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As filed with the Securities and Exchange Commission on February 27, 1998
Registration No. 33-77878
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 4
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NORTH AMERICA
SEPARATE ACCOUNT A,
formerly, NASL Variable Account
(Exact name of Registrant)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF
NORTH AMERICA
formerly, North American Security Life Insurance Company
(Name of Depositor)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of Depositor's Principal Executive Offices)
(617) 266-6004
(Depositor's Telephone Number Including Area Code)
Copy to:
James D. Gallagher J. Sumner Jones, Esq.
Vice President, Secretary and Jones & Blouch, L.L.P.
General Counsel 1025 Thomas Jefferson Street, N.W.
The Manufacturers Life Insurance Company Washington, DC 20007
of North America
73 Tremont Street
Boston, Massachusetts 02108
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[X] on May 1, 1998 pursuant to paragraph (a)(i) of Rule 485
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The Prospectus contained in this registration statement also relates to variable
annuity contracts covered by earlier registration statements under file no.
33-55712
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT A
CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-4
N-4 Item
Part A Caption in Prospectus
- ------ ---------------------
1 ................ Cover Page
2 ................ Special Terms
3 ................ Summary
4 ................ Performance Data; Financial Statements
5 ................ General Information about The Manufacturers Life Insurance
Company of North America, The Manufacturers Life Insurance
Company of North America Separate Account A, and
Manufacturers Investment Trust
6 ................ Charges and Deductions; Withdrawal Charge; Reduction or
Elimination of Withdrawal Charge; Administration Fees;
Distribution Fee; Mortality and Expense Risk Charge; Taxes;
Appendix A; Appendix B
7 ................ Accumulation Provisions; Company Approval; Purchase
Payments; Accumulation Units; Net Investment Factor;
Transfers Among Investment Options; Telephone Transactions;
Special Transfer Services - Dollar Cost Averaging; Asset
Rebalancing Program; Withdrawals; Special Withdrawal
Services - the Income Plan; Contract Owner Inquiries; Other
Contract Provisions; Ownership; Beneficiary; Modification
8 ................ Annuity Provisions; General; Annuity Options; Determination
of Amount of the First Variable Annuity Payment; Annuity
Units and the Determination of Subsequent Variable Annuity
Payments; Transfers After Maturity Date
9 ................ Accumulation Provisions; Death Benefit Before Maturity Date;
Annuity Provisions; Death Benefit on or After Maturity Date
10 ............... Accumulation Provisions; Purchase Payments; Accumulation
Units; Value of Accumulation Units; Net Investment Factor;
Distribution of Contracts
11 ............... Withdrawals; Restrictions under the Texas Optional
Retirement Program; Accumulation Provisions; Purchase
Payments; Other Contract Provisions; Ten Day Right to Review
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12 ............... Federal Tax Matters; Intro- duction; The Company's Tax
Status; Taxation of Annuities in General; Diversification
Requirements; Qualified Retirement Plans
13 ............... Legal Proceedings
14 ............... Statement of Additional Information - Table of Contents
Caption in Statement of
Part B Additional Information
- ------ ----------------------
15 ............... Cover Page
16 ............... Table of Contents
17 ............... General History and Information.
18 ............... Services-Accountants; Services-Servicing Agent
19 ............... Not Applicable
20 ............... Services - Principal Underwriter
21 ............... Performance Data
22 ............... Not Applicable
23 ............... Financial Statements
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PART A
INFORMATION REQUIRED IN A PROSPECTUS
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Annuity Service Office Mailing Address
116 Huntington Avenue Post Office Box 9230
Boston, Massachusetts 02116 Boston, Massachusetts
(617) 266-6004 02205-9230
(800) 344-1029
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NORTH AMERICA SEPARATE ACCOUNT A
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
This Prospectus describes a flexible purchase payment individual deferred
combination fixed and variable annuity contract (the "contract") issued by The
Manufacturers Life Insurance Company of North America, formerly North American
Security Life Insurance Company ("the Company"), a stock life insurance company
the ultimate parent of which is The Manufacturers Life Insurance Company
("Manulife"). The contract is designed for use in connection with retirement
plans which may or may not qualify for special Federal income tax treatment. The
Company has also issued a class of variable annuity contract which is only
available in the states of Washington and Maryland ("prior contracts" "VV"
contracts). This Prospectus principally describes the contract but also
describes the VV contract. The principal differences between the contract
offered by this Prospectus and the VV contract relate to the death benefit
provisions (see "Appendix D - Prior Contracts" "VV Contracts").
The contract provides for the accumulation of contract values and the
payment of annuity benefits on a variable and/or fixed basis. The contract
offers thirty-seven investment options: thirty-five variable and two fixed
accounts. The contract value during the accumulation period and annuity
payments, if selected on a variable basis, will vary according to the investment
performance of the sub-accounts of The Manufacturers Life Insurance Company of
North America Separate Account A, formerly NASL Variable Account (the "Variable
Account"). The Variable Account is a separate account established by the
Company. Purchase payments and earnings on those purchase payments may be
allocated to and transferred among one or more of thirty-five sub-accounts of
the Variable Account. The assets of each sub-account are invested in shares of
Manufacturers Investment Trust, formerly NASL Series Trust (the "Trust"), a
mutual fund having an investment portfolio for each sub-account of the Variable
Account (see the accompanying Prospectus of the Trust). Fixed contract values
may be accumulated under the one year fixed account investment option or the one
year dollar cost averaging fixed account investment option. Except as
specifically noted herein and as set forth under the caption "FIXED ACCOUNT
INVESTMENT OPTION" below, this Prospectus describes only the variable portion of
the contract.
Shares of the Trust are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and the shares are not Federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.
Additional information about the contract and the Variable Account is
contained in a Statement of Additional Information, dated the same date as this
Prospectus, which has been filed with the Securities and Exchange Commission
(the "SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon request by writing the Company at
the above address or telephoning (800) 344-1029. In addition, the SEC maintains
a Web site (http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
registrants that file electronically with the SEC. The table of contents for the
Statement of Additional Information is included on page __ of this Prospectus.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT
CONTAINS INFORMATION ABOUT THE VARIABLE ACCOUNT AND THE VARIABLE PORTION OF THE
CONTRACT THAT A PROSPECTIVE PURCHASER SHOULD KNOW BEFORE INVESTING.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE
SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 7
VIS25.PRO598 The date of this Prospectus is May 1, 1998
2
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TABLE OF CONTENTS
SPECIAL TERMS ........................................................... 3
SUMMARY.................................................................. 5
TABLE OF ACCUMULATION UNIT VALUES........................................ 10
GENERAL INFORMATION ABOUT THE MANUFACTURERS LIFE
INSURANCE COMPANY OF NORTH AMERICA, THE MANUFACTURERS
LIFE INSURANCE COMPANY SEPARATE ACCOUNT A AND
MANUFACTURERS INVESTMENT TRUST........................................... 13
The Manufacturers Life Insurance Company of North America .......... 13
The Manufacturers Life Insurance Company of North America
Separate Account A ............................................. 13
Manufacturers Investment Trust....................................... 13
DESCRIPTION OF THE CONTRACT .............................................. 18
ACCUMULATION PROVISIONS ............................................... 18
Purchase Payments ................................................... 18
Accumulation Units .................................................. 18
Value of Accumulation Units ......................................... 18
Net Investment Factor ............................................... 19
Transfers Among Investment Options .................................. 19
Maximum Number of Investment Options................................. 19
Telephone Transactions .............................................. 19
Special Transfer Services - Dollar Cost Averaging.................... 20
Asset Rebalancing Program............................................ 20
Withdrawals.......................................................... 20
Telephone Redemptions ............................................... 21
Special Withdrawal Services - the Income Plan ....................... 21
Loans................................................................ 21
Death Benefit Before Maturity Date................................... 22
ANNUITY PROVISIONS .................................................... 23
General ............................................................. 23
Annuity Options ..................................................... 24
Determination of Amount of the First Variable
Annuity Payment................................................... 25
Annuity Units and the Determination of
Subsequent Variable Annuity Payments ............................. 25
Transfers After Maturity Date ....................................... 25
Death Benefit on or After Maturity Date.............................. 26
OTHER CONTRACT PROVISIONS ........................................... 26
Ten Day Right to Review ............................................. 26
Ownership ........................................................... 26
Annuitant ........................................................... 26
Beneficiary ......................................................... 27
Modification ........................................................ 27
Company Approval .................................................... 27
Misstatement and Proof of Age, Sex or Survival....................... 27
Fixed Account Investment Option...................................... 27
CHARGES AND DEDUCTIONS ................................................... 29
Withdrawal Charges .................................................. 29
Reduction or Elimination of Withdrawal Charges ...................... 30
Administration Fees.................................................. 30
Distribution Fee..................................................... 31
Mortality and Expense Risk Charge ................................... 31
Taxes ............................................................... 31
FEDERAL TAX MATTERS ...................................................... 32
INTRODUCTION .......................................................... 32
THE COMPANY'S TAX STATUS .............................................. 32
TAXATION OF ANNUITIES IN GENERAL ...................................... 32
Tax Deferral During Accumulation Period ............................. 32
Taxation of Partial and Full Withdrawals ............................ 34
Taxation of Annuity Payments ........................................ 34
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Taxation of Death Benefit Proceeds .................................. 34
Penalty Tax on Premature Distributions .............................. 35
Aggregation of Contracts ............................................ 35
QUALIFIED RETIREMENT PLANS ............................................ 35
Qualified Plan Types ................................................ 36
Roth IRAs............................................................ 37
Direct Rollovers .................................................... 38
FEDERAL INCOME TAX WITHHOLDING......................................... 38
GENERAL MATTERS........................................................... 38
Tax Deferral......................................................... 38
Performance Data..................................................... 38
Financial Statements................................................. 39
Asset Allocation and Timing Services................................. 39
Restrictions under the Texas Optional
Retirement Program.............................................. 39
Distribution of Contracts ........................................... 39
Contract Owner Inquiries............................................. 39
Confirmation Statements.............................................. 40
Legal Proceedings ................................................... 40
Other Information ................................................... 40
STATEMENT OF ADDITIONAL INFORMATION-TABLE OF CONTENTS..................... 40
APPENDIX A: EXAMPLES OF CALCULATION OF WITHDRAWAL CHARGE................. 41
APPENDIX B: STATE PREMIUM TAXES.......................................... 43
APPENDIX C: MAXIMUM MATURITY AGES IN PENNSYLVANIA........................ 44
APPENDIX D: PRIOR CONTRACTS (VV CONTRACTS)............................... 45
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SPECIAL TERMS
The following terms as used in this Prospectus have the indicated meanings:
Accumulation Unit - A unit of measure that is used to calculate the value
of the variable portion of the contract before the maturity date.
Annuitant - Any natural person or persons whose life is used to determine
the duration of annuity payments involving life contingencies. If the contract
owner names more than one person as an "annuitant," the second person named
shall be referred to as "co-annuitant." The "annuitant" and "co-annuitant" will
be referred to collectively as "annuitant." The "annuitant" is as designated on
the contract specification page or in the application, unless changed.
Annuity Option - The method selected by the contract owner or as specified
in the contract if no selection is made for annuity payments made by the
Company.
Annuity Service Office - The service office of the Company is P.O. Box
9230, Boston, Massachusetts 02205-9230.
Annuity Unit - A unit of measure that is used after the maturity date to
calculate variable annuity payments.
Beneficiary - The person, persons or entity entitled to the death benefit
under the contract upon the death of a contract owner or, in certain
circumstances, an annuitant. The beneficiary is as specified in the application,
unless changed. If there is a surviving contract owner, that person will be
deemed the beneficiary.
Contingent Beneficiary - The person, persons or entity to become the
beneficiary if the beneficiary is not alive. The contingent beneficiary is as
specified in the application, unless changed.
Contract Anniversary - The anniversary of the contract date.
Contract Date - The date of issue of the contract.
Contract Value - The total of the investment account values and, if
applicable, any amount in the loan account attributable to the contract.
Contract Year - The period of twelve consecutive months beginning on the
contract date or any anniversary thereof.
Debt - Any amounts in the loan account attributable to the contract plus
any accrued loan interest. The loan provision is applicable to certain qualified
contracts only.
Due Proof of Death - Due Proof of Death is required upon the death of the
contract owner or annuitant, as applicable. One of the following must be
received at the Annuity Service Office within one year of the date of death:
(a) A certified copy of a death certificate;
(b) A certified copy of a decree of a court of competent jurisdiction as
to the finding of death; or
(c) Any other proof satisfactory to us.
Death Benefits will be paid within 7 days of receipt of due proof of death and
all required claim forms by the Company's Annuity Service Office.
Fixed Annuity - An annuity option with payments which are predetermined and
guaranteed as to dollar amount.
General Account - All the assets of the Company other than assets in
separate accounts.
Investment Account - An account established by the Company which represents
a contract owner's interest in an investment option prior to the maturity date.
Investment Account Value - The value of a contract owner's investment in an
investment account.
Investment Options - The investment choices available to contract owners.
Currently, there are thirty-five variable account investment options two fixed
investment options under the contract.
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Loan Account - The portion of the general account that is used for
collateral when a loan is taken.
Maturity Date - The date on which annuity benefits commence. The maturity
date is the date specified on the contract specifications page and is generally
the first day of the month following the later of the annuitant's 85th birthday
or the tenth contract anniversary, unless changed.
Net Purchase Payment - The purchase payment less the amount of premium tax,
if any.
Non-Qualified Contracts - Contracts which are not issued under qualified
plans.
Owner or Contract Owner - The person, persons (co-owner) or entity entitled
to all of the ownership rights under the contract. The owner has the legal right
to make all changes in contractual designations where specifically permitted by
the contract. The owner is as specified in the application, unless changed.
Portfolio or Trust Portfolio - A separate investment portfolio of the
Trust, a mutual fund in which the Variable Account invests, or of any successor
mutual fund.
Purchase Payment - An amount paid by a contract owner to the Company as
consideration for the benefits provided by the contract.
Qualified Contracts - Contracts issued under qualified plans.
Qualified Plans - Retirement plans which receive favorable tax treatment
under Section 401, 403, 408 408A, or 457 of the Internal Revenue Code of 1986,
as amended (the "Code").
Separate Account - A segregated account of the Company that is not
commingled with the Company's general assets and obligations.
Sub-Account(s) - One or more of the sub-accounts of the Variable Account.
Each sub-account is invested in shares of a different Trust portfolio.
Valuation Date - Any date on which the New York Stock Exchange is open for
business and the net asset value of a Trust portfolio is determined.
Valuation Period - Any period from one valuation date to the next, measured
from the time on each such date that the net asset value of each portfolio is
determined.
Variable Account - The Variable Account, which is a separate account of the
Company.
Variable Annuity - An annuity option with payments which: (1) are not
predetermined or guaranteed as to dollar amount, and (2) vary in relation to the
investment experience of one or more specified sub-accounts.
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SUMMARY
The Contract. The contract offered by this Prospectus is a flexible
purchase payment individual deferred combination fixed and variable annuity
contract. The contract provides for the accumulation of contract values and the
payment of annuity benefits on a variable and/or fixed basis.
Retirement Plans. The contract may be issued pursuant to either
non-qualified retirement plans or plans qualifying for special income tax
treatment under the Code, such as individual retirement accounts and annuities,
including Roth IRAs, pension and profit-sharing plans for corporations and sole
proprietorships/partnerships ("H.R. 10" and "Keogh" plans), tax-sheltered
annuities, and state and local government deferred compensation plans (see
"QUALIFIED RETIREMENT PLANS").
Purchase Payments. A contract may be issued upon the making of an initial
purchase payment of $25,000 or more. Minimum subsequent purchase payments must
be $1,000, with an exception for qualified plans where minimum subsequent
purchase payments must be $30. Purchase payments may be made at any time, except
that if a purchase payment would cause the contract value to exceed $1,000,000,
or the contract value already exceeds $1,000,000, additional purchase payments
will be accepted only with the prior approval of the Company. The Company may,
at its option, cancel a contract at the end of any two consecutive contract
years in which no purchase payments have been made, if both (i) the total
purchase payments made over the life of the contract, less any withdrawals, are
less than $2,000; and (ii) the contract value at the end of such two year period
is less than $2,000. The cancellation of contract privileges may vary in certain
states in order to comply with the requirements of insurance laws and
regulations in such state (see "PURCHASE PAYMENTS").
Investment Options. Purchase payments may be allocated among the
thirty-seven investment options currently available under the contract:
thirty-five variable account investment options two fixed investment options.
Due to current administrative capabilities, a contract owner is limited to a
maximum of seventeen investment options (including all fixed account investment
options) during the period prior to the maturity date of the contract. The
thirty-five investment options are the thirty-five sub-accounts of the Variable
Account, a separate account established by the Company. The sub-accounts invest
in corresponding portfolios of the Trust: the Pacific Rim Emerging Markets
Trust, the Science & Technology Trust, the International Small Cap Trust, the
Emerging Growth Trust, the Pilgrim Baxter Growth Trust, the Small/Mid Cap Trust,
the International Stock Trust, the Worldwide Growth Trust, the Global Equity
Trust, the Small Company Value Trust, the Equity Trust, the Growth Trust, the
Quantitative Equity Trust, the Blue Chip Growth Trust, the Real Estate
Securities Trust, the Value Trust, the International Growth and Income Trust,
the Growth and Income Trust, the Equity-Income Trust, the Balanced Trust, the
Aggressive Asset Allocation Trust, the High Yield Trust, the Moderate Asset
Allocation Trust, the Conservative Asset Allocation Trust, the Strategic Bond
Trust, the Global Government Bond Trust, the Capital Growth Bond Trust, the
Investment Quality Bond Trust, the U.S. Government Securities Trust, the Money
Market Trust, the Lifestyle Aggressive 1000 Trust, the Lifestyle Growth 820
Trust, the Lifestyle Balanced 640 Trust, the Lifestyle Moderate 460 Trust and
the Lifestyle Conservative 280 Trust (see the accompanying Prospectus of the
Trust). The contract value during the accumulation period and monthly annuity
payments, if selected on a variable basis, will reflect the investment
performance of the sub-accounts selected (see "THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA SEPARATE ACCOUNT A"). Purchase payments may also be
allocated to the one year fixed account investment option or the one year dollar
cost averaging account investment option. Under the fixed account investment
options, the Company guarantees the principal value of purchase payments and the
rate of interest credited to the investment account for the term of the
guarantee period. The portion of the contract value in the fixed account
investment options and monthly annuity payments, if selected on a fixed basis,
will reflect such interest and principal guarantees (see "FIXED ACCOUNT
INVESTMENT OPTION"). Subject to certain regulatory limitations, the Company may
elect to add, subtract or substitute investment options.
Transfers. Prior to the maturity date, amounts may be transferred among the
investment options. After the maturity date, amounts may be transferred from one
sub-account to another. After the maturity date, transfers are not permitted
from variable annuity options to fixed annuity options or from fixed annuity
options to variable annuity options. There is no transaction charge for
transfers. Transfers from any investment account must be at least $300 or, if
less, the entire balance in the investment account. If, after the transfer the
amount remaining in the investment account of the contract from which the
transfer is made is less than $100, then the Company will transfer the entire
amount instead of the requested amount. The Company may impose certain
additional limitations on transfers (see "TRANSFERS AMONG INVESTMENT OPTIONS"
and "TRANSFERS AFTER MATURITY DATE"). Transfer privileges may also be used under
a special service offered by the Company to dollar cost average an investment in
the contract (see "SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING").
Withdrawals. Prior to the earlier of the maturity date or the death of the
contract owner, the owner may withdraw all or a portion of the contract value.
The amount withdrawn from any investment account must be at least $300 or, if
less, the entire
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balance of the investment account. If a partial withdrawal plus any applicable
withdrawal charge would reduce the contract value to less than $300, the
withdrawal request will be treated as a request to withdraw the entire contract
value. A withdrawal charge and an administration fee may be imposed (see
"WITHDRAWALS"). A withdrawal may be subject to income tax and a 10% penalty tax
(see "FEDERAL TAX MATTERS"). Withdrawal privileges may also be exercised
pursuant to the Company's systematic withdrawal plan service (see "SPECIAL
WITHDRAWAL SERVICES - THE INCOME PLAN").
Loans. The Company offers a loan privilege to owners of contracts issued in
connection with Section 403(b) qualified plans that are not subject to Title I
of ERISA. Owners of such contracts may obtain loans using the contract as the
only security for the loan. The effective cost of a contract loan is 2% per year
of the amount borrowed (see "LOANS").
Confirmation Statements. Owners will be sent confirmation statements for
certain transactions in their account. Owners should carefully review these
statements to verify their accuracy. Any mistakes should immediately be reported
to the Company's Annuity Service Office. If the owner fails to notify the
Company's Annuity Service Office of any mistake within 60 days of the mailing of
the confirmation statement, the owner will be deemed to have ratified the
transaction.
Death Benefits. The Company will pay the death benefit described below
(which, as defined, is net of any debt) to the beneficiary if any contract owner
dies before the maturity date. If there is a surviving contract owner, that
contract owner will be deemed to be the beneficiary. No death benefit is payable
on the death of any annuitant, except that if any contract owner is not a
natural person, the death of any annuitant will be treated as the death of an
owner. The death benefit will be determined as of the date on which written
notice and proof of death and all required claim forms are received at the
Company's Annuity Service Office.
If any contract owner dies on or prior to his or her 85th birthday and the
oldest owner had an attained age of less than 81 years on the contract date, the
death benefit will be the greater of: (a) the contract value or (b) the excess
of (i) over (ii), where (i) equals the sum of all purchase payments made,
accumulated daily at the equivalent of 5% per year starting on the date each
purchase payment is allocated to the contract, subject to a maximum accumulation
of two times each purchase payment, and (ii) equals the sum of any amounts
deducted in connection with partial withdrawals, accumulated daily at the
equivalent of 5% per year starting on the date each such deduction occurs,
subject to a maximum accumulation of two times each amount deducted.
If any contract owner dies after his or her 85th birthday and the oldest
owner had an attained age of less than 81 years on the contract date, the death
benefit will be the greater of: (a) the contract value or (b) the excess of (i)
the sum of all purchase payments over (ii) the sum of any amounts deducted in
connection with partial withdrawals. If any contract owner dies and the oldest
owner had an attained age greater than 80 on the contract date, the death
benefit will be the contract value less any applicable withdrawal charges at the
time of payment of benefits. If there is any debt under the contract, the death
benefit equals the death benefit, as described above, less such debt (see "DEATH
BENEFIT BEFORE MATURITY DATE"). If the annuitant dies after the maturity date
and annuity payments have been selected based on an annuity option providing for
payments for a guaranteed period, the Company will make the remaining guaranteed
payments to the beneficiary. (see "DEATH BENEFIT ON OR AFTER MATURITY DATE").
See Appendix D for information on death benefit provisions applicable to certain
contracts no longer being issued and contracts issued in the States of
Washington and Maryland ("VV Contracts").
Annuity Payments. The Company offers a variety of fixed and variable
annuity options. Periodic annuity payments will begin on the maturity date. The
contract owner selects the maturity date, frequency of payment and annuity
option (see "ANNUITY PROVISIONS").
Ten Day Review. Within 10 days of receipt of a contract, the contract owner
may cancel the contract by returning it to the Company see "TEN DAY RIGHT TO
REVIEW").
Charges and Deductions. The following table and Example are designed to
assist contract owners in understanding the various costs and expenses that
contract owners bear directly and indirectly. The table reflects expenses of the
separate account and the underlying portfolio company. In addition to the items
listed in the following table, premium taxes may be applicable to certain
contracts and the Company reserves the right to impose an annual $30 per
contract administration fee on contracts where the contract value is less than
$10,000 as a result of a partial withdrawal. The items listed under "Contract
Owner Transaction Expenses" and "Separate Account Annual Expenses" are more
completely described in this Prospectus (see "CHARGES AND DEDUCTIONS"). The
items listed under "Trust Annual Expenses" are described in detail in the
accompanying Trust Prospectus to which reference should be made.
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CONTRACT OWNER TRANSACTION EXPENSES
Deferred sales load (as percentage of purchase payments) None*
NUMBER OF COMPLETE YEARS
PURCHASE PAYMENT IN CONTRACT WITHDRAWAL CHARGE PERCENTAGE
0 3%
1 3%
2 3%
3+ 0%
* For contracts issued prior to November 1, 1996, a withdrawal charge was
imposed on withdrawals from contracts.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and expense risk fees.......................................... 1.25%
Administration fee ...................................................... 0.25%
Distribution fee......................................................... 0.15%
Total Separate Account Annual Expenses................................... 1.65%
TRUST ANNUAL EXPENSES
(as a percentage of Trust average net assets)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets........ 0.850% 0.570% 1.420%
Science & Technology................ 1.100% 0.160% 1.260%
International Small Cap............. 1.100% 0.210% 1.310%
Emerging Growth..................... 1.050% 0.060% 1.110%
Pilgrim Baxter Growth............... 1.050% 0.130% 1.180%
Small/Mid Cap....................... 1.000% 0.050% 1.050%
International Stock................. 1.050% 0.330% 1.380%
Worldwide Growth.................... 1.000% 0.320% 1.320%
Global Equity....................... 0.900% 0.110% 1.010%
Small Company Value................. 1.050% 0.100%* 1.150%
Equity.............................. 0.750% 0.050% 0.800%
Growth.............................. 0.850% 0.100% 0.950%
Quantitative Equity................. 0.700% 0.070% 0.770%
Blue Chip Growth.................... 0.925% 0.050% 0.975%
Real Estate Securities.............. 0.700% 0.070% 0.770%
Value............................... 0.800% 0.160% 0.960%
International Growth and Income..... 0.950% 0.170% 1.120%
Growth and Income................... 0.750% 0.040% 0.790%
Equity-Income....................... 0.800% 0.050% 0.850%
Balanced............................ 0.800% 0.080% 0.880%
Aggressive Asset Allocation......... 0.750% 0.150% 0.900%
High Yield.......................... 0.775% 0.110% 0.885%
Moderate Asset Allocation........... 0.750% 0.100% 0.850%
Conservative Asset Allocation....... 0.750% 0.140% 0.890%
Strategic Bond...................... 0.775% 0.100% 0.875%
Global Government Bond.............. 0.800% 0.130% 0.930%
Capital Growth Bond................. 0.650% 0.080% 0.730%
Investment Quality Bond............. 0.650% 0.090% 0.740%
</TABLE>
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<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Securities.......... 0.650% 0.070% 0.720%
Money Market........................ 0.500% 0.040% 0.540%
Lifestyle Aggressive 1000#.......... 0% 1.116%** 1.116%
Lifestyle Growth 820#............... 0% 1.048%** 1.048%
Lifestyle Balanced 640#............. 0% 0.944%** 0.944%
Lifestyle Moderate 460#............. 0% 0.850%** 0.850%
Lifestyle Conservative 280#......... 0% 0.708%** 0.708%
</TABLE>
# Each Lifestyle Trust will invest in shares of the Underlying Portfolios.
Therefore, each Lifestyle Trust will, in addition to its own expenses, such as
certain Other Expenses, bear its pro rata share of the fees and expenses
incurred by the Underlying Portfolios and the investment return of each
Lifestyle Trust will be net of the Underlying Portfolio expenses.
* Based on estimates of payments to be made during the current fiscal year.
** Reflects expenses of the Underlying Portfolios. Manufacturers Securities
Services, LLC has voluntarily agreed to pay the expenses of each Lifestyle Trust
(excluding the expenses of the Underlying Portfolios). This voluntary expense
reimbursement may be terminated at any time. If such expense reimbursement was
not in effect, Total Trust Annual Expenses would be .04% higher (based on
expenses of the Lifestyle Trusts for the fiscal year ended December 31, 1997) as
noted in the chart below:
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000........... 0% 1.156% 1.156%
Lifestyle Growth 820................ 0% 1.088% 1.088%
Lifestyle Balanced 640.............. 0% 0.984% 0.984%
Lifestyle Moderate 460.............. 0% 0.890% 0.890%
Lifestyle Conservative 280.......... 0% 0.748% 0.748%
</TABLE>
EXAMPLE
A contract owner would pay the following expenses on a $1,000 investment,
assuming 5% annual return on assets, if the contract owner surrendered the
contract at the end of the applicable time period: (For contracts issued on or
after November 1, 1996, no withdrawal charges will be imposed upon surrender,
therefore, for such contracts please refer to the second table for expenses if
the contract owner surrendered at the end of the applicable time period.)
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets..... $59 $124 $161 $338
Science & Technology............. 57 119 153 323
International Small Cap.......... 58 120 156 328
Emerging Growth.................. 56 115 146 309
Pilgrim Baxter Growth............ 56 117 149 316
Small/Mid Cap.................... 55 113 143 303
International Stock.............. 58 122 159 335
Worldwide Growth................. 58 121 156 329
Global Equity.................... 55 112 141 299
Small Company Value*............. 56 116
Equity........................... 53 106 131 279
Growth........................... 54 110 138 293
Quantitative Equity.............. 52 105 129 276
Blue Chip Growth................. 54 111 139 296
</TABLE>
10
<PAGE> 16
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Real Estate Securities........... 52 105 129 276
Value............................ 54 110 139 294
Int'l Growth and Income.......... 56 115 146 310
Growth and Income................ 52 105 130 278
Equity-Income.................... 53 107 133 284
Balanced......................... 53 108 135 287
Aggressive Asset Allocation...... 54 109 136 289
High Yield....................... 53 108 135 287
Moderate Asset Allocation........ 53 107 133 284
Conservative Asset Allocation.... 53 108 135 288
Strategic Bond................... 53 108 134 286
Global Government Bond........... 54 109 137 291
Capital Growth Bond.............. 52 104 127 272
Investment Quality Bond.......... 52 104 128 273
U.S. Government Securities....... 52 103 127 271
Money Market..................... 50 98 117 252
Lifestyle Aggressive 1000........ 56 115 146 310
Lifestyle Growth 820............. 55 113 143 303
Lifestyle Balanced 640........... 54 110 138 293
Lifestyle Moderate 460........... 53 107 133 284
Lifestyle Conservative 280....... 52 103 126 269
</TABLE>
* The Example of Expenses for the Small Company Value Trust contains figures
for only 1 and 3 years since it is a newly created portfolio.
A contract owner would pay the following expenses on a $1,000 investment,
assuming 5% annual return on assets, if the contract owner annuitized as
provided in the contract or did not surrender the contract at the end of the
applicable time period:
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $31 $95 $161 $338
Science & Technology................ 29 90 153 323
International Small Cap............. 30 92 156 328
Emerging Growth..................... 28 86 146 309
Pilgrim Baxter Growth............... 29 88 149 316
Small/Mid Cap....................... 27 84 143 303
International Stock................. 31 94 159 335
Worldwide Growth.................... 30 92 156 329
Global Equity....................... 27 83 141 299
Small Company Value*................ 28 87
Equity.............................. 25 76 131 279
Growth.............................. 26 81 138 293
Quantitative Equity................. 25 75 129 276
Blue Chip Growth.................... 27 82 139 296
Real Estate Securities.............. 25 75 129 276
Value............................... 26 81 139 294
Int'l Growth and Income............. 28 86 146 310
Growth and Income................... 25 76 130 278
Equity-Income....................... 25 78 133 284
Balanced............................ 26 79 135 287
Aggressive Asset Allocation......... 26 79 136 289
High Yield.......................... 26 79 135 287
Moderate Asset Allocation........... 25 78 133 284
Conservative Asset Allocation....... 26 79 135 288
Strategic Bond...................... 26 79 134 286
Global Government Bond.............. 26 80 137 291
Capital Growth Bond................. 24 74 127 272
Investment Quality Bond............. 24 75 128 273
U.S. Government Securities.......... 24 74 127 271
</TABLE>
11
<PAGE> 17
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market........................ 22 69 117 252
Lifestyle Aggressive 1000........... 28 86 146 310
Lifestyle Growth 820................ 27 84 143 303
Lifestyle Balanced 640.............. 26 81 138 293
Lifestyle Moderate 460.............. 25 78 133 284
Lifestyle Conservative 280.......... 24 74 126 269
</TABLE>
* The Example of Expenses for the Small Company Value Trust contains figures for
only one and three years since it is a newly created Trust.
For purposes of presenting the foregoing Examples, the Company has made
certain assumptions mandated by the SEC. The Company has assumed that, where
applicable, the maximum sales load is deducted, that there are no transfers or
other transactions and that the "Other Expenses" line item under "Trust Annual
Expenses" will remain the same. Such assumptions, which are mandated by the SEC
in an attempt to provide prospective investors with standardized data with which
to compare various annuity contracts, do not take into account certain features
of the contract and prospective changes in the size of the Trust which may
operate to change the expenses borne by contract owners. Consequently, the
amounts listed in the Examples above should not be considered a representation
of past or future expenses and actual expenses borne by contract owners may be
greater or lesser than those shown.
The above summary is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus and Statement of Additional Information
and the accompanying Prospectus and Statement of Additional Information for the
Trust, to which reference should be made.
This Prospectus generally describes only the variable aspects of the contract,
except where fixed aspects are specifically mentioned.
<TABLE>
<CAPTION>
TABLE OF ACCUMULATION UNIT VALUES
=========================================================================================================
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF YEAR NUMBER OF UNITS AT END
YEAR* OF YEAR
- ---------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
Pacific Rim Emerging
Markets 1997
- ---------------------------------------------------------------------------------------------------------
Science & Technology
1997
- ---------------------------------------------------------------------------------------------------------
International Small Cap
1996 $12.500000 $13.465203 224,018.261
1997
- ---------------------------------------------------------------------------------------------------------
Emerging Growth
1997
- ---------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth
1997
- ---------------------------------------------------------------------------------------------------------
Small/Mid Cap
1996 $12.500000 $13.188627 587,704.824
1997
- ---------------------------------------------------------------------------------------------------------
International Stock
1997
- ---------------------------------------------------------------------------------------------------------
Worldwide Growth
1997
- ---------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 18
<TABLE>
<CAPTION>
================================================================================================================
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF YEAR NUMBER OF UNITS AT END
YEAR* OF YEAR
- ----------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
Global Equity
1994 $13.117996 $12.153179 49,050.593
1995 12.153179 12.872711 361,285.266
1996 12.872711 14.257610 622,699.384
1997
- ----------------------------------------------------------------------------------------------------------------
Small Company Value
1997
- ----------------------------------------------------------------------------------------------------------------
Equity
1994 $10.675585 $10.965867 36,324.491
1995 10.965867 15.402974 663,652.478
1996 15.402974 18.199588 1,024,727.992
1997
- ----------------------------------------------------------------------------------------------------------------
Growth
1996 $12.500000 $13.711434 136,813.299
1997
- ----------------------------------------------------------------------------------------------------------------
Quantitative Equity
1997
- ----------------------------------------------------------------------------------------------------------------
Blue Chip Growth 1994 $ 9.145044 $ 9.280989 18,796.455
1995 9.280989 11.551552 274,368.201
1996 11.551552 14.303631 673,370.337
1997
- ----------------------------------------------------------------------------------------------------------------
Real Estate Securities
1997
- ----------------------------------------------------------------------------------------------------------------
Value
1997
- ----------------------------------------------------------------------------------------------------------------
International Growth & Income
1995
1996 $10.000000 $10.528678 178,852.062
1997 10.528678 11.660474 351,591.394
- ----------------------------------------------------------------------------------------------------------------
Growth and Income
1994 $10.576574 $10.436393 24,644.881
1995 10.436393 13.263871 448,739.926
1996 13.263871 16.024067 1,043,469.657
1997
- ----------------------------------------------------------------------------------------------------------------
Equity-Income
1994 $10.844086 $10.578121 31,102.019
1995 10.578121 12.870851 375,815.524
1996 12.870851 15.172018 833,362.583
1997
- ----------------------------------------------------------------------------------------------------------------
Balanced
1997
- ----------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation
1994 $10.444531 $10.303433 7,523.248
1995 10.303433 12.443644 67,382.620
1996 12.443644 13.829135 119,961.606
1997
- ----------------------------------------------------------------------------------------------------------------
High Yield
1997
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 19
<TABLE>
<CAPTION>
================================================================================================================
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF YEAR NUMBER OF UNITS AT END
YEAR* OF YEAR
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Moderate Asset Allocation
1994 $10.269505 $10.156264 19,952.394
1995 10.156264 12.056663 205,665.149
1996 12.056663 13.039212 340,400.940
1997
- ----------------------------------------------------------------------------------------------------------------
Conservative Asset Allocation
1994
1995 $10.124972 $10.050011 2,989.757
1996 10.050011 11.672867 123,692.494
1997 11.672867 12.287873 193,254.830
- ----------------------------------------------------------------------------------------------------------------
Strategic Bond
1994 $10.132498 $ 9.897404 9,621.542
1995 9.897404 11.607403 146,877.133
1996 11.607403 13.093621 470,296.507
1997
- ----------------------------------------------------------------------------------------------------------------
Global Government Bond
1994 $10.345362 $10.262238 6,324.370
1995 10.262238 12.434811 108,887.995
1996 12.434811 13.821405 236,432.653
1997
- ----------------------------------------------------------------------------------------------------------------
Capital Growth Bond
1997
- ----------------------------------------------------------------------------------------------------------------
Investment Quality Bond
1994 $ 9.785855 $ 9.713969 5,980.272
1995 9.713969 11.417606 143,843.254
1996 11.417606 11.519237 359,256.707
1997
- ----------------------------------------------------------------------------------------------------------------
U.S. Government Securities
1994 $10.033365 $ 9.968713 17,964.448
1995 9.968713 11.333420 218,996.714
1996 11.333420 11.522857 283,607.608
1997
- ----------------------------------------------------------------------------------------------------------------
Money Market
1994 $10.172129 $10.290731 46,595.747
1995 10.290731 10.692803 282,116.623
1996 10.692803 11.048244 516,160.781
1997
- ----------------------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000
1997 $12.500000
- ----------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820
1997 $12.500000
- ----------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640
1997 $12.500000
- ----------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460
1997 $12.500000
- ----------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280
1997 $12.500000
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Units under this series of contracts were first credited under the
sub-accounts on August 9, 1994, except in the case of International Growth and
Income where units were first credited on January 9, 1995, Small/Mid Cap and
International Small Cap where units were first credited on March 4, 1996, Growth
where units were first credited on July 15, 1996, Pacific Rim Emerging Markets,
Science & Technology, Emerging Growth, Pilgrim Baxter Growth, International
Stock, Worldwide
15
<PAGE> 20
Growth, Quantitative Equity, Real Estate Securities, Value, Balanced, High
Yield, Capital Growth Bond, Lifestyle Aggressive, Lifestyle Growth, Lifestyle
Balanced, Lifestyle Moderate, Lifestyle Conservative where units were first
credited on January 1, 1997 and Small Company Value where units were first
credited on October 1, 1997.
+ See Appendix D for the TABLE OF ACCUMULATION UNIT VALUES for certain contracts
issued in Maryland and Washington (VV contracts).
GENERAL INFORMATION ABOUT THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NORTH AMERICA, THE MANUFACTURERS LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
AND MANUFACTURERS INVESTMENT TRUST
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
The Manufacturers Life Insurance Company of North America, formerly North
American Security Life Insurance Company ("the Company") is a stock life
insurance company organized under the laws of Delaware in 1979. The Company's
principal office is located at 116 Huntington Avenue, Boston, Massachusetts
02116. The ultimate parent of the Company is The Manufacturers Life Insurance
Company ("Manulife"), a Canadian mutual life insurance Company based in Toronto,
Canada. Prior to January 1, 1996, the Company was a wholly owned subsidiary of
North American Life Assurance Company ("NAL"), a Canadian mutual life insurance
company. On January 1, 1996 NAL and Manulife merged with the combined company
retaining the Manulife name.
On January 20, 1998, the Board of Directors of Manulife asked the
management of Manulife to prepare a plan for conversion of Manulife from a
mutual life insurance company to an investor-owned, publicly-traded stock
company. Any demutualization plan for Manulife is subject to the approval of the
Manulife Board of Directors and Policyholders as well as regulatory approval.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA SEPARATE ACCOUNT A
The Company established the Variable Account on August 24, 1984 as a
separate account under Delaware law. The income, gains and losses, whether or
not realized, from assets of the Variable Account are, in accordance with the
contracts, credited to or charged against the Variable Account without regard to
other income, gains or losses of the Company. Nevertheless, all obligations
arising under the contracts are general corporate obligations of the Company.
Assets of the Variable Account may not be charged with liabilities arising out
of any other business of the Company.
The Variable Account is registered with the SEC under the Investment
Company Act of 1940, as amended (the "1940 Act") as a unit investment trust. A
unit investment trust is a type of investment company which invests its assets
in specified securities, such as the shares of one or more investment companies.
Registration under the 1940 Act does not involve supervision by the SEC of the
management or investment policies or practices of the Variable Account. If
deemed by the Company to be in the best interests of persons having voting
rights under the contracts, the Variable Account may be operated as a management
company under the 1940 Act or it may be reregistered under such Act in the event
such registration is no longer required.
There are currently thirty-five sub-accounts within the Variable Account.
The Company reserves the right, subject to compliance with applicable law, to
add other sub-accounts, eliminate existing sub-accounts, combine sub-accounts or
transfer assets in one sub-account to another sub-account established by the
Company or an affiliated company. The Company will not eliminate existing
sub-accounts or combine sub-accounts without the prior approval of the
appropriate state or Federal regulatory authorities.
MANUFACTURERS INVESTMENT TRUST
The assets of each sub-account of the Variable Account are invested in
shares of a corresponding portfolio of the Trust. A description of each
portfolio is set forth below. The Trust is registered under the 1940 Act as an
open-end management investment company. Each of the portfolios is diversified
for purposes of the 1940 Act, except for the Global Government Bond Trust,
Emerging Growth Trust and the five Lifestyle Trusts which are non-diversified.
The Trust receives investment advisory services from Manufacturers Securities
Services, LLC, the successor to NASL Financial Services, Inc. ("MSS").
16
<PAGE> 21
The Trust currently has fifteen subadvisers who manage all of the
portfolios:
<TABLE>
<CAPTION>
SUBADVISER SUBADVISER TO
---------- -------------
<S> <C>
Fidelity Management Trust Company Equity Trust
Conservative Asset Allocation Trust
Moderate Asset Allocation Trust
Aggressive Asset Allocation Trust
Founders Asset Management LLC Growth Trust
Worldwide Growth Trust
Balanced Trust
International Small Cap Trust
Fred Alger Management, Inc. Small/Mid Cap Trust
J.P. Morgan Investment Management Inc. International Growth and Income Trust
Oechsle International Advisors, L.P. Global Government Bond Trust
Manufacturers Adviser Corporation Pacific Rim Emerging Markets Trust
Quantitative Equity Trust
Real Estate Securities Trust
Capital Growth Bond Trust
Money Market Trust
Lifestyle Trusts
Miller Anderson & Sherrerd, LLP Value Trust
High Yield Trust
Morgan Stanley Asset Management Inc. Global Equity Trust
Pilgrim Baxter & Associates, Ltd. Pilgrim Baxter Growth Trust
Rosenberg Institutional Equity Management Small Company Value Trust
Rowe Price-Fleming International, Inc. International Stock Trust
T. Rowe Price Associates, Inc. Science & Technology Trust
Blue Chip Growth Trust
Equity-Income Trust
Wellington Management Company LLP Growth and Income Trust
Investment Quality Bond Trust
Salomon Brothers Asset Management Inc U.S. Government Securities Trust
Strategic Bond Trust
Warburg Asset Management, Inc. Emerging Growth Trust
</TABLE>
The following is a brief description of each portfolio:
The PACIFIC RIM EMERGING MARKETS TRUST seeks long-term growth of capital by
investing in a diversified portfolio that is comprised primarily of common
stocks and equity-related securities of corporations domiciled in countries in
the Pacific Rim region.
The SCIENCE & TECHNOLOGY TRUST seeks long-term growth of capital. Current
income is incidental to the portfolio's objective.
17
<PAGE> 22
The INTERNATIONAL SMALL CAP TRUST seeks capital appreciation by investing
primarily in securities issued by foreign companies which have total market
capitalization or annual revenues of $1 billion or less. These securities may
represent companies in both established and emerging economies throughout the
world.
The EMERGING GROWTH TRUST seeks maximum capital appreciation by investing
primarily in a portfolio of equity securities of domestic companies. The
Emerging Growth Trust ordinarily will invest at least 65% of its total assets in
common stocks or warrants of emerging growth companies that represent attractive
opportunities for maximum capital appreciation.
The PILGRIM BAXTER GROWTH TRUST seeks capital appreciation by investing in
companies believed by the subadviser to have an outlook for strong earnings
growth and the potential for significant capital appreciation.
The SMALL/MID CAP TRUST seeks long-term capital appreciation by investing
at least 65% of its total assets (except during temporary defensive periods) in
small/mid cap equity securities. As used herein small/mid cap equity securities
are equity securities of companies that, at the time of purchase, have total
market capitalization between $500 million and $5 billion.
The INTERNATIONAL STOCK TRUST seeks long-term growth of capital by
investing primarily in common stocks of established, non-U.S. companies.
The WORLDWIDE GROWTH TRUST seeks long-term growth of capital by normally
investing at least 65% of its total assets in equity securities of growth
companies in a variety of markets throughout the world.
The GLOBAL EQUITY TRUST seeks long-term capital appreciation by investing
primarily in equity securities throughout the world, including U.S. issuers and
emerging markets.
The SMALL COMPANY VALUE TRUST seeks long term growth of capital by
investing in equity securities of smaller companies which are traded principally
in the markets of the United States.
The EQUITY TRUST seeks growth of capital by investing primarily in common
stocks of United States issuers and securities convertible into or carrying the
right to buy common stocks.
The GROWTH TRUST seeks long-term growth of capital by investing at least
65% of the portfolio's total assets in the common stocks of well-established,
high-quality growth companies that the subadviser believes have the potential to
increase earnings faster than the rest of the market.
The QUANTITATIVE EQUITY TRUST seeks to achieve intermediate and long-term
growth through capital appreciation and current income by investing in common
stocks and other equity securities of well established companies with promising
prospects for providing an above average rate of return.
The BLUE CHIP GROWTH TRUST seeks to achieve long-term growth of capital
(current income is a secondary objective) and many of the stocks in the
portfolio are expected to pay dividends.
The REAL ESTATE SECURITIES TRUST seeks to achieve a combination of
long-term capital appreciation and satisfactory current income by investing in
real estate related equity and debt securities.
The VALUE TRUST seeks to realize an above-average total return over a
market cycle of three to five years, consistent with reasonable risk, by
investing primarily in common and preferred stocks, convertible securities,
rights and warrants to purchase common stocks, ADRs and other equity securities
of companies with equity capitalizations usually greater than $300 million.
The INTERNATIONAL GROWTH AND INCOME TRUST seeks long-term growth of capital
and income by investing, under normal circumstances, at least 65% of its total
assets in equity securities of foreign issuers. The Portfolio may also invest in
debt securities of corporate or sovereign issuers rated A or higher by Moody's
Investor Services, Inc. or Standard & Poor's Corporation or, if unrated, of
equivalent credit quality as determined by the subadviser.
18
<PAGE> 23
The GROWTH AND INCOME TRUST seeks long-term growth of capital and income,
consistent with prudent investment risk, by investing primarily in a diversified
portfolio of common stocks of United States issuers which the subadviser
believes are of high quality.
The EQUITY-INCOME TRUST seeks to provide substantial dividend income and
also long-term capital appreciation by investing primarily in dividend-paying
common stocks, particularly of established companies with favorable prospects
for both increasing dividends and capital appreciation.
The BALANCED TRUST seeks current income and capital appreciation by
investing in a balanced portfolio of common stocks, U.S. and foreign government
obligations and a variety of corporate fixed-income securities.
The HIGH YIELD TRUST seeks to realize an above-average total return over a
market cycle of three to five years, consistent with reasonable risk, by
investing primarily in high yield debt securities, including corporate bonds and
other fixed-income securities.
The AUTOMATIC ASSET ALLOCATION TRUSTS seek the highest potential total
return consistent with a specified level of risk tolerance -- conservative,
moderate or aggressive -- by investing primarily in the kinds of securities in
which the Equity, Investment Quality Bond, U.S. Government Securities and Money
Market Trusts may invest.
- The AGGRESSIVE ASSET ALLOCATION TRUST seeks the highest
total return consistent with an aggressive level of risk tolerance.
This Trust attempts to limit the decline in portfolio value in very
adverse market conditions to 15% over any three year period.
- The MODERATE ASSET ALLOCATION TRUST seeks the highest total
return consistent with a moderate level of risk tolerance. This Trust
attempts to limit the decline in portfolio value in very adverse market
conditions to 10% over any three year period.
- The CONSERVATIVE ASSET ALLOCATION TRUST seeks the highest
total return consistent with a conservative level of risk tolerance.
This Trust attempts to limit the decline in portfolio value in very
adverse market conditions to 5% over any three year period.
The STRATEGIC BOND TRUST seeks a high level of total return consistent with
preservation of capital by giving its subadviser broad discretion to deploy the
portfolio's assets among certain segments of the fixed-income market as the
subadviser believes will best contribute to achievement of the portfolio's
investment objective.
The GLOBAL GOVERNMENT BOND TRUST seeks a high level of total return by
placing primary emphasis on high current income and the preservation of capital
by investing primarily in a global portfolio of high-quality, fixed-income
securities of foreign and United States governmental entities and supranational
issuers.
The CAPITAL GROWTH BOND TRUST seeks to achieve growth of capital by
investing in medium-grade or better debt securities, with income as a secondary
consideration. The Capital Growth Bond Trust differs from most "bond" funds in
that its primary objective is capital appreciation, not income.
The INVESTMENT QUALITY BOND TRUST seeks a high level of current income
consistent with the maintenance of principal and liquidity, by investing
primarily in a diversified portfolio of investment grade corporate bonds and
U.S. Government bonds with intermediate to longer term maturities. The portfolio
may also invest up to 20% of its assets in non-investment grade fixed income
securities.
The U.S. GOVERNMENT SECURITIES TRUST seeks a high level of current income
consistent with preservation of capital and maintenance of liquidity, by
investing in debt obligations and mortgage-backed securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
derivative securities such as collateralized mortgage obligations backed by such
securities.
The MONEY MARKET TRUST seeks maximum current income consistent with
preservation of principal and liquidity by investing in high quality money
market instruments with maturities of 397 days or less issued primarily by
United States entities.
19
<PAGE> 24
The LIFESTYLE AGGRESSIVE 1000 TRUST seeks to provide long-term growth of
capital (current income is not a consideration) by investing 100% of the
Lifestyle Trust's assets in other portfolios of the Trust ("Underlying
Portfolios") which invest primarily in equity securities.
The LIFESTYLE GROWTH 820 TRUST seeks to provide long-term growth of capital
with consideration also given to current income by investing approximately 20%
of the Lifestyle Trust's assets in Underlying Portfolios which invest primarily
in fixed income securities and approximately 80% of its assets in Underlying
Portfolios which invest primarily in equity securities.
The LIFESTYLE BALANCED 640 TRUST seeks to provide a balance between a high
level of current income and growth of capital with a greater emphasis given to
capital growth by investing approximately 40% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities and
approximately 60% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The LIFESTYLE MODERATE 460 TRUST seeks to provide a balance between a high
level of current income and growth of capital with a greater emphasis given to
high income by investing approximately 60% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities and
approximately 40% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The LIFESTYLE CONSERVATIVE 280 TRUST seeks to provide a high level of
current income with some consideration also given to growth of capital by
investing approximately 80% of the Lifestyle Trust's assets in Underlying
Portfolios which invest primarily in fixed income securities and approximately
20% of its assets in Underlying Portfolios which invest primarily in equity
securities.
In pursuing the Strategic Bond, High Yield and Investment Quality Bond
Trusts' investment objective, each portfolio expects to invest a portion of its
assets in high yield securities, commonly known as "junk bonds" which also
present a high degree of risk. The risks of these securities include price
volatility and risk of default in the payment of interest and principle. See
"Risk Factors Relating to High Yield Securities" contained in the Trust
Prospectus before investing in any of these Trusts.
In pursuing the International Stock, International Small Cap, Global
Equity, Strategic Bond, International Growth and Income, High Yield and Global
Government Bond Trusts' investment objective, each portfolio may invest up to
100% of its assets in foreign securities which may present additional risks. See
"Foreign Securities" in the Trust Prospectus before investing in any of these
Trusts.
If the shares of a Trust portfolio are no longer available for investment
or in the Company's judgment investment in a Trust portfolio becomes
inappropriate in view of the purposes of the Variable Account, the Company may
eliminate the shares of a portfolio and substitute shares of another portfolio
of the Trust or another open-end registered investment company. Substitution may
be made with respect to both existing investments and the investment of future
purchase payments. However, no such substitution will be made without notice to
the contract owner and prior approval of the SEC to the extent required by the
1940 Act.
The Company will vote shares of the Trust portfolios held in the Variable
Account at meetings of shareholders of the Trust in accordance with voting
instructions received from the persons having the voting interest under the
contracts. The number of portfolio shares for which voting instructions may be
given will be determined by the Company in the manner described below, not more
than 90 days prior to the meeting of the Trust. Trust proxy material will be
distributed to each person having the voting interest under the contract
together with appropriate forms for giving voting instructions. Portfolio shares
held in the Variable Account that are attributable to contract owners and as to
which no timely instructions are received and portfolio shares held in the
Variable Account that are beneficially owned by the Company will be voted by the
Company in proportion to the instructions received.
Prior to the maturity date, the person having the voting interest under a
contract is the contract owner and the number of votes as to each portfolio for
which voting instructions may be given is determined by dividing the value of
the investment account corresponding to the sub-account in which such portfolio
shares are held by the net asset value per share of that portfolio. After the
maturity date, the person having the voting interest under a contract is the
annuitant and the number of votes as to each portfolio for which voting
instructions may be given is determined by dividing the reserve for the contract
allocated to the sub-account in which such portfolio shares are held by the net
asset value per share of that portfolio. Generally, the number of votes tends to
decrease as annuity payments progress since the amount of reserves attributable
to a contract will usually decrease after commencement of
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annuity payments. The Company reserves the right to make any changes in the
voting rights described above that may be permitted by the Federal securities
laws or regulations or interpretations of these laws or regulations.
A full description of the Trust, including the investment objectives,
policies and restrictions of each of the portfolios is contained in the
Prospectus for the Trust which accompanies this Prospectus and should be read by
a prospective purchaser before investing.
DESCRIPTION OF THE CONTRACT
ACCUMULATION PROVISIONS
PURCHASE PAYMENTS
Purchase payments are paid to the Company at its Annuity Service Office.
The minimum initial purchase payment is $25,000. Minimum subsequent purchase
payments must be $1,000 with an exception for qualified plans where minimum
subsequent purchase payments must be $30. Purchase payments may be made at any
time. The Company may provide for purchase payments to be automatically
withdrawn from a contract owner's bank account on a periodic basis. If a
purchase payment would cause the contract value to exceed $1,000,000 or the
contract value already exceeds $1,000,000, additional purchase payments will be
accepted only with the prior approval of the Company.
The Company may, at its option, cancel a contract at the end of any two
consecutive contract years in which no purchase payments have been made, if both
(i) the total purchase payments made over the life of the contract, less any
withdrawals, are less than $2,000; and (ii) the contract value at the end of
such two year period is less than $2,000. The cancellation of contract
privileges may vary in certain states in order to comply with the requirements
of insurance laws and regulations in such state. Upon cancellation the Company
will pay the contract owner the contract value computed as of the valuation
period during which the cancellation occurs less any debt and less the annual
$30 administration fee. The amount paid will be treated as a withdrawal for
Federal tax purposes and thus may be subject to income tax and to a 10% penalty
tax (see "FEDERAL TAX MATTERS").
Purchase payments are allocated among the investment options in accordance
with the percentages designated by the contract owner. The contract owner may
change the allocation of subsequent purchase payments at any time upon written
notice to the Company or by telephone in accordance with the Company's telephone
transfer procedures.
ACCUMULATION UNITS
The Company will establish an investment account for the contract owner for
each investment option to which such contract owner allocates purchase payments.
Purchase payments are credited to such investment accounts in the form of
accumulation units. The following discussion of accumulation units, the value of
accumulation units and the net investment factor formula pertains only to the
accumulation in the variable account investment options. The parallel discussion
regarding accumulations in the fixed account investment options appears
elsewhere in this Prospectus (see "FIXED ACCOUNT INVESTMENT OPTIONS"). The
number of accumulation units to be credited to each investment account is
determined by dividing the net purchase payment allocated to that investment
account by the value of an accumulation unit for that investment account for the
valuation period during which the purchase payment is received at the Company's
Annuity Service Office complete with all necessary information or, in the case
of the first purchase payment, pursuant to the procedures described below.
Initial purchase payments received by mail will usually be credited in the
valuation period during which received at the Annuity Service Office, and in any
event not later than two business days after receipt of all information
necessary for processing issuance of the contract. The applicant will be
informed of any deficiencies preventing processing if the contract cannot be
issued and the purchase payment credited within two business days after receipt.
If the deficiencies are not remedied within five business days after receipt,
the purchase payment will be returned promptly to the applicant, unless the
applicant specifically consents to the Company's retaining the purchase payment
until all necessary information is received. Initial purchase payments received
by wire transfer from broker-dealers will be credited in the valuation period
during which received where such broker-dealers have made special arrangements
with the Company.
VALUE OF ACCUMULATION UNITS
The value of accumulation units will vary from one valuation period to the
next depending upon the investment results of the particular sub-accounts to
which purchase payments are allocated. The value of an accumulation unit for
each sub-account was
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arbitrarily set at $10 or $12.50 for the first valuation period under other
contracts issued by the Company. The value of an accumulation unit for any
subsequent valuation period is determined by multiplying the value of an
accumulation unit for the immediately preceding valuation period by the net
investment factor for such sub-account (described below) for the valuation
period for which the value is being determined.
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NET INVESTMENT FACTOR
The net investment factor is an index used to measure the investment
performance of a sub-account from one valuation period to the next. The net
investment factor for each sub-account for any valuation period is determined by
dividing (a) by (b) and subtracting (c) from the result:
Where (a) is:
(1) the net asset value per share of a portfolio share held in the
sub-account determined at the end of the current valuation period, plus
(2) the per share amount of any dividend or capital gain distributions
made by the portfolio on shares held in the sub-account if the
"ex-dividend" date occurs during the current valuation period.
Where (b) is:
the net asset value per share of a portfolio share held in the
sub-account determined as of the end of the immediately preceding valuation
period.
Where (c) is:
a factor representing the charges deducted from the sub-account on a
daily basis for administrative expenses, a portion of the distribution
expenses, and mortality and expense risks. Such factor is equal on an
annual basis to 1.65% (0.25% for administrative expenses, 0.15% for
distribution expenses and 1.25% for mortality and expense risks). The
charges deducted from the sub-account reduced the value of the accumulation
units for the sub-account.
The net investment factor may be greater or less than or equal to one;
therefore, the value of an accumulation unit may increase, decrease or remain
the same.
TRANSFERS AMONG INVESTMENT OPTIONS
Before the maturity date the contract owner may transfer amounts among the
investment options at any time and without charge upon written notice to the
Company or by telephone if the contract owner authorizes the Company in writing
to accept telephone transfer requests. Accumulation units will be canceled from
the investment account from which amounts are transferred and credited to the
investment account to which amounts are transferred. The Company will effect
such transfers so that the contract value on the date of the transfer will not
be affected by the transfer. The contract owner must transfer at least $300 or,
if less, the entire value of the investment account. If after the transfer the
amount remaining in the investment account is less than $100, then the Company
will transfer the entire amount instead of the requested amount. The Company
reserves the right to limit, upon notice, the maximum number of transfers a
contract owner may make to one per month or six at any time within a contract
year. In addition, the Company reserves the right to defer the transfer
privilege at any time that the Company is unable to purchase or redeem shares of
the Trust portfolios. The Company also reserves the right to modify or terminate
the transfer privilege at any time in accordance with applicable law.
MAXIMUM NUMBER OF INVESTMENT OPTIONS
Due to current administrative capabilities, a contract owner is limited to
a maximum of seventeen investment options (including the one year fixed account
investment option) during the period prior to the maturity date of the contract
(the "Contract Period"). In calculating this limit for each contract owner,
investment options to which the contract owner has allocated purchase payments
at any time during the Contract Period will be counted toward the seventeen
maximum even if the contract owner no longer has contract value allocated to the
investment option.
TELEPHONE TRANSACTIONS
Contract owners are permitted to request transfers/redemptions by
telephone. The Company will not be liable for following instructions
communicated by telephone that it reasonably believes to be genuine. To be
permitted to request a transfer/redemption by telephone, a contract owner must
elect the option on the Application. (If a contract owner does not initially
elect an option in the Application form, they may request authorization by
executing an appropriate authorization form provided by the Company upon
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request.) The Company will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine and may only be liable for
any losses due to unauthorized or fraudulent instructions where it fails to
employ its procedures properly. Such procedures include the following. Upon
telephoning a request, contract owners will be asked to provide their account
number, and if not available, their social security number. For the contract
owner's and Company's protection, all conversations with contract owners will be
tape recorded. All telephone transactions will be followed by a confirmation
statement of the transaction.
SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING
The Company administers a Dollar Cost Averaging ("DCA") program which
enables an owner to pre-authorize a periodic exercise of the contractual
transfer rights described above. Owners entering into a DCA agreement instruct
the Company to transfer monthly a predetermined dollar amount from any
sub-account or the one year fixed account investment option to other
sub-accounts until the amount in the sub-account from which the transfer is made
or one year fixed account investment option is exhausted. Except in the states
of ______, a special one year fixed account investment option (the "One Year DCA
Account") may be established under the DCA program to make automatic monthly
transfers. In the first eleven months the amount transferred is equal to one
eleventh of the amount allocated to the One Year DCA Account and in the twelfth
month the remaining balance of the One Year DCA Account is transferred. Only
initial and subsequent net payments may be allocated to the One Year DCA
Account. The DCA program is generally suitable for owners making a substantial
deposit and who desire to control the risk of investing at the top of a market
cycle. The DCA program allows such investments to be made in equal installments
over time in an effort to reduce such risk. Owners interested in the DCA program
may elect to participate in the program on the application or by separate
application. Owners may obtain a separate application and full information
concerning the program and its restrictions from their securities dealer or the
Annuity Service Office. There is no charge for participation in the DCA program.
ASSET REBALANCING PROGRAM
The Company administers an Asset Rebalancing Program which enables a
contract owner to indicate to the Company the percentage levels he or she would
like to maintain in particular portfolios. The contract owner's contract value
will be automatically rebalanced pursuant to the schedule described below to
maintain the indicated percentages by transfers among the portfolios. (The Fixed
Account Investment Options are not eligible for participation in the Asset
Rebalancing Program.) The entire value of the variable investment accounts must
be included in the Asset Rebalancing Program. Other investment programs, such as
the DCA program, or other transfers or withdrawals may not work in concert with
the Asset Rebalancing Program. Therefore, contract owners should monitor their
use of these other programs and any other transfers or withdrawals while the
Asset Rebalancing Program is being used. Contract owners interested in the Asset
Rebalancing Program may obtain a separate application and full information
concerning the program and its restrictions from their securities dealer or the
Annuity Service Office. There is no charge for participation in the Asset
Rebalancing Program.
For rebalancing programs begun on or after October 1, 1996 asset
rebalancing will only be permitted on the following time schedules:
(i) quarterly on the 25th day of the last month of the quarter (or the
next business day if the 25th is not a business day);
(ii) semi-annually on June 25th or December 26th (or the next business day
if these dates are not business days); or
(iii) annually on December 26th (or the next business day if December 26th
is not a business day).
Rebalancing will continue to take place on the last business day of every
calendar quarter for rebalancing programs begun prior to October 1, 1996.
WITHDRAWALS
Prior to the earlier of the maturity date or the death of the contract
owner, the owner may withdraw all or a portion of the contract value upon
written request, complete with all necessary information to the Company's
Annuity Service Office. For certain qualified contracts, exercise of the
withdrawal right may require the consent of the qualified plan participant's
spouse under the Code and regulations promulgated by the Treasury Department. In
the case of a total withdrawal, the Company will pay the contract value as of
the date of receipt of the request at its Annuity Service Office, less the
annual $30 administration fee if applicable, any debt and any applicable
withdrawal charge, and the contract will be canceled. In the case of a partial
withdrawal, the Company will pay the amount requested and cancel that number of
accumulation units credited to each investment account necessary to equal the
amount withdrawn from each investment account plus any applicable withdrawal
charge deducted from such investment account (see "CHARGES AND DEDUCTIONS").
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When making a partial withdrawal, the contract owner should specify the
investment options from which the withdrawal is to be made. The amount requested
from an investment option may not exceed the value of that investment option
less any applicable withdrawal charge. If the contract owner does not specify
the investment options from which a partial withdrawal is to be taken, the
withdrawal will be taken from the variable account investment options until
exhausted and then from the fixed account investment options. If the partial
withdrawal is less than the total value in the variable account investment
options, the withdrawal will be taken pro rata from the variable account
investment options: taking from each such variable account investment option an
amount which bears the same relationship to the total amount withdrawn as the
value of such variable account investment option bears to the value of all the
contract owner's investments in variable account investment options. For rules
governing the order and manner of withdrawals from the fixed account investment
options (see "FIXED ACCOUNT INVESTMENT OPTIONS").
There is no limit on the frequency of partial withdrawals; however, the
amount withdrawn must be at least $300 or, if less, the entire balance in the
investment option. If after the withdrawal (and deduction of any withdrawal
charge) the amount remaining in the investment option is less than $100, the
Company will treat the partial withdrawal as a withdrawal of the entire amount
held in the investment option. If a partial withdrawal plus any applicable
withdrawal charge would reduce the contract value to less than $300, the Company
will treat the partial withdrawal as a total withdrawal of the contract value.
The amount of any withdrawal from the variable account investment options
will be paid promptly, and in any event within seven days of receipt of the
request, complete with all necessary information at the Company's Annuity
Service Office, except that the Company reserves the right to defer the right of
withdrawal or postpone payments for any period when: (1) the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (2)
trading on the New York Stock Exchange is restricted, (3) an emergency exists as
a result of which disposal of securities held in the Variable Account is not
reasonably practicable or it is not reasonably practicable to determine the
value of the Variable Account's net assets, or (4) the SEC, by order, so permits
for the protection of security holders; provided that applicable rules and
regulations of the SEC shall govern as to whether the conditions described in
(2) and (3) exist.
Withdrawals from the contract may be subject to income tax and a 10%
penalty tax. Withdrawals are permitted from contracts issued in connection with
Section 403(b) qualified plans only under limited circumstances. (see "FEDERAL
TAX MATTERS").
TELEPHONE REDEMPTIONS
The contract owner may request the option to withdraw a portion of the
contract value by telephone by completing the application described under
"Telephone Transactions" above. The Company reserves the right to impose maximum
withdrawal amounts and procedural requirements regarding this privilege. For
additional information on Telephone Redemptions, see "Telephone Transactions"
above.
SPECIAL WITHDRAWAL SERVICES - THE INCOME PLAN
The Company administers an Income Plan ("IP") which enables a contract
owner to pre-authorize a periodic exercise of the contractual withdrawal rights
described above. Contract owners entering into an IP agreement instruct the
Company to withdraw a level dollar amount from specified investment options on a
periodic basis. The total of IP withdrawals in a contract year is limited to not
more than 10% of the purchase payments made to ensure that no withdrawal charge
will ever apply to an IP withdrawal. If an additional withdrawal is made from a
contract participating in an IP, the IP will terminate automatically and may be
reinstated only on or after the next contract anniversary pursuant to a new
application. The IP is not available to contracts participating in the dollar
cost averaging program or for which purchase payments are being automatically
deducted from a bank account on a periodic basis. IP withdrawals will be free of
withdrawal charges. IP withdrawals may, however, be subject to income tax and a
10% penalty tax (see "FEDERAL TAX MATTERS"). Contract owners interested in an IP
may obtain a separate application and full information concerning the program
and its restrictions from their securities dealer or the Annuity Service Office.
LOANS
The Company offers a loan privilege only to owners of contracts issued in
connection with Section 403(b) qualified plans that are not subject to Title I
of ERISA. Owners of such contracts may obtain loans using the contract as the
only security for the loan. Loans are subject to provisions of the Code and to
applicable retirement program rules (collectively, "loan rules"). Tax advisors
and retirement plan fiduciaries should be consulted prior to exercising loan
privileges.
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Under the terms of the contract, the maximum loan value is equal to 80% of
the contract value, although loan rules may serve to reduce such maximum loan
value in some cases. The amount available for a loan at any given time is the
loan value less any outstanding debt. Debt equals the amount of any loans plus
accrued interest. Loans will be made only upon written request from the owner.
The Company will make loans within seven days of receiving a properly completed
loan application (applications are available from the Annuity Service Office),
subject to postponement under the same circumstances that payment of withdrawals
may be postponed (see "WITHDRAWALS").
When an owner requests a loan, the Company will reduce the owner's
investment in the investment accounts and transfer the amount of the loan to the
loan account, a part of the Company's general account. The owner may designate
the investment accounts from which the loan is to be withdrawn. Absent such a
designation, the amount of the loan will be withdrawn from the investment
accounts in accordance with the rules for making partial withdrawals (see
"WITHDRAWALS"). The contract provides that owners may repay contract debt at any
time. Under applicable loan rules, loans generally must be repaid within five
years, repayments must be made at least quarterly and repayments must be made in
substantially equal amounts. When a loan is repaid, the amount of the repayment
will be transferred from the loan account to the investment accounts. The owner
may designate the investment accounts to which a repayment is to be allocated.
Otherwise, the repayment will be allocated in the same manner as the owner's
most recent purchase payment. On each contract anniversary, the Company will
transfer from the investment accounts to the loan account the amount by which
the debt on the contract exceeds the balance in the loan account.
The Company charges interest of 6% per year on contract loans. Loan
interest is payable in arrears and, unless paid in cash, the accrued loan
interest is added to the amount of the debt and bears interest at 6% as well.
The Company credits interest with respect to amounts held in the loan account at
a rate of 4% per year. Consequently, the net cost of loans under the contract is
2%. If on any date debt under a contract exceeds the contract value, the
contract will be in default. In such case the owner will receive a notice
indicating the payment needed to bring the contract out of default and will have
a thirty-one day grace period within which to pay the default amount. If the
required payment is not made within the grace period, the contract may be
foreclosed (terminated without value).
The amount of any debt will be deducted from the death benefit otherwise
payable under the contract (see "DEATH BENEFIT BEFORE MATURITY DATE"). In
addition, debt, whether or not repaid, will have a permanent effect on the
contract value because the investment results of the investment accounts will
apply only to the unborrowed portion of the contract value. The longer debt is
outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If the investment results are greater than the rate
being credited on amounts held in the loan account while the debt is
outstanding, the contract value will not increase as rapidly as it would have if
no debt were outstanding. If investment results are below that rate, the
contract value will be higher than it would have been had no debt been
outstanding.
DEATH BENEFIT BEFORE MATURITY DATE
In General. The following discussion applies principally to contracts that
are not issued in connection with qualified plans, i.e., a "non-qualified
contract." The requirements of the tax law applicable to qualified plans, and
the tax treatment of amounts held and distributed under such plans, are quite
complex. Accordingly, a prospective purchaser of the contract to be used in
connection with a qualified plan should seek competent legal and tax advice
regarding the suitability of the contract for the situation involved and the
requirements governing the distribution of benefits, including death benefits,
from a contract used in the plan. In particular, a prospective purchaser who
intends to use the contract in connection with a qualified plan should consider
that the contract provides a death benefit (described below) that could be
characterized as an incidental death benefit. There are limits on the amount of
incidental benefits that may be provided under certain qualified plans and the
provision of such benefits may result in currently taxable income to plan
participants (see "FEDERAL TAX MATTERS"). See APPENDIX D for information on
death benefit provisions applicable to certain contracts no longer being issued
and contracts issued in the States of Washington and Maryland ("VV contracts").
Amount of Death Benefit. If any contract owner dies on or prior to his or
her 85th birthday and the oldest owner had an attained age of less than 81 years
on the contract date, the death benefit will be the greater of: (a) the contract
value or (b) the excess of (i) over (ii), where (i) equals the sum of all
purchase payments made, accumulated daily at the equivalent of 5% per year
starting on the date each purchase payment is allocated to the contract, subject
to a maximum accumulation of two times each purchase payment, and (ii) equals
the sum of any amounts deducted in connection with partial withdrawals,
accumulated daily at the equivalent of 5% per year starting on the date each
such deduction occurs, subject to a maximum accumulation of two times each
amount deducted.
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If any contract owner dies after his or her 85th birthday and the oldest
owner had an attained age of less than 81 years on the contract date, the death
benefit will be the greater of: (a) the contract value or (b) the excess of (i)
the sum of all purchase payments over (ii) the sum of any amounts deducted in
connection with partial withdrawals. If any contract owner dies and the oldest
owner had an attained age greater than 80 on the contract date, the death
benefit will be the contract value less any applicable withdrawal charges at the
time of payment of benefits.
The determination of the death benefit will be made on the date written
notice and proof of death, as well as all required claims forms, are received at
the Company's Annuity Service Office. No person is entitled to the death benefit
until this time. In addition, partial withdrawals include amounts applied under
an annuity option under the contract. Also, amounts deducted in connection with
partial withdrawals include charges imposed on a partial withdrawal, but not
amounts charged to the contract in payment of the annual administration fee. If
there is any debt under the contract, the death benefit equals the death
benefit, as described above, less such debt.
Payment of Death Benefit. The Company will pay the death benefit (which, as
defined above, is net of any debt) to the beneficiary if any contract owner dies
before the maturity date. If there is a surviving contract owner, that contract
owner will be deemed to be the beneficiary. No death benefit is payable on the
death of any annuitant, except that if any contract owner is not a natural
person, the death of any annuitant will be treated as the death of an owner. On
the death of the last surviving annuitant, the contract owner, if a natural
person, will become the annuitant unless the contract owner designates another
person as the annuitant.
The death benefit may be taken in the form of a lump sum immediately. If
not taken immediately, the contract will continue subject to the following: (1)
The beneficiary will become the contract owner. (2) Any excess of the death
benefit over the contract value will be allocated to the owner's investment
accounts in proportion to their relative values on the date of the Company's
receipt at its Annuity Service Office of due proof of the owner's death. (3) No
additional purchase payments may be made. (4) If the beneficiary is not the
deceased's owner spouse, distribution of the contract owner's entire interest in
the contract must be made within five years of the owner's death, or
alternatively, distribution may be made as an annuity, under one of the annuity
options described below, which begins within one year of the owner's death and
is payable over the life of the beneficiary or over a period not extending
beyond the life expectancy of the beneficiary. Upon the death of the
beneficiary, the death benefit will equal the contract value which must be
distributed immediately in a single sum. (5) If the owner's spouse is the
beneficiary, the spouse continues the contract as the new owner. In such a case,
the distribution rules described in "(4)" applicable when a contract owner dies
will apply when the spouse, as the owner, dies. (6) If any contract owner dies
and the oldest owner had an attained age of less than 81 on the contract date,
withdrawal charges are not applied on payment of the death benefit (whether
taken through a partial or total withdrawal or applied under an annuity option).
If any contract owner dies and the oldest owner had an attained age greater than
80 on the contract date, withdrawal charges will be assessed only upon payment
of the death benefit (if such charges are otherwise applicable), so that if the
death benefit is paid in a subsequent year, a lower withdrawal charge will be
applicable.
If any annuitant is changed and any contract owner is not a natural person,
the entire interest in the contract must be distributed to the contract owner
within five years.
A substitution or addition of any contract owner may result in resetting
the death benefit to an amount equal to the contract value as of the date of the
change. For purposes of subsequent calculations of the death benefit prior to
the maturity date, the contract value on the date of the change will be treated
as a payment made on that date. In addition, all payments made and all amounts
deducted in connection with partial withdrawals prior to the date of the change
will not be considered in the determination of the death benefit. No such change
in death benefit will be made if the individual whose death will cause the death
benefit to be paid is the same after the change in ownership or if ownership is
transferred to the owner's spouse.
Death benefits will be paid within seven days of the date the amount of the
death benefit is determined, as described above, subject to postponement under
the same circumstances that payment of withdrawals may be postponed (see
"WITHDRAWALS").
ANNUITY PROVISIONS
GENERAL
The proceeds of the contract payable on death, withdrawal or the contract
maturity date may be applied to the annuity options described below, subject to
the distribution of death benefit provisions (see "DEATH BENEFIT BEFORE MATURITY
DATE").
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Generally, annuity benefits under the contract will begin on the maturity
date. The maturity date is the date specified on the contract specifications
page, unless changed. If no date is specified, the maturity date is the maximum
maturity date described below. The maximum maturity date is the first day of the
month following the later of the 85th birthday of the annuitant or the tenth
contract anniversary. See Appendix C for contracts issued in Pennsylvania. The
contract owner may specify a different maturity date at any time by written
request at least one month before both the previously specified and the new
maturity date. The new maturity date may not be later than the maximum maturity
date unless the Company consents. Maturity dates which occur at advanced ages,
e.g., past age 85, may in some circumstances have adverse income tax
consequences (see "FEDERAL TAX MATTERS"). Distributions from qualified contracts
may be required before the maturity date.
The contract owner may select the frequency of annuity payments. However,
if the contract value at the maturity date is such that a monthly payment would
be less than $20, the Company may pay the contract value, less any debt, in one
lump sum to the annuitant on the maturity date.
ANNUITY OPTIONS
Annuity benefits are available under the contract on a fixed or variable
basis, or any combination of fixed and variable bases. Upon purchase of the
contract, and on or before the maturity date, the contract owner may select one
or more of the annuity options described below on a fixed and/or variable basis
(except Option 5 which is available on a fixed basis only) or choose an
alternate form of settlement acceptable to the Company. If an annuity option is
not selected, the Company will provide as a default option variable annuity
payments in proportion to the Investment Account Value of each investment option
at the maturity date, such payments to be made for a period certain of 10 years
and continuing thereafter during the lifetime of the annuitant. Treasury
Department regulations may preclude the availability of certain annuity options
in connection with certain qualified contracts.
The following annuity options are guaranteed in the contract.
Option 1(a): Non-Refund Life Annuity - An annuity with payments during the
lifetime of the annuitant. No payments are due after the death of the
annuitant. Since there is no guarantee that any minimum number of payments
will be made, an annuitant may receive only one payment if the annuitant
dies prior to the date the second payment is due.
Option 1(b): Life Annuity with Payments Guaranteed for 10 Years - An
annuity with payments guaranteed for 10 years and continuing thereafter
during the lifetime of the annuitant. Since payments are guaranteed for 10
years, annuity payments will be made to the end of such period if the
annuitant dies prior to the end of the tenth year.
Option 2(a): Joint & Survivor Non-Refund Life Annuity - An annuity with
payments during the lifetimes of the annuitant and a designated
co-annuitant. No payments are due after the death of the last survivor of
the annuitant and co-annuitant. Since there is no guarantee that any
minimum number of payments will be made, an annuitant or co-annuitant may
receive only one payment if the annuitant and co-annuitant die prior to the
date the second payment is due.
Option 2(b): Joint & Survivor Life Annuity with Payments Guaranteed for 10
Years - An annuity with payments guaranteed for 10 years and continuing
thereafter during the lifetimes of the annuitant and a designated
co-annuitant. Since payments are guaranteed for 10 years, annuity payments
will be made to the end of such period if both the annuitant and the
co-annuitant die prior to the end of the tenth year.
In addition to the foregoing annuity options which the Company is
contractually obligated to offer at all times, the Company currently offers the
following annuity options. The Company may cease offering the following annuity
options at any time and may offer other annuity options in the future.
Option 3: Life annuity with Payments Guaranteed for 5, 15 or 20 Years - An
Annuity with payments guaranteed for 5, 15 or 20 years and continuing
thereafter during the lifetime of the annuitant. Since payments are
guaranteed for the specific number of years, annuity payments will be made
to the end of the last year of the 5, 15 or 20 year period.
Option 4: Joint & Two-Thirds Survivor Non-Refund Life Annuity - An annuity
with full payments during the joint lifetime of the annuitant and a
designated co-annuitant and two-thirds payments during the lifetime of the
survivor. Since there is no guarantee that any minimum number of payments
will be made, an annuitant or co-annuitant may receive only one payment if
the annuitant and co-annuitant die prior to the date the second payment is
due.
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Option 5: Period Certain Only Annuity for 5, 10, 15 or 20 years - An
annuity with payments for a 5, 10, 15 or 20 year period and no payments
thereafter.
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
The first variable annuity payment is determined by applying that portion
of the contract value used to purchase a variable annuity, measured as of a date
not more than ten business days prior to the maturity date (minus any applicable
premium taxes), to the annuity tables contained in the contract. (The amount of
the first and all subsequent fixed annuity payments is determined on the same
basis using the portion of the contract value used to purchase a fixed annuity.)
The rates contained in such tables depend upon the annuitant's sex and age (as
adjusted depending on the annuitant's year of birth) and the annuity option
selected, except for contracts issued in connection with certain employer
sponsored plans where sex-based tables may not be used. Under such tables, the
longer the life expectancy of the annuitant under any life annuity option or the
duration of any period for which payments are guaranteed under the option, the
smaller will be the amount of the first monthly variable annuity payment. The
rates are based on the 1983 Table A projected at Scale G, assume births in year
1942 and reflect an assumed interest rate of 3% per year. See APPENDIX D for
information on assumed interest rates applicable to certain contracts no longer
being issued and contracts issued in the states of Washington and Maryland (VV
contracts).
ANNUITY UNITS AND THE DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY PAYMENTS
Variable annuity payments subsequent to the first will be based on the
investment performance of the sub-accounts selected. The amount of such
subsequent payments is determined by dividing the amount of the first annuity
payment from each sub-account by the annuity unit value of such sub-account (as
of the same date the contract value to effect the annuity was determined) to
establish the number of annuity units which will thereafter be used to determine
payments. This number of annuity units for each sub-account is then multiplied
by the appropriate annuity unit value as of a uniformly applied date not more
than ten business days before the annuity payment is due, and the resulting
amounts for each sub-account are then totaled to arrive at the amount of the
payment to be made. The number of annuity units remains constant during the
annuity payment period.
The value of an annuity unit for each sub-account for any valuation period
is determined by multiplying the annuity unit value for the immediately
preceding valuation period by the net investment factor for that sub-account
(see "NET INVESTMENT FACTOR") for the valuation period for which the annuity
unit value is being calculated and by a factor to neutralize the assumed
interest rate.
A 3% assumed interest rate is built into the annuity tables in the contract
used to determine the first variable annuity payment. A higher assumption would
mean a larger first annuity payment, but more slowly rising subsequent payments
when actual investment performance exceeds the assumed rate, and more rapidly
falling subsequent payments when actual investment performance is less than the
assumed rate. A lower assumption would have the opposite effect. If the actual
net investment performance is 3% annually, annuity payments will be level.
TRANSFERS AFTER MATURITY DATE
Once variable annuity payments have begun, the contract owner may transfer
all or part of the investment upon which such payments are based from one
sub-account to another. Transfers will be made upon notice to the Company at
least 30 days before the due date of the first annuity payment to which the
change will apply. Transfers after the maturity date will be made by converting
the number of annuity units being transferred to the number of annuity units of
the sub-account to which the transfer is made, so that the next annuity payment
if it were made at that time would be the same amount that it would have been
without the transfer. Thereafter, annuity payments will reflect changes in the
value of the new annuity units. The Company reserves the right to limit, upon
notice, the maximum number of transfers a contract owner may make per contract
year to four. Once annuity payments have commenced, no transfers may be made
from a fixed annuity option to a variable annuity option or from a variable
annuity option to a fixed annuity option. In addition, the Company reserves the
right to defer the transfer privilege at any time that the Company is unable to
purchase or redeem shares of the Trust portfolios. The Company also reserves the
right to modify or terminate the transfer privilege at any time in accordance
with applicable law.
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DEATH BENEFIT ON OR AFTER MATURITY DATE
If annuity payments have been selected based on an annuity option providing
for payments for a guaranteed period, and the annuitant dies on or after the
maturity date, the Company will make the remaining guaranteed payments to the
beneficiary. Any remaining payments will be made as rapidly as under the method
of distribution being used as of the date of the annuitant's death. If no
beneficiary is living, the Company will commute any unpaid guaranteed payments
to a single sum (on the basis of the interest rate used in determining the
payments) and pay that single sum to the estate of the last to die of the
annuitant and the beneficiary.
OTHER CONTRACT PROVISIONS
TEN DAY RIGHT TO REVIEW
The contract owner may cancel the contract by returning it to the Company's
Annuity Service Office or agent at any time within 10 days after receipt of the
contract. Within 7 days of receipt of the contract by the Company, the Company
will pay the contract value, less any debt, computed at the end of the valuation
period during which the contract is received by the Company, to the contract
owner.
No withdrawal charge is imposed upon return of the contract within the ten
day right to review period. The ten day right to review may vary in certain
states in order to comply with the requirements of insurance laws and
regulations in such states. When the contract is issued as an individual
retirement annuity under the Code Sections 408 or 408A, during the first 7 days
of the 10 day period, the Company will return all purchase payments if this is
greater than the amount otherwise payable.
OWNERSHIP
The contract owner is the person entitled to exercise all rights under the
contract. Prior to the maturity date, the contract owner is the person
designated in the contract specifications page or as subsequently named. On and
after the maturity date, the annuitant is the contract owner. If amounts become
payable to any beneficiary under the contract, the beneficiary is the contract
owner.
In the case of non-qualified contracts, ownership of the contract may be
changed or the contract may be collaterally assigned at any time prior to the
maturity date, subject to the rights of any irrevocable beneficiary. Assigning a
contract, or changing the ownership of a contract, may be treated as a
distribution of the contract value for Federal tax purposes (see "FEDERAL TAX
MATTERS"). A change of any contract owner may result in resetting the death
benefit to an amount equal to the contract value as of the date of the change
and treating such value as a purchase payment made on that date for purposes of
computing the amount of the death benefit (see "DEATH BENEFIT BEFORE MATURITY
DATE").
Any change of ownership or assignment must be made in writing. Any change
must be approved by the Company. Any assignment and any change, if approved,
will be effective as of the date the Company receives the request at its Annuity
Service Office. The Company assumes no liability for any payments made or
actions taken before a change is approved or an assignment is accepted or
responsibility for the validity or sufficiency of any assignment. An absolute
assignment will revoke the interest of any revocable beneficiary.
In the case of qualified contracts, ownership of the contract generally may
not be transferred except by the trustee of an exempt employees' trust which is
part of a retirement plan qualified under Section 401 of the Code or as
otherwise permitted by applicable Internal Revenue Service ("IRS") regulations.
Subject to the foregoing, a qualified contract may not be sold, assigned,
transferred, discounted or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose to any person other
than the Company.
ANNUITANT
The annuitant is any natural person or persons whose life is used to
determine the duration of annuity payments involving life contingencies. If the
contract owner names more than one person as an "annuitant," the second person
named shall be referred to as "co-annuitant." The annuitant is as designated on
the contract specifications page or in the application, unless changed.
On the death of the annuitant, the co-annuitant, if living, becomes the
annuitant. If there is no living co-annuitant, the owner becomes the annuitant.
In the case of certain qualified contracts, there are limitations on the ability
to designate and change the annuitant and the co-annuitant.
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BENEFICIARY
The beneficiary is the person, persons or entity designated in the
contract specifications page or as subsequently named. However, if there is a
surviving contract owner, that person will be treated as the beneficiary. The
beneficiary may be changed subject to the rights of any irrevocable beneficiary.
Any change must be made in writing, approved by the Company and if approved,
will be effective as of the date on which written. The Company assumes no
liability for any payments made or actions taken before the change is approved.
If no beneficiary is living, the contingent beneficiary will be the beneficiary.
The interest of any beneficiary is subject to that of any assignee. If no
beneficiary or contingent beneficiary is living, the beneficiary is the estate
of the deceased contract owner. In the case of certain qualified contracts,
regulations promulgated by the Treasury Department prescribe certain limitations
on the designation of a beneficiary.
MODIFICATION
The contract may not be modified by the Company without the consent of
the contract owner, except as may be required to make it conform to any law or
regulation or ruling issued by a governmental agency. The provisions of the
contract shall be interpreted so as to comply with the requirements of Section
72(s) of the Code.
COMPANY APPROVAL
The Company reserves the right to accept or reject any contract
application at its sole discretion.
MISSTATEMENT AND PROOF OF AGE, SEX OR SURVIVAL
The Company may require proof of age, sex or survival of any person
upon whose age, sex or survival any payment depends. If the age or sex of the
annuitant has been misstated, the benefits will be those that would have been
provided for the annuitant's correct age and sex. If the Company has made
incorrect annuity payments, the amount of any underpayment will be paid
immediately and the amount of any overpayment will be deducted from future
annuity payments.
FIXED ACCOUNT INVESTMENT OPTIONS
Securities Registration. Due to certain exemptive and exclusionary
provisions, interests in the fixed account investment options are not registered
under the Securities Act of 1933, as amended, (the "1933 Act") and the Company's
general account is not registered as an investment company under the 1940 Act.
Accordingly, neither interests in the fixed account investment options nor the
general account are subject to the provisions or restrictions of the 1933 Act or
the 1940 Act and the staff of the SEC has not reviewed the disclosures in the
Prospectus relating thereto. Disclosures relating to interests in the fixed
account investment options and the general account, however, may be subject to
certain generally applicable provisions of the Federal securities laws relating
to the accuracy of statements made in a registration statement.
Guarantee. Pursuant to a Guarantee Agreement dated March 31, 1996,
Manulife, the ultimate parent of the Company, unconditionally guarantees to the
Company on behalf of and for the benefit of the Company and owners of fixed
annuity contracts issued by the Company that it will, on demand, make funds
available to the Company for the timely payment of contractual claims under
fixed annuity contracts issued after June 27, 1984. This Guarantee covers the
fixed portion of the contracts described in this Prospectus. This Guarantee may
be terminated by Manulife on notice to the Company. Termination will not affect
Manulife's continuing liability with respect to all fixed annuity contracts
issued prior to the termination of the Guarantee except if: (i) the liability to
pay contractual claims under the contracts is assumed by another insurer or (ii)
the Company is sold and the buyer's guarantee is substituted for the Manulife
guarantee.
Reinsurance. Effective June 30, 1995, the Company entered into a
Reinsurance Agreement with Peoples Security Life Insurance Company ("Peoples")
pursuant to which Peoples reinsures certain amounts with respect to the fixed
account portion of the contract described in this Prospectus. Under this
Reinsurance Agreement, the Company remains liable for the contractual
obligations of the contracts' fixed accounts and Peoples agrees to reimburse the
Company for certain amounts and obligations in connection with the fixed
accounts. Peoples contractual liability runs solely to the Company, and no
contract owner shall have any right of action against Peoples. Peoples is a
wholly-owned subsidiary of Louisville, Kentucky based Providian Corporation, a
diversified financial services corporation.
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Investment Options. A one year fixed account investment option is
available under the contract. In addition, a one year dollar cost averaging
fixed investment account may be established under the Dollar Cost Averaging
("DCA") program to make automatic monthly transfers from a one year fixed
account to one or more variable investment options (see "SPECIAL TRANSFER
SERVICES-DOLLAR COST AVERAGING" for details). Under the fixed account investment
options, the Company guarantees the principal value of purchase payments and the
rate of interest credited to the investment account for the term of the
guarantee period. The portion of the contract value in a fixed account
investment option and monthly annuity payments if selected on a fixed basis,
will reflect such interest and principal guarantees. The guaranteed interest
rates on new amounts allocated or transferred to a fixed investment account are
determined from time-to-time by the Company in accordance with market
conditions. In no event will the guaranteed rate of interest be less than 3%.
Once an interest rate is guaranteed for a fixed investment account, it is
guaranteed for the duration of the guarantee period and may not be changed by
the Company.
Investment Accounts. Contract owners may allocate purchase payments, or
make transfers from the variable investment options, to the one year fixed
account investment option at any time prior to the maturity date. The Company
establishes a separate investment account each time the contract owner allocates
or transfers amounts to the one year fixed account investment option. Amounts
may not be allocated to a fixed account investment option that would extend the
guarantee period beyond the maturity date.
Renewals. At the end of a guarantee period, the contract owner may
establish a new investment account with a one year guarantee period at the then
current interest rate or transfer the amounts to a variable account investment
option, all without the imposition of any charge. In the case of renewals within
one year of the maturity date, the only fixed account investment option
available is to have interest accrued up to the maturity date at the then
current interest rate for one year guarantee periods.
If the contract owner does not specify the renewal option desired, the
Company will select the one year fixed account investment option. In the case of
a renewal within one year of the maturity date, the Company will credit interest
up to the maturity date at the then current interest rate for one year guarantee
periods.
Transfers. Prior to the maturity date, the contract owner may transfer
amounts from the fixed account investment option to the variable account
investment options at the end of the guaranteed period; however, amounts may be
transferred prior to the end of the guarantee period pursuant to the DCA
program.
Where there are multiple investment accounts within the one year fixed
account investment option, amounts must be transferred from the one year fixed
account investment option on a first-in-first-out basis.
Withdrawals. The contract owner may make total and partial withdrawals
of amounts held in the fixed account investment options at any time prior to the
maturity date or his or her death. Withdrawals from the fixed account investment
options will be made in the same manner and be subject to the same limitations
as set forth under "WITHDRAWALS" plus the following provisions also apply to
withdrawals from the fixed account investment options: (1) the Company reserves
the right to defer payment of amounts withdrawn from the fixed account
investment options for up to six months from the date it receives the written
withdrawal request (if a withdrawal is deferred for more than 30 days pursuant
to this right, the Company will pay interest on the amount deferred at a rate
not less than 3% per year (or such higher rate as may be required by the
applicable state or jurisdiction)); and (2) if there are multiple investment
accounts under the fixed account investment options, amounts must be withdrawn
from such accounts on a first-in-first-out basis.
If the contract owner does not specify the investment options from
which a partial withdrawal is to be taken, a partial withdrawal will be taken
from the variable account investment options until exhausted and then from the
fixed account investment options. Such withdrawals will be made from the
investment options beginning with the shortest guarantee period. Within such
sequence, where there are multiple investment accounts within a fixed account
investment option, withdrawals will be made on a first-in-first out basis. For
this purpose, the one year DCA fixed account investment option is considered to
have a shorter guarantee period than the one year fixed account investment
option.
Withdrawals from the contract may be subject to income tax and a 10%
penalty tax. Withdrawals are permitted from contracts issued in connection with
Section 403(b) qualified plans only under limited circumstances (see "FEDERAL
TAX MATTERS" below).
Loans. The Company offers a loan privilege only to owners of contracts
issued in connection with Section 403(b) qualified plans that are not subject to
Title I of ERISA. Owners of such contracts may obtain loans using the contract
as the only security for
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the loan. Owners of such contracts may borrow amounts allocated to the fixed
investment account in the same manner and subject to the same limitations as set
forth under "LOANS" above.
Fixed Annuity Options. Subject to the distribution of death benefits
provisions (see "DEATH BENEFIT BEFORE MATURITY DATE" above), on death,
withdrawal or the maturity date of the contract, the proceeds may be applied to
a fixed annuity option (see "ANNUITY OPTIONS" above). The amount of each fixed
annuity payment is determined by applying the portion of the proceeds (less any
applicable premium taxes) applied to purchase the fixed annuity to the
appropriate table in the contract. If the table in use by the Company is more
favorable to the contract owner, the Company will substitute that table. The
Company guarantees the dollar amount of fixed annuity payments.
CHARGES AND DEDUCTIONS
Charges and deductions under the contracts are assessed against
purchase payments, contract values or annuity payments. Currently, there are no
deductions made from purchase payments, except for premium taxes in certain
states. In addition, there are deductions from and expenses paid out of the
assets of the Trust Portfolios that are described in the accompanying Prospectus
of the Trust.
WITHDRAWAL CHARGES
If a withdrawal is made from the contract before the maturity date, a
withdrawal charge (contingent deferred sales charge) may be assessed against
amounts withdrawn attributable to purchase payments that have been in the
contract less than three complete contract years. (Effective November 1, 1996,
no withdrawal charge will be imposed on withdrawals from contracts issued on or
after November 1, 1996) There is never a withdrawal charge with respect to
earnings accumulated in the contract, certain other free withdrawal amounts
described below or purchase payments that have been in the contract more than
three complete contract years. In no event may the total withdrawal charges
exceed 3% of the amount invested. The amount of the withdrawal charge and when
it is assessed is discussed below:
1. Each withdrawal from the contract is allocated first to the "free
withdrawal amount" and second to "unliquidated purchase payments". In any
contract year, the free withdrawal amount for that year is the greater of (1)
the excess of the contract value on the date of withdrawal over the unliquidated
purchase payments (the accumulated earnings on the contract) or (2) the excess
of (i) over (ii), where (i) is 10% of total purchase payments and (ii) is all
prior partial withdrawals in that contract year. Withdrawals allocated to the
free withdrawal amount may be withdrawn without the imposition of a withdrawal
charge. The free withdrawal amount will be applied to a requested withdrawal,
first, to withdrawals from variable account investment options and then to
withdrawals from the one year fixed account investment option.
2. If a withdrawal is made for an amount in excess of the free
withdrawal amount, the excess will be allocated to purchase payments which will
be liquidated on a first-in first-out basis. On any withdrawal request, the
Company will liquidate purchase payments equal to the amount of the withdrawal
request which exceeds the free withdrawal amount in the order such purchase
payments were made: the oldest unliquidated purchase payment first, the next
purchase payment second, etc. until all purchase payments have been liquidated.
3. Each purchase payment or portion thereof liquidated in connection
with a withdrawal request that has been in the contract for less than three
years is subject to a withdrawal charge of 3%.
4. The withdrawal charge is deducted from the contract value remaining
after the contract owner is paid the amount requested, except in the case of a
complete withdrawal when it is deducted from the amount otherwise payable. In
the case of a partial withdrawal, the amount requested from an investment
account may not exceed the value of that investment account less any applicable
withdrawal charge.
5. There is generally no withdrawal charge on distributions made as a
result of the death of the contract owner or, if applicable, the annuitant (see
"Death Benefit Before Maturity Date -- Amount of Death Benefit"), and no
withdrawal charges are imposed on the maturity date if the contract owner
annuitizes as provided in the contract.
The amount collected from the withdrawal charge will be used to
reimburse the Company for the compensation paid to cover selling concessions to
broker-dealers, preparation of sales literature and other expenses related to
sales activity.
For examples of calculation of the withdrawal charge, see Appendix A.
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REDUCTION OR ELIMINATION OF WITHDRAWAL CHARGES
The amount of the withdrawal charge on a contract may be reduced or
eliminated when sales of the contracts are made to individuals or to a group of
individuals in such a manner that results in savings of sales expenses. The
entitlement to such a reduction in the withdrawal charge will be determined by
the Company in the following manner:
1. The size and type of group to which sales are to be made will be
considered. Generally, sales expenses for a larger group are smaller than for a
smaller group because of the ability to implement large numbers of contracts
with fewer sales contacts.
2. The total amount of purchase payments to be received will be
considered. Per dollar sales expenses are likely to be less on larger purchase
payments than on smaller ones.
3. Any prior or existing relationship with the Company will be
considered. Per contract sales expenses are likely to be less when there is a
prior or existing relationship because of the likelihood of implementing the
contract with fewer sales contacts.
4. The level of commissions paid to selling broker-dealers will be
considered. Certain broker-dealers may offer the contract in connection with
financial planning programs offered on a fee for service basis. In view of the
financial planning fees, such broker-dealers may elect to receive lower
commissions for sales of the contracts, thereby reducing the Company's sales
expenses.
5. There may be other circumstances of which the Company is not
presently aware, which could result in reduced sales expenses.
If, after consideration of the foregoing factors, it is determined that
there will be a reduction in sales expenses, the Company will provide a
reduction in the withdrawal charge. The withdrawal charge will be eliminated
when a contract is issued to an officer, director or employee (or a relative
thereof) of the Company, Manulife, the Trust or any of their affiliates. In no
event will reduction or elimination of the withdrawal charge be permitted where
such reduction or elimination will be unfairly discriminatory to any person.
Withdrawal Charge Waiver in Connection with Clinton's Administration's Fiscal
Year 1999 Budget Proposal
The Clinton administration's Fiscal Year 1999 Budget proposal dated
February 2, 1998 (the "1999 Budget Proposal") contains proposals to change the
1999 Budget Proposal will become law, if the 1999 Budget Proposal is enacted
substantially as proposed, withdrawal charges will be waived on purchase
payments made on or after February 2, 1998, provided such amounts are withdrawn
within 60 days of the date that the 1999 Budget Proposal becomes law. The
Company reserves the right to terminate this withdrawal charge waiver at any
time. If the waiver is terminated, purchase payments made from February 2, 1998
to the termination date of the waiver will not be subject to withdrawal charge
as provided above. This waiver does not affect a contract owner's right to
cancel a contract within the ten day right to review period (see "OTHER CONTRACT
PROVISIONS - Ten Day Right to Review"). Withdrawals may be subject to income tax
to the extent of earnings under the contract and, if made prior to age 59 1/2,
generally will be subject to a 10% IRS penalty tax (see "FEDERAL TAX MATTERS -
Taxation of Partial and Full Withdrawals").
ADMINISTRATION FEES
A daily fee in an amount equal to 0.25% of the value of each variable
investment account on an annual basis is deducted from each sub-account as an
administration fee. The fee is designed to compensate the Company for the cost
of providing administrative services attributable to the contracts and the
operations of the Variable Account and the Company in connection with the
contracts. This asset based administration fee will not be deducted from the
fixed account investment option. The fee will be reflected in the contract value
as a proportionate reduction in the value of each variable investment account.
Because the administration fee is a percentage of assets rather than a flat
amount, larger contracts will in effect pay a higher proportion of the
administrative expenses than smaller contracts.
Also, if the contract value falls below $10,000 as a result of a
partial withdrawal, the Company may deduct an annual administration fee of $30
as partial compensation for administrative expenses. The fee will be deducted on
the last day of each contract year. It will be withdrawn from each investment
option in the same proportion that the value of such investment option bears to
the contract value. If the entire contract value is withdrawn on other than the
last day of any contract year, the fee will be deducted from the amount paid.
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The Company does not expect to recover from the administration fees any
amount in excess of its accumulated administrative expenses. Even though
administrative expenses may increase, the Company guarantees that it will not
increase the amount of the administration fees.
DISTRIBUTION FEE
A daily fee in an amount equal to 0.15% of the value of each variable
investment account on an annual basis is deducted from each sub-account as a
distribution fee. The fee is designed to compensate the Company for a portion of
the sales expenses it incurs with respect to the contracts. This asset based
distribution fee will not be deducted from the fixed account investment option.
The fee will be reflected in the contract value as a proportionate reduction in
the value of each variable investment account. Because the distribution fee is a
percentage of assets rather than a flat amount, larger contracts will in effect
pay a higher proportion of sales expenses than smaller contracts.
MORTALITY AND EXPENSE RISK CHARGE
The mortality risk assumed by the Company is the risk that annuitants
may live for a longer period of time than estimated. The Company assumes this
mortality risk by virtue of annuity rates incorporated into the contract which
cannot be changed. This assures each annuitant that his longevity will not have
an adverse effect on the amount of annuity payments. Also, the Company
guarantees that if the contract owner dies before the maturity date, it will pay
a death benefit (see "DEATH BENEFIT BEFORE MATURITY DATE"). The expense risk
assumed by the Company is the risk that the administration charges or withdrawal
charge may be insufficient to cover actual expenses.
To compensate it for assuming these risks, the Company deducts from
each of the sub-accounts a daily charge in an amount equal to 1.25% of the value
of the variable investment accounts on an annual basis, consisting of .8% for
the mortality risk and .45% for the expense risk. The charge will be reflected
in the contract value as a proportionate reduction in the value of each variable
investment account. The rate of the mortality and expense risk charge cannot be
increased. If the charge is insufficient to cover the actual cost of the
mortality and expense risks undertaken, the Company will bear the loss.
Conversely, if the charge proves more than sufficient, the excess will be profit
to the Company and will be available for any proper corporate purpose including,
among other things, payment of distribution expenses. The mortality and expense
risk charge is not assessed against the fixed account investment option.
TAXES
The Company reserves the right to charge, or provide for, certain taxes
against purchase payments, contract values or annuity payments. Such taxes may
include premium taxes or other taxes levied by any government entity which the
Company determines to have resulted from the (i) establishment or maintenance of
the Variable Account, (ii) receipt by the Company of purchase payments, (iii)
issuance of the contacts, or (iv) commencement or continuance of annuity
payments under the contracts. In addition, the Company will withhold taxes to
the extent required by applicable law.
Except for residents of those states which apply premium taxes upon
receipt of purchase payments, premium taxes will be deducted from the contract
value used to provide for fixed or variable annuity payments. For residents of
those states which apply premium taxes upon receipt of purchase payments,
premium taxes will be deducted upon payment of any withdrawal benefits, upon any
annuitization, or payment of death benefits. The amount deducted will depend on
the premium tax assessed in the applicable state. State premium taxes currently
range from 0% to 3.5% depending on the jurisdiction and the tax status of the
contract and are subject to change by the legislature or other authority (see
"APPENDIX B: STATE PREMIUM TAXES").
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FEDERAL TAX MATTERS
INTRODUCTION
The following discussion of the Federal income tax treatment of the
contract is not exhaustive, does not purport to cover all situations, and is not
intended as tax advice. A qualified tax advisor should always be consulted with
regard to the application of law to individual circumstances. This discussion is
based on the Code, Treasury Department regulations, and interpretations existing
on the date of this Prospectus. These authorities, however, are subject to
change by Congress, the Treasury Department, and judicial decisions.
The 1999 Budget Proposal dated February 2, 1998 contains proposals to
change the taxation of non-qualified annuity contracts. The 1999 Budget Proposal
proposes to tax exchanges of variable contracts for fixed contracts, exchanges
of fixed contracts for variable contracts, exchanges of variable contracts for
variable contracts and reallocation within variable contracts. Currently, owners
of annuity contracts may exchange their contracts for another annuity without
currently incurring tax, and reallocations among investment options are not
treated as a taxable exchange. In addition, the 1999 Budget Proposal proposes
that the contract owner's basis in annuity contracts be reduced annually by
1.25% of the cash value for purposes of determining the taxable gain on
surrenders, withdrawals, and all annuity payments except those made for life at
the rates guaranteed in the contract. Currently, basis in annuity contracts is
not reduced by this amount. The 1999 Budget Proposal states that it generally
would apply only to contracts issued after the date of first congressional
committee action, but that the new exchange and reallocation rules would also
apply to any existing contract that was materially changed. While it is
uncertain whether the Budget Proposal will become law, if the 1999 Budget
Proposal is enacted substantially as proposed, withdrawal charges will be waived
(see "CHARGES AND DEDUCTIONS - Reduction or Elimination of Withdrawal Charge").
This discussion does not address state or local tax consequences
associated with the purchase of a contract. In addition, THE COMPANY MAKES NO
GUARANTEE REGARDING ANY TAX TREATMENT -- FEDERAL, STATE, OR LOCAL -- OF ANY
CONTRACT OR OF ANY TRANSACTION INVOLVING A CONTRACT.
THE COMPANY'S TAX STATUS
The Company is taxed as a life insurance company under the Code. Since
the operations of the Variable Account are a part of, and are taxed with, the
operations of the Company, the Variable Account is not separately taxed as a
"regulated investment company" under the Code. Under existing Federal income tax
laws, investment income and capital gains of the Variable Account are not taxed
to the extent they are applied under a contract. The Company does not anticipate
that it will incur any Federal income tax liability attributable to such income
and gains of the Variable Account, and therefore the Company does not intend to
make provision for any such taxes. If the Company is taxed on investment income
or capital gains of the Variable Account, then the Company may impose a charge
against the Variable Account in order to make provision for such taxes.
TAXATION OF ANNUITIES IN GENERAL
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any
increase in the contract value is generally not taxable to the contract owner or
annuitant until received, either in the form of annuity payments, as
contemplated by the contract, or in some other form of distribution. However,
certain requirements must be satisfied in order for this general rule to apply,
including: (1) the contract must be owned by an individual (or treated as owned
by an individual), (2) the investments of the Variable Account must be
"adequately diversified" in accordance with Treasury Department regulations, (3)
the Company, rather than the owner, must be considered the owner of the assets
of the Variable Account for Federal tax purposes, and (4) the contract must
provide for appropriate amortization, through annuity payments, of the
contract's purchase payments and earnings, e.g., the maturity date must not
occur at too advanced an age.
Non-Natural Owners. As a general rule, deferred annuity contracts held
by "non-natural persons" such as a corporation, trust or other similar entity,
as opposed to a natural person, are not treated as annuity contracts for Federal
income tax purposes. The investment income on such contracts is taxed as
ordinary income that is received or accrued by the owner of the contract during
the taxable year. There are several exceptions to this general rule for
non-natural contract owners.
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First, contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity which holds the contract as an agent
for a natural person. However, this special exception will not apply in the case
of any employer who is the nominal owner of an annuity contract under a
non-qualified deferred compensation arrangement for its employees.
In addition, exceptions to the general rule for non-natural contract
owners will apply with respect to (1) contracts acquired by an estate of a
decedent by reason of the death of the decedent, (2) certain qualified
contracts, (3) certain contracts purchased by employers upon the termination of
certain qualified plans, (4) certain contracts used in connection with
structured settlement agreements, and (5) contracts purchased with a single
premium when the annuity starting date (as defined in the tax law) is no later
than a year from purchase of the annuity and substantially equal periodic
payments are made, not less frequently than annually, during the annuity period.
Loss of Interest Deduction Where Contracts are Held by or for the
Benefit of Certain Non-Natural Persons. In the case of contracts issued after
June 8, 1997 to a nonnatural taxpayer (such as a corporation or a trust), or
held for the benefit of such an entity, recent changes in the tax law may result
in otherwise deductible interest no longer being deductible by the entity,
regardless of whether the interest relates to debt is used to purchase or carry
the contract. However, this interest deduction disallowance does not affect
contracts where the income on such contracts is treated as ordinary income that
is received or accrued by the owner during the taxable year. Entities that are
considering purchasing the contract, or entities that will be beneficiaries
under a contract, should consult a tax advisor.
Diversification Requirements. For a contract to be treated as an
annuity for Federal income tax purposes, the investments of the Variable Account
must be "adequately diversified" in accordance with Treasury Department
Regulations. The Secretary of the Treasury has issued regulations which
prescribe standards for determining whether the investments of the Variable
Account are "adequately diversified." If the Variable Account failed to comply
with these diversification standards, a contract would not be treated as an
annuity contract for Federal income tax purposes and the contract owner would
generally be taxable currently on the excess of the contract value over the
premiums paid for the contract.
Although the Company does not control the investments of the Trust, it
expects that the Trust will comply with such regulations so that the Variable
Account will be considered "adequately diversified."
Ownership Treatment. In certain circumstances, a variable annuity
contract owner may be considered the owner, for Federal income tax purposes, of
the assets of the separate account used to support his or her contract. In those
circumstances, income and gains from such separate account assets would be
includible in the contract owner's gross income. The IRS has stated in published
rulings that a variable contract owner will be considered the owner of separate
account assets if the owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. In addition,
the Treasury Department announced, in connection with the issuance of
regulations concerning investment diversification, that those regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which Policyholders may direct their
investments to particular sub-accounts [of a separate account] without being
treated as owners of the underlying assets." As of the date of this Prospectus,
no such guidance has been issued.
The ownership rights under this contract are similar to, but different
in certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the owner of this contract has the choice of many more investment
options to which to allocate premiums and contract values, and may be able to
transfer among investment options more frequently than in such rulings. These
differences could result in the contract owner being treated as the owner of the
assets of the Variable Account and thus subject to current taxation on the
income and gains from those assets. In addition, the Company does not know what
standards will be set forth in the regulations or rulings which the Treasury
Department has stated it expects to issue. The Company therefore reserves the
right to modify the contract as necessary to attempt to prevent the contract
owner from being considered the owner of the assets of the Variable Account.
Delayed Maturity Dates. If the contract's maturity date occurs (or is
scheduled to occur) at a time when the annuitant has reached an advanced age,
e.g., past age 85, it is possible that the contract would not be treated as an
annuity for Federal income tax purposes. In that event, the income and gains
under the contract could be currently includible in the owner's income.
The remainder of this discussion assumes that the contract will be
treated as an annuity contract for Federal income tax purposes and that the
Company will be treated as the owner of the Variable Account assets.
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TAXATION OF PARTIAL AND FULL WITHDRAWALS
In the case of a partial withdrawal, amounts received are includible in
income to the extent the contract value before the withdrawal exceeds the
"investment in the contract." In the case of a full withdrawal, amounts received
are includible in income to the extent they exceed the "investment in the
contract." For these purposes the investment in the contract at any time equals
the total of the purchase payments made under the contract to that time (to the
extent such payments were neither deductible when made nor excludible from
income as, for example, in the case of certain employer contributions to
qualified plans) less any amounts previously received from the contract which
were not included in income.
Other than in the case of certain qualified contracts, any amount
received as a loan under a contract, and any assignment or pledge (or agreement
to assign or pledge) any portion of the contract value, is treated as a
withdrawal of such amount or portion. (Loans, assignments and pledges are
permitted only in limited circumstances under qualified contracts.) The
investment in the contract is increased by the amount includible in income with
respect to such assignment or pledge, though it is not affected by any other
aspect of the assignment or pledge (including its release). If an individual
transfers his or her interest in an annuity contract without adequate
consideration to a person other than the owner's spouse (or to a former spouse
incident to divorce), the owner will be taxed on the difference between the
"contract value" and the "investment in the contract" at the time of transfer.
In such case, the transferee's investment in the contract will be increased to
reflect the increase in the transferor's income.
The contract provides a death benefit that in certain circumstances may
exceed the greater of the purchase payments and the contract value. As described
elsewhere in this Prospectus, the Company imposes certain charges with respect
to the death benefit. It is possible that those charges (or some portion
thereof) could be treated for Federal income tax purposes as a partial
withdrawal from the contract.
There may be special income tax issues present in situations where the
owner and the annuitant are not the same person and are not married to one
another. A tax advisor should be consulted in those situations.
TAXATION OF ANNUITY PAYMENTS
Normally, the portion of each annuity payment taxable as ordinary
income is equal to the excess of the payment over the exclusion amount. In the
case of variable annuity payments, the exclusion amount is the "investment in
the contract" (defined above) allocated to the variable annuity option, adjusted
for any period certain or refund feature, when payments begin to be made divided
by the number of payments expected to be made (determined by Treasury Department
regulations which take into account the annuitant's life expectancy and the form
of annuity benefit selected). In the case of fixed annuity payments, the
exclusion amount is the amount determined by multiplying (1) the payment by (2)
the ratio of the investment in the contract allocated to the fixed annuity
option, adjusted for any period certain or refund feature, to the total expected
value of annuity payments for the term of the contract (determined under
Treasury Department regulations). A simplified method of determining the taxable
portion of annuity payments applies to contracts issued in connection with
certain qualified plans other than IRAs.
Once the total amount of the investment in the contract is excluded
using these ratios, annuity payments will be fully taxable. If annuity payments
cease because of the death of the annuitant and before the total amount of the
investment in the contract is recovered, the unrecovered amount generally will
be allowed as a deduction to the annuitant in his or her last taxable year.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a contract because of the death of an
owner or the annuitant. Prior to the maturity date, such death benefit proceeds
are includible in income as follows: (1) if distributed in a lump sum, they are
taxed in the same manner as a full withdrawal, as described above, or (2) if
distributed under an annuity option, they are taxed in the same manner as
annuity payments, as described above. After the maturity date, where a
guaranteed period exists under an annuity option and the annuitant dies before
the end of that period, payments made to the beneficiary for the remainder of
that period are includible in income as follows: (1) if received in a lump sum,
they are includible in income to the extent that they exceed the unrecovered
investment in the contract at that time, or (2) if distributed in accordance
with the existing annuity option selected, they are fully excludable from income
until the remaining investment in the contract is deemed to be recovered, and
all annuity payments thereafter are fully includible in income.
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PENALTY TAX ON PREMATURE DISTRIBUTIONS
There is a 10% penalty tax on the taxable amount of any payment from a
non-qualified contract unless the payment is: (a) received on or after the
contract owner reaches age 59 1/2; (b) attributable to the contract owner's
becoming disabled (as defined in the tax law); (c) made to a beneficiary on or
after the death of the contract owner or, if the contract owner is not an
individual, on or after the death of the primary annuitant (as defined in the
tax law); (d) made as a series of substantially equal periodic payments (not
less frequently than annually) for the life (or life expectancy) of the
annuitant or for the joint lives (or joint life expectancies) of the annuitant
and designated beneficiary (as defined in the tax law); (e) made under an
annuity contract purchased with a single premium when the annuity starting date
(as defined in the tax law) is no later than a year from purchase of the annuity
and substantially equal periodic payments are made, not less frequently than
annually, during the annuity period; or (f) made with respect to certain
annuities issued in connection with structured settlement agreements. (A similar
penalty tax, applicable to distributions from certain qualified contracts, is
discussed below.)
AGGREGATION OF CONTRACTS
In certain circumstances, the amount of an annuity payment or a
withdrawal from a contract that is includible in income may be determined by
combining some or all of the non-qualified contracts owned by an individual. For
example, if a person purchases a contract offered by this Prospectus and also
purchases at approximately the same time an immediate annuity, the IRS may treat
the two contracts as one contract. In addition, if a person purchases two or
more deferred annuity contracts from the same insurance company (or its
affiliates) during any calendar year, all such contracts will be treated as one
contract. The effects of such aggregation are not clear; however, it could
affect the amount of a withdrawal or an annuity payment that is taxable and the
amount which might be subject to the penalty tax described above.
QUALIFIED RETIREMENT PLANS
The contracts are also designed for use in connection with certain
types of retirement plans which receive favorable treatment under the Code.
Numerous special tax rules apply to the participants in such qualified plans and
to the contracts used in connection with such qualified plans. Therefore, no
attempt is made in this Prospectus to provide more than general information
about use of the contract with the various types of qualified plans.
The tax rules applicable to qualified plans vary according to the type
of plan and the terms and conditions of the plan itself. For example, for both
withdrawals and annuity payments under certain qualified contracts, there may be
no "investment in the contract" and the total amount received may be taxable.
Also, loans from qualified contracts, where allowed, are subject to a variety of
limitations, including restrictions as to the amount that may be borrowed, the
duration of the loan, and the manner in which the loan must be repaid. (Owners
should always consult their tax advisors and retirement plan fiduciaries prior
to exercising their loan privileges.) Both the amount of the contribution that
may be made, and the tax deduction or exclusion that the owner may claim for
such contribution, are limited under qualified plans. Those who are considering
the purchase of a contract in connection with a qualified plan should consider,
in evaluating the suitability of the contract, that the contract requires a
minimum initial purchase payment of $25,000. If this contract is used in
connection with a qualified plan, the owner and annuitant must be the same
individual. If a co-annuitant is named, all distributions made while the
annuitant is alive must be made to the annuitant. Also, if a co-annuitant is
named who is not the annuitant's spouse, the annuity options which are available
may be limited, depending on the difference in ages between the annuitant and
co-annuitant. Furthermore, the length of any guarantee period may be limited in
some circumstances to satisfy certain minimum distribution requirements under
the Code.
In addition, special rules apply to the time at which distributions
must commence and the form in which the distributions must be paid. For example,
failure to comply with minimum distribution requirements applicable to qualified
plans will result in the imposition of an excise tax. This excise tax generally
equals 50% of the amount by which a minimum required distribution exceeds the
actual distribution from the qualified plan. In the case of IRAs, distributions
of minimum amounts (as specified in the tax law) must generally commence by
April 1 of the calendar year following the calendar year in which the owner
attains age 70 1/2. In the case of certain other qualified plans, distributions
of such minimum amounts must generally commence by the later of this date or
April 1 of the calendar year following the calendar year in which the employee
retires.
There is also a 10% penalty tax on the taxable amount of any payment
from certain qualified contracts (but not Section 457 plans). (The amount of the
penalty tax is 25% of the taxable amount of any payment received from a "SIMPLE
retirement account" during the 2-year period beginning on the date the
individual first participated in any qualified salary reduction arrangement (as
defined in the tax law) maintained by the individual's employer.) There are
exceptions to this penalty tax which vary depending on the type of qualified
plan. In the case of an "Individual Retirement Annuity" or an "IRA", including
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a "SIMPLE IRA," exceptions provide that the penalty tax does not apply to a
payment (a) received on or after the contract owner reaches age 59 1/2, (b)
received on or after the owner's death or because of the owner's disability (as
defined in the tax law), or (c) made as a series of substantially equal periodic
payments (not less frequently than annually) for the life (or life expectancy)
of the owner or for the joint lives (or joint life expectancies) of the owner
and designated beneficiary (as defined in the tax law). These exceptions, as
well as certain others not described herein, generally apply to taxable
distributions from other qualified plans (although, in the case of plans
qualified under Sections 401 and 403, exception "c" above for substantially
equal periodic payments applies only if the owner has separated from service).
In addition, the penalty tax does not apply to certain distributions from IRAs
taken after December 31, 1997 which are used for qualified first time home
purchases or for higher education expenses. Special conditions must be met to
quality for these two exceptions to the penalty tax. Owners wishing to take a
distribution from an IRA for these purposes should consult their tax advisor.
When issued in connection with a qualified plan, a contract will be
amended as generally necessary to conform to the requirements of the plan.
However, contract owners, annuitants, and beneficiaries are cautioned that the
rights of any person to any benefits under qualified plans may be subject to the
terms and conditions of the plans themselves, regardless of the terms and
conditions of the contract. In addition, the Company shall not be bound by terms
and conditions of qualified plans to the extent such terms and conditions
contradict the contract, unless the Company consents.
QUALIFIED PLAN TYPES
Following are brief descriptions of various types of qualified plans in
connection with which the Company may issue a contract.
Individual Retirement Annuities. Section 408 of the Code permits
eligible individuals to contribute to an individual retirement program known as
an "Individual Retirement Annuity" or "IRA." IRAs are subject to limits on the
amounts that may be contributed, the persons who may be eligible and on the time
when distributions may commence. Also, distributions from certain other types of
qualified retirement plans may be "rolled over" on a tax-deferred basis into an
IRA. The contract may not, however be used in connection with an "Education IRA"
under Section 530 of the Code.
IRAs generally may not provide life insurance coverage, but they may
provide a death benefit that equals the greater of the premiums paid and the
contract value. The contract provides a death benefit that in certain
circumstances may exceed the greater of the purchase payments and the contract
value. It is possible that the contract's death benefit could be viewed as
providing life insurance coverage with the result that the contract would not be
viewed as satisfying the requirements of an IRA.
Simplified Employee Pensions (SEP-IRAs). Section 408(k) of the Code
allows employers to establish simplified employee pension plans for their
employees, using the employees' IRAs for such purposes, if certain criteria are
met. Under these plans the employer may, within specified limits, make
deductible contributions on behalf of the employees to IRAs. As discussed above
(see Individual Retirement Annuities), there is some uncertainty regarding the
treatment of the contract's death benefit for purposes of the tax rules
governing IRAs (which would include SEP-IRAs). Employers intending to use the
contract in connection with such plans should seek competent advice.
SIMPLE IRAs. Section 408(p) of the Code permits certain small employers
to establish "SIMPLE retirement accounts," including SIMPLE IRAs, for their
employees. Under SIMPLE IRAs, certain deductible contributions are made by both
employees and employers. SIMPLE IRAs are subject to various requirements,
including limits on the amounts that may be contributed, the persons who may be
eligible, and the time when distributions may commence. As discussed above (see
Individual Retirement Annuities), there is some uncertainty regarding the proper
characterization of the contract's death benefit for purposes of the tax rules
governing IRAs (which would include SIMPLE IRAs). Employers intending to use the
contract in connection with such plans should seek competent advice.
Corporate and Self-Employed ("H.R. 10" and "Keogh") Pension and
Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit corporate
employers to establish various types of tax-favored retirement plans for
employees. The Self-Employed Individuals' Tax Retirement Act of 1962, as
amended, commonly referred to as "H.R. 10" or "Keogh", permits self-employed
individuals also to establish such tax-favored retirement plans for themselves
and their employees. Such retirement plans may permit the purchase of the
contracts in order to provide benefits under the plans. The contract provides a
death benefit that in certain circumstances may exceed the greater of the
purchase payments and the contract value. It is possible that such death benefit
could be characterized as an incidental death benefit. There are limitations on
the amount of incidental benefits that may be provided under pension and profit
sharing plans. In addition, the provision of such benefits may result in current
taxable income to participants. Employers intending to use the contract in
connection with such plans should seek competent advice.
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Tax-Sheltered Annuities. Section 403(b) of the Code permits public
school employees and employees of certain types of charitable, educational and
scientific organizations specified in Section 501(c)(3) of the Code to have
their employers purchase annuity contracts for them and, subject to certain
limitations, to exclude the amount of purchase payments from gross income for
tax purposes. These annuity contracts are commonly referred to as "tax-sheltered
annuities". Purchasers of the contracts for such purposes should seek competent
advice as to eligibility, limitations on permissible amounts of purchase
payments and other tax consequences associated with the contracts. In
particular, purchasers should consider that the contract provides a death
benefit that in certain circumstances may exceed the greater of the purchase
payments and the contract value. It is possible that such death benefit could be
characterized as an incidental death benefit. If the death benefit were so
characterized, this could result in currently taxable income to purchasers. In
addition, there are limitations on the amount of incidental benefits that may be
provided under a tax-sheltered annuity. Even if the death benefit under the
contract were characterized as an incidental death benefit, it is unlikely to
violate those limits unless the purchaser also purchases a life insurance
contract as part of his or her tax-sheltered annuity plan.
Tax-sheltered annuity contracts must contain restrictions on
withdrawals of (i) contributions made pursuant to a salary reduction agreement
in years beginning after December 31, 1988, (ii) earnings on those
contributions, and (iii) earnings after 1988 on amounts attributable to salary
reduction contributions (and earnings on those contributions) held as of the
last day of the year beginning before January 1, 1989. These amounts can be paid
only if the employee has reached age 59 1/2, separated from service, died, or
become disabled (within the meaning of the tax law), or in the case of hardship
(within the meaning of the tax law). Amounts permitted to be distributed in the
event of hardship are limited to actual contributions; earnings thereon cannot
be distributed on account of hardship. Amounts subject to the withdrawal
restrictions applicable to Section 403(b)(7) custodial accounts may be subject
to more stringent restrictions. (These limitations on withdrawals do not apply
to the extent the Company is directed to transfer some or all of the contract
value to the issuer of another tax-sheltered annuity or into a Section 403(b)(7)
custodial account.)
Deferred Compensation Plans of State and Local Governments and
Tax-Exempt Organizations. Section 457 of the Code permits employees of state and
local governments and tax-exempt organizations to defer a portion of their
compensation without paying current taxes. The employees must be participants in
an eligible deferred compensation plan. Generally, a contract purchased by a
state or local government or a tax-exempt organization will not be treated as an
annuity contract for Federal income tax purposes. Those who intend to use the
contracts in connection with such plans should seek competent advice.
ROTH IRAS
Recently enacted Section 408A of the Code permits eligible individuals
to contribute to a type of IRA known as a "Roth IRA." Roth IRAs differ from
other IRAs in several respects. Among the differences is that, although
contributions to a Roth IRA are not deductible, "qualified distributions" from a
Roth IRA will be excludable from income. Additionally, the eligibility and
mandatory distribution requirements for Roth IRAs differ from non-Roth IRAs.
Furthermore, a rollover may be made to a Roth IRA only if it is a "qualified
rollover contribution." A "qualified rollover contribution" is a rollover
contribution to a Roth IRA from another Roth IRA or from a non-Roth IRA, but
only if such rollover contribution meets the rollover requirements for IRAs
under Section 408(d)(3) of the Code. In the case of a qualified rollover
contribution or a transfer from a non-Roth IRA to a Roth IRA, any portion of the
amount rolled over which would be includible in gross income were it not part of
a qualified rollover contribution or a nontaxable transfer will be includible in
gross income. However, the 10 percent penalty tax on premature distributions
generally will not apply.
All or part of amounts in a non-Roth IRA may be converted into a Roth
IRA. Such a conversion can be made without taking an actual distribution from
the IRA. For example, an individual may make a conversion by notifying the IRA
issuer or trustee, whichever is applicable. The conversion of an IRA to a Roth
IRA is a special type of qualified rollover distribution. Hence, the IRA
participant must be eligible to make a qualified rollover distribution in order
to convert an IRA to a Roth IRA. A conversion typically will result in the
inclusion of some or all of the IRA value in gross income, as described above.
Persons with adjusted gross incomes in excess of $100,000 or who are married and
file a separate return are not eligible to make a qualified rollover
contribution or a transfer in a taxable year from a non-Roth IRA to a Roth IRA.
Any "qualified distribution" from a Roth IRA is excludible from gross
income. A "qualified distribution" is a payment or distribution which satisfies
two requirements. First, the payment or distribution must be (a) made after the
owner attains age 59 1/2, (b) made after the owner's death, (c) attributable to
the owner being disabled, or (d) a qualified first-time homebuyer distribution
within the meaning of Section 72(t)(2)(F) of the Code. Second, the payment or
distribution must be made in a taxable year that is at least five years after
(a) the first taxable year for which a contribution was made to any Roth IRA
established for the owner, or (b) in the case of a payment or distribution
properly allocable to a qualified rollover
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contribution from a non-Roth IRA (or income allocable thereto), the taxable year
in which the rollover contribution was made. A distribution from a Roth IRA
which is not a qualified distribution is generally taxed in the same manner as a
distribution from non-Roth IRAs. Distributions from a Roth IRA need not commence
at age 70 1/2.
As described above (see "Individual Retirement Annuities"), there is
some uncertainty regarding the proper characterization of the contract's death
benefit for purposes of the tax rules governing IRAs (which include Roth IRAs).
Persons intending to use the contract in connection with a Roth IRA should seek
competent advice.
DIRECT ROLLOVERS
If the contract is used in connection with a retirement plan that is
qualified under Sections 401(a), 403(a), or 403(b) of the Code, any "eligible
rollover distribution" from the contract will be subject to "direct rollover"
and mandatory withholding requirements. An eligible rollover distribution
generally is any taxable distribution from such qualified plans, excluding
certain amounts such as (i) minimum distributions required under Section
401(a)(9) of the Code, and (ii) certain distributions for life, life expectancy,
or for 10 years or more which are part of a "series of substantially equal
periodic payments."
Under these requirements, Federal income tax equal to 20% of the
eligible rollover distribution will be withheld from the amount of the
distribution. Unlike withholding on certain other amounts distributed from the
contract, discussed below, the owner cannot elect out of withholding with
respect to an eligible rollover distribution. However, this 20% withholding will
not apply if, instead of receiving the eligible rollover distribution, the
distributee elects to have it directly transferred to certain qualified plans.
Prior to receiving an eligible rollover distribution, a notice will be provided
explaining generally the direct rollover and mandatory withholding requirements
and how to avoid the 20% withholding by electing a direct rollover.
FEDERAL INCOME TAX WITHHOLDING
The Company will withhold and remit to the U.S. Government a part of
the taxable portion of each distribution made under a contract unless the
distributee notifies the Company at or before the time of the distribution that
he or she elects not to have any amounts withheld. In certain circumstances, the
Company may be required to withhold tax. The withholding rates applicable to the
taxable portion of periodic annuity payments are the same as the withholding
rates generally applicable to payments of wages. In addition, the withholding
rate applicable to the taxable portion of non-periodic payments (including
withdrawals prior to the maturity date and rollovers from non-Roth IRAs to Roth
IRAs) is 10%. As discussed above, the withholding rate applicable to eligible
rollover distributions is 20%.
GENERAL MATTERS
TAX DEFERRAL
The status of the contract as an annuity generally allows all earnings
on the underlying investments to be tax-deferred until withdrawn or until
annuity payments begin (see "FEDERAL TAX MATTERS"). This tax deferred treatment
may be beneficial to contract owners in building assets in a long-term
investment program.
PERFORMANCE DATA
Each of the sub-accounts may in its advertising and sales materials
quote total return figures. The sub-accounts may advertise both "standardized"
and "non-standardized" total return figures, although standardized figures will
always accompany non-standardized figures. Non-standardized total return figures
may be quoted assuming both (i) redemption at the end of the time period and
(ii) not assuming redemption at the end of the time period. Standardized figures
include total return figures from: (i) the inception date of the sub-account of
the Variable Account which invests in the portfolio or (ii) ten years, whichever
period is shorter. Non-standardized figures include total return numbers from:
(i) inception date of the portfolio or (ii) ten year, whichever period is
shorter. Such figures will always include the average annual total return for
recent one year and, when applicable, five and ten year periods and, where less
than ten years, the inception date of the sub-account, in the case of
standardized returns, and the inception date of the portfolio, in the case of
nonstandardized returns. Where the period since inception is less than one year,
the total return quoted will be the aggregate return for the period. The average
annual total return is the average annual compounded rate of return that equates
a purchase payment to the market value of such purchase payment on the last day
of the period for which such return is calculated. The aggregate total return is
the percentage change (not annualized) that equates a purchase payment to the
market value of such purchase payment on the last day of the period for which
such return is calculated. For
42
<PAGE> 47
purposes of the calculations it is assumed that an initial payment of $1,000 is
made on the first day of the period for which the return is calculated. For
total return figures quoted for periods prior to the commencement of the
offering of the contract, standardized performance data will be the historical
performance of the Trust portfolio from the date the applicable sub-account of
the Variable Account first became available for investment under other contracts
offered by the Company, adjusted to reflect current contract charges. In the
case of non-standardized performance, performance figures will be the historical
performance of the Trust portfolio from the inception date of the portfolio (or
in the case of the Trust portfolios created in connection with the merger of
Manulife Series Fund, Inc. into the Trust, the inception date of the applicable
predecessor Manulife Series Fund portfolio), adjusted to reflect current
contract charges. Past performance figures quoted are not intended to indicate
future performance of any sub-account. More detailed information on the
computations is set forth in the Statement of Additional Information.
FINANCIAL STATEMENTS
Financial Statements for the Variable Account and the Company are
contained in the Statement of Additional Information.
ASSET ALLOCATION AND TIMING SERVICES
The Company is aware that certain third parties are offering asset
allocation and timing services in connection with the contracts. In certain
cases the Company has agreed to honor transfer instructions from such asset
allocation and timing services where it has received powers of attorney, in a
form acceptable to it, from the contract owners participating in the service.
The COMPANY DOES NOT ENDORSE, APPROVE OR RECOMMEND SUCH SERVICES IN ANY WAY AND
CONTRACT OWNERS SHOULD BE AWARE THAT FEES PAID FOR SUCH SERVICES ARE SEPARATE
AND IN ADDITION TO FEES PAID UNDER The CONTRACTS.
RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM
Section 830.105 of the Texas Government Code permits participants in
the Texas Optional Retirement Program ("ORP") to withdraw their interest in a
variable annuity contract issued under the ORP only upon (1) termination of
employment in the Texas public institutions of higher education, (2) retirement,
(3) death, or (4) the participant's attainment of age 70 1/2. Accordingly,
before any amounts may be distributed from the contract, proof must be furnished
to the Company that one of these four events has occurred. The foregoing
restrictions on withdrawal do not apply in the event a participant in the ORP
transfers the contract value to another contract or another qualified custodian
during the period of participation in the ORP. Loans are not available under
contracts subject to the ORP.
DISTRIBUTION OF CONTRACTS
MSS located at 73 Tremont Street, Boston, Massachusetts 02108, a
Delaware limited liability company controlled by the Company, is the principal
underwriter of the contracts in addition to providing advisory services to the
Trust. MSS is a broker-dealer registered under the Securities Exchange Act of
1934 (the "1934 Act") and a member of the National Association of Securities
Dealers, Inc. (the "NASD"). MSS has entered into a non-exclusive promotional
agent agreement with Wood Logan Associates, Inc. ("Wood Logan"). Wood Logan is a
broker-dealer registered under the 1934 Act and a member of the NASD. Wood Logan
is a wholly owned subsidiary of a holding company that is 62.5% owned by The
Manufacturers Life Insurance Company (U.S.A.), 22.5% owned by MRL Holding, LLC
and approximately 15% owned by the principals of Wood Logan. Sales of the
contracts will be made by registered representatives of broker-dealers
authorized by MSS to sell the contracts. Such registered representatives will
also be licensed insurance agents of the Company. Under the promotional agent
agreement, Wood Logan will recruit and provide sales training and licensing
assistance to such registered representatives. In addition, Wood Logan will
prepare sales and promotional materials for the Company's approval. MSS will pay
distribution compensation to selling brokers in varying amounts which under
normal circumstances are not expected to exceed 6% of purchase payments and
0.75% of the contract value per year beginning in the second contract year. MSS
may from time to time pay additional compensation pursuant to promotional
contests. Additionally, in some circumstances, MSS will provide reimbursement of
certain sales and marketing expenses. MSS will pay the promotional agent for
providing marketing support for the distribution of the contracts.
CONTRACT OWNER INQUIRIES
All contract owner inquiries should be directed to the Company's
Annuity Service Office at P.O. Box 9230, Boston, Massachusetts 02205-9230.
43
<PAGE> 48
CONFIRMATION STATEMENTS
Owners will be sent confirmation statements for certain transactions in
their account. Owners should carefully review these statements to verify their
accuracy. Any mistakes should immediately be reported to the Company's Annuity
Service Office. If the owner fails to notify the Company's Annuity Service
Office of any mistake within 60 days of the mailing of the confirmation
statement, the owner will be deemed to have ratified the transaction.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account is a party
or to which the assets of the Variable Account are subject. Neither the Company
nor MSS are involved in any litigation that is of material importance in
relation to their total assets or that relates to the Variable Account.
OTHER INFORMATION
A registration statement has been filed with the SEC under the 1933 Act
with respect to the contracts described in this Prospectus. Not all the
information set forth in the registration statement, amendments and exhibits
thereto has been included in this Prospectus. Statements contained in this
Prospectus or the Statement of Additional Information concerning the content of
the contracts and other legal instruments are only summaries. For a complete
statement of the terms of these documents, reference should be made to the
instruments filed with the SEC.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
General Information and History............................................ 3
Performance Data........................................................... 3
Service
Independent Auditors................................................ 13
Servicing Agent..................................................... 14
Principal Underwriter............................................... 14
Cancellation of Contract................................................... 14
Financial Statements....................................................... 15
44
<PAGE> 49
APPENDIX A
EXAMPLES OF CALCULATION OF WITHDRAWAL CHARGE*
Example 1 - Assume a single payment of $50,000 is made into the contract, no
transfers are made, no additional payments are made and there are no partial
withdrawals. The table below illustrates four examples of the withdrawal charges
that would be imposed if the contract is completely withdrawn, based on
hypothetical contract values.
<TABLE>
<CAPTION>
CONTRACT HYPOTHETICAL FREE PURCHASE WITHDRAWAL
YEAR CONTRACT WITHDRAWAL PAYMENTS CHARGE
VALUE AMOUNT LIQUIDATED -------------------
PERCENT AMOUNT
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 55,000 5,000(a) 50,000 3% 1,500
2 50,500 5,000(b) 45,500 3% 1,365
3 60,000 10,000(c) 50,000 3% 1,500
4 70,000 20,000(d) 50,000 0% 0
</TABLE>
(a) During any contract year the free withdrawal amount is the greater of
accumulated earnings, or 10% of the total purchase payments made under the
contract less any prior partial withdrawals in that contract year. In the
first contract year the earnings under the contract and 10% of purchase
payments both equal $5,000. Consequently, on total withdrawal $5,000 is
withdrawn free of the withdrawal charge, the entire $50,000 purchase
payment is liquidated and the withdrawal charge is assessed against such
liquidated purchase payment (contract value less free withdrawal amount).
(b) In the example for the second contract year, the accumulated earnings of
$500 is less than 10% of purchase payments, therefore the free withdrawal
amount is equal to 10% of purchase payments ($50,000 X 10% = $5,000) and
the withdrawal charge is only applied to purchase payments liquidated
(contract value less free withdrawal amount).
(c) In the example for the third contract year, the accumulated earnings of
$10,000 is greater than 10% of purchase payments ($5,000), therefore the
free withdrawal amount is equal to the accumulated earnings of $10,000 and
the withdrawal charge is applied to the purchase payments liquidated
(contract value less free withdrawal amount).
(d) There is no withdrawal charge on any purchase payments liquidated that have
been in the contract for at least 3 years.
Example 2 - Assume a single payment of $50,000 is made into the contract, no
transfers are made, no additional payments are made and there are a series of
four partial withdrawals made during the third contract year of $2,000, $5,000,
$7,000, and $8,000.
<TABLE>
<CAPTION>
HYPOTHETICAL PARTIAL FREE PURCHASE WITHDRAWAL
CONTRACT WITHDRAWAL WITHDRAWAL PAYMENTS CHARGE
VALUE REQUESTED AMOUNT LIQUIDATED -------------------
PERCENT AMOUNT
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
65,000 2,000 15,000(a) 0 3% 0
49,000 5,000 3,000(b) 2,000 3% 60
52,000 7,000 4,000(c) 3,000 3% 90
44,000 8,000 0(d) 8,000 3% 240
</TABLE>
(a) The free withdrawal amount during any contract year is the greater of the
contract value less the unliquidated purchase payments (accumulated
earnings), or 10% of purchase payments less 100% of all prior withdrawals
in that contract year. For the first example, accumulated earnings of
$15,000 is the free withdrawal amount since it is greater than 10% of
purchase payments less prior withdrawals ($5,000-0). The amount requested
($2,000) is less than the free withdrawal amount so no purchase payments
are liquidated and no withdrawal charge applies.
(b) The contract has negative accumulated earnings ($49,000-$50,000), so the
free withdrawal amount is limited to 10% of purchase payments less all
prior withdrawals. Since $2,000 has already been withdrawn earlier in the
current contract year, the remaining
45
<PAGE> 50
free withdrawal amount during the third contract year is $3,000. The $5,000
partial withdrawal will consist of $3,000 free of withdrawal charge, and
the remaining $2,000 will be subject to a withdrawal charge and result in
purchase payments being liquidated. The remaining unliquidated purchase
payments are $48,000.
(c) The contract has increased in value to $52,000. The unliquidated purchase
payments are $48,000 so the accumulated earnings are $4,000, which is
greater than 10% of purchase payments less prior withdrawals
($5,000-$2,000-$5,000[SMALLER THAN]0). Hence the free withdrawal amount is
$4,000. Therefore, $3,000 of the $7,000 partial withdrawal will be subject
to a withdrawal charge and result in purchase payments being liquidated.
The remaining unliquidated purchase payments are $45,000.
(d) The free withdrawal amount is zero since the contract has negative
accumulated earnings ($44,000-$45,000) and the full 10% of purchase
payments ($5,000) has already been utilized. The full amount of $8,000 will
result in purchase payments being liquidated subject to a withdrawal
charge. At the beginning of the next contract year the full 10% of purchase
payments would be available again for withdrawal requests during that year.
* Effective November 1, 1996, no withdrawal charge will be imposed on
withdrawals from contracts issued on or after November 1, 1996.
46
<PAGE> 51
APPENDIX B
STATE PREMIUM TAXES
Premium taxes vary according to the state and are subject to change. In many
jurisdictions there is no tax at all. For current information, a tax adviser
should be consulted.
<TABLE>
<CAPTION>
TAX RATE
--------------------------------
QUALIFIED NON-QUALIFIED
STATE CONTRACTS CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA...................................... .50% 2.35%
DISTRICT OF COLUMBIA............................ 2.25% 2.25%
KENTUCKY........................................ 2.00% 2.00%
MAINE........................................... .00% 2.00%
NEVADA.......................................... .00% 3.50%
PUERTO RICO..................................... 1.00% 1.00%
SOUTH DAKOTA*................................... .00% 1.25%
WEST VIRGINIA................................... 1.00% 1.00%
WYOMING......................................... .00% 1.00%
</TABLE>
* Premium tax paid upon receipt of premium (no tax at annuitization if tax paid
on premium at issue).
47
<PAGE> 52
APPENDIX C
For all contracts issued in Pennsylvania the maximum maturity age based upon the
issue age of the annuitant is as follows:
<TABLE>
<CAPTION>
ISSUE AGE MAXIMUM MATURITY AGE
- --------------------------------------------------------------------------------
<S> <C>
70 or less 85
71-75 86
76-80 88
81-85 90
86-90 93
91-93 96
94-95 98
96-97 99
98-99 101
100-101 102
102 103
103 104
104 105
105 106
</TABLE>
It is required that the annuitant exercise a settlement annuity option no
later than the maximum maturity age stated above. For example an annuitant age
60 at issue must exercise a settlement option prior to the attainment of age 86.
The Company will use the issue age of the youngest named annuitant in the
determination of the required settlement option date.
If contracts are issued with annuitants over age 96, a withdrawal charge
could be imposed if they terminate the contract rather than elect a settlement
option upon attainment of the maximum maturity age. This is a result of the
restrictions by Pennsylvania in combination with the 3-year withdrawal charge
schedule of the contract.
48
<PAGE> 53
APPENDIX D
PRIOR CONTRACTS (VV CONTRACTS)
PRIOR CONTRACTS
This Appendix D sets forth the principal differences between the
contract offered by this Prospectus and a class of variable annuity contract
issued by the Company which is offered in the states of Washington and Maryland
("prior contracts" or "VV" contracts") and which were previously sold in other
states during the period ____ to ____. The principal differences between the
contract offered by this Prospectus and the VV contract relate to the death
benefit provisions.
DEATH BENEFIT PROVISIONS
Prior Contract Death Benefit Provisions
The provisions governing death benefits under the prior contract are as
follows:
Death of Last Surviving Annuitant (Where the Annuitant Was Not an Owner)
The Company will pay the minimum death benefit, less any debt, to the
beneficiary if (1) the annuitant dies before the maturity date, (2) the
annuitant is not an owner, (3) there is no surviving co-annuitant, and (4) no
owner of the contract is a non-natural person. (If any owner of the contract is
a non-natural person, the death or change of any annuitant is treated as the
death of an owner -- see "Death of Owner") The beneficiary (1) may elect to
receive payment (either as a lump sum or in accordance with any annuity option
described in the contract) or (2) may elect to continue the contract, as its
owner, with the contract value on the date due proof of death and all required
claim forms are received, equal to the minimum death benefit. An election to
receive the minimum death benefit under an annuity option must be made within 60
days after the date on which the death benefit first becomes payable (see
"Annuity Options"). (In general, a beneficiary who continues the contract will
nonetheless be treated for Federal income tax purposes as if he or she had
received the minimum death benefit.)
Death of Owner
Deceased Owner (Who was the Last-Surviving Annuitant): The Company will
pay the minimum death benefit, less any debt, to the beneficiary if (1) an owner
dies before the maturity date, (2) the deceased owner is an annuitant, and (3)
there is no surviving co-annuitant. If the contract is a non-qualified contract,
after the owner's death, the beneficiary's entire interest must be distributed
within five years unless (1) the beneficiary elects to receive his or her
interest as an annuity which begins within one year of the owner's death and is
paid over the beneficiary's life or over a period not extending beyond the
beneficiary's life expectancy or (2) the beneficiary is the deceased owner's
surviving spouse and elects to continue the contract, as its owner, with the
contract value on the date due proof of death and all required claim forms are
received, equal to the minimum death benefit. An election to receive the minimum
death benefit as an annuity must be made within 60 days after the date on which
the death benefit first becomes payable (see "Annuity Options"). If the spouse
continues the contract, the distribution rules applicable when a contract owner
dies generally will apply when that spouse, as the owner, dies. For purposes of
this paragraph, in determining the minimum death benefit, withdrawal charges
(applicable when an annuitant either dies after the first of the month following
his or her 85th birthday or when the annuitant had attained age 81 or greater on
the contract date -- see "Minimum Death Benefit") will be taken into account,
but only when the minimum death benefit is paid and only if such charges would
have applied if the payment had been made to the deceased owner at that time.
Deceased Owner (Who was Not the Last-Surviving Annuitant and There Are
No Surviving Owners): If (1) an owner dies before the maturity date, (2) any
annuitant survives, and (3) there are no surviving owners, the Company will
transfer the interest in the contract to the successor owner. If the contract is
a non-qualified contract, after the owner's death, the successor owner's entire
interest in the contract must be distributed within five years unless (1) the
successor owner elects to receive payment of the interest in the contract as an
annuity which begins within one year of the owner's death and is paid over the
successor owner's life or over a period not extending beyond the successor
owner's life expectancy or (2) the successor owner is the deceased owner's
surviving spouse and elects to continue the contract, as its owner, with the
contract value on the date due proof of death and all required claim forms are
received, equal to the interest in the contract. An election to receive the
interest in the contract as an annuity must be made within 60 days after the
date on which the death benefit first becomes payable (see "Annuity Options").
If the spouse continues the contract, the distribution rules applicable when a
contract owner dies generally will apply when that spouse, as the owner, dies.
If the deceased Owner had not attained age 81 on the contract date, the interest
in the contract equals the contract value. If the deceased Owner had attained
age 81 on the contract date, the interest in the contract also equals the
contract value, but such interest may be subject to applicable withdrawal
charges when any amounts are actually paid (see "Withdrawals"). The
49
<PAGE> 54
successor owner's right to the interest in the contract does not affect the
annuitant designations in the contract, although the successor owner may change
such designations after acquiring the interest in the contract.
Deceased Owner (Who was Not the Last-Surviving Annuitant and There Are
Surviving Owners): If (1) an owner dies before the maturity date, (2) any
annuitant survives, and (3) there is a surviving owner, the Company will
transfer the interest in the contract to the surviving owner. The amount of this
interest and the rights and restrictions attendant to this transfer are the same
as those described in the immediately preceding paragraph, except that
"surviving owner" should be substituted for "successor owner," wherever these
terms appear.
Non-Natural Owners: If any owner of a non-qualified contract is not an
individual, the death or change of any annuitant will be treated as the death of
an owner (who was not the last-surviving annuitant), unless the last-surviving
annuitant has actually died in which case the death will be treated as the death
of an owner (who is the last-surviving annuitant).
Application of Distributed Amounts Towards the Purchase of a New
Contract: A beneficiary, successor owner, or surviving owner, as the case may
be, may apply amounts required to be distributed towards the purchase of a new
contract. In general, if such distributed amounts are so applied, the
beneficiary, successor owner, or surviving owner will be treated for Federal
income tax purposes as if he or she had received these distributed amounts.
Minimum Death Benefit
If the last surviving annuitant dies on or before the first of the
month following his or her 85th birthday and had an attained age of less than 81
years on the contract date, the minimum death benefit will be equal to the
greater of: (a) the contract value on the date due proof of death and all
required claim forms are received at the Company's Annuity Service Office, or
(b) the excess of (i) the sum of each purchase payment accumulated daily, at the
equivalent of 5% per year, starting on the date each purchase payment is
allocated to the Contract, with a maximum accumulation of two times each
purchase payment, over (ii) the sum of each withdrawal or annuitized amount,
including any applicable withdrawal charges, accumulated daily at a rate
equivalent to 5% per year, starting as of the date of each such withdrawal or
annuitization, with a maximum accumulation of two times each such withdrawal or
annuitization amount. If the last surviving annuitant dies after the first of
the month following his or her 85th birthday and had an attained age of less
than 81 years on the contract date, the minimum death benefit will be equal to
the greater of: (a) the contract value on the date due proof of death and all
required claim forms are received at the Company's Annuity Service Office, or
(b) the excess of (i) the sum of all purchase payments over (ii) the sum of any
amounts deducted in connection with partial withdrawals. If the last surviving
annuitant dies and the Annuitant had an attained age of 81 or greater on the
contract date, the minimum death benefit payable on due proof of death and
receipt of all required claim forms will equal the amount payable on total
withdrawal.
OTHER CONTRACT PROVISIONS
Annuity Tables Assumed Interest Rate
A 4% assumed interest rate is built into the annuity tables in the
prior contract used to determine the first variable annuity payment to be made
under that contract.
TABLE OF ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
=================================================================================================================
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF YEAR NUMBER OF UNITS AT END
YEAR* OF YEAR
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets
1997
$ $
- -----------------------------------------------------------------------------------------------------------------
Science & Technology
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
International Small Cap
1996 $12.500000 $13.465203 233,342.969
1997
- -----------------------------------------------------------------------------------------------------------------
Emerging Growth
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Small/Mid Cap
</TABLE>
50
<PAGE> 55
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
1996 $12.500000 $13.188627 283,880.941
1997
- -----------------------------------------------------------------------------------------------------------------
International Stock
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF YEAR NUMBER OF UNITS AT END
YEAR* OF YEAR
- -----------------------------------------------------------------------------------------------------------------
Worldwide Growth
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Global Equity
1994 $13.117996 $12.153179 49,050.593
1995 12.153179 12.872711 361,285.266
1996 12.872711 14.257610 2,854,082.412
1997
- -----------------------------------------------------------------------------------------------------------------
Small Company Value
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Equity
1994 $10.675585 $10.965867 36,324.491
1995 10.965867 15.402974 663,652.478
1996 15.402974 18.199588 2,871,862.671
- -----------------------------------------------------------------------------------------------------------------
Growth
1996 $12.500000 $13.711434 59,459.482
1997
- -----------------------------------------------------------------------------------------------------------------
Quantitative Equity
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Blue Chip Growth
1994 $9.145044 $9.280989 18,796.455
1995 9.280989 11.551552 274,368.201
1996 11.551552 14.303631 1,496,909.237
1997
- -----------------------------------------------------------------------------------------------------------------
Real Estate Securities
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Value
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
International Growth & Income
1995
1996 $10.00000 $10.528678 178,852.062
1997 10.528678 11.660474 687,006.606
- -----------------------------------------------------------------------------------------------------------------
Growth and Income
1994 $10.576574 $10.436393 24,644.881
1995 10.436393 13.263871 448,739.926
1996 13.263871 16.024067 2,888,470.321
1997
- -----------------------------------------------------------------------------------------------------------------
Equity-Income
1994 $10.844086 $10.578121 31,102.019
1995 10.578121 12.870851 375,815.524
1996 12.870851 15.172018 2,075,876.729
1997
- -----------------------------------------------------------------------------------------------------------------
Balanced
1997 $ $ $
- -----------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation
1994 $10.444531 $10.303433 7,523.248
1995 10.303433 12.443644 67,382.620
1996 12.443644 13.829135 407,378.669
1997
</TABLE>
51
<PAGE> 56
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
Moderate Asset Allocation
1994 $10.269505 $10.156264 19,952.394
1995 10.156264 12.056663 205,665.149
1996 12.056663 13.039212 1,358,995.894
1997
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
52
<PAGE> 57
<TABLE>
<CAPTION>
==================================================================================================================
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF YEAR NUMBER OF UNITS AT END
YEAR* OF YEAR
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Conservative Asset Allocation
1994
1995 $10.124972 $10.050011 2,989.757
1996 10.050011 11.672867 123,692.494
1997 11.672867 12.287873 661,002.839
- ------------------------------------------------------------------------------------------------------------------
Strategic Bond
1994 $10.132498 $9.897404 9,621.542
1995 9.897404 11.607403 146,877.133
1996 11.607403 13.093621 687,006.604
1997
- ------------------------------------------------------------------------------------------------------------------
Global Government Bond
1994 $10.345362 $10.262238 6,324.370
1995 10.262238 12.434811 108,887.995
1996 12.434811 13.821405 1,152,443.822
1997
- ------------------------------------------------------------------------------------------------------------------
Capital Growth Bond
1997 $ $ $
- ------------------------------------------------------------------------------------------------------------------
Investment Quality Bond
1994 $9.785855 $9.713969 5,980.272
1995 9.713969 11.417606 143,843.254
1996 11.417606 11.519237 727,979.095
1997
- ------------------------------------------------------------------------------------------------------------------
U.S. Government Securities
1994 $10.033365 $9.968713 17,964.448
1995 9.968713 11.333420 218,996.714
1996 11.333420 11.522857 909,658.556
1997
- ------------------------------------------------------------------------------------------------------------------
Money Market
1994 $10.172129 $10.290731 46,595.747
1995 10.290731 10.692803 282,116.623
1996 10.692803 11.048244 1,414,861.094
1997
- ------------------------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000
1997 $12.500000
- ------------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820
1997 $12.500000
- ------------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640
1997 $12.500000
- ------------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460
1997 $12.500000
- ------------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280
1997 $12.500000
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Units under each series of contracts were first credited under the
sub-accounts on August 9, 1994, except in the case of International Growth and
Income where units were first credited on January 9, 1995, Small/Mid Cap and
International Small Cap where units were first credited on March 4, 1996, Growth
where units were first credited on July 15, 1996, Pacific Rim Emerging Markets,
Science & Technology, Pilgrim Baxter Growth, International Stock, Worldwide
Growth, Quantitative Equity, Real Estate Securities, Value, Balanced and Capital
Growth Bond, Lifestyle Aggressive, Lifestyle Growth, Lifestyle Balanced,
Lifestyle Moderate, Lifestyle Conservative where units were first credited on
January 2, 1997 and Small Company Value where units were first credited on
October 1, 1997.
53
<PAGE> 58
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 59
STATEMENT OF ADDITIONAL INFORMATION
================================================================================
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA SEPARATE ACCOUNT A
================================================================================
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED
VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
This Statement of Additional Information is not a Prospectus. It contains
information in addition to that described in the Prospectus and should be read
in conjunction with the Prospectus dated the same date as this Statement of
Additional Information. The Prospectus may be obtained by writing The
Manufacturers Life Insurance Company of North America at the Annuity Service
Office, P.O. Box 9230, Boston, Massachusetts 02205-9230 or telephoning (617)
266-6008.
The date of this Statement of Additional Information is May 1, 1998.
The Manufacturers Life Insurance Company of North America
116 Huntington Avenue
Boston, Massachusetts 02116
(617) 266-6008
================================================================================
V1525.SAI 598
<PAGE> 60
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
General Information and History....................................... 3
Performance Data...................................................... 3
Service
Independent Auditors........................................... 13
Servicing Agent................................................ 14
Principal Underwriter.......................................... 14
Cancellation of Contract.............................................. 14
Financial Statements.................................................. 15
3
<PAGE> 61
GENERAL INFORMATION AND HISTORY
The Manufacturers Life Insurance Company of North America Separate Account
A (the "Variable Account") is a separate investment account of The Manufacturers
Life Insurance Company of North America (the "Company"), a stock life insurance
company organized under the laws of Delaware in 1979. The ultimate parent of the
Company is The Manufacturers Life Insurance Company ("Manulife"), a Canadian
mutual life insurance Company based in Toronto, Canada. Prior to January 1,
1996, the Company was a wholly owned subsidiary of North American Life Assurance
Company ("NAL"), a Canadian mutual life insurance company. On January 1, 1996
NAL and Manulife merged with the combined company retaining the Manulife name.
On January 20, 1998, the Board of Directors of Manulife asked the
management of Manulife to prepare a plan for conversion of Manulife from a
mutual life insurance company to an investor-owned, publicly-traded stock
company. Any demutualization plan for Manulife is subject to the approval of the
Manulife Board of Directors and policyholders as well as regulatory approval.
PERFORMANCE DATA
Each of the sub-accounts may in its advertising and sales materials quote
total return figures. The sub-accounts may advertise both "standardized" and
"non-standardized" total return figures, although standardized figures will
always accompany non-standardized figures. Non-standardized total return figures
may be quoted assuming both (i) redemption at the end of the time period and
(ii) not assuming redemption at the end of the time period. Standardized figures
include total return figures from: (i) the inception date of the sub-account of
the Variable Account which invests in the portfolio or (ii) ten years, whichever
period is shorter. Non-standardized figures include total return numbers from:
(i) inception date of the portfolio or (ii) ten years, whichever period is
shorter. Such figures will always include the average annual total return for
recent one year and, when applicable, five and ten year periods and, where less
than ten years, the inception date of the sub-account, in the case of
standardized returns, and the inception date of the portfolio, in the case of
nonstandardized returns. Where the period since inception is less than one year,
the total return quoted will be the aggregate return for the period. The average
annual total return is the average annual compounded rate of return that equates
a purchase payment to the market value of such purchase payment on the last day
of the period for which such return is calculated. The aggregate total return is
the percentage change (not annualized) that equates a purchase payment to the
market value of such purchase payment on the last day of the period for which
such return is calculated. For purposes of the calculations it is assumed that
an initial payment of $1,000 is made on the first day of the period for which
the return is calculated.
In calculating standardized return figures, all recurring charges (all
asset charges (mortality and expense risk fees, administrative fees, and
distribution fees)) are reflected, and the asset charges are reflected in
changes in unit values. Standardized total return figures will be quoted
assuming redemption at the end of the period. Non-standardized total return
figures reflecting redemption at the end of the time period are calculated on
the same basis as the standardized returns. Non-standardized total return
figures not reflecting redemption at the end of the time period are calculated
on the same basis as the standardized returns except that the calculations
assume no redemption at the end of the period and do not reflect deduction of
the annual contract fee. The Company believes such non-standardized figures not
reflecting redemptions at the end of the time period are useful to contract
owners who wish to assess the performance of an ongoing contract of the size
that is meaningful to the individual contract owner.
For total return figures quoted for periods prior to the commencement of
the offering of the contract, standardized performance data will be the
historical performance of the Trust portfolio from the date the applicable
sub-account of the Variable Account first became available for investment under
other contracts offered by the Company, adjusted to reflect current contract
charges. In the case of non-standardized performance, performance figures will
be the historical performance of the Trust portfolio from the inception date of
the portfolio (or in the case of the Trust portfolios created in connection with
the merger of Manulife Series Fund, Inc
4
<PAGE> 62
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
CALCULATED AS OF DECEMBER 31, 1997
FOR CONTACTS ISSUED PRIOR TO NOVEMBER 1, 1996
<TABLE>
<CAPTION>
=====================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE*
YEARS, WHICHEVER IS
SHORTER
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets N/A N/A -36.37% 1/01/97
- -----------------------------------------------------------------------------------------------------
Science & Technology N/A N/A 5.94 1/01/97
- -----------------------------------------------------------------------------------------------------
International Small Cap -3.54% N/A 2.11 3/04/96
- -----------------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 13.30 1/01/97
- -----------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -4.28 1/01/97
- -----------------------------------------------------------------------------------------------------
Small/Mid Cap 10.37 N/A 8.78 3/04/96
- -----------------------------------------------------------------------------------------------------
International Stock N/A N/A -1.76 1/01/97
- -----------------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 8.45 1/01/97
- -----------------------------------------------------------------------------------------------------
Global Equity 15.82 12.77% 7.96 3/18/88
- -----------------------------------------------------------------------------------------------------
Small Company Value N/A N/A -7.43 10/1/97
- -----------------------------------------------------------------------------------------------------
Equity 14.30 16.86 13.26(T) 6/18/85
- -----------------------------------------------------------------------------------------------------
Growth 20.30 N/A 21.05 7/15/96
- -----------------------------------------------------------------------------------------------------
Quantitative Equity N/A N/A 25.54 1/01/97
- -----------------------------------------------------------------------------------------------------
Blue Chip Growth 21.86 11.26 10.96 12/11/92
- -----------------------------------------------------------------------------------------------------
Real Estate Securities N/A N/A 16.30 1/01/97
- -----------------------------------------------------------------------------------------------------
Value N/A N/A 17.16 1/01/97
- -----------------------------------------------------------------------------------------------------
Int'l Growth & Income -4.37 N/A 3.75 1/09/95
- -----------------------------------------------------------------------------------------------------
Growth and Income 27.66 16.96 15.33 4/23/91
- -----------------------------------------------------------------------------------------------------
Equity-Income 24.59 N/A 15.58 2/19/93
- -----------------------------------------------------------------------------------------------------
Balanced N/A N/A 13.59 1/01/97
- -----------------------------------------------------------------------------------------------------
Aggressive Asset Allocation 14.15 10.75 8.30 8/03/89
- -----------------------------------------------------------------------------------------------------
High Yield N/A N/A 7.85 1/01/97
- -----------------------------------------------------------------------------------------------------
Moderate Asset Allocation 10.98 8.92 7.29 8/03/89
- -----------------------------------------------------------------------------------------------------
Conservative Asset 6.63 6.77 6.00 8/03/89
Allocation
- -----------------------------------------------------------------------------------------------------
Strategic Bond 6.19 N/A 7.62 2/19/93
- -----------------------------------------------------------------------------------------------------
Global Government Bond -1.48 8.16 7.09 3/18/88
- -----------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 63
<TABLE>
=====================================================================================================
<CAPTION>
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE*
YEARS, WHICHEVER IS
SHORTER
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Growth Bond N/A N/A 4.61 1/01/97
- -----------------------------------------------------------------------------------------------------
Investment Quality Bond 5.02 5.38 4.02(T) 6/18/85
- -----------------------------------------------------------------------------------------------------
U.S. Government Securities 3.80 4.87 5.49 3/18/88
- -----------------------------------------------------------------------------------------------------
Money Market 0.63 2.76 3.72(T) 6/18/85
- -----------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 7.59 1/01/97
- -----------------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 10.07 1/01/97
- -----------------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 10.16 1/01/97
- -----------------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 9.58 1/01/97
- -----------------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 7.86 1/01/97
- -----------------------------------------------------------------------------------------------------
</TABLE>
* Inception date of the subaccount of the Variable Account which invests in
the portfolio.
(T) 10 year average annual return.
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1997
FOR CONTACTS ISSUED PRIOR TO NOVEMBER 1, 1996
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging -36.84% N/A -9.51% 10/4/94
Markets*
- --------------------------------------------------------------------------------------------------------------------
Science & Technology N/A N/A 5.94 1/01/97
- --------------------------------------------------------------------------------------------------------------------
International Small Cap -3.54 N/A 2.11 3/04/96
- --------------------------------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 13.30 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -4.28 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Small/Mid Cap 10.37 N/A 8.78 3/04/96
- --------------------------------------------------------------------------------------------------------------------
International Stock N/A N/A -1.76 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 8.45 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Global Equity 15.82 12.77% 7.96 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Small Company Value N/A N/A -7.43 10/1/97
- --------------------------------------------------------------------------------------------------------------------
Equity 14.30 16.86 13.26(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 64
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth 20.30 N/A 21.05 7/15/96
- --------------------------------------------------------------------------------------------------------------------
Quantitative Equity* 24.71 14.63 13.23(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Blue Chip Growth 21.86 11.26 10.96 12/11/92
- --------------------------------------------------------------------------------------------------------------------
Real Estate Securities* 13.47 15.05 13.98(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Value N/A N/A 17.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Int'l Growth & Income -4.37 N/A 3.75 1/09/95
- --------------------------------------------------------------------------------------------------------------------
Growth and Income 27.66 16.96 15.33 4/23/91
- --------------------------------------------------------------------------------------------------------------------
Equity-Income 24.59 N/A 15.58 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Balanced N/A N/A 13.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation 14.15 10.75 8.30 8/03/89
- --------------------------------------------------------------------------------------------------------------------
High Yield N/A N/A 7.85 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Moderate Asset Allocation 10.98 8.92 7.29 8/03/89
- --------------------------------------------------------------------------------------------------------------------
Conservative Asset 6.63 6.77 6.00 8/03/89
Allocation
- --------------------------------------------------------------------------------------------------------------------
Strategic Bond 6.19 N/A 7.62 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Global Government Bond -1.48 8.16 7.09 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Capital Growth Bond* 4.03 5.43 6.75(T) 6/26/84
- --------------------------------------------------------------------------------------------------------------------
Investment Quality Bond 5.02 5.38 4.02(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
U.S. Government Securities 3.80 4.87 5.49 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Money Market 0.63 2.76 3.72(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 7.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 10.07 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 10.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 9.58 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 7.86 1/01/97
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(T) 10 year average annual return.
*On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance presented for these sub-accounts is based upon the performance of
the respective predecessor Manulife Series Fund, Inc. portfolio for periods
prior to December 31, 1996. Performance for each of these sub-accounts is based
on the historical expenses and performance of the predecessor Manulife Series
Fund, Inc. portfolio, adjusted to reflect current contract charges, and,
therefore, does not reflect for periods prior to December 31, 1996 the current
Trust portfolio expenses that an investor would incur as a holder of units of
the sub-account.
7
<PAGE> 65
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING NO REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1997
FOR CONTACTS ISSUED PRIOR TO NOVEMBER 1, 1996
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging -35.20% N/A -9.51% 10/4/94
Markets*
- --------------------------------------------------------------------------------------------------------------------
Science & Technology N/A N/A 8.91 1/01/97
- --------------------------------------------------------------------------------------------------------------------
International Small Cap -0.86 N/A 3.66 3/04/96
- --------------------------------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 16.30 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -1.63 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Small/Mid Cap 13.37 N/A 10.30 3/04/96
- --------------------------------------------------------------------------------------------------------------------
International Stock N/A N/A 0.97 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 11.45 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Global Equity 18.82 12.77% 7.96 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Small Company Value N/A N/A -4.87 10/1/97
- --------------------------------------------------------------------------------------------------------------------
Equity 17.30 16.86 13.26(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Growth 23.30 N/A 22.92 7/15/96
- --------------------------------------------------------------------------------------------------------------------
Quantitative Equity* 27.71 14.63 13.23(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Blue Chip Growth 24.86 11.26 10.96 12/11/92
- --------------------------------------------------------------------------------------------------------------------
Real Estate Securities* 16.47 15.05 13.98(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Value N/A N/A 20.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Int'l Growth & Income -1.72 N/A 4.68 1/09/95
- --------------------------------------------------------------------------------------------------------------------
Growth and Income 30.66 16.96 15.33 4/23/91
- --------------------------------------------------------------------------------------------------------------------
Equity-Income 27.59 N/A 15.58 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Balanced N/A N/A 16.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation 17.15 10.75 8.30 8/03/89
- --------------------------------------------------------------------------------------------------------------------
High Yield N/A N/A 10.85 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Moderate Asset Allocation 13.98 8.92 7.29 8/03/89
- --------------------------------------------------------------------------------------------------------------------
Conservative Asset 9.61 6.77 6.00 8/03/89
Allocation
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 66
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategic Bond 9.16 N/A 7.62 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Global Government Bond 1.26 8.16 7.09 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Capital Growth Bond* 6.94 5.43 6.75(T) 6/26/84
- --------------------------------------------------------------------------------------------------------------------
Investment Quality Bond 7.96 5.38 4.02(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
U.S. Government Securities 6.70 4.87 5.49 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Money Market 3.43 2.76 3.72(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 10.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 13.07 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 13.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 12.58 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 10.86 1/01/97
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(T) 10 year average annual return.
* On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance presented for these sub-accounts is based upon the performance of
the respective predecessor Manulife Series Fund, Inc. portfolio for periods
prior to December 31, 1996. Performance for each of these sub-accounts is based
on the historical expenses and performance of the predecessor Manulife Series
Fund, Inc. portfolio, adjusted to reflect current contract charges, and,
therefore, does not reflect for periods prior to December 31, 1996 the current
Trust portfolio expenses that an investor would incur as a holder of units of
the sub-account.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
CALCULATED AS OF DECEMBER 31, 1997
FOR CONTACTS ISSUED AFTER NOVEMBER 1, 1996
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE*
YEARS, WHICHEVER IS
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets N/A N/A -34.72% 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Science & Technology N/A N/A 8.91 1/01/97
- --------------------------------------------------------------------------------------------------------------------
International Small Cap -0.86% N/A 3.66 3/04/96
- --------------------------------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 16.30 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -1.63 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Small/Mid Cap 13.37 N/A 10.30 3/04/96
- --------------------------------------------------------------------------------------------------------------------
International Stock N/A N/A 0.97 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 11.45 1/01/97
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 67
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE*
YEARS, WHICHEVER IS
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Equity 18.82 12.77% 7.96 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Small Company Value N/A N/A -4.87 10/1/97
- --------------------------------------------------------------------------------------------------------------------
Equity 17.30 16.86 13.26(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Growth 23.30 N/A 22.92 7/15/96
- --------------------------------------------------------------------------------------------------------------------
Quantitative Equity N/A N/A 28.54 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Blue Chip Growth 24.86 11.26 10.96 12/11/92
- --------------------------------------------------------------------------------------------------------------------
Real Estate Securities N/A N/A 19.30 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Value N/A N/A 20.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Int'l Growth & Income -1.72 N/A 4.68 1/09/95
- --------------------------------------------------------------------------------------------------------------------
Growth and Income 30.66 16.96 15.33 4/23/91
- --------------------------------------------------------------------------------------------------------------------
Equity-Income 27.59 N/A 15.58 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Balanced N/A N/A 16.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation 17.15 10.75 8.30 8/03/89
- --------------------------------------------------------------------------------------------------------------------
High Yield N/A N/A 10.85 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Moderate Asset Allocation 13.98 8.92 7.29 8/03/89
- --------------------------------------------------------------------------------------------------------------------
Conservative Asset 9.61 6.77 6.00 8/03/89
Allocation
- --------------------------------------------------------------------------------------------------------------------
Strategic Bond 9.16 N/A 7.62 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Global Government Bond 1.26 8.16 7.09 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Capital Growth Bond N/A N/A 7.54 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Investment Quality Bond 7.96 5.38 4.02(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
U.S. Government Securities 6.70 4.87 5.49 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Money Market 3.43 2.76 3.72(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 68
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE*
YEARS, WHICHEVER IS
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000 N/A N/A 10.59 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 13.07 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 13.16 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 12.58 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 10.86 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Inception date of the subaccount of the Variable Account which invests in
the portfolio.
(T) 10 year average annual return.
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1997
FOR CONTACTS ISSUED AFTER NOVEMBER 1, 1996
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging -35.20% N/A -9.51% 10/4/94
Markets*
- --------------------------------------------------------------------------------------------------------------------
Science & Technology N/A N/A 8.91 1/01/97
- --------------------------------------------------------------------------------------------------------------------
International Small Cap -0.86 N/A 3.66 3/04/96
- --------------------------------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 16.30 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -1.63 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Small/Mid Cap 13.37 N/A 10.30 3/04/96
- --------------------------------------------------------------------------------------------------------------------
International Stock N/A N/A 0.97 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 11.45 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Global Equity 18.82 12.77% 7.96 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Small Company Value N/A N/A -4.87 10/1/97
- --------------------------------------------------------------------------------------------------------------------
Equity 17.30 16.86 13.26(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Growth 23.30 N/A 22.92 7/15/96
- --------------------------------------------------------------------------------------------------------------------
Quantitative Equity* 27.71 14.63 13.23(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Blue Chip Growth 24.86 11.26 10.96 12/11/92
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 69
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Real Estate Securities* 16.47 15.05 13.98(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Value N/A N/A 20.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Int'l Growth & Income -1.72 N/A 4.68 1/09/95
- --------------------------------------------------------------------------------------------------------------------
Growth and Income 30.66 16.96 15.33 4/23/91
- --------------------------------------------------------------------------------------------------------------------
Equity-Income 27.59 N/A 15.58 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Balanced N/A N/A 16.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation 17.15 10.75 8.30 8/03/89
- --------------------------------------------------------------------------------------------------------------------
High Yield N/A N/A 10.85 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Moderate Asset Allocation 13.98 8.92 7.29 8/03/89
- --------------------------------------------------------------------------------------------------------------------
Conservative Asset 9.61 6.77 6.00 8/03/89
Allocation
- --------------------------------------------------------------------------------------------------------------------
Strategic Bond 9.16 N/A 7.62 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Global Government Bond 1.26 8.16 7.09 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Capital Growth Bond* 6.94 5.43 6.75(T) 6/26/84
- --------------------------------------------------------------------------------------------------------------------
Investment Quality Bond 7.96 5.38 4.02(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
U.S. Government Securities 6.70 4.87 5.49 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Money Market 3.43 2.76 3.72(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 10.59 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 13.07 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 13.16 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 12.58 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 10.86 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(T) 10 year average annual return.
*On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance presented for these sub-accounts is based upon the performance of
the respective predecessor Manulife Series Fund portfolio for periods prior to
December 31, 1996. Performance for each of these sub-accounts is based on the
historical expenses and performance of the predecessor Manulife Series
12
<PAGE> 70
Fund portfolio, adjusted to reflect current contract charges, and, therefore,
does not reflect for periods prior to December 31, 1996 the current Trust
portfolio expenses that an investor would incur as a holder of units of the
sub-account.
13
<PAGE> 71
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING NO REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1997
FOR CONTACTS ISSUED AFTER NOVEMBER 1, 1996
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging -35.20% N/A -9.51% 10/4/94
Markets*
- --------------------------------------------------------------------------------------------------------------------
Science & Technology N/A N/A 8.91 1/01/97
- --------------------------------------------------------------------------------------------------------------------
International Small Cap -0.86 N/A 3.66 3/04/96
- --------------------------------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 16.30 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -1.63 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Small/Mid Cap 13.37 N/A 10.30 3/04/96
- --------------------------------------------------------------------------------------------------------------------
International Stock N/A N/A 0.97 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 11.45 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Global Equity 18.82 12.77% 7.96 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Small Company Value N/A N/A -4.87 10/1/97
- --------------------------------------------------------------------------------------------------------------------
Equity 17.30 16.86 13.26(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Growth 23.30 N/A 22.92 7/15/96
- --------------------------------------------------------------------------------------------------------------------
Quantitative Equity* 27.71 14.63 13.23(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Blue Chip Growth 24.86 11.26 10.96 12/11/92
- --------------------------------------------------------------------------------------------------------------------
Real Estate Securities* 16.47 15.05 13.98(T) 4/30/87
- --------------------------------------------------------------------------------------------------------------------
Value N/A N/A 20.16 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Int'l Growth & Income -1.72 N/A 4.68 1/09/95
- --------------------------------------------------------------------------------------------------------------------
Growth and Income 30.66 16.96 15.33 4/23/91
- --------------------------------------------------------------------------------------------------------------------
Equity-Income 27.59 N/A 15.58 2/19/93
- --------------------------------------------------------------------------------------------------------------------
Balanced N/A N/A 16.59 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Aggressive Asset Allocation 17.15 10.75 8.30 8/03/89
- --------------------------------------------------------------------------------------------------------------------
High Yield N/A N/A 10.85 1/01/97
- --------------------------------------------------------------------------------------------------------------------
Moderate Asset Allocation 13.98 8.92 7.29 8/03/89
- --------------------------------------------------------------------------------------------------------------------
Conservative Asset 9.61 6.77 6.00 8/03/89
Allocation
- --------------------------------------------------------------------------------------------------------------------
Strategic Bond 9.16 N/A 7.62 2/19/93
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 72
<TABLE>
<CAPTION>
====================================================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION OR 10 INCEPTION DATE OF
YEARS, WHICHEVER IS PORTFOLIO
SHORTER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Government Bond 1.26 8.16 7.09 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Capital Growth Bond* 6.94 5.43 6.75(T) 6/26/84
- --------------------------------------------------------------------------------------------------------------------
Investment Quality Bond 7.96 5.38 4.02(T) 6/18/85
- --------------------------------------------------------------------------------------------------------------------
U.S. Government Securities 6.70 4.87 5.49(T) 3/18/88
- --------------------------------------------------------------------------------------------------------------------
Money Market 3.43 2.76 3.72 6/18/85
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 10.59 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 13.07 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 13.16 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 12.58 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 10.86 1/01/97
1997
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(T) 10 year average annual return.
* On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance presented for these sub-accounts is based upon the performance of
the respective predecessor Manulife Series Fund, Inc. portfolio for periods
prior to December 31, 1996. Performance for each of these sub-accounts is based
on the historical expenses and performance of the predecessor Manulife Series
Fund, Inc. portfolio, adjusted to reflect current contract charges, and,
therefore, does not reflect for periods prior to December 31, 1996 the current
Trust portfolio expenses that an investor would incur as a holder of units of
the sub-account.
* * * * *
In addition to the non-standardized returns quoted above, each of the
sub-accounts may from time to time quote aggregate non-standardized total
returns calculated in the same manner as set forth above for other time periods.
From time to time the Trust may include in its advertising and sales literature
general discussions of economic theories, including but not limited to,
discussions on how demographic and political trends can affect the financial
markets. Further, the Trust may also include in its advertising and sales
literature specific information on each of the Trust's subadvisers, including
but not limited to, research capabilities of a subadviser, assets under
management, information relating to other clients of a subadviser, and other
generalized information.
SERVICES
INDEPENDENT AUDITORS
The financial statements of the Company and the Variable Account at
December 31, 1997 and 1996 and for the years then ended appearing in this
Statement of Additional Information have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing elsewhere
herein, and are included in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
15
<PAGE> 73
The statutory balance sheet of the Company as of December 31, 1995 and the
related statutory statements of operations, changes in capital and deficit and
cash flows for each of the two years in the period ended December 31, 1995,
appearing in this Statement of Additional Information have been included herein
in reliance on the report (which report includes an adverse opinion as to
generally accepted accounting principles and an unqualified opinion as to
statutory accounting practices prescribed or permitted by the Insurance
Department of the State of Delaware), of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
The statement of operations and changes in net assets of the Variable
Account for the year ended December 31, 1995, appearing in this Statement of
Additional Information has been included herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
The financial statements of the Company which are included in the Statement
of Additional Information should be considered only as bearing on the ability of
the Company to meet its obligations under the contracts. They should not be
considered as bearing on the investment performance of the assets held in the
Variable Account.
SERVICING AGENT
Computer Sciences Corporation Financial Services Group ("CSC FSG") provides
to the Company a computerized data processing recordkeeping system for variable
annuity administration. CSC FSG provides various daily, semimonthly, monthly,
semiannual and annual reports including: daily updates on accumulation unit
values, variable annuity participants and transactions, agent production and
commissions; semimonthly commission statements; monthly summaries of agent
production and daily transaction reports; semiannual statements for contract
owners; and annual contract owner tax reports. CSC FSG receives approximately
$7.80 per policy per year, plus certain other fees paid by the Company for the
services provided.
PRINCIPAL UNDERWRITER
Manufacturers Securities Services, LLC ("MSS"), the successor to NASL
Financial Services, Inc., a Delaware limited liability partnership controlled by
the Company, serves as principal underwriter of the contracts. Contracts are
offered on a continuous basis. The aggregate dollar amount of underwriting
commissions paid to MSS in 1997, 1996 and 1995 were $_______, $83,031,288 and
$68,782,161, respectively. MSS did not retain any of these amounts during such
periods.
CANCELLATION OF CONTRACT
The Company may, at its option, cancel a contract at the end of any two
consecutive contract years in which no purchase payments by or on behalf of the
contract owner have been made, if both (i) the total purchase payments made for
the contract, less any withdrawals, are less than $2,000; and (ii) the contract
value at the end of such two year period is less than $2,000. The Company, as a
matter of administrative practice, will attempt to notify a contract owner prior
to such cancellation in order to allow the contract owner to make the necessary
purchase payment to keep the contract in force. The cancellation of contract
provisions may vary in certain states in order to comply with the requirements
of insurance laws and regulations in such states.
16
<PAGE> 74
PART C
OTHER INFORMATION
<PAGE> 75
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(1) Financial Statements of the Registrant, The Manufacturers
Life Insurance Company of North America Separate Account A
(formerly NASL Variable Account) (Part B of the registration
statement) -- To be filed by amendment.
(2) Financial Statements of the Depositor, The Manufacturers
Life Insurance Company of North America (formerly North
American Security Life Insurance Company) (Part B of the
registration statement) -- To be filed by amendment.
(b) Exhibits
(1) (i) Resolution of the Board of Directors of North American
Security Life Insurance Company establishing the NASL
Variable Account - Incorporated by reference to Exhibit
(b)(1)(i) to Form N-4, file number 33-76162, filed
February 25, 1998.
(ii) Resolution of the Board of Directors of North American
Security Life Insurance Company redesignating existing
sub-accounts and dividing the NASL Variable Account to
create additional sub-accounts, dated May 30, 1995 -
Previously filed as Exhibit (b)(1)(ii) to
post-effective amendment no. 2 to Form N-4 filed March
1, 1996.
(iii) Resolution of the Board of Directors of North American
Security Life Insurance Company redesignating existing
sub-accounts and dividing the NASL Variable Account to
create additional sub-accounts, dated September 30,
1996 -- Previously filed as Exhibit (b)(i)(iii) to
post-effective amendment no. 3 to Form N-4 filed
February 28, 1997.
(iv) Resolution of the Board of Directors of North American
Security Life Insurance Company redesignating existing
sub-accounts and dividing the NASL Variable Account to
create additional sub-accounts, dated September 30,
1996 -- Previously filed as Exhibit (b)(1)(iv) to
post-effective amendment no. 3 to Form N-4 filed
February 28, 1997.
(v) Resolution of the Board of Directors of North American
Security Life Insurance Company redesignating existing
sub-accounts and dividing the NASL Variable Account to
create four additional sub-accounts, dated September
26, 1997 --Incorporated by reference to Exhibit
(b)(1)(v) to Form N-4, file number 33-76162, February
25, 1998.
<PAGE> 76
(2) Agreements for custody of securities and similar investments
- Not Applicable.
(3) (i) Underwriting Agreement between North American Security
Life Insurance Company (Depositor) and NASL Financial
Services, Inc. (Underwriter) -- Incorporated by
reference to Exhibit (b)(3)(i) to Form N-4, file number
33-76162, February 25, 1998.
(ii) Promotional Agent Agreement between NASL Financial
Services, Inc. (Underwriter), North American Security
Life Insurance Company (Depositor), Wood Logan
Associates, Inc. (Promotional Agent) and NAWL Holding
Company, Inc.-- Previously filed as Exhibit (b)(3)(ii)
to post-effective amendment no. 3 to Form N-4 filed
February 28, 1997.
(iii) Amendment to Promotional Agent Agreement -
Incorporated by reference to Exhibit (b)(3)(iii) to
Form N-4, file number 33-76162, February 25, 1998.
(iv) Form of Selling Agreement between The Manufacturers
Life Insurance Company of North America, Manufacturers
Securities Services, LLC, Selling Broker-Dealer and
General Agent -- Incorporated by reference to Exhibit
(b)(3)(iv) to Form N-4, file number 33-76162, filed
February 25, 1998.
(4) (i)(A) Specimen Flexible Purchase Payment Individual
Deferred Variable Annuity Contract, Non-Participating
(VIS25) - filed herewith.
(i)(B) Specimen Flexible Purchase Payment Individual
Deferred Variable Annuity Contract, Non-Participating
(VV) - filed herewith.
(ii) Specimen Fixed Account Endorsement to Flexible Purchase
Payment Individual Deferred Variable Annuity Contract,
Non-Participating (END.007.98) - filed herewith.
(iii) Specimen Individual Retirement Annuity Endorsement to
Flexible Purchase Payment Individual Deferred Variable
Annuity Contract, Non-Participating (ENDORSEMENT.001) -
filed herewith.
(iv) Specimen ERISA Tax-Sheltered Annuity Endorsement to
Flexible Purchase Payment Individual Deferred Variable
Annuity Contract, Non-Participating (END.002.97) -
filed herewith.
<PAGE> 77
(v) Specimen Tax-Sheltered Annuity Endorsement to Flexible
Purchase Payment Individual Deferred Variable Annuity
Contract, Non-Participating (END.003.97) - filed
herewith.
(vi) Specimen Qualified Plan Endorsement Section 401 Plans
to Flexible Purchase Payment Individual Deferred
Variable Annuity Contract, Non-Participating
(END.004.97) - filed herewith.
(5) (i) Specimen Application for Flexible Purchase Payment
Individual Deferred Combination Fixed and Variable
Annuity Contract, Non-Participating (VIS25) - filed
herewith.
(ii) Specimen Application for Flexible Purchase Payment
Individual Deferred Variable Annuity Contract,
Non-Participating (VV) - filed herewith.
(6) (i) Certificate of Incorporation of North American Security
Life Insurance Company -- Incorporated by reference to
Exhibit (3)(i) to Form 10Q of The Manufacturers Life
Insurance Company of North America, filed November 14,
1997.
(ii) Certificate of Amendment of Certificate of
Incorporation of the Company, Name Change July 1984 --
Incorporated by reference to Exhibit (3)(i)(a) to Form
10Q of The Manufacturers Life Insurance Company of
North America, filed November 14, 1997.
(iii) Certificate of Amendment of Certificate of
Incorporation of the Company, Authorization of Capital
December 1994 --Incorporated by reference to Exhibit
(3)(i)(b) to Form 10Q of The Manufacturers Life
Insurance Company of North America, filed November 14,
1997.
(iv) Certificate of Amendment of Certificate of
Incorporation, Name change March 1997 -- Incorporated
by reference to Exhibit (3)(i)(a) to post effective
amendment no. 1 to Form S-1 on behalf of The
Manufacturers Life Insurance Company of North America,
file number 333-6011, filed October 9, 1997.
(v) Certificate of Amendment of Certificate of
Incorporation of the Company, Registered Agent July
1997 -- Incorporated by reference to Exhibit (3)(i)(c)
to Form 10Q of The Manufacturers Life Insurance Company
of North America filed November 14, 1997.
(vii) Amended and Restated By-laws The Manufacturers Life
Insurance Company of North America --Incorporated by
reference to Exhibit (3)(ii) to Form 10Q of The
Manufacturers
<PAGE> 78
Life Insurance Company of North America filed November
14, 1997.
(7) (i) Contract of reinsurance in connection with the variable
annuity contracts being offered - Reinsurance and
Accounts Receivable Agreements between North American
Security Life Insurance Company and ITT Lyndon Life,
effective December 31, 1993, and Amendments thereto
effective January 1, 1994 and December 31, 1994 --
Incorporated by reference to Exhibit (b)(7)(i) to Form
N-4, file number 33-76162, filed February 25, 1998.
(ii)(A) Contract of reinsurance in connection with the
variable annuity contracts being offered Variable
Annuity Guaranteed Death Benefit Reinsurance Contract
between North American Security Life Insurance Company
and Connecticut General Life Insurance Company,
effective July 1, 1995 (VIS25) - Previously filed as
Exhibit (b)(7)(ii) to post-effective amendment no. 2 to
Form N-4 filed March 1, 1996.
(ii)(B) Contract of reinsurance in connection with the
variable annuity contracts being offered Variable
Annuity Guaranteed Death Benefit Reinsurance Contract
between North American Security Life Insurance Company
and Connecticut General Life Insurance Company,
effective July 1, 1995 (VV) - Previously filed as
Exhibit (b)(7)(ii) to post-effective amendment no. 2 to
Form N-4 filed March 1, 1996.
(iii) Contract of reinsurance in connection with the
variable annuity contracts being offered Contract
between North American Security Life Insurance Company
and Swiss Re America, effective August 1, 1995
Previously filed as Exhibit (b)(7)(iii) to
post-effective amendment no. 2 to Form N-4 filed March
1, 1996.
(8) Other material contracts not made in the ordinary course of
business which are to be performed in whole or in part on or
after the date the registration statement is filed:
(i) Form of Remote Service Agreement dated November 1, 1996
between North American Security Life Insurance Company
and CSC Continuum Inc. -- Previously filed as Exhibit
(b)(8)(i) to post-effective amendment no. 3 to Form N-4
filed February 28, 1997.
(9) (i) Opinion of Counsel and consent to its use as to the
legality of the securities being registered (VIS25) --
filed herewith.
(ii) Opinion of Counsel and consent to its use as to the
legality of the securities being registered (VV) -
filed herewith.
<PAGE> 79
(10) (i) Written consent of Ernst & Young LLP, independent
auditors -- To be filed by amendment.
(ii) Written consent of Coopers & Lybrand L.L.P, independent
accountants -- To be filed by amendment.
(11) All financial statements omitted from Item 23, Financial
Statements - Not Applicable
(12) Agreements in consideration for providing initial capital
between or among Registrant, Depositor, Underwriter or
initial contract owners -- Not Applicable.
(13) Schedule for computation of each performance quotation
provided in the Registration Statement in response to Item
21 -- Incorporated by reference to Exhibit (b)(13) to Form
N-4, 33-76162 filed March 1, 1996.
(14) Financial Data Schedule -- Not Applicable.
(15) (i) Power of Attorney - John D. Richardson (Chairman of the
Board of Directors, North American Security Life
Insurance Company) -- Incorporated by reference to
Exhibit (b)(15)(ii) to Form N-4, file number 33-76162,
filed April 29, 1997.
(ii) Power of Attorney - David W. Libbey (Principal
Financial Officer of North American Security Life
Insurance Company) --Incorporated by reference to
Exhibit (24)(ii) to Form 10Q of The Manufacturers Life
Insurance Company of North America filed November 14,
1997.
(iii) Power of Attorney - Peter Hutchison (Director, The
Manufacturers Life Insurance Company of North America)
-- Incorporated by reference to Exhibit (b)(15)(iii) to
Form N-4, file number 33-76162, filed February 25,
1998.
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR.
OFFICERS AND DIRECTORS OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH
AMERICA
Name and Principal
Business Address Position with Manulife North America
- ---------------- ------------------------------------
John D. Richardson Director and Chairman of the Board of
200 Bloor Street East Directors
North Tower, 11th Floor
Toronto, Ontario
<PAGE> 80
Canada M4W-1E5
Peter S. Hutchison Director
200 Bloor Street East
North Tower, 7th Floor
Toronto, Ontario
Canada M4W-1E5
John D. DesPrez III President & Director
73 Tremont Street
Boston, MA 02108
James Boyle Vice President, Administration and Chief
116 Huntington Avenue Administrative Officer
Boston, MA 02116
John G. Vrysen Vice President & Chief Actuary
73 Tremont Street
Boston, MA 02108
Hugh McHaffie Vice President, U.S. Annuities and Product
73 Tremont Street Development
Boston, MA 02108
Richard C. Hirtle Vice President, Strategic Development &
116 Huntington Avenue Accumulating Life Products
Boston, MA 02116
James D. Gallagher Vice President, Secretary and General Counsel
73 Tremont Street
Boston, MA 02108
Janet Sweeney Vice President, Corporate Services
73 Tremont Street
Boston, MA 02108
Robert Boyda Vice President, Investment Management Services
73 Tremont Street
Boston, MA 02108
David W. Libbey Vice President, Treasurer & Chief
73 Tremont Street Financial Officer
Boston, MA 02108
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR
REGISTRANT.
<PAGE> 81
THE MANUFACTURERS LIFE INSURANCE COMPANY
Manulife Corporate Organization as at December 31, 1997
The Manufacturers Life Insurance Company (Canada)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1. Cantay Holdings Inc. - Ontario (100%)
2. 484551 Ontario Limited - Ontario (100%)
3. 911164 Ontario Inc. - Ontario (100%)
4. Churchill Lifestyles Corp. (100%)
5. 495603 Ontario Limited - Ontario (100%)
6. 1198183 Ontario Limited - Ontario (100%)
7. 1198184 Ontario Limited - Ontario (100%)
8. 1235434 Ontario Limited - Ontario (100%)
9. 576986 Ontario Inc. - Ontario (100%)
10. Balmoral Developments Inc. - Ontario (100%)
11. Manulife Bank of Canada - Canada (100%)
12. Manulife Securities International Ltd. - Canada (100%)
13. Family Realty First Corp. - Ontario (100%)
14. NAL Resources Limited - Alberta (100%)
15. Manulife International Capital Corporation Limited - Ontario (100%)
16. Regional Power Inc. - Ontario (100%)
17. La Regionale Power (Port Cartier) Inc. - Ontario (100%)
18. La Regionale Power Angliers Inc. - Ontario (100%)
19. Addalam Power Corporation - Philippines (100%)
20. Peel-de Maisonneuve Investments Ltd. - Canada (100%)
21. 2932121 Canada Inc. - Canada (100%)
22. FNA Financial Inc. - Canada (100%)
23. NAL Trustco Inc. - Ontario (100%)
24. First North American Insurance Company - Canada (100%)
</TABLE>
<PAGE> 82
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
25. Elliott & Page Limited - Ontario (100%)
26. Seamark Asset Management Ltd. - Canada (67.86%)
27. NAL Resources Management Limited - Canada (100%)
28. NAL Energy Inc. - Alberta (100%)
29. ManuCab Ltd. - Canada (100%)
30. Plazcab Service Limited - Newfoundland (100%)
31. Manufacturers Life Capital Corporation Inc. - Canada (100%)
32. The North American Group Inc. - Ontario (100%)
33. 994744 Ontario Inc. - Ontario (100%)
34. 1268337 Ontario Inc. - Ontario (100%)
35. 3426505 Canada Inc. - Canada (100%)
36. The Manufacturers Investment Corporation - Michigan (100%)
37. Manulife Reinsurance Corporation (U.S.A.) - Michigan (100%)
38. The Manufacturers Life Insurance Company (U.S.A.) - Michigan (100%)
1. Dover Leasing Investments, LLC - Delaware (99%)
2. The Manufacturers Life Insurance Company of America - Michigan (100%)
1. Manulife Holding Corporation - Delaware (100%)
1. Manufacturers Adviser Corporation - Colorado (100%)
2. Succession Planning International, Inc. - Wisconsin (100%)
3. ManEquity, Inc. - Colorado (100%)
4. Manulife Property Management of Washington, D.C. Inc. - Washington, D.C. (100%)
5. Manulife Service Corporation - Colorado (100%)
6. Manulife Leasing Company, LLC - Delaware (80%)
3. Capitol Bankers Life Insurance Company - Michigan (100%)
4. Ennal, Inc. - Ohio (100%)
5. Manulife-Wood Logan Holding Co. Inc. - Delaware (62.5%)
1. Wood Logan Associates, Inc. - Connecticut (100%)
1. Wood Logan Distributors, Inc. - Connecticut (100%)
2. The Manufacturers Life Insurance Company of North America - Delaware (100%)
1. Manufacturers Securities Services, LLC - Massachusetts (100%)
</TABLE>
<PAGE> 83
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
2. The Manufacturers Life Insurance Company of New York - New York (100%)
1. Manulife Reinsurance Limited - Bermuda (100%)
6. MRL Holding, LLC - Delaware (99%)
1. Manulife-Wood Logan Holding Co. Inc. - Delaware (22.5%)
1. MRL Holding, LLC - Delaware (1%)
1. Manulife International Investment Management Limited - U.K. (100%)
2. Manulife International Fund Management Limited - U.K. (100%)
3. WT(SW) Properties Ltd. - U.K. (100%)
4. Manulife Europe Ruckversicherungs-Aktiengesellschaft - Germany (100%)
5. Manulife International Holdings Limited - Bermuda (100%)
6. Manulife (International) Limited - Bermuda (100%)
7. Zhong Hong Life Insurance Co., Ltd. - China (51%)
8. The Manufacturers (Pacific Asia) Insurance Company Limited - H.K. (100%)
9. Newtime Consultants Limited - H.K. (100%)
10. Manulife (International) Reinsurance Limited - Bermuda (100%)
11. Manulife (International) P & C Limited - Bermuda (100%)
12. Manufacturers P & C Limited - Barbados (100%)
13. Manufacturers Life Reinsurance Limited - Barbados (100%)
14. Chinfon-Manulife Insurance Company Limited - Bermuda (100%)
15. Manulife (Malaysia) SDN. BHD. - Malaysia (100%)
16. Manulife (Thailand) Ltd. - Thailand (100%)
17. Young Poong Manulife Insurance Company - Korea (100%)
18. Manulife Data Services Inc. - Barbados (100%)
19. Manulife Funds Direct (Barbados) Limited - Barbados (100%)
20. Manulife Funds Direct (Hong Kong) Limited - H.K. (100%)
21. OUB Manulife Pte. Ltd. - Singapore (100%)
22. Manulife Holdings (Hong Kong) Limited - H.K. (100%)
23. ManuLife Financial Systems (Hong Kong) Limited - H.K. (100%)
24. P.T. Asuransi Jiwa Dhamala ManuLife - Indonesia (51%)
25. P.T. AMP Panin Life - Indonesia (100%)
</TABLE>
<PAGE> 84
Item 27. NUMBER OF CONTRACT OWNERS.
As of December 31, 1997, there were 1,104 qualified and 3,263 non-qualified
contracts for VIS25 and 630 qualified and 2,375 non-qualified contracts for VV
of the series offered hereby outstanding.
Item 28. INDEMNIFICATION.
Article 9 of the Articles of Incorporation of the Company provides as follows:
NINTH: A director of this corporation shall not be liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director
except to the extent such exemption from liability or limitation thereof is not
permitted under the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended. Any repeal or modification of the foregoing
sentence shall not adversely affect any right or protection of a director of the
corporation existing hereunder with respect to any act or omission occurring
prior to such repeal or modification.
Article XIV of the By-laws of the Company provides as follows:
Each Director or officer, whether or not then in office, shall be
indemnified by the Company against all costs and expenses reasonably incurred by
or imposed upon him or her, including legal fees, in connection with or
resulting from any claim, action, suit or proceeding, whether civil, criminal or
administrative, in which he or she may become involved as a party or otherwise,
by reason of his or her being or having been a Director or officer of the
Company.
(1) Indemnity will not be granted to any Director or officer with
respect to any claim, action, suit or proceeding which shall be brought against
such Director or officer by or in the right of the Company, and
(2) Indemnification for amounts paid and expenses incurred in settling
such action, claim, suit or proceeding, will not be granted, until it shall be
determined by a disinterested majority of the Board of Directors or by a
majority of any disinterested committee or group of persons to whom the question
may be referred by the Board, that said Director or officer did indeed act in
good faith and in a manner he or she reasonably believed to be in, or not
adverse, to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonably cause to believe that his or her
conduct was legal, and that the payment of such costs, expenses, penalties or
fines is in the interest of the Company, and not contrary to public policy or
other provisions of law.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendre or its equivalent, shall
not, of itself, create a presumption that the person did not act in good faith
and in a manner which he or she reasonably believed to be in, or not adverse, to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
<PAGE> 85
Indemnification shall be made by the corporation upon determination by a
disinterested majority of the Board of Directors or of a majority of any
disinterested committee or group or persons to whom the question may be referred
to by said Board, that the person did indeed act in good faith and in a manner
he or she reasonably believed to be in, or not adverse, to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had
reasonably cause to believe that his or her conduct was legal.
The foregoing right to indemnity shall not be exclusive of any other
rights to which such Director or officer may be entitled as a matter of law.
The foregoing right to indemnity shall also extend to the estate of any
deceased Director or officer with respect to any such claim, action, suit or
proceeding in which such Director or officer or his or her estate may become
involved by reason of his or her having been a Director or officer of the
Company, and subject to the same conditions outlined above.
Section IX, paragraph D of the Promotional Agent Agreement among the Company
(referred to therein as "Security Life"), NASL Financial and Wood/Logan
(referred to therein as "Promotional Agent") provides as follows:
a. NASL Financial and Security Life agree to indemnify and hold harmless
Promotional Agent, its officers, directors and employees against any and
all losses, claims, damages or liabilities to which they may become
subject under the Securities Act of 1933 ("1933 Act"), the 1934 Act or
other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact or any omission
or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in any registration
statement for the Contracts filed pursuant to the 1933 Act or any
prospectus included as a part thereof, as from time to time amended and
supplemented, or any advertisement or sales literature approved in
writing by NASL Financial or Security Life pursuant to Section VI,
paragraph B of this Agreement.
b. Promotional Agent agrees to indemnify and hold harmless NASL Financial
and Security Life, their officers, directors and employees against any
and all losses, claims, damages or liabilities to which they may become
subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (i) any oral or written
misrepresentation by Promotional Agent or its officers, directors,
employees or agents unless such misrepresentation is contained in any
registration statement for the Contracts or Fund shares, any prospectus
included as a part thereof, as from time to time amended and
supplemented, or any advertisement or sales literature approved in
writing by NASL Financial pursuant to Section VI, paragraph B of this
Agreement or, (ii) the failure of Promotional Agent or its officers,
directors, employees or agents to comply with any applicable provisions
of this Agreement.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
<PAGE> 86
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE> 87
Item 29. PRINCIPAL UNDERWRITERS.
a. Name of Investment Company Capacity in which acting
-------------------------- ------------------------
Manufacturers Investment Trust Investment Adviser
The Manufacturers Life Insurance Principal Underwriter
Company of North America Separate
Account A
The Manufacturers Life Insurance Principal Underwriter
Company of North America Separate
Account B
The Manufacturers Life Insurance Principal Underwriter
Company of New York Separate
Account A
b. The Manufacturers Life Insurance Company of North America is the
managing member of Manufacturers Securities Services, LLC and has sole power to
act on behalf of Manufacturers Securities Services, LLC. The officers and
directors of The Manufacturers Life Insurance Company of North America are set
forth under Item 25.
c. None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
All books and records are maintained at 116 Huntington Avenue, Boston, MA 02116
and at 73 Tremont Street, Boston, MA 02108.
Item 31. MANAGEMENT SERVICES.
None.
Item 32. UNDERTAKINGS.
Representation of Insurer Pursuant to Section 26 of the Investment Company Act
of 1940
The Manufacturers Life Insurance Company of North America (the "Company") hereby
represents that the fees and charges deducted under the contracts issued
pursuant to this registration statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the Company.
<PAGE> 88
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, The Manufacturers Life Insurance Company of North America
Separate Account A, has caused this Amendment to the Registration Statement to
be signed on its behalf, in the City of Boston, and Commonwealth of
Massachusetts on this 26th day of February, 1998.
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NORTH AMERICA SEPARATE ACCOUNT A
----------------------------------------
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA
----------------------------------------
(Depositor)
By: /s/ JOHN D. DESPREZ III
----------------------------------------
John D. DesPrez III, President
Attest:
/s/ JAMES D. GALLAGHER
- -----------------------------------------
James D. Gallagher, Secretary
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Depositor has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned on the
26th day of February, 1998 in the City of Boston, and Commonwealth of
Massachusetts.
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA
----------------------------------------
(Depositor)
By: /s/ JOHN D. DESPREZ III
----------------------------------------
John D. DesPrez III, President
Attest:
/s/ JAMES D. GALLAGHER
- -----------------------------------------
James D. Gallagher, Secretary
<PAGE> 89
As required by the Securities Act of 1933, this amended Registration
Statement has been signed by the following persons in the capacities with the
Depositor and on the dates indicated.
SIGNATURE TITLE DATE
/s/ JOHN D. DESPREZ III Director and President February 26, 1998
- --------------------------- (Principal Executive -----------------
John D. DesPrez III Officer) (Date)
* Director February 26, 1998
- --------------------------- -----------------
Peter S. Hutchison (Date)
* Director and Chairman February 26, 1998
- --------------------------- of the Board -----------------
John D. Richardson (Date)
/s/ DAVID W. LIBBEY Vice President, Treasurer February 26, 1998
- --------------------------- and Chief Financial Officer -----------------
David W. Libbey (Principal Financial Officer) (Date)
*By: /s/ JAMES D. GALLAGHER February 26, 1998
---------------------- -----------------
James D. Gallagher (Date)
Attorney-in-Fact
Pursuant to Powers
of Attorney
<PAGE> 90
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
(4)(i)(A) Specimen Flexible Purchase Payment Individual Deferred
Variable Annuity Contract, Non-Participating (VIS25)
(4)(i)(B) Specimen Flexible Purchase Payment Individual Deferred
Variable Annuity Contract, Non-Participating (VV)
(4)(ii) Specimen Fixed Account Endorsement to Flexible Purchase
Payment Individual Deferred Variable Annuity Contract,
Non-Participating (END.007.98)
(4)(iii) Specimen Individual Retirement Annuity Endorsement to
Flexible Purchase Payment Individual Deferred Variable
Annuity Contract, Non-Participating (ENDORSEMENT.001)
(4)(iv) Specimen ERISA Tax-Sheltered Annuity Endorsement to Flexible
Purchase Payment Individual Deferred Variable Annuity
Contract, Non-Participating (END.002.97)
(4)(v) Specimen Tax-Sheltered Annuity Endorsement to Flexible
Purchase Payment Individual Deferred Variable Annuity
Contract, Non-Participating (END.003.97)
(4)(vi) Specimen Qualified Plan Endorsement Section 401 Plans to
Flexible Purchase Payment Individual Deferred Variable
Annuity Contract, Non-Participating (END.004.97)
(5)(i) Specimen Application for Flexible Purchase Payment
Individual Deferred Combination Fixed and Variable Annuity
Contract, Non-Participating (VIS25)
(5)(ii) Specimen Application for Flexible Purchase Payment
Individual Deferred Variable Annuity Contract,
Non-Participating (VV)
(b)(9)(i) Opinion of Counsel and consent to its use as to the legality
of the securities being registered (VIS25)
(b)(9)(ii) Opinion of Counsel and consent to its use as to the legality
of the securities being registered (VV)
<PAGE> 1
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA
- --------------------------------------------------------------------------------
EXECUTIVE OFFICE: ANNUITY SERVICE OFFICE: HOME OFFICE
116 Huntington Avenue P.O. Box 9230 Wilmington, Delaware
Boston, MA 02116 Boston, MA 02205-9230
1-800-344-1029
This is a Legal Contract - read it carefully.
We agree to pay the benefits of this Contract in accordance with its terms.
This Contract is issued in consideration of the Payments.
TEN DAY RIGHT TO REVIEW
The Contract Owner may cancel the Contract by returning it to our Annuity
Service Office or agent at any time within 10 days after receipt of the
Contract. Within 7 days of receipt of the Contract by us, We will pay the
Contract Value, computed at the end of the valuation period during which the
Contract is received by us, to the Contract Owner.
When the Contract is issued as an individual retirement annuity, during the
first 7 days of this 10 day period, we will return the greater of (i) Contract
Value computed at the end of the valuation period during which the Contract is
received by us, or (ii) sum of all payments.
Signed for the Company at its Executive Office,
Boston, Massachusetts, on the Contract Date.
DETAILS OF VARIABLE ACCOUNT PROVISIONS ON PAGE 8
Vice President President
Flexible Payment Deferred Variable Annuity
Non-Participating
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS
TO FIXED DOLLAR AMOUNT.
VISION.001
<PAGE> 2
INTRODUCTION
This is a flexible payment deferred variable annuity. This annuity provides that
the Contract Value will accumulate on a variable basis and annuity payments may
be either fixed or variable, or a combination of fixed and variable. The
Contract Value will vary with the investment performance of the Variable
Account.
If you select annuity payments on a variable basis, the payment amount will vary
with the investment performance of the Variable Account.
You must allocate Payments among one or more Investment Options. The Investment
Options are identified on the Contract Specifications Page.
<TABLE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<CAPTION>
Contract Specifications Page Page
<S> <C>
PART 1 - DEFINITIONS ...................................................... 1
PART 2 - GENERAL PROVISIONS ............................................... 2
PART 3 - OWNERSHIP ........................................................ 4
PART 4 - BENEFITS ......................................................... 5
PART 5 - PAYMENTS ......................................................... 7
PART 6 - VARIABLE ACCOUNT PROVISIONS ...................................... 7
PART 7 - ANNUITY PROVISIONS ............................................... 8
PART 8 - TRANSFERS ........................................................ 9
PART 9 - WITHDRAWAL PROVISIONS ............................................ 10
PART 10 - FEES AND DEDUCTIONS ............................................. 11
PART 11 - LOAN PROVISION .................................................. 12
PART 12 - PAYMENT OF CONTRACT BENEFITS .................................... 12
</TABLE>
<PAGE> 3
SPECIFICATIONS PAGE
TYPE OF CONTRACT: NON-QUALIFIED
CONTRACT DATE: 11/06/1997 MATURITY DATE: 11/06/2017
INITIAL PURCHASE PAYMENT: $ 100,000.00 CONTRACT NUMBER: 000000025
GOVERNING LAW: DE
INITIAL ALLOCATION OF NET
PURCHASE PAYMENT: (SEE REVERSE FOR ALL AVAILABLE OPTIONS)
INVESTMENT OPTIONS: INTEREST RATE: GUARANTEED TO:
1 YEAR FIXED 50.00% 4.00% 11/06/1998
EQUITY 50.00%
-----------
TOTAL 100.00%
OWNER: JOE OWNER CO-OWNER:
ANNUITANT: JOE OWNER AGE: 77
CO-ANNUITANT: BENEFICIARY: SEE ATTACHED LIST
<PAGE> 4
AVAILABLE INVESTMENT OPTIONS
FIXED INVESTMENT OPTIONS
1 Year Fixed
VARIABLE INVESTMENT OPTIONS
Pacific Rim Emerging Markets Manufacturers Adviser Corporation
Science & Technology T. Rowe Price Associates, Inc.
International Small Cap Founders Asset Management, Inc.
Emerging Growth Warburg, Pincus Counsellors, Inc.
Pilgrim Baxter Growth Pilgrim Baxter & Associates
Small/Mid Cap Fred Alger Management, Inc.
International Stock Rowe Price-Fleming International, Inc.
Worldwide Growth Founders Asset Management, Inc.
Global Equity Morgan Stanley Asset Management Inc.
Small Company Value Rosenberg Institutional Equity Management
Growth Founders Asset Management, Inc.
Equity Fidelity Management Trust Company
Quantitative Equity Manufacturers Adviser Corporation
Blue Chip Growth T. Rowe Price Associates, Inc.
Real Estate Securities Manufacturers Adviser Corporation
Value Miller Anderson & Sherrerd, LLP
International Growth & Income J.P. Morgan Investment Management Inc.
Growth and Income Wellington Management Company, LLP
Equity-Income T. Rowe Price Associates, Inc.
Balanced Founders Asset Management, Inc.
Aggressive Asset Allocation Fidelity Management Trust Company
High Yield Miller Anderson & Sherrerd, LLP
Moderate Asset Allocation Fidelity Management Trust Company
Conservative Asset Allocation Fidelity Management Trust Company
Strategic Bond Salomon Brothers Asset Management Inc.
Global Government Bond Oechsle International Advisors, L.P.
Capital Growth Bond Manufacturers Adviser Corporation
Investment Quality Bond Wellington Management Company, LLP
U.S. Government Securities Salomon Brothers Asset Management Inc.
Money Market Manufacturers Adviser Corporation
Lifestyle Portfolios: Manufacturers Adviser Corporation
Conservative 280
Moderate 460
Balanced 640
Growth 820
Aggressive 1000
<PAGE> 5
BENEFICIARY INFORMATION
Please find below the Beneficiary Information for contract number, 000000025,
currently on file at The Manufacturers Life Insurance Company of North America:
Kathy Owner
<PAGE> 6
FIXED INVESTMENT OPTION ENDORSEMENT
ALL CONTRACTS BEGINNING WITH FORM NUMBERS VEN10 AND VISION.001 TO WHICH THIS
ENDORSEMENT IS ATTACHED IS AMENDED AS FOLLOWS:
PART 1, DEFINITIONS, ACCUMULATION UNIT and INVESTMENT OPTIONS are replaced as
follows:
ACCUMULATION UNIT A unit of measure that is used to calculate the value
of the variable portion of this Contract before the Maturity
Date.
INVESTMENT OPTIONS The Investment Options made available under this Contract
are the Sub-Accounts of the Variable Account and the fixed
interest rate options as shown on the Contract
Specifications Page and application.
PART 6 - VARIABLE ACCOUNT PROVISIONS, INVESTMENT ACCOUNT, is to be added as
follows:
INVESTMENT ACCOUNT We will establish a separate Investment Account for
you for each variable Investment Option to which you
allocate amounts. The Investment Account represents the
number of your Accumulation Units in an Investment Option.
The FIXED ACCOUNT PROVISIONS are to be added as follows:
INVESTMENT ACCOUNT We will establish a separate Investment Account for you each
time you allocate amounts to the fixed Investment Option.
Any amounts you allocate to the fixed Investment Option on
the same day will establish a new Investment Account.
Amounts invested in these Investment Accounts will earn
interest at the guaranteed rate in effect on the date the
amounts are allocated for the duration of the guarantee
period.
We will determine the guaranteed rate from time to time for
new allocations, but in no event will the minimum guaranteed
rate under a fixed Investment Account be less than 3%.
GUARANTEE PERIODS The guarantee period will be the duration of the fixed
Investment Option measured from the date the amount is
allocated to the Investment Account. Amounts cannot be
allocated to a fixed Investment Option that would extend the
guarantee period beyond the Maturity Date.
RENEWALS The renewal amount is the Investment Account Value at the
end of the particular guarantee period. The renewal amount
will be automatically renewed in the fixed Investment Option
at the end of the guarantee period, unless you specify
otherwise. If renewal in the fixed Investment Option would
result in the guarantee period for the fixed Investment
Account extending beyond the Maturity Date, the renewal
amount may not be renewed in the fixed Investment Option.
INVESTMENT ACCOUNT The amount in the Investment Accounts will accumulate at a
VALUE rate of interest determined by us and in effect on the date
the amount is allocated to the Investment Account. The
Investment Account Value is the accumulated value of the
amount invested in the Investment Account reduced by any
withdrawals, loans, transfers or charges taken from the
Investment Account.
ENDORSEMENT.025
<PAGE> 7
PART 8, TRANSFERS, is modified as follows:
TRANSFERS The following paragraph is added following the first
paragraph:
Amounts may not be transferred from a fixed Investment
Account unless those amounts have been in the fixed
Investment Account for at least one year.
PART 9, WITHDRAWAL PROVISIONS, is modified as follows:
SUSPENSION OF The following paragraph is added following the first
PAYMENTS paragraph:
We may defer the right of withdrawal from the fixed
Investment Accounts for not more than six months from the
day we receive written request and the Contract, if
required. If such payments are deferred 30 days or more, the
amount deferred will earn interest at a rate not less than
3% per year.
PARTIAL WITHDRAWAL The following is added following the first paragraph:
If there are multiple Investment Accounts under a fixed
Investment Option, the requested amount from that Investment
Option must be withdrawn from those Investment Accounts on a
first-in-first-out basis. If you do not specify, the
requested amount will be withdrawn in the following order:
(a) Variable Investment Accounts on a pro rata basis,
(b) Fixed Investment Option on a first-in-first-out basis.
WITHDRAWAL CHARGE The following is added preceding item (2):
The free withdrawal amount will be applied to your requested
withdrawal in the following order:
(a) Variable Investment Accounts on a pro rata basis,
(b) Fixed Investment Option on a first-in-first-out basis.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
<PAGE> 8
WITHDRAWAL CHARGE ENDORSEMENT
PART 9, WITHDRAWAL PROVISIONS, PARTIAL WITHDRAWAL and WITHDRAWAL CHARGE, of all
contracts beginning with form numbers VEN10 and VISION.001 to which this
endorsement is attached are amended as follows:
PARTIAL WITHDRAWAL The second paragraph is deleted.
WITHDRAWAL CHARGE This section is replaced in its entirety, as follows:
If a withdrawal is made from the Contract before the
Maturity Date, no withdrawal charge will be assessed against
Payments.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
ENDORSEMENT.030
<PAGE> 9
PART 1 DEFINITIONS
- -------------------------------------------------------------------------------
WE AND YOU "We", "us", and "our" means The Manufacturers Life Insurance
Company of North America. "You" or "your" means the Owner of
this Contract.
ACCUMULATION UNIT A unit of measure that is used to calculate the value of
your Contract before the Maturity Date.
ANNUITANT Any individual person or persons whose life is
used to determine the duration of annuity payments involving
life contingencies. The Annuitant is as designated on the
Contract Specification Page and application, unless changed.
ANNUITY OPTION The method selected by you for annuity payments made by us.
ANNUITY SERVICE Any office designated by us for the receipt of Payments and
OFFICE processing of Contract Owner requests.
ANNUITY UNIT A unit of measure that is used after the Maturity Date to
calculate Variable Annuity payments.
BENEFICIARY The person, persons, or entity to whom certain benefits are
payable following the death of an Owner, or in certain
circumstances, an Annuitant.
CONTINGENT The person, persons or entity who becomes the Beneficiary if
BENEFICIARY the Beneficiary is not alive.
CONTRACT The anniversary of the Contract Date.
ANNIVERSARY
CONTRACT DATE The date of issue of the Contract as specified on the
Contract Specifications Page.
CONTRACT VALUE The total of the Investment Account Values and, if
applicable, any amount in the Loan Account attributable to
the Contract.
CONTRACT YEAR The period of twelve consecutive months beginning on the
Contract Date or any anniversary thereafter.
DEBT Any amounts in the Loan Account attributable to the Contract
plus any accrued loan interest. The loan provision is
applicable to certain Qualified Contracts only.
FIXED ANNUITY An Annuity Option with payments which are predetermined and
guaranteed as to dollar amount.
GENERAL ACCOUNT All the assets of The Manufacturers Life Insurance
Company of North America other than assets in separate
accounts.
INTERNAL REVENUE The Internal Revenue Code of 1986, as amended from time to
CODE (IRC) time, and any successor statute of similar purposes.
INVESTMENT ACCOUNT An account established by us which represents your interest
in an Investment Option prior to the Maturity Date.
INVESTMENT ACCOUNT
VALUE The value of your investment in an Investment Account.
INVESTMENT OPTIONS The Investment Options made available under this Contract
are the Sub-Accounts of the Variable Account as shown on the
Contract Specifications Page and application.
LOAN ACCOUNT
The portion of the General Account that is used for
collateral when a loan is taken.
1
<PAGE> 10
MATURITY DATE The date on which annuity benefits commence. It is the date
specified on the Contract Specifications Page, unless
changed.
NET PAYMENT The Payment less the amount of premium tax, if any, deducted
from the Payment.
NON-QUALIFIED Contracts which are not issued under Qualified Plans.
CONTRACTS
OWNER OR CONTRACT The person, persons or entity entitled to the ownership
OWNER rights under this Contract. The Owner is as designated on
the Contract Specifications Page and application, unless
changed.
PORTFOLIO OR TRUST A separate portfolio of Manufacturers Investment Trust, a
PORTFOLIO mutual fund in which the Variable Account invests, or any
successor mutual fund.
PAYMENT An amount paid to us by you as consideration for the
benefits provided by the Contract.
QUALIFIED CONTRACTS Contracts issued under Qualified Plans.
QUALIFIED PLANS Retirement plans which receive favorable tax treatment under
section 401, 403, 408 or 457, of the Internal Revenue Code
of 1986, as amended.
SEPARATE ACCOUNT A segregated account of The Manufacturers Life Insurance
Company of North America that is not commingled with our
general assets and obligations.
SUB-ACCOUNT(S) One or more of the Sub-Accounts of the Variable Account.
Each Sub-Account is invested in shares of a different Trust
Portfolio.
VALUATION DATE Any date on which the New York Stock Exchange is open for
business and the net asset value of a Trust Portfolio is
determined.
VALUATION PERIOD Any period from one Valuation Date to the next, measured
from the time on each such date that the net asset value of
each Portfolio is determined.
VARIABLE ACCOUNT The Manufacturers Life Insurance Company of North America
Separate Account A, which is a separate account of The
Manufacturers Life Insurance Company of North America.
VARIABLE ANNUITY An Annuity Option with payments which: (1) are not
predetermined or guaranteed as to dollar amount, and (2)
vary in relation to the investment experience of one or more
specified Sub-Accounts.
PART 2 GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ENTIRE CONTRACT The entire contract consists of this Contract, any Contract
endorsements, and a copy of the application if one is
attached to the Contract when issued.
Only our President, Vice-President or Secretary may agree to
change or waive any provisions of the Contract. The change
or waiver must be in writing.
We will not change or modify this Contract without your
consent except as may be required to make it conform to any
applicable law or regulation or any ruling issued by a
government agency.
The benefits and values available under this Contract are
not less than the minimum required by any statute of the
state in which the Contract is issued. We have filed a
detailed statement of the method used to calculate the
benefits and values with the Department of Insurance in the
state in
2
<PAGE> 11
which the Contract is issued, if required by law.
BENEFICIARY The Beneficiary is as designated in the Contract
Specifications Page and application, unless changed.
However, if there is a surviving Owner, that person will be
treated as the Beneficiary. If no such Beneficiary is
living, the Beneficiary is the "Contingent Beneficiary". If
no Beneficiary or Contingent Beneficiary is living, the
Beneficiary is the estate of the deceased Owner.
CHANGE OF MATURITY Prior to the Maturity Date, you may request in writing a
DATE change of the Maturity Date. Any extension of the Maturity
Date will be subject to our prior approval.
ASSIGNMENT You may assign this Contract at any time prior to the
Maturity Date. No assignment will be binding on us unless it
is written in a form acceptable to us and received at our
Annuity Service Office. We will not be liable for any
payments made or actions we take before the assignment is
accepted by us. An absolute assignment will revoke the
interest of any revocable Beneficiary. We will not be
responsible for the validity of any assignment.
CLAIMS OF CREDITORS To the extent permitted by law, no benefits payable under
this Contract will be subject to the claims of your, the
Beneficiary's or the Annuitant's creditors.
MISSTATEMENT AND We may require proof of age, sex or survival of any person
PROOF OF AGE, SEX upon whose age, sex or survival any payments depend. If the
age or sex of the Annuitant has been misstated, the benefits
will be those which the Payments would have provided for the
correct age and sex. If we have made incorrect annuity
payments, the amount of any underpayment will be paid
immediately. The amount of any overpayment will be deducted
from future annuity payments.
ADDITION, DELETION We reserve the right, subject to compliance with applicable
OR SUBSTITUTION OF law, to make additions to, deletions from, or substitutions
INVESTMENT OPTIONS for the Portfolio shares that are held by the Variable
Account or that the Variable Account may purchase. We
reserve the right to eliminate the shares of any of the
eligible Portfolios and to substitute shares of another
Portfolio of the Trust, or of another open-end registered
investment company, if the shares of any eligible Portfolio
are no longer available for investment, or if in our
judgment further investment in any eligible Portfolio should
become inappropriate in view of the purposes of the Variable
Account. We will not substitute any shares attributable to
your interest in a Sub-Account without notice to you and
prior approval of the Securities and Exchange Commission to
the extent required by the Investment Company Act of 1940.
Nothing contained herein shall prevent the Variable Account
from purchasing other securities for other series or classes
of contracts, or from effecting a conversion between shares
of another open-end investment company.
We reserve the right, subject to compliance with applicable
law, to establish additional Sub-Accounts which would invest
in shares of a new Portfolio of the Trust or in shares of
another open-end investment company. We also reserve the
right, subject to compliance with applicable law, to
eliminate existing Sub-Accounts, to combine Sub-Accounts or
to transfer assets in a Sub-Account to another Separate
Account established by us or an affiliated company. In the
event of any such substitutions or changes, we may, by
appropriate endorsement, make such changes in this and other
Contracts as may be necessary or appropriate to reflect such
substitutions or changes. If deemed by us to be in the best
interests of persons having voting rights under the
Contracts, the Variable Account may be operated as a
management company under the Investment Company Act of 1940
or it may be deregistered under such Act in the event such
registration is no longer required.
3
<PAGE> 12
NON-PARTICIPATING Your Contract is non-participating and will not share in our
profits or surplus earnings. We will pay no dividends on
your Contract.
REPORTS At least once each year we will send you a report containing
information required by the Investment Company Act of 1940
and applicable state law.
INSULATION The portion of the assets of the Variable Account equal to
the reserves and other contract liabilities with respect to
such account are not chargeable with liabilities arising out
of any other business we may conduct. Moreover, the income,
gains and losses, realized or unrealized, from assets
allocated to the Variable Account shall be credited to or
charged against such account without regard to our other
income, gains or losses.
CURRENCY AND PLACE All payments made to or by us shall be made in the lawful
OF PAYMENTS currency of the United States of America at the Annuity
Service Office or elsewhere if we consent.
NOTICES AND To be effective, all notices and elections you make under
ELECTIONS this Contract must be in writing, signed by you and received
by us at our Annuity Service Office. Unless otherwise
provided in this Contract, all notices, requests and
elections will be effective when received by us, complete
with all necessary information and your signature, at our
Annuity Service Office.
GOVERNING LAW This Contract will be governed by the laws of the
jurisdiction indicated on the Contract Specifications Page.
SECTION 72(s) The provisions of the Contract shall be interpreted so as to
comply with the requirements of Section 72(s) of the
Internal Revenue Code.
PART 3 OWNERSHIP
- --------------------------------------------------------------------------------
GENERAL Before the Maturity Date, the Owner of this Contract shall
be the person, persons, or entity designated on the Contract
Specifications Page and application or the latest change
filed with us. On the Maturity Date, the Annuitant becomes
the Owner of the Contract. If amounts become payable to the
Beneficiary under the Contract, the Beneficiary becomes the
Owner of the Contract.
CHANGE OF OWNER, Subject to the rights of an irrevocable Beneficiary, you may
ANNUITANT, change the Owner, Annuitant, or Beneficiary by written
BENEFICIARY request in a form acceptable to us and which is received at
our Annuity Service Office. The Annuitant may not be changed
after the Maturity Date. You need not send us the Contract
unless we request it. Any change must be approved by us. If
approved, any change in Beneficiary will take effect on the
date you signed the request. If approved, any change in
Owner or Annuitant will take effect on the date we received
the request at the Annuity Service Office. We will not be
liable for any payments or actions we take before the change
is approved.
The substitution or addition of any Owner may result in the
resetting of the Death Benefit to an amount equal to the
Contract Value as of the date of such change. For purposes
of subsequent calculations of the Death Benefit, described
in Part 4, Benefits, Death Benefit Before Maturity Date, the
Contract Value on the date of the change will be treated as
a Payment made on that date. In addition, all Payments made
and all amounts deducted in connection with Partial
Withdrawals prior to the date of the change of Owner will
not be considered in the determination of the Death Benefit.
This paragraph will not apply if (a) the individual whose
death will cause the Death Benefit to be paid is the same
after the change of Owner, or (b) if
4
<PAGE> 13
Ownership is transferred to your spouse. If any Annuitant is
changed and any Owner is not an individual, the entire
interest in the Contract must be distributed to the Owner
within five years of the change.
PART 4 BENEFITS
- --------------------------------------------------------------------------------
ANNUITY BENEFITS We will pay a monthly income to the Annuitant, if living, on
the Maturity Date. Payments can be fixed or variable, or a
combination of fixed and variable. Annuity benefits will
commence on the Maturity Date and continue for the period of
time provided for under the Annuity Option selected.
We may pay the Contract Value, less Debt, on the Maturity
Date in one lump sum if the monthly income is less than $20.
On or before the Maturity Date you must select how the
Contract Value will be used to provide the monthly income.
You may select a Fixed or Variable Annuity. Unless you
indicate otherwise, we will provide variable annuity
payments in proportion to the Investment Account Value of
each Investment Option at the Maturity Date. Annuity
Payments will continue for 10 years or the lifetime of the
Annuitant, if longer.
If a Variable Annuity is used, the amount of the first
monthly annuity payment will be obtained from the
appropriate option table under the "Payment of Contract
Benefits" section. Subsequent monthly annuity payments will
vary based on the investment experience of the
Sub-Account(s) used to effect the annuity. The method used
to calculate the amount of the initial and subsequent
payments is described under the "Variable Annuity Payments"
Section of Part 7.
If a Fixed Annuity is used, the portion of the Contract
Value used to effect a Fixed Annuity will be applied to the
appropriate table contained in this Contract. If the table
in use by us on the Maturity Date is more favorable to you,
we will use that table. We guarantee the dollar amount of
fixed annuity payments.
DEATH BENEFIT A Death Benefit will be determined as of the date on which
BEFORE MATURITY written notice and proof of death and all required claim
DATE forms are received at the Company's Annuity Service Office
as follows:
1. If any Owner dies on or prior to their 85th birthday
and the oldest Owner had an attained age of less than
81 years on the Contract Date, the Death Benefit will
be the greater of:
(a) the Contract Value, or
(b) the excess of (i) over (ii) where
(i) equals the sum of each Payment accumulated
daily, at the equivalent of 5% per year,
starting on the date each Payment is
allocated to the Contract, with a maximum
accumulation of 2 times each Payment.
(ii) equals the sum of any amounts deducted in
connection with partial withdrawals,
accumulated daily at the equivalent of 5% per
year, starting on the date each such
deduction occurs, with a maximum accumulation
of 2 times each amount deducted.
2. If any Owner dies after their 85th birthday and the
oldest Owner had an attained age of less than 81 years
on the Contract Date, the Death
5
<PAGE> 14
Benefit will be determined as the greater of:
(a) the Contract Value, or
(b) the excess of (i) over (ii) where:
(i) equals the sum of all Payments,
(ii) equals the sum of any amounts deducted in
connection with partial withdrawals.
3. If any Owner dies and the oldest Owner had an attained
age of 81 or greater on the Contract Date, the Death
Benefit will be the Contract Value less any applicable
Withdrawal Charges at the time of payment of benefits.
If there is any Debt, the Death Benefit equals the amount
described above less the Debt under the Contract.
Death Of Annuitant: On the death of the last surviving
Annuitant, the Owner becomes the new Annuitant, if the Owner
is an individual. If any Owner is not an individual the
death of any Annuitant is treated as the death of an Owner
and the Death Benefit will be determined by substituting the
Annuitant for the Owner as described below.
Death Of Owner: We will pay the Death Benefit to the
Beneficiary if any Owner dies prior to the Maturity Date.
The Death Benefit may be taken in one sum immediately, in
which case the Contract will terminate. If the Death Benefit
is not taken in one sum immediately, the Contract will
continue subject to the following provisions:
(a) The Beneficiary becomes the Contract Owner.
(b) The excess, if any, of the Death Benefit over the
Contract Value will be allocated to and among the
Investment Accounts in proportion to their values
as of the date on which the Death Benefit is
determined.
(c) No additional Payments may be applied to the
Contract.
(d) If the Beneficiary is not the deceased Owner's
spouse, the entire interest in the Contract must
be distributed under one of the following options:
(i) The entire interest in the Contract must be
distributed over the life of the Beneficiary,
or over a period not extending beyond the
life expectancy of the Beneficiary, with
distributions beginning within one year of
the Owner's death; or
(ii) the entire interest in the Contract must be
distributed within 5 years of the Owner's
Death.
If the Beneficiary dies before the distributions
required by (i) or (ii) are complete, the entire
remaining Contract Value must be distributed in a
lump sum immediately.
(e) If the Beneficiary is the deceased Owner's spouse,
the Contract will continue with the surviving
spouse as the new Owner. The surviving spouse may
name a new Beneficiary (and, if no Beneficiary is
so named, the surviving spouse's estate will be
the Beneficiary). Upon the death of the surviving
spouse, the Death Benefit will equal the Contract
Value at the time of the surviving spouse's death,
and the entire interest in the Contract must be
distributed to the new Beneficiary in accordance
with the provisions of (d) (i) or (d) (ii) above.
6
<PAGE> 15
(f) Withdrawal Charges will be waived on any
withdrawals, unless the Death Benefit payable upon
the Owner's death was defined under provision 3.,
Death Benefit Before Maturity Date above. If the
Death Benefit was so defined, Withdrawal Charges
will be assessed at the time a withdrawal occurs.
If there is more than one Beneficiary, the foregoing
provisions will independently apply to each
Beneficiary.
DEATH BENEFIT ON OR If annuity payments have been selected based on an
AFTER MATURITY DATE Annuity Option providing for payments for a guaranteed
period, and the Annuitant dies on or after the Maturity
Date, we will make the remaining guaranteed payments to
the Beneficiary. Any remaining payments will be made as
rapidly as under the method of distribution being used
as of the date of the Annuitant's death. If no
Beneficiary is living, we will commute any unpaid
guaranteed payments to a single sum (on the basis of
the interest rate used in determining the payments) and
pay that single sum to the estate of the last to die of
the Annuitant and the Beneficiary.
PROOF OF DEATH Proof of death is required upon the death of the
Annuitant or the Owner. Proof of death is one of the
following received at the Annuity Service Office:
(a) A certified copy of a death certificate.
(b) A certified copy of a decree of a court of
competent jurisdiction as to the finding of death.
(c) Any other proof satisfactory to us.
PART 5 PAYMENTS
- --------------------------------------------------------------------------------
GENERAL All Payments under this Contract are payable at our
Annuity Service Office or such other place as we may
designate. The minimum initial Payment is $25,000.
Minimum subsequent Payments must be $1,000 with an
exception for qualified plans where minimum subsequent
Payments must be $30.00. Payments may be made at any
time. If a Payment would cause the Contract Value to
exceed $1,000,000, or the Contract Value already
exceeds $1,000,000, no additional Payments will be
accepted without our prior approval.
NONPAYMENT OF PAYMENTS If, prior to the Maturity Date, no Payments are made
FOR TWO YEARS for two consecutive Contract Years and if both:
(a) the total Payments made, less partial withdrawals,
are less than $2,000; and
(b) the Contract Value at the end of such two year
period is less than $2,000;
We may cancel the Contract and pay you the Contract
Value (measured as of the Valuation Period during which
the cancellation occurs), less the Debt and Annual
Administration Fee.
ALLOCATION OF NET When we receive Payments, the Net Payments will be
PAYMENTS allocated among Investment Options in accordance with
the allocation percentages shown on the Contract
Specifications Page. You may change the allocation of
subsequent Net Payments at any time, without charge, by
giving us written notice.
7
<PAGE> 16
PART 6 VARIABLE ACCOUNT PROVISIONS
- --------------------------------------------------------------------------------
INVESTMENT ACCOUNT We will establish a separate Investment Account for you
for each Investment Option to which you allocate
amounts. The Investment Account represents the number
of your Accumulation Units in an Investment Option.
INVESTMENT ACCOUNT The Investment Account Value of an Investment Account
VALUE is determined by (a) times (b) where:
(a) equals the number of Accumulation Units credited
to the Investment Account, and
(b) equals the value of the appropriate Accumulation
Unit.
ACCUMULATION UNITS We will credit Net Payments to your Investment Accounts
in the form of Accumulation Units. The number of
Accumulation Units to be credited to each Investment
Account of the Contract will be determined by dividing
the Net Payment allocated to that Investment Account by
the Accumulation Unit value for that Investment
Account. Accumulation Units will be adjusted for any
transfers and will be canceled on payment of a Death
Benefit, withdrawal, maturity or assessment of certain
charges based on their value for the Valuation Period
in which such transaction occurs.
VALUE OF ACCUMULATION The Accumulation Unit value for any Valuation Period is
UNIT determined by multiplying the Accumulation Unit value
for the immediately preceding Valuation Period by the
"net investment factor" for the Investment Account for
the Valuation Period for which the value is being
determined. The value of an Accumulation Unit may
increase, decrease or remain the same from one
Valuation Period to the next.
NET INVESTMENT FACTOR The net investment factor for an Investment Account is
an index that measures the investment performance of a
Sub-Account from one Valuation Period to the next. The
net investment factor for any Valuation Period is
determined by dividing (a) by (b) and subtracting (c)
from the result where:
(a) is the net result of:
(1) the net asset value per share of a Portfolio
share held in the Sub-Account determined as
of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or
capital gain distributions made by the
Portfolio on shares held in the Sub-Account
if the "ex-dividend" date occurs during the
current Valuation Period, and
(b) is the net asset value per share of a Portfolio
share held in the Sub-Account determined as of the
end of the immediately preceding Valuation Period,
and
(c) is the Asset Fee as defined in Part 10, Fees and
Deductions.
The net investment factor may be greater or less than
or equal to one.
PART 7 ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
VARIABLE ANNUITY The amount of the first variable annuity payment is
PAYMENTS determined by applying
8
<PAGE> 17
the portion of the Contract Value used to effect a
Variable Annuity, measured as of a date not more than
10 business days prior to the Maturity Date (minus any
applicable premium taxes), to the appropriate tables(s)
contained in this Contract. If the table in use by us
on the Maturity Date is more favorable to you, we will
use that table. Subsequent payments will be based on
the investment performance of one or more Sub-Accounts
as you select. The amount of such payments is
determined by the number of Annuity Units credited for
each Sub- Account. Such number is determined by
dividing the portion of the first payment allocated to
that Sub-Account by the Annuity Unit value for that
Sub-Account determined as of the same date that the
Contract Value to effect annuity payments was
determined. This number of Annuity Units for each
Sub-Account is then multiplied by the appropriate
Annuity Unit value for each subsequent determination
date, which is a uniformly applied date not more than
10 business days before the payment is due.
MORTALITY AND EXPENSE We guarantee that the dollar amount of each variable
GUARANTEE annuity payment will not be affected by changes in
mortality and expense experience.
ANNUITY UNIT VALUE The value of an Annuity Unit for each Sub-Account for
any Valuation Period is determined as follows:
(a) The net investment factor for the Sub-Account for
the Valuation Period for which the Annuity Unit
value is being calculated is multiplied by the
value of the Annuity Unit for the preceding
Valuation Period; and
(b) The result is adjusted to compensate for the
interest rate assumed in the tables used to
determine the first variable annuity payment.
The dollar value of Annuity Units may increase,
decrease or remain the same from one Valuation Period
to the next.
FIXED ANNUITY PAYMENTS The amount of each fixed annuity payment is determined
by applying the portion of the Contract Value used to
effect a Fixed Annuity measured as of a date not more
than 10 business days prior to the Maturity Date (minus
any applicable premium taxes) to the appropriate table
contained in this Contract. If the table in use by us
on the Maturity Date is more favorable to you, we will
use that table.
We guarantee the dollar amount of fixed annuity
payments.
PART 8 TRANSFERS
- --------------------------------------------------------------------------------
TRANSFERS Before the Maturity Date you may transfer amounts among
Investment Accounts of the Contract. There is no
transaction charge for transfers. Amounts will be
canceled from the Investment Account from which amounts
are transferred and credited to the Investment Account
to which amounts are transferred. We will effect such
transfers so that the Contract Value on the date of
transfer will not be affected by the transfer. We
reserve the right to limit, upon notice, the maximum
number of transfers you may make per Contract Year to
one per month or six at any time within a Contract
Year. You must transfer at least $300 or, if less, the
entire amount in the Investment Account each time you
make a transfer. If, after the transfer, the amount
remaining in the Investment Account from which the
transfer is made is less than $100, then we will
transfer the entire amount instead of the requested
amount.
9
<PAGE> 18
We reserve the right to defer the transfer privilege at
any time that we are unable to purchase or redeem
shares of the Trust Portfolios. In addition, in
accordance with applicable law, the Company reserves
the right to modify or terminate the transfer privilege
at any time.
Once variable annuity payments have begun, you may
transfer all or part of the investment upon which your
variable annuity payments are based from one
Sub-Account to another. To do this, we will convert the
number of variable Annuity Units you hold in the
Sub-Account from which you are transferring to a number
of variable Annuity Units of the Sub-Account to which
you are transferring so that the amount of a variable
annuity payment, if it were made at that time, would
not be affected by the transfer. After that, your
variable annuity payments will reflect changes in the
values of your new variable Annuity Units. You must
give us notice at least 30 days before the due date of
the first variable annuity payment to which the
transfer will apply. We reserve the right to limit,
upon notice, the maximum number of transfers you may
make, per Contract Year after variable annuity payments
have begun, to four.
After the Maturity Date, transfers will not be allowed
from a fixed to a variable Annuity Option, or from a
variable to a fixed Annuity Option.
PART 9 WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
CONTRACT VALUE Your Contract Value is equal to the total of the
Investment Account Values and, if applicable, any
amount in the Loan Account attributable to the
Contract.
PAYMENTS OF WITHDRAWALS You may withdraw part or all of the Contract Value,
less any Debt, at any time before the earlier of your
death or the Maturity Date by sending us a written
request. We will pay all withdrawals within seven days
of receipt at the Annuity Service Office subject to
postponement in certain circumstances, as specified
below.
SUSPENSION OF PAYMENTS We may defer the right of withdrawal, or postpone the
date of payment, from the Investment Accounts for any
period when: (1) the New York Stock Exchange is closed
(other than customary weekend and holiday closings);
(2) trading on the New York Stock Exchange is
restricted; (3) an emergency exists as a result of
which disposal of securities held in the Variable
Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the
Variable Account's net assets; or (4) the Securities
and Exchange Commission, by order, so permits for the
protection of security holders; provided that
applicable rules and regulations of the Securities and
Exchange Commission shall govern as to whether the
conditions described in (2) and (3) exist.
TOTAL WITHDRAWAL Upon receipt of your request to withdraw all of your
Contract Value, we will terminate the Contract and pay
you the Contract Value less, any applicable Debt,
Withdrawal Charges and the Annual Administration Fee.
PARTIAL WITHDRAWAL If you are withdrawing part of the Contract Value, you
should specify the amount that should be withdrawn from
each Investment Option of the Contract. If you do not
specify, the requested amount will be withdrawn from
the Investment Accounts on a pro rata basis.
We will deduct the Withdrawal Charge, if applicable,
from the Contract Value remaining after payment of the
requested amount.
10
<PAGE> 19
WITHDRAWAL CHARGE If a withdrawal is made from the Contract before the
Maturity Date, a Withdrawal Charge (contingent deferred
sales charge) may be assessed against Payments that
have been in your Contract for less than 3 years. No
Withdrawal Charge will apply to Payments being
withdrawn that have been in the Contract for 3 or more
years. The amount of the Withdrawal Charge and when it
is assessed is discussed below:
(1) The free withdrawal amount is defined as the
greater of:
(a) the excess of the Contract Value on the date
of withdrawal over the unliquidated Payments,
or
(b) the excess of (i) over (ii), where:
(i) equals 10% of total Payments,
(ii) equals 100% of all prior partial
withdrawals, in that Contract Year.
The free withdrawal amount may be withdrawn free
of a Withdrawal Charge.
(2) If a withdrawal is made for an amount greater than
the free withdrawal amount, Payments will be
liquidated on a first-in-first-out basis. We will
liquidate Payments in the order such Payments were
made: the oldest unliquidated Payment first, the
next Payment second, etc...until all Payments have
been liquidated.
(3) A 3% Withdrawal Charge will be assessed against
Payments liquidated that have been in the Contract
for less than 3 years.
(4) The Withdrawal Charge is deducted from the
Contract Value remaining after you are paid the
amount requested, except in the case of a complete
withdrawal when it is deducted from the amount
otherwise payable. In the case of a partial
withdrawal, the amount requested from an
Investment Account may not exceed the value of
that Investment Account less any applicable
Withdrawal Charge.
(5) In no event will the aggregate Withdrawal Charge
be greater than 3% of the total Payments made.
REQUENCY AND AMOUNT OF You may make as many partial withdrawals as you wish.
PARTIAL WITHDRAWAL Any withdrawal from an Investment Account of the
Contract must be at least $300 or the entire balance of
the Investment Account, if less. If after the
withdrawal, the amount remaining in the Investment
Account is less than $100, then we will consider the
withdrawal request to be a request for withdrawal of
the entire amount held in the Investment Account. If a
partial withdrawal would reduce the Contract Value to
less than $300, then we will treat the partial
withdrawal request as a total withdrawal of the
Contract Value.
PART 10 FEES AND DEDUCTIONS
- --------------------------------------------------------------------------------
ASSET FEE To compensate us for assuming mortality and expense
risks, and certain administration expenses, we deduct
from each Sub-Account a fee each Valuation Period at an
annual rate of 1.65%. A portion of this Asset Fee may
also be used to reimburse us for distribution expenses.
This fee is reflected in the Net Investment Factor used
to determine the value of Accumulation Units and
Annuity Units of the Contract.
ANNUAL ADMINISTRATION We reserve the right to impose a $30 Annual
FEE Administration Fee on each
11
<PAGE> 20
Contract Anniversary prior to the Maturity Date any
time the Contract Value is less than $10,000 as a
result of a partial withdrawal. The Annual
Administration Fee will be withdrawn from each
Investment Option in the same proportion that the value
of the Investment Accounts of each Investment Option
bears to the Contract Value. If the Contract Value is
totally withdrawn on any date other than the Contract
Anniversary, we will deduct the full amount of the $30
Annual Administration Fee from the amount paid.
TAXES We reserve the right to charge certain taxes against
your Payments (either at the time of payment or
liquidation), Contract Value, payment of Death Benefits
or annuity payments, as appropriate. Such taxes may
include any premium taxes or other taxes levied by any
government entity which we, in our sole discretion,
determine have resulted from the establishment or
maintenance of the Variable Account, or from the
receipt by us of Payments, or from the issuance of this
Contract, or from the commencement or continuance of
annuity payments under this Contract.
PART 11 LOAN PROVISION (CERTAIN QUALIFIED CONTRACTS ONLY)
- --------------------------------------------------------------------------------
GENERAL This loan provision applies only to certain Qualified
Contracts. All provisions and terms of a loan are
included in the Qualified Plan Endorsement, if
attached.
PART 12 PAYMENT OF CONTRACT BENEFITS
- --------------------------------------------------------------------------------
GENERAL Benefits payable under this Contract may be applied in
accordance with one or more of the Annuity Options
described below, subject to any restrictions of
Internal Revenue Code section 72(s)
ALTERNATE ANNUITY OPTIONS Instead of settlement in accordance
with the Annuity Options described below, you may
choose an alternate form of settlement acceptable to
us.
DESCRIPTION OF ANNUITY Option 1: Life Annuity
OPTIONS
(a) Life Non-Refund. We will make payments during the
lifetime of the Annuitant. No payments are due
after the death of the Annuitant.
(b) Life 10-Year Certain. We will make payments for 10
years and after that during the lifetime of the
Annuitant. No payments are due after the death of
the Annuitant or, if later, the end of the 10-year
period certain.
Option 2: Joint and Survivor Life Annuity
The second Annuitant named shall be referred to as the
Co-Annuitant.
(a) Joint and Survivor Non-Refund. We will make
payments during the joint lifetime of the
Annuitant and Co-Annuitant. Payments will then
continue during the remaining lifetime of the
survivor. No payments are due after the death of
the last survivor of the Annuitant and
Co-Annuitant.
(b) Joint and Survivor with 10-Year Certain. We
will make payments for 10
12
<PAGE> 21
years and after that during the joint lifetime of
the Annuitant and Co-Annuitant. Payments will then
continue during the remaining lifetime of the
survivor. No payments are due after the death of
the survivor of the Annuitant and Co-Annuitant or,
if later, the end of the 10-year period certain.
ANNUITY PAYMENT RATES The annuity payment rates on the attached tables show,
that for each $1,000 applied, the dollar amount of both
(a) the first monthly variable annuity payment based on
the assumed interest rate of 3% and (b) the monthly
fixed annuity payment, when this payment is based on
the minimum guaranteed interest rate of 3% per year.
The annuity payment rates for payments made on a less
frequent basis (quarterly, semiannual or annual) will
be quoted by us upon request. The annuity payment rates
are based on the 1983 Table A projected at Scale G with
interest at the rate of 3% per annum and assume births
in year 1942. The amount of each annuity payment will
depend upon the sex and adjusted age of the Annuitant,
the Co-Annuitant, if any, or other payee. The adjusted
age is determined from the actual age nearest birthday
at the time the first monthly annuity payment is due,
as follows:
<TABLE>
<CAPTION>
CALENDAR YEAR OF BIRTH ADJUSTMENT TO ACTUAL AGE
---------------------- -----------------------
<S> <C>
1899 - 1905 +6
1906 - 1911 +5
1912 - 1918 +4
1919 - 1925 +3
1926 - 1932 +2
1933 - 1938 +1
1939 - 1945 +0
1946 - 1951 -1
1952 - 1958 -2
1959 - 1965 -3
1966 - 1972 -4
1973 - 1979 -5
1980 - 1986 -6
1987+ -7
</TABLE>
The dollar amount of annuity payment for any age or
combination of ages not shown following or for any
other form of Annuity Option agreed to by us will be
quoted on request.
13
<PAGE> 22
AMOUNT OF FIRST MONTHLY PAYMENT
PER $1000 OF CONTRACT VALUE
OPTION 1: LIFE ANNUITY
<TABLE>
<CAPTION>
Option 1(A): Non-Refund Option 1(B): 10-Year Certain
----------------------------------------------------- ------------------------------------------------------
Adjusted Age of Adjusted Age of
Annuitant Male Female Annuitant Male Female
----------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 4.23 3.83 55 4.19 3.82
60 4.64 4.15 60 4.57 4.12
65 5.20 4.57 65 5.05 4.51
70 5.94 5.13 70 5.65 5.02
75 6.91 5.91 75 6.35 5.67
80 8.21 6.98 80 7.13 6.45
85 9.94 8.47 85 7.90 7.29
</TABLE>
OPTION 2: JOINT AND SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
Option 2(A): Non-Refund
Age of Co-Annuitant
---------------- ---------------------------------------------------------------------------------
Adjusted
Age of Male 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
---------------- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 3.24 3.38 3.53 3.69 3.83
60 3.40 3.58 3.78 3.98 4.16
65 3.61 3.85 4.10 4.36 4.61
70 3.88 4.19 4.53 4.88 5.20
75 4.23 4.64 5.10 5.57 6.00
80 4.70 5.26 5.88 6.51 7.06
85 5.34 6.09 6.94 7.76 8.43
</TABLE>
<TABLE>
<CAPTION>
Option 2(B): 10 Year Certain
Age of Co-Annuitant
---------------- ---------------------------------------------------------------------------------
Adjusted
Age of Male 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
---------------- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 3.24 3.38 3.53 3.69 3.83
60 3.40 3.58 3.78 3.98 4.16
65 3.61 3.85 4.10 4.36 4.59
70 3.88 4.18 4.52 4.86 5.16
75 4.23 4.63 5.07 5.50 5.86
80 4.68 5.21 5.78 6.30 6.69
85 5.27 5.95 6.62 7.18 7.56
--------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 23
Monthly installments for ages not shown will be furnished on request
This page intentionally left blank
15
<PAGE> 24
- -------------------------------------------------------------------------------
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA
- --------------------------------------------------------------------------------
<PAGE> 25
Manulife Financial and the block design are registered service marks of The
Manufacturers Life Insurance Company and are used by it and its subsidiaries.
.
<PAGE> 1
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA
- --------------------------------------------------------------------------------
EXECUTIVE OFFICE: ANNUITY SERVICE OFFICE: HOME OFFICE
116 Huntington Avenue P.O. Box 9230 Wilmington, Delaware
Boston, MA 02116 Boston, MA 02205-9230
1-800-344-1029
This is a Legal Contract - Read it Carefully.
We Agree to pay the benefits of this Contract in accordance with its
terms.
This Contract is issued in consideration of the Application and the Purchase
Payments.
TEN DAY RIGHT TO REVIEW
The Contract Owner may cancel the Contract by returning it to our Annuity
Service Office or agent at any time within 10 days after receipt of the
Contract. Within 7 days of receipt of the Contract by us, we will pay to the
Contract Owner an amount equal to the sum of (i) the difference between the
Purchase Payments paid and the net Purchase Payments, and (ii) the Contract
Value computed at the end of the Valuation Period during which the Contract is
received by us.
When the Contract is issued as an individual retirement annuity, during the
first 7 days of this TEN DAY RIGHT TO REVIEW period, we will return all Purchase
Payments if this is greater than the amount payable under the TEN DAY RIGHT TO
REVIEW.
Signed for the Company at its Executive Office, Boston, Massachusetts, on the
Contract Date.
DETAILS OF VARIABLE ACCOUNT PROVISIONS ON PAGE 8
Vice President President
Flexible Purchase Payment Deferred Variable Annuity
Non-Participating
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS
TO FIXED DOLLAR AMOUNT.
VENIO
<PAGE> 2
INTRODUCTION
- --------------------------------------------------------------------------------
This is a flexible purchase payment deferred variable annuity. This annuity
provides that the Contract Value will accumulate on a variable basis and annuity
payments may be either fixed or variable, or a combination of fixed and
variable. The Contract Value will vary with the investment performance of the
Variable Account.
If you select annuity payments on a variable basis, the payment amount will vary
with the investment performance of the Variable Account.
You must allocate Purchase Payments among one or more Investment Options. The
Investment Options are identified on the Application and on the Contract
Specifications Page.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Contract Specifications Page
PART 1 - DEFINITIONS 1
-----------------------------------------------------
PART 2 - GENERAL PROVISIONS 2
----------------------------------------------
PART 3 - OWNERSHIP 4
-------------------------------------------------------
PART 4 - BENEFITS 5
--------------------------------------------------------
PART 5 - PURCHASE PAYMENTS 7
-----------------------------------------------
PART 6 - VARIABLE ACCOUNT PROVISIONS 8
-------------------------------------
PART 7 - ANNUITY PROVISIONS 9
----------------------------------------------
PART 8 - TRANSFERS 9
-------------------------------------------------------
PART 9 - WITHDRAWAL PROVISIONS 10
-------------------------------------------
PART 10 - FEES AND DEDUCTIONS 11
---------------------------------------------
PART 11 - LOAN PROVISION 12
--------------------------------------------------
PART 12 - PAYMENT OF CONTRACT BENEFITS 12
------------------------------------
<PAGE> 3
SPECIFICATIONS PAGE
TYPE OF CONTRACT: NON-QUALIFIED
CONTRACT DATE: 11/06/1997 MATURITY DATE: 11/06/2017
INITIAL PURCHASE PAYMENT: $ CONTRACT NUMBER:000000005
100,000.00
INITIAL ALLOCATION OF NET PURCHASE PAYMENT: (SEE REVERSE FOR ALL
AVAILABLE OPTIONS)
INVESTMENT OPTIONS: INTEREST RATE: GUARANTEED TO:
1 YEAR FIXED 50.00% 4.00% 11/06/1998
EQUITY 50.00%
------------
TOTAL 100.00%
OWNER: JOE OWNER CO-OWNER:
ANNUITANT: JOE OWNER AGE: 77
CO-ANNUITANT: BENEFICIARY: SEE ATTACHED LIST
<PAGE> 4
AVAILABLE INVESTMENT OPTIONS
FIXED INVESTMENT OPTIONS
1 Year Fixed
VARIABLE INVESTMENT OPTIONS
Pacific Rim Emerging Markets Manufacturers Adviser Corporation
Science & Technology T. Rowe Price Associates, Inc.
International Small Cap Founders Asset Management, Inc.
Emerging Growth Warburg, Pincus Counsellors, Inc.
Pilgrim Baxter Growth Pilgrim Baxter & Associates
Small/Mid Cap Fred Alger Management, Inc.
International Stock Rowe Price-Fleming International, Inc.
Worldwide Growth Founders Asset Management, Inc.
Global Equity Morgan Stanley Asset Management Inc.
Small Company Value Rosenberg Institutional Equity Management
Growth Founders Asset Management, Inc.
Equity Fidelity Management Trust Company
Quantitative Equity Manufacturers Adviser Corporation
Blue Chip Growth T. Rowe Price Associates, Inc.
Real Estate Securities Manufacturers Adviser Corporation
Value Miller Anderson & Sherrerd, LLP
International Growth & Income J.P. Morgan Investment Management Inc.
Growth and Income Wellington Management Company, LLP
Equity-Income T. Rowe Price Associates, Inc.
Balanced Founders Asset Management, Inc.
Aggressive Asset Allocation Fidelity Management Trust Company
High Yield Miller Anderson & Sherrerd, LLP
Moderate Asset Allocation Fidelity Management Trust Company
Conservative Asset Allocation Fidelity Management Trust Company
Strategic Bond Salomon Brothers Asset Management Inc.
Global Government Bond Oechsle International Advisors, L.P.
Capital Growth Bond Manufacturers Adviser Corporation
Investment Quality Bond Wellington Management Company, LLP
U.S. Government Securities Salomon Brothers Asset Management Inc.
Money Market Manufacturers Adviser Corporation
Lifestyle Portfolios: Manufacturers Adviser Corporation
Conservative 280
Moderate 460
Balanced 640
Growth 820
Aggressive 1000
<PAGE> 5
BENEFICIARY INFORMATION
Please find below the Beneficiary Information for contract number, 000000005,
currently on file at The Manufacturers Life Insurance Company of North America:
Kathy Owner
<PAGE> 6
DEATH BENEFIT ENDORSEMENT
PART 4, BENEFITS, DEATH BENEFIT BEFORE MATURITY DATE of the Flexible Purchase
Payment Deferred Variable Annuity to which this endorsement is attached is
replaced as follows:
DEATH BENEFIT BEFORE Minimum Death Benefit. The minimum death benefit
MATURITY DATE is payable upon the death of the last surviving
Annuitant named under the Contract. The age of
the Annuitant will be the age of the youngest
Annuitant on the Contract Date.
1. If the Annuitant dies on or prior to the first of
the month following his or her 85th birthday and had
an attained age of less than 81 years on the
Contract Date, the minimum death benefit will be the
greater of:
(a) the Contract Value on the date due proof of
death is received at the Company's Annuity
Service Office, or
(b) the excess of (i) over (ii) where:
(i) equals the sum of each Purchase Payment
accumulated daily, at the equivalent of 5%
per year, starting on the date each
Purchase Payment is allocated to the
Contract, with a maximum accumulation of 2
times each Purchase Payment, over
(ii)equals the sum of each withdrawal or
annuitized amount, including any applicable
withdrawal charges, accumulated daily at
the equivalent of 5% per year, starting as
of the date of each such withdrawal or
annuitization, with a maximum accumulation
of 2 times each such withdrawal or
annuitized amount.
2. If the Annuitant dies after the first of the month
following his or her 85th birthday and had an
attained age of less than 81 years on the Contract
Date, the minimum death benefit will be determined
as the greater of:
(a) the Contract Value on the date due proof of death
is received at the Company's Annuity Service
Office, or
(b) the excess of (i) over (ii) where:
(i) equals the sum of all Purchase Payments, over
h (ii)equals the sum of any amounts deducted in
connection with partial withdrawals.
3. If the Annuitant dies and the Annuitant had an
attained age of 81 or greater on the Contract
Date, the minimum death benefit payable on due
proof of death will equal the amount payable on
total withdrawal.
Death of Annuitant (Where the Annuitant Was Not An
Owner). We will pay the minimum death benefit, less any
Debt, to the Beneficiary if the Annuitant is not an
Owner, the Annuitant dies before the Maturity Date,
there is no surviving Co-Annuitant, and all Owners are
individuals. The Beneficiary (1) may elect to receive
payment (either as a lump sum or in accordance with any
Annuity Option described in the Contract) or (2) may
continue the Contract, as its Owner, with the Contract
Value on the date of due proof of death equal to the
minimum death benefit.
Death of Owner (Who Was the Last-Surviving Annuitant).
If any Owner dies before the Maturity Date, the deceased
Owner is also the Annuitant, and there is no surviving
Co-Annuitant, we will pay the minimum death benefit,
less any Debt, to the Beneficiary. In the case of a
Non-Qualified Contract, after such Owner's death, the
beneficiary's entire interest must be
ENDORSEMENT.022
<PAGE> 7
distributed within five years unless (1) the Beneficiary
elects to receive his or her interest as an annuity
which begins within one year of the Owner's death and is
paid over the Beneficiary's life or over a period not
extending beyond the Beneficiary's life expectancy or
(2) the Beneficiary is the deceased Owner's surviving
spouse and elects to continue the Contract, as its
Owner, with the Contract Value on the date of due proof
of death equal to the minimum death benefit. For
purposes of this paragraph, in calculating the minimum
death benefit, the applicability of any withdrawal
charges (under subparagraph "3." of the definition of
"Minimum Death Benefit" above) will be made only if and
when the minimum death benefit is actually paid.
Death of Owner (Who Was Not the Last-Surviving
Annuitant). If any Owner dies before the Maturity Date
and any Annuitant survives, we will transfer the
interest in the Contract to the Successor Owner. If the
deceased Owner had not attained age 81 on the Contract
Date, the interest in the Contract equals the Contract
Value. If the deceased Owner had attained age 81 on the
Contract Date, the interest in the Contract also equals
the Contract Value, but such interest may be subject to
applicable withdrawal charges when any amounts are
actually paid. In the case of a Non-Qualified Contract,
after such Owner's death, the Successor Owner's entire
interest must be distributed within five years unless
(1) the Successor Owner elects to receive his or her
interest as an annuity which begins within one year of
the Owner's death and is paid over the Successor Owner's
life or over a period not extending beyond the Successor
Owner's life expectancy or (2) the Successor Owner is
the deceased Owner's surviving spouse and elects to
continue the Contract, as its Owner, with the Contract
Value on the date of due proof of death equal to the
interest in the Contract.
If there are surviving Owners, such surviving Owners
will be substituted for the Successor Owner in the
preceding paragraph.
Non-Natural Owners. If any Owner of a Non-Qualified
Contract is not an individual, the death or change of
any Annuitant will be treated as the "Death of Owner
(Who Was Not the Last-Surviving Annuitant)," unless the
last-surviving Annuitant has actually died in which case
the death will be treated as the "Death of Owner (Who
Was the Last-Surviving Annuitant)."
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
ENDORSEMENT.022
<PAGE> 8
FIXED INVESTMENT OPTION ENDORSEMENT
All contracts beginning with form numbers VEN10 And VISION.001 To which this
Endorsement is attached is amended as follows:
PART 1, DEFINITIONS, ACCUMULATION UNIT and INVESTMENT OPTIONS are replaced as
follows:
ACCUMULATION UNIT A unit of measure that is used to calculate the value of
the variable portion of this Contract before the
Maturity Date.
INVESTMENT OPTIONS The Investment Options made available under this
Contract are the Sub-Accounts of the Variable Account
and the fixed interest rate options as shown on the
Contract Specifications Page and application.
PART 6 - VARIABLE ACCOUNT PROVISIONS, INVESTMENT ACCOUNT, is to be added as
follows:
INVESTMENT ACCOUNT We will establish a separate Investment Account for you
for each variable Investment Option to which you
allocate amounts. The Investment Account represents the
number of your Accumulation Units in an Investment
Option.
The FIXED ACCOUNT PROVISIONS are to be added as follows:
INVESTMENT ACCOUNT We will establish a separate Investment Account for you
each time you allocate amounts to the fixed Investment
Option. Any amounts you allocate to the fixed Investment
Option on the same day will establish a new Investment
Account. Amounts invested in these Investment Accounts
will earn interest at the guaranteed rate in effect on
the date the amounts are allocated for the duration of
the guarantee period.
We will determine the guaranteed rate from time to time
for new allocations, but in no event will the minimum
guaranteed rate under a fixed Investment Account be less
than 3%.
GUARANTEE PERIODS The guarantee period will be the duration of the fixed
Investment Option measured from the date the amount is
allocated to the Investment Account. Amounts cannot be
allocated to a fixed Investment Option that would extend
the guarantee period beyond the Maturity Date. Within 3
years of the Maturity Date, no payments may be applied
to the fixed Investment Option.
RENEWALS The renewal amount is the Investment Account Value at
the end of the particular guarantee period. The renewal
amount will be automatically renewed in the fixed
Investment Option at the end of the guarantee period,
unless you specify otherwise. If renewal in the fixed
Investment Option would result in the guarantee period
for the fixed Investment Account extending beyond the
Maturity Date, the renewal amount may not be renewed in
the fixed Investment Option.
INVESTMENT ACCOUNT The amount in the Investment Accounts will accumulate at
a rate of interest determined by us and in effect on the
date the amount is allocated to the Investment Account.
The Investment Account Value is the accumulated value of
the amount invested in the Investment Account reduced by
any withdrawals, loans, transfers or charges taken from
the Investment Account.
ENDORSEMENT.025
<PAGE> 9
Investment Account.
PART 8, TRANSFERS, is modified as follows:
TRANSFERS The following paragraph is added after the second
paragraph:
Amounts may not be transferred from a fixed Investment
Account unless those amounts have been in the fixed
Investment Account for at least one year.
PART 9, WITHDRAWAL PROVISIONS, is modified as follows:
SUSPENSION OF PAYMENTS The following paragraph is added following the first
paragraph:
We may defer the right of withdrawal from the fixed
Investment Accounts for not more than six months from
the day we receive written request and the Contract, if
required. If such payments are deferred 30 days or more,
the amount deferred will earn interest at a rate not
less than 3% per year.
TOTAL WITHDRAWAL The following is added to the first paragraph: The
amount available upon Total Withdrawal will be provided
upon the Contract Owner's request.
PARTIAL WITHDRAWAL The following is added following the first paragraph:
If there are multiple Investment Accounts under a fixed
Investment Option, the requested amount from that
Investment Option must be withdrawn from those
Investment Accounts on a first-in-first-out basis. If
you do not specify, the requested amount will be
withdrawn in the following order:
(a) Variable Investment Accounts on a pro rata basis,
(b) Fixed Investment Option on a first-in-first-out
basis.
WITHDRAWAL CHARGE The following is added preceding item (2):
The free withdrawal amount will be applied to your
requested withdrawal in the following order:
(a) Variable Investment Accounts on a pro rata basis,
(b) Fixed Investment Option on a first-in-first-out
basis.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
ENDORSEMENT.025
<PAGE> 10
WITHDRAWAL CHARGE ENDORSEMENT
PART 9, WITHDRAWAL PROVISIONS, PARTIAL WITHDRAWAL and WITHDRAWAL CHARGE, of all
contracts beginning with form numbers VEN10 and VISION.001 to which this
endorsement is attached are amended as follows:
PARTIAL WITHDRAWAL The second paragraph is deleted.
WITHDRAWAL CHARGE This section is replaced in its entirety, as follows:
If a withdrawal is made from the Contract before the
Maturity Date, no withdrawal charge will be assessed
against Payments.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
ENDORSEMENT.030
<PAGE> 11
PART 1 DEFINITIONS
- --------------------------------------------------------------------------------
ACCUMULATION UNIT A unit of measure that is used to calculate the
value of your Contract before the Maturity Date.
ANNUITANT Any natural person or persons whose life is used to
determine the duration of annuity payments involving
life contingencies. If you name more than one person as
an "Annuitant", the second person named shall be
referred to as "Co-Annuitant". All provisions based on
the date of death of the "Annuitant" will be based on
the date of death of the last to survive of the
"Annuitant" or "Co-Annuitant". The "Annuitant" and
"Co-Annuitant" will be collectively referred to as
"Annuitant" in this Contract. The Annuitant is as
specified in the Application, unless changed. ANNUITY
OPTION The method selected by you for annuity payments
made by us. Unless you indicate otherwise, we will
provide variable annuity payments which will continue
for 10 years or for the life of the Annuitant, if
longer.
ANNUITY SERVICE OFFICE Any office designated by us for the receipt of Purchase
Payments and processing of Contract Owner requests.
ANNUITY UNIT A unit of measure that is used after the Maturity Date
to calculate Variable Annuity payments.
BENEFICIARY The person, persons or entity entitled to the death
benefit under this Contract upon the death of the
Annuitant. The Beneficiary is as specified in the
Application, unless changed.
CONTINGENT BENEFICIARY The person, persons or entity to become the Beneficiary
if the Beneficiary is not alive. The Contingent
Beneficiary is as specified in the Application, unless
changed.
CONTRACT ANNIVERSARY The anniversary of the Contract Date.
CONTRACT DATE The date of issue of the Contract.
CONTRACT VALUE The total of the Investment Account Values and, if
applicable, any amount in the Loan Account attributable
to the Contract.
CONTRACT YEAR The period of twelve consecutive months beginning on the
Contract Date or any anniversary thereafter.
DEBT The amount of any Loan outstanding attributable to the
Contract plus any accrued loan interest. The loan
provision is applicable to certain Qualified Contracts
only.
FIXED ANNUITY An Annuity Option with payments which are predetermined
and guaranteed as to dollar amount.
GENERAL ACCOUNT All the assets of The Manufacturers Life Insurance
Company of North America other than assets in separate
accounts.
INVESTMENT ACCOUNT An account established by us which represents your
interest in an Investment Option prior to the Maturity
Date.
INVESTMENT ACCOUNT The value of your investment in an Investment Account.
VALUE
INVESTMENT OPTIONS The Investment Options available under this Contract are
the Sub-Accounts of the Variable Account made available
to the Contract as shown on the Contract Specifications
Page.
LOAN ACCOUNT The portion of the General Account that is used for
collateral when a loan is taken.
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<PAGE> 12
MATURITY DATE The date on which annuity benefits commence. It is the
date specified on the Contract Specifications Page,
unless changed.
NET PURCHASE PAYMENT The Purchase Payment less the amount of premium tax, if
any, deducted from the Purchase Payment.
NON-QUALIFIED Contracts which are not issued under Qualified Plans.
CONTRACTS
OWNER OR CONTRACT The person, persons or entity entitled to the ownership
OWNER rights under this Contract. The Owner is as specified in
the Application, unless changed.
PORTFOLIO OR TRUST A separate portfolio of Manufacturers Investment Trust,
PORTFOLIO a mutual fund in which the Variable Account invests,
or any successor mutual fund.
PURCHASE PAYMENT An amount paid to us by you as consideration for the
benefits provided by the Contract.
QUALIFIED CONTRACTS Contracts issued under Qualified Plans.
QUALIFIED PLANS Retirement Plans which receive favorable tax treatment
under section 401, 403, 408 or 457, of the Internal
Revenue Code of 1986, as amended.
SEPARATE ACCOUNT A segregated account of The Manufacturers Life Insurance
Company of North America that is not commingled with our
general assets and obligations.
SUB-ACCOUNT(S) One or more of the Sub-Accounts of the Variable Account.
Each Sub-Account is invested in shares of a different
Trust Portfolio.
SUCCESSOR OWNER The person, persons or entity, to become the Owner if
the Owner dies prior to the Maturity Date. The Successor
Owner is as specified in the Application, unless
changed. If no Successor Owner is designated, or the
Successor Owner dies before the Owner, the Owner's
estate is the Successor Owner.
VALUATION DATE Any date on which the New York Stock Exchange is open
for business and the net asset value of a Trust
Portfolio is determined.
VALUATION PERIOD Any period from one Valuation Date to the next, measured
from the time on each such date that the net asset value
of each Portfolio is determined.
VARIABLE ACCOUNT The Manufacturers Life Insurance Company of North
America Separate Account A, which is a separate account
of The Manufacturers Life Insurance Company of North
America.
VARIABLE ANNUITY An Annuity Option with payments which: (1) are not
predetermined or guaranteed as to dollar amount, and (2)
vary in relation to the investment experience of one or
more specified Sub-Accounts.
WE AND YOU "We", "us" and "our" means The Manufacturers Life
Insurance Company of North America. "You" or "your"
means the Owner of this Contract.
PART 2 GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ENTIRE CONTRACT This Contract and any Contract endorsements and attached
copy of the Application are the entire Contract. Only
our President, Vice-President or Secretary may agree to
change or waive any provisions of the Contract. The
change or waiver must be in writing.
We will not change or modify this Contract without your
consent except as may be required to make it conform to
any applicable law or regulation or
2
<PAGE> 13
any ruling issued by a government agency. The benefits
and values available under this Contract are not less
than the minimum required by any statute of the state in
which the Contract is issued. We have filed a detailed
statement of the method used to calculate the benefits
and values with the Department of Insurance in the state
in which the Contract is issued, if required by law.
BENEFICIARY The Beneficiary is the person, persons or entity to whom
benefits will be paid upon death of the Annuitant.
Unless otherwise indicated, the Beneficiary will be
revocable. A revocable Beneficiary may be changed by
you. If changed, the Beneficiary is as shown in the
latest change. Prior to the Maturity Date, if no
Beneficiary survives the Annuitant, you or your estate
will be the Beneficiary. The interest of any revocable
Beneficiary is subject to that of any assignee.
If more than one Beneficiary is designated, the interest
of a Beneficiary who dies before any other Beneficiary
will pass to the surviving Beneficiaries in proportion
to their share in the benefits unless otherwise
provided.
CHANGE IN MATURITY Prior to the Maturity Date, you may change the Maturity
DATE Date by written request at least one month before both
the previously specified Maturity Date and the new
Maturity Date. After the election, the new Maturity Date
will become the Maturity Date. The maximum Maturity
Date, subject to applicable state law, will be the later
of the first of the month following the Annuitant's
eighty-fifth birthday or the first month following the
tenth Contract Anniversary. Any extension of the
Maturity Date beyond the maximum Maturity Date will be
allowed only with our prior approval.
ASSIGNMENT You may assign this Contract at any time during the
lifetime of the Annuitant and prior to the Maturity
Date. No assignment will be binding on us unless it is
written in a form acceptable to us and received at our
Annuity Service Office. We will not be liable for any
payments made or actions we take before the assignment
is accepted by us. An absolute assignment will revoke
the interest of any revocable Beneficiary. We will not
be responsible for the validity of any assignment. A
Qualified Contract may not be assigned to any person
other than the employer.
CLAIMS OF CREDITORS To the extent permitted by law, no payments under this
Contract will be subject to the claims of your, the
Beneficiary's or the Annuitant's creditors.
MISSTATEMENT AND We may require proof of age or survival of any person
PROOF OF AGE OR upon whose age or survival any payments depend. If the
SURVIVAL age of the Annuitant has been misstated, the benefits
will be those which the Purchase Payments would have
provided for the correct age. If we have made incorrect
annuity payments, the amount of any underpayment will be
paid immediately. The amount of any overpayment will be
deducted from future annuity payments.
ADDITION, DELETION OR We reserve the right, subject to compliance with
SUBSTITUTION OF applicable law, to make additions to, deletions from, or
INVESTMENT OPTIONS substitutions for the Portfolio shares that are held by
the Variable Account or that the Variable Account may
purchase. We reserve the right to eliminate the shares
of any of the eligible Portfolios and to substitute
shares of another Portfolio of the Trust, or of another
open-end registered investment company, if the shares of
any eligible Portfolio are no longer available for
investment, or if in our judgment further investment in
any eligible Portfolio should become inappropriate in
view of the purposes of the Variable Account. We will
not substitute any shares attributable to your interest
in a Sub-Account without notice to you and prior
approval of the Securities and Exchange Commission to
the extent required by the Investment Company Act of
1940. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for
other
3
<PAGE> 14
series or classes of contracts, or from effecting a
conversion between shares of another open-end investment
company. We reserve the right, subject to compliance
with applicable law, to establish additional
Sub-Accounts which would invest in shares of a new
Portfolio of the Trust or in shares of another open-end
investment company. We also reserve the right, subject
to compliance with applicable law, to eliminate existing
Sub-Accounts, to combine Sub-Accounts or to transfer
assets in a Sub-Account to another Separate Account
established by us or an affiliated company. In the event
of any such substitutions or changes, we may, by
appropriate endorsement, make such changes in this and
other Contracts as may be necessary or appropriate to
reflect such substitutions or changes. If deemed by us
to be in the best interests of persons having voting
rights under the Contracts, the Variable Account may be
operated as a management company under the Investment
Company Act of 1940 or it may be deregistered under such
Act in the event such registration is no longer
required.
NON-PARTICIPATING Your Contract is non-participating and will not share in
our profits or surplus earnings. We will pay no
dividends on your Contract.
REPORTS At least once each year we will send you a report
containing information required by the Investment
Company Act of 1940 and applicable state law.
INSULATION The portion of the assets of the Variable Account equal
to the reserves and other contract liabilities with
respect to such account are not chargeable with
liabilities arising out of any other business we may
conduct. Moreover, the income, gains and losses,
realized or unrealized, from assets allocated to the
Variable Account shall be credited to or charged against
such account without regard to our other income, gains
or losses.
OWNERSHIP OF ASSETS We shall have exclusive and absolute ownership and
control of our assets, including the assets of the
Variable Account.
CURRENCY AND PLACE OF All payments made to or by us shall be made in the
PAYMENTS lawful currency of the United States of America.
Payments to us or by us shall be made at the Annuity
Service Office or elsewhere if we consent.
NOTICES AND ELECTIONS To be effective, all notices and elections you make
under this Contract must be in writing, signed by you
and received by us at our Annuity Service Office. Unless
otherwise provided, all notices, requests and elections
will be effective when received by us, complete with all
necessary information and your signature, at our Annuity
Service Office.
GOVERNING LAW This Contract will be governed by the laws of the
jurisdiction where your Application is signed.
PART 3 OWNERSHIP
- --------------------------------------------------------------------------------
GENERAL During the Annuitant's lifetime and prior to the
Maturity Date, the Owner of this Contract shall be the
person so named in the Application or the latest change
filed with us. On and after the Maturity Date, the
Annuitant is the Owner of the Contract. After the
Annuitant's death, the Beneficiary is the Owner of the
Contract.
CHANGE OF OWNER, Subject to the rights of an irrevocable Beneficiary, you
ANNUITANT, BENEFICIARY may change the Owner, Annuitant, or Beneficiary during
the Annuitant's lifetime by written request in a form
acceptable to us and which is received at our Annuity
Service Office. The Annuitant may not be changed after
the Maturity Date. You need not send us the Contract
unless we request it. Any change must
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<PAGE> 15
be approved by us. If approved, it will take effect on
the date you signed the request. We will not be liable
for any payments or actions we take before the change is
approved. In the case of the Qualified Contracts,
ownership of the Contract generally may not be
transferred except by the trustee of an exempt
employees' trust which is part of a retirement plan
qualified under section 401 of the Internal Revenue
Code. Subject to the foregoing, a Qualified Contract may
not be sold, assigned, transferred, discounted or
pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to
any person other than the employer.
PART 4 BENEFITS
- --------------------------------------------------------------------------------
ANNUITY BENEFITS We will pay a monthly income to the Annuitant, if
living, on the Maturity Date. Payments can be fixed or
variable, or a combination of fixed and variable.
Annuity benefits will commence on the Maturity Date and
continue for the period of time provided for under the
Annuity Option selected.
We may pay the Contract Value, less Debt, on the
Maturity Date in one lump sum if the monthly income is
less than $20.
On or before the Maturity Date you must select how the
Contract Value will be used to provide the monthly
income. You may select a Fixed or Variable Annuity.
If a Variable Annuity is used, the amount of the first
monthly annuity payment will be obtained from the
appropriate option table under the "Payment of Contract
Benefits" section. Subsequent monthly annuity payments
will vary based on the investment experience of the
Sub-Account(s) used to effect the annuity. The method
used to calculate the amount of the initial and
subsequent payments is described under the "Variable
Annuity Payments" Section of Part 7.
If a Fixed Annuity is used, the portion of the Contract
Value used to effect a Fixed Annuity will be applied to
the appropriate table contained in this Contract. If the
table in use by us on the Maturity Date is more
favorable to you, we will use that table. We guarantee
the dollar amount of fixed annuity payments.
If on the Maturity Date you have not selected an Annuity
Option, we will provide variable annuity payments which
will continue for ten years or for the life of the
Annuitant, if longer. Such variable annuity payments
will be based on the allocation of your Contract Value
among the Sub-Account(s) at the time the first variable
annuity payment is determined as described under the
"Variable Annuity Payments" Section of Part 7.
DEATH BENEFIT BEFORE Minimum Death Benefit. The minimum death benefit is
MATURITY DATE payable upon the death of the last surviving Annuitant
named under the Contract. The age of the Annuitant will
be the age of the youngest Annuitant on the Contract
Date.
i) If the Annuitant dies on or prior to the first of
the month following his or her 85th birthday and
had an attained age of less than 81 years on the
Contract Date, the minimum death benefit will be
the greater of:
(1) the Contract Value on the date due proof of
death is received at the Company's Annuity
Service Office, or
(2) the excess of:
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<PAGE> 16
(a) the sum of each Purchase Payment
accumulated daily, at the equivalent of 5%
per year, starting on the date each
Purchase Payment is allocated to the
Contract, with a maximum accumulation of 2
times each Purchase Payment, over
(b) the sum of each withdrawal or annuitized
amount, including any applicable withdrawal
charges, accumulated daily at the
equivalent of 5% per year, starting as of
the date of each such withdrawal or
annuitization, with a maximum accumulation
of 2 times each such withdrawal or
annuitized amount.
ii) If the Annuitant dies after the first of the month
following his or her 85th birthday or had attained
age 81 or greater on the Contract Date, the
minimum death benefit payable on due proof of
death will equal the amount payable on total
withdrawal.
Death of Annuitant (Where The Annuitant Was Not An
Owner). We will pay the minimum death benefit, less any
Debt, to the Beneficiary if the Annuitant is not an
Owner, the Annuitant dies before the Maturity Date,
there is no surviving Co-Annuitant, and all Owners are
individuals. The Beneficiary (1) may elect to receive
payment (either as a lump sum or in accordance with any
Annuity Option described in the Contract) or (2) may
continue the Contract, as its Owner, with the Contract
Value on the date of due proof of death equal to the
minimum death benefit.
Death Of Owner (Who Was The Last-Surviving Annuitant).
If any Owner dies before the Maturity Date, the deceased
Owner is also the Annuitant, and there is no surviving
Co-Annuitant, we will pay the minimum death benefit,
less any Debt, to the Beneficiary. In the case of a
Non-Qualified Contract, after such Owner's death, the
beneficiary's entire interest must be distributed within
five years unless (1) the Beneficiary elects to receive
his or her interest as an annuity which begins within
one year of the Owner's death and is paid over the
Beneficiary's life or over a period not extending beyond
the Beneficiary's life expectancy or (2) the Beneficiary
is the deceased Owner's surviving spouse and elects to
continue the Contract, as its Owner, with the Contract
Value on the date of due proof of death equal to the
minimum death benefit. For purposes of this paragraph,
in calculating the minimum death benefit, the
applicability of any withdrawal charges (under
subparagraph "(ii)" of the definition of "Minimum Death
Benefit" above) will be made only if and when the
minimum death benefit is actually paid.
Death Of Owner (Who Was Not The Last-Surviving
Annuitant). If any Owner dies before the Maturity Date
and any Annuitant survives, we will transfer the
interest in the Contract to the Successor Owner. If the
deceased Owner had not attained age 81 on the Contract
Date, the interest in the Contract equals the Contract
Value. If the deceased Owner had attained age 81 on the
Contract Date, the interest in the Contract also equals
the Contract Value, but such interest may be subject to
applicable withdrawal charges when any amounts are
actually paid. In the case of a Non-Qualified Contract,
after such Owner's death, the Successor Owner's entire
interest must be distributed within five years unless
(1) the Successor Owner elects to receive his or her
interest as an annuity which begins within one year of
the Owner's death and is paid over the Successor Owner's
life or over a period not extending beyond the Successor
Owner's life expectancy or (2) the Successor Owner is
the deceased Owner's surviving spouse and elects to
continue the Contract, as its Owner, with the Contract
Value on the date
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<PAGE> 17
of due proof of death equal to the interest in the
Contract.
If there are surviving Owners, such surviving Owners
will be substituted for the Successor Owner in the
preceding paragraph.
Non-Natural Owners. If any Owner of a Non-Qualified
Contract is not an individual, the death or change of
any Annuitant will be treated as the "Death of Owner
(Who Was Not the Last-Surviving Annuitant)," unless the
last-surviving Annuitant has actually died in which case
the death will be treated as the "Death of Owner (Who
Was the Last-Surviving Annuitant)."
DEATH BENEFIT ON OR If annuity payments have been selected based on an
AFTER MATURITY DATE Annuity Option providing for payments for a guaranteed
period, and the Annuitant dies on or after the Maturity
Date, we will make the remaining guaranteed payments to
the Beneficiary. Such payments will be made as rapidly
as under the method of distribution being used as of the
date of the Annuitant's death. If no Beneficiary is
living, we will commute any unpaid guaranteed payments
to a single sum (on the basis of the interest rate used
in determining the payments) and pay that single sum to
the estate of the last to die of the Annuitant and the
Beneficiary.
SECTION 72(s) The provisions of Death Benefit Before Maturity Date and
Death Benefit on or After Maturity Date above, shall be
interpreted so as to comply with the requirements of
Section 72(s) of the Internal Revenue Code.
DUE PROOF OF DEATH Due proof of death is required upon the death of the
Annuitant or the Owner. Due proof of death is one of the
following received at the Annuity Service Office within
1 year of the date of death:
(a) A certified copy of a death certificate.
(b) A certified copy of a decree of a court of competent
jurisdiction as to the finding of death.
(c) Any other proof satisfactory to us.
Death benefits will be paid within 7 days of receipt of
due proof of death, accompanied by appropriate
distribution instructions.
PART 5 PURCHASE PAYMENTS
- --------------------------------------------------------------------------------
GENERAL All Purchase Payments under this Contract are payable at
our Annuity Service Office or such other place as we may
designate.
The minimum initial Purchase Payment is $25,000. Minimum
subsequent Purchase Payments must be $1,000 with an
exception for qualified plans where minimum subsequent
Purchase Payments must be $30.00. Purchase Payments may
be made at any time. If a Purchase Payment would cause
the Contract Value to exceed $1,000,000, or the Contract
Value already exceeds $1,000,000, no additional Purchase
Payments will be accepted without our prior approval.
NONPAYMENT OF PURCHASE If, prior to the Maturity Date, no Purchase Payments are
PAYMENTS FOR TWO YEARS made for two consecutive Contract Years and if both:
(a) the total Purchase Payments made, less partial
withdrawals, are less than $2,000; and
(b) the Contract Value at the end of such two year
period is less than $2,000; we may cancel the
Contract and pay you the Contract Value
(measured as of the Valuation Period during
which the cancellation occurs), less the Debt
and administration fee.
7
<PAGE> 18
ALLOCATION OF NET When we receive Purchase Payments, the Net Purchase
PURCHASE PAYMENTS Payments will be allocated among
Investment Options in accordance with the allocation
percentages shown in the Application. You may change the
allocation of subsequent Purchase Payments at any time,
without charge, by giving us written notice.
PART 6 VARIABLE ACCOUNT PROVISIONS
- --------------------------------------------------------------------------------
INVESTMENT ACCOUNT We will establish a separate Investment Account for you
for each Investment Option to which you allocate
amounts. The Investment Account represents the number of
your Accumulation Units in an Investment Option.
INVESTMENT ACCOUNT The Investment Account Value of an Investment Account is
VALUE determined by
(a) times (b) where:
(a) equals the number of Accumulation Units credited to
the Investment Account, and
(b) equals the value of the appropriate Accumulation
Unit.
ACCUMULATION UNITS We will credit Net Purchase Payments to your Investment
Accounts in the form of Accumulation Units. The number
of Accumulation Units to be credited to each Investment
Account of the Contract will be determined by dividing
the Net Purchase Payment allocated to that Investment
Account by the Accumulation Unit value for that
Investment Account. Accumulation Units will be adjusted
for any transfers and will be canceled on payment of a
death benefit, withdrawal, maturity or assessment of
certain charges based on their value for the Valuation
Period in which such transaction occurs.
VALUE OF ACCUMULATION The Accumulation Unit value for any Valuation Period is
UNIT determined by multiplying the Accumulation Unit value
for the immediately preceding Valuation Period by the
"net investment factor" for the Investment Account for
the Valuation Period for which the value is being
determined. The value of an Accumulation Unit may
increase, decrease or remain the same from one Valuation
Period to the next.
NET INVESTMENT FACTOR The net investment factor for an Investment Account is
an index that measures the investment performance of a
Sub-Account from one Valuation Period to the next. The
net investment factor for any Valuation Period is
determined by dividing (a) by (b) and subtracting (c)
from the result where:
(a) is the net result of:
1) the net asset value per share of a Portfolio
share held in the Sub-Account determined as of
the end of the current Valuation Period, plus
2) The per share amount of any dividend or capital
gain distributions made by the Portfolio on
shares held in the Sub-Account if the
"ex-dividend" date occurs during the current
Valuation Period, and
(b) is the net asset value per share of a Portfolio
share held in the Sub-Account determined as of
the end of the immediately preceding Valuation
Period, and
(c) is a factor representing the charges deducted from
the Sub-Account on a daily basis. Such factor is
equal on an annual basis to 1.65%.
The net investment factor may be greater or less than or
equal to one.
8
<PAGE> 19
PART 7 ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
VARIABLE ANNUITY The amount of the first variable annuity payment is
determined by applying the portion of the Contract Value
used to effect a Variable Annuity, measured as of a date
not more than 10 business days prior to the Maturity
Date (minus any applicable premium taxes), to the
appropriate tables(s) contained in this Contract. If the
table in use by us on the Maturity Date is more
favorable to you, we will use that table. Subsequent
payments will be based on the investment performance of
one or more Sub-Accounts as you select. The amount of
such payments is determined by the number of Annuity
Units credited for each Sub-Account. Such number is
determined by dividing the portion of the first payment
allocated to that Sub-Account by the Annuity Unit value
for that Sub-Account determined as of the same date that
the Contract Value to effect annuity payments was
determined. This number of Annuity Units for each
Sub-Account is then multiplied by the appropriate
Annuity Unit value for each subsequent determination
date, which is a uniformly applied date not more than 10
business days before the payment is due.
MORTALITY AND EXPENSE We guarantee that the dollar amount of each variable
GUARANTEE annuity payment will not be affected by changes in
mortality and expense experience.
ANNUITY UNIT VALUE The value of an Annuity Unit for each Sub-Account for
any Valuation Period is determined as follows:
(a) The net investment factor for the Sub-Account for
the Valuation Period for which the Annuity Unit
value is being calculated is multiplied by the
value of the Annuity Unit for the preceding
Valuation Period; and
(b) The result is adjusted to compensate for the
interest rate assumed in the tables used to
determine the first variable annuity payment.
The dollar value of Annuity Units may increase, decrease
or remain the same from one Valuation Period to the
next.
FIXED ANNUITY PAYMENTS The amount of each fixed annuity payment is determined
by applying the portion of the Contract Value used to
effect a Fixed Annuity measured as of a date not more
than 10 business days prior to the Maturity Date (minus
any applicable premium taxes) to the appropriate table
contained in this Contract. If the table in use by us on
the Maturity Date is more favorable to you, we will use
that table. We guarantee the dollar amount of fixed
annuity payments.
PART 8 TRANSFERS
- --------------------------------------------------------------------------------
TRANSFERS Before the Maturity Date you may transfer amounts among
Investment Accounts of the Contract. There is no
transaction charge for transfers. Amounts will be
canceled from the Investment Account from which amounts
are transferred and credited to the Investment Account
to which amounts are transferred. We will effect such
transfers so that the Contract Value on the date of
transfer will not be affected by the transfer. We
reserve the right to limit, upon notice, the maximum
number of transfers you may make per Contract Year to
one per month or six at any time within a Contract Year.
You must transfer at least $300 or, if less, the entire
amount in the Investment Account each time you make a
transfer. If, after the transfer, the amount remaining
in the Investment Account from which the transfer is
made is less than $100, then we will transfer the entire
amount instead of the requested amount.
9
<PAGE> 20
We reserve the right to defer the transfer privilege at
any time that we are unable to purchase or redeem shares
of the Trust Portfolios. In addition, in accordance with
applicable law, the company reserves the right to modify
or terminate the transfer privilege at any time.
Once variable annuity payments have begun, you may
transfer all or part of the investment upon which your
variable annuity payments are based from one Sub-Account
to another. To do this, we will convert the number of
variable Annuity Units you hold in the Sub-Account from
which you are transferring to a number of variable
Annuity Units of the Sub-Account to which you are
transferring so that the amount of a variable annuity
payment, if it were made at that time, would not be
affected by the transfer. After that, your variable
annuity payments will reflect changes in the values of
your new variable Annuity Units. You must give us notice
at least 30 days before the due date of the first
variable annuity payment to which the transfer will
apply. We reserve the right to limit, upon notice, the
maximum number of transfers you may make, per Contract
Year after variable annuity payments have begun, to
four.
PART 9 WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------
CONTRACT VALUE Your Contract Value is equal to the total of the
Investment Account Values and, if applicable, any amount
in the Loan Account attributable to the Contract.
PAYMENTS OF WITHDRAWALS You may withdraw part or all of the Contract Value, less
any Debt, at any time before the earlier of the death of
the Annuitant or the Maturity Date, by sending us a
written request. We will pay all withdrawals within
seven days of receipt at the Annuity Service Office
subject to postponement in certain circumstances, as
specified below.
SUSPENSION OF PAYMENTS We may defer the right of withdrawal, or postpone the
date of payment, from the Investment Accounts for any
period when: (1) the New York Stock Exchange is closed
(other than customary weekend and holiday closings); (2)
trading on the New York Stock Exchange is restricted;
(3) an emergency exists as a result of which disposal of
securities held in the Variable Account is not
reasonably practicable or it is not reasonably
practicable to determine the value of the Variable
Account's net assets; or (4) the Securities and Exchange
Commission, by order, so permits for the protection of
security holders; provided that applicable rules and
regulations of the Securities and Exchange Commission
shall govern as to whether the conditions described in
(2) and (3) exist.
TOTAL WITHDRAWAL If you are withdrawing all of the Contract Value, we
will deduct, if applicable, the Debt, the withdrawal
charge and the administration fee, if applicable, from
the amount otherwise payable.
PARTIAL WITHDRAWAL If you are withdrawing part of the Contract Value, you
should specify the amount that should be withdrawn from
each Investment Option of the Contract. If you do not
specify, the requested amount will be withdrawn from the
Investment Accounts on a pro rata basis.
We will deduct the withdrawal charge, if applicable,
from the Contract Value remaining after payment of the
requested amount.
WITHDRAWAL CHARGE If a withdrawal is made from the Contract before the
Maturity Date, a withdrawal charge (contingent deferred
sales charge) may be assessed
10
<PAGE> 21
against Purchase Payments that have been in your
Contract for less than 3 years. No withdrawal charge
will apply to Purchase Payments being withdrawn that
have been in the Contract for 3 or more years. The
amount of the withdrawal charge and when it is assessed
is discussed below:
1. The free withdrawal amount is defined as the greater
of:
a) the excess of the Contract Value on the date of
withdrawal over the unliquidated Purchase
Payments, or
b) 10% of total Purchase Payments minus 100% of all
prior partial withdrawals, in that Contract
Year.
The free withdrawal amount may be withdrawn free of a
withdrawal charge.
2. If a withdrawal is made for an amount greater than
the free withdrawal amount, Purchase Payments will
be liquidated on a first-in-first-out basis. We
will liquidate Purchase Payments in the order such
Purchase Payments were made: the oldest
unliquidated Purchase Payment first, the next
Purchase Payment second, etc...until all Purchase
Payments have been liquidated.
3. A 3% withdrawal charge will be assessed against
Purchase Payments liquidated that have been in the
Contract for less than 3 years.
4. The withdrawal charge is deducted from the
Contract Value remaining after you are paid the
amount requested, except in the case of a complete
withdrawal when it is deducted from the amount
otherwise payable. In the case of a partial
withdrawal, the amount requested from an
Investment Account may not exceed the value of
that Investment Account less any applicable
withdrawal charge.
5. In no event will the aggregate withdrawal charge
be greater than 3% of the total Purchase Payments
made.
FREQUENCY AND AMOUNT You may make as many partial withdrawals as you wish.
OF PARTIAL WITHDRAWAL Any withdrawal from an Investment Account of the
Contract must be at least $300 or the entire balance of
the Investment Account, if less. If after the
withdrawal, the amount remaining in the Investment
Account is less than $100, then we will consider the
withdrawal request to be a request for withdrawal of the
entire amount held in the Investment Account. If a
partial withdrawal would reduce the Contract Value to
less than $300, then we will treat the partial
withdrawal request as a total withdrawal of the Contract
Value.
PART 10 FEES AND DEDUCTIONS
- --------------------------------------------------------------------------------
ASSET FEE To compensate us for assuming mortality and expense
risks, certain administration expenses, and a proportion
of our distribution expenses, we deduct from each
Sub-Account a fee each Valuation Period at an annual
rate of 1.65%. This fee is reflected in the Net
Investment Factor used to determine the value of
Accumulation Units and Annuity Units of the Contract.
TAXES We reserve the right to charge certain taxes against
your Purchase Payments (either at the time of payment or
liquidation), Contract Value, payment of death benefits
or annuity payments, as appropriate. Such taxes may
include any premium taxes or other taxes levied by any
government entity which we, in our sole discretion,
determine have resulted from the establishment or
maintenance of the Variable Account, or from the receipt
by us of Purchase Payments, or from the issuance of this
Contract, or from the commencement or continuance of
annuity payments under this Contract.
11
<PAGE> 22
ANNUAL ADMINISTRATION We reserve the right to impose an annual $30
FEE administration fee on each Contract Anniversary prior to
the Maturity Date any time the Contract Value is less
than $10,000 as a result of a partial withdrawal. The
annual Administration Fee will be withdrawn from each
Investment Option in the same proportion that the value
of the Investment Accounts of each Investment Option
bears to the Contract Value. If the Contract Value is
totally withdrawn on any date other than the Contract
Anniversary, we will deduct the full amount of the $30
administration fee from the amount paid.
PART 11 LOAN PROVISION (QUALIFIED CONTRACTS ONLY)
- --------------------------------------------------------------------------------
GENERAL This loan provision applies only to certain Qualified
Contracts. While this Contract is in force, you may
borrow using the Contract as the sole security for the
loan. We will usually make a loan within seven days
after we receive your request, subject to the suspension
of payment provision set forth in Part 9.
LOAN VALUE The maximum loan value is 80% of the Contract Value. You
may borrow an amount up to the maximum loan value less
any existing Debt.
EFFECT OF THE LOAN Your investment in each Investment Account will be
reduced by the amount withdrawn from that Investment
Account in connection with the loan and such amount will
be transferred to the Loan Account. Unless you request
otherwise, we will withdraw the amount of the loan from
each Investment Option in the same manner as partial
withdrawals. On each Contract Anniversary the excess of
the Debt over the amount in the Loan Account
attributable to your Contract will be transferred from
the Investment Accounts to the Loan Account. Any amounts
in the Loan Account will earn interest at 4% per annum.
LOAN INTEREST The loan interest rate will be 6% per annum. Interest
will be payable in arrears on each Contract Anniversary.
Any interest not paid when due will be added to the Debt
and bear interest in the same manner.
REPAYMENT You may repay any Debt in whole or in part while this
Contract is in force. An amount equal to the amount of
loan repayment will be transferred from the Loan
Account to the Investment Options in the same proportion
as Purchase Payments are currently allocated, unless
you request otherwise. Loans must be repaid within 5
years, except for loans to acquire a principal residence
for you or your family. Repayments must be made at
least quarterly.
GRACE PERIOD If, on any date, the Debt exceeds the Contract Value,
then the Contract will be in default. In this case we
will send you a notice of default and tell you what
payment is needed to bring the Contract out of default.
You will have a 31-day grace period from the date of
mailing of such notice during which to pay the default
amount. If the required payment is not paid within the
grace period, the Contract will foreclose (terminate
without value).
PART 12 PAYMENT OF CONTRACT BENEFITS
- --------------------------------------------------------------------------------
GENERAL Benefits payable under this Contract may be applied in
accordance with one or more of the Annuity Options
described below.
ALTERNATE ANNUITY Instead of settlement in accordance with the Annuity
OPTIONS Options described below, you may choose an alternate
form of settlement acceptable to us.
12
<PAGE> 23
DESCRIPTION OF ANNUITY Option 1: Life Annuity
OPTIONS (a) Life Non-Refund. We will make payments during the
lifetime of the Annuitant. No payments are due
after the death of the Annuitant.
(b) Life 10-Year Certain. We will make payments for 10
years and after that during the lifetime of the
Annuitant. No payments are due after the death of
the Annuitant or, if later, the end of the 10-year
period certain.
Option 2: Joint and Survivor Life Annuity
(a) Joint and Survivor Non-Refund. We will make
payments during the joint lifetime of the
Annuitant and Co-Annuitant. Payments will then
continue during the remaining lifetime of the
survivor. No payments are due after the death of
the last survivor of the Annuitant and
Co-Annuitant.
(b) Joint and Survivor with 10-Year Certain. We will
make payments for 10 years and after that during
the joint lifetime of the Annuitant and
Co-Annuitant. Payments will then continue during
the remaining lifetime of the survivor. No
payments are due after the death of the survivor
of the Annuitant and Co-Annuitant or, if later,
the end of the 10-year period certain.
ANNUITY PAYMENT RATES The annuity payment rates on the attached tables show,
that for each $1,000 applied, the dollar amount of both
(a) the first monthly variable annuity payment based on
the assumed interest rate of 4% and (b) the monthly
fixed annuity payment, when this payment is based on the
minimum guaranteed interest rate of 4% per year. The
annuity payment rates for payments made on a less
frequent basis (quarterly, semiannual or annual) will be
quoted by us upon request.
The annuity payment rates are based on the 1983 Table A
projected at Scale G with interest at the rate of 4% per
annum and assume births in year 1942. The amount of each
annuity payment will depend upon the adjusted age of the
Annuitant, the Co-Annuitant, if any, or other payee. The
adjusted age is determined from the actual age nearest
birthday at the time the first monthly annuity payment
is due, as follows:
<TABLE>
<CAPTION>
CALENDAR YEAR OF BIRTH ADJUSTMENT TO ACTUAL AGE
---------------------- ------------------------
<S> <C>
1899 - 1905 +6
1906 - 1911 +5
1912 - 1918 +4
1919 - 1925 +3
1926 - 1932 +2
1933 - 1938 +1
1939 - 1945 +0
1946 - 1951 -1
1952 - 1958 -2
1959 - 1965 -3
1966 - 1972 -4
1973 - 1979 -5
1980 + -6
</TABLE>
The dollar amount of annuity payment for any age or
combination of ages not shown following or for any other
form of Annuity Option agreed to by us will be quoted on
request.
13
<PAGE> 24
AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT
PER $1000 OF CONTRACT VALUE FOR AN OWNER
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OPTION 1: LIFE ANNUITY
Option 1(A): Non-Refund Option 1(B): 10-Year Certain
--------------------------- -----------------------------
Adjusted Adjusted
Age of Age of
Annuitant Annuitant
--------------------------- -----------------------------
<S> <C> <C> <C>
55 4.83 55 4.78
60 5.24 60 5.15
65 5.79 65 5.62
70 6.35 70 6.21
75 7.51 75 6.89
80 8.81 80 7.65
85 10.57 85 8.40
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OPTION 2: JOINT AND SURVIVOR LIFE ANNUITY
Option 2(A): Non-Refund
Adjusted Adjusted Age of Co-Annuitant
Age of Oldest 10 Years 5 Years Same
Annuitant Younger Younger Age
--------- -------- ------- ----
<S> <C> <C> <C>
55 3.87 3.99 4.13
60 4.02 4.18 4.36
65 4.21 4.43 4.67
70 4.47 4.76 5.08
75 4.80 5.20 5.65
80 5.26 5.80 6.41
85 5.89 6.63 7.47
</TABLE>
<TABLE>
<CAPTION>
Option 2(B): 10-Year Certain
Adjusted Adjusted Age of Co-Annuitant
Age of Oldest 10 Years 5 Years Same
Annuitant Younger Younger Age
--------- -------- ------- ----
<S> <C> <C> <C>
55 3.87 3.99 4.13
60 4.02 4.18 4.36
65 4.21 4.43 4.66
70 4.46 4.75 5.07
75 4.80 5.18 5.61
80 5.24 5.75 6.30
85 5.82 6.47 7.13
</TABLE>
- --------------------------------------------------------------------------------
Monthly installments for ages not shown will be furnished on request.
14
<PAGE> 25
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<PAGE> 26
- --------------------------------------------------------------------------------
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NORTH AMERICA
- --------------------------------------------------------------------------------
Manulife Financial and the block design are registered service marks of The
Manufacturers Life Insurance Company and are used by it and its subsidiaries.
<PAGE> 1
FIXED ACCOUNT ENDORSEMENT
PART 7, FIXED ACCOUNT PROVISIONS, INVESTMENT ACCOUNT of all contracts to which
this Endorsement is attached is replaced as follows:
INVESTMENT ACCOUNT We will establish a separate Investment Account for you
each time you allocate amounts to a fixed Investment
Option. Amounts invested in these Investment Accounts
will earn interest at the guaranteed rate in effect on
the date the amounts are allocated for the duration of
the guarantee period.
We will determine the guaranteed rate from time to time
for Net Payments, renewal amounts and amounts
transferred to a fixed Investment Option. In no event
will the minimum guaranteed rate under a fixed
Investment Account be less than 3%.
PART 7, FIXED ACCOUNT PROVISIONS, 1-YEAR DOLLAR COST AVERAGING OPTION is added
to all contracts to which this Endorsement is attached as follows:
1-YEAR DOLLAR COST The 1-Year DCA Investment Option may be elected by the
AVERAGING (DCA) Owner to make automatic monthly transfers from a 1-Year
INVESTMENT OPTION fixed Investment Account to one or more variable
Investment Options. Only initial and subsequent Net
Payments may be allocated to the 1-Year DCA Investment
Option. Amounts may not be transferred from other
Investment Options to the 1-Year DCA Investment Option.
The automatic monthly transfer amount, "DCA amount", is
determined as follows:
(a) In the first 11 months, the DCA amount will be equal
to 1/11 of the amount allocated to the 1-Year DCA
Investment Option.
(b) At the end of the 12th month, the DCA amount will be
equal to the remaining balance in the Investment
Account.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
END.007.98 SAMPLE
<PAGE> 1
INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
Notwithstanding any provision contained therein to the contrary, the Contract to
which this Endorsement is attached is amended as follows:
OWNER AND ANNUITANT
1. The Owner must be one individual and the Annuitant. Neither the Owner nor
the Annuitant can be changed.
NONFORFEITABLE
2. The Contract is established for the exclusive benefit of the Owner or his
or her Beneficiaries and the interest of the Owner is nonforfeitable.
NONTRANSFERABLE
3. The Owner may not assign, sell, transfer, discount or pledge this Contract
as collateral for a loan or as security for the performance of any
obligation or for any other purpose (other than a transfer incident to a
divorce or separation instrument in accordance with IRC Section 408(d)(6))
to any person other than us.
MAXIMUM PAYMENTS
4. The maximum annual Payments shall not exceed the lesser of $2,000 or 100%
of compensation unless (a) such Payment qualifies as a rollover
contribution described in IRC Sections 408(d)(3), 402(c), 403(a)(4) or
403(b)(8); or (b) such Payment qualifies as a contribution made in
accordance with a Simplified Employee Pension Program as described in IRC
Section 408(k).
To the extent necessary to preserve qualification under the Internal
Revenue Code, We may refund Payments. Any refund of Payments (other than
those attributable to excess contributions) will be applied, before the
close of the calendar year following the refund, toward future Payments or
the purchase of additional benefits.
DISTRIBUTIONS DURING OWNER'S LIFE
5. The Owner's entire interest in the Contract shall be distributed as
required under IRC Section 408(b)(3) and applicable regulations. Unless
deferral is otherwise permitted under applicable regulations, the Owner's
entire interest shall be distributed no later than the "required beginning
date," or shall be distributed beginning no later than the "required
beginning date" over (a) the life of the Owner or the joint lives of the
Owner and an individual who is his or her designated beneficiary (within
the meaning of IRC Section 401(a)(9)), or (b) a period not extending beyond
the life expectancy of the Owner, or joint life and last survivor
expectancy of the Owner and the designated beneficiary.
The "required beginning date" shall mean April 1 of the calendar year
following the calendar year in which the Owner attains age 70 1/2.
If the Owner's interest is to be distributed over a period greater than one
year, then the amount to be distributed by December 31 of each year
(including the year in which the required beginning date occurs) shall be
determined in accordance with the requirements of IRC Section 401(a)(9),
including the incidental death benefit requirements of IRC Section
401(a)(9)(G), and the regulations thereunder, including the minimum
distribution incidental benefit requirement of Proposed Treasury Regulation
Section 1.401(a)(9)-2.
ANNUITY OPTIONS
ENDORSEMENT.001
<PAGE> 2
6. Only Annuity Options 1 and 2 shall be offered unless We consent to the use
of an additional option. Annuity Option 1(b) is not available for an Owner
whose life expectancy is less than 10 years. Under Annuity Options 2(a) and
2(b) the designated Co-Annuitant must be the Owner's spouse. Annuity Option
2(b) is not available for an Owner and his or her spouse where the life
expectancy of the Owner and such spouse is less than 10 years.
DISTRIBUTIONS AFTER OWNER'S DEATH
7. If an Owner dies on or after the required beginning date (or if
distributions have begun before the required beginning date as irrevocable
annuity payments), the remaining portion of such interest (if any) shall be
distributed at least as rapidly as under the method of distribution in
effect as of the Owner's death.
If the Owner dies before the required beginning date and an irrevocable
annuity distribution has not begun, the entire interest shall be
distributed by December 31 of the calendar year containing the fifth
anniversary of the Owner's death, except that
(a) if the interest is payable to an individual who is the Owner's
designated beneficiary, the designated beneficiary may elect to
receive the entire interest over the life of the designated
beneficiary or over a period not extending beyond the life
expectancy of the designated beneficiary, commencing on or before
December 31 of the calendar year immediately following the
calendar year in which the Owner died; or
(b) if the designated beneficiary is the Owner's surviving spouse,
the surviving spouse may elect to receive the entire interest
over the life of the surviving spouse or over a period not
extending beyond the life expectancy of the surviving spouse,
commencing at any date prior to the later of
(i) December 31 of the calendar year immediately following the
calendar year in which the Owner died, and
(ii) December 31 of the calendar year in which the Owner would
have attained age 70 1/2.
If the surviving spouse dies before distributions begin, the limitations of
this section shall be applied as if the surviving spouse were the Owner.
An irrevocable election of the method of distribution by a designated
beneficiary who is the surviving spouse must be made no later than the
earlier of December 31 of the calendar year containing the fifth
anniversary of the Owner's death or the date distributions are required to
begin pursuant to this provision (b).
If the designated beneficiary is the Owner's surviving spouse, the spouse
may irrevocably elect to treat the Contract as his or her own individual
retirement arrangement (IRA). This election will be deemed to have been
made if such surviving spouse (i) fails to elect that his or her interest
will be distributed in accordance with one of the preceding provisions, or
(ii) makes a rollover from the Contract.
An irrevocable election of the method of distribution by a designated
beneficiary who is not the surviving spouse must be made within one year of
the Owner's death, and if no election is made, the entire interest will be
distributed by December 31 of the calendar year containing the fifth
anniversary of the Owner's death.
In the "Death Benefit Before Maturity Date" section of part 4 of the
Contract, (a) the provision entitled "Death of Annuitant" is deleted; and
(b) in the "Death of Owner" provision, the distribution requirements of
provisions "(d)" and "(e)" are deleted. If, after the Owner's death, the
designated beneficiary dies before the Maturity Date, no Death Benefit is
payable.
LIFE EXPECTANCY CALCULATIONS
8. Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
If benefits under the Contract are payable in accordance with an Annuity
Option provided under the Contract, life expectancy shall not be
recalculated. If benefits are payable under an alternate form acceptable to
us, life expectan-
2
<PAGE> 3
cies shall not be recalculated unless annual recalculations are elected at
the time distributions are required to begin (a) by the Owner, or (b) for
purposes of distributions beginning after the Owner's death, by the
surviving spouse. Such an election shall be irrevocable as to the Owner or
the surviving spouse, and shall apply to all subsequent years.
The life expectancy of a non-spouse designated beneficiary (a) may not be
recalculated, and (b) shall be calculated using the attained age of such
designated beneficiary during the calendar year in which distributions are
required to begin pursuant to this Endorsement. Payments for any subsequent
calendar year shall be calculated based on such life expectancy reduced by
one for each calendar year which has elapsed since the calendar year life
expectancy was first calculated.
CANCELLATION FOR NONPAYMENT
9. We may cancel the Contract for nonpayment of Payments and pay you the
Contract Value (measured as of the Valuation Period during which the
cancellation occurs), less the Administration Fee (if applicable), if
(a) prior to the Maturity Date, no Payments are made for two consecutive
Contract Years; (b) the total Payments made, less any partial withdrawals,
are less than $2,000; (c) the Contract Value at the end of such two-year
period is less than $2,000; and (d) the paid-up annuity benefit at the
Maturity Date at the end of such two-year period would be less than $20 per
month.
IRC SECTION 72(s)
10. All references in the Contract to IRC Section 72(s) are deleted.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
3
<PAGE> 1
ERISA TAX-SHELTERED ANNUITY ENDORSEMENT
Notwithstanding any provision contained therein to the contrary, the Contract to
which this Endorsement is attached is amended as follows:
OWNER AND ANNUITANT
1. The Owner must be either an organization described in IRC Section
403(b)(1)(A) or an employee of such an organization. If the Owner is an
organization described in IRC Section 403(b)(1)(A), the term "Employee" as
used in this Endorsement shall mean the individual employee for whose
benefit the organization has established an annuity plan under IRC Section
403(b). Such employee shall be the Annuitant. If the Owner is an employee
of an organization described in IRC Section 403(b)(1)(A), the Annuitant
must be the same employee.
If this Contract is used as a funding mechanism for a rollover under IRC
Sections 403(b) or 408(d)(3), the Owner must be one individual, that same
individual must be the Annuitant, and the term "Employee" shall mean that
individual.
The Annuitant cannot be changed. Prior to the Maturity Date, the
Co-Annuitant can be changed, but such change shall not require any
distributions to be made under the Contract.
NONTRANSFERABLE
2. The interest of the Employee in this Contract is non-transferable within
the meaning of IRC Section 401(g) and applicable regulations and is
nonforfeitable. In particular, the Contract may not be sold, assigned,
discounted, or pledged as collateral for a loan or as security for the
performance of any obligation or for any other purpose, to any person other
than us.
PAYMENTS
3. Payments must be made by an organization described in IRC Section
403(b)(1)(A), except in the case of rollover contributions under IRC
Sections 403(b)(8) and 408(d)(3). The Employee must be an employee of such
organization.
Payments made pursuant to a salary reduction agreement shall be limited to
the extent provided in IRC Section 402(g). Payments shall not exceed the
amount allowed by IRC Section 415.
REQUIRED BEGINNING DATE
4. The Employee's entire interest in this Contract shall be distributed as
required under IRC Section 403(b)(10) and applicable regulations.
Except as otherwise provided by law, for years beginning after December 31,
1996, the term "required beginning date" means April 1 of the calendar year
following the later of (1) the calendar year in which the Employee attains
age 70 1/2, or (2) the calendar year in which the Employee retires.
However, to the extent required by law, the required beginning date means
April 1 of the calendar year following the calendar year in which the
Employee attains age 70 1/2 for an Employee who:
(a) is a 5-percent owner (as defined in IRC Section 416) of the
ENDORSEMENT.002.97
<PAGE> 2
organization described in Section 1 of this Endorsement with respect
to the plan year ending in the calendar year in which the Employee
attains age 70 1/2; and
(b) is not in a governmental plan or a church plan (as defined in IRC
Section 401(a)(9)(C)).
DISTRIBUTIONS DURING EMPLOYEE'S LIFE
5. The Employee's entire interest shall be distributed no later than the
required beginning date, or shall be distributed, beginning no later than
the required beginning date, over (a) the life of the Employee or the joint
lives of the Employee and an individual who is his or her designated
beneficiary (within the meaning of IRC Section 401(a)(9), or (b) a period
not extending beyond the life expectancy of the Employee, or the joint life
and last survivor expectancy of the Employee and the designated
beneficiary.
If the Employee's interest is to be distributed over a period greater than
one year, then the amount to be distributed by December 31 of each year
(including the year in which the required beginning date occurs) shall be
made in accordance with the requirements of IRC Section 401(a)(9),
including the incidental death benefit requirements of IRC Section
401(a)(9)(G), and the regulations thereunder, including the minimum
distribution incidental benefit requirement of Proposed Treasury Regulation
Section 1.401(a)(9)-2.
DEATH BENEFIT
6. If, in the event of the Employee's death prior to the Maturity Date, the
Death Benefit is not paid to the employer plan, it shall be paid to (1) the
surviving spouse of the Employee in the form required by section 205 of the
Employee Retirement Income Security Act of 1974 (ERISA), unless the spouse
elects otherwise in accordance with the requirements of such section 205 or
applicable regulations; or (2) if there is no surviving spouse, or if the
surviving spouse has consented in the manner required by section 205 of
ERISA, or if the applicable regulations otherwise permit, to the
Beneficiary under the Contract.
In the "Death Benefit Before Maturity Date" section of part 4 of the
Contract, the first sentence of the paragraph "Death of Annuitant" is
deleted, and the second sentence is modified to read as follows: "If any
Owner is not an individual, the death of the Annuitant (but not of the
Co-Annuitant) is treated as the death of an Owner."
DISTRIBUTIONS AFTER EMPLOYEE'S DEATH
7. If an Employee dies on or after the required beginning date (or if
distributions have begun before the required beginning date as irrevocable
annuity payments), the remaining portion of the Employee's interest (if
any) shall be distributed at least as rapidly as under the method of
distribution in effect as of the Employee's death.
If the Employee dies before the required beginning date and an irrevocable
annuity distribution has not begun, the entire interest shall be
distributed by December 31 of the calendar year containing the fifth
anniversary of the Employee's death, except that
(a) if the interest is payable to an individual who is the Employee's
designated beneficiary, the designated beneficiary may elect to
receive the entire interest over the life of the designated
beneficiary or over a period not extending beyond the life expectancy
of the designated beneficiary, commencing on or before December 31 of
the calendar year immediately following the calendar year in which the
Employee died; or
(b) if the designated beneficiary is the Employee's surviving spouse, the
surviving spouse may elect to receive the entire interest over the
life of the surviving spouse or over a period not extending beyond the
life expectancy of the surviving spouse, commencing at any date prior
to the later of
(i) December 31 of the calendar year immediately following the
calendar year in which the Employee died, and
(ii) December 31 of the calendar year in which the Employee would have
attained age 70 1/2.
2
<PAGE> 3
If the surviving spouse dies before distributions begin, the
limitations of this section shall be applied as if the surviving
spouse were the Employee.
An irrevocable election of the method of distribution by a
designated beneficiary who is the surviving spouse must be made
no later than the earlier of December 31 of the calendar year
containing the fifth anniversary of the Employee's death or the
date distributions are required to begin pursuant to this
provision (b). If no election is made, the entire interest will
be distributed in accordance with the method of distribution in
this provision (b).
An irrevocable election of the method of distribution by a designated
beneficiary who is not the surviving spouse must be made within one
year of the Employee's death. If no election is made, the entire
interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Employee's death.
In the "Death of Owner" section of the "Death Benefit Before Maturity Date"
part of the Contract, the distribution requirements of provisions "(d)" and
"(e)" are deleted. If, after the Employee's death, the designated
beneficiary dies before the Maturity Date, no Death Benefit is payable.
LIFE EXPECTANCY CALCULATIONS
8. Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
If benefits under the Contract are payable in accordance with an Annuity
Option provided under the Contract, life expectancy shall not be
recalculated. If benefits are payable under an alternate form acceptable to
us, life expectancies shall not be recalculated unless annual
recalculations are elected at the time distributions are required to begin
(a) by the Employee, or (b) for purposes of distributions beginning after
the Employee's death, by the surviving spouse. Such an election shall be
irrevocable as to the Employee or the surviving spouse, and shall apply to
all subsequent years.
The life expectancy of a non-spouse designated beneficiary (a) may not be
recalculated, and (b) shall be calculated using the attained age of such
designated beneficiary during the calendar year in which distributions are
required to begin pursuant to this Endorsement. Payments for any subsequent
calendar year shall be calculated based on such life expectancy reduced by
one for each calendar year which has elapsed since the calendar year life
in which expectancy was first calculated.
ANNUITY OPTIONS
9. Except to the extent Treasury regulations allow us to offer different
Annuity Options that are agreed to by us, only Annuity Options 1 and 2
shall be available to an Employee. All Annuity Options must meet the
requirements of IRC Section 403(b)(10), including the requirement that
payments to persons other than Employees are incidental.
Annuity Option 1(b) is not available for an Employee whose life expectancy
is less than 10 years. Under Annuity Options 2(a) and 2(b), the designated
Co-Annuitant must be the Employee's spouse. Annuity Option 2(b) is not
available for an employee and his or her spouse where the life expectancy
of the employee and such spouse is less than 10 years.
Except as hereinafter provided, only Annuity Option 2(a) is available to a
married Employee. A married Employee may elect another Annuity Option,
provided his or her spouse consents in accordance with the requirements of
section 205 of ERISA (and applicable regulations), or provided such
election is otherwise permitted under such applicable regulations. An
unmarried Employee will be deemed to have elected annuity Option 1(a)
unless he or she makes a different election in the manner required under
section 205 of ERISA (and applicable regulations).
ELECTIONS AND CONSENTS
3
<PAGE> 4
10. Elections and consents required by ERISA may be revoked in the form, time,
and manner prescribed in section 205 of ERISA (and applicable regulations).
All elections and consents required by ERISA shall adhere to the
requirements of the applicable regulations interpreting section 205 of
ERISA (or any other applicable law), including the requirements as to the
timing of any elections or consents.
If a withdrawal is permitted by the employer's plan, no withdrawal, partial
or total, may be made without consent of the Employee and the Employee's
spouse in the manner required by section 205 of ERISA (and applicable
regulations), except to the extent that such consent is not required under
such applicable regulations. Any withdrawal made must be made in the form
required under section 205 of ERISA (and applicable regulations), unless
the employee (and spouse, if applicable) makes an election in the form and
manner permitted under such regulations, to receive the benefit in another
form.
WITHDRAWAL OF SALARY REDUCTION CONTRIBUTIONS
11. Withdrawals and other distributions attributable to contributions made
pursuant to a salary reduction agreement after December 31, 1988, and the
earnings on such contributions and on amounts held as of December 31, 1988,
shall not be paid unless the Employee has reached age 59 1/2, separated
from service, died, become disabled (within the meaning of IRC Section
72(m)(7)) or incurred a hardship as determined by the organization
described in Section 3 of this Endorsement; provided, that amounts
permitted to be distributed in the event of hardship shall be limited to
actual salary deferral contributions (excluding earnings thereon); and
provided further that amounts may be distributed pursuant to a qualified
domestic relations order to the extent permitted by IRC Section 414(p).
WITHDRAWAL OF CUSTODIAL ACCOUNT CONTRIBUTIONS
12. Payments made by a nontaxable transfer from a custodial account qualifying
under IRC Section 403(b)(7), and earnings of such amounts, shall not be
paid or made available before the Employee dies, attains age 59 1/2,
separates from service, becomes disabled (within the meaning of IRC Section
72(m)(7)) or in the case of such amounts attributable to contributions made
under the custodial account pursuant to a salary reduction agreement,
encounters financial hardship; provided, that such amounts permitted to be
paid or made available in the event of financial hardship shall be limited
to amounts attributable to actual salary deferral contributions made under
the custodial account (excluding earnings thereon); and provided further
that amounts may be distributed pursuant to a qualified domestic relations
order to the extent permitted by IRC Section 414(p).
MATURITY VALUE
13. If the Employee's Contract Value is greater than $3,500, as determined on
the first day of the month preceding the Maturity Date, in accordance with
section 205 of ERISA (and applicable regulations), We will not exercise our
right to pay the Contract Value of an employee on the Maturity Date in one
lump sum in lieu of annuity benefits.
DIRECT ROLLOVERS
14. This Section 14 applies to distributions made on or after January 1, 1993.
A distributee may elect, at the time and in the manner prescribed by us, to
have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that
an eligible rollover distribution does not include (1) any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; (2) any
distribution to the extent such distribution is required under IRC
Section 401(a)(9); and (3) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
4
<PAGE> 5
An eligible retirement plan is an annuity described in IRC Section
403(b), an individual retirement account described in IRC Section
408(a), or an individual retirement annuity described in IRC Section
408(b), that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
A distributee includes an Employee or former Employee. In addition,
the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternative payee under a qualified domestic relations order, as
defined in IRC Section 414(p), are distributees with regard to the
interest of the spouse or former spouse. A direct rollover is a
payment by the plan administrator or us to the eligible retirement
plan specified by the distributee.
IRC SECTION 72(S)
15. All references in the Contract to IRC Section 72(s) are deleted.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
5
<PAGE> 1
TAX-SHELTERED ANNUITY ENDORSEMENT
Notwithstanding any provision contained therein to the contrary, the Contract to
which this Endorsement is attached is amended as follows:
OWNER AND ANNUITANT
1. The Owner must be either an organization described in IRC Section
403(b)(1)(A) or an employee of such an organization. If the Owner is an
organization described in IRC Section 403(b)(1)(A), the term "Employee" as
used in this Endorsement shall mean the individual employee for whose
benefit the organization has established an annuity plan under IRC Section
403(b). Such employee shall be the Annuitant. If the Owner is an employee
of an organization described in IRC Section 403(b)(1)(A), the Annuitant
must be the same employee.
If this Contract is used as a funding mechanism for a rollover under IRC
Sections 403(b) or 408(d)(3), the Owner must be one individual, that same
individual must be the Annuitant, and the term "Employee" shall mean that
individual.
The Annuitant cannot be changed. Prior to the Maturity Date, the
Co-Annuitant can be changed, but such change shall not require any
distributions to be made under the Contract. In the "Death Benefit Before
Maturity Date" section of part 4 of the Contract, the first sentence of
the paragraph "Death of Annuitant" is deleted, and the second sentence is
modified to read as follows: "If any Owner is not an individual, the death
of the Annuitant (but not of the Co-Annuitant) is treated as the death of
an Owner."
NONTRANSFERABLE
2. The interest of the Employee in this Contract is non-transferable within
the meaning of IRC Section 401(g) and applicable regulations and is
nonforfeitable. In particular, the Contract may not be sold, assigned,
discounted, or pledged as collateral for a loan or as security for the
performance of any obligation or for any other purpose, to any person
other than us.
PAYMENTS
3. Payments must be made by an organization described in IRC Section
403(b)(1)(A), except in the case of rollover contributions under IRC
Sections 403(b)(8) and 408(d)(3). The Employee must be an employee of such
organization. Payments made pursuant to a salary reduction agreement shall
be limited to the extent provided in IRC Section 402(g). Payments shall
not exceed the amount allowed by IRC Section 415.
REQUIRED BEGINNING DATE
4. The Employee's entire interest in this Contract shall be distributed as
required under IRC Section 403(b)(10) and applicable regulations.
Except as otherwise provided by law, for years beginning after December
31, 1996, the term "required beginning date" means April 1 of the calendar
year following the later of (1) the calendar year in which the Employee
attains age 70 1/2, or (2) the calendar year in which the Employee
retires. However, to the extent required by law, the required beginning
date means April 1 of the calendar year following the calendar year in
which the Employee attains age 70 1/2 for an Employee who:
(a) is a 5-percent owner (as defined in IRC Section 416) of the
organization described in Section 1 of this Endorsement with respect
to the plan year ending in the calendar year in which the Employee
attains age 70 1/2; and
END.003.97 1
<PAGE> 2
(b) is not in a governmental plan or a church plan (as defined in IRC
Section 401(a)(9)(C)).
DISTRIBUTIONS DURING EMPLOYEE'S LIFE
5. The Employee's entire interest shall be distributed no later than the
required beginning date, or shall be distributed, beginning no later than
the required beginning date, over (a) the life of the Employee or the
joint lives of the Employee and an individual who is his or her designated
beneficiary (within the meaning of IRC Section 401(a)(9), or (b) a period
not extending beyond the life expectancy of the Employee, or the joint
life and last survivor expectancy of the Employee and the designated
beneficiary.
If the Employee's interest is to be distributed over a period greater than
one year, then the amount to be distributed by December 31 of each year
(including the year in which the required beginning date occurs) shall be
made in accordance with the requirements of IRC Section 401(a)(9),
including the incidental death benefit requirements of IRC Section
401(a)(9)(G), and the regulations thereunder, including the minimum
distribution incidental benefit requirement of Proposed Treasury
Regulation Section 1.401(a)(9)-2.
DISTRIBUTIONS AFTER EMPLOYEE'S DEATH
6. If an Employee dies on or after the required beginning date (or if
distributions have begun before the required beginning date as irrevocable
annuity payments), the remaining portion of the Employee's interest (if
any) shall be distributed at least as rapidly as under the method of
distribution in effect as of the Employee's death.
If the Employee dies before the required beginning date and an irrevocable
annuity distribution has not begun, the entire interest shall be
distributed by December 31 of the calendar year containing the fifth
anniversary of the Employee's death, except that
(a) if the interest is payable to an individual who is the Employee's
designated beneficiary, the designated beneficiary may elect to
receive the entire interest over the life of the designated
beneficiary or over a period not extending beyond the life
expectancy of the designated beneficiary, commencing on or before
December 31 of the calendar year immediately following the calendar
year in which the Employee died; or
(b) if the designated beneficiary is the Employee's surviving spouse,
the surviving spouse may elect to receive the entire interest over
the life of the surviving spouse or over a period not extending
beyond the life expectancy of the surviving spouse, commencing at
any date prior to the later of
(i) December 31 of the calendar year immediately following
the calendar year in which the Employee died, and
(ii) December 31 of the calendar year in which the Employee
would have attained age 70 1/2.
If the surviving spouse dies before distributions begin, the
limitations of this section shall be applied as if the
surviving spouse were the Employee.
An irrevocable election of the method of distribution by a
designated beneficiary who is the surviving spouse must be
made no later than the earlier of December 31 of the calendar
year containing the fifth anniversary of the Employee's death
or the date distributions are required to begin pursuant to
this provision (b). If no election is made, the entire
interest will be distributed in accordance with the method of
distribution in this provision (b).
An irrevocable election of the method of distribution by a
designated beneficiary who is not the surviving spouse must be made
within one year of the Employee's death. If no election is made, the
entire interest will be distributed by December 31 of the calendar
year containing the fifth anniversary of the Employee's death.
In the "Death of Owner" section of the "Death Benefit Before Maturity
Date" part of the Contract, the distribution requirements of provisions
"(d)" and "(e)" are deleted. If, after the Employee's death, the
designated beneficiary
END.003.97 2
<PAGE> 3
dies before the Maturity Date, no Death Benefit is payable.
LIFE EXPECTANCY CALCULATIONS
7. Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
If benefits under the Contract are payable in accordance with an Annuity
Option provided under the Contract, life expectancy shall not be
recalculated. If benefits are payable under an alternate form acceptable
to us, life expectancies shall not be recalculated unless annual
recalculations are elected at the time distributions are required to begin
(a) by the Employee, or (b) for purposes of distributions beginning after
the Employee's death, by the surviving spouse. Such an election shall be
irrevocable as to the Employee or the surviving spouse, and shall apply to
all subsequent years.
The life expectancy of a non-spouse designated beneficiary (a) may not be
recalculated, and (b) shall be calculated using the attained age of such
designated beneficiary during the calendar year in which distributions are
required to begin pursuant to this Endorsement. Payments for any
subsequent calendar year shall be calculated based on such life expectancy
reduced by one for each calendar year which has elapsed since the calendar
year life in which expectancy was first calculated.
ANNUITY OPTIONS
8. Except to the extent Treasury regulations allow us to offer different
Annuity Options that are agreed to by us, only Annuity Options 1 and 2
shall be available to an Employee. All Annuity Options must meet the
requirements of IRC Section 403(b)(10), including the requirement that
payments to persons other than Employees are incidental.
Annuity Option 1(b) is not available for an Employee whose life expectancy
is less than 10 years. Under Annuity Options 2(a) and 2(b), the designated
Co-Annuitant must be the Employee's spouse. Annuity Option 2(b) is not
available for an employee and his or her spouse where the life expectancy
of the employee and such spouse is less than 10 years.
WITHDRAWAL OF SALARY REDUCTION CONTRIBUTIONS
9. Withdrawals and other distributions attributable to contributions made
pursuant to a salary reduction agreement after December 31, 1988, and the
earnings on such contributions and on amounts held as of December 31,
1988, shall not be paid unless the Employee has reached age 59 1/2,
separated from service, died, become disabled (within the meaning of IRC
Section 72(m)(7)) or incurred a hardship as determined by the organization
described in Section 3 of this Endorsement; provided, that amounts
permitted to be distributed in the event of hardship shall be limited to
actual salary deferral contributions (excluding earnings thereon); and
provided further that amounts may be distributed pursuant to a qualified
domestic relations order to the extent permitted by IRC Section 414(p).
WITHDRAWAL OF CUSTODIAL ACCOUNT CONTRIBUTIONS
10. Payments made by a nontaxable transfer from a custodial account qualifying
under IRC Section 403(b)(7), and earnings of such amounts, shall not be
paid or made available before the Employee dies, attains age 59 1/2,
separates from service, becomes disabled (within the meaning of IRC
Section 72(m)(7)) or in the case of such amounts attributable to
contributions made under the custodial account pursuant to a salary
reduction agreement, encounters financial hardship; provided, that such
amounts permitted to be paid or made available in the event of financial
hardship shall be limited to amounts attributable to actual salary
deferral contributions made under the custodial account (excluding
earnings thereon); and provided further that amounts may be distributed
pursuant to a qualified domestic relations order to the extent permitted
by IRC Section 414(p).
LOANS
END.003.97 3
<PAGE> 4
11. While this Contract is in force, an Employee may borrow using his or her
interest in this Contract as the sole security for the loan. We will
usually make a loan within seven days after We receive the request,
subject to suspension of payment as set forth in part 10 of the Contract.
The maximum loan value is 80% of the Contract Value for an Employee. An
Employee may borrow an amount up to the lessor of:
(a) the maximum loan value less any existing Debt, or
(b) An amount which, when added to any existing Debt, does not exceed
the lesser of:
(i) $50,000 (reduced by any excess of the highest outstanding Debt
during the one year period ending on the day before the date
on which the current loan is made, over the outstanding Debt
on the date the current loan is made), or
(ii) $10,000 or, if greater, one-half of the Contract Value.
An Employee's investment in each Investment Account will be reduced by the
amount withdrawn from that Investment Account in connection with the loan
and such amount will be transferred to the Loan Account. Unless requested
otherwise, We will withdraw the amount of the loan from each Investment
Account in the same manner as partial withdrawals. If We withdraw part of
the loan from an Employee's fixed Investment Account, a Market Value
Charge may be applied. On each Contract Anniversary, the excess of the
Debt over the amount in the Loan Account will be transferred from the
Investments Accounts to the Loan Account. Any amounts in the Loan Account
will earn interest at 4% per annum.
Since the amount of a loan is removed from the Investments Accounts, a
loan will have a permanent effect on the Contract Value. The longer the
loan is outstanding, the greater the effect is likely to be.
The loan interest rate will be 6% per annum. Interest will be payable in
arrears on each Contract Anniversary. Any interest not paid when due will
be added to the Debt and bear Interest in the same manner.
An Employee may repay any Debt in whole or in part while the Contract is
in force. An amount equal to the amount of the loan repayment will be
transferred from the Loan Account to the Investment Accounts in the same
proportion as Purchase Payments are currently allocated, unless the
Employee requests otherwise. Loans must be repaid within 5 years, except
for loans to acquire a principal residence for the Employee. Repayment
must be in level amounts made at least quarterly.
If, on any date, the Debt exceeds the Contract Value, then the Contract
will be in default. In such case We will send the Employee a notice of
default and tell him what payment is needed to cure the default. The
Employee will have a 31-day grace period from the date of mailing of such
notice during which to pay the default amount. If the required payment is
not paid within the grace period, the Contract may be foreclosed
(terminate without value).
DIRECT ROLLOVERS
12. This Section 12 applies to distributions made on or after January 1, 1993.
A distributee may elect, at the time and in the manner prescribed by us,
to have any portion of an eligible rollover distribution paid directly to
an eligible retirement plan specified by the distributee in a direct
rollover.
An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include (1) any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; (2) any distribution to the extent
such distribution is required under IRC Section 401(a)(9); and (3) the
portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
An eligible retirement plan is an annuity described in IRC Section 403(b),
an individual retirement account described
END.003.97 4
<PAGE> 5
in IRC Section 408(a), or an individual retirement annuity described in
IRC Section 408(b), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
A distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternative payee
under a qualified domestic relations order, as defined in IRC Section
414(p), are distributees with regard to the interest of the spouse or
former spouse.
A direct rollover is a payment by the plan administrator or us to the
eligible retirement plan specified by the distributee.
IRC SECTION 72(S)
13. All references in the Contract to IRC Section 72(s) are deleted.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
END.003.97 5
<PAGE> 1
QUALIFIED PLAN ENDORSEMENT SECTION 401 PLANS
Notwithstanding any provision contained therein to the contrary, the Contract to
which this Endorsement is attached is amended as follows:
OWNER AND ANNUITANT
1. The Owner of the Contract must be either a trustee of a qualified
retirement plan under IRC Sections 401(a) or 403(a) or an employee covered
by such a plan. If the Owner is a trustee, the term "Participant" as used
in this Endorsement shall mean the individual employee for whose benefit
the employer has established the plan. If the Owner is an employee, the
term "Participant" shall mean the employee.
In all cases, the Annuitant shall be the Participant and the Annuitant
cannot be changed. Prior to the Maturity Date, the Co-Annuitant can be
changed, but such change shall not require any distributions under the
Contract.
NONTRANSFERABLE
2. Ownership of this Contract may not be transferred except: (1) to the
Participant; (2) to a trustee or successor trustee of a retirement plan
qualified under IRC Sections 401(a) or 403(a); or (3) as otherwise
permitted by applicable regulations of the Internal Revenue Service.
If the Contract is transferred to the Participant, the Participant becomes
the Owner of the Contract and thereafter may not assign, sell, transfer,
or discount the Contract, or pledge it as collateral for a loan or as
security for the performance of an obligation or for any other purpose,
other than to us.
REQUIRED BEGINNING DATE
3. The Participant's entire interest in the Contract shall be distributed as
required by IRC Section 401(a)(9), and the regulations thereunder,
including the minimum distribution incidental benefit requirement of Prop.
Treas. Reg. Section 1.401(a)(9)-2.
Except as otherwise provided by law, for years beginning after December
31, 1996, the term "required beginning date" means April 1 of the calendar
year following the later of (1) the calendar year in which the Employee
attains age 70 1/2, or (2) the calendar year in which the Employee
retires. However, to the extent required by law, the required beginning
date means April 1 of the calendar year following the calendar year in
which the Employee attains age 70 1/2 for an Employee who:
(a) is a 5-percent owner (as defined in IRC Section 416) of the
organization described in Section 1 of this Endorsement with respect
to the plan year ending in the calendar year in which the Employee
attains age 70 1/2; and
(b) is not in a governmental plan or a church plan (as defined in IRC
Section 401(a)(9)(C)).
The requirements of Sections 3,4, and 6 of this Endorsement do not apply
with respect to a benefit to which a proper designation is in effect under
section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982.
DISTRIBUTIONS DURING PARTICIPANT'S LIFE
4. The Participant's entire interest shall be distributed no later than the
required beginning date, or shall be distributed, beginning no later than
the required beginning date over (a) the life of the Participant or the
joint lives of the Participant and an individual who is his or her
designated beneficiary (within the meaning of IRC Section 401(a)(9)), or
(b) a period
ENDORSEMENT.004.97
<PAGE> 2
not extending beyond the life expectancy of the f Participant, or the
joint life and last survivor expectancy of the Participant and the
designated beneficiary. If the Participant's interest is to be distributed
over a period greater than one year, then the amount to be distributed by
December 31 of each year (including the year in which the required
beginning date occurs) shall be determined in accordance with the
requirements of IRC Section 401(a)(9), including the incidental death
benefit requirements of IRC Section 401(a)(9)(G), and the regulations
thereunder, including the minimum distribution incidental benefit
requirements of Proposed Treasury Regulation Section 1.401(a)(9)-2.
DEATH BENEFIT
5. If, in the event of the Participant's death prior to the Maturity Date,
the Death Benefit is not paid to the trustee of a retirement plan
qualified under IRC Sections 401(a) or 403(a), it shall be paid to (1) the
surviving spouse of the Participant in the form required by IRC Section
417(c), unless the spouse elects otherwise in accordance with the
requirements of IRC Section 417 or regulations promulgated thereunder, or
(2) if there is no surviving spouse, or if the surviving spouse has
consented in the manner required by IRC Section 417, or if regulations
promulgated by the Treasury Department under IRC Section 417 otherwise
permit, to the Beneficiary under the Contract.
In the "Death Benefit Before Maturity Date" section of part 4 of the
Contract, the first sentence of the paragraph "Death of Annuitant" is
deleted, and the second sentence is modified to read as follows: "If any
Owner is not an individual, the death of the Annuitant (but not of the
Co-Annuitant) is treated as the death of an Owner."
DISTRIBUTIONS AFTER PARTICIPANT'S DEATH
6. If the Participant dies on or after the required beginning date (or if
distributions have begun before the required beginning date as irrevocable
annuity payments), the remaining portion of the Participant's interest (if
any) shall be distributed at least as rapidly as under the method of
distribution in effect as of the Participant's death.
If the Participant dies before the required beginning date and an
irrevocable annuity distribution has not begun, the entire interest shall
be distributed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death, except that
(a) if the interest is payable to an individual who is the Participant's
designated beneficiary, the designated beneficiary may elect to
receive the entire interest over the life of the designated
beneficiary or over a period not extending beyond the life
expectancy of the designated beneficiary, commencing on or before
December 31 of the calendar year immediately following the calendar
year in which the Participant died; or
(b) if the designated beneficiary is the Participant's surviving spouse,
the surviving spouse may elect to receive the entire interest over
the life of the surviving spouse or over a period not extending
beyond the life expectancy of the surviving spouse, commencing at
any date prior to the later of
(i) December 31 of the calendar year immediately following the
calendar year in which the Participant died, and
(ii) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the surviving spouse dies before distributions begin, the
limitations of this section shall be applied as if the surviving
spouse were the Participant.
An irrevocable election of the method of distribution by a
designated beneficiary who is the surviving spouse must be made no
later than the earlier of December 31 of the calendar year
containing the fifth anniversary of the Participant's death or the
date distributions are required to begin pursuant to this provision
(b). If no election is made, the entire interest will be distributed
in accordance with the method of distribution in this provision (b).
An irrevocable election of the method of distribution by a
designated beneficiary who is not the surviving spouse must be made
within one year of the Participant's death. If no election is made,
the entire interest will be
END.004.97 2
<PAGE> 3
distributed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
In the "Death of Owner" section of the "Death Benefit Before
Maturity Date" part of the Contract, the distribution requirements
of provisions "(d)" and "(e)" are deleted. If, after the
Participant's death, the designated beneficiary dies before the
Maturity Date, no Death Benefit is payable.
LIFE EXPECTANCY CALCULATIONS
7. Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
If benefits under the Contract are payable in accordance with an Annuity
Option provided under the Contract, life expectancy shall not be
recalculated. If benefits are payable under an alternate form acceptable
to us, life expectancies shall not be recalculated unless annual
recalculations are elected at the time distributions are required to begin
(a) by the Participant, or (b) for purposes of distributions beginning
after the Participant's death, by the surviving spouse. Such an election
shall be irrevocable as to the Participant or the surviving spouse, and
shall apply to all subsequent years.
The life expectancy of a non-spouse designated beneficiary (a) may not be
recalculated, and (b) shall be calculated using the attained age of such
designated beneficiary during the calendar year in which distributions are
required to begin pursuant to this Endorsement. Payments for any
subsequent calendar year shall be calculated based on such life expectancy
reduced by one for each calendar year which has elapsed since the calendar
year life in which expectancy was first calculated.
ANNUITY OPTIONS
8. Except to the extent Treasury regulations allow us to offer different
Annuity Options that are agreed to by us and are stated in the employer's
plan, only Annuity Options 1 and 2 shall be available to the Participant.
All Annuity Options must meet the requirements of IRC Section 401(a)(9),
including the requirement of IRC Section 401(a)(9)(G) that payments to
persons other than Participants are incidental.
Annuity Option 1(b) is not available for a Participant whose life
expectancy is less than 10 years. Under Annuity Option 2(a) and 2(b) the
designated Co-Annuitant must be the Participant's spouse. Annuity Option
2(b) is not available for a Participant and his or her spouse where the
joint life expectancy of the Participant and such spouse is less than 10
years.
Except as hereinafter provided, only Annuity Option 2(a) is available to a
married Participant. A married Participant may elect another Annuity
Option, provided his or her spouse consents in accordance with the
requirements of IRC Section 417 or provided such election is otherwise
permitted under Treasury Regulations. An unmarried Participant will be
deemed to have elected Annuity Option 1(a) unless he or she makes a
different election in the manner required under IRC Section 417 (and
applicable regulations).
ELECTIONS AND CONSENTS
9. Elections and consents made pursuant to this Contract may be revoked in
the form, time, and manner prescribed in IRC Section 417 (and applicable
regulations). All elections and consents required by this Contract shall
adhere to the requirements of the applicable regulations interpreting IRC
Section 417 (or any other applicable law), including the requirements as
to the timing of any elections or consents. No amount may be paid from the
Contract in a lump sum unless such payment is allowed under both the
retirement plan with regard to which the Contract is purchased and the
Internal Revenue Code and related regulations. A Participant who is
married must have the consent of his or her spouse to withdraw all or part
of the Contract Value.
MATURITY VALUE
END.004.97 3
<PAGE> 4
10. If the Contract Value is greater than $3,500, as determined on the first
day of the month preceding the Maturity Date, in accordance with the
requirements of IRC Sections 411(a)(11) and 417 (and applicable
regulations), We will not exercise our right to pay the Contract Value on
the Maturity Date in one lump sum in lieu of annuity benefits.
DIRECT ROLLOVERS
11. This Section 11 applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Contract to the contrary that would
otherwise limit a distributee's election under this Section 11, a
distributee may elect, at the time and in the manner prescribed by us, to
have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under IRC Section 401(a)(9); and the portion of
any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
An eligible retirement plan is an individual retirement account described
in IRC Section 408(a), an individual retirement annuity described in IRC
Section 408(b), an annuity plan described in IRC Section 403(a), or a
qualified trust described in IRC Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
A distributee includes a Participant. In addition, the Participant's
surviving spouse and the Participants's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
IRC Section 414(p), are distributees with regard to the interest of the
spouse or former spouse.
A direct rollover is a payment by us to the eligible retirement plan
specified by the distributee.
IRC SECTION 72(S)
12. All references in the Contract to IRC Section 72(s) are deleted from the
Contract.
Endorsed on the Date of issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Vice-President
END.004.97 4
<PAGE> 5
<PAGE> 1
<TABLE>
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====================================================================================================================================
Flexible Payment Deferred Variable Annuity Application. Payment (or original of exchange/transfer request) must accompany
Application. Please make check payable to THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA (the "Company") and address to:
P.O. BOX 9230 GMF, Boston, MA 02205-9230.
- ---------------------------------------------------------------- ----------------------------------------------------------------
1. OWNERS (APPLICANTS) 4. MY INVESTMENT
- ---------------------------------------------------------------- ----------------------------------------------------------------
Name* Allocate payment with application of $____________ as indicated
- ---------------------------------------------------------------- below (must total 100%) (Minimum initial investment of $25,000.
First Middle Last Allocation percentages must total 100%):
Address
- ---------------------------------------------------------------- ____ % Manufacturers Adviser Pac Rim Emerging Mkts (038)
Street
____ % T. Rowe Price Science & Technology (046)
- ----------------------------------------------------------------
City State Zip ____ % Founders Int'l Small Cap (036)
_____ _____ _____
Sex [ ] M [ ] F Date of Birth | | | | ____ % Warburg Pincus Emerging Growth (050)
|_____|_____|_____|
Month Day Year ____ % Pilgrim Baxter Growth (052)
Daytime Phone Number: ( ) _____________________________
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ % Fred Alger Small/Mid Cap (041)
| | | | | | | | | | | | | | | | | | | |
|__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__| ____ % Rowe Price-Fleming Int'l Stock (054)
Social Security Number Tax ID Number
____ % Founders Worldwide Growth (056)
Client Brokerage Acct. # (If applicable):__________________
____ % Morgan Stanley Global Equity (039)
- ----------------------------------------------------------------
CO-OWNER (OPTIONAL) ____ % Rosenberg Small Company Value (121)
- ----------------------------------------------------------------
____ % Fidelity Equity (031)
Name*
- ---------------------------------------------------------------- ____ % Founders Growth (035)
First Middle Last
_____ _____ _____ ____ % Manufacturers Adviser Quant Equity (053)
Sex [ ] M [ ] F Date of Birth | | | |
|_____|_____|_____| ____ % T. Rowe Price Blue Chip Growth (042)
Month Day Year
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ____ % Manufacturers Adviser Real Estate Securities (057)
| | | | | | | | | | | | | | | | | | | |
|__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__| ____ % Miller Anderson Value (055)
Social Security Number Tax ID Number
____ % J.P. Morgan Int'l Growth & Income (043)
- ----------------------------------------------------------------
2. ANNUITANTS (IF DIFFERENT FROM OWNER) ____ % Wellington Management Growth & Income (047)
- ----------------------------------------------------------------
____ % T. Rowe Price Equity-Income (037)
Name*
- ---------------------------------------------------------------- ____ % Founders Balanced (058)
First Middle Last
Address ____ % Fidelity Aggr Asset Alloc (034)
- ----------------------------------------------------------------
Street ____ % Miller Anderson High Yield (059)
- ---------------------------------------------------------------- ____ % Fidelity Mod Asset Allocation (033)
City State Zip
_____ _____ _____ ____ % Fidelity Cons Asset Allocation (032)
Sex [ ] M [ ] F Date of Birth | | | |
|_____|_____|_____| ____ % Salomon Brothers Strategic Bond (045)
Month Day Year
Daytime Phone Number: ( ) _____________________________ ____ % Oechsle Global Gov't Bond (040)
__ __ __ __ __ __ __ __ __
| | | | | | | | | | ____ % Manufacturers Adviser Capital Growth Bond (060)
|__|__|__|__|__|__|__|__|__|
Social Security Number ____ % Wellington Management Inv Quality Bond (048)
- ---------------------------------------------------------------- ____ % Salomon Brothers U.S. Gov't Securities (044)
CO-ANNUITANT (OPTIONAL)
- ---------------------------------------------------------------- ____ % Manufacturers Adviser Money Market (049)
Name* FIXED ACCOUNTS
- ----------------------------------------------------------------
First Middle Last ____ % 1 Yr (051)**
_____ _____ _____
Sex [ ] M [ ] F Date of Birth | | | | LIFESTYLE PORTFOLIOS
|_____|_____|_____|
Month Day Year ____ % Cons 280 (184)
__ __ __ __ __ __ __ __ __
| | | | | | | | | | ____ % Mod 460 (185)
|__|__|__|__|__|__|__|__|__|
Social Security Number ____ % Bal 640 (186)
- ---------------------------------------------------------------- ____ % Growth 820 (187)
3. BENEFICIARIES
- ---------------------------------------------------------------- ____ % Aggr 1000 (188)
(Enclose signed letter if more information is required.)
** Not available in WA.
Name*
- --------------------------------------------------------------- ----------------------------------------------------------------
First Middle Last Relationship REMARKS
_____ _____ _____ __ __ __ __ __ __ __ __ __ ----------------------------------------------------------------
Date of Birth | | | | | | | | | | | | | |
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number
Name*
- ---------------------------------------------------------------
First Middle Last Relationship
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | |
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number
- ----------------------------------------------------------------
CONTINGENT BENEFICIARY
- ----------------------------------------------------------------
Name*
- ---------------------------------------------------------------
First Middle Last Relationship
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | |
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number
- ------------------------------------------------------------------------------------------------------------------------------------
VISION.APP.002 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
</TABLE>
<PAGE> 2
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<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
5. TYPE OF PLAN (MUST BE COMPLETED)
- -----------------------------------------------------------------------------------------------------
[ ] Non-Qualified or [ ] IRA Rollover [ ] IRA Transfer [ ] IRA Tax Year____________
[ ] Profit Sharing [ ] 401(k) [ ] SEP IRA Tax Year_________
[ ] Money Purchase [ ] Keogh (HR-10) [ ] 403(b) Check if ERISA [ ]
[ ] Defined Benefit [ ] 457 [ ] Other ___________________
- -----------------------------------------------------------------------------------------------------
REPLACEMENT
Will this Annuity replace or change any other insurance or annuity? [ ] No [ ] Yes
(State company and contract number in Remarks, and attach replacement forms.)
- -----------------------------------------------------------------------------------------------------
6. SIGNATURES
- -----------------------------------------------------------------------------------------------------
(Irrevocable Beneficiary, if designated, must also sign application.)
STATEMENT OF APPLICANT: I/We agree that the Contract I/we have applied for shall not take effect
until the later of: (1) the issuance of the Contract, or (2) receipt by the Company at its Annuity
Service Office of the first payment required under the Contract. The information above is true and
complete to the best of my/our knowledge and belief and is correctly recorded. I/We agree to be
bound by the representations made in this application and acknowledge the receipt of an effective
Prospectus describing the Contract applied for. The Contract I/we have applied for is suitable for
my/our insurance investment objectives, financial situation and needs. When utilizing Check Plus or
the Income Plan, I/we agree that if any debit/transfer is erroneously received by the bank indi
cated on the enclosed voided check, or is not honored upon presentation, any accumulation units may
be canceled, and agree to hold the Company harmless from any loss due to such electronic
debits/transfers. I/We understand that unless I/we elect otherwise in the remarks section, the
Maturity Date will be the later of the Annuitant's 85th birthday, or 10 years from the Contract
Date.
I/WE UNDERSTAND THAT ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THE CONTRACT APPLIED FOR, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT.
___________________________________________________________________________________________________
Signed in (State) Date Signed Signature of Owner/Applicant Signature of Co-Owner
___________________________________________________________________________________________________
Signature of Annuitant Signature of Co-Annuitant Signature of Irrevocable Beneficiary
(if different from Owner) (if different from Owner) (if designated)
STATEMENT OF AGENT: Will this contract replace or change any existing life insurance or annuity in
this or any other company? [ ] Yes [ ] No If yes, please explain under Remarks. I certify I am
authorized and qualified to discuss the Contract herein applied for.
___________________________________________________________________________________________________
Signature of Agent Print Full Name Name of Firm
___________________________________________________________________________________________________
Agent Number Agent Phone Number State License ID Number
- -----------------------------------------------------------------------------------------------------
VISION.APP.002 9/97
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<PAGE> 3
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===================================================================================================
Indicate below each VENTURE VISION service option you wish to elect.
- ---------------------------------------------------------------------------------------------------
7. CHECK PLUS - AUTOMATIC PURCHASE*
- ---------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________ .
I authorize the Company to collect $________ (minimum $30) starting the month of _____________ by
initiating electronic debit entries to my account with the following frequency:
[ ] MONTHLY: [ ] 5th or [ ] or 20th [ ]
[ ] QUARTERLY (20th of Jan., April, July and Oct.)
(Please Attach a Voided Check/Withdrawal Slip.)
- ---------------------------------------------------------------------------------------------------
8. DOLLAR COST AVERAGING* (MINIMUM PAYMENT $6,000)
- ---------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________ .
I authorize the Company to transfer an amount (minimum $100) each month as indicated below.
Transfers are available from all variable and the one-year fixed investment options. A maximum of
10% from the one-year fixed investment option may be transferred monthly.
Please make first transfer on _____/_____/_____.
Month Day Year
</TABLE>
<TABLE>
<CAPTION>
Source Fund Destination Fund Amount
<S> <C> <C>
_______________________________ _______________________________ _____________________________
_______________________________ _______________________________ _____________________________
_______________________________ _______________________________ _____________________________
_______________________________ _______________________________ _____________________________
_______________________________ _______________________________ _____________________________
- ---------------------------------------------------------------------------------------------------
9. INCOME PLAN* (MINIMUM PAYMENT $12,000)
- ---------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________ .
I authorize withdrawals (minimum $100) from my Contract Value to commence as indicated below. A
maximum of 10% of payments may be withdrawn annually. When utilizing the Income Plan, I agree that
if any debit/transfer is erroneously received by the bank indicated on the enclosed voided check,
or is not honored upon presentation, any accumulation units may be canceled, and agree to hold the
Company harmless from any loss due to such electronic debits/transfers.
</TABLE>
<TABLE>
<S> <C>
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
Please indicate frequency: [ ] Monthly or [ ] Quarterly (January, April, July and October)
on the [ ] 7th [ ] 16th or [ ] 26th.
Please [ ] Withhold [ ] Do not withhold Federal Income Taxes
[ ] I wish to utilize Electronic Funds Transfer in the processing of my Income Plan.
Please attach a voided check, or, if different from owner, make check payable to:
___________________________________________________________________________________________________
First Middle Last
___________________________________________________________________________________________________
Street City State Zip
(Please allow 7 business days for receipt of check.)
- ---------------------------------------------------------------------------------------------------
Vision.APP.002 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
</TABLE>
<PAGE> 4
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- --------------------------------------------------------------------------------------------------------------------
Indicate below each VENTURE VISION service option you wish to elect.
- --------------------------------------------------------------------------------------------------------------------
10. TELEPHONE TRANSFER AUTHORIZATION
- --------------------------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________ .
I authorize the Company to act on transfer instructions given by telephone from any person who can furnish proper
identification. Neither the Company nor any person authorized by the Company will be responsible for any claim,
loss, liability or expense in connection with a telephone transfer if the Company or such other person acted on
telephone transfer instructions in good faith in reliance on this authorization.
- --------------------------------------------------------------------------------------------------------------------
11. TELEPHONE WITHDRAWAL AUTHORIZATION
- --------------------------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________ .
I authorize the Company to act on withdrawal instructions given from any person who can furnish proper
identification by telephone. Neither the Company nor any person authorized by the Company will be responsible for
any claim, loss, liability or expense in connection with a telephone withdrawal if the Company or such other person
acted on telephone withdrawal instructions in good faith in reliance on this authorization. The minimum withdrawal
amount is $1,000.
Withdrawal instructions may authorize Partial Withdrawals of up to $50,000.00 per account. (Full withdrawals are
not permitted by telephone.) The check may only be payable to the owner of record (who must be individual) and may
be mailed only to the address of record. The Company will not allow telephone withdrawals for the following
accounts: a) An account on which the address has been changed in the last 30 days, b) Accounts over which a person
has Power of Attorney, c) 403(b) accounts for which the owner is under 59 1/2, d) Custodial accounts, and e) Accounts
with Market Timers as owners.
- --------------------------------------------------------------------------------------------------------------------
12. AUTOMATIC REBALANCING
- --------------------------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________ .
If marked, the policyholder's contract value, excluding amounts in the fixed account investment options, will be
automatically rebalanced to maintain the rebalancing percentage levels in the variable portfolios as selected
below, based on the current total value of the eligible portfolios on the day of rebalancing.
You may change the rebalancing percentages or terminate your participation in the program by providing the Company
with a completed Automatic Rebalancing Authorization form or by providing instructions via telephone to an
authorized Company representative prior to the day the rebalancing will occur.
If a policyholder elects to participate in Automatic Rebalancing, the total value of the variable portfolios must
be included in the program. Therefore, subsequent payments received and applied to portfolios in percentages
different from the current rebalancing allocation will be rebalanced at the next date of rebalancing unless the
subsequent payments are allocated to the fixed account investment options.
Rebalancing will occur on the 25th of the month (or next business day), please indicate frequency:
[ ] Quarterly [ ] Semi-Annually (June & December) [ ] Annually (December)
ASSET ALLOCATIONS (must total 100%):
____ % Manufacturers Adviser Pac Rim Emerging Mkts (038) ____ % Founders Balanced (058)
____ % T. Rowe Price Science & Technology (046) ____ % Fidelity Aggr Asset Alloc (034)
____ % Founders Int'l Small Cap (036) ____ % Miller Anderson High Yield (059)
____ % Warburg Pincus Emerging Growth (050) ____ % Fidelity Mod Asset Alloc (033)
____ % Pilgrim Baxter Growth (052) ____ % Fidelity Cons Asset Alloc (032)
____ % Fred Alger Small/Mid Cap (041) ____ % Salomon Brothers Strategic Bond (045)
____ % Rowe Price-Fleming Int'l Stock (054) ____ % Oechsle Global Gov't Bond (040)
____ % Founders Worldwide Growth (056) ____ % Manufacturers Adviser Capital Growth Bond (060)
____ % Morgan Stanley Global Equity (039) ____ % Wellington Management Inv Quality Bond (048)
____ % Rosenberg Small Company Value (121) ____ % Salomon Brothers U.S. Gov't Securities (044)
____ % Fidelity Equity (031) ____ % Manufacturers Adviser Money Market (049)
____ % Founders Growth (035)
____ % Manufacturers Adviser Quant Equity (057) LIFESTYLE PORTFOLIOS
____ % T. Rowe Price Blue Chip Growth (042) ____ % Cons 280 (184)
____ % Manufacturers Adviser Real Estate Securities (057) ____ % Mod 460 (185)
____ % Miller Anderson Value (055) ____ % Bal 640 (186)
____ % J.P. Morgan Int'l Growth & Income (043) ____ % Growth 820 (187)
____ % Wellington Management Growth & Income (047) ____ % Aggr 1000 (188)
____ % T. Rowe Price Equity-Income (037)
- --------------------------------------------------------------------------------------------------------------------
VISION.APP.002 9/97
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Flexible Purchase Payment Deferred Variable Annuity Application. Payment (or original of exchange/transfer request) must accompany
Application. Please make check payable to THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA (the "Company") and address to:
P.O. BOX 9230 GMF, Boston, MA 02205-9230.
- ---------------------------------------------------------------- ----------------------------------------------------------------
1. OWNERS (APPLICANTS) 7. CONTINGENT BENEFICIARY
- ---------------------------------------------------------------- ----------------------------------------------------------------
Name* Name*
- ---------------------------------------------------------------- ---------------------------------------------------------------
First Middle Last First Middle Last Relationship
Address _____ _____ _____ __ __ __ __ __ __ __ __ __
- ---------------------------------------------------------------- Date of Birth | | | | | | | | | | | | | |
Street |_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number
- ----------------------------------------------------------------
City State Zip
_____ _____ _____ ----------------------------------------------------------------
Sex [ ] M [ ] F Date of Birth | | | | 8. MY INVESTMENT
|_____|_____|_____| ----------------------------------------------------------------
Month Day Year
Allocate payment with application of $____________ as indicated
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ below (Minimum Initial Investment of $25,000. Allocation
| | | | | | | | | | | | | | | | | | | | percentages must total 100%):
|__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__|
Social Security Number Tax ID Number ____ % Manufacturers Adviser Pac Rim Emerging Mkts (038)
____ % T. Rowe Price Science & Technology (046)
- ---------------------------------------------------------------- ____ % Founders Int'l Small Cap (036)
2. CO-OWNER (OPTIONAL)
- ---------------------------------------------------------------- ____ % Warburg Pincus Emerging Growth (050)
Name* ____ % Pilgrim Baxter Growth (052)
- ----------------------------------------------------------------
First Middle Last ____ % Fred Alger Small/Mid Cap (041)
_____ _____ _____
Sex [ ] M [ ] F Date of Birth | | | | ____ % Rowe Price-Fleming Int'l Stock (054)
|_____|_____|_____|
Month Day Year ____ % Founders Worldwide Growth (056)
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
| | | | | | | | | | | | | | | | | | | | ____ % Morgan Stanley Global Equity (039)
|__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__|
Social Security Number Tax ID Number ____ % Rosenberg Small Company Value (121)
- ---------------------------------------------------------------- ____ % Fidelity Equity (031)
3. SUCCESSOR OWNER (OPTIONAL)
- ---------------------------------------------------------------- ____ % Founders Growth (035)
Name* ____ % Manufacturers Adviser Quant Equity (053)
- ----------------------------------------------------------------
First Middle Last ____ % T. Rowe Price Blue Chip Growth (042)
_____ _____ _____
Sex [ ] M [ ] F Date of Birth | | | | ____ % Manufacturers Adviser Real Estate Securities (057)
|_____|_____|_____|
Month Day Year ____ % Miller Anderson Value (055)
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
| | | | | | | | | | | | | | | | | | | | ____ % J.P. Morgan Int'l Growth & Income (047)
|__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__|
Social Security Number Tax ID Number ____ % Wellington Management Growth & Income (047)
- ---------------------------------------------------------------- ____ % T. Rowe Price Equity-Income (037)
4. ANNUITANT* (IF DIFFERENT FROM OWNER)
- ---------------------------------------------------------------- ____ % Founders Balanced (058)
Name* ____ % Fidelity Aggr Asset Alloc (034)
- ----------------------------------------------------------------
First Middle Last ____ % Miller Anderson High Yield (059)
Address
- ---------------------------------------------------------------- ____ % Fidelity Mod Asset Alloc (033)
Street
____ % Fidelity Cons Asset Alloc (032)
- ----------------------------------------------------------------
City State Zip ____ % Salomon Brothers Strategic Bond (045)
_____ _____ _____
Sex [ ] M [ ] F Date of Birth | | | | ____ % Oechsle Global Gov't Bond (040)
|_____|_____|_____|
Month Day Year ____ % Manufacturers Adviser Capital Growth Bond (060)
__ __ __ __ __ __ __ __ __ ____ % Wellington Management Inv Quality Bond (048)
| | | | | | | | | |
|__|__|__|__|__|__|__|__|__| ____ % Salomon Brothers U.S. Gov't Securities (044)
Social Security Number
____ % Manufacturers Adviser Money Market (049)
- ----------------------------------------------------------------
5. CO-ANNUITANT (OPTIONAL) FIXED ACCOUNT
- ----------------------------------------------------------------
____ % 1 Year (051)**
Name*
- ---------------------------------------------------------------- LIFESTYLE PORTFOLIOS
First Middle Last
Address ____ % Cons 280 (184)
- ----------------------------------------------------------------
Street ____ % Mod 460 (185)
- ---------------------------------------------------------------- ____ % Bal 640 (186)
City State Zip
_____ _____ _____ ____ % Growth 820 (187)
Sex [ ] M [ ] F Date of Birth | | | |
|_____|_____|_____| ____ % Aggr 1000 (188)
Month Day Year
__ __ __ __ __ __ __ __ __ ** Not available in WA.
| | | | | | | | | |
|__|__|__|__|__|__|__|__|__| ----------------------------------------------------------------
Social Security Number 9. REMARKS
- ----------------------------------------------------------------
6. BENEFICIARIES ----------------------------------------------------------------
- ----------------------------------------------------------------
(Enclose signed letter if more information is required.)
Name*
- ---------------------------------------------------------------
First Middle Last Relationship
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | |
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number
Name*
- ---------------------------------------------------------------
First Middle Last Relationship
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | |
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number
- ------------------------------------------------------------------------------------------------------------------------------------
APP-VEN 10-2 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
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- -----------------------------------------------------------------------------------------------------
10. TYPE OF PLAN (MUST BE COMPLETED)
- -----------------------------------------------------------------------------------------------------
[ ] Non-Qualified or [ ] IRA Rollover [ ] IRA Transfer [ ] IRA Tax Year____________
[ ] Profit Sharing [ ] 401(k) [ ] SEP IRA Tax Year_________
[ ] Money Purchase [ ] Keogh (HR-10) [ ] 403(b)
[ ] Defined Benefit [ ] 457 [ ] Other ___________________
- -----------------------------------------------------------------------------------------------------
11. Will the purchase of this Annuity replace or change any other insurance or annuity? [ ] No [ ] Yes
(If yes, state company, contract number in Remarks, and attach replacement forms.)
If 10035 exchange or other transfer of assets, attach original exchange form or letter.
- -----------------------------------------------------------------------------------------------------
12. Has Annuitant or applicant(s) other annuities or insurance with the Company? [ ] No [ ] Yes
(If yes, list contract number in Remarks.)
- -----------------------------------------------------------------------------------------------------
13. Maturity Date______________________(mm/yy) Default is later of Annuitant's 85th birthday or the
10th contract anniversary.
- -----------------------------------------------------------------------------------------------------
STATEMENT OF APPLICANT: It is hereby agreed that the Contract applied for shall not take effect
until the later of: (1) the issuance of the Contract, or (2) receipt by the Company at its Annuity
Service Office of the first payment required under the Contract. The foregoing information is true and
complete to the best of the applicant's knowledge and belief and is correctly recorded. The Proposed
Owner agrees to be bound by the representations herein and acknowledges the receipt of an effective
Prospectus describing the Contract applied for. The Contract applied for is suitable for
my insurance investment objectives, financial situation and needs. When utilizing Check Plus or
the Systematic Withdrawal Program, I/we agree that if any debit/transfer is erroneously received
by the bank indicated on my voided check, or is not honored upon presentation, any accumulation units
may be canceled, and agree to hold the Company harmless from any loss due to such electronic
debits/transfers.
I UNDERSTAND THAT ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THE CONTRACT APPLIED FOR, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT.
___________________________________________________________________________________________________
Signed in (State) Date Signed Signature of Owner/Applicant Signature of Co-Owner
___________________________________________________________________________________________________
Signature of Annuitant Signature of Co-Annuitant Signature of Irrevocable Beneficiary
(if different from Owner) (if different from Owner) (if designated)
STATEMENT OF AGENT: Will this contract replace or change any existing life insurance or annuity in
this or any other company? [ ] Yes [ ] No If yes, please explain under Remarks. I certify I am
authorized and qualified to discuss the Contract herein applied for.
___________________________________________________________________________________________________
Signature of Agent Agent Number Print Full Name Agency Number
___________________________________________________________________________________________________
Name of Firm Dealer Number Agent Phone Number State License ID Number
___________________________________________________________________________________________________
Brokerage Account Number
- -----------------------------------------------------------------------------------------------------
APP-VEN 10-2 9/97
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Initial below each VENTURE VISION service option you wish to elect.
- --------------------------------------------------------------------------------------------------------------------
14. TELEPHONE TRANSFER AUTHORIZATION
- --------------------------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________
I authorize the Company to act on transfer instructions given by telephone from any person who can furnish proper
identification. Neither the Company nor any person authorized by the Company will be responsible for any claim,
loss, liability or expense in connection with a telephone transfer if the Company or such other person acted on
telephone transfer instructions in good faith in reliance on this authorization.
- --------------------------------------------------------------------------------------------------------------------
15. TELEPHONE WITHDRAWAL AUTHORIZATION
- --------------------------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________
I authorize the Company to act on withdrawal instructions given from any person who can furnish proper
identification by telephone. Neither the Company nor any person authorized by the Company will be responsible for
any claim, loss, liability or expense in connection with a telephone withdrawal if the Company or such other person
acted on telephone withdrawal instructions in good faith in reliance on this authorization. The minimum withdrawal
amount is $1,000.
Withdrawal instructions may authorize Partial Withdrawals of up to $50,000 per account. (Full withdrawals are
not permitted by telephone.) The check may only be payable to the owner of record (who must be individual) and may
be mailed only to the address of record. The Company will not allow telephone withdrawals for the following
accounts: a) An account on which the address has been changed in the last 30 days, b) Accounts over which a person
has Power of Attorney, c) 403(b) accounts for which the owner is under 59 1/2, d) Custodial accounts, and e) Accounts
with Market Timers as owners.
- --------------------------------------------------------------------------------------------------------------------
16. CHECK PLUS - AUTOMATIC PURCHASE
- --------------------------------------------------------------------------------------------------------------------
Owner please initial here __________
I authorize the Company to collect the amount indicated, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence.
(PLEASE ATTACH A VOIDED CHECK.)
Electronic purchase payments to my Contract in the amount of $__________ are to commence during the
month of ______________.
Minimum payments for Non-Qualified: $1,000. Minimum payments for Qualified: $30
Indicate frequency: [ ] Monthly: on the [ ] 5th or [ ] 20th OR [ ] Quarterly: (20th of January, April, July and October)
- --------------------------------------------------------------------------------------------------------------------
17. DOLLAR COST AVERAGING PROGRAM
- --------------------------------------------------------------------------------------------------------------------
Owner please initial here __________
I authorize to have $__________ (minimum $100) over at least a one-year period transferred each month
from the [ ] Money Market or [ ] U.S. Government Securities. Withdrawals should be made as follows:
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$_________________ to the ______________________________ portfolio
$_________________ to the ______________________________ portfolio
$_________________ to the ______________________________ portfolio
[ ] Please make my first transaction on ___/___/___(mm/dd/yy) and monthly thereafter.
- --------------------------------------------------------------------------------------------------------------------
18. SYSTEMATIC WITHDRAWAL PROGRAM
- --------------------------------------------------------------------------------------------------------------------
Owner please initial here __________ .
I authorize withdrawals (minimum $100) from my Contract Value to commence as indicated below. A
maximum of 20% of payments may be withdrawn annually. When utilizing the Systematic Withdrawel Program,
I agree that if any debit/transfer is erroneously received by the bank indicated on the enclosed voided check,
or is not honored upon presentation, any accumulation units may be canceled, and agree to hold the
Company harmless from any loss due to such electronic debits/transfers.
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From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
Please indicate frequency:
[ ] Monthly or [ ] Quarterly (January, April, July and October) on the [ ] 7th [ ] 16th or [ ] 26th.
Please [ ] Withhold [ ] Do not withhold Federal Income Taxes
[ ] I wish to utilize Electronic Funds Transfer in the processing of my Systematic WithdrawAl Program.
Please attach a voided check or, if different from owner, make check payable to:
___________________________________________________________________________________________________
First Middle Last
___________________________________________________________________________________________________
Street City State Zip
(Please allow 7 business days for receipt of check.)
- --------------------------------------------------------------------------------------------------------------------
APP-VEN 10-2 9/97
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Initial below each VENTURE VISION service option you wish to elect.
- --------------------------------------------------------------------------------------------------------------------
19. AUTOMATIC REBALANCING
- --------------------------------------------------------------------------------------------------------------------
OWNER PLEASE INITIAL HERE __________
If marked, the policyholder's contract value, excluding amounts in the fixed account investment options, will be
automatically rebalanced to maintain the rebalancing percentage levels in the variable portfolios as selected
below, based on the current total value of the eligible portfolios on the day of rebalancing.
You may change the rebalancing percentages or terminate your participation in the program by providing the Company
with a completed Automatic Rebalancing Authorization form or by providing instructions via telephone to an
authorized Company representative prior to the day the rebalancing will occur.
If a policyholder elects to participate in Automatic Rebalancing, the total value of the variable portfolios must
be included in the program. Therefore, subsequent payments received and applied to portfolios in percentages
different from the current rebalancing allocation will be rebalanced at the next date of rebalancing unless the
subsequent payments are allocated to the fixed account investment options.
Rebalancing will occur on the 25th of the month (or next business day), please indicate frequency:
[ ] Quarterly [ ] Semi-Annually (June & December) [ ] Annually (December)
ASSET ALLOCATIONS (must total 100%):
____ % Manufacturers Adviser Pac Rim Emerging Mkts (038) ____ % Founders Balanced (058)
____ % T. Rowe Price Science & Technology (046) ____ % Fidelity Aggr Asset Alloc (034)
____ % Founders Int'l Small Cap (036) ____ % Miller Anderson High Yield (059)
____ % Warburg Pincus Emerging Growth (050) ____ % Fidelity Mod Asset Alloc (033)
____ % Pilgrim Baxter Growth (052) ____ % Fidelity Cons Asset Alloc (032)
____ % Fred Alger Small/Mid Cap (041) ____ % Salomon Brothers Strategic Bond (045)
____ % Rowe Price-Fleming Int'l Stock (054) ____ % Oechsle Global Gov't Bond (040)
____ % Founders Worldwide Growth (056) ____ % Manufacturers Adviser Capital Growth Bond (060)
____ % Morgan Stanley Global Equity (039) ____ % Wellington Management Inv Quality Bond (048)
____ % Rosenberg Small Company Value (121) ____ % Salomon Brothers U.S. Gov't Securities (044)
____ % Fidelity Equity (031) ____ % Manufacturers Adviser Money Market (049)
____ % Founders Growth (035)
____ % Manufacturers Adviser Quant Equity (053) LIFESTYLE PORTFOLIOS
____ % T. Rowe Price Blue Chip Growth (042) ____ % Cons 280 (184)
____ % Manufacturers Adviser Real Estate Securities (057) ____ % Mod 460 (185)
____ % Miller Anderson Value (055) ____ % Bal 640 (186)
____ % J.P. Morgan Int'l Growth & Income (043) ____ % Growth 820 (187)
____ % Wellington Management Growth & Income (047) ____ % Aggr 1000 (188)
____ % T. Rowe Price Equity-Income (037)
- --------------------------------------------------------------------------------------------------------------------
APP-VEN 10-2 9/97
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NORTH AMERICAN SECURITY LIFE [LOGO]
INSURANCE COMPANY
June 28, 1994
To whom it may concern,
This opinion is written in reference to the flexible purchase payment individual
deferred variable annuity contracts (the "Contracts") to be issued by North
American Security Life Insurance Company, a Delaware corporation (the
"Company"), with respect to which a Registration Statement on form N-4 (the
"Registration Statement") is being filed under the Securities Act of 1933, as
amended (the "Act").
As Assistant Counsel to the Company, I have examined such records and documents
and reviewed such questions of law as I deemed necessary for purposes of this
opinion.
1. The Company has been duly incorporated under the laws of the state of
Delaware and is a validly existing corporation.
2. NASL Variable Account (the "Variable Account") is a separate account
of the Company and is duly created and validly existing pursuant to
Title 18, Section 2932(a) of the Delaware Code, as amended.
3. The portion of the assets to be held in the Variable Account equal to
the reserves and other liabilities under the Contracts is not
chargeable with liabilities arising out of any other business the
Company may conduct.
4. The Contracts, when issued in accordance with the prospectus contained
in the effective Registration Statement and upon compliance with
applicable local law, will be legal and binding obligations of the
Company.
I consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement.
Very truly yours,
/s/ TRACY ANNE KANE
Tracy Anne Kane
Assistant Counsel
Mailing Address
116 Huntington Avenue P.O. Box 818 Toll-free 800-344-1029
Boston, Massachusetts 02116 Boston, MA 02117-0818 617-266-6004
A wholly-owned subsidiary of North American Life Assurance Company,
established 1881
<PAGE> 1
NORTH AMERICAN SECURITY LIFE [LOGO]
INSURANCE COMPANY
March 3, 1993
To whom it may concern,
This opinion is written in reference to the flexible purchase payment individual
deferred variable annuity contracts (the "Contracts") to be issued by North
American Security Life Insurance Company, a Delaware corporation (the
"Company"), with respect to which a Registration Statement on form N-4 (the
"Registration Statement") is being filed under the Securities Act of 1933, as
amended (the "Act").
As Counsel to the Company, I have examined such records and documents and
reviewed such questions of law as I deemed necessary for purposes of this
opinion.
1. The Company has been duly incorporated under the laws of the state of
Delaware and is a validly existing corporation.
2. NASL Variable Account (the "Variable Account") is a separate account
of the Company and is duly created and validly existing pursuant to
Title 18, Section 2932(a) of the Delaware Code, as amended.
3. The portion of the assets to be held in the Variable Account equal to
the reserves and other liabilities under the Contracts is not
chargeable with liabilities arising out of any other business the
Company may conduct.
4. The Contracts, when issued in accordance with the prospectus contained
in the effective Registration Statement and upon compliance with
applicable local law, will be legal and binding obligations of the
Company.
I consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement.
Very truly yours,
/s/ JEFFREY M. ULNESS
Jeffrey M. Ulness
Counsel
Mailing Address
116 Huntington Avenue P.O. Box 818 Toll-free 800-344-1029
Boston, Massachusetts 02116 Boston, MA 02117-0818 617-266-6004
A wholly-owned subsidiary of North American Life Assurance Company,
established 1881
