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File Number 33-62147
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NUMBER
POST-EFFECTIVE AMENDMENT NUMBER 3
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NUMBER ____
VARIABLE ANNUITY ACCOUNT
(formerly Minnesota Mutual Variable Annuity Account)
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(Exact Name of Registrant)
Minnesota Life Insurance Company
(formerly The Minnesota Mutual Life Insurance Company)
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(Name of Depositor)
400 Robert Street North, St. Paul, Minnesota 55101-2098
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(Address of Depositor's Principal Executive Offices) (Zip Code)
(651) 665-3500
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(Depositor's Telephone Number, Including Area Code)
Dennis E. Prohofsky Copy to:
Senior Vice President, J. Sumner Jones, Esq.
General Counsel and Secretary Jones & Blouch L.L.P.
Minnesota Life Insurance Company 1025 Thomas Jefferson Street, N.W.
400 Robert Street North Suite 405
St. Paul, Minnesota 55101-2098 Washington, D.C. 20007
(Name and Address of Agent for Service)
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box)
immediately upon filing pursuant to paragraph (b)
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on (date) pursuant to paragraph (b) of Rule 485
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60 days after filing pursuant to paragraph (a)(i)
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X on May 3, 1999 pursuant to paragraph (a)(i)
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75 days after filing pursuant to paragraph (a)(ii)
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on (date) pursuant to paragraph (a)(ii) of Rule 485.
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IF APPROPRIATE, CHECK THE FOLLOWING BOX:
this post-effective amendment designates a new effective date for a
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previously filed post-effective amendment.
Title of Securities being registered: Immediate Variable Annuity Contracts
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
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Variable Annuity Account
Cross Reference Sheet to Prospectus
Form N-4
Item Number Caption in Prospectus
1. Cover Page
2. Special Terms
3. Questions and Answers About the Variable Annuity Contracts
4. Condensed Financial Information; Performance Data
5. General Descriptions
6. Contract Charges
7. Description of the Contracts
8. Description of the Contracts; Annuity Payments and Options
9. Description of the Contracts; Death Benefits
10. Description of the Contracts; Purchase Payments and Value of the
Contract
11. Description of the Contracts; Redemptions
12. Federal Tax Status
13. Not Applicable
14. Table of Contents of the Statement of Additional Information
<PAGE>
PROSPECTUS
IMMEDIATE VARIABLE ANNUITY CONTRACT
VARIABLE ANNUITY ACCOUNT
("VARIABLE ANNUITY ACCOUNT"), A SEPARATE ACCOUNT OF
MINNESOTA LIFE INSURANCE COMPANY
("MINNESOTA LIFE")
400 Robert Street North
St. Paul, Minnesota 55101-2098
Telephone: (651) 665-3500
This Prospectus describes an individual, immediate variable annuity contract
(the "contract") offered by Minnesota Life Insurance Company. It may be used in
connection with all types of personal retirement plans.
Your contract values are invested in our Variable Annuity Account. The Variable
Annuity Account invests in shares of the Index 500 Portfolio of the Advantus
Series Fund, Inc. The value of the contract and the amount of each variable
annuity payment will vary in accordance with the performance of the Index 500
Portfolio, except as payments are guaranteed in amount by Minnesota Life. The
contract lets you make additional purchase payments and withdrawals during part
of the time you are receiving annuity payments.
This Prospectus includes information you should know before purchasing a
contract. You should read and keep it for future reference. A Statement of
Additional Information, bearing the same date, which contains further
information, has been filed with the Securities and Exchange Commission ("SEC")
and is incorporated by reference into this Prospectus. A copy of the Statement
of Additional Information may be obtained without charge by calling (651)
665-3500, or by us at 400 Robert Street North, St. Paul, Minnesota 55101-2098.
THIS PROSPECTUS IS NOT VALID UNLESS ATTACHED TO A CURRENT
PROSPECTUS OF ADVANTUS SERIES FUND, INC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS SHOULD BE READ CAREFULLY AND
RETAINED FOR FUTURE REFERENCE.
The date of this document and the Statement of Additional Information is: May 3,
1999.
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THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THE PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SPECIAL TERMS 1
QUESTIONS AND ANSWERS ABOUT THE VARIABLE ANNUITY CONTRACT 3
EXPENSE TABLE 7
CONDENSED FINANCIAL INFORMATION 8
GENERAL DESCRIPTIONS 9
Minnesota Life Insurance Company 9
Separate Account 9
Advantus Series Fund, Inc. 9
Additions, Deletions or Substitutions 10
CONTRACT CHARGES 11
Sales Charges 11
Risk Charge 11
Mortality and Expense Risk Charges 12
Administration Charge 12
DESCRIPTION OF THE CONTRACTS 13
General Provisions 13
Annuity Payments and Options 15
Death Benefits 18
Purchase Payments and Value of the Contract 19
Redemptions 21
FEDERAL TAX STATUS 24
VOTING RIGHTS 24
PERFORMANCE DATA 31
YEAR 2000 COMPUTER PROBLEM 31
STATEMENT OF ADDITIONAL INFORMATION 32
APPENDIX A -- CONDENSED FINANCIAL INFORMATION A-1
APPENDIX B -- TAXATION OF QUALIFIED PLANS B-1
APPENDIX C -- COMPUTATION AND EXAMPLES OF WITHDRAWALS C-1
APPENDIX D -- IMMEDIATE VARIABLE ANNUITY ILLUSTRATION D-1
</TABLE>
<PAGE>
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
AGE: the age of a person at nearest birthday.
ANNUITANT: the person named on page one of the contract who may receive
lifetime benefits under the contract. Except in the event of the death of either
annuitant prior to the annuity payment commencement date, joint annuitants will
be considered a single entity.
ANNUITY PAYMENT COMMENCEMENT DATE: the first annuity payment date as specified
on page one of the contract.
ANNUITY PAYMENT DATE: each day indicated by the annuity payment commencement
date and the annuity payment frequency for an annuity payment to be determined.
This is shown on page one of the contract.
ANNUITY PAYMENTS: payments made at regular intervals to the annuitant or any
other payee. The annuity payments will increase or decrease in amount. The
changes will reflect the investment experience of the sub-account of the
separate account.
ANNUITY UNIT: the standard of value for the variable annuity payment amount.
BENEFICIARY: the person, persons or entity designated to receive death benefits
payable in the event of the annuitant's death.
CASH VALUE: the dollar amount available for withdrawal under the contract at
any time. A cash value exists only as long as both the number of cash value
units and the applicable factor from the cash value factor table shown in the
contract are greater than zero.
CASH VALUE PERIOD: the time during which there is a cash value under the
contract. The cash value period begins on the annuity commencement date and ends
on the cash value end date shown on page one of the contract.
CASH VALUE UNIT: the measure of your interest in the Separate Account that is
available for withdrawal during the cash value period.
CODE: the Internal Revenue Code of 1986, as amended.
CONTRACT DATE: the effective date of a contract.
FUND: Advantus Series Fund, Inc. or any mutual fund or separate investment
portfolio within a series mutual fund which is designated as an eligible
investment for the Separate Account.
GENERAL ACCOUNT: all of our assets other than those in the Separate Account or
in other separate accounts established by us.
GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT: the amount which is guaranteed as
the minimum annuity payment amount. This amount is payable regardless of the
performance of the Sub-Account. Purchase payments and cash value withdrawals
will change the guaranteed minimum annuity payment amount.
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JOINT OWNER: the person designated to share equally in the rights and
privileges provided to the owner of this contract. Only you and your spouse may
be named as a joint owner in those states where we offer joint contracts.
PLAN: a tax-qualified employer pension, profit-sharing, or annuity purchase
plan which provide benefits using these contracts.
PURCHASE PAYMENT DATE: the date we receive a purchase payment in our home
office.
PURCHASE PAYMENTS: amounts paid to us as consideration for the contract.
SEPARATE ACCOUNT: a separate investment account entitled Variable Annuity
Account. The assets of the Separate Account are ours. Those assets are not
subject to claims arising out of any other business which we may conduct.
SURRENDER VALUE: the surrender value of the contract shall be the total annuity
value as of the date of surrender plus the amounts deducted from purchase
payments. These include deductions for sales charges, risk charges and state
premium taxes where applicable.
TOTAL ANNUITY VALUE: the total annuity value represents your total interest in
the Separate Account.
VALUATION DATE: any date on which a Fund is valued.
VALUATION PERIOD: the period between successive valuation dates measured from
the time of one determination to the next.
VARIABLE ANNUITY: an annuity providing for payments varying in amount in
accordance with the investment experience of the Fund.
WE, OUR, US: Minnesota Life Insurance Company.
WRITTEN REQUEST: a request in writing signed by you. In the case of joint
owners, the signatures of both owners will be required to complete a written
request. In some cases, we may provide a form for your use. We may also require
that the contract be sent to us along with your written request.
YOU, YOUR: the owner of this contract. The owner may be the annuitant or
someone else. The owner is named in the application.
1940 ACT: the Investment Company Act of 1940, as amended, or any similar
successor federal legislation.
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QUESTIONS AND ANSWERS ABOUT
THE VARIABLE ANNUITY CONTRACT
WHAT IS AN ANNUITY?
An annuity is a series of payments for the life of a person or for the joint
lifetimes of the annuitant and another person and thereafter during the lifetime
of the survivor. An annuity with payments which are guaranteed as to amount
during the payment period is a fixed annuity. An annuity with payments which
vary during the payment period in accordance with the investment experience of a
separate account of an insurance company is called a variable annuity.
WHAT IS AN IMMEDIATE ANNUITY?
An immediate annuity provides for annuity payments beginning within a relatively
short period after contract issue. This type of annuity is distinguished from a
deferred annuity where contract values may be left with an insurance company or
separate account for some years before annuity payments begin. In some states
this period is shortened so that the contract may be considered to be an
immediate annuity within that state.
WHAT IS THE CONTRACT OFFERED BY THIS PROSPECTUS?
The contract is an immediate, variable annuity contract with scheduled annuity
payments. Annuity payments may be received on a monthly, quarterly, semi-annual
or annual basis. These payments may begin immediately and must begin on a date
within 12 months after the issue date of the contract. Purchase payments are
allocated to the Separate Account. In the Separate Account, your purchase
payments are put into a Sub-Account which invests only in the Index 500
Portfolio of the Fund.
IS THERE A GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT?
Yes. You will receive at least the guaranteed minimum annuity payment amount
shown in your contract. Each variable annuity payment will vary upwards or
downwards in accordance with the performance of the Sub-Account, however, unless
it would be less than the guaranteed minimum annuity payment amount. If it is,
you will get the guaranteed amount instead. At each annuity payment date, we
will pay the annuitant or annuitants the greater of:
- the annuity payment amount determined by multiplying the number of
annuity units times the annuity unit value; or
- the guaranteed minimum annuity payment amount currently in force for the
contract.
We guarantee that variable annuity payments will always be at least 85% of the
initial variable annuity payment amount. We determine this amount when we issue
your contract. It is shown on page one of the contract. If an additional
purchase payment is made, we guarantee that variable annuity payments will
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always be at least 85% of the annuity amount attributable to that additional
purchase payment, plus the amount already guaranteed. If you withdraw cash value
amounts, the guaranteed annuity payment amount will be reduced by the same
proportion that the withdrawal reduces the number of annuity units.
IS THE AMOUNT OF THE CASH VALUE OF THE CONTRACT GUARANTEED?
No. The cash value of the contract decreases as annuity payments are made. It
will also increase or decrease based upon the performance of the Sub-Account of
the Separate Account. This is reflected in the annuity unit value. We do not
guarantee the performance of any Sub-Account, nor do we guarantee the annuity
unit value, which may fall to zero. The performance of the Sub-Account will not
affect the duration of the cash value period.
ARE THERE LIMITATIONS ON PURCHASE PAYMENTS?
Yes. A purchase payment in an amount of at least $10,000 is required in order
for us to issue the contract. Contracts will not be issued for less than that
amount.
After we issue the contract, you may make additional purchase payments. This
right extends only until the end cash value period of the contract. This period
is shown on page one of the contract. You may make more purchase payments only
while the annuitant is alive. Additional purchase payments must be in an amount
of at least $5,000. We will waive this contract limitation for amounts which are
received after the contract effective date as part of an integrated rollover or
Section 1035 transaction.
WHEN ADDITIONAL PURCHASE PAYMENTS ARE MADE UNDER AN EXISTING IMMEDIATE VARIABLE
ANNUITY CONTRACT, THOSE PURCHASE PAYMENTS FOR TAX PURPOSES WILL NOT RESULT IN A
RECALCULATION OF THE OWNER'S INVESTMENT IN THE CONTRACT AND A DETERMINATION OF A
NEW EXCLUSION AMOUNT. THE AMOUNT OF THOSE ADDITIONAL PURCHASE PAYMENTS WILL BE
TAXABLE WHEN DISTRIBUTED, AS AN ANNUITY OR OTHERWISE.
WE RESERVE THE RIGHT TO SUSPEND THE SALE OF THESE CONTRACTS AND TO TERMINATE
YOUR ABILITY TO MAKE ADDITIONAL PURCHASE PAYMENTS INTO THE CONTRACT.
Total purchase payments may not exceed $1,000,000 except with our prior consent.
WHAT INVESTMENT OPTIONS ARE AVAILABLE FOR THE SEPARATE ACCOUNT?
Purchase payments are allocated to the Sub-Account and in shares of the Index
500 Portfolio of the Fund.
There is no assurance that the Portfolio will meet its objectives. Additional
information concerning the investment objectives and policies of the Portfolio
can be found in the current prospectus for the Fund, which is attached to this
Prospectus. You should carefully read the Fund prospectus before purchasing the
contract.
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WHAT CHARGES ARE ASSOCIATED WITH THE CONTRACTS?
There are charges which reduce purchase payments and charges made directly to
the assets held in the Separate Account.
A deduction for a sales charge and a risk charge is made from purchase payments.
The sales charge is up to 4.5% of purchase payments.
The risk charge, for guaranteeing the minimum annuity payment amount, may be as
much as 2% of each purchase payment. Currently, this charge is made at the per
annum rate of 1.25% of purchase payments.
We deduct a daily charge of .80% of the net asset value of the Separate Account
on an annual basis for our mortality and expense risk guarantees. We reserve the
right to increase this charge to 1.40% on an annual rate.
The Portfolio pays advisory and other expenses. Total advisory and other
expenses of the Portfolio is .44% of average daily net assets of the Portfolio
on an annual basis.
We deduct an administrative charge from the net asset value of the Separate
Account the amount of .15% computed daily, on an annual basis. We reserve the
right to increase this charge to .40%.
Deductions for any applicable premium taxes may also be made (currently such
taxes range from 0.0% to 3.5%) depending upon applicable law.
CAN YOU SURRENDER THE CONTRACT?
Yes. Before annuity payments begin, you can surrender the contract for its
surrender value. The surrender value is its total annuity value plus the amounts
deducted from your purchase payments for sales charges, risk charges and state
premium taxes where applicable.
CAN YOU MAKE WITHDRAWALS FROM THE CONTRACT?
Yes. During the cash value period, you can make withdrawals of the cash value of
the contract, pursuant to your written request. Each withdrawal must be in an
amount of at least $500 or, if the cash value of the contract is less than that
amount, all of the total remaining cash value in the contract must be withdrawn.
Withdrawals are not allowed during the period before annuity payments begin.
A withdrawal of all or a portion of the cash value of the contract, subject to
the dollar limitations described above, may be made during the "cash value
period" of the contract. The amount of the cash value depends upon the number of
cash value units in the contract. The number of cash value units and the cash
value period are shown on page one of each contract. If you make later purchase
payments or withdrawals we will give you a new page one.
When a withdrawal is made during the cash value period, the amount of the
annuity payment to be received by the annuitant after the withdrawal will be
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recalculated. The guaranteed minimum annuity payment amount will be redetermined
as well. Each will be adjusted downward to reflect the withdrawal of cash
values.
WHEN WITHDRAWALS ARE TAKEN FROM THE CASH VALUE, ALL AMOUNTS RECEIVED BY THE
TAXPAYER ARE TAXABLE AS ORDINARY INCOME IN THE YEAR IN WHICH THE WITHDRAWALS ARE
TAKEN. THOSE AMOUNTS ARE TAXABLE TO THE RECIPIENT WITHOUT REGARD TO THE OWNER'S
INVESTMENT IN THE CONTRACT OR ANY INVESTMENT GAIN IN THE CONTRACT.
DO YOU HAVE A RIGHT TO CANCEL THE CONTRACT?
Yes. You may cancel the contract any time within ten days of your receipt of the
contract by returning it to us or your agent.
WHAT ANNUITY OPTIONS ARE AVAILABLE?
You may select one of two variable annuity options. One provides for lifetime
variable annuity payments based on the life of a single annuitant, the other
provides for the lifetime variable annuity payments based upon the combined
lives of joint annuitants.
WHAT HAPPENS IF THE ANNUITANT DIES?
If the annuitant, or one of the named joint annuitants dies before annuity
payments begin, we will pay a death benefit to you or the named beneficiary.
This death benefit will be the sum of the contract's total annuity value plus
the amounts deducted from the contract's purchase payments for sales charges,
risk charges and state premium taxes, where applicable.
If the annuitant dies after annuity payments have begun, or after the second
death in the case of joint annuitants, we will pay a death benefit. It will be
equal to the cash value, if any, of the contract as of the date of the
annuitant's death.
WHAT VOTING RIGHTS DO YOU HAVE?
Contract owners and annuitants will be able to direct us as to how to vote
shares of the Portfolio held for their contracts in the Sub-Account of the
Separate Account.
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EXPENSE TABLE
The following contract expense information is intended to illustrate the
expenses of the individual, immediate variable annuity contract. All expenses
shown are rounded to the nearest dollar. The information contained in the tables
must be considered with the narrative information which immediately follows them
in this heading.
INDIVIDUAL, IMMEDIATE VARIABLE ANNUITY CONTRACT
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
CUMULATIVE TOTAL SALES CHARGE AS A PERCENTAGE
PURCHASE PAYMENTS OF PURCHASE PAYMENTS
- ------------------------------------------------------------ ----------------------------
<S> <C>
$ 0 to 499,999.99 4.500%
500,000 to 749,999.99 4.125
750,000 to 1,000,000.00 3.750
1,000,000.01 to 1,499,999.99 3.375
1,500,000 to 1,999,999.99 3.000
2,000,000 to 2,499,999.99 2.625
2,500,000 to 2,999,999.99 2.250
3,000,000 to 3,999,999.99 1.875
4,000,000 to 5,000,000.00 1.500
Risk Charge 1.25%
--
Total Contract Expenses (assuming maximum sales charge) 5.75%
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)
<TABLE>
<S> <C>
Mortality and Expense Risk Fees* 0.80%
Administrative Charge* 0.15%
--
Total Separate Account Annual Expenses 0.95%
</TABLE>
ADVANTUS SERIES FUND, INC. INDEX 500 PORTFOLIO ANNUAL EXPENSES (AS A PERCENTAGE
OF AVERAGE NET ASSETS)
<TABLE>
<S> <C>
Index 500 Portfolio
Management Fees .40%
Other Expenses .05%
--
Total Index 500 Portfolio Annual Expenses .45%
--
--
</TABLE>
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EXAMPLE:
Whether or not you surrender your contract at the end of the applicable time
period:
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<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C> <C>
You would pay the following expenses on a $10,000 $ 709 $ 993 $ 1,297 $ 2,158
investment as of the end of the period indicated,
assuming a 5% annual return on assets:
</TABLE>
*Under the terms of the contract, total mortality and expense risk fees may be
increased to as much as 1.40% (provided any necessary regulatory approvals are
obtained) and the administrative charge may be increased to as much as .40%.
These figures are based on the assumption that the contract will accumulate
value prior to the annuity payment commencement date at a 5% annual return on
assets for one, three, five and ten years, respectively. The maximum period
allowable between the issuance of a contract and the commencement of annuity
payments is one year.
The tables shown above are to assist a contract owner in understanding the costs
and expenses that a contract will bear directly or indirectly. For more
information on contract costs and expenses, see the Prospectus heading "Contract
Charges" and the information immediately following. The table does not reflect
deductions for any applicable premium taxes which may be made from each purchase
payment depending upon applicable law. The examples contained in this table
should not be considered a representation of past or future expenses. Actual
expenses may be greater or less than those shown.
CONDENSED FINANCIAL INFORMATION
The financial statements of Variable Annuity Account and the consolidated
financial statements of Minnesota Life Insurance Company may be found in the
Statement of Additional Information. Condensed financial information may be
found in Appendix A.
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(SIDEBAR)
We are a life insurance company.
The Variable Annuity Account is one of our separate accounts.
Contract values are invested in a single Portfolio.
(END SIDEBAR)
GENERAL DESCRIPTIONS
A. MINNESOTA LIFE INSURANCE COMPANY
We are Minnesota Life Insurance Company ("Minnesota Life"), a life insurance
company organized under the laws of Minnesota. Minnesota Life was formerly known
as The Minnesota Mutual Life Insurance Company ("Minnesota Mutual"), a mutual
life insurance company organized in 1880 under the laws of Minnesota. On October
1, 1998, a plan of reorganization created a mutual insurance holding company
named Minnesota Mutual Companies, Inc. Minnesota Mutual reorganized as a stock
insurance company subsidiary of the new holding company and took the new name
Minnesota Life. Our home office is at 400 Robert Street North, St. Paul,
Minnesota 55101-2098, telephone: (651) 665-3500. We are licensed to do a life
insurance business in all state of the United States (except New York where we
are an authorized reinsurer), the District of Columbia, Canada, Puerto Rico and
Guam.
B. SEPARATE ACCOUNT
We established the Variable Annuity Account on September 10, 1984. The Separate
Account is registered as a "unit investment trust" with the SEC under the 1940
Act, but such registration does not signify that the SEC supervises the
management, or the investment practices or policies, of the Separate Account.
The assets of the Separate Account are not chargeable with liabilities arising
out of any other business we may conduct. The investment performance of the
Separate Account is entirely independent of both the investment performance of
our General Account and of any of our separate accounts. All obligations under
the contracts are general corporate obligations of Minnesota Life.
The Separate Account has one Sub-Account available for your purchase payments to
the contract. That Sub-Account invests in the Index 500 Portfolio.
C. ADVANTUS SERIES FUND, INC.
Advantus Series Fund, Inc. (the "Fund"), is a mutual fund advised by Advantus
Capital Management, Inc. ("Advantus Capital"). Prior to May 1, 1997, the name of
the Fund was "MIMLIC Series Fund, Inc." The Fund issues its shares only to us
and our separate accounts. It may be offered to separate accounts of insurance
companies affiliated with us in the future.
Advantus Capital is a wholly-owned subsidiary of Minnesota Life.
The only Portfolio of the Fund which is available for investment by the contract
is the Index 500 Portfolio.
A prospectus for the Fund is attached to this Prospectus. You should carefully
read the Fund's prospectus before investing in the contract.
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(SIDEBAR)
We may change the Portfolios offered under the contract.
(END SIDEBAR)
D. ADDITIONS, DELETIONS OR SUBSTITUTIONS
We retain the right, subject to any applicable law, to make substitutions with
respect to the investments of the Sub-Accounts of the Separate Account. If
investment in a Fund should no longer be possible or if we determine it becomes
inappropriate for contracts of this class, we may substitute another Fund for a
sub-account. Substitution may be with respect to existing total annuity values
and cash values, future purchase payments and future annuity payments.
We reserve the right to transfer assets of the separate account to another
separate account.
We may also establish additional Sub-Accounts in the Separate Account and we
reserve the right to add, combine or remove any Sub-Accounts of the Separate
Account. Each additional Sub-Account will purchase shares in a new portfolio or
mutual fund. Such Sub-Accounts may be established when, in our sole discretion,
marketing, tax, investment or other conditions warrant. We will use similar
considerations in determining to eliminate one or more of the Sub-Accounts of
the Separate Account. The addition of any investment option will be made
available to existing contract owners on whatever basis we determine.
We also reserve the right, when permitted by law, to de-register the Separate
Account under the 1940 Act to restrict or eliminate any voting rights of the
contract owners, and to combine the Separate Account with one or more of our
other separate accounts.
Shares of the Fund are also sold to some of our other separate accounts, which
are used to receive and invest premiums paid under our variable life policies.
It is conceivable that in the future it may be disadvantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the Fund simultaneously. Although neither we nor the Fund currently foresees any
such disadvantages either to variable life insurance policy owners or to
variable annuity contract owners, the Fund's Board of Directors intends to
monitor events in order to identify any material conflicts between such policy
owners and contract owners and to determine what action, if any, should be taken
in response. Action could include the sale of Fund shares by one or more of the
separate accounts, which could have adverse consequences. Material conflicts
could result from, for example,
- changes in state insurance laws,
- changes in federal income tax laws,
- changes in the investment management of any of the Portfolios of the
Fund, or
- differences in voting instructions between those given by policy owners
and those given by contract owners.
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(SIDEBAR)
A deferred sales charge of up to 4.5% may apply.
The risk charge is 1.25%.
(END SIDEBAR)
CONTRACT CHARGES
Under this contract, there are deductions for charges from purchase payments and
other charges which are made directly to the Separate Account. Deductions from
purchase payments are made for sales charges, risk charges and state premium
taxes, where applicable. Deductions for the mortality risk charge, expense risk
charge and the administrative charge are all deducted on each valuation date
from the Separate Account.
A. SALES CHARGES
A sales charge is deducted from the purchase payments. The percentage amount of
the deduction is as follows:
<TABLE>
<CAPTION>
CUMULATIVE TOTAL SALES CHARGE AS A PERCENTAGE
PURCHASE PAYMENTS OF PURCHASE PAYMENTS
- ---------------------------- ----------------------------
<S> <C>
$ 0 to 499,999.99 4.500%
500,000 to 749,999.99 4.125
750,000 to 1,000,000.00 3.750
1,000,000.01 to 1,499,999.99 3.375
1,500,000 to 1,999,999.99 3.000
2,000,000 to 2,499,999.99 2.625
2,500,000 to 2,999,999.99 2.250
3,000,000 to 3,999,999.99 1.875
4,000,000 to 5,000,000.00 1.500
</TABLE>
The applicable percentage will be based on the total cumulative purchase
payments to the date of payment, including the new purchase payment. In
addition, if you purchase multiple contracts at different times, purchase
payments made under all contracts will be aggregated solely for the purpose of
determining the sales charge applicable to those purchase payments made to later
contracts.
These sales charges may be waived in whole or in part where sales expenses are
not paid at the time of sale to registered representatives and broker-dealers
responsible for the sale of the contracts or where the contract is sold in
anticipation of reduced expenses in group or group-type situations. We will not
eliminate or reduce a sales charge if that would be unfairly discriminatory to
any person or class of persons.
B. RISK CHARGE
A risk charge is deducted from each purchase payment for our guarantee of the
minimum annuity payment amount. The risk charge may be as much as 2% of each
purchase payment. Currently, this charge is made at the per annum rate of 1.25%
of purchase payments made to the contract. This rate is not guaranteed for
future purchase payments made under the contract and may change based upon our
experience.
PAGE 11
<PAGE>
(SIDEBAR)
The mortality and expense risk charge is .80%, but we may increase it to 1.40%.
The administrative charge is .15%.
(END SIDEBAR)
If this deduction proves to be insufficient to cover our actual costs of the
risk assumed by us in providing a guaranteed minimum payment, then we will
absorb the resulting losses. If these deductions prove to be more than
sufficient after the establishment of any contingency reserves deemed prudent or
required by law, any excess will be profit to us.
C. MORTALITY AND EXPENSE RISK CHARGES
We assume the mortality risk by our obligation to continue to make scheduled
annuity payments, in accordance with the annuity rate tables and other
provisions contained in the contract, to each annuitant regardless of how long
that annuitant lives or all annuitants as a group live. This assures an
annuitant that neither the annuitant's own longevity nor an improvement in life
expectancy generally will have an adverse effect on the scheduled annuity
payments received under the contract. Our actual mortality results will not
adversely affect any payments or values.
We assume an expense risk by assuming that deductions in the contracts will be
adequate to cover our actual expenses. Our actual expense results incurred by us
will not adversely affect any payments or values.
For assuming these risks, we currently make a deduction from the net asset value
of the Separate Account to an annual rate of .80%. This is 0.55% for the
mortality expense risk charge and 0.25% for the expense risk charge. We have the
right to increase these charges. If these charges are increased to the maximum
amount, then the total for the mortality risk and expense risk charges would be
1.40% on an annual basis.
If these deductions prove to be insufficient to cover our actual costs, then we
will absorb the resulting losses. If these deductions prove to be more than
sufficient after the establishment of any contingency reserves deemed prudent or
required by law, any excess will be profit to us. Some or all of such profit may
be used to cover any distribution costs not recovered through the sales charge.
D. ADMINISTRATION CHARGE
We perform all administrative services relative to the contract. These services
include the review of applications for compliance with our issue rules, the
preparation and issue of the contract, the receipt of purchase payments,
forwarding amounts to the Fund for investment, the calculation of the guaranteed
minimum annuity payment amount, the preparation and mailing of periodic reports
and the performance of other services.
As consideration for providing these services, we currently make a deduction
from the Separate Account at the annual rate of 0.15%. We reserve the right to
increase this charge. If we do, the amount of this charge will not exceed 0.40%.
PAGE 12
<PAGE>
(SIDEBAR)
The contract is an immediate payment variable annuity. It may be used with a
variety of retirement plans.
We issue the contract to you and you select the annuitant.
(END SIDEBAR)
DESCRIPTION OF THE CONTRACTS
A. GENERAL PROVISIONS
1. Types of Contracts Offered
(a) Variable Annuity Contract
The contract is an individual, immediate, variable annuity contract
issued by us. It provides for scheduled annuity payments on a monthly,
quarterly, semi-annual or annual basis. These payments may begin
immediately. They must begin on a date within 12 months after the issue
date of the contract. Purchase payments received by us under a contract
are allocated to the Separate Account. In the Separate Account, your
purchase payments are put into a Sub-Account which are then invested in
the Portfolio.
This type of contract may be used in connection with a pension or profit
sharing plan under which plan contributions have been accumulating. It
may be used in connection with a plan which has previously been funded
with insurance or annuity contracts. It may also be purchased by
individuals not as a part of any qualified plan. The contract provides
for a variable annuity which is paid on the basis of a single or joint
life annuity. The annuity option elected may not be changed.
2. Issuance of Contracts
The contracts are issued to you. The owner of the contract may be the annuitant
or someone else. The contract may be owned by two persons jointly. In some
states, we may not offer joint contracts.
3. Modification of the Contracts
A written agreement between you and us may modify a contract. However, no
modification will adversely affect the rights of an annuitant under the contract
unless it is made to comply with a law or government regulation. You will have
the right to accept or reject a modification. You cannot reject a modification
where the contract is used in a tax-qualified arrangement, and the change is
required to conform the contract with tax laws or regulations.
4. Assignment
The annuitant, or the joint annuitants, can direct or assign the contract
annuity payments so that they are paid to someone else. We will not be bound by
any assignment until we have recorded a written request of it at our home
office. We are not responsible for the validity of any assignment. An assignment
will not apply to any payment or action before it was recorded. Any claim made
by an assignee will be subject to proof of the assignee's interest and the
extent of the assignment.
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(SIDEBAR)
You cannot pay more than $1 million unless we consent.
We normally pay lump sum payments within 7 days, but may delay payments in
certain circumstances.
(END SIDEBAR)
If the contract is part of a tax-qualified program (including employer-sponsored
employee pension benefit plans, tax-sheltered annuities and individual
retirement annuities), your or the annuitant's interest may not be assigned,
sold, transferred, discounted or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose. To the maximum
extent permitted by law, benefits payable under the contract shall be exempt
from the claims of creditors.
5. Limitations on Purchase Payments
Purchase payments must be made at our home office. Our home office is at 400
Robert Street North, St. Paul, Minnesota 55101-2098. When we receive a purchase
payment, we will send you a confirmation statement and an updated page one for
the contract.
A purchase payment in an amount of at least $10,000 will be required in order
for us to issue the contract. We will not issue a contract for less than that
amount.
After the contract has been issued, you may make additional purchase payments.
You can do this only during the cash value period of the contract as shown on
page one. Additional purchase payments may be made only while the annuitant is
alive. Additional purchase payments must be in an amount of at least $5,000. We
will waive this contract provision for amounts which are received after contract
issue if it is part of an integrated rollover or Section 1035 transaction. When
you make additional purchase payments, those purchase payments will not result
in a recalculation of your investment in the contract and a determination of a
new exclusion amount. You may also wish to consult with your tax adviser.
WE RESERVE THE RIGHT TO SUSPEND THE SALE OF THESE CONTRACTS AND TO TERMINATE
YOUR ABILITY TO MAKE ADDITIONAL PURCHASE PAYMENTS INTO THE CONTRACT.
You may not make total purchase payments which exceed the amount of $1,000,000
unless you have our prior consent. Currently, we are accepting purchase payments
of up to $5,000,000 without requiring specific advance consent.
Some states will limit these contracts to a single purchase payment.
There may be limits on the maximum contributions to retirement plans that
qualify for special tax treatment.
6. Deferment of Payment
Whenever we make any payment in a single sum, we will make it within seven days
after the date such payment is called for by the terms of the contract, except
as payment may be subject to postponement for:
- any period during which the New York Stock Exchange is closed other than
customary weekend and holiday closings, or during which trading on the
New York Stock Exchange is restricted, as determined by the Commission;
PAGE 14
<PAGE>
(SIDEBAR)
The contract is non-participating.
(END SIDEBAR)
- any period during which an emergency exists as determined by the
Commission as a result of which it is not reasonably practical to dispose
of securities in the Fund or to fairly determine the value of the assets
of the Fund;
- or such other periods as the Commission may by order permit for the
protection of the contract owners.
7. Participation
The contract is nonparticipating. Contracts issued before October 1, 1998 were
participating.
No assurance can be given as to the amounts, if any, that will be distributable
under participating contracts in the future. If any distribution of divisible
surplus is made, it will take the form of the purchase of additional annuity
units.
B. ANNUITY PAYMENTS AND OPTIONS
1. Annuity Payments
Variable annuity payments are determined on the basis of
- the mortality table specified in the contract, which reflects the age of
the annuitant or the joint annuitants, and
- the investment performance of the Sub-Account.
The amount of the variable annuity payments will not be affected by adverse
mortality experience or by an increase in our expenses in excess of the expense
deductions provided for in the contract. The annuitant will receive the value of
a fixed number of annuity units each month. The value of those units (and thus
the amount of each scheduled annuity payment) will reflect investment gains and
losses and investment income of the Portfolio. The amount of the annuity payment
will increase or decrease from one annuity payment date to the next unless
affected by the guaranteed minimum annuity payment amount.
2. Electing the Annuity Commencement Date
The contracts are issued as immediate annuities on the contract date. When you
purchase a contract, you must indicate the annuity commencement date. It must be
within 12 months from the contract date. Some jurisdictions may restrict this
time limit to a shorter period.
An annuity payment may begin on any day of the month. Annuity payments may be
received on a monthly, quarterly, semi-annual or annual basis.
Benefits under retirement plans that qualify for special tax treatment generally
must commence no later than the April 1 following the year in which the
participant reaches age 70 1/2 and are subject to other conditions and
restrictions.
PAGE 15
<PAGE>
(SIDEBAR)
Two annuity options are available on a fixed. Each is payable only as a variable
annuity.
The amount of your first annuity payment depends on the age of the annuitant and
the annuity option you select.
(END SIDEBAR)
3. Annuity Forms
The contracts provide for two lifetime annuity forms, a life annuity or a joint
and last survivor annuity. Each annuity payment option is available only as a
variable annuity. No additional optional annuity forms are provided or allowed
under the contracts.
LIFE ANNUITY
This is a scheduled annuity payable during the lifetime of the annuitant.
Annuity payments terminate with the last scheduled payment preceding the death
of the annuitant if the annuitant's death occurs after the cash value period has
expired. If the annuitant dies during the cash value period, the beneficiary
will be paid a death benefit that permits the beneficiary to elect to continue
receiving payments until the end of the cash value period or to withdraw some or
all of the cash value amount. Annuity payment amounts payable as a death benefit
will be reduced for any cash value withdrawals received by the beneficiary.
JOINT AND LAST SURVIVOR ANNUITY
This is a scheduled annuity payable during the joint lifetime of the annuitant
and a designated joint annuitant. Payments continue during the remaining
lifetime of the survivor. If the last surviving annuitant dies during the cash
value period, the beneficiary will be paid a death benefit. The beneficiary may
elect to continue receiving payments until the end of the cash value period or
to withdraw some or all of the cash value. Annuity payment amounts payable as a
death benefit will be reduced for any cash value withdrawals received by the
beneficiary. If this option is elected, the contract and payments shall then be
the joint property of the annuitant and the designated joint annuitant.
The amount of the first scheduled payment depends on the annuity form elected
and the age of the annuitant and the joint annuitant, if any.
4. Determination of Amount of Variable Annuity Payments
Unless annuity payments are based on the guaranteed minimum annuity payment
amount, the dollar amount of each variable annuity payment is equal to:
- the number of annuity units in the contract, multiplied by;
- the annuity unit value as of the due date of the payment.
A number of annuity units is credited at issuance of the contract based upon the
initial annuity payment amount attributable to the initial purchase payment
received for the contract. The number of annuity units to be credited is
determined by dividing the initial annuity payment amount by the annuity unit
value as of the contract date. The number of annuity units remains unchanged
except as adjusted for your additional purchase payments, cash value withdrawals
or an annuitant's death.
The initial annuity payment amount is determined by applying the purchase
payment, after deductions, to the appropriate annuity purchase rate per $1,000.
Deductions from purchase payments may include premium taxes. Where applicable,
these taxes currently range from 0% to 3.5%.
PAGE 16
<PAGE>
(SIDEBAR)
Payments are guaranteed at 85% of your initial variable annuity.
(END SIDEBAR)
The initial annuity payment amount depends on the annuity form you elected and
upon the adjusted age of the annuitant and the joint annuitant, if any. The
initial annuity payment amount is also based upon annuity payment purchase rate
tables which assume an interest rate of 4.5% per annum. The 4.5% interest rate
will produce level annuity payments if the net investment performance remains
constant at 4.5% per year. Subsequent payments will decrease, remain the same or
increase depending upon whether the actual net investment performance is less
than, equal to, or greater than 4.5%.
The amount of the first annuity payment after the initial purchase payment, or
after an addition or withdrawal, may be different than the initial annuity
payment amount used to determine the number of annuity units credited at the
time of that transaction. The actual annuity payment amount on any due date is
the number of annuity units multiplied by the annuity unit value on the due date
of the payment. We will pay the guaranteed minimum annuity payment amount if
that amount is greater. The annuity unit value recognizes the net sub-account
performance between the date of a transaction and the date the annuity payment
is calculated for payment.
5. Amount of Second and Subsequent Scheduled Annuity Payments
Unless annuity payments are the guaranteed minimum annuity payment amount, the
dollar amount of the second and later variable annuity payments is equal to:
- the number of annuity units determined for the Sub-Account, times
- the annuity unit value as of the due date of the payment. This amount
will increase or decrease from payment to payment.
6. The Guaranteed Minimum Annuity Payment Amount
You will receive at least the guaranteed minimum annuity payment amount
specified in your contract. Each variable annuity payment will vary upwards or
downwards in accordance with investment performance unless it would be less than
the guaranteed minimum annuity payment amount. At each annuity payment date, we
will pay the annuitant or annuitants the greater of:
- the annuity payment amount determined by multiplying the number of
annuity units times the annuity unit value; or
- the guaranteed minimum annuity payment amount currently in force for the
contract.
We guarantee that variable annuity payments will always be at least 85% of the
initial variable annuity payment amount.
The guaranteed amount is determined on the contract issue date and shown on page
one of the contract. If an additional purchase payment is made, we will
guarantee that variable annuity payments will always be at least 85% of the
annuity amount attributable to that additional purchase payment, plus the amount
already guaranteed when you make that purchase payment. If you withdraw cash
value amounts under the contract, it will reduce the guaranteed annuity payment
amount by the same proportion that the withdrawal reduces the number of annuity
units.
PAGE 17
<PAGE>
(SIDEBAR)
This variable annuity has a death benefit during the cash value period.
(END SIDEBAR)
C. DEATH BENEFITS
The contracts provide that in the event of the death of the annuitant or a joint
annuitant before the annuity payments begin, a death benefit will be paid to you
or, if applicable, to your beneficiary. The death benefit will be paid when we
receive due proof, satisfactory to us, of the death at our home office. The
death benefit will be the sum of:
- the total annuity value of the contract; plus
- the amounts deducted from your purchase payments for sales charges, risk
charges and state premium taxes where applicable.
Death proceeds will be paid in a single sum to the beneficiary designated to
receive a lump sum benefit. Payment will be made within seven days after we
receive due proof of death. Except as noted below, the entire interest in the
contract must be distributed within five years of an owner's death.
We will pay the cash value of the contract, if any, as a lump sum death benefit
in the event of the death of the annuitant or the second joint annuitant after
annuity payments have begun. We will pay the death benefit to the beneficiary.
If you are not an annuitant and you die, or if any joint owner who is not an
annuitant dies, a death benefit will be paid. This death benefit will be the
same amount as the amount that would be paid on the death of the annuitant or
joint annuitant. It will be paid out in the same manner, except that if death
occurs before the annuity payments begin, the death benefit will be paid out
within five years of the date of death. When we pay a death benefit on the death
of the owner, no other contract benefits are then payable.
You can file a written request with us to change the beneficiary. It will not be
effective until it is recorded in our home office records. After it has been
recorded, it will take effect as of the date you signed the request. However, if
a death occurs before the request has been recorded, the request will not be
effective as to any death proceeds we have paid before the request was recorded
in our home office. If a beneficiary dies, that beneficiary's interest in a
contract ends with his or her death. Only those beneficiaries who survive will
be eligible to share in the amount payable to the beneficiary at the annuitant's
death. If there is no surviving beneficiary upon the death of the annuitant, any
remaining value of death benefit payable to the beneficiary will be paid to the
annuitant's estate.
If the death benefit is payable after annuity payments have begun, the
beneficiary may elect to receive annuity payments during the remainder of the
cash value period rather than a lump sum benefit. However, the number of annuity
units will be set as a number equal to the number of cash value units as of the
date of the annuitant's death. The annuity payments to the beneficiary will
terminate at the end of the cash value period. Then, the guaranteed minimum
annuity payment amount will be adjusted in proportion to any change in the
number of annuity units. The new guaranteed minimum annuity payment amount will
be equal to:
- the guaranteed minimum annuity payment amount just prior to the
annuitant's death, multiplied by
- the number of annuity units after the annuitant's death,
PAGE 18
<PAGE>
(SIDEBAR)
Initial purchase payments are credited within 2 business days of our receipt of
a complete application.
This immediate annuity allows you to make additional purchase payments.
(END SIDEBAR)
- divided by the number of annuity units prior to the annuitant's death.
If the beneficiary elects to continue the annuity payments, the cash value will
also continue on the beneficiary's behalf as part of the death benefit. This
allows the beneficiary to withdraw any or all of the cash value available at any
time during the remaining cash value period. As with cash value withdrawals
while the annuitant is alive, cash value withdrawals by the beneficiary after
the annuitant's death will reduce future annuity payments and the guaranteed
minimum annuity payment amount.
Death benefits payable after the annuitant's death must be distributed at least
as rapidly as under the method elected by the annuitant or annuitants.
D. PURCHASE PAYMENTS AND VALUE OF THE CONTRACT
1. Crediting Annuity and Cash Value Units
You must complete an application and send it to our home office. We will review
each application form submitted to us for compliance with our issue criteria
and, if it is accepted, we will issue a contract. The initial purchase payment
for the contract must be an amount of at least $10,000.
If we receive money and an incomplete application, that purchase payment will
not be credited until the valuation date coincident with or next following the
date a completed application is received and accepted. We will offer to return
the initial purchase payment with an incomplete application if it appears that
the application cannot be completed within five business days.
Purchase payments are credited to the contract in the form of annuity units and
cash value units. Each purchase payment is credited on the valuation date
coincident with or next following the date such purchase payment is received by
us at our home office, except for the initial purchase payment. The number of
annuity and cash value units credited with respect to each purchase payment is
determined by:
- dividing the initial annuity payment amount attributable to the purchase
payment by
- the then current annuity unit value for the Sub-Account on the date the
purchase payment is credited.
The net amount of each purchase payment, after deductions, will be applied to
purchase an additional initial annuity payment amount at least as great as that
determined by using the guaranteed annuity payment purchase rate table for new
purchase payments included in the contract. The guaranteed annuity payment
purchase rates used for new purchase payments as shown in the contract. When a
purchase payment is made, we are using a more favorable table of annuity payment
purchase rates for new purchase payments, we will use that table instead.
The number of annuity and cash value units determined shall not be changed by
any subsequent change in the value of a unit, but the value of a unit will vary
from valuation date to valuation date to reflect the investment experience of
the Sub-Account.
PAGE 19
<PAGE>
We will determine the value of annuity units on each day on which the Portfolio
of the Fund is valued.
Cash value units will be credited for each purchase payment in a number equal to
the number of annuity units credited for each respective purchase payment.
2. Total Annuity Value of the Contract
The total annuity value of the contract at any time is the present value of the
future annuity payments expected to be made under the contract. The total
annuity value represents your total interest in the Separate Account.
When the annuitant is alive, the total annuity value is equal to:
- the sum of the number of cash value units, multiplied by the annuity unit
value,
- multiplied by the appropriate factor from the total annuity value factor
table(s) included in the contract;
- plus the number of annuity units in excess of the number of cash value
units,
- multiplied by the annuity unit value,
- multiplied by the appropriate factor from the total annuity value factor
table(s) included in the contract.
After the annuitant's death, if the beneficiary elects to continue annuity
payments for the remainder of the cash value period, the total annuity value
will be equal to the cash value at all times during the cash value period.
3. Value of the Annuity Unit
The value of an annuity unit for the Sub-Account is determined on each valuation
date by using the product of:
- the value of an annuity unit on the preceding valuation date;
- the net investment factor for the Sub-Account for the valuation period
ending on the current valuation date; and
- a daily factor (.999879) which adjusts the value for the effect in the
valuation period of the 4.5% annual assumed interest rate that has
already been built into each contract's total annuity value, cash value
and annuity payment calculations.
4. Net Investment Factor for Each Valuation Period
The net investment factor is an index used to measure the investment performance
of a Sub-Account from one valuation period to the next. For the Sub-Account, the
net investment factor for a valuation period is the gross investment rate for
the valuation period, less a deduction for the mortality and expense risk
charges and the administrative charge at the current rate of 0.95% per annum.
The gross investment rate is equal to:
- the net asset value of a Portfolio share determined at the end of the
current valuation period, plus
PAGE 20
<PAGE>
- the per share amount of any dividend or capital gain distribution by the
Portfolio if the "ex-dividend" date occurs during the current valuation
period, divided by
PAGE 21
<PAGE>
(SIDEBAR)
The contract may be surrendered before annuity payments begin.
This immediate annuity allows cash withdrawals during the cash value period.
(END SIDEBAR)
- the net asset value of a Portfolio share determined at the end of the
preceding valuation period. The gross investment rate may be positive or
negative.
E. REDEMPTIONS
1. Withdrawals and Surrender
Withdrawals are not allowed prior to the "cash value period" which begins when
annuity payments begin. At any time during the cash value period of the
contract, you may request a withdrawal from the cash value of the contract. Each
withdrawal must be in an amount of at least $500. However, if the cash value of
the contract is less than that amount, the total of any remaining cash value in
the contract must be withdrawn. Other restrictions on withdrawals may be present
when the contract is used in conjunction with tax qualified programs. You must
make a written request for any withdrawal or surrender.
You may surrender the contract at any time before the annuity payment
commencement date. The annuity payment commencement date is the day the first
annuity payment is made under the contract and it is the beginning of the cash
value period. If you make a surrender request, you will receive the contract's
surrender value. The surrender value will be determined on the valuation date
coincident with or next following the day your written request is received at
our home office.
Withdrawal or surrender proceeds will be paid in a single sum within seven days
of our receipt of your written request.
(a) Determination of Surrender Value
The surrender value of a contract is the total annuity value of the contract as
of the date of surrender plus the amounts deducted from your purchase payments
for sales charges, risk charges and state premium taxes where applicable. As
this surrender value is available only until the time the first annuity payment
is made under the contract, this provision has the effect of providing a return
of your contract's charges, the net purchase payments, plus or minus investment
gains or losses and less Separate Account charges, up until the time of that
payment. As the maximum period of deferral is 12 months after the Contract Date,
this provision offers a benefit which is limited in time.
(b) Determination of Cash Value
The cash value of the contract is not guaranteed. The cash value decreases as
annuity payments are made, but also increases or decreases based on the
performance of the Sub-Account of the Separate Account given by the relative
change in the annuity unit value.
A withdrawal of all or a portion of the cash value of the contract, subject to
the dollar limitations described above, may be made during the "cash value
period" of the contract. The amount of the cash value available for withdrawal
is equal to: (a) times (b) times (c), where (a) is the number of cash value
units credited to
PAGE 21
<PAGE>
(SIDEBAR)
This is how we calculate your new annuity payment after a withdrawal.
This immediate annuity will always pay an annuity benefit, even if you withdraw
all available amounts.
(END SIDEBAR)
the contract, (b) is the current annuity unit value and (c) is the appropriate
cash value factor set forth in a table in the contract. The cash value period
begins at the annuity payment commencement date of the contract and runs for a
period approximately equal to the annuitant's life expectancy at the time the
contract is issued. The number of cash value units and the cash value period are
shown on page one of your contract. We will send you a new page one if you make
subsequent purchase payments or withdrawals. This will inform you of the number
of cash value units remaining in your contract.
The number of cash value units credited under a contract depends on your
purchase payments cash withdrawals. On the issue date of the contract the number
of cash value units will be equal to the number of annuity units credited to the
contract. Normally, withdrawals will reduce both the number of cash value units
and the number of annuity units but at different rates, so that after a
withdrawal the number of cash value units will no longer equal the number of
annuity units.
(c) Effect of Withdrawals on Cash Value
A withdrawal during the cash value period reduces the number of cash value units
of the contract. The new number of cash value units after a withdrawal is equal
to:
- the number of cash value units just prior to the withdrawal,
- multiplied by the cash value prior to withdrawal,
- less the cash value withdrawn, divided by the cash value prior to
withdrawal.
Cash value units are reduced on a last in, first out basis. Therefore, if you
make additional purchase payments were made to the contract after its issue, the
value of the cash value units attributable to those payments will be valued and
cashed out as withdrawals first, running backwards in time until we reach the
values attributable to the initial purchase payment.
(d) Annuity Payment Determinations after Withdrawals
A cash value withdrawal will affect future annuity payments by reducing the
number of annuity units, the basis for determining the amount of those payments.
The new number of annuity units following a cash value withdrawal will depend on
whether or not the annuitant is alive at the time the cash value withdrawal is
made. If the annuitant is not alive, in other words if the withdrawal is made by
the beneficiary as part of the death benefit, the new number of annuity units
will equal the number of cash value units following the withdrawal. At the death
of the annuitant, the number of annuity units is adjusted, if necessary, to
equal the then number of cash value units, and this equivalency is continued
through any subsequent cash value withdrawals.
If the annuitant is alive at the time of the withdrawal, the adjustment of
subsequent annuity payments that occurs after a withdrawal is designed to
produce a new level of annuity payments -- assuming a rate of return exactly
equal to 4.5% -- over the remaining lifetime of the contract, including the
period after the end of the cash value period. After such a withdrawal, there
will be less cash value to support benefit payments during the cash value
period, so that the same level of annuity payments as before the withdrawal
cannot be maintained
PAGE 22
<PAGE>
(SIDEBAR)
You can cancel your contract within 10 days of receiving it and we will refund
you the greater of your accumulation value or your purchase payments.
(END SIDEBAR)
during the cash value period. In order to levelize payments -- again, based on
the assumption of a 4.5% return -- both before and after the end of the cash
value period, it is necessary to "redistribute" annuity payments, reducing
payments after the end of the cash value period and using the portion of the
excess reserves attributable to the reduction to increase payments during the
cash value period above the level that could be supported by the remaining cash
value alone to the level payable after the cash value period. (As a result, even
if all of a contract's cash value is withdrawn, annuity payments will continue
to be made, although at a considerably reduced level.)
If the annuitant is alive at the time of the withdrawal, annuity payments after
a withdrawal are determined as follows. When a withdrawal occurs, the total
annuity value of the contract is recomputed by adding the sum of the new cash
value immediately after the withdrawal and the contract's excess reserves. The
new total annuity value is then converted into a new "initial annuity payment
amount," based on tables set forth in the contract, and the new initial annuity
payment amount is in turn converted into annuity units by dividing it by the
annuity unit value on the date of the withdrawal. The tables are actuarially
computed to produce a level annuity payment for the remaining lifetime of the
contract based on an interest rate of 4.5% and the mortality rates originally
applied to purchase payments received under the contract using its specified
table. When a cash value withdrawal is made, we will inform you of the new
number of annuity units by sending you a new page one for your contract.
Redistribution of annuity payments after withdrawals do not adjust
redistributions made in connection with prior withdrawals. Despite
redistributions, the original mortality guarantees associated with each purchase
payment are preserved.
While annuity payments will be reduced as a result of cash value withdrawals, so
long as the annuitant is alive, annuity payments will never be eliminated by
cash value withdrawals even if all available cash value is completely withdrawn.
Some level of annuity benefit, under the option elected, will always be payable.
Also, a new guaranteed annuity amount will always be in effect after cash
withdrawals. While a new initial annuity payment amount is determined after a
cash withdrawal, additional cash values are not created.
2. Right of Cancellation
You should read the contract carefully when you receive it. You may cancel the
purchase of a contract within ten days after its delivery, for any reason, by
giving us written notice at 400 Robert Street North, St. Paul, Minnesota
55101-2098, of your intention to cancel. If the contract is canceled and
returned, we will refund to you the greater of:
- the total annuity value of the contract attributable to your purchase
payments, plus the amounts deducted from your purchase payments, or
- the amount of purchase payments paid under this contract. Payment of the
requested refund will be made to you within seven days after we receive
notice of cancellation.
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(SIDEBAR)
You can instruct us how to vote Fund shares.
We are not offering tax advice. You should consult your own tax adviser.
(END SIDEBAR)
VOTING RIGHTS
We will vote fund shares held in the Separate Account at the regular and special
meetings of the Fund. We will vote shares attributable to contracts in
accordance with instructions received from the annuitant or annuitants or,
during the surrender period of the contract, from the owner, if different from
the annuitants. In the event no instructions are received from the person or
persons entitled to direct such a vote, we will vote shares attributable to that
contract in the same proportion as shares of the Portfolio held by the
Sub-Account for which instructions have been received. If, however, the 1940
Act, any interpretations of that Act or the regulations under it should change
so that we may be allowed to vote shares in our own right, then we may elect to
do so.
The number of votes will be determined by dividing the total annuity value for
each contract allocated to the Sub-Account by the net asset value per share of
the underlying Fund shares held by that Sub-Account. The votes attributable to
any particular contract will decrease as the reserves decrease. In determining
any voting interest, fractional shares will be recognized.
We will notify each person entitled to vote of a Fund shareholders' meeting if
the shares held for his or her contract may be voted at that meeting. We will
also provide proxy materials and a form of instruction to facilitate provision
of voting instructions.
FEDERAL TAX STATUS
INTRODUCTION
The discussion contained herein is general in nature and is not intended as tax
advice. Each person concerned should consult a competent tax adviser. No attempt
is made to consider any applicable state or other tax laws. In addition, this
discussion is based on our understanding of federal income tax laws as they are
currently interpreted. No representation is made regarding the likelihood of
continuation of current income tax laws or the current interpretations of the
Internal Revenue Service. The contract may be purchased on a non-tax qualified
basis ("Nonqualified Contract") or purchased and used in connection with certain
retirement arrangements entitled to special income tax treatment under Section
401(a), 403(b), 408, 408A or 457 of the Code ("Qualified Contracts"). The
ultimate effect of federal income taxes on the amounts held under a contract on
annuity payments, and on the economic benefit to the contract owner, the
annuitant, or the beneficiary may depend on the tax status of the individual
concerned.
We are taxed as a "life insurance company" under the Internal Revenue Code. The
operations of the Separate Account form a part of, and are taxed with, our other
business activities. Currently, no federal income tax is payable by us on income
dividends received by the Separate Account or on capital gains arising
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(SIDEBAR)
Taxes on gains under the contract are normally deferred until there is a
distribution of contract values.
Ordinary income tax rates apply to amounts distributed in excess of purchase
payments. Gains are assumed to be distributed before return of purchase
payments.
(END SIDEBAR)
from the Separate Account's activities. The Separate Account is not taxed as a
"regulated investment company" under the Code and it does not anticipate any
change in that tax status.
TAXATION OF ANNUITY CONTRACTS IN GENERAL
Section 72 of the Code governs taxation of nonqualified annuities in general and
some aspects of qualified programs. No taxes are generally imposed on increases
in the value of a contract until distribution occurs, either in the form of a
payment in a single sum or as annuity payments under the annuity option elected.
As a general rule, annuity contracts held by a corporation, trust or other
similar entity, as opposed to a natural person, are not treated as annuity
contracts for federal tax purposes. The investment income on such contracts is
taxed as ordinary income that is received or accrued by the owner of the
contract during the taxable year. There is an exception to this general rule for
immediate annuity contracts. An immediate annuity contract for these purposes is
an annuity (i) purchased with a single premium or annuity consideration, (ii)
the annuity starting date of which commences within one year from the date of
the purchase of the annuity, and (iii) which provides for a series of
substantially equal periodic payments (to be made not less frequently than
annually) during the annuity period. Corporations, trusts and other similar
entities, other than natural persons, seeking to take advantage of this
exception for immediate annuity contracts should consult with a tax adviser.
Under current guidance, the tax consequences of additional premium payments and
partial withdrawals under nonqualified and qualified annuities are unclear,
including the effect on taxation of distributions, required distribution
provisions and penalty taxes. Consult a qualified tax adviser before submitting
additional premium payments or requesting a partial withdrawal.
For payments made in the event of a full surrender of an annuity not part of a
qualified program, the taxable portion is generally the amount in excess of the
cost basis of the contract. Amounts withdrawn upon a partial surrender from the
variable annuity contracts are generally treated first as taxable income to the
extent of the excess of the contract value over the purchase payments made under
the contract. All taxable amounts received under an annuity contract are subject
to tax at ordinary rather than capital gain rates.
In the case of a withdrawal under an annuity that is part of a tax qualified
retirement plan, a portion of the amount received is taxable based on the ratio
of the "investment in the contract" to the individual's balance in the
retirement plan, generally the value of the annuity. The "investment in the
contract" generally equals the portion of any deposits made by or on behalf of
an individual under an annuity which was not excluded from the gross income of
the individual. For annuities issued in connection with qualified plans, the
"investment in the contract" can be zero.
For annuity payments, the taxable portion is generally determined by a formula
that establishes a specific dollar amount of each payment that is not taxed. In
this
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(SIDEBAR)
A penalty tax may apply to distributions prior to age 59- 1/2.
Transfers, assignments and certain designations of annuitants can have tax
consequences.
(END SIDEBAR)
respect, Congress has indicated that the Treasury Department may have authority
to treat the combination purchase of an immediate annuity contract and a
separate deferred annuity contract as a single annuity contract under its
general authority to prescribe rules as may be necessary to enforce the income
tax laws. A prospective purchaser of more than one annuity contract in a
calendar year should consult a tax adviser. The taxable part of each annuity
payment is taxed at ordinary income rates.
The Code imposes a 10% penalty tax on the taxable portion of certain
distributions from annuity contracts. This additional tax does not apply where
the payment is made under an immediate annuity contract, as defined above, or
where the taxpayer is:
- 59 1/2 or older,
- where payment is made on account of the taxpayer's disability
- where payment is made by reason of the death of an owner and
- in certain other circumstances.
The Code also provides an exception to the 10% additional tax for distributions,
in periodic payments, of substantially equal installments, being made for the
life (or life expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of the taxpayer and beneficiary.
For some types of qualified plans, other tax penalties may apply to certain
distributions.
A transfer of ownership of a contract, a pledge of any interest in a contract as
security for a loan, the designation of an annuitant or other payee who is not
also the contract owner, or the assignment of the contract may result in certain
income or gift tax consequences to the contract owner that are beyond the scope
of this discussion. A contract owner who is contemplating any such transfer,
pledge, designation or assignment should consult a competent tax adviser with
respect to the potential tax effects of that transaction.
NOTICE -- PLEASE READ CAREFULLY
WE HAVE BEEN ADVISED THAT IT IS THE POSITION OF THE INTERNAL REVENUE SERVICE
THAT WHEN WITHDRAWALS (OTHER THAN ANNUITY PAYMENTS) ARE TAKEN FROM THE CASH
VALUE OF AN IMMEDIATE VARIABLE ANNUITY CONTRACT, SUCH AS THAT OFFERED BY THIS
PROSPECTUS, THEN ALL AMOUNTS RECEIVED BY THE TAXPAYER ARE TAXABLE AT ORDINARY
INCOME RATES AS AMOUNTS "NOT RECEIVED AS AN ANNUITY." IN ADDITION, SUCH AMOUNTS
ARE TAXABLE TO THE RECIPIENT WITHOUT REGARD TO THE OWNER'S INVESTMENT IN THE
CONTRACT OR ANY INVESTMENT GAIN WHICH MIGHT BE PRESENT IN THE CURRENT ANNUITY
VALUE. FOR EXAMPLE, UNDER THIS VIEW, A CONTRACT OWNER WITH A CASH VALUE OF
$100,000, SEEKING TO OBTAIN $20,000 OF THE CASH VALUE IMMEDIATELY AFTER ISSUE,
WOULD PAY INCOME TAXES ON THE ENTIRE $20,000 AMOUNT IN THAT TAX YEAR. FOR SOME
TAXPAYERS, SUCH AS THOSE UNDER AGE 59 1/2, ADDITIONAL TAX PENALTIES MAY ALSO
PAGE 26
<PAGE>
APPLY. THIS ADVERSE TAX RESULT MEANS THAT OWNERS OF NONQUALIFIED CONTRACTS
SHOULD CONSIDER CAREFULLY THE TAX IMPLICATIONS OF ANY WITHDRAWAL REQUESTS AND
THEIR NEED FOR CONTRACT FUNDS PRIOR TO THE EXERCISE OF THIS RIGHT. CONTRACT
OWNERS SHOULD ALSO CONTACT THEIR TAX ADVISER PRIOR TO MAKING WITHDRAWALS.
IN ADDITION, WE HAVE BEEN ADVISED THAT IT IS THE POSITION OF THE INTERNAL
REVENUE SERVICE THAT WHEN ADDITIONAL PURCHASE PAYMENTS ARE MADE UNDER AN
EXISTING IMMEDIATE VARIABLE ANNUITY CONTRACT, SUCH AS THAT OFFERED BY THIS
PROSPECTUS, THOSE PURCHASE PAYMENTS WILL NOT RESULT IN A RECALCULATION OF THE
OWNER'S INVESTMENT IN THE CONTRACT AND A DETERMINATION OF A NEW EXCLUSION
AMOUNT. FOR EXAMPLE, A CONTRACT OWNER AGED 60 MIGHT PURCHASE A CONTRACT FOR THE
SUM OF $100,000, WHICH WOULD RESULT IN AN INITIAL LIFETIME ANNUITY PAYMENT OF
$460.00 PER MONTH. EACH YEAR, $4,132.23 WOULD BE RECEIVED AS A RETURN OF
INVESTMENT IN THE CONTRACT AND THE EXCESS WOULD BE TAXED AS ORDINARY INCOME. IF
WE ASSUME THAT THE CONTRACT OWNER MAKES AN ADDITIONAL PURCHASE PAYMENT OF
$20,000, THE EXCLUSION AMOUNT OF $4,123.23 WOULD NOT CHANGE, EVEN THOUGH
ADDITIONAL CASH VALUE WILL RESULT IN A NEW VARIABLE ANNUITY PAYMENT. THIS
POSITION OF THE SERVICE WILL RESULT IN THE OWNER'S INABILITY TO RECOVER HIS OR
HER INVESTMENT OVER THE PERIOD OF THE PAYMENTS. ACCORDINGLY, CONTRACT OWNERS,
ESPECIALLY THOSE INTENDING TO MAKE SUBSTANTIAL AND MATERIAL ADDITIONAL PAYMENTS,
SHOULD CONSIDER PURCHASING AN ADDITIONAL CONTRACT INSTEAD OF MAKING AN
ADDITIONAL PAYMENT. FOR FURTHER INFORMATION YOU SHOULD CONSULT YOUR OWN
QUALIFIED TAX ADVISER.
DIVERSIFICATION REQUIREMENTS
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Separate Account to be
"adequately diversified" in order for the contract to be treated as a life
insurance contract for federal tax purposes. The Separate Account, through the
Fund, intends to comply with the diversification requirements prescribed in
Regulations Section 1.817-5, which affect how the Fund's assets may be invested.
Although the investment adviser is an affiliate of ours, we do not have control
over the Fund or its investments. Nonetheless, we believe that the Portfolio of
the Fund in which the Separate Account owns shares will be operated in
compliance with the requirements prescribed by the Treasury.
Prior to the enactment of Section 817(h), the IRS published several rulings
under which owners of certain variable annuity contracts were treated as the
owners, for federal income tax purposes, of the assets held in a separate
account used to support their contracts. In those circumstances, income and
gains from the separate account assets would be includable in the variable
annuity contract owner's gross income. However, the continued effectiveness of
the pre-Section 817(h) published rulings is somewhat uncertain. In connection
with its issuance of proposed regulations under Section 817(h) in 1986, the
Treasury Department announced that those regulations did not "provide guidance
PAGE 27
<PAGE>
concerning the circumstances in which investor control of the investments of a
segregated asset account may cause the investor (i.e., the contract owner),
rather than the insurance company to be treated as the owner of the assets in
the account." While the Treasury's 1986 announcement stated that guidance would
be issued on the "extent to which the policyholders may direct their investments
to particular sub-accounts without being treated as owners of the underlying
assets", no such guidance has been forthcoming.
The ownership rights under the contract are similar to, but different in certain
respects from, those described by the IRS in rulings in which it was determined
that contract owners were not owners of separate account assets. We do not
believe that the ownership rights of a contract owner under the contract would
result in any contract owner being treated as the owner of the assets of the
Variable Annuity Account. However, we do not know what standards would be
applied if the Treasury Department should proceed to issue regulations or
rulings on this issue. We reserve the right to modify the contract as necessary
to attempt to prevent a contract owner from being considered the owner of a pro
rata share of the assets of the Variable Annuity Account.
REQUIRED DISTRIBUTIONS
In order to be treated as an annuity contract for federal income tax purposes,
Section 72(s) of the Code requires any nonqualified contract issued after
January 18, 1985 to provide that (a) if an owner dies on or after the annuity
starting date but prior to the time the entire interest in the contract has been
distributed, the remaining portion of such interest will be distributed at least
as rapidly as under the method of distribution being used as of the date of that
owner's death; and (b) if an owner dies prior to the annuity starting date, the
entire interest in the contract must be distributed within five years after the
date of the owner's death.
These requirements shall be considered satisfied if any portion of the owner's
interest which is payable to or for the benefit of a "designated beneficiary" is
distributed over the life of such beneficiary or over a period not extending
beyond the life expectancy of that beneficiary and such distributions begin
within one year of that owner's death. The owner's "designated beneficiary", who
must be a natural person, is the person designated by such owner as a
beneficiary and to whom ownership of the contract passes by reason of death.
However, if the owner's "designated beneficiary" is the surviving spouse of the
owner, the contract may be continued with the surviving spouse as the new owner.
Nonqualified contracts issued after January 18, 1985 contain provisions which
are intended to comply with the requirements of Section 72(s) of the Code,
although no regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to assure that
they comply with the requirements of Code Section 72(s) when clarified by
regulation or otherwise.
PAGE 28
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(SIDEBAR)
Congress may change the tax laws and reduce or eliminate any tax advantages of
the contract.
(END SIDEBAR)
Other rules may apply to qualified contracts.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a contract because of the death of an owner.
Generally, such amounts are includable in the income of the recipient as
follows: (1) if distributed in a lump sum, they are taxed in the same manner as
a full surrender of the contract, as described above, or (2) if distributed
under an annuity option, they are taxed in the same manner as annuity payments,
as described above. For these purposes, the investment in the contract is not
affected by the owner's death. That is, the investment in the contract remains
the amount of any purchase payments paid which were not excluded from gross
income.
POSSIBLE CHANGES IN TAXATION
Although the likelihood of there being any change in taxation is uncertain,
there is always the possibility that the tax treatment of the contracts could
change by legislation or other means. Moreover, it is also possible that any
change could be retroactive (that is, effective prior to the date of the
change). You should consult a tax adviser with respect to legislative
developments and their effect on the contract.
TAX QUALIFIED PROGRAMS
The annuity is designed for use with several types of retirement plans that
qualify for special tax treatment. The tax rules applicable to participants and
beneficiaries in retirement plans vary according to the type of plan and the
terms and
conditions of the plan. Special favorable tax treatment may be available for
certain types of contributions and distributions. Adverse tax consequences may
result from:
- contributions in excess of specified limits;
- distributions prior to age 59 1/2 (subject to certain exceptions);
- distributions that do not conform to specified minimum distribution
rules; and
- other specified circumstances.
We make no attempt to provide more than general information about use of
annuities with the various types of retirement plans. Some retirement plans are
subject to distribution and other requirements that are not incorporated in the
annuity. The rights of any person to benefits under annuity contracts purchased
in connection with these plans may be subject to the terms and conditions of the
plans themselves, regardless of the terms and conditions of the annuity issued
in connection with such a plan. Some retirement plans are subject to
distribution and other requirements that are not incorporated into our annuity
administration procedures. Owners, participants and beneficiaries are
responsible for determining that contributions, distributions and other
transactions with respect to the
PAGE 29
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(SIDEBAR)
Distributions are subject to income tax withholding requirements unless you take
steps to prevent it.
(END SIDEBAR)
annuities comply with applicable law. If you intend to purchase a contract for
use with any retirement plan you should consult legal counsel and a tax adviser
regarding the suitability of the contract.
For qualified plans under Section 401(a), 403(b) and 457, the Code requires that
distributions generally must commence no later than the later of April 1 of the
calendar year following the calendar year in which the owner (or plan
participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in a
specified form or manner. If the plan participant is a "5 percent owner" (as
defined in the Code), distributions generally must begin no later than April 1
of the calendar year following the calendar year in which the owner (or plan
participant) reaches age 70 1/2. For IRAs described in Section 408,
distributions generally must commence no later than April 1 of the calendar year
following the calendar year in which the owner (or plan participant) reaches age
70 1/2. Roth IRAs under Section 408A do not require distributions at any time
prior to the owner's death.
WITHHOLDING
In general, distributions from annuities are subject to federal income tax
withholding unless the recipient elects not to have tax withheld. Different
rules may apply to payments delivered outside the United States. Some states
have enacted similar rules.
Recent changes to the Code allow the rollover of most distributions from tax-
qualified plans and Section 403(b) annuities directly to other tax-qualified
plans that will accept such distributions and to individual retirement accounts
and individual retirement annuities. Distributions which may not be rolled over
are those which are:
- one of a series of substantially equal annual (or more frequent) payments
made (a) over the life or life expectancy of the employee, (b) the joint
lives or joint expectancies of the employee and the employee's designated
beneficiary, or (c) for a specified period of ten years or more;
- a required minimum distribution; or
- the non-taxable portion of a distribution.
Any distribution eligible for rollover, which may include payment to an
employee, an employee's surviving spouse or an ex-spouse who is an alternate
payee, will be subject to federal tax withholding at a 20% rate unless the
distribution is made as a direct rollover to a tax-qualified plan or to an
individual retirement account or annuity. It may be noted that amounts received
by individuals which are eligible for rollover may still be placed in another
tax-qualified plan or individual retirement account or individual retirement
annuity if the transaction is completed within 60 days after the distribution
has been received. Such a taxpayer must replace withheld amounts with other
funds to avoid taxation on the amount previously withheld.
PAGE 30
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SEE YOUR OWN TAX ADVISER
It should be understood that the foregoing description of the federal income tax
consequences under these contracts is not exhaustive and that special rules are
provided with respect to situations not discussed herein. It should also be
understood that should a plan lose its qualified status, employees will lose
some of the tax benefits described. Statutory changes in the Internal Revenue
Code with varying effective dates, and regulations adopted thereunder may also
alter the tax consequences of specific factual situations. Due to the complexity
of the applicable laws, tax advice may be needed by a person contemplating the
purchase of a variable annuity contract or exercising elections under such a
contract. For further information a qualified tax adviser should be consulted.
PERFORMANCE DATA
From time to time the Variable Annuity Account may publish advertisements
containing performance data relating to the Sub-Account. Performance data will
consist of average annual total return quotations for recent one-year, five-year
and ten-year periods. Performance data may also include cumulative total return
quotations for the period since June 1, 1987 or average annual total return
quotations for periods other than as described above. Performance figures are
based on historical performance information on the assumption that the contracts
offered by this Prospectus were available for sale on June 1, 1987 and could
accumulate value prior to the commencement of annuity payments for periods in
excess of one year. The figures are not intended to suggest that such
performance will continue in the future.
Average annual total return figures are the average annual compounded rates of
return required for an initial investment to equal its total annuity value at
the end of the period. The total annuity value will reflect the sales and risk
charges deducted from purchase payments as well as all other contract charges.
Cumulative total return figures are the percentage changes between the value of
an initial investment and its total annuity value at the end of the period.
Cumulative total return figures will not reflect the deduction of any amounts
from purchase payments. Cumulative total return figures will always be
accompanied by average annual total return figures. More detailed information on
the computations is set forth in the Statement of Additional Information.
YEAR 2000 COMPUTER PROBLEM
The services provided by Minnesota Life to the Separate Account and its contract
owners depend on the smooth functioning of its computer systems. Many computer
software systems in use today cannot distinguish the year 2000 from the year
1900 because of the way that dates are encoded, stored and calculated. That
failure could have a negative impact on the ability of Minnesota Life to provide
services to contract owners. Minnesota Life has been actively working on
necessary changes to its computer systems to deal with the year 2000. Although
PAGE 31
<PAGE>
there can be no assurance of complete success, Minnesota Life believes that it
will be able to resolve these issues on a timely basis and that there will be no
material adverse impact on its ability to provide services to the Separate
Account.
In addition, Minnesota Life's operations could be impacted by its service
providers' or suppliers' year 2000 efforts. Minnesota Life has undertaken an
initiative to assess the efforts of organizations where there is a significant
business relationship; however there is no assurance that Minnesota Life will
not be affected by year 2000 problems of other organizations.
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information, which contains additional information
including financial statements, is available from the offices of Minnesota Life
at your request. The Table of Contents for that Statement of Additional
Information is as follows:
Directors and Principal Management Officers of Minnesota Life
Distribution of Contracts
Performance Data
Auditors
Registration Statement
Financial Statements
PAGE 32
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
PAGE A-1
<PAGE>
APPENDIX B
TAXATION OF QUALIFIED PLANS
PUBLIC SCHOOL SYSTEMS AND CERTAIN TAX EXEMPT ORGANIZATIONS
Under Code Section 403(b), payments made by public school systems and certain
tax exempt organizations to purchase annuity contracts for their employees are
excludable from the gross income of the employee, subject to certain
limitations. However, these payments may be subject to FICA (Social Security)
taxes.
Code Section 403(b)(11) restricts the distribution under Code Section 403(b)
annuity contracts of: (1) elective contributions made in years beginning after
December 31, 1988; (2) earnings on those contributions; and (3) earnings in such
years on amounts held as of the last year beginning before January 1, 1989.
Distribution of those amounts may only occur upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
Individual Retirement Annuity, hereinafter referred to as an "IRA". Also,
distributions from certain other types of qualified plans may be "rolled over"
on a tax-deferred basis into an IRA. The sale of a contract for use with an IRA
may be subject to special disclosure requirements of the Internal Revenue
Service. Purchasers of a contract for use with IRAs will be provided with
supplemental information required by the Internal Revenue Service or other
appropriate agency. Such purchasers will have the right to revoke their purchase
within 7 days of the earlier of the establishment of the IRA or their purchase.
A Qualified Contract issued in connection with an IRA will be amended as
necessary to conform to the requirements of the Code. Purchasers should seek
competent advice as to the suitability of the contract for use with IRAs.
Earnings in an IRA are not taxed until distribution. IRA contributions are
limited each year to the lesser of $2,000 or 100% of the owner's adjusted gross
income and may be deductible in whole or in part depending on the individual's
income. The limit on the amount contributed to an IRA does not apply to
distributions from certain other types of qualified plans that are "rolled over"
on a tax-deferred basis into an IRA. Amounts in the IRA (other than
nondeductible contributions) are taxed when distributed from the IRA.
Distributions prior to age 59 1/2 (unless certain exceptions apply) are subject
to a 10% penalty tax.
SIMPLIFIED EMPLOYEE PENSION (SEP) IRAS
Employers may establish Simplified Employee Pension (SEP) IRAs under Code
Section 408(k) to provide IRA contributions on behalf of their employees. In
addition to all of the general Code rules governing IRAs, such plans are subject
to certain Code requirements regarding participation and amounts of
contributions.
PAGE B-1
<PAGE>
SIMPLE IRAS
Beginning January 1, 1997, certain small employers may establish Simple IRAs as
provided by Section 408(p) of the Code, under which employees may elect to defer
up to $6,000 (as increased for cost of living adjustments) as a percentage of
compensation. The sponsoring employer is required to make a matching
contribution on behalf of contributing employees. Distributions from a Simple
IRA are subject to the same restrictions that apply to IRA distributions and are
taxed as ordinary income. Subject to certain exceptions, premature distributions
prior to age 59 1/2 are subject to a 10% penalty tax, which is increased to 25%
if the distribution occurs within the first two years after the commencement of
the employee's participation in the plan.
ROTH IRAS
Effective January 1, 1998, Section 408A of the Code permits certain eligible
individuals to contribute to a Roth IRA. Contributions to a Roth IRA, which are
subject to certain limitations, are not deductible and must be made in cash or
as a rollover or transfer from another Roth IRA or other IRA. A rollover from or
conversion of an IRA to a Roth IRA may be subject to tax. Other special rules
may apply.
Qualified distributions from a Roth IRA, as defined by the Code, generally are
excluded from gross income. Qualified distributions include those distributions
made more than five years after the taxable year of the first contribution to
the Roth IRA, but only if:
- the annuity owner has reached age 59 1/2;
- the distribution is paid to a beneficiary after the owner's death;
- the annuity owner becomes disabled; or
- the distribution will be used for a first time home purchase and does not
exceed $10,000.
Nonqualified distributions are includible in gross income only to the extent
they exceed contributions made to the Roth IRA. The taxable portion of a
nonqualified distribution may be subject to a 10% penalty tax.
In addition, state laws may not completely follow the federal tax treatment of
Roth IRAs. You should consult your tax adviser for further information regarding
Roth IRAs.
CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS
Code Section 401(a) permits employers to establish various types of retirement
plans for employees, and permits self-employed individuals to establish
retirement plans for themselves and their employees. These retirement plans may
permit the purchase of the contracts to accumulate retirement savings under the
plans. Adverse tax or other legal consequences to the plan, to the participant
or to both
PAGE B-2
<PAGE>
may result if this annuity is assigned or transferred to any individual as a
means to provide benefit payments, unless the plan complies with all legal
requirements applicable to such benefits prior to transfer of the annuity.
DEFERRED COMPENSATION PLANS
Code Section 457 provides for certain deferred compensation plans. These plans
may be offered with respect to service for state governments, local governments,
political subdivisions, agencies, instrumentalities and certain affiliates of
such entities, and tax exempt organizations. The plans may permit participants
to specify the form of investment for their deferred compensation account. With
respect to non-governmental Section 457 plans, all investments are owned by the
sponsoring employer and are subject to the claims of the general creditors of
the employer and depending on the terms of the particular plan, the employer may
be entitled to draw on deferred amounts for purposes unrelated to its Section
457 plan obligations. In general, all amounts received under a Section 457 plan
are taxable and are subject to federal income tax withholding as wages.
PAGE B-3
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APPENDIX C
COMPUTATION AND EXAMPLES OF WITHDRAWALS
A cash value withdrawal will affect future annuity payments by reducing the
number of annuity units, the basis for determining the amount of such payments.
If the annuitant is alive at the time of the withdrawal, the new number of
annuity units is determined by first computing a new initial annuity payment
amount and then dividing that amount by the annuity unit value at the time of
the withdrawal.
IF NO PRIOR WITHDRAWALS
If no prior cash withdrawals have been made, the new initial annuity payment
amount is the sum of
(i) the product of the number of cash value units after the withdrawal
times the current annuity unit value, and
(ii) the product of ([(a) X (b)]/1000) times (c), where
(a) is the excess of the total annuity value over the cash value
immediately prior to the withdrawal,
(b) is the ratio of the cash value withdrawn over the cash value prior to
the withdrawal, and
(c) is the applicable annuity purchase rate set forth in the contract in
the table captioned "Total Annuity Value Factors and Annuity Payment
Purchase Rates Applicable at a Cash Value Withdrawal while the
Annuitant is Alive" ("Table I").
In the above computation "(i)" reflects the portion of the new initial annuity
payment amount supported by the reserves attributable to the cash value of the
contract, and "(ii)" reflects the portion of the new initial annuity payment
amount supported by the annuity reserves in excess of the cash value. The excess
reserves, "(ii) (a)," are multiplied by the proportionate reduction in the cash
value, "(ii) (b)," to determine the portion of the excess reserves that are to
be redistributed, and the redistribution is effected by dividing the portion so
determined by 1000 and multiplying the result by the appropriate annuity
purchase rate.
An example of the withdrawal calculation may serve as a useful illustration.
Assume a contract issued to a woman in 1995, age 60, for an initial purchase
payment of $100,000, and assume further that the net Sub-Account performance
matches the assumed interest rate of 4.5% so that we need not consider the
variation in annuity payments as a result of fluctuations in investment
performance. Assume also that the annuity unit value is and remains $1.00. At
the time of issue of the contract, the initial annuity payment amount, if paid
as a life annuity, will be $460.99, and the number of annuity units and cash
value units will be 460.9900. The guaranteed minimum annuity payment amount is
$391.84 (85% X $460.99).
PAGE C-1
<PAGE>
Assume that at year five, the contract owner makes a withdrawal of 60% of the
cash value. Immediately prior to the withdrawal, the contract has a total
annuity value of $85,594, which is determined by multiplying the current annuity
payment amount, $460.99, by the appropriate factor set forth in the contract
applicable to cash value units in Table I, 185.6737. The total annuity reserves
amount is $85,594. The cash value of the contract immediately prior to the
withdrawal is $70,890, which is determined by multiplying the current annuity
payment amount, $460.99, by the appropriate factor set forth in the contract in
the table captioned "Cash Value Factors." ("Table II"), 153.7783. $70,890 is the
amount of the annuity reserves attributable to the cash value of the contract.
The cash value after the withdrawal is $28,356 ($70,890 - $42,534 (60% X
$70,890)), and the new number of cash value units is 184.3960 (460.9900 X
($28,356/$70,890)).
The new initial annuity payment amount is $235.19, the sum of
(i) $184.40, the product of the number of cash value units after the
withdrawal (184.3960) times the annuity unit value ($1.00), and
(ii) $50.79, the product of ([(a) X (b)]/1000) times (c), where
(a) is $14,704, the excess of the total annuity value ($85,594) over the
cash value ($70,890) immediately prior to the withdrawal,
(b) is .6, the ratio of the cash value withdrawn ($42,534) over the cash
value prior to the withdrawal ($70,890), and
(c) is 5.7568, the applicable annuity purchase rate set forth in the
contract in Table I.
The new guaranteed minimum annuity payment amount after the withdrawal is
$199.91 ($391.84 X (235.1900/460.9900)).
IF PRIOR WITHDRAWALS
Where prior withdrawals have been made, the above formula is adjusted in the
manner shown in the following example. Assume that after the withdrawal of 60%
of the cash value in the contract described above the owner withdraws 75% of the
remaining cash value at year 15.
Immediately prior to the transaction the contract has a total annuity value of
$32,003. This is determined by multiplying the two components of the current
annuity payment amount $184.40 -- the portion attributable to the cash value
reserves, and $50.79 -- the portion attributable to the annuity reserves in
excess of the cash value, by the appropriate factors set forth in the contract
applicable to cash value units and annuity units in excess of cash value units,
respectively, in Table I, namely, 137.7353 and 130.0297 ($32,003 = ($184.40 X
137.7353) + ($50.79 X 130.0297)). The cash value of the contract immediately
prior to the withdrawal is $16,289, which is determined by multiplying the
portion of the current annuity payment amount attributable to the cash value,
$184.40, by the appropriate factor set forth in the contract in Table II,
88.3373 ($16,289 =
PAGE C-2
<PAGE>
$184.40 X 88.3373). The cash value after the withdrawal is $4,072 ($16,289 -
$12,217 (75% X $16,289)), and the new number of cash value units is 46.0962
(184.3960 X ($4,072/$16,289)).
The new initial annuity payment amount is $149.44, the sum of
(i) $46.10, the product of the number of cash value units after the
withdrawal (46.0962) times the current annuity unit value ($1.00),
(ii) $50.79, the product of the number of annuity units (235.19) minus the
number of cash value units (184.40), each prior to the withdrawal,
times the current annuity unit value ($1.00), and
(iii) $52.55, the product of ([(a) X (b)]/1000) times (c), where
(a) is $9110, which is
(A) $15,714, the excess of the total annuity value ($32,003) over the cash
value ($16,289) immediately prior to the withdrawal, minus
(B) $6,604, the value is (ii) above ($50.79) multiplied by the appropriate
factor as of the withdrawal date applicable to annuity units in excess
of cash value units set forth in the contract in Table I (130.0297),
(b) is .75, the ratio of the cash value withdrawn ($12,217) over the cash
value prior to the withdrawal ($16,289), and
(c) is 7.6905, the applicable annuity purchase rate set forth in the
contract in Table I.
The new initial annuity payment amount has a new guaranteed minimum annuity
payment amount associated with it of $127.02 ($199.91 X 149.4400/235.1900).
PAGE C-3
<PAGE>
APPENDIX D
ADJUSTABLE INCOME ANNUITY DISCLOSURE "A VARIABLE IMMEDIATE ANNUITY"
<TABLE>
<S> <C>
PREPARED FOR: Jane M. Doe COMMENCEMENT DATE: 10/01/1995
DATE OF BIRTH: 10/01/1935 SEX: Female INCOME FREQUENCY: Monthly
STATE: MN INITIAL PERIODIC INCOME: $460.99
PURCHASE PAYMENT: $100,000.00 GUARANTEED MINIMUM INCOME AT ISSUE:
FUNDS: Non-Qualified $391.84
LIFE EXPECTANCY: 24.2 (IRS) ESTIMATED ANNUAL EXCLUSION AMOUNT AT
PREPARED BY: Minnesota Life ISSUE: $3,471.07
QUOTATION DATE: 10/01/1995
ANNUITIZATION OPTION: Single Life
</TABLE>
AGE Your age at nearest birthday.
GUARANTEED INCOME The guaranteed income column represents the minimum annuity
payment you will receive. This amount will be adjusted for additional purchase
payments made to the contract or cash value withdrawals taken from the contract.
PROJECTED INCOME The variable annuity income amount shown assumes a constant
annual investment return. 4.5% is the assumed interest rate used to calculate
the first payment. Thereafter, payments will increase or decrease based upon the
relationship between the 4.5% interest rate and the net investment performance
of the Index 500* Portfolio of the Advantus Series Fund, Inc. Actual value of
the contract will fluctuate depending on the performance of the underlying
sub-account.
CUMULATIVE INCOME The cumulative income amount shown represents the sum of the
projected income payments on an annual basis.
TOTAL ANNUITY VALUE The total annuity value at issue is the net amount credited
to your account after deduction of all front end charges. Thereafter, the total
annuity value changes based on fund performance, annuity payments made, and
subsequent purchase payments or withdrawals. The total annuity value includes
the cash value plus an amount intended to fund annuity payments for the
remainder of your life after the cash value period has ended.
CASH VALUE The cash value is the dollar amount available for withdrawal under
this contract at a given point in time. Access to the cash value is available
during the cash value period--a time period from the first annuity payment date
to your life expectancy as determined at issue. It is important to note that
withdrawals of cash value will reduce the amount of the minimum guaranteed
payment.
Page 1 of 5
Not valid without all pages.
The investment returns shown are hypothetical and are not
a representation of future results.
This is an illustration only and not a contract.
Prepared by Minnesota Life Insurance Company
PAGE D-1
<PAGE>
ESTIMATED ANNUAL EXCLUSION AMOUNT AT ISSUE The annual variable exclusion amount
is based on a cost basis of $100,000 and represents the amount of variable
payments that are excluded from taxation in each calendar year. This annual
amount is prorated in the first calendar year and may be recalculated in any
year where the total value of the annuity payments is less than the exclusion
amount. Exclusion calculations apply only until the cost basis is returned,
thereafter, all payments are fully taxable. This calculation does not include
future contributions or withdrawals.
SPECIAL TAX RULES APPLY TO NON-QUALIFIED PLANS When withdrawals are taken from
the cash value of the Adjustable Income Annuity contract, all amounts received
by the taxpayer are taxable as ordinary income in the year in which the
withdrawals are taken. Under certain circumstances, you may be able to get an
offsetting deduction. When additional purchase payments are made under an
existing Adjustable Income Annuity contract, those purchase payments will not
result in a recalculation of the owner's investment in the contract and a
determination of a new exclusion amount.
OTHER Deductions from your purchase payments are made for sales charges, risk
charges and state premium taxes where applicable. Sales charges are based on
your total cumulative purchase payments (see prospectus for schedule). A risk
charge is deducted for Minnesota Life's guarantee of a minimum annuity payment
amount. This charge is 1.25% of each purchase payment.
Net rates of return reflect expenses totaling 1.40%, which consist of the .95%
Variable Annuity Account mortality and expense risk charge and administrative
charge, and .45% for the Series Fund management fee and other expenses.
Minnesota Life variable immediate annuities are available through registered
representatives of Ascend Financial Services, Inc., Securities Dealer, Member
NASD/SIPC. This illustration must be accompanied or preceded by a current
prospectus for the Variable Annuity Account and for the Advantus Series Fund,
Inc.
* "Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P
500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks of
The McGraw-Hill Companies, Inc. and have been licensed for use by Advantus
Series Fund, Inc. The Fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding the
advisability of investing in the Fund."
Page 2 of 5
Not valid without all pages.
The investment returns shown are hypothetical and are not
a representation of future results.
This is an illustration only and not a contract.
Prepared by Minnesota Life Insurance Company
PAGE D-2
<PAGE>
ADJUSTABLE INCOME ANNUITY ILLUSTRATION "A VARIABLE IMMEDIATE ANNUITY"
<TABLE>
<S> <C>
PREPARED FOR: Jane M. Doe ANNUITIZATION OPTION: Single Life
DATE OF BIRTH: 10/01/1935 SEX: Female COMMENCEMENT DATE: 10/01/1995
STATE: MN INCOME FREQUENCY: Monthly
PURCHASE PAYMENT: $100,000.00 INITIAL PERIODIC INCOME: $460.99
FUNDS: Non-Qualified GUARANTEED MINIMUM INCOME AT ISSUE:
LIFE EXPECTANCY: 24.2 (IRS) $391.84
PREPARED BY: Minnesota Life *ESTIMATED ANNUAL EXCLUSION AMOUNT AT
QUOTATION DATE: 10/01/1995 ISSUE: $3,471.07
</TABLE>
<TABLE>
<CAPTION>
0.00% GROSS RATE OF RETURN (-1.40% NET)
---------------------------------------------------------------
BEGINNING GUARANTEED PROJECTED CUMULATIVE TOTAL ANNUITY
DATE OF YEAR AGE INCOME INCOME INCOME VALUE CASH VALUE
- --------------- ---------- --- ---------- --------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Oct 1, 1995.... 1 60 $392 $461 $461 $93,789 $81,667
Oct 1, 1996.... 2 61 392 435 5,822 87,076 75,197
Oct 1, 1997.... 3 62 392 410 10,881 80,764 69,119
Oct 1, 1998.... 4 63 392 392 15,662 74,829 63,409
Oct 1, 1999.... 5 64 392 392 20,364 69,250 58,048
Oct 1, 2000.... 6 65 392 392 25,066 64,009 53,013
Oct 1, 2001.... 7 66 392 392 29,768 59,087 48,288
Oct 1, 2002.... 8 67 392 392 34,470 54,465 43,854
Oct 1, 2003.... 9 68 392 392 39,172 50,128 39,694
Oct 1, 2004.... 10 69 392 392 43,874 46,059 35,792
Oct 1, 2005.... 11 70 392 392 48,576 42,244 32,134
Oct 1, 2006.... 12 71 392 392 53,278 38,670 28,705
Oct 1, 2007.... 13 72 392 392 57,980 35,325 25,493
Oct 1, 2008.... 14 73 392 392 62,682 32,197 22,484
Oct 1, 2009.... 15 74 392 392 67,384 29,277 19,667
Oct 1, 2010.... 16 75 392 392 72,086 26,555 17,031
Oct 1, 2011.... 17 76 392 392 76,788 24,027 14,565
Oct 1, 2012.... 18 77 392 392 81,490 21,682 12,259
Oct 1, 2013.... 19 78 392 392 86,193 19,513 10,104
Oct 1, 2014.... 20 79 392 392 90,895 17,514 8,092
Oct 1, 2015.... 21 80 392 392 95,597 15,682 6,213
Oct 1, 2016.... 22 81 392 392 100,299 14,013 4,460
Oct 1, 2017.... 23 82 392 392 105,001 12,505 2,826
Oct 1, 2018.... 24 83 392 392 109,703 11,160 1,303
Oct 1, 2019.... 25 84 392 392 114,405 9,980 0
Oct 1, 2020.... 26 85 392 392 119,107 8,932 0
Oct 1, 2021.... 27 86 392 392 123,809 7,983 0
Oct 1, 2022.... 28 87 392 392 128,511 7,124 0
Oct 1, 2023.... 29 88 392 392 133,213 6,350 0
Oct 1, 2024.... 30 89 392 392 137,915 5,654 0
Oct 1, 2025.... 31 90 392 392 142,617 5,030 0
Oct 1, 2026.... 32 91 392 392 147,319 4,485 0
Oct 1, 2027.... 33 92 392 392 152,021 3,999 0
Oct 1, 2028.... 34 93 392 392 156,723 3,563 0
Oct 1, 2029.... 35 94 392 392 161,425 3,173 0
Oct 1, 2030.... 36 95 392 392 166,128 2,821 0
</TABLE>
* The exclusion amount does not assume future contributions or withdrawals.
Page 3 of 5
Not valid without all pages.
The investment returns shown are hypothetical and are not
a representation of future results.
This is an illustration only and not a contract.
Prepared by Minnesota Life Insurance Company
PAGE D-3
<PAGE>
ADJUSTABLE INCOME ANNUITY ILLUSTRATION "A VARIABLE IMMEDIATE ANNUITY"
<TABLE>
<S> <C>
PREPARED FOR: Jane M. Doe ANNUITIZATION OPTION: Single Life
DATE OF BIRTH: 10/01/1935 SEX: Female COMMENCEMENT DATE: 10/01/1995
STATE: MN INCOME FREQUENCY: Monthly
PURCHASE PAYMENT: $100,000.00 INITIAL PERIODIC INCOME: $460.99
FUNDS: Non-Qualified GUARANTEED MINIMUM INCOME AT ISSUE:
LIFE EXPECTANCY: 24.2 (IRS) $391.84
PREPARED BY: Minnesota Life *ESTIMATED ANNUAL EXCLUSION AMOUNT AT
QUOTATION DATE: 10/01/1995 ISSUE: $3,471.07
</TABLE>
<TABLE>
<CAPTION>
5.90% GROSS RATE OF RETURN (4.50% NET)
---------------------------------------------------------------
BEGINNING GUARANTEED PROJECTED CUMULATIVE TOTAL ANNUITY
DATE OF YEAR AGE INCOME INCOME INCOME VALUE CASH VALUE
- --------------- ---------- --- ---------- --------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Oct 1, 1995.... 1 60 $392 $461 $461 $93,789 $81,667
Oct 1, 1996.... 2 61 392 461 5,993 92,286 79,697
Oct 1, 1997.... 3 62 392 461 11,525 90,718 77,638
Oct 1, 1998.... 4 63 392 461 17,057 89,081 75,487
Oct 1, 1999.... 5 64 392 461 22,589 87,373 73,239
Oct 1, 2000.... 6 65 392 461 28,120 85,593 70,890
Oct 1, 2001.... 7 66 392 461 33,652 83,738 68,435
Oct 1, 2002.... 8 67 392 461 39,184 81,807 65,869
Oct 1, 2003.... 9 68 392 461 44,716 79,798 63,188
Oct 1, 2004.... 10 69 392 461 50,248 77,708 60,387
Oct 1, 2005.... 11 70 392 461 55,780 75,537 57,459
Oct 1, 2006.... 12 71 392 461 61,312 73,284 54,400
Oct 1, 2007.... 13 72 392 461 66,844 70,950 51,203
Oct 1, 2008.... 14 73 392 461 72,375 68,538 47,862
Oct 1, 2009.... 15 74 392 461 77,907 66,050 44,371
Oct 1, 2010.... 16 75 392 461 83,439 63,494 40,722
Oct 1, 2011.... 17 76 392 461 88,971 60,888 36,910
Oct 1, 2012.... 18 77 392 461 94,503 58,233 32,926
Oct 1, 2013.... 19 78 392 461 100,035 55,544 28,762
Oct 1, 2014.... 20 79 392 461 105,567 52,838 24,412
Oct 1, 2015.... 21 80 392 461 111,099 50,141 19,865
Oct 1, 2016.... 22 81 392 461 116,630 47,485 15,114
Oct 1, 2017.... 23 82 392 461 122,162 44,912 10,149
Oct 1, 2018.... 24 83 392 461 127,694 42,480 4,961
Oct 1, 2019.... 25 84 392 461 133,226 40,261 0
Oct 1, 2020.... 26 85 392 461 138,758 38,191 0
Oct 1, 2021.... 27 86 392 461 144,290 36,172 0
Oct 1, 2022.... 28 87 392 461 149,822 34,211 0
Oct 1, 2023.... 29 88 392 461 155,354 32,318 0
Oct 1, 2024.... 30 89 392 461 160,886 30,498 0
Oct 1, 2025.... 31 90 392 461 166,417 28,755 0
Oct 1, 2026.... 32 91 392 461 171,949 27,176 0
Oct 1, 2027.... 33 92 392 461 177,481 25,678 0
Oct 1, 2028.... 34 93 392 461 183,013 24,253 0
Oct 1, 2029.... 35 94 392 461 188,545 22,888 0
Oct 1, 2030.... 36 95 392 461 194,077 21,569 0
</TABLE>
* The exclusion amount does not assume future contributions or withdrawals.
Page 4 of 5
Not valid without all pages.
The investment returns shown are hypothetical and are not
a representation of future results.
This is an illustration only and not a contract.
Prepared by Minnesota Life Insurance Company
PAGE D-4
<PAGE>
ADJUSTABLE INCOME ANNUITY ILLUSTRATION "A VARIABLE IMMEDIATE ANNUITY"
<TABLE>
<S> <C>
PREPARED FOR: Jane M. Doe ANNUITIZATION OPTION: Single Life
DATE OF BIRTH: 10/01/1935 SEX: Female COMMENCEMENT DATE: 10/01/1995
STATE: MN INCOME FREQUENCY: Monthly
PURCHASE PAYMENT: $100,000.00 INITIAL PERIODIC INCOME: $460.99
FUNDS: Non-Qualified GUARANTEED MINIMUM INCOME AT ISSUE:
LIFE EXPECTANCY: 24.2 (IRS) $391.84
PREPARED BY: Minnesota Life *ESTIMATED ANNUAL EXCLUSION AMOUNT AT
QUOTATION DATE: 10/01/1995 ISSUE: $3,471.07
</TABLE>
<TABLE>
<CAPTION>
12.00% GROSS RATE OF RETURN (10.60% NET)
---------------------------------------------------------------
BEGINNING GUARANTEED PROJECTED CUMULATIVE TOTAL ANNUITY
DATE OF YEAR AGE INCOME INCOME INCOME VALUE CASH VALUE
- --------------- ---------- --- ---------- --------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Oct 1, 1995.... 1 60 $392 $461 $461 $93,789 $81,667
Oct 1, 1996.... 2 61 392 488 6,166 97,673 84,349
Oct 1, 1997.... 3 62 392 516 12,204 101,618 86,967
Oct 1, 1998.... 4 63 392 547 18,595 105,609 89,493
Oct 1, 1999.... 5 64 392 578 25,359 109,631 91,896
Oct 1, 2000.... 6 65 392 612 32,517 113,666 94,141
Oct 1, 2001.... 7 66 392 648 40,094 117,695 96,185
Oct 1, 2002.... 8 67 392 686 48,113 121,692 97,984
Oct 1, 2003.... 9 68 392 726 56,599 125,632 99,483
Oct 1, 2004.... 10 69 392 768 65,582 129,484 100,622
Oct 1, 2005.... 11 70 392 813 75,088 133,214 101,332
Oct 1, 2006.... 12 71 392 860 85,150 136,785 101,537
Oct 1, 2007.... 13 72 392 911 95,798 140,159 101,148
Oct 1, 2008.... 14 73 392 964 107,069 143,296 100,068
Oct 1, 2009.... 15 74 392 1,020 118,997 146,157 98,184
Oct 1, 2010.... 16 75 392 1,080 131,621 148,702 95,371
Oct 1, 2011.... 17 76 392 1,143 144,983 150,922 91,488
Oct 1, 2012.... 18 77 392 1,209 159,124 152,767 86,376
Oct 1, 2013.... 19 78 392 1,280 174,091 154,217 79,859
Oct 1, 2014.... 20 79 392 1,355 189,932 155,269 71,736
Oct 1, 2015.... 21 80 392 1,434 206,697 155,944 61,783
Oct 1, 2016.... 22 81 392 1,517 224,441 156,303 49,750
Oct 1, 2017.... 23 82 392 1,606 243,220 156,466 35,358
Oct 1, 2018.... 24 83 392 1,700 263,096 156,630 18,291
Oct 1, 2019.... 25 84 392 1,799 284,132 157,116 0
Oct 1, 2020.... 26 85 392 1,904 306,396 157,735 0
Oct 1, 2021.... 27 86 392 2,015 329,960 158,116 0
Oct 1, 2022.... 28 87 392 2,133 354,899 158,278 0
Oct 1, 2023.... 29 88 392 2,257 381,294 158,246 0
Oct 1, 2024.... 30 89 392 2,389 409,230 158,052 0
Oct 1, 2025.... 31 90 392 2,528 438,796 157,715 0
Oct 1, 2026.... 32 91 392 2,676 470,088 157,759 0
Oct 1, 2027.... 33 92 392 2,832 503,207 157,764 0
Oct 1, 2028.... 34 93 392 2,998 538,259 157,702 0
Oct 1, 2029.... 35 94 392 3,173 575,357 157,516 0
Oct 1, 2030.... 36 95 392 3,358 614,621 157,103 0
</TABLE>
* The exclusion amount does not assume future contributions or withdrawals.
Page 5 of 5
Not valid without all pages.
The investment returns shown are hypothetical and are not
a representation of future results.
This is an illustration only and not a contract.
Prepared by Minnesota Life Insurance Company
PAGE D-5
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
Variable Annuity Account
Cross Reference Sheet to Statement of Additional Information
Form N-4
Item Number Caption in Statement of Additional Information
15. Cover Page
16. Cover Page
17. Directors and Principal Management Officers of Minnesota Life
18. Not Applicable
19. Not Applicable
20. Distribution of Contracts
21. Performance Data
22. Not Applicable
23. Financial Statements
<PAGE>
Variable Annuity Account
("Variable Annuity Account"), a Separate Account of
Minnesota Life Insurance Company
("Minnesota Life")
400 Robert Street North
St. Paul, Minnesota 55101-2098
Telephone: (651) 665-3500
Statement of Additional Information
The date of this document and the Prospectus is: May 3, 1999
This Statement of Additional Information is not a prospectus. Much of the
information contained in this Statement of Additional Information expands
upon subjects discussed in the Prospectus. Therefore, this Statement should
be read in conjunction with the Separate Accounts current Prospectus, bearing
the same date, which may be obtained by calling Minnesota Life Insurance
Company at (651) 665-3500, or writing to us at: 400 Robert Street North, St.
Paul, Minnesota 55101-2098.
Directors and Principal Management Officers of Minnesota Life
Distribution of Contracts
Performance Data
Auditors
Registration Statement
Financial Statements
-1-
<PAGE>
DIRECTORS AND PRINCIPAL MANAGEMENT OFFICERS OF MINNESOTA LIFE
Directors Principal Occupation
--------- --------------------
Giulio Agostini Senior Vice President, Finance and Administrative
Services, 3M, St. Paul, Minnesota
Anthony L. Andersen Chair-Board of Directors, H. B. Fuller Company,
St. Paul, Minnesota, since June 1995, prior
thereto for more than five years President and
Chief Executive Officer, H. B. Fuller Company
(Adhesive Products)
Leslie S. Biller Vice Chairman and Chief Operating Officer, Wells
Fargo & Company, San Francisco, California
(Banking)
John F. Grundhofer President, Chairman and Chief Executive Officer,
U.S. Bancorp, Minneapolis, Minnesota (Banking)
David S. Kidwell, Ph.D. Dean and Professor of Finance, The Curtis L.
Carlson School of Management, University of
Minnesota, Minneapolis, Minnesota
Reatha C. King, Ph.D. President and Executive Director, General Mills
Foundation, Minneapolis, Minnesota
William B. Lawson, Sr. Chairman and Chief Executive Officer,
Lawson Software, Minneapolis, Minnesota
Thomas E. Rohricht Of Counsel, Doherty, Rumble & Butler Professional
Association, St. Paul, Minnesota (Attorneys)
Robert L. Senkler Chairman of the Board, President and Chief
Executive Officer, Minnesota Life
Insurance Company, since August 1995; prior
thereto for more than five years Vice President
and Actuary, Minnesota Life Insurance
Company
Michael E. Shannon Chairman, Chief Financial and Administrative
Officer, Ecolab, Inc., St. Paul, Minnesota
(Develops and Markets Cleaning and Sanitizing
Products)
Frederick T. Weyerhaeuser Retired since April 1998, prior thereto
Chairman and Treasurer, Clearwater Investment
Trust since May 1996, prior thereto for more than
five years, Chairman, Clearwater Management
Company, St. Paul, Minnesota (Financial
Management)
-2-
<PAGE>
Principal Officers (other than Directors)
Name Position
John F. Bruder Senior Vice President
Keith M. Campbell Senior Vice President
Robert E. Hunstad Executive Vice President
James E. Johnson Senior Vice President and Actuary
Dennis E. Prohofsky Senior Vice President, General Counsel and
Secretary
Gregory S. Strong Senior Vice President and Chief Financial
Officer
Terrence M. Sullivan Senior Vice President
Randy F. Wallake Senior Vice President
William N. Westhoff Senior Vice President and Treasurer
All Directors who are not also officers of Minnesota Life have had the
principal occupation (or employers) shown for at least five years. All
officers of Minnesota Life have been employed by Minnesota Life for
at least five years with the exception of Mr. Westhoff. Mr. Westhoff has
been employed by Minnesota Life since April 1998. Prior thereto, Mr.
Westhoff was employed by American Express Financial Corporation, Minneapolis,
Minnesota, from August 1994 to October 1997 as Senior Vice President, Global
Investments and from November 1989 to July 1994 as Senior Vice President,
Fixed Income Management.
DISTRIBUTION OF CONTRACTS
The contract will be sold in a continuous offering by our life insurance
agents who are also registered representatives of Ascend Financial Services,
Inc. ("Ascend Financial") or other broker-dealers who have entered into
selling agreements with Ascend Financial. Ascend Financial acts as principal
underwriter of the contracts. Ascend Financial is a wholly-owned subsidiary
of Advantus Capital Management, Inc, which in turn is a wholly-owned
subsidiary of Minnesota Life. Ascend Financial is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. The amount paid by
Minnesota Life to the underwriter for 1998 and 1997 was $15,989,724 and
$15,067,613 for payments to associated dealers on the sale of this class of
variable annuity contracts issued through the Variable Annuity Account.
Agents of Minnesota Life who are also registered representatives of Ascend
Financial are compensated directly by Minnesota Life.
PERFORMANCE DATA
TOTAL RETURN FIGURES FOR THE SUB-ACCOUNT
Average annual total return figures for one-year, five-year and ten-year
periods are presented. Average annual total return figures are the average
annual compounded rates of return required for an initial investment of
$10,000 to equal the total annuity value of that same investment at the end
of the period. The total annuity value will reflect the deduction of the
sales and risk charges applicable to the contract. The average annual total
return figures published by the Variable Annuity Account will reflect
Minnesota Life's voluntary absorption of certain Fund expenses. For the
period subsequent to December 31, 1987, Minnesota Life is voluntarily
absorbing the fees and expenses that exceed .55% of the daily net assets of
the Index 500 Portfolio. There is no specified or minimum period of time
during which Minnesota Life has agreed to continue its voluntary absorption
of these expenses, and Minnesota Life may in its discretion cease its
absorption of expenses at any time. Should Minnesota Life cease absorbing
expenses the effect would be to increase substantially Fund expenses and
thereby reduce investment return.
-3-
<PAGE>
The average annual rates of return for the Sub-Account, in connection with the
contract described in the Prospectus, for the specified periods ended
December 31, 1998 are shown in the table below. The figures in parentheses show
what the average annual rates of return would have been had Minnesota Life not
absorbed Fund expenses as described above. These figures also assume that the
contracts described herein were issued when the underlying Portfolio first
became available to the Variable Annuity Account.
<TABLE>
<CAPTION>
Year Ended Five Years Ten Years
12/31/98 Ended 12/31/98 Ended 12/31/98
---------- -------------- --------------
<S> <C> <C> <C>
Index 500 Sub-Account
------ -------- ------ -------- ------ --------
</TABLE>
AUDITORS
The financial statements of The Variable Annuity Account and the consolidated
financial statements of Minnesota Life included herein have been audited by
KPMG Peat Marwick LLP, 4200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402, independent auditors, whose reports thereon
appear elsewhere herein, and have been so included in reliance upon the
reports of KPMG Peat Marwick LLP and upon the authority of said firm as
experts in accounting and auditing.
REGISTRATION STATEMENT
We have filed with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933, as amended, with respect to the
contracts offered hereby. This Prospectus does not contain all the information
set forth in the registration statement and amendments thereto and the exhibits
filed as a part thereof, to all of which reference is hereby made for further
information concerning the Variable Annuity Account, Minnesota Life, and the
contracts. Statements contained in this Statement of Additional Information as
to the contents of contracts and other legal instruments are summaries, and
reference is made to such instruments as filed.
-4-
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
Variable Annuity Account
Cross Reference Sheet to Other Information
Form N-4
Item Number Caption in Other Information
24. Financial Statements and Exhibits
25. Directors and Officers of the Depositor
26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
27. Number of Contract Owners
28. Indemnification
29. Principal Underwriters
30. Location of Accounts and Records
31. Management Services
32. Undertakings
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Audited Financial Statements of Variable Annuity Account for the
fiscal year ended December 31, 1998, are included in Part B of this
filing and consist of the following:
TO BE FILED BY SUBSEQUENT AMENDMENT
1. Independent Auditors' Report
2. Statement of Assets and Liabilities.
3. Statement of Operations.
4. Statement of Changes in Net Assets.
5. Notes to Financial Statements.
(b) Audited Financial Statements of the Depositor, Minnesota Life
Insurance Company, for the fiscal year ended December 31, 1998, are
included in Part B of this filing and consist of the following:
TO BE FILED BY SUBSEQUENT AMENDMENT
1. Independent Auditors' Report - Minnesota Life Insurance Company.
2. Consolidated Balance Sheets - Minnesota Life Insurance Company.
3. Consolidated Statements of Operations and Policyowners' Surplus -
Minnesota Life Insurance Company.
4. Consolidated Statements of Cash Flows - Minnesota Life Insurance
Company.
5. Notes to Consolidated Financial Statements - Minnesota Life
Insurance Company.
6. Summary of Investments-Other than Investments in Related
Parties - Minnesota Life Insurance Company.
7. Supplementary Insurance Information - Minnesota Life Insurance
Company.
8. Reinsurance - Minnesota Life Insurance Company.
(c) Exhibits
1. The Resolution of The Minnesota Mutual Life Insurance Company's
Executive Committee of its Board of Trustees establishing the
Variable Annuity Account, previously filed as Exhibit (c)1. to
Registrant's Form N-4, File Number 33-62147, is hereby
incorporated by reference.
2. Not applicable.
3. (a) The Distribution Agreement between The Minnesota Mutual Life
Insurance Company and MIMLIC Sales Corporation, previously
filed as Exhibit (c)3.(a) to Registrant's Form N-4, File
Number 33-62147, is hereby incorporated by reference.
(b) Dealer Selling Agreement, previously filed as Exhibit
(c)3.(b) to Registrant's Form N-4, File Number 33-62147, is
hereby incorporated by reference.
<PAGE>
4. (a) The Immediate Variable Annuity Contract, form MHC-95-9326.
(b) The Immediate Variable Annuity Contract (Unisex), form
MHC-95-9327.
(c) The Individual Retirement Annuity (IRA) Agreement, SEP,
Traditional IRA and Roth-IRA, form MHC-97-9418.
(d) The Individual Retirement Annuity, SIMPLE - (IRA)
Agreement, form MHC-98-9431.
(e) The Qualified Plan Agreement, form MHC-88-9176.
(f) Tax Sheltered Annuity, form MHC-88-9213.
5. (a) Application, form MHC-95-9328.
6. Certificate of Incorporation and Bylaws.
(a) Restated Certificate of Incorporation of Minnesota Life
Insurance Company.
(b) Bylaws of Minnesota Life Insurance Company.
7. Not applicable.
8. Not applicable.
9. Opinion and consent of Donald F. Gruber, Esq., to be filed by
subsequent amendment.
10. Consent of KPMG Peat Marwick LLP, to be filed by subsequent
amendment.
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. Minnesota Life Insurance Company Power of Attorney To Sign
Registration Statements.
Item 25. Directors and Officers of the Depositor
Name and Principal Positions and Offices Positions and Offices
Business Address with Insurance Company with Registrant
---------------- ---------------------- ---------------
Giulio Agostini Director None
3M
3M Center -
Executive 220-14W-08
St. Paul, MN 55144-1000
Anthony L. Andersen Director None
H. B. Fuller Company
2424 Territorial Road
St. Paul, MN 55114
Leslie S. Biller Director None
Wells Fargo & Company
420 Montgomery Street
MHC 0101-121
San Francisco, CA 94104
John F. Bruder Senior Vice President None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101
Keith M. Campbell Senior Vice President None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101
John F. Grundhofer Director None
U.S. Bancorp
601 2nd Avenue South
Suite 2900
Minneapolis, MN 55402-4302
<PAGE>
Robert E. Hunstad Executive Vice President None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101
James E. Johnson Senior Vice President None
Minnesota Life and Actuary
Insurance Company
400 Robert Street North
St. Paul, MN 55101
David S. Kidwell, Ph.D. Director None
The Curtis L. Carlson
School of Management
University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Reatha C. King, Ph.D. Director None
General Mills Foundation
P.O. Box 1113
Minneapolis, MN 55440
William B. Lawson, Sr. Director None
Lawson Software
1300 Godward Street
Minneapolis, MN 55413
Dennis E. Prohofsky Senior Vice President, None
Minnesota Life General Counsel and
Insurance Company Secretary
400 Robert Street North
St. Paul, MN 55101
Thomas E. Rohricht Director None
Doherty, Rumble & Butler
Professional Association
2800 Minnesota World
Trade Center
30 East Seventh Street
St. Paul, MN 55101-4999
Robert L. Senkler Chairman, President and None
Minnesota Life Chief Executive Officer
Insurance Company
400 Robert Street North
St. Paul, MN 55101
Michael E. Shannon Director None
Ecolab, Inc.
370 Wabasha Street
Ecolab Center
St. Paul, MN 55102
Gregory S. Strong Senior Vice President and None
Minnesota Life Chief Financial Officer
Insurance Company
400 Robert Street North
St. Paul, MN 55101
Terrence M. Sullivan Senior Vice President None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101
Randy F. Wallake Senior Vice President None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101
William N. Westhoff Senior Vice President None
Minnesota Life and Treasurer
Insurance Company
400 Robert Street North
St. Paul, MN 55101
Frederick T. Weyerhaeuser Director None
Clearwater Investment Trust
332 Minnesota Street
Suite W-2090
St. Paul, MN 55101-1308
<PAGE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
Wholly-owned subsidiary of Minnesota Mutual Companies, Inc.:
Securian Holding Company (Delaware)
Wholly-owned subsidiary of Securian Holding Company:
Securian Financial Group, Inc. (Delaware)
Wholly-owned subsidiary of Securian Financial Group, Inc.
Minnesota Life Insurance Company
Wholly-owned subsidiaries of Minnesota Life Insurance Company:
Advantus Capital Management, Inc.
HomePlus Insurance Company
Northstar Life Insurance Company (New York)
The Ministers Life Insurance Company
MIMLIC Life Insurance Company (Arizona)
Robert Street Energy, Inc.
Capitol City Property Management, Inc.
Personal Finance Company (Delaware)
Enterprise Holding Corporation
Wholly-owned subsidiary of Advantus Capital Management, Inc.:
Ascend Financial Services, Inc.
Wholly-owned subsidiaries of Ascend Financial Services, Inc.:
MIMLIC Insurance Agency of Massachusetts, Inc. (Massachusetts)
MIMLIC Insurance Agency of Texas, Inc. (Texas)
Ascend Insurance Agency of Nevada, Inc. (Nevada)
Ascend Insurance Agency of Oklahoma, Inc. (Oklahoma)
Wholly-owned subsidiaries of Enterprise Holding Corporation:
Financial Ink Corporation
Oakleaf Service Corporation
Concepts in Marketing Research Corporation
Concepts in Marketing Services Corporation
Lafayette Litho, Inc.
DataPlan Securities, Inc. (Ohio)
MIMLIC Imperial Corporation
MIMLIC Funding, Inc.
MCM Funding 1997-1, Inc.
MCM Funding 1998-1, Inc.
MIMLIC Venture Corporation
HomePlus Insurance Agency, Inc.
Ministers Life Resources, Inc.
Wedgewood Valley Golf, Inc.
<PAGE>
Wholly-owned subsidiary of HomePlus Insurance Agency, Inc.:
HomePlus Insurance Agency of Texas, Inc. (Texas)
Majority-owned subsidiary of Ascend Financial Services, Inc.:
MIMLIC Insurance Agency of Ohio, Inc. (Ohio)
Open-end registered investment company offering shares solely to separate
accounts of Minnesota Life Insurance Company:
Advantus Series Fund, Inc.
Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:
C.R.I. Securities, Inc.
Majority-owned subsidiaries of Minnesota Life Insurance Company:
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Real Estate Securities Fund, Inc.
Less than majority owned, but greater than 25% owned, subsidiaries of Minnesota
Life Insurance Company:
Advantus Money Market Fund, Inc.
MIMLIC Cash Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Index 500 Fund, Inc.
Less than 25% owned subsidiaries of Minnesota Life Insurance Company:
Advantus Horizon Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Bond Fund, Inc.
Unless indicated otherwise parenthetically, each of the above corporations is a
Minnesota corporation.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of ___________, 1999, the number of holders of securities of the Registrant
of this class were as follows:
Number of Record
Title of Class Holders
-------------- ----------------
Immediate Variable Annuity Contracts
<PAGE>
ITEM 28. INDEMNIFICATION
The State of Minnesota has an indemnification statute (Minnesota Statutes
300.083), as amended, effective January 1, 1984, which requires indemnification
of individuals only under the circumstances described by the statute. Expenses
incurred in the defense of any action, including attorneys' fees, may be
advanced to the individual after written request by the board of directors upon
receiving an undertaking from the individual to repay any amount advanced unless
it is ultimately determined that he or she is entitled to be indemnified by the
corporation as authorized by the statute and after a determination that the
facts then known to those making the determination would not preclude
indemnification.
Indemnification is required for persons made a part to a proceeding by reason of
their official capacity so long as they acted in good faith, received no
improper personal benefit and have not been indemnified by another organization.
In the case of a criminal proceeding, they must also have had no reasonable
cause to believe the conduct was unlawful. In respect to other acts arising out
of official capacity: (1) where the person is acting directly for the
corporation there must be a reasonable belief by the person that his or her
conduct was in the best interests of the corporation or, (2) where the person is
serving another organization or plan at the request of the corporation, the
person must have reasonably believed that his or her conduct was not opposed to
the best interests of the corporation. In the case of persons not directors,
officers or policy-making employees, determination of eligibility for
indemnification may be made by a board-appointed committee of which a director
is a member. For other employees, directors and officers, the determination of
eligibility is made by the Board or a committee of the Board, special legal
counsel, the shareholder of the corporation or pursuant to a judicial
proceeding.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
Minnesota Life Insurance Company and Variable Annuity Account pursuant to the
foregoing provisions, or otherwise, Minnesota Life Insurance Company and
Variable Annuity Account have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by Minnesota Life Insurance Company and Variable Annuity Account
of expenses incurred or paid by a director, officer or controlling person of
Minnesota Life Insurance Company and Variable Annuity Account in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities
being registered, Minnesota Life Insurance Company and Variable Annuity
Account will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) The principal underwriter is Ascend Financial Services, Inc.
Ascend Financial Services, Inc. is also the principal underwriter
for twelve mutual funds (Advantus Horizon Fund, Inc.; Advantus
Spectrum Fund, Inc.; Advantus Money Market Fund, Inc.; Advantus
Mortgage Securities Fund, Inc.; Advantus Bond Fund, Inc.,;
Advantus Cornerstone Fund, Inc.; Advantus Enterprise Fund, Inc.;
Advantus International Balanced Fund, Inc.; Advantus Venture
Fund, Inc.; Advantus Index 500 Fund, Inc.; Advantus Real
Estate Securities Fund, Inc.; and the MIMLIC Cash
<PAGE>
Fund, Inc.) and for four additional registered separate accounts
of Minnesota Life Insurance Company, all of which offer annuity
contracts and life insurance policies on a variable basis.
(b) Directors and Officers of Underwriter.
DIRECTORS AND OFFICERS OF UNDERWRITER
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Depositor
- ------------------ --------------------- ---------------------
Robert E. Hunstad Director None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
George I. Connolly President, Chief None
Ascend Financial Services, Inc. Executive Officer, Chief
400 Robert Street North Compliance Officer and
St. Paul, Minnesota 55101 Director
Margaret Milosevich Vice President, Chief Assistant
Ascend Financial Services, Inc. Operations Officer, Secretary
400 Robert Street North Treasurer and Secretary
St. Paul, Minnesota 55101
Dennis E. Prohofsky Director None
Minnesota Life
Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Thomas L. Clark Assistant Treasurer Assistant
Ascend Financial Services, Inc. and Assistant Secretary Secretary
400 Robert Street North
St. Paul, Minnesota 55101
(c) All commissions and other compensation received by each principal
underwriter, directly or indirectly, from the Registrant during
the Registrant's last fiscal year for this class of securities:
Name of Net Underwriting Compensation on
Principal Discounts and Redemption or Brokerage Other
Underwriter Commissions Annuitization Commissions Compensation
----------- ---------------- --------------- ----------- ------------
Ascend $15,989,724 ___ ___ ___
Financial
Services, Inc,
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules promulgated thereunder are in the physical
possession of Minnesota Life Insurance Company, St. Paul, Minnesota 55101-2098.
ITEM 31. MANAGEMENT SERVICES
None.
<PAGE>
ITEM 32. UNDERTAKINGS
(a) The Registrant hereby undertakes to file a post-effective
amendment to this registration statement as frequently as is
necessary to ensure that the audited financial statements in the
registration statement are never more than 16 months old for so
long as payments under the Contracts may be accepted.
(b) The Registrant hereby undertakes to include as part of any
application to purchase a contract offered by the prospectus a
space that an applicant can check to request a Statement of
Additional Information.
(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statement required to be
made available under this form promptly upon written or oral
request.
(d) Minnesota Life Insurance Company hereby represents that, as to
the variable annuity contract which is the subject of this
Registration Statement, File Number 33-62147, the fees and
charges deducted under the contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses
expected to be incurred and the risks assumed by Minnesota
Life Insurance Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of St. Paul and the State of Minnesota on the 3rd day of March, 1999.
VARIABLE ANNUITY ACCOUNT
(Registrant)
By: MINNESOTA LIFE INSURANCE COMPANY
(Depositor)
By
-------------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the Depositor,
Minnesota Life Insurance Company, has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Saint
Paul, and State of Minnesota, on the 3rd day of March, 1999.
MINNESOTA LIFE INSURANCE COMPANY
By
-------------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in their capacities
with the Depositor and on the date indicated.
Signature Title Date
--------- ----- ----
Chairman, President and March 3, 1999
- ----------------------------- Chief Executive Officer
Robert L. Senkler
* Director
- -----------------------------
Giulio Agostini
* Director
- -----------------------------
Anthony L. Andersen
* Director
- -----------------------------
John F. Grundhofer
<PAGE>
* Director
- -----------------------------
David S. Kidwell, Ph.D.
- ----------------------------- Director
William B. Lawson, Sr.
* Director
- -----------------------------
Reatha C. King, Ph.D.
* Director
- -----------------------------
Thomas E. Rohricht
* Director
- -----------------------------
Michael E. Shannon
* Director
- -----------------------------
Frederick T. Weyerhaeuser
Vice President March 3, 1999
- ----------------------------- (chief financial officer)
Gregory S. Strong
Vice President March 3, 1999
- ----------------------------- (chief accounting officer)
Gregory S. Strong
Attorney-in-Fact March 3, 1999
- -----------------------------
*By Dennis E. Prohofsky
* Pursuant to power of attorney dated October 19, 1998, a copy of which is
filed herewith.
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------
4(a) The Immediate Variable Annuity Contract, form MHC-95-9326.
4(b) The Immediate Variable Annuity Contract (Unisex), form
MHC-95-9327.
4(c) The Individual Retirement Annuity (IRA) Agreement, SEP,
Traditional IRA and Roth-IRA, form MHC-97-9418.
4(d) The Individual Retirement Annuity, SIMPLE - (IRA) Agreement, form
MHC-98-9431.
4(e) The Qualified Plan Agreement, form MHC-88-9176.
4(f) Tax Sheltered Annuity, form MHC-88-9213.
5(a) Application, form MHC-95-9328.
6(a) Restated Certificate of Incorporation of Minnesota Life Insurance
Company.
6(b) The Bylaws of Minnesota Life Insurance Company.
14 Minnesota Life Insurance Company Power of Attorney To Sign
Registration Statement
<PAGE>
Exhibit 4(a)
READ YOUR CONTRACT CAREFULLY
THIS IS A LEGAL CONTRACT
We promise to pay, subject to the provisions of this
contract, the benefits described by this contract.
We make this promise and issue this contract in
consideration of the application for this contract and
the payment of the purchase payments.
The owner and beneficiary are as named in the
application unless they are changed as provided for in
this contract.
Minnesota Life Insurance Company is a subsidiary of
Minnesota Mutual Companies, Inc., a mutual insurance
holding company. The owner is a member of Minnesota
Mutual Companies, Inc., which holds it's annual meetings
on the first Tuesday in March of each year at 3 p.m.
local time. The meetings are held at 400 Robert Street
North, St. Paul, MN 55101-2098
Signed for Minnesota Life Insurance Company at St. Paul,
Minnesota, on the contract date.
/s/ Robert L. Senkler
President
/s/ Dennis E. Prohofsky
Secretary
Registrar
NOTICE OF YOUR RIGHT TO EXAMINE THIS
CONTRACT FOR 10 DAYS.
IT IS IMPORTANT TO US THAT YOU ARE SATISFIED WITH THIS
CONTRACT. IF YOU ARE NOT SATISFIED, YOU MAY RETURN
THE CONTRACT TO US OR TO YOUR AGENT WITHIN 10 DAYS
OF ITS RECEIPT. IF YOU EXERCISE THIS RIGHT, YOU WILL
RECEIVE THE GREATER OF: (A) THE TOTAL ANNUITY VALUE
OF THIS CONTRACT ATTRIBUTABLE TO YOUR PURCHASE PAYMENTS
PLUS THE AMOUNTS DEDUCTED FROM YOUR PURCHASE PAYMENTS;
OR (B) THE AMOUNT OF PURCHASE PAYMENTS PAID UNDER THIS
CONTRACT. WE WILL PAY THIS REFUND WITHIN 7 DAYS AFTER WE IMMEDIATE
RECEIVE YOUR NOTICE OF CANCELLATION. VARIABLE ANNUITY
CONTRACT
ALL PAYMENTS AND VALUES PROVIDED BY GUARANTEED MINIMUM
THIS CONTRACT ARE VARIABLE. A MINIMUM ANNUITY PAYMENT
ANNUITY PAYMENT AMOUNT IS GUARANTEED AMOUNT
TO YOU. OTHER PAYMENTS AND VALUES ARE
NOT GUARANTEED. A NONPARTICIPATING
CONTRACT
MINNESOTA LIFE
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, MN 55101-2098
MHC-95-9326
<PAGE>
CONTRACT INDEX
Alphabetical Index to the Provisions of Your Contract
Page
----
Additional Information
Amount Payable at Death
Annuity Provisions
Assignment
Beneficiary
Contract Charges
Definitions
General Information
Misstatement
Purchase Payments
Valuation
Withdrawal and Surrender
<PAGE>
YOUR CONTRACT INFORMATION - EFFECTIVE OCTOBER 1, 1995
This page one supersedes any previously dated page one for this contract.
Please replace any prior page one of your contract with this new page.
Owner: Jane M. Doe
Contract Number: 1-234-567
Contract Date: October 1, 1995
Jurisdiction: Your State
Annuity Option: Single Life
Annuitant: Jane M. Doe
Annuitant's Date of Birth: October 1, 1935
Annuitant's Sex: Female
Joint Annuitant: not applicable
Joint Annuitant's Date of Birth: not applicable
Joint Annuitant's Sex: not applicable
Annuity Payment Commencement Date: October 1, 1995
Annuity Payment Frequency: Monthly
End of Cash Value Period: September 30, 2019
Annuity Unit Value on October 1, 1995: 1.012345
<TABLE>
<CAPTION>
Prior to Effect of
Purchase Payment Purchase Payment As of
October 1, 1995 October 1, 1995 October 1, 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Cumulative Purchase Payments: 0.00 100,000.00 100,000.00
Total Annuity Value: 0.00 93,789.44 93,789.44
Cash Value: 0.00 81,667.70 81,667.70
* Initial Annuity Payment Amount: 0.00 460.99 460.99
** Guaranteed Minimum
Annuity Payment Amount: 0.00 391.84 391.84
** Number of Annuity Units: 0.00 455.3685 455.3685
** Number of Cash Value Units: 0.00 455.3685 455.3685
<FN>
* The annuity payment amount shown here is annuity units multiplied by
the annuity unit value as of the effective date of this page one. The
actual annuity payment amount at the next annuity payment date will
differ from this amount. It will be based on the net separate account
sub-account performance from the effective date to the next annuity
payment date.
** These values will change each time you make a cash value withdrawal or
an additional purchase payment. You will be notified of the new
values.
</TABLE>
MHC-95-9326 Minnesota Life 1
<PAGE>
CASH VALUE FACTORS AND GUARANTEED ANNUITY PAYMENT PURCHASE RATES FOR
CALCULATING THE INITIAL ANNUITY PAYMENT AMOUNT WHICH IS PURCHASED WITH
EACH $1,000 OF VALUE APPLIED FOR A NEW PURCHASE PAYMENT
Annuitant: Jane M. Doe
Contract Number: 1-234-567
Guaranteed Annuity Payment
Amount per $1,000 of Value Applied
Cash Value Factor for a New Purchase Payment
----------------- --------------------------
Contract Date: not applicable 4.8911
Annuitization
Anniversary
-----------
0 177.1572 4.8911
1 172.8837 4.9703
2 168.4179 5.0558
3 163.7512 5.1482
4 158.8745 5.2483
5 153.7783 5.3569
6 148.4528 5.4749
7 142.8876 5.6034
8 137.0720 5.7437
9 130.9947 5.8972
10 124.6440 6.0657
11 118.0074 6.2510
12 111.0722 6.4553
13 103.8249 6.6810
14 96.2515 6.9309
15 88.3373 7.2079
16 80.0670 7.5141
17 71.4244 7.8540
18 62.3930 8.2312
19 52.9552 8.6490
20 43.0926 9.1100
21 32.7862 9.6147
22 22.0161 10.1598
23 10.7613 10.7353
24 0.0000 11.3202
over 24 0.0000 not applicable
This table provides factors to determine cash values and the guaranteed annuity
payment amount per $1,000 of value applied for a new purchase payment at the
contract date and each annuitization anniversary. The applicable factor at
times between these dates will be determined consistently with the mortality and
interest rates used to determine the factors shown here.
MHC-95-9326 Minnesota Life 1A
<PAGE>
Total Annuity Value Factors and Annuity Payment Purchase Rates Applicable
at a Cash Value Withdrawal while the Annuitant is Alive
per $1,000 Applied - Single Life Issue
Annuitant: Jane M. Doe
Contract Number: 1-234-567
FOR CASH VALUE AND ANNUITY UNITS ATTRIBUTABLE TO TRANSACTIONS ON OR AFTER:
OCTOBER 1, 1995
Annuity Payment
Factor Purchase Rate
Factor Applicable to at a Cash Value
Applicable to Annuity Units Withdrawal while
Cash Value in excess of Annuitant is alive
Units Cash Value Units per $1,000 Applied
----- ---------------- ------------------
Contract Date: 203.4522 191.6400 not applicable
Annuitization
Anniversary
-----------
0 203.4522 191.6400 5.2181
1 200.1934 188.2657 5.3116
2 196.7917 184.7827 5.4117
3 193.2402 181.1931 5.5189
4 189.5356 177.5000 5.6338
5 185.6737 173.7047 5.7568
6 181.6504 169.8072 5.8890
7 177.4614 165.8058 6.0311
8 173.1024 161.6965 6.1844
9 168.5694 157.4751 6.3502
10 163.8597 153.1408 6.5299
11 158.9726 148.6972 6.7250
12 153.9099 144.1518 6.9371
13 148.6764 139.5159 7.1676
14 143.2807 134.8037 7.4181
15 137.7353 130.0297 7.6905
This table provides factors to determine the total annuity value and the annuity
payment purchase rates applicable at a cash value withdrawal while the annuitant
is alive, at the contract date and each annuitization anniversary. The
applicable factor at times between these dates will be determined consistently
with the mortality and interest rates used to determine the factors shown here.
MHC-95-9326 Minnesota Life 1B
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Total Annuity Value Factors and Annuity Payment Purchase Rates Applicable
at a Cash Value Withdrawal while the Annuitant is Alive
per $1,000 Applied - Single Life Issue
Annuitant: Jane M. Doe
Contract Number: 1-234-567
FOR CASH VALUE AND ANNUITY UNITS ATTRIBUTABLE TO TRANSACTIONS ON OR AFTER:
OCTOBER 1, 1995
Annuity Payment
Factor Purchase Rate
Factor Applicable to at a Cash Value
Applicable to Annuity Units Withdrawal while
Annuitization Cash Value in excess of Annuitant is alive
Anniversary Units Cash Value Units per $1,000 Applied
----------- ----- ---------------- ------------------
16 132.0819 125.2714 7.9826
17 126.3228 120.4840 8.2998
18 120.4885 115.6810 8.6444
19 114.6193 110.8750 9.0191
20 108.7685 106.0804 9.4268
21 103.0065 101.3125 9.8704
22 97.4264 96.5881 10.3532
23 92.1500 91.9241 10.8785
24 87.3376 87.3376 11.4498
25 82.8458 82.8458 0.0000
26 78.4655 78.4655 0.0000
27 74.2135 74.2135 0.0000
28 70.1063 70.1063 0.0000
29 66.1586 66.1586 0.0000
30 62.3764 62.3764 0.0000
31 58.9525 58.9525 0.0000
32 55.7028 55.7028 0.0000
33 52.6101 52.6101 0.0000
34 49.6496 49.6496 0.0000
35 46.7882 46.7882 0.0000
36 43.9834 43.9834 0.0000
37 41.1801 41.1801 0.0000
38 38.3067 38.3067 0.0000
39 35.2973 35.2973 0.0000
40 32.0851 32.0851 0.0000
This table provides factors to determine the total annuity value and the annuity
payment purchase rates applicable at a cash value withdrawal while the annuitant
is alive, at the contract date and each annuitization anniversary. The
applicable factor at times between these dates will be determined consistently
with the mortality and interest rates used to determine the factors shown here.
MHC-95-9326 Minnesota Life 1C
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Total Annuity Value Factors and Annuity Payment Purchase Rates Applicable
at a Cash Value Withdrawal while the Annuitant is Alive
per $1,000 Applied - Single Life Issue
Annuitant: Jane M. Doe
Contract Number: 1-234-567
FOR CASH VALUE AND ANNUITY UNITS ATTRIBUTABLE TO TRANSACTIONS ON OR AFTER:
OCTOBER 1, 1995
Annuity Payment
Factor Purchase Rate
Factor Applicable to at a Cash Value
Applicable to Annuity Units Withdrawal while
Annuitization Cash Value in excess of Annuitant is alive
Anniversary Units Cash Value Units per $1,000 Applied
----------- ----- ---------------- ------------------
41 30.0168 30.0168 0.0000
42 27.9334 27.9334 0.0000
43 25.8440 25.8440 0.0000
44 23.7625 23.7625 0.0000
45 21.7058 21.7058 0.0000
46 19.6915 19.6915 0.0000
47 17.7367 17.7367 0.0000
48 15.8564 15.8564 0.0000
49 14.0629 14.0629 0.0000
This table provides factors to determine the total annuity value and the annuity
payment purchase rates applicable at a cash value withdrawal while the annuitant
is alive, at the contract date and each annuitization anniversary. The
applicable factor at times between these dates will be determined consistently
with the mortality and interest rates used to determine the factors shown here.
MHC-95-9326 Minnesota Life 1D
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DEFINITIONS
When we use the following words, this is what we mean:
ANNUITANT
The person named on page one of the contract who may receive lifetime benefits
under the contract. Except in the event of the death of either annuitant prior
to the annuity payment commencement date, joint annuitants will be considered a
single entity.
YOU, YOUR
The owner of this contract. The owner may be the annuitant or someone else.
The owner shall be that person or entity named as owner in the application.
JOINT OWNER
The person designated to share equally in the rights and privileges provided to
the owner of this contract. Only you and your spouse may be named as joint
owners.
WE, OUR, US
Minnesota Life Insurance Company.
BENEFICIARY
The person, persons or entity designated to receive death benefits payable under
the contract in the event of the annuitant's death.
WRITTEN REQUEST
A request in writing signed by you. In the case of joint owners, the signatures
of both owners will be required to complete a written request. In some cases,
we may provide a form for your use. We may also require that this contract be
sent to us with your written request.
PURCHASE PAYMENTS
Amounts paid to us as consideration for the benefits provided by this contract.
PURCHASE PAYMENT DATE
The date we receive a purchase payment in our home office.
CONTRACT DATE
The effective date of this contract.
ANNUITY PAYMENT DATE
Each day indicated by the annuity payment commencement date and the annuity
payment frequency for an annuity payment to be determined. This is shown on
page one of this contract.
ANNUITY PAYMENT COMMENCEMENT DATE
The first annuity payment date as specified on page one.
ANNUITIZATION ANNIVERSARY
The same day and month as the annuity payment commencement date for each
succeeding year of this contract.
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FUND
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
ANNUITY UNIT
The standard of value for the variable annuity payment amount.
CASH VALUE UNIT
The measure of your interest in the separate account that is available for
withdrawal under this contract during the cash value period.
CASH VALUE PERIOD
The time during which a cash value exists under the contract. The cash value
period begins on the annuity payment commencement date and ends on the cash
value end date shown on page one.
CASH VALUE
The dollar amount available for withdrawal under this contract during the cash
value period. A cash value exists only as long as both the number of cash value
units and the applicable factor from the cash value factor table are greater
than zero.
TOTAL ANNUITY VALUE
The total annuity value represents your total interest in the separate account.
SURRENDER VALUE
The surrender value of this contract shall be the total annuity value as of the
date of surrender plus the amounts deducted from your purchase payments. Those
include deductions for sales charges, risk charges, and state premium taxes
where applicable.
SEPARATE ACCOUNT
A separate investment account entitled Variable Annuity Account. This
separate account was established by us under Minnesota law. The separate
account is composed of several sub-accounts. The assets of the separate
account are ours. Those assets are not subject to claims arising out of any
other business which we may conduct.
1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor federal
legislation.
ANNUITY PAYMENTS
Payments made at regular intervals to the annuitant or any other payee. The
annuity payments will increase or decrease in amount. The changes will reflect
the investment experience of the sub-account of the separate account.
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GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT
The amount which is guaranteed as the minimum annuity payment amount. This
amount is payable without regard to the performance of the sub-account of the
separate account. Purchase payments, cash value withdrawals, and surrenders
will cause this guaranteed minimum annuity payment amount to be adjusted. The
adjustment will reflect your new interest in the separate account.
AGE
The age of a person at nearest birthday.
GENERAL INFORMATION
WHAT IS YOUR AGREEMENT WITH US?
This contract and the copy of the application attached to it constitute the
entire contract between you and us. Any statements made in the application
either by you or by the annuitant will, in the absence of fraud, be considered
representations and not warranties. Also, any statement made either by you or
the annuitant will not be used to void this contract unless the statement is
contained in the application.
No change or waiver of any of the provisions of this contract will be valid
unless made in writing by us. This must be signed by our president, a vice
president, secretary or an assistant secretary. No agent or other person has
the authority to change or waive any provision of this contract.
Any additional agreement attached to this contract will become a part of this
contract. The agreement will be subject to all the terms and conditions of this
contract unless we state otherwise in it.
HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT?
You can exercise all the rights under this contract by giving us a written
request. We will deal with you, unless this contract provides otherwise, on the
basis that you have full ownership and control of this contract.
HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT?
Each year we will send you a report. This report will summarize the year's
transactions. It will show the current total annuity value and cash value of
this contract, the current annuity payment amount, and the current guaranteed
minimum annuity payment amount. It will also show the current annuity unit
value. This report will be as of a date within two months of its mailing.
PURCHASE PAYMENTS
IS THIS AN IMMEDIATE ANNUITY?
Yes. Annuity payments begin on the annuity payment commencement date. This
date is shown on page one. Annuity payments must begin not later than 12 months
after the contract date. An earlier date may be required by law to qualify this
contract as an immediate annuity in the state in which this contract is
delivered.
MAY YOU MAKE ADDITIONAL PURCHASE PAYMENTS TO THIS CONTRACT AFTER ITS ISSUE?
Yes. You may make additional purchase payments to this contract after its issue
as long as we are accepting purchase payments for this class of contract. Each
additional purchase payment must be in an amount of at least $5,000. Total
purchase payments made by you may not exceed $1,000,000, except with our prior
consent. We may discontinue accepting purchase payments for this class of
contract. We can do
MHC-95-9326 Minnesota Life 4
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this at any time. We may then terminate your ability to make additional
purchase payments into the contract.
DO YOU CHOOSE WHEN TO MAKE ADDITIONAL PURCHASE PAYMENTS?
Yes. You may choose when to make any additional purchase payments to this
contract at any time before the end of the cash value period. Purchase payments
may be made only while the annuitant is alive and we are accepting purchase
payments for this class of contract. No purchase payments are allowed after the
annuitant's death or after the cash value period has expired.
WHERE DO YOU MAKE ADDITIONAL PURCHASE PAYMENTS?
Your purchase payments must be made at our home office. Our home office is at
400 Robert Street North, St. Paul, Minnesota 55101-2098. When we receive a
purchase payment from you, we will send you a confirmation and an updated page
one for this contract.
WILL PURCHASE PAYMENTS AFFECT FUTURE ANNUITY PAYMENTS?
Yes. Purchase payments made by you will purchase additional annuity units.
The net amount of each purchase payment, after deductions, will be applied to
purchase an additional initial annuity payment amount. This will be determined
as of the purchase payment date. This amount will be at least as great as that
determined by using the guaranteed annuity payment purchase rate table for new
purchase payments. This table is included in this contract.
The new number of annuity units after a purchase payment will be equal to the
number of annuity units prior to the purchase payment plus the additional
annuity units resulting from the current purchase payment. These annuity units
shall equal a number which is equal to the initial annuity payment amount
attributable to the new purchase payment, divided by the annuity unit value on
the purchase payment date.
When you make a purchase payment, we will inform you of the number of annuity
units in your contract. Annuity units will be recorded separately whenever a
different annuity payment purchase rate table is used.
WHAT ARE THE GUARANTEED ANNUITY PAYMENT PURCHASE RATES TO BE USED IN DETERMINING
THE ADDITIONAL ANNUITY PAYMENT AMOUNT ATTRIBUTABLE TO A NEW PURCHASE PAYMENT?
The guaranteed annuity payment purchase rates used for new purchase payments are
given in the guaranteed annuity payment purchase rate table. This table is
included in this contract. The rates are based on a 4.5% assumed interest rate
and Individual Annuity 1983 Table A mortality rates projected to the terminal
age of the table using projection scale G.
WILL THE GUARANTEED TABLE ALWAYS BE USED FOR NEW PURCHASE PAYMENTS?
Not always. At the time of a purchase payment, we may be using a table of
annuity payment purchase rates for this contract which would result in a larger
initial annuity payment. If we are, we will use that table instead.
WILL PURCHASE PAYMENTS AFFECT THE CASH VALUE?
Yes. Purchase payments will affect the cash value. The purchase payment will
increase the number of cash value units. The new number of cash value units
after a purchase payment will be equal to the number of cash value units prior
to the purchase payment plus the number of annuity units attributable to the new
purchase payment.
MHC-95-9326 Minnesota Life 5
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We will inform you of the number of cash value units in your contract when you
make a purchase payment. Cash value units attributable to a purchase payment
will be recorded separately if a different annuity purchase rate table was used
to determine the additional annuity units purchased.
WILL PURCHASE PAYMENTS AFFECT THE GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT?
Yes. The guaranteed minimum annuity payment amount will be increased. This
increase will reflect your additional interest in the separate account after the
additional purchase payment. The new guaranteed minimum annuity payment amount
after an additional purchase payment will be equal to: the guaranteed minimum
annuity payment amount prior to the purchase payment, plus 85% of the additional
initial annuity payment amount attributable to the new purchase payment. This
will be determined on the date we receive the purchase payment.
We will inform you of the new guaranteed minimum annuity payment amount for your
contract when you make a purchase payment.
HOW ARE YOUR PURCHASE PAYMENTS INVESTED?
The net amount of your purchase payments, after deductions, is invested
exclusively in the Index 500 Account sub-account of the separate account.
ARE THERE ANY OTHER INVESTMENT OPTIONS?
No.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
The separate account is divided into sub-accounts. For each sub-account, there
is a fund for the investment of that sub-account's assets. Net purchase
payments are invested in the funds at their net asset value.
If investment in a fund should no longer be possible or if we determine it
becomes inappropriate for contracts of this class, we may substitute another
fund. Substitution may be with respect to existing total annuity values, cash
values, future annuity payments, or future purchase payments.
MAY WE MAKE CHANGES TO THE SEPARATE ACCOUNT?
Yes. We reserve the right to transfer assets of the separate account to another
separate account. The transfer will be of assets associated with this class of
contracts. We will make that determination. If this type of transfer is made,
the term separate account, as used in this contract, shall then mean the
separate account to which the assets were transferred.
We also reserve the right, when permitted by law, to:
(a) deregister the separate account under the Investment Company Act of
1940;
(b) restrict or eliminate any voting rights of contract owners or other
persons who have voting rights as to the separate account; and
(c) combine the separate account with one or more other separate accounts.
CONTRACT CHARGES
ARE THERE CHARGES UNDER THIS CONTRACT?
Yes. This contract makes certain deductions from purchase payments. There are
also certain charges which are made directly to the separate account.
MHC-95-9326 Minnesota Life 6
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WHAT DEDUCTIONS ARE MADE FROM YOUR PURCHASE PAYMENTS?
Deductions from your purchase payments are made for sales charges, risk charges,
and state premium taxes where applicable.
WHAT SALES CHARGES ARE DEDUCTED FROM YOUR PURCHASE PAYMENTS?
The sales charge is deducted from your purchase payments using the percentages
shown in the table below:
Cumulative Sales Charge as a Percentage
Total Purchase Payments of Purchase Payments
----------------------- --------------------
$ 0 - 499,999.99 4.500%
500,000 - 749,999.99 4.125%
750,000 - 1,000,000.00 3.750%
The applicable percentage from the chart will be based on the total cumulative
purchase payments to date, including the new purchase payment.
WHAT RISK CHARGES ARE DEDUCTED FROM YOUR PURCHASE PAYMENTS?
A risk charge is deducted from each purchase payment when paid. This is for our
guaranteeing the minimum annuity payment amount shown on page one. This risk
charge may be as much as 2% of each purchase payment.
WHAT ARE THE CHARGES ASSOCIATED WITH THE SEPARATE ACCOUNT?
There are three charges associated with the separate account. These are the
expense risk charge, the mortality risk charge, and the administrative charge.
All of these charges are deducted from the separate account on each valuation
date.
WHAT IS THE EXPENSE RISK CHARGE?
This is a charge to compensate us for the guarantee that the deductions provided
for in this contract will be sufficient to cover our actual expenses incurred.
Actual expense results incurred by us shall not adversely affect any payments or
values under this contract. On an annual basis, this charge may be as much as
0.60% of the net asset value of the separate account.
WHAT IS THE MORTALITY RISK CHARGE ASSOCIATED DIRECTLY WITH THE SEPARATE ACCOUNT?
This is a charge to compensate us for the mortality guarantees we make under the
contract. Actual mortality results incurred by us shall not adversely affect
any payments or values under this contract. On an annual basis, this charge may
be as much as 0.80% of the net asset value of the separate account.
WHAT IS THE ADMINISTRATIVE CHARGE?
This is a charge to compensate us for the administrative expenses we incur under
this contract. On an annual basis, this charge will not exceed 0.40% of the net
asset value of the separate account.
VALUATION
HOW IS THE CASH VALUE DETERMINED?
The cash value is equal to: the number of cash value units in the contract,
multiplied by the current annuity unit value, multiplied by the appropriate cash
value factor. The cash value factor comes from the table included in this
contract.
MHC-95-9326 Minnesota Life 7
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HOW IS THE TOTAL ANNUITY VALUE DETERMINED?
While the annuitant is alive, the total annuity value is equal to: the sum of
the number of cash value units, multiplied by the annuity unit value, multiplied
by the appropriate factor from the total annuity value factor table(s) included
in this contract; plus the number of annuity units in excess of the number of
cash value units, multiplied by the annuity unit value, multiplied by the
annuity value factor. The total annuity value factor comes from the table(s)
included in this contract.
After the annuitant's death, the beneficiary may elect to continue annuity
payments. The payments will continue for the remainder of the cash value
period. If the beneficiary does so elect, the total annuity value will be equal
to the cash value at all times during the cash value period.
WHAT IS THE ANNUITY UNIT VALUE AND HOW IS IT DETERMINED?
The annuity unit value reflects the net investment experience of the sub-account
of the separate account. The annuity unit value was originally set at $1.00 on
the first valuation date. For any subsequent valuation date, its value is equal
to: the value on the preceding valuation date, multiplied by the net investment
factor for the sub-account for the valuation period ending on the current
valuation date, and multiplied by a factor adjusting out the effect for the
valuation period of the 4.5% annual assumed interest rate. This rate has been
built into this contract's total annuity value, cash value, and annuity payment
calculations.
WHAT IS THE NET INVESTMENT FACTOR FOR THE SUB-ACCOUNT?
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the expense and mortality risk
charges and administrative charges. These charges shall be at a rate of not
more than 1.80% per annum.
The gross investment rate is equal to:
(a) the net asset value per share of a fund share held in the sub-account
of the separate account determined at the end of the current valuation
period; plus
(b) the per share amount of any dividend or capital gain distributions by
the fund if the "ex-dividend" date occurs during the current valuation
period; divided by
(c) the net asset value per share of that fund share held in the sub-
account determined at the end of the preceding valuation period.
WITHDRAWAL AND SURRENDER
MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT?
Yes. At any time during the cash value period of this contract you may request
a withdrawal from its cash value. Each withdrawal must be in the amount of at
least $500. However, if the cash value of the contract is less than that
amount, all of the remaining cash value in the contract must be withdrawn. You
must make a written request for any withdrawal.
IS A NEW NUMBER OF CASH VALUE UNITS DETERMINED AFTER A CASH VALUE WITHDRAWAL?
Yes. A cash value withdrawal reduces the number of cash value units of this
contract. The new number of cash value units after a withdrawal is equal to the
number of cash value units just prior to withdrawal, multiplied by the cash
value prior to withdrawal less the cash value withdrawn, divided by the cash
value prior to withdrawal. Cash value units are reduced on a last in, first out
basis.
When you make a withdrawal of cash value, we will inform you of the number of
cash value units remaining in your contract.
MHC-95-9326 Minnesota Life 8
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IS THE CASH VALUE GUARANTEED?
No. The cash value decreases as annuity payments are made under the contract.
The cash value will also increase or decrease based on the performance of the
separate account sub-account given by the relative change in the annuity unit
value.
WILL FUTURE ANNUITY PAYMENTS BE AFFECTED BY A CASH VALUE WITHDRAWAL?
Yes. The number of annuity units used to calculate each future annuity payment
will be reduced to reflect the cash value withdrawal. The calculation of the
new number of annuity units will be based on whether or not the annuitant is
alive at the time the cash value withdrawal is made.
We will inform you of the number of annuity units remaining in your contract
whenever you make a cash value withdrawal.
HOW WILL THE NUMBER OF ANNUITY UNITS BE DETERMINED AFTER A CASH VALUE WITHDRAWAL
WHILE THE ANNUITANT IS ALIVE?
The new number of annuity units will be the new initial annuity payment amount
after a cash value withdrawal, as described in the next paragraph, divided by
the annuity unit value at the time of the withdrawal. The new initial annuity
payment amount is determined separately for purchase payments which used
different annuity payment purchase rates at the purchase payment date. The
number of annuity units is reduced, treating the number of annuity units and
cash value units derived from purchase payments using different annuity payment
purchase rates separately, on a last in, first out basis.
The new initial annuity payment amount after a cash value withdrawal will be
based on the remaining total annuity value immediately following the cash value
withdrawal. The new initial annuity payment amount will be the sum of the
following three values shown in the paragraph below. Annuity payment amounts
will be determined separately for purchase payments which used different annuity
payment purchase rates at the purchase payment date.
The new initial annuity payment amount after a cash value withdrawal will be
equal to the sum of:
(a) The number of cash value units remaining after the withdrawal
multiplied by the annuity unit value; plus
(b) The number of annuity units just prior to withdrawal minus the cash
value units just prior to withdrawal, multiplied by the annuity unit
value; plus
(c) The amount determined by steps 1 through 4,
(1) the total annuity value just prior to withdrawal; less
(2) the cash value just prior to withdrawal; and less
(3) the value in (b) multiplied by the appropriate total annuity
value factor for annuity units in excess of cash value units, as
of the withdrawal date, from the total annuity value factor
table(s) included in this contract; this sum then multiplied by
(4) the ratio of the cash value withdrawn divided by the cash value
just prior to withdrawal; applied to the appropriate annuity
payment purchase rate factor from table(s) included in this
contract for use at a cash value withdrawal while the annuitant
is alive.
The actual annuity payment amount payable for the next annuity payment date will
differ from this new initial annuity payment amount determined on the date of
the withdrawal. It will be based on the performance of the separate account
sub-account between the date of withdrawal and the valuation date for the next
annuity payment date as given by the relative change in the annuity unit value.
MHC-95-9326 Minnesota Life 9
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HOW WILL THE NUMBER OF ANNUITY UNITS BE DETERMINED AFTER A CASH VALUE WITHDRAWAL
BY THE BENEFICIARY WHO ELECTED TO CONTINUE RECEIVING ANNUITY PAYMENTS FOR THE
REMAINDER OF THE CASH VALUE PERIOD AFTER THE ANNUITANT'S DEATH?
Whenever the beneficiary has elected to continue receiving annuity payments and
a withdrawal of cash value is made, the number of annuity units is set equal to
the number of cash value units as determined after the withdrawal of cash value.
WILL THE GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT BE AFFECTED BY A CASH VALUE
WITHDRAWAL?
Yes. The guaranteed minimum annuity payment amount will be reduced to reflect
your reduced interest in the separate account, after the cash value withdrawal,
as represented by the number of annuity units. The new guaranteed minimum
annuity payment amount will be equal to: the guaranteed minimum annuity payment
amount just prior to the withdrawal, multiplied by the number of annuity units
after the withdrawal divided by the number of annuity units prior to the
withdrawal.
We will inform you of the new guaranteed minimum annuity payment amount for your
contract when you make a cash value withdrawal.
MAY YOU SURRENDER THE CONTRACT?
Yes. At any time before the annuity payment commencement date you may surrender
this contract for its surrender value. You must make a written request for any
surrender. The surrender value will be determined as of the valuation date
coincident with or next following the date your written request is received at
our home office.
HOW WILL WITHDRAWAL OR SURRENDER PROCEEDS BE PAID?
We will pay those benefits in a single sum within seven days of receiving your
written request.
ANNUITY PROVISIONS
WHAT ANNUITY OPTIONS ARE ALLOWED?
This contract provides for lifetime annuity payments which are based on the
survival of a single annuitant or based on the combined survival of joint
annuitants. On the contract date you elected between the single life or joint
life option as shown on page one of this contract. That election, once made,
cannot be changed under this contract.
WHEN DO ANNUITY PAYMENTS BEGIN?
Annuity payments begin on the annuity payment commencement date.
MHC-95-9326 Minnesota Life 10
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WHEN ARE ANNUITY PAYMENTS MADE?
Annuity payments are withdrawn from the sub-account on the valuation date on or
next following each annuity payment date. Each annuity payment is then paid as
directed immediately after its withdrawal from the sub-account.
HOW LONG ARE ANNUITY PAYMENTS PAID?
Annuity payments are paid during the lifetime of the annuitant. In the event of
the annuitant's death, the beneficiary may elect to continue annuity payments
for the remainder of the cash value period.
TO WHOM ARE THE ANNUITY PAYMENTS PAID?
Annuity payments will be paid to the person or persons named as an annuitant on
page one of this contract. Any annuity payments payable as a death benefit
elected by the beneficiary will be paid to the beneficiary.
CAN THE ANNUITANT DIRECT OR ASSIGN ANNUITY PAYMENTS TO BE PAID TO SOMEONE ELSE?
Yes. The annuitant, or the joint annuitants, can direct or assign annuity
payments to be made under the contract. Those payments will then be paid to
someone else. However, we will not be bound by any assignment until we have
recorded a written request of it at our home office. We are not responsible for
the validity of any direction or assignment. A direction to pay someone other
than the annuitant will not apply to any payment made by us before it was
recorded. Any claim made by an assignee will be subject to proof of the
assignee's interest and the extent of the assignment.
MAY WE REQUIRE ADDITIONAL INFORMATION?
Yes. We reserve the right to require proof satisfactory to us of the age of the
annuitant and of any joint annuitant. We may also require proof that a person
is alive before making any annuity payment which is based on the survival of
that person.
HOW IS THE AMOUNT OF AN ANNUITY PAYMENT DETERMINED?
The dollar amount of annuity payments is equal to the number of annuity units
remaining for this contract multiplied by the annuity unit value as of the
valuation date of the payment. The amount may increase or decrease from one
annuity payment date to the next.
IS THERE A GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT?
Yes. Each annuity payment date we will pay the annuitant the greater of: (a)
the annuity payment amount determined by multiplying the number of annuity units
times the annuity unit value; or (b) the guaranteed minimum annuity payment
amount currently in force for this contract.
AMOUNT PAYABLE AT DEATH
IS THERE A DEATH BENEFIT IF THE ANNUITANT OR JOINT ANNUITANT DIES BEFORE THE
ANNUITY PAYMENT COMMENCEMENT DATE?
Yes. When we receive due proof at our home office, satisfactory to us, of
either annuitant's death before the annuity payment commencement date, a death
benefit will be paid to you, or your beneficiary, if applicable. This death
benefit will be the sum of: the total annuity value plus the amounts deducted
from your purchase payments for sales charges, risk charges, and state premium
taxes where applicable.
IS THERE A DEATH BENEFIT WHEN THE ANNUITANT DIES AFTER THE ANNUITY PAYMENT
COMMENCEMENT DATE?
Yes. However, this death benefit is payable only so long as the contract has a
cash value. When we receive due proof, satisfactory to us, of the annuitant's
death after the annuity payment commencement date, we will pay the cash value of
the contract as a lump sum death benefit. The beneficiary will be the
MHC-95-9326 Minnesota Life 11
<PAGE>
person or persons named in the application for this contract unless you
subsequently change the beneficiary. In that event, we will pay the death
benefit to the beneficiary named in your last change of beneficiary request as
provided for in this contract.
MAY A BENEFICIARY, IN THE EVENT OF THE ANNUITANT'S DEATH AFTER ANNUITY PAYMENTS
HAVE BEGUN, ELECT TO CONTINUE ANNUITY PAYMENTS UNTIL THE END OF THE CASH VALUE
PERIOD INSTEAD OF RECEIVING THE LUMP SUM DEATH BENEFIT?
Yes. A beneficiary may elect to continue annuity payments. However, the number
of annuity units will be set equal to the number of cash value units at the time
of the annuitant's death, the annuity payments to the beneficiary will terminate
at the end of the cash value period, and the guaranteed minimum annuity payment
amount will be adjusted in proportion to any change in the number of annuity
units. The new guaranteed minimum annuity payment amount will be equal to the
guaranteed minimum annuity payment amount just prior to the annuitant's death,
multiplied by the number of annuity units after the annuitant's death divided by
the number of annuity units prior to the annuitant's death.
If the beneficiary elects to continue the annuity payments, the cash value will
also continue on the beneficiary's behalf as part of the death benefit. This
allows the beneficiary to withdraw any or all of the cash value at any time
during the remaining cash value period. As with cash value withdrawals while
the annuitant is alive, cash value withdrawals by the beneficiary after the
annuitant's death will reduce future annuity payments and the guaranteed minimum
annuity payment amount. This reduction will be based on the reduced interest in
the separate account as described in the "Withdrawal and Surrender" section of
this contract.
WHEN MUST DEATH BENEFITS PAID AS AN ANNUITY BE PAID?
Death benefits payable after the annuitant's death must be distributed at least
as rapidly as under the method elected by the annuitant.
WHAT HAPPENS IF A BENEFICIARY DIES BEFORE THE ANNUITANT DIES?
If a beneficiary dies, that beneficiary's interest in this contract ends with
his or her death. Only those beneficiaries who survive will be eligible to
share in the amount payable to the beneficiary at the annuitant's death. If
there is no surviving beneficiary upon the death of the annuitant, any remaining
value of death benefit payable to the beneficiary will be paid to the
annuitant's estate.
ARE THERE ANY OTHER CIRCUMSTANCES WHERE DEATH BENEFITS WILL BE PAID?
Yes. If you are not an annuitant and you die, or if any joint owner who is
not an annuitant dies, a death benefit will be paid. This death benefit will
be the same amount as the amount that would be paid on the death of the
annuitant or joint annuitant and will be paid out in the same manner, except
that if death occurs before the annuity payment commencement date, such death
benefit will be paid out within five years of the date of death. On the
payment of such a death benefit in the event of the death of the owner, no
other contract benefits are then payable.
CAN YOU CHANGE THE BENEFICIARY?
Yes. You can file a written request with us to change the beneficiary. Your
written request will not be effective until it is recorded in our home office
records. After it has been recorded, it will take effect as of the date you
signed the request. However, if death occurs before the request has been
recorded, the request will not be effective as to any death proceeds we have
paid before the request was recorded in our home office.
ADDITIONAL INFORMATION
ARE THE CONTRACT BENEFITS PROTECTED?
Yes. To the extent permitted by law, no benefit provided by this contract will
be subject to any creditor's claim or process of law.
HOW WILL BENEFITS BE DETERMINED?
Any benefit described by this contract shall be calculated as of the date the
provisions of the contract are exercised.
MHC-95-9326 Minnesota Life 12
<PAGE>
WILL THERE BE AN ADJUSTMENT IF THE ANNUITANT'S AGE OR SEX IS MISSTATED?
Yes. If the annuitant's age or sex has been misstated, the amount payable under
this contract as an annuity will be that amount which would have been paid based
upon the annuitant's correct age and sex. In the case of an overpayment, we may
either deduct the required amount from future contract payments or, we may
require you to pay us in cash. We may do both until we are fully repaid. In
the case of an underpayment, we will pay the required amount with the next
payment.
MUST YOU PROVIDE ANY ADDITIONAL INFORMATION?
Yes. You must provide us with any other information we need to administer this
contract. If you cannot do so, we may ask the person concerned for that
information. We shall not be liable for any payment based upon information
given to us in error or not given to us.
DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS?
Yes. All values and benefits described by this contract are not less than the
minimum values and benefits required by any statute of the state in which this
contract is delivered.
WILL WE HOLD ANNUITY RESERVES UNDER THIS CONTRACT?
Yes. Reserves held by us for annuity payments under this contract shall not be
less than those reserves required by the state law. We will refer to the laws
of the state in which this contract is delivered.
MAY THIS CONTRACT BE MODIFIED?
Yes. This contract may be modified at any time. It may be modified only by
written agreement between you and us. However, no such modification will
adversely affect the rights of an annuitant under this contract unless made to
comply with a law or government regulation. A modification must be in writing.
You will have the right to accept or reject a modification.
WHEN WILL LUMP SUM PAYMENTS BE MADE?
Usually, we will make payment within seven days after payment is called for by
the terms of the contract. In the case of payments from the separate account,
we reserve the right to defer payment for any period during which the New York
Stock Exchange is closed for trading (except for normal holiday closing), or
when trading on the Exchange is restricted when the Securities and Exchange
Commission has determined that a state of emergency exists which may make such
determination and payment impractical or such other periods as the Commission
may by order permit for the protection of contract owners.
DO YOU HAVE ADDITIONAL VOTING RIGHTS?
Yes. If you have separate account annuity units under this contract you may
direct us with respect to the voting rights of fund shares held by us and
attributable to this contract.
MHC-95-9326 Minnesota Life 13
<PAGE>
IMMEDIATE
VARIABLE ANNUITY CONTRACT
GUARANTEED MINIMUM
ANNUITY PAYMENT AMOUNT
A NONPARTICIPATING CONTRACT
MINNESOTA LIFE
<PAGE>
Exhibit 4(b)
READ YOUR CONTRACT CAREFULLY
THIS IS A LEGAL CONTRACT
We promise to pay, subject to the provisions of this
contract, the benefits described by this contract.
We make this promise and issue this contract in
consideration of the application for this contract and
the payment of the purchase payments.
The owner and beneficiary are as named in the
application unless they are changed as provided for in
this contract.
Minnesota Life Insurance Company is a subsidiary of
Minnesota Mutual Companies, Inc., a mutual insurance
holding company. The owner is a member of Minnesota
Mutual Companies, Inc., which holds it's annual meetings
on the first Tuesday in March of each year at 3 p.m.
local time. The meetings are held at 400 Robert Street
North, St. Paul, MN 55101-2098
Signed for Minnesota Life Insurance Company at St. Paul,
Minnesota, on the contract date.
/s/ Robert L. Senkler
President
/s/ Dennis E. Prohofsky
Secretary
Registrar
NOTICE OF YOUR RIGHT TO EXAMINE THIS
CONTRACT FOR 10 DAYS.
IT IS IMPORTANT TO US THAT YOU ARE SATISFIED WITH THIS
CONTRACT. IF YOU ARE NOT SATISFIED, YOU MAY RETURN
THE CONTRACT TO US OR TO YOUR AGENT WITHIN 10 DAYS
OF ITS RECEIPT. IF YOU EXERCISE THIS RIGHT, YOU WILL
RECEIVE THE GREATER OF: (A) THE TOTAL ANNUITY VALUE
OF THIS CONTRACT ATTRIBUTABLE TO YOUR PURCHASE PAYMENTS
PLUS THE AMOUNTS DEDUCTED FROM YOUR PURCHASE PAYMENTS;
OR (B) THE AMOUNT OF PURCHASE PAYMENTS PAID UNDER THIS
CONTRACT. WE WILL PAY THIS REFUND WITHIN 7 DAYS AFTER WE IMMEDIATE
RECEIVE YOUR NOTICE OF CANCELLATION. VARIABLE ANNUITY
CONTRACT
ALL PAYMENTS AND VALUES PROVIDED BY GUARANTEED MINIMUM
THIS CONTRACT ARE VARIABLE. A MINIMUM ANNUITY PAYMENT
ANNUITY PAYMENT AMOUNT IS GUARANTEED AMOUNT
TO YOU. OTHER PAYMENTS AND VALUES ARE
NOT GUARANTEED. A NONPARTICIPATING
CONTRACT
MINNESOTA LIFE
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, MN 55101-2098
MHC-95-9327
<PAGE>
CONTRACT INDEX
Alphabetical Index to the Provisions of Your Contract
Page
----
Additional Information
Amount Payable at Death
Annuity Provisions
Assignment
Beneficiary
Contract Charges
Definitions
General Information
Misstatement
Purchase Payments
Valuation
Withdrawal and Surrender
MHC-95-9327
<PAGE>
YOUR CONTRACT INFORMATION - EFFECTIVE OCTOBER 1, 1995
This page one supersedes any previously dated page one for this contract.
Please replace any prior page one of your contract with this new page.
Owner: Jane M. Doe
Contract Number: 1-234-567
Contract Date: October 1, 1995
Jurisdiction: Minnesota
Annuity Option: Single Life
Annuitant: Jane M. Doe
Annuitant's Date of Birth: October 1, 1935
Annuitant's Sex: Female
Joint Annuitant: not applicable
Joint Annuitant's Date of Birth: not applicable
Joint Annuitant's Sex: not applicable
Annuity Payment Commencement Date: October 1, 1995
Annuity Payment Frequency: Monthly
End of Cash Value Period: September 30, 2019
Annuity Unit Value on October 1, 1995: 1.012345
<TABLE>
<CAPTION>
Prior to Effect of
Purchase Payment Purchase Payment As of
October 1, 1995 October 1, 1995 October 1, 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Cumulative Purchase Payments: 0.00 100,000.00 100,000.00
Total Annuity Value: 0.00 93,789.44 93,789.44
Cash Value: 0.00 81,667.70 81,667.70
* Initial Annuity Payment Amount: 0.00 460.99 460.99
** Guaranteed Minimum
Annuity Payment Amount: 0.00 391.84 391.84
** Number of Annuity Units: 0.00 455.3685 455.3685
** Number of Cash Value Units: 0.00 455.3685 455.3685
<FN>
* The annuity payment amount shown here is annuity units multiplied by
the annuity unit value as of the effective date of this page one. The
actual annuity payment amount at the next annuity payment date will
differ from this amount. It will be based on the net separate account
sub-account performance from the effective date to the next annuity
payment date.
** These values will change each time you make a cash value withdrawal or
an additional purchase payment. You will be notified of the new
values.
</TABLE>
MHC-95-9327 Minnesota Life 1
<PAGE>
CASH VALUE FACTORS AND GUARANTEED ANNUITY PAYMENT PURCHASE RATES FOR
CALCULATING THE INITIAL ANNUITY PAYMENT AMOUNT WHICH IS PURCHASED WITH
EACH $1,000 OF VALUE APPLIED FOR A NEW PURCHASE PAYMENT
Annuitant: Jane M. Doe
Contract Number: 1-234-567
Guaranteed Annuity Payment
Amount per $1,000 of Value Applied
Cash Value Factor for a New Purchase Payment
----------------- --------------------------
Contract Date: not applicable 4.8911
Annuitization
Anniversary
-----------
0 177.1572 4.8911
1 172.8837 4.9703
2 168.4179 5.0558
3 163.7512 5.1482
4 158.8745 5.2483
5 153.7783 5.3569
6 148.4528 5.4749
7 142.8876 5.6034
8 137.0720 5.7437
9 130.9947 5.8972
10 124.6440 6.0657
11 118.0074 6.2510
12 111.0722 6.4553
13 103.8249 6.6810
14 96.2515 6.9309
15 88.3373 7.2079
16 80.0670 7.5141
17 71.4244 7.8540
18 62.3930 8.2312
19 52.9552 8.6490
20 43.0926 9.1100
21 32.7862 9.6147
22 22.0161 10.1598
23 10.7613 10.7353
24 0.0000 11.3202
over 24 0.0000 not applicable
This table provides factors to determine cash values and the guaranteed annuity
payment amount per $1,000 of value applied for a new purchase payment at the
contract date and each annuitization anniversary. The applicable factor at
times between these dates will be determined consistently with the mortality and
interest rates used to determine the factors shown here.
MHC-95-9327 Minnesota Life 1A
<PAGE>
Total Annuity Value Factors and Annuity Payment Purchase Rates Applicable
at a Cash Value Withdrawal while the Annuitant is Alive per
$1,000 Applied - Single Life Issue
Annuitant: Jane M. Doe
Contract Number: 1-234-567
FOR CASH VALUE AND ANNUITY UNITS ATTRIBUTABLE TO TRANSACTIONS ON OR AFTER:
OCTOBER 1, 1995
Annuity Payment
Factor Purchase Rate
Factor Applicable to at a Cash Value
Applicable to Annuity Units Withdrawal while
Cash Value in excess of Annuitant is alive
Units Cash Value Units per $1,000 Applied
----- ---------------- ------------------
Contract Date: 203.4522 191.6400 not applicable
Annuitization
Anniversary
-----------
0 203.4522 191.6400 5.2181
1 200.1934 188.2657 5.3116
2 196.7917 184.7827 5.4117
3 193.2402 181.1931 5.5189
4 189.5356 177.5000 5.6338
5 185.6737 173.7047 5.7568
6 181.6504 169.8072 5.8890
7 177.4614 165.8058 6.0311
8 173.1024 161.6965 6.1844
9 168.5694 157.4751 6.3502
10 163.8597 153.1408 6.5299
11 158.9726 148.6972 6.7250
12 153.9099 144.1518 6.9371
13 148.6764 139.5159 7.1676
14 143.2807 134.8037 7.4181
15 137.7353 130.0297 7.6905
This table provides factors to determine the total annuity value and the annuity
payment purchase rates applicable at a cash value withdrawal while the annuitant
is alive, at the contract date and each annuitization anniversary. The
applicable factor at times between these dates will be determined consistently
with the mortality and interest rates used to determine the factors shown here.
MHC-95-9327 Minnesota Life 1B
<PAGE>
Total Annuity Value Factors and Annuity Payment Purchase Rates Applicable
at a Cash Value Withdrawal while the Annuitant is Alive per
$1,000 Applied - Single Life Issue
Annuitant: Jane M. Doe
Contract Number: 1-234-567
FOR CASH VALUE AND ANNUITY UNITS ATTRIBUTABLE TO TRANSACTIONS ON OR AFTER:
OCTOBER 1, 1995
Annuity Payment
Factor Purchase Rate
Factor Applicable to at a Cash Value
Applicable to Annuity Units Withdrawal while
Annuitization Cash Value in excess of Annuitant is alive
Anniversary Units Cash Value Units per $1,000 Applied
----------- ----- ---------------- ------------------
16 132.0819 125.2714 7.9826
17 126.3228 120.4840 8.2998
18 120.4885 115.6810 8.6444
19 114.6193 110.8750 9.0191
20 108.7685 106.0804 9.4268
21 103.0065 101.3125 9.8704
22 97.4264 96.5881 10.3532
23 92.1500 91.9241 10.8785
24 87.3376 87.3376 11.4498
25 82.8458 82.8458 0.0000
26 78.4655 78.4655 0.0000
27 74.2135 74.2135 0.0000
28 70.1063 70.1063 0.0000
29 66.1586 66.1586 0.0000
30 62.3764 62.3764 0.0000
31 58.9525 58.9525 0.0000
32 55.7028 55.7028 0.0000
33 52.6101 52.6101 0.0000
34 49.6496 49.6496 0.0000
35 46.7882 46.7882 0.0000
36 43.9834 43.9834 0.0000
37 41.1801 41.1801 0.0000
38 38.3067 38.3067 0.0000
39 35.2973 35.2973 0.0000
40 32.0851 32.0851 0.0000
This table provides factors to determine the total annuity value and the annuity
payment purchase rates applicable at a cash value withdrawal while the annuitant
is alive, at the contract date and each annuitization anniversary. The
applicable factor at times between these dates will be determined consistently
with the mortality and interest rates used to determine the factors shown here.
MHC-95-9327 Minnesota Life 1C
<PAGE>
Total Annuity Value Factors and Annuity Payment Purchase Rates Applicable
at a Cash Value Withdrawal while the Annuitant is Alive per
$1,000 Applied - Single Life Issue
Annuitant: Jane M. Doe
Contract Number: 1-234-567
FOR CASH VALUE AND ANNUITY UNITS ATTRIBUTABLE TO TRANSACTIONS ON OR AFTER:
OCTOBER 1, 1995
Annuity Payment
Factor Purchase Rate
Factor Applicable to at a Cash Value
Applicable to Annuity Units Withdrawal while
Annuitization Cash Value in excess of Annuitant is alive
Anniversary Units Cash Value Units per $1,000 Applied
----------- ----- ---------------- ------------------
41 30.0168 30.0168 0.0000
42 27.9334 27.9334 0.0000
43 25.8440 25.8440 0.0000
44 23.7625 23.7625 0.0000
45 21.7058 21.7058 0.0000
46 19.6915 19.6915 0.0000
47 17.7367 17.7367 0.0000
48 15.8564 15.8564 0.0000
49 14.0629 14.0629 0.0000
This table provides factors to determine the total annuity value and the annuity
payment purchase rates applicable at a cash value withdrawal while the annuitant
is alive, at the contract date and each annuitization anniversary. The
applicable factor at times between these dates will be determined consistently
with the mortality and interest rates used to determine the factors shown here.
MHC-95-9327 Minnesota Life 1D
<PAGE>
DEFINITIONS
When we use the following words, this is what we mean:
ANNUITANT
The person named on page one of the contract who may receive lifetime benefits
under the contract. Except in the event of the death of either annuitant prior
to the annuity payment commencement date, joint annuitants will be considered a
single entity.
YOU, YOUR
The owner of this contract. The owner may be the annuitant or someone else.
The owner shall be that person or entity named as owner in the application.
JOINT OWNER
The person designated to share equally in the rights and privileges provided to
the owner of this contract. Only you and your spouse may be named as joint
owners.
WE, OUR, US
Minnesota Life Insurance Company.
BENEFICIARY
The person, persons or entity designated to receive death benefits payable under
the contract in the event of the annuitant's death.
WRITTEN REQUEST
A request in writing signed by you. In the case of joint owners, the signatures
of both owners will be required to complete a written request. In some cases,
we may provide a form for your use. We may also require that this contract be
sent to us with your written request.
PURCHASE PAYMENTS
Amounts paid to us as consideration for the benefits provided by this contract.
PURCHASE PAYMENT DATE
The date we receive a purchase payment in our home office.
CONTRACT DATE
The effective date of this contract.
ANNUITY PAYMENT DATE
Each day indicated by the annuity payment commencement date and the annuity
payment frequency for an annuity payment to be determined. This is shown on
page one of this contract.
ANNUITY PAYMENT COMMENCEMENT DATE
The first annuity payment date as specified on page one.
ANNUITIZATION ANNIVERSARY
The same day and month as the annuity payment commencement date for each
succeeding year of this contract.
MHC-95-9327 Minnesota Life 2
<PAGE>
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
ANNUITY UNIT
The standard of value for the variable annuity payment amount.
CASH VALUE UNIT
The measure of your interest in the separate account that is available for
withdrawal under this contract during the cash value period.
CASH VALUE PERIOD
The time during which a cash value exists under the contract. The cash value
period begins on the annuity payment commencement date and ends on the cash
value end date shown on page one.
CASH VALUE
The dollar amount available for withdrawal under this contract during the cash
value period. A cash value exists only as long as both the number of cash value
units and the applicable factor from the cash value factor table are greater
than zero.
TOTAL ANNUITY VALUE
The total annuity value represents your total interest in the separate account.
SURRENDER VALUE
The surrender value of this contract shall be the total annuity value as of the
date of surrender plus the amounts deducted from your purchase payments. Those
include deductions for sales charges, risk charges, and state premium taxes
where applicable.
SEPARATE ACCOUNT
A separate investment account entitled Variable Annuity Account. This
separate account was established by us under Minnesota law. The separate
account is composed of several sub-accounts. The assets of the separate
account are ours. Those assets are not subject to claims arising out of any
other business which we may conduct.
1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor federal
legislation.
ANNUITY PAYMENTS
Payments made at regular intervals to the annuitant or any other payee. The
annuity payments will increase or decrease in amount. The changes will reflect
the investment experience of the sub-account of the separate account.
MHC-95-9327 Minnesota Life 3
<PAGE>
GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT
The amount which is guaranteed as the minimum annuity payment amount. This
amount is payable without regard to the performance of the sub-account of the
separate account. Purchase payments, cash value withdrawals, and surrenders
will cause this guaranteed minimum annuity payment amount to be adjusted. The
adjustment will reflect your new interest in the separate account.
AGE
The age of a person at nearest birthday.
GENERAL INFORMATION
WHAT IS YOUR AGREEMENT WITH US?
This contract and the copy of the application attached to it constitute the
entire contract between you and us. Any statements made in the application
either by you or by the annuitant will, in the absence of fraud, be considered
representations and not warranties. Also, any statement made either by you or
the annuitant will not be used to void this contract unless the statement is
contained in the application.
No change or waiver of any of the provisions of this contract will be valid
unless made in writing by us. This must be signed by our president, a vice
president, secretary or an assistant secretary. No agent or other person has
the authority to change or waive any provision of this contract.
Any additional agreement attached to this contract will become a part of this
contract. The agreement will be subject to all the terms and conditions of this
contract unless we state otherwise in it.
HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT?
You can exercise all the rights under this contract by giving us a written
request. We will deal with you, unless this contract provides otherwise, on the
basis that you have full ownership and control of this contract.
HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT?
Each year we will send you a report. This report will summarize the year's
transactions. It will show the current total annuity value and cash value of
this contract, the current annuity payment amount, and the current guaranteed
minimum annuity payment amount. It will also show the current annuity unit
value. This report will be as of a date within two months of its mailing.
PURCHASE PAYMENTS
IS THIS AN IMMEDIATE ANNUITY?
Yes. Annuity payments begin on the annuity payment commencement date. This
date is shown on page one. Annuity payments must begin not later than 12 months
after the contract date. An earlier date may be required by law to qualify this
contract as an immediate annuity in the state in which this contract is
delivered.
MAY YOU MAKE ADDITIONAL PURCHASE PAYMENTS TO THIS CONTRACT AFTER ITS ISSUE?
Yes. You may make additional purchase payments to this contract after its issue
as long as we are accepting purchase payments for this class of contract. Each
additional purchase payment must be in an amount of at least $5,000. Total
purchase payments made by you may not exceed $1,000,000, except with our prior
consent. We may discontinue accepting purchase payments for this class of
contract. We can do
MHC-95-9327 Minnesota Life 4
<PAGE>
this at any time. We may then terminate your ability to make additional
purchase payments into the contract.
DO YOU CHOOSE WHEN TO MAKE ADDITIONAL PURCHASE PAYMENTS?
Yes. You may choose when to make any additional purchase payments to this
contract at any time before the end of the cash value period. Purchase payments
may be made only while the annuitant is alive and we are accepting purchase
payments for this class of contract. No purchase payments are allowed after the
annuitant's death or after the cash value period has expired.
WHERE DO YOU MAKE ADDITIONAL PURCHASE PAYMENTS?
Your purchase payments must be made at our home office. Our home office is at
400 Robert Street North, St. Paul, Minnesota 55101-2098. When we receive a
purchase payment from you, we will send you a confirmation and an updated page
one for this contract.
WILL PURCHASE PAYMENTS AFFECT FUTURE ANNUITY PAYMENTS?
Yes. Purchase payments made by you will purchase additional annuity units.
The net amount of each purchase payment, after deductions, will be applied to
purchase an additional initial annuity payment amount. This will be determined
as of the purchase payment date. This amount will be at least as great as that
determined by using the guaranteed annuity payment purchase rate table for new
purchase payments. This table is included in this contract.
The new number of annuity units after a purchase payment will be equal to the
number of annuity units prior to the purchase payment plus the additional
annuity units resulting from the current purchase payment. These annuity units
shall equal a number which is equal to the initial annuity payment amount
attributable to the new purchase payment, divided by the annuity unit value on
the purchase payment date.
When you make a purchase payment, we will inform you of the number of annuity
units in your contract. Annuity units will be recorded separately whenever a
different annuity payment purchase rate table is used.
WHAT ARE THE GUARANTEED ANNUITY PAYMENT PURCHASE RATES TO BE USED IN DETERMINING
THE ADDITIONAL ANNUITY PAYMENT AMOUNT ATTRIBUTABLE TO A NEW PURCHASE PAYMENT?
The guaranteed annuity payment purchase rates used for new purchase payments are
given in the guaranteed annuity payment purchase rate table. This table is
included in this contract. The rates are based on a 4.5% assumed interest rate
and Individual Annuity 1983 Table A female mortality rates projected to the
terminal age of the table using projection scale G.
WILL THE GUARANTEED TABLE ALWAYS BE USED FOR NEW PURCHASE PAYMENTS?
Not always. At the time of a purchase payment, we may be using a table of
annuity payment purchase rates for this contract which would result in a larger
initial annuity payment. If we are, we will use that table instead.
WILL PURCHASE PAYMENTS AFFECT THE CASH VALUE?
Yes. Purchase payments will affect the cash value. The purchase payment will
increase the number of cash value units. The new number of cash value units
after a purchase payment will be equal to the number of cash value units prior
to the purchase payment plus the number of annuity units attributable to the new
purchase payment.
MHC-95-9327 Minnesota Life 5
<PAGE>
We will inform you of the number of cash value units in your contract when you
make a purchase payment. Cash value units attributable to a purchase payment
will be recorded separately if a different annuity purchase rate table was used
to determine the additional annuity units purchased.
WILL PURCHASE PAYMENTS AFFECT THE GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT?
Yes. The guaranteed minimum annuity payment amount will be increased. This
increase will reflect your additional interest in the separate account after the
additional purchase payment. The new guaranteed minimum annuity payment amount
after an additional purchase payment will be equal to: the guaranteed minimum
annuity payment amount prior to the purchase payment, plus 85% of the additional
initial annuity payment amount attributable to the new purchase payment. This
will be determined on the date we receive the purchase payment.
We will inform you of the new guaranteed minimum annuity payment amount for your
contract when you make a purchase payment.
HOW ARE YOUR PURCHASE PAYMENTS INVESTED?
The net amount of your purchase payments, after deductions, is invested
exclusively in the Index 500 Account sub-account of the separate account.
ARE THERE ANY OTHER INVESTMENT OPTIONS?
No.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
The separate account is divided into sub-accounts. For each sub-account, there
is a fund for the investment of that sub-account's assets. Net purchase
payments are invested in the funds at their net asset value.
If investment in a fund should no longer be possible or if we determine it
becomes inappropriate for contracts of this class, we may substitute another
fund. Substitution may be with respect to existing total annuity values, cash
values, future annuity payments, or future purchase payments.
MAY WE MAKE CHANGES TO THE SEPARATE ACCOUNT?
Yes. We reserve the right to transfer assets of the separate account to another
separate account. The transfer will be of assets associated with this class of
contracts. We will make that determination. If this type of transfer is made,
the term separate account, as used in this contract, shall then mean the
separate account to which the assets were transferred.
We also reserve the right, when permitted by law, to:
(a) deregister the separate account under the Investment Company Act of
1940;
(b) restrict or eliminate any voting rights of contract owners or other
persons who have voting rights as to the separate account; and
(c) combine the separate account with one or more other separate accounts.
CONTRACT CHARGES
ARE THERE CHARGES UNDER THIS CONTRACT?
Yes. This contract makes certain deductions from purchase payments. There are
also certain charges which are made directly to the separate account.
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WHAT DEDUCTIONS ARE MADE FROM YOUR PURCHASE PAYMENTS?
Deductions from your purchase payments are made for sales charges, risk charges,
and state premium taxes where applicable.
WHAT SALES CHARGES ARE DEDUCTED FROM YOUR PURCHASE PAYMENTS?
The sales charge is deducted from your purchase payments using the percentages
shown in the table below:
Cumulative Sales Charge as a Percentage
Total Purchase Payments of Purchase Payments
----------------------- --------------------
$ 0 - 499,999.99 4.500%
500,000 - 749,999.99 4.125%
750,000 - 1,000,000.00 3.750%
The applicable percentage from the chart will be based on the total cumulative
purchase payments to date, including the new purchase payment.
WHAT RISK CHARGES ARE DEDUCTED FROM YOUR PURCHASE PAYMENTS?
A risk charge is deducted from each purchase payment when paid. This is for our
guaranteeing the minimum annuity payment amount shown on page one. This risk
charge may be as much as 2% of each purchase payment.
WHAT ARE THE CHARGES ASSOCIATED WITH THE SEPARATE ACCOUNT?
There are three charges associated with the separate account. These are the
expense risk charge, the mortality risk charge, and the administrative charge.
All of these charges are deducted from the separate account on each valuation
date.
WHAT IS THE EXPENSE RISK CHARGE?
This is a charge to compensate us for the guarantee that the deductions provided
for in this contract will be sufficient to cover our actual expenses incurred.
Actual expense results incurred by us shall not adversely affect any payments or
values under this contract. On an annual basis, this charge may be as much as
0.60% of the net asset value of the separate account.
WHAT IS THE MORTALITY RISK CHARGE ASSOCIATED DIRECTLY WITH THE SEPARATE ACCOUNT?
This is a charge to compensate us for the mortality guarantees we make under the
contract. Actual mortality results incurred by us shall not adversely affect
any payments or values under this contract. On an annual basis, this charge may
be as much as 0.80% of the net asset value of the separate account.
WHAT IS THE ADMINISTRATIVE CHARGE?
This is a charge to compensate us for the administrative expenses we incur under
this contract. On an annual basis, this charge will not exceed 0.40% of the net
asset value of the separate account.
VALUATION
HOW IS THE CASH VALUE DETERMINED?
The cash value is equal to: the number of cash value units in the contract,
multiplied by the current annuity unit value, multiplied by the appropriate cash
value factor. The cash value factor comes from the table included in this
contract.
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HOW IS THE TOTAL ANNUITY VALUE DETERMINED?
While the annuitant is alive, the total annuity value is equal to: the sum of
the number of cash value units, multiplied by the annuity unit value, multiplied
by the appropriate factor from the total annuity value factor table(s) included
in this contract; plus the number of annuity units in excess of the number of
cash value units, multiplied by the annuity unit value, multiplied by the
annuity value factor. The total annuity value factor comes from the table(s)
included in this contract.
After the annuitant's death, the beneficiary may elect to continue annuity
payments. The payments will continue for the remainder of the cash value
period. If the beneficiary does so elect, the total annuity value will be equal
to the cash value at all times during the cash value period.
WHAT IS THE ANNUITY UNIT VALUE AND HOW IS IT DETERMINED?
The annuity unit value reflects the net investment experience of the sub-account
of the separate account. The annuity unit value was originally set at $1.00 on
the first valuation date. For any subsequent valuation date, its value is equal
to: the value on the preceding valuation date, multiplied by the net investment
factor for the sub-account for the valuation period ending on the current
valuation date, and multiplied by a factor adjusting out the effect for the
valuation period of the 4.5% annual assumed interest rate. This rate has been
built into this contract's total annuity value, cash value, and annuity payment
calculations.
WHAT IS THE NET INVESTMENT FACTOR FOR THE SUB-ACCOUNT?
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the expense and mortality risk
charges and administrative charges. These charges shall be at a rate of not
more than 1.80% per annum.
The gross investment rate is equal to:
(a) the net asset value per share of a fund share held in the sub-account
of the separate account determined at the end of the current valuation
period; plus
(b) the per share amount of any dividend or capital gain distributions by
the fund if the "ex-dividend" date occurs during the current valuation
period; divided by
(c) the net asset value per share of that fund share held in the sub-
account determined at the end of the preceding valuation period.
WITHDRAWAL AND SURRENDER
MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT?
Yes. At any time during the cash value period of this contract you may request
a withdrawal from its cash value. Each withdrawal must be in the amount of at
least $500. However, if the cash value of the contract is less than that
amount, all of the remaining cash value in the contract must be withdrawn. You
must make a written request for any withdrawal.
IS A NEW NUMBER OF CASH VALUE UNITS DETERMINED AFTER A CASH VALUE WITHDRAWAL?
Yes. A cash value withdrawal reduces the number of cash value units of this
contract. The new number of cash value units after a withdrawal is equal to the
number of cash value units just prior to withdrawal, multiplied by the cash
value prior to withdrawal less the cash value withdrawn, divided by the cash
value prior to withdrawal. Cash value units are reduced on a last in, first out
basis.
When you make a withdrawal of cash value, we will inform you of the number of
cash value units remaining in your contract.
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IS THE CASH VALUE GUARANTEED?
No. The cash value decreases as annuity payments are made under the contract.
The cash value will also increase or decrease based on the performance of the
separate account sub-account given by the relative change in the annuity unit
value.
WILL FUTURE ANNUITY PAYMENTS BE AFFECTED BY A CASH VALUE WITHDRAWAL?
Yes. The number of annuity units used to calculate each future annuity payment
will be reduced to reflect the cash value withdrawal. The calculation of the
new number of annuity units will be based on whether or not the annuitant is
alive at the time the cash value withdrawal is made.
We will inform you of the number of annuity units remaining in your contract
whenever you make a cash value withdrawal.
HOW WILL THE NUMBER OF ANNUITY UNITS BE DETERMINED AFTER A CASH VALUE WITHDRAWAL
WHILE THE ANNUITANT IS ALIVE?
The new number of annuity units will be the new initial annuity payment amount
after a cash value withdrawal, as described in the next paragraph, divided by
the annuity unit value at the time of the withdrawal. The new initial annuity
payment amount is determined separately for purchase payments which used
different annuity payment purchase rates at the purchase payment date. The
number of annuity units is reduced, treating the number of annuity units and
cash value units derived from purchase payments using different annuity payment
purchase rates separately, on a last in, first out basis.
The new initial annuity payment amount after a cash value withdrawal will be
based on the remaining total annuity value immediately following the cash value
withdrawal. The new initial annuity payment amount will be the sum of the
following three values shown in the paragraph below. Annuity payment amounts
will be determined separately for purchase payments which used different annuity
payment purchase rates at the purchase payment date.
The new initial annuity payment amount after a cash value withdrawal will be
equal to the sum of:
(a) The number of cash value units remaining after the withdrawal
multiplied by the annuity unit value; plus
(b) The number of annuity units just prior to withdrawal minus the cash
value units just prior to withdrawal, multiplied by the annuity unit
value; plus
(c) The amount determined by steps 1 through 4,
(1) the total annuity value just prior to withdrawal; less
(2) the cash value just prior to withdrawal; and less
(3) the value in (b) multiplied by the appropriate total annuity
value factor for annuity units in excess of cash value units, as
of the withdrawal date, from the total annuity value factor
table(s) included in this contract; this sum then multiplied by
(4) the ratio of the cash value withdrawn divided by the cash value
just prior to withdrawal; applied to the appropriate annuity
payment purchase rate factor from table(s) included in this
contract for use at a cash value withdrawal while the annuitant
is alive.
The actual annuity payment amount payable for the next annuity payment date will
differ from this new initial annuity payment amount determined on the date of
the withdrawal. It will be based on the performance of the separate account
sub-account between the date of withdrawal and the valuation date for the next
annuity payment date as given by the relative change in the annuity unit value.
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HOW WILL THE NUMBER OF ANNUITY UNITS BE DETERMINED AFTER A CASH VALUE WITHDRAWAL
BY THE BENEFICIARY WHO ELECTED TO CONTINUE RECEIVING ANNUITY PAYMENTS FOR THE
REMAINDER OF THE CASH VALUE PERIOD AFTER THE ANNUITANT'S DEATH?
Whenever the beneficiary has elected to continue receiving annuity payments and
a withdrawal of cash value is made, the number of annuity units is set equal to
the number of cash value units as determined after the withdrawal of cash value.
WILL THE GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT BE AFFECTED BY A CASH VALUE
WITHDRAWAL?
Yes. The guaranteed minimum annuity payment amount will be reduced to reflect
your reduced interest in the separate account, after the cash value withdrawal,
as represented by the number of annuity units. The new guaranteed minimum
annuity payment amount will be equal to: the guaranteed minimum annuity payment
amount just prior to the withdrawal, multiplied by the number of annuity units
after the withdrawal divided by the number of annuity units prior to the
withdrawal.
We will inform you of the new guaranteed minimum annuity payment amount for your
contract when you make a cash value withdrawal.
MAY YOU SURRENDER THE CONTRACT?
Yes. At any time before the annuity payment commencement date you may surrender
this contract for its surrender value. You must make a written request for any
surrender. The surrender value will be determined as of the valuation date
coincident with or next following the date your written request is received at
our home office.
HOW WILL WITHDRAWAL OR SURRENDER PROCEEDS BE PAID?
We will pay those benefits in a single sum within seven days of receiving your
written request.
ANNUITY PROVISIONS
WHAT ANNUITY OPTIONS ARE ALLOWED?
This contract provides for lifetime annuity payments which are based on the
survival of a single annuitant or based on the combined survival of joint
annuitants. On the contract date you elected between the single life or joint
life option as shown on page one of this contract. That election, once made,
cannot be changed under this contract.
WHEN DO ANNUITY PAYMENTS BEGIN?
Annuity payments begin on the annuity payment commencement date.
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WHEN ARE ANNUITY PAYMENTS MADE?
Annuity payments are withdrawn from the sub-account on the valuation date on or
next following each annuity payment date. Each annuity payment is then paid as
directed immediately after its withdrawal from the sub-account.
HOW LONG ARE ANNUITY PAYMENTS PAID?
Annuity payments are paid during the lifetime of the annuitant. In the event of
the annuitant's death, the beneficiary may elect to continue annuity payments
for the remainder of the cash value period.
TO WHOM ARE THE ANNUITY PAYMENTS PAID?
Annuity payments will be paid to the person or persons named as an annuitant on
page one of this contract. Any annuity payments payable as a death benefit
elected by the beneficiary will be paid to the beneficiary.
CAN THE ANNUITANT DIRECT OR ASSIGN ANNUITY PAYMENTS TO BE PAID TO SOMEONE ELSE?
Yes. The annuitant, or the joint annuitants, can direct or assign annuity
payments to be made under the contract. Those payments will then be paid to
someone else. However, we will not be bound by any assignment until we have
recorded a written request of it at our home office. We are not responsible for
the validity of any direction or assignment. A direction to pay someone other
than the annuitant will not apply to any payment made by us before it was
recorded. Any claim made by an assignee will be subject to proof of the
assignee's interest and the extent of the assignment.
MAY WE REQUIRE ADDITIONAL INFORMATION?
Yes. We reserve the right to require proof satisfactory to us of the age of the
annuitant and of any joint annuitant. We may also require proof that a person
is alive before making any annuity payment which is based on the survival of
that person.
HOW IS THE AMOUNT OF AN ANNUITY PAYMENT DETERMINED?
The dollar amount of annuity payments is equal to the number of annuity units
remaining for this contract multiplied by the annuity unit value as of the
valuation date of the payment. The amount may increase or decrease from one
annuity payment date to the next.
IS THERE A GUARANTEED MINIMUM ANNUITY PAYMENT AMOUNT?
Yes. Each annuity payment date we will pay the annuitant the greater of: (a)
the annuity payment amount determined by multiplying the number of annuity units
times the annuity unit value; or (b) the guaranteed minimum annuity payment
amount currently in force for this contract.
AMOUNT PAYABLE AT DEATH
IS THERE A DEATH BENEFIT IF THE ANNUITANT OR JOINT ANNUITANT DIES BEFORE THE
ANNUITY PAYMENT COMMENCEMENT DATE?
Yes. When we receive due proof at our home office, satisfactory to us, of
either annuitant's death before the annuity payment commencement date, a death
benefit will be paid to you, or your beneficiary, if applicable. This death
benefit will be the sum of: the total annuity value plus the amounts deducted
from your purchase payments for sales charges, risk charges, and state premium
taxes where applicable.
IS THERE A DEATH BENEFIT WHEN THE ANNUITANT DIES AFTER THE ANNUITY PAYMENT
COMMENCEMENT DATE?
Yes. However, this death benefit is payable only so long as the contract has a
cash value. When we receive due proof, satisfactory to us, of the annuitant's
death after the annuity payment commencement date, we will pay the cash value of
the contract as a lump sum death benefit. The beneficiary will be the
MHC-95-9327 Minnesota Life 11
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person or persons named in the application for this contract unless you
subsequently change the beneficiary. In that event, we will pay the death
benefit to the beneficiary named in your last change of beneficiary request as
provided for in this contract.
MAY A BENEFICIARY, IN THE EVENT OF THE ANNUITANT'S DEATH AFTER ANNUITY PAYMENTS
HAVE BEGUN, ELECT TO CONTINUE ANNUITY PAYMENTS UNTIL THE END OF THE CASH VALUE
PERIOD INSTEAD OF RECEIVING THE LUMP SUM DEATH BENEFIT?
Yes. A beneficiary may elect to continue annuity payments. However, the number
of annuity units will be set equal to the number of cash value units at the time
of the annuitant's death, the annuity payments to the beneficiary will terminate
at the end of the cash value period, and the guaranteed minimum annuity payment
amount will be adjusted in proportion to any change in the number of annuity
units. The new guaranteed minimum annuity payment amount will be equal to the
guaranteed minimum annuity payment amount just prior to the annuitant's death,
multiplied by the number of annuity units after the annuitant's death divided by
the number of annuity units prior to the annuitant's death.
If the beneficiary elects to continue the annuity payments, the cash value will
also continue on the beneficiary's behalf as part of the death benefit. This
allows the beneficiary to withdraw any or all of the cash value at any time
during the remaining cash value period. As with cash value withdrawals while
the annuitant is alive, cash value withdrawals by the beneficiary after the
annuitant's death will reduce future annuity payments and the guaranteed minimum
annuity payment amount. This reduction will be based on the reduced interest in
the separate account as described in the "Withdrawal and Surrender" section of
this contract.
WHEN MUST DEATH BENEFITS PAID AS AN ANNUITY BE PAID?
Death benefits payable after the annuitant's death must be distributed at least
as rapidly as under the method elected by the annuitant.
WHAT HAPPENS IF A BENEFICIARY DIES BEFORE THE ANNUITANT DIES?
If a beneficiary dies, that beneficiary's interest in this contract ends with
his or her death. Only those beneficiaries who survive will be eligible to
share in the amount payable to the beneficiary at the annuitant's death. If
there is no surviving beneficiary upon the death of the annuitant, any remaining
value of death benefit payable to the beneficiary will be paid to the
annuitant's estate.
ARE THERE ANY OTHER CIRCUMSTANCES WHERE DEATH BENEFITS WILL BE PAID?
Yes. If you are not an annuitant and you die, or if any joint owner who is
not an annuitant dies, a death benefit will be paid. This death benefit will
be the same amount as the amount that would be paid on the death of the
annuitant or joint annuitant and will be paid out in the same manner, except
that if death occurs before the annuity payment commencement date, such death
benefit will be paid out within five years of the date of death. On the
payment of such a death benefit in the event of the death of the owner, no
other contract benefits are then payable.
CAN YOU CHANGE THE BENEFICIARY?
Yes. You can file a written request with us to change the beneficiary. Your
written request will not be effective until it is recorded in our home office
records. After it has been recorded, it will take effect as of the date you
signed the request. However, if death occurs before the request has been
recorded, the request will not be effective as to any death proceeds we have
paid before the request was recorded in our home office.
ADDITIONAL INFORMATION
ARE THE CONTRACT BENEFITS PROTECTED?
Yes. To the extent permitted by law, no benefit provided by this contract will
be subject to any creditor's claim or process of law.
HOW WILL BENEFITS BE DETERMINED?
Any benefit described by this contract shall be calculated as of the date the
provisions of the contract are exercised.
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WILL THERE BE AN ADJUSTMENT IF THE ANNUITANT'S AGE OR SEX IS MISSTATED?
Yes. If the annuitant's age or sex has been misstated, the amount payable under
this contract as an annuity will be that amount which would have been paid based
upon the annuitant's correct age and sex. In the case of an overpayment, we may
either deduct the required amount from future contract payments or, we may
require you to pay us in cash. We may do both until we are fully repaid. In
the case of an underpayment, we will pay the required amount with the next
payment.
MUST YOU PROVIDE ANY ADDITIONAL INFORMATION?
Yes. You must provide us with any other information we need to administer this
contract. If you cannot do so, we may ask the person concerned for that
information. We shall not be liable for any payment based upon information
given to us in error or not given to us.
DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS?
Yes. All values and benefits described by this contract are not less than the
minimum values and benefits required by any statute of the state in which this
contract is delivered.
WILL WE HOLD ANNUITY RESERVES UNDER THIS CONTRACT?
Yes. Reserves held by us for annuity payments under this contract shall not be
less than those reserves required by the state law. We will refer to the laws
of the state in which this contract is delivered.
MAY THIS CONTRACT BE MODIFIED?
Yes. This contract may be modified at any time. It may be modified only by
written agreement between you and us. However, no such modification will
adversely affect the rights of an annuitant under this contract unless made to
comply with a law or government regulation. A modification must be in writing.
You will have the right to accept or reject a modification.
WHEN WILL LUMP SUM PAYMENTS BE MADE?
Usually, we will make payment within seven days after payment is called for by
the terms of the contract. In the case of payments from the separate account,
we reserve the right to defer payment for any period during which the New York
Stock Exchange is closed for trading (except for normal holiday closing), or
when trading on the Exchange is restricted or when the Securities and Exchange
Commission has determined that a state of emergency exists which may make such
determination and payment impractical or such other periods as the Commission
may by order permit for the protection of contract owners.
DO YOU HAVE ADDITIONAL VOTING RIGHTS?
Yes. If you have separate account annuity units under this contract you may
direct us with respect to the voting rights of fund shares held by us and
attributable to this contract.
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IMMEDIATE
VARIABLE ANNUITY CONTRACT
GUARANTEED MINIMUM
ANNUITY PAYMENT AMOUNT
A NONPARTICIPATING CONTRACT
MINNESOTA LIFE
<PAGE>
Minnesota Life INDIVIDUAL RETIREMENT ANNUITY
(IRA) AGREEMENT
SEP, TRADITIONAL IRA AND ROTH-IRA
WHAT DOES THIS AGREEMENT PROVIDE?
This agreement modifies the contract. Provisions are changed before issue. In
the event of a conflict between the provisions of this agreement and the
contract to which it is attached, the provisions of this agreement will control.
These changes will allow its use: (a) with a Simplified Employee Pension
(herein "SEP"); and/or (b) as a Traditional Individual Retirement Annuity under
the Employee Retirement Income Security Act of 1974, as amended (herein "IRA");
and/or (c) as a Roth Individual Retirement Annuity under section 408A of the
Internal Revenue Code (herein "Roth-IRA"). The provisions that apply for
Traditional IRAs generally apply for SEPs, unless otherwise stated.
PURCHASE PAYMENTS
ARE TRADITIONAL IRA PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant has an IRA, purchase payments may be limited. An
annual cash purchase payment may not exceed the lesser of: (a) the amount of
compensation includible in gross income in any taxable year; or (b) $2,000, or
such other maximum amount as may be allowed by law.
Where an annuitant establishes an IRA along with a lower earning spouse,
purchase payments may be limited. They are also limited if the annuitant is the
lower earning spouse. The cash purchase payments for both annuities and
accounts must then be considered together. They may not exceed the lesser of:
(a) the amount of compensation includible in the working spouse's compensation
includible in gross income in any taxable year; or (b) $4,000, or such other
maximum amount as may be allowed by law. In no event may an annuitant's annual
purchase payment exceed the cash amount of: (a) $2,000; or (b) the maximum
annual contribution allowed for an IRA.
The annuitant's employer may make purchase payments under the annuitant's SEP up
to the lesser of 15% of the annuitant's compensation (exclusive of compensation
in excess of $160,000) or $30,000. Other limits will apply if the annuitant's
IRA is used as part of a salary reduction SEP.
The annuitant, or the annuitant and his or her employer, are responsible for
determining the maximum purchase payments that may be made to an IRA.
ARE ROTH-IRA PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant has a Roth-IRA, purchase payments may be limited.
Annual purchase payments for all IRAs maintained by the annuitant may not exceed
the lesser of 100% of the annuitant's compensation includible in gross income in
any taxable year or $2,000. The maximum purchase payment that an annuitant may
make to a Roth-IRA will depend on the amount of the annuitant's income. The
maximum annual purchase payment allowed for a Roth-IRA is gradually reduced to
$0 between certain levels of Adjusted Gross Income ("AGI"). Adjusted gross
income is defined in section 408A(c)(3) of the Code and does not include amounts
transferred or rolled over to Traditional IRAs or Roth-IRAs. In accordance with
section 408A(c)(3) of the Code, if an annuitant is single, the $2,000 limit is
phased out between AGI of $95,000 and $110,000; if an annuitant is married and
files a joint federal income tax return, it is phased out between $150,000 and
$160,000; and if an annuitant is married and
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files a separate federal income tax return, it is phased out between $0 and
$10,000.
If an annuitant is married, the maximum purchase payment to the lower-earning
spouse's Spousal Roth-IRA may not exceed the lesser of: (a) 100% of both
spouses' combined compensation minus any Roth-IRA or deductible Traditional IRA
contribution for the spouse with the higher compensation; or (b) $2,000. A
maximum of $4,000 may be contributed to both spouses' Spousal Roth-IRAs.
Purchase payments can be divided between the spouses' IRAs as the annuitant and
his spouse wish, but annual purchase payments to either one of the IRAs may not
exceed $2,000.
DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER TO A ROTH-IRA?
No. However, some individuals are not eligible to make rollover purchase
payments to a Roth-IRA.
A qualified rollover is a rollover contribution from another Roth-IRA or
Traditional individual retirement account or annuity in accordance with sections
408(d)(3), 408A(c)(3)(B), 408A(c)(6) and 408A(e) of the Code. A cash purchase
payment may be the amount received by or on behalf of the annuitant as all or
any portion of a distribution which is a rollover contribution. The
distribution may be one from a Traditional IRA or Roth-IRA, but may not be an
eligible rollover distribution from a tax-exempt employee's trust or a qualified
employee annuity plan.
A rollover or transfer from a Traditional IRA to a Roth-IRA will not be
permitted if the annuitant's AGI for the tax year exceeds $100,000 or if the
annuitant is married and files a separate federal income tax return. A rollover
contribution must be received by us not later than 60 days after the annuitant
receives it.
DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER?
No. Limits on purchase payments to the contract do not apply with a rollover
contribution. A rollover contribution is one within the meaning of sections
408(d)(3), 402(c), 403(a)(4), 403(b)(8), 408A(c)(3)(B), 408A(c)(6), 408A(d)(3)
or 408A(e) of the Internal Revenue Code (herein "Code") or a purchase payment
made in accordance with the terms of a SEP as described in section 408(k) of the
Code. In that case, a cash purchase payment may be the amount received by or on
behalf of an annuitant as all or any portion of a distribution which is a
rollover contribution. The distribution may be one from an individual
retirement account, annuity or bond plan; or an eligible rollover distribution
from a tax-exempt employee's trust; a qualified employee annuity plan; or such
other plan as may be allowed by law. A Roth-IRA, however, may not receive a
rollover contribution directly from any plan other than a Traditional IRA or
another Roth-IRA. In addition, a rollover or transfer from a Traditional IRA to
a Roth-IRA will not be permitted if the annuitant's AGI for the tax year exceeds
$100,000; or if the annuitant is married and files a separate federal income tax
return. A rollover contribution must be received by us not later than 60 days
after the annuitant receives it. A direct rollover payment may be made to us
from the plan making the distribution. A purchase payment may not include
contributions to a tax-qualified plan made by the annuitant as an employee.
MAY THE ANNUITANT ALWAYS MAKE PURCHASE PAYMENTS?
No. We will not accept purchase payments under this contract as of a date the
annuitant is not eligible for a SEP, IRA or Roth-IRA.
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In addition, no additional cash contributions or rollover contributions may be
accepted under the contract if: (a) the owner dies before the distribution of
the entire interest in the contract; and (b) the beneficiary is not the
surviving spouse.
Purchase payments which exceed those allowed for an IRA or Roth-IRA may be
returned. We will send them to the annuitant. Return is without regard to the
provisions of this contract dealing with withdrawals. Excess purchase payments
to a SEP may similarly be returned. We will send them to the payer.
The annuitant has the sole responsibility for determining whether any purchase
payments meet applicable income tax requirements.
DISTRIBUTION PROVISIONS
ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS FROM AN IRA?
Yes. The distribution of an annuitant's value shall be made in accordance with
the minimum distribution requirements of section 408(b)(3) of the Code and the
regulations thereunder, including the incidental death benefit provisions of
section 1.401(a)(9)-2 of the proposed regulations. All of these rules are
incorporated herein by reference.
The annuitant's accumulation value, or withdrawal value if applicable, must be
distributed or begin to be distributed, by the annuitant's required beginning
date. This is the April 1 following the calendar year in which the annuitant
reaches age 70 1/2. For each succeeding year, a distribution must be made on or
before December 31.
The annuitant or, if applicable, the annuitant's beneficiary, is responsible for
assuring that the required minimum distribution is taken in a timely manner and
that the correct amount is distributed.
ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS FROM A ROTH-IRA WHILE THE
ANNUITANT IS ALIVE?
No. The rules that apply to Traditional IRAs regarding required distributions
while an annuitant is alive do not apply to Roth-IRAs.
WHAT FORMS OF DISTRIBUTION ARE AVAILABLE FROM AN IRA?
By the required beginning date the annuitant may elect to have the accumulation
value, or withdrawal value if applicable, distributed. It must be in one of the
following forms:
(a) a single sum payment;
(b) equal or substantially equal payments over the life of the annuitant;
(c) equal or substantially equal payments over the joint lives of the annuitant
and spouse;
(d) equal or substantially equal payments over a specified period that may not
be longer than the annuitant's life expectancy;
(e) equal or substantially equal payments over a specified period that may not
be longer than the joint life and last survivor expectancy of the annuitant
and spouse.
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<PAGE>
Options (b), (c), (d), and (e) can be satisfied by an annuity form elected by
the annuitant or by systematic withdrawal.
Payments must be made in periodic payments at intervals of no longer than one
year. In addition, payments must be either nonincreasing or they may increase
only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the Proposed Income Tax
Regulations or such final regulations as adopted.
ARE THERE SPECIAL RULES IF THE ANNUITANT DIES BEFORE THE ENTIRE VALUE IN THE
CONTRACT IS DISTRIBUTED?
Yes. If the annuitant dies on or after the date distributions have begun, the
entire remaining value must be distributed at least as rapidly as under the
method of distribution being used as of the date of the annuitant's death. If
the annuitant dies before distributions have begun, the entire remaining value
must be distributed as elected by the annuitant or, if the annuitant has not so
elected, as elected by the beneficiary or beneficiaries, as follows:
(a) by December 31st of the year containing the fifth anniversary of the
annuitant's death; or
(b) in equal or substantially equal payments over the life or life expectancy
of the designated beneficiary or beneficiaries starting by December 31st of
the year following the year of the annuitant's death. If, however, the
beneficiary is the annuitant's surviving spouse, then this distribution is
not required to begin until later. It must begin by December 31st of the
year in which the annuitant would have turned 70 1/2. Minimum payments to
the surviving spouse will be calculated in accordance with the applicable
regulations.
ARE OTHER OPTIONS AVAILABLE TO A SPOUSE BENEFICIARY?
Yes. In addition to the options discussed above, the spouse beneficiary has
other options. He or she may elect to treat the annuitant's IRA or Roth-IRA as
his or her own. This is done by either: (a) not taking a distribution within
the required time period; or (b) making eligible IRA or Roth-IRA contributions
to it.
If the beneficiary chooses one of these options then he or she is the contract
owner. He or she will assume all rights and privileges under the contract.
This right is available only to the spouse of the annuitant.
HOW ARE LIFE EXPECTANCIES FOR CALCULATING REQUIRED DISTRIBUTIONS DETERMINED?
Life expectancy is computed by use of the expected return multiples in Table V
and VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the annuitant prior to the commencement of
distributions or, if applicable, by the surviving spouse where the annuitant
dies before distributions have commenced, life expectancies of an annuitant or
spouse beneficiary shall be recalculated annually for purposes of required
distributions. An election not to recalculate shall be irrevocable and shall
apply to all subsequent years. The life expectancy of a nonspouse beneficiary
shall not be recalculated. Instead, life expectancy will be calculated using
the attained age of such beneficiary during the calendar year in which the
annuitant attains age 70 1/2; and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar year
which has elapsed since the calendar year life expectancy was first calculated.
MHC-97-9418 Minnesota Life 4
<PAGE>
In the case of a Roth-IRA, life expectancy will be calculated using the attained
age of such beneficiary in the calendar year distributions are required to
begin; and payments for subsequent years shall be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed since the
calendar year life expectancy was first calculated.
MAY THE ANNUITANT SATISFY MINIMUM DISTRIBUTION REQUIREMENTS BY RECEIVING A
DISTRIBUTION FROM ANOTHER IRA?
Yes. An annuitant may satisfy the minimum distribution requirements under
sections 408(a)(6) and 408(b)(3) of the Code by receiving a distribution from
one IRA that is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the owner of two or more
IRAs may use the "alternative method" described in Notice 88-38, to satisfy the
minimum distribution requirements described above.
WITHDRAWAL BENEFITS
ARE THERE LIMITS ON WITHDRAWALS FROM AN IRA?
Yes. These limits apply to a partial withdrawal or a surrender of the contract
before the annuitant's age 59 1/2. In that case, we must receive notice of the
intended disposition of the proceeds. This will not apply if the annuitant dies
or is disabled.
ARE ALL WITHDRAWALS FROM ROTH-IRAS SUBJECT TO FEDERAL INCOME TAX?
No. Purchase payments to Roth-IRAs are not deductible. Any partial withdrawal
or surrender of the contract that includes a return of the annuitant's purchase
payment(s) will not be taxable to the extent it is attributable to the purchase
payment(s). Earnings on the purchase payment(s) that are withdrawn are subject
to income tax if withdrawn within 5 years of the annuitant's first contribution
to a Roth-IRA or within 5 years of a rollover purchase payment. In addition,
earnings will be subject to income tax if withdrawn before the annuitant reaches
age 59 1/2; unless the earnings are being withdrawn because of the annuitant's
death or disability or to pay first-time home buyer expenses. If a withdrawal
is made, we must receive notice of the reason for withdrawal or intended
disposition of the proceeds. Income tax will also not apply to distributions
made if the amount received is in excess of the allowed contribution and
returned to the annuitant before the required tax return filing date for that
year, together with any earned interest; or if the entire contract is received
and reinvested in a similar plan entitled to similar tax treatment.
MAY TAX PENALTIES APPLY FOR WITHDRAWALS FROM AN IRA?
Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if: (1) the annuitant becomes disabled as defined by
the Code; (2) the amount received is in excess of the allowed deduction and
returned to the annuitant before the required tax return filing date for that
year, together with any earned interest; or (3) if the entire amount in the
contract is received and reinvested in a similar plan entitled to similar tax
treatment. Additional exceptions to tax penalties may be available to the
annuitant.
We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract.
MHC-97-9418 Minnesota Life 5
<PAGE>
Any transaction treated by law as a contract distribution may be treated by us
as a complete contract surrender.
MAY TAX PENALTIES APPLY FOR WITHDRAWALS FROM ROTH-IRAS?
Yes. Certain tax penalties are imposed under the Code. If the annuitant owes
income tax on the amount withdrawn, the annuitant will also generally be subject
to a 10% premature withdrawal tax penalty on the amount on which the annuitant
paid income tax. However, the tax penalties will not apply if earnings in the
Roth-IRA are withdrawn within 5 years of the annuitant's first contribution to a
Roth-IRA or within 5 years of a rollover purchase payment from a Traditional IRA
if the distribution is: (1) made on or after the date on which the annuitant
attains age 59 1/2; (2) made because of the annuitant's disability or death; or
(3) made because the amount received was in excess of the allowed contribution
and returned to the annuitant before the required tax return filing date for
that year, together with any earned interest. In addition, the tax penalty will
not apply to a distribution if the entire contract is received and reinvested in
a similar plan entitled to similar tax treatment. Additional exceptions to tax
penalties may be available to the annuitant.
We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract. Any
transaction treated by law as a contract distribution may be treated by us as a
complete contract surrender.
GENERAL INFORMATION
IS THE INTEREST OF THE ANNUITANT IN THIS CONTRACT NONFORFEITABLE?
Yes. The entire interest of the annuitant in this contract is nonforfeitable.
The annuitant shall possess the entire benefit provided by this contract. This
contract is established for the exclusive benefit of the annuitant and his or
her beneficiaries.
HOW WILL A REFUND OF PREMIUMS BE APPLIED?
Any refund of premiums (other than those attributable to excess purchase
payments) will be applied, before the close of the calendar year following the
year of the refund, toward the payment of future premiums or the purchase of
additional benefits.
MAY THIS AGREEMENT BE AMENDED?
Yes. This contract may be amended as required to reflect any change in the
Code, regulations or published revenue rulings. The annuitant will be deemed to
have consented to any such amendment. We will promptly furnish any such
amendment to the annuitant.
This agreement is effective as of the original contract date unless a different
effective date is shown here.
Secretary
President
MHC-97-9418 Minnesota Life 6
<PAGE>
MINNESOTA LIFE INDIVIDUAL RETIREMENT ANNUITY
SIMPLE - (IRA) AGREEMENT
WHAT DOES THIS AGREEMENT PROVIDE?
This agreement modifies the contract. Provisions are changed before issue. In
the event of a conflict between the provisions of this agreement and the
contract to which it is attached, the provisions of this agreement will control.
These changes will allow its use with a Savings Incentive Match Plan for
Employees (herein "SIMPLE-IRA").
PURCHASE PAYMENTS
ARE SIMPLE-IRA PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant's employer establishes a SIMPLE-IRA, purchase payments
may be limited. The annual cash purchase payments must be the lesser of: (a)
an amount equal to 100% of the compensation included in gross income in any
taxable year; or (b) $6,000, or such other maximum amount as may be allowed by
law. Mandated employer purchase payments, in addition to your purchase
payments, can range from 0% to 3% of your annual compensation.
DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER?
No. Limits on purchase payments to the contract do not apply with a rollover
contribution. A rollover contribution is one within the meaning of sections
408(d)(3)(G) of the Internal Revenue Code (herein "Code") or a purchase payment
made in accordance with the terms of a SIMPLE-IRA as described in section 408(p)
of the Code. In that case, a cash purchase payment may be the amount received
by or on behalf of an annuitant as all or any portion of a distribution which is
a rollover contribution. The distribution may be one as allowed by law. A
rollover contribution must be received by us not later than 60 days after the
annuitant receives it. A direct rollover payment may be made to us from the
plan making the distribution. A purchase payment may not include contributions
to a tax-qualified plan made by the annuitant as an employee.
MAY THE ANNUITANT ALWAYS MAKE PURCHASE PAYMENTS?
No. We will not accept purchase payments under this contract as of a date the
annuitant is not eligible for a SIMPLE-IRA.
In addition, no additional cash contributions or rollover contributions may be
accepted under the contract if: (a) the owner dies before the distribution of
the entire interest in the contract; and (b) the beneficiary is not the
surviving spouse.
Purchase payments which exceed those allowed for a SIMPLE-IRA may be returned.
We will send them to the payer. Return is without regard to the provisions of
this contract dealing with withdrawals.
DISTRIBUTION PROVISIONS
ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS?
Yes. The distribution of an annuitant's value shall be made in accordance with
the minimum distribution requirements of section 408(b)(3) of the Code and the
regulations thereunder, including the incidental death benefit provisions of
section 1.401(a)(9)-2 of the proposed regulations. All of these rules are
incorporated herein by reference.
MHC-98-9431 Minnesota Life Insurance Company 1
<PAGE>
The annuitant's accumulation value, or withdrawal value if applicable, must be
distributed or begin to be distributed, by the annuitant's required beginning
date. This is the April 1 following the calendar year in which the annuitant
reaches age 70 1/2. For each succeeding year, a distribution must be made on or
before December 31.
WHAT FORMS OF DISTRIBUTION ARE AVAILABLE?
By the required beginning date the annuitant may elect to have the accumulation
value, or withdrawal value if applicable, distributed. It must be in one of the
following forms:
(a) a single sum payment;
(b) equal or substantially equal payments over the life of the annuitant;
(c) equal or substantially equal payments over the joint lives of the annuitant
and spouse;
(d) equal or substantially equal payments over a specified period that may not
be longer than the annuitant's life expectancy;
(e) equal or substantially equal payments over a specified period that may not
be longer than the joint life and last survivor expectancy of the annuitant
and spouse.
Options (b), (c), (d), and (e) can be satisfied by an annuity form elected by
the annuitant or by systematic withdrawal.
Payments must be made in periodic payments at intervals of no longer than one
year. In addition, payments must be either nonincreasing or they may increase
only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the Proposed Income Tax
Regulations or such final regulations as adopted.
ARE THERE SPECIAL RULES IF THE ANNUITANT DIES BEFORE THE ENTIRE VALUE IN THE
CONTRACT IS DISTRIBUTED?
Yes. If the annuitant dies on or after the date distributions have begun, the
entire remaining value must be distributed at least as rapidly as under the
method of distribution being used as of the date of the annuitant's death. If
the annuitant dies before distributions have begun, the entire remaining value
must be distributed as elected by the annuitant or, if the annuitant has not so
elected, as elected by the beneficiary or beneficiaries, as follows:
(a) by December 31st of the year containing the fifth anniversary of the
annuitant's death; or
(b) in equal or substantially equal payments over the life or life expectancy
of the designated beneficiary or beneficiaries starting by December 31st of
the year following the year of the annuitant's death. If, however, the
beneficiary is the annuitant's surviving spouse, then this distribution is
not required to begin until later. It must begin by December 31st of the
year in which the annuitant would have turned 70 1/2.
ARE OTHER OPTIONS AVAILABLE TO A SPOUSE BENEFICIARY?
Yes. In addition to the options discussed above, the spouse beneficiary has
other options. He or she may elect to treat the annuitant's IRA as his or her
MHC-98-9431 Minnesota Life 2
<PAGE>
own. This is done by either: (a) not taking a distribution within the required
time period; or (b) making eligible IRA contributions to it.
If the beneficiary chooses one of these options then he or she is the contract
owner. He or she will assume all rights and privileges under the contract.
This right is available only to the spouse of the annuitant.
HOW ARE LIFE EXPECTANCIES FOR CALCULATING REQUIRED DISTRIBUTIONS DETERMINED?
Life expectancy is computed by use of the expected return multiples in Table V
and VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the annuitant prior to the commencement of
distributions or, if applicable, by the surviving spouse where the annuitant
dies before distributions have commenced, life expectancies of an annuitant or
spouse beneficiary shall be recalculated annually for purposes of required
distributions. An election not to recalculate shall be irrevocable and shall
apply to all subsequent years. The life expectancy of a nonspouse beneficiary
shall not be recalculated. Instead, life expectancy will be calculated using
the attained age of such beneficiary during the calendar year in which the
annuitant attains age 70 1/2, and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar year
which has elapsed since the calendar year life expectancy was first calculated.
MAY THE ANNUITANT SATISFY MINIMUM DISTRIBUTION REQUIREMENTS BY RECEIVING A
DISTRIBUTION FROM ANOTHER IRA?
Yes. An annuitant may satisfy the minimum distribution requirements under
sections 408(a)(6) and 408(b)(3) of the Code by receiving a distribution from
one IRA that is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the owner of two or more
IRAs may use the "alternative method" described in Notice 88-38, to satisfy the
minimum distribution requirements described above.
WITHDRAWAL BENEFITS
ARE THERE LIMITS ON WITHDRAWALS?
Yes. These limits apply to a partial withdrawal or a surrender of the contract
before the annuitant's age 59 1/2. In that case, we must receive notice of the
intended disposition of the proceeds. This will not apply if the annuitant dies
or is disabled.
MAY TAX PENALTIES APPLY?
Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if: (1) the annuitant becomes disabled as defined by
the Code; (2) the amount received is in excess of the allowed deduction and
returned to the annuitant before the required tax return filing date for that
year, together with any earned interest; or (3) if the entire amount in the
contract is received and reinvested in a similar plan entitled to similar tax
treatment. Additional exceptions to tax penalties may be available to the
annuitant.
We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract.
MHC-98-9431 Minnesota Life 3
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Any transaction treated by law as a contract distribution may be treated by us
as a complete contract surrender.
GENERAL INFORMATION
IS THE INTEREST OF THE ANNUITANT IN THIS CONTRACT NONFORFEITABLE?
Yes. The entire interest of the annuitant in this contract is nonforfeitable.
The annuitant shall possess the entire benefit provided by this contract. This
contract is established for the exclusive benefit of the annuitant and his or
her beneficiaries.
HOW WILL A REFUND OF PREMIUMS BE APPLIED?
Any refund of premiums (other than those attributable to excess purchase
payments) will be applied, before the close of the calendar year following the
year of the refund, toward the payment of future premiums or the purchase of
additional benefits.
MAY THIS AGREEMENT BE AMENDED?
Yes. This contract may be amended as required to reflect any change in the
Code, regulations or published revenue rulings. The annuitant will be deemed to
have consented to any such amendment. We will promptly furnish any such
amendment to the annuitant.
This agreement is effective as of the original contract date unless a different
effective date is shown here.
/s/ Dennis E. Prohofsky
Secretary
/s/ Robert L.Senkler
President
MHC-98-9431 Minnesota Life 4
<PAGE>
Exhibit 4(e)
MINNESOTA LIFE QUALIFIED PLAN AGREEMENT
WHAT DOES THIS AGREEMENT PROVIDE?
Minnesota Life - 400 Robert Street North - St. Paul, Minnesota 55101-2098.
The Agreement modifies the contract. The Agreement is used when an annuity
contract is distributed by a pension or profit sharing plan. The plan must
be qualified under Section 401(a) of the Internal Revenue Code, ("Code") as
amended.
IS THIS CONTRACT TRANSFERABLE?
No. This contract is non-transferable. It may not be sold or assigned. There
is an exception if the contract is the subject of a domestic relations order.
IS THERE AN AUTOMATIC FORM OF RETIREMENT BENEFIT?
Yes. The automatic form is payable if the annuitant is married when a contract
benefit is paid. The automatic form is a joint and 100% to survivor annuity.
It is payable to the annuitant and the annuitant's spouse. The automatic option
is a life annuity if the annuitant is single when a contract benefit is paid.
It is payable to the annuitant.
MAY ANOTHER PAYMENT OPTION OF THE RETIREMENT BENEFIT BE ELECTED?
Yes. However, there are two conditions. First, the annuitant must elect a
different contract option. This election must be made within the 90 day period
before the benefit is paid. Second, the spouse of a married annuitant must
consent to any election of an optional form. This consent must be made on a
Minnesota Life form. It must contain a notarized statement. Any consent by a
spouse herein shall be effective only with respect to such spouse. Any annuity
payment option may not provide for payments over a period longer than the life
or the life expectancy of the annuitant or the joint annuitant.
ARE THERE RULES AS TO WHEN ANNUITY PAYMENT MUST BEGIN?
Yes. Payments under the contract must begin no later than April 1st following
the calendar year in which the annuitant attains age 70 1/2.
IS THERE A PRE-RETIREMENT DEATH BENEFIT?
Yes. The pre-retirement death benefit is payable if the annuitant dies before
annuity payments have started. It is the amount provided by the accumulation
value of the contract.
IS THE BENEFICIARY OF THE PRE-RETIREMENT DEATH BENEFIT SPECIFIED?
Yes. If the annuitant was married for a period of at least one year at the time
of death, the beneficiary of the pre-retirement death benefit is the annuitant's
spouse. The spouse's payment option is a life annuity.
MHC-88-9176 Minnesota Life 1
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If the annuitant was not married or was married less than one year at death, the
general rule does not apply. The beneficiary of this benefit is then the
designated beneficiary. The automatic annuity payment option in this case is a
lump sum payment.
MAY THE ANNUITANT WHO HAS BEEN MARRIED FOR AT LEAST ONE YEAR ELECT ANOTHER
BENEFICIARY FOR THE PRE-RETIREMENT DEATH BENEFIT?
Yes. Such an annuitant may choose a beneficiary. It may be a person other than
the spouse. The spouse must consent to such an election. The consent must be
obtained prior to the annuitant's death. This consent must be on a Minnesota
Life form. It must include a notarized statement. Consent must also be
obtained if there is a subsequent change of beneficiary.
MAY ANOTHER PAYMENT OPTION BE ELECTED FOR THE PRE-RETIREMENT DEATH BENEFIT?
Yes. On the annuitant's death, the beneficiary may elect any contract option.
The option elected must be permitted by the code.
MAY THE PAYMENT OF THE PRE-RETIREMENT DEATH BENEFIT BE DEFERRED?
Yes. The pre-retirement death benefit may begin at any time after the
annuitant's death. If the beneficiary is the annuitant's spouse, the spouse may
elect to defer the benefit. The benefit must begin by the time the annuitant
would have been age 70 1/2.
Payment rules differ if the beneficiary is not the annuitant's spouse. In that
case payment must begin no later than one year from the annuitant's death.
Payment must be: (a) in lump sum; (b) in substantially equal installments over
the life of that beneficiary; and (c) over a period not longer than that
beneficiary's life expectancy.
ARE THERE ANY EXCEPTIONS TO THESE DISTRIBUTION REQUIREMENTS?
No.
ARE THERE ADDITIONAL REQUIREMENTS THAT APPLY TO WITHDRAWALS AND SURRENDERS?
Yes. They may not be made without the written consent of the spouse entitled to
the pre-retirement death benefits.
ARE CONTRACT DISTRIBUTIONS TAXABLE?
Yes. Distributions from this contract are taxable. In addition, tax penalties
may apply to distributions which are classified as premature distributions. Tax
penalties may apply to amounts in excess of statutory limitations as described
in the Code.
Minnesota Life will not be liable for any tax or tax penalties on contract
amounts received or paid.
MHC-88-9176 Minnesota Life 2
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MAY THIS CONTRACT BE ROLLED OVER OR EXCHANGED FOR ANOTHER CONTRACT OR FOR AN
INDIVIDUAL RETIREMENT ACCOUNT OR ANNUITY PLAN?
No. This contract may not be exchanged or rolled over. The issuance of this
contract to you is treated as a distribution from a qualified pension plan.
WILL MINNESOTA LIFE PROVIDE TAX ADVICE WITH RESPECT TO CONTRACT DISTRIBUTIONS?
No. For tax advice you must see your own tax adviser.
This Agreement is effective as of the original contract date. For purposes of
the deferred sales charge, the contract year shall be determined from the date
shown here:
MHC-88-9176 Minnesota Life 3
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Exhibit 4(f)
MINNESOTA LIFE TAX SHELTERED ANNUITY AMENDMENT
Minnesota Life Insurance Company - 400 Robert Street North - St. Paul, Minnesota
55101-2098. We have made the following changes to your contract. They modify
the contract. They are considered to be a part of it. This agreement is
effective as of the original contract date unless a different effective date
is shown here.
WHAT DOES THIS AGREEMENT PROVIDE?
This Agreement modifies your contract. The Agreement is used when the contract
is issued to fund a tax sheltered annuity program. This is as described in
Section 403(b) of the Internal Revenue Code (hereinafter "Code"), as amended.
PURCHASE PAYMENTS
ARE PURCHASE PAYMENTS LIMITED?
Yes. Where the annuitant has a tax sheltered annuity, purchase payments may be
limited. Elective deferrals which are purchase payments made by salary
reduction are limited to: (a) $9,500; or (b) an indexed amount, if greater.
A special increased limit in the case of an annuitant who has completed 15 years
of service with an educational organization, a hospital, a home health service
agency, a church, a convention or association of churches, or a health and
welfare service agency may be available. The limit for any one year is
increased by the lesser of:
(a) $3,000;
(b) $15,000 reduced by amounts already excluded for prior taxable years by
reason of this special exception; or
(c) the excess of $5,000 multiplied by the number of years of service the
annuitant has with the employer less all prior elective deferrals.
The amount of salary reduction excludable from an annuitant's gross income may
actually be less than the amount permitted under this limit on elective
deferrals. This may be true if the annuitant's exclusion allowance, described
in Section 403(b)(2), of the Code or the overall limit as described in Section
415(c) of the Code is less.
WITHDRAWAL AND SURRENDERS
ARE THERE RESTRICTIONS ON WHEN WITHDRAWALS FROM THIS CONTRACT MAY BE MADE?
Yes. Contracts issued to fund 403(b) tax sheltered annuity programs must
restrict certain withdrawals. Any purchase payment made after January 1, 1989
pursuant to a salary reduction agreement between you and your employer may be
paid only when:
MHC-88-9213 Minnesota Life Insurance Company
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(a) you attain age 59 1/2;
(b) when you separate from service with your employer;
(c) when you die;
(d) when you become disabled; or
(e) if you qualify for a hardship withdrawal.
WHAT IS MEANT BY A HARDSHIP WITHDRAWAL?
A hardship withdrawal is one that is made on account of an immediate and heavy
financial need and a withdrawal is necessary to satisfy that financial need.
You may be required to provide us with information so that we may be satisfied
that your hardship is one described in the Code and its regulations.
WHAT AMOUNT MAY BE WITHDRAWN UNDER THE HARDSHIP PROVISION?
You may withdraw only the amount represented by your salary reduction
contributions. Any earnings attributable to such contributions may not be
withdrawn.
MAY TAX PENALTIES APPLY?
Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if:
(a) the annuitant becomes disabled as defined by the Code;
(b) The amount received is in excess of the allowed elective deferral and
returned to the annuitant before the required tax return filing date for
that year, together with any earned interest; or
(c) if the entire amount in the contract is received and reinvested in a
similar plan entitled to similar tax treatment.
We will not be liable for any tax penalties on amounts received or paid by us
under this contract. We also retain the right to treat any transaction treated
by law as a contract distribution as a complete contract surrender.
MHC-88-9213 Minnesota Life Insurance Company
<PAGE>
GENERAL INFORMATION
IS THERE A TIME WHEN DISTRIBUTIONS FROM THIS CONTRACT MUST BE MADE?
Yes. Distributions must begin within 90 days after the end of the year in which
the annuitant reaches age 70 1/2. Distributions may be made as withdrawals or
under one of the available annuity forms. In order to avoid tax penalties, you
will have to meet certain minimum distribution requirements.
IS THIS CONTRACT TRANSFERABLE?
No. This contract is non-transferable. It may not be sold or assigned.
/s/ Dennis E. Prohofsky
Secretary
/s/ Robert L. Senkler
President
MHC-88-9213 Minnesota Life Insurance Company
<PAGE>
<TABLE>
<CAPTION>
Exhibit 5(a)
<S> <C>
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MINNESOTA LIFE VARIABLE ANNUITY APPLICATION
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Minnesota Life Insurance Company - Annuity Services - 400 Robert Street North - St Paul, Minnesota 55101-2098 -
Toll Free 1-800-362-3141
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OWNER (PLEASE PRINT) ANNUITANT (IF OTHER THAN OWNER)
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NAME NAME
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ADDRESS ADDRESS
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CITY, STATE, ZIP CITY, STATE, ZIP
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DATE OF BIRTH SEX TAXPAYER I.D.(SOC SEC # OR EIN) DATE OF BIRTH SEX SOCIAL SECURITY NUMBER
/ /M / /F / /M / /F
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JOINT OWNER (OPTIONAL - MUST BE SPOUSE OF OWNER) JOINT ANNUITANT (OPTIONAL - MUST BE SPOUSE OF ANNUITANT)
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NAME NAME
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DATE OF BIRTH SEX SOCIAL SECURITY NUMBER DATE OF BIRTH SEX SOCIAL SECURITY NUMBER
/ /M / /F / /M / /F
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BENEFICIARY
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CLASS NAME RELATIONSHIP DATE OF BIRTH SEX SOCIAL SECURITY NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
/ /M / /F
- -----------------------------------------------------------------------------------------------------------------------------------
/ /M / /F
- -----------------------------------------------------------------------------------------------------------------------------------
/ /M / /F
- -----------------------------------------------------------------------------------------------------------------------------------
/ /M / /F
- -----------------------------------------------------------------------------------------------------------------------------------
TYPE OF PLAN (PLEASE CHECK ONLY ONE BOX - SEE REVERSE FOR ADDITIONAL INSTRUCTIONS)
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Non-Qualified / / SIMPLE (SARSEP)
/ / IRA Rollover / / Tax Sheltered Annuity (IRC Section 403(b))
/ / IRA Transfer from existing IRA / / Qualified Retirement Plan (IRC Section 401)
/ / Simplified Employee Pension (SEP) / / Non-Qualified Deferred Compensation
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUITY OPTION REPLACEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Single life option commencing on Will this contract applied for replace or change an existing
________ month ___ day insurance or annuity contract?
/ / Joint life option commencing on
________ month ___ day / / Yes* / / No
*If yes, please provide your contract number and the name of
the insurance company under Special Instructions.
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ANNUITY PAYMENT FREQUENCY STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
I wish the payment frequency to be The Prospectuses for the Variable Annuity Account and the
/ / Monthly / / Quarterly Fund each refer to a Statement of Additional Information.
/ / Semi-Annually / / Annually Would you like us to send you a copy? / / Yes / / No
- -----------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS OR REMARKS
- -----------------------------------------------------------------------------------------------------------------------------------
MHC-95-9328
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT SUITABILITY
- -----------------------------------------------------------------------------------------------------------------------------------
1. Are you an employee of Minnesota Life or a subsidiary? / / Yes / / No
2. Are you a spouse or dependent child of an employee of Minnesota Life or a subsidiary? / / Yes / / No
3. Are you an employee of an NASD firm? / / Yes / / No
4. Dependents: / / Spouse / / Children Ages_____________________
5. Current Approximate: Annual Income ________________ Assets $_________________ Debt $______________ Tax Bracket ____________%
6. Other Investments:
Savings $________________ Balanced/Total Return Funds $_________________
Insurance Cash Values $________________ Stock Funds $_________________
Real Estate $________________ Bond Funds $_________________
Business Interests $________________ Individual Stocks $_________________
Retirement Funds $________________ Individual Bonds $_________________
Other __________________ $________________
7. Ranking of Investment Objectives (Rank 1 - 5 in order of importance):
_______ Capital Preservation/Conservative Income
_______ Current Income
_______ Total Return/Conservative Growth
_______ Growth
_______ Aggressive Growth
8. Risk Tolerance (check one): / / Low Risk / / Moderate Risk / / High Risk
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURES
- -----------------------------------------------------------------------------------------------------------------------------------
- - I have received and had an opportunity to read a current copy of the Variable Annuity Account Prospectus and the prospectus for
the Advantus Series Fund, Inc.
- - I have been informed of all charges and expenses associated with this investment.
- - I understand that all payments and values of any contract issued, when based upon the investment experience of a Separate
Account, are variable and are not guaranteed as to a fixed dollar amount. A contract guarantee for minimum payment amounts will
be applicable in computing variable annuity payments.
- - Given my personal circumstances, this is a suitable investment.
I believe the information provided on this form is true and accurate to the best of my knowledge. I have read and agree with the
above statement.
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNED AT (City, State) DATE AMOUNT REMITTED WITH APPLICATION
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE OF OWNER SIGNATURE OF ANNUITANT (if other than owner)
X X
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE OF JOINT OWNER SIGNATURE OF JOINT ANNUITANT (if other than joint owner)
X X
- -----------------------------------------------------------------------------------------------------------------------------------
TO BE COMPLETED BY REPRESENTATIVE
- -----------------------------------------------------------------------------------------------------------------------------------
To the best of my knowledge this contract / / will / / will not replace or change an existing insurance or annuity contract. I
certify that a current prospectus was delivered. No written sales materials were used other than those furnished by the Home
Office.
- -----------------------------------------------------------------------------------------------------------------------------------
REPRESENTATIVE NAME (PRINT) REPRESENTATIVE SIGNATURE AGENCY CODE AGENT CODE
X %
- -----------------------------------------------------------------------------------------------------------------------------------
X %
- -----------------------------------------------------------------------------------------------------------------------------------
TO BE COMPLETED BY DEALER
- -----------------------------------------------------------------------------------------------------------------------------------
DEALER NAME DATE SIGNATURE OF AUTHORIZED DEALER
X
- -----------------------------------------------------------------------------------------------------------------------------------
THIS APPLICATION BECOMES EFFECTIVE ONLY UPON ITS ACCEPTANCE BY ASCEND FINANCIAL & SERVICES, INC.
- -----------------------------------------------------------------------------------------------------------------------------------
ACCEPTED BY DATE CONTRACT NUMBER CASE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
See additional information for completion, including signatures, on back.
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
WITHHOLDING ON ANNUITIZATION PAYMENTS (W-4P)
- -----------------------------------------------------------------------------------------------------------------------------------
If you require assistance in completing this section, please refer to the instructions for Internal Revenue Service Form W-4P. Do
not complete for Deferred Compensation plans, attach a separate W-4.
Complete the following applicable lines:
1 I elect not to have income tax withheld from my pension or annuity. (Do not complete lines 2 or 3.)..........> / /
2 I want my withholding from each periodic pension or annuity payment to be figured using the number ---------------
of allowances and marital status shown. (You may also designate an amount on line 3.).......................> (Enter number
Marital status: / / Single / / Married / / Married, but withhold at higher Single rate of allowances.)
3 I want the following additional amount withheld from each pension or annuity payment. NOTE: FOR PERIODIC PAYMENTS,
YOU CANNOT ENTER AN AMOUNT HERE WITHOUT ENTERING THE NUMBER (INCLUDING ZERO) OF ALLOWANCES ON LINE 2.........> $
- -----------------------------------------------------------------------------------------------------------------------------------
DIRECT DEPOSIT
- -----------------------------------------------------------------------------------------------------------------------------------
/ / I wish to have my annuity payment direct deposited.
/ / I do not wish to have my annuity payment direct deposited.
I (we) authorize Minnesota Life to initiate deposits and corrections to adjust any deposits made in error to my (our) account
indicated below. I (we) authorize the financial institution named below to accept these deposits and/or corrections made to this
account.
This authorization is to remain in full force and effect until Minnesota Life has received written notice from me (or either of
us if joint owners) of its termination in such time and manner as to afford Minnesota Life and the financial institution listed
below a reasonable opportunity to act on it, or such time as Minnesota Life terminates this method of payment.
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF PAYEE(S) ACCOUNT NUMBER (ATTACH VOIDED CHECK)
- -----------------------------------------------------------------------------------------------------------------------------------
NAME OF FINANCIAL INSTITUTION BANK ROUTING NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
ADDRESS (Street, City, State, Zip) ACCOUNT TYPE
/ / Checking / / Savings
- -----------------------------------------------------------------------------------------------------------------------------------
BACKUP WITHHOLDING
- -----------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to
me), AND
(2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (IRS) that I
am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS - If you have been notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return, you must cross out item (2) above. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject
to backup withholding, do not cross out item (2).
You are subject to backup withholding if:
1) You fail to furnish us with your Taxpayer Identification Number, OR
2) The IRS notifies us that you furnished an incorrect Taxpayer Identification Number, OR
3) You have been notified by the IRS that you are subject to backup withholding.
In addition, you could be penalized by the IRS if:
1) You fail to furnish us with your Taxpayer Identification Number - subject to $50.00 penalty.
2) You fail to include in your gross income any portion of an includable payment - subject to 5% penalty.
3) You make a false statement which results in no imposition of backup withholding - subject to $500.00 penalty.
4) You falsify certificates or affirmations - subject to criminal penalties, including fines and/or imprisonment.
- -----------------------------------------------------------------------------------------------------------------------------------
NOTICE - FEDERAL TAX MATTERS - NON-QUALIFIED CONTRACTS - PLEASE READ CAREFULLY
- -----------------------------------------------------------------------------------------------------------------------------------
WITHDRAWALS OF CASH VALUE - When withdrawals are taken from the cash value of any immediate variable annuity contract, all
amounts received by the taxpayer are taxable as ordinary income in the year in which the withdrawals are taken. Those amounts
are taxable to the recipient without regard to the owner's investment in the contract or any investment gain in the contract.
ADDITIONAL PURCHASE PAYMENTS - When additional purchase payments are made under an existing immediate variable annuity contract,
those purchase payments will not result in a recalculation of the owner's investment in the contract and a determination of a new
exclusion amount.
For more information on these matters see your prospectus under the heading Federal Tax Status. Consult with your tax adviser.
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE OF TAXPAYER TAXPAYER'S SOCIAL SECURITY NUMBER
X
- -----------------------------------------------------------------------------------------------------------------------------------
PROOF OF AGE IS REQUIRED FOR THE ANNUITANT AND JOINT ANNUITANT (IF APPLICABLE).
PLEASE ATTACH A COPY OF YOUR DRIVER'S LICENSE OR BIRTH CERTIFICATE.
</TABLE>
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
of
MINNESOTA LIFE INSURANCE COMPANY
Robert L. Senkler and Dennis E. Prohofsky, respectively, the President and
Secretary of Minnesota Life Insurance Company, a corporation under and existing
by virtue of the laws of the State of Minnesota, do hereby certify that the
following Restated Certificate of Incorporation was duly adopted by an
affirmative vote of a majority of the stockholders at a special meeting of the
Company on December 10, 1998.
This Restated Certificate of Incorporation of Minnesota Life Insurance Company
supersedes and takes the place of the existing Certificate of Incorporation and
all amendments to it:
ARTICLE I
The name of the Company is Minnesota Life Insurance Company (the "Company").
ARTICLE II
The principal office of the Company shall be located at 400 Robert Street North,
Saint Paul, Minnesota 55101-2098.
ARTICLE III
The Company is incorporated for the purpose of transacting the business of and
making insurance upon the lives of individuals and every assurance pertaining
thereto or connected therewith, to grant, purchase and dispose of annuities and
endowments of every kind and description whatsoever, to provide an indemnity
against death and for weekly or other periodic indemnity for disability
occasioned by accident or sickness to the person of the assured and to have all
the further rights, powers and privileges granted or permitted life insurance
companies organized under the provisions of Minnesota Statutes, Chapter 300, and
all Acts amendatory thereof or additional thereto.
ARTICLE IV
The duration and continuation of the Company shall be perpetual.
ARTICLE V
The authorized capital stock of this Company shall be 5,000,000 shares initially
paid in by operation of Minnesota Statutes Section 60A.077 and subsequently paid
in cash, consisting of shares of Common Stock, with par value of $1.00 per
share. Each share of the Common Stock shall have one vote per share.
No shareholder of the Company shall have any pre-emptive or preferential right,
nor be entitled as such as a matter of right, to subscribe for or purchase any
part of any new or additional issue
<PAGE>
of stock of the Company of any class or series, whether issued for money or for
consideration other than money, or of any issue of securities convertible into
stock of the Company.
ARTICLE VI
The corporate powers of the Company shall be vested in a Board of Directors of
at least five persons and shall be exercised by the Board of Directors and by
such officers, agents, employees and committees as the Board of Directors may,
in its discretion, from time to time appoint and empower. The Board of
Directors shall have the power from time to time to make, amend or repeal such
bylaws, rules and regulations for the transaction of the business of the Company
as the Board of Directors may deem expedient and as are not inconsistent with
this Certificate of Incorporation or the constitution or other laws of the State
of Minnesota.
The directors of the Company shall be divided into three classes, as nearly
equal in number as reasonably possible: the first class, the second class and
the third class. Each such director shall serve for a term ending on the third
annual meeting of stockholders following the annual meeting at which such
director was elected, provided, that the directors first elected to the first
class shall serve for a term ending upon the election of directors at the annual
meeting in 2000, the directors first elected to the second class shall serve for
a term ending upon the election of directors at the annual meeting in 2001, and
the directors first elected to the third class shall serve for a term ending
upon the election of directors at the annual meeting in 2002.
At each annual election, commencing at the annual meeting in 2000, the
successors to the class of directors whose term expires at that time shall be
elected by stockholders to hold office for a term of three years to succeed
those directors whose term expires, so that the term of one class of directors
shall expire each year.
Notwithstanding the requirement that the three classes of directors shall be as
nearly equal in number of directors as reasonably possible, in the event of any
change in the authorized number of directors, each director then continuing to
serve as such shall nevertheless continue as a director of the class of which he
or she is a member until the expiration of his or her current term, or his or
her prior resignation, disqualification, disability or removal. There shall be
no cumulative voting in the election of the directors.
Any vacancy on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, an increase in the number of
directorships or other cause shall be filled only by the affirmative vote of a
majority of directors then in office, although less than a quorum or by the sole
remaining director. A director so chosen shall hold office for a term expiring
at the annual meeting at which the term of the class to which he or she has been
elected expires. If the number of directors is changed, any increase or
decrease shall be apportioned among the three classes by a two-thirds (2/3) vote
of the directors then in office. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
-2-
<PAGE>
ARTICLE VII
The incumbent members of the Board of Directors as of the date of the filing of
this Restated Certificate of Incorporation shall continue to be directors of the
Company until their successors are duly elected and qualified in accordance with
the bylaws. The current members of the Board of Directors who shall continue to
be directors of the Company and their respective addresses are:
NAME OF DIRECTOR ADDRESS
Giulio Agostini 3M
3M Center - Executive 220-14W-08
St. Paul, MN 55144-1000
Anthony L. Andersen H. B. Fuller Company
2424 Territorial Road
St. Paul, MN 55114
Leslie S. Biller Norwest Corporation
Sixth and Marquette
Minneapolis, MN 55479-1052
John F. Grundhofer U.S. Bancorp
601 2nd Avenue South
Suite 2900
Minneapolis, MN 55402-4302
Harold V. Haverty 701 Fourth Avenue South, Suite 300
Minneapolis, MN 55415
David S. Kidwell The Curtis L. Carlson School of
Management
University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Reatha C. King General Mills Foundation
P O Box 1113
Minneapolis, MN 55440
Thomas E. Rohricht Doherty, Rumble & Butler P.A.
2800 Minnesota World Trade Center
30 East Seventh Street
St. Paul, MN 55101-4999
Terry T. Saario Bravo!, LLC
900 Hennepin Avenue
Minneapolis, MN 55403
-3-
<PAGE>
Robert L. Senkler Minnesota Life Insurance Company
400 Robert Street North
St. Paul, MN 55101
Michael E. Shannon Ecolab, Inc.
370 Wabasha Street
Ecolab Center
St. Paul, MN 55102
Frederick T. Weyerhaeuser Clearwater Investment Trust
332 Minnesota Street
Suite W-2090
St. Paul, MN 55101-1308
ARTICLE VIII
A director of the Company shall not be liable to the Company or the stockholders
of the Company for monetary damages for a breach of the fiduciary duty of care
as a director, except to the extent such exemption from liability or limitation
thereof is not permitted under the Minnesota Statutes, Section 300.64, as the
same currently exists or hereafter is amended. Specifically such exemption
shall not apply to:
(a) a breach of the director's duty of loyalty to the Company or its
stockholders;
(b) acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of the law;
(c) acts prohibited under Minnesota Statutes, Section 300.60, as the same
currently exists or is hereafter amended;
(d) payment of a dividend when the Company is insolvent;
(e) intentional neglect or refusal to perform a duty imposed by law;
(f) a transaction from which the director derives an improper personal
benefit; or
(g) an act or omission occurring prior to the date when this Restated
Certificate of Incorporation became effective.
ARTICLE IX
In no event shall any funds or investments be held in the name of any individual
who is an officer or employee of the Company. The Board of Directors shall
designate those banks and financial institutions in which the Company funds
shall be deposited. The Board by separate resolution also shall designate the
persons authorized to withdraw or transfer funds held in those accounts. No
funds shall be withdrawn or transferred from those accounts except upon the
authorization of the person or persons so authorized.
-4-
<PAGE>
ARTICLE X
The annual meeting of the Company shall be held on the first Tuesday in May of
each year, if not a legal holiday, and if a legal holiday, then on the next day
not a legal holiday.
ARTICLE XI
The Company is authorized to issue any or all of its policies with or without
participation in profits, savings or unabsorbed portions of premiums; to
classify such policies issued on a participating or nonparticipating basis; and
to determine the right to participate and the extent of participation of any
class or classes of such policies, at the discretion of the Board of Directors.
The declaration and crediting of any policy dividend shall be subject to
approval by majority vote of the Minnesota Mutual Companies, Inc. Board of
Directors.
ARTICLE XII
This Restated Certificate of Incorporation may be amended at any annual meeting
of the Company, or any special meeting of the Company called for that expressly
stated purpose, by the affirmative vote of a majority of the stockholders.
IN WITNESS WHEREOF, the undersigned have executed this Restated Certificate of
Incorporation.
_____________, 1998 ________________________________
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
_____________, 1998 ________________________________
Dennis E. Prohofsky
Senior Vice President, Secretary
and General Counsel
-5-
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
As adopted on October 1, 1998
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
TABLE OF CONTENTS
ARTICLE I STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2 SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.3 PLACE AND HOUR OF MEETING. . . . . . . . . . . . . . . . . . . . .1
SECTION 1.4 NOTICE OF MEETINGS; RECORD DATE. . . . . . . . . . . . . . . . . .1
SECTION 1.5 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.6 VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.7 VOTING BY PROXY. . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.8 VOTING OF SHARES BY CERTAIN HOLDERS. . . . . . . . . . . . . . . .2
ARTICLE II BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.1 NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.1 NON-OVERLAPPING DIRECTORS. . . . . . . . . . . . . . . . . . . . .3
SECTION 2.2 FILLING OF VACANCIES . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.3 PLACE OF MEETING, CORPORATE BOOKS. . . . . . . . . . . . . . . . .3
SECTION 2.4 REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.5 SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.6 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.7 COMPENSATION OF DIRECTORS. . . . . . . . . . . . . . . . . . . . .4
SECTION 2.8 ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS . . . . . . . . .4
SECTION 2.9 REMOVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE III COMMITTEES OF THE BOARD. . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.1 CREATION OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.2 APPOINTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.3 QUALIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.4 COMMITTEE CHAIRS . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.5 MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.6 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.7 VACANCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.8 MINUTES AND REPORTS. . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.9 AUDIT COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.10 INVESTMENT COMMITTEE. . . . . . . . . . . . . . . . . . . . . . .7
SECTION 3.11 COMMITTEE OF NON-OVERLAPPING DIRECTORS. . . . . . . . . . . . . .7
<PAGE>
ARTICLE IV OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 4.1 NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 4.2 ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 4.3 TERM OF OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.4 REMOVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.5 VACANCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.6 DUTIES OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.7 ABSENCE OR DISABILITY. . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES . . . . . . . .9
ARTICLE VI DISPOSITION OF FUNDS AND INVESTMENTS. . . . . . . . . . . . . . . .9
SECTION 6.1 FUNDS AND INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . .9
SECTION 6.2 DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII CORPORATE STOCK. . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7.1 CERTIFICATES FOR SHARES. . . . . . . . . . . . . . . . . . . . . 10
SECTION 7.2 TRANSFER OF SHARES . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7.3 TRANSFER BOOKS . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VIII AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
ARTICLE I
STOCKHOLDERS
SECTION 1.1 ANNUAL MEETING.
The annual meeting of stockholders shall be held on the first Tuesday in May of
each year, if not a legal holiday, and if a legal holiday, then on the next day
not a legal holiday, when members of the Board of Directors shall be elected to
succeed those whose terms are then expiring and such other business shall be
transacted as may properly be brought before the meeting.
SECTION 1.2 SPECIAL MEETINGS.
Special meetings of stockholders for the transaction of such business as may
properly come before the meeting may be called by order of the Board of
Directors or by stockholders holding together at least a majority of all the
shares of the Company entitled to vote at the meeting. Business transacted at
all special meetings of stockholders shall be confined to the purpose or
purposes stated in the notice of the meeting.
SECTION 1.3 PLACE AND HOUR OF MEETING.
Every annual meeting of stockholders shall commence at such hour as shall be
determined by the Board of Directors. Every meeting of stockholders, whether an
annual or a special meeting, shall be held at the principal office of the
Company at 400 Robert Street North in the City of Saint Paul, in the State of
Minnesota (the "Home Office"), or at such other place as may be selected by the
Board of Directors.
SECTION 1.4 NOTICE OF MEETINGS; RECORD DATE.
Notice of each meeting of stockholders shall be mailed to each stockholder of
the Company not less than thirty days previous to such meeting, and every such
notice shall state the day and hour and the place at which the meeting is to be
held and, in the case of any special meeting, shall indicate briefly the purpose
or purposes thereof. The Board of Directors may fix in advance a date, not less
than twenty calendar days preceding the dates of the aforenamed occurrences, as
a record date for the determination of the shareholders entitled to notice of,
and to vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
shares. In such case, such stockholders, and only such stockholders as are
stockholders of the Company of record on the record date so fixed, are entitled
to notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Company after such record date so fixed. If the
-1-
<PAGE>
Board of Directors shall not set a record date for the determination of the
stockholders entitled to notice of, and to vote at, a meeting of stockholders,
only the stockholders who are stockholders of record at the close of business on
the 20th day preceding the date of the meeting are entitled to notice of, and to
vote at, the meeting and any adjournment of the meeting.
SECTION 1.5 QUORUM.
A majority of the outstanding shares entitled to notice of and to vote at a
meeting, present in person or by proxy conforming the requirements of Section
1.7 of these bylaws, shall constitute a quorum for the transaction of any
business coming before any regular or special meeting of stockholders duly and
properly called, except as provided by law, the Restated Certificate of
Incorporation of the Company, or these bylaws. If, however, such quorum of
stockholders shall not be present or represented at any meeting of stockholders,
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a requisite number of stockholders shall be
present. At any such adjourned meeting at which the requisite number of
stockholders shall be represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
SECTION 1.6 VOTING RIGHTS.
Each outstanding share of Common Stock shall be entitled to one vote upon each
matter submitted to a vote at any annual or special meeting of stockholders.
SECTION 1.7 VOTING BY PROXY.
Any stockholder may vote by proxy at any meeting of stockholders. To be valid,
the proxy appointment must be in writing and must be filed with, and received
by, the Secretary at the Home Office of the Company at least five days before
the meeting at which it is to be used, exclusive of the day of the meeting, but
inclusive of the day of receipt and filing of the proxy. A proxy appointment
may be for a specified period of time not to exceed one year. A proxy may be
revoked by a stockholder at any time by written notice to the Secretary of the
Company, or by executing a new proxy appointment and filing it as required
herein, or by personally appearing and exercising his or her rights as a
stockholder at any meeting of the stockholders.
SECTION 1.8 VOTING OF SHARES BY CERTAIN HOLDERS.
(a) Shares of stock in the name of another corporation, foreign or
domestic, are to be voted by such officer, agent, or proxy as the bylaws of such
corporation may determine.
(b) Shares of stock in the name of a deceased person are to be voted by
his executor or administrator in person or by proxy.
(c) Shares of stock in the name of a fiduciary, such as guardian, curator,
or trustee are to be voted by such fiduciary either in person or by proxy,
provided the books of the Company show the stock to be in the name of such
fiduciary in such capacity.
(d) Shares of stock in the name of a receiver are to be voted by such
receiver, and shares held by, or in the control of, a receiver are to be voted
by such receiver without the
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transfer thereof into his name, if such voting authority is contained in an
appropriate order of the court by which such receiver was appointed.
(e) Shares of stock which have been pledged are to be voted by the pledgor
until the shares of stock have been transferred into the name of the pledgee,
and thereafter, the pledgee is entitled to vote the shares so transferred.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.1 NUMBER.
The Board of Directors shall consist of such number of Directors, not fewer than
five or more than sixteen, as the Board shall from time to time determine.
SECTION 2.1 NON-OVERLAPPING DIRECTORS.
Commencing with the first annual election of directors, and unless and until
Minnesota Mutual Companies, Inc. (or any successor mutual insurance holding
company) is converted from a mutual insurance holding company to a stock
company, the Board of Directors shall at all times include at least three
directors who are not concurrently serving as directors on the board(s) of
Minnesota Mutual Companies, Inc., Securian Holding Company or Securian Financial
Group, Inc. ("Non-overlapping Directors").
SECTION 2.2 FILLING OF VACANCIES.
If the office of any Director becomes vacant for any reason, a majority of the
remaining Directors may choose a successor. Each Director so chosen shall hold
office until the next regular annual meeting of the shareholders and until his
or her successor has been duly elected and qualified. Not more than one-third
of the maximum number of Directors may be so chosen by the Board between regular
annual meetings of the shareholders.
SECTION 2.3 PLACE OF MEETING, CORPORATE BOOKS.
The Board of Directors may hold its meetings and keep the books of the Company
at the Home Office of the Company, or at such other place or places as they may
from time to time by resolution determine, except as otherwise required by law.
SECTION 2.4 REGULAR MEETINGS.
Regular meetings of the Board shall be held at such times and places as are
fixed from time to time by resolution of the Board. Notice need not be given of
those regular meetings of the Board held at the times and places fixed by
resolution, nor need notice be given of adjourned meetings. If either or both
the time or place of a regular meeting are other than that fixed by resolution,
a telephonic or written notice shall be given to each Director not less than
twenty-four hours prior to the time of that regular meeting.
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SECTION 2.5 SPECIAL MEETINGS.
Special meetings of the Board may be held at any time upon call either of the
Chair of the Board, or of the Chief Executive Officer, or upon written request
of any three or more directors. Except as otherwise provided, notice of a
special meeting shall be given to each director either in writing or by
telephone. Notice of at least seventy-two hours prior to the meeting time is
required if written notice is deposited in the United States mail in the City of
Saint Paul. Notice of at least twenty-four hours prior to the meeting time is
required if written notice is left at either the place of business or residence
of each director. Notice of at least six hours prior to the meeting time is
required if all directors are personally either served with a written notice or
contacted by telephone. Notice need not be given to the directors of adjourned
special meetings. Also, special meetings may be held at any time without notice
if all of the directors are present, or if, before the meeting, those not
present waive such notice in writing. Notice of a special meeting shall state
the purpose of the meeting.
SECTION 2.6 QUORUM.
At all meetings of the Board of Directors, a majority of the directors then in
office shall be necessary and sufficient to constitute a quorum for the
transaction of business, but if, at any meeting, less than a quorum shall be
present, a majority of those present may adjourn the meeting from time to time,
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute or by the Restated Certificate of
Incorporation of the Company or by these bylaws.
SECTION 2.7 COMPENSATION OF DIRECTORS.
Members of the Board of Directors, who are not salaried officers of the Company,
shall receive such annual compensation as shall be fixed from time to time by
resolution of the Board of directors; and, in addition, the directors who are
not salaried officers of the Company shall receive a sum in such amount as shall
be fixed from time to time by resolution of the Board of Directors, and the
expenses of attendance, if any, for attendance at each regular or special
meeting of the Board, whether or not an adjournment be had because of the
absence of a quorum.
SECTION 2.8 ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS.
If all the directors severally or collectively consent in writing to any action
taken or to be taken by the directors, such consents have the same force and
effect as a unanimous vote of the directors at a meeting duly held, and may be
stated as such in any certificate or document filed with the Secretary of State
of Minnesota or any other state in the United States of America or other
Country. The Secretary of the Company shall file such consents with the minutes
of the meetings of the Board of Directors.
SECTION 2.9 REMOVAL.
Any director or the entire Board of Directors may be removed at any time but
only for cause or pursuant to the Company's retirement policy in effect when the
director was first elected.
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ARTICLE III
COMMITTEES OF THE BOARD
SECTION 3.1 CREATION OF COMMITTEES.
The following designated standing committees of the Board are hereby authorized
and created: Audit, Investment, and Non-overlapping Directors. In addition,
the Board is authorized to create any other committee or committees of the Board
as the Board from time to time deems necessary. The name, duration and duties
of each other committee and the number of members thereof shall be as prescribed
in the action creating the committee. In the event the Board of Directors
creates an Executive Committee invested with the full powers of the Board of
Directors between meetings of the Board of Directors, then that Committee must
have at least the same proportion of Non-overlapping Directors as does the full
Board of Directors.
SECTION 3.2 APPOINTMENTS.
The members of each standing Board committee shall consist of those Directors
appointed by the Board of Directors. Each Director appointed to a Board
committee shall continue to serve on that committee at the will and pleasure of
the Board for the period specified in his or her appointment or until his or her
earlier death, resignation or removal.
SECTION 3.3 QUALIFICATIONS.
Each Director is qualified to be appointed and successively reappointed to one
or more committees.
SECTION 3.4 COMMITTEE CHAIRS.
The Board shall appoint one of the members of each of the Board committees to
chair that committee and, in its discretion, may also appoint one of the members
of each of the committees to serve as a vice chair of that committee. If
neither the committee chair nor the committee vice chair is present at a meeting
of a committee, the committee members present at that committee meeting shall
elect another committee member to chair that meeting.
SECTION 3.5 MEETINGS.
Each committee shall meet at such times as the chair of that committee may
designate or as a majority of that committee may determine, subject to a minimum
of not less than two meetings per calendar year.
SECTION 3.6 QUORUM.
A majority of each Board committee shall constitute a quorum at each meeting of
that committee. At any meeting of a committee at which a quorum is present, the
committee may continue to transact business until adjournment, even though
committee member(s) may have left the meeting so that less than a quorum is
present at the meeting. If a quorum is not present for a committee meeting, the
chair of that committee may request the Board to appoint a sufficient number of
other directors to serve as members of the committee only for that meeting, so
as to obtain a quorum. If the Board makes the requested appointments, any
action so taken at the committee meeting shall be valid and binding.
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SECTION 3.7 VACANCIES.
In the case of the death, resignation or removal of a member of a committee, the
Board may appoint another Director to fill the vacancy so created on that
committee for the balance of the unexpired appointment. The appointment shall
be subject to the qualifications set forth for that committee.
SECTION 3.8 MINUTES AND REPORTS.
Each committee shall keep a written record of its acts and proceedings and shall
submit that record to the Board of Directors at a regular meeting of the Board
and at such other times as requested by the Board or when a majority of the
committee deems it desirable to do so. Failure to submit a record will not,
however, invalidate any action taken by the committee prior to the time the
record of the action was, or should have been, submitted to the Board. The
minutes of each committee shall be recorded by the person designated by the
chair of that committee.
SECTION 3.9 AUDIT COMMITTEE.
The Audit Committee shall consist of not fewer than four directors that are not
officers or employees of Minnesota Mutual Companies, Inc. or any of its
subsidiaries. The committee shall have the following powers and duties:
(a) Annually recommend to the Board a firm of independent certified public
accountants to audit the Company's books, records and accounts.
(b) Approve the scope of audits to be conducted by the independent
certified public accountants, taking into account the principal risks inherent
in the Company's business and the recommendations from the independent
accountants as to scope of audit.
(c) Review all recommendations made by the independent certified public
accountants in their audit reports to the Board.
(d) Approve the scope of audits to be conducted by the Company's internal
auditors and review the reports of those audits.
(e) Review the reports which result from the examinations of the Company
conducted by state insurance authorities.
(f) Review corporate litigation involving extra-contractual damages.
(g) Periodically review the Company's plans for data security and disaster
recovery.
(h) Advise the Board of the results of the committee's reviews and
recommendations resulting therefrom.
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SECTION 3.10 INVESTMENT COMMITTEE.
The Investment Committee shall consist of not fewer than four directors and
shall have the following powers and duties which shall be exercised not less
than once every twelve months:
(a) Review the written investment policy for the Company investments,
recommend changes thereto, and submit to the Board for its approval and adoption
the policy and procedures for the ensuing twelve months.
(b) Review all investments of Company funds, including their acquisition
and sale and report findings to the Board.
(c) Furnish the Board with summaries of investment transactions.
(d) Review compliance with the written investment policy and valuation
procedures and submit findings to the Board.
SECTION 3.11 COMMITTEE OF NON-OVERLAPPING DIRECTORS.
The Committee of Non-overlapping Directors shall consist of not fewer than three
Non-overlapping Directors (as described in Section 2.1 of these bylaws) and
shall have the following powers and duties:
(a) Review all agreements and material transactions between and among the
Company, its affiliates and subsidiaries to assure that such agreements and
transactions are fair and reasonable and that they comply with Minnesota
Statutes, Section 60D, and all Acts amendatory thereof or additional thereto.
For purposes of this section, the term "material" shall have the definition set
forth in Minnesota Statutes, Section 60D.19, subd. 4, as it may be amended from
time to time.
(b) Such other powers and duties as determined by the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER.
The officers of the Company shall be a Chief Executive Officer, a President, one
or more Vice Presidents, a Treasurer, an Actuary, a Controller, a Secretary, and
one or more Assistant Secretaries. In addition, there may be such other
officers as the Board of Directors from time to time may deem necessary. One
individual may hold two or more offices, except those of President and
Secretary.
SECTION 4.2 ELECTION.
Officers shall be elected or appointed by the Board of Directors.
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SECTION 4.3 TERM OF OFFICE.
Each officer shall serve for the term stated in his or her election or
appointment or until his or her earlier death, resignation or removal.
SECTION 4.4 REMOVAL.
Any officer may be removed from office, with or without cause, at any time by
the affirmative vote of the majority of the Board of Directors then in office.
SECTION 4.5 VACANCIES.
Any vacancy in any office from any cause may be filled by the Board of Directors
at its next meeting.
SECTION 4.6 DUTIES OF OFFICERS.
The duties of the officers shall be as follows:
(a) CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have
general active management of the business of the Company and, in the absence of
the Chair of the Board, shall preside at all meetings of the members and the
Board of Directors, and shall see that all orders and resolutions of the Board
are carried into effect. Except where, by law, the signature of the President
is required, the Chief Executive Officer shall possess the same power as the
President to sign and execute all authorized certificates, contracts, bonds, and
other obligations of the Company.
(b) PRESIDENT. The President, in the absence of the Chair of the Board
and the Chief Executive Officer, shall preside at all meetings of the members
and the Board of Directors. The President shall be the chief administrative
officer of the Company and shall have the power to sign and execute all
authorized certificates, contracts, bonds, and other obligations of the Company.
The President also shall perform such other duties as are incident to the office
or are properly required of him or her by the Board or the Chief Executive
Officer.
(c) VICE PRESIDENTS. Each Vice President will perform those duties as
from time to time may be assigned by the Chief Executive Officer. In the
absence of the President, a Vice President designated by the Board of Directors
shall perform the duties of the President. A Vice President shall have the
power to sign and execute all authorized certificates, contracts, bonds and
other obligations of the Company. One or more of the Vice Presidents may be
entitled Executive Vice President, Senior Vice President, Vice President, Second
Vice President, or such other variation thereof as may be designated by the
Board.
(d) SECRETARY. The Secretary shall give notice and keep the minutes of
all meetings of the members and of the Board of Directors and shall give and
serve all notices of the Company. The Secretary or an Assistant Secretary shall
have the power to sign with the Chief Executive Officer, President, or any Vice
President in the name of the Company all authorized certificates, contracts,
bonds, or other obligations of the company and may affix the Company Seal
thereto. The Secretary shall have charge and custody of the books and papers of
the Company and in general shall perform all duties incident to the office of
Secretary, except as
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otherwise specifically provided in these bylaws, and such other duties as from
time to time may be assigned by the Chief Executive Officer. If Assistant
Secretaries are elected or appointed, they shall have those powers and perform
those duties as from time to time may be assigned to them by the Chief Executive
Officer and, in the absence of the Secretary, one of them shall perform the
duties of the Secretary.
(e) TREASURER. The Treasurer shall have those powers and shall perform
those duties as from time to time may be assigned by the Chief Executive
Officer. If Assistant Treasurers are elected or appointed, they shall have
those powers and perform those duties as from time to time may be assigned to
them by the Chief Executive Officer and, in the absence of the Treasurer, one of
them shall perform the duties of the Treasurer.
(f) CONTROLLER. The Controller shall have those powers and shall perform
those duties as from time to time may be assigned by the Chief Executive
Officer.
(g) ACTUARY. The Actuary shall have those powers and shall perform those
duties as from time to time may be assigned by the Chief Executive Officer.
(h) OTHER OFFICERS. Other officers elected or appointed by the Board of
Directors shall have those powers and perform those duties as from time to time
may be assigned by the Chief Executive Officer.
SECTION 4.7 ABSENCE OR DISABILITY.
In the case of the absence or disability of any officer of the Company or of any
person authorized to act in his or her place during such period of absence or
disability, the Board of Directors from time to time may delegate the powers and
duties of such officer to any other officer, or any Director, or any other
person whom they may select.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
The Company shall, to the fullest extent permitted under Minnesota Statutes,
Section 300.083, as the same currently exists or hereafter is amended, indemnify
(and advance expenses to) the directors, officers and employees of this Company.
The provisions of this Article shall not be deemed to limit or preclude
indemnification of a director, officer or employee by the Company for any
liability which has not been eliminated by the provisions of this Article.
ARTICLE VI
DISPOSITION OF FUNDS AND INVESTMENTS
SECTION 6.1 FUNDS AND INVESTMENTS.
All funds and investments of the Company shall be held in the name of "Minnesota
Life Insurance Company" or its nominee or as otherwise provided in accordance
with applicable Minnesota Statutes, as amended from time to time. In no event
shall any funds or investments be held in the name of any individual who is an
officer or employee of the Company.
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SECTION 6.2 DEPOSITS.
The Board of Directors shall designate those banks and financial institutions in
which Company funds shall be deposited. The Board by separate resolution also
shall designate the persons authorized to withdraw or transfer funds held in
those accounts. No funds shall be withdrawn or transferred from those accounts
except upon the authorization of the person or persons so authorized.
ARTICLE VII
CORPORATE STOCK
SECTION 7.1 CERTIFICATES FOR SHARES.
The Board of Directors is to prescribe the form of the certificate(s) of stock
of the Company. The certificate is to be signed by the President or Vice
President and by the Secretary, Treasurer, or Assistant Secretary or Assistant
Treasurer, is to be sealed with the seal of the Company and is to be numbered
consecutively. The name of the owner of the certificate, the number of shares
of stock represented thereby, and the date of issue are to be recorded on the
books of the Company. Certificates of stock surrendered to the Company for
transfer are to be canceled, and new certificates of stock representing the
transferred shares issued. New stock certificates may be issued to replace
lost, destroyed or mutilated certificates upon such terms and with such security
to the Company as the Board of Directors may require.
SECTION 7.2 TRANSFER OF SHARES.
Shares of stock of the Company may be transferred on the books of the Company by
the delivery of the certificates representing such shares to the Company for
cancellation, and with an assignment in writing on the back of the certificate
executed by the person named in the certificates as the owner thereof, or by a
written power of attorney executed for such purpose by such person. The person
registered on the books of the Company as the owner of shares of stock of the
Company is deemed the owner thereof and is entitled to all rights of ownership
with respect to such shares.
SECTION 7.3 TRANSFER BOOKS.
Transfer books are to be maintained under the direction of the Secretary,
showing the ownership and transfer of all certificates of stock issued by the
Company.
ARTICLE VIII
AMENDMENTS
These bylaws may be amended by the Board of Directors or by the stockholders at
a regular meeting, or at a special meeting called for that expressly-stated
purpose, by the affirmative vote of a majority of the stockholders present, in
person or by proxy, at the meeting.
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Minnesota Life Insurance Company
Power of Attorney
To Sign Registration Statements
WHEREAS, Minnesota Life Insurance Company ("Minnesota Life") has
established certain separate accounts to fund certain variable annuity and
variable life insurance contracts, and
WHEREAS, Variable Fund D ("Fund D") is a separate account of Minnesota Life
registered as a unit investment trust under the Investment Company Act of 1940
offering variable annuity contracts registered under the Securities Act of 1933,
and
WHEREAS, Variable Annuity Account ("Variable Annuity Account") is a
separate account of Minnesota Life registered as a unit investment trust under
the Investment Company Act of 1940 offering variable annuity contracts
registered under the Securities Act of 1933, and
WHEREAS, Minnesota Life Variable Life Account ("Variable Life Account") is
a separate account of Minnesota Life registered as a unit investment trust under
the Investment Company Act of 1940 offering variable adjustable life insurance
policies registered under the Securities Act of 1933,
WHEREAS, Group Variable Annuity Account ("Group Variable Annuity Account")
is a separate account of Minnesota Life which has been established for the
purpose of issuing group annuity contracts on a variable basis and which is to
be registered as a unit investment trust under the Investment Company Act of
1940 offering group variable annuity contracts and certificates to be registered
under the Securities Act of 1933;
WHEREAS, Minnesota Life Variable Universal Life Account ("Variable
Universal Life Account") is a separate account of Minnesota Life which has been
established for the purpose of issuing group and individual variable universal
life insurance policies on a variable basis and which is to be registered as a
unit investment trust under the Investment Company Act of 1940 offering group
and individual variable universal life insurance policies to be registered under
the Securities Act of 1933;
NOW THEREFORE, We, the undersigned Directors and Officers of Minnesota Life,
do hereby appoint Dennis E. Prohofsky and Garold M. Felland, and each of them
individually, as attorney in fact for the purpose of signing in their names and
on their behalf as Directors of Minnesota Life and filing with the Securities
and Exchange Commission Registration Statements, or any amendment thereto, for
the purpose of: a) registering contracts and policies of Fund D, the Variable
Annuity Account, the Variable Life Account, the Group Variable Annuity Account
and the Variable Universal Life Account for sale by those entities and Minnesota
Life under the Securities Act of 1933; and b) registering Fund D, the Variable
Annuity Account, the Variable Life Account, the Group Variable Annuity Account
and the Variable Universal Life Account as unit investment trusts under the
Investment Company Act of 1940.
Signature Title Date
--------- ----- ----
/s/Robert L. Senkler Chairman of the Board, October 19, 1998
- ------------------------------ President and Chief
Robert L. Senkler Executive Officer
<PAGE>
Signature Title Date
--------- ----- ----
/s/Giulio Agostini Director October 19, 1998
- ------------------------------
Giulio Agostini
/s/Anthony L. Andersen Director October 19, 1998
- ------------------------------
Anthony L. Andersen
/s/Leslie S. Biller Director October 19, 1998
- ------------------------------
Leslie S. Biller
/s/John F. Grundhofer Director October 19, 1998
- ------------------------------
John F. Grundhofer
/s/David S. Kidwell Director October 19, 1998
- ------------------------------
David S. Kidwell, Ph.D.
/s/Reatha C. King, Ph.D. Director October 19, 1998
- ------------------------------
Reatha C. King, Ph.D.
/s/Thomas E. Rohricht Director October 19, 1998
- ------------------------------
Thomas E. Rohricht
/s/Michael E. Shannon Director October 19, 1998
- ------------------------------
Michael E. Shannon
/s/Frederick T. Weyerhaeuser Director October 19, 1998
- ------------------------------
Frederick T. Weyerhaeuser
