. Houser III* Vice President, Claims
</TABLE>
-3-
<PAGE> 52
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Charles S. Mechem, Jr. Director
One East Fourth Street
Cincinnati, Ohio 45202
James I. Miller, II* Vice President, Marketing Support
Thomas O. Olson* Vice President, Underwriting
David B. O'Maley* Director, Chairman, President and Chief
Executive Officer
James F. Orr Director
201 East Fourth Street
Cincinnati, Ohio 45202
John J. Palmer* Director and Senior Vice President, Strategic
Initiatives
George B. Pearson, Jr.* Vice President, PGA Marketing
J. Donald Richardson* Senior Regional Vice President
D. Gates Smith* Director and Senior Vice President, Sales
Michael D. Stohler* Vice President, Mortgages and Real Estate
Stuart G. Summers* Director and Senior Vice President and General
Counsel
Dennis C. Twarogowski* Vice President, Career Marketing
Oliver W. Waddell Director
425 Walnut Street
Cincinnati, Ohio 45202
Dr. David S. Williams* Vice President and Medical Director
Stephen T. Williams* Vice President, Equity Investments
</TABLE>
*The principal business address for these individuals is One Financial Way,
Montgomery, Ohio 45242.
-4-
<PAGE> 53
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI
A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- --------------------------------------------------------------------------------
<S> <C>
- ------------------------------- -----------------------------
ENTERPRISE PARK, INC. OHIO NATIONAL EQUITIES INC.
A GEORGIA CORPORATION A BROKER/DEALER
REAL ESTATE DEVELOPMENT COMPANY CAPITALIZED BY ONLI @ $30,000
CAPITALIZED BY ONLI $50,000
- ------------------------------- --------------------------------
Pres. & Dir. M. Stohler Chm. & Dir. D. O'Maley
V.P. & Dir. J. Brom Pres. & Dir. J. Palmer
Secy. & Dir. J. Fischer VP & Dir. T. Backus
Treas. & Dir. D. Taney VP & Dir. J. Miller
Sr. VP T. Barefield
Secretary & Dir. R. Benedict
Treasurer B. Turner
Compliance Officer J. Dunn
Asst. Secy. M. Haverkamp
- ------------------------------- --------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI
A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- -------------------------------------------------------------------------------------------------------------------
S E P A R A T E A C C O U N T S
--------------------------------
A B C D E F
--------------------------------
<S> <C> <C>
- ------------------------------- ------------------------------ -------------------------------------
OHIO NATIONAL INVESTMENTS, INC. THE O.N. EQUITY SALES COMPANY OHIO NATIONAL LIFE
ASSURANCE CORPORATION
AN INVESTMENT ADVISER AN OHIO CORPORATION AN OHIO CORPORATION
CAPITALIZED BY ONLI @ $10,000 A BROKER/DEALER A STOCK LIFE INSURANCE COMPANY
CAPITALIZED BY ONLI @ $790,000 CAPITALIZED BY ONLI @ $32,000,000
INCORPORATED UNDER THE LAWS OF OHIO
- ------------------------------- ------------------------------ ------------------------------------
Chm. & Dir. D. O'Maley Chm./Pres/.CEO & Dir. D. O'Maley
Pres. & Dir. J. Brom Sr. VP & Dir. R. Dolan
Pres. & Dir. J. Palmer Sr. VP & Dir. J. Palmer
VP & Dir. M. Boedeker Sr. VP & Dir. S. Summers
V.P. & Dir. M. Haverkamp Sr. VP & Dir. J. Brom
VP & Dir. M. Stohler Sr. VP T. Barefield
Secy. & Dir. R. Benedict Sr. Vice Pres. A. Bowen
VP & Dir. S. Williams Sr. Vice Pres. D. Cook
Treasurer B. Turner Sr. Vice Pres. G. Smith
Treasurer D. Taney Vice Pres. & Treas. R. Broadwell
Compliance Director J. Dunn Vice President M. Boedeker
Secretary R. Benedict Vice President T. Backus
Vice President G. Pearson
VP K. Hanson Vice President M. Stohler
VP D. Hundley Vice Pres. J. Houser
VP J. Martin Vice President D. Twarogowski
VP & Secy. R. Benedict
Asst. Secy. J. Fischer
Asst. Actuary K. Flischel
- ------------------------------- ------------------------------ -----------------------------------
SEPARATE ACCOUNT
-----------------------------------
R
---
<CAPTION>
<= Advisor to Advisor to =>
--------------------------------------------------------
<S> <C> <C>
- ------------------ -------------------------------- --------------------------------
ONE FUND, INC. O.N. INVESTMENT MANAGEMENT CO. OHIO NATIONAL FUND
A MARYLAND CORPORATION AN OHIO CORPORATION A MARYLAND CORPORATION
AN OPEN END DIVISIFIED A FINANCIAL ADVISORY SERVICE AN OPEN END DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY CAPITALIZED BY ONESCO @ $145,000 MANAGEMENT INVESTMENT COMPANY
- ----------------------------- -------------------------------- --------------------------------
Pres. & Dir. J. Palmer Pres. & Dir. J. Palmer Pres. & Dir. J. Palmer
Vice. Pres. M. Boedeker ----- Vice President M. Boedeker
Vice Pres. J. Brom VP & Dir. G. Smith Vice President J. Brom
Vice Pres. T. Barefield Vice President S. Williams
Vice Pres. S. Williams VP & Dir. D. McClure Treasurer D. Taney
Treasurer D. Taney --------Secy. & Dir. R. Benedict
Secy. & Dir. R. Benedict Treasurer K. Jaeger Director R. Love
Director R. Love Director G. Castrucci
Director G. Castrucci Secretary M. Haverkamp Director G. Vredeveld
Director G. Vredeveld Sr. VP T. Barefield
- --------------------------------- -------------------------------- ---------------------------------
</TABLE>
<PAGE> 54
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Organization Chart showing the relationships among the Depositor, the
Registrant and their affiliated entities is on page 4A hereof.
ITEM 27. NUMBER OF CONTRACTOWNERS
As of February 5, 1999 the Registrant's contracts were owned by 8,339 owners.
ITEM 28. INDEMNIFICATION
The sixth article of the Depositor's Articles of Incorporation, as amended,
provides as follows:
Each former, present and future Director, Officer or Employee of the
Corporation (and his heirs, executors or administrators), or any such
person (and his heirs, executors or administrators) who serves at the
Corporation's request as a director, officer, partner, member or employee
of another corporation, partnership or business organization or
association of any type whatsoever shall be indemnified by the Corporation
against reasonable expenses, including attorneys' fees, judgments, fine
and amounts paid in settlement actually and reasonably incurred by him in
connection with the defense of any contemplated, pending or threatened
action, suit or proceeding, civil, criminal, administrative or
investigative, other than an action by or in the right of the corporation,
to which he is or may be made a party by reason of being or having been
such Director, Officer, or Employee of the Corporation or having served at
the Corporation's request as such director, officer, partner, member or
employee of any other business organization or association, or in
connection with any appeal therein, provided a determination is made by
majority vote of a disinterested quorum of the Board of Directors (a) that
such a person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, and (b)
that, in any matter the subject of criminal action, suit or proceeding,
such person had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself create a presumption that the person did
not act in good faith in any manner which he reasonably believed to be in
or not opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, he had reasonable cause to believe
that his conduct was unlawful. Such right of indemnification shall not be
deemed exclusive of any other rights to which such person may be entitled.
The manner by which the right to indemnification shall be determined in
the absence of a disinterested quorum of the Board of Directors shall be
set forth in the Code of Regulations or in such other manner as permitted
by law. Each former, present, and future Director, Officer or Employee of
the Corporation (and his heirs, executors or administrators) who serves at
the Corporation's request as a director, officer, partner, member or
employee of another corporation, partnership or business organization or
association of any type whatsoever shall be indemnified by the Corporation
against reasonable expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of
any contemplated, pending or threatened action, suit or proceeding, by or
in the right of the Corporation to procure a judgment in its favor, to
which he is or may be a party by reason of being or having been such
Director, Officer or Employee of the Corporation or having served at the
Corporation's request as such director, officer, partner, member or
employee of any other business organization or association, or in
connection with any appeal therein, provided a determination is made by
majority vote of a disinterested quorum of the Board of Directors (a) that
such person was not, and has not been adjudicated to have been negligent
or guilty of misconduct in the performance of his duty to the Corporation
or to such other business organization or association, and (b) that such
person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation.
-5-
<PAGE> 55
Such right of indemnification shall not be deemed exclusive of any other
rights to which such person may be entitled. The manner by which the right
of indemnification shall be determined in the absence of a disinterested
quorum of the Board of Directors shall be as set forth in the Code of
Regulations or in such other manner as permitted by law.
In addition, Article XII of the Depositor's Code of Regulations states as
follows:
If any director, officer or employee of the Corporation may be entitled to
indemnification by reason of Article Sixth of the Amended Articles of
Corporation, indemnification shall be made upon either (a) a determination
in writing of the majority of disinterested directors present, at a
meeting of the Board at which all disinterested directors present
constitute a quorum, that the director, officer or employee in question
was acting in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of this Corporation or of such other
business organization or association in which he served at the
Corporation's request, and that, in any matter which is the subject of a
criminal action, suit or proceeding, he had no reasonable cause to believe
that his conduct was unlawful and in an action by or in the right of the
Corporation to procure a judgment in its favor that such person was not
and has not been adjudicated to have been negligent or guilty of
misconduct in the performance of his duty to the Corporation or to such
other business organization or association; or (b) if the number of all
disinterested directors would not be sufficient at any time to constitute
a quorum, or if the number of disinterested directors present at two
consecutive meetings of the Board has not been sufficient to constitute a
quorum, a determination to the same effect as set forth in the foregoing
clause (a) shall be made in a written opinion by independent legal counsel
other than an attorney, or a firm having association with it an attorney,
who has been retained by or who has performed services for this
Corporation, or any person to be indemnified within the past five years,
or by the majority vote of the policyholders, or by the Court of Common
Pleas or the court in which such action, suit or proceeding was brought.
Prior to making any such determination, the Board of Directors shall first
have received the written opinion of General Counsel that a number of
directors sufficient to constitute a quorum, as named therein, are
disinterested directors. Any director who is a party to or threatened with
the action, suit or proceeding in question, or any related action, suit or
proceeding, or has had or has an interest therein adverse to that of the
Corporation, or who for any other reason has been or would be affected
thereby, shall not be deemed a disinterested director and shall not be
qualified to vote on the question of indemnification. Anything in this
Article to the contrary notwithstanding, if a judicial or administrative
body determines as part of the settlement of any action, suit or
proceeding that the Corporation should indemnify a director, officer or
employee for the amount of the settlement, the Corporation shall so
indemnify such person in accordance with such determination. Expenses
incurred with respect to any action, suit or proceeding which may qualify
for indemnification may be advanced by the Corporation prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
director, officer or employee to repay such amount if it is ultimately
determined hereunder that he is not entitled to indemnification or to the
extent that the amount so advanced exceeds the indemnification to which he
is ultimately determined to be entitled.
ITEM 29. PRINCIPAL UNDERWRITERS
The principal underwriter of the Registrant's securities is Ohio National
Equities, Inc. ("ONEQ"). ONEQ is a wholly-owned subsidiary of the
Depositor. ONEQ also serves as the principal underwriter of securities
issued by Ohio National Variable Accounts A and D, other separate accounts of
the Depositor which are registered as unit investment trusts; and Ohio National
Variable Account R, a separate account of the Depositor's subsidiary, Ohio
National Life Assurance Corporation, which separate account is also registered
as a unit investment trust; and ONE Fund, Inc., an open-end investment company
of the management type.
-6-
<PAGE> 56
The directors and officers of ONEQ are:
Name Position with ONEQ
---- -----------------------
David B. O'Maley Chairman and Director
John J. Palmer President & Chief Executive Officer and
Director
Thomas A. Barefield Senior Vice President
Trudy K. Backus Vice President and Director
Joni L. Dunn Vice President and Compliance Officer
Ronald L. Benedict Secretary and Director
Barbara A. Turner Operations Vice President and Treasurer
James I. Miller II Vice President and Director
The principal business address of each of the foregoing is One Financial Way,
Cincinnati, Ohio 45242.
During the last fiscal year, ONEQ received the following commissions and other
compensation, directly or indirectly, from the Registrant:
<TABLE>
<CAPTION>
Net Underwriting Compensation
Discounts and on Redemption Brokerage
Commissions or Annuitization Commissions Compensation
- ----------- ---------------- ----------- ------------
<S> <C> <C> <C>
$934,575 None None None
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books and records of the Registrant which are required under Section 31(a)
of the 1940 Act and Rules thereunder are maintained in the possession of the
following persons:
(1) Journals and other records of original entry:
The Ohio National Life Insurance Company ("Depositor")
One Financial Way
Montgomery, Ohio 45242
Firstar Bank, N.A. ("Custodian")
425 Walnut Street
Cincinnati, Ohio 45202
-7-
<PAGE> 57
(2) General and auxiliary ledgers:
Depositor and Custodian
(3) Securities records for portfolio securities:
Custodian
(4) Corporate charter, by-laws and minute books:
Registrant has no such documents.
(5) Records of brokerage orders:
Not applicable.
(6) Records of other portfolio transactions:
Custodian
(7) Records of options:
Not applicable
(8) Records of trial balances:
Custodian
(9) Quarterly records of allocation of brokerage orders and commissions:
Not applicable
(10) Records identifying persons or group authorizing portfolio
transactions:
Depositor
(11) Files of advisory materials:
Not applicable
(12) Other records
Custodian and Depositor
ITEM 3L. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS AND REPRESENTATIONS
Representation pursuant to Section 26(e)(2)(A) of the Investment Company Act of
1940, as amended, was furnished in the Registrant's Form N-4, Post-effective
Amendment no. 21, on April 25, 1997.
-8-
<PAGE> 58
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant, Ohio National Variable Account B has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Montgomery and the State of Ohio on this 25th day of
February, 1999.
OHIO NATIONAL VARIABLE ACCOUNT B
(Registrant)
By THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/ John J. Palmer
_____________________________________________
John J. Palmer, Senior Vice President,
Strategic Initiatives
Attest:
/s/Ronald L. Benedict
____________________________________
Ronald L. Benedict
Corporate Vice President, Counsel
and Secretary
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the depositor, The Ohio National Life Insurance Company, has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Montgomery and the State of Ohio on the 25th day of
February, 1999.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/John J. Palmer
_______________________________________________
John J. Palmer, Senior Vice President,
Strategic Initiatives
Attest:
/s/Ronald L. Benedict
_________________________________
Ronald L. Benedict
Corporate Vice President, Counsel
and Secretary
<PAGE> 59
As required by the Securities Act of 1933, this post-effective amendment to the
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
s/David B. O'Maley Chairman, President, February 25, 1999
------------------------------
David B. O'Maley Chief Executive Officer
and Director
s/Joseph P. Brom Director February 25, 1999
- ------------------------------
Joseph P. Brom
*s/Dale P. Brown Director February 25, 1999
- ------------------------------
Dale P. Brown
*s/Jack E. Brown Director February 25, 1999
- ------------------------------
Jack E. Brown
*s/William R. Burleigh Director February 25, 1999
- ------------------------------
William R. Burleigh
*s/Victoria B. Buyniski Director February 25, 1999
- ------------------------------
Victoria B. Buyniski
*s/Raymond R. Clark Director February 25, 1999
- ------------------------------
Raymond R. Clark
s/Ronald J. Dolan Director February 25, 1999
- ------------------------------
Ronald J. Dolan
*s/Charles S. Mechem, Jr. Director February 25, 1999
- ------------------------------
Charles S. Mechem, Jr.
*s/James F. Orr Director February 25, 1999
- ------------------------------
James F. Orr
s/John J. Palmer Director February 25, 1999
- ------------------------------
John J. Palmer
s/D. Gates Smith Director February 25, 1999
- ------------------------------
D. Gates Smith
s/Stuart G. Summers Director February 25, 1999
- ------------------------------
Stuart G. Summers
</TABLE>
<PAGE> 60
<TABLE>
<S> <C> <C>
*s/Oliver W. Waddell Director February 25, 1999
- -------------------------------
Oliver W. Waddell
</TABLE>
By s/ John J. Palmer
- -------------------------------
John J. Palmer, Attorney in Fact pursuant to Powers of Attorney, copies
of which have previously been filed as exhibits to the Registrant's
registration statement.
<PAGE> 61
INDEX OF CONSENTS AND EXHIBITS
Page Number in
Exhibit Sequential
Number Description Numbering System
None
